A completely revised Model Tax Curriculum and a new Web site with content from the AICPA’s Next Generation Task Force are among the new tools available to tax faculty seeking to modify their course offerings and to help prepare students to enter the accounting profession.

Revision of the Model Tax Curriculum

The AICPA’s Model Tax Curriculum (MTC), developed in 1996 and modified in 1999 was completely revised in 2007. The original MTC was created because the AICPA’s Tax Education Committee was concerned with the topical coverage in the undergraduate tax curriculum, particularly the first tax course. Traditionally, the first tax course emphasized individual taxation while the second focused on business taxation. The committee was concerned that if students took only one tax course, they would not be exposed to important business taxation topics. Although the original task force’s charge was to develop a model tax curriculum for both the undergraduate and graduate levels, it was to specifically focus on developing content recommendations for a single, stand-alone undergraduate tax course that might be a student’s only exposure to tax.

Since the early versions of the MTC were developed, there have been a number of changes both in accounting education and in the profession. First, the AICPA released its Core Competency Framework, defining a set of skills-based competencies needed by all students entering the accounting profession. The framework is an online resource that educators can use in curriculum reform to help students develop the skills necessary to succeed in the accounting profession. These competencies are arranged into three broad categories:

1. Functional (including decision modeling, risk analysis, measurement, reporting, research, and leveraging technology to develop and improve functional competencies);

2. Personal (including professional demeanor, problem solving and decision making, interaction, leadership, communication, project management, and leveraging technology to develop and improve personal competencies); and

3. Broad business perspective (including strategic and critical thinking, industry and sector perspectives, international and global perspectives, resource management, legal and regulatory perspectives, marketing and client focus, and leveraging technology to develop and enhance a broad business perspective).

Second, the implementation of the 150-hour requirement in more states affected the accounting curriculum, as did the introduction of the new computer-based CPA examination. The new online exam is intended to assess the skills required for entry-level CPAs. The skills tested on the CPA exam are shown in Exhibit 1, along with their related core competency.

Third, accreditation standards shifted from an input-driven model to a more flexible mission-driven model in which outcomes are evaluated. The Association for the Advancement of Collegiate Schools of Business (AACSB International) added an assurance of learning approach that requires programs to articulate their learning goals and to demonstrate through outcome-based assessments that students are meeting those goals.

Finally, the Enron and WorldCom bankruptcies and the enactment of the Sarbanes-Oxley Act expanded the knowledge base expectation of tax practitioners to include generally accepted accounting principles (GAAP) as they apply to tax accounting. The implementation of FIN 48 has made it more important than ever for tax students to have a good understanding of the relationship between financial accounting and tax.

To address this changing environment, the AICPA’s Pre-certification Education Executive Committee organized a joint task force of American Taxation Association (ATA) and AICPA members to revise the MTC. The task force surveyed all ATA members on the content and structure of their accounting curriculum’s tax component. The survey results indicated that the first tax course had little or no coverage of tax research, tax planning, business entity taxation, or the interaction between taxes and financial reporting. The results were discussed during a session at the ATA’s 2004 midyear meeting.

After considering input received at the meeting, the task force drafted a revised version of the MTC. This version was sent to all members of the ATA and the AICPA’s Tax Division for their input. Once changes were made, a revised MTC was sent to the ATA Board of Trustees and to the AICPA’s Pre-certification Education and Tax Executive Committees for their feedback and approval. Download the complete new MTC.

The primary objective of the new MTC is to help students understand taxation’s role in business decision making and financial reporting and to build a foundation for future learning in the tax field even if they do not plan to become tax professionals. The new MTC is significantly different from the earlier versions in that it does not prescribe the amount of time to be devoted to specific topics for each course. Instead, it begins with learning objectives and outcomes that a student should achieve before entering the profession. These are followed by a matrix, which maps the recommended learning outcomes to the AICPA core competencies and technical tax curriculum content. The technical content is based on the AICPA’s tax content specification outlines for the CPA exam, with some slight modifications.

The new MTC states that before entering the accounting profession, a student should have the ability to:

• Understand the rationale for tax laws and the multiple objectives of tax policy makers.
• Assess how taxes affect economic decisions for all taxpaying entities (including individuals, partnerships, and C and S corporations) (1) in the amount and timing of income recognition and deductions; (2) related to property transactions that generate recognized, deferred, or no taxable gains or losses; and (3) in choice of entity decisions.
• Analyze how taxes affect financial reporting, including:
  

• Comparing and contrasting book and tax differences and how they affect tax-based and financial-reporting-based income statements and balance sheets;
• Detecting issues under Statement of Financial Accounting Standards No. 109 (FAS 109), Accounting for Income Taxes, including applying the accounting standards for determining deferred tax assets and liabilities;
• Developing an awareness of internal control issues related to tax reporting.
  

• Develop a fundamental understanding of the components of taxable income determination across taxable entities so that the student builds a foundation for effectively learning future tax laws in order to implement future tax compliance and planning strategies.
• Draw supportable conclusions regarding tax issues by using research skills (including accessing and interpreting sources of authoritative support) to identify and evaluate strengths, weaknesses, and opportunities.
• Communicate tax conclusions and recommendations in a clear and concise manner to relevant stakeholders.
• Appreciate the professional and ethical obligations as well as community service opportunities for tax service providers.
• Improve his or her interpersonal skills.
• Develop technological skills necessary to undertake tax planning, compliance and research strategies.

The MTC and the AICPA Core Competency Framework are basically consistent in that both emphasize skill building. They differ in that the MTC is specifically aimed at tax accounting while the framework is designed for accounting education in general. To assist tax educators in adopting the framework in their tax classes, the MTC includes a matrix that contains columns for each of its learning outcomes.

The first part of the matrix lists the competencies in the framework and then indicates which of the learning outcomes are related to each of the competencies. (See Exhibit 2 for a section of the matrix.) For example, the matrix shows that the MTC learning outcome “analyze how taxes affect financial reporting” is related to functional competencies of risk analysis, measurement, reporting, and several other competencies not reflected in the exhibit.

The second part of the MTC matrix relates the learning outcomes to 12 broad technical categories, with topics under each category identifying more specific technical issues (see Exhibit 3 for the list of topics). The matrix indicates which of the MTC learning outcomes are related to technical topics that might be used to help achieve the learning outcomes. The list provided is not intended to be all inclusive, nor does the revised MTC suggest that all of the listed topics be covered in every program.

The MTC matrix should help faculty examine their curricula to ensure that students can achieve the learning outcomes. Referring to the first part of the MTC matrix then will allow them to identify the related learning outcome. Following the column for the learning outcome to the second part of the matrix will then help identify technical topics that might be used to achieve the desired learning outcome.

The MTC remains a valid and vibrant document that is consistent with today’s thinking as incorporated in the AICPA’s Vision Project and Core Competency Framework. The new MTC provides tax educators with a significant amount of flexibility to determine how they will achieve the recommended learning outcomes. Although the new MTC does not specify the number of tax courses that should be part of the required curriculum, there was general agreement among the task force members that a minimum of six semester hours of tax content is necessary to prepare students for entry into the profession.

Shirley Dennis-Escoffier, Ph.D., CPA, Associate Professor, Department of Accounting, University of Miami, Coral Gables, FL, and Jane T. Rubin, CPA, Educational Strategies Co., St Louis, MO, are contributing writers for The Tax Adviser. Their views as expressed in this article do not necessarily reflect the views of the AICPA or The Tax Adviser.