Tax Section Odyssey: Recent Episodes
AICPA Tax Section
Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.
On this episode, April Walker is joined by Benjamin Alarie, CEO and co-founder of Blue J, to discuss the ways that artificial intelligence (AI) is changing tax practice – not only by accelerating research and compliance work, but also by reshaping how firms define and deliver value.
Ben shares new research showing widespread AI adoption among tax professionals and how firms are using the resulting time savings to improve client service, strengthen work-life balance and focus on higher value advisory work. The discussion explores whether the traditional billable hour model still makes sense when technology can dramatically reduce time spent on technical tasks.
Together, April and Ben also examine the IRS Office of Professional Responsibility's (OPR) preliminary guidelines on responsible AI use and why professional judgement, due diligence and client trust remain essential in an AI-enabled profession.
Questions answered in this episode:
- How quickly are tax professionals adopting AI based on the most recent CPA.com/Blue J survey and what are they using it for?
- If AI can potentially provide research results in minutes instead of hours, how could this affect how firms think about pricing their services?
- What does the IRS Office of Professional Responsibility's guidelines on responsible AI use mean for tax practitioners?
- How can firms use AI to improve client service while maintaining professional responsibility and quality?
**Blue J's AI-powered tax research delivers instant, reliable insights grounded in primary authority, Tax Notes, and IBFD — so you can focus on applying your judgment where it matters most. Start your free trial today.
AICPA resources
AICPA insights: Introductory guidelines for responsible AI use in federal tax practice
2026 AI Tax Research Solution Outlook Report by CPA.com and Blue J
Artificial Intelligence (AI) Tax Research Center
Statements on Standards for Tax Services (SSTSs)
Treasury Department Circular No. 230
Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.
This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home base for staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you're not already a member, consider joining this prestigious community of your tax peers. You'll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.
In this episode of the Tax Section Odyssey podcast, April Walker is joined by former IRS Communications Chief Terry Lemons, Public Relations Director — Frost Law, and Kelly Phillips Erb (Taxgirl), Senior Writer — Forbes, about what tax professionals should understand about the IRS, the media and today's fast-moving tax information environment. Their conversation explores IRS complexity, why tax stories matter, how misinformation spreads, the role of artificial intelligence (AI) and social media and why practitioners remain essential trusted guides for taxpayers.
Questions answered in this episode:
- What do IRS employees wish tax practitioners better understood about the agency
- What makes a tax story newsworthy from a media perspective?
- How can practitioners help clients sort through tax myths and misinformation?
- What role are AI and social media playing in spreading — and correcting — tax information?
- Why are tax professionals especially important in today's complex and noisy tax environment?
AICPA resources
IRS Practice & Procedures
Contacting the IRS FAQs
Best Practices for Written Communication with the IRS | Webcasts | AICPA & CIMA
Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.
This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home base for staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you're not already a member, consider joining this prestigious community of your tax peers. You'll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.
In this episode of the Tax Section Odyssey podcast, host April Walker talks with Jennifer Dymond, founder and CEO of Spire Consulting Services, about how improv techniques can help tax practitioners build stronger client communication and greater advisory confidence. Their conversation explores how skills like active listening, curiosity, flexibility and staying present can help practitioners move beyond scripted compliance conversations and into more effective, collaborative advisory discussions.
Questions answered in this episode:
- What does improv actually mean in a professional setting?
- Why do tax practitioners often feel comfortable with compliance work but less confident in advisory conversations?
- How can the "yes, and" mindset improve listening, responsiveness, and client relationships?
- What should you do when a client seems disengaged, resistant, or not ready to collaborate?
- What practical questions or exercises can tax practitioners use to build stronger advisory communication skills?
AICPA resources
There is still time to register for the ENGAGE conference, coming up June 8 -11 in Las Vegas, NV. Dymond's referenced session is on Tuesday, June 9 at 4:10pm PT.
Reimagining your tax practice – Register for roundtables and watch prior recordings
Focused CPE for Tax Section members
Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.
This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home base for staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you're not already a member, consider joining this prestigious community of your tax peers. You'll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.
After deadline season, it's tempting to move on and forget what didn't work — but this is the best time to make changes while the lessons are still fresh.
In this episode, April Walker is joined by Nancy McClelland, owner of The Dancing Accountant, to discuss small, realistic practice changes that can dramatically reduce tax-season stress. From shifting annual tasks to year‑round workflows and setting clear client expectations to using technology that streamlines document collection and follow-up, Nancy shares practical strategies that help tax pros protect their time, teams and sanity — without overhauling everything at once.
Questions answered in this episode:
- What's one practical change you can make right now that will noticeably improve next tax season?
- How can shifting "annual" work to monthly or year‑round workflows reduce deadline-season pressure?
- What are effective ways to set client expectations and boundaries — without damaging the relationship?
- How can technology reduce document-chaos, missing information and the constant chase for "one last form"?
- How do you define (and refine) your ideal client profile so you're working with clients you actually enjoy?
AICPA resources
ENGAGE 2026 conference session: How to Align Your Bookkeeper and Tax Accountant for Financial Success
Optimizing your tax practice
Reimagining your tax practice
Tax Communities on Engage365
Other resources
She Counts
Ask a CPA - Nancy's YouTube channel
Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.
This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home base for staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you're not already a member, consider joining this prestigious community of your tax peers. You'll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.
In this episode of the Tax Section Odyssey podcast, host April Walker is joined by Michael Waalkes of Kostelanetz LLP to discuss Kwong v. United States and why it has become a practical, time-sensitive issue for CPA firms after filing season. The episode discusses the facts of the case and what it held at a high level, why Sec. 7508A's COVID disaster relief period (through July 10, 2023) is driving renewed attention, and how the reasoning may affect deadlines, refund-suit timing, and potential interest/penalty arguments for certain clients. The conversation focuses on what firms are doing right now — client communications, internal triage, documentation, and risk management — along with how to think about tools like client alerts and protective claims while the law and potential IRS guidance continue to develop.
Questions answered in this episode:
- What did Kwong v. United States actually hold, and why did it is a "post–April 15" priority for firms?
- How does Sec. 7508A's COVID disaster relief period (through July 10, 2023) affect statutes of limitation and other key deadlines?
- Which clients and fact patterns should firms' triage that might be affected by this ruling?
- What's the practical risk-management approach when the law is still unsettled?
- What is a "protective claim," and when might it make sense (or not) in the context of Kwong and potential interest/penalty arguments?
AICPA resources
AICPA IRS Practice & Procedures resource center
Disaster Tax Relief Procedures and Processes
Other resources
National Taxpayer Advocate Blog: Tens of Millions of Taxpayers May be Eligible for Significant Tax Refunds - If they act by July 10
KWONG v. USA court decision
Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.
This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home base for staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you're not already a member, consider joining this prestigious community of your tax peers. You'll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.
In this joint Tax Section Odyssey and Journal of Accountancy (JofA) podcast episode, host Neil Amato is joined by Melanie Lauridsen, AICPA VP of Tax Policy & Advocacy and Todd Sloves, AICPA Director of Congressional & Political Affairs, to discuss why paid tax preparer oversight is back in the spotlight. The conversation looks at key findings from a recent Government Accounting Office (GAO) report, what "minimum professional standards" could mean for the largely unregulated preparer market, and how the Senate's Taxpayer Assistance and Service (TAS) Act would implement guardrails and enforcement tools. The episode also explains a practical proposal from the SAFE Act that could simplify filing extensions and reduce penalty risk for taxpayers.
Questions answered in this episode:
- What did the GAO find in its latest report on paid tax return preparers, and why does it matter to taxpayers and the IRS?
- Why are so many paid tax preparers considered "unregulated," and what risks can that create for taxpayers?
- What are "minimum professional standards" for paid preparers, and what role does the AICPA support for establishing them?
- How would the TAS Act change IRS authority and guardrails around PTINs (including the ability to revoke and restore a PTIN)?
- How would the SAFE Act's extension safe harbor simplify filing an extension and help reduce underpayment penalty exposure?
AICPA resources
AICPA Advocacy news and resources
AICPA Tax Section
Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.
This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home base for staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you're not already a member, consider joining this prestigious community of your tax peers. You'll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.
Filing season is here — and so is confusion. In this episode, host April Walker, CPA, CGMA, Senior Manager — AICPA & CIMA, is joined by Mark Gallegos, CPA, MST, Partner — Porte Brown, to break down the most common questions around the new H.R. 1, P.L. 119-21, the law known as the One Big Beautiful Bill Act (OBBBA) provisions, from Trump accounts to the senior deduction as well as discussion around electronic payments and refunds. Practical guidance is here to help you cut through the noise and get it right.
What you'll learn from this episode:
- How new Trump accounts are prompting new client questions while key issues remain unresolve
- How to clear up confusion around the senior deduction and social security taxation
- What additional information may be needed from clients for the new deductions for tips, overtime and auto loan interest
- Why practitioners might need to ask more questions related to energy credit expenditures
- That managing client misinformation and expectations is a core busy-season skill, especially as guidance continues to evolve.
AICPA resources
Planning after tax changes
FAQs on qualified tip and overtime deductions
IRS Payment Modernization: Sending and Receiving Funds Electronically
IRS Practice & Procedures
Trump accounts under Sec. 530A — FAQs and insights
Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.
This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home base for staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you're not already a member, consider joining this prestigious community of your tax peers. You'll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.
In this episode, host April Walker, CPA, CGMA, Senior Manager — AICPA & CIMA, is joined by Kasey Pittman, Managing Director of Tax Policy — Cherry Bekaert. A recent Supreme Court decision invalidated key tariffs issued under the International Emergency Economic Powers Act (IEEPA) — raising major questions about refunds, executive authority and what comes next. We discuss the ruling itself, explain what tariffs are impacted and outline practical steps tax practitioners should consider right now for importer clients.
What you'll learn from this episode:
· Why the Supreme Court invalidated the IEEPA tariffs
· Which tariffs are affected and which remain in place
· What we know (and don't know) about potential refunds
· How tax practitioners with importer clients can add value right now
· What to watch next in tariff policy
AICPA resources
Supreme Court decisions: Implications for the tax and accounting profession
Tariff Resource Center
Tax implications of tariffs
Other resources
Global Business Alliance (GBA) Tariff Tracker
Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.
This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home base for staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you're not already a member, consider joining this prestigious community of your tax peers. You'll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.
In this joint episode with the Personal Financial Planning (PFP) podcast, hosts Cary Sinnett, CPF, CAP, CFT-1, CExP, and April Walker, CPA, CGMA, Senior Manager — AICPA & CIMA, are joined by is joined by Sebrina Ivey, CPA/PFS to explore Trump accounts, also known as Sec. 530A accounts. These accounts are a new tax-advantaged savings vehicle for children created under H.R 1, P.L. 119-21, the law known as the One Big Beautiful Bill Act (OBBBA). The episode focuses on what CPAs need to know now to advise families on coordinating these accounts with broader tax, estate and financial plans.
NOTE: Gift tax return/GST tax return requirements for contributions to a Trump Account: At this time, Treasury and the IRS have not provided guidance under Sec. 530A clarifying that contributions to Trump Accounts are considered a completed gift of a present interest in property eligible for the annual gift tax exclusion ($19,000 per recipient for 2026 gifts). Without further guidance, it appears any contribution to a Trump Account will be considered a taxable gift of a future interest and therefore subject to both gift and GST tax — effectively reducing a taxpayers' federal estate tax lifetime exclusion ($15M for deaths occurring in 2026).
What you'll learn from this episode:
- What Trump Accounts are and how they fit alongside 529s, Roth IRAs and custodial accounts
- Understand who can contribute and how much to Trump Accounts
- Key contribution, investment and compliance rules for these accounts
- How to plan ahead for key transition points
Resources
Trump Accounts under Sec. 530A — Timeline and insights
IRS Trump Accounts
IRS Notice 2025-68
Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.
This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home base for staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you're not already a member, consider joining this prestigious community of your tax peers. You'll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.
In this episode, host April Walker, CPA, CGMA, Senior Manager — AICPA & CIMA, is joined by Edward Jenkins, CPA, CGMA, Professor of Practice in Accounting — Penn State University, to discuss name, image and likeness (NIL) taxation issues for student athletes. Together they unpack common misconceptions, emerging revenue streams, unresolved classification issues and the growing complexity of state taxation. Highlights include key considerations — and opportunities — for CPAs advising clients in this rapidly changing area.
What you'll learn from this episode:
- Understand how NIL income is taxed — and why student athletes are often surprised at filing time
- Learn where the biggest compliance risks and reporting pitfalls are for student athletes
- Explore the unresolved questions around worker classification and self‑employment (SE) tax
- Hear why state tax, dependency and multi‑state issues make NIL especially complex
Resources
· State and Local Tax (SALT) Resource Center
· Student Athlete Income Recognition: State and Federal Tax Care Required
Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.
This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home base for staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you're not already a member, consider joining this prestigious community of your tax peers. You'll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.
Align your compass to the year ahead. In this episode, April Walker brings tax leaders together to share intentional, practical ways to run a better practice, focusing on advisory-first mindsets, using artificial intelligence (AI) with a purpose, collaboration around new legislation and sustainable operating rhythms.
What you'll learn from this episode:
- How to prioritize client outcomes and reinvest tech-enabled time into higher-value conversations
- Using AI with purpose — concrete use cases, role-based workflows and "AI stacking" for research, communication and tools
- Why we need to be ready for digital asset taxation with Form 1099-DA on the way
- How to be intentional with your operations — creating boundaries, systems and prioritizing consistency over intensity
AICPA resources
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Tax Section landing page
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Tax Section news and member FAQs
In this Tax Section Odyssey podcast episode, the final in a three-part miniseries on reimagining firm ownership, April Walker, CPA, CGMA, is again joined by Adam Shay, CPA, a former firm owner turned business coach for accounting firm owners. This episode explores the personal and professional journeys that can follow selling a firm. This candid conversation offers practical advice for firm owners and professionals navigating major transitions in their careers.
What you'll learn from this episode:
- The importance of prioritizing self-care
- Why it is normal to expect identity shifts
- Ways to rediscover your purpose
- How connecting with others who have experienced similar transitions can ease the journey
AICPA resources
Reimagining firm ownership — Building and growing a modern practice | Tax Section Odyssey (episode 1 in the reimagining miniseries)
Reimagining firm ownership - Selling smart in a changing environment | Tax Section Odyssey (episode 2 in the reimagining miniseries)
Engage365
Key considerations when selling a CPA practice
PCPS Transforming Your Business Model
Reimagining Your Tax Practice
In this Tax Section Odyssey podcast episode, the second in a three-part miniseries on reimagining firm ownership, April Walker, CPA, CGMA, is again joined by Adam Shay, CPA, a former firm owner turned business coach for accounting firm owners. This conversation explores how accounting firm owners can successfully navigate the process of selling their firm in today's competitive market.
Gather actional insights for firm owners considering a sale, emphasizing strategic preparation, objective valuation and thoughtful communication throughout the process.
What you'll learn from this episode:
- Key qualities buyers look for, including strong people, pricing, processes and technology
- Common mistakes sellers make, such as accepting the first offer or neglecting competition
- The important role of due diligence, transparency and cultural fit in successful transactions
AICPA resources
Reimagining firm ownership — Building and growing a modern practice | Tax Section Odyssey (episode 1 in the reimagining miniseries)
Engage365
Reimagining Your Tax Practice
PCPS Transforming Your Business Model
In this Tax Section Odyssey podcast episode, April Walker, CPA, CGMA, is joined by Adam Shay, CPA, a former firm owner turned business coach for accounting firm owners, to kick off a three-part series on reimagining firm ownership.
The conversation explores the lifecycle of a modern accounting firm, focusing on building a sellable practice, developing future leaders and overcoming common challenges such as owner dependency and process bottlenecks. Hear insights on leveraging people, processes, pricing and technology to create a sustainable, scalable firm.
What you'll learn from this episode:
- Practical strategies for delegation, leadership development and embracing innovation.
- Actionable advice for navigating growth, preparing for transition and fostering a culture of continuous improvement in today's rapidly evolving tax profession.
- How process documentation and technology adoption drive consistency in a firm.
- How to use a pricing model to reflect value provided to your clients.
AICPA resources
Engage365
Reimagining Your Tax Practice
PCPS Transforming Your Business Model
In this episode, host April Walker, CPA, CGMA, Senior Manager — AICPA & CIMA, sits down with Mark Gallegos, CPA, MST, Partner — Porte Brown, to unpack key year-end tax planning strategies. They dive into new opportunities for individuals and businesses under the H.R. 1, P.L. 119-21, the law known as the One Big Beautiful Bill Act (OBBBA), including the increased state and local tax (SALT) cap, expanded deductions and the return of immediate expensing for domestic research and development (R&D) costs. Tune in for practical insights on proactive planning and multi-year modeling to help clients maximize benefits under the new law.
What you'll learn from this episode:
- The impact of H.R. 1 on income tax planning
- Learn more about new and expanded deductions
- Hear about year-end actions that might be beneficial for taxpayers
- Why entity choice conversations might be necessary given the current law
AICPA resources
- Planning after tax changes
- Tax Section
- Tax Section news and member FAQs
- Year-End Tax and Financial Planning Toolkit
Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.
This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home base for staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you're not already a member, consider joining this prestigious community of your tax peers. You'll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.
In this joint Tax Section Odyssey and Journal of Accountancy (JofA) podcast episode, host Neil Amato discusses the impact of the recent and ongoing federal government shutdown on IRS operations and tax practitioners with Melanie Lauridsen, VP of Tax Policy & Advocacy at the AICPA.
The conversation covers the history and mechanics of government shutdowns, what we know about IRS contingency plans and the practical effects on taxpayers and professionals. Listeners can also gain timely insights into recent developments such as the transition away from paper refund checks and implementation of guidance and updates to forms related to the new tax legislation.
What you’ll learn from this episode:
- Government shutdown impacts on IRS operations
- Important information from the IRS on electronic refunds and payments
- Updates on guidance received from Treasury and the IRS on H.R. 1, P.L. 119-21, the law known as the One Big Beautiful Bill Act (OBBBA) implementation
- Concerns about IRS service levels in a government shutdown
AICPA resources
· Navigating the government shutdown
· Client letter and FAQ for a government shutdown during tax season
· Planning after tax changes
IRS resources
· FY2026 IRS Lapse in Appropriations Contingency Plan
Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.
This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home base for staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you’re not already a member, consider joining this prestigious community of your tax peers. You’ll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.
In this joint Tax Section Odyssey and Journal of Accountancy (JofA) podcast episode, host Neil Amato sits down with tax expert Annette Nellen, Esq., CPA/CGMA, to discuss the latest developments in tax legislation, specifically H.R. 1, P.L. 119-21, the law known as the One Big Beautiful Bill Act (OBBBA). Annette shares her insights on the new tax provisions, effective dates and the importance of accurate information and research in the tax field. This episode also serves as a preview of the upcoming National Tax Conference in Washington, D.C., where Annette will be speaking on key tax updates for individuals and businesses.
What you’ll learn from this episode:
· What tax provisions from H.R. 1 are permanent vs. temporary
· Where guidance and technical corrections are needed related to H.R. 1
· Learn more about recent IRS rules and significant court cases
· The importance of accurate information and thorough research in the tax area
AICPA resources
- Register here for the AICPA National Tax Conference – Nov. 17 – 18, Washington, DC
- Planning after tax changes
Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.
This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home base for staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you’re not already a member, consider joining this prestigious community of your tax peers. You’ll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.
In this episode, host April Walker, CPA, CGMA, Senior Manager — AICPA & CIMA, delves into the recently issued IRS Rev. Proc. 2025-28 with Mark Gallegos, CPA, MST, Partner — Porte Brown. Tune in to discover the implications of this IRS guidance and hear about the strategic decisions businesses can make to take advantage of presented opportunities.
What you’ll learn from this episode:
- Details of Rev. Proc. 2025-28
- Changes made by H.R. 1, P.L. 119-21, the law known as the One Big Beautiful Bill Act (OBBBA) to Sec. 174 research & experimental (R&E) expenditures
- Options for small businesses to be able to retroactively take advantage of the changes
- Decision criteria for evaluating how to advise affected businesses
- How to navigate R&E expenditures going forward for 2025 returns
AICPA resources
- Planning after tax changes
- Practical Insights from IRS Rev. Proc. 2025-28
- Summary of IRS released R&E expense guidance under H.R. 1 and Rev. Proc. 2025-28
Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.
This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home base for staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you’re not already a member, consider joining this prestigious community of your tax peers. You’ll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.
In this episode, Benjamin Alarie, CEO and co-founder of Blue J, and Ashley Francis, CPA/PFS, owner of The Francis Group, PLLC, discuss the integration of artificial intelligence (AI) in tax research. They sift through the best practices for using AI tools, the importance of asking the right questions and the future of AI in the tax profession. The conversation also touches on the potential risks and cautions associated with using AI, emphasizing the need for professional judgment and client confidentiality.
What you’ll learn from this episode:
- How to integrate AI tools into your tax research workflow
- Ways to evaluate AI output to determine accuracy
- The top cautions and risks associated with using AI for tax research
- The future of AI in tax research
AICPA and CPA.com resources
Artificial Intelligence (AI) Tax Resource Center — Explore the AI Tax Resource Center for insights, tools and guidance on leveraging artificial intelligence to optimize tax practices and enhance compliance.
The future of tax research: Frameworks, use cases, and best practices for AI research — A practical framework to evaluate, adopt and scale AI-powered research tools
Bartlett, Pringle, and Wolf (BPW) Case Study: Learn how BPW turned to Blue J to confidently embrace generative AI — gaining instant, verifiable tax answers and high-quality drafts without compromising accuracy or authority
Blue J AI Tax Research — Sign up today to access preferred pricing through the CPA.com partner program.
Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.
This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home base for staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you’re not already a member, consider joining this prestigious community of your tax peers. You’ll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.
On this episode, Chris Wittich, MBT, CPA, Partner — Boyum Barenscheer, joins again to discuss the latest updates on the employee retention credit (ERC) from H.R. 1, P.L. 119-21, the law known as the One Big Beautiful Bill Act (OBBBA). Chris discusses how the legislation affects ERC claims and the implications for businesses with pending claims. He also delves into the extension of the statute of limitations for examination.
What you’ll learn from this episode:
- What H.R. 1 changes about ERC claims processing
- An update on ERC claims processing
- What the extension of the statute for examination from H.R. 1 means for ERC claims
- Reminder about the IRS FAQs about income tax returns and ERC claims
AICPA resources
Employee retention credit guidance and resources — A library for comprehensive guidance, essential tools and the latest news on the ERC.
Planning after tax changes — The tax landscape has shifted. Now’s the time for CPAs to turn insights into action with proactive financial planning. Access FAQs, guides, summaries and learning solutions in one central hub.
IRS FAQs about the Employee Retention Credit — On March 20, the IRS provided updated FAQs on income tax and ERC.
Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.
This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home base for staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you’re not already a member, consider joining this prestigious community of your tax peers. You’ll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.
In this joint episode with the Personal Financial Planning (PFP) Section podcast, host Cary Sinnett, Senior Manager, Personal Financial Planning — AICPA & CIMA, further discusses the latest tax legislation with guests Mark Gallegos, CPA, MST, Partner — Porte Brown and Robert Keebler, CPA/PFS, MST, AEP (Distinguished), CGMA. Hear insights on the recently passed tax legislation, implications for clients and important considerations for tax professionals now that the bill has been passed signed into law on July 4, 2025.
What you’ll learn from this episode:
- Discussion of what the permanent TCJA tax brackets and QBI deduction mean for tax planning
- Details on the new income exclusions for tips and overtime
- Topics important to discuss with clients, including Roth conversions, entity structure decisions, as well as estate and gifting strategies
AICPA resources
2025 Reconciliation Charts: Key Tax Provisions and PFP Considerations — Tax and PFP downloadable charts provide clear, side-by-side comparisons of current tax law, the original H.R. 1 provisions and the Senate’s reconciliation version — highlighting where they align or diverge — and outline the final legislation
Planning after tax changes — CPAs need to not only brace for tax law changes but also be proactive in planning for them. Find more resources here to learn more about the latest updates.
2025 Tax Reform Advocacy — The AICPA tax advocacy library on current tax reform developments that Congress is considering in 2025.
FAQs on Tax Reform via Budget Reconciliation — Tax reform FAQs that explain the budget reconciliation process, legislative timing, key issues and practical tips for CPAs.
Tax Section news and member FAQ — Get the latest tax news, a digest of key tax topics and commonly asked questions about resources and benefits.
In this joint episode with the Personal Financial Planning (PFP) podcast, host April Walker, CPA, CGMA, Senior Manager — AICPA & CIMA, discusses the latest tax legislation with guests Mark Gallegos, CPA, MST, Partner — Porte Brown and Robert Keebler, CPA/PFS, MST, AEP (Distinguished), CGMA. Hear insights on current tax legislation, implications for clients and important considerations for tax professionals.
What you’ll learn from this episode:
- The next steps for this pending legislation
- Key points about state and local tax (SALT) cap, pass-through entity tax (PTET) and Sec. 199A, Qualified Business Income (QBI) provisions
- Legislative take on Sec. 174 R&E expenditures
- Other important conversations that may be necessary in the coming months
AICPA resources
2025 Reconciliation Charts: Key Tax Provisions and PFP Considerations — Tax and PFP downloadable charts provide clear, side-by-side comparisons of current tax law, the proposed changes in H.R. 1 and how the Senate Finance Committee’s proposal aligns or diverges with H.R. 1.
Planning for tax changes and tax reform — CPAs need to not only brace for tax law changes such as the Tax Cuts and Jobs Act (TCJA) and expiring provisions but also be proactive in planning for them. Find more resources here to learn more about the latest updates.
AICPA submits recommendations to Senate Finance Committee on reconciliation bill — The AICPA submitted a letter to Senate Finance Committee leadership outlining its endorsements, concerns about the PTET SALT deduction and a request for clarification and two additional recommendations.
2025 Tax Reform Advocacy — The AICPA tax advocacy library on current tax reform developments that Congress is considering in 2025, including the expiring provisions of the TCJA.
FAQs on Tax Reform via Budget Reconciliation — Tax reform FAQs that explain the budget reconciliation process, legislative timing, key issues and practical tips for CPAs.
Tax Section news and member FAQ — Get the latest tax news, a digest of key tax topics and commonly asked questions about resources and benefits.
This discussion with Katie Thomas, CPA, Founder and Owner of Leaders Online, covers three key phases related to making the most of attending professional conferences: pre-conference preparation, strategies for networking and attending sessions during the conference and post-conference activities to reinforce learning and capitalize on connections.
The conversation includes practical tips for setting clear goals, engaging with vendors, navigating networking events and balancing various activities to ensure a productive and enjoyable conference experience.
What you’ll learn from this episode:
- How to plan your schedule in advance and the benefits of doing so
- Tips for navigating networking events and making meaningful connections
- Strategies for maintaining momentum after you leave the conference
AICPA resources
ENGAGE 25 — Registration and information page for the upcoming conference
AICPA Tax Practitioners LinkedIn group — This specialized group keeps members up to date on tax legislation and regulatory developments and fosters peer discussions on technical tax issues and practice management.
Tax Division Committees and Technical Resource Panels — Volunteering is an excellent way to build a network of professionals to help you with tax matters. Visit Volunteer Central or contact the AICPA Tax Section at taxsection@aicpa-cima.com to find out how you can get involved
Note: This episode was recorded on Wednesday, May 21, 2025, prior to the House of Representatives vote early Thursday morning May 22, 2025 — 215 in favor, 214 opposed, 1 voting present. See this Journal of Accountancy (JofA) article for updates on the bill that occurred overnight prior to the vote.
In this joint episode with the JofA podcast, host Neil Amato discusses with Melanie Lauridsen, Vice President of Tax Policy & Advocacy for the AICPA, the AICPA’s perspective on several aspects of the budget bill that was voted and approve by the House of Representatives in the early morning hours of May 22, 2025.
What you’ll learn from this episode:
· An explanation of the pass-through entity tax (PTET) state and local tax (SALT) deduction
· Some of the AICPA “wins” in the legislation
· The top concern from a survey of members just after tax filing season
· The definition of “fractures”
AICPA resources
2025 Tax Reform Advocacy — AICPA tax advocacy efforts on current developments on the tax changes that Congress is considering in 2025, including the expiring provisions of the Tax Cuts and Jobs Act of 2017 (TCJA).
Planning for tax changes and tax reform — CPAs need to not only brace for tax law changes such as the Tax Cuts and Jobs Act (TCJA) and expiring provisions but also be proactive in planning for them.
FAQs on Tax Reform via Budget Reconciliation — Tax reform FAQs that explain the budget reconciliation process, legislative timing, key issues and practical tips for CPAs.
Tax Section news and member FAQ — Get the latest tax news, a digest of key tax topics and commonly asked questions about resources and benefits.
This discussion with Nik Fahrer, Director and Digital Assets practice leader at Forvis Mazars, and Shehan Chandrasekera, Head of Tax Strategy at CoinTracker, centers around the complexities of digital asset tax reporting. The conversation highlights the importance of accurate tracking and reporting of digital asset transactions, the nuances of the new regulations and the need for tax practitioners to stay informed and seek expert assistance.
What you’ll learn from this episode:
- Current tax reporting regime for Form-DA, Digital Asset Proceeds From Broker Transactions.
- The distinctions between custodial and non-custodial brokers
- Anticipated compliance challenges due to the complexity of digital asset transactions.
- The importance of accurate tracking of digital asset transactions and cost basis, including why using software is a good idea.
AICPA resources
Digital assets and virtual currency tax guidance and resources — Sharpen your tax knowledge on digital asset and understand the tax complexities and strategies involved with virtual currency and cryptocurrency.
Demystifying IRS guidance on digital assets | Tax Section Odyssey — This podcast episode from October 2024 discusses the details of IRS Rev. Proc. 2024-28.
Other resources
Final Regulations 2024-07-09 — Guidance on gross proceeds and basis reporting by brokers and determination of amount realized and basis for digital asset transactions.
Rev. Proc. 2024-28 — Guidance to allocate basis in digital assets to wallets or accounts as of Jan. 1, 2025.
On this episode, Steve Wrappe, a National Technical Leader of transfer pricing at Grant Thorton and Reema Patel, a Senior Manager on the AICPA’s Tax Policy & Advocacy team, discuss the intersection of tariffs and tax. The conversation covers the basics of tariffs, their implications for US-based businesses and how tariffs interact with transfer pricing and inventory valuation. The guests also share practical advice for mitigating costs associated with tariffs and discuss the importance of careful planning and strategic decision-making in the current landscape.
What you’ll learn from this episode:
- Basics of tariffs, including how they apply and are collected
- The interaction between tariffs and transfer pricing
- The impact of tariffs on inventory valuation methods
- Practical advice for mitigating costs related to tariffs
AICPA resources
International Taxation Resource Hub — Stay current on international taxation with the latest advocacy efforts, guidance and tools available in this AICPA & CIMA reference library.
Five actions finance teams can take on tariffs, AICPA & CIMA, April 11, 2025
Breaking down the reasons for a decline in economic sentiment, Journal of Accountancy podcast, March 11, 2025
Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.
This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home base for staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you’re not already a member, consider joining this prestigious community of your tax peers. You’ll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.
On this episode uncover the latest updates related to disaster tax relief with the “Master of Disaster” Jerry Schreiber, CPA, and Brandon Nishnick, Manager, Tax Practice & Ethics — AICPA & CIMA. Hear valuable insights and practical advice for tax practitioners who are dealing with disaster-related tax issues.
What you’ll learn from this episode: • The latest legislation related to tax disaster relief • What’s considered a “qualified disaster” for tax purposes • Practical considerations around filing extensions for tax returns postponed due to disasters • State disaster tax relief resources available • How to obtain disaster relief when records are located in a disaster area
AICPA resources
Disaster Relief Resource Center — Preparing for disasters beforehand, deciphering tax relief opportunities and accessing resources during the recovery process help to protect personal and business assets. In the event of a disaster, AICPA & CIMA are here to help and provide resources to help you get on the road to personal and financial recovery.
State Disaster Tax Relief Guide — There is inconsistency in the tax relief states offer following federally declared disasters. This resource serves as a guide to reduce confusion.
IRS resources
IR-2025-41 — IRS reminder: Disaster victims in twelve states have automatic extensions to file and pay their 2024 taxes.
Publication 547, Casualties, Disasters, and Thefts — This IRS publication explains the tax treatment of casualties, thefts and losses on deposits.
Other resources
Federal Emergency Management Agency (FEMA) — Bookmark the FEMA website for FEMA responses to all declared domestic disasters and emergencies, whether natural or man-made.
Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.
This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home base for staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you’re not already a member, consider joining this prestigious community of your tax peers. You’ll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.
On this episode (an updated version of the previous episode ERC updates & deadlines) Chris Wittich, MBT, CPA, Partner — Boyum Barenscheer, discusses the latest updates on the employee retention credit (ERC) as the five-year anniversary of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, P.L. 116-136, approaches. He emphasizes the upcoming deadline for submitting 2021 ERC claims by April 15, 2025.
Also covered is the latest guidance from the IRS on how to handle income tax returns for ERC claims, the challenges faced by clients related to slow IRS ERC claim processing and tips for addressing claim denial letters.
What you’ll learn from this episode:
- Reminder of the upcoming April 15 deadline to submit ERC claims
- What the updated IRS FAQs say about reflecting salary deductions for claims and denials
- What to tell your clients about processing times for current ERC claims
- Different types of IRS correspondence that are being received related to ERC claims
AICPA resources
Employee retention credit guidance and resources — A library for comprehensive guidance, essential tools and the latest news on the ERC.
IRS FAQs about the Employee Retention Credit — On March 20, the IRS provided updated FAQs on income tax and ERC.
Traction with the Tiger — Hosted by Chris Wittich, Traction with the Tiger is a podcast series for staying ahead in accounting, business and beyond. Chris covers hot topics, shares key business tips and welcomes engaging guests to provide expert insights, inspiration and actionable advice.
Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.
This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home base for staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you’re not already a member, consider joining this prestigious community of your tax peers. You’ll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.
On this episode Chris Wittich, MBT, CPA, Partner — Boyum Barenscheer, discusses the latest updates on the Employee Retention Credit (ERC) as the five-year anniversary of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, P.L. 116-136, approaches. He emphasizes the upcoming deadline of submitting 2021 ERC claims by April 15, 2025 and addresses the complexities surrounding the statute of limitations for ERC claims and income tax returns. The episode also highlights the challenges faced by clients in managing tax liabilities, the slow IRS ERC claims processing and tips for addressing claim denial letters.
What you’ll learn from this episode:
- Reminder of the upcoming April 15 deadline to submit ERC claims
- Complexities surrounding the statute of limitations for income tax returns where an ERC claim was filed
- What to tell your clients about the processing times for current ERC claims
- Different types of IRS correspondence that are being received related to ERC claims
AICPA resources
Employee retention credit guidance and resources — A library for comprehensive guidance, essential tools and the latest news on the ERC.
Traction with the Tiger — Hosted by Chris Wittich, Traction with the Tiger is a podcast series for staying ahead in accounting, business and beyond. Chris covers hot topics, shares key business tips and welcomes engaging guests to provide expert insights, inspiration and actionable advice.
Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.
This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home base for staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you’re not already a member, consider joining this prestigious community of your tax peers. You’ll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.
On this episode, Mark Gallegos, CPA, MST, Partner — Porte Brown, discusses strategies for thriving during tax season. Mark highlights his current challenges but reiterates the importance of staying educated and focused in order to foster a spirit of collaboration and support to get through busy season.
What you’ll learn from this episode:
- Practical tips on supporting staff during busy season
- How to stay focused and avoid getting distracted with all the noise
- The importance of providing support and guidance to your colleagues
- Tips on managing workflow and deadlines
AICPA resources
Reimaging your tax practice — Tackle today’s top practice management issues with insights and tips from pioneers in the tax community. Join the upcoming session on March 19 at 3pm ET to hear about Tax Season Triage: Your questions answered.
Beneficial ownership information (BOI) reporting — Access resources to learn about the BOI reporting requirement under FinCEN’s Corporate Transparency Act (CTA).
Transforming Your Business Model: Talent — Tap into the Private Company Practice Section (PCPS) toolkit for resources around attracting, retaining and developing talent to ensure the growth of the profession and position your firm for success.
Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.
This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home base for staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you’re not already a member, consider joining this prestigious community of your tax peers. You’ll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.
In this episode, Jamie Lopiccolo, CPA, CGMA, Founder and Managing Member of Capocore Professional Advisors, and Will Hill, Owner of Will Hill Consults, discuss marketing and pricing tax advisory services. They explore the importance of identifying client needs through effective listening and highlight the significance of understanding clients’ pain points and gaps to move beyond traditional tax.
What you’ll learn from this episode:
- How to use effective listening techniques to identify client needs and help uncover pain points and gaps
- The importance of moving beyond traditional tax services to offer comprehensive advisory solutions.
- How to potentially classify tax advisory opportunities into different pricing buckets and the importance of adjusting pricing based on scope changes.
- The importance of involving team members in advisory services early on, even if they feel unprepared, as this helps them learn and grow in their roles.
AICPA resources
Broadridge Advisor Spotlight for Tax Section Members — Tax Section members can access sample resources from Broadridge Advisor which provides client education and communication tools on personal financial planning.
2025 Tax and Financial Planner — This digital, month-by-month planner is designed for Tax and PFP Section members and serves as a field guide to summarize key due dates, action items, client engagement ideas and financial planning tips.
Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.
This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home base for staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you’re not already a member, consider joining this prestigious community of your tax peers. You’ll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.
On this episode, Nicole Graham, Risk Consultant — Aon, and Stan Sterna, Vice President — Aon, the national administrator and broker for the AICPA Member Insurance Programs, discuss identifying high-risk clients and managing conflicts of interest. They share their experiences and insights on professional liability risks, client acceptance and continuance protocols and the importance of maintaining objectivity and ethical standards in the accounting profession.
What you’ll learn from this episode:
- Why it’s critical to have and follow client acceptance and continuance protocols.
- How to properly manage a conflict-of-interest situation within a firm.
- Best practices on termination of client relationships.
- The importance of having an engagement letter in place particularly when dealing with high-risk clients.
AICPA resources
Client Termination Practitioner Checklist and Notification Letter Terminate a client relationship by following these helpful practice management reminders and then formally communicate the termination to your client.
Say “I do” to engagement letters
This podcast centers around the importance of engagement letters for tax practitioners.
Client Continuance Evaluation Tool
Tool designed to help CPA firms determine whether or not they should continue working with a client or terminate the relationship.
Transcript
April Walker: Hello, everyone, and welcome to the AICPA's Tax Section Odyssey podcast, where we offer thought leadership on all things tax-facing the profession. I'm April Walker, a lead manager for the Tax Section, and I'm here today with Nicole Graham and Stan Sterna. They are both with Aon, and I'm going to let them tell you a little bit about what they do. We're here together recording, which is always exciting to be able to do that in person at Digital CPA in Denver, and they are doing a session called identifying conflicts of interest and high-risk clients.
I thought, that sounds really interesting and something our listeners might want to learn more about. Stan, we'll start with you. Tell us a little bit about your background and where you're coming at this session.
Stan Sterna: Sure, thank you, April. I have a legal background. I started off practicing law, about 34 years ago, I'm dating myself. My entire career has been defending professional service firms and then an opportunity to take a position with Aon, who is the national administrator and broker for the AICPA Insurance Program, of which CNA is the underwriting partner, the carrier and had worked with Aon for a long time and they wanted me to come over and serve as a risk control consultant for not only the program but also for some of the larger firms as well.
I came over about 2016 and I currently advise firms on professional liability risks, cyber risk. I'm also involved in doing presentations like I am here today at Digital CPA and other industry events, writing articles for the Journal of Accountancy, as well as other publications. I like to look at ourselves as risk advisors as not somebody that puts a stop sign up and says, don't do anything or don't do something. It's giving folks in the accounting profession the tools in order to manage the risk while providing services and expanding and growing their practice.
April Walker: Nicole, what's your perspective on this topic today?
Nicole Graham: Well, I am here to scare everyone just a little bit.
April Walker: That's okay.
Nicole Graham: But I'm Nicole Graham. I am like Stan, a recovering attorney. I was in litigation practice for almost 18 years. For the majority of that time, I represented professional service firms in professional liability litigation and also disciplinary actions. I did that for a long time and decided to take off the boxing gloves, stop fighting every day, and instead take all those lessons learned and now try to work with firms proactively to avoid some of those pitfalls.
April Walker: Let's talk about identifying high risk. High risk could mean different things to different people.
Stan Sterna: I think the first thing you need to do, April, is you have to have client acceptance and continuance protocols in place. That's vital to identifying, is this client a right fit? You have to have that process, but as part of that process, you have to identify initially what is the risk appetite of the firm. What is your ideal client? It could be by industry, it can be by size. It could be by geographical location. It could be by the amount of revenue they make if it's a company or income. Identifying what is your ideal client, I think, is the first step.
Then you have to not only, and I think this is important, evaluate a client when they're coming through the door to see if it fits the risk appetite at a firm, but also you have to continually and regularly monitor the client and whether or not the client is still a member or still fits within your risk appetite. That's what we call client continuance. Sometimes client acceptance, everybody does client acceptance and might not be in one shape or the other, might not be the best client acceptance.
April Walker: It's not formal maybe.
Stan Sterna: Everybody's evaluating even folks that don't have written criteria or developed any concrete parameters. In some subconscious level, you're thinking, is this somebody that I want to work with or have as a client? But on the other hand, continuance seems to get short changed, especially in the tax area. One of the things that we've seen when we've dealt with a tax claim is situations where you have a client who maybe doesn't pay on time, or the client is constantly providing information at the last minute, and you're scrambling and you have to get extensions.
But yet, when the client came in the door, it seemed like a perfect fit for the firm. You're not re evaluating the situation, whether it's the demeanor of the client, the way they cooperate or maybe just circumstances change with the client that at least should be the impetus for looking at the client and rethinking is this client a good fit for our particular firm? Unfortunately, we've seen a lot of claims in the past, both Nicole and I, where continuance was the issue and not monitoring, is this a potentially high risk client? I think, in the tax area, one of the biggest risk flags or red flags is not paying fees and/or not giving information on time.
Unfortunately, when people don't pay fees and they're constantly either slow paying or they want to pay a fraction of it, if you pursue those fees, a lot of clients will turn around and point the finger at the accountant and say, well, there was something that you did that I didn't like, and that's the reason why I'm withholding fees. A lot of them it's a ruse to be frank with you, a client ruse in order to avoid either paying the fees or have some leverage in negotiating the fees.
April Walker: Sure.
Stan Sterna: Folks people are dedicated to the profession and I'm sure there's a lot of folks out there that absolutely love what they do and they love their clients, but for the most part, people aren't doing tax work for free. This is not a hobby.
April Walker: This is not nonprofit.
Stan Sterna: You should get paid. We've seen plenty of circumstances in the past where you know it's a problem client. Every time you say, well, I'm in the midst of preparing your returns for this year, I need to get paid from last year, and they'll put it off because they don't necessarily want to get in a situation where they're going back and forth with the client. Some folks will look back and go, well, the founder of our firm brought that client and it's a legacy client, and yeah, they don't pay, or yes, they're always questioning what I'm doing. They always want to, and these are other red flags, take shortcuts when preparing their taxes or giving you incomplete information.
Then you continue to say, look the other way and muddle through it and file a return with the best information available. Keep your fingers crossed.
April Walker: That's not a good risk plan.
Stan Sterna: That's not a good risk risk plan. In that situation, you should really look at that individual. It could be a friend. It could be a legacy client and decide, do we really continue together on this path in a tax preparer client relationship? Is it in my best interest to do that?
April Walker: These are good things. I'd like to pivot a little bit now and we'll talk about with Nicole, and certainly a high risk client could be, or another way of looking at it would be a conflict of interest. Talk to me Nicole a little bit about what kind of conflict of interests do you see that are problematic and how practitioners can recognize that, and also, take the next step as far as what do they do if they identify something as conflict of interest?
Nicole Graham: A conflict of interest is really just being able to identify and manage situations where there are competing interests or relationships. CPAs are required to maintain and protect their objectivity when they're providing client services. That is paramount to their duties to their client under the code of conduct, and something that we have to protect.
Nicole Graham: The way that the conflict of interest comes up is you have clients that could be adverse to one another.
April Walker: A divorce situation?
Nicole Graham: Correct. Or you have business partners who are going through a business dispute and you represent both of the business partners. We see that a lot.
When you look at these relationships and competing interests, you have to ask yourself questions. Am I able to remain objective while providing service to both affected clients, you also need to make sure that you are not putting your personal interest before client interest because there are your own self-interest or the interest of interests that your firm has or that close family members or close friends have that could affect your objectivity in providing client services. This is something that you need to look at when you're evaluating a potential conflict. You should be asking yourself, who are the stakeholders, do I have any personal issues that I need to address or any personal interests? Yes, no. Does this affect a client? For example, do I already represent a competitor in that industry, and would providing strategic insights to these competitors be a conflict? Could it be to the detriment of my other client? These are things you need to look at.
If you have a conflict, it doesn't necessarily mean you have to turn away the business, but it is something that you need to evaluate and you need to evaluate it from the beginning. If however, you identify the conflict, you can then proceed with a representation, but you have to meet a little test. If you look at Section, I think it's 10.29 of circular 230, it identifies the ways that you can manage the conflict and still represent the client. You have to have a reasonable belief that you can provide the affected clients with proper objectivity and diligence in the representation. You have to make sure that you're not violating any laws by representing them both and you have to have informed consent and waiver by the client and it must be in writing, and it must be done sooner rather than later. Don't wait till the end of the representation to address it.
In identifying how you go about this, we usually refer to it as the ACE framework. Awareness, communication, and exit, awareness, identifying the conflict, and once you identify it through asking yourself these various questions, then you have to communicate the conflict to the client. When you do that, you have to be specific about the potential conflict. You want to make them aware of it, you want to make them aware of the potential implications. You want to tell them your idea for how you plan to manage what guardrails you're going to put in place during the provision of services to protect them. You want to get their consent. You want to get it in writing. You want to document it, and then you also need to keep that documentation. Then if you decide through your analysis though, that the conflict can't be properly managed, that despite all the guardrails you can put in place, you still feel that there is exposure to you or your firm in going forward with the representation, then you should consider not taking on that client or disengaging, you have to eliminate the conflict.
April Walker: Very helpful, Nicole. In your ACE framework, E is for exit. We've got exit and terminating the relationship.
