7v¢-~«'-u«.-- AN ANALYSIS OF TAX PRACTICE WITH IMPLICATIONS FOR THE IMPROVEMENT OF TAX INSTRUCTION. Thesis for the Degree of Ph. D. MICHIGAN STATE UNIVERSITY DWARD c. FOTI-I ' 1971 ' —.~-,y—. n ,_ .'}"v”v*/D’F -- , . . . .. ,JIJr’v'A , v.. -.., . r. .l.,....- p5,. . - 4 "—0 .5? 5;." ; ..,. -, .. . ‘-w“—V V ~ "hint! L I BR A R Y 1 Michigan Stew - University ' This is to certify that the thesis entitled AN ANALYSIS OF TAX PRACTICE WITH IMPLICATIONS FOR THE IMPROVEMENT OF TAX INSTRUCTION presented by Edward C. Foth has been accepted towards fulfillment of the requirements for Ph.D . Accounting - Business degreem / I/‘ Date November 2, 1971 {$217 9/ éfl/ I I II IIIIAB ssons III IBIIUK mm M, II : amome av 7"? LseaAn-v Beanies ' srmamr Mmmnn III *urr.‘_ __ "(I up .- \ - ABSTRACT AN ANALYSIS OF TAX PRACTICE WITH IMPLICATIONS FOR THE IMPROVEMENT OF TAX INSTRUCTION BY Edward C. Foth The purpose of the research was to gather tax prac- titioners' recommendations regarding tax education. The study gathered specific recommendations concerning areas to be stressed in the first undergraduate tax course, the teaching of tax research procedures in college and univer- sity tax courses, the teaching of computer oriented subject matter in college and university tax courses, and the emphasis to be accorded specific tax tOpics in college and university tax courses. In addition, the study determined the relative frequency of use of tax information sources, the use of com— puters in performing tax work, the relative frequency of performance of specific types of tax service, and the nature of in-firm staff training programs in taxation. Data were gathered by means of a questionnaire sur- vey and personal interviews. A total of six hundred ques- tionnaires were sent to practitioners, with two hundred questionnaires allocated to practitioners in each of three Edward C. Foth firm classifications: (1) local public accounting firms; (2) national public accounting firms; and, (3) corporations. Separate interviews were held with the national tax training directors of seven national public accounting firms, and with tax project managers from the Professional Development Division of the American Institute of Certified Public Accountants. The data were analyzed to determine if there was any agreement between the educational recommendations made by the three practitioner groups. Of particular interest was a comparison of practitioners' recommendations with views previously expressed by academicians. The major conclusion derived from the results of the study is that there was significant agreement among tax prac- titioners in national and local public accounting firms, and in corporations, regarding certain recommendations for tax education in colleges and universities. This conclusion is e8pecially significant in View of the practitioners' diverse academic and professional qualifications, and the fact that there was no significant agreement between the three practi- tioner groups for the frequency of job activities performed. Thus, even though their job activities varied, in general, Edward C. Foth most practitioners had similar recommendations for tax educa- tion in colleges and universities. The second conclusion concerns a comparison of prac- titioners' recommendations with the recommendations made by tax professors. The results of the study indicate that according to tax practitioners, teaching emphasis has been misdirected in the first undergraduate tax course. This conclusion is reached because there was found to be no significant agreement between practitioners' and tax pro- fessors' priority rankings of areas to be stressed in the first undergraduate tax course. The third conclusion concerns whether it is feasible to divide tax subject matter into tOpics for emphasis in the classroom, and other tOpics for emphasis in professional or in-firm training programs. The practitioners' responses did not yield evidence to support the assertion that such a division of tOpics is feasible, at least not on an overall basis for the thirty-eight tOpics contained in this study. This conclusion is reached because in general, those tOpics highly ranked to be emphasized in college and university tax courses, also were highly ranked to be emphasized in professional and in-firm training programs. Similarly, those Edward C. Foth t0pics ranked to receive little emphasis in college and university tax courses, also were lowly ranked for emphasis to be accorded in professional or in-firm training programs. The fourth conclusion concerns the elimination of duplicated educational effort posited to accrue to a divi- sion of tax topics between universities and the profession. Since the study revealed concordance between a t0pic's ranking for emphasis in college and university tax courses, and the same t0pic's ranking for emphasis to be accorded in professional or in-firm tax training programs, it is doubtful that any meaningful amount of duplication can be eliminated. This conclusion also is supported by the fact that the time and expense incurred in the duplicated portion of in—firm training is mostly offset by such benefits as standardized training, g§.p£i£‘g§ corps within the firm as a result of personal interaction, and more effective training within the context of actual practice. AN ANALYSIS OF TAX PRACTICE WITH IMPLICATIONS FOR THE IMPROVEMENT OF TAX INSTRUCTION BY If“ Edward Ci Foth A THESIS Submitted to Michigan State University in partial fulfillment of the requirements for the degree of DOCTOR OF PHILOSOPHY Department of Accounting and Financial Administration 1971 @ COpyright by EDWARD CARL FOTH 1972 AC KNOWLEDGMENT S The completion of this research required the cooper- ation of many people. Although it is not feasible to acknow— ledge each individual, I wish to express my gratitude to those not mentioned. To the members of my dissertation committee, Professors Charles J. Gaa (Chairman), James C. Lampe, and Andrew C. Porter, I wish to express my sincere appreciation for their valuable assistance and constructive criticism during the preparation of this study. For the financial assistance received throughout my doctoral program, I take this opportunity to thank the American Institute of Certified Public Accountants, the Price Waterhouse Foundation,.the General Electric Co., Professor James Don Edwards, Chairman of the Department of Accounting and Financial Administration at Michigan State University, and Professor Clarence G. Avery, Chairman of the Department of Accountancy at Northern Illinois University. Special thanks to Song Ki Kim and Ronald Maxson, graduate assistants at Northern Illinois University, for their aid in compiling and tabulating the data. Finally, I wish to express my sincerest gratitude to my wife, Judy, for her encouragement and understanding throughout my doctoral program. ii TABLE OF CONTENTS ACKNOWLEDGMENTS. . . . . . . . . . . . . . LIST OF TABLES . . . . . . . . . . . . . . CHAPTER I. II. III. INTRODUCTION . . . . . . . . . . Background . . . . . . . . . . Statement of the Problem . . . Related Literature . . . . . . Need for the Study . . . . . . Objectives of the Study. . . . Contribution Toward Accounting Methodology. . . . . . . . . . Limitation of the Study. . . . Organization . . . . . . . .-. METHODOLOGY. . . . . . . . . . . Introduction . . . . . . . . . Interviews . . . . . . . . . . The Questionnaire. . . . . . . Sample Selection . . . . . . . Procedures . . . . . . . . . . Data Analysis. . . . . . . . . Hypotheses . . . . . . . . . . RESULTS OF THE STUDY . . . . . . Introduction . . . . . . . . . The Typical Respondent . . . . Questionnaire Hypotheses . . . Areas to be Stressed in the First Undergraduate Tax Course. . . Use of Tax Research Sources. . Teaching of Tax Research . . . Use of Computers in Taxation . Teaching of Computer Subject Matter. Job Activities . . . . . . . . Tax TOpics . . . . . . . . . . iii Page ii 21 21 21 22 29 32 34 41 45 45 45 48 48 52 56 59 65 71 77 CHAPTER IV. APPENDIX A. Staff Training . . . . . . . . . . . AICPA Professional DevelOpment Programs in Taxation. . . . . . . . In—Firm Tax Training in Seven Public Accounting Firms. . . . . . . . . . Duplication of Effort. . . . . . . . Reaction to AAA and AICPA Committee Recommendations for Tax Education . Role of Universities and Firms in Tax Education . . . . . . . . . . . SUMMARY, CONCLUSIONS, RECOMMENDATIONS, AND SUGGESTIONS FOR FUTURE RESEARCH . Brief Summary of Purpose and Methodology . . . . . . . . . . Summary of Findings. . . . . . . . . Conclusions. . . . . . . . . . . . . Implications and Recommendations for Tax Instruction in Colleges and Universities. . . . . . . . . . Suggestions for Future Research. . . SUMMARY OF PROPOSED RESEARCH AND INTERVIEW GUIDE 0 C O O O O O O O O 0 THE QUESTIONNAIRE. . . . . . . . . . . RESEARCH HYPOTHESES. . . . . . . . . . MISCELLANEOUS TABLES . . . . . . . . . BIBLIOGRAPHY . . . . . . . . . . . . . . . . . . iv Page 89 95 99 113 115 117 122 122 123 128 130 136 138 144 149 152 162 TABLE 10. 11. 12. 13. 14. LIST OF TABLES Areas that should be stressed in the first tax course. 0 O O O O O O O O O O O O 0 Tax services available in libraries for research and teaching . . . . . . . . . . . . Ranking of importance of suggested tax courses . . . . . . . . . . . . . . . . . Employer interest in graduates of hypothetical tax curriculum . . . . . . . . . Summary of practitioner response rate . . . . Summary of responses received . . . . . . . . Percentage frequency of response to the demographic questions for all respondents . . Frequency of response to years of experience in the tax area for all respondents . . . . . Ranking of areas to be stressed in the first undergraduate tax course. . . . . . . . Ranking of information sources according to frequency of use by tax practitioners . . . . Frequency of reSponse to "Should tax case research be taught in college and university tax courses?". . . . . . . . . .‘. Respondents classified by computer use. . . . Summary of positive responses to "Do you use a computer in performing your tax work? '. O O C I O O O O O O O O O O 0 Summary of "Yes-other" responses given by corporate tax accountants. . . . . . . . . Page 10 12 13 33 34 46 47 49 53 57 6O 61 62 TABLE Page 15. Computer income tax services used by respondents. . . . . . . . . . . . . . . . 63 16. Frequency of response to "Should computer oriented subject matter be included in college and university tax courses?". . . . . 66 17. Summary of ranks assigned according to frequency of preparation or review of tax returns (federal, state, and local as required). . . . . . . . . . . . . . . . . 72 18. Summary of ranks assigned according to frequency of consultation on tax problems (federal, state, and local as required) . . . 73 19. Summary of ranks assigned according to frequency of performance of technical tax services. . . . . . . . . . . . . . . . . 75 20. Summary of the Kendall coefficient of concordance W with the null hypothesis that the coefficient of concordance between pairs of group rankings equals zero . 76 21. Summary of tax t0pics ranked according to the emphasis that the t0pics should receive in tax instruction. . . . . . . . . . 79 22. Summary of tax t0pics ranked according to the emphasis that the t0pics should receive in tax instruction in colleges and universities . . . . . . . . . . 85 23. Summary of tax t0pics ranked according to the emphasis that the t0pics should receive in professional or in-firm tax training programs . . . . . . . . . . . . 87 24. Frequency of response to "Does your firm offer staff training programs in taxation?'. 0 O O O O C O O O O O O O O O O O O 89 vi TABLE Page 25. Summary of responses for total hours of in-firm staff training programs in taxation . . . . . . . . . . . . . . . . . 91 26. Summary of responses for "prerequisite training or level of those participating" in staff training programs in taxation. . . . 93 27. Summary of responses for "general subject emphasis" of staff training programs in taxation . . . . . . . . . . . . . . . . . 94 28. Frequency of response to ”Have you par- ticipated in any of the AICPA professional develoPment courses in taxation?" . . . . . . 95 29. Tax t0pics ranked according to the emphasis that the t0pics should receive in tax instruction in colleges and universities. . . 133 30. "Other" tax information sources listed as responses to item eleven of the questionnaire . . . . . . . . . . . . . . . . 152 31. Summary of mean response to frequency of preparation or review of tax returns (federal, state, and local as required) . . . 154 32. Summary of mean response to frequency of consultation on tax problems (federal, state, and local as required) . . . . . . . . 155 33. Summary of mean response to frequency of performance of technical tax services . . . . 156 34. "Other" job activities listed as responses to preparation or review of tax returns . . . 157 35. "Other" job activities listed as responses to consultation on tax problems . . . . . . . 158 36. Summary of mean response to tax t0pic emphaSiS. O O O O O O O O O O O O O O O O O O 159 vii CHAPTER I INTRODUCTION Background Most of the past dialogue concerning tax education has been among college and university professors who design courses and course requirements. However, tax professors represent only one of several groups who have a vital interest in the orientation of tax offerings. Total curric- ulum evaluation should also include participation by gradu- ates and employers.1 Graduates, as previous "consumers" of the educational process, can make constructive suggestions based in part upon "real world" eXperiences. Employers, and especially employer training directors, can provide construc- tive suggestions based on their own in-firm training expe- riences and their perception of the needs and capabilities of their employees.2 1William 0. Hancock and James E. Bell, "An Effective Model for Changing Curriculum," Collegiate News and Views, March, 1970, p. 8. 2Ronald C. Doll, Curriculum Improvement: Decision- Making and Process (Boston: Allyn and Bacon, Inc., 1964), p. 225. In this study, the assumption is made that practi- tioners in the field can contribute descriptions and recom- mendations relevant to tax education. Thus, this study in- volves a survey of tax practitioners and professional tax training programs, with implications for the improvement of tax instruction in colleges and universities. Statement of the Problem John L. Carey, in The CPA Plans For The Future, voiced a plea for the reappraisal of the CPA's training for tax practice: While the CPA must be better prepared than ever before to practice in the tax field, the training available to the aSpiring CPA does not seem to have been adapted to meet this need, except perhaps in the internal training programs of some firms. Perhaps the CPA in the tax field is in greater danger of relative loss of position from these circumstances than from any external influences.3 Related Literature Since Carey's appeal, various educational study com- mittees of the American Accounting Association (AAA) and the American Institute of Certified Public Accountants (AICPA), as well as individuals, have considered both the problems of 3John L. Carey, The CPA Plans for the Future (New York: American Institute of Certified Public Accountants, 1965), p. 176. total curriculum and the content of specific courses in accounting, of which taxation is a part. Study by Committees of the American Accounting Association In 1964, the Committee to Compile a Revised State- ment of Educational Policy was appointed with the task of reviewing the reports of previous AAA education committees, and based on the results of their study, to prepare a sum- mary statement on educational policy that would provide a guide to accounting educators and administrators. The com— mittee noted that in the area of taxation there was conflict between previous AAA reports concerning the nature of income tax course offerings. One report emphasized a basic under— standing of the law rather than intricate forms, while another emphasized a comprehensive knowledge of Federal Income Taxes and general knowledge of other taxes. The committee concluded that: ...the income tax course should be restudied and reports issued on the location in the accounting curriculum of the various facets of income and other taxes which education committees have in the past suggested as approgriate for study by some or all accounting majors. 4Committee to Compile a Revised Statement of Educa- tional Policy, "A Restatement of Matters Relating to Educa- tional Policy," Accounting Review, Supplement to Vol. XLIII, 1968, p. 119.. 4 Stemming from the above recommendation, the 1966-67 Committee on Income Tax Instruction was charged to prepare a statement of tax concepts as a basis for teaching in the field of income taxation. Their work was followed by a charge to the 1967-68 Committee on Income Tax Instruction to develop sub-concepts or areas of emphasis which should be included in an adequate tax presentation. The results of the work of those committees, "A Statement of Tax Concepts to be Used as a Basis for Teaching Income Taxation," and, "Subject Matter Outline to Accompany the Statement of 'Concepts of Federal Income Taxation,'" were published in the 1969 Supplement to the AccountianReview. As suggested by the titles of the reports, the com- mittees favored a conceptual approach to teaching taxation. Their findings are designed to guide the teaching of a basic (first) course in taxation and are intended to provide students with a sufficient knowledge to enable them: (A) to understand the relationships of the con- cepts of taxable net income to the accounting and economic concepts of income, (B) to appreciate the impact of taxes on business and business decision making, and (C) to appreciate the availability of and the proper utilization of professional tax guidance.5 5Committee on Income Tax Instruction, "A Statement of Tax Concepts to be Used as a Basis for Teaching Income Taxation," Accounting Review, Supplement to Vol. XLIV, 1969, p. 1. 5 Study by Committees of the American Institute of Certified Public Accountants Horizons For A Profession: The Common Body of Know- ledge For Certified Public Accountants was published in 1967. It represented the results of a three-year study for the pur- pose of delineating the common body of knowledge to be pos— sessed by those about to begin their professional careers as certified public accountants. Authors Roy and MacNeill attempted to discover what the beginning CPA should know, not what he should be taught, and in their book refrained from attempting to specify curriculum content. Subsequently in March 1967, the president of the American Institute of Certified Public Accountants appointed a committee on education and experience requirements for CPAs. The committee was charged with reviewing the conclu- sions of The Common Body of Knowledge and recommending a position on education and experience for CPAs as a basis for Institute policy. The results of the committee's review were published "to provide more specific guidance to planners of accounting curriculums."6 The committee's suggested curriculum was described 6Committee on Education and Experience Requirements for CPAs, "Academic Preparation for Professional Accounting Careers," Journal of Accountancy, December, 1968, p. 57. 6 in three main areas: general education, general business education, and accounting, with accounting segmented into the four areas of auditing, financial, managerial, and tax- ation. In regard to taxation, the committee discussed course content under the headings of tax theory and consid- erations, and tax problems: Tax Theory and Considerations. Because the tax law is complex and continually changing, it is neither possible nor desirable to provide in the curriculum enough time to cover exhaustively the subject of taxes. But if a student is to work with the problems of a financial nature, some knowledge of taxes and their impact on decision making is essential. To place in perspective the multitude of tax laws, regulations, administrative and judicial rulings, it is necessary to have a broad appreciation of the tax structure and its role both as a source of revenue and as a device to control the economy. Basic ideas must be understood such as the importance of a corporation distinguishing between interest and dividend payments, the definition of a capital asset, limitations on certain deductions and the relief afforded by the carryback and carryover provisions. Again, it is not expert knowledge that is required but an understanding of the reasons behind each of these provisions and the impact of their interrelationships. Tax Problems. In addition to a broad background in the field of taxes, the accountant should be able to apply tax principles to the solution of problems of some complexity. These cases should involve indi- viduals, corporations, partnerships, trusts, estates, etc., and should include some that involve the inter- relationships between various entities. Only when these interrelationships are seen can the student develop a sense of the impact of taxes on decision making and planning.7 7Committee on Education and Experience Requirements for CPAs, Report of the Committee on Education and Experience Requirements for CPAs (New York: American Institute of Certified Public Accountants, 1969), pp. 55-56. Other Studies In addition to the aforementioned studies by the AICPA and AAA, there are several individual studies con- cerned with university taxation courses that also deserve mention. One, a study by Otha L. Gray in 1964, was concerned primarily with undergraduate tax courses, with emphasis on the first course.8 Professor Gray surveyed tax professors in member schools of the American Association of Collegiate Schools of Business and obtained an overall view of the tax programs existing in member schools and the ideas of pro- fessors regarding the orientation of their courses. Among Gray's findings were: 1. The substantial majority of tax students take only one tax course. In 59 schools where more than one tax course was offered, 72 percent of the schools reported that less than one-half of their first tax course students con— tinued on to a second course, and 33 percent reported a con- tinuation rate of less than one-fourth. 2. Non-accounting or general business students accounted for only 25 percent or less of the first tax course enrollment in 74 percent of the responding schools. This 8Otha L. Gray, "Opinions of Tax Professors on Tax Courses," Accounting Review, January, 1965, pp. 204-11. 8 fact tends to eliminate one possible explanation for the low continuation rate mentioned in (1) above. 3. A detailed analysis of the assignment sheets submitted by 60 schools revealed that the subject matter in the first tax course was typically limited to coverage of the personal income tax. This revelation, combined with the large percentage of students who take only one tax course, led Gray to conclude that most tax students receive only "a partial or fragmented view of the field of taxation."9 4. Eighty-four percent of the responding tax pro- fessors felt that a division of tax subject matter, some for emphasis in the classroom and other for learning on the job, was both feasible and desirable. Gray concluded that this "indicates an awareness that the goal of academic instruction in taxation should not be that of turning out "tax experts" primarily skilled for their first job, but rather something more fundamental and conceptual. --- the limited objective of "how" is rejected in favor of the con- ceptual "why" of taxation."10 5. Tax professors ranked a list of suggested funda- mental emphases in the first tax course. Table 1 summarizes 91bid., p. 207. loIbid., p. 209. Table 1. Areas that should be stressed in the first tax course Accumulated Responses (Priority 1, 2, 3) Relative No. % Ranking Understanding of the current pro- visions of the tax law. . . . . . . . 71 35 let History and philosOphy of the income tax. . . . . .e. . . . . . . 39 19 2nd Tax ethics. . . . . . . . . . . . . . . 33 16 3rd Economic aspects. . . . . . . . . . . . 31 15 4th Researching tax problems. . . . . . . . 20 10 5th Preparation of tax returns. . . . . . . _ng ___5 6th 204 100 the results.11 A second and more recent study, by Earl F. Davis, also was a survey of tax professors in American Association of Collegiate Schools of Business, but was concerned with tax courses offered in graduate programs.12 He found that most of the professors approached the graduate tax course from other than a straight lecture approach, attempting to involve students in research papers or projects. Tax plan- ning, often accompanied by research, appeared to be the most llIbid., p. 203. 12Earl F. Davis, "A Compendium of Opinions of Tax Teachers on the Sc0pe and Content of Graduate Tax Courses," figurnal of Accountancy, August, 1968, pp. 86-89. 10 emphasized area. Davis also queried the availability of various tax research sources and reported results as summarized in Table 2.13 Table 2. Tax services available in libraries for research and teaching Number of Schools Service Having Service Per Cent Commerce Clearing House 56 100 Prentice-Hall 56 100 Rabkin & Johnson 25 45 Martens 42 75 Tax Co-ordinator (RIA) 30 54 Tax Management Portfolios (BNA) 22 40 ——vfi A third study, more broad in scope than the Gray and Davis studies, was conducted by Ray Sommerfeld, who sur- veyed public accountants, industrial executives, and uni- versity educators, concerning the possible develOpment of a 14 Sommerfeld's questionnaire graduate program in taxation. pr0posed a hypothetical program of tax courses patterned after those offered by the City University of New York, 13Ibid., p. 89. 