Restoring the Profession's Public Interest Role

Lessons from Tax Shelter Activities

Martin Stuebs, PhD, CPA, and Brett R. Wilkinson, PhD

Over the past few years, government regulators have revisited the standards that tax preparers must meet in order to avoid tax return preparer penalties when taking a tax position. Unexpectedly, regulators substantially raised the bar in 2007 from the previous “realistic possibility of success” to the “more likely than not” standard. This change caused much concern within the preparer community, and, in 2008, Congress retroactively replaced this standard with the requirement that practitioners have “substantial authority” for adopted positions. Although the new standard alleviates much of the immediate concern, these developments signal an increased level of government scrutiny and regulation of tax preparation. This increased monitoring and regulation should be of concern to the accounting profession because one of the hallmarks of a profession is the freedom to regulate itself.