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The AICPA represents the CPA profession and its interests before the government and regulatory bodies. The AICPA regularly meets with the White House, Congress and regulators, such as the Securities and Exchange Commission and the Internal Revenue Service.

 

 

 

 

 

 

 

 


 

Preserving Cash Accounting

Cash-accountingHumorist Art Buchwald once described tax reform as taking the taxes off things that have been taxed in the past and putting taxes on things that haven’t been taxed before. Buchwald’s amusing analysis notwithstanding, tax reform is an arduous task. There are a lot of moving parts being studied on Capitol Hill at the moment. And one part in particular is of great concern to the nation’s CPAs.

As Congress considers the most significant attempt at tax reform in almost 30 years, the House Ways and Means Committee has produced a small business tax reform discussion draft that focuses on simplifying the tax codes for small businesses, including individuals and passthrough entities. While supportive of the Committee’s efforts to simplify the tax code and responsiveness to taxpayer concerns that the code is too complex, the AICPA strongly opposes a proposed limitation on the use of the cash basis method (for the non-CPAs among us, the cash method recognizes revenue and expenses when cash is received or disbursed rather than when earned or incurred. It is simpler in application, has lower compliance costs, and does not require taxpayers to pay tax before receiving the income being taxed). 

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Fall Review of State Legislative and Regulatory Issues: Part 2 of 2

Across the county, state legislatures considered numerous issues that impact the CPA profession.  In part two of this two-part post, we review issues dealing with: CPAs providing services for marijuana-related businesses, state board of accountancy reorganizations, sales tax on professional services and peer review.

Marijuana Businesses and CPAs

Colorado-capitolAn issue with implications for the CPA profession centers on the legalization of marijuana for both recreational and medicinal use.  While the sale and use of marijuana is illegal at the federal level, state governments and voters are increasingly showing a willingness, in certain jurisdictions, to decriminalize the drug. In November 2012, voters in Colorado and Washington approved ballot measures legalizing the recreational use of marijuana.  A total of 19 states and the District of Columbia have laws permitting the use of marijuana for medical purposes. The AICPA, with input from the Colorado and Washington state CPA societies, has developed an issue brief that gives an overview of U.S. recreational and medicinal marijuana laws, the current legislative/regulatory environment and information for CPAs considering providing services to businesses that operate in these industries (including a list of questions for CPAs to ask themselves before considering this line of work).

Continue reading "Fall Review of State Legislative and Regulatory Issues: Part 2 of 2" »

Fall Review of State Legislative and Regulatory Issues: Part 1 of 2

CPA-Mobility-MapAcross the county, state legislatures considered numerous issues that impact the CPA profession.  In Part one of this two-part post, we review legislation that affected CPA mobility, including streamlining military family licensure processes, promoting film tax credits and creating state tax tribunals.  Part two will cover state board reorganizations, sales tax on professional services, new peer review laws and CPAs providing services for marijuana-related businesses.

Currently, 49 states and the District of Columbia have passed individual CPA mobility laws and the remaining U.S. jurisdictions are working toward this goal.  These laws allow CPAs to operate across state lines without obtaining reciprocal licenses in each state in which they practice.  New state legislation is sometimes proposed in a way that can have unintended consequences on the profession’s mobility regime.  This year, there were three particularly noteworthy areas where CPA cross-border practice could have been put in jeopardy.  These included:

  1. the easing of occupational licensing requirements for members of the military and their spouses;
  2. the creation of film tax incentives requiring audits by in-state CPAs; and
  3. the establishment of state tax tribunals wherein CPAs would seek to represent taxpayers.

Continue reading "Fall Review of State Legislative and Regulatory Issues: Part 1 of 2" »

In the News: AICPA to Congress: Consolidate Small Business Retirement Plans

The AICPA is gearing up for our Fall Meeting of Council, which begins Oct. 20 in Los Angeles. Be sure to follow @AICPA_JofA and @AICPANews on Twitter and subscribe to the AICPA’s Press Center RSS feed to keep up with all the news and information coming out of the meeting.

