CPA's spokesman on taxes;Constructive services;

              THE CPAs
SPOKESMAN ON
TAXES
"Mortimer Caplin deserves a lot of credit," said Thomas
J. Graves, partner in the Executive Office, not long ago.
"He has helped to stiffen the moral fiber of taxpayers
and tax collectors alike."
As general chairman of the committee on federal
taxation of the American Institute of CPAs, Mr. Graves
is in a better position than most people to observe the
work of the Commissioner of Internal Revenue. The
committee maintains virtually continuous liaison with
the Internal Revenue Service.
Commissioner Caplin, who has just resigned his post
after nearly four years in office, has in a sense returned
the compliment by the keen interest he has shown in the
committee's program as a means of achieving his own
objectives. Criticism of tax morals has been mounting
for years, and the tax committee has placed high on its
crowded agenda the job of defining just what a CPA's
responsibilities are in tax practice. Since this is the first
time that any profession or group has ventured to define
a tax practitioner's responsibilities, the Commissioner's
interest is not surprising.
For nearly ten years the Institute has been consider­ing
this question in an exploratory sort of way. The sub­committee
on responsibilities in tax practice, formed in
1962, is the third committee to wrestle with it and the
first to come forth with tangible results. Based on its rec­ommendations,
the federal tax committee is issuing the
first of a series of Statements on Responsibilities in Tax
Practice, intended to guide a CPA within the general
limits of the Institute's Code of Professional Ethics. In
essence, it explains the circumstances in which a CPA
who prepares a client's federal income tax return must
"verify" the return by signing it.
This is only the first of several such "responsibility"
statements which the committee expects to issue. Other
topics under consideration are: whether or not you must
sign as a preparer when you review a return; what effect
examinations of prior years have on preparing a return
for the current year; and how omissions and errors of
prior years affect preparation of the current year's
return.
The work of the subcommittee on responsibilities in
tax practice is but a small part of the program of the fed­eral
taxation committee. However, like the part of the
iceberg above the water, it is conspicuous, and its fate is
being followed by other interested groups and profes­sions.
The Firm's professional staff will doubtless hear it
mentioned by IRS agents, lawyers, and representatives
of other organizations—the Tax Executives Institute, for
example.
Less conspicuous projects may call for such delicate
negotiations that no attention can be called to them.
Recently, for example, Mr. Graves talked with the IRS
about its desire to see accountants' audit working pa­pers
when it examines taxpayers' returns. Some CPAs,
with their clients' permission, have been willing to fur­nish
the Service with information from their audit pa­pers
in response to examiners' questions. For the IRS to
insist on regular examinations of audit papers would be
another matter. It could jeopardize the CPA's confiden­tial
relationship with his client, and it could inhibit the
audit process itself. After talking with Mr. Graves sev­eral
times over a period of months, IRS officials agreed
tentatively not to seek routine access to audit papers.
The discussions have not yet been concluded.
How Work Gets Done
There are seven other subcommittees of the com­mittee
on federal taxation, which deal with everything
from estate planning to the administrative procedures
of the IRS. An executive group, composed of the gen­eral
chairman and all subcommittee chairmen, reviews
all committee matters and considers what issues the full
committee should take up. With 66 members, it is the
largest technical committee of the Institute and one of
the oldest, having first been organized in 1925. It is also
one of the most demanding. Mr. Graves estimates that
its affairs absorb a good half of his time. Often he is on
the phone for committee matters three to five times a
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