Monday, September 4, 2017


I received several responses to my post on ethics from various sources.  Many agreed with me -
ü I read your Ethics essay and totally agree. Ethics is within a person's DNA. There are a lot of Circular 230 practitioners who stretch the law. I question their taxation morals and ethics. Yet, they sit next to me at Ethics Seminars. Same goes for Insurance, Real Estate and Financial Planning. What I've figured out is that the elected officials can better keep their jobs if they tell the public the assorted professionals go through Ethics training on a regular basis. It's a smoke and mirrors routine that we get stuck with.”
ü Let's see. All the questions on ethics tests boil down to "Should I lie?" If you're an honest bloke, the answer is obvious. If you're a cheating scoundrel, the answer is STILL obvious. Both groups say No although only one of the groups mean it. Thus, mandatory ethics classes are a waste of everyone's time.”
ü “I agree ethics should NOT be part of most CE programs. In addition to your statements, for the 'enrolled' who must have 72 CE each three years (including 2 CE per year), we cannot use excess CE. If we take more than 2 CE of ethics in a year, the excess CANNOT be counted as 'federal courses'. Rather the credits are lost. I am a frequent speaker for the IRS at annual tax updates, and they allow me 50 minutes for ethics. I have explained until I am blue in the face that since most ethics programs are 2 CE (to meet the requirements), a 1 CE class is a true waste for all.
I would rather see a triennial requirement. I also think ethics should be presented as case study and not lecture, allowing the professional to truly think about 'real world' applications of ethics.”
And some took some exception to my opinion -
First I disagree a bit on WHY we have ethics requirements. I think they exist more as a way to prevent an unethical tax professional, when being prosecuted, from having the defense of ‘I didn't know any better”’.
That is possible – but still doesn’t justify requiring at least 2 CPE per year.
. . . my opinion is that a reminder never hurts anyone. The news is filled with stories of preparers who did not get the message. And I find it a little troubling that you describe the CE course you took as "cheating" you by including the ethics requirement as part of the day.”
A reminder – yes.  But, again, not requiring at least 2 hours per year.  And why is it troubling?  I pay for 8 50-minute hours of potentially useful tax information to help me to properly prepare 1040s and I get only 6.
I am still interested in hearing more thoughts and comments of fellow tax pros.
While we are on the subject of ethics let me share another opinion of mine (taken from my SO YOU WANT TO BE A TAX PREPARER, reviewed here) -
During the redundant ethics preaching that tax professionals are forced to sit through each year at CPE offerings I have found that much of what the instructors teach regarding privacy is, to me, totally ridiculous.
What am I talking about?
Say I was talking to a friend, who was also a client, in a public place and another client, let’s call him George, who my friend coincidently also knows, happened along, saying hello to us in passing.  If my friend asked me, “How do you know George,” I would normally think nothing of replying, “I have been doing his taxes for years”.
But by doing so, I am told, I would be seriously violating “privacy” rules!
The issue of privacy applies to what the client tells me about his personal finances, and not the fact that he is a client or friend.  Obviously I am not allowed to discuss the details of George’s Form 1040, or any other financial or personal information I was told in confidence in the course of preparing his return, with my friend.  But not being able to simply mention that he is also a client is pure nonsense.
If a friend or fellow client asks the question in casual conversation I do not see a problem.  If a stranger comes up to me out of the blue and asks if and how I know a client I will be on my guard and ask why they want to know.  And if a stranger, to me, or only a casual acquaintance, comes up to the two of us and asks how we know each other I will let the client with me respond first and take my lead from him or her.
Many tax professionals have “waiting rooms”, which are often crowded during the tax season.  We do not segregate clients in individual cubicles so they do not see each other, or ask them to wear masks while sitting in the waiting room.  Often in the past, when I had an office open to the public, I had a client enter my waiting area and be surprised to see a friend or co-worker sitting there.  Nobody ever ran out of the office in fear because they were seen there.    
I am certainly not going to take out a full page ad with my client list in the local newspaper.  But the fact that a person is my client is not a state secret.
It is different with a doctor, whose specialty may “betray” personal medical information that the client does not want known.  And perhaps, for the same reason, with certain lawyers, such as the divorce attorney.  But there is nothing revealing in the mere fact that a person uses a professional to prepare his tax return, other than the intelligence of that person.
Looking forward to your thoughts and comments on this aspect of “ethics”.

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