14Ray M. Sommerfeld, "Taxation: Education's Orphan," JOurnal of Accountancy, December, 1966, pp. 38-44. 11 leading to the degree of Master of Business Administration in Taxation. Respondents were asked to classify each course as "very important," "desirable or helpful," or "not needed" for the educational preparation of a good tax practitioner. Results are summarized in Table 3, on page 12.15 Sommerfeld also queried the employability of a gradu- ate of such a program and asked: If a graduate program in business were con- structed to include 12 to 20 semester hours of tax courses (such as those listed in Table 3), would well-qualified students completing such a course be of interest to you as an employer?16 15Ibid., p. 42. lerid., p. 40. 12 HNw no mnV Anna Ho noqv Aqu no smcv waHxamm HmuoH macho m. m. m. .3 mm mm. .2 mm as 332.. Mm. mm. mm. aH RH aH N ON a mamHnoum sea HmaoaumaumuaH o n N «N mm mm m m 0H .oum .wcHaumm .uobaHu .mmw .HHOII umoumunH Hmsonmm mo monoa me H m 0 NH mm «H mH o MN moxma uwHu was oumumm a m 5 Nu NH mm m NH m moNMu HmooH use macaw wchsHuaH Imoxmy mmochsm oaoochoz H o H HH mH mH mH NH mH ouapmooum use ooHuomum Mme N N m an mm mm HH OH w maonflpmu ammoa noun can msmH unouuso mo hpnum “Sheena was muoumHm Iluamanon>mn Mme maoosH o o H s m 8 mm mu mm mafiaemHm cam goummmum awe o N u 0 HH OH nu ma mm maonH>oua upon uHsUHUMHp .pmuomHmm mo hpsum pmHHmuoaII mameoum Noe Hanovoh voosm>v< N o o N s m mm mm em maonH>oua uaouuso ou aoHuosv IouusH lema oaoocH Hmuopom muoumo HwHuu m o m H m momusoo sou woumumwsm mo oucmuuonaH mo wachmm .m poma l3 17 Responses to this question are summarized in Table 4. Table 4. Employer interest in graduates of hypothetical tax curriculum CPA Industrial Totals Response Firms Firms Educators No. Z Of less value than a person with any other degree 0 l 2 3 3 0f no more value than a person with a master's degree in business or accounting 7 3 9 l9 17 Of more value than a person with a master's degree in business but of less value than a per- son with a law degree 6 19 8 33 31 As valuable as a person with a law degree 13 7 3 23 21 Of more value than a person with either a master's degree in accounting or a law degree 12 7 8 27 25 Other 2 O l 3 3 Totals 3.28. 100 The responses indicated that nearly half of the respondents felt that such a program "a one-year graduate program in business, placing primary emphasis on the study of taxation, could produce a man that would be at least as 18 valuable to them as would the graduate of a law curriculum." Sommerfeld concluded that "The study of law, as currently structured, leaves much to be desired in the way of an ade— quate preparation for tax wor ,"19 17Ibid., p. 43. 18Ibid., p. 41. 19Ibid., p. 41. 14 Need for the Study The need for this study develOped out of considera- tion that practitioners can provide meaningful suggestions for tax education in light of their "real world" experiences in taxation, and that their views should be considered an important input to the continuing develOpment of tax curric- ula. A review of related literature revealed the tax educa- tion recommendations by committees of the AAA and AICPA, and the studies by Gray, Davis, and Sommerfeld. However, no previous study has researched practitioners' Opinions-regard- ing the content of college and university tax courses. The work of the AAA's 1967-68 Committee on Income Tax Instruction, while a significant contribution to guide the teaching of taxation, still leaves a multitude of alternative t0pics and questions regarding emphasis to con- front the prospective tax instructor when considering course content beyond the basic, first course in taxation. Similarly, the general recommendations of the AICPA's Com- mittee on Education and Experience Requirements for CPAs give little assistance to the instructor in terms of the placement of emphasis on specific tax t0pics. The Gray and Davis studies revealed professors' fundamental emphases in teaching taxation, and the belief 15 that tax subject matter could be divided between subject matter for emphasis in the classroom, and other subject matter for learning on-the-job. These findings raise the questions--Do practitioners agree with professors' teaching emphases? and, Can practitioners emphasis recommendations discriminate between tax t0pics for which academic prepara- tion is well suited as Opposed to those t0pics for which in- firm and professional training is apprOpriate? Additional impetus for this study was derived from Doyle Williams' article concerning reactions to Horizons for a Profession.20 Williams reported that during 1967 and 1968, seminars were held on 55 college campuses involving account- ing educators from 668 colleges and universities, representa- tives of state CPA societies, and other prominent CPAs. The principal objectives of these seminars were to analyze the recommendations of Horizons, evaluate the relevance of those findings to accounting education, and consider apprOpriate means of implementing those recommendations. The seminar participants generally approved of the findings of Horizons and believed that Horizons would serve as an effective motivator for the improvement of the 20Doyle Z. Williams, "Reactions to 'Horizons for a Profession,'" Journal of Accountangy, June, 1969, pp. 81-84. 16 educational preparation of CPAs. But in endorsing the con- ceptual emphasis of Horizons, the participants concluded that further thought and study should be devoted to determining "the respective roles of colleges and universities and the profession in sharing the responsibility for the initial education and training of professional accountants." Objectives of the Study The primary objectives of this study are: l. to determine the relative importance of areas to be stressed in the first undergraduate tax course, 2. to determine the relative frequency of use of tax research sources, 3. to determine the need for tax research experience in tax instruction, 4. to determine the ways in which computers are used by tax practitioners, 5. to determine the need for computer oriented content in tax instruction, 6. to determine the degree to which the relative frequency of job activities is standardized in taxation, 7. to determine those t0pics in need of emphasis 21Ibid., p. 83. l7 and those which should be deemphasized in the instruction of taxation, 8. to determine the sc0pe and perceived role of staff training programs in taxation, and 9. to derive conclusions which may be used to guide taxation educators in the formulation of the content of tax courses . Contribution Toward Accounting This study focuses on the lack of empirically veri- fied knowledge concerning practitioners' recommendations for tax education. The results of the study will hOpefully benefit accounting firms, tax educators, and future tax practitioners in the following ways: 1. provide guidance to tax educators in the develop- ment of relevant content for taxation courses, 2. help determine the respective roles of univer— sities and the profession in sharing the responsibility for the initial education and training of future practitioners in the area of taxation, and 3. help eliminate deficiencies in tax education at the university level. 18 Methodology This study was conceptualized as containing two main tasks: 1. Surveying tax practitioners -- A questionnaire was deve10ped to seek information pertaining to tax practice activities, t0pica1 emphasis in tax instruction, research experience, computer usage, staff training, and certain demographic variables. Questionnaires were sent to a total of six hundred practitioners in local and national public accounting firms, and in corporations. Samples were strati- fied by firm classification to obtain a broad range of response and to facilitate the statistical analysis of response between groups. 2. Conducting interviews with tax training directors —- Separate personal interviews were arranged with the tax training directors of seven national public accounting firms, and with project managers from the Professional Deve10pment Division of the American Institute of Certified Public Accountants. An outline was prepared to guide the inter- views, and information was sought pertaining to staff train- ing and the role of the profession in the area of tax education. A detailed description of the research methodology 19 is presented in Chapter II. Limitation of the Study There are three limitations related to this study. The first is a limitation of sc0pe and concerns the study's orientation toward the education of accountants for tax prac- tice. The activities and attitudes of lawyers (not employed by accounting firms as tax practitioners) in the tax area were not a part of this study. The second limitation is inherent in any behavioral study. The empirical results of this study will depend upon the attitudes, views, and Opinions of the participants. The third limitation concerns the extent of general- ization of the results. The sample was drawn from a limited population to minimize non-response and facilitate follow up. The results are strictly applicable to the pOpulation from which the sample was drawn. However, it is believed that this population is representative of all accounting tax practitioners. Thus, there is no reason to believe that accounting tax practitioners not in the pOpulation will have characteristics different from those of the pOpulation in this study. Based on this assumption, the results of this study can be generalized to all tax practitioners. 20 Organization This study consists of four chapters: 1. Introduction 2. Methodology 3. Results of the Study 4. Summary, Conclusions, Recommendations, and Suggestions for Future Research Chapter I introduces the study by stating the prob- lem and briefly reviewing related studies. The objectives of this study are presented along with methodology, and potential contributions to accounting. Chapter II details the research methodology including the develOpment of the questionnaire, sample selection pro- cedure, and data collection and analysis. Chapter III presents the results of the question- naire survey of tax practitioners, and discusses the findings derived from interviews with directors of professional tax training programs. Chapter IV briefly summarizes the research method- ology and then presents a review of the major findings and conclusions. The chapter concludes with recommendations for tax instruction, and suggestions for future research. CHAPTER II METHODOLOGY Introduction This chapter explains in detail the procedures em- ployed to accomplish the research objectives. The proce- dures involved formulating hypotheses, defining the pOpula- tion, selecting samples, develOping and administering a questionnaire survey of tax practitioners, interviewing directors of in-firm tax training programs, and selecting statistical tests for hypothesis testing. Interviews Personal interviews were used to gather data con- cerning professional and in-firm staff training programs in the tax area. Separate personal interviews were held with the tax training directors of seven national public account- ing firms. Similar interviews also were conducted with the tax area project managers from the Professional Development Division of the American Institute of Certified Public Accountants. The seven national public accounting firms inter- viewed can be described as a judgemental sample from a 21 22 pOpulation of ten national public accounting firms. Each was selected as a result of considering its estimated poten— tial for contributing relevant materials, the availability of its national tax training director, and the amount of time and travel expense that the interview would require. A letter requesting an interview, together with a "Summary of PrOposed Research" and an "Interview Guide"(see Appendix A), were sent to each of the persons interviewed. The "Summary of PrOposed Research" and "Interview Guide" were sent to familiarize the interviewees with the research objectives and to help prepare them to answer pertinent questions. The "Interview Guide" contained questions concerning: 1. Staff training in taxation 2. Tax education recommendations by AICPA and AAA tax committees 3. Respective roles of firms and universities in the area of tax education. Thevguestionnaire A questionnaire was develOped and distributed to twenty-five practitioners in two Lansing public accounting firms as a pilot study. Based on the results and comments received from the pilot study, the questionnaire was revised and an improved questionnaire was sent to six 23 hundred practitioners. The same questionnaire format was sent to all members of the three sample groups: (1) local public accounting practitioners; (2) national public accounting practitioners; and, (3) corporate practitioners. The questionnaire was divided into two major parts and is reproduced in Appendix B. Questionnaire - Part One Part One of the questionnaire contained a total of sixteen questions to provide data of seven types: 1. Job experience-- Question 1 asked for the title of the participant's position and was used to help identify the respondent as being prOperly included in the sample. Questions 4 and 5, concerning years of experience and per— centage of work in the tax area, were used to describe the representativeness and sc0pe of the samples. Question 16 asked the respondent to indicate the frequency (frequently, occasionally, or never) with which he performed thirty-two specific job activities. These activi— ties were listed in three categories: 1. Preparation or review of tax returns 2. Consultation on tax problems 3. Technical tax accounting services 24 The list of activities was adapted from the job activities included in the questionnaire survey in Horizons for a Profession: The Common Bodernowledge for Certified Public Accountants.1 However unlike the Horizons survey, which indicated activities performed by individual public accounting firms in total, the responses to this question provided job activity data for individual practitioners who could then be classified by type of employer. The data on job activities were collected to deter- mine the degree to which certain activities are standardized between the three practitioner groups, and to provide a possible explanation for any differences between the educa- tional recommendations made by the three practitioner groups. If the performance of job activities differs between the three practitioner groups, on-the-job training, and pro- fessional or in-firm training programs can be expected to assume major importance in the develOpment of future tax practitioners. On the other hand, if the three practitioner. groups do not differ in their performance of job activities, more academic training of a technical nature may be desired, 1Robert H. Roy and James H. MacNeill, Horizons for a Profession: The Common Body of Knowledge for Certified Public Accountants (New York: American Institute of Certi— fied Public Accountants,.l967), pp. 289-90. 25 since students could be trained for a standard set of job activities. Also, it is reasonable to assume that practitioners consider their job activities important, and that the im- portance of their job activities will be reflected in their recommendations for tax education. For example, if a par- ticular tax practitioner specialized in estate planning, it is possible that this practitioner would feel that estate planning should be heavily emphasized in college and univer- sity tax courses, and in professional and in-firm tax train— ing. Thus, if the three practitioner groups differ in their performance of job activities, it also is likely that they will differ in their recommendations for tax education. 2. Qualifications—- Questions 2 and 3 were used to describe the respondents in regard to their status as certi- fied public accountants, attorneys, former revenue agents, or enrolled after examination to practice before the Internal Revenue Service. 3. Education-- Questions 6, 7, 8, and 10 were used to determine the educational background of the respondents. Specifically, the questions concerned the respondents' level of formal education, major area of study, the number of tax courses included in their formal education, and their 26 participation in AICPA professional development courses in taxation. 4. Tax research-- Question 11 was used to determine the use made of various tax research sources. The six item choices were adapted from Earl F. Davis' study which indi- cated the tax services that were available for research and teaching in business school libraries. Question 12 also was concerned with tax research and asked the participants to express their Opinion regard- ing the teaching of tax case research in college and univer— sity tax courses. 5. Computers-— Questions 13 and 14 were used to determine the type and extent of computer usage by tax practitioners, and their Opinions of the degree to which computer oriented subject matter should be included in college and university tax instruction. 6. Staff training-- Question 15 was used to elicit information concerning in-firm staff training programs in the tax area. Participants were asked to describe their staff training in terms of general subject emphasis and the amount of time devoted to training. 7. First tax course-- Question 9 was used to 2Davis, Op. cit., p. 89. 27 determine practitioner Opinion concerning the priority of areas that should be stressed in a first undergraduate tax course. Respondents were asked to select and rank as to priority three of the six item choices. This question was adapted from the Gray study in which tax professors were asked to respond in a similar manner to the same question.3 ngstionnaire - Part Two The second part of the questionnaire consisted of a listing of thirty—eight tax tOpics likely to be encountered in a college or university undergraduate course in taxation, and/or professional tax training programs. Each tOpic was followed by a brief description detailing the contents of the topic. The tOpics were selected as a result of a gen- eral review of taxation texts and instruction materials, with Federal Income Taxation: Fundamentalguestions, Problems, and Cases, by Charles J. Gaa, serving as the pri- mary source for the organization of the tOpics. Part Two was designed to provide information con- cerning the emphasis to be accorded certain tax tOpics in tax instruction, and to determine those tOpics for Which academic preparation is felt to be well suited as Opposed to those tOpics for which in-firm or professional tax 3Gray, Op. cit., p. 205. 28 training is more apprOpriate. Each participant was asked to respond twice to each tOpic -- once for emphasis to be accorded the tOpic in college and university tax instruction (Section A), and once for emphasis to be accorded the tOpic in professional or in- firm tax training programs (Section B). To provide a common point of reference for Section A, each participant was told to assume that the college Or university tax instruction was "oriented toward accounting majors.” For each tOpic, there were four response Options available to indicate the apprOpriate degree of instructional emphasis. The Options in each of sections "A" and "B" in- cluded: (1) Major Emphasis; (2) Some Emphasis; (3) Little Emphasis; and, (4) No Emphasis. ngstionnaire - Other Following Parts One and Two, the last page of the questionnaire invited each participant to add his comments, offer suggestions, or amplify his answer to any previous question. In addition, each participant was also invited to list his name and address if he wished a COpy of the sur- vey results to be sent to him. This latter provision facil— itated the sending of the "second request" letters, and possibly increased the rate of response over what it 29 otherwise might have been. Sample Selection Questionnaires were sent to a stratified sample of six hundred practitioners in three firm classifications: (1) local public accounting; (2) national public accounting; and (3) corporations. Two hundred questionnaires were allo- cated to each stratum. Local Public Accounting Firms Practitioners employed by local public accounting firms in Michigan were identified from the Michigan Board 4 of Accountancy Register - 1969. The Register — 1969 con- tained an alphabetic listing of individuals registered to practice public accounting in Michigan during the year 1969. For each individual, the register provided the registrant's name, address, certificate number, and employer. There were 958 individuals identified as being employed by local public accounting firms in Michigan. Each of these 958 individuals was first assigned an identification number, and then a table of random numbers5 4Board of Accountancy, Register - 1969 (Lansing, Mich.: State of Michigan, 1969). 5John R. Stockton, Business Statistics (Cincinnati: South-Western Publishing Co., 1962), pp. 626-633. 30 was used to select 200 individuals. Responses of this sample group are intended to represent the population of :practitioners employed by local public accounting firms in Michigan. For purposes of this sample, "local public accounting iiirms" was defined as those firms registered with the Mich- i4gan.Board of Accountancy to practice public accounting in the State of Michigan during 1969, but excluding the follow- ing ten firms: 1. Arthur Andersen & Co. 2. Ernst & Ernst 3. Alexander Grant & Co. 4. Haskins & Sells 5. Lybrand, Ross Bros. & Montgomery 6. Peat, Marwick, Mitchell & Co. 7. Price Waterhouse & Co. 8. Seidman & Seidman 9. Touche, Ross, Bailey & Smart 10. Arthur Young & Co. The ten firms listed above were designated "national public accounting firms," and their practitioners were sampled as described in the next section. 31 National Public Accounting Firms The job activities performed by practitioners em- ployed by national public accounting firms tend to be specialized in one of three areas: (1) auditing; (2) tax; or, (3) management services. Thus, when selecting a sample of practitioners from this stratum of firms, a prime objec— tive was to include a majority of practitioners who were tax specialists. To obtain this objective, the seven national public accounting firms interviewed were asked to provide an em- ployee listing of their tax specialists. Four firms pro- vided such listings, two firms did not have a separate list- ing of tax specialists, and one firm refused to provide a listing for use in a questionnaire survey. The four avail- able listings were then used to randomly select 30 individ- uals from each of the four firms, a total of 120 practitioners. The remainder of the sample (200 - 120 = 80) were selected from the Michigan Board of Accountancy Register — 1969. The Register - 1969 identified 1,429 individuals as employees of the ten firms designated as national public accounting firms. The same procedures as previously described were used to select a random sample of 80 indi- viduals from the ten national public accounting firms. 32 Responses from the practitioners in this sample are intended to represent the pOpulation of practitioners em- ployed by national public accounting firms. Corporations Corporate tax practitioners were chosen from the September 15, 1969 Membership Roster6 of the Tax Executives Institute (TEI). The Tax Executives Institute is a national organization of approximately four thousand persons employed by corporations and other businesses to administer the tax affairs of their employers. Using sampling procedures as previously described, each TEI member was assigned an identification number and two hundred were then selected with the use of a table of random numbers. Responses from this sample are intended to represent the pOpulation of persons engaged in tax work for corporations. Procedures A letter explaining the objectives of the study and appealing for assistance was sent to members of the three sample groups on June 17, 1970, along with a questionnaire 6Tax Executives Institute, Membership_Roster (Washington, D.C.: Tax Executives Institute, 1969). 33 and stamped return envelOpe. A follow—up letter, with ques- tionnaire and stamped return envelOpe, was mailed to non- reSpondents on July 7, 1970. Responses were received from 74.7 percent, or from 448 of the 600 participants in the original sample. A sum- mary of the response rate is given in.Table 5. Table 5. Summary of practitioner response rate M = Local National Response Corporate Firm Firm after: Practitioners Practitioners Practitioners Total N Z N z N % N Z First letter 95 48 97 49 124 62 316 53 Second letter 55 27 44 22 33 17 132 22 Sub-total 150 75 141 71 157 79 448 75 No response 50 25 59 29 .33 21 152 25 Totals 200 100 200 100 200 100 600 100 f Usable responses totaled 373 or 83.5 percent of the total responses received, and 65.3 percent of the corrected sample size of 571. The corrected sample represents the original sample of 600 minus those not prOperly included; i.e., retired, deceased, or not associated with the field of taxation. Table 6 presents a summary of the types of response received. 