Tax Pro Roundup: April Edition
SurePrep, part of Thomson Reuters
SurePrep integrates with leading tax software to streamline the 1040 process for tax pros and taxpayers.
Accounting Today
[3/15] BDO USA Alliance, Chicago, teamed up with Cetrom for cloud-hosting solutions, Hancock Askew & Co., Atlanta, merged its advisory practices, and CohnReznick, New York, earned Handshake's Early Talent Award for the third time. Article features tax and accounting updates from across the U.S.
"Derek Kearns, partner, was named the next SEC financial reporting practice leader at Centri Business Consulting, Philadelphia, assuming the role held by Christopher Mora, who will continue to serve as the capital markets practice leader."
San Francisco Chronicle
[3/12] KPMG extended its lease through September 2026 at its longtime San Francisco office. The Big Four firm has occupied the building since 2003, but were considering offices elsewhere with the rise of remote work.
"The renewal is a win for owners Paramount Group and Harel Insurance, though it’s unclear what KPMG’s plans are beyond the next two years."
CPA Practice Advisor
[3/19] Upwork conducted a study to determine the top skills that accounting firms and corporate accounting departments are looking for when hiring employees. In addition to standard skills like bookkeeping and tax preparation, the study revealed more unconventional abilities like instructional design, management consulting, and personal coaching.
"'While we don’t have a crystal ball, we do have a broad-based view of the frontier of work as clients seek new types of work and independent professionals bring new skill sets to their profiles and projects,' Upwork said in the study."
Fortune
[3/1] Skyrocketing CPA wages, long hours, increased reporting errors, and heaps of unanswered job postings are all signs that the U.S. workforce is in dire need of additional accountants. Fortune shines a light on how companies are adjusting to the increasingly difficult labor shortage.
"The demand for fresh talent has become?so intense that Jacqueline Burke, a professor of accounting at Hofstra University’s Zarb School of Business, says more and more firms are turning to undergraduates to bridge gaps, leading to many students taking on full-time internships on top of their full-time studies."
CPA Practice Advisor
[3/5] AICPA has made it their ongoing mission to help boost the accounting pipeline and has formed a new panel to help. The National Pipeline Advisory Group is fielding two new surveys to help drive recommended recruitment and training strategies, one for college students and one for the entire industry.
"'We’ve said from the beginning we’d be data driven, that we’re looking to get buy-in from the profession and its many stakeholders, and that we wanted to make NPAG’s process as transparent as possible,'" said Lexy Kessler, mid-Atlantic regional leader for the accounting firm Aprio and NPAG’s chair."
Accounting Today
[3/20] Leaders around the tax industry share what they find to be the biggest issues facing accounting in 2024.?Among the most common answers: staffing, IT management, and keeping up with compliance mandates.
"'Recruiting is a year-round effort,' said Darci Congrove, managing director at Columbus, Ohio-based GBQ Partners. 'Attracting, developing and retaining talent is a continuous process, which is much different than even five years ago, when it was a seasonal activity.'"
Thomson Reuters
[3/6] Artificial intelligence (AI) can be used to deliver accurate, timely calculations and more to help ensure compliance with tax rules. Many organizations have data in disparate places (e.g., shared drives, spreadsheets, PDFs) and AI can sift through this data, distill it, and present it in an understandable format. This capability, in part, is driving the use of AI-powered automation too.
"AI-powered automation is becoming more and more prevalent, with the majority (60%) of respondents to the Thomson Reuters 2024 Corporate Tax Department Technology Report estimating that between 10% and 50% of their tax departments’ work processes are now automated."
Accounting Today
[3/11] Ron Baker sits down with Accounting High TV to discuss broad issues facing public accounting. Topics range from the necessity of time sheets to growth opportunities to how firms can recruit and retain talent.
"A subscription model of pricing can be an effective way of upgrading a relationship with your clients and speeding up your cash flow. It takes time out of the price-creating equation and also permits a growth of ideas and the initiation of new services that would benefit the client. It also sows seeds for added billing opportunities to flush out or implement the ideas."
CPA Practice Advisor
[3/8] The new AI systems offered by TurboTax and H&R Block for tax prep are subpar, according to an investigation by The Washington Post revealed. The built-in AI assistants from both companies answered questions in a sequence of tests, returning incorrect or irrelevant information.