Nicole Graham: It's really when you're evaluating how to put in different guardrails, for example, can you have separate engagement teams to help both clients who might have competing interests and form an ethical wall? Then you realize, actually, I don't have enough people with the requisite expertise to form two engagement teams. Well, then that means you cannot take on both representations, you're going to have to eliminate the conflict, so you'll have to figure out which of the clients to move forward with and which one to let go. That's one of the most basic ways I've seen firms have to exit from a situation where they didn't have the resources to put in the proper guardrails, like having separate engagement teams.
April Walker: That makes sense. Stan, where do you see termination in this risk area, and how do you help your clients with that?
Stan Sterna: It's an important part. Like I said, not every client is a good fit for a firm. There's going to be clients that you really shouldn't touch with a 10 foot pole. There is a method to terminating that if you do it effectively, can help mitigate your risk. This is in the context of not only conflicts of interest, but high-risk clients that you don't want to take on. Most claim scenarios involving client termination involve terminating in such a way that the client feels you left them in a lurch, and that there was some deadline that is going to be missed because you left him in a lurch and maybe you didn't tell him about that deadline. That is really, I think, the core focus of claim scenarios involving termination.
How do you terminate? Is there a good or is there a bad way? I think there is a good way. Once you make the decision, we need to terminate this client. I'll say April, more and more firms, and I'm encouraged by this, are culling their clients. The way to do that is once you identify this as a client that maybe for whatever reason is one that the firm is no longer going to continue with, what you should do it should be in writing definitely. Claim scenarios involving accountants' liability situations are document intensive. This is not a car accident type of case where there are eyewitnesses, it is going to fall back on documentation.
Documenting a letter by a traceable delivery method, whether it's certified, whether it's traceable electronic communication, registered mail, whatever, a traceable delivery system or delivery method that says we are terminating. The ABC CPA firm is terminating the engagement effective immediately returning all original documents to them and then saying in the letter, you have important deadline and it's coming up here. You have to file your returns by this date or you have to file an extension by the state. We'll gladly connect with your successor tax preparer when you identify them and provide them whatever information they need so that they can I'm not going to do any work. But if they need some documents that we have or just want to converse, we'll make ourselves available.
Then one thing we always hear from clients is that they want to get into a tit-for-tat with the client. I want to put in the letter everything that I felt they did that made my life miserable. We always advise, don't do that. The termination letter is not an opportunity to go through a give and take, a back and forth with my client. It's not productive. You don't have to do that. You should have a termination clause and your engagement letter says, we can terminate at any time. If you want to put in there because the fees aren't being paid, I would say each side should be allowed to terminate. That's not the point to do it.
Plus, when you start arguing facts, facts they're subjective. People have their own ideas and their own version. Another important thing is, I think you should always say there's unpaid fees and that you owe me the outstanding fees because I don't want to give the disgruntled client the opportunity to say, well, obviously you terminated because you did something wrong and you didn't ask for your fees. That's why you didn't really pursue your fees. Saying, hey, it's legitimate work we did. This is the work that's finished. You owe us X amount. I think further buttresses the strength of the termination letter. There is a mitigating way to mitigate risk.
Nicole Graham: I just wanted to add a point on when you in your termination letter advised that there are outstanding fees, I would always characterize enclosing your final bill. You don't want a situation where they think paying the bill means that they get to stay on as a client or that they get to argue that. Definitely characterize it as the final bill for services and that making it clear that there will be no further services.
April Walker: Thank you so much. Nicole and Stan. This has been a lot of good information for our listeners to think about. Nicole, is there anything else you would like to leave us with as we're thinking about conflict of interest?
Nicole Graham: Sure. I think it's really important to have your conflict management practices and protocols in place. You want to make sure that you have your framework really built out and you want everyone in your firm to know what these practices and procedures are and explain to them why they're needed. These are not just for your intake people to go through because during the course of an engagement, these conflicts can change and if you have a conflict that changes, you need to address that with the client because you no longer have informed consent if they don't know that there was a change.
That's good. That's why it's imperative that not just your intake people know, but the whole firm knows and understands why you do that. It's important to create a culture where people are aware of their ethical obligations, they feel comfortable raising these questions and concerns to the appropriate channels within the firm. You want to make sure that your tone of the top is really stressing your ethical responsibilities, that there are clear reporting channels for your people to address their concerns with.
Really, as Stan said, documentation is so key in these engagements, you want to make sure that your conflict management process is properly documented. You want to have everything documented from when you identified the conflict to however it was managed and resolved, whether it was exiting the engagement with the client and having your disengagement letter or having your informed consent and putting your guardrails in place. That should all be properly documented.
Consistency is key because if you have the practices and procedures in place, you need to follow them. Because if you have a deviation from your practices and procedures, that will be exploited by a plaintiff's attorney and you're going to have to answer that in a lawsuit. A good way to have consistency is training and education with your people. Make sure that they are aware you have continuous training and workshops to stress their ethical responsibilities in managing these conflicts.
April Walker: I know that when I was in practice, we had a yearly review of the client list and we had to sign and say that there were no conflicts or if there were, we had to address them. I don't know if yearly was sufficient, but that was the message that I heard that it was important.
Nicole Graham: I think that's a great idea. I will say, to make it where that exercise doesn't become a check the box exercise for your practitioners, have that statement that they have to sign go out at the same time you're doing the training. So all of the things you're telling them to consider about ethics and conflicts are top of mind when they're reviewing that.
April Walker: Makes sense.
Nicole Graham: Stan, what's some closing thoughts you'd like to leave us with today?
Stan Sterna: Well, I think the first thing I'd like to note is that tax claim severity has been increasing in recent years. I've been doing this a long time and for years, tax claim frequency was and still is the highest. We receive more claims involving tax services than any other service offering and that's not surprising. It's the bread and butter of what CPAs do and accountants do. But we've seen an increase and it's driven mainly by FBAR and syndicated conservation easements, promoting them, lack of due diligence with regard to it and IRS disallowing the deduction and then the accountant gets sued. Those are some substantial damages involved.
The other thing is tax is always the lowest service line in terms of use of engagement letters. Obviously, as an auditor, our attest engagements are required to have engagement letters. But a lot of folks and we get a lot of questions from folks or a lot of comments that are tax preparer only and saying something along the lines of, well, I've never used engagement letters or my clients there's no expectation. I've had these clients for years and years. It's monotonous. It makes it look like I'm trying to hide something or cover my bases and all that.
It's really not true. You got to look at it this way, and it's an analogy that Nicole and I use a lot when we're talking to folks is you certainly wouldn't have somebody come into your home and do work on your house without a contract, without an engagement agreement, without knowing what they're going to do, what's the limitations of what they're going to do, what is the scope of what they're going to do, how much they're going to get paid, all those things. Why would the expectation be that the client is going to get their tax returns prepared or have tax work done without an engagement agreement? Just doesn't make make sense. They shouldn't be offended by it. It should just be something that is just as beneficial for them as it is for the CPA is Number 1.
Number 2 is that when you're dealing with a high-risk client, one of the first things that we go to high-risk client or not, Nicole can tell you this when we would deal with defending CPAs in a professional liability claim, first thing we would ask for is the engagement letter. Let me see what you're doing, what you agreed to do and with certain clients or with any client? What are your liability limitations that you have in engagement agreement?
A lot of folks use and we recommend highly and we have templates of terms and conditions where you can limit the liability. You can have damage caps if the other side agrees to it. You can shorten the statute of limitations. You can pinpoint what venue and what law will apply. A lot of different things to help limit your exposure. It's going to ultimately be the court's decision if you end up unfortunately in litigation as to whether or not they're going to uphold these provisions.
Well, I know some will if it's clear and concise, and it's not otherwise boilerplate in the engagement agreement. They'll look at two sophisticated parties, both going back and forth negotiating an engagement agreement. It was pretty clear what the expectation was and everybody knew what was intended. But even if it's not used or the court does not uphold it, we use it claims in defending the claim.
In settlement negotiation, you can use it as leverage to say to the other party, you're asking for exorbitant damages. You really need to discount them considerably because I have this cap, let's say, a damage cap in a provision limiting your damages to $10,000. Even in situations where maybe the court didn't uphold the cap, maybe it's subject to appeal, maybe a court just denied a summary judgment motion to limit the damages and said, you know what, we'll let the jury decide later. You can use that as leverage.
It's always an argument unless it's dead in the water, unless they dismiss it with prejudice, it's something that you can use if it's subject to appeal or if it's just going to be something they're going to argue at trial as an issue of fact and the court didn't dismiss it. I think those are two critical things that I'd like to tell your audience since we had the opportunity today.
April Walker: Those are good. I appreciate you giving us information and I know our listeners will appreciate it. Again, sometimes it's not the most fun topic to talk about or to hear about, but important nonetheless.
Stan Sterna: You're right. It's not fun, but it's fun when you avoid a bad situation because you remember something that either you read or maybe something Nicole and I said today, that makes it where you feel like it's well worth it.
April Walker: Very good. Thank you so much, Nicole and Stan. The name of our podcast is Tax Section Odyssey, so I like to think about our journeying together, we're journeying together as an odyssey towards a better profession. Just for a little bit of fun, I like to hear from our guests on what their journeys outside of tax are. Just quickly give me if you have a travel, something planned maybe for the holidays or something coming up that you're excited about.
Nicole Graham: Well, I'm very excited for the holiday season, but not for traveling, but I'm excited for traveling this winter for the ski season. I will be traveling up to Vermont to go skiing, I'll be traveling locally in Pennsylvania to go skiing, and I'm hoping to make it back out to these parts since we're in Denver to do a little skiing. Unfortunately, I can't tack on any days to this conference. But I'm very excited for the ski season.
April Walker: Wonderful. What about you, Stan?
Stan Sterna: Well, I'm almost hesitant to say this as a risk advisor, but I'm hoping to have a casualty-free holiday season. I ended up three stitches in my index finger at Thanksgiving carving the turkey, so I'm just going to watch someone else carve it and just eat and enjoy my holidays hopefully casualty-free. I love it. That sounds good.
April Walker: Just enjoying without a trip to the urgent care or the emergency room. That's perfect. Thank you again so much.
Again, this is April Walker from the AICPA Tax Section. This community is your go-to source for technical guidance and resources designed especially for CPA tax practitioners like you in mind. This is a podcast from AICPA & CIMA together as the Association of International Certified Professional Accountants. You can find us wherever you listen to your podcast and we encourage you to follow us so you don't miss an episode. If you already follow us, thank you so much and please feel free to share with a like-minded friend. You can also find us at aicpa-cima.com/tax and find our other episodes. One of which is an episode specifically about engagement letters with our CNA friends. You can find that and get access to other resources mentioned. Thank you so much and thank you for listening.
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In this episode, Brian Davis, owner of One Stop CPA, discusses how technology has transformed the way his CPA firm operates and interacts with clients. Brian highlights the importance of using technology to provide a top-notch, virtual client experience. He shares insights on tools that have enhanced client engagement and streamlined his firms’ operations.
What you’ll learn from this episode:
- Examples of ways to use technology to enhance a client’s experience
- How remote work and serving clients virtually has worked for his firm
- The benefits of offering subscription model billing
- The importance of investing in client education as you introduce new tools and processes
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Transcript
April Walker: Hello, everyone, and welcome to the AICPA Tax Section Odyssey podcast, where we offer thought leadership on all things tax, facing the profession. I'm April Walker, Lead Manager for the Tax section, and I'm today with Brian Davis. Brian is the CEO of One Stop CPA, which is a firm that focuses on tax, tax planning, and advisory. We're going to hear more about that. Brian, let's start off with telling me a little bit about your firm and how you got started and what you think, are your distinguishing characteristics.
Brian Davis: Definitely. Well, excited to be here. Thanks for having me. Definitely, so my firm is One Stop CPA. It's a traditional small firm. We do compliance. I'm a CPA. We do tax compliance, tax planning, we do accounting services. It's a team of five, including myself, some onshore, some offshore. And the thing that I think distinguishes our product in our service that we deliver to our clients is how we deliver it.
We use technology and pair it with insights. We pair it with traditional advisory things that we're giving the clients, and we try to give them that feel as if they're getting in person, top-notch experience because all of the clients that we work with are all virtual. So that gives us the ability to work with a remote team. It gives us the ability to deliver the clients nationwide. I think it's a little, I think it's definitely helped me grow business, get me a little bit more work-life balance, all the above.
April Walker: All positive things. So for those who are listening, I mean, I think COVID taught us a lot of things - that we don't always have to be in person, although it's lovely to be in person. I love being next to people. But we don't have to be in person with our staff, with our clients. Maybe talk a little bit about that, how you still get that really great relationship with your clients and your staff, even being remote.
Brian Davis: Sure, yeah. Definitely. COVID changed a lot within my firm. I went out on my own in 2017. This was pre-COVID. I went out for a lot of the reasons that are popular now, but back then it was not as popular as it's becoming. The commute to work, having to meet in person just to get a tax return signed, mailing off things. All these different things, I saw them as, these are not the values that customers appreciate. They're looking for me to help them do so many other things, save them, strategize on how to lower their tax bill, how to help them grow their business, how to go for an exit one day. I want to sell this, we can have that on a phone call.
I could actually deliver even better results to you. I just started to think, before COVID, it was a little bit tougher to sell clients on this service. It was a lot of teaching. You have to tell your client, hey, well, you have to e-sign your returns, so go to your email. And it's like, I'm not used to this. This is not how we do things with our last accountant. After COVID, of course, that exploded. A lot of clients would reach out to us and say, yeah, if you could get this done for us remotely, that'd be great. So from there, I also switched over to the subscription model around March 2020. When we made that switch because it's hey, well, we want to serve you guys, and we want to give you all the things that you now need to do remotely. So technology is a big part of that.
The way you educate your clients, the way they feel. Because you're losing a little bit of the touch when they're not in person. I can't offer you a drink when you come to the office, but there's even things now where you could send a client a gift card. Here's a five dollar Starbucks gift card, so we could out grab a coffee. There's all these cool little ways where you can just make that customer feel so good, even though we're doing it all the time.
April Walker: We're going to talk a little bit about while we're here together, talk about technology. So maybe talk a little bit about where you see those biggest friction points with your clients and how you think technology or how you've explored technology helping some of those friction points.
Brian Davis: Definitely. I made all the mistakes when I started my firm. I would do compliance-only work. I would do tax prep only, and I would have different segments of clients that I would deal with in different ways. Well, this person likes to sign in person. This person likes to drop off a package in the mail. When you look into this technology, when we look at things as a firm, it's always well, these clients wouldn't adopt it. These clients wouldn't like it. I wouldn't be able to attract these style of clients.
But when you meet a client, and you say, hey, this is our portal. This is how we do business. Take a good look at it, give them a free trial, maybe if you're seriously considering them, and then try to do a test. Did you see this message that I just sent you there? Here's a template. Did you get it? Cool. So that's how we communicate. Believe it or not, nowadays, more and more people, no matter their level of skill and technology, if you could simplify it for them, they appreciate that. Whenever I'm looking at new technology, I'm looking for, I love the new features and how I could make all this money using it and save time.
But it's also, will the client feel a disconnect or will they feel like I'm throwing them into the tech dark hole? You could lose a good client because they don't feel that personal touch. Even though we're investing in different technologies and moving to greater things that help us on the back end, we also want to at the same time, if not even more important, when you're making sales, when you're delivering, you want to make them feel comfortable with your tools. If your tool is so hard for them to navigate, it's going to create that for them.
April Walker: That's right. What are some exciting things that you have implemented lately around technology?
Brian Davis: Definitely. Well, I'll highlight two of my favorites. They know that they're my favorites. TaxDome is my client portal that I use. Before TaxDome, I was doing the spreadsheet and notepad method of workflow management, which is not the right way.
April Walker: Maybe in Excel spreadsheets.
Brian Davis: Excel spreadsheets. Before that and then implementing TaxDome, it helped me map out how I want to grow the team, how I see myself. Like, which task within this job that we're doing, do I want to, one day off load to somebody, so that I could free up more time for myself to do sales, do client services, help people do like advisory one on one because that's where the value is to the client. They don't care if you're in the back turning out bookkeeping and entering in numbers on your 10 key. They want to know the results, and it's the client experience. So TaxDome is great because when I started it, I was slow to implement. I would pick a few clients, test out on myself. I'm a client, too. I would test out my firm's tax return process and say, Hey, what went smoothly? What can we tweak and make better before we go live with this with everyone?
But the feedback I would get from clients is this is so great. I love how easy that was. It's on the app. I can download an app. Everybody knows how to download an app.
April Walker: Most everybody, yeah.
Brian Davis: Most people. If you're going to work with us, you got to be able to e-sign your return. That's one of the things TaxDome makes. I was getting the feedback that clients really like the experience, and I like the back office side of it, which there are other options out there. I just know that doing TaxDome, clients loved it. Another one is spotlight reporting. A lot of clients are used to seeing their QuickBooks reports black and white, ledger. What's more fun than watching that with the client and just going through a list of fixed assets? Here's your security department. They don't want to see that. You got to make these numbers kind of come alive for the clients have a discussion.
Spotlight Reporting connects directly to your QuickBooks file, your Zero files, and you can create your own advisory dashboards. A lot of clients I have will ask, well, how I'm I on pace compared to last year? I would say, well, let me run that report on QuickBooks. Let me do the prior year comparison.
Now, I have a custom bar chart, and it shows month by month, how you're doing this year, how you're doing versus last year. Another one that I made was a EBITA monitor. It looks like an EKG machine. When I'm showing doctors, hey, this is your EBITA monitor, I say, this is like a heart rate monitor. When you're having these conversations, it's better to have a nice report that you can get them to collaborate with you because there's nothing more boring than reading a report and everybody's just staring at you, and that comes across.
Spotlight's another one. When I show people the reports, it's like, this is great. It really answers my questions, and now we could move forward to the future planning conversation where I could make the big bucks with advisory.
April Walker: Sure. I want to talk about advisory. Let's lean into advisory. Did you start doing advisory right away, or how did you implement that and what have you seen, the changes and maybe the client satisfaction? I don't want to lead the witness.
Brian Davis: Like I said, I made all the mistakes when I started our firm. I was doing advisory, but I wasn't charging for it. I was doing tax compliance. I was charging by the form. This is your form. You need some bookkeeping write-up work. But clients would reach out. Hey, we have some questions surrounding the tax, not necessarily doing the tax return. We have some year-round support questions.
We want to go buy a car. What's the best way to do it. I got to come up with a way where I could not just be quick with them in five seconds, get them off the phone. No, I want to actually help you walk through this process. Clients would rely on us for those things. It's not just for the compliance. That's part of why I branded my company one stop, because I want them to feel like it's not just that we're coming to do your tax return and bill you by the form. We're adding that other piece, the advisory, to take advantage of different things. That's under the umbrella of your subscription.
Now taking on clients, that's part of the package. You have to sign up for some piece of the advisory and the taxes will come along with it, but you can't do this tax prep. The advisory journey, it's been a journey for me, for sure. It's still, always working on ways to make it better. But things like TaxDome puts them at ease with the compliance part. All your stuff's there. You get audited. You have your forms and your backup. We saved it in a portal. If you want to look at some reporting, we can, support an advisory conversation with these nice cool. People like pretty colors. It's the colors and the pictures.
April Walker: Hundred percent that's what I like, too. On that, with this subscription advisory and learning how to charge for that, how has that evolved? Where are you now now with that? Because I feel like that a lot of firms that I talked to just cannot figure it out- cannot figure out value pricing, cannot get away from time and billing, you know, everyone has a different answer, and there's not one right thing.
Brian Davis: I mean, the subscription model, of course, it has its little pieces where you, it has to make sense for what you're offering. Just because you subscribe doesn't mean I'm going to go back and do your five years of catch up filings and year to date books. There's also those one time services. Usually when we meet a new client, there's going to be some advisory diagnostic assessment fee. That's just we try to be as upfront about the pricing that we're going to charge them going forward, so we can see do even want to take this client on for this one time service. It's been a journey to get there. As you get more revenue, you can make these decisions.
April Walker: A little more picky.
Brian Davis: You could be a little bit more picky, but that's been the journey. The price I advertise and go for now is probably 10X what I was thinking in the beginning. Because I was going off of what I think the customers are ready to pay. But if I explain it to them, so you can't just go straight into the pricing conversation. I heard it from the conference before one of the speakers, it's malpractice to just price without a diagnosis. That's one of the medical rules, the medical oaths. We have to diagnose what you're looking for, to put you in the right package. But I do the three tiers of package thing, but the way I do it is I show the big package, the good one. First all the cool features. Sounds great, right? Well, these are the other options, but once I've showed you this one, you're sold. I showed you all the tech that comes with it, and now I start to piece away some of the reporting. Hey, you can't get those cool pretty colors, you want to have that.
April Walker: You get the simple quickbooks report.
Brian Davis: How can I give you support for those big questions? If you're going through, when I got my start, I got lucky. I got a couple of clients that were in the medical profession that were doing deals where they were getting ready to sell their practices. I got a first hand experience of what a private equity investor would come in and say, Here's our due diligence questions. I said, "Well, you know, half of these are financial statements." I could pull those out. But there's some other things they're asking you that the customer wasn't even tracking. It's these cool reports bring that alive. It shows them, okay?
We can support you in more than just getting your taxes and having the financials for the bank and the IRS. We have it so that you can make better decisions and if you're going to add or remove shareholders, this supports that, as well. That's part of the part of the pricing well, as far as pricing, it's all based on what we're including so you got to have your packages premade and a lot goes into that. But one thing I would do is try to not my prices and packages have one name. The name explains what [it is]. Advanced, starter and small. And there's limited seats on small. We're probably already booked.
That's how you propose it to the clients. So you are either going to get one of the two. I'm not going to give them all the options. I'm going to recommend one and if they decide they want the smaller one, well, hey, we'll take them on maybe, and you could grow into the big package. But a lot of times, what I'm seeing, is sometimes I meet with good clients and go through this process, the intake proposal, the discovery assessment, and they realize, no, you don't get this advanced. You're not going to get the results you're asking me for.
April Walker: What they really need.
Brian Davis: Because it's not a solution that everybody explains and a lot of times when I meet clients, they don't have this. All virtual - nobody's using the same tech stack as me. It's a little bit of training and education that you're doing. So what I do like about some of these software vendors now, they're working with us accountants to help us sell in.
Here's how you can grow your advisory practice and just the idea of it. Well, being that we're talking to just smaller firms, smaller firm practitioners and owners, we undervalue how agile we are. We can implement something, and that could be the start of something great. It's just, you got to do it one software tool at a time, one employee at a time, one customer.
April Walker: That brings up another thought I had is, is there a magic time to add a new software or do you not limit that?
Brian Davis: I mean, you got to keep an open mind so you're definitely not going to you don't want to keep moving your clients from portal to portal software to software that's a big no no because then they'll look at you like, am I an on the job training client or you know what you're doing. You know, would you move me from this one to this one? Definitely demoing the like I said, if you're doing your own taxes, test your firm out. You could do your own and say, Hey, how do I feel as a customer, or pick a couple of friends or those friend clients and say, Hey, I'm going to send you down this pipeline. How did you feel about the experience? Then I mean, we're small firms. We can implement.
Like that spotlight reporting is something I implemented. Immediately, I started to see that customers were reacting well to it, so I put it in my offer in a way. Hey, well, my new customers get this. My old customers, well, I'm trying to tell them hey, this is where we're going. Maybe we'll keep you for this year, but we'll have this conversation and revisit. Hopefully your business grows and you need this. You can't you're not a one even though I have the name one stop CPA, we're not one size fits all. That's the thing you have to educate. It's a lot of proposals and presentations. That's why I like to use YouTube and Loom.
They help with I don't have to do a presentation to everyone and lose my voice. I could make a nice intro. Give you the presentation that applies to yours, what I'm trying to talk to you about. Then I jump in on the back end of I mean, big companies do it.
April Walker: Absolutely. I'm sure we're going to talk about it a decent amount. We're just getting started at this conference today, but AI. What's your take on it? How are you using it? How has it made your life better or your firm's life better?
Brian Davis: Oh, it's made my life better, everything. I mean, we learn how to do recipes on there, everything. You could almost use it for anything outside of that.
April Walker: Absolutely.
Brian Davis: But AI, I mean, it's great and you have to know it's just like another tool. You have to know how it applies to your firm and how you're using it. Of course, we have to be careful with security and making sure you're not uploading personal data. What I talked about in the session is think about who the customer is. If you're on a free version of ChatGPT, you're the customer. They're using your input to build the model. But if you pay for the workspace, the app it costs a little bit more money, you can control those settings, and now you can get even more advanced with, endless opportunities.
I mean, I have when I'm doing video deliveries that, now sometimes I'll do a tax return and I'll send you a Loom video that will kind of answer the questions I know you're going to have so that that way, when you look at it, you're not hey, I got questions, and I'm busy because I'm at digital CPA. Let me show the video, send it to you. I have a script writer that will help me write the script. There's so much different ways you can play around.
I mean, I feel like AI is just getting better and better, so I can't say that I'm an expert on it because it's who it is. It's it's such an early stage but it's great. I'm definitely impressed with it. I try to do as much improvement as I can because it's kind of an assistant. We used to go to Google, research different articles, different people's opinions on tax. Now, you could kind of use it as a research assistant.
April Walker: To get you started, at least.
Brian Davis: Hey, I'm researching these tax things and I have these questions. This is the idea that I want to present to the client. How would you approach that? Of course, I'm not going to just forward that, but it's definitely better to have that with you kind of just to help you out. I see it as another team member. It's like another team member.
April Walker: Yeah, we use Copilot.
Brian Davis: Well, one way that I'll be using it now, and I got to give a shout out to Automation Town, it's a community that I'm part of with Chad Davis. One thing I even expressed him, I said, well, the Zoom AI summary after I have my discovery call, Zoom gives a pretty decent, recap of the meeting. But I can't just forward that to the client because there's sometimes there's little, I want to put all that. It's kind of look at it before you send anything to a client. Before I start running off tasks to people, I want to put a little bit of, that would be me, something I would go and manually do. I said, well, he kind of laid out a way where you can combine Zoom's AI summary that comes to you by email with a zappier integration that can create a new Google document with action plan, potential action task for the team, a potential agenda recap that you can send to the client.
Then pair that with you tell it stuff about your firm. Well, hey, we talked about this, we want offer this afterwards, and now it already knows what you mean. It can get very customized. You just got to play around with it. It's so cool. There's so many different ways people are using it, and you don't have to be any kind of super tech-forward. You can play around with it.
April Walker: I think that's right. I mean, just keep in mind the security aspects, and don't put personal information in there, and then just have fun.
Brian Davis: Yeah, get those settings right where you're not uploading your life to the cloud. You know, it's analyzing everything, but, once you're in there, I mean, it's helped me design chat messages that I send to clients just enhancing, hey, I want to come across this way because when we're accounting, you wouldn't even want to see some of the emails I used to send to people just to summarize our meeting.
April Walker: Oh my gosh I know.
Brian Davis: You got to be an accountant to read this but you know, you could say, hey, read this so it's easier to digest. It's great that you could do those. It's pairing it with our knowledge. As accountants, we got so much that we're good at. Now there's these tools that help us out.
April Walker: Brian, we've had a great conversation today. I love it. I don't know if you have listened to our podcast before. It's called Tax Section Odyssey. On it, I like to think about taking an Odyssey together, journey together towards a better profession. We'll pip it a little bit to do you have any dreams outside of the world of tax that you have a bucket list or any travel you've got planned that's still there.
Brian Davis: No, well, I definitely want to start traveling in the future. Again, before COVID, that was the one thing when I went out on my own, I got to start traveling. That's why I was hooked on, okay, I got to make this firm work because then I could keep doing these trips. My son, he's 11 months now, so when he's starting to walk, he's starting to stumble so when he starts walking, we want to spend the summer in a different country and those things. I'd love to do that.
April Walker: My daughter had a passport before she was two, so do it.
Brian Davis: Right. Exactly. Definitely looking forward to some travel, and just building the firm that can run smooth. I don't plan on selling my firm anytime. I do enjoy being an accountant. I kind of lost that love when I was at the firms and having trouble breaking through to the partners - hey, we should do this, there's some tools that we could use to save me time. We have to document every 15 minutes that we're doing. Now that I got out on my own, I saw that there's a better way that you could actually run an amazing firm.
I know that there's a shortage of accountants that are trying that are getting into it because it's seen as this heavy, burdensome job and there's definitely ways you could break through. In the future, you know, just being a part of that, whether it means helping accountants that are kind of coming up in my shoes. I talked to a lot of my friends and fellow CPAs that just may have met me on a Zoom or something or met me on a community chat or something, and they're just, you know, looking for these tips to help them get out on their own.
What is the tech stack you use? What should I maybe start off with?. Maybe some kind of coaching thing where I'm just helping out profession a little bit. That's something like an Odyssey.
April Walker: I love that. That's great. On an Odyssey. Brian, thank you so much for joining me today. I enjoyed it.
Brian Davis: This is great. Thanks for having me.
April Walker: Of course. Again, this is April Walker from the AICPA Tax section. This community is your go to source for technical guidance and resources design, especially for CPA tax practitioners like you in mind. This is a podcast from AICPA and CIMA together as the Association of International certified Professional Accountants. You can find us wherever you listen to your podcasts, and we encourage you to follow us so you don't miss an episode. If you already follow us, thank you so much, and please feel free to share with a like-minded friend. Thanks again for listening.
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"The tax industry is a gift for people who want to learn and grow and be challenged. There's never going to come a day where you close volume two of the code and say, 'I figured it all out, I know what it all means now.’” Tony Nitti, Partner — EY National Tax
In this final episode of 2024, Tony Nitti shares his journey within the tax industry, emphasizing the importance of finding one’s passion, investing in oneself and overcoming personal challenges. Listen as Tony shares his personal experience and practical advice for career growth and fulfillment in the tax profession.
What you’ll learn from this episode:
· Finding Your Passion: The importance of identifying and nurturing your specific passion within the tax industry, whether it's the law itself, client relationships, or running a firm.
· Invest in Yourself: The value of investing in your knowledge and skills by learning, writing, and teaching the tax law.
· Overcome Challenges: Strategies for attracting and retaining talent in the tax industry by providing intellectual challenges and growth opportunities.
· Try hard things: The benefits of overcoming fears of public speaking and using writing as a tool to communicate complex concepts and share your passion.
Resources
S Corporation Shareholder Compensation: How much is Enough?, The Tax Adviser, August 2011
Note: This was the article referenced in the podcast written by Tony. In August 2012, it was the winner of The Tax Adviser’s 2011 Best Article Award.
Transcript
April Walker: Hello everyone, and welcome to the Tax Section Odyssey podcast where we offer thought leadership on all things tax facing the profession. Today, I'm excited to be here with Tony Nitti. Tony is a partner at EY National Tax and he's a frequent guest on the show.
We were just chatting about we think this is maybe the sixth time he's been with us. We appreciate you being with us. Our topic today is not a techie topic. It is a soft topic, but I think an important one. Tony, you did a session at National Tax which was just a couple of weeks ago, on finding your passion in tax and it incorporated some technical topics.
But today, we're just going to lean right into the finding your passion. I think we, as listeners, we just want to hear your story, tell us more about how you started and got where you are today at National Tax at EY, which is pretty impressive, I must say. Tell us more, Tony.
Tony Nitti: It's good to be here with you, April. I will also say I admire your bravery, because like you said, we just did this National Tax a couple weeks ago, or at least a shorter version of it you just went charging full speed ahead and said, let's do a podcast before we get our hands on those evaluations. We might just be doubling down on a disastrous decision.
April Walker: Never know.
Tony Nitti: Nobody wants to hear, but that's not the hope. Obviously, the hope is that something here will resonate with people who are listening who maybe are just struggling to find their center and find their passion within their careers. But if it's all right with you, I always want to address what I consider the elephant in the room of the conversation like this before we get started.
When we talk about this passion for tax, when we did it at National Tax, when we're doing it today, we're talking about a specific type of passion for this industry. What I mean by that is this idea that people are lured to the tax industry as I certainly was by a desire to live in and learn the law. Because we take one look at that tax law and we realize that it's something that's not solvable, and we want to spend our careers being challenged and being forced to grow and learning that law and apply it to our clients.
But that's not the only passion you can have in a tax industry. This passion for law, you probably need to learn the law regardless of your passion, but I've met many people in my career who have a very different passion than me. People whose passion is client relationships, building a relationship that lasts for decades, other people whose passion would be to run a firm someday because they want to prove that accounting can be done differently.
Those are extremely valid passions and we don't mean to discount them, but we're focusing today on a passion for the law. Learning and applying the law, and we're doing it for two reasons, I think. Number 1, at the AICPA, we're keenly aware of the challenges we have attracting and retaining talent. And specific to retaining talent, we just see all these good people at all levels of experience, leave the industry and as they're on their way out the door, they say, You know what, I got into this industry because I wanted to work in the law.
I wanted to solve complicated problems for sophisticated clients and be forced to think on my feet. Instead, for the first four years of my career, all I've done is prepare the same 30 tax returns every year. I haven't seen anything new in 18 months, I'm bored out of my mind, I'm going to go try something completely different.
That should never happen. It should never happen in this industry because the tax industry, it is a gift for people who want to learn and grow and be challenged. I think we've all been around long enough to know that there's never going to come a day where you close volume two of the code and say, I figured it all out, I know what it all means now.
That day is not coming and so we should never lose people because they're bored, because they're not being challenged. But we do, I assume for two reasons. One is the reason we want to tell ourselves when things aren't going well. It's not to say it's not appropriate sometimes. But this is the reason we want it to be and we want it to be because we're not getting a fair shake.
We're getting a raw deal. We work for the wrong firm or the wrong people, and we're not getting the type of work that we enjoy. That may be possible. If you're in a situation like that, the beautiful thing about the industry today is there's more change available to you than ever before. We're not tied into geographic regions. There are purely remote firms.
You can change your situation in a heartbeat. But there's also a second possibility. That's a possibility that people don't want to embrace as much. But there's a possibility that we're not in a terrible situation, we just haven't let it be known to the people we work for, the people we work with, what we're passionate about.
We haven't shown what's meaningful to us and proven to people that this is the type of work that I want to do. That leads to the second reason we're focusing on this specific type of passion for the law. That reason, April is I'm not Tony Robbins, I'm not a paid motivational speaker. The only thing I have to offer your listeners is my experience, and my passion for this industry, there's no two ways about it is rooted in the law.
I'm not someone who has a passion necessarily for forging client relationships that last 40 years. I'm not someone who ever thought I would run my own firm. My passion is constant intellectual stimulation, growth, learning that law. The only thing I have to offer people until I become a paid motivational speaker someday and go through the five step training program is my life experience, what I've learned in this career.
That's why I just want to address that because I feel bad. I can't tell someone with other types of passions how to reconnect with their passion in tax, because I only know my experience at this point. But the hope would be that my experience can help some people because I am a good example of someone who got into this industry for a specific reason, like I said, this desire to learn and build expertise in the law. And then quickly went down the wrong path that so many of us do, and I arrived at a crossroads where I was ready to leave this industry four or five years in because I wasn't growing.
I wasn't the person I wanted to be. I wasn't doing the type of work that lured me to this industry and I had to make a conscious decision at that point to say, if I'm going to stick it out in this industry, I am going to make what I'm passionate about the centerpiece of my career and hope that it pays off. That was, again, a proactive conscious decision, and it paid off in ways that I would have never seen coming because what I found is the more I showed people what I was passionate about, the more I made my passion the centerpiece of my career, the more the industry rewarded me with more of the type of work I was passionate about.
We can talk about that process. But that decision being something that I decided to do proactively, I also ended up learning lessons later in my career that were taught to me that I didn't decide to do. That I learned the hard way, that had made all the difference as far as understanding, that in life, in our careers, it's probably best to leave no stone unturned. To try different things, to find out what you're capable of, what you might be passionate about, and just say yes to new opportunities.
It's been a mix of making a proactive decision to invest in myself and we can talk about that. And then being taught through just the harsh reality of life that you're probably best served to say yes to as many opportunities as you can to just constantly move the goal posts on what you love and what you need out of your career to be happy.
With that long rambling introduction....
April Walker: I think it's good. You don't have to convince me because I think some of the themes in your story will apply to a lot of people, even if, like you said, their passion is not necessarily your direction or whatever. Let's get into it.
Tony Nitti: That would be the hope. Like I said, it's always uncomfortable because I only have my own experience to talk about, you end up talking about your own experience the whole time and you just sit there and go, why does anybody want to listen to my path? But listen, I didn't grow up dreaming of being a CPA, and I don't know that many people do.
I didn't really have many dreams growing up as far as a career. The one thing I thought I would want to be was a writer. Because I love to read as a kid and I wanted to be a sports writer, but it's never something I took seriously. Because I decided at a very young age that I did not have anywhere near the talent necessary to be a writer, and so it's just something I never even pursued.
But I went to college undecided as far as a major goes. The only reason I ended up an accounting major is because I told one of my college soccer teammates I was going to go to law school. And he said if you want to get into a good law school, be an accounting major. I'd never even considered accounting, and I don't even know if there's any truth to what he said.
But I didn't want to go to law school because I wanted to be a lawyer. I wanted to go law school because I had no idea what I wanted to be. And I just thought I'd put off that decision as long as I could. I end up this accounting major by accident. But after I get through the cost accounting class and the microeconomics class and those types of things, I eventually land in my first tax class. I'm guessing that other people had a similar experience where I get introduced to the tax law and I say, now this might work for me.
Because even though I didn't know specifically what I wanted my career to be, I knew that I wanted a career that provided an opportunity for constant challenge, constant growth. I wanted that feeling of going to bed every night a little bit smarter than when I woke up in the morning. To me, the idea of a death sentence was any career where after three months or three years or even 30 years, you've seen everything there is to see and you're just going through the motions.
There's nothing wrong with a career like that, it just wasn't going to work for me. The first thing you see when you get introduced to the tax law, this stuff is hard. Hard is good, hard is what I want. We know that in common culture, the tax law is held up as this point of reference for something that's incomprehensible.
Einstein once famously said that the hardest thing for him to figure out was the income tax. Sitting there as a 21-year-old kid, you're like, All right, if this was a challenge for Einstein, it's certainly going to kick my butt for the entirety of my career, and that's what I'm looking for. That's how I ended up choosing a career in tax and taking a job with Arthur Andersen. As I said before, this industry should certainly provide all the opportunities someone like me craves, that wants to grow and learn. You could even argue that if you are making your career in the tax industry, it's almost hard to not be passionate about your career if you're passionate about learning and growth. But that doesn't mean it's impossible. I am living proof of that April because pretty much as soon as I started my career, I fell into a very familiar trap.
You take a guy who was lured to this industry by this desire to learn the law, and then you put him as a new hire at what was at that time, the largest firm in the world, Arthur Andersen. And pairing up with 25 other new hires. What happens. You get in that competitive environment and you say, forget that learning the law stuff. I have one singular focus and it is to move up the ranks as quickly as possible. To climb the ladder as fast as I can, because I will be damned if I am to let Sally make it to senior before me or Johnny make it to manager before me. That became the focus. That became the priority. How do I get promoted? That is largely based sometimes on just playing the game. Shaking hands with the right clients and being close with the right partners. And just making sure everyone knows what you want, when you want to get promoted, being the squeaky wheel. When you get promoted as senior, pushing your staff as hard as you can to meet deadlines. That's what I valued. That's what was important to me was moving up those ranks, and the thing is it worked.
Now four and a half years into my career, I get promoted to manager at what is now PWC, not Arthur Andersen anymore because in the interim there, Andersen collapsed on itself like a dying star after the Enron scandal. Now I'm at PWC, and they promote me to tax manager, and it's supposed to be this cause for celebration. Because they say, you make manager in public accounting. It opens doors that aren't open at any previous level. You want to go make an extra 20, 30 grand and work at another accounting firm, you can do it. You want to go work in a tax department of private company and make some more money while working fewer hours, you can do that, too. Everybody's patting me on the back and they're telling me, this is an impactful day for you. It's a big day in your career. You can go anywhere and do anything now.
The thing is, it wasn't just the biggest day to that point in my career. Looking back at it now a full 20 years later, the day I made manager at PWC was and is the single biggest day of my entire career. Now that I could leave you now on a cliffhanger like Dukes of Hazard. Remember, like, they would be launching off some jump, and they go to commercial and you don't know are they going to be okay? This was the biggest day in my career, April, and you probably wondering why? What was so big about?
April Walker: Yeah, I'm wondering.
Tony Nitti: I went home that night, and all, like, the pats on the back had ended. I'm sitting there, and it hit me like a brick wall. It was this realization that I was a fraud. I know that may sound harsh. I know there are people who are listening that may think you're just being unduly hard on yourself, but I also know there's people listening who are going to say, “I know exactly the feeling he's talking about.” What I mean when I say I was a fraud, April, is it dawned on me that I had just been promoted to tax manager at the second biggest tax firm in the world, and I didn't know a damn thing about the tax law. I didn't.
April Walker: I'm sure you knew some stuff.
Tony Nitti: Well, that's what everyone says, because they say, “How could you get promoted to manager if you didn't know.” I never have read a court case at that point in my life. I didn't know how the code was strung together. You know what I was good at? Do you know why I got promoted? Because I was good at following processes.
April Walker: And competitive, a little bit competitive.
Tony Nitti: But I could take the last year's work papers for the return I was doing and turn them into the current year's workpapers. I knew how to do that, but when I was doing that current year return. When I was adding back 50% of M&E, I wasn't doing it because 274(n) told me to. I was doing it because they did it last year. When I was asking the client, how much of your accrued liability was paid within eight and a half months? I had no idea it's because I was trying to apply the recurring item exception of 1.461-5. I was doing it because that's what they had done last year.
April Walker: SALY, man.
Tony Nitti: SALY. And I know people have shared this experience, but what hit me was that I had been so focused on those processes to get promoted that I had never actually bothered to learn much of anything about the law in which I lived every day. What was terrifying was the realization that I couldn't go anywhere and do anything. It was the exact opposite, April. I was a prisoner at PWC because they knew my limitations. They knew what I could do and couldn't do, and they were content to respond to my constant complaints about promotion by promoting me. But if I wanted to go somewhere else or think about what I had already learned four years into my career. I had learned the lesson that the largest firm in the world can disappear overnight. What if that happened again? And I had to go somewhere else. Could my resume get my foot in the door? Yeah, of course, I could.
Would my undeniable charm possibly land me that job? I'd like to think it would, April, but then what after that? Because how long would it take my new employer to realize, Oh, we just hired a tax manager who can't think critically, can't research and solve problems in the code, can't provide planning advice for clients. You know what he can do? He can take last year's workpapers and turn them into this year's workpapers, and that's about the extent of it. I realized when I say I was a fraud, I realized that I had fallen into a trap of pushing so hard for promotion that I had gotten promoted to a level that I was not capable of delivering on. I hated that feeling. The reason it was the most important day of my entire career is because two things changed that day.
Number 1, I said, no more am I going to measure my success in this industry by my pace of promotion or my pay rate. I'm done with that. Look what it's gotten me. I've gotten everything I've asked for and it's now made me miserable and terrified. From now on, I am going to reprioritize what attracted me to this industry, which was the law, the substance. I'm going to make that the centerpiece of my career. Whatever happens good or bad, I'm going to live with the results. But if I'm going to call myself a tax person, then I'm going to be the best version of a tax person that I can imagine being. To me that meant building technical expertise.
The second thing that happened, and this is a part people aren't going to want to hear quite as much about. I realized that it was nobody's fault but my own. Of course, I wanted to blame PwC, but for what? They gave me everything I asked for. I showed them what I cared about. What I cared about was getting promoted. They promoted. It was not their job to feed me every piece of law I ever wanted to know when I hadn't prioritized that to them.
They were trying to run a business and I helped them run a business. The fact that I hadn't learned what I needed or wanted to learn, that was on me. That's when I made the conscious decision to invest in myself. And April, it really was as dramatic a switch as I'm making it sound here. Four and a half years of my career, zero priority on my passion, learning the law. That day everything changed.
The way it changed is, first things first, desperate times call for desperate measures. And I had a big gap between what I could do and what my resume said I could do. To solve that gap, I applied that day to the graduate tax program at University of Denver. Because I needed to be spoon fed tax law as quickly as I could. But as soon as I showed up in that program, what happened is I realized I had made the right choice in making this the focus of my career. Because I forgot how passionate I was about the law about learning and growing.
Because now I'm sitting there in this class and they're feeding me the law and every day I am going to bed, a little bit smarter than when I woke up in the morning. And I'm saying to myself, this is what attracted me here, this needs to be the focus. Then the second thing is, I'm listening to these professors and I finally know what I want to be in my career. I don't mean a professor, even though that's a great gig as well. I just wanted that substance.
I'm listening to them cite case law from 50 years ago, off the top of their head and reference private letter rulings down to the final digit. And I'm saying, I want to be able to do that, because one, that's where my passion lies, but two, I'm guessing if I can have that substance, I will never have to have this horrible feeling again of feeling like I can't deliver what I should be able to deliver.
That just set me on the right track, but it didn't solve all the problems, obviously. This decision to invest in yourself, it's got to become a career-long process. I graduate from the program. I felt like the program really helped me bridge that gap, but I knew the process was just starting. Coming out of the program, the one thing I know for sure is that, yes, my one true passion in this industry is to live in the law. Let's be honest, we can argue about it, but you said in your intro. If you truly love working in the law all day and solving complicated problems for sophisticated clients, one could argue there's nowhere you can do that at a more regular level than National Tax group for a big Four firm.
That was my dream job back in 2005, when I came out of DU, but it was never possible for me. The reason I say possible is because, look, if we had all the time in the world, we'd be talking about not just pursuing your passions professionally, but also personally. I am a guy that has a lot of passions from a personal perspective. From the time I was 16-years-old, I knew that I was not going to be a happy adult unless I lived in a mountain town where I could be on skis, 70 days a year and riding my mountain bike another 250 days a year. It had to be that way.
When I graduated in 2005, I was already laying the groundwork to move up to the mountains of Colorado in 2006. At that time, if you were going to work in Big Four National Tax, you had to physically sit in DC. It's something I never even sent a resume, never even applied for. Because I knew that even if I were happy professionally, if I were miserable personally, it wasn't going to be a winning formula.
