Comment: PEEC’s Tax Services proposal

In our letter responding to the AICPA’s Professional Ethics Executive Committee’s (PEEC’s) proposed revisions to the “Tax Services” interpretation (ET Sec. 1.295.160) of the  “Independence Rule” (ET Sec 1.200.001), we agree that tax advisory and tax planning services should be covered within the scope of the Tax Services interpretation and that appropriate guidance is essential to address potential self-review and advocacy threats to independence when members perform tax services for attest clients.

However, we believe that the proposal lacks sufficient rationale and analysis for applying a “more likely than not” standard in providing tax services to private businesses if attest services are also provided. The proposal seems substantively silent in explaining why tax services performed for privately held attest clients must be measured at a more likely than not threshold. In our view, more deliberation and discussion is warranted before a more likely than not tax standard is adopted and broadly applied by the AICPA to tax services applied to a firm’s attest clients.

Download our letter to read our comments in full.