ORIGINALLY WRITTEN DON RATZLAFF
Even as thousands of professional tax preparers across the country work frantically to complete the necessary forms for their clients by the April 15 deadline, the next generation of tax preparers is sweating out some deadlines, too.
In the college classroom.
Tabor College, like many colleges and universities across the nation, offers courses on tax preparation as part of their business and accounting curriculum.
Tabor works in conjunction with McPherson College to offer two upper-level courses: “Individual Income Taxes” and “Corporate, Partnership, Estate and Trust Income Taxes.”
“The individual class is required for accounting/finance people,” said Norm Hope, professor of business administrator and director of the master of science in accounting program at Tabor.
“For the graduate students in Wichita, the corporate class is required for graduation.”
Hope usually teaches the class on corporate income taxes independently for the graduate program, while the responsibility for teaching the class on individual taxes has fallen on David O’Dell, associate professor of accounting at McPherson.
O’Dell has a class of eight students this spring, seven of which are Tabor students.
In addition to their academic credentials, both professors are trained in the real world. They are licensed certified public accountants and Hope works in the accounting firm O’Dell has established in McPherson.
Both instructors try to teach their courses in the context of the real world of tax preparation.
“There’s sort of an assumption that students who will leave the institution, and those interested in public accounting, will be faced with having to do tax preparation,” Hope said about the objective of the classes.
“The other thing is that some will be interested in taking the CPA exam. So there’s a desire that they have enough knowledge to be successful on that piece of the exam-both with the individual stuff and the corporate stuff.”
Because the two classes are for upper-level credit, students will have already taken some basic business classes that introduce them to basic concepts they will encounter in their tax courses.
But the arena of tax preparation forces students to rethink many of those concepts.
“One of the things they have to realize is that accounting rules are different from tax rules,” Hope said. “What’s income on a financial statement, in most cases, is different than what’s going to be reported on a tax return.
“Likewise, certain deductions are not going to be allowed on a tax return that would be allowable as expenses on a financial statement.
“One of the big things, at least from my perspective from the accounting side of it, is to be able to reconcile the difference between accounting income and income-tax income,” Hope added. “That’s pretty critical for any preparer who’s doing a business return.”
O’Dell said his objective in the personal tax class is that students will feel confident filling out someone else’s moderately complicated individual tax form by the time the class is over.
In fact, his final exam does precisely that.
“It’s not going to be so overwhelming that they they give up,” O’Dell said of the exam. “If they can do that return and it comes out in real good shape, then I think there’s been learning that’s going on. And that’s the key part-that learning is happening.”
A key reason job opportunities exist in the field of tax preparation is that the complexity of tax regulations overwhelms the average taxpayer.
The same is true is for some students. Those who have a more technical mind tend to catch on sooner to the intricacies of tax law than those who think more abstractly.
“In tax law there’s a general rule and then there’s an exception to the rule-you have to be able to put that into some sort of framework,” Hope said. “Students who are able to think that through logically have an easier time of it.
“That may be due to the nature of the discipline, too. Certain kinds of individuals do better in accounting and finance as a profession than others might.”
O’Dell said he doesn’t expect his students to memorize the breadth of tax law.
“I believe every practitioner at some time during tax season eventually opens up a book and says ‘I’ve got to look that up,'” he said.
“What I do, there’s a closed-book portion of every test-which are items I think they should absolutely know. Then there’s an open-book portion, and those will be the things that are more like, ‘How do I work through a certain formula that’s unique to the tax code.”
O’Dell said he incorporates another element of the real world into his testing strategy.
“(The tests) are all timed, so they can’t take a lot of time to look things up because when they get out into the real world they can’t always bill that time to the client.
“I’m a practitioner also, so I’m trying to bring in the reality of serving the client, but also working in a CPA firm in a timely fashion.”
Hope and O’Dell said the basic instruction in their classes isn’t much different than you’d find in any other college class on tax preparation. After all, the rules and regulations are standard.
But both men feel they bring an added dimension to their instruction by virtue of teaching in small colleges that are rooted in a Christian perspective.
First, smaller class sizes-generally from seven to 15 students-mean more frequent and personal interaction between student and professor.
Beyond that, both professors said they make a concerted effort to talk about the ethical dimensions of tax preparation.
“You have to have a reasonable basis in the law to take a position on a return,” Hope said. “If you don’t, then you have to disclose the fact that you don’t have that basis in the law for that return-or you’re in violation of the ethical code.
“If you do (disclose), for sure the return is going to be audited, and nine chances out of 10 things will be kicked out,” he said. “So you need to talk to clients about not taking frivolous positions-that’s always an issue.”
While working with individual returns, a tax preparer will encounter a variety of perspectives about taxation in general, O’Dell added.
Those perspectives range from people who are convinced the government’s authority to tax individuals is unconstitutional-which O’Dell and the courts disagree with-to the occasional taxpayer who refuses on the basis of moral conviction to pay the portion of their taxes that would be used for military purposes.
Recently, O’Dell said he came across a discussion among former IRS agents about occasions when the taxation authority of government can conflict with the sovereignty of God for a Christian. He said he wants to think about that issue for a while.
“You run into a lot of different views,” O’Dell said. “Everybody has to decide if it is in opposition to their beliefs.
“I hope I never run into a situation where I have to choose to break a law, but it may come into that. Especially the way it appears our country is going.”
O’Dell added that while some aspects of the tax code are gray in their practical interpretation, the vast majority is black and white. In those cases, tax preparers have an ethical obligation to follow the rules.
“The government is not going to put up with blatant disregard of the law,” he said. “If there’s an area that’s gray, they’re probably going to work with you. But we have too many people who try to stretch that.”
O’Dell said another component of tax preparation he stresses with his students is that they are there to serve their clients as well as their employer.
“Over the years, as you’re in practice, you get to be kind of another member of the family,” he said. “You don’t live with them, but you watch the kids grow up. You know eventually there’s going to be college savings, or maybe retirement, or maybe they had cancer that year.
“So you think about what might be deductible in those areas that can help them out,” he said. “They may be overwhelmed, and you may have to do some thinking for them.”