Tax Pro Roundup: March Edition

NASBA upholds 150-hour education requirement for CPA licensure

Journal of Accountancy

[2/10] Support for a CPA licensure requirement of 150 credit hours was reaffirmed with a unanimous vote by the Board of Directors of the National Association of State Boards of Accountancy (NASBA).

“Across the board, stakeholders charged with promoting and protecting the accounting profession are searching for solutions to a talent acquisition issue that isn't unique to the profession.”

U.S. Companies Anticipate Increased Hiring in the First Half of 2023

CPA Practice Advisor

[2/16] Despite ongoing recession speculation, data from Robert Half shows that companies nationwide are still looking to hire. The accounting sector ranks highest in staffing needs.

“According to the research, 72% of managers plan to hire more contract professionals in the first half of 2023, compared to 45% six months ago.”

AICPA Seeks Considerations for Tax Provisions

Insightful Accountant

[2/20] AICPA urges Congress to simplify tax compliance and minimize confusion related to identifying costs that should be capitalized rather than expensed.

"The association urged Congress to ease the confusion and stress by immediately extending the expensing provision related to Section 174 and consider the other tax provisions that have recently expired or will expire in 2023." 

Special Report: Accounting – Accounting Firms Prepare for Tax Season

Los Angeles Business Journal

[2/6] Accounting firms and their clients are navigating several challenges this tax season. Leaders from Deloitte, KPMG, and PricewaterhouseCoopers (PWC) share their thoughts on the industry’s latest developments and the current tax season.

“This tax season is being affected by several issues, including the Inflation Reduction Act and macroeconomic risks. Those and other factors are impacting accounting firms and their clients.”

8 ways to fill the pipeline

Accounting Today

[2/24] It’s no secret that the accounting industry has a staffing problem. In this article, thought leaders across the industry and academia share their opinions on how to fix it.

“To increase high school students' exposure to accounting, advocates such as the Texas Society of CPAs have been pushing for accounting to be included among STEM-designated disciplines."

How CPA Firms Are Engaging the Next Tax and Accounting Pros

Bloomberg Tax

[2/23] Accounting firms are adopting strategies from other industries to attract and retain talent. Offering hybrid work environments, investing in professional development, and developing a more inclusive workplace culture are part of this effort.

“Accounting firms that invest in their employees’ professional development by helping each define their own personal purpose will foster a sense of teamwork and community and will be more likely to attract and retain their top performers.”

KPMG becomes first Big Four accounting firm to cut staff in U.S. - FT

Thomson Reuters

[2/15] KPMG is cutting nearly 2% of its U.S. workforce, according to the Financial Times, which cited an internal announcement. About 700 KPMG employees will be affected.

“Several financial firms have slashed jobs in recent months including major Wall Street banks, asset managers and fintechs amid a turbulent macroeconomic environment that has pressured consumers and soured demand in several mainstay business units.”

Talent acquisition: AICPA chair hears student voices, shares strategies

Journal of Accountancy

[2/6] AICPA chair Anoop Natwar Mehta has been meeting with thousands of students to promote the accounting profession and better understand its future workforce.

“Mehta believes that CPAs thriving in the profession have a responsibility to support aspiring CPAs. He also believes that firms and organizations can benefit from doing the same.”

How your firm can avoid SaaS sprawl

SurePrep, part of Thomson Reuters

[2/17] Software-as-a-Service (SaaS) can be effective when deployed with care, but digital applications can also accumulate and become challenging to manage. Preventing "SaaS sprawl" is possible with a measured approach to app adoption.

“This phenomenon reached critical mass in 2020 when companies were forced to go remote with limited notice. Many had to adopt multiple cloud technologies without adequately vetting their compatibility. As a result, some companies are operating with makeshift tech stacks to this day.”

Don't Put Process Improvement on Hold During Tax Season!

Boomer Consulting

[2/7] There are many ways for firms to continually improve their processes throughout the year. Firms can identify categories of waste, review client fit against certain criteria, and schedule busy season post-mortems.