What I did instead was I took a job at a wonderful regional firm called Withum. And they were so wonderful, in fact, that they let me work remotely at a time where remote work was not really prevalent within our industry. But they let me work from Aspen, even though they were an East Coast firm. But we finally get now to the lesson, how? How do you connect with your passion for your industry? Knowing that my passion was learning the law, now starting at a brand new firm. I don't have anybody spoon feeding me tax law every day. How do I unlock the secret to a happy career? That secret is not really a secret. You want a happy career, do more of the work you love and less of the work you don't.
How do I get my hands on this type of work I love and the decision that I made. There are people listening who are at that crossroads right now who may have to say, it sounds like a lot of work, but I get it. Maybe it's time for me to make that decision as well to invest in myself. Was that if I can't bring myself to Big Four National Tax and do the type of work I love, I am going to find a way to bring the type of work I love to me. I realized that the responsibility is mine to show this new firm that I'm passionate about working in the law and that I'm capable of working in the law.
Part of that happens obviously on the job. Part of it happens by doing diligent research and coming up with good answers and thinking outside the box. But I knew that I needed to really prove to everybody where my passion lies so I could get more of that work. What I did, and this was the thrust of our AICPA class, is I instituted this three-step process that I had been using for the last 20 years and just repeating over and over again, and it has served me better than I ever could have dreamed. But what I did was Step 1, I'd say, I am going to learn everything I can about some narrow area of the law.
I would pick an area of the law, usually one that I found that the industry was struggling with. What I mean by that is we all know there's certain things we do in the tax world that all of us do, and we apply it all the time for our tax returns. We never truly understand why we're doing what we're doing. That was back to what we said earlier, the same as last year's stuff. Perfect example would be allocation of partnership liabilities under Section 752. We all fill out a K-1 on a 1065 and allocate recourse and non-recourse liabilities. But how many people truly understand what makes a liability recourse and non-recourse or how those liabilities should be allocated?
I would say, Sec. 752. I am going to learn everything I could about 752. This is a part people don't want to hear, but it would happen outside work hours. I would read the code, I would read the regs, I would read the editorial content, I would read the key cases and the rulings and things like that. And I would read and re-read and make notes and do outlines until I felt like I understood what it was I was reading. Then I would move on to Step 2. Step 2 is, how do I cement this knowledge? I would sit down and say, if I truly understand all that stuff I just read, I should be able to explain it to other people.
I would sit down and I would write up everything I just read. Try to re-package and re-purpose the law in a way that would make someone who read what I was writing understand. Maybe some of your listeners know that later and we'll get into this, I would go on to write for more national publications. That's not what I'm talking about here in 2006, April. I didn't have a platform. When I say I'm writing about the law, I was quite literally putting together an email for my firm's tax department that absolutely nobody asked for. I would summarize 752. I would put together a PDF decision tree and flow chart and show how we should be allocating things.
I was doing it for two reasons. The reason I like to tell people is I wanted to help my firm understand 752. But the true selfish reason I was doing it is because I wanted to understand that law, and I wanted to show everyone else that I understood that law and that I was passionate about that law. I would send out this email to my firm's tax department explaining 752. Going through that process of writing it up really did cement that knowledge for me because I had to think about the law in a different way from reading it to say, how do I now explain it?
April Walker: How did they react to those emails?
Tony Nitti: You could almost hear the eyerolls in the system. You can almost hear, who is this kid? What is he doing? I wasn't even a kid at that point, I was near 30. Here's the thing. We're going to talk some life lessons here, but I was talking to somebody after the presentation at AICPA. Sometimes the key to success in any career is just being willing to do the thing other people won't. What I mean by that is those books, the code, the regs, we all have access to them. What I was doing is I was diving in and saying, I'm going to figure out what they say and what they mean. Other people probably rolled their eyes when I would summarize law that nobody asked for. But you know what those same people would do when they had a 752 issue? Who were they coming to?
April Walker: For sure.
Tony Nitti: Well, the only other option was to open the books themselves.
That's what I mean about doing what other people won't. That's not everyone's priority and I'm not here to say it's right or wrong, but the reality is when I showed people that I'm willing to open the books, I started to get that work because other people aren't. Not everybody, but there are just people who say, I'd rather just push it to someone who enjoys that stuff and that became a common theme of my career where people come to me and say, I know you love this research stuff, so I'm going to give it to you. You probably give it to me because you don't want to do the research stuff. That's fine by me because I do want to do it. I do want to do this work. To your point, there are eye rolls, but those eye rolls, I'm sure, were the same people who'd say, I got this question. I know this dude seems to care about this stuff. I'm going to go to him and let him answer it for me, which is exactly what I was hoping for. After that writing step, I would go to Step 3.
Step 3 was the uncomfortable step. Because as much as I enjoy writing, and I know this sounds strange because we're doing a podcast about a presentation I gave, but speaking in public, not for me. We're going to talk more about this later, but terrifies me. And I would go into my partner's office, and I'd say, you see that email that I sent around about 752? I need to teach it. I need to teach here at the firm - some lunch and learn local office or the firm's annual update, but I need to teach it. Why would I ask to teach if I was terrified of it? It's because I was terrified of it. Because if I want to know that law, there is no greater motivator than fear. If I'm going to stand in front of a room full of my peers or some people who've been practicing 20 years longer than me, I was really going to make sure I understood that law really well.
To this day, I don't give a presentation that I don't walk around my house and rehearse to air, just to time it out, to make sure I'm comfortable with the transitions, to make sure I know the law. Because that fear still exists from a public speaking perspective. I would go through that process, and by the time it was done, by the time I was done handling that fear and speaking in front of - these are tiny rooms. These are my firm. These are not strangers to me, but by the time I was done, I would say, that area of the law, that is in my back pocket. I feel like I know that well, and more importantly, my firm now knows that I know that well.
All those questions are going to come to me. I would just repeat that process, every year, not every year. I'm just repeat it over and over again with deducting accrued liabilities or 263(A) or prepaid expenses. I would just repeat the process if the firm. Read about it, write about it, teach about it. The more I'm doing it, the more they can see where my passion lies and that I'm capable. To the point where 2008ish, the firm decides to launch its version of a National Tax Group and in addition to our mutual friend Brian Lovett, who's still at Withum, and I get to be one of the founding members of that National Tax Group. Now all of a sudden, I have brought national tax to me and my passion is much more of the focus of my career. As I said, that's the recipe, right? Do more of what you like and less of what you don't and that's what I'm getting now as a return on my investment.
That's where the proactive decisions I made to help improve my career, that's pretty much the end of them. From there, it's just life has taught me because now you get to 2008, April and my career is going really well. I'm doing the type of work I love to do. Personally, I am living in Aspen and like I said, I'm on skis 70 days a year. I'm living on my mountain bike all spring. Life is good.
April Walker: That's when life smacks you in the face.
Tony Nitti: Exactly. That's when the headache started, and I'm your audience with the entire story, obviously. But after one particularly brutal race in Aspen, I was rushed to the emergency room with a terrible migraine-type headache. But I imagine more intense than most migraines because eventually, what they would figure out, it took a little bit of time, was that I had an aneurysm in my brain. Most people know somebody impacted by brain aneurysm and those stories typically do not have happy endings. The reality is once an aneurysm leaks blood into the brain cavity, 70% of people are dead by the next morning. As my surgeon so eloquently put it, of the other 30%, half of them will wish they were by the next morning because they're permanently disabled. This is something where I went from thinking I was invincible at 33 years old to absolutely certain that I was going to die. The only reason we bring this up here is because I had to face my mortality, and I had to go in for 8 hours of surgery to save my life. I had that morning to lay on that metal table before they wheeled me in for the surgery. They were very clear about the risks.
There's a 5% chance I go into vasospasm and I never wake up. There's a 15% chance if I wake up, I've got memory problems, right side of the body problems, cognitive deficit, and that's terrifying. Laying there that morning, I know it sounds cliche, but looking back at 33 years I'd spent on the planet, I wasn't spending any of that morning regretting the things I had done that maybe didn't go the way I wanted him to do. I was spending the time regretting the things I had said I was going to try, but I hadn't tried yet. It was eating away. Like, I thought I had so much more time, and now the prospect that either I don't wake up or I wake up a different person and I never get to find out some of those things about myself. It was not something you ever want to have to face. That the tomorrow you thought you had may never arrive. Now, obviously, I had a good surgeon.
April Walker: Given that that was in 2008?
Tony Nitti: Yeah. Doctor Jefferson. He fixed me right up. I knew within 48 hours that all the Simpsons references, all the code sections, they were all still in there. But I did come out of it a changed person. Not cognitively, necessarily, but I came out of it saying, I'm going to live the rest of my life slightly different than I did before, starting with the fact that I'm leaving no stone unturned. This is what we were talking about earlier. Anything I've been curious about - personal, professional, could I be good at it? Would I enjoy it? I am going to find out. I'm going to say yes, because I just want to know. It started simply enough. I wasn't even in my professional capacity, like silly little thing. I spent my whole childhood saying I wanted to learn how to play guitar. I never bothered to learn guitar. I had a year, basically year it took me to recover from that surgery before I could get back to my normal life, and I spent that year playing ten years worth of guitar. But what happens is you realize, I love this. I thought I would enjoy it.
Tony Nitti: I do enjoy it. I shouldn't let other things slip past me like this. I should try everything. Within my career, it's now 2009, and I've made partner at Withum. There's no impetus to try new things in my career. I've gotten the last promotion I'm never going to get. But that's not what's driving me at that point. What's driving me is this primal realization that, life is fleeting and so I'm going to go find out whatever I want to find out about. We go back to how we started this conversation. Growing up, the only thing I ever thought I would enjoy was being a writer. I had been doing those emails to my firm, but I never tried anything bigger than that because I just assumed I didn't have the ability. What bothered me after the surgery is I never even risked it enough for someone to tell me I wasn't any good. I just decided it for myself. I said, look, I'm never going to write the Great American novel. I'm not that talented, but they say write what you know and I know some things about the tax law.
April Walker: Sure.
Tony Nitti: I said, I just want to find out. I want to find out what I'm capable of. The next time I went through that three step process, it was about a court case that came out on S corp reasonable comp. I said, well, this time, even though no one's pushing for it, no one at my firm cares, it's not anything anyone else values, I'm going to find out if I can get this thing published externally.
I wrote up the entire case history of S-Corp Reasonable comp for The Tax Adviser. I wrote and rewrote and I edited, I reedited and I eventually submitted it for publishing and they published it as a feature article. What I had learned in that process was not that I was a talented writer, but that I was as passionate about it as I thought I would be. I loved it. I love the process of trying to explain the law to somebody else in the hopes that the light bulb goes off and they go, I never understood that before, now I understand.
Of course, I looked from a selfish perspective having to learn the law that well, to read all of the cases that had ever been settled. It was just a really gratifying process, but the problem is, my firm's not paying me to sit around and write articles all day, so it's a bit of a bummer. Because I had done it, I loved it. But how do I get to do more of it? This is where the worlds collide between leaving no stone unturned, but also investing in yourself. Where the article, it went well.
Tony Nitti: It went well to the point where The Tax Adviser asked me to write a couple more articles, and I did. Then what happened is just if you invest in yourself, I firmly believe good things happen. You get a return on that investment. CCH reaches out to my firm and they're like. Hey, we see this writing this kid's doing, it's pretty darn good and we need someone to co author a treatise on consolidated returns and we'll pay your firm for six months of his time if he can contribute a bunch of chapters to this treatise.
Tony Nitti: My firm comes to me and says, CCH wants you to write a treatise on consolidated returns, you want to do it? Like any rational human being, every instinct in my body said, absolutely not. Why would I want to write a consolidated returns treatise, it's terrible. It's the worst area of the law. But the point is, who am I to say no? I'm passionate about writing. I want to be challenged, and it's just this idea of leave no stone unturned.
I'm going to write it just to see if I can write it and to see if good things come of it. Now my firm is getting paid for me to write, so they allow me to do more of the type of work I'm passionate about. I got to write that treatise, which is probably the last time I thought about a consolidated return. But it just things snowballed. From there, April and now the editor at Forbes, Janet Novack, she's reading my writing. She reaches out to me more than day. I'd never met her, or heard her.
She reaches out to me and says. Hi, I like your style of writing. Would you move your platform over to Forbes? For a regional firm like Withum at that time, the exposure was tremendous. Of course, we'll do it and so that's how I land at Forbes, where now anyone who ever read anything I wrote on Forbes, I'm not making up this three step process. Because the entirety of my writing on Forbes, for the most part, was this, like trying to explain complicated areas of the law. There was that whole Tax Geek Tuesday.
That's all it was. Breaking down things that no one was insane enough to want to write about because it's so dry and so complicated, like opportunity zones or 263 A or whatever it may be. Now all your listeners know my deep dark secret, which is it may have looked like I was doing all that writing because I wanted to help the industry, which obviously I'm joking. Obviously, I did. But why else was I doing it? Because I wanted to learn that stuff. I wanted to build that expertise and hope that it would pay off.
One of the things we'll finish with in a couple of minutes is how that ended up paying off with my dream job. But even at that point, even with the writing, and this comes full circle to how this class came to be for us because of what happened in Engage this summer. But at that point, we're talking 2011. I've never done public speaking. Outside of my firm, outside of a lunch and learn, I've never stood in front of a room full of strangers and taught.
What happened was you do enough writing, eventually, someone's going to come to you and say, you're decent at explaining a tax law, wouldn't you like to try it, like in person. So you don't have to trust that someone's going to read your writing and understand it all, first try, things like that? My friend Mark Friedlich at CCH approached me and said, "We do this conference every year. Come speak at the conference.".
Again, every fiber of my being said, Mark, absolutely not. Because I am someone who has got more than my share of social anxiety. I just do, I'm an introvert. There's a reason I love having my nose in the books. The idea of standing in front of a room full of strangers, it terrifies me to this day. I just learned to deal with it a little bit better.
Then, of course, there's the impostor syndrome that comes with it. I'm like, why would anybody want to listen to me? There's so many people who know this stuff better than I do. I said, "Mark, it is not for me." Because as much as I always knew I would enjoy writing, I knew I would hate public speaking. He just said, "Look, just give it a try. What's the worst that could happen?" Eventually he's right. Who am I to say no to this?
The whole point of this second act I'm getting in life, is say yes, find out what you're capable of, find out what you might enjoy. I flew to Arizona, April and I did 90 minutes on the tax consequences of foreclosures and short sales. That tells you.
April Walker: That's very specific.
Tony Nitti: It's 2011. This is where it's getting real for the crash and so everybody's dealing with foreclosures and short sales. I went in there and I talked for 90 minutes, and let me tell you, it was every bit as awful as I thought it was going to be. But when I walked out of that room, I knew my goals in my career. I knew my passion in my career had changed, had evolved. Because I walked out of that room saying, I need to do more of this. But why? If it was so terrifying, why?
Because it was so gratifying, Just to have even one person come up to you afterwards and say, "I struggled to understand that now. The light bulb went off. I get it." This desire to communicate and help other people and explain the law in a way that people can understand. It's fun to do it in writing. Maybe not that efficient. You have to trust that they're going to read the whole thing, not have any follow up question. But with speaking, I could read their faces. Are they following along?
Do they look lost or are they tilting their head to the side like my pup Maggie does in some futile attempt to understand what I'm saying to her? I'm like, I'm not built for this, but I need to do it. For me to be the best version of myself, the happiest version of myself in my career, I need to do this thing regularly that terrifies me because the reward is so great.
That ability to repackage and repurpose the law in a way that connects with other people in the industry. Of course, the byproduct of learning it so well. If I'm going to stand in front of the room and talk about foreclosures and short sales, that's another thing I'm going to get to add to my quiver as far as areas of expertise.
It's funny, because like I said, growing up, I knew I'd be passionate about writing, and I was. Knew I'd be terrified to speak publicly, and I am. But I'm just as passionate about it now as I am the writing. One final story to just tie everything together and just show you how. Look, I don't know. Maybe my experience is unique. Maybe we need one of those things to run on the bottom of the podcast that says. What is it? Past performances are not indicative of future performances?
April Walker: Future yeah?
Tony Nitti: I don't know. Maybe it's just unique, but this right place, right time. The rewards I've gotten on the decision to invest in myself from Withum's willingness to create a national tax group, to Forbes noticing my writing and bringing me on. Just the little things that have impacted the course of my career. It's remarkable because listeners out there, especially the younger variety, they're going to think it's these big decisions that I stress out about that are going to impact the course of my career. Which job do I take or what area of the law do I focus on? But my goodness, it's sometimes the smallest things.
What changed the course of my career was a decision in 2013 to waste my Thanksgiving weekend. Because 2013, right around this time, the IRS issues regulations under 1411, the net investment income tax regs. I didn't want to necessarily spend my Thanksgiving weekend learning about those regs and writing about them, but it was new. I love writing about new stuff. I love trying to explain to people how to read [how the] law works and so I said. I'm going to sit down and go through the three step process, at least the first two.
For now, I'm going to learn about it, I'm going to write about it. I wrote about the net investment income tax regs. It was no different than any other article. There's nothing special about it. The only thing that was special is a couple of days later, I get an email from the attorney at the IRS who wrote those regulations.
April Walker: Spoiler.
Tony Nitti: Felt encouraging. He just reached out to me to say, here's what you got right. Here's what you got wrong. I want to send a unified message out to the people. You know [David] Kirk, so there's probably some expletives thrown in there.
April Walker: Absolutely.
Tony Nitti: I just thought, that's so admirable that this guy would take that level of ownership over his work. Dave and I would become what I would loosely call friends. I think we met in person once at National Tax, but other than that, we maybe connected once a year for the next decade. But the point is, this return on investment, that decision to write that article would change everything. Because 10 years later, Kirk is not at the IRS anymore.
Now he's at EY running one of the National Tax groups, and one of his partners is retiring and unbeknownst to me, he's been keeping track of my career the entire time and he's seeing this investment I'm making in myself. He's seeing my passion for learning the law and whatever small ability I might have to explain that law to other people. He's saying. That's the guy I want. He's going to his bosses and saying. This is the person I want to come in as the new partner in EY National Tax.
In 2021, he reaches out to me. And I was working for an amazing firm at the time, Rubin Brown, and I loved my job. But he reaches out to me and he says. Come work with me and work in this National Tax group. The opportunity, obviously, to work with Dave Kirk is pretty much all you need to hear. But of course, me being a pain, the first thing I say is, do I have to move to DC?
Now, this is the benefit of the post pandemic world. We can do this remotely from Aspen and so he's offering me my dream job, April. What's amazing about that is I spent a couple months agonizing over that decision. I very nearly turned it down. Why?
Because, honestly, I was scared. I couldn't do it. It was back to almost that feeling of being a fraud again, but just feeling, I don't know. This guy has forgotten more about the law than most people know. And I had that impostor syndrome kick in again. Can I do it? Am I capable? Who knows? Maybe I'm not and the firm has just been lying to me for the last three years.
The point is, I almost didn't take it and then I sat down and said, hold on a second. What is it that makes you not want to take this job? I'm scared because I think I might have to learn a lot to be able to hang.
Then I'm like, wait a minute. What is it you're most passionate about in your career? Where you're forced to learn a lot so that you can hang? Finally, it just became obvious to me that I had to take the opportunity because this was my dream. My dream to just live in the law all day, every day, and it came about in the most bizarre fashion.
April, I didn't submit a resume because it didn't mesh with my personal goals. But then this decision to invest in myself, which eventually led to Forbes, which got me in front of Kirk. It's just crazy. Crazy to think how it all unfolded. The message for someone listening out there, is I was no kid when Dave Kirk called me.
I was 45 years old. 45, to land my dream job in this industry and patience is certainly a virtue. The bigger virtue is just understanding some of the things we talked about here today. Which is, look, no one wants to hear this. The easy way out is to say, I'm in a bad situation, no one's treating me fairly. I'm not learning what I want to learn.
Look, there are bad situations out there. Like I said, if you're in one, it's pretty easy to move. Problems are going to follow you even to good situations, if you don't take ownership over your own career and if you don't say at a certain point, it's no one's job to make me the professional that I want to be other than myself. That's not easy. It comes with a lot of extra work.
You think I wanted to be reading Bittker & Eustis on the beach on a weekend back when I was fielding materials a lot? Of course, I didn't. The BNA portfolio at night? No, but I was making an investment in the hope that it would pay off. The way it paid off, like I said, was doing more of the type of work I love, which is all you can possibly ask for.
It's not an easy thing to communicate to people - as much as we work in this job, sometimes you have to you go above and beyond to show people what you're passionate about and that you're capable of handling it. If you don't show, no one knows and you can just get lost in the shuffle and end up being that person we talked about that's doing the same tax returns five years in a row and not growing and not learning.
If you haven't shown people that you're not content with that. If you haven't shown people where your passions lie, human nature is such that firms of any size are just going to say, April just keeps doing what we ask for every year. We're just going to keep asking her to do it.
April Walker: I think that's great. It's funny when you were starting to tell your story about that you hadn't learned anything. I had a question in my mind, like, don't you think that's partially the firm's responsibility that they hadn't invested in you to send you enough trainings or things? Then you answered the question. That's a personal responsibility thing.
Tony Nitti: Perfect example of that. They did send me to trainings. I can remember most of those trainings, and everyone knows someone like this. Being the guy who spent half of the trainings outside the room, doing work for my senior or my manager back in the office because I didn't value the training.
What I valued was getting promoted. If my senior manager said, I need you to do something right now, even though I was at a training at St. Charles for Andersen, I was going to walk out of that room and get that work done for them.
Everybody wants a villain. Life is always easier with a villain. PWC was no villain. Because it's not like I asked them to teach me and they refused to. I showed them what I valued and they rewarded that. If I only valued promotion, they gave me promotion.
Since that point in my career, when I showed my employers that I valued the type of work I love, I valued being challenged, I valued living in the law, I have gotten rewarded with more of that type of work. I refuse to believe my experience is a one-off, that it's completely unique. I definitely got some very lucky breaks at some key points in time.
Then I got dealt a harsh lesson that I wouldn't wish upon anybody. I don't want anyone at 33 years old to have to face their mortality. But that was an impetus to say, I got to find out more of what I'm capable of. And that opened up doors that I never dreamed, April, that I would spend as much of my career doing.
When I say passionate about my love for writing, I just never thought it would even be an option in a career in tax. Then it ended up being a huge part of what I did for so long. I refuse to believe that that's unique to me. I think that anybody who says, I'm willing to do what the other person isn't. I'm willing to get into these books, learn what they say, show people that I care about what they say, and that I can communicate them to other people, that really good things are going to follow.
April Walker: Writing might not be your passion, but I think the message today, as we're wrapping up, figure out what that passion is. It doesn't matter how old you are. You can try to figure it out and do more. I just read this book that was talking about - do the next right thing. The big picture might feel huge and scary, but just whatever the next step is, just do the next right thing.
Tony Nitti: The way I've always described that too, April, is you shouldn't at any point in your life be finished finding out what your passions are. That's the whole point, is you should be a fundamentally different person at 35, that you're at 25 and 45 that you're at 35. You should be saying yes to opportunities that help you unearth new passions and new things that you are capable of doing.
Because like I said, there is no scenario, and people who know me well know what I mean, where I should be making career out of public speaking, doing as much public speaking as I do. It is so foreign and uncomfortable to me. But I look past that, because I'm passionate about it and so I find a way to make it work through truly ridiculous levels of preparation.
April Walker: Some might say you're good at it. I'll give you a little spoiler. Your two sessions were the top rated at National Tax, so there you go.
Tony Nitti: Now, you have to edit out earlier today when I said, we're doing this without the safety net of the evaluation.
April Walker: I didn't want to tell you in advance.
Tony Nitti: See that. Again, but that is proof that anybody, if I can make any career out of public speaking, anybody can. That's why you got to try. That was the thing at ENGAGE that started all this, is when we were just talking about say yes to opportunities because you know what, if you are as bad as you think you're going to be and you hate it as much as you think you will, you haven't lost anything. You just go back to not doing it anymore, but you might unearth new passions that move the goalposts on what you need out of your career. That's a goal in life to keep growing and keep finding things that really drive you. Hopefully, April, something we said resonates with the listeners, but I guess we'll find out.
April Walker: I hope so too. This is our last podcast episode of the year. You can listen to it at the end of the year. I used to love your resolution articles. I think that was a Forbes thing. I love these articles. I miss those articles and people come up to you still all the time and are like, I really miss those articles.
Tony Nitti: What's funny is the last thing I ever wrote for Forbes was one of those resolution articles and I don't know. Maybe I wrote 200, 300 articles for Forbes over the 10 years, but the last thing is my favorite thing I ever wrote because it had absolutely nothing to do with tax. I had to do with my pup Macy.
April Walker: I know.
Tony Nitti: You knew well and Macy was on her way out of the world at the time and just to be able to even have a platform to write about my pup, that is still the one thing I've ever written that I go back and read. I don't hate this. I don't want to change anything.
April Walker: That's good. Thank you so much, Tony. This was so fun. I know our listeners will enjoy it. Also, again, thanks a bunch. This is April Walker from the AICPA Tax section. This community is your go to source for technical guidance and resources designed, especially for CPA tax practitioners like you in mind. This is a podcast from AICPA and CIMA together as the Association of International Certified Professional Accountants.
You can find us wherever you listen to your podcasts and we encourage you to follow us so you don't miss an episode. If you already follow us, thank you so much. Please feel free to share with a like-minded friend. You can also find us at aicpa-cima.com/tax and find our other episodes. Thank you so much. Have a wonderful holiday season and come back and 2025 is going to be an exciting tax year. I just feel it. Thanks for listening.
Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.
This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home base for staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you’re not already a member, consider joining this prestigious community of your tax peers. You’ll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.
Note: This podcast episode was recorded Nov. 20, 2024, and since then, the U.S. House of Representatives races have been called, giving the Republicans 220 congressional members and the Democrats 215. This balance could change depending on potential special elections if some members of the House are appointed to positions within President-Elect Trump’s administration.
In this episode of the AICPA's Tax Section Odyssey podcast, Kasey Pittman, CPA, MST, Director of Tax Policy — Baker Tilly US LLP, discusses potential upcoming tax legislation for 2025, focusing on the complexities and challenges of extending the Tax Cuts and Jobs Act (TCJA) and other tax provisions.
What you’ll learn from this episode:
- The potential complexities and challenges of extending provisions of the TCJA and other tax legislation.
- The implications of a unified government and the reconciliation process for passing tax legislation.
- The financial constraints posed by the national debt and the importance of managing the deficit.
- The influence of individual policymakers and the importance of state and local tax (SALT) deductions.
- Potential revenue raisers like tariffs and ending the employee retention credit early, and their impact on the overall tax legislation.
AICPA resources
Planning for tax changes — CPAs need to not only brace for tax law changes such as the TCJA and expiring provisions but also be proactive in planning for them.
Tax advocacy — Advocacy is a core element of our purpose and value proposition. It is a strong mechanism for promoting trust and confidence in the CPA and CGMA credentials around the world.
Transcript
April Walker: Hello, everyone, and welcome back to the AICPA's Tax Section Odyssey podcast, where we offer thought leadership on all things tax facing the profession. I'm April Walker, a lead manager from the tax section, and I'm here today with Kasey Pittman. Kasey is the director of Tax Policy with Baker Tilly's National Tax Office. Welcome, Kasey.
Kasey Pittman: Thank you for having me.
April Walker: I thought we'd spend a few minutes today setting expectations for tax legislation for 2025. First, a little bit of a spoiler, tax legislation is likely, right, but what it will actually entail is probably a lot more complicated than just a straight status quo extension of TCJA. Kasey, let's set the stage a little bit and talk about what we know about the makeup of the government and what that will mean for upcoming legislation.
Kasey Pittman: I think going into the election, the vast majority of people assumed we were going to wind up in some divided government. We knew it was very likely that Republicans would capture the Senate. The math there was not very good for Democrats, just in terms of how many seats were up, and one of the Democratic-turned-independent retiring senators from a deep red state was almost a certainty to flip. I think the general thinking was that either Democrats would capture the White House or the House, and neither of those things came to fruition. We are sitting here in the 2024 election was a Republican sweep.
We've done a lot of worrying about things that we can let go of, and I think probably we'll touch on that a little bit later in the podcast. But the margins aren't very big. Trump captured the White House actually by a good margin in terms of both electoral votes and total votes in the country. It looks like Senate Republicans will have the majority with a 53-47 split between Republicans and Democrats. The house is currently unknown.
We know that the House has captured 218, and that's what you need for the majority. There's 435 seats. 218 is literally a one seat majority. There are five races outstanding, and probably threeish, maybe four of those are likely to go Republican. We're just waiting on final vote counts. In the House, we're looking at a few vote margin, in the Senate, we're looking at a few vote margin, and that can make legislating really difficult.
One of the themes we touch on here as we go through is reconciliation. When you have a unified government, and a unified government is one where one party has both chambers in Congress, and the White House, which is what we're going into in 2025, there's this process that you can use for certain types of legislation, fiscal legislation called reconciliation. What reconciliation does is it allows you to overcome the filibuster in the Senate. You actually only need a simple majority, like 51 votes in the Senate to pass a bill, but anybody can hold up a bill with a filibuster, and you need 60 votes to end debate and force the vote on the floor. But this type of legislation doesn't require that, so we can move forward with a simple majority.
However, there are a lot of limitations to the reconciliation process. Everything in a reconciliation bill has to be financial. It needs to deal with spending or revenues and it can't be incidentally related to those. That has to be its primary purpose. Tax provisions are perfect for this. It cannot increase the deficit outside of the budget window. The budget window is typically 10 years. Then inside that budget window, you can only increase or decrease the deficit by the amount in the reconciliation instructions.
Reconciliation instructions are set again, by a simple majority on a budget resolution in the House and in the Senate. That number can be hard to define. We also can't touch Social Security, by the way, which is why you never see Social Security in a reconciliation bill. However, that number is really difficult to come to an agreement on sometimes, and I predict that we're going to face some issues just in getting to that budget reconciliation number before we even start to put together the bill.
April Walker: That's a great summary, and we used reconciliation before to actually pass TCJA and some other legislation in the past few years, but it's still not how I grew up learning how law was passed. It's a little bit interesting and that's a great summary. Kasey, I led with saying, we don't think it's going to be a straight extension of TCJA and some of the other proposals that have been thrown out throughout campaigns.
Talk through a little bit about specific provisions, what they're scoring out at, why they may or may not be included in this legislation. Again, I don't think we have to say this. This is all just speculation on our part. We will have to see what we will see once it turns to 2025.
Kasey Pittman: Some of it is really speculative. We're guessing, they are educated guesses based on history and based on what influential policymakers are telling us. For many months, Republicans have really optimistically been planning for reconciliation, hoping to capture both chambers, hoping that Trump would be in the White House. They've been planning. Honestly, there's been a ton of organization inside the House Ways and Means Committee around it.
What I said just a minute ago was that I think we're going to have trouble getting to that number, and here's why. If we want a blanket 10-year extension of the Tax Cuts and Jobs Act, all these taxpayer-favorable provisions, they're mostly taxpayer-favorable and we'll get into that in a second too. It's going to cost $4.6 trillion. Just for benchmarking for everybody, our national debt, which is the sum accumulation of all the deficits we've ever run right now is $35 trillion. That's really impactful because each year, honestly, I believe since Clinton, we've run at a deficit and some of the Clinton years too.
But each year, since I was in middle school, we've run at a deficit, which means we're spending more money than we're bringing in, and part of the reason we're spending more money than we're bringing in is because we have to pay interest on all this debt. It's really come to a head over the last couple of years for two reasons. One, our debt skyrocketed. Recently, TCJA added to it. COVID certainly didn't help it at all. Then additionally, because we've had such high inflation, the Fed has increased interest rates and that's the rate that we pay to service the debt.
In FY 24, which ended at the end of September. This year, we paid over a trillion dollars just to service our debt, not paying down our debt, just paying the interest on our debt. That's more than we spent on defense spending for the entire year. It becomes a liability if our debt is too large. Particularly, we like to compare it to our GDP. This year we ran a $1.8 trillion deficit. Over a trillion of that we could say is attributable to interest costs. Anyway, here we are. We've got $4.6 trillion to extend the TCJA.
Then we've got a whole host of other campaign proposals that Trump made on the trail. No SALT, and we'll get to SALT in a second. No SALT, no tax on tips, no tax on overtime, no tax on Social Security benefits. There's family caregivers credit for home caregivers. There's just a number of things, and some of them are hard to score because there's not a lot of details around the policy yet. They're more on the idea than the actual detailed policy phase at this point but those are a lot and estimates are 8-10 trillion with the Tax Cuts and Jobs Act plus all of the other campaign promises, and that is just wild as compared to our current national debt and the fiscal responsibility that I think a lot of policymakers and Americans really are focused on.
Do I think that Senate Republicans and House Republicans are going to come together and say, let's write a $10 trillion bill that's not paid for at all, that increases the deficit? No, I don't. We still have deficit hawks in the Republican Party, we have people who are really concerned about it and for good reason. That's going to be a struggle. I want to say SALT is really important here. Republicans are fairly united in the general extension of Tax Cuts and Jobs Act. There's a lot of campaigning this cycle on it. It's been a priority where we're fairly unified.
However, that's not where it ends. We're looking again at these small margins in the House and the small margins in the Senate. When we have that, we have individual policymakers who have a lot of influence.
We saw that in 2021- 2022, when Democrats had a big bill and they said, Hey, this is our wish list, and Joe Manchin and Kristen Sinema, who are Democrats, turned independents in the Senate, said, Oh gosh, no, thank you, that's way too big. Here's what we can do. We'll do the Inflation Reduction Act, which was a fraction and a little bit of a different direction on some than the original Democratic priorities. That's what we passed, because again, these two policymakers were able to exert a ton of influence.
Then we saw it in 2023, when I think it was a total of eight house members ousted their speaker, which was the historic moment for Republicans in the House, what we see is a lot of power when we have those small vote margins.
In the House, there's a really strong caucus for repeal of the state and local income tax, a limitation of $10,000. It's bipartisan. But there are a number of Republicans on there, particularly from high tax states, from traditionally blue states, New York, California, Connecticut, New Jersey. There's dozens of them, really, and they've won re election to the House and they've campaigned on this, and this is going to be a priority for them. I think it's really impractical to think we're going to see a tax bill that doesn't have SALT attached to it because this is a pretty strong caucus.
Again, the margins are small, and to fully repeal SALT for 10 years is another $1.2 trillion. Now I'm at $6 trillion April, and that's before the overtime and before the Social Security, which is already system in peril in terms of being able to fund it. It's not quite that simple, and we do have deficit hawks. When we saw Tax Cuts and Jobs Act originally come through in 2017, we used the reconciliation process, Republicans did, and then Democrats used it in 2022 to pass the Inflation Reduction Act. There were many Republicans who wanted much more than TCJA cost.
TCJA eventually they came to an agreement, and they said, We can do $1.5 trillion. 1.5 trillion is what we can sign on for. We can get everybody on board for that. That's what the budget instruction said. You can write a bill that increases the deficit by 1.5 trillion dollar over 10 years and so they did that. But it's not quite that simple. People say, $1.5 trillion, it wasn't 1.5 trillion dollar in tax cuts. It was $5.5 trillion in tax cuts with four trillion dollar in revenue raisers, some of them were pretty simple.
I replaced these itemized deductions with the standard deductions, they kinda offset, but there were some provisions in there that were just revenue raisers and one of them is 163(j), the business interest limitation. Then additionally, we couldn't see them all through the entire budget window and still hit that mark. When I originally described it literally in 2017, 2018, when I was talking about it, I would say. Hey, look, we've got all these dials, and at the top, we've got this big number, and this is what we've added up to. We want to turn this dial up, but that costs too much money, and that puts us over, so maybe we dial it down on the number of years or maybe we add this revenue raiser.
We're trying to back into this $1.5 trillion number, and that's part of the reason we saw some of these changes that transitioned under TCJA. We're seeing right now the bonus depreciation number come down. We've seen a change in how we calculate ATI for that business interest limitation, and we've changed how we deduct research and experimental expenditures. Honestly, they just couldn't make it all the way through that budget window at that number.
Just a quick note on those things that have already changed, we saw a bipartisan bill sail through the House, sail through 83% vote margin, 357-70, I want to say on January 31 this year, and it died in the Senate. Senate Finance Committee Leader Ranking member, Mike Crapo, said, No, thank you. [He was] really confident that he was going to have a majority in the Senate in 2025 and he does, and he now also is able to have a Republican House to work with.
One of the questions I get a lot is, do I think that we're going to see that bill be taken up in the lame duck session? My answer is no, I do not. I don't see what the incentive is for Republicans to make the concessions in there with Democrats around the refundability of child tax credit because they've got different methodologies on that. I don't see an incentive for them when they know they're going to run the table next year.
April Walker: One thing I know you and I have talked about before, there's in evaluating “pay fors” and revenue raisers, there's the ERC provisions that are in that legislation that you're talking about in the past. I guess that's still potentially on the table ending ERC in January, that's potentially out there. What about tariffs? Tariffs have been suggested as a revenue raiser. How does that work with reconciliation?
Kasey Pittman: There are a couple of revenue raisers that have been widely talked about, and I think there's a lot of bipartisan agreement around ending the employee retention credit early, and that's scored, if they use it from the old bill, that's scored around $77 billion. But you have to think that's drop in the bucket when we're talking about $6 trillion, $8 trillion, $10 trillion dollars. But it helps - every bit helps, obviously right?
And then there's another one that's clawing back a lot of the IRA provisions, some of those clean energy provisions and semi recently, I think last weekend, President Elect Trump said,"Hey, I'm going to take away this $7,500 EV credit. We're not doing that anymore once I'm president." That's one item, but there are a lot of energy provisions outside of just that. That's the one that I think most individuals know about, but there are a lot of energy provisions outside of that. How they dismantle that is going to be really interesting to me, because there are some proponents who just say kill it all. This is not where our priorities are.
There are others and there was a letter, I want to say to Speaker Johnson in the summer, that came from a number of House Republicans, a dozen or so that said, Hey, these are really beneficial in my district. I really hope that we and the language we've heard a lot of here is take a scalpel and not a sledgehammer. That's the talking point, scalpel and not a sledgehammer, to clawing back some of these provisions.
I do expect some exploration of clawing back those provisions, and then tariffs. President Trump has talked a lot about tariffs and we've heard a number of things between 10 and 20% across the board tariff rate for anything coming into the country, about 60% on China. I believe we've heard 100% on cars coming from Mexico. What we don't know is and I've gotten a ton of questions on this, honestly. What we don't know is how serious he is about those.
Is it an idea? Is it something that he intends to use as a bargaining chip in trade negotiations? Is it something that's going to be applied potentially in a more specific niche, these particular areas? That's what we saw in his first presidency was that it was particular items coming in. We saw it on aluminum, we saw it on steel. Or is it going to really be, does he intend to do it across the board?
The thing is that presidents do not have completely unfettered power here, but they have the ability to enact certain tariffs without the consent of Congress. That being said, unless they find a way to write that into the reconciliation bill, they can't use the money they believe they'll generate from the tariffs as an offset to try to get back into that number.
Because again, TCJA, $5.5 trillion in cuts, $4 trillion in revenue, if we want to include that in revenue, it's going to have to be present in the bill in some fashion. What I have been reading and researching a little bit, does it have to be explicit or does it have prescriptive or does it have to authorize him to move in that area? I'm still doing a little research there. But anyway, it would have to be in the bill in order to be included in the revenue scoring.
April Walker: Lots of items to think about as we're rapidly going towards the end of the year and our listeners are [a lot of] tax partitioners talking to clients. I think another top question I'm sure you've been getting is, what are we thinking about timing? When is this going to happen? When is legislation going to happen? Because we really think it's going to happen, they're not going to let TCJA expire at the end at 12/31/25. But what are we thinking?
Kasey Pittman: Speaker Johnson has been very bullish on this and saying he would like a bill coming out of the house, not necessarily enacted, but out of the house in the first 100 days of Trump's presidency. Just if we're going from inauguration day of January 20th, that date would be April 30th. That is a really ambitious goal. There's a number, it's ambitious in ideal scenarios. There's a ton of other priorities as well, including government funding, which as of this moment, is not done, and we don't know if it'll be a continuing resolution or if they'll fund the government through the end of the year.
But there are a lot of priorities for this Congress, and one of them is the confirmation of all of President Trump's picks for various administration positions, which is going to complicate this. Because right now, the House Republicans have the generally accepted number is 218 seats. There are five seats outstanding. They could wind up with a total of 223. That's probably more like 221, 222, maybe 220, but probably 221, 222 (See note above for the final results).
There are three people from the House that President Trump has nominated. They're leaving their seats, assuming they get this job, Matt Gaetz has already left his seat, and that's going to complicate matters. It's not an easy swap. Speaker Johnson will be working with a very tight majority, like a very razor thin majority in the House until all of that is sorted out, and you've got new policymakers in seat. That's going to complicate things as well, and it's going to be difficult to get to that number. Again, I think that there are a lot of different, even within the Republican Party, even though they believe in the TCJA. They believe it was stimulating. They think that they should extend it. Deficit funding for a large number is going to be really difficult.
First, we're going to have to come to that number, and that is going to be a negotiation in and of itself. It's not going to be $10 trillion. It's not going to be, hey, we get everything we want for 10 years. In addition, then they have to figure out how to work with that number. Let's say $2 trillion, I'm just going to throw that out there, $2 trillion, $3 trillion, whatever they've decided on. You can increase the deficit over the budget window by $2 trillion dollars, $3 trillion dollars. I've got 10 years. In my budget window, what am I going to do with it? I could try to find a ton of revenue raisers, and I think it's honestly going to be a mix of these things.
I could try to find a ton of revenue raisers. I could try to reduce government spending. I could not put everything in place for 10 years. We could see a bill that comes out for four years. Even though the budget window could be larger, they could say, hey, they're all going to expire after four years because that's how we can get most of our priorities in, and then we're going to kick this can down the road.
When they crafted TCJA, it was very intentional. The portion that they made permanent was the corporate rate, there's a much longer planning runway for large corporations and businesses than there are for individuals, typically.That was smart. In addition, the things that are expiring are the things that are popular with voters, lower rates, increased child tax credit. It puts political pressure on the extension of these items. They could do that again because the items we're talking about are by and large, popular with voters. Nobody's looking, nobody raises their hand and says, I'd really love you to increase my tax rate. Personally, thank you so much. I'd like my bill to go up every year.
Now, many taxpayers are okay with it and they believe in the methodology of a graduated system, but nobody's personally asking for an income tax increase that I've seen anyway in my practice. They're popular, they could kick it down the road and put pressure on the 2028 election, if they only do it for four years. I'd be interested to see what happens. They could also only enact them partially or phase them out or make other changes. There's a lot to figure out. There are a lot of dueling priorities and there's a lot of money at stake.
April Walker: Lots to think about as we move into 2025, but I so appreciate your sitting down with us today, Kasey, and thinking through the scenarios. Very helpful for me.
In closing, as we wrap up this podcast, I like to take a little bit of a left turn and think about, hey, we're together, we're taking a journey together towards a better profession in doing that, I like to get a glimpse of my guest other journeys outside of the world of tax. Kasey, tell me about a trip you have planned or a bucket list item you've got on the agenda.
Kasey Pittman: Actually, we took our kids out of the country for the first time this summer, and we had a little bit of a larger trip planned and it got delayed because of a couple of years, mostly because of COVID, honestly. It was wonderful. We went to Germany and Austria and London, and we were hoping to add France on there too, but we couldn't because it was the Olympics and it was bananas getting into France. It was absolutely bananas. We are hoping to go, not next summer, but maybe the following summer go back and bring the kids to France. I enjoy traveling a lot, but I think it's so cool to see it through their eyes, too. I think it's really neat because the world.
April Walker: I love to do that, too. Traveling is definitely I didn't do it a ton as a kid, and so I try to do it and get my daughter on the road as much as possible.
Kasey Pittman: But in the short term, April, I'm going to come down your way. Let's see. I want to say it's the first Sunday of December to watch because on Monday, it is the Women's NCAA soccer championship, which will be very exciting. It'll be our third year and it's in Cary. Unfortunately, the next three years, I think, after that are in California, and we're not going to make that trip. It's probably our last year.
April Walker: Yes, you're always welcome to come down to a lovely North Carolina. Hopefully the weather will cooperate.
Kasey Pittman: Fingers crossed.
April Walker: Thanks again so much, Kasey. Again, this is April Walker from the AICPA Tax Section. This community is your go to source for technical guidance and resources design, especially for CPA tax practitioners like you in mind. This is a podcast from AICPA and CIMA together as the Association of International Certified Professional Accountants. You can find us wherever you listen to your podcast and we encourage you to follow us so you don't miss an episode. If you already follow us, thank you so much. Please feel free to share with a like minded friend. You can also find us at aicpa-cima.com/tax and find our other episodes and get access to any resources we mentioned during this episode. Thank you so much for listening and wishing everyone a happy upcoming holiday season.
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In this joint episode with the JofA podcast, host Neil Amato discusses with Melanie Lauridsen, Vice President of Tax Policy & Advocacy for the AICPA, what tax practitioners can expect regarding tax legislation. The conversation covers key tax topics following the 2024 election, including the future of the Tax Cuts and Jobs Act (TCJA), beneficial ownership information (BOI) reporting, and disaster relief efforts. Melanie provides insights into the challenges and opportunities facing tax professionals in 2025, emphasizing the importance of staying informed.
What you’ll learn from this episode:
- The latest updates on disaster relief for BOI reporting.
- Melanie’s insights about the potential future of the TCJA provisions.
- How IRS funding might be impacted by the new administration
AICPA resources
Planning for tax changes – CPAs need to not only brace for tax law changes such as the Tax Cuts and Jobs Act (TCJA) and expiring provisions but also be proactive in planning for them.
Tax Advocacy – Advocacy is a core element of our purpose and value proposition. It is a strong mechanism for promoting trust and confidence in the CPA and CGMA credentials around the world.
Transcript
April Walker: Welcome back to the AICPA’s Tax Section Odyssey podcast, where we offer thought leadership on all things tax facing the profession. I'm April Walker, lead manager from the Tax section, and today we have a joint episode with the JOA, providing information on several important tax topics, such as BOI, disaster relief, and also upcoming potential tax legislation. Let's hear more.
Neil Amato: Welcome to the Journal of Accountancy podcast. This is Neil Amato with the JofA. This episode is a special collaboration between the JofA and the Tax Section Odyssey podcast. It's Nov. 19 as we're recording, two weeks since the 2024 election. With the election over, we have results. We also have questions about the future of several tax topics. Here to provide some analysis and clarity on those topics is Melanie Lauridsen, vice president–Tax Policy & Advocacy for the AICPA. Melanie, welcome back to the podcast.