34 Table 6. Summary of responses received Local National Type of Corporate Firm Firm Response: Practitioners Practitioners Practitioners Total N Z N z N Z N Z Usable 125 83 129 92 119 76 373 83 Not completed 22 14 7 5 15 9 44 10 Non-deliver— able. 1 l 0 0 22 14 23 5 Retired 1 l 3 2 0 O 4 l Deceased l 1 2 l l l 4 1 Totals 150 100 141 100 157 100 448 100 Data Analysis The data from each questionnaire was coded by hand and keypunched into Hollerith cards. A computer program was then employed to determine cumulative frequencies, percent- ages, the Pearson Chi-Square statistic and the Goodman-Kruskal and means, -index of predictive association. Since the data under analysis was the result of and for certain statistical hypotheses-- ordinal measurement, weaker than the interval measurement required by parametric tests, two nonparametric tests, the Pearson Chi—Square Test of Association and the Kendall Coef— ficient of Concordance, were selected for use in this study. 35 Each of these nonparametric tests is discussed in a separate subsection below. Pearson Chi-Square Test of Association This measure was used to determine whether the three groups of practitioners significantly differed with respect to their responses to certain questions. The purpose was to determine if the fact that a respondent was a member of one group had any relationship with his response classification on a particular attribute. Chi—square tests the significance of the discrepancy between observed and expected frequencies of the occurrence of a joint event under the null hypothesis that two attri- butes are independent. The statistic is computed from the 2 2 25 ”U ' Eij’ X = . . E 1 3 following formula: ij where F.. = observed number of cases categorized in 1] . . the ipp row of 132 column Eij = number of cases expected under HO to be categorized in ipp row of jpp column The decision is to reject the null hypothesis if the calcu- lated value of X2 is greater than or equal to the tabled value of X2 at the .05 level of confidence and the correct 36 degrees of freedom. :Rejection of the null hypothesis allows the conclusion that dependence exists between the two attri— butes tested. Failure to reject indicates tentative accept- ance of the null hypothesis of independence. The X2 test is usually considered applicable to data in a contingency table only if the expected frequencies are sufficiently large. Although there are no hard and fast rules concerning the size of expected frequencies, one rule of thumb states, "When k is larger than 2 (and thus df> l), the X2 test may be used if fewer than 20 per cent of the cells have an expected frequency of less than 5 and if no cell has an expected frequency of less than 1."7 However, ; this rule is ordinarily conservative, and circumstances may arise where smaller expected frequencies can be tolerated. When expected frequencies do not meet the above size requirements, they may be increased by combining adjacent classifications. This is desirable only if such combining does not rob the data of its meaning. 7Sidney Siegel, Nonparametric Statistics (New York: McGraw-Hill Book Co., Inc., 1956), p. 110. 37 Goodman-Kruskal Index of Predictive Association (AB) The chi—square test is extremely sensitive to any systematic departure from independence or total nonpredict- ability. "If N is very large, as it should be for the best application of the test, virtually any 'degree' of true sta- tistical relationship between attributes will show up as a significant result."8 Thus I measures are used as an adjunct to the chi-square test to measure the strength of association between the attributes studied. Hays explains the importance of the A measures: When the value of X2 turns out significant one can say with confidence that the attributes A and B are not independent. Nevertheless, the signifi- cance level alone tells almost nothing about the strength of association. Usually we want to say something about the predictive strength of the relation as well. If there is the remotest interest in actual predictions using the relation studied, then the A measures are worthwhile. Statistical relations so small as to be almost nonexistent can show up as highly significant X2 results, and this is especially likely to occur when sample size is large. All too often the experimenter then "kids himself" into thinking that he has discovered some relationship observ- able tO the "naked eye," which will be applicable in some real-world situation. Plainly, this is not necessarily true. The A indices do, however, suggest just how much the relationship found im- plies about real predictions, and how much one attribute actually does tell us about the other. Such indices are a most important corrective to 8William L. Hays, Statistics (New York: Holt, Rine- hart, and Winston, Inc., 1963), p. 613. 38 the experimenter's tendency to confuse statistical significance with the importance of results for actual prediction. Virtually any statistical relation will show up as highly significant given a sufficient sample size, but it takes a relation of considerable strength to enhance our ability to predict in real, uncontrolled situations.9 The Goodman and Kruskal index of predictive associ- ation is computed from the following formula: 2 max. Fi' - max. F AB=ii 3 i N - max. F i where Fij = observed frequency in cell (Aj, Bi) mix. Fij = largest frequency in column Aj max. F.i = largest marginal frequency among rows Bi 1 As used in this study, the AB index shows the pro- portional reduction in the probability of error afforded by specifying Aj, a respondent's firm category. The value of the index may range from zero to 1.00. If knowledge of the firm category does not reduce the probability of error in predicting Bi' the index is zero, and one can say that there is no predictive association. On the other hand, if the index is 1.00, no prediction error is made given the firm classification, and there is complete predictive association. 91bid., p. 610. 39 It is possible for some statistical association to exist even though the value of AB is zero. In this situa- tion, attributes A and B are not independent, but the rela- tionship is not such that giving Aj causes one to change his prediction about Bi; the index IB is other than zero only when different Bi categories would be predicted for differ- ent Aj categories. Sheffe’Post-Hoc Comparisons In general, post-hoc comparisons may be used to further investigate the source of significance when a sta- tistical test has disclosed overall significance. The use of post—hoc comparisons is restricted to the situation where a preliminary test has shown overall significance. In this study, post-hoc comparisons are used when a chi-square test has shown overall significance between the responses of the three practitioner groups. Specifically, post-hoc comparisons allow an evaluation of the differences in response between each pair of practitioner groups to determine if the response differences contribute to the overall significance of chi-square. 40 Kendall Coefficient of Concordance (W) The Kendall Coefficient of Concordance measures the extent of agreement between two or more rank orders. The test statistic, W, may range in value from 0 (perfect dis- agreement) to +1.0 (perfect agreement). The coefficient may be computed from the following formula: 2(Rj ' ZRjIZ W: J N _12 12k (N3-N) where Rj = sum of the ranks for the jpp variable k = number of sets of rankings N = number of variables ranked ..l.k2 3 _ . . . 12 (N - N) - max1mum possrble sum of squared deVi- ations, i.e., the sum that would occur with perfect agreement between the k rankings. The null hypothesis (H0) is that the rank orders are ppp associated and that the observed value of W differs from zero only by chance. The test of the hypothesis con- sists of determining the observed value of W and then deter- mining the probability under H0 associated with such an extreme value. If that probability is equal to or less than .05, the decision is to reject H0 in favor of the research hypothesis, H1. 41 In this study, a high or significant W may be inter- preted as meaning that essentially the same standards have been applied in ranking the N variables. Thus, when the value of W is significant, the combined or "pooled" ordering may serve as a "standard" or best estimate of the "true" ranking of each of the N variables being ranked.lo Hypotheses Hypothesis testing is the process of inferring from a sample whether or not to accept a particular statement about the pOpulation. The statement itself is called the null hypothesis and is denoted by H0. The research hypoth- esis, denoted by H1, is the negation of the null hypothesis, and usually consists of a statement equivalent to saying "H0 is not true." Thus, a decision to reject H0 is equiv- alent to acceptance of the research hypothesis, H1. In this study, those null hypotheses tested by using the Pearson Chi-Square statistic are denoted by Xi, and those tested by the Kendall Coefficient of Concordance are denoted by W6, The research hypotheses are presented in Appendix C. 10Siegel, Op. cit., p. 237. 42 Areas to be Stressed in the First Undergraduate Tax Course W Tax Research ‘W Computers 0 O N X 2 o N The coefficient of concordance between the three respondent groups equals zero for the ranking of areas to be stressed in the first undergraduate tax course. The coefficient of concordance between prac- titioners' total ranking of areas to be stressed in the first undergraduate tax course and tax professors' ranking of areas to be stressed in the first undergraduate tax course equals zero. The coefficient of concordance between the three respondent groups equals zero for the ranking of information sources used most frequently in tax research. The coefficient of concordance between prac— titioners' total ranking of information sources used most frequently in tax research and the ranking of information sources accord- ing to their availability in libraries for research and teaching equals zero. There is no difference between the three respondent groups in their recommendations concerning instruction of tax research in colleges and universities. There is no difference between the three respondent groups in the percentage that use computers to perform tax work. There is no difference between the three respondent groups in their recommendations concerning instruction of computer oriented subject matter in college and university tax courses. 43 Job Activities ‘W O The coefficient of concordance between the three respondent groups equals zero for the ranking of frequency of preparation or review of tax returns. The coefficient of concordance between the three reSpondent groups equals zero for the ranking of frequency of consultation on tax problems. The coefficient of concordance between the three respondent groups equals zero for the ranking of frequency of technical tax accounting services. Tax TOpic Emphasis 'W O The coefficient of concordance between the three respondent groups equals zero for the ranking of emphasis to be accorded tOpics in undergraduate tax instruction in colleges and universities. The coefficient of concordance between the three respondent groups equals zero for the ranking of emphasis to be accorded tOpics in professional or in—firm tax training programs. The coefficient of concordance between total ranking of emphasis to be accorded tOpics in undergraduate tax instruction in colleges and universities and total ranking of emphasis to be accorded tOpics in professional or in-firm tax training programs equals zero. In-firm Staff Training There is no difference between the three respondent groups in the prOportion of respondents whose firms offer in-firm staff training programs in taxation. 44 AICPA Professional Develgpment in Taxation xg- There is no difference between the three respondent groups in the percentage that participate in AICPA professional develOp- ment courses in taxation. CHAPTER III RESULTS OF THE STUDY Introduction This chapter presents the results of the present study, and begins with a description of the typical question- naire respondent. Respondents are characterized by modal response, and response percentages are presented for the demographic questions. The remainder of the chapter reports the question- naire findings and the results of interviews with directors of professional tax training programs. The Typical Respondent The "typical" respondent (as characterized by modal response) to the questionnaire: 1. Graduated from a four-year college; 2. Was 3. Had 4. Was 5. Had tax an accounting major; one tax course at the undergraduate level; a CPA; ten years of professional experience in the area; and, 6. Devoted 76-100% of his work time to the tax area. 45 Table 7. Percentage frequency of response to the demographic questions for all respondents Question (Z) Question (2) CPA? Undergraduate major? Yes 70 Accounting 82 No __30_ Pre-Law 4 100 Economics 4 Bus. Administration 2 Attorney? Other 6 Yes 24 No Response __J; No _19’ 100 100 Graduate major? Accounting 12 Former Revenue Aggnt? Law 23 Yes 7 No 93 Taxation 2 1—6 Other 2 No Response _6]_._ 100 Enrolled by examination to practice befOre IRS? Tax courses taken in Yes 2 underggaduate education? No _2§_ 0 ll 1 0 l 42 2 32 Per cent of work in 3 6 Other 2 the tax area? No Response 7 __Z_. 1‘55 1-25' 16 26-50 19 51-75 12 Tax-courses taken in 76-100 _£:§ ‘graduate education? 100 0 3 l 13 Education level? 2 7 High School 2 3 6 2-year College 5 4 3 4-year College 55 Other 6 Masters Degree 14 No Response _Qg Law Degree 23 100 D°°t°ml Degree -—1 Enrolled in AICPA 100 tax courses? Yes 36 No 60 No Response 100 47 Table 7 presents a summary of the responses of 373 practitioners to the demographic questions contained in the questionnaire. The frequency of response to years of professional experience in the tax area is presented in Table 8. The response mean was 12.5 years of experience, with a standard deviation of 8.0 years. Table 8. Frequency of response to years of experience in the tax area for all respondents ' Years Frequency Years Frequency 1 12 20 31' 2 13 21 5 3 17 22 9 4 16 23 6 5 24 24 l 6 22 25 9 7 16 27 l 8 23 28 4 9 ' 7 29 l 10 33 30 4 ll 10 31 l 12 12 32 l 13 14 33 l 14 10 34 l 15 24 35 3 16 14 37 l 17 7 42 1 18 10 45 l 19 8 MEan - 12.50 Std. Dev. =.8.00 Median = 10.85 48 Qpestionnaireggypotheses For each hypothesis, the results of the statistical test are reported and a conclusion is reached concerning the relationship Specified in the hypothesis. The statistical procedure is to reject the null hypothesis in favor of the research hypothesis if a statis- tical test yields a value whose associated probability of occurrence under the null hypothesis is equal to or less than some small probability noted as a (alpha). This small probability is called the "level of significance." Throughout this chapter, a null hypothesis is rejected only if the level of probability attained is .05 or smaller. The choice of .05 was arbitrary, but this value enjoys common usage among researchers. Areas to be Stressed in the First Undergraduate Tax Course Item 9 of the questionnaire asked participants to —- "Select three of the following as areas that should be stressed in the first undergraduate tax course in a college or university. (RANK AS TO PRIORITY-l,2,3.)" The item is identical to an item included in a study by Otha Gray in which Gray asked tax professors to make a similar ranking. To analyze the practitioners' responses for each 49 subject area, each first-priority response was assigned a weight of three, each second-priority response was assigned a weight of two, and each third-priority response was assigned a weight of one. This weighting maintained the ordinality of the priority responses and allowed a comparison between the six subject areas to determine the priority ranking for each practitioner group. Table 9 presents respondents' rankings of the areas to be stressed in the first undergraduate tax course. A ranking is shown for each respondent group (i.e., corporate, local public accounting, and national public accounting firm practitioners). Table 9. Ranking of areas to be stressed in the first undergraduate tax course lumk Areas Rank by Practitioners Total in Gray's Corp. Local ~ Nat'l. Rank. Study Current provisions of taxlaw 2 l l 1 1 History and philosophy of taxation 1 3 2 2 2- Researching tax problems 3 2 3 3 5 Preparation of tax returns 4 4 5 4 6 Economic aspects 5 S 4 5 4 Tax ethics 6 6 6 6 3 50 W : The coefficient of concordance between the 0 three respondent groups equals zero for the ranking of areas to be stressed in the first undergraduate tax course. W1: The coefficient of concordance between the three respondent groups does not equal zero for the ranking of areas to be stressed in the first undergraduate tax course. The results of the test showed that the coefficient of concordance (W) between the three group rankings was 0.911, which was significantly different from zero at the .05 level of significance. The results rejected the null hypothesis (W0) and led to the acceptance of the research hypothesis (W1). This indicated that there was statistically signifi- cant agreement between the subject area priority rankings made by the three practitioner groups. It also indicated that there must have been some within group agreement, since in order for there to be between group agreement, there must also be at least some within group agreement. In this case, since there was overall significant agreement, the best esti- mate of the "true" priority ranking for each subject area is represented by the combined or "total rank" for each area. This "total rank" was derived by a comparison of the sum of ranks for each subject area across the three practi- tioner groups. The total rank for each of the six subject areas is presented in Table 9 and may be compared with the 51 ranking of subject areas made by the tax professors in Gray's study. W O The coefficient of concordance between prac- titioners' total ranking of areas to be stressed in the first undergraduate tax course and tax professors' ranking of areas to be stressed in the first undergraduate tax course equals zero. The coefficient of concordance between prac- titioners' total ranking of areas to be stressed in the first undergraduate tax course and tax_professors' ranking of areas to be stressed in the first undergraduate tax course does not equal zero. The coefficient of concordance (W) equaled 0.757. This W was not significantly different from zero and led to a failure to reject the null hypothesis. This means that there was no significant agreement between the priority rankings made by practitioners and the priority rankings made by tax professors. Thus, even though practitioners and professors agreed as to the priority ranking of "current provisions of tax law" and "history and philOSOphy of taxation," there was suffi- cient disagreement concerning the ranking of the four remaining areas that in total there was no significant agree- ment between practitioners' and professors' rankings. It is interesting to note the relatively low priority assigned by practitioners to "preparation of tax returns," 52 which was ranked fourth in priority among six subject areas. This appears to contradict the a priori assumption made by some academicians that practitioners would like university tax educators to place primary emphasis on tax return preparation. Use of Tax Research Sources Item 11 of the questionnaire asked -- "What three information sources do you use most frequently when doing tax research? (RANK AS TO FREQUENCY - l,2,3.)" Six infor— mation sources were listed together with a seventh alterna- tive - "other." To combine the responses for each information source, the frequency-rank responses "1,” "2," and "3" were assigned weights three, two, and one, respectively. This weighting maintained the ordinality of the frequency—rank responses and allowed a comparison between the six information sources to determine the frequency ranking for each practitioner group. Table 10 contains the six information sources ranked as to frequency of use by the three respondent groups and in total. Nineteen "other" information sources specified by respondents are presented in Table 30 of Appendix D. 53 Table 10. Ranking of information sources according to frequency of use by tax practitioners C Li f Rank Total in Davis' Corp. Local Nat'l. Rank Study ‘Souree Rank by Practitioners Standard Federal Tax. . Reporter (CCH)_ l 1 l 1 1.5 Tax Managgment (BNA) 2 4 2 2 Federal Tax Coordinator Research Institute of America Federal Taxes (P-H) 3 3 4 4 1.5 Law of Federal Income Taxation Mertens 5 6 5 5 3 Federal Income, Gift, & Estate Taxation (Rabkin and Johnson) 6 5 6 6 5 W : The coefficient of concordance between the three respondent groups equals zero for the ranking of information sources used most frequently in tax research. W : The coefficient of concordance between the three regpondent groups does not equal zero for the ranking of information sources used most frequently in tax research. The test results showed that the W between the three group rankings equaled 0.873. This value was significantly different from zero at the .05 level of significance and the null hypothesis was rejected. Rejection of the null hypothesis is equivalent to the acceptance of the research hypothesis, W and may be 1! 54 interpreted as meaning that the three practitioner groups significantly agreed in their ranking of information sources according to frequency of use. The "true" rank for each in— formation source is represented by its "total rank" and is shown in Table 10. It is interesting to note that the responses indi- cate that Commerce Clearing House's Standard Federal Tax Reporter was used most frequently by each practitioner group. In total, the Standard Federal Tax Reporter was ranked as a response by 317 practitioners, of which 226 practitioners ranked it first in frequency of use, 63 ranked it second, and 28 practitioners ranked it third. Its use far exceeded the indicated use of the second-ranked Tex Management, which was ranked as a response by 214 practi- tioners. Of these, 11 practitioners ranked Tax Management first in frequency of use, 114 ranked it second, and 89 practitioners ranked it third in frequency of use. The six information sources listed in Table 10 also were included in Earl F. Davis' study of member schools of the American Association of Collegiate Schools of Business (AACSB). Davis queried the tax services available for research and teaching in AACSB schools and reported the number of schools having each service (shown on page 10, 55 Chapter I). For purposes of the present study, each source (service) was ranked according to its availability as re- ported by Davis. This ranking of sources by availability also appears in Table 10 and may be compared with the "total rank" derived from the practitioners' responses in this study. W0: The coefficient of concordance between prac— titioners' total ranking of information sources used most frequently in tax research and the ranking of tax information sources according to their availability in libraries equals zero. W : The coefficient of concordance between prac— titioners' total ranking of information sources used most frequently in tax research and the ranking of tax information sources according to their availability in libraries does not equal zero. The results of the test showed that the coefficient of concordance was 0.579. This statistic was not signifi- cantly different from zero and the null hypothesis was not rejected. Thus, there was no significant agreement between the ranking of information sources according to frequency of use by tax practitioners, and the ranking of information sources according to their availability in AACSB school libraries. The difference between the two rank orders is especially evident for Prentice-Hall's Federal Taxes and Bureau of National Affairs' Tax Management. 56 Teaching of Tax Research Item 12 of the questionnaire is related to the in- struction of tax research methodology and asked participants -- "Should tax case research be taught in college and univer- sity tax courses? (CHOOSE ONE PER COURSE - FIRST, SECOND, GRAD.)" The responses are presented in Table 11. X3: There is no difference between the three respondent groups in their recommendations concerning instruction of tax research in colleges and universities. X : There is a difference between the three respondent groups in their recommendations concerning_instruction of tax research in colleges and universities. The above null hypothesis was tested with the Pear- son chi-square test of association for each of the three courses, with the "no response" category omitted from the computation of the chi-square statistic. Results of the chi-square test were: Undergraduate - first course. The value of the test statistic (X2) equaled 11.815. This value of chi—square was not significant at the .05 level and the null hypothesis was not rejected. The modal reSponse across all groups was -- "Yes--discussion of information sources only," and accounted for 43 percent of all responses. Undergraduate - second course. The test results 57 OOH nun OOH mHH OOH ONH OOH nNH OOH mum OOH OH OCH ONH OOH 2H OCH mum OOH OHH OOH ONH OOH nNH Hmuou. H a N N N N O O O H H H O O O O H O N N N N O O . . . . . . . . . . uncommon oz HN an 4H NH mN mm ON nN NH cc m O OH OH OH AH OH oo o OH OH nN ON mN . . . . . . . coHnHeo o: u>mn H noHnO HH on nONMO On mHH mHmo NHON nHON NNwN ...............02 ON anN mm mm co mm mo Ow NN NOH on on ON On ON Nn N m n c N N N N . .Hmvummu xeu mo OOHuuumeuun One consumes Husuumuaumr O OH O m n O n O we ONH Nm No me no NO mm ON nN ON ON OH nN NH HN . . . .mouapououe use moousom coHuusuowcH Ho cOHmnsomHOIImu» H n O O O O N m m ON o N N O OH NH no mnH be en me an an OO . . . . . . . . .NHso moousom OOHueBHOHOH mo connsumHOIImo> u z u z N z N z N z N z N z N z N z N z N z N z Hduoa .H.uoz HnOOH .mmoo kuoa .H.umz HaooH, .mmou kuou .H.uez HcooH .mmoo masonuem omusou ouusvouo onusou anoomIIOuwapoumuovcs onuaou unuHmIquasvuumwovaa :Nuoausoo xnu suHauo>Hcs can ONOHHOO :H nausea on :uueooou undo may OHsozm: cu oudoeoou «o Nosesvoum .HH OHbaH 58 showed chi—square equaled 9.840. This value was not signifi- cant at the .05 level and led to a failure to reject the null hypothesis. The most frequent response for this second course was -- "Yes-—discussion of information sources and procedures," and represented 48 percent of all responses. 