"While both companies include fine print disclaimers that their AI systems are incomplete and that you should review their output, The Washington Post found the AIs were ineffective about half the time. In a sequence of tests, asking the AI assistants for advice on specific details needed for a putative tax filing, some of the results were totally incorrect."
Boomer Consulting
[2/27] Learning and development plays a critical role at forward-thinking firms. From ensuring competency in existing roles to mastering new skills, dedicated tax and accounting professionals are filling knowledge gaps and becoming indispensable. Sandra Wiley, Shareholder and President of Boomer Consulting, offers her expertise on the subject.
"For example, the demand for expertise in data analytics is surging. Rather than immediately looking to hire new talent with these skills, firms should first consider the potential within their existing workforce. Many employees possess diverse interests and capabilities that, if nurtured, could significantly benefit the firm."
The Wall Street Journal
[2/23] A longer February means that financial executives need to account for an extra day of employee benefits, interest rates, comparable year-over-year metrics, and more. For certain types of companies, there’s sometimes a leap-day benefit of increased revenue.
"Some firms incorporate the additional revenue from leap day into their full-year or quarterly guidance. Theoretically, leap day would produce about 1% of additional sales for a typical quarter ending March 31, because it covers 91 days instead of 90."
SurePrep, part of Thomson Reuters
[2/13] Automation technology may be able to assist your firm’s staff much more than you think. Time-consuming preparation tasks can be eliminated with automation, allowing tax preparers to focus on detailed workpaper preparation, first-line review, and more.
"Unfortunately, staffing constrictions have placed additional workload demands on preparers. Many lack the bandwidth to hone their expertise because manual tasks consume most of their time. That’s why tax technology is no longer a luxury for many firms, but a necessary tool to get true value out of their staff."
Rightworks
[2/15] Automation is increasing efficiency and reducing costs for tax and accounting firms. If your firm hasn’t implemented automation yet, it’s time to take another look at the potential benefits.
"Manual data entry is a place where firms can rely on accounting automation. And during tax season, applications like 1040SCAN by SurePrep? use OCR (optical character recognition) technology to read and enter data. This essentially removes the manual data entry process and reduces human error. Consider how much time you save with an automated application like that—and time is money, my friends. But I don’t have to tell you that."
Accounting Today
[3/19] The IRS has already rolled out technological improvements made possible by funding from the Inflation Reduction Act, such as replacing legacy IT systems and expanding taxpayer services. However, they still haven't laid out plans for how the entirety of the funding will be used.
"In part, that's because the funds are constantly under threat of being rescinded by Congress… over $21 billion in funding over a decade for tax enforcement was clawed back last year as part of the bipartisan deal to lift the debt limit and was distributed to other federal agencies. To avert the threat of a government shutdown in January, government leaders agreed to accelerate those cuts."
Yahoo Finance
[3/18] The IRS has announced a new initiative aimed at high-income non-filers. The efforts aim to improve tax compliance and ensure a fair system. There are more than 125,000 instances of people earning in excess of $400,000 that haven’t filed taxes since 2017.
"The 2022 Inflation Reduction Act has led to $80 billion in funding over a decade, which has allowed the IRS to hire new staff and start mailing non-filing notices out again. It’s worth mentioning that the non-filer enforcement program was limited in recent years due to budget cuts. The enforcement program had been operating sporadically since 2016 due to cutbacks in this department that led to limited staffing."
CPA Practice Advisor
[3/12] Almost 6 million fewer refunds have been issued by the IRS so far this year compared to early March 2023. Those that have received them saw the refund amount increase by an average of 5% from last year.
"A small part of that can be explained by the calendar—last year’s tax season began a week earlier than this year—but the number of tax returns received and processed is only about 2% lower than this point in the tax season last year, according to the statistics."
CNBC
[3/4] The IRS is increasing its cryptocurrency expertise as tax professionals are preparing for a rise in crypto tax scrutiny and enforcement. Industry experts from alliantgroup, Baker Tilly, and Piascik share their thoughts on some of the latest regulatory developments.