Melanie Lauridsen: Thank you for having me back, Neil.
Amato: We talk pretty regularly, pretty much a quarterly basis. It's safe to say that even if we keep this discussion fairly narrow in scope, there is plenty to discuss, so we'll get right to it. I'm going to tease for the listeners that there will be discussion of the future of the Tax Cuts and Jobs Act. But first, I'd like to ask about BOI reporting, beneficial ownership information reporting, as that's been in the news lately as well. What's the latest from your lens, the advocacy lens, on the topic of FinCEN's disaster relief for BOI?
Lauridsen: Good topic, Neil. Disaster relief is something, regardless of what it is, whether it's tax or BOI, it is critical that people are able to get it as quickly as possible in the largest scope possible. With BOI, we are grateful that FinCEN did offer disaster relief for victims of various hurricanes, most notably Hurricane Milton and Hurricane Helene, which created quite a bit of damage to the areas they hit.
But, unfortunately, the scope of the relief, particularly for those victims of Hurricane Helene, is not as broad and as encompassing as we would have liked it to have been. They did offer a filing relief for those victims. However, they didn't extend it to entities that had been created prior to 2024 and therefore had a Jan. 1, 2025, deadline.
We know that [for] some of the entities, it took everything away. It destroyed everything, and those entities have years to rebuild, and they really could use an extension. With that in mind, we are actually working with various state CPA societies, and we are also working with FinCEN in order to broaden the scope that was issued, in particular for victims of Hurricane Helene. Of course, we are working with people on the Hill because there are a lot of questions around the Corporate Transparency Act and BOI reporting to begin with, much more so also with disaster relief that they would like to see some expansion of the scope, too.
Amato: Yeah, and on that topic of the reports that are in versus the reports that are expected, it's still a pretty small number. I know people like to do things at the last minute, but it's something like 6.5 million of 32 million, so still a long way to go.
Lauridsen: There is an awareness issue there, and FinCEN is highly aware that there is an awareness issue because, like you said, 6.5 million filings of 32.6 [million], there's a little bit of a disconnect, especially when we're in November. So we're talking there's a month and a half to file to meet those other — what is it? — 20-plus million filings that we have to go in 1½ months? I don't think they're going to be able to meet those numbers, so, yes.
But a couple of things to note about that 6.5 million. Of those 6.5 million, the majority of those filings are for entities that were created in 2024 and had that 90-day deadline, and also for the 30-day corrected and updates that are needed, and that's the 30-day deadline needed. A lot of the existing entities, those that were created prior to 2024, still need to file. Now, FinCEN realizes that their numbers are not where they want them to be, and they are now focusing on awareness and not so much on enforcement. But they are, like I said, making pushes for awareness, and they were even on our AICPA Town Hall, so you can look at the archive there because we did host Phil Lam for that.
But also, the other day, I was watching national television, and I saw one of their commercials. I just about fell out of my seat. I didn't think the messaging was as clear as it could have been, but they are trying to make efforts there.
Amato: Was this the coffee shop ad that you saw?
Lauridsen: Yes, it is.
Amato: We wrote about that earlier this year, that the outreach had begun. But still, I guess, a ways to go on that topic. Let's look ahead to one item that was popular at the tax conference. It's popular in the news headlines, and I know it's something you're paying attention to: the Tax Cuts and Jobs Act. It's a very open-ended question, but I'll ask it anyway: What's the future of the Tax Cuts and Jobs Act?
Lauridsen: Well, Neil, we would all love to know exactly what the future is. But, the Tax Cuts and Jobs Act, it's interesting because a lot of people said prior to the election, we always knew that tax was going to be on the agenda. People were saying that, it all depended on if it was Democrat or Republican that ended up taking the presidency. Ultimately, the same topics are at stake. TCJA was always something that was going to be debated and discussed, regardless of who ended up being in office and who will be in office. The difference is we definitely know that President-elect Trump would like to see TCJA provisions become permanent.
Now, the reality is all those provisions cost money, and there are real dollars associated with it. Even though we are going to be seeing in 2025 the trifecta effect, where the Republicans have swept across the board, it doesn't mean that everybody is in line with the same provisions, and therefore it doesn't mean we know exactly what will be coming. A lot of what is to come becomes an argument of how much things cost and how much things don't cost and what can be included and what can be agreed on. The debate is still very much alive as to what will happen with TCJA.
I think, this is my pure speculation, I think we're going to see a hybrid of all the things that are there and not necessarily everything becoming permanent. But who's to say? Things could absolutely change.
Amato: Do you want to talk about any of the particulars within that, for example, the SALT cap, estate tax policies, the future of the corporate tax rate?
Lauridsen: All of those pieces are very interesting. The SALT cap, let's start with that one. The SALT cap, we have heard that they would like to eliminate the SALT cap. On a personal level, sure. I would love to see that go away. I know quite a few people feel that way about it. But the reality is that it costs money. Right now, the SALT cap at the $10,000 cap is a revenue raiser, and it helps pay for other aspects of it. If they were to eliminate it, that will cost a lot more money than what is anticipated.
If we were to see a change, again, this is pure speculation on my part, obviously, we have to wait and see how things play out and what indicators we see. Right now, we haven't seen any specific indicators, but I wouldn't be surprised if the SALT cap ends up being raised slightly, not completely eliminated because, again, it costs money to eliminate it.
Amato: OK, state tax policies next.
Lauridsen: You said estate?
Amato: Estate. Sorry, estate, not state, as opposed to state and local tax. Now, estate tax.
Lauridsen: With estate tax policy, there's definitely a desire and a will to see the cap also eliminated because with TCJA, after TCJA, it will cut in half of what we're seeing. Who knows what we'll see in that play. Again, it costs money to be able to have no limit for estate tax planning purposes. I do think like the SALT cap we're going to see something come out in the middle. Maybe it'll maintain, maybe it might increase, but completely unlimited — I don't see that happening, either.
Amato: Then finally, the corporate tax rate as it relates to the TCJA.
Lauridsen: The corporate tax rate, that is definitely something that has been discussed.
We have heard during the campaigns from President-elect Trump that he would like to lower the corporate tax rates, but please keep in mind that the current corporate tax rates in TCJA, again, they cost money. What is paying for those corporate tax rates are those small business provisions that we would like to see come back. For example, Sec. 174, the R&E expenditures. We would like to see that 100% bonus depreciation. We would like to see that come back, but those are some of those provisions that pay for that lower corporate tax rate. Of course, there's the [Sec.] 163(j) interest expense deduction and Sec. 199A, the qualified business income. Again, all those pieces come into play into that corporate tax rate because, technically, those are the pay-fors for that corporate tax rate, so it's a handoff.
Amato: Good description of the pay-for aspect of it. Anytime there's a change in administration, I guess the IRS funding topic comes up. The IRS has said many times that the funding it received under the Inflation Reduction Act was helping it provide better service. Now, I guess that funding is going to be up for debate. What do you see as the future there?
Lauridsen: Well, that is definitely something. The funding for the IRS, specifically, the Inflation Reduction Act, the IRA as we call it, is something that we are definitely going to keeping an eye on because, if you take a look at the Inflation Reduction Act, the majority of the money, $80 billion — that was allocated towards enforcement. Now there was a piece that was allocated to IRS services, and it is that piece, that portion where we've seen the increased answering of the telephone, the hiring of people at the IRS to be able to provide services with that. Now, we know that that particular funding for IRS services from the Inflation Reduction Act is set to run out by 2026. If the money runs out, what do you think will happen? We'll see decreased IRS services. The way we're looking at it is we do know there is interest in clawing back the Inflation Reduction Act funding and, specifically, for the enforcement piece of it.
Our position is, well, let's not take it away from the IRS. Let's rebalance it and shift it over to services. One thing to note, though, is enforcement is a critical function of the IRS. Not everything under enforcement is audits, liens, and levies — all these things that people don't want to see happening. There are pieces of enforcement like Chief Counsel's Office that is covered under enforcement, and Chief Counsel are the ones who provide the regulations and those guides, the guidelines to people in order to be compliant with their taxes. It is a critical function of the IRS. Now, do they need as much as they got? I would venture to say and would like to see some of that money going from enforcement to IRS services and not necessarily clawed back.
Amato: That's great. Now, I said we're two weeks since the election. We're also about one week since the AICPA & CIMA National Tax Conference. I know you were there. I know you were busy yourself, but maybe, as you interact with members, as you interact with people in Washington, if you could then look ahead to 2025, what do you see as challenges that are tax-related and also opportunities for the new year?
Lauridsen: Some of the challenges that our people have, and we've actually done some informal surveys, too, and the results are the same and we're seeing this trend. There's a lot of growing concern with new legislation coming and, in particular, retroactive legislation or midyear legislation, which makes it particularly hard for members to be able to keep up with it. Retroactivity doesn't help because then you have to amend returns if you already started down that process. Of course, with both last-minute legislation and retroactive legislation, you have to keep on top of the tax changes. Now, you should do that on every given year, but when they do it retroactively or midyear, it makes it particularly hard when you're in the middle of filing season. That is one of the biggest challenges that our members are concerned about.
Also, with new legislation, that means we are waiting on guidance from the IRS. The IRS [process] can be very time-consuming in looking at the rules to able to provide guidance. Again, people just want to be compliant. People aren't trying to get out of it. They just want to be compliant, and they need some guidance. That's another concern that we see there.
Of course, other challenges that we're seeing associated with Sec. 199A — we would love to see the extension of that to continue, but ideally, we would also like to see the expansion of Sec. 199A. Again, that costs money, and where is that money going to come by in order to be able to achieve something along those lines within it.
But, there are opportunities, Neil. Some of those opportunities there's mobile workforce, opportunities there's an appetite for that hopefully that we can see move forward, and that would be something that would make a lot of people's lives a lot easier. That essentially is saying to put a safe harbor that if you work less than 30 days in a state, then you don't file at that state level. It would have to be over 30 days to be able to move forward with that.
The expanded use of 529 accounts to be able to pay for studying to sit for the CPA Exam or to be able to get your financial planning certification associated with that. There are pieces of opportunities. Another piece of opportunity that we would like to see — maybe we'll see a change with the Form 1099-K, with the threshold. Remember that was at $600, and there's been a debate where it could be, so maybe we'll see an increase in that threshold filing. Of course, disaster relief. We would love to be able to see some of the bigger positions that we've had associated with disaster relief to make a real difference for victims of disasters.
Amato: Good points all. Thank you very much, Melanie. I'll give you the opportunity to give a closing thought if you have one.
Lauridsen: My closing thoughts are, I think 2025 is a huge tax year. I think we just need to buckle down and get ready for that roller coaster that's going to be coming, and it's always important to keep up to date and follow through, but in this year, changes are happening. They're happening quickly. I think podcasts like this, webcasts, things like the AICPA Town Hall, they become even more critical for people to keep up to date.
Amato: Great. We will keep having you on. We'll see you again in 2025, and thank you for being on the show today.
Lauridsen: Thank you, Neil.
Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.
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This podcast discussion with Michael Reese, Risk Control Consulting Director (Accountants) — CNA Insurance, centers around the importance of engagement letters for tax practitioners. Michael emphasizes the role engagement letters play in setting expectations, providing clarity and mitigating risks during engagements. He also reviews the necessity of having clear, documented agreements to minimize disputes and liability issues.
What you’ll learn from this episode:
- The importance of engagement letters
- Common risks in tax engagements
- The role of client education and communication in managing risk
- How to handle quality control under deadline pressure
AICPA resources
Annual Tax Compliance Kit — Engagement letters, organizers, checklists and practice guides help you manage your tax season workflow.
Say "I do" to engagement letters — Uncover the importance of establishing parameters of client relations and detail the scope of services to be provided.
Other resources
Frequently Asked Engagement Letter Questions — The Accountants Risk Control team at CNA, the endorsed underwriter of the AICPA Professional Liability Insurance Program, summarizes answers to frequently asked questions.
Transcript
April Walker: On today's podcast, listen to hear how you can manage your risk with engagement letters. Hello, everyone, and welcome to the AICPA’s Tax Section Odyssey Podcast, where we offer thought leadership on all things tax facing the profession. I'm April Walker, a Lead Manager from the Tax Section. And I'm here today with Michael Reese. Michael is a risk control director with CNA.
Michael Reese: Good morning, April.
April Walker: Thanks for joining me today. Here at the AICPA, we work really closely with Michael and his team on lots of things and lots of projects. But I'm especially grateful for the partnership that we have with his team for Tax engagement letter templates. Speaking of engagement letters, they are now currently available to Tax Section members. Of course, I will put a link in the show notes so that you're able to access those.
April Walker: Today, we're going to talk about some common questions that we get, and I'm sure that you also get Michael on Tax Engagement Letters and just generally how to manage your risk as a tax practitioner. Welcome, Michael, and thank you for joining me.
Michael Reese: Thank you. Hopefully, what I can provide will be of use to your listeners. These are questions we often get as well. I do want to confirm that, but it's a very important topic. Glad we're talking about it here today.
April Walker: I'm positive that they will be helpful. Sometimes people get answers to questions that they don't really want to hear, but they're important for them to hear.
Michael Reese: Exactly.
April Walker: Just to start off, I'm wondering why you think it's crucial for tax practitioners to have an engagement letter in place not only for every engagement but before they actually start the work.
Michael Reese: April, I think there's two primary answers to this question. First, setting expectations and then setting guardrails in case something goes wrong. From a practice standpoint, it's very important for both the practitioner and the client to know what's going to happen and what work is being done. Your engagement letter hopefully is going to clearly state, "This is what you've asked us to do. This is what we're doing. This is what we collectively need to do to get this completed. This is the info we need and when we need it," etc.
If a practitioner doesn't have this, then they run the risk of a client coming back later and either adding services, sometimes without the added fee, or complaining that a service has not been performed. There needs to be that clarity upfront. For professional liability reasons, having that clarity helps limit your duty of care to the agreed-upon scope.
This way, in the event of a dispute, the practitioner has a strong argument for avoiding liability related to items for which they had no responsibility. That leads me to the second answer involving guardrails. Ideally, the engagement letter is going to set out the agreed-upon rules if something goes wrong.
Dispute resolution is not really something CPAs focus on until they are in the middle of one, but we routinely talk to tax practitioners who are in the middle of an engagement with a problem and they don't have the signed letter to fall back on. If that letter is in place before the work starts, you now have options if something goes wrong, whereas without the letter, you don't.
Now, I'm not ignoring the fact that getting a signed letter back can be a challenge, especially for 1040 clients. But I know there are practitioners out there that have a strict process. No letter, no work. Remember, the onus is on the client because they do need your help. Otherwise, they aren't showing up to your office.
If they want the service, then they need to work with you. April, I would say put it this way. When I go to get work done on my car, even for an oil change, they don't even take my keys until I've signed a piece of paper that says I agree to the service and the terms of service. If I ignore that paper, disappear for some period of time, and then come back like some tax clients, when I come back, my car is still how I left it unrepaired, and I can't now complain that I'm going to be late for work because my car isn't fixed. I can, but I don't know how far it's going to get me. I really would like to think that tax professionals should have no trouble with a similar approach.
April Walker: That's a great analogy. That's where we'll talk about this. Mike, you and I have both been in practice before. And sometimes we struggle with the way we've always done things, in a certain way, but it might not be the way the rest of the world operates. If we're thinking about this in a way of managing your risk, this is definitely a best practice.
Michael Reese: Yeah, I would agree.
April Walker: Great. Let's talk about some common risks that tax practitioners face during engagement. You've got your engagement letter, for sure. Check one. We are in the engagement. How might having that engagement letter help mitigate some of the risks that can happen as things are going on?
Michael Reese: I'll give you four. We can talk about these. But the first one and we did touch on it before in the prior question, there's risk when there's no alignment on what the client needs. The client may not understand truly what they need to comply. They just know they need to file a return. Once you have the discussion with your client and identify the extent of the need, that engagement letter is going to provide the clarity that we spoke of, so both you and the client understand - this is what we're doing.
Two, once you know what you're doing, there's still a risk that the client doesn't know what's included. Let me give you an example. When I practiced, I had a 1040 business owner client that felt they were paying too much in estimated taxes using the 110% safe harbor method. We ended up doing actual method.
They didn't realize that meant doing quarterly drafts for the business and then calculating actual tax in multiple draft 1040s to figure out how much they owed each quarter. Added a lot of time, added a lot of fees. The client thought it was, "Part of the return." But at the time, the engagement letter didn't really break down for the client what was part of the return and what was not. That subsequent argument about fees could all have been avoided.
Three, there is a small risk someone may use the work for a purpose other than what was originally intended and we don't see this too often in tax. It's more of an attest item, but sometimes we do see it in tax. Just think of how often clients ask for comfort letters and you'll see where I'm going with this. Once you give them the deliverable, you do lose a bit of control as to what they might do with it.
Your engagement letter can anticipate this risk by saying, "We're doing this X." Tax return, consulting project, whatever. "We're doing this X for this specific reason. If you use it for some other reason, that risk and or loss is on you." I helped you with your tax return so that you can file your taxes and not have the IRS sending you nosy letters. If you gave that return to someone else for some other reasons, you've been warned, that's between you and that other person. But if your engagement letter doesn't close that door, you could have an issue.
Fourth, strangely enough, not every client realizes that if you don't file and pay your taxes on time, there's some downside associated with that. A lot of professional liability claims fall into the bucket of, "You didn't tell me," regardless of merit. At minimum, your engagement letter can put the client on notice. "Hey, if you don't do this or you don't take your responsibilities seriously, bad things can happen."
April Walker: I think those are all great examples. I'm specifically thinking about and we may touch on it a little bit later talking about some of the planning that might be around some of the upcoming TCJA sunset items and work you're going to be doing around that. I like your example and that absolutely has happened to me before about the estimated tax payments. The client didn't really understand, "Hey, cash out is also the fees you pay to me." I think that's a interesting one.
But you want to make sure that you're not leaving on the table the assumption that any planning and projection work that you might be doing related to these consulting projects or whatever around TCJA or whatever it might be is specifically either included in the engagement letter or you have a separate engagement letter that talks about that.
Michael Reese: I think you used a very important term when you say assumption. I think a lot of times CPAs are very in tune with the work and what needs to be done and there's an assumption that the client has the same knowledge or the same background. I think you talk to a lot of clients and what the CPA believes to be true isn't always necessarily what the client believes to be true. That's why you'll hear me talk a lot about that alignment between client and CPA. Documenting that and getting that understanding and having it in the engagement letter is very helpful.
April Walker: Like you said, in assurance engagements, you hear more about scope creep. But definitely, it happens in tax engagement too. It's important to think about.
I know this doesn't happen with people who listen to this podcast and are AICPA and tax section members. I know this doesn't happen. But maybe you have friends who do not have an engagement letter for an engagement. What are some examples of situations? Not specific - we're not calling names and calling people out here, but where might there be significant issues for a tax practitioner if they don't have an engagement letter?
Michael Reese: Sure, and you're right. I can't name names, but we've seen enough that I can give you some generic examples inspired by true events. Hopefully one listening doesn't say that's my situation, but that's not where this is intended to go. If you don't have an engagement letter, you may have an oral contract even if you don't realize it. I'm not sure most people are aware. Simple fact pattern. Client calls you for work, you discuss fees, client says, there's an argument, that's a contract. The problem is other than the fee and the return, what are the terms? What's the result if something weird happens and you want to fire the client? Or if the client never pays you for your time, or and I've seen this one before, the person goes MIA, you don't realize they were serious and they show up on the due date with a stack of papers and your fee demanding a tax return.
Oral contracts are a gray area and frankly, one where I think practitioners should seek legal help if one exists because of the ambiguity around performance, remedy and termination. When I say performance, I mean doing the work. Remedy is what one party can look forward to if the other party violates the agreement and termination I hope is self explanatory. I'll put a plug in here for the engagement letters offered to AICPA members in the tax compliance kit. Those letters include a provision that states the agreement supersedes all previous oral agreements. That's there on purpose. You can hopefully avoid the issues related to possibly having entered into an oral agreement, when you've provided a written proposal, or if the engagement letter scope differs from prior understandings. And that happens frequently enough where you talk about the work and then you put it in the letter and maybe the client doesn't realize the scope has changed a little bit.
Another situation. If you don't have an engagement letter and a good percentage of tax claims actually fall into this category, the disputes and ensuing lawsuits are more difficult to defend and more expensive to defend. You're now trying to piece together all of those conversations, all of those emails, dealing with all of the finger pointing and the convenient lapse of memories, just to figure out what was supposed to happen. Just put it in writing so it's clear upfront what the agreement is. I think an area I would be concerned with here is with SALT (state and local tax) compliance. Here it's more often that there's an engagement letter, but the letter is ambiguous or silent on key scope matters. It's not absence of an engagement letter as in your question, but functionally, it's the same principle because whether you have no letter or the letter is silent, in both cases, you don't have contemporaneous documentation.
A lot of clients forego SALT compliance because to them, the cost outweighs the act. But when the state comes knocking, you're going to have to navigate that lack of documentation. I don't know if too many clients audited by the state who raise their hand and say, no, I told my CPA not to prepare that return. My last example is the long standing client with recurring compliance that all of a sudden has new facts. Sometimes the practitioner isn't even aware of the new information when it's in their possession. If the planned scope anticipates 20 hours of work with commensurate fee, and now all of a sudden you realize the scope needs 50 hours of work. With a commensurate fee, the lack of an engagement letter is going to be a real problem when you send that bill for 2.5 times the fee that the client expected. Fee disputes are common claim drivers.
April Walker: Those are great examples and the SALT one particularly. You just need to make sure I think in the engagement letters that are part of our toolkit, it specifically says that you need to list out the state returns you're going to do, but there needs to be, like you said, some documentation about you may have a nexus and exposure in these particular states and somehow document what the client is telling you to do. Then just a quick note on sometimes people will talk about unilateral engagement letters. Hey, we've had this client forever, and we're doing the same thing for them. Do we really need to get an engagement letter every single year? What's your thought on that?
Michael Reese: I would say yes. You do need to get an engagement letter every single year. I'd say that for a couple of reasons. If your practice is still the practice 10 years later after you gave that original engagement letter, I'd be hard pressed to think that most people's practices and practices internally have changed. I think the engagement letter is a reflection of how your practice evolves and your quality control and what you're doing for a client. Two, depending on what's in your engagement letter, you want the engagement to actually end so that you're not indefinitely keeping open potential statute of limitations or potential liability. I'll give you a high level example. If you have an engagement letter and you say, I'm not going to do an engagement letter, I'll do the evergreen letter where it just continues on indefinitely. There's a question that engagement is still there. It's just an ongoing one really long engagement.
Whereas if you have the engagement letter, you clarify the scope every year. By clarifying the scope every year, you limit your duty of care for that year and then it ends. When you look at the statute of limitations for liability, you can say okay this letter is done with, this statute is done with, anything related to the work done there, that's passed. You can't come back and argue with me about it, but if you have just this amorphous, non defined or ill defined client situation, you interject a lot of ambiguity and that can become a problem for liability purposes. It's really just best to make everything clean, do one letter a year, make sure the clients understand that when that letter ends or when that work delivers, that one's done. I'm not tied to you indefinitely. I may be tied to indefinitely as the client, but I'm not tied to indefinitely visa V that engagement. Next year, when the work comes up, issue another letter. It also helps you understand what the client needs. Or if the client's needs they changed and it's evolved, the letter is going to reflect that every year as opposed to just having one letter, it's old you push out the same one. If their needs have changed, that letter really needs to reflect it.
April Walker: Good thoughts. Michael, I'm thinking about client education. I feel client education and communication is a big part of underlying a lot of what we talked about today. But I'm assuming you think it's an important role that we play in client education. But how can practitioners work on educating their clients about the importance of these engagement letters?
Michael Reese: I don't know if it's so much educating them about the importance of the letters. They need to understand the letter aspect of it as well, but it really is educating clients on their role in the process and reinforcing the fact that whatever the client brings to your door, it's ultimately the client's responsibility, not the CPA's responsibility. It's the client's tax return. It's the client's tax planning. As your service provider, I can provide you with suggestions, guidance, or advice, but really it's up to you to make the decision. The engagement letter should confirm that and lay out with some specificity what that decision is and what the client needs to do to support that decision.
One problem I saw from my own practice was that most clients concerns, especially around the engagement letter, started and stopped with a fee and the deliverable. It was very transactional. If the practitioner can impress upon clients that you're not a vending machine. They can't just drop off paper and money and expect magic. And that you client have to put some effort into the process too. That right there really helps everyone involved. I'll continue to harp on it, but things go a lot smoother when both practitioner and the client are on the same page. Client education can be a big help here because practitioners shouldn't take for granted that even their longstanding clients fully understand what's going on or what the process requires.
On your question of how. It's never a bad idea to be open and upfront about both the service and the engagement letter and answering any questions the client may have. Some firms take this approach as part of onboarding new clients. I know you and I talked a little bit about onboarding before we got underway, but practitioners should be forewarned. The risks of misunderstandings between practitioner and client are not limited to new clients. Practitioners need to be able to talk about what's in their letter. That may require them to sit down with an attorney that helped draft the letter so that they know what certain provisions mean and where it's okay to be flexible.
I might also challenge practitioners to not be afraid to openly discuss what might happen if things don't go as planned. Now, this doesn't have to be a doom and gloom or threatening conversation. But, hey, I need your help here to make this go smoothly and if I don't get your help, here's what the downside to you client might look like. I would hazard to guess that outside of a small population of clients that repeatedly get fired by their professional, most clients don't think about the prospect of what might happen if they don't hold up their end of the bargain.
Talking about client responsibilities openly and soberly and what happens if the client doesn't support the work might help make this prospect not so remote. Because unless the client just doesn't care about their taxes, and those are out there. I have to believe most clients do not want the prospect of either paying some unexpected amount on the due date or trying to find assistance at the last minute. If you think about it, a lot of client angst really revolves around those two items, paying more than expected or necessary and having the government come back and stress them out later. Use that and have an honest conversation with the client about what they need to do to avoid either of those outcomes. Then make sure it's in your engagement letter.
April Walker: Like I said, our conversation today boils down to communication and so I think those are good thoughts and good conversations to have. I mentioned it earlier but you and I are both in the public accounting world, and we're aware of the pressure that you can face with client demands and deadline demands and all of that. What do you think - do you have to balance that, with the need for thorough quality control? What are some of your thoughts around that question?
Michael Reese: I'll challenge it a little bit just because.
April Walker: That's fine.
Michael Reese: I don't want your listeners thinking that they need to make a choice between quality control and something else. You and I both know when the clock hits the week before deadline, ten, 11, 12th, a lot of things start getting squishy, I guess, maybe is the best way.
April Walker: Squishy is a good word.
Michael Reese: You got hard rules all of a sudden those rules get a little squishy. The term balancing may give some the impression that if one end is weighted more heavily, the other one is up in the air. Practitioners shouldn't view the quality control as optional if their reputation is built on doing quality work.
I think most if not all practitioners would say that's the case. I want to look at both parts of your question, thorough quality control and deadline pressure/client demands. Now, the most obvious answer to me for dealing with the pressure of a tight deadline and client demand is to not have deadline pressure or client demands. I know. Before I get laughed out of the room, I've had my share of deadline horror stories. We all have. The concept really isn't that outlandish. I'm starting to see a lot of evidence slowly, but surely practitioners are challenging that default notion that tax due dates have to be this pressure filled exercise that makes you wonder or question, why do I put up with this every year? If you can create optimal work conditions, that's a huge win rather than simply accepting that there's no alternative and suffering the consequences.
For those that aren't fully to a stress free deadline yet, and I know they're out there as well, your quality control, whether that's informal or it's a 50 page document that no one reads or refers to, it needs to be designed in a more intentional way. To me anytime you talk about quality control, I think you have to look at your process and your process design. Then you have to look at the people integral to the process, including the client. A lot of process is iterative, organic, reactive. When that happens, there's no design, there's no intentionality. You're just patching holes as they appear or responding to the latest impetus.
On the other hand, when there is design, sometimes we fall into the trap of designing to a best case scenario instead of a worst case scenario or realistic scenario. Mistakes happen all the time, but I don't think it's far fetched or controversial thing to say that in periods of high stress and pressure, the likelihood of a mistake is higher.
When I say process design requires intentionality, I'm really trying to highlight that the design needs to operate from the base assumption that the players involved aren't always going to do things in a rational, uniform or expected manner.
The question is, can your process for quality control withstand the sheer hysteria of those last days before the due date? Because if it can, you're not really balancing quality control or sacrificing quality. Your system accounts for the insanity as a given and then responds appropriately.
For those that have QC in place, I want you to ask yourself, are they rules or do they become suggestions in the face of competing interests? Do they become squishy, as we said before? Is it easy to rationalize an exception to the rule on April 13th compared to January 13th?
Part of this depends on what habits you have as a professional. If you have strong habits, the answer or choice you make doesn't change regardless of day or situation. I think the last thing I want to say about QC design is often practitioners are challenged because they don't know what they don't know, and that is a real and legitimate hurdle. We completely understand that.
We get a lot of calls on the risk management hot line where practitioners have never had to deal with this before and I get it. You can't design for what you don't know. But that's where I think you tap into your professional network, attend conferences, like National Tax Conference, where you and I will be and understand what resources are available to you, whether it's a tax section or your insurance carrier or your state society. There's tons of ideas out there, maybe too much, but there's nothing that says you have to keep doing it the same way and expecting a different outcome. I think that's called insanity.
April Walker: I particularly love that we start off talking about engagement letters, but then we circle back to thinking about a new way to operate in tax, which I do think is possible and one of my passion projects. I love that.
I just wanted to note another important aspect of quality control that in my mind, is a best practice for firms to minimize errors and omissions, and those are checklists that help you consider, have you addressed these key issues and making that not just a rote check.
It's a real part of your procedures and really stepping away and making sure you have a process for all of the things. Making sure you have a process for getting your signed engagement letter before you start your work, making sure every return has some review procedure.
Even if you're a very small practitioner you should have some kind of [review process]. Is it stepping away for a period of time before you look at the return again or something like that. Speaking of the checklist, they will be available soon in mid December as part of the annual tax compliance kit. Look forward to those.
Thank you so much Michael for this discussion today. I think it was a good one and hopefully a educational one for our listeners. In closing on these podcasts, if you're a listener, I hope you are. You know that this next question is coming and so it's Tax Section Odyssey we're taking a journey together towards a better profession.
In doing so I like to hear about my guest other journeys outside of tax. Talk to me about something that's on your bucket list or a recent trip you've had, something that you've got on the horizon.
Michael Reese: I have not had any recent trips, but I do have an upcoming trip next month and then I will give you a bucket list one as well because I'm always happy to talk about bucket list travel. Next month and we started this maybe eight or nine years ago. We took our daughter to Vienna for Christmas. We got away from the house for Christmas. I'm taking the family including the grandmothers. We are going to Germany to do Christmas markets. We're going to trips around Germany for about two weeks and visit a couple of Christmas markets and we'll make a pit stop in France to do some markets there. And my mother has never been overseas and so I'm really looking forward to that just reliving that child like joy that comes around the holiday season. That's what we'll be doing next month, lots of plans going into that. That will be a little bit of an odyssey as well because we'll see how well I can survive with my mother for 12 plus days. Shouldn't be an issue, but we'll see. Fingers crossed.
April Walker: Inter-generational trips.
Michael Reese: Exactly. I would say bucket list and I was talking to a couple of friends about this actually earlier this week, I would love to go to Easter Island and see the Moai and the Rapa Nui. That's a really long trip. But that's one that I think has been on my bucket list. If I can take that one off that would be really cool . I think maybe was it last month where Easter Island had the full solar eclipse? I would have loved to have been down there for that. But if I can get down there and check that out, I will definitely be in a good spot.
April Walker: Wonderful. I look forward to hearing about your trip to Germany and the Christmas markets. That's definitely on my bucket list as well.
Michael Reese: I will tell you all about it.
April Walker: Again this is April Walker from the AICPA Tax Section. This community is your go to source for technical guidance and resources designed especially for CPA tax practitioners like you and mine. This is a podcast from AICPA & CIMA together as the Association of International certified Professional Accountants. You can find us wherever you find your podcast, and we encourage you to follow us so you don't miss an episode. If you already do thank you so much, and please feel free to share with a like minded friend.
You can also find us at aicpa-cima.com/tax check out our other episodes and get access to all the resources, including those wonderful engagement letters mentioned during the episode. Thank you so much for listening.
Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.
This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home base for staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you’re not already a member, consider joining this prestigious community of your tax peers. You’ll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.
The AICPA & CIMA National Tax Conference will take place on November 11 and 12 in Washington, DC. Join Brandon Lagarde, Tax Partner at EisnerAmper, and April Walker, Lead Manager on AICPA & CIMA’s Tax Practice & Ethics team, to learn more about what to expect from the upcoming conference.
Conference sessions will feature topics such as:
- The impact of election results on tax legislation: Investigate the potential legislative outlook based on the recent election results and how it might affect tax policies.
- Tax Cuts and Jobs Act (TCJA) expiring provisions: Provisions of the TCJA are scheduled to sunset at the end of 2025; learn more about how to prepare and explore planning opportunities.
- Practical tax strategies: Sessions at the conference will cover various tax tactics, including gifting and income tax planning strategies, for clients who are not currently subject to estate tax.
- Ethical dilemmas in tax practice: A session will discuss common ethical dilemmas faced by tax practitioners and provide insights on how to handle them.
- The future of tax practice: Investigate the importance of transforming tax practices with year-round advisory services and how to implement these changes in a tax firm.
AICPA resources
AICPA & CIMA National Tax Conference — For tax practitioners, there’s no better place to get immersed in current events than the AICPA & CIMA National Tax Conference; in-person and virtual options are available.
Reimagining your tax practice — Join us for free upcoming live roundtable sessions to tackle today’s top practice management issues with insights and tips from pioneers in the tax community.
TCJA expiring provisions — This detailed, downloadable resource offers an in-depth look at the expiring provisions under the TCJA and other recent legislation. It categorizes changes across individual tax, estate and gift tax and business tax provisions, organized by year of expiration.
Transcript
Neil Amato: Welcome back to the Journal of Accountancy podcast. This is Neil Amato with the JofA. I'm excited to be joined for today's episode by two top flight tax experts in this special collaboration episode with the Tax Section Odyssey podcast with our guests, we're discussing the AICPA & CIMA National Tax Conference which begins November 11th in Washington.
Those guests, April Walker, lead manager with the tax practice and ethics team and host of the aforementioned Tax Section Odyssey. Also Brandon Lagarde, tax partner at EisnerAmper and Chair of the Tax Conference Planning Committee. We have a lot to get to. We're excited to have you on. First, a quick welcome, April and Brandon, thanks for being repeat guests on the JofA podcasts.
April Walker: Thanks so much for having me Neil. I'm excited to be here.
Brandon Lagarde: It's very exciting to be here Neil. Thank you for having me.
Neil Amato: Yeah, we're glad to have you both on as I said, the Tax Conference is November 11th, less than a week after election day. Brandon for you first, tell me what you're looking forward to about this event which is at the Omni Shoreham Hotel in Washington?
Brandon Lagarde: Yeah. I'm looking forward to just go into DC. It's going to be a week after the election, hoping that we know who the president will be and what the makeup of Congress will be at that time. Again, it's going to be a great atmosphere, a great opportunity to go to the nation's capital, to hear from some of the best tax minds out there.
Neil Amato: April, I know you're a repeat attendee at that conference. You're also running sessions, recording podcasts, taking part in panels. What do you look forward to from the event?
April Walker: It's always a busy conference for me and I love being in DC and it's very exciting for me to be there, like Brandon said right after the election. Speaking of that, really what I'm looking forward to most is hearing more about what the potential legislation outlook could look like based on those results, based on those election results. I think we'll hear more about we've talked a lot about the Tax Cuts and Jobs Act, the TCJA, that it potential expiration, what that means. We'll really be able to dig into that at the conference. I'm excited about that.
Neil Amato: It's almost like we planned this. My next thing was going to be the TCJA. Some of the provisions of that Act, the Tax Cuts and Jobs Act, are scheduled to sunset at the end of 2025. Clearly, there is a lot of uncertainty about the provisions right now as we record and the first part of October. But I imagine that topic is going to be a popular one at the conference. Brandon, What do you think?
Brandon Lagarde: Yes, absolutely and that's why, again, being there at the heart of it all after the election and getting to hear from presenters and speakers about just what the future holds for tax professionals, end of 2024 is going to be really important for us.
2025 is going to be incredibly important for tax practitioners to understand and remind ourselves of here are all these provisions that we've been dealing with for the last seven years that are going to expire. What's going to happen? Where are we going to be? A lot of planning opportunities, lot of reason to get in front of clients to learn about what we have in the horizon. Again, that's why this conference, particularly just the time of the year. It is in the election cycle, and heading into 2025, 2026. It's probably the most important conference that's ever taken place.
This is just a really important time for us to get together and to really try to figure out what's going to happen. Of course, we're not going to know exactly at that time, but at least start to have a better understanding, a clear picture of what we can expect and what should we be talking to clients heading into 2025? What are some things that need to be doing?
Because you can't just turn on the switch in November of 2025 and start to really think about this. Right now is really the time to get ahead of it and remind ourselves what provisions are expiring? What do we need to start thinking about planning opportunities to get ahead of it? That's what's at stake at this time.
April Walker: I love Brandon that you're setting the bar really high. The most important conference of all time. Here we go.
Neil Amato: Yeah, that's great and because it's the most important conference of all time, we will include a link to the conference registration page with the agenda information and all of that in the show notes for this episode. One of the items on that agenda is being led by Marty Finn. He's a previous guest on the podcast. He has a session on tax and financial planning. When estate taxes don't matter. Now not to steal Marty's thunder. But can you give me a little preview of the highlights of that session?
Brandon Lagarde: Certainly. We will spend a lot of time at this conference again, learning about the estate tax world and the sunset provisions and trying to navigate that. But the reality is a lot of our clients are not subject to estate tax. A lot of our clients are not having to worry about the sun setting provisions.
We thought it was important to have sessions that not just focused on the top 1% of our clients, but to the 99% or to the large majority of our client base. Things like gifting strategies, what we need to be talking to clients about, who aren't necessarily dealing with the estate tax. Income tax planning strategies around that.
Really just as practitioners, what do we need to be talking to clients about? We're not super focused on just estate tax and the ultra wealthy or the wealthy. That's one thing that we really try to work hard as committee in this conference is to find sessions that have a very practical application.
That we can take away tips and tricks and things to our client base and back to our hometown and not just focused on the very academic discussion that a lot of tax practitioners like to have. That they can relate to. Try to have sessions that are very practical in nature and the Marty session is definitely one of those. He's going to do a great job giving some really good tips and tricks to people to bring home.
Neil Amato: I liked the practical part you mentioned, and that leads me into another session that I want to ask you about. This is one that April is taking part in with Dan Moore and Mark Gallegos.The title of the session is Tax Practice makeover, transforming with year-round advisory services. Tell me some more about that session.
April Walker: Yeah. I'm really excited about that session. A lot of what I do here at the AICPA is try to help practitioners think about the future, the future of Tax Practice, the future of what a firm could look like. So we had this idea to do like a makeover of a practice. We're going to talk about some of the different aspects of a practice that you could make over- billing, client focus.
One of those is about adding advisory services. We'll talk more about that. So come and join us and learn how you could do a makeover of your practice.
Neil Amato: That's great. Now another session with an intriguing title, this is you, Brandon and you April, test your tax ethics IQ. Now one that sounds like one that people have to do some homework on or some pre-reading, maybe I don't know, but tell us about that session. What's a flavor of it that you can tell attendees about now?
Brandon Lagarde: We're going to try have fun with this session. Play some games that have come up with like a quiz atmosphere. I think April going to try bring a buzzer for people to buzz in and answer our questions. But really focus on ethical dilemmas.
We're faced with ethical dilemmas daily, with clients who are either trying to push the boundaries a little bit or just get into some situations where they find themselves in a bad place. We're constantly being asked to address the situation with our client base. Whether you need amended return for XYZ reason. Can you take on a client because of what's going on? Do you need a fire a client? Because they may be trying to push the envelope a little bit.
Really, there's a lot of ethical dilemmas that we face as practitioners. This is really a time for us to again, have some fun with it. To the extent that ethics is fun. We're going to try to test the audience and see what they think. It's always amazing if you ask a room of people what they think about certain tax ethic issue or are really just a tax topic.
In a room of 100 people, there are probably 100 different opinions on what should be done. I think it can be fun. We're going to try have fun with it. Again, I really trying to also provide some education so if you find yourself in these situations, here's some things to consider. But again, April and I, we hope to have fun with that.
April Walker: Just come visit us. There is no pre-work. To answer your question, Neil, there is no pre-work to the session. We'll take a lighthearted take on a potentially tough, dry subject.
Neil Amato: Great, and this quiz is not graded. You still get the CPE as long as you're showing up, right?
April Walker: Absolutely.
Neil Amato: Well, good. One of the themes that I'm hearing is providing advice on the topic of expanding services beyond just, "Hey, we're going to do taxes for someone." But if someone said to you, maybe after a session, "Hey, I really liked what you said there. But gosh, I'm a smaller firm," or "It's only me. I don't know where to start." What do you tell them?
April Walker: What I would do, if they came up to me and I hope they do. You can come up to me at our booth. You can come up to Brandon and I if you see us. We will likely be posted up in the bar at the Omni. Come see us anytime. But what I would tell you, we talk to small firms all the time.
One thing I recommend them is come to a session that I do that's on the computer. It's not live at the conference, but it's called Reimagining your tax practice. I'm really more about re-imagining and having makeovers and that sort of thing it seems like. But in those sessions we really talk about the nitty-gritty. Sometimes it's hard to think about this big process of going from X to Y.
We like to talk in those sessions about practical ways. I like to focus on the practical. How to actually get where you're going, or how to change things in your practice or how to change how you're operating. That's probably what I would say if you came up to see me wherever you might find me.
Neil Amato: This has been great. We've mentioned session by Marty Finn. We've mentioned some sessions you are taking part in. Of course, we've mentioned that key acronym these days, TCJA. Brandon, in closing. Anything you'd like to add as we wrap up this Tax Conference preview episode.
Brandon Lagarde: Yeah. Certainly. A couple of other terms you'll hear out there. AI, which we have a session. Transforming your tax practice. One thing we like to emphasize about all of our conferences, but certainly this one is, there'll be lots of sessions with lots of smart people talk speaking at these sessions with great content.
A lot of times your challenge is which sessions do I go to. Because it's such a great hour, hour-and-a-half of content. You'd have to choose. At the moment, you do have to pick a session. But you have access to recordings of all the sessions after. I often go back and watch sessions that I wasn't able to attend because of that great content. It's just a wealth of information.
Again, you get a little parting gift when you leave. Not only do you meet up, making new friends, meet people at the conference, talk about challenges you're facing with your colleagues and also hear some of the best speakers in DC and have a great time there. But you also get to have access to all the recordings after and watch the sessions after that you missed, and that is invaluable to have access to that content.
Neil Amato: April, how about you? Anything to add in closing?
April Walker: I think one thing that's really important about this conference being in DC, and we haven't mentioned yet, is the ability to have IRS speakers that come and speak to us. We're going to have the taxpayer advocate, Erin Collins. We'll have other IRS speakers scattered throughout the conference.That's another opportunity to really hear where they are on certain things and be able to ask them questions.
Neil Amato: Yeah. That's great. It's a good reminder that there is that access to IRS officials every year at this conference. Really thank both of you for your time. Again, look forward to the conference November 11th, Brandon, April. Thanks for being on the JofA podcast.
Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.
This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home base for staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you’re not already a member, consider joining this prestigious community of your tax peers. You’ll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.
This podcast conversation with digital asset specialist Kirk Phillips, CPA, CMA, CFE & CPB, Managing Director — Global Crypto Advisors, focuses on demystifying IRS Rev. Proc. 2024-28, which provides guidance on transitioning from universal basis tracking for holders of digital assets and a safe harbor deadline of Jan. 1, 2025, to determine how to allocate any unused basis in digital assets. Phillips shares recommendations for tax practitioners around communicating with clients and the need for careful planning and documentation to meet the safe harbor provisions.
What you’ll learn from this episode:
Understand more about Rev. Proc. 2024-28 and what it means for holders of digital assets.
- Hear about the safe harbor provisions provided in the revenue procedure.
- Learn the importance of the Jan. 1, 2025, deadline for making a reasonable allocation of unused basis.
- Find out about the challenges of documenting and reconciling cost basis related to digital assets.
- How to communicate and prepare individuals and businesses for the upcoming changes related to reporting of digital asset transactions.
AICPA resources
Digital assets and virtual currency tax guidance and resources — Sharpen your tax knowledge on digital asset and understand the tax complexities and strategies involved with virtual currency and cryptocurrency.
AICPA advocacy resources
AICPA makes recommendations for digital asset transactions regulations, March 7, 2024
Other resources
Rev. Proc. 2024-28 — Guidance to allocate basis in digital assets to wallets or accounts as of January 1, 2025
Final Regulations 2024-07-09 — Gross proceeds and basis reporting by brokers and determination of amount realized and basis for digital asset transactions
Transcript
April Walker: Hello everyone, and welcome to the AICPA's Tax Section Odyssey podcast, where we offer thought leadership on all things tax facing the profession. I'm April Walker, a lead manager from the tax section, and I'm here today with Kirk Phillips. Kirk is a CPA and it has a lot of other designations behind his name. But he's also more importantly for today's discussion, a specialist in the world of digital assets and crypto. [He's] been in it for a long time.
Our goal today, Kirk, is to demystify some of this latest guidance that we've gotten from the IRS. We're definitely not going to be able to demystify all of it in the time we're just going to spend today. But there are some important deadline related items, so we want to make sure we're covering those. Kirk is on the AICPA's Digital Asset Tax Task Force. And for the past few months, we've actually been meeting weekly, which is unusual for a task force. Because really we've been discussing one thing, Revenue Procedure 2024-28. What it actually said, what it meant. Just really delving into that, the details of all of that.
That's going to be the topic of what we're going to talk about today. What that means for tax practitioners and holders of digital assets. Especially like I said, there are deadlines around this safe harbor. Kirk, to start off. Welcome. Let's talk about I mentioned the deadline and let's talk about the significance of that January 1, 2025 deadline for making that reasonable allocation of unused basis. That's what the Rev Proc says.
Talk to us a little bit about what that means, what you're thinking about, what practitioners should be doing now to prepare for that date.