2 Graduate course. To compute the X' statistic for the graduate course responses, it was necessary to combine the three responses for "discussion of information sources only" with the responses for "discussion of information sources and procedures." This combining of two adjacent categories was necessary because the chi-square test is not applicable to data when the expected frequency of the occur— rence of a joint event is less than one. After the above adjustment, the value of chi-square equaled 9.536. This value was not significant at the .05 level for six degrees of freedom, and the null hypothesis was not rejected. The most frequent response in each group was -- "Yes--actua1 research and preparation of tax case(s)," and this reSponse accounted for 70 percent of all responses. Summary. The null hypothesis was not rejected for each of the three courses. This means that for each course, there was concordance (agreement) between the responses of the three practitioner groups. 59 The overall perceived importance of tax research in college and university tax courses is evident from the re- Sponses in Table 11. The table reveals a vast majority of positive responses, each indicating at least some instruc- tional emphasis on tax research. Also, a comparison of the modal response for each course indicates an increasing empha- sis on tax research as the course level progresses from the first and second undergraduate courses to the graduate tax course. Finally, the responses for the "undergraduate - first course" appear consistent with--and reinforce the practitioners' ranking of "researching tax problems" third in priority among six subject areas to be stressed in the first undergraduate tax course, as previously reported in Table 9. Use of Computers in Taxation Item 13 was designed to determine the type and ex- tent Of computer usage by tax practitioners in the three sample groups. Table 12 classifies respondents according to their use of computers. X3: There is no difference between the three reSpondent groups in the percentage that use computers to perform tax work. X : There is a difference between the three respondent groups in the percentage that use computers to perform tax work. 60 Table 12. Respondents classified by computer use Corp. Local Nat'l. Total Use Computers N Z -—--—N Z -———-—N Z -———N Z Yes 57 46 82 63 101 85 240 64 No 68 54 46 36 l7 14 131 35 No response 0 0 l l 1 l 2 1 Totals 125 100 129 100 119 100 373 100 The test results showed that chi-square equaled 42.537. This value was significant at the .05 level and rejected the null hypothesis of no difference. The three respondent groups differed in the percentage that use com- puters to perform tax work. Furthermore, post-hoc compari— sons revealed that there was a significant difference in the percentage that use computers between each pair of practi- tioner groups. However, the overall significant difference was not predictive as evidenced by a Goodman-Kruskal index of predictive association (AB) of 0.0839. Respondents who used computers in conjunction with their tax work, indicated such use by checking one or more of four alternative responses. These responses and accom— panying frequencies are presented in Table 13. Column totals in Table 13 exceed the total "yes" category in Table 12 because some respondents indicated more than one type of USE. 61 Table 13. Summary of positive responses to "Do you use a computer in performing your tax work?" Corp. Local Nat'l. Total Reapmse N z N z N z N Z Yes - to prepare tax returns 25 36 82 99 99 60 206 65 Yes — to assist in estate planning 0 0 1 l 37 23 38 12 Yes - to assist in tax planning 6 9 O 0 24 15 3O 10 Yes - other 38 55 0 O 4 2 42 13 Totals 69 100 83 100 164 100 316 100 In addition to responding to the above alternatives, the respondents were asked to amplify the extent of their use of computers by answering: What % of tax returns? Which service? What % of estate planning? and, What % of tax planning? Corporate. Twenty-five respondents in this group indicated that computers were used to generate and accumu— late data for their corporations own tax returns. Responses to "What % of tax returns?" ranged from 5 percent to 90 per- cent, with a median response of 25 percent. In reply to "Which service?" respondents specified "Our own in-house computer." 62 In addition to the preparation of tax return data, six respondents indicated that computers were used to assist in tax planning. Responses to "What % of tax planning?" ranged from 5 percent to 20 percent, with a median response of 10 percent. Thirty-eight respondents checked "Yes-other," and the responses that they specified are summarized in Table 14. Table 14. Summary of "Yes-other" responses given by corporate tax accountants Response Frequency Accumulating data for tax return 26 Property tax returns 3 Depreciation schedules 3 Accounting analysis 2 Determination of useful life 1 In connection with IRS audit 1 State allocation information 1 Audit ..l Total 38 Local public accounting. With the exception of one response, all positive responses in this practitioner group indicated that computers were used to prepare clients' tax 63 returns. The single exception was "Yes - to assist in estate planning" and the respondent indicated 10 percent of his estate planning was computer assisted. Table 15 lists the computer income tax return ser- vices used by respondents and the frequencies with which they were employed. Table 15. Computer income tax services used by respondents Service REE-i. EMA-é Computax 54 66 63 64 Autotax 14 17 13 13 Fast-tax -- -- 18 18 CCH 6 7 l 1 Programmed Tax Systems 1 1 -- _- No response _7_ _9_ __4_ __4_ Total 82 100 99 100 Local practitioners used the above services to vary- ing degrees. Responses to "What % of tax returns?" ranged from 1 percent to 100 percent. The median response indi- cated 40 percent of tax returns were computer processed. Nationalgpublic accounting. As shown by Table 15, practitioners in this group also used computer income tax 64 services. Responses indicated that the selection of a par- ticular tax service was made by individual local offices. Their selection of a service would often depend on the availability of state and local tax returns in addition to the federal return. Responses to "What % of tax returns?" ranged from 1 percent to 100 percent, with a median response of 50 percent. Similar information was provided for estate planning and tax planning. National practitioners reported that com- puter assisted estate planning accounted for 5 percent to 80 percent of total estate planning. The median percentage was 20. National practitioners also reported that computers were used for tax planning purposes. Twenty-four individuals reported that the computer accounted for 1 percent to 40 per- cent of total tax planning, with a median utilization of 10 percent. Four national practitioners responded "Yes - other." Their responses included: "projections and forecasts;" "depreciation schedules;" "defense of IRS pr0posed audit changes;" and, "various." Summary. The basic utilization of computers by cor- porate tax accountants differed from the use made of computers 65 by tax practitioners in public accounting firms. The cor- porate tax accountant often utilized an in-house computer to generate data pertaining to the corporation's own tax returns, whereas public practitioners often employed computer service companies to provide computer prepared tax returns and other services for their clients. Although some practitioners used computers to assist in estate planning and tax planning, responses indicate that computers were mainly used to assist in the preparation of tax returns. Computers were utilized most frequently by national public accounting firm practitioners, followed by local pub- lic practitioners and corporate practitioners, respectively. Teaching of Computer Subject Matter Item 14 asked —— "Should computer oriented subject matter be included in college and university tax courses?" Participants were asked to respond for three tax courses; the first and second undergraduate courses, and a graduate tax course. The responses are summarized in Table 16. X2: There is no difference between the three 0 respondent groups in their recommendations concerning instruction of computer oriented subject matter in college and university tax courses. X : There is a difference between the three respondent groups in their recommendations concerning_instruction of computer oriented subject matter in collgge and university tax courses. 66 ooH MNn OOH oHH OOH oNH ooH nNH ooH NNN ooH oHH ooH oNH OOH nNH 00H MNn ooH OHH ooH «NH OOH nNH Hmuoe III-III II II Ill-III III III 'III' III III! II I'll! II H « H H N N H H H « o o H N H N H « o o H N H N . . . . . . . . . . . . . . . uncommon oz 0N No ON «N Nn N« HN 0N «H Nn HH NH oH «N NH nH oN MN nH 0H NN mN MN mN . . . . . . . . . . . . cOHaHao on u>an H NH m« cH mH NH NH 0 NH NH No NH NN nH OH NH HN Hm OHH Nm «« NN «n Hm an . . . . . . . . . . . . . . . . . . . .02 o H o o o o o H o c o o o o o o o o o o o o O o . . . . . . . . . . . . . . . MonuOIomor Hm «HH mm o« «N Hm mm m« NH Hm a HH NH NN «H 0H H « o o H N H N . . . . . . . . . . . . . . . Anuadvaum an on: uuuanaou Hasuuuv nsoHpoun no ooaHuuoxollmor oH MN NN NN «H HN oN mN wN «oH NM mm NN oN Hm Nm mH mo NH oN HN NN wH NN . . . . . . . . . . . . . . noHuaxuu aH muons wousaaou we cOHnwso InHv 0>HuaHuuoov HHouo>ounno> N mN o N n N N HH «H co NH ON NH NN «H NH NH o« NH oN HH «H NH nH . . . . . . .uuudOHuHuocum ou oHnoHHu>m nuuH>uou no aOHunHuunueulmvw n HH H H n « n 0 HH o« NH nH 0 HH HH «H 0H mm oH oH NH NN «H NH . . . . . . . . . . . . . .uuouaaaou mo on: a.mxH no aOHunHuoaovuuuu» N z N z N z N z N z N z N z N z N z N z N z N 2 Honey .H.uaz Huoog .Nmoo Hooch .H.uaz Huuoa .Nmoo Hausa .H.u~z Huuoq .Nmoo onnoauum onusou oumwuouu unusoo vaooemnnouqsvauuuovaa onusou uouamunuunsvnuuuovaa :Nuouusou nau Nanuo>Hna can ouoHHou aH vuvsHocH on wouuul uoofiaau vounuHuo nauanloo vHao:m: cu codename uo Noauscouh .oH oHnuh 67 The Pearson chi-square statistic was used to test the above null hypothesis for each of the three tax courses, with the "no response" category omitted from the computation of the test statistic. Test results were as follows: Undergraduate - first course. The test results showed that chi-square equaled 10.519. This value was not significant at the .05 level and led to a failure to reject the null hypothesis of no difference between the three respondent groups in their recommendations concerning in— struction of computer oriented subject matter in the first undergraduate tax course. Forty-eight percent of the respondents indicated that they favored the inclusion of at least some computer oriented subject matter in the first undergraduate tax course. An "overall descriptive discussion of computer usage in taxation" was the most frequent positive response. Thirty- one percent of the respondents answered "No," computer oriented subject matter should not be included in the first course. An additional 20 percent of the respondents had "no Opinion." Undergraduate - second course. The value of the X2 statistic was 9.976. This value of chi—square was not sig- nificant and the null hypothesis was not rejected for the 68 second undergraduate tax course. Sixty-eight percent of the respondents indicated that they favored the inclusion of at least some computer oriented subject matter in the second tax course. The most frequent response in each group was -- "Yes--overall descriptive discussion of computer usage in taxation," and represented 28 percent of all responses. Graduate course. One respondent checked "Yes--other" and specified "use of time sharing for tax planning." How- ever, for the computation of X2 statistic, this response was reclassified as "overall descriptive discussion of com- puter usage in taxation." This reclassification was neces- sary to insure prOper application of the chi-square test. After the above adjustment, the value of chi-square equaled 18.807. This value of X2 was significant and rejected the null hypothesis. Thus, the three respondent groups significantly differed in their recommendations con- cerning instruction of computer oriented subject matter in graduate tax courses. Thirty-one percent of the respondents indicated "Yes--exercises or problems (actual computer use by students)." This response was closely followed in frequency by "I have no Opinion" which accounted for 26 percent of all responses and was the modal response for "local" practitioners. This 69 large prOportion of local practitioners who responded "I have no Opinion" was the primary cause of the significant chi—square statistic. The Goodman-Kruskal index of predictive association (XB) for the graduate tax course responses was 0.0639. This statistic indicates that knowledge of a respondent's firm category would only reduce the probability of error in predicting his response by 0.06. Thus, there was little predictive association among the significantly different responses of the three practitioner groups. Summary. The three practitioner groups agreed in their response recommendations concerning computer oriented subject matter in the first and second tax courses in colleges and universities. However, the three groups sig- nificantly differed concerning their recommendations for the graduate tax course. Table 16 reflects practitioners' perceptions of the importance of computer oriented subject matter in college and university tax courses. The responses indicated that there should be at least some computer oriented subject matter in the first and second undergraduate tax courses, and in a graduate tax course. Furthermore, the responses indicated the inclusion of progressively more computer 70 content as the course level increased. Modal responses across the three groups of practitioners indicated that an overall descriptive discussion of computer usage in taxation should be included in the second undergraduate course, and students should be exposed to actual computer use through exercises or problems in a graduate tax course. However, interviews with tax training directors re- vealed that they generally disagreed with this latter recom- mendation for the graduate course. Instead, they would prefer to limit computer oriented subject matter in the graduate course to a descriptive discussion of the ways in which a computer can aid the tax Specialist in the perform- ance of his work. They viewed actual computer use as a series of mechanical procedures which are better left to on-the-job training. One practitioner expressed a similar view: I believe there will be an increased use of com- puters by CPAs in two ways--the active preparation of returns by doing the computation work, and by use of the computer for researching tax questions by retrieval of information, tax cases, etc. I believe a student needs to know how CPAs are using such equipment-- largely thru service centers and in some cases on their own computers, but there is no necessity for going into the techniques in any great depth -- this can be acquired in a relatively short period "on the job." 71 Job Activities Item 16 of the questionnaire asked practitioners to indicate their experience in performing specific job activi— ties. These activities were categorized under three types of service: preparation or review of tax returns; consultation on tax problems; and, technical tax accounting services. For each individual activity, response alternatives in- cluded "frequently (more than 10 times per year), occasion- ally, or never." To analyze the data, the three response alternatives were numbered for each activity in such a manner that the higher the number, the more frequent the activity. Thus, numbers were assigned so that Frequently = 3, Occasionally = 2, and Never = l. The mean response was then calculated for each activity and reported in Tables 31, 32, and 33 of Appendix D. The response means were then utilized to assign ranks to the activities in the order of their frequency of perform- ance. Ranks were assigned within the three categories of service for each respondent group and in total, and are summarized in Tables 17, 18, and 19. Twenty—two activities specified by respondents as "other" are presented in Tables 34 and 35 of Appendix D. Table 17. Summary of ranks assigned according to frequency of preparation or review of tax returns (federal, state, and local as required) 72 Type of return Total Corp. Local Nat'l. Corporate income. . . . . . Franchise taxes . . . . . . Individual income . . . . . Partnership income. . . . Sales and use taxes . . . . Payroll taxes . . . . . . . Property taxes — personal . Capital stock . . . . . . . Employee trusts . . . . . Corporate organization and qualification . . . . . . Exempt organizations. . . . Gross receipts taxes. . . . Gift tax. . . . . . . . . . Property taxes - real . . Personal trusts . . . . . . Estates and inheritance . . Excise taxes. . . . . . . . 10 11 12 13 14 15 16 17 10 14 12 13 15 17 16 11 10 11.5 14 16 13 15 11.5 17 4.5 14 12 13 10 11 15 4.5 17 16 73 Table 18. Summary of ranks assigned according to frequency of consultation on tax problems (federal, state, and local as required) Type Of problem Total Corp.Rank Local Nat'l. Closely held corporations. . . . l 10 1 1 Form of business organization. . 2 6 2 4 Real estate. . . . . . . . . . . 3 3 4 8 Reorganizations, mergers, acquisitions . . . . . . . . . 4 4 7.5 2 Executive compensation . . . . . 5 7 3 6 Consolidations . . . . . . . . . 6 2 9 5 Liquidations . . . . . . . . . . 7 8 7.5 3 Multi-state operations . . . . . 8 1 10 9 Employee trusts, formation, operation, etc. . . . . . . . 9 9 5.5 11 Estate planning. . . . . . . . . 10 11 5.5 7 Foreign operations . . . . . . . ll 5 11 10 74 The coefficient of concordance between the three respondent groups equals zero for the ranking of frequency of preparation or review of tax returns. The coefficient of concordance between the three respondent groups does not equal zero for the ranking of frequency_of preparation or review of tax returns. The test results showed that the coefficient of con- cordance between the three group rankings equaled 0.497. This value was not significantly different from zero at the .05 level of significance and the null hypothesis was not rejected. This means that there was pg significant agree- ment between the rank orders of the three practitioner groups (shown in Table 17) for the ranking of preparation or review of tax returns according to the frequency of preparation or review. W' O The coefficient of concordance between the three respondent groups equals zero for the ranking of frequency of consul- tation on tax problems. The coefficient of concordance between the three respondent groups does not equal zero for the ranking of frequency of consultation on tax problems. The results of the test showed that the W between the three group rankings in Table 18 was 0.267. This coef- ficient of concordance was not significantly different from zero and led to a failure to reject the null hypothesis. 75 There was no significant agreement between the rank orders of the three practitioner groups for the ranking of consul- tation on tax problems according to the frequency of consul- tation. Since there was as significant agreement for the fre- quency of preparation or review of tax returns, and the fre- quency of consultation on tax problems, the "total" ranks in Tables 17 and 18 are based on a comparison of the overall mean response for the activities within each table. Table 19. Summary of ranks assigned according to frequency of performance of technical tax services Rank Service during. Total Corp. Local Nat'l. Audit by revenue agent (field and/or office). . . . . . 1 l 1 1 Informal conference. . . . . . . . 2 2 2 2 Appellate Division proceedings . . 3 3 3 3 Formal litigation (Tax Court, Dist. Court, etc.) . . . . . . . 4 4 4 4 W0: The coefficient of concordance between the three respondent groups equals zero for the ranking of frequency of technical tax accounting services. W1: The coefficient of concordance between the three respondent groups does not equal zero for the ranking of frequency of technical tax accounting services. 76 Since there was perfect agreement between the rank orders of the three respondent groups, the coefficient of concordance (W) equaled 1.000. This extreme value of W is significantly different from zero and the null hypothesis was rejected. The Kendall coefficient of concordance showed that there was no significant agreement between the three prac- titioner groups for the ranking of frequency of preparation or review of tax returns, and the ranking of frequency of consultation on tax problems. Further analysis of that data was possible by comparing the rankings between groups, taken two at a time. Table 20 summarizes the results of the tests. Table 20. Summary of the Kendall coefficient of concordance W with the null hypothesis that the coefficient of concordance between pairs of group rankings equals zero Group Group W Level of Significance Preparation or Review of Tax Returns Corporate Local . 0.689 NS Corporate National 0.380 NS Local National 0.799 NS Consultation on Tax Problems Corporate Local 0.234 NS Corporate .National . 0.414 NS Local National 0.700 NS 77 Each of the six comparisons produced a test statistic that was not significant at the .05 level, indicating no sig- nificant agreement between pairs of group rankings. However, since this lack of between group agreement could be due to a lack of within group agreement, further analyses were per- formed by computing a two—way analysis of variance for each practitioner group under each job classification (preparation or review of tax returns, and consultation on tax problems), a total of six two-way analysis of variance tests. The results of the six tests disclosed that the mean square for activities accounted for 93.6 percent to 99.2 per- cent of the total expected mean square for practitioners. This indicated that there was high response agreement within each practitioner group. Thus, there was no agreement between pairs of group rankings for the frequency of prepa- ration or review of tax returns, and consultation on tax problems, even though there was agreement within groups. Tax Topics The second part of the questionnaire was designed to gather data concerning the relative instructional emphasis to be accorded thirty—eight specific tax topics, and to determine those tOpics for which academic preparation is \ well suited as Opposed to those tOpics for which in-firm or 78 professional tax training is more apprOpriate. Participants were asked to respond twice to each t0pic -- once for emphasis to be accorded the t0pic in college and university tax courses, and once for emphasis to be accorded the t0pic in professional or in-firm tax training programs. The procedures used in the analysis of tax t0pic re- sponse were similar to the procedures employed for the analysis of tax activities. Numbers were assigned to the response choices so that Major Emphasis 4, Some Emphasis = 3, Little Emphasis = 2, and No Emphasis 1. For each tOpic, means were calculated in two categories (College or Univer- sity Emphasis, and Profession or In-Firm Emphasis), for each of the three practitioner groups (corporate, local public accounting, and national public accounting). The tOpics and response means are presented in Table 36 of Appendix D. The response means for t0pic emphasis was then used to assign ranks to the tax tOpics in such a manner that the highest t0pic mean was ranked number one and the lowest mean, thirty-eight. Thus, the t0pic to be given the most emphasis was ranked 1, while the t0pic to be given the least emphasis was ranked 38. Table 21 presents the thirty-eight tax tOpics, with accompanying emphasis rankings, in the order in which the tOpics appeared in the questionnaire. 79 m.mH NH OH OH m.m O O N . . . . . . . a . . . . . meccaH mmouO .NH ON OH N «H m m.n « m . . . . .soHumuHuuosw new GOHueHumummO .OH NN mH ON OH «H OH mN mH . . . . . . . .musumm Hmmu scum oaousH .OH OH NN HN m.HN OH OH OH m.NH . mmHuHusoom I musmaumm>uH aoum uaoodH .«H HN HH ON OH m.m O OH O . . . . . . . . . .mnOHuusOoO OmuHEUuH .OH OH O OH O O N O m.m . . . . . . . mommoH was maHeO HmanwO .NH OH mN OH ON O NH HH m . . . . . . . . . . .Nuummoun mo mHmmO .HH « N O m.N NH m.m OH OH . . . . . . . . . . .maoHuOmoxm OaHaHH .OH O N N m.N « « m m.m . . . mooHuosOoO vow mmsoooH mo OaHaHH .m m m.OH m HH N N n O . . . . . . . . . . . . OoHusooouw Maw .O N « « « N H m.H H .GOHuMUHOHmmeu “«3.33.3 I maoHuoovoO .N mH NN OH OH H m m.H N . . . . . . . . unwoaou uaooaH mHOmme .O NH mN NN m.mN HH «H NH HH . . . . . . . . oaouaH mo unusaOHmmm was moHuHuam mo NuHHHOuxma .O NH O m N OH NH HN m.mH . . . . . . . . . . . . udosmwmssa was .