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A CPA firm planning to apply the new reasonably rely on tools used in the performance
standard first must consider whether the firm’s of tax services.
existing data protection efforts are reasonable. SSTS Section 1.4. applies to a broad range of
As explained in SSTS Section 1.3.6., factors tools including but not limited to tax preparation
including the impact of continuing technological software, tax calculation tools, and tax research
developments, member-specific factors such as the tools. Members are allowed to reasonably rely on
type of service being provided, and firm size are tools as long as they use appropriate professional
taken into account when considering whether a judgment and professional care in selecting and
plan is reasonable. For example, a sole practitioner using that tool. For example, it would generally
would not be expected to have a plan as complex not be reasonable for a member to assume a tax
as that of a 100-member firm but would be return prepared using a standard tax compliance
expected to take basic steps to protect taxpayer software package was complete without reviewing
data, which might include installing and using the prepared tax return itself. The member should
virus-scanning software, using VPN software, and also employ a normal tax return review process,
securing computers with a password. Also note taking steps such as confirming that taxable
that the Gramm-Leach-Bliley Act, P.L. 106-102, income computed by the tax return software
establishes a requirement for tax preparers to matches the expected taxable income from the
implement an information security plan. The taxpayer’s trial balance.
AICPA has developed a sample template available In the case of tools used for tax research, the
to Tax Section members. member may not be able to confirm the accuracy
Once members have verified they have taken of a specific source as directly. Instead, the mem-
reasonable efforts to protect taxpayer data, they ber should consider the source of the research. For
should consider whether additional steps are example, documentation obtained from a promi-
advisable. For example, members may choose to nent subscription-based tax research software ven-
put in place a plan to ensure unnecessary client dor may have more weight than opinion articles
data is not maintained, mask personally iden- from independent internet sources. The standard
tifiable information where permissible, and/or does not, however, prevent a member from using
establish a training program around data protec- an opinion article in developing a position; a
tion measures. member should use professional judgment to
apply sound tax principles in applying the opinion
SSTS 1.4., Reliance on Tools put forward in that article.
New standards: The task force believes the majority of mem-
Section 1.4.3. A member should exercise ap- bers already follow the proposed standard, exercis-
propriate professional judgement and profes- ing diligence in both the selection of tax tools and
sional care when relying on a tool. their use. This standard will assist those members
when working through an issue arising from soft-
Section 1.4.4. A member may reasonably rely ware errors. Although reliance on software alone
on tools used in providing tax services to a will not constitute an adequate defense, the task
taxpayer. Use of the tool does not absolve the force believes this standard establishing principles
member of his or her professional obligations for the reliance on tools will be overwhelmingly
under AICPA or other applicable ethi- beneficial to members (see, e.g., “Reliance on Tax
cal standards. Software Does Not Let Taxpayer Off the Hook,”
Tax Insider, Aug. 3, 2017, discussing a Tax Court
CPAs rely on technology to provide services case where the taxpayer was denied relief when
more today than at any point in history. That asserting reliance on personal tax preparation
trend will likely continue with the introduction software).
of artificial intelligence, data science, quantum To implement this standard, firms should re-
computers, and other developing technologies. view their current tool selection process to ensure it
However, tax professionals do not have written meets the essence of the standard. For many widely
standards allowing them to place a degree of available and relied-upon tax software packages,
reliance on these tools when providing services. members may find that a basic review of a new
The task force identified the need for a standard software vendor’s offerings is sufficient to demon-
that protects members by defining when they may strate that reliance on the tool is appropriate.

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