Kirk Phillips: Sure. Thank you so much April for having me on the podcast. I love talking digital assets and crypto, whether it's tax-related or otherwise. I'm excited to help demystify this Rev Proc. One of the key things here is that and why this is so important is we both have a short timeline. Because we're already nearing the last quarter of the year 2024. It's also very challenging - it's a onetime exercise that we have to go through and on a short timeline. That's why this is critical and that's why we're here today to talk about that.
One of the key things here is that prior to this Rev Proc that the taxpayers would do their accounting for the digital asset transactions, which would be their trading or their sales, and it could be other related transactions as well. But basically they would do all the accounting on a universal basis. The question is, what does universal basis mean?
Universal basis means that whether you have one wallet or one exchange account or you've got 37 wallets and six exchange accounts or even something more crazy than that, you would for the most part, more than 99% of the time people would use specialized tax software because that's really the only way to get the job done. You would connect all those things and or import your transactions into the software and it would essentially co-mingle all those transactions. I like to say as if it was one wallet or as if it was a single exchange.
But it's not simply for the tracking purposes, all the transactions are simply dumped together and you perform one set of accounting. That's what the universal [method] is. Now, you can no longer use universal. You have to do a wallet by wallet, account by account basis. Which means that if you, again using those same numbers I did in my example there. If you had 37 wallets, that means you essentially have to do 37 different sets of accounting for those. I think that without knowing even anything more about it, an accountant hearing that would say, "Wow," immediately that sounds like that could be challenging, that could be a lot more work, and so on.
There could be issues around that. And all those things are true. Because of this short timeline between now and the end of 2024 and essentially we're talking here at the end of September, so we got one-quarter left to do this. The important thing here is if you have any channels to communicate with your clients, the first thing to do would be to communicate with them and let them know, "Hey, there's this Rev Proc 2024-28." Maybe, perhaps even provided a link if you want to, and or read that yourself in detail at least once.
But there's a lot of other things that you can lean on in AICPA guidance, of course. But just to send that out, in other words, you don't have to know it in detail before communicating. You should start the process communicating right now to say, "Hey, there's a lot to unpack here. I'm just letting you know there's going to be more that's coming. Be on the lookout. We're going to do a series of blogs on this or whatever it is you do or a newsletter, segments, and things like that.
I think that's probably the number one thing to start off with is start the communication now, because this is not a one-shot communication thing. This is a series of communications that you're going to need to do. Whether you're just providing value to non-clients or you're working with current clients, you're going to need them to be thinking in steps and increments along the way.
April Walker: Yeah. That's a lot of what we've been talking about over the past couple of months. Who this actually applies to you and who needs to really take notice of this? I think that's a great suggestion. Our listeners might be thinking, "Hey, I didn't know that we are not allowed to use universal method of basis allocation anymore. Did that come from the revenue procedure or where did that come from?"
Kirk Phillips: Well, that actually came from the digital asset broker regulations. But then what happened is in the process of those becoming final and the fact that universal [tracking] comes to an end. And we have to do the wallet by wallet approach. What arises from that is a onetime exercise of how do we get from one thing to the other thing? How do we get from point A to point B?
April Walker: The Sec. 6045 regs, which are long and complicated. Again, like Kirk said, we'll continue to create resources around all of this information because it's a lot to unpack. In the revenue procedure, it talks about a safe harbor. As we're transitioning between universal and wallet by wallet, the procedure provides a safe harbor. Let's talk about what are the key criteria that qualify you for using that safe harbor and give some of the requirements for it and so talk a little bit about that.
Kirk Phillips: Sure. That's one of the big things here is what are those key criteria for the safe harbor? Of course, another thing is we're wondering what is it actually a safe harbor from? There's going to be more to come on that. Because that's actually not super clear and usually that is when it comes to safe harbor. The critical things here are that you have two methods that you can follow in this universal transition process. From universal cost basis tracking.
In that transition process you can use a specific units method or you can use a global allocation method. In either case, you need to do some work before the end of the year arrives at 12-31-24, or before January the 1st, whichever way you want to say that. Those two methods are two distinct ways of doing it. You might say that the global allocation method is more straightforward and less work or less complicated. But let's just unpack those briefly. There's more to dig into on these, but this is a brief touchpoint.
Let's start with global allocation. Global allocation, I like to think of it as more like a recipe. There's more than one way to get the "cake baked". Because you've got your grandmother's recipe and you've got your own style and you've got things like that and things in the cookbook. So you can arrive at a different cake, but if you follow the recipe, you're going to get the same cake. Basically, another way I like to say it too, is if you come up with a global allocation, which is simply saying, "You know, what I want to do is I want to allocate my Ethereum, my ether. And I want to take some low-cost basis.
Maybe you could say, "I want to use my oldest cost basis and I want to apply it to my oldest wallets." For Bitcoin, I had only two Bitcoin wallets and one of them, it's only collected Bitcoin, received Bitcoin, it hasn't sold any. Say, you want to allocate maybe what's already there. Whatever it is, you're really defining a process. You're not actually going through with the process, you're simply defining it.
The key distinction about global allocation is, if you define the process and if you were to give it to, let's say another CPA, they will come up with the same answer. If you give it to CPA A, CPA B, or CPA C, they should all come up with the same answer. It's very systematic. That's the distinction there. Now with the specific units, it's simply user's choice. Like in baseball, it's a fielder's choice. It's user's choice. It's however you want to allocate it specifically.
Again, you have to follow the date. You can't break the date in the basis or a specific lot based on the date that it was purchased. You can't break that up. At that level that's as granular as you can get. If there was a lot or a tranche of Bitcoin or whatever, AVAX, or just pick your favorite coin and that was purchased on a certain date. You can't break up the date because the date piece has to be maintained and be consistent.
Anyway, that's really just a user's choice scenario. That's the difference because you can't give that method to three other CPAs and have them come with the same result because that's not what it is. It has nothing to do with following a process. It's simply just a user's choice. Now the key thing on the dates there is that the specific units method has to be conducted and finalize before the end of the year, before the last day of the year.
With the global allocation method, you just need to come up with the formula for doing it by the end of the year. But you actually can apply the formula to get the allocation after that. That's a super important point right there. Under global allocation, you also have until either the original due date or even the extended due date of the tax return if you did not conduct a transaction. The key is not having any transactions. You've got to put a halt to your transactional activity until you apply the global allocation method.
But it does buy you more time to do it. You just gotta be careful because that's how you could throw off the safe harbor. And ruin the safe harbor if you don't put a halt to the transactions before doing the allocation.
April Walker: You mentioned in one of our discussions is about what is this a safe harbor from? Based on our best discussions and where we think we are now, what do you think about that? What is it a safe harbor? What is our alternative if we blow this safe harbor.
Kirk Phillips: That's a great question. It looks like it would be a safe harbor prospectively from this day forward or the end of the year exercise that we're talking about forward. We're not sure about retroactively. It mentioned if you don't follow the safe harbor, you can incur penalties and interests.
As I recall that's about as deep as it goes. You could draw an inference from that and say, if I don't follow the safe harbor, does that mean that all of my transactional activity, all my reporting for the prior years could be recast and recalculated under different cost basis method. And therefore end up with a different tax liability than you originally calculated. Those things can be worst-case scenario. We just don't really know.
April Walker: Usually when you have a safe harbor, you have rules of what to do and how to document that you have met that safe harbor. Again, things we've struggled with. Seems like a simple question right? But I'm telling you a lot of smart people in the room, this is not a simple question. Kirk, as we know it now, what types of documentation do we think will be good enough to substantiate that we have met that safe harbor as of 1/1/25.
Kirk Phillips: That's right. You could actually take an action. You could perform your allocation, and you could do this all before the end of the year. The question is, how do you prove that you've done it before the end of the year? People have talked about, well, you could have files saved that because you can look and see what a file date is, the modification date of a file.
But then you could also later open up the file, not even change anything but potentially open a file, change the modification date. If that was something that is being looked at, then that could be an issue there. This is really where it comes into use in your CPA skills to figure out what's a good way to document. We're already good at that. Even in the world of not knowing, you can come up with "well I think I should do this" to document.
One of the things is if there's a way to send an email to yourself. Time stamping on emails is one way to do things like that. Just in the larger world of documentation. Like I said, everybody is relegated to using specialized crypto tax software. You might as well say everybody uses crypto tax software.
Then the question is, which one do you use? Because they're all different. They all have issues and so on. But hopefully regardless of the software, it would allow you to export an end of the year holdings report or an inventory report. That's essentially what it is because the data is in the software and if that's going to be one of the key things is, can I get that report?
Let's just assume that you do. The first thing you do is to export that report. That's going to be the basis and the starting point for doing an allocation. Let's fast forward just a second. Let's say you go through the allocation however long that happens and let's say you're done. For example you could say, let me attach that file now. Again, figuring out how do you document.
You could attach that file in an email or you're copying [yourself] with your client and maybe there's other members in the firm as well. Maybe there's a specifically designated digital asset person who want to get copied. But nonetheless, that would create an email timestamp on it and that document is attached to it. That's one way that you can actually document that these things were done ahead of time.
I guess if we want to dive into documentation further again, I was talking about that inventory being a starting point. Regardless of whether you use this global allocation that we spoke about or specific units allocation. You would need to take the starting point of the ending balances or the inventory and then you need to take your wallets. Then you need to then allocate the basis that's in the wallet. Because remember it's on a universal basis. Now you're trying to allocate it on a wallet by wallet.
You then need to go through it, but it's difficult to describe it without seeing a visual. But basically you would allocate all of the inventory that starting to all of the current wallets that you have. Again it depends on what method you're using.
But at the end of the day, what you're trying to achieve is you want to get a proof. We all love proofs, and this is one way to do it. What's the proof? The proof is the check total. It could be a check total per asset, for example that you've allocated all the Bitcoin, you've allocated all the ether, you've allocated all the Solana, the AVAX, the whatever. You've allocated everything so that the check totals on the top match the check totals on the allocation. That's how you know that you've done it and it is complete and correct. Is by doing the methodology that is like that. Because if you don't do that then there's really no way to know that it's complete. You got to have checked totals and arrive at the same numbers and then that's how you do it.
Again it can be challenging because it's depends on what's the quality of the data that you're starting with. One of the big challenges is I think all the software has different types of issues, limitations, certain features some have that others don't have and things like that.
The first thought might be from the accountant mindset oh, if I split this inventory report out it's accurate. But the thing is, it's most likely not accurate. There's going to be issues with it. You're actually starting with something that's not solid in the first place, which creates a whole other set of challenges. But we can't dig too far into that one right now.
April Walker: I was just went back into my way back machine and I was doing proofs and doing double underlines and I was getting really excited. I think that's a great point. If you are using software for yourself or for your clients, you need to, just like with everything we would say, you're not printing it out and then just putting it in a file or somewhere and never looking at it again. You got to make sure that it's not garbage in, garbage out situation. Again, lots of potential steps in this seemingly simple, allocate your basis comment.
Another thing we've talked about is the role of brokers. Because eventually in the years to come, I'm sure you're aware, there's going to be in a form 1099-DA. And there's going to be reporting of digital assets and then hopefully there's going to be at some point, [cost] basis on those forms.
Again, happy little world the basis is going to be equal to what you think it is and everybody's happy. I think we know that it's going to be much more difficult than it sounds, but let's stay simple for the moment. Let's talk about how that revenue procedure 2024-28 impacts how a broker might communicate with your clients regarding interactions with brokers and how this might be a help eventually.
Kirk Phillips: That's all a great question and it's interesting how just the broker side of things, what were the centralized digital assets exchange. Because that's what we're talking about. It's just the two ways of saying it. But just to be clear what we're talking about because we have decentralized exchanges.
Then the other side of that is the brokers and the centralized exchanges. And so that creates a whole another set of unique things and considerations with the brokers. And how they're going to report basis because they're the ones that are required to do it right now. We don't have it on the self custody side. I guess the overarching thing is you could end up with perpetual mismatches. And when I say perpetual, they could go on forever - definition of the word. But it could go on for a very long time. Just to make a point there, you have a perpetual mismatch between what you have been tracking with your crypto tax software and what the broker actually has on file.
If it was Coinbase, for example, Coinbase and the assets that are on Coinbase were actually purchased there. Coinbase is going to have a record in that scenario. Then your tax software may have under the universal method have already spent some of that basis. Because again, those transactions are treated as if it was all one big wallet. You've got a mismatch off the start, even if you do a proper allocation on your own side, you may not even know what the broker has. So the question is, how can you communicate with the broker and let them know?
The centralized exchange services or these brokers, they can receive user provided basis, but they're not required to, but they may accept it. If you have some that accept it, that may be one path that you could try to match up what you have from your allocation and communicate that to the broker so it matches up. But again, that's not going to be perfect because not every centralized exchange is going to do that. Only some of them are. Even in cases where they do provide that as a courtesy to their customers, that's not a magic wand either. If there's other things that can happen there, we could get into the weeds further on that.
But one of the things is when you transfer in tokens to a broker, that they don't have any cost basis there. Again, if you wanted to report it because they're accepting it, yes. Otherwise they wouldn't have the information. There's just no way for them to know. If you think about the different assets that they may have in your account, they're going to have some that they know the basis for which would be the ones that you traded with them. Then they're going to have other transferred in assets from customers and they're not going to have any basis information on that.
That just exacerbates the issue of what basis they have, what information they have and what's getting reported. You're going to have basically you could have 1099-DAs and so on that get reported on your behalf or the basis information is not correct. I think you know what is going to happen in those cases. You can imagine the challenges of trying to reconcile. That's what it was going to come down to is creating a really challenging reconciliation process with what the broker reported and the software with the software not really having features enough to give you reconciliation, the ability to reconcile to the degree that we're talking about.
April Walker: We've talked a little bit about there are times certainly where you get it 1099-B and the basis that the broker reports, doesn't match for this or that reason? It can be inherited and who knows a couple of different scenarios. But generally, you can rely on what the basis is. I'm not sure that's going to be the case in this situation. But again, we're just scratching the surface on some of these complex issues. More from an issue highlighting, you can recognize that this is coming. Kirk, This has been great, we've covered a lot of great information, gives us some good takeaways as we're wrapping up listening to this podcast and what can practitioners do in the next quarter coming up or then as they're starting working on a 2024 tax returns.
Kirk Phillips: Yes, I've got some great key takeaways and key points here. Then again, these things will be some of the stuff that I was suggesting in the beginning where you incorporate it into your blogs and newsletters, etc. This ongoing communication that's going to be critical. One of those could be strategically setup and tee up this allocation process in such a way that it is less complicated and has less issues. There's really going to be a strategy that could alleviate some of that. It's not relegated to whatever challenging process is going to be for any specific client. One way you can do that as potentially consolidating wallets.
If there's an example, like I said, the client that's got the 37 wallets and the six exchanges. You can consolidate those down. Now whether it whittles down to a single wallet, probably not, with that many for various different reasons. But if you could go from, say, 37 and six, what's that? Forty three. If you go from 43 and you're able to whittle that down to say four or five. You're automatically going to have less challenges and the less complicated allocation process. Really strategically consolidating assets and wallets is one way that could make this process easier. And then also similar and in conjunction with that could be to take the assets off the exchange.
Because again, if you don't have the ability to communicate with that particular broker because they're not receiving user provided information. If you take the assets off the end of the year, and then you put it back, they're going to have a zero basis. Again, that's its own issue, but I think it's the lesser of the evils, if you will. It's a better scenario for them to have a zero basis because then you're going to report something for it. Rather than they have some number and you have some different numbers. It's kinda like cost basis cleansing and you could call it that.
The other thing here is the third key takeaway. I talked about all crypto software has limitations and challenges and issues, all different from one another. You really need to know [whether the software can help]. For example, if a software provider is going to provide some tooling to be able to help in this process, they may actually provide it to the user. And say, hey, you could just click a box here and we're going to lock down the inventory. Then we're going to do this reallocation for you and you think to yourself, that's great.
I don't have to do any of the work, but you're still going to need to check that. You can't just rely on that. Then furthermore, if there is anything [available] like that, the question [comes] back to safe harbor. Does just checking a box, is that an action that proves that I took an action, a timely action, and allows me to be in the safe harbor or not. I think one of the best takeaways is, regardless of any of these pathways, is that you got to have a workpaper of some sort. And it says, I examined this. Here's a work paper that shows I did the work.
Because it's one of the things that the software doesn't lock down the previous inventory. Find out what software the person uses. Because you may know or you may not know. It depends how you work with the client. [You need to] really understand what is that software provider doing to handle this. That's another key thing. This is really a big, interesting brain teaser for CPAs who were in the digital asset space.
April Walker: For sure and we appreciate you taking a walk with us down, at least to start or the path and more to come. Kirk, this first time you've been with me on this podcast. We call it Tax Section Odyssey. We think of it as an Odyssey, a journey toward a better profession. In doing that, I like to get a glimpse of my guests other journeys outside of the world of tax. What's something on your travel bucket list? Something you have planned. Give me something to add to my bucket list.
Kirk Phillips: Yes. I will be going to Orlando in about a month to see my sister and I don't get to see her much. But one of the things I like to do is backpacking. I am involved with Scouts and I discovered backpacking in 2021 for the first time. I just love going on the Appalachian Trail and all different kinds of trails, whether it's with Scouts or other things. That's one of the things I like to do a lot.
April Walker: Nice being outside and in nature and there's some beautiful places to hike for sure. You'll have to share some pictures from your hike when you're back with us. Thanks again, Kirk. This was very informative for me, as it always is. I didn't give a shout out to our digital asset page, but I will certainly put it on the resources.
Again this April Walker from the AICPA Tax Section. This community is your go-to source for technical guidance and resources designed especially for CPA tax practitioner like you in mind. This is a podcast from AICPA and CIMA together as the Association of International Certified Professional Accountants. You can find us wherever you listen to your podcasts and we encourage you to follow us so you don't miss an episode. If you already follow us, thank you so much and please feel free to share with a like-minded friend. You can also find us at aicpa-cima.com/tax and check out our other episodes, as well as getting access to resources mentioned during this episode. Thank you so much for listening.
Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.
This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home base for staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you’re not already a member, consider joining this prestigious community of your tax peers. You’ll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.
In this episode David Snider, Founder and CEO — Harness Wealth, discusses the transformative role of technology in tax practices, exploring how tools like practice management software can enhance client relationships and streamline operations. David shares insights on what he sees as three phases of technology adoption in the tax industry and offers practical advice for firms looking to advance their tech capabilities. Tune in to learn how embracing technology can lead to a more efficient, client-focused tax practice.
What you’ll learn from this episode:
- What David thinks are the three phases of a firm’s technology journey.
- How leveraging technology can streamline tax practice management.
- How practice management software can enhance efficiency and client experience.
- Why regularly communicating with clients can strengthen relationships.
- The importance of allocating time and resources to implement new technologies.
AICPA resources
Adding AI into your tax practice — Artificial intelligence (AI) is certainly a hot topic of late. Listen to hear Jason Staats and Ashley Francis talk about the latest information in this area and where you should move forward and where you should proceed cautiously in this Reimagining Your Tax Practice archived session.
Transitioning to a tax-focused CPA financial planner — Tax return compliance is continuing to become more of a commodity. Your clients see you as their trusted adviser and ask about a range of topics that affect their financial well-being. In this Reimagining Your Tax Practice archived session, learn more about practitioners who offer financial planning services and how that has impacted their practices.
Transforming Your Business Model…Technology — The Private Companies Practice Section (PCPS) is developing tools around technology designed to help firms not only identify elements of their current business model that may be holding them back but also offering solutions to help them adapt in this changing environment.
Upcoming event
Tech stack wars in 2024 — With the amount of technology products out in the market, how do they perform in reality? Join our next tech stack wars challenge on Oct. 16, 2024, to hear about the latest in technology for tax practices.
Other resources
Harness Wealth — Learn more about how Harness Wealth strives to provide the next generation of builders confidence in the path to their best financial future.
Transcript
April Walker: On today's podcast, listen to hear more about leaning into technology for your tax practice. Hi everyone and welcome to the AICPA Tax Section Odyssey podcast, where we offer thought leadership on all things tax facing the profession. I'm April Walker, a lead manager from the Tax Section and I'm here today with a repeat guest. His name is David Snider. He's the Founder and CEO of Harness Tax. Welcome back, David.
David Snider: It's a pleasure to be here. Thank you April.
April Walker: David, I'd love for you to start. Tell us a little bit about yourself and tell us a little bit about Harness Tax and where you see yourself in this world of tax.
David Snider: Thank you for having me. Yes, so Harness has a platform for routine tax advisors that are looking to make their relationship with their clients more seamless and insightful. What that really means is a practice management solution that's tied into a much broader set of offerings. That includes business development to help advisors with leads, a concierge team to help with support, as well as a broader network of resources to help guide advisors and give them the resources of bigger firms.
April Walker: Wonderful. I feel since we talked in Spring of 2022, if it's possible, I feel like the importance of technology is even more important. Maybe that's just me being dramatic, but let's start off just by pretty broad question like, how do you see technology transforming the way tax advisors interact with their clients?
David Snider: Absolutely. I think about it being in the second of three inevitable phases. I think the first was the first stage, which is very typical across industries. My background was spending, now 12 years, building tech enabled services, software solutions, first at Compass, a real estate advisory firm, and now at Harness. Before that in the middle, spent a lot of time at Bain Capital looking at different disruptive technologies. And so that first phase that we went through, very similar to a lot of industries, adoption of email, adoption of technologies that clients can actually submit core documents digitally and not just in paper.
The ability with the early software to actually complete and file electronically. That really is table stakes. If you look at the data, it's 99% of advisors have an Efin, etc. The second phase that we're really still in the early to mid innings of is the software collaboration phase. What that looks like is work-flow automation, ways of interacting with clients to create leverage for advisors and scale. It's not just, hey, I typed an email, send it to one, or I create an engagement letter sent to one. It's using the efficiencies of technology that can, at the vanguard be AI, but really doesn't need to be.
In the vast majority of cases, it's just having good practice management software to create efficiencies for the advisor that end up, ironically, even though you have to spend less time, creating a better client experience and one that's more customized to the individual. It gives them more visibility into what's going on, what's coming next.
The third phase, which I think only a handful of firms are really investing in, fully tapping into, which is totally fine. I don't think the client expectation is there, is around customized insights. How do you not just deliver an efficient workflow? But how do you, at the outset of a tax season, demonstrate to your client that you already know some stuff about them from prior years, here's why we really need just to tweak that. Showing your work. Here is all the different analysis that we ran in the completion of your return or the discussions that we had and at the end of the process, Yes, here's a completed tax document or analysis that you requested, but also here's what it means.
I think that ability to both give insights to people and leave clients like they actually understand tax, the tax process, the work that you did, is going to create massive benefits in terms of client's willingness to pay, their retention, their happiness, etc. Very few firms are at a Phase 3 in our opinion. You don't need to be concerned if you're not. Because there are a few, if any are. But certainly making sure that you've put in place or have the opportunities to go into next tax season and really nail Phase 2. I think will put advisors in a great place to really capture what is happening on the vanguard in Phase 3.
April Walker: We definitely hear from people and when I'm out talking to firms, people who are definitely still in that Phase 1. Where they transferred to Cloud. That seemed like a huge deal and leaning into some technology, but maybe taking that next step into two, even is difficult. Do you have any advice or thoughts on that? Because everyone is so busy and it's hard to figure out, especially if you're really small, it's hard to figure out how to take that time and really invest in trying to get to that next step. Any ideas or suggestions there?
David Snider: I think the good news is there are a lot of very good practice management software that did not exist or did not have the robustness that they do today, five years ago. One of the things to consider in evaluating the different choices is, ensuring that you price in the value of your time as a practice leader. In that there is a learning curve on anything, no matter how good the technology is. There are some that I think are much cheaper and may have the technologies you want to check the box on. But I think really understanding what is the on-boarding team look like?
What does the client success infrastructure of that solution look like? Who's going to make it as easy as possible to set you and in many cases your team up to use it successfully? And to answer issues that will inevitably arise from any change. I think we have over-invested in those resources, because we know there's a lot of change and fully transitioning the way that you think about practice management, some of the potential third-party software you can plug in, etc. That's important.
I think whatever approach that you take, whether it's working with Harness or a whole host of other solutions that are out there that are very good. I think just making sure that you understand, hey, what are the functionality each have, what's going to be accretive to the way that you want to work and your staff and perhaps your clients. But also what's the process going to be to fully utilize and take advantage of that.
April Walker: Those are some good thoughts. Just maybe if we can talk about a few examples of ways that firms can use practice management tools to really help them. Because this is really what it's about. It's about not having to have an Excel spreadsheet of clients and that's all you have. I'm not saying that's what our firms have. I'm just saying, I was in practice for some time and I remember that. What are some ways you can use tools to really advance your practice?
David Snider: I think there's both external components. How do you enhance the way that your clients perceive their process and there are internal things. How do you ensure that you don't miss a filing? The reason that advisors have Excel is just a mechanism to ensure that they do the work for their clients that the clients expect. I think on the external side, the more frequently you're interacting with clients around the tax process, generally the better, not in an annoying way, but I think tax is something clients generally don't want to think about, but definitely want to get right.
It's no different than a patient coming in to a doctor if they have an issue, but don't really totally understand it. Having a solution that allows you to email me before the season starts, to preview of what's to come and the deadlines and things that are upcoming. What do you need from your clients? What is the engagement going to look like from a pricing standpoint? Being able to send out engagement letters that reflect that. So someone feels like they weren't surprised because they had exactly what's being done for them and the pricing terms, etc, outlined being laid out. Having the client questionnaire customized ideally to what the clients already told you in previous years.
It feels intelligent, not like you're starting at Day 1 every year with the same advisor around your materials, etc. All that stuff is beneficial, being able to update them that "I've received everything I need" or expect to hear from me this time in March for business filing. Aspirationally, late March not April 14th, but whatever that may be for the draft filing, what their advisors recommended, etc. Or at extension deadlines, etc. That stuff all again can be done without moving your practice to Phase 2, but it's going to be dramatically more time consumptive. And it's stuff that you can't bill and price for in the way that you want.
Because there are lots of other tax firms that have already made those investments and therefore they can do those things with very little time invested. Internal stuff is really around collaboration, tracking, knowing what clients have uploaded what? Who has been filed? Who's working on documents? Etc. Where are they in the process? Have they paid? The more visibility you have, the easier it is to spend each day, not driven by who is pinging you over and over in your inbox, but who actually needs something based upon external deadlines or prioritization or the revenue they're going to drive wherever that may be as you think about being the quarterback of your practice rather than playing defense. Just having the scrimmage run towards you over and over again during tax season and hoping you're still standing at the end of it.
April Walker: Yes, I love a football analogy. I was just in Minnesota to watch my Tar Heels play. My first trip to Minnesota anyway, it was fun.
David Snider: I went to the Super Bowl when The Patriots played there against The Eagles a number of years ago and it was bone chilling.
April Walker: Yes, we're recording this in early September. It will come out in a couple of weeks and what we're really thinking about, and what I hope our practitioners are thinking about is year-end planning and there's a lot to talk about with impending legislation. There's Tax Cuts and Jobs Act sunsetting. There's a lot going on for you to be in front of your clients and proving your value. Talk a little bit about how technology might assist you with some of those conversations, or pulling data together to be able to help understand who you need to talk to you, and what about?
David Snider: Number 1, I would say, and this is anecdotal, I don't have the data to prove it. The majority of advisors do not proactively email their clients in Q4. Unless they need to collect certain things to do a quarterly estimate, etc. That is a huge missed opportunity. Even if you adopt, no technology, take an hour jot down some thoughts, a few bullets on what could be at stake in the election or the expiration of the Trump tax cuts or of the estate tax exemption, whatever it is, send something that seems thoughtful, and obviously it's going to be thoughtful from any practitioner who cares about what they're doing.
If you do that, you may think, I actually have the time to have something more customized. A, you can use software at least have to be addressed to the person, even if it's a mass email versus just a generic one, but then you could potentially also group your clients and say, hey, I've got 15 law firm partners, and I've got 42 small businesses, and I've got a cohort of people with multi-state issues, etc. I'm going to create three different end of year planning emails.
I'm going to categorize my clients and be able to send out something that's not individual, but that makes you feel like, wow, April is really ahead of the curve in terms of giving the insights that I wouldn't have expected. Although it obviously can be automated, but it takes the adviser having the initiative to create that content and think about what's going to be most useful for. When you do that, feel free to promote the scope of what you can offer. Tax advisors or not, the world's sales-iest profession. In many respects that can be a good thing, but it also does you a disservice where your clients don't know what type of things might be beneficial.
For that end of the year planning to small business owners be like, hey, you're thinking about possibly selling or transferring a chunk of the business to a child or an employee or selling outright, etc. There are a whole bunch of things that you should be thinking about now, potentially some things that may involve tax decisions this year versus next year, etc. I can be helpful with that.
I think highlighting the opportunities around that and giving people the ability to opt in for more complex planning is going to be really accretive. But yes, whether it's Harness practice management solution or others, there are definitely ways to customize the messaging, the cohorts, some of that stuff, but it really starts with the advisers sitting down and saying what is potentially meaningful on the horizon for my clients. And how much time energy do I want to take to customize that? And maybe it's hey, it's one generic one, and there are 10 clients that really move the needle. These are my 10K plus clients, whatever the threshold may be. I actually want to spend some time and really make them feel that I'm paying attention to their holistic needs and how I can be strategic to them.
April Walker: A lot of times we hear people say, I don't want to bother my clients, but I feel like on the other side, they really want to hear from you when you have something to say that's really important and crucial to them. I think it's important. That's a great point you made about reaching out in some way fourth quarter of 2024, because like we said, there's a lot of different things that you could bring up that are specific to their situation.
David Snider: Honestly, my view and it's just a personal view having now been in and around this industry for several years is book-ended communications is extraordinarily rare and extraordinarily valuable. What I mean by that is communication before the season starts, the more customized, the better, but at least something. The same thing at the end, that even after the client has signed a return, you've completed some analysis that post-season follow up.
If it's just previewing when they think about bringing for the next year or some of those planning opportunities goes a really long way, I think in demonstrating value. I'm seeing advisers do the presentation of insights through loom videos and other things that I think is also an element of that. Which is do more than deliver the bare minimum of the compliance requirements, and you will stand out and generate a tremendous amount of goodwill from your clients in whatever form it takes. A Loom video, something semi-customized, something even generic will be helpful to a lot of the people that you work with.
April Walker: Just thinking about some clients you may have worked with with Harness Tax, do you have any success stories that come to mind where technology really improved someone's practice?
David Snider: Yeah. I think we have two different types of advisors that we principally help. The one is a practice with 1-25 employees under 10 million of revenue, that's really making an investment. [They say] we've got a good business. We're going to do just fine regardless, but we also recognize to make it A, sustainable, B, to enable growth,
We've got to be more efficient and we want to not just be good enough that clients don't leave, we want to be better. For a number of those practices, I think the combination of a workflow, practice management technology that can save a couple hours per client with some of these automations of the client engagement letter or the intelligent client questionnaire, the status updates, also supplemented by our client's success team that can help field those level 1 questions that may come into the advisor. They're not necessarily required to answer. They don't require tax expertise, etc. All that stuff gets unburdened. Those firms have then been able to take advantage of new referrals that they generate and a whole bunch of Harness generated clients.
One of the earliest practices that came on to the platform has grown, I think 80, 90% across two seasons because the practice leader is getting a lot more leverage in the amount of time that she spends with each client. She's gotten more resources to talk about in the conversation. The clients, they don't use the network of tax attorneys that we have or some of the other software and database that they have access through our platform.
The other group are people that have been at top 50 firms and for a variety of reasons feel like now is the time to be more entrepreneurial to create their own practice. There's tremendous demand for people that have specialization, nimbleness, a willingness to create a great experience. And one that joined that had been at a top 50 firm to create his own practice and his first year was able to generate over a quarter million dollars of revenue. That really came from Day 1, adoption of Harness' technology, a few other components to that workflow and the ability to really highlight some areas of specialization and to take a lot of clients that came through our consumer-facing side that brings in clients and distributes those to the right advisors to serve them.
It's really a powerful combination that no matter how good your practice seems, if you free up hours and you position yourself well, you're going to grow. I think giving yourself that time, especially in Q4, to really think through what are ways that you can generate more value, maybe capture a fraction of that incremental value for existing clients and create the space for you to take on new ones that would be incrementally valuable is wonderful. We've certainly seen that just in the top-line value and in really high net promoter scores of the clients that are being served by advisors using our technology.
April Walker: We'll go live before the end of September. Hopefully this will be valuable information for people and we talk about growing. Sometimes firms don't want to grow because they feel like they have too much going on at the time. But what we have talked about and heard and I'm sure you'll echo this is sometimes you need to grow in a different way, like you need to cull some clients and really focus on growing your experience with those really good clients.
David Snider: Grow your free time. Grow your client value and or grow the amount of money that you pocket at the end of the year.
April Walker: All three, I'm going to say, check, check, check for me. David, it has been lovely chatting with you today. Any final thoughts as we're wrapping up?
David Snider: I think we're turning back to that initial theme. If you are an advisor in Phase 1 where you adopted some technology probably 7-10 plus years ago, it's really important, to get ahead of clients expectations. Which I think will rise as more advisers are using technologies to create a better experience. But don't also get anxious. Oh, if I don't have a fully outsourced AI practice then I'm behind the curve or my job's going away. There is secular growth in demand for tax services.
The more that you can devote time to areas that you are advising, building relationships, strengthen relationships you will thrive in this profession. But don't sit in the same as last year mentality. Take Q4, look at what is going well, look at what's going to create the most value for you and your clients and make those investments of time and in some cases, expenditure.
April Walker: Great thoughts. You've been with us before, so you know that in closing on these podcasts — we're Tax Section Odyssey — we're taking a journey together toward a better profession. But I also like to think about other journeys outside of tax. David, share a page from your travel journal, a trip coming up or something you've just recently done. You already had a spoiler with the Super Bowl trip, so that was cool.
David Snider: That's way in the rearview, I don't think the Patriots are making a run this year unless something dramatic changes. But the trip I'm excited about I'm heading actually tomorrow night to Barcelona and watch the America's Cup race as a father sons trip. [He has] always been a big sailor before my time. He spends a lot of the summer and now year-round in Rhode Island. That used to be where the America's Cup always was held and for the last almost 40 years, I think it's been elsewhere. We decided rather than just wait, we will take the trip. We're hoping that Team USA, American Magic, can at least win the Louis Vuitton cup to be the challenger against New Zealand.
April Walker: Worst-case scenario, enjoy some time in Spain which doesn't sound like a bad plan for me.
David Snider: Exactly.
April Walker: Thanks again so much, David. Again, this is April Walker from the AICPA Tax Section. This community is your go-to source for technical guidance and resources designed especially for CPA tax practitioners like you in mind. This is a podcast from AICPA and CIMA together as the Association of International Certified Professional Accountants. You can find us wherever you listen to your podcasts and please feel free to follow us so don't miss an episode. If you already follow us, thank you so much and please feel free to share with a like-minded friend. You can also find us at aicpa-cima.com/tax and find our other episodes as well as resources mentioned today. Thank you so much for listening and happy fall.
Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.
This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home base for staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you’re not already a member, consider joining this prestigious community of your tax peers. You’ll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.
This Tax Section Odyssey podcast episode takes a deeper dive into the Organisation for Economic Co-operation and Development’s (OECD) initiative on Base Erosion Profit Sharing (BEPS) 2.0 which sets to reform the internation tax system with Pillar 1 and 2 tax regimes. In addition to the complexity of such international regulations, the political landscape for U.S. implementation is uncertain, and potential action is needed from Congress.
Cory Perry, Principal, National Tax — Grant Thorton Advisors, and Vice Chair of the AICPA’s International Technical Resource Panel (TRP), highlights that while many U.S. companies may not face larger tax bills if these regimes are adopted in the U.S., the administrative and compliance challenges are significant. The AICPA has submitted comment letters to the OECD, Treasury, and the IRS, focusing on simplification and clarification of rules.
AICPA resources
OECD BEPS 2.0 - Pillar One and Pillar Two — The OECD BEPS 2.0 sets out to provide a tax reform framework allowing for more transparency in the global tax environment.
What you need to know about BEPS 2.0: Pillar One and Pillar Two | Tax Section Odyssey — The OECD BEPS 2.0 project is an international effort to reform the international tax system that addresses transfer pricing, profit allocation and tax avoidance.
Advocacy
Comments to Treasury on tax issues of OECD Pillar Two, Feb. 14, 2024
Comments to Treasury on Amount B of OECD Pillar One, Dec. 12, 2023
Other resources
OECD BEPS — Inclusive Framework on Base Erosion and Profit Sharing
For a full transcript of the episode, see Tax Section Odyssey on the AICPA & CIMA website.
In this joint episode, Neil Amato, host of the Journal of Accountancy podcast and Melanie Lauridsen, VP of AICPA Tax Policy and Advocacy discuss two recent Supreme Court decisions.
The Supreme Court ruling in Loper Bright Enterprises v. Raimondo overturned a 40-year-old precedent of deference referred to as the Chevron doctrine, affecting future rulemaking by eliminating the need for judges to defer to agency interpretations of ambiguous statutes. In Corner Post, Inc. v. Board of Governors of the Federal Reserve System, the Supreme Court ruled to alter the statute of limitations for challenging regulations, starting the clock when a plaintiff is injured rather than when the regulation is enforced.
These decisions introduce significant uncertainty for the accounting profession, particularly regarding IRS regulations and long-standing rules and emphasize the need for CPAs to stay informed and adaptable as the implications of these rulings unfold.
AICPA Resources
Melancon: Supreme Court decisions are ‘big deal’ for tax pros, The Tax Adviser, Aug. 1, 2024
Supreme Court overrules 40-year-old Chevron doctrine, The Tax Adviser, June 28, 2024
Supreme Court decision on Chevron doctrine will affect tax pros, Journal of Accountancy, June 24, 2024
For a full transcript of the episode, see Tax Section Odyssey on the AICPA & CIMA website.
On this episode of the Tax Section Odyssey podcast episode, Dave Kirk, National Tax Partner — EY, and Chair of the AICPA’s Pass-through Entity Tax Task Force, discusses the complexities surrounding state tax refunds related to the pass-through entity tax (PTET) and delves into the challenges posed by the lack of IRS guidance, the application of the tax benefit rule and varying state regulations. Dave emphasizes the importance of consistency in handling these refunds and advises practitioners to involve taxpayers in decision-making due to the inherent uncertainties and risks.
AICPA resources
FAQ on the Federal Taxation of State Income Tax Refunds for PTET Payments — FAQ guidance on the federal taxation of state income tax refunds for PTET payments.
AICPA list of taxpayer and practitioner considerations for whether to elect into a state pass-through entity (PTE) tax — Various issues should be considered when deciding whether a taxpayer can, and should, elect into a state PTE tax.
Pass-through Entity (PTE) Taxes States’ Legislation and Tax Authorities’ Information and Guidance — A state-by-state PTE matrix tracking and linking to legislative updates, guidance, as well as other relevant information.
State and Local Tax (SALT) Roadmap and Resource Center — Browse the reference library for the latest guidance and tools to address your state and local tax needs including tax rates, due dates, nexus, PTE tax and more.
For a full transcript of the episode, see Tax Section Odyssey on the AICPA & CIMA website.
If you're advising businesses on their pending ERC claims, this is a must-listen for practical guidance on navigating the process and setting the right expectations.
Tune in to hear Chris Wittich and Dan Chodan, two experts immersed in Employee Retention Credit (ERC) matters for four years, discuss the IRS's upcoming actions for sorting and processing pending ERC claims by risk level. High-risk claims are likely to be denied, medium-risk claims require more detailed review, and low-risk claims will be processed starting soon. The IRS moratorium on processing claims filed after September 14, 2023, is still in place.
Businesses with pending ERC claims are facing critical choices about amending income tax returns due to statute limitations. The speakers advise open communication with clients about the limited options available and the importance of understanding the ethical responsibilities as tax preparers. Based on the current backlog at the IRS for ERC claims, it is important to manage client’s expectations around the processing time as the impact of potential changes in legislation.
Related resources
Previous Tax Section Odyssey episodes discussing the Employee Retention Credit (ERC):
· Sifting through ERC questions | Tax Section Odyssey
· ERC suspended: What happens next | Tax Section Odyssey
· Employee retention credit and professional responsibilities | Tax Section Odyssey
ERC guidance and resources — The rules to be eligible to take this refundable payroll tax credit are complex. This AICPA resource library will help you understand both the retroactive 2020 credit and the 2021 credit.
Employee Retention Credit (ERC): Fact or Fiction? — Use this guide to educate yourself and others on common misconceptions surrounding the ERC.
Employee Retention Credit Decision Tree — Download the ERC decision tree to help you with various decision points when working with clients to protect yourself/your firm from significant risk.
IRS resources
· IR-2024-169 — IRS news release on June 20, 2024, discussing the next stage of ERC work
· IR-2023-169 — IRS news release on Sept. 14, 2023, ordering the immediate stop to new ERC claim processing.
· IRS ERC resource center — IRS hub for ERC information, including links to guidance, FAQs and the latest news.
For a full transcript of the episode, see Tax Section Odyssey on the AICPA & CIMA website.
In this joint episode, Neil Amato, host of the JOA podcast and Melanie Lauridsen, VP of Tax Policy and Advocacy for the AICPA discuss recent updates on three key tax topics: the Employee Retention Credit (ERC), Beneficial Ownership Information (BOI) reporting, and a member survey about IRS performance during tax season. Melanie highlights the IRS’s recent actions and proposed regulations regarding ERC, the implications of BOI reporting requirements, and the mixed feedback from AICPA members on IRS service improvements.
AICPA resources
AICPA Employee retention credit guidance and resources — Access resources providing the latest updates on the employee retention credit (ERC).
Beneficial ownership information (BOI) reporting resource center — Access resources to learn about the beneficial ownership information reporting requirement under FinCEN’s Corporate Transparency Act (CTA).
For a full transcript of the episode, see Tax Section Odyssey on the AICPA & CIMA website.
In this episode of the Tax Section Odyssey podcast, the focus is on the landmark Supreme Court case, Moore v. United States, which examined the constitutionality of the mandatory repatriation tax under Sec. 965 of the Tax Cuts and Jobs Act (TCJA). The Court upheld the tax with a 7–2 majority.
The case opens up further discussion on the taxation of unrealized gains and the constitutionality of a wealth tax. Tony Nitti highlights the significance of the Supreme Court’s decisions on taxation and encourages a thorough reading of the opinions for their educational value.
Also, revisit previous episode from Nov. 22, 2023 — All eyes on Moore v. U.S. plus a history lesson on tax cases.
Get a glimpse from the Engage Conference held June 2024 in Las Vegas. The episode includes recordings from conference attendees, sharing their experiences and the knowledge gained from various sessions. Highlights include discussions on professional growth, balance, mental wellness, and the significance of networking.
Sign up now to attend the 2025 ENGAGE conference.
The OECD BEPS 2.0 project consists of two pillars. Pillar One applies to the biggest and most profitable multinational enterprises and reallocates part of their profit and taxing rights to the countries where they sell their products and services. Pillar Two introduces a global minimum corporate tax of 15% to prevent tax avoidance and base erosion.
The U.S. has not yet adopted the OECD project into its tax system, but it will still impact U.S. multinational businesses that operate abroad. Practitioners need to know about the OECD project because it is a major change in the international tax system that will affect many multinational enterprises and their tax compliance.
AICPA resources
OECD BEPS 2.0 - Pillar One and Pillar Two — The OECD BEPS 2.0 sets out to provide a tax reform framework allowing for more transparency in the global tax environment.
Advocacy
Comments to Treasury on tax issues of OECD Pillar Two, Feb. 14, 2024
Comments to Treasury on Amount B of OECD Pillar One, Dec. 12, 2023
Other resources
OECD BEPS – Inclusive Framework on Base Erosion and Profit Sharing
Melanie Lauridsen, AICPA & CIMA VP of Tax Policy & Advocacy, provides an update on IRS service improvements and the impact of the Inflation Reduction Act funding. She also discusses other key tax advocacy tax initiatives that are top of mind right now.
AICPA resources
Employee retention credit resource center — Access resources to learn the latest on the employee retention credit (ERC).
Beneficial ownership information (BOI) reporting resource center — Access resources to learn about the beneficial ownership information reporting requirement under FinCEN’s Corporate Transparency Act (CTA).
For a full transcript, see Tax Section Odyssey on the AICPA & CIMA website.
Mark Gallegos, CPA, MST, Partner — Porte Brown LLC, discusses the importance of having processes around retaining documents for accounting firms as well as advising clients on what information is important for them to maintain. It is imperative to manage files in an efficient manner, and, often, there are different considerations for physical storage versus digital storage.
AICPA resources
Document Retention FAQs for Tax Practitioners — Having a written document retention policy for your firm is a must-do along with advising clients on taxpayer record retention.
Document Retention Policy Template for Tax Practitioners — Formalize your tax firm’s policies about retaining documents related to firm operations and client records.
Optimizing your tax practice — Explore tools to manage a more efficient tax practice, enhance your operations, add value to your service offerings and reinforce client relationships.
For a full transcript, see Tax Section Odyssey on the AICPA & CIMA website.
In this episode, listen to a conversation with Jody Padar, the Radical CPA, about the evolving role of CPAs in the face of technological advancements. Jody emphasizes the need for proactive communication, year-round tax planning, and restructuring business models to prioritize client needs so that CPAs can maintain their relevance in the accounting industry.
To learn more about Jody and her new book coming out soon, please visit her website.
AICPA resources
Reimagining your tax practice — Tackle today’s top practice management issues with insights and tips from pioneers in the tax community.
Transforming Your Business Model — “Transform” indicates a dynamic but collaborative change that our business models will support. This concept invites firms to join the discussion and explore their businesses through the lens of the five focus areas.
For a full transcript, see Tax Section Odyssey on the AICPA & CIMA website.
Elizabeth (Liz) Young, the new Director of the AICPA & CIMA’s Tax Practice & Ethics team joins the podcast to discuss the importance of clear communication with clients, especially during the tax filing season.
Liz emphasizes the need for valid contracts and signed engagement letters before filing extensions. Common risks and pitfalls associated with not having them in place include improperly filed extensions, missed deadlines, fee disputes and potential loss of revenue.
Sharing her passion for safeguarding the profession and futureproofing it for upcoming generations, she is focused on initiatives to recruit, retain and support young practitioners.
AICPA resources
Say "I do" to engagement letters — Understand the importance of establishing parameters of client relationships and detail the scope of services to be provided.