« «H ON m mH m.ON OH OH «H . . . . .moamHHaaoo paw ooHuauumHaHsp< .m Om NO Hm Om mH HN N m.NH . . . coHuaon>o paw GOHumsuom esH use .N On On Nm Om NH ON a m.OH . . . . . . . . . .vssoumxown HsomHm paw .HmsoHusuHumdoo .HonuoumHm .H .H.umz Hmuoa .nuoo Hmymm .H.uez..Hmooa. .Ouwo Hmuoe new“ gammy . (scum canes canoe akach no HaaOHmmmeum. NuHmum>HsO no oOoHHou :oHuozuumaH xwu oH oeHooou OHsonm moHOou may umnu mHmmnaam onu ou OaHpuooom possum moHaou am» no Newsasm .HN oHOwH 80 m.OH «N ON «O NO ON HH ON mm ON mm OH ON NH «N Hm Om ON «H mm HN «m «H ON NO ON ON ON Om mm OH «O OO OH «N NH ON m.HN m.NN NO mm HO OH m.NN Nm m.mN on «N HO NN ON m.ON NO OH OH ON on Om NN NH mm 0.0H Hm ON HH OH «O ON ON «N NN Nm m.OH ON mm ON OO «O ON ON mm NN ON «N mm Om OH «H on NN «m ON m.mN HN mm m.mN ON NN Hm Om OH m.OH Nm .GOHumuoOuoo onHuHaa.mOcHoamaHm paw GOHuwauom I mGOHuduonuou o o o e o o o o e ewafiagfig mumumm . . maHumHonwnon .mumnuu .mmumumm o o o o o o o o e o o o e maougfi mo GOHuanuumHv I mmHnmumcuumm . . . . . . Hmumcmm I mmHsmuoauumm . . . . sun OmumsHumm “OsHOHonsqu o e o o o o o o o o o o o gumum Nafiamm use subsuma I mHmaaa>HeaH mmmaoaxo mmwaHmsnuoa I mHmapH>HvaH . . . . . OGOHmnon “:0Hummaogaoo Omuuummv I momNoHOam van mumNoHOam .maomumm OmNoHOamImHmm mo mamHnouO May a o e o o o e e o e 8°Huaumgo an“ . . . . . . . .Nuuonoum mmosHmaa mo aoHuHmoanO van aoHuHmHsvod O O O O C O O O O I O O 0300“.“ NO GOHuosOoun osu you momammxm . .aoHumHOmp can amonsommu Hmuausz .Hm .ON .ON .ON .NN .ON .ON .«N .ON .NN .HN .ON .OH .OH .H.uuz HmuoH Noam owmmH .Ouou Hauoa auHNIaH no Huaoaamomoum. i .H.umz HmooH Noam onoa .Ouoo Hmuoa Nuanu»»a¢:.uo.ummaaoo oHOoa OosaHucoutI.HN anua 81 . . . . .mmxmu huHusumm HMHoom . . . . . . . . . .mmxmu muwum o o o o o o o o o waflafiflwflg .me o o o o e o o o e omHUQQMU :OHmuom Oam maooaH smHouom . . . . . OGOHumNHGmeo unfimxm o o o o e o o e WGOHUNHOEOU :m: nwumwnonam I mOOHumuomuoo coaumsasafia was coauspfiuumaa "coHumuHsmOuoou I mGOHumuonuou .OO .NO .OO .OO .«O .OO NO NO OO O.«O OO OO NO OO ON ON HH ON NO NO NN OO H H H H ON NN NH 0.0H NN OO NH ON «O OO ON OO HO OO OO O.«O OO OO NO NO OH OH NN NH ON ON HO ON N 0.0H NH O ON OO OH ON .H.umz HQUOH .Ouoo HmuoH .H.umz HmooH .Ouoo Hauos xcmm UHOOH xamm OHOoH suHmIaH uo HmOOHmmmmoum NuHmum>HaO no mOoHHoO oHOoa swagguaoqu.H~ manna 82 W : The coefficient of concordance between the three respondent groups equals zero for the ranking of emphasis to be accorded tOpics in undergraduate tax instruction in colleges and universities. W : The coefficient of concordance between the three respondent groups does not equal zero for the ranking of emphasis to be accorded topics in undergraduate tax instruction in colleges and universities. The test results showed that the coefficient of con- cordance between the three group rankings equaled 0.871. This value of W was significantly different from zero, and the null hypothesis was rejected at the .05 level of signifi— cance. Thus, the three practitioner groups agreed in their ranking of tax tOpics according to the emphasis to be accorded the tOpics in college and university tax courses. This means that there was a concensus among the three prac- titioner groups as to those topics that should be emphasized and those that should receive little emphasis in college and university tax courses. W0: The coefficient of concordance between the three respondent groups equals zero for the ranking of emphasis to be accorded tOpics in professional or in-firm tax training programs. W : The coefficient of concordance between the the three respondent groups does not equal zero for the ranking of emphasis to be accorded tOpics inpprofessional or in-firm tax training programs. 83 The W between the three group rankings equaled 0.810 which was significantly different from zero. The significant agreement rejected the null hypothesis and led to the accept- ance of the research hypothesis, Wl‘ The respondents in the three practitioner groups agreed concerning the ranking of tax tOpics according to the emphasis to be accorded those tOpics in professional or in-firm tax training programs. Since there was significant agreement for t0pic emphasis in undergraduate tax instruction, and t0pic emphasis in tax instruction in professional or in-firm training pro- grams, the best estimates of the "true" relative emphasis to be accorded each topic are represented by the "total" emphasis ranks for each t0pic. These "total" ranks are shown in Table 21 and were derived by comparisons of the sum of ranks for each t0pic across the three practitioner groups. W : The coefficient of concordance between total ranking of emphasis to be accorded tOpics in undergraduate tax instruction in colleges and universities and total ranking of empha- sis to be accorded tOpics in professional or in-firm tax training programs equals zero. W : The coefficient of concordance between total ranking of emphasis to be accorded tOpics in undergraduate tax instruction in colleges and universities and total ranking of emphasis to be accorded tgpics insprofessional or in- firm tax trainingpprograms does not equal zero. 84 The test results showed that the coefficient of con- cordance (W) equaled 0.764. This value of W was signifi- cantly different from zero and the null hypothesis was rejected. This was equivalent to acceptance of the research hypothesis and means that there was significant agreement between the ranking of tax tOpics according to emphasis to be accorded in colleges and universities, and the ranking of those same tOpics according to emphasis in professional or in-firm tax training programs. Thus, those tOpics highly ranked to be emphasized in college and university tax courses, also were highly ranked to be emphasized in professional and in-firm tax training programs. Similarly, those tOpics ranked to receive little emphasis in college and university tax courses, also were lowly ranked for emphasis to be accorded in professional or in—firm tax training programs. Table 22 presents the thirty-eight tOpics in the order of their total ranking for emphasis in college and university tax courses. In Table 23, the tOpics are arranged in the order of their total ranking for emphasis in profes- sional or in—firm tax training programs. 85 Table 22. Summary of tax topics ranked according to the emphasis that the tOpics should receive in tax instruction in colleges and universities Emphasis Rank Topic Total Corp. Local Nat'l. Deductions - criteria; classification. . . . . . . . . . . 1 1.5 1 2 Taxable income concept. . . . . . . . 2 1.5 3 1 Capital gains and losses. . . . . . . 3.5 6 2 3 Timing of incomes and deductions. . . 3.5 3 4 4 Depreciation and amortization . . . . 5 4 5.5 9 Tax accounting. . . . . . . . . . . . 6 5 7 7 Gross income. . . . . . . . . . . . . 7 8 8 5.5 Itemized deductions . . . . . . . . . 8 10 9 5.5 Basis of property . . . . . . . . . . 9 11 12 8 Timing exceptions . . . . . . . . . . 10 15 5.5 12 Taxability of entities and assignment of income. . . . . . . . 11 17 14 11 Income from investments - securities. 12.5 18 15 10 Tax law formation and evaluation. . . 12.5 7 21 15 Administration and compliance . . . . 14 13 16 20.5 Income from real estate . . . . . . . 15 23 l3 14 Historical, constitutional, and fiscal background . . . . . . . . . 16.5 9 29 13 Expenses for the production Of income 0 O O I O O O O O O O O O 16 O 5 14 20 17 Acquisition and disposition of business property . . . . . . . . . 18 16 18.5 22 Tax planning. . . . . . . . . . . . . 19.5 12 22 23 86 Table 22.--Continued Emphasis Rank Topic Total Corp. Local Nat'l. Tax management. . . . . . . . . . . . 19.5 21 17 19 Partnerships - general. . . . . . . . 21 28 10 20.5 Corporations - formation and financing; multiple corporations. . 22 20 18.5 24 Partnerships - distribution of income . . . . . . . . . . . . 23.5 29 ll 26 Individuals - marital and family status . . . . . . . . . . . 23.5 27 23 16 Individuals - nonbusiness expenses. . 25 26 28 18 Corporations - reorganization; distribution and liquidation. . . . 26 19 30 25 Employers and employees - deferred compensation;pensions . . . . . . . 27 24 24 29 Corporations - subchapter "S" corporations. . . . . . . . . . . . 28 31 25 28 Estates, trusts;and beneficiaries . . 29 34 26 27 State taxes . . . . . . . . . . . . . 30 22 32 37 Tax problems of self-employed persons 31 35 27 30 Natural resources and depletion . . . 32 30 33 33 Foreign income and foreign taxpayers. 33 25 38 34 Estate planning . . . . . . . . . . . 34 36 31 31 Withholding; estimated tax. . . . . . 35 33 34 32 Social security taxes . . . . . . . . 36 32 36 38 Exempt organizations. . . . . . . . . 37 37 35 35 Farm operations . . . . . . . . . . . 38 38 37 36 87 Table 23. Summary of tax topics ranked according to the emphasis that the topics should receive in professional or in- firm tax training programs Emphasis Rank Topic Total Corp. Local Nat'l. Tax planning. . . . . . . . . . . . 1 l l 1 Timing exceptions . . . . . . . . . . 2.5 8 2 4 Timing of incomes and deductions. . . 2.5 2 7 5 . Deductions - criteria; classification. . . . . . . . 4 4 4 7 Acquisition and disposition of business property . . . . . . . 5 6 6 8 Capital gains and losses. . . . . . . 6 10 3 10 Tax management. . . . . . . . . . . . 7 5 8 12 Corporations - formation and financing; multiple corporations . . . . . . . 8 14 10 3 Corporations - reorganization; distribution and liquidation. . . . 9 12 18.5 2 Employers and employees - deferred compensation; pensions. . . . . . . 10 19 5 11 Tax accounting. . . . . . . . . . . . ll 9 18.5 9 Estate planning . . . . . . . . . . . 12 28 9 6 Administration and compliance . . . . l3 3 28 14 Depreciation and amortization . . . . 14 7 16 23 Gross income. . . . . . . . . 15 13 17 19.5 Itemized deductions . . . . . . . . 16 20 ll 21 Corporations - subchapter "S" corporations. . . . . . . . . . . . 17 27 15 13 Taxable income concept. . . . . . . . 18 15 27 15 Income from real estate . . . . . . . 19 23 13 22 88 Table 23.--Continued Emphasis Rank Topic Total Corp. Local Nat'l. Basis of property . . . . . . . . . . 20 18 25 16 Income from investments - securities. 21.5 21 22 18 Partnerships - distribution of income . . . . . . . . . . . . . 21.5 25 12 24 Expenses for the production of income . . . . . . . . . . . . . 23.5 16 21 25 Taxability of entities and assignment of income. . . . . . . . 23.5 22 23 17 State taxes . . . . . . . . . . . . . 25 11 26 29 Estates, trusts;and beneficiaries . . 26 32 20 19.5 Partnerships - general. . . . . . . . 27.5 26 24 26 Tax problems of self-employed persons . . . . . . . . . . . . . . 27.5 34 14 28 Foreign income and foreign taxpayers . . . . . . . . . . . . . 29 17 36 27 Natural resources and depletion . . . 30 24 34 33 Individuals - nonbusiness expenses. . 31 33 29 30 Withholding; estimated tax. . . . . . 32 29 31 34 Individuals - marital and family status . . . . . . . . . . . 33 36 30 32 Exempt organizations. . . . . . . . . 34.5 35 33 31 Social security taxes . . . . . . . . 34.5 30 32 37 Tax law formation and evaluation. . . 36 31 37 36 Farm operations . . . . . . . . . . . 37 38 35 35 Historical, constitutional, and fiscal background . . . . . . . . . 38 37 38 38 Question 15 asked practitioners "Does your firm offer staff training programs in taxation?" Table 24 presents 89 Staff Training a summary of practitioner responses to this question. Table 24. Frequency of response to "Dees your firm offer staff training programs in taxation?" Cogp. Local Nat'l. Total “3PM“ N z N z N z N z Yes 14 11 49 38 116 97 179 48 No 109 87 77 60 0 0 186 50 No response 2 2 3 __2_ 3 3 , 8 2 Total 125 100 129 100 119 373 100 100 x-: There is no difference between the three respondent groups in the pr0portion of respondents whose firms offer in—firm staff training programs in taxation. X : There is a difference between the three respondent groups in thegproportion of respondents whose firms offer in-firm staff training programs in taxation. The null hypothesis was tested with the Pearson chi- square test of association, with the "no response" category omitted from the computation of the chi-square statistic. 1The assumption of independence was violated in the application of this test because in some cases, more than one respondent was employed by the same firm. 90 The value of x2 equaled 195.675. This extreme value of chi- square was significantly different from zero at the .05 level of confidence, and rejected the null hypothesis of no difference. The three practitioner groups significantly differed in the preportion of respondents whose firms offered staff training programs in taxation. Post-hoc comparisons revealed that there also was a significant difference be- tween the responses of each pair of practitioner groups. Furthermore, the significant difference in response between practitioner groups was predictive, as signified by a Goodman-Kruskal index of predictive association of 0.6481. This statistic indicated that knowledge of a respondent's firm category would reduce the probability of error in pre- dicting his response for staff training by 0.65. Thus, there was major predictive association between the signifi- cantly different responses of the three practitioner groups. Those respondents who indicated that their firms offer staff training programs in taxation were asked to describe their firm's tax training programs offered in the last twelve months in regard to the number of meetings, length of individual meetings, total hours for all meetings, prerequisite training for those participating, and general subject emphasis. 91 The first three items (number of meetings, length of individual meetings, and total hours for all meetings) re- late to the amount of time devoted to in-firm tax training. All three items were included in the questionnaire to aid respondents in making a reasonable estimate of the total hours devoted to tax training, since the number of meetings multiplied by length of individual meetings equals the total amount of time for all meetings combined. Table 25 summarizes the practitioner responses for total hours of in-firm tax training. 'Table 25. Summary of responses for total hours of in-firm staff training programs in taxation i — — i Total hours NCogp.z NLocalz NNat'li NTotalz 1 - 25 4 29 36 74 28 24 .68: 38 26 - 50 2 l4 4 8 29 25 35 19 51 - 75 1 7 3 6 ll 10 15 8 76 - 100 1 7 0 0 8 7 9 5 101 - 125 2 14 0 0 5 4 7 4 126 - 350 0 0 0 0 8 7 8 5 No response _3 __2_9 _12 ._21 _2_§ __31 __2_1 100 " I 00" H O O H H 0‘ H C O H \l \D Total 14 100 92 The responses appear to indicate that those corporate and national public accounting practitioners who received in- firm tax training, received more intensive tax training than did the local public accounting practitioners. The responses ranged from a low of two hours to a high of three-hundred- fifty training hours. For all respondents, the median re- sponse was thirty hours, while the mean response was forty- seven tax training hours. Respondents were next asked to describe any "pre- requisite training or level of those participating" in tax training programs. Their responses are summarized in Table 26. The last item in question 15 asked practitioners to indicate the general subject emphasis of their in-firm tax training. Table 27 presents a summary of practitioners' responses. As is evident from Tables 26 and 27, practitioners' responses were exceptionally brief and generally nonspecific. Many responses did not indicate specific training emphasis, course levels, or Specific prerequisites for participants. However, the responses do indicate a broad sc0pe of training areas. In—firm training ranged from the mechanical aspects of Computax, and the concepts of a basic tax course, to the technical aspects of corporate tax planning. The 93 Table 26.‘ Summary of responses.for "prerequisite training or level of those participating" in staff training programs in taxation Response NCorp.z NLocalz NNat'li NTotalZ Various (depends on, experience and level) 4 28 9 18 40 34 53 30 All staff members 0 0 21 43 l6 14 37 21 One year experience as tax specialist l 7 l 2 16 l4_ 18 10 None 3 22 3 6 10 9 l6 9 BS in accounting 2 14 2 4 8 7 12 7 2 - 3 years experience 0 0 l 2 7 6 8 4 Basic tax course 1 7 0 0 5 4 6 3 No response _3 __2_2 _1_2_ 25 14 12 29 _1_6 Total 14 100 49 100 116 100 179 100 responses also indicate that national public accounting firms placed major emphasis on in—firm tax training, covering all areas of taxation. Local public accounting firms appeared to place less emphasis on in-firm tax train- ing programs, with most of their training concentrated on the study of changes in tax laws and procedures. 94 Table 27. Summary of responses for "general subject emphasis" of staff training programs in taxation Corp. Local Nat'l. Total Resp°nse N z N z N z N 2 Full scope (all tax subjects) . . . . . . . 2 l4 2 4 31 27 35 19 Tax law changes .'. . . . 3 22 18 37 10 8 31 17 Various depends on level . . . . . . . . . l 7 6 12 22 19 29 16 Tax reform act and prep- aration of returns. . . 0 0 9 19 13 ll 22 12 Corporate and personal income tax. . . . . . . 0 0 l 2 9 8 10 6 Specialized problems. . . l 7 3 6 1 l 5 3 Basic tax course. . . . . 0 0 0 0 . 4 3 4 2 Internal revenue code . . 1 7 0 0 3 2 4 2 Federal income tax. . . . l 7 0 0 2 2 3 2 Conceptual subjects; income determination. . 0 0 0 0 2 2 2 1 Corporate tax planning; subchapter C 0 0 0 0 2 2 2 1 Internal revenue code; research and communica- tion of opinion to client. . . . . . . . . 0 0 0 0 l l l 1 Problem solving . . . . . 0 O 0 0 1 l l l Computax 0 0 0 0 1 l 1 1 No response ._5 36 19_ 20 14 12 29 16 Total 14 100 49 100 116 100 '179 100 95 AICPA Professional Develgpment Progpams in Taxation Many firms supplement their formal in-firm staff training with AICPA professional develOpment programs. Table 28 indicates respondents' participation in taxation programs. Table 28. Frequency of response to "Have you participated in any of the AICPA professional develOpment courses in taxation?" Cogp. Local Nat'l. Total Reapm“ N z N z N z N 74 Yes 14 11 71 6O 48 42 133 37 No 110 89 47 40 67 58 224 63 Total 124 100 118 100 115 100 357 100 X : There is no difference between the three 0 respondent groups in the percentage that participate in AICPA professional develOp— ment courses in taxation. 2 X : There is a diffepsnce between the three 1 respondent groups in theupercentuge that participate in AICPA professional develpp- ment courses in taxation. The test results showed chi-square equaled 61.887. This value was significant at the .05 level and rejected the null hypothesis of no difference. The three respondent groups differed in their participation in AICPA professional develOpment courses in taxation. Furthermore, post-hoc 96 comparisons revealed that there was a significant difference in participation between each pair of groups. The signifi- cant difference also was mildly predictive as evidenced by an index of predictive association (AB) of 0.1804. Table 28 reveals that local public accounting prac- titioners made more use of AICPA professional develOpment programs in taxation than did national public accounting practitioners. This appears reasonable, since local public accounting firms offered less in-firm training than did national public accounting firms. Thus, local firms had more need for external training programs. The table also shows that corporate tax practitioners made substantially less use of AICPA sponsored programs in taxation than did public accounting practitioners. However, it is likely that corporate practitioners made use of com- parable professional develOpment programs offered by organ- izations not included in the sc0pe of this study. The AICPA professional develOpment offerings in taxation consisted of five types of educational programs. These programs ranged from ten days to as little as a few minutes a day in length. The principal areas covered under each type of program are discussed below: 1. Seminars - were generally one day in length and 97 centered around group discussion. They were generally pre- sented through state societies of CPAs to small groups of approximately 25 participants. Various seminars were devoted to tax planning, estate planning, Subchapter "C", and proce- dure and practice before the IRS. The Effective Tax Planning Series consisted of nine individual seminars and involved such areas as problems of the closely-held corporation; pur- chase, sale or liquidation of a corporate business; taxation of personal holding companies; partnerships; depreciation; tax accounting problems; Subchapter "S" corporations; tax problems of individuals; and, multiple corporations. The Estate Planning Series consisted of five separate seminars including estate and gift taxation; income taxation of estates and trusts; basic concepts in estate planning; planning for the executive or professional person; and, planning for the owner of a closely-held enterprise. Two seminars were offered in the Subchapter "C" Series; one devoted to corporate liquidations, the other covered tax- free reorganizations. Finally, a single seminar was devoted to procedure and practice before the Internal Revenue Service. This seminar was intended for CPAs who occasionally repre- sent their clients on procedural matters before the IRS. 2. Workshgps - provide practical training in the 98 techniques and procedures of tax return preparation. They generally lasted two days in length and were presented by the AICPA's Professional Development Division, or were co- sponsored by a state society. There were two workshOps: one involved individual tax returns, the other concerned corpor- ate income tax return preparation. 3. Training programs - in taxation were of one-week duration and utilized lecture, group discussion, and problem solving instructional techniques. Subjects encountered in the Level III program included capital and casualty losses, contributions, real estate problems, securities transactions, and selected depreciation and partnership problems. The Level IV program focused on tax planning approaches and pro- cedures in such areas as nonrecognition of gains and losses by corporations and shareholders, consolidated returns, multiple corporations, depreciation, and taxation of per- sonal holding companies. 4. Lectures — were designed to bring practitioners up to date on significant current tax develOpments. Each lecture was followed by a question and answer period during which participants could ask questions concerning specific prdblems. 5. CPAudio - consisted of cassette tapes featuring 99 lectures and discussions of pertinent tax problem areas. There were two principal cassette offerings. One, "Tax Highlights Quarterly," was available on a subscription basis and alerted practitioners to recent IRS rulings and court decisions, together with their impact on tax planning. The second consisted of three casette tapes featuring an in- depth discussion of the 1969 Tax Reform Act. Comment. Interviews with the Professional Develop— ment Division's tax area project managers disclosed that most course materials were develOped by outside authors con- tracted by the AICPA. Much of the work of the project managers involved rewriting, editing, and revising those course materials. The project managers indicated that most AICPA course materials in taxation consist of advanced subjects not taught in undergraduate tax courses. The managers also felt that a conceptual emphasis made the AICPA's basic tax materials unique, and not a duplication of the tax materials used in colleges and universities. In-Firm Tax Training in Seven Public Accounting Firms Each of the national public accounting firms inter- viewed offered extensive in-firm staff training in taxation. 