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||The examples and perspective in this article deal primarily with the United States and do not represent a worldwide view of the subject. (December 2010)|
A tax advisor or tax consultant is a financial expert specially trained in tax law. Some countries require tax advisors to verify the balance sheets 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.
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 Technicians, 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:
- A member’s primary duty is to ensure that his actions comply with the law. He/she owes a contractual duty to the client to act for him/her 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.
In the United States, paid tax return preparers are regulated but not licensed by the Internal Revenue Service 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 Accountants (CPAs), Enrolled Agents, 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.
In the United States, the term "tax professional" is a generic term describing a variety of professions including enrolled agents, Certified Public Accountants (CPAs), financial planners, accountants, tax preparers, and some lawyers.
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.
In Japan, there is a specific license for tax advisors called certified public tax accountant (税理士 zeirishi?). 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.
- Association of Taxation Technicians
- Certified Public Accountant
- Chartered Institute of Taxation
- Institute of Indirect Taxation
- Taxation in Germany
- Worshipful Company of Tax Advisers
- "Tax Advisor Definition". Investopedia. Retrieved 10 February 2013.
- "7 Questions to Ask a Tax Consultant". US Tax Shield. Retrieved 10 February 2013.
- Codified in regulations at 31 C.F.R. subtitle A, part 10.
- "Bundessteuerberaterkammer" (in German). Bundessteuerberaterkammer. Retrieved 10 February 2013.
- Japan Federation of Certified Public Tax Accountants' Organizations