“In our process improvement engagements, we help firms identify waste—activities that don't add value from the client's point of view, resulting in decreased profitability, lost capacity, and longer cycle times.”

Data to Drive Excellence and Enhance Recruiting and M&A Options

CPA Practice Advisor

[2/17] Data is the backbone of the accounting industry. That’s why it’s important to keep track of how performance analytics can represent your firm. Here are firm metrics your firm can use to impress potential employees, clients, and M&A candidates.

“When you know the achieved hourly rate, you know what your “engine” is pushing out. Do you have capacity to do more?” 

Gen Z: The next generation of taxpayers and tax pros

SurePrep, part of Thomson Reuters

[2/22] Many firms looking for their next hires or their next clients may be depending on Generation Z. Understanding Gen Z’s characteristics can help firms appeal to them.

“Generation Z hasn’t made much of a footprint in the tax and accounting industry yet, but recruiting them in the coming years will be paramount. People born between 1997 and 2012 are projected to make up 30% of the U.S. workforce by 2030, according to a May 2022 story from Fortune.”

How tax professionals can add value by investing in advisory services

Thomson Reuters

[2/23] Expanding advisory services gives lets you demonstrate your expertise and grow client relationships in ways that aren’t possible with 1040-exclusive clients. Here are best practices to maximize your value to clients.

“Some practitioners fear losing clients due to higher fees, but the reality is, clients are willing to pay a premium when they have a clear understanding of the value being provided.” 

Is Cyber Insurance Worth it For Accounting Firms?

CPA Practice Advisor

[3/02] Since 2020, cyberattacks have risen 600%. Investing in cyber insurance to cover financial damages might be the best way to protect your firm in a volatile digital landscape.

“According to a Forbes article, the rise in high-profile cyberattacks means that cyber insurance is also up. Not only is it increasingly essential but increasingly expensive, with premiums up 79% in Q2 of 2022 compared to 2021.” 

CPAaaS: Pros and cons for the potential future of billing

SurePrep, part of Thomson Reuters

[3/1] The rise of Software as a Service (SaaS) has driven intrigue toward other potential subscription models like CPA as a Service (CPA as a Service).

“Tax and accounting leaders have begun to rethink conventional wisdom in this time of change and adaptation. Digital automation and remote work have already transformed the industry. Could billing be next?”

The 7 habits for modern firms: Part 1

Rootworks

[02/17] These 7 habits can guide you in your personal and professional life.

"In their recent podcast, Darren Root, Chief Strategist for Right Networks, and John Mitchell, Culture and Workforce Advisor for Right Networks, dive into the first three habits of Stephen Covey’s, “The 7 Habits of Highly Effective People.”

How an Internal Coaching Program Can Support Employee Wellbeing at CPA Firms

CPA Practice Advisor

[03/02] Prioritizing the wellbeing of staff creates a healthy and more productive workplace culture.

"Most recently, we piloted a wellbeing program for our partners to help them learn the skills they need to role model wellbeing and create an unparalleled people experience."

IRS Says State Issued Stimulus Payments are Not Taxable

CPA Practice Advisor

[2/11] The IRS clarified its approach on federal taxes for state-issued special payments in 2022. Such payments will not be taxable.

“The IRS has determined that in the interest of sound tax administration and other factors, taxpayers in many states will not need to report these payments on their 2022 tax returns.” 

IRS now accepting uploaded docs for some notices*

Accounting Today

[2/16] In an effort to reduce their backlog and increase flexibility, the IRS now allows clients to upload select notices electronically rather than mailing them.

“The IRS estimated that could potentially help more than 500,000 taxpayers each year who receive such notices, which include military personnel serving in combat zone areas and recipients of important credits like the Earned Income Tax Credit and Child Tax Credit.” 

IRS Processing Tax Returns At a Quicker Rate Than Last Year

CPA Practice Advisor

[2/20] Taxpayers can expect their tax returns sooner than expected this year.

"The IRS has been processing refunds faster this tax season than last year, but the average refund Americans are receiving is slightly lower, the federal agency recently announced." 

