Advanced Taxation, Chapter 1: "Introduction to Tax Practice and Ethics" flashcards

Practice of Taxation

(1.1) The practice of applying tax laws, rules, regulations, and judicial rulings to specific transactions.

Taxation

(1.1) The process of collecting revenue from citizens to fund government operations.

Tax Research

(1.1) An element of tax practice which involves identifying, interpreting, and applying relevant tax laws and authorities to resolve complex tax issues and support accurate decision-making.

Tax Compliance

(1.1) An element of tax practice which involves accurately following tax laws and regulations to prepare, file, and report all required tax obligations on time.

Tax Planning

(1.1) An element of tax practice involving the strategic arrangement of financial activities to minimize tax liability while complying with applicable laws and regulations.

Tax Litigation

(1.1) An element of tax practice involving the process of resolving disputes between taxpayers and law authorities through administrative proceedings or court actions.

Tax Avoidance

(1.1) A legal, legitimate objective to minimize tax liability.

Tax Evasion

(1.1) The process of illegally refusing to pay taxes.

Open Transactions

(1.1) A tax plan for pending future transactions.

Closed Transactions

(1.1) A tax plan for how to best present past transactions.

Contingent Fee

(1.1) A fee based on the successful avoidance of challenge by the IRS, or a successful result in an audit or litigation challenge.

Responsibilities

(1.2) An AICPA Code of Conduct principle which declares that members should exercise professional and moral judgments.

Public Interest

(1.2) An AICPA Code of Conduct principle which declares that members should act in a way that serves the public interest, honors the public trust, and shows a commitment to professionalism.

Integrity

(1.2) An AICPA Code of Conduct principle which declares that members should perform with the highest level of integrity.

Objectivity and Independence

(1.2) An AICPA Code of Conduct principle which declares that members should maintain objectivity and be free of conflicts.

Due Care

(1.2) An AICPA Code of Conduct principle which declares that members should practice professional and ethical standards and strive to improve competence.

Scope and Nature of Services

(1.2) An AICPA Code of Conduct principle which declares that members of the public practice should observe principles of the Code.

Independence Rule

(1.2) An AICPA Code rule which declares that a CPA must be independent of the client they provide services for.

Contingent Fee Rule

(1.2) An AICPA Code rule which declares that a CPA cannot charge/receive a contingent fee for professional services from a client.

Commissions and Referral Fees Rule

(1.2) An AICPA Code rule which declares that a CPA cannot receive a payment from the referral of a third party’s product/service.

Form of Organization and Name Rule

(1.2) An AICPA Code rule which declares that a CPA can only practice in a manner allowed by state law/regulation. They cannot use a misleading name.

Advertising and Solicitation Rule

(1.2) An AICPA Code rule which declares that a CPA cannot use false, misleading, or deceptive advertising or solicitation.

Confidential Client Information Rule

(1.2) An AICPA Code rule which declares that a CPA cannot disclose client information without their consent.

Integrity and Objectivity Rule

(1.2) An AICPA Code rule which declares that a CPA should render services with integrity, without any conflicts of interest.

General Standards Rule

(1.2) An AICPA Code rule which declares that CPAs must maintain competence, due professional care, adequate planning and supervision, and obtain relevant data for conclusions/recommendations.

Compliance with Standards Rule/Accounting Principles Rule

(1.2) An AICPA Code rule which declares that a CPA must comply with all promulgated standards adopted by AICPA Council designees.

Acts Discreditable Rule

(1.2) An AICPA Code rule which declares that a CPA must not commit an act that discredits the profession.

Nonregulatory Ethics

(1.2) The process of making ethical choices that are not clearly defined in standards or laws of conduct.

End-Based Reasoning

(1.2) A form of ethical reasoning that suggests an action is “right” if it produces at least as much net good as any alternative action that could have been produced.

Rule-Based Reasoning

(1.2) A form of ethical reasoning which suggests that rules apply to everyone, with no exceptions.

Care-Based Reasoning

(1.2) A form of ethical reasoning which suggests that decisions are based on the treatment one would like to receive.

Ethical Professional Behavior

(1.2) The process of consistently applying honesty, integrity, and professional judgment to ensure compliance with laws and uphold trust.

Morality

(1.2) A form of ethical professional behavior which suggests there is a continuum of morally right and wrong accountants tread through their actions.

Social Responsibility

(1.2) A form of ethical professional behavior which suggests that accountants should exceed the minimum required legal responsibility to perform a social benefit through their practices.

Business Ethics

(1.2) A form of ethical professional behavior which suggests that judgments must be exercised for a purpose greater than simply making a profit.