In the meantime, I’ve highlighted a few recent accounting articles in the news that you may missed over the last week.

US-capitolAccounting Today covered the recent written testimony that the AICPA submitted for the record of the House Small Business Committee’s hearing on retirement savings for small employers. In the testimony Jeffrey A. Porter, AICPA Tax Executive Committee chairman, suggested several ways to simplify the complexity of the retirement planning universe.

“When a small business grows and begins to explore options for establishing a retirement plan, the alternatives, and the various rules, can become overwhelming,” he wrote in his testimony.

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Placing the Public’s Interest at the Forefront

HandshakeThe CPA profession has a long-standing history of serving the public interest, with more than 125 years of providing services in the highest professional manner. As individual clients’ financial worlds become increasingly complex, many CPAs have responded by expanding their service offerings beyond traditional tax compliance and planning to include investment, estate, retirement and risk management advice.

The landmark Dodd-Frank Wall Street Reform and Consumer Protection Act, passed in the wake of the economic crisis of 2008, required that the Securities and Exchange Commission conduct a study on the effectiveness of the existing standards of care for financial professionals. The study covers CPAs who provide investment advice and personal financial planning services to their individual clients (download the free CPA’s Guide to Investment Advisory Business Models to determine if you have a registration requirement). Currently, broker-dealers and investment advisers operate under different standards of care.

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CPAs Bring Expertise, Bipartisanship to Congress

Businesses and individuals trust CPAs for their objectivity, integrity and independence. Those characteristics are what the public also values in elected officials, so we are fortunate that a growing number of CPAs are involved in state, local and federal government.

This year, two more CPAs were elected to Congress: Rep. Tom Rice (R-SC) and Rep. Patrick Murphy (D-FL.). That makes a total of 10 CPAs in Congress, plus an additional two accountants in the Senate.

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Tax Reform is Centerpiece of CPAs’ Advocacy on Capitol Hill

Capitol HillWhen more than 400 leaders of the CPA profession journeyed to Washington, D.C., to attend last month’s AICPA Spring Meeting of Council, visits to Capitol Hill to engage in advocacy of the profession’s legislative goals were a highlight of the agenda. To no one’s surprise, tax reform – which sits atop the list of the Institute’s legislative priorities – was a focal point of the visits.

The AICPA has a longstanding tradition of advocating for sound tax policy and assisting lawmakers on tax policy matters. The proliferation of new income tax provisions since the 1986 tax reform effort has led to complex compliance hurdles for taxpayers, administrative complexity and enforcement challenges for the Internal Revenue Service. The Institute has testified on tax reform before the House Ways & Means Committee and the Senate Finance Committee and submitted technical recommendations to five study groups whose findings will shape legislation expected later this year.

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Wrap Up of AICPA Spring Governing Council Meeting 2013

The 2013 AICPA Spring governing Council meeting kicked off on Sunday and just wrapped up. Take a look at the three-day meeting through the eyes of social media. (Email subscribers: View the full story on AICPA Insights.)

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Tax Reform: The Crystal Ball Never Lies

Crystal-ballPeople often ask me, “Ed, when do you think we’ll finally see tax reform?”

“Not before 2014,” I respond with assurance.
“How can you be so sure, Ed?” they say.
“My crystal ball never lies!

But I started getting a bit nervous about sounding so confident.  After a little digging, I found out my crystal ball had once predicted that the Titanic was unsinkable, yet it went down on April 15, 1912. How’s that for foreshadowing?! That forced me to do some soul searching and thinking.

Flash back to November 2011. I was sitting next to Pat Thompson, who chaired the AICPA Tax Executive Committee.  We were listening to Don Longano, former House Ways and Means Committee Chief Counsel and Washington tax insider, share his views on the prospects for tax legislation at the National Tax Conference.

