Ed Zollars, CPA <ezollar[at]mindspring.com> wrote:

- quote -

I guess so. For one thing, I'd have to select different
software because my current package doesn't prepare Forms
8275 and 8275-R. But, it would help me to postpone efiling
unless/until they accept more than ONE copy of each of those
forms. <g
Somewhat more seriously, it seems like this proposal would
cause the IRS to be drowned in paperwork, not to mention
endless debate over theoretical percentage points (51-49%
vs. 50-50%, etc.). I doubt they'd like it.

MTW

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Michael T Wing CPA wrote:

- quote -

Actually, it might have *some* impact on your practice. One
proposed change is in the standard for when a preparer can
sign a return without disclosing the position. It would
move from the "one out of three" chance of success standard
for a position being eventually sustained (presumable
meaning Billy and the Supremes would rule in favor <grin> )
to a "more likely than not" standard (one out of two).

That raises a couple of issues. First, it may more often
produce a conflict between the interests of the preparer and
the interests of the client.

Let us imagine a case where there was a 49% chance of the
client prevailing on a position if it were to be challenged
and all appeals exhausted (given our current Supreme Court,
it means that Sandra Day O'Connor is the "great unknown" on
this issue, with the others split 4-4 <grin> ). Under
current rules, the preparer, having informed the client of
the potential controversy and being told by the client to
take the more aggressive position, could sign the return
without any extra disclosure on the return and not risk a
negligence penalty. The client would still be exposed, but
the client might reasonably conclude that a) the odds of the
issue arising at all would go up if explicit disclosure was
made (waving the red cape in front of the bull, so to speak
<grin> ), b) the expected cost of an exam would be greater
than the penalty that might be avoided *if* the issue was
lost and c) the client has rationally decided that his
interest is best served by not adding in the additional
disclosure.

Clearly, the *client* has made a rational choice. But,
theoretically, under the new rules the preparer may be
forced to either persuade the client that someone it's in
his interests *to* include the disclosure, decide the
preparer is willing to now take a risk of a penalty (which
arguably might impact his/her qualification for the efiling
program, which might be a real problem in California,
Oklahoma, etc.), or fire the client (that is, refuse to
prepare the return).

That one is more theoretical. However, I see a more real
world problem in a view that some agents might adopt--since
it's a "more likely than not" standard, the agent might
decide that *any* issue that he/she sees differently that
the position take on the return might fail that test.
Previously that agent was somewhat discouraged from looking
seriously at a preparer penalty, since it was clear that the
agent not only had to carry the issue that the position was
wrong, but that no substantial authority existed that would
have cleared the "one out of three" standard.

--
Ed Zollars, CPA
Phoenix, Arizona

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Gene E. Utterback, EA <eagent[at]alliancetax.com> wrote:

- quote -

The trouble is, if I have to go OUT OF MY WAY, or incur
EXTRA EXPENSE to comply with this requirement, it will
simply help me "remember and reinforce" the days of the
anti-regulation Reagan administration. <g
MTW

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Ed Zollars, CPA <ezollar[at]mindspring.com> wrote:

- quote -

Gee, and just how much impact will that have on my ~small
time~ practice? <g> Once again, us little guys are paying
the price for the Big 8 (or however many).

MTW

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Michael T Wing CPA wrote:
- quote -

over kill is quite right. Every time I read something
about this 2 hours requirement, I think of he Mexican in
"Treasure of Sierra Madre" when asked if he had a badge.
Or most experienced EA's when asked if they need a course in
ethics: "We don't NEED no stinking ethics!"

Christmas Cheer$,
Harlan Lunsford, EA n LA

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Ed Zollars, CPA wrote:
- quote -

(snipped)

At our recent state society board of directors' meeting we
discussed the upcoming requirement and chose to include the
2 hours in upcoming seminar in May. Question was, who and
how? One director from up in UA (upper Alabama) mentioned
this well known Baptist preacher who used to be our governor
(before he went to jail.) So we considered a Methodist
preacher; problem is, he wouldn't want to report the income.
I won't mention the other demonation, but talk was he'd be
too drunk to make the presentation.

Still , what to do? who to ask? WE might HAVE to pay big
bucks to get one of those motivational type speakers. And
I'd hate to have to write a check to one of those guys.

Christmas Cheer$,
Harlan Lunsford, EA n LA

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"Michael T Wing CPA" <mtwingcpa[at]yahoo.com> wrote:
- quote -

While I "want" to agree with you about this being overkill -
and because I don't think ethics are anything that can
really be taught to anyone old enough to be in this
profession - I believe in this particular requirement.

IMNHO - if taking 2 hours of "ethics" each year does nothing
more than help us remember and reinforce the concept of
ethical behavior then it is worth it. I don't believe that
the folks at Enron or Arthur Andersen started out bad. I
don't believe that they, for the most part, work up one
morning and decided to cross a technical line. Rather, I
believe that the people that are responsible for that fiasco
simply lost sight of their ethical obligations.

