Any discussion of ethics at its core involves understanding right and wrong. This may seem simple on the surface, but as anyone who has studied philosophy will readily admit, there is much more complexity to this practice. In professions like tax preparation, accountancy, and other similar professions, ethical questions are likely to arise on a regular basis. Naturally, federal and local laws govern a great deal of these decisions, as well as ethical codes laid out by professional organizations. At the end of the day, making that crucial distinction between right and wrong in a given scenario requires tax professionals to use their training to make an informed judgment. In addition to equipping students to navigate complex tax laws, the Online Master of Science in Taxation from Northeastern University reinforces the importance of professional ethics.
Laws governing tax practice
Any tax professional with the appropriate education, training, and experience is certainly familiar with the U.S. tax code, along with a litany of state and local laws and regulations governing tax practice. Whether they are working with clients to prepare individual tax returns, working as an accountant for a company, or providing any kind of professional tax advice, anyone interfacing directly or indirectly with the IRS is beholden to a code of conduct known as Circular 230 [i].
As an official publication of the governing body of the IRS, the Department of the Treasury, Circular 230 is the defining standard of conduct for any Certified Public Accountant, Enrolled Agent, tax attorney, and anyone else working as a taxation professional [ii]. The document, available on the IRS website, is very dense, but tax professionals don’t need to read it line by line before they can understand its main tenets and use it in their practice.
To advance the goals outlined in Circular 230, the IRS’ Office of Professional Responsibility (OPR) acts as an official representative and advocate for ethical standards in tax practice [iii]. As stated on its website, “OPR’s vision, mission, strategic goals, and objectives support effective tax administration by ensuring all tax practitioners, tax preparers, and other third parties in the tax system adhere to professional standards and follow the law” [iii].
To accomplish this mission, OPR listed three primary objectives [iii]:
- “Increase awareness and understanding of Circular 230 and OPR through outreach activities [iii].
- Apply the principles of due process to the investigation, analysis, enforcement, and litigation of Circular 230 cases [iii].
- Build, train, and motivate a cohesive OPR team [iii].