The United States tax system is complex and in a state of continuous change. The use of taxes
as an instrument of economic and social policy and the competing objectives of various interest
groups have led to frequent legislative changes in the tax laws.
Certified public accountants (CPAs) advise both individuals and businesses on all aspects of
compliance with the tax laws. CPAs are bound by a stringent code of professional ethics and
are qualified through their education and experience to provide a wide range of tax services
relating to personal and business decisions. They prepare tax returns and related schedules,
provide advice on tax issues, help individuals and businesses plan effective tax strategies, and
represent taxpayers before taxing authorities.
CPAs' knowledge and training in tax matters and their awareness of new developments and
emerging issues enable them to develop effective tax-planning techniques that often result in
substantial tax savings. Similarly, they use their experience in tax return preparation to explore
the many facets of personal finance or running a business. As tax advisors, CPAs can provide
the following services:
Tax consulting
Personal tax planning
Business tax advice
Representation before tax authorities
Other tax services
Tax consulting
Today's CPAs are problem solvers. They can
Advise on the tax effects of transfers of ownership among family members in a business.
Provide income and estate tax counseling with respect to the financial settlements involved in
separation and divorce.
Design compensation, fringe benefit, and retirement plans for a company.
Plan for a change in a corporation's accounting methods.
Obtain an advance ruling from the IRS on the tax consequences of a proposed corporate
acquisition of the stock or assets of another company.
Analyze the tax aspects of investment opportunities.
Personal tax planning
As financial planning experts, CPAs can also develop strategies to meet the long-term needs of
yourself and your family.
CPAs' expertise and in-depth understanding of complex tax rules and regulations can help
individuals and families improve their tax position and realize significant tax savings.
CPAs have the knowledge to assist in developing an appropriate estate plan for building and
preserving assets while minimizing estate and inheritance taxes.
Business tax advice
There are tax implications to most business decisions, such as relocation or changes in
inventory procedures. Before making such decisions, consult a CPA who can give advice on
the tax effects they may have on various types of business organizations - such as a sole
proprietorship, a partnership, or a corporation.
They offer sound tax and accounting advice in connection with the organization, purchase, sale,
or merger of a business. CPAs advise business owners on establishing pension and
profit-sharing plans and preparing all types of tax reports for such plans.
Representation before tax authorities
A CPA can act as a client's representative before state and federal tax authorities. A CPA
might serve as a personal representative, or reply to correspondence concerning tax returns or
provide explanations, schedules, and other documents in tax examinations.
CPAs get involved in specific activities such as the following:
Challenging the IRS position regarding issues on which there are conflicting points of view
Preparing a protest that cites reasonable cause to abate a penalty assessed to an individual for
the late filing of a tax return
Presenting oral and written arguments before an IRS appeals conference
Other tax services
The CPA is an important part of your professional advisory team and a CPA's advice is
essential for special projects. For example, a tax consulting engagement for a commercial real
estate venture will involve the CPA in consultations with the developers, syndicator, investment
bankers, architects, construction engineers, and attorneys.
In a pension and profit-sharing plan engagement, the CPA will work with actuaries, attorneys,
insurance company representatives, trustees of the plan, and investment counselors.
Whether you're concerned about your personal tax return, looking at your company's finances,
or assessing your financial goals, CPAs are the professionals trained to give you sound advice.
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