"With billions of funding enacted via the Inflation Reduction Act, the IRS has focused on reversing historically low audit rates of higher earners, corporations and complex partnerships. There has also been a rise in digital currency tax investigations from the agency’s crime unit, including unreported capital gains, mining and other income, according to the division’s 2023 annual report."
The New York Times
[3/3] Some people with more than $1 million incomes haven’t filed tax returns since 2017. Now the IRS is sending letters to these high earners to collect taxes. Ken Corbin, chief taxpayer experience officer of the IRS, is interviewed about his role at the agency.
"Everyone else, the agency insists, is going to benefit from the $60 billion, scaled back from an initial $80 billion, that the agency has won via the Inflation Reduction Act of 2022. The year before that, the I.R.S. appointed Ken Corbin as its first chief taxpayer experience officer. So what does he do all day? I went to the agency’s headquarters in Washington to find out, which was an experience unto itself."
ABC News
[2/23] Direct File, the free tax filing website from the IRS, is opening for new users in 12 states for unspecified amounts of time. Some federal government workers have already used Direct File during a testing phase.
"With this pilot program, the IRS says it is trying to provide a free alternative to taxpayers so they can use the government website for online filing instead of paying to do so with a commercial company. According to the IRS, the website explains tax concepts and has customer support representatives available via chat to answer basic tax law questions in English and Spanish."
Yahoo Finance
[3/18] A new rule for public companies to disclose emissions could mean increased demand for services from Big Four accounting firms and specialized reviewers. This may drive competition between the two well-known reporting options. Industry experts from ERM CVS, EY, and Optera share their thoughts.
"The U.S. Securities and Exchange Commission (SEC) on March 6 approved a new rule for public companies to disclose emissions and other climate-related details. The SEC estimates the rule will increase spending by filers on external service providers like assurance firms by as much as $907 million a year, an 18% increase over current levels."
CPA Practice Advisor
[3/6] A new set of rules from the SEC have been published to improve and standardize climate-related disclosures from public companies. Some of the top requirements include climate-related risks, material impacts, and processes for determining their reporting.
"'Our federal securities laws lay out a basic bargain. Investors get to decide which risks they want to take so long as companies raising money from the public make what President Franklin Roosevelt called complete and truthful disclosure,' said SEC Chair Gary Gensler."
PYMNTS
[2/28] Sage is partnering with Amazon Web Services (AWS) to help small to medium-sized businesses (SMBs) optimize their operations with generative AI and address environmental responsibilities. The partnership aims to support SMBs with Sage’s new AI-powered assistant and navigate carbon accounting.
"The release also noted that Sage Earth, a carbon accounting software, will be available in AWS Marketplace in the U.K. and Ireland in the following weeks. The software uses accounting and other sources of data to calculate businesses’ carbon footprints. It also suggests emission reduction strategies for small businesses and large enterprises’ value chains, according to the release."
Accounting Today
[2/23] The tax and accounting industry has no shortage of AI-powered tools, cloud solutions, partnerships, and software integrations. ADP, KPMG, QuickBooks, Sovos, and more are driving the latest headlines.
"QuickBooks launches Solopreneur for sole proprietors; Sovos debuts Compliance Cloud for tax compliance and regulatory reporting; and other accounting tech news."
Thomson Reuters
[2/22] It can be challenging to keep up with all the developments in AI. Tracking the terminology isn’t easy either, especially while managing a demanding workload. You can focus on understanding a few key terms for the types of AI that actually impact your profession.
"Machine learning involves training algorithms to learn from large amounts of data so that the software can perform tasks and improve how it performs those tasks over time. Unlike with traditional computing, there’s no need for the software to be given specific instructions for every aspect of a task because it learns what to do."
Yahoo Finance
[2/28] Two former executives from the cryptocurrency industry have been hired by the IRS to strengthen its expertise of digital assets. IRS Commissioner Danny Werfel said the agency is bringing in experts from the private sector to build and lead specific programs focused on these assets.
"Sulolit “Raj” Mukherjee, the former global head of tax at ConsenSys and former executive at Binance's U.S. unit, will serve as an adviser to the IRS. Seth Wilks, who previously worked at crypto tax software firm TaxBit, will also take on a similar role."
