50 years ago in The Tax Adviser

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

CPAs as advocates

I am firmly convinced that the CPA, when representing a client before the IRS, must properly act as an advocate, not as an independent judge or arm of the Service. His primary obligation is to his client. . . . [T]o restrict the proper role of the CPA alone as an advocate in administrative proceedings before the IRS beyond what the Treasury's rules of practice permit attorneys and enrolled agents to do — or for that matter their own rules of professional conduct prescribe — under comparable conditions, would do a serious disservice to both the CPA and his taxpayer-client.

— Bernard Barnett, CPA, "Readers Write: Tax Practice: Adversary, No. Advocate, Yes!," p. 476. Barnett was with Seidman & Seidman in New York City and was a member of The Tax Adviser's Editorial Advisory Board.

Secret foreign bank accounts

Now we come to a matter of growing concern, that of secret foreign bank accounts . . . The IRS is using a three-pronged approach in this matter. First is the legislative, since current law does not provide our agents with all of the tools they need to cope with the illegal use of foreign banks. . . . The second approach we are using is that of direct negotiations with foreign governments in order to get the most information available. . . . The third and simultaneous approach we are using is increased administrative and enforcement activity on our own part, which includes … the declaration on an income tax return of the existence of a foreign bank or other account.

— Randolph W. Thrower, "Recent Developments in International Tax Administration and Enforcement," p. 479. Thrower was the commissioner of Internal Revenue.

Salaried-only retirement plans

It has not been uncommon for a corporation to have two qualified retirement plans, one in the form of a pension plan covering hourly employees and the other a pension or profit-sharing plan covering salaried employees. In many cases, the plan covering hourly employees is a union-negotiated retirement plan. Employees who are members of the union are generally prohibited from participating in a company retirement plan, and as a result they may only participate in the union retirement plan. Therefore, it is often difficult to have enough low-paid common law employee participants in the salaried-only plan to meet the coverage requirements of Sec. 401(a)(3)(B).

— Herbert J. Lerner, CPA, "Tax Clinic: Problems of Qualifying Salaried-Only Plans,"
p. 518. Lerner was with Ernst & Ernst in Washington, D.C.

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