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Windows on Washington

Distorted-politicsA few weeks ago I talked about the jitters many business owners and families are feeling in regards to the current U.S. economic situation. Now, more than ever, businesses are looking to their CPAs to help them make sense of this increasingly complex world. At the AICPA, we want to do everything we can to help you succeed in this environment.

We asked you to describe the angst you are observing in your practice. We received dozens of comments via the blog post and social media channels. Overwhelmingly, members said that Congressional action—or in many cases, inaction—is the primary source of uncertainty and anxiety for clients and in their companies.

Right or wrong, it is clear that we live in a time when the Federal government is quite active. Think about it: TARP, the auto-industry bailout, Dodd-Frank, healthcare reform, American Tax Reform Act—and the list continues to grow. There will assuredly be more “cliffs” to come this year: surpassing the debt ceiling, a possible downgrade in US credit ratings, sequestration, and another continuing resolution(s) to fund the Federal government.

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Tentacles of State Tax on Professional Services May Reach CPAs

TentacleCould your clients be required to pay a sales tax on your CPA tax and accounting professional services? Could states really “tax a tax service” that CPAs provide to taxpayers who need these services to comply with the increasingly complex tax law and accounting rules?

Well, three states already tax professional services and do not exempt accounting services, so CPAs in those states can speak to its impact. The states are Hawaii - 4%, New Mexico - 5% and South Dakota - 4%. Some states also have taxes that affect (but do not specifically target) the accounting profession. For example, Delaware imposes a gross receipts tax of .004% on monthly receipts over $100,000, and the state of Washington has a 1.8% business and occupation tax on service providers.

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CPAs Say Reducing Nation’s Deficits Is Job No. 1

Money-bandaidWhen a CPA alerts an individual or an organization to a problem, it’s usually wise to heed the financial advice. CPAs figure out the meaning of numbers every day and are accustomed to giving guidance on complex financial situations.

Once again, CPAs are informing America that the federal budget numbers tell an alarming story. In an online survey conducted by the AICPA in December, three-quarters of CPAs said immediate action is needed to quell spiraling federal budget deficits. More than half identified deficit reduction as the top economic priority for the United States, ahead of creating jobs (23 percent), tax reform (18 percent) and ensuring the long-term stability of Social Security and Medicare (5 percent).

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AICPA Advocates for CPAs with Mobile Workforce Legislation

Tax formsDo you or your employees travel around the country, working in different states and jurisdictions? As I travel around the United States, I hear more and more management accountants lamenting the difficulties associated with interstate operations and the significant regulatory burden with regard to compliance with non-resident state income tax withholding laws.

Currently, there are 41 states that impose a personal income tax on wages and there are many different tax requirements regarding the withholding of income tax of non-residents among those 41 states. While some states offer de minimis thresholds or exemptions before taxes must be withheld and paid, others require only a work appearance in the state before imposing personal income taxes on the employee and withholding requirements on the employer—even for just one day.

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An Interview with AICPA President and CEO on 2013

Barry_Melancon

The following is an interview with AICPA President and CEO Barry Melancon, CPA, CGMA. He was asked to share his thoughts about some of the major issues and trends that will affect CPAs in 2013.  

 

In the coming year, we will see the first efforts of the Private Company Council. What changes can CPAs and the companies they serve expect to see?

The Financial Accounting Foundation’s Private Company Council was created to address issues affecting companies that need GAAP-based financial statements. The PCC only recently began meeting, and will be weighing in on existing standards and ones in development. Private company accounting stakeholders are expecting prompt action by the PCC in modifying GAAP to bring more relevance and simplification to financial reporting.

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The Extraordinary Possibilities of the Accounting Profession

Richard-caturanoI was a kid from a blue-collar immigrant background, growing up in a neighborhood where most adults cobbled together a living from two or three jobs. When I turned 12, our community got its first CPA resident. That’s when I learned what a CPA was, and that it could lead to a better life. Thanks to the CPA profession, I grew up to be able to live the great American Dream.

