Accredited Tax Advisor Exam Blueprint
Domain 1: Financial Statements Accounting
Task 1: Record Setup – Design a system for record setup to organize the financial data.
- Accounting cycle
- Accounting methods
- Debits and credits
- Journals and ledgers
Task 2: Establish a system to measure revenue and expense.
- Cash vs. accrual
Task 3: Documentation – Detail the process and procedures used in engaging and preparing financial statements.
- Engagement letters
- Financial reporting framework (e.g., generally accepted accounting principles [GAAP]) or financial accounting framework (e.g., other comprehensive basis of accounting [OCBOA])
- Work papers
Task 4: Balance Sheet – Prepare financial statements to report financial condition.
- Accounting principles (e.g., cash and equivalents, accounts receivable, discounted notes, investments, inventory, property and equipment, intangible assets, liabilities, current liabilities, long-term liabilities, leases, pensions, stockholder's equity)
Task 5: Income Statement – Prepare financial statements to report revenue and expenses.
- Accounting principles (e.g., revenue recognition, matching principle, owner's equity)
Task 6: Statement of Cash Flows – Prepare financial statements to report use and availability of cash.
- Direct or indirect method
- Operating activities
- Investing activities
- Financing activities
Task 7: Reports – Provide documents for owners and interested parties using client representations to provide additional information regarding financial statements.
- Statement analysis
- Accounting pronouncements
- Cost basis
- Going concern
Domain 2: Taxation
Task 1: Overview of Tax Structure – Identify the five basic taxable reporting entities (e.g., individuals, corporations, partnerships, estates, trusts).
- Tax entity determination reporting
Task 2: Individual Tax Returns (1040) – Collect information from the taxpayer to prepare a complete and accurate return.
- Self-employment (e.g., sole proprietor, farms)
- Inventory (e.g., FIFO, LIFO, lower cost of market)
- Depreciation (e.g., straight line, modified accelerated cost recovery system [MACRS], Section 179)
- Business use of home
- Farming activities
- Rental activities
- Basis of assets
- Independent contractor
- Taxability of gifts
- Taxability of insurance proceeds
Task 3: Filing Consideration – Determine the correct filing status and eligible dependents for an individual tax return.
- Filing status choices
- Rules of dependency
Task 4: Inclusions in Income – Determine the sources of income to be included on a tax return.
- S. tax law (e.g., compensation income, including fringe benefits, scholarships, fellowships, teaching stipends, interest, dividends, capital gains, state and local refunds, alimony received, business and farm income, rental activities and pass-through entities, debt relief, gambling income, hobby income, prizes, jury duty, Social Security benefits, unemployment compensation, retirement distributions, life insurance, disability, VA benefits)
Task 5: Deductions for AGI – Determine the eligible adjustments from total income to produce adjusted gross income.
- S. tax law (e.g., alimony, self-employment health insurance deduction, health savings account [HSA] deductions, Keogh/Self-employment plan [SEP], IRA contributions, self-employment tax deduction, moving expense, penalty on early savings withdrawal, student loan interest, tuition and fees deduction, educator expenses, domestic production deduction)
Task 6: Itemized Deductions – Determine the use of standard or itemized deductions to calculate the lowest taxable income.
- Schedule A (e.g., medical expense, tax expense, interest expense, charitable contributions, miscellaneous, unreimbursed employee expenses, gambling losses, casualty/theft)
Task 7: Income Tax Credits – Determine eligible reduction in income tax from various tax credits.
- S. tax law (e.g., earned income tax credit, due diligence requirements, foreign tax credit, retirement credit, child and dependent care credit, education, credits, child tax credits, energy credits)
Task 8: Limited Liability Companies/Disregarded Entities – Determine the best method of reporting client income and expenses for LLCs and disregarded entities.
- Single-member/multimember LLC tax law
Task 9: S Corporations (1120S) – Compile client data to prepare a complete and accurate S corporation tax return.
- S corporation tax law (e.g., basis, built-in gains tax, shareholder compensation, S corporation election and revocation, shareholder benefits, shareholder loans and distributions, eligible owners, at-risk rules, capital accounts)
Task 10: Partnerships (1065) – Compile client data to prepare a complete and accurate partnership tax return.
- Partnership tax law (e.g., basis – inside and outside, capital accounts, elections, at-risk rules)
Task 11: Corporations (1120) – Compile client data to prepare a complete and accurate corporate tax return.
- Corporate tax law
Task 12: Trust and Estates Income Tax (1041) – Compile client data to prepare a complete and accurate fiduciary tax return.
- Trust document
- The will
- Titling of assets (probate)
- Roles of trustees, executor, beneficiary, surviving spouse
- Fiduciary tax law
Task 13: Federal Estate Tax Return (706) – Compile client data to prepare a complete and accurate estate tax return.
- The will
- Trust document
- Gift tax returns filed by decedent prior to death
- Estate tax law
- Roles of trustees, executor (personal representative), beneficiaries, and surviving spouse
Task 14: Nonprofit Issues (990) – Compile client data to prepare a complete and accurate nonprofit information return.
- Type of nonprofit (e.g., churches, veteran’s organizations, hospitals, member organizations, schools) and related tax code section
- Nonprofit tax law
Task 15: United States Gift (and Generation Skipping Transfer) Tax Return (709) – Compile and prepare gift tax returns to report the transfer of money or property.
- Limits on annual gift exclusion
- Transfer of assets to reduce estate tax
Task 16: Specialty Topics – Review additional topics that might affect the client.
- Investment taxation
- Divorce issues
- Community property
- Social Security and Medicare issues
- Retirement issues
- Net operating loss (NOL)
- Tax estimates for all types of entities (e.g., individuals, corporations)
- Affordable Care Act
Domain 3: Business Law
Task 1: Recognize different business entities and transactions to advise clients.
- Business law principles (e.g., property law, contracts, Uniform Commercial Code, agency, partnerships, corporations, trusts, limited liability companies)
Domain 4: Ethics
Task 1: Determine best practices and procedures for tax professionals.
- Circular 230
- Practice procedures
- Due diligence