Tax advisor
Encyclopedia
A tax advisor is a financial expert specially trained in tax law
. Some countries require tax advisors to verify the balance sheet
s of companies above a certain size. Individuals usually require tax advisors to minimize taxation, to avoid learning the details of tax law in complicated financial situations themselves or to learn the details of tax law from a professional advisor.
, there is a specific license for tax advisors called Steuerberater.
, there is a specific license for tax advisors called . In order to obtain this qualification, an individual must pass a special state examination, or already be qualified as an attorney at law
or certified public accountant
.
, the Institute of Indirect Taxation
, the Institute of Chartered Accountants in England and Wales, the Institute of Chartered Accountants of Scotland
and the Association of Chartered Certified Accountants
. These were prepared for the assistance of members of the various associations both generally in dealing with clients and the tax authorities and specifically in relation to irregularities and errors.
The guidelines, which include practical advice about a range of legal and ethical issues, are summarised as:
of the United States Department of the Treasury
. There are penalties for failure to disclose the identity of the preparer on the return, for the failure to give the taxpayer a copy of the return, and for negligence in preparing the return.
Practice before the Internal Revenue Service is regulated by Treasury Department Circular No. 230
, Regulations Governing the Practice of Attorneys, Certified Public Accountants, Enrolled Agents, Enrolled Actuaries, and Appraisers before the Internal Revenue Service. Most practice is limited to attorneys, Certified Public Accountant
s (CPAs), Enrolled Agent
s, and Enrolled Actuaries
. Rendering tax advice is also regulated by Circular 230
.
Failure to uphold these standards can result in disciplinary action ranging from reprimand to permanent disbarrment from practice.
Tax Professional is a generic term in the United States describing a variety of professions including Enrolled Agent
s, Certified Public Accountant
s, Financial Planner
s, Accountant
s, Tax Preparers, and some Lawyer
s.
Until the year 2010, the United States Department of Treasury's Internal Revenue Service
did not require certification of individual tax practitioners. As of mid-2010, the IRS was working on proposed changes that will eventually require the registration of almost all paid federal tax return preparers. The new rules will require that some paid preparers pass a national tax law exam and undergo continuing education requirements. See Tax preparation
.
In the United States, by far the largest segment of tax professionals are individual tax preparers.
Tax law
Tax law is the codified system of laws that describes government levies on economic transactions, commonly called taxes.-Major issues:Primary taxation issues facing the governments world over include;* taxes on income and wealth...
. Some countries require tax advisors to verify the balance sheet
Balance sheet
In financial accounting, a balance sheet or statement of financial position is a summary of the financial balances of a sole proprietorship, a business partnership or a company. Assets, liabilities and ownership equity are listed as of a specific date, such as the end of its financial year. A...
s of companies above a certain size. Individuals usually require tax advisors to minimize taxation, to avoid learning the details of tax law in complicated financial situations themselves or to learn the details of tax law from a professional advisor.
Federal Republic of Germany
In GermanyGermany
Germany , officially the Federal Republic of Germany , is a federal parliamentary republic in Europe. The country consists of 16 states while the capital and largest city is Berlin. Germany covers an area of 357,021 km2 and has a largely temperate seasonal climate...
, there is a specific license for tax advisors called Steuerberater.
Japan
In JapanJapan
Japan is an island nation in East Asia. Located in the Pacific Ocean, it lies to the east of the Sea of Japan, China, North Korea, South Korea and Russia, stretching from the Sea of Okhotsk in the north to the East China Sea and Taiwan in the south...
, there is a specific license for tax advisors called . In order to obtain this qualification, an individual must pass a special state examination, or already be qualified as an attorney at law
Attorney at law (Japan)
In Japan, form the base of the country's legal community. They are the only individuals authorized to represent others and they are automatically qualified to practice in most Japanese legal professions...
or certified public accountant
Certified Public Accountant
Certified Public Accountant is the statutory title of qualified accountants in the United States who have passed the Uniform Certified Public Accountant Examination and have met additional state education and experience requirements for certification as a CPA...
.