I am honored and excited to write to you as the new AICPA Chairman of the Board of Directors. I believe the CPA profession is full of even more promise today than it was when I first started my career. For those with determination, adaptability and persistence, the profession offers extraordinary possibilities. I’ve learned the key to achieving that success: embracing change and seeing the opportunities in it.

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2012 Presidential Election and the CPA Profession

Election 2012The 2012 presidential election is just around the corner. While it’s not clear who will win the White House, there are many reasons you should be paying close attention. And we’re seeing indications that you’re doing just that. In a CPA Letter Daily poll on Oct. 16, 65% of more than 3,200 respondents said they would be watching that night’s presidential debate.

There is no shortage of issues affecting CPAs and our clients or employers. Highlighted below are some of the important financial issues facing our country:

  • “Fiscal cliff.” The uncertainty surrounding potential tax increases and spending cuts, as well as related issues, has brought Washington to a stand-still. Uncertainties include extension of the Bush-era tax cuts, a fix for the Alternative Minimum Tax, tax increases attached to the Patient Protection and Affordable Care Act, and a package of mandatory federal spending cuts totaling $1.2 trillion over 10 years.

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In the News: CGMAs Can Bridge the Gap in Human Capital Management

CGMA logoDavid McCann at CFO.com spoke with Arleen Thomas, CPA, CGMA, AICPA SVP of management accounting, about a recent talent management survey for Chartered Global Management Accountants conducted jointly between the AICPA and the Chartered Institute of Management Accountants by the Economist Intelligence Unit. The report found that 43 percent of the CEOs, CFOs and human resource directors surveyed said their companies have missed financial goals in the past 18 months because of inadequacies in human capital management. Almost the same number, 40 percent, indicated that such shortcomings—which could include insufficient systems, processes or management information—have hindered their ability to innovate. “We believe that talent and the human dimension drive business growth and companies haven’t focused enough on that,” said Thomas. “Too many companies look at talent in terms of what they have to do to comply with labor laws and regulations, rather than understanding that it can be a competitive differential.”

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A New Chapter in the Profession’s Extraordinary Story

It’s amazing to see what can happen within a single year. That’s one of my main observations as I complete my extraordinary time as your chairman.

I was honored to serve as chairman during the AICPA’s 125th anniversary. The Institute’s founders wanted to make a difference in the lives of CPAs and the people and organizations with whom they worked. They clearly succeeded, and I am confident we will continue to create value for our clients, employers and the public as the 21st Century progresses. As this year draws to a close, I see an increasingly vibrant profession preparing for the immense challenges facing us. Most of all, I see a profession that, throughout its history, has served with integrity and unleashed opportunities for success.

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AICPA Tells Congress to Keep Oversight of Investment Advisers with SEC

As the AICPA gears up for our 125th Anniversary next week, here’s a wrap up of a few interesting accounting topics recently making the news. You can follow @AICPANews on Twitter to stay on top of all the latest official AICPA news as well as articles impacting the profession.

Barry MelanconCFO.com wrote that the AICPA raised concerns over the Investment Adviser Oversight Act of 2012 and urged Congress to keep oversight of investment advisers with the SEC. Introduced in the House of Representatives on April 25, the bill would transfer oversight of investment advisers from the SEC to a self-regulatory organization."Many of our members work for a firm that is registered as, or affiliated with, a registered investment adviser," Barry Melancon, CPA, CGMA, AICPA president and CEO, said in a statement. The AICPA's stance is that the system proposed under the bill would cost advisers much more in fees than current SEC oversight would.

On January 19, 2011, the SEC issued a staff report that found the current SEC-registered investment-adviser examination program faces hefty capacity and funding challenges. Three options were proposed to offset these challenges.  One would be to impose "user fees" on SEC-registered investment advisers to fund oversight. A second would authorize one or more SROs to examine investment advisers, with oversight from the SEC. A third choice would be to authorize the Financial Industry Regulatory Authority, a leading broker-dealer SRO, to examine dual registrants for compliance with the Investment Advisers Act of 1940. All three options require congressional action. "We believe that the SEC's core mission to protect investors requires adequate regulation of the investment advisory profession. The SEC remains the proper regulatory body to protect the public's best interest." Melancon said, "Providing the SEC with resources to properly enforce their rules is the best solution for investors and the public."

