50 years ago in The Tax Adviser

Here are some highlights from the April 1970 issue. Click here to view an interactive timeline of tax and other events from the past 50 years.

Tax planning

Should accountants provide or refuse to provide a tax planning service? Is tax planning of benefit to the community? Are suggestions that it is a crime justified? These questions can be answered only if we understand the meaning of and work involved in tax planning. ...

[T]he opportunities for tax planning are almost limitless. Only three factors prevent the general practitioner from exploiting the field on behalf of his clients: (a) time, (b) knowledge, and (c) the ability of the client to pay an economic fee.

— K.S. Carmichael, FCA, "Tax Planning — A Service or a Crime?" p. 225. Carmichael was a sole practitioner in London.

Earned income relief

It has been over twenty-six years since the Congress last recognized that the usual earned income should be given special relief from the graduated tax rates. A provision which had allowed a limited earned income credit (not exceeding $1,400) against an individual's tax was eliminated for years beginning after 1943.

New Sec. 1348 provides that under certain conditions an individual's earned income, after prescribed modifications, is not to be subject to a graduated tax rate in excess of 50%. [footnotes omitted]

— Peter Elder, CPA, and James F. Kennedy, CPA, "Relief for Earned Income — The 50% Maximum Rate," p. 229. Elder was a partner and Kennedy was a manager in the New York City office of Peat, Marwick, Mitchell & Co.

Using paraprofessional help

In view of the increasing cost of labor and the shortage of professional help, the use of paraprofessional personnel in the preparation of tax returns should be considered.

This past tax season, one CPA firm was successful in using two former comptometer operators to assist in the preparation of Form 1040 — Federal Individual Income Tax Return. Previously, these employees had performed the mechanical job of checking the footing on completed returns.

Through the use of [an] excellent correspondence course ... the two employees were trained to prepare individual returns. After completing the course, they participated in an AICPA workshop on individual income tax returns.

As a result of this program, two valuable employees were given an opportunity to prove themselves capable of handling greater responsibility.

— Sidney Kess, CPA, J.D., LL.M., ed., "Tax Practice Management: Tax Personnel," p. 259. Kess was then national director of taxation with Main Lafrentz & Co. in New York City.

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