I can't help but wonder if the people at AA had taken an
outside ethics course of just 2 hours each year, just to
keep the concepts of ethical responsibilities in the
forefront of their minds, would the situation have been
different in the end? I honestly don't know, but I think a
2 hour ethics requirement is a step in the right direction
which avoids, or at least temporarily averts, more serious
government oversight.

Gene E. Utterback, EA

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Michael T Wing CPA wrote:

- quote -

I think the IRS is *expecting* a major change in the area
next year as part of the tax shelter reform provisions that
the Senate Finance Committee keeps trying to attach to every
tax bill.

--
Ed Zollars, CPA
Phoenix, Arizona

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Michael T Wing CPA wrote:

- quote -

That may be possible for sponsors that sell *only* to CPAs
or EAs--but if the course attempts to appeal to both groups
for continuing education then the problem of "just what is
ethics training" may make that an impossible feat to pull
off.

I would note that the Oklahoma Society of CPAs, at the
Oklahoma Tax Institute that I spoke at, *did* offer breakout
sessions that would meet the Oklahoma state ethics
requirement for two hours of ethics. But, clearly, the
Oklahoma Society of CPAs has an easier time designing an
ethics section <grin> and doing it as a breakout session
meant that you only picked it up if you wanted/needed
it--others weren't "burdened" with it.

--
Ed Zollars, CPA
Phoenix, Arizona

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Michael T Wing CPA wrote:
- quote -

...If we really HAD ethics in taxes, we'd have a fair tax system!
(Remember that FAIR is a four-letter word starting with an F) :-)

I concur - I don't see how enough material will be gathered
on a regular basis to provide for such a requirement -
unless one does case studies of all the criminal [tax] cases
in the past year and why the accused went bad....

================================================== ==========
Moderator:
Taxation is about collecting money, enforcing social
policies, and pandering votes and campaign contributions.
Taxation is unrelated to both fairness and logic.
================================================== ==========

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BigBill0716 <bblankenship0716[at]sbcglobal.net> wrote:

- quote -

One further thought on this: Does anyone believe that there
is enough NEW AND DIFFERENT MATERIAL in the area of "ethics"
to justify devoting TWO HOURS to it EVERY YEAR ??? Given
that we live in a world of scarce resources, the two hours
devoted to a topic that doesn't change (much) means two
hours LESS devoted to topics that DO !!!

Can anyone recall a recent tax act that made ~big changes~
in the area of ethics? Can anyone recall a recent tax act
that made ~big changes~ in lots of OTHER areas? Duh, where
should the study time be spent ???

This ~really~ seems like overkill...

MTW

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BigBill0716 <bblankenship0716[at]sbcglobal.net> wrote:

- quote -

That's a good question. And/or will the major seminar
sponsors "build in" two hours in their annual update
courses?

The two hours every year requirement, as opposed to (say)
six hours every three years, is a major "pain" in my opinion
because it DOES raise the question as to how you will
comply. I think it likely that many people will end up
taking ADDITIONAL hours in order to meet this requirement
(ie: a dedicated two hour class) because it will likely be
difficult to make sure the requirement has been met based on
the OTHER classes that you would normally take. Unless you
can find other classes of six hour duration to pair up with
this, you will probably end up doing ADDITIONAL time each
year.

Also, as I am both a CPA and an EA, I'm also subject to the
bored [sic] of accountancy requirements in my state. That
calls for four hours of ethics every three years. But here's
the "rub": The "ethics" that I take for CPA purposes will
probably not meet the needs of the EA requirement because
the CPA course must be STATE SPECIFIC and, in fact, covers
very little related to taxation. Meanwhile, I can't see the
DOP accepting a course in "accounting and auditing" ethics
related to Washington State as meeting ITS requirements. So,
I expect to have to do a lot of meaningless ~extra~ CPE to
meet these two similar-but-dissimilar "ethics" requirements.

MTW

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- quote -

Cool down and reread that letter. The first people who need
the ethics courses are those with SSN's ending in 0, 1, 2,
or 3, and they don't need ethics until the cycle beginning
April 2004. 4, 5, and 6 people begin ethics in the April
2005 cycle, and the rest in the April 2006 cycle.

http://www.irs.gov/taxpros/agents/ar...114324,00.html

Incidentally, I did confirm with the OPE office that the
years that they talk about still run from Feb 1 thru Jan 31.

--
Don EA in Upstate NY

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- quote -

The ethics is a new requirement and goes into affect in your
renewal year (which I guess is now, if you are 0-1-2-3
ending SSN). If you are a member of NAEA, you can use your
May-June edition and get your 2 hours. If you are not a
member, I don't know if we can do it for you, but you can
check it out at www.naea.org

Helen, EA in PA
Member of The Tax Gang
President, PA Society of Enrolled Agents
Campaigning for NAEA Board of Directors - Looking for YOUR vote

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I read circular 230 carefully (I thought). Then a letter
arrived from the IRS stating I had to have two hours per
year continuing education in ethics. I'm rather annoyed
about this requirement popping up right before the end of
the year.

Between the classes I taught and attended I'm sure we
discussed ethics two hours. Do we now have to attend a
specific course in ethics each year?

It looks like I might get whistle bit on this one.

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