Tax Extension FAQ for Clients — Do you have clients who are hesitant about filing an extension to file their tax return? Communicate the who, what, when and how to ease their minds.
Annual Tax Compliance Kit — Engagement letters, organizers, checklists and practice guides help you manage your tax season workflow
Tax season resource center — Access the AICPA’s central hub for guidance, tools and developments throughout the tax filing season.
Steve Turanchik from the AICPA’s Digital Assets Tax Task Force discusses upcoming reporting requirements for digital assets. Sec. 6045 will require brokers to report transactions involving digital assets, similar to how they report securities transactions currently. This is meant to combat anonymity concerns and improve tax compliance. However, the reporting rules have been delayed multiple times. The AICPA continues advocacy efforts in this area, providing comments to highlight issues and gaps in reporting requirements.
AICPA resources
- Digital assets and virtual currency tax guidance and resources — This hub is your go-to library for AICPA guidance and resources as well as current legislation, IRS initiatives and tax advocacy projects.
. Advocacy
· AICPA submits additional comments on the proposed Sec. 6045 regulations on gross proceeds and basis reporting by brokers and determination of amount realized and basis for digital asset transactions, March 4, 2023
· AICPA comments on the proposed Sec. 6045 regulations on gross proceeds and basis reporting by brokers and determination of amount realized and basis for digital asset transactions, Nov. 8, 2023
· AICPA comments on virtual currency reporting under Sec. 6045 and Sec. 6050I, Form 8300 and instructions, Oct. 28, 2022
Other resources
- IRS Digital Asset page — Recently redesigned page to provide the latest IRS information on digital assets
- Treasury and IRS announce that businesses do not have to report certain transactions involving digital assets until regulations are issued, Jan. 16, 2024
For full transcript of the episode, visit Tax Section Odyssey on the AICPA &CIMA website.
Melanie Lauridsen, AICPA & CIMA VP of Tax Policy & Advocacy, provides an update on several key tax initiatives that are top of mind right now. Highlights include the latest updates on beneficial ownership interest (BOI) reporting as well as what to expect from pending tax legislation.
AICPA resources
- Decision holding Corporate Transparency Act unconstitutional appealed, The Tax Adviser, March 12, 2024
- Federal court holds Corporate Transparency Act unconstitutional, The Tax Adviser, March 5, 2024
- Plaintiffs: FinCEN should pause all CTA enforcement, The Tax Adviser, March 5, 2024
- Beneficial ownership information (BOI) reporting resource center — Access resources to learn about the beneficial ownership information reporting requirement under FinCEN’s Corporate Transparency Act (CTA).
- Client letter and FAQ for a government shutdown during tax season — Share some considerations with your clients as the potential for a government shutdown looms, and IRS services will be affected during tax season.
For full transcript of the episode, visit Tax Section Odyssey on the AICPA &CIMA website.
Superseded returns — essentially a replacement for an originally filed tax return — can be a useful tool, especially as it relates to partnership returns which operate in the centralized partnership audit regime (CPAR). Learn more about when these “do-over returns” should be considered and what implications they may have for statutes of limitations.
AICPA resources
Superseding returns and statutes of limitations, July 1, 2021, The Tax Adviser
BBA Partnership Audit and Adjustment Rules FAQ — Gain answers to frequently asked questions about the centralized partnership audit regime under the Bipartisan Budget Act of 2015 (BBA).
Other resources
Amended and Superseding Corporate Returns — Information from the IRS on filing a superseded return electronically
For full transcript of the episode, visit Tax Section Odyssey on the AICPA &CIMA website.
The tax treatment for digital asset losses can be a complex area. Not to mention, misleading information can cause confusion for tax practitioners and taxpayers alike. Learn more about the intricacies of how realized digital asset losses are reported and why it likely makes sense to avoid having the digital asset be considered worthless or abandoned based on the current tax treatment.
AICPA resources
- Digital assets and virtual currency tax guidance and resources —This hub is your go-to library for AICPA guidance and resources as well as current legislation, IRS initiatives and tax advocacy project
- Crypto loss tax reporting fact or fiction — With the prevalence of recent virtual currency exchange bankruptcies and digital asset volatility, taxpayers may have misconceptions on reporting tax losses.
- AICPA comments on digital currency losses, April 14, 2023
Other resources
- IRS Chief Counsel Advice (CCA) 202302011 — Memorandum that addresses the applicability of IRS Sec. 165 to cryptocurrency that has declined in value
- IRS Digital Assets — Resources and guidance available on the IRS.gov website
For a full transcript of the episode, see Tax Section Odyssey on the AICPA &CIMA website.
Misconceptions about digital asset tax compliance are common. With business tax returns now requiring taxpayers to affirm their taxable digital asset transactions, it is even more important to ask the right questions. Educating yourself and your clients in this area is important to fulfill your due diligence requirements as a tax practitioner.
AICPA resources
- Digital assets and virtual currency tax guidance and resources —This hub is your go-to library for AICPA guidance and resources as well as current legislation, IRS initiatives and tax advocacy projects.
- Questionnaire for Individual Clients — Before accepting clients that are engaged in digital asset activities, there are certain questions CPA practitioners should have answers to.
Advocacy
- AICPA comments on the proposed Sec. 6045 regulations on gross proceeds and basis reporting by brokers, Nov. 8, 2023
- AICPA comments in response to the July 11, 2023, Senate Finance Committee letter on taxation of digital assets, Sept. 8, 2023
- AICPA comments on the IRS draft 2023 tax forms digital asset question, July 28, 2023
Other resources
- IRS Digital Assets — Resources and guidance available on the IRS.gov website
For full transcript of the episodes, see Tax Section Odyssey on the AICPA &CIMA website.
Daniel Moore, CPA, Owner — D.T. Moore and Company, LLC, discusses the recent Department of Labor rule on determining the classification of workers as either employees or independent contractors under the Fair Labor Standards Act. He also highlights the potential legal and financial risks associated with worker misclassification.
The rule, effective on March 11, 2024, aims to align with judicial precedents, reduce misclassification risks and offer more flexibility for businesses engaging with independent contractors.
Factors for worker classification under this rule are:
- Opportunity for profit or loss that a worker might have
- Investments of resources by the worker and potential employer
- Degree of permanence of the work relationship
- Nature and degree of control an employer has over the work
- Extent to which the work is integral to the employer's business
- Skill and initiative of the worker
Dan highlights the importance of considering both IRS and Department of Labor rules when advising clients on worker classification and how to best communicate this change to clients.
AICPA resources
· Tax season resource center — Access the AICPA’s central hub for guidance, tools and developments throughout the tax filing season.
· Employee or independent contractor? DOL issues new guidance, Journal of Accountancy, Jan. 10, 2024
Other resources
· RIN 1235-AA43 published in the Federal Register — Department of Labor (DOL) rule
On this podcast, Mark Gallegos, a partner at Porte Brown, provides advice for getting ready for tax season. He discusses the importance of preparing staff, communicating with clients, managing workloads, taking care of yourself, and setting expectations. With the right preparation and mindset, the next few months leading up to April 15 don't have to be too difficult.
AICPA resources
Tax season resource center — Access the AICPA’s central hub for guidance, tools and developments throughout the tax filing season.
Beneficial ownership information (BOI) reporting — Access resources to learn about the beneficial ownership information reporting requirement under FinCEN’s Corporate Transparency Act (CTA).
The Corporate Transparency Act (CTA), enacted Jan. 1, 2021, requires many entities to file a beneficial ownership information (BOI) report with the Financial Crimes Enforcement Network (FinCEN) beginning in January 2024. Its goal is to increase transparency about who owns or controls an entity and deter money laundering activities.
Tune in to this podcast episode to hear from Melanie Lauridsen, Vice President, Tax Policy & Advocacy — AICPA & CIMA, Roger Harris, President and COO — Padgett Business Services, and Larry Gray, Owner —Alfermann Gray & Co LLC, on the latest with regards to BOI reporting.
What you’ll learn in this episode
- Background on BOI reporting (0:57)
- Professional risks associated with completing BOI reports for clients (1:50)
- Advice for CPAs considering an engagement (3:58)
- Roger’s take on the unauthorized practice of law (UPL) (5:32)
- Larry’s view on how he’s handling this UPL (7:33)
- How to communicate to clients about BOI reporting (11:00)
- Recommendations on managing risks (13:51)
- How to relay changes that would impact reports to clients (16:40)
- FAQ from fellow practitioners (19:02)
- Final thoughts (25:13)
AICPA resources
- Beneficial ownership information (BOI) reporting — Access resources to learn about the beneficial ownership information reporting requirement under CTA.
- Risk Alert: Navigating Corporate Transparency Act/Beneficial Ownership Reporting – Risk alert from AON, issued Oct. 17, 2023, and updated Nov. 30, 2023.
Other resources
- FinCEN's Beneficial Ownership Information — Access FinCEN’s comprehensive information on BOI reporting, including a reporting rule fact sheet, FAQ and newsroom.
Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.
This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home base for staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you’re not already a member, consider joining this prestigious community of your tax peers. You’ll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.
Marna Ricker, Global Vice Chair, Tax — EY, has held various leadership roles including most recently the EY Americas Vice Chair – Tax. She engages and inspires her team to provide unique client experiences and create digitally enabled services.
On this podcast episode, Marna shares her insights on how to blend and balance soft skills with technical skills — touching on how to develop each set and how emerging technologies influence future accounting professionals.
What you’ll learn in this episode
- How the tax industry has evolved over the years and advice Marna would give to her younger self (1:15)
- Key skills leaders are looking for in employees today (4:15)
- Can soft skills be learned? (6:18)
- Balancing technical changes while also developing leadership skills (8:23)
- How artificial intelligence (AI) is set to influence tax professionals’ skills (10:52)
- Final thoughts (16:00)
- A page from Marna’s travel journal (17:15)
AICPA resources
- Reimagining your tax practice — Tackle today’s top practice management issues with insights and tips from pioneers in the tax community. The Reimagining Your Tax Practice webcast series will tackle these issues and more in a Q&A roundtable series with tax pioneers from the profession.
Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.
This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home base for staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you’re not already a member, consider joining this prestigious community of your tax peers. You’ll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.
In 2017, Congress made several permanent changes to the taxation of foreign earnings with the enactment of the Tax Cuts and Jobs Act (TCJA), P.L. 115-97 . The TCJA imposed a deemed repatriation (Sec. 965). In the Moore v. United States case, the constitutionality of this policy is being challenged.
Listen to Tony Nitti, CPA, Tax Partner — EY, and Damien Martin, CPA, Tax Partner — EY, discuss the pending case live from the 2023 AICPA & CIMA National Tax & Sophisticated Tax Conference, as well as the top tax cases of all time.
What you’ll learn in this episode
- Background on the case and case law history involving U.S. taxation (0:44)
- Deeper dive into the history of U.S. tax law (11:41)
- Hylton v. United States, 3 U.S. (3 Dall.) 171 (1796) (20:38)
- Temporary income tax enactment (23:47)
- Pollock v. Farmers’ Loan & Trust Company, 157 U.S. 429 (1895) (26:06)
- 16th Amendment (28:36)
- Commissioner v. Glenshaw Glass Co., 348 U.S. 426 (1955) (34:13)
- Lead up to the Moore case (35:20)
- Advice for how to explain the Moore case to clients (41:24)
IRS resources
- Section 965 Transition Tax — IRS webpage detailing Sec. 965, including an overview, what taxpayers are impacted and what potentially impacted taxpayers need to know.
Other resources
- Charles G. Moore, et ux., Petitioners v. United States — Case whether the 16th amendment authorizes Congress to tax unrealized sums without apportionment among the states.
The employee retention credit (ERC) continues to be a topic of conversation amongst taxpayers and their trusted advisers. Now that the IRS has placed an immediate moratorium on processing new claims to at least the end of 2023, additional considerations and challenges have manifested.
Justin Elanjian, CPA, Managing Director — Disputes, Claims & Investigations, Stout, chats with April Walker, CPA, CGMA, Lead Manager — Tax Practice & Ethics, AICPA & CIMA, and shares best practices for navigating the current ERC environment.
What you’ll learn in this episode
- Current ERC developments and how Justin is assisting his clients (0:50)
- Tips for taxpayers who have already claimed the ERC (4:55)
- How to advise clients contemplating withdrawing their claim (10:31)
- Advice for helping clients that have not yet filed for the ERC (16:22)
- Statute of limitation issues and recommendations to consider (19:50)
- Office of Professional Responsibilities (OPR) guidance around professional responsibilities around claims (26:23)
- What Justin is seeing in ERC examinations (33:05)
- Final thoughts (41:34)
- A page from Justin’s travel journal (43:45)
Related resources
- ERC guidance and resources — The rules to be eligible to take this refundable payroll tax credit are complex. This AICPA resource library will help you understand both the retroactive 2020 credit and the 2021 credit.
- ERC suspended: What happens next | Tax Section Odyssey — October 16 has sunset. Tune in to this podcast to hear fellow CPA practitioner Brandon Lagarde’s experience with the 2023 extension season and what to expect in 2024.
- Employee Retention Credit (ERC): Fact or Fiction? — Use this guide to educate yourself and others on common misconceptions surrounding the ERC.
- Employee Retention Credit Decision Tree — Download the ERC decision tree to help you with various decision points when working with clients to protect yourself/your firm from significant risk.
IRS resources
- IR-2023-169 — IRS news release on Sept. 14, 2023, ordering the immediate stop to new ERC claim processing.
- IRS ERC resource center — IRS hub for ERC information, including links to guidance, FAQs and the latest news.
- ERC eligibility checklist: Help understanding this complex credit — IRS chart is used to help taxpayers figure out if they may be eligible for the credit. Use this chart if you are considering claiming the credit or have already submitted a claim to the IRS.
October 16 is in the rearview mirror. Brandon Lagarde, CPA, JD, LLM, Partner — EisnerAmper, chats with April Walker, CPA, CGMA, Lead Manager — Tax Practice & Ethics, AICPA & CIMA, to review what went well during the extension tax season and what to look forward to in 2024.
What you’ll learn in this episode
- 2023 tax extension season highlights (0:58)
- Challenges and concerns to think about for 2024 (3:05)
- What’s keeping Brandon up at night (7:30)
- Sneak peek of the National Tax & Sophisticated Tax Conference (10:13)
- Final thoughts (14:24)
- A page from Brandon’s travel journal (15:35)
Related resources
- AICPA & CIMA National Tax & Sophisticated Tax Conference 2023 — This premier conference provides tax experts with the latest updates and information on new regulations. Your team will hear from IRS executives on current challenges and opportunities. Use promo code NTA150 at checkout to save $150 (exclusions apply).
- Annual Tax Compliance Kit — Engagement letters, organizers, checklists and practice guides help you manage your tax season workflow and excel as a tax and financial planning adviser.
- Tax Season resource library — With constant changes to the tax landscape, being prepared for tax season is critical for success. Set yourself up for a smoother filing season by tapping into the wealth of AICPA and Tax Section resources.
Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.
This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home base for staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you’re not already a member, consider joining this prestigious community of your tax peers. You’ll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.
The tax profession offers a myriad of potential paths to a successful, satisfying and rewarding career. On this episode, listen in as Will Weatherford, CPA, Managing Director — Transaction Advisory Services, Forvis, and Teri Hanson, Managing Director — Alvarez & Marsal Tax, LLC, share their perspectives of what it’s like to be in the mergers and acquisitions (M&A) tax niche from both a federal and state perspective.
What you’ll learn in this episode
- A day in the life of an M&A tax professional (0:58)
- Steps when starting an engagement (4:20)
- Red flags and lessons learned (9:24)
- Saving the day (12:02)
- Reflections — past and future (16:31)
- Career drivers (17:14)
- Pages from Will and Teri’s travel journals (21:18)
AICPA resources
- Salt Roadmap and Resource Center — Browse the reference library for the latest guidance and tools to address your state and local tax needs. Navigate to the interactive U.S. map to reference taxes imposed, tax rates, due dates, tax forms and more. View the SALT resources index for additional resources by topic.
- 2022 State Tax Nexus Guide — Learn about state tax nexus including the many types of nexus (affiliate, economic, click-through, cookie, etc.), the physical presence standard and more.
- 2022 State Tax Nexus Checklist — Access a comprehensive checklist about state tax nexus considerations involving income, franchise, sales and use taxes.
- 6 reasons an S corporation wouldn’t need a PLR | Tax Section Odyssey — On this podcast episode, Tony Nitti, CPA, Partner — National Tax, EY discusses Rev. Proc. 2022-19, which provides procedures to allow S corporations and their shareholders to resolve frequently encountered issues without requesting a PLR.
- Wayfair Client Notification Letter — The U.S. Supreme Court ruling in South Dakota v. Wayfair, Inc. opens the door for possible economic nexus issues. Use this letter to initiate client planning.
Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.
This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home base for staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you’re not already a member, consider joining this prestigious community of your tax peers. You’ll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.
On Sept. 14, 2023, in release IR-2023-169, the IRS suspended the processing of new ERC claims to combat the prevalent fraud occurring. These measures will help to protect small businesses and aim to stop fraud by promoters of ERC mills.
In this episode, Kris Esposito, Director — Tax Policy & Advocacy, AICPA & CIMA, joins April Walker, CPA, CGMA, Lead Manager — Tax Practice & Ethics, AICPA & CIMA, to discuss this important news development and break down the details of the announcement.
What you’ll learn in this episode
- Highlights of the announcement (1:24)
- How to find if submitted claims have been processed (3:53)
- When will recently submitted claims be processed? (4:41)
- Number of claims currently in the audit process (5:45)
- Client talking points (6:22)
- Available resources (7:38)
- Kris’ final thoughts (9:07)
AICPA resources
- ERC guidance and resources — The rules to be eligible to take this refundable payroll tax credit are complex. This AICPA resource library will help you understand both the retroactive 2020 credit and the 2021 credit.
- Employee Retention Credit (ERC): Fact or Fiction? — Use this guide to educate yourself and others on common misconceptions surrounding the ERC.
- Employee Retention Credit Decision Tree — Download the ERC decision tree to help you with various decision points when working with clients to protect yourself/your firm from significant risk.
IRS resources
- IR-2023-169 — IRS news release on Sept. 14, 2023, ordering the immediate stop to new ERC claim processing.
- IRS ERC resource center — IRS hub for ERC information, including links to guidance, FAQs and the latest news.
- Employee Retention Credit Eligibility Checklist: Help understanding this complex credit — This IRS question-and-answer chart is used to help taxpayers figure out if they may be eligible for the credit. Use this chart if you are considering claiming the credit or have already submitted a claim to the IRS.
Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.
This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home base for staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you’re not already a member, consider joining this prestigious community of your tax peers. You’ll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.
In this episode, Rudy Rudolph, Executive AICPA Risk Advisor — AON, and April Walker, CPA, CGMA, Lead Manager — Tax Practice & Ethics, AICPA & CIMA, discuss how data breaches can cause acute and lasting issues to victims.
Small businesses are often easy targets for cyber criminals because they typically have less security in place than larger companies. A customized cybersecurity insurance policy can help mitigate risks and provide coverage in an evolving market to protect your organization.
What you’ll learn in this episode
- Questions companies need to ask about cyber security insurance (0:59)
- The most common types of cyber attacks (3:56)
- Usual misconceptions about cybersecurity (6:14)
- Types of costs that cyber insurance covers (8:37)
- Items not generally covered by cybersecurity insurance (11:12)
- Insurance consequences of not following your own cybersecurity policies (13:27)
- Rudy’s final thoughts (15:35)
- A page from Rudy’s travel journal (17:23)
AICPA resources
- Best practices for data security and cybersecurity incident mitigation — Learn about general, preventative and reactive data security tips to implement to keep data protected from identity theft.
- Cyber insurance solutions | AON — AON’s brokerage team understands the risks and how to arrange coverage in an evolving market. It’s not one-size-fits-all, so AON teams with you to create a custom cyber insurance policy fit for your organization.
- Cybersecurity Lab — Building a nimble cybersecurity response plan | Tax Section Odyssey — In this podcast, Ashley Grover, Cybersecurity Threat Intelligence Analyst — Sylint, discusses how the cyber threat landscape continues to change rapidly. Keeping up with the latest cybersecurity trends is vital to not fall victim to attacks and data theft.
- Gramm-Leach-Bliley Act (GLBA) Written Information Security Plan Template — The GLBA Act requires financial institutions to have a written information security plan. Use this template to document your firm’s policies.
- Identity Theft Checklist | Tax Identity Theft Toolkit — Provide this checklist to clients to help them appropriately and efficiently address identity theft issues and access additional resources.
Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.
This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home base for staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you’re not already a member, consider joining this prestigious community of your tax peers. You’ll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.
In this episode, Mike Whitmore, CPA, Shareholder — HMA CPA, a member of the AICPA Tax Practice Management Committee, chats with April Walker, CPA, CGMA, Lead Manager — Tax Practice & Ethics, AICPA & CIMA, about a checklist of items to consider when in the market for acquiring a CPA firm. He highlights red flags to look out for and green lights that signal a firm is a “go” for acquisition, and what due diligence is needed to ensure the perfect fit.
What you’ll learn in this episode
- The most crucial due diligence aspect when shopping for a CPA firm (2:08)
- Ideal time commitment you should dedicate to the due diligence stage (7:52)
- Red flags to watch out for (9:43)
- Green lights to follow (13:00)
- Lessons learned and a real-life example (16:07)
- A page from Mike’s travel journal (18:54)
AICPA resources
- Practice Management & Professional Standards — The AICPA Tax Section provides the guidance and tools you need to manage a successful tax practice and maintain the highest level of ethical standards in tax.
Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.
This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home base for staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you’re not already a member, consider joining this prestigious community of your tax peers. You’ll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.
In this episode two members of the AICPA Virtual Currency and Digital Assets Tax Task Force (VCDATTF), Nik Fahrer, CPA, Senior Manager, National Tax Professional Standards Group — FORVIS, and Robert Tobey, CPA, Partner — REID CPAs, LLP, share their expertise with April Walker, CPA, CGMA, Lead Manager — Tax Practice & Ethics, AICPA & CIMA, on how to vet potential clients with digital asset activities, including questions to ask, as well as how to gain more expertise in this evolving field.
What you’ll learn in this episode
- Expertise tax practitioners need to be proficient in the digital asset field (0:55)
- Best places and ways to gain digital asset tax expertise (3:00)
- Examples of processes and procedures to set in place before accepting a client with digital asset activities (5:59)
- Record keeping responsibilities (14:05)
- Red flags (15:04)
- Highlights from Rev. Rul. 2023-14 (16:41)
- Current projects of the VCDATTF (18:36)
- Final thoughts (20:48)
Related resources
- Frequently asked questions on virtual currency transactions — IRS webpage explaining virtual currency questions and answers.
AICPA resources
- Digital assets and virtual currency tax guidance and resources — Sharpen your tax knowledge on digital assets and understand the tax complexities and strategies involved with virtual currency and cryptocurrency. This hub is your go-to library for AICPA guidance and resources as well as current legislative and IRS initiatives and projects the VCDATTF is monitoring.
- Crypto Loss Tax Reporting: Fact or Fiction — With the prevalence of recent virtual currency exchange bankruptcies and digital asset volatility, taxpayers may have misconceptions on reporting tax losses.
- Rev. Rul. 2023-14 — The ruling provides that cash-method taxpayers who stake cryptocurrency native to a proof-of-stake blockchain and receive additional units of cryptocurrency when validation occurs (i.e., validation rewards) must include the fair market value (FMV) of proof-of-stake validation rewards in their gross income for the tax year in which they gain dominion and control over the validation rewards.
- AICPA Comments on the IRS Draft 2023 Forms 1040, 1065, 1120, and 1120-S Digital Asset Question — The AICPA submitted comments on the digital asset question that is first appearing on the draft 2023 Forms 1065, U.S. Return of Partnership Income (version dated June 23, 2023); 1120, U.S. Corporation Income Tax Return (version dated June 2, 2023); and 1120-S, U.S. Income Tax Return for an S Corporation (version dated June 22, 2023). The AICPA also commented on the draft 2023 Form 1040, U.S. Individual Income Tax Return (version dated June 22, 2023), digital asset question.
- AICPA Comments on Non-Fungible Tokens – Notice 2023-27 — The AICPA submitted comments on Notice 2023-27 on the treatment of certain non-fungible tokens (NFTs) as collectibles. The AICPA is requesting that Treasury and the IRS provide further guidance on the issues suggested in our comments.
Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.
This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home base for staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you’re not already a member, consider joining this prestigious community of your tax peers. You’ll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.
In this episode, Tim O'Neill, CPA, Senior Tax Manager — Wipfli LLP, joins April Walker, CPA, CGMA, Lead Manager — Tax Practice & Ethics, AICPA & CIMA, live from ENGAGE 2023 to discuss the current environment for recruitment and retention of employees in tax and how to build deeper connections with staff to help them feel more invested in their organizations.
What you’ll learn in this episode
- Strategies for employee retention and engagement (1:01)
- Differences between a “manager” and a “leader” (2:48)
- What it means to prioritize outcomes vs. outputs (5:04)
- The notion of no more timesheets (7:20)
- Final thoughts (8:05)
- A page from Tim’s travel journal (9:31)
Related resources
- Practice Management & Professional Standards — The AICPA Tax Section provides the guidance and tools you need to manage a successful tax practice and maintain the highest level of ethical standards in tax.
- Reimagining your tax practice — Tackle today’s top practice management issues with insights and tips from pioneers in the tax community. The Reimagining Your Tax Practice webcast series will tackle these issues and more in a Q&A roundtable series with tax pioneers from the profession.
Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.
This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home base for staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you’re not already a member, consider joining this prestigious community of your tax peers. You’ll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.
In this episode Tony Nitti, CPA, Partner — National Tax, EY, joins April Walker, CPA, CGMA, Lead Manager — Tax Practice & Ethics, AICPA & CIMA, live from ENGAGE 2023 to discuss S corporations and Rev. Rul. 2008-18, delving into S corporation reorganizations.
What you’ll learn in this episode
- Overview and applicability (1:56)
- Hypothetical example (3:14)
- Review of Rev. Proc. 2022-19 and fixes to prevent invalid S elections (8:58)
- The extra step when an S Corp owns 100% of a QSub (15:33)
- Relevant articles from The Tax Adviser (24:40)
- A page from Tony’s travel journal (24:56)
Related resources
- Rev. Rul. 2008-18 — Postulates two situations in which an S corporation becomes a qualified subchapter S subsidiary (QSub) of a newly formed corporation that will qualify as an F reorganization. The ruling also provides new guidance on the proper employer identification number (EIN) to be used by the entities in each situation.
- Private equity and F reorganizations involving S corporations — The Tax Adviser, Sept. 1, 2020
- 6 reasons an S corporation wouldn’t need a PLR | Tax Section Odyssey — Rev. Proc. 2022-19 provides procedures to allow S corporations and their shareholders to resolve frequently encountered issues without requesting a PLR.
Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.
This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home base for staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you’re not already a member, consider joining this prestigious community of your tax peers. You’ll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.
In this episode Jason Staats, CPA, MBA, Firm Runner and Content Creator — Realize, joins April Walker, CPA, CGMA, Lead Manager — Tax Practice & Ethics, AICPA & CIMA, live from ENGAGE 2023 to highlight the fast-paced world of transformational technology and its prominent impact on the accounting profession. He explores how emerging technologies including artificial intelligence (AI) are not only changing the way things are done but also redefining the rules of the game.
What you’ll learn in this episode
- Getting started with cutting-edge technology (1:30)
- Tips from a practice management standpoint (3:17)
- Ways firms can incorporate AI such as ChatGPT (5:26)
- Tips for memo and email enhancements (8:28)
- The optimal time to incorporate/upgrade technology (10:05)
- Jason’s parting thoughts (12:09)
- A page from Donny’s travel journal (12:56)
Related resources
- Jason.CPA YouTube channel — Jason Staats talks about how to build calm, sustainable accounting firms.
- The digital download — ChatGPT, AI and data security | Tax Section Odyssey — AI is transformational for the tax profession. In this Tax Section Odyssey episode Ashley Francis, CPA, shares her experience with ChatGPT and BingAI.
- AICPA Technology Library — Technology is evolving at an unprecedented speed and affects each of us in almost all facets of life and business. This hub provides you with access to the latest technology information, tools and resources to best serve your clients or support the organization where you work.
Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.
This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home base for staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you’re not already a member, consider joining this prestigious community of your tax peers. You’ll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.
The future of accounting continues to require more automated processes and less transactional work, and accountants will be expected to lead the charge. More and more, accountants rely on cloud software and artificial intelligence and boost their soft skills and leadership prowess to excel in the profession.
Additionally, with cybersecurity threats on the rise, being proactive before a cyber incident happens is key — understanding potential threats, identifying vulnerabilities and planning around security optimization. Adherence to cybersecurity frameworks will continue to be important, and financial institutions must comply with the Safeguards Rule as set forth by the Federal Trade Commission (FTC). Although updates to the Safeguards Rule are set to take effect on June 9, 2023, the requirement for each financial institution to implement an information security program has been in effect since May 23, 2003.
Listen in as Donny C. Shimamoto, CPA/CITP, CGMA, Owner — IntrapriseTechKnowlogies LLC, chats with April Walker, CPA, CGMA, Lead Manager — Tax Practice & Ethics, AICPA & CIMA, on these topics and highlights the latest with regards to written information security plans as well as learning, networking and research opportunities available to practitioners.
What you’ll learn in this episode
- Takeaways from the recent webcast: Tax Practice Quarterly: Cutting-Edge Cybersecurity in 2023 (1:20)
- Q&A available with the webcast archive (3:53)
- Preview of Donny’s session at the upcoming ENGAGE 2023 conference (4:41)
- Center for Accounting Transformation research surveys (8:03)
- A page from Donny’s travel journal (13:00)
Related resources
- ENGAGE 2023 conference — ENGAGE 23 will help you evolve by turning the pace of change from a challenge to an opportunity. With nine tracks of expert content, you’ll gain exclusive insights, develop practical skills and walk away with tangible guidance to evolve at your own pace. Join us in June at the ARIA in Las Vegas or live online.
- Gramm-Leach-Bliley Act Information Security Plan Template — The Gramm-Leach-Bliley Act requires financial institutions to have a written information security plan. Use this template to document your firm’s policies.
- Webcast archive: Tax Practice Quarterly: Cutting-Edge Cybersecurity in 2023 — Jeffrey Birnbach, Senior Partner & Managing Director — Sylint, and Donny C. Shimamoto, CPA/CITP, CGMA, Founder & Managing Director — IntrapriseTechKnowlogies LLC, provided practical advice on mitigating cybersecurity incidents and protecting data privacy in this recent webcast from May 2023. Center for Accounting Transformation is conducting research on two important topics. Voice your opinions in the Advisory Services Research Survey and Staffing Strategies Research Survey.
Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.
This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home base for staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you’re not already a member, consider joining this prestigious community of your tax peers. You’ll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.
Starting Jan. 1, 2024, most companies created in or registered to do business in the U.S. will need to report information on their beneficial owners to the Financial Crimes Enforcement Network (FinCEN) under the Corporate Transparency Act (CTA). In 2024, 32.6 million entities should submit their initial BOI reports with approximately 5 million initial BOI reports filed each year thereafter. The AICPA, as part of a coalition, calls attention to the new BOI reporting requirements to taxpayers and practitioners.
Listen in as Art Auerbach, CPA and Andy Mattson, CPA, Tax Partner — Moss Adams LLP, delve into the 5 Ws (who, what, where, when and why) of BOI reporting with April Walker, CPA, CGMA, Lead Manager — Tax Practice & Ethics, AICPA & CIMA to help raise awareness that is critically needed.
What you’ll learn in this episode
- Why is BOI important? (0:54)
- Who must file and who is exempt? (2:55)
- When must entities file? (8:01)
- What are the reporting obligations? (11:04)
- Where to file (what agency) and other concerns, including the potential for unauthorized practice of law? (15:00)
- Resources to help (21:59)
- Final thoughts (22:32)
- A page from Art and Andy’s travel journals (24:56)
Related resources
- AICPA BOI reporting resources — Access resources (FAQs, summary of data fields, advocacy efforts, etc.) to learn about the BOI reporting requirement under FinCEN’s CTA.
- FinCEN BOI reporting resources — FinCEN resources on reporting requirements, fact sheets and FAQ.
Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.
This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home base for staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you’re not already a member, consider joining this prestigious community of your tax peers. You’ll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.
Artificial intelligence (AI) is the simulation of human intelligence by machines, and the applications for use are rapidly increasing each day. Chatbots such as ChatGPT and BingAI are at the forefront of this movement, but Ashley Francis, CPA, Owner — The Franchise Group, PLLC, notes that more than 1,500 similar AI were released in the past week.
Listen in as Ashley shares more insights with April Walker, CPA, CGMA, Lead Manager — Tax Practice & Ethics, AICPA & CIMA, including how AI is positioned to transform the future of tax compliance.
What you’ll learn in this episode
- Why the time is ripe for AI and why it creates both excitement and anxiety (0:48)
- Other players on the scene besides ChatGPT (5:03)
- The more exciting implications of AI for tax practitioners (9:07)
- Is this just a fad? (13:52)
- Tips for getting started (16:29)
- How to create a helpful prompt (19:48)
- Data security concerns, legal and ethical concerns and tips for risk mitigation (26:18)
- A page from Ashley’s travel journal (30:05)
Related resources
- The Francis Group, PLLC — At The Francis Group, Ashley offers expert technical services and personalized service to sophisticated taxpayers and family entities with high net worth. Ashley can also be found on Twitter.
- AICPA & CIMA ENGAGE 2023 — June 5–8, 2023 (live onsite at Aria Resort & Casino, Las Vegas, NV, or online), will help you evolve by turning the pace of change from a challenge to an opportunity. With nine tracks of expert content, you’ll gain exclusive insights, develop practical skills and walk away with tangible guidance to evolve at your own pace.
- Technology resource center — Technology is evolving at an unprecedented speed and affects each of us in almost all facets of life and business. This hub provides you with access to the latest technology information, tools and resources to best serve your clients or support the organization where you work.
Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.
This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home base for staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you’re not already a member, consider joining this prestigious community of your tax peers. You’ll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.
April 18 marks the close of tax season 2023. This is a time for many practitioners to reflect on the past few months and decide what went well and what could be improved for future tax seasons ahead.
Nicole Davis, CPA, has one word to encapsulate this tax season. She also shares her wins and challenges along with solutions she implemented including the pizza tracker protocol and videos.
What you’ll learn in this episode
- Tax season 2023 defined in one word (1.24)
- Changes/improvements that made a difference (2.35)
- Advantages of using a tax process explainer video (5.25)
- The pizza tracker tool (8.05)
- Tax practice management software Nicole uses (10.55)
- Challenges and lessons learned (12.09)
- Nicole’s take on IRS service level (16.21)
- Final thoughts (18.01)
- A page from Nicole’s travel journal (20.15)
Related resources
- Tax season resources – With constant changes to the tax landscape, being prepared for tax season is critical for success. Set yourself up for a smoother filing season by tapping into the wealth of AICPA and Tax Section resources.
Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.
This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home base for staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you’re not already a member, consider joining this prestigious community of your tax peers. You’ll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.
The employee retention credit (ERC), established in 2020 by the Coronavirus Aid, Relief, and Economic Security (CARES) Act, P.L. 116-136, a refundable tax credit for businesses that paid employees while they were shut down due to the COVID-19 pandemic or had significant declines in gross receipts for the period between March 13, 2020, and Dec. 31, 2021, continues to be front and center on the minds of taxpayers and CPA practitioners. In response to requests from practitioners given the slew of ERC credit “mills,” the Office of Professional Responsibility (OPR) provided guidance on clients' claims for the ERC on returns prepared by others.
The OPR said in a bulletin that practitioners want to be sure that "they are meeting their Circular 230 professional responsibilities and the standards required to prepare and sign original tax returns, amended returns, or claims for refund" related to the ERC. The OPR administers and enforces Treasury Circular 230, Regulations Governing Practice Before the Internal Revenue Service (31 C.F.R. Part 10).
On this Tax Section Odyssey episode, April Walker, CPA, CGMA, Lead Manager — Tax Practice & Ethics, AICPA & CIMA, discusses the latest in the world of ERC with Chris Wittich, MBT, CPA, Partner — Boyum Barenscheer, and Dan Chodan, CPA, Partner — Trout CPA.
What you’ll learn in this episode
- Where things can go wrong in considering ERC eligibility (1.45)
- Red flags to watch out for when considering third-party ERC providers (5.00)
- IRS audit procedures and examinations of the ERC, including real-time information document request (IDR) examples (7.33)
- The OPR bulletin, Circular 230 and Statements on Standards for Tax Services (SSTSs) (12.44)
- Level of “auditing” a tax practitioner needs to do to examine third-party ERC calculations (17.56)
- The importance of ERC documentation and how to put numbers behind examples to hit home with clients (23.07)
- Final thoughts (29.57)
Related resources
- Employee retention credit guidance and resources — The rules to be eligible to take this refundable payroll tax credit are complex. This resource library will help you understand both the retroactive 2020 credit and the 2021 credit.
- Professional Responsibility and the Employee Retention Credit — Alert wherein ORP advised that to fulfill their professional obligations to clients and to tax administration, practitioners — attorneys, CPAs, and enrolled agents — must meet the applicable provisions of Circular 230.
- Statements on Standards for Tax Services (SSTSs) — Tax standards are the foundation for validating reputational integrity in the tax profession. These SSTSs are the enforceable tax practice standards for members of the AICPA.
- Treasury Department Circular No. 230 — Guidance, information, practice aids and other resources related to Circular 230, which govern a CPA’s practice before the IRS.
Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.
This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home basefor staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you’re not already a member, consider joining this prestigious community of your tax peers. You’ll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser
Natural disasters create a great deal of anxiety for all involved. Disaster tax relief in the form of tax return delays and casualty loss provisions are meant to ease some of that anxiety, but uncertainty surrounding some of the relief can cause confusion.
On this Tax Section Odyssey episode, April Walker, CPA, CGMA, Lead Manager — Tax Practice & Ethics, AICPA & CIMA, goes behind the scenes with Jerry Schreiber, CPA, partner at Schreiber & Schreiber in Louisiana, dubbed the “Master of Disaster,” and Adam Silva, senior manager at Crowe LLP.
What you’ll learn in this episode
- Distinction between a “qualified disaster loss” and a disaster loss (1:02)
- Refund claims when they occur during a postponement of filing due dates (5:00)
- How to indicate to the IRS that a return is being filed under disaster relief (9:47)
- AICPA advocacy efforts related to disaster relief (13:41)
Related resources
- Lookback period extended for refunds related to pandemic postponements, The Tax Adviser, March 1, 2023
- Disaster tax relief guidance and resources — Provides resources and guidance regarding the disaster relief process as well as answers to frequently asked questions (FAQs) concerning disaster, casualty or theft losses and how these events may impact a client’s tax returns and business affairs.
- Automatic postponement date lookback period for allowing tax credits or refunds for all disasters — AICPA submitted comments to Treasury and IRS requesting that the IRS apply the relief given in Notice 2023-21 regarding the lookback period for allowing tax credits or refunds to all federally declared disasters.
- Road to recovery — Primer on disaster tax relief | Tax Section Odyssey — The “Master of Disaster,” Jerry Schreiber, CPA and Amy Miller, JD, CPA from the AICPA discuss tax-related disaster relief and resources to aid in recovery in this podcast episode.
- AICPA tax season library — With constant changes to the tax landscape, being prepared for tax season is critical for success. Set yourself up for a smoother filing season by tapping into the wealth of AICPA and Tax Section resources.
Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.
This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home basefor staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you’re not already a member, consider joining this prestigious community of your tax peers. You’ll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.
Another busy season is upon the profession. With several tumultuous tax seasons in the recent past, the 2023 tax filing season is shaping up to be relatively normal, a welcomed changed for taxpayers, tax practitioners and the IRS. Normalcy doesn’t exactly equate to status quo, however. There are new rules, new guidance releases as well as established items with newfound scrutiny that practitioners and taxpayers need to be aware of.
On this Tax Section Odyssey episode, April Walker, CPA, CGMA, Lead Manager — Tax Practice & Ethics, AICPA & CIMA, conducts a tax season pulse check with Annette Nellen, CPA, CGMA, Esq., Tax Professor — MST Program at San Jose State University, and a past Chair of the AICPA Tax Executive Committee, touching on some key topics in the tax arena that are currently noteworthy.
What you’ll learn in this episode
- Latest in virtual currency/digital assets and the most recent AICPA comment letter (1.02)
- Confusion around “worthless” virtual currency (4.17)
- Practical discussion on the Form 1099-K and the transition year (13.14)
- Change in the bonus depreciation percentage for 2023 (23.31)
- Reminders about the accumulated earnings tax and personal holding company tax (25.18)
- ChatGPT (29.32)
- A page from Annette’s travel journal (34.02)
Related resources
- AICPA comments for IRS consideration on AICPA proposed FAQs on the new digital assets question on the 2022 Form 1040 — AICPA suggested for IRS consideration proposed frequently asked questions (FAQs) to assist taxpayers in responding to the new digital asset question on the 2022 Form 1040, U.S. Individual Income Tax Return and discussed in the instructions. Also see AICPA press release on these comments.
- AICPA tax season library — With constant changes to the tax landscape, being prepared for tax season is critical for success. Set yourself up for a smoother filing season by tapping into the wealth of AICPA and Tax Section resources.
- ChatGPT and the tax law — Official blog post by Professor Nellen on the 21st Century Taxation website.
- Chief Counsel Advice (CCA) 202302011 — Addresses the applicability of Sec. 165 to cryptocurrency that has declined in value.
- Frequently asked questions about Form 1099-K – Links to frequently asked questions about the Form 1099-K including general information, reporting requirements and filing the form.
- Internal Revenue Manual (IRM) 4.10.13.2 – IRM on accumulated earnings Tax (IRC 531)
- IRS Practice & Procedure — Browse the latest resources to help with IRS tax matters including news, guidance and tools.
- Reminder to answer the digital asset question on the 2022 tax return — In IR-2023-12, Jan. 24, 2023, the IRS reminded taxpayers that they must again answer a digital asset question and report all digital asset-related income when they file their 2022 federal income tax return, as they did for fiscal year 2021. The term "digital assets" has replaced "virtual currencies," a term used in previous years.
- U.S. Federal Tax law Hierarchy — Understand the weight of taxing authorities from highest to lowest for use in determining whether a source can be relied upon for a tax position.
Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.
This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home basefor staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you’re not already a member, consider joining this prestigious community of your tax peers. You’ll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.
Rev. Proc. 2022-19 appears in the Internal Revenue Bulletin 2022-41 for Oct. 11, 2022, and provides taxpayer assistance procedures to allow S corporations and their shareholders to resolve frequently encountered issues without requesting a private letter ruling (PLR) issued by the Internal Revenue Service (IRS).
On this Tax Section Odyssey episode, April Walker, CPA, CGMA, Lead Manager — Tax Practice & Ethics, AICPA & CIMA, discusses the revenue procedure in detail with Tony Nitti, CPA, Partner — National Tax, EY. Tony combs through the circumstances in which a PLR will not be available or will not ordinarily be issued. In these cases, the IRS does not have a concern with the validity of the entity’s S corporation election or there are other avenues to address the matter outside of the PLR process.
What you’ll learn in this episode
- Setting the stage for Rev. Proc. 2022-19 (0.49)
- Generalization of the frequently encountered issues provided in Rev. Proc. 2022-19 (15.52)
- Principal purpose motivation (16.55)
- Disproportionate distributions (22.14)
- Missing shareholder consent (27.53)
- Missing an administrative letter relating to the IRS’s acceptance of an election (33.28
- Federal income tax return filing that is inconsistent with the entity’s S corporation status (34.20)
- Non-identical governing provisions (35.24)
- A word of caution (39.25)
- Tony’s final thoughts (43.57)
Related resources
- Rev. Proc. 2022-19 — Published in Internal Revenue Bulletin No. 2022-41 on Oct. 11, 2022.
- IRS Practice & Procedure — Browse the latest resources to help with IRS tax matters including news, guidance and tools.
- AICPA tax season library — With constant changes to the tax landscape, being prepared for tax season is critical for success. Set yourself up for a smoother filing season by tapping into the wealth of AICPA and Tax Section resources.
Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.
This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home basefor staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you’re not already a member, consider joining this prestigious community of your tax peers. You’ll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.
ESG is becoming an increasingly familiar acronym, standing for environmental, social and governance. Similarly, ESG analysis has become an increasingly important part of the tax compliance process and, for CPAs, it’s a key area to understand as part of a taxpayer’s overall financial snapshot.
On this Tax Section Odyssey episode, April Walker, CPA, CGMA, Lead Manager — Tax Practice & Ethics, AICPA & CIMA, chats with April Little, CPA, Partner, Tax Risk & Advisory Services — Grant Thornton, about the importance of ESG matters and why tax practitioners need to be part of the conversation.
What you’ll learn in this episode:
- High level introduction to ESG and sustainability topics (0.54)
- Why accountants are (and should be) interested in the ESG area (6.35)
- Why all-sized firms, including smaller firms, need to get up to speed and focus on ESG (9.02)
- Where tax specifically fits in with ESG (11.05)
- A deeper dive into the “g” of ESG — governance (13.47)
- What companies are currently doing around ESG and tax risk management (14.59)
- A page from April Little’s travel journal (18.06)
Related resources:
- ESG and taxation: A necessary part of a company’s strategic objectives, The Tax Adviser, Oct. 6, 2022
- Key tax provisions in the Senate reconciliation bill, The Tax Adviser, Oct. Aug. 8, 2022
- Energy Tax Credits And ESG Client Letter — Inform your clients about ESG investing and energy tax credits for electric vehicles and residential energy efficiency
- Inflation Reduction Act Energy Credits Chart — Learn more about the energy credits related to home improvements and electric vehicles from the Inflation Reduction Act.
- Tax Policy & Regulatory Change — Stay informed on the latest in tax legislation and tax policy developments. To support members and the profession, we have collated relevant guidance, resources and learning opportunities — and will continue to add new materials as tax law changes unfold.
Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.
This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home basefor staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you’re not already a member, consider joining this prestigious community of your tax peers. You’ll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.
The Tax Cuts and Jobs Act (TCJA), P.L. 115-97, imposed a $10,000 limitation on individual taxpayers for the deduction of state and local taxes (SALT) for tax years 2018 through 2025. In response, many states enacted laws allowing (or mandating) passthrough entities (PTEs) to pay the taxes at the entity level instead.