Senate committee approves Werfel as IRS commissioner*

Accounting Today

[03/03] Winning by a 17-9 vote, David Wershel officially wins The Senate Finance Committee nomination.

"'The fact that Mr. Werfel's nomination passed through committee with bipartisan support is a testament to his record as a fair-minded public servant who's able to work with both sides in Congress,' said Senate Finance Committee Chairman Ron Wyden, D-Oregon, in a statement."

Bill Would Make Preparers Financially Responsible For Tax Return Errors

Forbes

[2/10] A Connecticut senator has proposed a bill that would hold tax preparers financially responsible for accounting errors.

“S.B. 814 would require that the tax preparer shall file an amended return at no cost to the taxpayer and be liable for any additional tax, penalties or interest owed.”

Challenges this tax season include finding time to eat*

Accounting Today

[2/14] Tax professionals are forced to adjust just about everything during busy season, including their diets. A new study from EZCater shows that tax pros have limited time to eat during this time of year and largely resort to fast food.

“An overwhelming 98% of tax professionals who get free meals during tax seasons said it makes them feel appreciated. 66% of those fed for free say it helps them eat healthier food, and over half (55%) who don't get free meals say they would feel less stressed if they did.” 

Are tax & accounting professionals returning to the office?

Thomson Reuters

[2/13] Many large companies are delivering return-to-office mandates for employees. That doesn’t appear to be the case for the tax and accounting industry.

“Of the 216 accounting firms that participated in the 2022 ATAWW Survey, 97% allowed their talent to choose where they work, while 94% offer flexibility in when people are working.” 

Nearly two-thirds of 529 accounts leave big money on the table. Here's why

Accounting Today

[2/23] A National Bureau of Economic Research study shows that most 529 college savings plans underperform due to high fees and state-by-state variables.

“Maine, for example, offers multiple matching grants for in-state residents. Meanwhile, Florida offers a lower-cost plan relative to California's, but the Sunshine State's plan is only available to in-state residents.” 

What’s Making Self-Employed Workers Miserable? Mean Clients

CPA Practice Advisor

[2/23] Self employment its perks, but it can require shouldering some unpleasant responsibilities as well. In a recent FreshBooks survey, one third of respondents cited “meanness” as their clients’ worst trait, ahead of “dishonestly” and “not paying on time.”

“Women are seemingly taking the brunt of this mistreatment. They’re 50% more likely to experience “mean behavior” from bad clients, and twice as likely to say their worst client was 'skeptical of their abilities' from the beginning.” 

9 in 10 Accounting and Audit Firms Struggle to Find Talent

CPA Practice Advisor

[2/23] Two newly released reports highlight the ongoing staffing challenges for the tax and accounting industry. More than 4,100 accountants and 2,300 auditors contributed responses.

“More than 90% of accountants and 95% of auditors surveyed find it either challenging or extremely challenging to hire skilled talent. When retaining talent, more than 85% of accountants and 90% of auditors said it is either somewhat or extremely difficult.” 

Building a Foundation for ESG: How companies define, develop & manage ESG programs

Thomson Reuters

[2/22] Corporate leaders in ESG and supply chain roles were surveyed by Thomson Reuters for a report on how ESG efforts are developing.

“Interestingly, the report found that while ESG is widely embraced as a top priority at many public companies, with established programs and designated ESG leaders in place, many privately held companies are at an earlier stage of adoption with their efforts being more siloed into such departments as Supply Chain and Human Resources.” 

2023 State of the Tax Professionals Report: Accounting firms have different priorities this year

Thomson Reuters

[2/17] More than 500 accounting firms from the United States, United Kingdom, Canada, Argentina, and Brazil were surveyed by Thomson Reuters for a report to determine firms’ strategic priorities.

“The report goes deep into what strategies tax & accounting firm leaders said they are prioritizing in 2023, why technology and automation play such an important role in these long-term strategic plans, and how firms intend to streamline their operations to remain competitive.” 