100 They offered various courses and seminars apprOpriate to the particular areas of specialty and levels of develOpment of their tax specialists and other employees. In-firm training programs included firm-wide centralized training at the national level, and training in local offices. Formal classroom-type training was offered on a regular basis at the national level. Local office training, formal and informal, was usually offered as required by the needs of local office employees. Formal training at the national level was usually scheduled once a year and courses typically lasted one week. Courses were usually offered at the basic, advanced, and specialty levels. The basic tax course was designed for new tax specialists and dealt with basic concepts of income and deductions, as well as firm procedures. The basic tax course often was also offered to audit staff at the senior—staff level. The advanced tax course was designed for tax specialists with about eighteen months experience and centered around corporate taxation, with most emphasis placed on corporate reorganization, liquidation, and tax planning. The advanced course was followed by special tax courses or seminars which focused on specific tOpics such as compensa- tion, reorganizations, consolidated returns, and foreign 101 taxes. These sessions lasted two to five days depending on the scope of the topic and were intended for seniors or managers specializing in particular areas. In addition, there was usually an annual tax conference for partners during which seminars and workshOps were held to discuss special areas and tax law changes. At the local office level, training was often in the form of departmental meetings held on a regular monthly basis. These meetings were of one to three hours duration and typically were devoted to tax planning techniques, specialized tOpics, and current develOpments. Often the mechanics of tax-return preparation were also taught at the local level. The following sections contain a description of the tax training programs of seven national public accounting firms: Firm A. The basic tax course of this firm was designed for new tax specialists who did not have an advanced degree in taxation. The course lasted two weeks and was based on a text especially designed to teach the concepts of Federal income taxation. TOpics emphasized included gross income, exclusions from gross income, deductions, gains and losses from disposition of prOperty, accounting 102 periods, accounting methods, tax research, partnerships, and fiduciaries. A two-week intermediate tax course was designed for tax staff with about eighteen months experience. Emphasis was given to the tax considerations relating to the organ- ization, reorganization, liquidation, and Operations Of corporations. An introduction was made to forms of business organization, Subchapter S corporations, personal holding companies, accumulated earnings tax, net Operating losses, taxable and tax-free reorganizations, and collapsible corporations. Specialized tax courses were Offered to staff and managers to provide training in specific areas of tax prac- tice. These courses lasted two to five days, with instruc— tion devoted to the taxation provisions peculiar to certain industries (such as utilities, financial institutions, and minerals) as well as advanced study of corporate reorganiza- tion, international taxation, and family tax planning. Attendance was based upon the needs of each individual and the nature of the tax practice of the office to which he was assigned. There was also a two—day seminar for all tax managers and partners. This seminar was designed to keep them abreast 103 of current develOpments and provide an Opportunity for dis- cussion of subjects of mutual interest. TOpics discussed in the past have included corporate reorganizations, family tax planning, pending I.R.S. develOpments, and the use of com- puters in tax practice. In addition to the above courses and seminars Offered on a national basis at one centralized location, firm tax specialists had prepared tax training kits for use by the Operating Offices in their local training programs. The content varied depending upon the subject covered, but in- cluded the applicable sections of the Internal Revenue Code and Regulations, rulings, court cases, and tax planning ideas. These training kits were prepared by the national office to help standardize the quality of training at local offices. Tax training kits were available for such subjects as family tax planning, depreciation recapture, prOperty valuation, employee stock plans, the formation Of corpora— tions, tax return preparation, and tax research. Firm B. The basic tax course was given in local offices to all staff members within their first two years on the staff. The course was composed of twenty-two assign- ments and was patterned after the P—H and CCH Federal Tax Courses. Emphasis was placed on the Internal Revenue Code 104 and Regulations, and on group discussion. Each assignment was covered in two class hours, and required two to five hours of preparation. The basic course was followed by the initial tax course for tax specialists. This course was offered pri— marily to tax specialists who had spent a maximum of one year in tax work and had previously completed the basic tax course. The initial tax course for tax specialists was given at a university over a four week period, six days per week. The primary emphasis of the course was on tax research and the writing of technical memorandums. For most of the subjects, in addition to reading assignments, the specialists were assigned specific questions to be researched in various tax services. For many research problems, the students wrote a memorandum or other document typical of those pre- pared in practice. Subjects covered included partnerships, inventories, sales and exchange, depreciation, estate and gift taxes, tax planning, consolidated returns, corporate organization and reorganization, and corporate distributions and liquidations. The firm also conducted an annual firm-wide tax con- ference on a workshOp and seminar basis, and conducted other special seminars from time to time as required by 105 special problems and current developments. Firm C. Tax specialists in this firm received centralized training in four courses at four levels. Each course was given once per year and lasted five days; a sixth day was devoted to examinations. Throughout the four courses there was increasing emphasis on case studies and the planning implications of tax provisions. The suggested minimum study time for each course was 120 hours. The basic first course contained tOpics such as pro- fessional responsibilities in tax practice, research tech- niques, gross income, deductions, income averaging, pre- paring and reviewing tax returns, family financial planning, and writing of tax memoranda. Many audit staff members also took this course. The second course was designed to give more advanced tax training with emphasis on corporations, personal holding companies, accumulated earnings tax, partnerships, estates and trusts, private foundations, and depreciation recapture. The third course was designed to emphasize the prac— tical applications of Subchapter C of the Internal Revenue Code including corporate distributions, liquidations, organ- izations, and reorganizations. The fourth course was devoted to family financial 106 planning. This area of practice was an outgrowth Of the firm's tax planning services to companies and provided similar services for individual executives. Topics included gifts, short-term trusts, revocable living trusts, and deferred compensation arrangements. In addition to the four courses, the firm held special seminars at the district level, and in local offices Offered periodic staff meetings to advise the staff of changes in the tax law.' Firm D. This firm recently redesigned its national tax training program. Prior to the new program, tax specialists, on an annual basis, attended a one-week national training program for their first fouryears in the firm's tax department. The year four program presumed an excellent background of the basics in taxation and dealt almost in its entirety with tax planning ideas and techniques. The overall program was primarily changed because the firm discovered that they were spending a lot of money training pe0ple who did not remain with the firm. As a substitute, the new program contained less national training and con- sisted of four phases. 1. All first year tax specialists attended a national basic tax training program. This program lasted 107 for three days and was designed to assist new staff members who had no experience in tax work. The program explained the tax accounting services Offered for corporations, indi- viduals, and trusts, and described the technique of preparing various tax returns. Topics included such subjects as tax planning, research, and conferences with Internal Revenue Agents. Instruction was given in small discussion groups. 2. In addition to the basic program, three two-day seminars were held for specialists at the seniOr staff_ level or above. One seminar reviewed the specialized tax benefits available to savings and loan companies and the tax planning problems unique to commercial banks. Another seminar was devoted to an in-depth coverage of several of the tax problems most prevalent in the real estate industry, such as dealer versus investor, collapsible corporations, multiple corporations, foreclosures, syndications, and methods of accounting. A third seminar placed emphasis on situations where LIFO should be used and on various applica- tions of the installment method for retailers and manufac- turers. Actual cases were used as a basis for discussion. 3. In addition to the national training program, local offices sponsored periodic training meetings through- out the year except for the busy season. These local 108 programs were varied but generally emphasized current tax planning ideas, Tax Management Portfolios, and Federal Income Taxation of Corporations and Shareholders by Bittker and Eustice. 4. The last phase involved a "personal self-develOp- ment program." The Firm had outlined those areas of the Code with which new specialists were expected to become conversant within a two-year period. To assist the staff in their self-development program, tax departments were organized into small groups wherein the staff helped one another in understanding the various technical areas. Firm E. The Basic Tax Concepts course in this firm was given at the national level and lasted for one week. Included in the course were twenty-five short case studies, each devoted to a specific area of tax law. The subjects emphasized included substance vs. form, constructive receipt, assignment of income, claim of right, capital expenditures vs. repairs, bad debts, depreciation, depreciation recapture, accounting periods, inventory valuation, long-term contracts, travel and entertainment expense, charitable contributions, fringe benefits, net operating losses, consolidated returns, involuntary conversions, like—kind exchanges, and install- ment sales. 109 Following the above course, the advanced tax train- ing program consisted of thirty case studies Offered over five different levels on a national basis. Tax specialists each year advanced to the next level. Some cases were de- voted to change of accounting methods, casualty losses, Sub- chapter S corporations, corporate organization, complete liquidations, nontaxable exchanges, personal holding com- panies, retirement plans, partnerships, accumulated earnings, partial liquidation, taxable acquisitions, collapsible cor- porations, divisive reorganizations, trusts and estates, estate planning, financial institutions, foreign Operations, Oil and gas taxation, and mitigation of statute. Tax training at local Offices was offered as needed and often included instruction in the preparation Of tax returns. Firm F. This firm offered three, three-day courses on a national basis for tax specialists. One course was devoted to individual income taxation and preparation of individual returns, a second course dealt with corporate taxation and the preparation Of corporate returns, and the third course was devoted to tax planning for clients. The basic national training was subsequently followed with training on a regional or sub-regional basis 110 for tax staff with two or more years of experience. This training consisted of specialized courses of one to five days duration which were devoted to such tOpics as consolidated returns, taxation of banks, estate and financial planning, taxation of insurance companies, and the tax aspects of doing business abroad. The firm also encouraged the use Of cer- tain AICPA professional develOpment courses in taxation in- cluding the Subchapter "C" Series, Procedure and Practice Before the IRS, and the Effective Tax Planning Series. On the local level, Offices conducted programs as made necessary by staff requirements. Training for new em- ployees centered around income tax return preparation and research techniques. The firm also had an annual tax conference for managers and partners which lasted three to five days. Seminars and workshOps were used to highlight new laws and current develOpments. Firm G. The national tax training program of this firm consisted of three formal tax courses, and various special tax seminars devoted to specific problems. The courses were Offered once a year and lasted approximately one week; the seminars were of one to two days duration. The first course was designed for new staff and lll covered the principal aspects of Federal income tax law. The course briefly covered estate and gift taxes and placed special emphasis on the Internal Revenue Code, Regulations, and researching tax problems. The second course was designed for staff with one year of tax experience. Course tOpics included pension and profit-sharing plans, accounting and inventory methods, cor- porate distributions, liquidations, reorganizations, and partnerships. The course also covered ethics, the sc0pe and limitations of tax practice, and procedures and problems in representing clients before the Internal Revenue Service. The third course was designed for staff who had the second course and approximately two years of tax experience. Half Of the course was devoted to corporate liquidations and reorganizations, with major emphasis on corporate acquisi- tion problems. The remainder of the course was devoted to consolidated returns and the international aspects of U.S. taxation. Attendance at special tax seminars was limited to tax personnel selected to obtain the special exposure that the seminars offered. The seminar programs dealt with cur- rent developments and advanced problems including corporate reorganizations, with emphasis on corporate acquisitions; 112 income taxation of estates, trusts, and decedents; pension, profit sharing, and deferred compensation; and, consolidated returns. Training programs in the form of staff meetings were held at local Offices as needed. Comment. Although each of the seven tax training programs was in some respect uniquely different from the others, there were certain characteristics which appeared common to all of the programs. These common characteristics included the discussion method of teaching, the use of case study, and the great amount Of emphasis on tax planning. Training directors indicated that the discussion method of teaching was used because they had found that dis- cussion promoted attention, participation, and interaction among their employees. Although the lecture method was used to present current develOpments, lectures had been generally found to be unnecessary because of good outside preparation by trainees. The use of case studies also had been found to have several advantages. The case studies were drawn from the firm's practice experience and therefore acquainted trainees with situations they would likely encounter in practice. They also Offered Opportunities to demonstrate the firm's 113 technique in approaching a problem, or the firm's position in respect to a particular problem. The emphasis placed on tax planning was understand- able, since tax planning means "tax avoidance." Many prac- titioners devote more than half their time to helping clients save money by reducing their taxes or by deferring them through prOper tax planning. Finally, there was common agreement among the train- ing directors that no formal training program could com- pletely substitute for on—the-job training. To them, this meant that it was important that the individuals who sched- uled assignments provide for a wide range of industries and client sizes for their junior staff. Formal training was provided for in—charge seniors and other supervisory staff to help them in developing junior staff through effective on-the-job training and supervision. Duplication of Effort In the process of reviewing the in-firm tax training programs, it became apparent that there was duplication of educational effort between the Offerings of university tax courses and the basic course as found in the in-firm train- ing programs of national public accounting firms. Duplica- tion of material was Obvious, since three of the texts used 114 in basic in-firm courses were also widely adOpted by colleges and universities. Training directors were asked, "If the tax subject matter to be taught in universities were specifically defined, could this duplication of education be eliminated?" They generally agreed that the answer was "ideally-yes" but, "practically-no." One training director said that the pur- pose of his firm's in-firm training was to provide uniformity in training materials, emphasis applied, and time alloted, so that staff members can be considered as achieving a cer- tain standard of training for basic to advanced subjects. Another indicated that he would be reluctant to dictate to university professors what theY.EE§E teach in the tax area. Others indicated that since students do not concentrate in taxation at the undergraduate level, and since there is usually some time lag between the university tax course and any practical experience in the tax area, at least some dup- lication would be necessary to review the basics of taxation in in—firm programs. In addition, most directors also felt that there were different levels of quality among college and university tax courses, and that this variety of quality tended to preclude the elimination of duplicated effort. 115 Reaction to AAA and AICPA Committee Recommendations for Tax Education The tax training directors of the seven national public accounting firms were asked for their reaction tO the tax education recommendations made by the AAA's Income Tax Instruction Committee, and the AICPA's Committee on Education and Experience Requirements for CPA's. Four of the seven training directors responded by saying that they were not familiar with the tax education recommendations made by those committees. The three directors who were aware of the recommendations could make no specific comments about the recommendations, and said that the recommendations had not influenced their own in-firm tax training programs. All seven were then shown a c0py of the AAA's "A Statement of Tax Concepts to be Used as A Basis for Teaching Income Taxation," and "Subject Matter Outline to Accompany the Statement Of 'Concepts of Federal Income Taxation,'" along with a COpy of the AICPA's "Report of the Committee on Education and Experience Requirements for CPAs," which contained recommended content concerning 'Tax Theory and Considerations' and 'Tax Problems.’ After a review of the materials, the directors voiced a general approval of the .AAA Committee's recommendations because the directors liked the conceptual emphasis of the suggested course content. 116 However, they thought that the AICPA Committee's recommenda- tions were not specific enough to give adequate guidance, and felt that the general directives were too broad in sc0pe to be included in one three—semester-hour course. Several directors also remarked that the inclusion of only one required three—semester-hour tax course in a four- or five-year accounting program would result in insuf- ficient coverage of taxation, and would not reflect the growing importance of taxation in the CPA's business. Others felt that the requirement of only one tax course was inconsistent with the emphasis placed on taxation in recent CPA exams, and the AICPA Committee's recommendation that "Candidates should be encouraged to take the CPA examination as soon as they have fulfilled education requirements and as close to their college graduation as possible."2 The directors were most likely correct in their assertion that a recent graduate, who has taken only one undergraduate tax course, does not have sufficient knowledge to achieve a passing score on the tax portions of the CPA exam. But, on the other hand, many academicians would prob- ably argue that "preparation for the CPA exam" should not, 2Committee on Education and EXperience Requirements for CPAs, Op..cit., p. 14. 117 be a principal Objective of the first undergraduate tax course. Also, from a statistical vieWpoint, a three-semester- hour tax course, as a percentage of total accounting hours, closely approximated the percentage that tax represented of the total accounting and auditing sections of the CPA exam. For example, the tax portions of the 1960 thru 1970 CPA exams have, on the average, accounted for approximately 11.5 percent of the total accounting and auditing sections. Looking at just the 1968 thru 1970 exams, the average per- centage has slightly increased to 13 percent. This percent- age closely approximates the three semester hours of tax as a percentage of the recommended total accounting hours. In the four-year program, tax accounts for approximately 16 per- cent Of the recommended nineteen hours of accounting courses. While in the five-year accounting program, tax accounts for 10 percent Of the recommended 30 credit hours of accounting. Role of Universities and Firms in Tax Education The respective roles of universities and firms in the area of tax education escaped precise definition. With regard to universities, "role" was interpreted as meaning the content of tax courses. The definition of the firms' role was more evasive. 118 Role of Universities The interviews revealed that training directors felt that universities should stress the develOpment of basic principles, concepts, and the theory of taxation in the first tax course. They would favor a course patterned after "A Statement of Tax Concepts to be Used as a Basis for Teaching Income Taxation," which was develOped by the 1967-68 Income Tax Instruction Committee of the American Accounting Associa- tion. The training directors were Opposed to the memoriza- tion of detailed regulations or emphasis on the preparation of tax returns. Practitioners' questionnaire responses indicated that they favored a somewhat more extensive coverage in the first tax course. Examples of practitioners' recommendations are: I believe the most important criteria the college or university should strive to achieve is "exposure." Introduce the student to as much and as many tax areas as possible.' The student can become "eXpert" after he has graduated and tackles his Egg; prob- lems. Schooling should help trigger problems, not necessarily help solve them. Speaking generally, the first taxation course in college should give as broad an introduction to taxation as is possible and subsequent courses should build on this foundation. Once the graduate is in practice, areas of special interest in taxa— tion will deve10p and professional, in-firm, and other training can emphasize these areas as desired. 119 In addition to a broad approach, many practitioners felt that universities should emphasize research techniques and tax planning: I feel that in school we would be better off if we taught peOple "How to find an answer" rather than try to teach the law. The law is too in- volved and too pragmatic to "learn." If we could devise a method of teaching concepts and how to use various reference services the person would be "better" educated. I feel that most practi- tioners, even with experience, very seldom give answers to tax questions without (a) building up the factual situation (therefore learning a law within a hypothetical set Of facts is no answer), (b) quickly reviewing a reference even in simple cases or more involved research for moderately complex to complex situations. I feel that most tax subjects should be reviewed and touched on at the university level. Emphasis should be placed on awareness of the overall prob- lems of individuals, partnerships, and corporations. Since no practical experience has been attained by college or university students the fine points or details will not register with the student. If the student is aware and knows how to research them (the problems) when he does want the answer he can readily locate the legal or IRS position or answer. Based on my own experience, I feel that college and university courses should touch lightly on the tOpics listed, only enough to give a basic understanding. These courses should emphasize more the tax planning aspects, and the sources and procedures for research on the various tOpics. I believe tax courses researching the law to give expe- rience in finding the answer to tax questions in tax services (CCH and PH, euLJ and case law, Rev. Rulings, etc., would be helpful. Memorizing tax laws have little value in college as Opposed to general tax structure and ability to find the answer. 120 Some Of the training directors pointed out that most undergraduate accounting majors do not know what area of accounting they will be entering, certainly not all will be tax specialists, or connected professionally with taxation. Thus, the first course should be general in SCOpe, with subsequent courses devoted to specialized tOpics. They felt that graduate level courses hold the most promise for aca- demic Specialization in taxation, and hOpe that more schools will develOp a masters degree in taxation: There is, in my Opinion, room for a degree in taxa- tion as Opposed to accounting or business admin- istration. I Should like to see Michigan State or some other university develOp a curriculum for those intending to make taxation their life work. The field encompasses sufficient theoretical as well as practical material to warrant it as a field of concentration in and of itself. Maybe a partial Solution to the lack of trained tax personnel would be the offering by more uni- versities of a masters degree program in taxation. Role Of Firms The role of firms in the area of tax education could not be Specifically defined in terms of course content. AS one director said, "We want our staff to be well informed, up to date, and expert in their Specialties. To do this, we must assess the needs of our staff and the needs of our firm in respect to our clientele." 