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In the News: Accounting named one of the Happiest Jobs in America

We’ve got a lot of big things on the horizon at the AICPA: April Financial Literacy Month (we’ll be releasing survey results on the financial state of Americans) and in mid-May, we’ll be celebrating the 125th Anniversary of the AICPA at our Spring Council meeting in Washington D.C.

Barry Melancon, CPA, Testifying in front of CongressWhich is not to say that we’ve haven’t been busy lately! Just in the last week we released the results of our CGMA Global Economic Forecast and Barry Melancon, CPA, CGMA, president and CEO of the AICPA, testified before the House Capital Markets Subcommittee Accounting and Auditing Oversight Hearing. Melancon told members of the subcommittee that AICPA supports a strong, balanced and independent regulatory structure that protects investors but does not restrict the flow of capital.

During busy season and year-round, you can keep abreast of all the most important AICPA news by subscribing to the Media Relations RSS feed or following @AICPANews on Twitter. On to news of note from the last few days.

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Proposed SOX 404(b) Changes Could Add to Investors’ Risks

House Financial Services committee members sit...Image via Wikipedia

There has been quite a bit of legislative and regulatory activity over the past few months regarding Sarbanes-Oxley Section 404(b), which requires public companies to have an independent auditor attest to management’s assertions on internal controls over financial reporting. I want to bring you up to date on recent developments and the AICPA’s position on the issue.

Currently, an exemption exists for issuers with a public float of less than $75 million, a provision enacted as part of the 2010 Dodd-Frank Act. These smaller issuers were never required by the Securities and Exchange Commission to comply with Section 404(b) since enactment of SOX. However, legislative, regulatory, business and economic influences are combining to apply pressure to extend the exemption to larger public companies, believing it would reduce reporting burdens and spur job growth. The AICPA has consistently urged implementation of Section 404(b) for all publicly held companies. It has led to improved financial reporting and greater transparency, and the AICPA believes all investors in public companies should have equal benefit of the same protections.

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What’s Hot These Days in AICPA Tax Advocacy?

Tax formsWhile you are working late preparing tax returns, the AICPA is also keeping busy, evaluating proposed regulations and interpretations of current law that could affect your practice. What are some of the hot topics on our advocacy to-do list?  

Let’s start with information reporting.  Businesses that accept credit or debit cards are starting to receive the new Form 1099-K from their merchant card processing company that reports the gross amount they received during the prior year.  The form was created to ensure that businesses report their credit and debit card income, especially from online sales. (The IRS just posted more information on its website about the requirements.) 

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Congress is Keen on XBRL

CongressAICPA staff members are very busy keeping up with activity related to eXtensible Business Reporting Language in the U.S. Congress.  Earlier this month House Ways and Means Human Resources Subcommittee Chairman Geoff Davis (R-KY) and Ranking Member Lloyd Doggett (D-TX) introduced H.R. 3339, the Standard Data and Technology Advancement Act, or the “Standard DATA Act.” The bill aims to establish consistent requirements for the electronic content and format of data used in the administration of key human services programs. Specifically, it calls for the incorporation of existing nonproprietary standards, such as XBRL.

If enacted, this bill would improve the collection and dissemination process for the federal government by standardizing data and eliminating time-consuming and error-prone manual processes. 

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In the News: Accountant Named a Top Career for Women

Professional female CPAMore Magazine named ‘accountant’ as one of the top ten careers for women who wish to balance a career and a personal life. “Younger people are saying, ‘Yes, I want to telecommute or take a two-year sabbatical and come back where I left off’—and providing these options is helping employers attract and retain talent,” says Mary Bennett, a member of the AICPA. Beyond the possibility of work/life balance, the article noted that the CPA credential also provides the flexibility to work in a field you're passionate about and move among a wide range of industries, since businesses in all sectors need accountants.