United Kingdom
In the UK, guidelines concerning professional conduct in relation to taxation are published in conjunction with the Chartered Institute of Taxation, the Association of Taxation TechniciansAssociation of Taxation Technicians
The Association of Taxation Technicians, or ATT, is the leading professional body in the UK for those providing tax compliance services and related activities, with over 6,000 members.The ATT is based in London, UK....
, the Institute of Indirect Taxation
Institute of Indirect Taxation
The Institute of Indirect Taxation is a professional body in the United Kingdom. Its members specialise in the study and practice of indirect taxes. The body was formed in July 1991 and formally launched in October 1991. It gained permission to call itself an institute in December of the same year...
, the Institute of Chartered Accountants in England and Wales, the Institute of Chartered Accountants of Scotland
Institute of Chartered Accountants of Scotland
The Institute of Chartered Accountants of Scotland is the Scottish professional body of Chartered Accountants . It is a regulator, educator and influencer.ICAS act as a thought leader and voice of the professional business community...
and the Association of Chartered Certified Accountants
Association of Chartered Certified Accountants
Founded in 1904, the Association of Chartered Certified Accountants is the global body for professional accountants offering the Chartered Certified Accountant qualification . it is one of the largest and fastest-growing global accountancy bodies with 147,000 members and 424,000 students in 170...
. These were prepared for the assistance of members of the various associations both generally in dealing with clients and the tax authorities and specifically in relation to irregularities and errors.
The guidelines, which include practical advice about a range of legal and ethical issues, are summarised as:
- A member’s primary duty is to ensure that his actions comply with the law. He owes a contractual duty to the client to act for him with the requisite degree of skill and care, and the contractual relationship should be governed by a letter of engagement. The member also has duties to the tax authorities, notably of compliance with the law and the honest presentation of his client’s circumstances.
- It is the taxpayer’s responsibility to ensure that returns made to the tax authorities are correct and complete. It is for the member to assist him to decide on the extent and manner of disclosure of facts in relation to his tax affairs.
- Where a member becomes aware that irregularities have occurred in relation to a client’s tax affairs he should advise the client of the consequences, and the manner of disclosure. If necessary, appropriate specialist advice should be taken.
- Where a client refuses to follow the advice of a member in relation to issues involving disclosure, the member should consider whether he should continue to act. If appropriate, specialist advice should be taken.
- If mistakes are made by the tax authorities there may be a need, and in some cases a duty, on the part of the client and sometimes the member, to put matters right.
- Members may have statutory duties of disclosure where they have suspicions of criminal activity.
- When approached for information on a client’s affairs by another adviser the member should ensure that he has his client’s authority before making any disclosure.
United States
In the United States, paid tax return preparers are regulated but not licensed by the Internal Revenue ServiceInternal Revenue Service
The Internal Revenue Service is the revenue service of the United States federal government. The agency is a bureau of the Department of the Treasury, and is under the immediate direction of the Commissioner of Internal Revenue...
of the United States Department of the Treasury
United States Department of the Treasury
The Department of the Treasury is an executive department and the treasury of the United States federal government. It was established by an Act of Congress in 1789 to manage government revenue...
. There are penalties for failure to disclose the identity of the preparer on the return, for the failure to give the taxpayer a copy of the return, and for negligence in preparing the return.
Practice before the Internal Revenue Service is regulated by Treasury Department Circular No. 230
Circular 230
Circular 230 prescribes the rules governing practice before the U.S. Internal Revenue Service . These rules also require attorneys, Certified Public Accountants , Enrolled Agents, and others preparing tax returns and giving tax advice to do certain things, and prohibit certain things...
, Regulations Governing the Practice of Attorneys, Certified Public Accountants, Enrolled Agents, Enrolled Actuaries, and Appraisers before the Internal Revenue Service. Most practice is limited to attorneys, Certified Public Accountant
Certified Public Accountant
Certified Public Accountant is the statutory title of qualified accountants in the United States who have passed the Uniform Certified Public Accountant Examination and have met additional state education and experience requirements for certification as a CPA...
s (CPAs), Enrolled Agent
Enrolled Agent
An Enrolled Agent is a tax professional recognized by the United States federal government to represent taxpayers in dealings with the Internal Revenue Service...
s, and Enrolled Actuaries
Enrolled Actuary
An Enrolled Actuary is an actuary who has been licensed by a Joint Board of the Department of the Treasury and the Department of Labor to perform a variety of actuarial tasks required of pension plans in the United States by the Employee Retirement Income Security Act of 1974...