121 In general, the role of firms was to bridge the gap between academia and the "real world" and between the resources of the firm and the needs of its clients. Several practitioners expressed the idea that the "role” depended on the particular firm: The role of the firm in tax training should be guided by the Specific areas in which that firm is dealing, or in which a person may be working. These areas may differ according to the size of the firm, location, and also the specialties of that firm. The role of in-firm tax training and the impor- tance of such training largely depends on one'S clientele or one'S specialty. CHAPTER IV SUMMARY, CONCLUSIONS, RECOMMENDATIONS, AND SUGGESTIONS FOR FUTURE RESEARCH Brief Summary of Puppose and Methodology The purpose of the research was to gather tax prac- titioners' recommendations regarding tax education. The study gathered Specific recommendations concerning areas to be stressed in the first undergraduate tax course, the teaching of tax research procedures in college and univer- Sity tax courses, the teaching of computer oriented subject matter in college and university tax courses, and the empha- Sis to be accorded Specific tax tOpics in college and univer- Sity tax courses. In addition, the study determined the relative frequency of use of tax information sources, the use Of computers in performing tax work, the relative fre- quency of performance of Specific types of tax service, and the nature of in—firm staff training programs in taxation. Data were gathered by means of a questionnaire sur- vey and personal interviews. A total of Six hundred ques- tionnaires were sent to practitioners employed by local and national public accounting firms, and by corporations, with 122 123 two hundred questionnaires allocated to practitioners in each firm classification. Separate interviews were held with the national tax training directors of seven national public accounting firms, and with tax project managers from the Professional Development Division of the American Institute of Certified Public Accountants. The data were analyzed to determine if there was any consensus between the educational recommendations made by the three practitioner groups. Of particular interest was a comparison Of practitioners' recommendations with views previously expressed by academicians. Statistical tests of Significance were conducted using the Pearson chi-square test of association and the Kendall coefficient of concordance. Summary_of Findings Areas to beg§tressed in the First Undepgraduate Tax Course There was Significant agreement between the three practitioner groups for the ranking Of areas to be stressed in the first undergraduate tax course. The areas were assigned the following priorities: (1) current provisions Of tax law; (2) history and philOSOphy of taxation; (3) re- searching tax problems; (4) preparation of tax returns; 124 (5) economic aspects; and, (6) tax ethics. However, there was up significant agreement between the above priority rankings made by the practitioners in this study, and the priority rankings of the same areas made by tax professors in Otha Gray's study. Use of Tax Research Sources The three practitioner groups Significantly agreed in their use of Six information Sources for tax research. In the order of frequency of use, the sources were: 1. Standard Federal Tax Reporter (CCH) 2. Tax Management (BNA) 3. Federal Tax Coordinator (RIA) 4. Federal Taxes (P-H) 5. Law of Federal Income Taxation (Mertens) 6. Federal Income, Gift, & Estate Taxation (Rabkin and Johnson) However, there was up Significant agreement between the above ranking according to frequency of use by tax prac- titioners, and the ranking of the same Sources according to their availability in AACSB libraries. 125 Teaching_of Tax Research The three practitioner groups also agreed in their recommendations for teaching tax case research in college and university tax courses. The consensus was that there Should be a discussion of tax research sources in the first undergraduate tax course, discussion of tax research sources and procedures in the second undergraduate tax course, and actual tax research and preparation of tax cases in a graduate level tax course. Use of Computers in Taxation The three groups of practitioners Significantly differed in their use of computers in the tax area. Com- puters were utilized most frequently by national public accounting firm practitioners, followed by local public prac- titioners-and corporate practitioners, respectively. Re- sponses indicated that approximately 75 percent of computer usage in the tax area was devoted to the preparation of tax returns. The remaining usage was about evenly divided be- tween estate planning and tax planning. Teaching of Computer Subject Matter Practitioners agreed in their recommendations for the first and second undergraduate courses. The general 126 recommendation was that there Should be at least some com- puter oriented subject matter in the first tax course, and that an overall descriptive discussion of computer usage in taxation should be included in the second tax course. Practitioners displayed less agreement in their recommendations for the graduate level course. Although 31 percent of all respondents felt that there Should be exer- cises or problems featuring actual computer use by students, 19 percent felt that an overall descriptive discussion was adequate, and 26 percent had no Opinion. Performance of JOb Activities The three practitioner groups Significantly differed in their frequency of preparation or review Of the seventeen tax returns listed in the questionnaire. The three groups of practitioners also differed in their frequency of consulta- tion on the eleven tax problem areas contained in the ques- tionnaire. Further analysis revealed that not only was there no agreement between the three groups, but there also was no agreement between any two of the practitioner groups for the above job activities. However, the three groups of practi- tioners did agree in their frequency of performance of four technical tax services. 127 Tax TOpic Emphasis The three groups of practitioners agreed in their ranking Of thirty-eight Specific tax tOpics according to the emphasis to be accorded those tOpics in college and univer- ‘Sity undergraduate tax courses. The practitioners also agreed in their ranking of the same thirty-eight tax tOpics according to the emphasis to be accorded the tOpics in pro- fessional or in-firm tax training programs. Further analysis revealed that there also was Sig- nificant agreement between the ranking of tax tOpics accord- ing to emphasis to be accorded in colleges and universities, and the ranking of those same tOpics according to emphasis in professional or in-firm tax training programs. Thus, in general, there was concordance between a t0pic's ranking for emphasis in college and university tax courses, and the same t0pic's ranking for emphasis to be accorded in professional or in-firm tax training programs. In-Firm Tax Trainipg The three practitioner groups significantly differed in the prOportion of respondents whose firms offered in-firm staff training programs in taxation. Practitioners in national public accounting firms received the most in-firm training, followed by local public and corporate~ 128 practitioners, respectively. Interviews revealed that the in-firm tax training programs of seven national public accounting firms Offered extensive taxation coverage, from basic concepts to highly technical specialty areas. The interviews also revealed that there was duplication of educational content and effort between the basic courses offered by in-firm programs, and basic tax courses offered in colleges and universities. However, the directors of in-firm tax training programs felt that it was doubtful that any Significant duplication could be eliminated. Conclusions The major conclusion derived from the results of the study is that there was significant agreement among tax prac- titioners in national and local public accounting firms, and in corporations, regarding certain recommendations for tax education in colleges and universities. This conclusion is especially Significant in View of the practitioners' diverse academic and professional qualifications, and the fact that there was no significant agreement between the three practi- tioner groups for the frequency of job activities performed. Thus, even though their job activities varied, in general, most practitioners had Similar recommendations for tax 129 education in colleges and universities. The second conclusion concerns a comparison of prac- titioners' recommendations with the recommendations made by tax professors. The results of the study indicate that according to tax practitioners, teaching emphasis has been misdirected in the first undergraduate tax course. This con- clusion is reached because-there was found to be no Signifi- cant agreement between practitioners' and tax professors' priority rankings of areas to be stressed in the first under- graduate tax course. The third conclusion concerns whether it is feasible to divide tax subject matter into tOpics for emphasis in the classroom, and other tOpics for emphasis in professional or in-firm training programs. The practitioners' responses did not yield evidence to support the assertion that such a divi- sion of tOpics is feasible, at least not on an overall basis for the thirty-eight tOpics contained in this study. This conclusion is reached because in general, those tOpics highly ranked to be emphasized in college and university tax courses, also were highly ranked to be emphasized in professional and in-firm training programs. Similarly, those tOpics ranked to receive little emphasis in college and university tax courses, also were lowly ranked for emphasis to be accorded 130 in professional or in-firm training programs. The fourth conclusion concerns the elimination of duplicated educational effort posited to accrue to a division of tax tOpics between universities and the profession. Since the study revealed concordance between a t0pic's ranking for emphasis in college and university tax courses, and the same t0pic's ranking for emphasis to be accorded in professional or in-firm tax training programs, it is doubtful that any meaningful amount of duplication can be eliminated. This conclusion also is supported by the fact that the time and expense incurred in the duplicated portion Of in-firm train- ing is mostly offset by such benefits as standardized training, gs EEEE gs corps within the firm as a result Of personal interaction, and more effective training within the context of actual practice. Implications and Recommendations for Tax Instruction in Colleges and Universities Total curricula improvement Should involve active participation on the part of faculty, administrators, students, graduates, and employers.1 To this end, the re- sults of this study reflect the views of graduates and and employers, and should be considered as one of several lHancock and Bell, Op. cit., p. 9. 131 inputs in the continuing develOpment Of tax curricula in colleges and universities. AS an input, the results of this study should be used by instructors to assist in the evalua- tion of the content of tax courses, the establishment of teaching Objectives for tax courses, and the evaluation of textbooks and other instructional materials in the tax area. There are Specific recommendations included in the results of this study for the first and second undergraduate tax courses, as well as a graduate tax course. These prac- titioner recommendations are as follows: First undergraduate course. The instructor Should assign teaching priorities to the following Six subject areas according to the order in which they are listed: 1. Current provisions of tax law 2. History and philOSOphy Of taxation 3. Researching tax problems 4. Preparation of tax returns 5. Economic aspects 6. Tax ethics. Within the framework of the above general areas, the data in Table 29 Should be used as a guage to measure the relative emphasis to be accorded the specific tOpics included in the first course. Table 29 contains thirty-eight tax 132 tOpics-ranked according to the relative emphasis that the topics should receive in tax instruction in colleges and universities. In addition, students Should be exposed to an intro- ductory discussion concerning the use of information sources for tax research. Also, at least some computer oriented subject matter should be included in the first tax course. Two areas for possible discussion are the use of computers by the Internal Revenue Service, and the use of computers by tax practitioners. Second undepgraduate course. In this course, students should receive a more expanded discussion of tax research including procedures followed in the process Of researching a tax problem. Students also Should receive an overall descriptive discussion of computer usage in taxation. This discussion Should reflect actual practice and Should include a description of computer applications for preparing tax returns, estate planning, tax planning, and the use of computers by the Internal Revenue Service. »AS in the first course, the data in Table 29 should be used as a measure of the relative emphasis to be assigned the tOpics included in this second course. Graduate level course. In a graduate level tax 133 Table.29. Tax tOpics ranked according-to the emphasis.that the topic: .should receive in tax instruction in colleges and universities Emphasis Rank Topic 1 Deductions-- criteria; classification; deduction for adjusted gross and deductions from adjusted gross income; non- deductible items. “ 2 Taxable Income Concepsr- nature of income; possible alterna— tives-accounting, economic, psychic; gross income; tax-exempt income. 3.5 Capital Gains & Losses-— nature of capital assets; sales & exchanges; holding periods; 50% net long term capital gain deduction; alternative tax; real and depreciable business property. 3.5 Timing of Incomes & Deductions-- accounting methods; realization; recognition; cash basis; hybrid basis; change of basis. 5 Dspreciation & Amortization-- depreciation methods; amortiza- tion. 6 Tax Accounting-- tax formula; tax periods; change of period; matching of incomes and deductions. 7 Gross Income-- sales of merchandise; inventories; capital gain v. ordinary income. 8 Itemized Deductions-- losses; bad debts; interest expense; taxes expense; contributions. 9 Basis of PrOpertyr- historical cost; fair market value; March 1, 1913 value; substituted basis derived from other property; substituted basis derived from other persons; adjustment of basis. 10 Timing Exceptions- averaging; installment sales; deferred payment sales; long—term contracts; "tax free" exchanges. ll Taxability of Entities and Assignment of Income-- classifica- tion of taxpayers; closely related parties; restrictions upon assignment. 12.5 Income from Investments- Securities-- interest; dividends; stock dividends; constructive dividends;.sale.and. redemption of shares. 134 Table 29.--Continued_ Emphasis Rank TOpic 12.5 Tax Law Formation and.Eva1uation. 14 Administration and Compliance-- Internal Revenue Service organization and operation; tax examination; appeal procedures; court systems. 15 Income from Real Estate-- rentals; leaseholds; leasehold improvements; personal residence; disposition of real estate. 16.5 Historical, Constitutional, and Fiscal Background of income taxation. 16.5 4E§penses for the Production of Income—— capital expenditures v. expenses; entertainment; travel & transportation; education expenses. 18 Acquisition & Disposition of Business Property-— lease v. purchase; depreciation recapture; transfer_to a controlled corporation; exchanges and tradeins; involuntary conversion. 19.5 Tax Planning. 19.5 Tax Management-- nature of; avoidance v. evasion; restric- tions and limitations on tax management. 21- Partnerships-— General. 22 Corporations-- formation & financing; multiple corporations. 23.5 Partnerships-- distribution of partnership income; contribu- tion and distribution of prOperty; partnership interest; sale, retirement, and death of partners. 23.5 Individuals- Marital & Family Status-- joint returns, separate returns; surviving spouse; head of household; exemptions. 25. Individuals- Nonbusiness Expenses-- medical expense; alimony and separate maintenance; standard deduction; outline of tax calculation. 26 Corporations-- reorganization; distribution & liquidation. 135 Table.29.-—C0ntinued Emphasis Rank Topic 27 Employers & Employees-- compensation for services; deferred compensation; pensions; profit-sharing plans; employees expenses. .28 Corporations-— subchapter "S" corporations. 29 Estates, TruSts; Beneficiaries-- taxation of estates, decedents, trusts, grantors, and beneficiaries. 30 State Taxes. 31 Tax Problems of.Self-Employed Persons-- fringe benefits; retirement plans; partly business & partly personal ,expenses and property. 32 Natural Resources and Dspletion. 33 . Foreigu Income & Foreign Taxpayers-- income from U.S. possessions; earned foreign income; income and foreign corporations, foreign trusts; foreign corporations; foreign tax credit; resident aliens. 34 Estate Planning. 35. Withholding; Estimated Tax. 36 . .Social Security Taxes. 37 Exempt Organizations. 38 . Farm Operations-—.farming; gentleman farmer; crop basis; inventory basis; cash basis; farm coOperatives. 136 course, students Should be exposed to actual tax research and the preparation of one or more tax cases. This research Should be supplemented or combined with exercises or prob- lems featuring actual computer use by students. Suggestions for Future Research There are several directions that future research could take in the general area of tax curricula. Three possibilities are as follows: 1. Manypractitioners noted that the graduate level seems to Offer the most promise for additional curricula in the tax area. Thus, it appears reasonable that a study of the present offerings of masters programs in taxation, and research into the need for additional graduate tax programs would provide beneficial guidance for future tax curricula development. 2. The present Study was restricted to practitioners in local and national public accounting firms, and in corpo- rations. Extension of the study to teachers of college and university tax courses could determine areas Of disagreement or agreement between teachers and practitioners, and any overall concensus of recommendations for teaching tax courses. 3. Results of any empirical study which involves sampling should not be completely relied upon until 137 replication Of the study provides similar results. Thus, replication of this present study appears justified to im- prove the confidence that can be placed in the results obtained. APPENDIX A SUMMARY OF PROPOSED RESEARCH AND INTERVIEW GUIDE APPENDIX A AN ANALYSIS OF TAX PRACTICE WITH IMPLICATIONS FOR THE IMPROVEMENT OF TAX INSTRUCTION Summary of PrOposed Research by Edward C. Foth April, 1970 138 139 The Problem The content and topical emphasis of taxation courses appears to be in a transitional stage. Two factors which have contributed to this change are the national trend in education away from the Specialized and toward the general, and statements by educational committees that advocate an emphasis on conceptual understanding rather than procedural details. This de—emphasis of Specialized areas is also re- flected in the "Model Program" in accounting described by the AICPA Committee on Education and Experience Requirements for CPAS.l Their program places increased emphasis on the quantitative and behavioral areas and advocates the inclusion Of only one required three-semester-hour taxation course in the undergraduate curriculum. But if the content and SOOpe of taxation offerings are to be decreased, it is important that remaining coverage be consistent with professional recommendations and be rele- vant to the demands of current practice. Change also implies that there may be some alteration in the respective 1Committee on Education and Experience Requirements for CPAs, "Academic Preparation for Professional Accounting Careers," Journal of Accountancy, December, 1968, p. 57. . cl. ‘ 111“] Ill]. .llllll‘ in?! [II ‘II". I ‘I ' 140 responsibilities Of accounting firms and universities for the education and training of future practitioners. John L. Carey, in The CPA Plans For The Future, voiced a plea for the reappraisal of the CPA's training for tax practice: While the CPA must be better prepared than ever before to practice in the tax field, the training available to the aspiring CPA does not seem to have been adapted to meet this need, except perhaps in the internal training programs of some firms. Per— haps the CPA in the tax field is in greater danger of relative lOSS of position from these circumstances than from any external influence. Objectives of the Study The primary objectives of this study are: l. to determine those tOpic areas that are in need of emphasis in the instruction of taxation, to determine the need for computer oriented content in tax instruction, to determine the need for in-depth tax research experience in tax instruction, to determine the SCOpe and perceived role of staff training programs in taxation, and to derive conclusions which may be used to guide taxation educators in the formulation of the content of tax courses. 2John L. Carey, The CPA Plans for the Future (New York: Accountants, American Institute of Certified Public 1965), p. 176. 141 Research Methodology The prOpOsed dissertation is based on the following research efforts: 1. Questionnaire survey -- AS a pretest, a question- naire will be prepared and discussed in interviews with area tax practitioners to determine its effectiveness. Based on the results Of the pretest, the questionnaire will be revised and an improved questionnaire sent to the participants in this study. A primary purpose of the pilot study will be to transform free-answer questions into closed-form questions. It is intended to send the questionnaire to a strati- fied random sample of practitioners from the following firm classifications: (1) National public accounting -- "Big 10" (2) Local public accounting -- Michigan firms (excluding "Big 10") (3) Corporations The above classifications will be used in order to obtain a broad range of responses, Since a priori analysis suggests that the activities of tax practitioners differ accordingly. Returned questionnaires will be statistically tested for differences in response among groups. 2. Field research -— This phase of the research will provide a description Of the scope and perceived role of 142 staff training programs in taxation. The technique used will be that Of personal interview. Separate personal interviews will be held with the tax training directors of several national public accounting firms, and with the tax area project managers from the Pro— fessional Development Division of the American Institute of Certified Public Accountants. Contribution Toward Accounting It is believed that this prOposed dissertation will benefit accounting firms, tax educators, and future tax prac- titioners in the following ways: 1. provide guidance to tax educators in the develOpment of relevant content for taxation courses, 2. help determine the respective roles of universities and the profession in sharing the responsibility for the initial education and training of future practitioners, 3. help eliminate the duplication of educational effort in the taxation area, and 4. help eliminate gaps in tax education at the university level. 143 INTERVIEW GUIDE Staff Training in Taxation UI-file-J O O \Dmflm 000 Location? Number of courses? Frequency? Length? Academic or experience prerequisites prior to admission? Course content? What changes have been made in last three years? Do you emphasize on-the-job training? To what extent, if any, is computer oriented subject matter utilized? AICPA and AAA 1. Are you aware of the AICPA and AAA tax education recommendations? a. What is your reaction? b. Have they influenced your staff training? Part Two of Questionnaire 1. What do you perceive to be the role of the firm (profession) v. the role of the university in the area of tax education? a. Can roles be defined? b. Is it possible to eliminate duplication of educational effort? How many tax courses should be required of accounting majors? What emphasis/content? APPENDIX B THE QUESTIONNAIRE APPENDIX B UESTIONNAIRE Part one is designed to gather certain data to help in my generalizations. Please understand that this information will be kept confidential and at no time will any specific information about you be revealed. 1. 2. 3. 4e 5. 6. 7. 9. 10. ll. 12. PART ONE What is the title of your position? Are you a CPA?[ lYes I ]No An attorngy?[ lYes [ ]No A former revenue agent?[ lYes [ lNo If not a CPA or attorney, are you enrolled to practice before the IRS? [ ]Yes [ )No How many years of professional experience have you had in the tax area? What per cent of your work involves the tax ares? [ ll - 251 [ 126 - 502 [ 151 - 752 [ )76 - 1001 What level of formal education have you completed? [ lHigh School [ l4-year College [ lLaw Degree [ lZ-yesr College [ ]Hsster's Degree [ lDoctorel Degree Was accounting your major area of undergrad. study? [ lYes [ ]No--(pleese specify) " " " " " " graduate study? [ lYes [ ]No--(please specify) How many tax courses were included in your formal education? Undergrad. Grad. Select three of the following as areas that should be stressed in the first undergraduate tax course in a college or university. (RANK AS TO PRIORITY- 1,2,3.) [ ICurrent provisions of tax law [ lEconomic aspects [ lHistory and philosophy of taxation [ lPrepsration of tax returns [ lResesrching tax problems [ ITex ethics Have you participated in any of the AICPA professional development courses in taxation? [ )Yes [ ]No What three information sources do you use most frequently when doing tax research? (RANK AS TO PREQUENCY- 1,2,3.) lFederal Income, Gift 521 Estate Taxation, by Rabbis and Johnson, Matthew Bender 8 Co. lFederal Is! Coordinator, by Research Institute of America lFederal Taxes, by Prentice-Hell 155g 2; Federal Income Taxation, by Hertens, Callaghan & Co. ]Standard Federal :55 Reporter, by Commerce Clearing House llg§_flsnagement, by Bureau of National Affairs 10ther--(pleese specify) “HHHHQH Should tax case research be taught in college and university tax courses? (CHOOSE ONE PER COURSE- FIRST, SECOND, GRAD.) Undergraduate First Second Grad. Course Course Course [ ] Yes--discussion of information sources only [ ] Yes--discussion of information sources and procedures I ] Yes--ectual research and preparation of tax case(s) [1N0 [l I have no opinion ”H-" HHH‘H s—mF-os-ev-I ] l l 1 (Please Continue to Next Page) 144 1-455 13. Do you use a computer in performing your tax work? I llo I I!es-to prepare tax returns. What 2 of tax returns? 