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In the News: IRS Tax Preparer Fees

1040 formsPatrick Temple-West at Reuters reports that the IRS is getting ready to impose the first comprehensive regulation of the industry's 730,000 practitioners who prepare tax returns. The IRS estimates the licensing fee for some tax preparers at between $250 and $275, which includes one-time fees to take a competency exam and be fingerprinted. (CPAs are exempt from the exam and fingerprint requirement and fees. For decades, CPAs and other credentialed preparers have been subject to state regulation as well as IRS rules for ethical practice and procedures, but many others were not.) The AICPA supports tax preparer regulation, but has expressed concern over the costs of requiring supervised non-signing staff at CPA firms to be fingerprinted "We have serious concerns regarding the level of burden that the user fee regulations will place on CPA firms, primarily small- and medium-size CPA firms," said Patricia Thompson, who chairs the AICPA Tax Executive Committee. The IRS, which plans to finalize the new fees in coming months, recently said it was open to ways to mitigate costs

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Persistence Results in Protecting Taxpayers

Obama signs america invents actIt was a five-year battle, but working together the AICPA and state CPA societies were gratified  when President Obama on Sept. 16 signed into law a bill that includes a provision to prevent the issuance of new patents on tax strategies. We asked so many of you to send letters, and state CPA societies and members responded each time. Details on the harm tax patents could cause are discussed in this AICPA Insights blog post.

Tax strategy patents now become one of only a handful of patent types that the Patent & Trademark Office is prohibited from issuing, which includes medical procedures, nuclear technology and, now, tax strategies. 

I would like to thank each of the AICPA staff, members, states, committees and others who participated in this advocacy effort, which marks a huge victory for both the public and the CPA profession.

It is important to note that existing tax strategy patents remain in effect so tax practitioners still need to remain vigilant. Patent applications pending as of Sept. 16 were discontinued and no new applications are allowed.

This victory shows the positive results that stem from collaborative and persistent efforts when it comes to getting legislation enacted.  Congratulations to those who played a part in this process. On behalf of taxpayers and the profession, I thank you.

Barry C. Melancon, CPA, President and CEO, American Institute of CPAs.

 

In the News: Hurricane Irene, Cloud Computing

Hurricane Irene Disaster PreparednessAs Topical Storm Irene left a trail of devastation in its wake, initial estimates of damages were in the billions. For individuals struggling to put the pieces of their life together, the aftermath can be extremely difficult to navigate. Michael Eisenberg, CPA/PFS, told MarketWatch that gathering the facts and carefully evaluating contractors was the prudent approach. “As much as somebody wants to jump in and do something now, you need to step back a little bit, take a breath, get your wits about you before you start making decisions,” said Eisenberg. Mitchell Freedman, CPA/PFS, advised readers that in the article if their house is unlivable, they need to find out whether their insurance policy covers the expense of a hotel or rental apartment.

In related news, the AICPA wrote a letter to the IRS asking them to extend the Sept. 15 filing deadline for business tax returns for tax payers and preparers in areas impacted by Hurricane Irene. Mike Cohn of Accounting Today reports that the AICPA asked the IRS to use its administrative authority to grant at least a two-week extension of the deadline for those in the areas affected by the hurricane. Patricia Thompson, CPA, chair of the AICPA’s Tax Executive Committee, also asked that any relief apply to situations in which the taxpayer, tax return preparer or the records are located in areas ravaged by the hurricane. The Tax Adviser reports that the IRS announced September 1 that taxpayers in certain areas affected by Hurricane Irene have until October 31 to file certain returns and make payments normally due before then. The areas eligible for relief include parts of North Carolina, New Jersey, New York, and Puerto Rico; the IRS expects to provide similar relief to other places affected by the hurricane, such as Vermont

As many business are considering transitioning to cloud computing, a CFO.com article tackles the not-so-simple question of what it means to ‘move to the cloud.’ As CPA firms who have adopted the cloud model likely know, there are a number of different options for companies looking to make the switch. In the article, Timothy Chou provides real life examples and breaks down six distinct different ways to make the move.

