An examination of the “relistic possibility” standard's influence on tax practitioner aggressiveness

Professional standards are used as a means of regulating professional behavior. This relationship raises the question of how standards can be effectively employed. This study considers whether tax preparer aggressiveness is influenced by the preparer's familiarity with the relevant professional standard. The current “realistic possibility” standard replaced the “reasonable basis” standard as the previous standard was considered too low a threshold. Its application did not afford an effective form of ethical guidance controlling tax practitioner aggressiveness (Bandy et al., 1993; Graetz, 1987). The results of this study indicate that practitioner aggressiveness is inversely related to familiarity with the standard. This finding in turn suggests that a program of familiarization may be needed to achieve compliance with professional ethical standards.