Financial Times
[3/7] More firms are ditching the traditional partnership structure to experiment with private equity-owned models. Vanessa Houlder wrestles with the implications of this trend, examining what it could mean for industry growth and technological investment.
"Private equity investment does not always mean abandoning the partnership structure. Both Baker Tilly US and Moore Kingston Smith illustrate the point. But it is frequently a trigger for abandoning what critics say is often an unwieldy decision-making structure."
CNET
[3/7] Dragging your feet doesn’t do you any favors when filing your taxes. But there are several ways to navigate tax filing and pay your tax bill. CPA Logan Allec discusses ways to succeed during tax time.
"Whether your tax bill caught you by surprise or you need more time to pay it in full, you have options. I talked to Logan Allec, a certified public accountant and CEO of Choice Tax Relief, to find out what you should do in this situation. Here's what he recommends."
Journal of Accountancy
[2/29] Gartner thinks companies should prioritize “technology acceptance” to reduce financial errors. There has been an increasing demand on accountants’ expertise due to new regulations, and adopting technology could benefit all employees in the finance function.
"Gartner research found that companies that achieve technology acceptance saw a 75% reduction in financial errors. Those that don't achieve technology acceptance saw a 61% increase in errors."
AI Business
[2/26] The story of how AI will impact business and jobs is still being written. David Mallon, managing director of Deloitte Consulting, shares his thoughts on AI’s role in today’s workforce and what the technology could mean for digital natives of the future.
"The best way to avoid being disrupted by AI is to figure out how to use AI to reinvent what you do. If you're on the forefront of re-authoring your own job, you've increased the likelihood that you're going to be just fine no matter how this plays out."
Santa Monica Daily Press
[3/13] Accounting has an unfortunate reputation for being an unexciting discipline. But Santa Monica College Accounting Professor Greg Brookins is looking to change that by injecting his signature brand of passion and enthusiasm into every lesson.
"Two weeks into his Accounting 1 class with Brookins, Gordon knew better than to think of an accountant as someone at a desk 'just doing balances and bank reconciliations.' After his epiphany, Gordon asked his professor about SMC’s accounting program. Later, he connected Gordon with the California Society of CPAs, where the latter is now employed as a student recruiter."
AOL
[3/9] PCAOB chair Erica Williams has made it her mission to reduce the rising number of accounting errors that emerged post-pandemic. In 2022, the PCAOB found errors in 40% of the audits they reviewed.
"'Some things that we've heard is that maybe the pandemic or the resulting economic effects of that may have impacted firms,' she tells Fortune. 'But now, we're many years out from the pandemic. And it's really time for solutions, not excuses, on those things. You'll see that there are some firms that have far fewer deficiencies than others.'"
Thomson Reuters
[2/29] In their ongoing series highlighting women in the advisory space, Thomson Reuters looks at a Texas A&M grad who started her own practice at the age of 25. Brittany Lanphier strengthened client partnerships and expanded advisory offerings using a relationship-centric billing model.
"Lanphier’s whole outlook on what skills and expertise were needed to succeed in an advisory practice has changed. Now, she says, it’s less about the technical tax knowledge and more about 'creating a process and system to deliver basic knowledge to clients.'"
Accounting Today
[3/5] After a period of COVID-impacted uncertainty, 2023 saw highly promising growth for mid-sized and large accounting firms for the second year in a row. Here’s a list of the top 25 fastest growing firms in 2023, according to Accounting Today.
"The firms in Accounting Today's 2024 Top 100 Firms roster of the largest practices in the country reported that their revenues grew by 12.88% in 2023 — the second-highest rate in a decade, though down from 18.55% in 2022."
Sports Illustrated
[3/18] Even professional sports organizations aren't immune to accounting slip-ups. As punishment for misreporting their payroll in 2022, the San Francisco 49ers must forfeit a 4th round draft pick in 2025.
"Here's what the 49ers had to say in a written statement: 'We take responsibility and accept the imposed discipline from the NFL due to a clerical payroll error. At no time did we mislead or otherwise deceive the league or gain a competitive advantage in connection with the payroll mistake.'"
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Absolutely energizing to see the adaptability in the tax profession! Growth amidst challenges speaks volumes. Like Aristotle said, through adversity, we find our strengths. Kudos to everyone navigating these times with such resilience and innovation! ??????