Opportunity knocks for firms as ESG reporting, assurance levels rise

Journal of Accountancy

[02/27] The percentage of large companies disclosing and obtaining assurance on ESG data is increasing, but the percentage of assurance provided by accounting firms is decreasing.

"Ninety-five percent of companies reported some ESG information, and 64% obtained some level of assurance on that data in 2021, according to The State of Play: Sustainability Disclosure & Assurance."

What does the Future of Accounting Look Like?

Data Science Central

[2/14] Technology is changing the way the tax industry works and Artificial Intelligence, cloud computing, and blockchain represent the next frontier. Here’s how your firm can leverage them.

“The rise of AI and robotics has caused a significant decrease in accounting labor costs. AI uses complex algorithms and machine learning to take over repetitive and mundane accounting tasks like data entry.” 

No Tax On Crypto Purchases — Texas Proposals Go Big On Digital Assets

Forbes

[2/14] A new bill presented to the Texas legislature intends to expand the state’s blockchain presence by eliminating taxes for cryptocurrency purchases.

“Payments made in cryptocurrency at the point of sale would receive a two-year retail sales tax holiday.”

Black Tax Leader on Driving Diversity in the Field (Podcast)

Bloomberg Tax

[2/23] Tifphani White-King, principal at Mazars USA, shares her experiences and insights for meaningful change in the tax profession with Bloomberg Tax reporter Jeff Leon.

Tax practitioner Tifphani White-King is strongly invested in increasing diversity and equity in the world of tax.” 

Accounting Needs Entrepreneurial Spirit to Stem Staff Shortfalls

Bloomberg Tax

[3/1] Maybe an image makeover can help the tax and accounting industry solve its staffing woes. Anees Pretorius argues that providing greater equity opportunities and cutting-edge SaaS products can help attract qualified tax professionals.

“Workflow tools that used to belong to the “top of the pyramid” are being improved as access to them is being democratized, which sets the stage for a new, entrepreneurial form of accounting.” 

A Positive Take on Employee Turnover

Boomer Consulting

[2/28] Employee turnover is a difficult reality in the tax industry. But with the right mindset, your tax practice can use it as an opportunity from learning, growth, and development.

“With an open position available, you may have an opportunity to develop existing team members by offering promotions or lateral moves that can help stimulate job satisfaction” 

5 reasons taxpayers love TaxCaddy

SurePrep, part of Thomson Reuters

[02/17] Offer your firm and clients a modernized workflow solution. Here are 5 reasons your taxpayers will love TaxCaddy. (Video)

The 2023 Top New Products

Accounting Today

[2/10] The accounting profession continues to see major developments regarding process changes and technological advancements. Accounting Today lists their choices for 2023's top new products across several categories.

“Time stands still for no one, not even accountants, and this year's selections for the Top New Products of 2023 reflect this. In just a short time, we have seen major changes to the nature of the accounting profession, which have necessitated new solutions to capitalize on these opportunities.”

From Accountant to Award-Winning PGA Professional: the Story of Joe Hallett, PGA

PGA of America

[2/15] Joe Hallett’s love for golf pulled him away from his position as a junior accountant. What started off as an offer to run a golf shop turned into a 26-year career as a PGA Professional.

“Although he’s still got that accounting degree at his house somewhere, his role as a PGA Coach to a few legendary names who've graced the LPGA Tour is the job he’s loved fully and completely.” 

Can Volunteering Lower Your Taxes?

Forbes

[2/21] Pro-tips on how to itemize volunteering in order to receive a bigger tax return.

"To qualify for this tax deduction, the expenses you are planning to deduct must directly relate to the charity where you volunteer." 

Florida Man Gets 6 Years for PPP Fraud

CPA Practice Advisor

[3/02] While PPP loan fraud was rampant, not all offenders posted pictures of themself driving an exotic Lamborghini or flying on a private jet on social media.

“Barosy fabricated prior-year business expenses, net profits, and employee payrolls, and submitted bogus IRS tax form… to buy the Lamborghini, fancy watches and designer clothes.”