In November of 2020, the IRS issued Notice 2020-75, which clarified that partnerships and S corporations may deduct their SALT payments at the entity level in computing nonseparately stated taxable income or loss. The notice also indicated that the IRS intends to issue proposed regulations to this effect.
While electing a PTE tax election can be very beneficial overall, certain aftereffects — while small alone — when stacked together, may reach a materiality level where it should be second-guessed.
On this Tax Section Odyssey episode, David Kirk, CPA, CFP, LLM, Private Tax Leader, National Tax — EY, discusses with April Walker, CPA, CGMA, Lead Manager — Tax Practice & Ethics, AICPA & CIMA, several concerns that could lead to reconsideration of making a PTE election.
What you’ll learn in this episode
- S corporation issues (3.08)
- State crediting complications (11.54)
- State governments sharing in a “piece of the pie” (14.24)
- Alternative minimum tax (AMT) matters (16.11)
- Grantor trusts considerations (20.10)
- Non-grantor trusts concerns (22.48)
- Thoughts on refunds (25.00)
- Final thoughts (28.29)
Related resources
- SALT Roadmap — State and Local Tax Guide — Navigate the complex world of state and local taxes with a compilation of information and quick links to additional guidance and references. Use the map to access information on the types of state and local taxes imposed, tax rates, nexus, passthrough entity (PTE) tax elections and mandates, due dates, government websites and CPA society information. Also quickly determine commonly used state and local tax forms and easily locate versions and their instructions.
- State and Local Tax Advocacy Resources — This page provides information and documents created by the AICPA State and Local Tax Technical Resource Panel (SALT TRP) on state-level tax advocacy issues affecting tax professionals.
- State implications with the PTE tax | Tax Section Odyssey — States continue to look at the PTE tax to sidestep the federal $10,000 SALT cap deduction limitation following the IRS’s Notice 2020-75.
- Questions to consider before electing into a PTE tax, The Tax Adviser, Sept. 1, 2022.
- Map of states with adopted or proposed PTE level tax — AICPA downloadable map open to everyone.
- Links to PTE taxes states' legislation and tax authorities' information and guidance — AICPA downloadable document open to everyone.
- Taxpayer and practitioner considerations for whether to elect into a state PTE tax — AICPA downloadable document open to everyone.
Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.
This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home basefor staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you’re not already a member, consider joining this prestigious community of your tax peers. You’ll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.
In December 2022, the IRS posted a revised draft version of the 2022 Partnership Instructions for Schedule K-2 and K-3 (Form 1065) and a similar revised version of the 2022 S Corporation Instructions for Schedules K-2 and K-3 (Form 1120-S). They were subsequently finalized.
On this Tax Section Odyssey episode, April Walker, CPA, CGMA, Lead Manager — Tax Practice & Ethics, AICPA & CIMA along with Tim Chan, Managing Director, Washington National Tax — Passthroughs — KPMG LLP and David Sites, National Managing Partner, International Tax Services — Grant Thornton LLP, sift through the changes between the draft instructions and dive into the particulars taxpayers need to know.
What you’ll learn in this episode
- Who needs to file the Schedules K-2 and K-3 (2.41)
- Domestic filing exception in the December 2022 draft instructions (5.06)
- The two-prong test (5.47)
- What no or limited foreign activity means (6.46)
- How to report foreign-source income (8.33)
- Requirement that all direct partners are US citizens/resident aliens (9.26)
- Partner or shareholder notification (11.20)
- Requirements for the schedules and the 1-month date (13.14)
- Form 1116, Foreign Tax Credit (Individual, Estate, or Trust), exception (18.21)
- Risks and penalties associated with not completing or filing required schedules (22.55)
- Final thoughts (25.05)
Related resources
- IRS Schedules K-2 and K-3 guidance and resources — Access resources to advise clients on IRS Schedules K-2 and K-3, which are used to report items of international tax relevance from the operations of passthrough entities.
- Tax potpourri — Form 1099-K, Schedules K-2/K-3 and tax legislation | Tax Section Odyssey — Schedules K-2 and K-3 aim to standardize international tax information reporting to flow-through investors, yet challenges in practical implementation exist.
- K-2/K-3 — Making sense of new international passthrough reporting | Tax Section Odyssey — Listen to this podcast covering the new schedules and related past and future AICPA efforts.
Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.
This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home basefor staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you’re not already a member, consider joining this prestigious community of your tax peers. You’ll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.
The end of the year is upon us. While the hustle and bustle of the holidays and winter hibernation sets in, April Walker, CPA, CGMA, Lead Manager — Tax Practice & Ethics, AICPA & CIMA, fills you in on some quick updates about a few trending tax topics to keep you in the know, including Schedules K-2 and K-3, Form 1099-K, Payment Card and Third-Party Network Transactions and tax legislation developments
What you’ll learn in this episode
- Second draft of Form 1065 Schedules K-2 and K-3 instructions revise domestic filing exception (0.34)
- Continued concerns regarding the revised reporting threshold for Form 1099-K (6.13)
- Year-end legislation, including the potential for tax extenders (8.31)
Related resources
- AICPA Comments on Form 1099-K Reporting Threshold — The AICPA has deep concerns regarding the Form 1099-K reporting threshold that was lowered to $600 for 2022 and will lead to significant confusion in the tax system in the next several months.
- Form 1099-K — New lowered threshold for 2022 — New reporting requirements for Form 1099-K are effective for tax years beginning in 2022. Access information and tools to help you with the changes.
- IRS Schedules K-2 and K-3 guidance and resources — Access resources to advise clients on IRS Schedules K-2 and K-3, which are used to report items of international tax relevance from the operations of passthrough entities.
- JCX-1-22 (January 13, 2022) — The staff of the Joint Committee on Taxation has prepared a list of Federal tax provisions that expired in 2021 or are scheduled to expire in the future.
Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.
This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home basefor staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you’re not already a member, consider joining this prestigious community of your tax peers. You’ll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.
An engagement letter is an important written agreement that describes the business relationship and the types of services agreed upon by a client and a professional firm. The letter details the scope of the agreement, terms and costs and sets expectations for both sides of the arrangement.
In this Tax Section Odyssey episode, April Walker, CPA, CGMA, Lead Manager — Tax Practice & Ethics, Association of International Certified Professional Accountants, representing AICPA & CIMA, chats with Deb Rood, CPA, MST, CAN, Risk Control Consulting Director — CNA, about the importance of engagement letters and determines why a well-drafted engagement letter can help prevent a misunderstanding with a client from turning into an expensive liability claim.
What you’ll learn in this episode
- The necessity of engagement letters (0.57)
- Liability claims and engagement letters — the statistics (2.24)
- Specific understandings and agreements that should be included in an engagement letter (5.35)
- Timing and fee topics in engagement letters (7.32)
- Electronic engagement letters (10.44)
- Tips for those getting started on using engagement letters or for those that want to improve their processes (11.30)
- Resources, including those related to client terminations (13.44)
- A page from Deb’s travel journal (16.45)
AICPA resources
- 2022 engagement letters — The 2022 engagement letters are available for Tax Section members to download. These resources are part of the Annual Tax Compliance Kit — a library of engagement letters, client organizers, tax return checklists and practice guides to help you get ready for the next tax season.
- AICPA Member Insurance Program education and resources — Brought to you by AON, on this hub you can find articles, tips, calculators, checklists, webinars, letter samples and downloadable materials.
- Advice for when it's time to say goodbye (to clients) — On this Tax Section Odyssey episode, professionals discuss how ending a client relationship is a weighty decision for any CPA. Whatever the reasons are for the termination, disengage cleanly and timely.
- Rogue behavior: Risks your CPA firm should avoid — Deb Rood shares claim experience of the AICPA Professional Liability Insurance Program that demonstrates that rogue behavior, especially at the partner level, can lead to professional liability claims.
- Use of e-signatures for engagement documentation — The question of whether a client's electronic signature on engagement letters, management representation letters and other documents is acceptable is examined.
- Surviving tax season: Checklists to manage your risk — Access these interactive checklists to help you navigate tax season and manage your professional liability risk.
- Client Evaluation Tool — Use this tool to identify your firm’s better clients who deserve more of your time and attention.
- Client Termination Practitioner Checklist and Notification Letter — Terminate a client relationship by following these helpful practice management reminders and then formally communicate the termination to your client.
- Practice Management & Professional Standards — Browse tax practice management resources and guidance to help keep your firm performing at the optimal level.
Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.
This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home basefor staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you’re not already a member, consider joining this prestigious community of your tax peers. You’ll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.
Knowing the right time to end a client relationship can be tricky. No matter the reason for termination, managing the practical components plus the human emotions can be difficult.
In this Tax Section Odyssey episode, April Walker, CPA, CGMA, Lead Manager — Tax Practice & Ethics, Association of International Certified Professional Accountants, representing AICPA & CIMA, chats with Daniel Moore, CPA, Owner — D.T. Moore & Company, LLC, and Brandon LaGarde, CPA, JD, LLM, Director — Postlethwaite & Nettervile, about their perspectives on when and how to terminate a client relationship for a successful outcome for both parties.
What you’ll learn in this episode
- The first steps in this process (1.22)
- Tips and tools for ranking client relationships (3.40)
- Client Evaluation Tool from the Private Company Practice Section (PCPS) (5.46)
- Example of “buckets” of client relationship types (7.00)
- The next steps after the client evaluation process (13.16)
- Client termination letters (15.09)
- Should you explain the why to your clients? (18.23)
- Thoughts on referrals (20.45)
- Considerations from a firm administration standpoint (23.53)
- Final thoughts (27.22)
- A page from the guests’ travel journals (29.33)
AICPA resources
- Client Evaluation Tool — Use this tool to identify your firm’s better clients who deserve more of your time and attention.
- Client Termination Practitioner Checklist and Notification Letter — Terminate a client relationship by following these helpful practice management reminders and then formally communicate the termination to your client.
- Practice Management & Professional Standards — Browse tax practice management resources and guidance to help keep your firm performing at the optimal level.
- Reimagining Your Tax Practice Q&A roundtable sessions — Tackle today’s top practice management issues with a free interactive virtual Q&A roundtable series. Get innovative advice from our panel of experts on running an efficient, agile and profitable practice.
Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.
This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home basefor staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you’re not already a member, consider joining this prestigious community of your tax peers. You’ll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.
Managing a future-forward tax practice that is efficient, profitable and agile can be overwhelming. Meeting client expectations, streamlining workflows and handling staffing challenges are just some top-of-mind concerns. One resonating topic throughout this year, is also the debate regarding shifting the tax filing deadlines. Will they remain what they currently are or is there an appetite for change?
The AICPA Tax Practice Resilience Task Force, composed of a diverse group of tax professionals, are tackling these issues.
In this Tax Section Odyssey episode, April Walker, CPA, CGMA, Lead Manager — Tax Practice & Ethics, Association of International Certified Professional Accountants, representing AICPA & CIMA, chats with three members of the task force: Chris Wittich, MBT, CPA, Partner — Boyum Barenscheer, Kelly Rohrs, CPA, P.C., Owner — Kelly A. Rohrs, CPA, and Chet Buchman CPA, CVA, CEPA, CGMA, CNC, Managing Partner — Swindoll, Janzen, Hawk & Lloyd, LLC, to discuss the genesis of the group, topics of discussion amongst the members and future endeavors.
What you’ll learn in this episode
- Mission of the task force (1.00)
- Top practice management pain points (2.20)
- Tax filing deadlines (5.37)
- Task force members’ viewpoint on changing tax filing deadlines (9.33)
- What changing tax filing deadlines entails (12.06)
- Conclusion regarding advocating for tax filing deadline changes (16.24)
- Potential alternative fixes that could make a difference (18.57)
- Future ventures of the task force (24.41)
- Upcoming Zoom rountable sessions (31.12)
- Closing thoughts (32.12)
AICPA resources
- Practice Management & Professional Standards — Browse tax practice management resources and guidance to help keep your firm performing at the optimal level.
- Reimagining Your Tax Practice Q&A roundtable sessions — Tackle today’s top practice management issues with a free interactive virtual Q&A roundtable series. Get innovative advice from our panel of experts on running an efficient, agile and profitable practice.
Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.
This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home basefor staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you’re not already a member, consider joining this prestigious community of your tax peers. You’ll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.
Statements on Standards for Tax Services (SSTSs) are the foundation for validating reputational integrity in the tax profession. The SSTSs are the enforceable tax practice standards for members of the AICPA.
To keep pace with the evolving tax profession, the updates to the AICPA’s SSTSs will guide tax practitioners into the future, help them enhance their services and maintain their professional edge.
On this Global Ethics Day, in collaboration with the Journal of Accountancy podcast, April Walker, CPA, CGMA, Lead Manager — Tax Practice & Ethics, Association of International Certified Professional Accountants, representing AICPA & CIMA, is joined by David Holets, CPA, Partner – Crowe LLP, and Henry Grzes, CPA, Lead Manager — Tax Practice & Ethics, Association of International Certified Professional Accountants, representing AICPA & CIMA, to discuss the proposed revisions to the standards. Tune in to this special episode to learn more about the goals and timeline for these revisions and how you can provide your input.
What you’ll learn in this episode
- What are the SSTSs are and why are they being revised now? (0.54)
- What are the proposed changes? (2.36)
- Other subjects considered but not included in the revisions (6.13)
- SSTSs resources available (8.05)
- How to submit comments to the proposed revisions by the due date (9.35)
- Invitation to comment (ITC) (10.50)
- Discussion about quality management (13.19)
- Project timeline (15.25)
- Closing thoughts (17.37)
AICPA resources
- Statement on Standards for Tax Services (SSTSs)— Examine the toolkit for the enforceable tax practice standards for members of the AICPA.
- Proposed revisions to the AICPA tax standards (SSTS)— Access a resource hub that provides the objective of the SSTS updates, project timeline and answers to frequently asked questions (FAQs). Please complete the Comments Form or email feedback to SSTScomments@aicpa-cima.com by Dec. 31, 2022. Comments will be available for viewing on the AICPA’s website at the conclusion of the comment period.
- Circular No. 230 guidance — Title 31 United State Code section 330 was first published as the Horse Act of 1884 which granted the Secretary of the Treasury the authority to regulate agents representing claimants before the Treasury Department. Guidance was provided to these agents by the Treasury in the form of circulars.
- Professional responsibilities in data security for tax professionals — Safeguarding your client’s data is paramount. Use these laws and guidelines to help you help your clients.
Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.
This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home basefor staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you’re not already a member, consider joining this prestigious community of your tax peers. You’ll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.
Securing data against bad actors is crucial to the long-term success of a business. The average cost of a data breach in the U.S. in 2022 was over $9 million. With proper planning the risk can be mitigated, and even if an incident occurs, the cost and the time to recover can be significantly reduced.
In this Tax Section Odyssey episode, April Walker, CPA, CGMA, Lead Manager — Tax Practice & Ethics, Association of International Certified Professional Accountants, representing AICPA & CIMA, speaks with Ashley Grover, Cybersecurity Threat Intelligence Analyst — Sylint, on the latest trends in cybersecurity and how businesses can better protect themselves.
What you’ll learn in this episode
- Ashley’s role as a cyber threat analyst (0.33)
- Why businesses should take cyber threats seriously (2.20)
- Coordination with information technology (IT) department/providers (4.47)
- Safeguards rule contained in the Gramm-Leach-Bliley Act (7.53)
- Actions for an IT department to safeguard data (8.32)
- Current cyber threat trends and infiltration techniques (11.42)
- Specific recommendations for tax professionals (17.58)
- Remediation tips should a cybersecurity incident occur (19.38)
- What a cyber incident response would entail (21.20)
- Final thoughts (23.44)
- A page from Ashley’s travel journal (26.30)
AICPA resources
- Gramm-Leach-Bliley Information Security Plan Template — Tax preparers must implement security plans to protect client data. Failure to do so may result in an FTC investigation. Download and customize this template to document your firm’s policies.
- Professional responsibilities in data security for tax professionals — Safeguarding your client’s data is paramount. Use these laws and guidelines to help you help your clients.
- Tax Identity Theft Toolkit — CPA tax practitioners need to combat tax-related identity theft daily as it has become pervasive globally. Use this toolkit to tackle tax identity theft issues with your clients.
Other resources
- Cybersecurity and Infrastructure Security Agency (CISA) — CISA works with partners to defend against today’s threats and collaborates to build a more secure and resilient infrastructure for the future.
- National Institute of Standards and Technology (NIST) Cybersecurity Framework — A set of industry standards and best practices developed by NIST to help organizations manage cybersecurity risks.
- Center for Internet Security (CIS) Controls Framework — A prioritized set of actions to protect an organization and data from cyber-attack vectors.
Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.
This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home basefor staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you’re not already a member, consider joining this prestigious community of your tax peers. You’ll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.
The employee retention credit (ERC) has been an important lifeline to many struggling businesses impacted by the economic uncertainty around the COVID-19 pandemic.
The ERC has helped support many businesses through the onset of the COVID-19 pandemic and taxpayers, many with the help of their CPA practitioners, have faithfully filed for refund claims.
However, some taxpayers have been approached by firms or consultants who may promote an overly aggressive narrative with the promise that any and every business can qualify for the ERC. Taxpayers should be wary of such aggressive claims and be conscientious of how to mitigate risks when applying for the ERC.
In this Tax Section Odyssey episode, April Walker, CPA, CGMA, Lead Manager — Tax Practice & Ethics, Association of International Certified Professional Accountants, representing AICPA & CIMA, welcomes back Kristin Esposito, CPA, MST, Director — Tax Policy & Advocacy, Association of International Certified Professional Accountants, representing AICPA & CIMA, to discuss this top-of-mind topic.
What you’ll learn in this episode
- The current environment (1.27)
- Concerns with overly aggressive firms or consultants (2.48)
- Steps for taxpayers who have fallen victim (3.51)
- IRS guidance available and on the horizon around this topic (7.35)
- Impact on those who have filed legitimate claims (9.02)
- The latest in processing times for filed Form 941-X, Adjusted Employer's Quarterly Federal Tax Return or Claim for Refund, and the coordination with examination activities (10.19)
- AICPA advocacy efforts around ERC (12.20)
- A page from Kristin’s travel journal (15.29)
AICPA resources
- Employee retention credit guidance and resources — The rules to be eligible to take this refundable payroll tax credit are complex. This resource library will help you understand both the retroactive 2020 credit and the 2021 credit.
- Mythbust and maximize the employee retention credit | Tax Section Odyssey — Helping eligible clients successfully apply for and receive the ERC is a once-in-a-lifetime opportunity for CPAs according to Chris Wittich, MBT, CPA.
- ERC — What we know now | Tax Section Odyssey — Kristin Esposito, CPA, MST, addresses the much-anticipated employee retention credit (ERC) guidance released in August 2021 that answered many outstanding questions.
Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.
This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home basefor staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you’re not already a member, consider joining this prestigious community of your tax peers. You’ll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.
The employee retention credit (ERC) has been an important lifeline to many struggling businesses impacted by the economic uncertainty around the COVID-19 pandemic.
The ERC has helped support many businesses through the onset of the COVID-19 pandemic and taxpayers, many with the help of their CPA practitioners, have faithfully filed for refund claims.
However, some taxpayers have been approached by firms or consultants who may promote an overly aggressive narrative with the promise that any and every business can qualify for the ERC. Taxpayers should be wary of such aggressive claims and be conscientious of how to mitigate risks when applying for the ERC.
In this Tax Section Odyssey episode, April Walker, CPA, CGMA, Lead Manager — Tax Practice & Ethics, Association of International Certified Professional Accountants, representing AICPA & CIMA, welcomes back Kristin Esposito, CPA, MST, Director — Tax Policy & Advocacy, Association of International Certified Professional Accountants, representing AICPA & CIMA, to discuss this top-of-mind topic.
What you’ll learn in this episode
- The current environment (1.27)
- Concerns with overly aggressive firms or consultants (2.48)
- Steps for taxpayers who have fallen victim (3.51)
- IRS guidance available and on the horizon around this topic (7.35)
- Impact on those who have filed legitimate claims (9.02)
- The latest in processing times for filed Form 941-X, Adjusted Employer's Quarterly Federal Tax Return or Claim for Refund, and the coordination with examination activities (10.19)
- AICPA advocacy efforts around ERC (12.20)
- A page from Kristin’s travel journal (15.29)
AICPA resources
- Employee retention credit guidance and resources — The rules to be eligible to take this refundable payroll tax credit are complex. This resource library will help you understand both the retroactive 2020 credit and the 2021 credit.
- Mythbust and maximize the employee retention credit | Tax Section Odyssey — Helping eligible clients successfully apply for and receive the ERC is a once-in-a-lifetime opportunity for CPAs according to Chris Wittich, MBT, CPA.
- ERC — What we know now | Tax Section Odyssey — Kristin Esposito, CPA, MST, addresses the much-anticipated employee retention credit (ERC) guidance released in August 2021 that answered many outstanding questions.
Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.
This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home basefor staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you’re not already a member, consider joining this prestigious community of your tax peers. You’ll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.
The Inflation Reduction Act of 2022 increases the IRS budget by roughly $80 billion over 10 years. The funds are broken down into four main categories: taxpayer services, business system modernization, operations support and enforcement.
On this Tax Section Odyssey episode, April Walker, CPA, CGMA, Lead Manager — AICPA Tax Section, talks with Gloria Sullivan, Managing Director, Tax Controversy & Regulatory Services — PwC, who spent 37 years with the IRS Large Business & International (LB&I) division. Gloria provides her insights on differentiating between the funding categories and understanding the ins and outs of the IRS from a personnel, budgetary and personal perspective.
What you’ll learn in this episode
- Introspection at the IRS — How it’s changed over the years and the current environment (1.20)
- IRS funding provisions set forth in the Inflation Reduction Act of 2022 (8.48)
- Deeper dive and insider look at the funding provisions (14.44)
- Insights regarding the IRS backlog (18.42)
- Can the IRS move funds from one category to another (22.21)
- Enforcement insights on a comparison of statutes and the U.S. Treasury Secretary Janet Yellen’s letter to Commissioner Rettig (25.03)
- A page from Gloria’s travel journal (32.49)
AICPA resources
- Inside look at the Inflation Reduction Act | Tax Section Odyssey — The Inflation Reduction Act, H.R. 5376, now law, includes a 15% corporate minimum tax, various energy credits and increased IRS funding.
- Breakdown of the Inflation Reduction Act of 2022 — The Inflation Reduction Act of 2022 contains several provisions that could affect your tax clients. Learn what's changed so you can adapt in this webcast.
Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.
This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home basefor staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you’re not already a member, consider joining this prestigious community of your tax peers. You’ll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.
President Biden signed the Inflation Reduction Act, H.R. 5376, into law on Aug. 16, 2022. Tax professionals must now undertake the task of quickly understanding the tax provisions, including the new corporate minimum tax, based on financial statement, or "book," income and various energy credits, which include several new credits for clean energy and fuels and clean vehicles and other transportation. The bill also extends several temporary existing credits.
On this Tax Section Odyssey episode, April Walker, CPA, CGMA, Lead Manager — AICPA Tax Section, and Kasey Pittman, CPA, Senior Manager, Washington National Tax — Baker Tilly US, dissect the tax stipulations in the new tax and climate legislation.
What you’ll learn in this episode
- What’s in the Inflation Reduction Act, H.R. 5376 (1.35)
- 15% minimum tax for large corporations (5.07)
- 1% excise tax on corporate stock buybacks (11.12)
- Extension of the Sec. 461(l) business loss limitation (13.24)
- Clean energy measures (17.22)
- IRS funding provisions (24.14)
- A page from Kasey’s travel journal (28.33)
AICPA resources
- AICPA comments on tax provisions in Senate reconciliation legislation released on July 27, 2022 — On Aug. 4, 2022, the AICPA submitted comments regarding important profession and tax policy issues that are in the Senate reconciliation legislation released on July 27, 2022.
- AICPA comments on the corporate profits minimum tax in reconciliation legislation being considered —
On June 21, 2022, the AICPA recommended that Congress reconsider and clarify the rules associated with the proposal regarding implementing a minimum tax on corporate adjusted financial statement income due to complexity and because it may have many significant and potentially negative implications. The AICPA previously submitted a letter on Oct. 28, 2021. - AICPA request for additional guidance and relief regarding Sec. 461(l) – limitations on excess business losses of noncorporate taxpayers — On June 22, 2020, the AICPA submitted a comment letter requesting for additional guidance and relief regarding Sec. 461(l). The recommendations address treatment of previously reported excess business losses and relief for underpayment of estimated taxes.
Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.
This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home basefor staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you’re not already a member, consider joining this prestigious community of your tax peers. You’ll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.
The tax ecosystem is in constant flux given the rotating release of legislation and regulations and reliance upon open communication with, and accessibility to, the IRS.
On this Tax Section Odyssey episode, April Walker, CPA, CGMA, Lead Manager – AICPA Tax Section, and Lauren Pfingstag, Director of AICPA Congressional & Political Affairs, review frequently asked questions (FAQs) that the AIPA Tax Section receives from members on topics such as the employee retention credit (ERC), tax-related legislation and IRS service levels.
What you’ll learn in this episode
- ERC-related topics (1.11)
- Potential credit reinstatement possibilities for Q4 2021 (1.22)
- Aggressive ERC services by third parties (3.08)
- Timing, salaries and the ERC (5.20)
- Other potential legislative action possibilities (6.59)
- Timing of ERC refunds (8.00)
- Tax-related legislation on the horizon (9.43)
- Tax-related legislative packages most likely to pass (10.12)
- LIFO relief for certain industries (14.15)
- IRS-related topics (15.53)
- Erin Collins’s 2023 Objectives Report to Congress (16.05)
- Additional IRS funding (16.52)
- Notices (18.56)
- Proposed regulations related to RMDs (21.52)
- A page from Lauren’s travel journal (26.43)
AICPA resources
- Mythbust and maximize the employee retention credit— Helping eligible clients successfully apply for and receive the ERC is a once-in-a-lifetime opportunity for CPAs according to Chris Wittich, MBT, CPA.
- 2023 Objectives Report to Congress — National Taxpayer Advocate Erin Collins's annual midyear report for fiscal 2023 was released in June. The report reviewed the IRS's performance in the 2022 tax filing season, outlined 14 "systemic advocacy objectives" going forwards and lists internal goals and objectives for the Taxpayer Advocate Service (TAS).
- Relief for Taxpayers for the 2022 Filing Season (Coalition letter) — The coronavirus pandemic has created enormous challenges for taxpayers, tax professionals and the IRS. Implementing reasonable penalty relief measures, that the IRS can offer immediately, are necessary to help not only taxpayers and tax professionals but also the IRS during these challenging times.
- Proposed regulations update RMDs for SECURE Act changes — The Tax Adviser, Feb. 23, 2022.
Other resources
- Where's My Refund? — IRS tool that provides refund information for the 2021, 2020 and 2019 tax years.
Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.
This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home basefor staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you’re not already a member, consider joining this prestigious community of your tax peers. You’ll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.
The employee retention credit (ERC), the refundable tax credit designed to reward business owners for retaining employees throughout the COVID-19 pandemic was signed into law on March 27, 2020, as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act and further significantly expanded in 2021.
Eligible business owners can claim up to $5,000 in refundable tax credits for each employee on their payroll in 2020 and up to a $7,000 credit per quarter (excluding Q4) for each employee in 2021. The calculation and procedures are complex, and taxpayers continue to seek help from trusted advisers to help them successfully claim their benefit.
On this Tax Section Odyssey episode, April Walker, CPA, CGMA, Lead Manager — AICPA Tax Section, and Chris Wittich, MBT, CPA, Partner — Boyum Barenscheer, discuss eligibility requirements for the credit, how to help clients with their ERC needs and pitfalls when working with questionable third parties.
What you’ll learn in this episode
- Overview of ERC qualifications (2.47)
- What is an acceptable government order (4.50)
- How to collect documentation regarding government orders (9.00)
- Supply chain disruptions effect on the ERC (11.46)
- How to handle clients that don’t qualify (13.43)
- Marketing strategies for clients (17.09)
- Contingent fees (21.29)
- Experiences with refund statuses (24.50)
- Wrap-up (27.14)
- A page from Chris’s travel journal (28.07)
AICPA resources
- Employee retention credit guidance and resources — The ERC is an important of the COVID-19 relief legislation for small businesses. This library provides the ins and outs of calculating this credit.
- Challenges with contingency fees and the ERC | Tax Section Odyssey — Explore the prospect of contingent fees for ERC work and how regulatory rules govern its usage with the AICPA’s April Walker and Ed Karl.
Other resources
- FAQs: Employee Retention Credit under the CARES Act — IRS answers to frequently asked questions on the ERC.
Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.
This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home basefor staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you’re not already a member, consider joining this prestigious community of your tax peers. You’ll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.
In this episode of the Tax Section Odyssey, April Walker, CPA, CGMA, Lead Manager — AICPA Tax Section, talks with brand, marketing and growth strategists, Manny Torres and Kenny Harper from Growth Amplifiers.
Growth Amplifiers works with business advisors to help them increase their profits and the success of their businesses. The organization provides tips, tools and strategies to help advisory businesses elevate the value and experience they provide to their customers and/or clients.
What you’ll learn in this episode
- What Growth Amplifiers offers to business owners (1.52)
- Strategies to help tax professionals elevate the type of clients that they serve (3.17)
- Tips for attracting the right clients (8.58)
- How to decide what range of services to offer to attract ideal clients (13.11)
- The profit-growth formula (15.35)
- Communication strategies to overcome the overwhelming feeling during tax season (23.01)
- Final thoughts (29.16)
- A page from Kenny’s travel journal (31.24)
AICPA resources
- CPA Marketing Toolkit — The resources in the CPA Marketing toolkit help you communicate with prospects and clients throughout your career. These tools help you demonstrate your strength as a trusted adviser, assisting with all aspects of your clients’ financial situations.
Other resources
- Business Advisor Growth Guide — Growth Amplifiers offers a free downloadable resource to amplify your practice.
Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.
This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home base for staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you’re not already a member, consider joining this prestigious community of your tax peers. You’ll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.
Alternative work arrangements such as remote or hybrid options are becoming more prolific making it crucial for firms to fully leverage digital technologies. Mainstays like automation, e-marketing and employee engagement strengthen relevancy and future proof a business — especially with the “great resignation” looming and client interaction mechanisms evolving.
In this episode of the Tax Section Odyssey, April Walker, CPA, CGMA, Lead Manager — AICPA Tax Section, talks through these topics with Cari Weston, MST, CPA, CGMA, Executive Director — Center for Accounting Transformation. Cari will be joined by Donny Shimamoto, CPA,CITP, CGMA, Founder and Managing Director — IntrapriseTechKnowlogies LLC, for the webcast Tax Practice Quarterly: A Blueprint for Tax Technology and Digital Optimization on May 17, 2022, 1–3pm ET (rebroadcasted on May 25, 2022, 3–5pm ET) to continue the discussion with an in-depth presentation.
What you’ll learn in this episode
- Important objectives for the Center for Accounting Transformation (2.45)
- Tips on how to narrow the search for technology stack improvements and ideal implementation timing (4.10)
- Primary hold ups that impede the progress of firms embracing technological changes (9.45)
- Potential processes often overlooked that are eligible for the biggest automation improvements (15.00)
- Alternate work arrangements and related technology improvement needs (16.26)
- Cari’s final thoughts (20.50)
- A page from Cari’s travel journal (22.08)
AICPA resources
- Tax Practice Quarterly: A Blueprint for Tax Technology and Digital Optimization — Digital transformation can take a “phoenix” or “evolutionary” approach — the path you take depends on your risk appetite, budget, and business strategy. Attend this non-technical session on May 17, 2022, 1 – 3pm ET (rebroadcast on May 25, 2022, 3 – 5pm ET) to figure out which digital technologies you should be looking at and which transformation strategy may be the right one for you.
- AICPA Town Hall Series— Bi-monthly, high-impact news broadcast series that delivers the latest news, analysis, insights and practical guidance to accounting and finance professionals and respond to pressing issues facing the profession
Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.
This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home base for staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you’re not already a member, consider joining this prestigious community of your tax peers. You’ll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.
The April 2022 tax deadline has passed and many tax practitioners are soaking in a well-deserved respite. Now may be the opportune time to think about starting up your own tax practice. While the thought of being a successful entrepreneur may seem daunting, there’s some best practices to get you started.
On this episode of the Tax Section Odyssey April Walker, CPA, CGMA, Lead Manager — AICPA Tax Section, talks with Kelly Rohrs, CPA, P.C., Owner — Kelly A. Rohrs, CPA, about her transition over the past year to owning her own tax practice and lessons learned for success.
What you’ll learn in this episode
- Motivating factors that influenced Kelly to open her own practice (1.57)
- Important lessons learned over the past year (4.09)
- Finding help for administrative tasks (5.38)
- Knowing your optimal technology stack needs (7.20)
- Tips for having a successful work-life balance (10.06)
- Evaluating social media platforms(15.22)
- Billing practice suggestions (17.53)
- Final thoughts from Kelly (22.10)
- A page from Kelly’s travel journal (23.06)
AICPA resources
- Key considerations when buying a CPA practice | Tax Section Odyssey — Raleigh Cutrer, CPA/PFS/ABV, Shareholder at Matthews, Cutrer and Lindsay, P.A., talks about five key areas to consider when exploring whether to acquire another CPA practice.
- Key considerations when selling a CPA practice | Tax Section Odyssey — Raleigh Cutrer, CPA/PFS/ABV, Shareholder at Matthews, Cutrer and Lindsay, P.A., talks about five key areas to consider when in the process of selling your CPA practice.
- AICPA Town Hall Series– Bi-monthly, high-impact news broadcast series that delivers the latest news, analysis, insights and practical guidance to accounting and finance professionals and respond to pressing issues facing the profession
Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.
This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home base for staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you’re not already a member, consider joining this prestigious community of your tax peers. You’ll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.
The homestretch of the tax season is drawing near. On this episode of the Tax Section Odyssey April Walker, CPA, CGMA, Lead Manager — AICPA Tax Section, highlights three top-of-mind items lingering on as we near the end of busy season 2022.
What you’ll learn in this episode
- Status of relief around Schedules K-2/K-3 (0.50)
- Updates to the Gramm-Leach-Bliley Act Safeguards Rule (3.45)
- Where to hear more about the “billionaire tax” and other proposed tax reforms related to the 2023 fiscal year budget (6.36)
AICPA resources
- Gramm-Leach-Bliley Information Security Plan Template — Tax preparers must implement security plans to protect client data. Failure to do so may result in a Federal Trade Commission (FTC) investigation. Download and customize this template to document your firm’s policies.
- The 2023 tax revenue proposals released by the Biden Administration — In this March 29, 2022 episode of the PFP Section podcast, Bob Keebler, CPA/PFS, highlights the relevant proposals to CPA financial planners.
Other resources
- General Explanations of the Administration’s Fiscal Year 2023 Revenue Proposals — Commonly referred to as the “Greenbook,” the document summarizes the Administration’s tax proposals contained in the fiscal year 2023 budget.
- FTC Strengthens Security Safeguards for Consumer Financial Information Following Widespread Data Breaches — The FTC announced on Oct. 27, 2021 updates to the Safeguards Rule to better protect the American public from breaches and cyberattacks that lead to identity theft and other financial losses.
Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.
This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home base for staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you’re not already a member, consider joining this prestigious community of your tax peers. You’ll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.
At the end of 2017, the Tax Cuts and Jobs Act (TCJA), P.L. 115-97 delivered the $10,000 state and local tax (SALT) deduction limitation. Before passage of TCJA, individuals who itemized deductions could deduct their state tax payments in full using Schedule A, Itemized Deductions, of their federal Form 1040, U.S. Individual Income Tax Return. Now that the amount of the deduction is limited, shifting the income taxes directly to the passthrough entity swings the deduction upstream.
In theory, a basic workaround seems simple. However, the varying mechanics of how each state’s workaround actually works has created complexities for taxpayers and practitioners.
On this episode of the Tax Section Odyssey, Alexander Scott, JD, LLM Senior Manager — AICPA Tax Policy & Advocacy, and Annette Nellen, CPA, CGMA, Esq., Tax Professor — MST Program at San Jose State University, and a past Chair of the AICPA Tax Executive Committee, join April Walker, CPA, CGMA, Lead Manager — AICPA Tax Section, to examine the current state of various passthrough entity (PTE) tax workaround regimes.
What you’ll learn in this episode
- Overview of the passthrough entity (PTE) tax (1.07)
- Items to keep in mind that vary among states (2.23)
- Highlights of the Notice 2020-75 published in 2020 (4.05)
- Considerations for tax practitioners when working with clients (7.42)
- Terminology considerations, including “specified income tax payments” and “nonseparately stated taxable income or loss” (8.55)
- Additional considerations to keep in mind for compliance purposes, including what personnel within a client’s business you’re interacting with (10.55)
- Similarity to second class of stock complications (12.26)
- Form presentation and partnership agreement modifications (15.35)
- Timing sensitivities and mechanic issues (17.15)
- Final thoughts (21.42)
AICPA resources
- SALT Roadmap — State and Local Tax Guide — Navigate the complex world of state and local taxes with an animated map compiling basic state information and quick links to state's forms and instructions, government websites and CPA society information.
- State and Local Tax Advocacy Resources — Information on state-level advocacy issues featuring the AICPA position paper on state PTE tax implementation issues.
- States with adopted or proposed PTE tax — This map demonstrates state activity regarding PTE tax.
- The Tax Adviser —a collated list of the latest articles on the SALT cap deduction.
Other resources
- Notice 2020-75 — The IRS clarified in 2020 that partnerships and S corporations may deduct their state and local tax (SALT) payments at the entity level in computing their nonseparately stated taxable income or loss. In addition, the notice announced that the Department of the Treasury and the IRS intend to issue proposed regulations of the same.
Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.
This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home base for staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you’re not already a member, consider joining this prestigious community of your tax peers. You’ll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.
Non-cash compensation has become more familiar in the workplace, with nearly one-in-five individuals holding some type of equity. As such, taxpayers need to have the right mix of tax, financial and legal advice, as well as appropriate technology solutions, to confidently make critical decisions around wealth management.
On this episode of the Tax Section Odyssey, April Walker, CPA, CGMA, Lead Manager — AICPA Tax Section, talks with guest David Snider, Founder and CEO — Harness Wealth, about his mission to make financial advice accessible, intuitive and valuable using a holistic wealth platform.
What you’ll learn in this episode
- Who is Harness Wealth and its unique approach to financial planning (3.01)
- What is a “NextGen” client and why is this important to business operations? (5.29)
- How technology alters the needed skill sets for CPAs (9.22)
- Some unique characteristics of NextGen clients’ needs (14.14)
- What the phrases “financial planning” and “wealth management” really mean and how tax advisers implement these areas of practice (16.02)
- Fees and billing strategies (18.43)
- Serving clients investing in cryptocurrency (21.22)
- Important advice practitioners can offer to clients early in their careers (23.51)
- A page from David’s travel journey (24.54)
AICPA resources
- Virtual currency tax guidance and resources — Sharpen your cryptocurrency tax skills and advise clients on virtual currency tax complexities and strategies.
- Personal Financial Planning — Navigating personal finance decisions is more complex than ever. Your position as a trusted adviser in tax, retirement, estate, risk management and investment planning is critical to helping clients prepare for the future. Here's everything you need to know to serve as their primary point of contact.
Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.
This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home base for staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you’re not already a member, consider joining this prestigious community of your tax peers. You’ll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.
The new Schedules K-2 and K-3 aim to improve reporting by standardizing international tax information to partners and flow-through investors, making it easier for them to report these items on their individual tax returns. However, implementing the required changes continues to cause transitional challenges for the tax community. Although the IRS has released IR-2022-38 and a series of frequently asked questions (FAQs), more guidance is needed.
On this episode of the Tax Section Odyssey, April Walker, CPA, CGMA, Lead Manager — AICPA Tax Section, talks with guest Stephanie L. Chapman, CPA, Director, International Services — Belfint, Lyons, Shuman, CPAs, about where we are with Schedules K-2 and K-3 reporting and discusses procedural tips for preparation.
What you’ll learn in this episode
- Timeline of Schedules K-2 and K-3 information releases and AICPA resources and comment letters (0.47)
- The potential for a full delay in implementation (2.28)
- Who must file the new schedules (4.58)
- Filing requirement exceptions (8.12)
- What taxpayers can do in tax software if country codes are unknown (11.02)
- Woes with PDF attachments when forms aren’t available in software (13.08)
- Client management guidance, billing practices and engagement letters (15.23)
AICPA resources
- IRS Schedules K-2 and K-3 guidance and resources — Access resources to advise clients on IRS Schedules K-2 and K-3, such as a client information letter and an earlier podcast episode from November 2021, which are used to report items of international tax relevance from the operations of pass-through entities.
- AICPA additional comments regarding Schedules K-2 and K-3 reporting – The AICPA submitted comments on Feb. 18, 2022, requesting a delay in the implementation of Schedules K-2 and K-3 to 2023 and recommending the IRS provide additional guidance.
- AICPA comments on proposed international changes to Form 1065, Schedule K-2, and Schedule K-3 — The AICPA submitted comments in 2020 on the proposed international changes to Form 1065, Schedule K-2, and Schedule K-3, including the recommend transmittal of Schedule K-3 in portions and minimizing overreporting by allowing partnerships the ability to determine the reporting needs of its partners.
Other resources
- Schedules K-2 and K-3 Frequently Asked Questions (Forms 1065, 1120S, and 8865) — A set of FAQs released by the IRS on the new schedules and their reporting requirements.
- News Release IR-2022-38 — The IRS announced further details on additional relief for certain partnerships preparing Schedules K-2 and K-3 for 2021 on Feb. 16, 2022.
Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.
This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home base for staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you’re not already a member, consider joining this prestigious community of your tax peers. You’ll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.
According to the FBI, cybercrime has increased by 300% since the start of the COVID-19 pandemic. Now, more crucial than ever, tax practitioners need to remain vigilant and one step ahead of cybercriminals in the everchanging world of data security.
Listen in to a frank discussion on cybersecurity with April Walker, CPA, CGMA, Lead Manager — AICPA Tax Section and special guest Byron Shinn, CPA, Partner — Carr, Riggs & Ingram, LLC, on this episode of The Tax Section Odyssey.
What you’ll learn in this episode
- Is a cyberattack a real threat? (0.43)
- What does a data security plan look like (3.15)
- How often should you review a data security plan (8.16)
- Cybersecurity insurance considerations (10.14)
- Attorney recommendations to help in the cybersecurity arena (13.55)
- Real-life examples of CPA firm concerns and data security plan insecurities (16.29)
- The why and how of independently testing network security (16.47)
- Example of encryption hack; ransomware and cryptocurrency (18.51)
- Lack of cyberattack reporting and high-profile cases (20.40)
- Important takeaways for cybersecurity (22.31)
- A page from Byron’s travel journal (24.38)
AICPA resources
- Cybersecurity resources — Access additional resources on our Cybersecurity Resource Center to help organizations and businesses, including CPA firms, assess risks.
- Best Practices for Keeping Client Data Secure — Learn about proactive data security tips for practitioners to implement to keep client data protected from identity theft.
- Gramm-Leach-Bliley Act Information Security Plan Template — The Gramm-Leach-Bliley Act requires financial institutions to have a written information security plan. Use this template to document your firm's policies.
- Identity Theft Checklist — Provide this checklist to clients to help them appropriately and efficiently address identity theft issues.
- Letter to Advise Client on Tax-Related Identity Theft — Notify a client of a potential tax-related identity theft and/or outline the steps that can be taken to address the issue.
- Letter to Client to Protect Against Tax-Related Identity Theft — Help clients take steps to secure their personal information and prevent identity theft.
- Tax Identity Theft Toolkit — CPA tax practitioners need to combat tax-related identity theft daily as it has become pervasive globally. Use this toolkit to tackle tax identity theft issues with your clients.
Other resources
- Get An Identity Protection PIN (IP PIN) — An IP PIN is a six-digit number that prevents someone else from filing a tax return using your Social Security number or Individual Taxpayer Identification Number.
- PTIN Requirements for Tax Return Preparers — Anyone who prepares or assists in preparing federal tax returns for compensation must have a valid 2022 PTIN before preparing returns.
- Publication 1345, Handbook for Authorized IRS e-file Providers of Individual Income Tax Returns – This guide addresses the rules and requirements for participation in IRS e-file by authorized IRS e-file providers filing individual income tax returns and related forms and schedules.
- Publication 4557, Safeguarding Taxpayer Data — This guide seeks to help tax professionals to understand basic security steps and how to take them as well as recognize the signs of data theft, how to report data theft and understand and comply with the FTC Safeguards Rule.
- Tax Preparer Tips for Hiring a Cybersecurity Professional — The IRS provides tips for tax preparers to consider when evaluating and selecting a cybersecurity professional.
- Treasury Inspector General for Tax Administration (TIGTA), IRS Impersonation Scam — Fill out this online form to report an IRS impersonation scam. Note that a taxpayer may also call (800) 366-4484 to report the scam.
- What to Do After a Tax Professional Data Compromise — This IRS video gives steps tax professionals should take if they are the victim of a data compromise.
- Why Tax Professionals Need a Security Plan — In this IRS video, learn the importance of tax professionals establishing data security plan.
Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.
This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home base for staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you’re not already a member, consider joining this prestigious community of your tax peers. You’ll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.
From a record number of unprocessed returns to the inability to contact the IRS, these ongoing issues continue to be a problem for taxpayers and tax practitioners. The Tax Professionals United for Taxpayer Relief Coalition — a diverse group of stakeholders from the tax community including the AICPA — is taking steps to help by providing recommendations the IRS can implement now and raising the profile of the systematic issues.
Hear how the IRS can do more on this Tax Section Odyssey episode where April Walker, CPA, CGMA, Lead Manager – AICPA Tax Section, is joined by Ed Karl, CPA, CGMA, Vice President – AICPA Tax Policy & Advocacy.
What you’ll learn in this episode
- History of IRS service level issues (1.20)
- Steps the AICPA is taking to try to impact the current situation (3.43)
- What the IRS needs to be able to improve the situation (6.01)
- Practical recommendations and tips the IRS can take to mitigate the need for practitioners and taxpayers to contact the IRS (7.22)
- Upcoming events to attend for the latest updates (17.53)
- Will the April 18 tax deadline change? (19.12)
- Final thoughts from Ed (20.56)
AICPA resources
- Is Help on the Way from the IRS for this Filing Season? — Hear how the IRS can do more in this free, one-hour webinar (no CPE credits offered) on Feb. 8, 1pm ET.
