The ethical limits of tax planning

Abstract

The scope of legitimate tax planning by US tax practitioners has been significantly reduced over recent decades by the continuous development of robust rules of conduct applicable to tax practitioners, as well as the ever-increasing pressure on tax professionals to meet broadening ethical standards. US tax practitioners are constrained by various sources of ethical obligations, including formally promulgated rules of conduct, as well as changing general legal doctrines. In addition, the Internal Revenue Service and Department of Justice, spurred by Congress, have vastly improved their enforcement mechanisms, and the courts are approving the use of such mechanisms with increasing frequency.