. Rendering tax advice is also regulated by Circular 230
Circular 230
Circular 230 prescribes the rules governing practice before the U.S. Internal Revenue Service . These rules also require attorneys, Certified Public Accountants , Enrolled Agents, and others preparing tax returns and giving tax advice to do certain things, and prohibit certain things...
.
Failure to uphold these standards can result in disciplinary action ranging from reprimand to permanent disbarrment from practice.
Tax Professional is a generic term in the United States describing a variety of professions including Enrolled Agent
Enrolled Agent
An Enrolled Agent is a tax professional recognized by the United States federal government to represent taxpayers in dealings with the Internal Revenue Service...
s, Certified Public Accountant
Certified Public Accountant
Certified Public Accountant is the statutory title of qualified accountants in the United States who have passed the Uniform Certified Public Accountant Examination and have met additional state education and experience requirements for certification as a CPA...
s, Financial Planner
Financial planner
A financial planner or personal financial planner is a practicing professional who helps people deal with various personal financial issues through proper planning, which includes: cash flow management, education planning, retirement planning, investment planning, risk management and insurance...
s, Accountant
Accountant
An accountant is a practitioner of accountancy or accounting , which is the measurement, disclosure or provision of assurance about financial information that helps managers, investors, tax authorities and others make decisions about allocating resources.The Big Four auditors are the largest...
s, Tax Preparers, and some Lawyer
Lawyer
A lawyer, according to Black's Law Dictionary, is "a person learned in the law; as an attorney, counsel or solicitor; a person who is practicing law." Law is the system of rules of conduct established by the sovereign government of a society to correct wrongs, maintain the stability of political...
s.
Until the year 2010, the United States Department of Treasury's Internal Revenue Service
Internal Revenue Service
The Internal Revenue Service is the revenue service of the United States federal government. The agency is a bureau of the Department of the Treasury, and is under the immediate direction of the Commissioner of Internal Revenue...
did not require certification of individual tax practitioners. As of mid-2010, the IRS was working on proposed changes that will eventually require the registration of almost all paid federal tax return preparers. The new rules will require that some paid preparers pass a national tax law exam and undergo continuing education requirements. See Tax preparation
Tax preparation
Tax preparation is the process of preparing tax returns, often income tax returns, often for a person other than the taxpayer, and generally for compensation. Tax preparation may be done by the taxpayer with or without the help of tax preparation software and online services...
.
In the United States, by far the largest segment of tax professionals are individual tax preparers.
See also
- Association of Taxation TechniciansAssociation of Taxation TechniciansThe Association of Taxation Technicians, or ATT, is the leading professional body in the UK for those providing tax compliance services and related activities, with over 6,000 members.The ATT is based in London, UK....
- Certified Public AccountantCertified Public AccountantCertified Public Accountant is the statutory title of qualified accountants in the United States who have passed the Uniform Certified Public Accountant Examination and have met additional state education and experience requirements for certification as a CPA...
- Chartered Institute of Taxation
- Institute of Indirect TaxationInstitute of Indirect TaxationThe Institute of Indirect Taxation is a professional body in the United Kingdom. Its members specialise in the study and practice of indirect taxes. The body was formed in July 1991 and formally launched in October 1991. It gained permission to call itself an institute in December of the same year...
- Taxation in GermanyTaxation in GermanyTaxes in Germany—being a Federal Republic—are levied by the Federation , the States as well as the Municipalities . Many direct and indirect taxes exist, whereof income tax and VAT are the most relevant. The German word for tax is die Steuer which originates from the Old High German word stiura...
- Worshipful Company of Tax AdvisersWorshipful Company of Tax AdvisersThe Worshipful Company of Tax Advisers is a Livery Company of the City of London. It was started as a Guild of the City of London by some members of the Chartered Institute of Taxation in 1995 and became a Company without Livery in 2000. On 18 January 2005, the Court of Aldermen granted the...