Going Concern recently covered the AICPA’s announcement of the second annual accounting case competition. The article notes that the contest asks college students to flex their fraud and forensic skills in advising a fictional client on a major overseas expansion. “The competition is an opportunity for students to get a hands-on, real-life understanding of one of the fastest-growing interest areas in accounting: fraud and forensics,” said Jeannie Patton, AICPA vice president for students, academics and membership. The top three teams will strut their stuff in Washington D.C. and the one that does the best job keeping the project on track — and on the right side of the law — gets $10,000.

If you come across a recent article of note about the profession, please let me know in the comments section or send me an email.

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We Heard You Loud and Clear on the Due Dates Issue

Tax Return Due DatesEvery voice is important to us.  So when the AICPA heard from so many of you a few years ago about the problems associated with the late receipt of Schedules K-1, we mobilized to come up with a solution.

After considerable dialogue, the AICPA submitted a proposal to Congress in October 2010 suggesting that the due dates for Forms 1065, 1120, 1120S, 1041 (along with some others) be shuffled around a bit--with the understanding that change can be difficult.  We know how important and ingrained return due dates are to tax professionals. Because members’ practices are so diverse and varied, and most members tend to have general practices, our volunteer leadership wanted to make changes that benefited the tax filing system as a whole.  We all understand how challenging the filing season can be.

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“Who’s on First” with the Best Deficit Reduction Idea

deficit reduction ideasWell, it seems as if deficit-reduction watching has nudged baseball out as America’s favorite pastime!!  With a full count on the debt ceiling, Congress came together on August 2 to strike out the looming debt ceiling cap and hit a $1 trillion in spending cuts.  At the same time, lawmakers also agreed to come to grips with the monumental deficit.  The agreement created the “Dirty Dozen,” a bipartisan Joint Congressional Committee that is charged with moving forward additional deficit-reduction ideas of at least $1.5 trillion by November 23, 2011. Automatic, across-the-board spending cuts will ensue if Congress fails to come up with a specific plan by the end of December.

So what’s still in the field of play of ideas? 

Continue reading "“Who’s on First” with the Best Deficit Reduction Idea" »

It’s Time Congress Says No to Withholding Rule

Two architects accountants CPAIf there are any lessons to be learned from the 1099 reporting controversy, it’s that hitting the proverbial fly with the hammer is not the best way to go after tax cheats.  The fly still lives but everything around the fly gets whacked.

What is shaping up to be Lesson #2 is a rule that will force many federal, state and local agencies to withhold 3 percent of payments to contractors for goods and services that cost over $10,000.  It covers governments with total yearly contract expenditures over $100 million, which means most states and large cities.  The rule was enacted in 2006 but its implementation has been delayed – but barring congressional intervention, it will take effect Jan. 1, 2013.  Three bills have been introduced in Congress so far to abolish it - H.R. 674 and S. 89, which would simply repeal the rule, and S. 164, which would offset the cost of the repeal with unobligated funds. 

Why is the 3 percent withholding a bad idea and why is the AICPA opposing it?

Continue reading "It’s Time Congress Says No to Withholding Rule" »

In the News: IRS Tax Preparer Exam, Same-Sex Filings

CPA Profession in the News Accounting Today reports that the AICPA wrote to the IRS offering to help develop the IRS exam for registered tax return preparers by leveraging the AICPA’ s experience with the Uniform CPA Exam. AICPA Tax Executive Committee Chair Patricia Thompson wrote “we believe the examination should address problems faced by tax return preparers that might arise in the preparation of basic Form 1040 returns, including coverage of basic self-employment income.” Thompson noted that the IRS exam should have questions related to ethical responsibilities of tax return preparers and be updated annually to reflect the most current tax laws and regulations.

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