My comment on revised Statements on Standards for Tax Services

The AICPA proposed revisions to its Statements on Standards for Tax Services. Tax practitioners are asked to provide comments on the proposed SSTS changes. I submitted a comment regarding the disclosure on the use of estimates when a taxpayer is ill.


The current standard on the use of estimates under unusual circumstances 2.4.1 says (emphasis added): “Specific disclosure that an estimate is used for an item on the return is not generally required; however, such disclosure should be made in unusual circumstances where nondisclosure might mislead the taxing authority regarding the degree of accuracy of the return as a whole. Some examples of unusual circumstances include: a. a taxpayer has died or is ill at the time the tax return must be filed”.

In other words, the Statement is saying that if the tax preparer has information, or makes an assessment, that the taxpayer is ill and also uses an estimate in the preparation of the return, then the preparer should report to the taxing authority that an estimate was used. I believe this Statement is inappropriate, unprofessional, and possibly a violation of the taxpayer’s rights to medical information privacy. I am especially concerned with the Statement when a mental illness is the underlying issue.

Public health authorities generally acknowledge that we are facing an epidemic of mental illnesses. I notice that these types of illnesses often affect taxpayers’ ability to fulfill their obligations to submit appropriate tax returns. A wide range of these special circumstances may trigger the need for the tax preparer to use estimates in the preparation of a tax return. These special circumstances may include, for example, ADD, PTSD, autism, prescription or illegal drug use, other substance abuse, dementia, lingering covid, stroke and other special circumstances

It is not appropriate for us as tax preparers to make an assessment of a possible medical illness. Nor is it appropriate for us to report that we have information of a private medical illness. Our role is simply to prepare the tax return using the best information, appropriate methods, and estimates as necessary.

I feel strongly that we should not consider reporting to tax authorities that an estimate was used because the tax preparer knows or suspects tax the taxpayer is suffering from an illness.