AN INSTITUTE of Chartered Accountants of Jamaica's (ICAJ) member rendering professional tax services is entitled to put forward the best position in favour of a client, or an employer, provided the service is rendered with professional competence, does not in any way impair integrity and objectivity, and is in the opinion of the member consistent with the law. Doubt may be resolved in favour of the client or the employer if there is reasonable support for the position.
A member should not hold out to a client or an employer the assurance that the tax return prepared and the tax advice offered are beyond challenge. Instead, the member should ensure that the client or the employer is aware of the limitations attached to tax advice and services so that they do not misinterpret an expression of opinion as an assertion of fact.
A member who undertakes or assists in the preparation of a tax return should advise the client or the employer that the responsibility for the content of the return rests primarily with the client or employer. The member should take the necessary steps to ensure that the tax return is properly prepared on the basis of the information received.
Tax advice or opinions of material consequence given to a client or an employer should be recorded, either in the form of a letter or in a memorandum for the files.
A member should not be associated with any return or communication in which there is reason to believe that it:
(a) contains a false or misleading statement;
(b) contains statements or information furnished recklessly or without any real knowledge of whether they are true or false; or
(c) omits or obscures information required to be submitted and such omission or obscurity would mislead the revenue authorities.
Members should take note that Section 99 of the Income Tax Act makes liable to penalties a person who for himself or any other person, makes a false statement or representation in connection with a tax return. The section also makes persons who aid or abet another person in such falsehoods liable to penalties.
A member may prepare tax returns involving the use of estimates if it is impractical under the circumstances to obtain exact data. When estimates are used, they should be presented as such in a manner so as to avoid the implication of greater accuracy than exists. The member should be satisfied that estimated amounts are reasonable under the circumstances.
In preparing a tax return, a member ordinarily may rely on information furnished by the client or employer provided that the information appears reasonable. Although an examination of documents or other evidence in support of the information is not required, the member should encourage, when appropriate, such supporting data to be provided.
In addition, the member:
(a) should make use of the client's returns for prior years whenever feasible;
(b) is required to make reasonable inquiries when the information presented appears to be incorrect or incomplete; and
(c) is encouraged to make reference to the books and records of the business operations.
When a member learns of a material error or omission in a tax return of a prior year (with which the member may or may not have been associated), or of the failure to file a required tax return, the member has a responsibility:
(a) to promptly advise the client or employer of the error or omission and recommend that disclosure be made to the revenue authorities. The member is not obligated to inform the revenue authorities, nor may this be done without permission, except when specifically required by law. In these circumstances the member should advise the client or employer of the position before informing the authorities and should give no additional information to the authorities without the consent of the client or the employer.
(b) if the client or the employer does not correct the error the member:
(i) should inform the client or the employer that it is not possible to act for them in connection with that return or other related information submitted to the authorities; and
(ii) should consider whether continued association with the client or employer in any capacity is consistent with professional responsibilities.
(c) if the member concludes that a professional relationship with the client or employer can be continued, all reasonable steps should be taken to ensure that the error is not repeated in subsequent tax returns.