1 Which service? I IYes-to assist in estate planning. What 1 of estate planning? _2 I IYes-to assist in tax planning. What 2 of tax planning? _1 I IYes--other (please specify) 14. Should computer oriented subject matter be included in college and university tax courses? (CHOOSE ONE PER CDDESE- FIRST, SECOND, GRAD ) Undergraduate First Second Grad. Course Course Course I I I Yes--description of 138's use of computers I Yes--description of services available to practitioners I Yes-overe11 descriptive discussion of computer usage in taxation I Yes-exercises or problems (actual computer use by students) 1 In I I E {n Yes-—other (specify) "HHHHHH HHHHUHH I I 1 0have no opinion 15. Does your firm offer staff training programs in taxation? I lie I I!es-p1esse describe the programs (offered in last 12 mos.) in regard to: Number of meetings: Length of individual meetings: Total hours all meetings: Prerequisite training or level of those participating: General subject emphasis: 16. Please indicate LII on each of the following lines, your experience in rendering the following types of service, that is, frequently (more than 10 times per year), occasionally, or never. PREPARATION 0R REVIEW OF CONSULTATION ON TAX PROBLEMS IA! RETURNS (’30., STAIN, (FEDERAL, STATE, 6 LOCAL AS 6 LOCAL As HIRED Fr . Occas. Never EEQUIEED) INVOLVING: Freq, Occss. Sever 1. Capital stoch.............. I I I I I I l. Closely held corporations I I I I I I 2. Corporate organisation and 2. Consolidations............ I I I I I I qualification............. I I I I I I 3. Employee trusts, formation, 3. Corporation income......... I I I I I I operation, etc. ......... I I I I I I 4. Employee trusts............ I I I I I I 4. Estate p1snning........... I I I I I I 5. Estates and inheritance.... I I I I I I 5. Executive compensation.... I I I I I I 6. Excise tsxes............... I I I I I I 6. Foreign operations........ I I I I I I 7. Except organisetions....... I I I I I I 7. Form of business organic. I I I I I I 8. Franchise tsxss............ I I I I I I 8. Liquidations.............. I I I I I I 9. Gift tsx................... I I I l I I 9. Nulti-stste operations.... I I I I I ] 10. Gross receipts tsxss....... I I I I I I 10. Deal estate............... I I I I I I 11. Individual income.......... I I I I I I 11. lsorgsnisstions, mergers, 12. Partnership income......... I I I I I I ecquisitions............. I I I I I I 13. Payroll tsxes.............. I I I I I I 12. Other (specify) 14. Personal trusts............ E I E I I I I I I I I I 15. Property taxes- reel....... TECSNICAL TAX ACCOUNTING {3‘ gim'zdtgr;n’x'°“l'zz I I I I I I ssevzcrs wuss: Freq. 0%. Never 18. Other (specify) 1. Audit by revenue agent I l I I I I (field and/or office).... I I I I I I 2. Informal conference....... I I I I I I 3. Appellate Division proceed.[ I [ I I I 4. Formal litigation (Tax Court, Dist. Court, etc.. [ l [ l [ 1 (Please Continue to Next Page) 146 PART TWO Part two is designed to gather data concerning the relative emphasis to be accorded certain tax topics, and to determine those topics for which academic preparation is well suited as opposed to those topics for which in-firm or professional tax training is more appropriate. DIRECTIONS: Following are a number of tax topics that might be encountered in a first or second undergraduate course in taxation, and/or professional tax training programs. SECTION A: Indicate by a check mark fill in the appropriate column the emphasis to be accorded the topic in tax instruction in colleges ad universities. (Aasue tax instruction oriented toward accounting majors.) SECTIQ‘ E: Indicate by a check earl: [J] in the appropriate colun the emphasis to be accorded the topic in professional or in-firm tax training programs. Topic and Description SECTION A SECTION 3 College or Profession Universit or In-Eir! Degree of Degree of Emphasis Emphasis I O . 'F‘ I ~04 “:0 :30 s-2=2~:= §3§~33a~ 5 2mg 2 0 0 u .4 3' u - i o 3 OJ u: :3 g u m H U H U a $403 HO ca .1 2: en .4 z historical, Constitutional, and Fiscal Background of income taxation. Tax Law Formation and Evaluation. Administration and Coupliance-- Internal Revenue Service organisation and operation; tax examination; appeal procedures; court systems. Tax Management-- nature of; avoidance v. evasion; restrictions and limitations on tax management. Taxability of Entities and Assiggggnt of Income-- classification of taxpayers; closely related parties; restrictions upon assignment. Taxable Incoee Concept-- nature of income; possible alternatives- accounting. economic, psychic; gross income; tax-exempt incoee. Deductions-- criteria; classification; deduction for adjusted gross and deductions from adjusted gross income; nondeductible items. Tax Accounting-- tax formula; tax periods; change of period; matching of incomes and deductions. 9. Tining of Incomes & Deductions- accounting methods; realisation; recognition; cash basis; accrual basis; hybrid basis; change of basis 10. Timing Exceptions-- averaging; installment sales; deferred payment sales; long-tern contracts; "tax free" exchanges. 11. Eggis of Propertyé- historical cost; fair market value; Her. 1, 1913 value; substituted basis derived from other property; substituted basis derived from other persons; adjustment of basis. 12. Capital Gains & Losses-- nature of capital assets; sales a exchanges; holding periods; 50! net long tern capital gain deduction; alterna- tive tax; real and depreciable business property. 13. Itemized Deductions-- losses; bad debts; interest expense; taxes expense; contributions. 14. Income from Investments- Securities-- interest; dividends; stock dividends; constructive dividends; sale and redemption of shares. 15. Income from Real Estate-- rentals; leaseholds; leasehold improvements; personal residence; disposition of real estate. 16. Depreciation 6 Amortization-- depreciation methods; amortisation. (Please Continue to Next Page) 147 ._._._.‘. . - “--.— SECTION A SECTION B 0 College or Profession University or In-Firm Degree of Degree of Emphasis Emphasis CD to I! 'H w H Hum «as avid «av-4 25:22:11: glass-sag Eofimsog l-a Hal-4 o-o O umOoum figs) figs-l I! 'HO ~40 : an A z :3 u: a n 17. Gross Incons-- sales of merchandise; inventories; capital gain v. ordinary income. ---...- 1H 18 0 Natural Resources and Depletion. 19. Expenses for the Production of Income-- capital expenditures v. exp.; entertainment; travel 6 transportation; education expenses. 20 Asquisition & Disposition of Business Property-- lease v. purchase; depreciation recapture; transfer to a controlled corporation; exchanges and tradeins; involuntary conversion. 21. 22. Farm Operations-- far-ing; gentleman farmer; crop basis; inventory basis; cash basis; farm cooperatives. Tax Problggp of Self-Egployed Persons-- fringe benefits; retirement plans; partly business 8 partly personal expenses and property. 23. Esployers bgggplgyees-- compensation for services; deferred compensa- tion; pensions; profit-sharing plans; employees expenses. 2b. Individgpls- NonbusinessfiEgpensea-- medical expense; alimony and separate maintenance; std. deduction; outline of tax calculation. 25. Individpgls- Marital a Easily Status-- joint returns; separate returns; surviving spouse; head of household; exemptions. 26. Withholdin ; Estippted Tax. 27. Partnershipi- General. 28. Partnerships-- distribution of partnership income; contribution and distribution of property; partnership interest; sale, retirement, and death of partners. 29 EstatesI Trusts, Sepgficiaries-- taxation of estates, decedents, trusts, grantors, and beneficiaries. .3 Estate Planning. 3l. Cogporations-- formation 8 financing; multiple corporations. 32 Cogporations-- reorganization; distribution 5 liquidation. 33 Corporations- subchapter "S" corporations. 3b. Exempt Organisations. 35 Foreigp Income 8 Foreigp Taxpayers-- income from US possessions; earned foreign income; income from foreign corporations, foreign trusts; foreign corporations; foreign tax credit; resident aliens. 36 Tax Planning. 37. State Taxes. .38. Social Security Taxes. 148 CONNENTS If you have any suggestions or if there is any question which you feel needs a more amplified answer, please feel free to add your comments here: Would you like a copy of the results of this survey sent to you? If yes, please list your name and address: Name: Address: Again. thankgyou for_your tips. Please place this questionnaire in the return envelope and mail it at your earliest convenience. APPENDIX C RESEARCH HYPOTHESES 149 RESEARCH HYPOTHESES Areas to be_§tressed in the First Undergraduate Tax Course 'W Tax Research ‘W _Computers X 1 1 l-‘N 2 1 The coefficient of concordance between the three respondent groups does not equal zero for the ranking of areas to be stressed in the first undergraduate tax course. The coefficient of concordance between prac— titioners' total ranking of areas to be stressed in the first undergraduate tax course and tax professors' ranking of areas to be stressed in the first undergraduate tax course does not equal zero. The coefficient of concordance between the three respondent groups does not equal zero for the ranking of information sources used most frequently in tax research. The coefficient of concordance between prac- titioners' total ranking of information sources used most frequently in tax research and the ranking of information sources accord- ing to their availability in libraries for research and teaching does not equal zero. There is a difference between the three respondent groups in their recommendations concerning instruction of tax research in colleges and universities. There is a difference between the three respondent groups in the percentage that use computers to perform tax work. l—‘N 150 There is a difference between the three respondent groups in their recommendations concerning instruction of computer oriented subject matter in college and university tax courses. Job Activities W1: The coefficient of concordance between the three respondent groups does not equal zero for the ranking of frequency of preparation or review of tax returns. The coefficient of concordance between the three respondent groups does not equal zero for the ranking of frequency of consultation on tax problems. The coefficient of concordance between the three respondent groups does not equal zero for the ranking of frequency of technical tax accounting services. Tax Topic Emphasis W1: The coefficient of concordance between the three respondent groups does not equal zero for the ranking of emphasis to be accorded tOpics in undergraduate tax instruction in colleges and universities. The coefficient of concordance between the three respondent groups does not equal zero for the ranking of emphasis to be accorded tOpics in professional or in-firm tax training programs. The coefficient of concordance between total ranking of emphasis to be accorded tOpics in undergraduate tax instruction in colleges and universities and total ranking of emphasis to be accorded topics in professional or in- firm tax training programs does not equal zero. 151 In-Firm Staff Training There is a difference between the three respondent groups in the prOportion of respondents whose firms offer in-firm staff training programs in taxation. AICPA Professional Develgpment in Taxation X'e 2 1 There is a difference between the three respondent groups in the percentage that participate in AICPA professional develOp- ment courses in taxation. APPENDIX D MISCELLANEOUS TABLES 152 APPENDIX D Table 30. "Other" tax information sources listed as responses to item eleven of the questionnaire Rank and Source Frequency Listed by corporate ,praCtitioners State Tax Reporter (CCH) State & Local Tax Service (P-H) Montgomery's Federal Taxes Federal Tax Guide (CCH) IRS publications Periodicals NYU Institute of Taxation Original material - bulletins & tax cases European Taxation by International Fiscal Documentation West Legal Reporting System UWUWHl—‘HH 0900 Listed by local public accounting firm practitioners U. S. Master Tax Guide (CCH) 1 Federal Tax Guide and Reports (CCH) 1 NYU Institute of Taxation 1, Federal Income Taxes (CCH) 1 IRS code 1 J. K. Lasser Professional Edition - Income Tax 2 Firm publications 3 Journal of Taxation 3 Periodicals' 3 Taxation for Accountants 3 8Rank and frequency should be interpreted as follows: Five corporate practitioners listed this information source; two ranked it first, and three practitioners ranked it second in frequency of use. 153. Table 30.--Continued Source Rank and Frequency Listed by national public accountigg_firmgpractitioners Bittker & Eustice Code, regs., cases, legist. history Federal Estate & Gift Tax Reporter (CCH) IRS code Periodicals 154 Table 31. Summary of mean response to frequency of preparation‘ or review of tax returns (federal, state, and local as required) ....... Type of return Mean Response Total Corp. Local Nat'l.‘ 1.* Capital stock. . . . . . . . . 2.194 2.323 2.132 2.126 2. Corporate organization and qualification. . . . . . . 2.062 2.121 2.070 1.992 3. Corporate income . . . . . . 2.903 2.887 2.930 2.891 4. Employee trusts. . . . . . 2.073 1.766 2.202 2.252 5. Estates and inheritance. . . . 1.860 1.323- 2.070 2.193 6. Excise taxes . . . . . . . 1.763 2.097 1.628 1.563 7. Exempt organizations . . . . 2.048 1.742 2.023 2.395- 8. Franchise taxes. . . . . . . 2.685 2.661 2.814 2.571 9. Gift tax . . . . . . . . . . 2.019 1.331’ 2.171 2.571 10. Gross receipts taxes . . . . . 2.038 2.363 1.922- 1.824 11. Individual income. . . . . . 2.653 2.105 2.969 2.882 12. Partnership income . . . . . 2.419 1.637 2.884 2.731 13. Payroll taxes. . . . . . . 2.352 2.387 2.667 1.975 14. Personal trusts. . . . . . 1.901 1.258 2.008 2.454 15. Property taxes - real. . . . 2.011 2.435 2.047 1.529 16. Property taxes — personal. . 2.285 2.418 2.528 1.891 17. Sales and use taxes. . . . . . . 2.372 2.639 2.591 1. 866. Table 32. 155 Summary of mean response to frequency of consultation on tax prdblems (federal, state, and local as required) Vf. Type of prOblem + Mean Rpsponse Total Corp. Local Nat'l. 1. Closely held corporations. . . . 2.384 1.613 2.822 2.714 2. Consolidations . . . . . . . . . 2.170 2.339 1.783 2.415 3. Employee trusts, formation, operation, etc. . . . . 2.024 1.815 2.124 2.134 4. Estate planning. . . . . . . . . 1.935 1.347 2.124 2.345 5. Executive compensation . . . . 2.280 2.032 2.442 2.361- 6. Foreign operations . . . . . . . 1.863‘ 2.258 1.225. 2.143 7. Form of business organization. . 2.364 2.089 2.585 2.441 8. Liquidations . . . . . . . 2.169 2.016 2.062 2.445 9. Multiestate operations . . . . . 2.145 2.508 1.705 2.244 10. Real estate. . . . . . . . . 2.347 2.306 2.419 2.311 11. Reorganizations, mergers, acquisitions . . . . . . . . . 2.288 2.274 2.062 2.546 fl Table 33. 156 of technical tax services Summary of mean response to frequency of performance I .fiav . l Service during: ‘Mean Response Nat'l. Total Corp. Local 1. Audit by revenue agent (field and/or office) . . . . 2.586 2.621 2.581 2.556 2. Informal conference . . . . . . . 2.092 2.129 2.023 2.128 3. Appellate Division proceedings . . . . . . . . . . 1.686 1.790 1.442 1.846 4. Formal litigation (Tax Court, Dista court, ates)e s e e e e e 1e235 1e435 1e085 1e188 157 Table 34. '"Other" job activities listed as responses to preparation or review of tax returns Tax Return Frequency Listed by corporate practitioners Foreign F Payments in lieu of taxes F State and local licenses F Regulatory reports and drawback claims F Narcotics alcohol draWback F Export drawback F Listed by local public accountigggfirm practitioners Michigan intangibles Foreign tax credits Highway use tax Depreciation, State and city income Ofii’fi'fl’fl Listed by national_public accounting firm practitioners Foreign Earnings and profits Intangibles 0'11"! aFrequency should be interpreted as follows: Seven corporate practitioners listed this tax return; four indicated Frequently (more than 10 times.per year), and three practitioners indicated Occasionally. 158 Table 35. "Other" jab activities listed as responses to consultation on tax problems Y Y—fi Tax Problems Frequency Listed by corporate' practitioners Corporate withdrawal from states Inter-corporate pricing Patent and license transfers Exempt organizations O'Ii'fl'ii .Listed byglocal public accguntipg firm practitioners Depreciation F Listed by nationalgpublic accountinggfirmpractitioners Life insurance and brokerage Oil and gas Accounting methods and periods ’11'11'11 159 owuwm mmm.m en~.m mo~.m emN.m noa.m . . . . . . . . . . osoooa moose .NH nm~.m mmm.m «He.m oau.m mm~.m ~w~.m . . . . .coauosauuoam was coaowfioounon .oH Hou.m «mm.m mam.~ ooo.m mHH.m mmn.~ . . . . . . . .ouoono Home Boom oaoosH .nH mmm.m mom.m ~mo.m ooa.m mmo.m oum.~ . moaufiuouon I nuooaono>ca scum oaoooH .«H nn~.m nNa.m wNH.N mo~.m mHN.m «NH.m . . . . . . . . .chHuosnov posfiaouH .ma nme.m mmm.m wum.m uae.m nmm.m mnu.m . . . . . . . nonmoa one mcacm Housman .NH aam.m mm~.m mna.m ma~.m mma.m amo.m . . . . . . . . . . .suuuaoua no means .HH nem.m noo.m mo¢.m ~oa.m mnN.m oHo.m . . . . . . . . . . .mcowuaooxo wcaaaa .OH o~n.m omm.m mum.m e¢N.m cam.m oom.m . . . macauuopop one beacons mo unease .m mme.m Num.m Hmm.m oum.m me~.m ow~.m . . . . . . . . . masocsooon sea .m mne.m mon.m ome.m mnm.m mmn.m «me.m .coaumofimamncao "caucuses I msofiuosvon .n omm.m No~.m nm~.m amo.m mmm.m Noe.m . . . . . . . . unoocoo oaooca sansxoa .o Nom.m em~.m wem.~ OHH.m NOH.M amm.~ . . . . . . . . osoooa mo ucoaowamno was meanness no shenanaxma .n wan.m mee.m nm¢.m mom.~ mso.m Hmm.~ . . . . . . . . . ucosowscma sea .e mmm.m mma.m Hoe.m snw.m m~o.m nno.m . . . . .oocmaanaou one cowumuumaoflsns .m oam.~ enm.H woe.~ mmm.~ onm.~ «mH.m . . . coauosas>o poo coauoauom and any .~ qnm.a mam.H aoo.~ «wo.m muw.~ ooa.m . . . . . . . . . .pnsouwxoon acumen use .anofiusuauncoo .Hmuwuounwm .H .H.uuz Hoooa .auoo .H.unz. aooon, .nuoo mansmmam coo: sufimch no Hmooanmomoum mammnnam omoz huamuo>acp no omoaaoo mammseau_ouaou as» ou uncommon come no mumHESm canoe .em manna 160 mamscmam coo: auwmloH no Hooownmomoum awesomeu coo: huwnuo>aca no owuaaoo Hoo.m mmq.m ee~.m ama.~ moo.m oom.~ . . .aoauauoauoo «agendas “manganese one cowumauom I occaumuonuoo .Hm won.m wmq.m a~m.~ o~e.~ omn.~ an.N . . . . . . . . . . . .wcficcoaa oumumm .om owN.m aHm.m w¢<.~ o<~.~ nom.~ omm.~ . . . . mofinnwoamocob .munsuu .moumunm .mu n-.m «He.m mno.~ mem.m mma.m eme.~ . . . . . . . . . . . . . . . oaoocw mo coauonwuumwv I mafinmuocuumm .mN nma.m HoN.m mam.~ nmm.m mea.m man.~ . . . . . . . . Hmuocom I meanmnocuunm .NN Hmn.~ mmw.m mom.~ nm~.~ Hem.~ eo~.N . . . . . . sou pousaaumo uwcapaonnufiz .ou awn.~ Nqo.m mum.~ moa.~ mmm.~ 5mm.~ . . u . . . ... . . . . . . . possum mafiamm pom Hmuauca I mamsva>apoH .nm Hmm.~ mHH.m ~N<.N mnw.~ omm.~ Nwm.~ . . nonsense nnocemoncoc I namopwbaocH .«N moe.m wmm.m Hma.m mon.~ mmm.u amo.~ . . . . . . . accessed "cosponsoaaoo nonsense I noohoaaao was nuohoanam .mm Hmo.m Hmm.m o~m.~ Hae.~ ~nm.~ ao~.~ .maomuoa uaaoaaam-eamm mo nauseous was .NN eem.~ meq.~ mea.a moo.~ oo~.~ oom.a . . . . . . . . . . . .maoaumumao anus .HN ooe.m mmn.m em¢.m Nam.m moo.m oam.~ . . . . . . . . . .huuoaoua nonsense mo cowuwnoaoav pom oofiuwnasuo< .ON mo~.m cam.m o-.m wa.m N¢a.~ mmo.m . . . . . . . . . . . . . .oaoooe mo sowuosvoue one you duodenum .mH Hun.~ omn.~ nm~.~ nmm.~ moa.~ noe.~ . . . .sOHuoHaov was noousomou Housuoz .mH .H.unz Hnoog .nuoo .H.uoz Hoooa .auoo oanoa soaaauaoouu.om «Hana 161 manosmam coo: auHmIsH no Hmcoamoomoum cannon—am one: muamuo>waa no oonHoo canoe moa.~ mmo.~ Hmm.~ o-.a mom.m nom.~ . . . . .noxnu masseuse Hmaoom .mm mnw.~ mou.m Ham.m oom.a 5mm.m om~.~ . . . . . . . . . .moxnu oucum .nm Nam.m omo.m wan.m Huw.m mmm.~ mmo.m . . . . . . . . . wcascoaa soy .om oeo.m mmm.~ a-.m NNH.N oao.~ ~oe.~ . . . . . . . . . .mnmamaxau cwwouom woo mason“ owaouom .nm man.m mum.~ nem.~ «mo.~ oun.~ Nao.~ . . . . . ncoaomswsomuo unseen .em omm.m own.m omm.~ mo~.~ Hum.~ wnm.m . . . . . . . . mcowuonoauoo :m: nounssonsn.l odoaunuonuoo .mm mam.m mum.m ow~.m hmm.~ wnn.~ oom.~_ cofiuooaovaa one coauonauunao “cowuosacmmuoou I ncowoouonuoo .Nm .H.unz Hooog .nuoo .H.umz Hoooa .euou vananuaooun.em magma BIBLIOGRAPHY [III-Illlllllllall I! l BIBLIOGRAPHY Books American Institute of Certified Public Accountants. 1971 Professional Develgpment. New York: American Institute of Certified Public Accountants, Inc., 1970. Carey, John L. The CPA Plans for the Future. New York: American Institute of Certified Public Accountants, Inc., 1965. D011. Ronald C. Curriculum Improvement: Decision-Making and Process. Boston: Allyn and Bacon, Inc., 1964. 1970 Federal Tax Course. New York: Commerce Clearing House, Inc., 1969. 1970 Federal Tax Course. Englewood Cliffs, N. J.: Prentice— Hall, Inc., 1969. Gaa, Charles J. Contemporary Thought on Federal Income Taxation. Belmont, Ca1if.: Dickenson Publishing Company, Inc., 1969. . Federal Income Taxation: Fundamentalgguestions, Problemngand Cases. Volume I. New York: McGraw- Hill Bock Co., 1965. Hays, William L. Statistics for Psychologists. New York: Holt, Rinehart and Winston, Inc., 1963. McCarthy, Clarence F.. and others. The Federal Income Tax: Its Spurces and Applications. Englewood Cliffs, N.J.: Prentice-Hall, Inc., 1968. Oppenheim, A. N. [Questionnaire Design and Attitute Measure- ment. New York: Basic Bodks, Inc., 1966. Raby, William L. The Income Tax and Business Decisions. Englewood Cliffs, N.J.: Prentice-Hall, Inc., 1964. Roy, Robert H., and MacNeill, James. Horizons for a Profession: The Common Body of Knowledge for 162 163 Certified gpblic Accountants. New York: American Institute of Certified Public Accountants, Inc., 1967. Siegel, Sidney. Nonparametric Statistics for the Behavioral Sciences. New York: McGraw—Hill Book Co., 1956. Stockton, John R. Business Statistics. Cincinnati: South- Western Publishing Company, 1962. 1970 U. S. Master Tax Guide. Chicago: Commerce Clearing House, Inc., 1969. Articles and Periodicals Bondar, Vincent. "I Wish You Wouldn't Call It 'Staff Training.'" E & E (Summer, 1963), 16-19. Committee on Education and Experience Requirement for CPAs. "Academic Preparation for Professional Accounting Careers." JOurnal of Accountangy, CXXVI (December, 1968), 57-61. Davis, Earl F. "A Compendium of Opinions of Tax Teachers on the Sc0pe and Content of Graduate Tax Courses,” Journal of Accountangx. CXXVI (August, 1968), 86-89. Gray, Otha L. "Opinions of Tax Professors on Tax Courses." Accounting Review, XL (January, 1965), 204-11. Hancock, William 0., and Bell, James E. "An Effective Model for Changing Curriculum," Collegiate News and Views, XXIII, No. 3 (March, 1970), 7-9. Hart, Donald J. "An Outsider Looks at the Accounting Curriculum." Journal of Accountancy, CXXVII (March, 1969), 87-89. Horn, Frederick E. "Formal Training: Programs & Prospects." Arthur Young Journal (Summer, 1965), 14-18. Kess, Sidney. "The Lybrand Tax Training Program." Lybrand 164 Lamb, Edwin M., and McCarthy, Dennis J. "On-TheeJobn Training: A Business Approach." Arthur Young JOurnal (Summer, 1965), 19—26. Lamden, Charles W. "Coordinating Professional Practice and Education." World, III (Spring, 1969), 36-41. Lyverse, Sam. "Results of Model Recruiting and Training in a Local Accounting Firm." Journal of Accountancy, CXXIII (May, 1967), 87-89. McMullen, Stewart Y. "The Key to Developing the Striking Power of the Staff -- On-the-JOb Training." Journal of Accountancy, CXXI (February, 1966), 75-79. Patton, Ronald J. "Education of the Certified Public Accountant: A Joint Undertaking." Journal of Accountancy, CXXVI (November, 1968), 91-93. Salowe, William. "Staff Men Today, Partners Tomorrow." JOurnal of Accountangy. CXVIIII (January, 1965), 84-8 7 m Sheinfeld, Ira S. "Computers and Taxes." Arthur Young JOurnal (Winter, 1968), 16-21. Sommerfeld, Ray M. "Taxation: Education's Orphan." JOurnal of Accountangy, CXXII (December, 1966), 38-44. Stone, Marvin L. "Staff Training Programs of Twelve Selected Firms." Journal of Accountancy, CXVII (October, 1964), 78, 80-81. Sunder, Roger W. "What Management Expects From the Tax Department." Tax Executive (October, 1969), 22-27. Surrency, Erwin C. "A Basic Survey of Research Sources and Tools in Federal Taxation." Journal of Taxation, XXIII (August, 1965), 114-19. Van Horn, Lawrence. "An Experiment With the Case Method in Teaching Federal Income Taxes." Accounting_Review, XL (January, 1965), 230-33. 165 Westphal, William H. "The Future of the CPA in Tax Practice." Journal of Accountangy, CXXVII (June, 1969), 40-44. Williams, Doyle Z. "Reactions to 'Horizons for a Profession.'“ Journal of Accountancy, CXXVII (June, 1969), 81-84. Reports American Accounting Association. Report of the Committee to Compile A Revised Statement of Educational Policy. "A Restatement of Matters Relating to Educational Policy." Accounting Review, XLIII (Supplement, 1968), 51-121. . Report of the Committee on Income Tax Instruction. "A Statement of Tax Concepts to be Used as A Basis for Teaching Income Taxation." Accounting Review, XLIV (Supplement, 1969), 1-18. . . "Subject Matter Outline to Accompany the Statement of 'Concepts of Federal Income Taxation.'" Accounting Review, XLIV (Supplement, 1969),-l9-4l. Committee on Education and Experience Requirements for CPAs. Report of the Committee on Education and Experience Requirements for CPAs. New York: American Institute of Certified Public Accountants, 1969.