- AICPA Relief for Taxpayers for the 2022 Filing Season — The AICPA led a coalition of stakeholders to urge action from the IRS to mitigate anticipated challenges in the upcoming tax season. The coalition also requested a meeting with IRS officials to discuss their concerns and recommendations and directly address any questions.
- AICPA Town Hall Series— Bi-monthly, high-impact news broadcast series that delivers the latest news, analysis, insights and practical guidance to accounting and finance professionals and responds to pressing issues facing the profession.
- Press Center — The Press Center includes news and information for reporters and editors, including press releases, media advisories and other official statements from the AICPA.
- Tax season hub — With constant changes to the tax landscape, being prepared for tax season is critical for success. Set yourself up for a smoother filing season by tapping into the wealth of AICPA and Tax Section resources.
Other resources
- IRS Statement — Providing meaningful assistance to taxpayers in the current environment — IRS statement on January 27, 2022
- Understanding Your CP80 Notice — A notice that states credited payments and/or other credits to a taxpayer’s account for the tax period; however, the IRS hasn’t received the tax return. Due to processing delays for 2019 and 2020 tax returns, the issuance of CP80 and CP080 notices have been suspended. If a taxpayer received a notice for the 2019 return and it was filed timely, please refile the return. If a taxpayer receives a notice for the 2020 return, do not
- Your Online Account — Encourage your clients to sign up for an IRS online account to access their individual account information including balance, payments, tax records and more.
Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.
This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home base for staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you’re not already a member, consider joining this prestigious community of your tax peers. You’ll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.
The IRS is now accepting and processing 2021 tax returns — a signal that the official start of the busy tax filing season is here. While it’s a new year, this tax season has similar vibes as the past two years but with some new obstacles as well.
On this Tax Section Odyssey episode, April Walker, CPA, CGMA, Lead Manager – AICPA Tax Section sits down with Daniel Moore, CPA, Owner — D.T. Moore & Company, LLC, to discuss issues tax practitioners may encounter this season, as well as provide some real-world relatable examples and tips for a successful tax season.
What you’ll learn in this episode
- Reporting Paycheck Protection Program (PPP) loan forgiveness and S Corporations (4.15)
- Advance child tax credits and Letter 6419 (7.42)
- Economic impact payments and Letter 6475 (13.19)
- IRS service level issues and a real-life example (14.50)
- Unprocessed 2020 returns and overpayment application tips for 2021 filings (20.42)
- How to make cryptocurrency reporting as easy as possible (24.27)
- Schedules K-2 and K-3 for passthrough entities (28.05)
- Tax return extensions (30.37)
- Dan’s tax firm traditions (33.54)
- A page from Dan’s travel journey (35.19)
AICPA resources
- 2021 Paid Preparer’s Due Diligence Checklist – Form 8867 — A comprehensive tool to use when preparing Form 8867 that is associated with claiming the earned income tax credit, American opportunity tax credit, child tax credit (including the additional child tax credit), the credit for other dependents and head-of-household filing status.
- AICPA Relief for Taxpayers for the 2022 Filing Season — The AICPA led a coalition of stakeholders to urge action from the IRS to mitigate anticipated challenges in the upcoming tax season. The coalition also requested a meeting with IRS officials to discuss their concerns and recommendations and directly address any questions.
- Annual Tax Compliance Kit — This toolkit includes engagement letters, organizers, checklists and practice guides to help you manage your tax season workflow and excel as an adviser of tax and financial planning services.
- AICPA Town Hall Series— Bi-monthly, high-impact news broadcast series that delivers the latest news, analysis, insights and practical guidance to accounting and finance professionals and responds to pressing issues facing the profession.
- ENGAGE 22 Conference — Gain exclusive insights, develop practical skills, and network with your unique professional community online or in person over 4 energizing days June 6-9, 2022, in Las Vegas, Nevada.
- IRS E-Services Transcript Delivery System Quick Reference Chart — This handy, one-page, quick reference chart is geared to help practitioners obtain and effectively use transcript data via this e-Services tool. It offers practical tips for how to use TDS and answers questions such as “Who may use TDS?”.
- IRS third-party authorization guidance — This guidance provides a summary of the most common types of IRS authorizations and what each authorization permits the representative to do. Learn how to record authorizations with the Centralized Authorization File (CAF) unit, how to withdraw an authorization and other practice tips to help practitioners represent clients before the IRS.
- Tax season hub — With constant changes to the tax landscape, being prepared for tax season is critical for success. Set yourself up for a smoother filing season by tapping into the wealth of AICPA and Tax Section resources.
- The 2022 Winter Tax Rewind — In this Jan. 31, 2022, installment of the quarterly Tax Rewind series, Art Auerbach, CPA, CGMA provides an update on tax planning, legislative changes and the latest in IRS tax practice and procedures so you can proficiently advise your clients.
- Using IRS e-Services — An AICPA hub centered around IRS e-Services, a suite of web-based tools that allow eligible tax professionals to perform certain transactions online.
Other resources
- 2021 Child Tax Credit and Advance Child Tax Credit Payments Frequently Asked Questions — IRS frequently asked questions about the advance child tax credit payments in 2021, separated by topic
- General FAQs on Payment Card and Third-Party Network Transactions — IRS general frequently asked questions on payment card and third-party network transactions
- Instructions for Form 1120-S, U.S. Income Tax Return for an S Corporation — Final instructions released on Jan. 20, 2022
- Your Online Account — Encourage your clients to sign up for an IRS online account to access their individual account information including balance, payments, tax records and more.
Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.
This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home base for staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you’re not already a member, consider joining this prestigious community of your tax peers. You’ll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.
A new year has arrived, and it’s an opportune time to pause and take some time to reflect on new goals and consider what’s possible.
It’s been a rough 18 months since the start of the pandemic, and tax practitioners continue to brave the storm of seemingly never-ending tax legislation, related guidance and client mentoring. April Walker, CPA, CGMA, from the AICPA Tax Section and host of the Tax Section Odyssey podcast, reached out to tax practitioners to find out if they have goals for the upcoming year. Sit back, relax and take a few minutes to hear what your fellow tax practitioners have down for their 2022 resolutions on this Tax Section Odyssey episode.
Featured resolutions
- Compilation of mailed responses (1.35)
- Charles J. Kelly, CPA, Chief Executive Officer — CJ the Smart Guy’s Tax Services, LLC (4.10)
- Orumé Hays, CPA, CGMA, MST, Managing Director — Hays CPA (5.06)
- Chris Wittich, MBT, CPA, Partner — Boyum Barenscheer (5.37)
- Larry Marietta, CPA, Owner — Marietta Financial Services, Inc. (6.28)
- Amie K — livingthetaxlife.com (7.15)
- Daniel Moore, CPA, Owner — D.T. Moore & Company, LLC (8.40)
AICPA resources
- AICPA Town Hall Series— Bi-monthly, high-impact news broadcast series that delivers the latest news, analysis, insights and practical guidance to accounting and finance professionals and responds to pressing issues facing the profession.
Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.
This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home base for staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you’re not already a member, consider joining this prestigious community of your tax peers. You’ll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.
The IRS recently released long-awaited guidance related to PPP forgiveness with three revenue procedures — Rev. Procs. 2021-48, 2021-49 and 2021-50.
Earlier in the year, the AICPA submitted a letter to the IRS requesting guidance for a range of issues which are addressed in the revenue procedures. These include:
- The timing for tax purposes of when PPP loan forgiveness is received or accrued
- How partners and partnerships may allocate PPP forgiveness as exempt income and allocate deductions resulting from expenditures attributable to the use of forgiven PPP loan proceeds
- How eligible partnerships subject to audit procedures under the Bipartisan Budget Act of 2015, P.L. 114-74, (BBA partnerships) may file amended returns.
Consequently, amended returns remain an area of confusion for many professionals. On today’s Tax Section Odyssey episode, Jan Lewis, CPA, Tax Partner — Haddox Reid Eubank Betts PLLC, discusses some nuanced issues with amended returns, and when they can be used and when they should be used.
What you’ll learn in this episode
- Jan’s overall perspective on the newly released guidance (2.00)
- Reflections around when an amended return is needed and how to broach the subject with a client (5.12)
- Timing issues with the employee retention credit and the Form 941X, Adjusted Employer’s Quarterly Federal Tax Return or Claim for Refund (10.12)
- Billing considerations with amended returns (13.37)
- Final thoughts from Jan (18.00)
- A page from Jan’s travel journal (18.48)
AICPA resources
- AICPA Town Hall Series— Bi-monthly, high-impact news broadcast series that delivers the latest news, analysis, insights and practical guidance to accounting and finance professionals and responds to pressing issues facing the profession.
- Employee retention credit guidance and resources— The ERC is an important of the COVID-19 relief legislation for small businesses. This library provides the ins and outs of calculating this credit.
- SBA PPP resources for CPAs— Tools and resources on the ever-evolving PPP
Other resources
- IRS Operations During COVID-19: Mission-critical functions continue — COVID-19 continues to cause delays in IRS services. The page is kept up to date to inform taxpayers and practitioners of the status of IRS functions.
Note: If your podcast app does not hyperlink to resources, visit https://taxodyssey.libsyn.com to access show notes with direct links.
This episode is brought to you by the AICPA’s Tax Section, your home base to maintain your professional edge. To learn more about the Tax Section, check out aicpa.org/tax or sign up for a free web tour.
In these challenging times, many CPAs may be contemplating if working in the profession among constant chaos is worth it.
In this Tax Section Odyssey episode, Tony Nitti, CPA chats with April Walker, CPA, CGMA, from the AICPA Tax Section, about the current state of the profession and its future. Professionals at all levels of their careers will find something they can relate to and perhaps hear some insights worth considering.
Tony also discusses what’s next for him in his career and gives a sneak peek as to what attendees will hear in the upcoming webcast — Tax Practice Quarterly: 2022 Busy Season Readiness happening on December 6 and rebroadcasted on December 8.
What you’ll learn in this episode
- What’s up next for Tony in his career (1.07)
- A preview of what Tony will cover in the upcoming AICPA webcast (3.01)
- Ways CPA professionals can move out of survival mode to a thriving mode (11.23)
- Closing thoughts (29.41)
AICPA resources
- Tax Practice Quarterly: 2022 Busy Season Readiness — Tony Nitti, CPA, highlights the key takeaways from this year to help you proactively and effectively plan with your clients before year end with this free, CPE-eligible event for Tax Section members.
Note: If your podcast app does not hyperlink to resources, visit https://taxodyssey.libsyn.com to access show notes with direct links.
This episode is brought to you by the AICPA’s Tax Section, your home base to maintain your professional edge. To learn more about the Tax Section, check out aicpa.org/tax or sign up for a free web tour.
In June 2021, the IRS released final versions of two new international-related schedules that are being added to passthrough entity returns:
- Schedule K-2, Partners' Distributive Share Items — International
- Schedule K-3, Partner's Share of Income, Deductions, Credits, etc. — International
The new international-related schedules will be required for 2021 partnership and S corporation returns and 2021 Schedules K-1, Partner's Share of Income, Deductions, Credits, etc.
In this Tax Section Odyssey episode, April Walker, CPA, CGMA, from the AICPA Tax Section, welcomes Amy Miller, JD, CPA, from the AICPA Tax Policy and Advocacy team, David Sites, CPA, Managing Partner of International Tax Services — Grant Thornton, Kyle Dawley, JD, CPA, Principal — Clifton Larson Allen, and Tim Chan, CPA, Managing Director — KPMG, to discuss the new schedules and related past and future AICPA efforts.
What you’ll learn in this episode
- Background of the AICPA Foreign Passthrough Reporting Task Force and its past activities (1.19)
- Summary of the September 2020 AICPA comment letter (2.08)
- AICPA recommendations that were adopted by the U.S. Treasury and IRS (3.24)
- What the IRS is trying to achieve with the new schedules (4.20)
- Timing of schedule furnishment to partners (6.29)
- Thoughts on potential postponement of the Schedules K-2 and K-3 (8.06)
- Status of form instructions and major issues that practitioners and clients need to be aware of (10.37)
- Parts II and III reporting for those with 100% U.S. source activity (14.37)
- Country-by-country reporting requirement (16.49)
- Interaction between international forms (e.g., Forms 8858 and 5471) and new reporting requirements (18.00)
- Filing requirements for entities that are not required to file Forms 1065 or 8865 (20.37)
- What an upper-tier partnership should do if a lower-tier partnership does not provide any or all of Schedule K-3 information (21.30)
- Next steps for the AICPA Foreign Passthrough Reporting Task Force (23.00)
AICPA resources
- Comments on Proposed International Changes to Form 1065, Schedule K-2, and Schedule K-3 — The AICPA submitted comments on the proposed international changes to Form 1065, Schedule K-2 and Schedule K-3. The AICPA recommended transmittal of Schedule K-3 in portions and minimizing overreporting by allowing partnerships the ability to determine the reporting needs of its partners.
Other resources
- Notice 2021-39 — The IRS announced draft 2021 instructions for Schedules K-2 and K-3 for partnership and S corporation Forms 1065, 1120-S and 8865 as well as transition relief from penalties for any incorrect or incomplete reporting on the schedules.
- About Form 1065 and About Form 1120-S — The recent developments section provides updates as Schedules K-2 and K-2 are finalized for the 2021 tax year.
Note: If your podcast app does not hyperlink to resources, visit https://taxodyssey.libsyn.com to access show notes with direct links.
This episode is brought to you by the AICPA’s Tax Section, your home base to maintain your professional edge. To learn more about the Tax Section, check out aicpa.org/tax or sign up for a free web tour.
The Infrastructure Investment and Jobs Act was approved in the House of Representatives on Nov. 5, 2021 and is headed to President Joe Biden's desk to be signed into law. The House passed the legislation by a 228–206 vote after it passed the Senate by a 69–30 vote in August.
In this Tax Section Odyssey episode, April Walker, CPA, CGMA, from the AICPA Tax Section, highlights major tax-related items contained in the bill and shares several resources available for practitioners to navigate the provisions.
What you’ll learn in this episode
- Status of the enactment of the Infrastructure Investment and Jobs Act (0.25)
- Early termination of the employee retention credit (ERC) (0.56)
- Cryptocurrency reporting (1.58)
- Build Back Better Act legislation status and related resources (3.30)
- Additional AICPA year-end resources (4.31)
AICPA resources
- Year-End Tax Planning Letter for Individual Clients — Use this letter template to get the conversations started with your individual tax clients to help them take a fresh look at their current and future financial health.
- Year-End Tax Planning Letter for Small Business Clients — This small business client letter template provides a handy list of key considerations for this year that your clients need to factor in for next year and a jumping off point for them to contact you as their tax and financial planning adviser.
- 2021 Tax Year in Review Presentation for Clients — A presentation to use as a touchpoint with your clients to update them on various tax law changes and year-end reminders and encourage them to talk with you about their long-term financial plans. This template also works as a starting point for presentations to networking groups, rotary clubs, chambers of commerce and many other groups.
- CPA Marketing Toolkit — A toolkit to help you communicate with prospects and clients throughout your career to help you demonstrate your strength as a trusted adviser, assisting with all aspects of your clients’ financial situations.
- Build Back Better Act: Where we are now — Recorded on Nov. 8, 2021, Bob Keebler, CPA/PFS, reports on the latest with the Build Back Better Act. Bob will also be speaking on a related webcast on Nov. 17, 2021.
Note: If your podcast app does not hyperlink to resources, visit https://taxodyssey.libsyn.com to access show notes with direct links.
This episode is brought to you by the AICPA’s Tax Section, your home base to maintain your professional edge. To learn more about the Tax Section, check out aicpa.org/tax or sign up for a free web tour.
Many tax practitioners think their clients are insulated from the world of international tax issues. However, as the business environment continues to evolve globally, tax practitioners need to make sure they are taking inventory of various international tax matters. International tax policies can dramatically affect business decisions, job creation and retention and office and plant locations. Having exposure to international tax issues will allow tax practitioners to spot potential issues and provide a value-add service to clients.
In this Tax Section Odyssey episode, April Walker, CPA, CGMA, from the AICPA Tax Section and Jason Freeman JD, CPA,
Managing Member — Freeman Law, highlight the latest happenings in the current and future international tax landscape. Jason provides an avenue for CPA practitioners to learn more at the upcoming Freeman Law International Tax Symposium taking place November 18-19, 2021 and shares various AICPA resources and programs.
What you’ll learn in this episode
- What international tax issues should a tax practitioner focus on (1.42)
- Overview of the Freeman Law International Tax Symposium (2.50)
- Why all tax practitioners need to have awareness of international tax issues (5.59)
- Jason’s advice for small practices without an international alliance option and how to find specialists (8.02)
- Potential international tax policies that could be included in future tax legislation (10.19)
- Reporting requirements for Form 5471, Information Return of U.S. Persons With Respect To Certain Foreign Corporations (14.41)
- AICPA U.S. International Tax Certificate program (16.08)
- A page from Jason’s travel journal (18.19)
AICPA resources
- AICPA International Tax Hub — A compendium of international tax resources
- S. International Tax Certificate program — The AICPA U.S. International Tax Certificate Program provides accounting and finance professionals the competencies needed to navigate the international tax environment.
Other resources
- The Freeman Law International Tax Symposium — Join leading tax experts from across the globe on November 18–19, 2021 as they discuss tax trends that are reshaping international taxation.
Note: If your podcast app does not hyperlink to resources, visit https://taxodyssey.libsyn.com to access show notes with direct links.
This episode is brought to you by the AICPA’s Tax Section, your home base to maintain your professional edge. To learn more about the Tax Section, check out aicpa.org/tax or sign up for a free web tour.
The 2021 PCPS CPA Firm Top Issues Survey polled firms of all sizes to get a pulse on the top pressing issues impacting them.
In this Tax Section Odyssey episode, April Walker, CPA, CGMA, from the AICPA Tax Section and Brad Barbour, CPA, from the AICPA Private Companies Practice Section, and host of the Small Firm Philosophy podcast discuss tax-related challenges that emerged in the 2021 CPA Firm Top Issues Survey.
What you’ll learn in this episode
- Overview of the survey and highlights of results (1.18)
- What’s happening with tax law that is keeping practitioners up at night (2.07)
- Advice from the AICPA Tax Section to help tax practitioners remain up to date and communicate tax changes with clients (3.07)
- Challenges when working with the IRS (5.01)
- Relevant AICPA Tax Section resources (8.00)
- Resources available to help practitioners deal with workload and deadlines (10.24)
- Staffing issues (13.20)
- A page from Brad’s travel journal (15.41)
AICPA resources
- Resources to address CPA firm top issues — The PCPS and the AICPA provide a variety of resources that can help address the issues identified in the 2021 PCPS CPA Firm Top Issues Survey. Also included in this toolkit is the Client Evaluation Tool.
- PCPS CPA Firm Top Issues Survey — Professional insights highlighting the results of the biannual firm top issues survey conducted in May and June of 2021.
- Small Firm Philosophy podcast — This podcast shares big ideas about small firms. You'll hear from leaders of small accounting firms about their philosophies on running a successful practice in today's rapidly changing environment.
- AICPA tax hub — Compendium of tax guidance and resources.
- IRS Hotlines Quick Reference Chart — Summary of contact telephone numbers for various IRS departments to help practitioners resolve IRS tax matters for their clients.
- Contacting the IRS FAQs — Answers to frequently asked questions help you navigate your correspondence and activities with the IRS.
- Client Termination Practitioner Checklist and Notification Letter — This checklist will guide you through some important items to keep in mind when terminating a client relationship. The notification letter is used to notify a client about the termination of your professional relationship with them and remind them of other unsettled matters.
- Extension Reminder Letter for Client Tax Return — Customizable letter to send to your clients to help them understand the tax return extension process and inform them of what financial information you need from them and when.
Other resources
- IRS Operations During COVID-19: Mission-critical functions continue — COVID-19 continues to cause delays in IRS services. The page is kept up to date to inform taxpayers and practitioners of the status of IRS functions.
Note: If your podcast app does not hyperlink to resources, visit https://taxodyssey.libsyn.com to access show notes with direct links.
This episode is brought to you by the AICPA’s Tax Section, your home base to maintain your professional edge. To learn more about the Tax Section, check out aicpa.org/tax or sign up for a free web tour.
As virtual currencies gain more traction in the marketplace, the IRS is taking notice. Your clients may be unaware of the tax reporting requirements and the tax implications from their cryptocurrency transactions.
In this Tax Section Odyssey episode, April Walker, CPA, CGMA, Lead Manager — Tax Practice & Ethics, Association of International Certified Professional Accountants, representing AICPA & CIMA, and Shehan Chandrasekera, CPA, Head of Tax Strategy — CoinTracker, delve into the cryptic world of virtual currency and discuss practical tax compliance tips.
What you’ll learn in this episode
- History and the basics of cryptocurrency (1.01)
- Advantages and benefits of owning and transacting with cryptocurrency (2.39)
- Non-fungible tokens (NFTs) (4.18)
- The taxation of cryptocurrency and IRS guidance (5.56)
- Advice to clients regarding cryptocurrency activity and transaction tracking (8.39)
- How to answer the virtual currency question on the Form 1040 (10.53)
- Potential tax legislation and virtual currency (13.01)
- What to do when a client receives an IRS letter or notice regarding virtual currency activity (15.07)
- Journal of Accountancy podcast episode that focuses on the recent annual tax software survey (18.43)
AICPA resources
- Virtual currency tax guidance and resources — Consolidation of AICPA resources, comment letters and IRS guidance to help tax practitioners advise clients on cryptocurrency complexities
- Blockchain & Digital Assets — Hub of resources around this increasingly-common technology
Other resources
- Coinmarketcap.com — Website consolidating the various cryptocurrency properties and current prices
- IRS Notice 2014-21 —IRS guidance for individuals and businesses on the tax treatment of transactions using virtual currencies
- Rul. 2019-24 — IRS guidance that addresses common questions by taxpayers and tax practitioners regarding the tax treatment of a cryptocurrency hard fork
- The IRS also published Frequently Asked Questions on Virtual Currency Transactions for individuals who hold cryptocurrency as a capital asset and are not engaged in the trade or business of selling cryptocurrency
- CoinTracker — Software to help track cryptocurrency investment performance and taxes.
- Lukka — Data and software solutions to manage crypto assets on infrastructure built for the future of commerce. In December 2019, CPA.com announced a strategic alliance with Lukka to deliver crypto asset solutions to firms.
- IRS Cryptocurrency Tax Letter Guide: 6173, 6174, 6174-A, CP-2000 — Step-by-step guide to help taxpayers know what to do if they receive a cryptocurrency-related letter from the IRS
- Tax software: What CPAs like and dislike — Journal of Accountancy podcast where editors Alistair Nevius and Paul Bonner discuss details of the annual tax software survey.
Note: If your podcast app does not hyperlink to resources, visit https://taxodyssey.libsyn.com to access show notes with direct links.
This episode is brought to you by the AICPA’s Tax Section, your home base to maintain your professional edge. To learn more about the Tax Section, check out aicpa.org/tax or sign up for a free web tour.
As a tax practitioner during the revolving door of tax law changes this year, you might have asked yourself questions such as:
- Can I bill my clients for PPP loan assistance?
- How do I bill my clients for employee retention credit consultations?
- How do I get my long-time clients to value and agree to pay for the high-quality services that I offer each year?
If any of the above apply, we have some tips. Loren Fogelman, a business coach for accounting professionals at Business Success Solution, provides some best practices on how to innovate your billing practices for the future.
What you’ll learn in this episode
- Low-value vs. high-value clients (2.07)
- Ways that firms and practitioners can attract the right kind of clients (6.52)
- How firms determine whether it is time to move on from a client relationship (9.18)
- Step-by-step process to raise rates for existing clients (11.53)
- How to determine package services and pricing (14.40)
- The lowdown on timesheets and hourly rates (18.48)
- Formula for best pricing (20.22)
- How to handle situations when clients do comparison shopping with each other (24.10)
- Four takeaways on clients’ perceptions of value (27.08)
AICPA resources
- CPA Marketing Toolkit — These tools help you demonstrate your strength as a trusted adviser, assisting with all aspects of your clients’ financial situations.
Other resources
- 10 steps to package and price your services — A free resource from Business Service Solutions that lists steps to transition from hourly rates to packages.
Note: If your podcast app does not hyperlink to resources, visit https://taxodyssey.libsyn.com to access show notes with direct links.
This episode is brought to you by the AICPA’s Tax Section, your home base to maintain your professional edge. To learn more about the Tax Section, check out aicpa.org/tax or sign up for a free web tour.
The impact of disasters can be life changing. Fortunately, special tax law provisions may aid in the recovery efforts for individual taxpayers and businesses alike. Depending on the circumstances, the IRS may grant additional time to file returns and pay taxes. Victims may also be able to deduct casualty losses that occurred.
In this Tax Section Odyssey podcast episode, Jerry Schreiber, CPA, partner at Schreiber & Schreiber in Louisiana, the recipient of the AICPA’s 2018 Arthur J. Dixon Memorial Award and dubbed the “Master of Disaster,” along with Amy Miller, JD, CPA, Senior Manager — AICPA Tax Policy & Advocacy, Association of International Certified Professional Accountants, representing AICPA & CIMA, join April Walker, CPA, CGMA, Lead Manager — Tax Practice & Ethics, Association of International Certified Professional Accountants, representing AICPA & CIMA, to discuss tax-related disaster relief and insights to resources available for taxpayers and their CPA practitioners.
What you’ll learn in this episode
- Top AICPA member concerns during disasters (1.18)
- How tax relief is applied if either the CPA practitioner or the client is not located in the disaster area (2.30)
- Summary of the steps CPA practitioners can take to help clients impacted by a disaster (3.38)
- Tax-deductible charitable contributions (7.17)
- How CPA practitioners can assist their business clients in disaster situations (11.18)
- AICPA advocacy efforts in the disaster arena (12.36)
- Helpful resources in times of disasters (16.28)
AICPA resources:
- Disaster Tax Relief Guidance and Resources —Provides answers to frequently asked questions (FAQs) concerning a disaster, casualty or theft; how these events may impact a client’s tax returns and business affairs and a list of valuable resources to help navigate the complexities of a disaster.
- Disaster financial issues tools to help with disaster recovery — Tools included on this page include the Disaster and Financial Planning Guide and Disaster and Financial Planning Guide Checklists by the American Red Cross.
Other resources:
- Guides for CPAs to providing disaster assistance — Please contact Jerry Schreiber at ghschreiber@bellsouth.net to request detailed, state-specific guides on disaster-related topics, including the disaster declaration process, tax implications of disasters, IRS filing relief, insurance company claim numbers and FAQs on charitable contributions for aid given to disaster victims. The guides are frequently updated.
- LA-2021-04, August 31, 2021 — IRS announces tax relief for victims of Hurricane Ida in Louisiana
- IR-2021-175, August 31, 2021 — IRS announces tax relief to victims of Hurricane Ida
- fema.gov — The official website of the Federal Emergency Management Agency
- Revenue Procedure 2018-08 —Provides safe harbor methods that may be used in the case of casualty and theft losses occurring as a result of any federally declared disaster.
- Tax Relief in Disaster Situations — IRS website housing the most recent tax relief provisions for taxpayers affected by disaster situations
- Publication 584, Casualty, Disaster, and Theft Loss Workbook — Designed to help to help taxpayers figure losses on personal-use property in the event of a disaster, casualty or theft.
- Publication 584-B, Business Casualty, Disaster, and Theft Loss Workbook — Designed to help taxpayers figure losses on business and income-producing property in the event of a disaster, casualty or theft.
Note: If your podcast app does not hyperlink to resources, visit https://taxodyssey.libsyn.com to access show notes with direct links.
This episode is brought to you by the AICPA’s Tax Section, your home base to maintain your professional edge. To learn more about the Tax Section, check out aicpa.org/tax or sign up for a free web tour.
The Association of International Certified Professional Accountants provides the world’s most highly skilled accountants with knowledge, insight and foresight to meet the demands of a disruptive world. It is a driving force in a dynamic profession that powers trust, opportunity and prosperity for people, businesses and economies worldwide.
But the Association can’t do its work without the dedicated group of volunteers behind the scenes. Approximately 2,500 volunteers serving across nearly 200 official groups work and are committed to protecting the public interest, speaking with the power of more than 650,000 professional accountants and students around the world. In addition, all AICPA conferences have volunteer committees that work diligently on the logistics and content creation to help plan the spectacular events held year-round.
In this Tax Section Odyssey episode, April Walker, CPA, CGMA, Lead Manager — Tax Practice & Ethics, Association of International Certified Professional Accountants, representing AICPA & CIMA, and Brandon LaGarde, CPA, JD, LLM, Director — Postlethwaite & Nettervile, chat about what it means to volunteer with the Association on official groups and with conference planning committees.
What you’ll learn in this episode
- Tips on making the most of a conference experience (1.07)
- An important tidbit Brandon learned at the recent ENGAGE 2021 conferences (7.05)
- Brandon’s experience volunteering with the AICPA and advice for others (8.49)
- How and where to submit a volunteer application in Volunteer Central (12.31)
- How to express interest in speaking at a conference (13.04)
- Overarching thoughts about volunteering at the AICPA (15.58)
AICPA resources
- Volunteer Central – Repository of the official AICPA volunteer groups and hub for the volunteer application process.
- Webcasts & Conferences – Explore all the upcoming conferences and filter by such categories as topic, content type and CPE credits to find your next event.
- Email the Tax Section – Let us know if you’re interested in learning more about volunteer opportunities in tax.
Note: If your podcast app does not hyperlink to resources, visit https://taxodyssey.libsyn.com to access show notes with direct links.
This episode is brought to you by the AICPA’s Tax Section, your home base to maintain your professional edge. To learn more about the Tax Section, check out aicpa.org/tax or sign up for a free web tour.
The employee retention credit (ERC) is a new credit created in the Coronavirus Aid, Relief, and Economic Security (CARES) Act passed in March 2020 and later modified with subsequent legislation.
Tax preparers and their clients have been anticipating updated guidance on several remaining questions related to the ERC. On August 4, the IRS issued Notice 2021-49 and accompanying IR-2021-165. Further, on August 10, the IRS issued Rev. Proc. 2021-33, which provides a safe harbor permitting employers to exclude certain amounts from gross receipts solely for purpose of determining eligibility for the ERC.
Notice 2021-49 provides guidance on the ERC provided under Sec. 3134 of the Internal Revenue Code, as added by Sec. 9651 of the American Rescue Plan Act of 2021, and applies to qualified wages paid after June 30, 2021, and before Jan. 1, 2022. The notice amplifies Notices 2021-20 and 2021-23 with additional guidance on claiming the ERC in the third and fourth calendar quarters of 2021 as well as guidance on several miscellaneous ERC concerns.
In this Tax Section Odyssey episode, April Walker, CPA, CGMA, Lead Manager — Tax Practice & Ethics, Association of International Certified Professional Accountants, representing AICPA & CIMA, and Kristin Esposito, CPA, MST, Director — Tax Policy & Advocacy, Association of International Certified Professional Accountants, representing AICPA & CIMA, dissect the latest guidance.
What you’ll learn in this episode
- Are wages of >50% shareholders and their spouses are considered qualified wages? (2.25)
- The calculation of gross receipts and a discussion on how Paycheck Protection Program (PPP) loans and other COVID-19 relief programs are incorporated (3.56)
- Are cash tips considered qualified wages? (5.25)
- The use of full-time employees or full-time equivalents in the determination of whether a business is a small or a large-eligible employer and the period for this calculation (5.53)
- Timing of the wage deduction disallowance (7.11)
- Determination of eligible employer status clarification for the 2021 credit (9.06)
- Recovery startup business overview (9.58)
- What is a severely financially distressed employer? (11.55)
- Potential legislative impacts to the ERC (13.27)
AICPA resources
- Employee retention credit guidance and resources — The ERC is an important of the COVID-19 relief legislation for small businesses. This library provides the ins and outs of calculating this credit.
- AICPA Town Hall Series — Bi-monthly, high-impact news broadcast series that delivers the latest news, analysis, insights and practical guidance to accounting and finance professionals and responds to pressing issues facing the profession
- Challenges with contingency fees and the ERC — Explore the prospect of contingent fees for ERC work and how regulatory rules govern its usage with the AICPA’s April Walker and Ed Karl on this Tax Section Odyssey episode from June 2021.
- What to know about the 2021 ERC before April 30 — On this April 2021 Tax Section Odyssey episode, Jan Lewis, CPA, with Haddox Reid CPAs & Advisors, reviews the latest ERC guidance and important information to help your clients benefit from this credit.
- PPP and ERC in 2020 — This Tax Section Odyssey episode from March 2021 reviews the IRS Notice 2021-20 and highlights what you need to know about the interaction between the ERC and PPP.
- Breaking down the employee retention credit – This February 2021 Tax Section Odyssey episode contains a deep dive on the calculation of the ERC.
Other resources
- FAQs: Employee Retention Credit under the CARES Act — IRS answers to frequently asked questions on the ERC
- Rev. Proc. 2021-33 provides a safe harbor that permits a taxpayer to exclude certain items from “gross receipts” under Sec. 448(c) and Sec. 6033, as applicable, solely for purposes of determining eligibility to claim the ERC
- Notices 2021-20 — Guidance for employers claiming the ERC for calendar quarters in 2020
- IRS Notice 2021-23 — Guidance on the ERC under the CARES Act for the first and second calendar quarters of 2021
- Notice 2021-49 — Guidance that amplifies Notices 2021-20 and 2021-23 by providing additional guidance on claiming the ERC in the third and fourth calendar quarters of 2021.
Note: If your podcast app does not hyperlink to resources, visit https://taxodyssey.libsyn.com to access show notes with direct links.
This episode is brought to you by the AICPA’s Tax Section, your home base to maintain your professional edge. To learn more about the Tax Section, check out aicpa.org/tax or sign up for a free web tour.
The ongoing COVID-19 pandemic has impacted both the personal and professional lives of CPAs and their clients. The legislative changes alone provided an incredible amount of complexity to sift through, but the trailing guidance thereafter has compounded the intricacy.
Two of the most talked about pieces of enacted legislation is the Paycheck Protection Program (PPP) and the employee retention credit (ERC). While we have guidance on how to treat most aspects of these provisions, key questions remain.
On this Tax Section Odyssey episode, April Walker, CPA, CGMA, Lead Manager — Tax Practice & Ethics, Association of International Certified Professional Accountants, representing AICPA & CIMA, and Cari Weston, MST, CPA, CGMA, Director — Tax Practice & Ethics, Association of International Certified Professional Accountants, representing AICPA & CIMA, discuss how to finalize client tax returns when we don’t yet have all the answers.
What you’ll learn in this episode
- Initial thoughts on how to handle open, unclarified and unclear issues while trying to finalize extended tax returns (1.43)
- Professional responsibilities and the signing of tax returns (9.11)
- Example on how to handle the ambiguity of a shareholder and their spouse’s salaries as qualifying wages for the ERC. (19.43)
- What to do when the IRS releases guidance after a position is taken on a return (24.28)
AICPA resources
- SBA PPP resources for CPAs – Tools and resources on the ever-evolving PPP
- AICPA Town Hall Series – Bi-monthly, high-impact news broadcast series that delivers the latest news, analysis, insights and practical guidance to accounting and finance professionals and respond to pressing issues facing the profession
- Treasury Department Circular No. 230 – Consolidated information on the rules governing the recognition of attorneys, CPAs, enrolled agents, enrolled retirement plan agents, registered tax return preparers and other persons representing taxpayers before the IRS
- Statement on Standards for Tax Services (SSTSs) – Toolkit for the enforceable tax practice standards for members of the AICPA
Other resources
- Circular No. 230 Tax Professionals – IRS resource page with multiple links to information on Circular No. 230 and information from the Office of Professional Responsibility (OPR).
Note: If your podcast app does not hyperlink to resources, visit https://taxodyssey.libsyn.com to access show notes with direct links.
This episode is brought to you by the AICPA’s Tax Section, your home base to maintain your professional edge. To learn more about the Tax Section, check out aicpa.org/tax or sign up for a free web tour.
Summer may be in full swing, but tax practitioners still need to be mindful of certain alerts and deadlines that might have gotten lost in the shuffle earlier this year.
Annette Nellen, CPA, CGMA, Esq., Tax Professor – MST Program at San Jose State University, and a past Chair of the AICPA Tax Executive Committee, shares her summer hit list of items to be aware of including:
- Discussion on how to repay any deferred payroll taxes from 2020
- Documentation needed for the employee retention credit (ERC) and other COVID-19 payroll tax credits
- Treatment of other COVID-19 relief including grants and debt cancellation programs
What you’ll learn in this episode
- General overview of the deferred payroll taxes (1.20)
- How self-employed individual and household employers can repay deferred Social Security taxes (4.29)
- Accrual method employer treatment of the deferred payroll taxes (9.42)
- ERC and sick leave credit documentation requirements (11.22)
- Tax treatment of other COVID-19 relief (23.00)
AICPA resources
- Employer retention credit guidance – Collection of resources and guidance on the latest with the ERC
Other resources
- Use Tax Pro Account – Information on how to request Power of Attorney (POA) or Tax Information Authorization (TIA) online
- COVID Tax Tip 2021-96: How self-employed individuals and household employers repay deferred Social Security tax – Provides information on how these taxpayers can repay the deferred payroll taxes
- COVID Tax Tip 2021-99: Making payments for deferred tax reported by third party payers – Pointers on how to make payments for deferred payroll tax by third party payers
Note: If your podcast app does not hyperlink to resources, visit https://taxodyssey.libsyn.com to access show notes with direct links.
This episode is brought to you by the AICPA’s Tax Section, your home base to maintain your professional edge. To learn more about the Tax Section, check out aicpa.org/tax or sign up for a free web tour.
The pressure to adapt business models to the present while simultaneously preparing for the future has always been a force acting upon professionals.
On this Tax Section Odyssey episode, April Walker, CPA, CGMA, Lead Manager — Association of International Certified Professional Accountants, representing AICPA & CIMA, and Donald A. Nelson, EA, Co-Founder — Pacesetter Tax, discuss current technology buzz words and what it takes to become modern firm in a sustainable model.
What you’ll learn in this episode
- What the term “embrace the change” means (0.50)
- Evaluate your tech stack (3.08)
- The IRS tech stack (4.50)
- Key things to keep in mind when considering modifications to your tech stack (7.00)
- What a “modern firm” is (8.01)
- Ways to incorporate automation to facilitate efficiency (9.37)
- Steps firm leaders can take to help themselves and staff avoid burnout (14.58)
- Overview of Pacesetter Tax (17.39)
AICPA resources
- Technology hub – Provides access to the latest technology information, tools and resources to best serve your clients or support the organization where you work.
- Tax Practice Quarterly: Managing a Tax Practice in the Modern World | Tax Section webcast archive – Webcast archive from May 19, 2021 that covers important issues such as how to expand your service offerings as a result of the pandemic, delve into the evolution of the virtual tax practice and explore best practices from a human resource and a client-service perspective
- Talking to clients about the advanced child tax credit before July | Tax Section Odyssey – This podcast, recorded in late June 2021, covers the latest news to date regarding the child tax credit advanced payments and the related online tools and portals.
- 2020 tax software survey – Journal of Accountancy article featuring the results of their annual tax software survey
Other resources
- Pacesetter Tax – Integrated solution that allows tax preparation practices to work more efficiently and serve clients more effectively. Pacesetter Tax is designed to work seamlessly with whatever tax software your practice uses, from basic to top-of-the-line, and to replace the patchwork of other one-off tools that don’t play nicely together.
Note: If your podcast app does not hyperlink to resources, visit https://taxodyssey.libsyn.com to access show notes with direct links.
This episode is brought to you by the AICPA’s Tax Section, your home base to maintain your professional edge. To learn more about the Tax Section, check out aicpa.org/tax or sign up for a free web tour.
On this Tax Section Odyssey episode, April Walker, CPA, CGMA, Lead Manager — Association of International Certified Professional Accountants, representing AICPA & CIMA, and Larry Pon, CPA/PFS, CFP, EA, USTCP, AEP — Pon & Associates, review the changes to the 2021 child tax credit (CTC) and discuss the latest news regarding the related advanced payments.
The American Rescue Plan Act enacted in March 2021 temporarily expands the CTC amount for certain taxpayers, made the credit fully refundable (meaning taxpayers can receive it even if they don’t owe the IRS) and directs the IRS to make advance payments equal to 50% of IRS's estimate of the eligible taxpayer's 2021 CTCs during the period July 2021 through December 2021.
In a letter currently being sent to taxpayers, the IRS explains that taxpayers will automatically receive advance CTC payments —assuming they are otherwise eligible to receive the CTC — for 2021.
To date, theIRS has unveiled the following:
- Child Tax Credit Eligibility Assistant – allows families to answer a series of questions to determine whether they qualify for the advance payments
- Child Tax Credit Update Portal – allows families to verify their eligibility for the payments and gives them an option to unenroll from receiving the monthly payments
- Child Tax Credit Non-filer Sign-up Tool – allows families who are not required to file a tax return but who are otherwise eligible for the payments to report their qualifying children.
What you’ll learn in this episode
- Changes to the CTC for 2021 (1.13)
- What we know about the advance payments (3.50)
- How qualifying children are defined for the advance CTC (5.29)
- What practitioners should be discussing with clients in the next few weeks and related financial planning tips (6.28)
- Scenarios in which practitioners should advise clients to opt out of receiving advance payments and what is involved in the opt-out process (9.33)
- Tips for billing clients for work in this area (14.41)
- The CTC in 2022 and beyond (16.50)
AICPA resources
- Child Tax Credit Client Letter – Client letter template for tax practitioners to use to notify their clients about the child tax credit changes and encourage clients to contact their CPA for additional tax and financial planning guidance.
- Child tax credit: New portal for opting out of advance payments – The Tax Adviser article published June 22, 2021 detailing the latest about the new portal.
Other resources
- Advance Child Tax Credit Payments in 2021 – The IRS dedicated site that houses information related to the advance CTC payments as well as the eligibility assistant, update portal and non-filer sign-up tool
- 2021 Child Tax Credit and Advance Child Tax Credit Payments Frequently Asked Questions – Consolidation of answers to frequently asked questions related to the CTC and the advanced payments, separated by topic
- Proc. 2021-24 – Procedures for individuals who are not otherwise required to file federal income tax returns for taxable year 2020 to receive advance child tax credit payments under Sec. 7527A.
Note, if your podcast app does not hyperlink to resources, visit https://taxodyssey.libsyn.com to access show notes with direct links.
This episode is brought to you by the AICPA's Tax Section, your home base to maintain your professional edge. To learn more about the Tax Section, check out aicpa.org/tax or sign up for a free web tour.
The employee retention credit (ERC) has been a significant lifeline to struggling businesses in the wake of the COVID-19 pandemic. The refundable credit was first established in March 2020 with the enactment of the Coronavirus Aid, Relief and Economic Security (CARES) Act. Since then, is has been expanded in various other relief legislation, most recently in the American Rescue Plan Act, H.R. 1319 enacted in the first quarter of 2021.
While at its core the mechanics may appear straightforward, its practical application has shown to be complex and tax preparers have been an integral part of making it a reality for clients. Meanwhile, some professionals debate whether contingent fees should be considered in this area.
On this Tax Section Odyssey episode, April Walker, CPA, CGMA, Lead Manager – AICPA Tax Section and Ed Karl, CPA, CGMA, Vice President – AICPA Tax Policy & Advocacy, delve into the intricacies of what is considered a contingent fee and how the AICPA Code of Professional Conduct and other regulatory rules address its usage.
What you’ll learn in this episode
- What is a contingent fee (0.40)
- AICPA Code of Professional Conduct surrounding acceptability of contingent fees for original and amended returns (2.04)
- Alternative acceptable fee arrangements (5.39)
- History and evolution of contingent fee usage (6.51)
- Treasury Department Circular No. 230 considerations for contingent fees (9.48)
AICPA resources
- AICPA Code of Professional Conduct – Dedicated hub for the AICPA Code of Professional Conduct which provides guidance and rules to all members in the performance of their professional responsibilities
- COVID-19 tax resources – Resources and information to help CPA tax practitioners navigate the tax world in the COVID-19 pandemic
- Getting to the Bottom Line about Contingent Fees – Blog post by Edward Karl, CPA, CGMA on Oct. 16, 2014
- Tax advocacy – Consolidation of the AICPA Tax Policy & Advocacy team efforts as they advocate for legislative, regulatory and administrative tax matters on behalf of members. See also AICPA advocacy news and recent comment letters.
- Treasury Department Circular No. 230 – Consolidated information and a link to the rules governing the recognition of attorneys, certified public accountants, enrolled agents, enrolled retirement plan agents, registered tax return preparers and other persons representing taxpayers before the IRS.
Note, if your podcast app does not hyperlink to resources, visit https://taxodyssey.libsyn.com to access show notes with direct links.
This episode is brought to you by the AICPA's Tax Section, your home base to maintain your professional edge. To learn more about the Tax Section, check out aicpa.org/tax or sign up for a free web tour.
The past 15 months have been a whirlwind in the tax arena with several COVID-19 relief packages introducing new tax provisions and enhancements to older ones now passed and packed away. President Biden, his administration and Congress are turning their attention to more permanent legislative tax reform measures.
On this Tax Section Odyssey episode, April Walker, CPA, CGMA, Lead Manager – AICPA Tax Section, sits down with Lauren Pfingstag, Director of AICPA Congressional & Political Affairs, to discuss the possibilities of tax legislation in the near future.
What you’ll learn in this episode
- Broad overview of what’s included in the various proposals (0.49)
- Outlook regarding the regulation of tax return preparers and the AICPA’s position on such regulation (3.00)
- Three potential tax proposal scenarios considering competing political forces and procedural limitations (6.11)
- Timing and likelihoods for tax legislation (13.30)
AICPA resources
- COVID-19 tax resources - Developed resources and information to help CPA tax practitioners navigate the tax world in the COVID-19 pandemic.
- Tax advocacy– Consolidation of the AICPA Tax Policy & Advocacy team efforts as they advocate for legislative, regulatory and administrative tax matters on behalf of members. See also AICPA advocacy news and recent comment letters.
Resources
- GovTrack – Tracks the United States Congress and publishes the status of federal legislation and information about members of Congress.
Note: If your podcast app does not hyperlink to resources, visit https://taxodyssey.libsyn.com to access show notes with direct links.
This episode is brought to you by the AICPA’s Tax Section, your home base to maintain your professional edge. To learn more about the Tax Section, check out aicpa.org/tax or sign up for a free web tour.