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AICPA Appeals to IRS, Treasury for ‘Extensive Relief’ for Taxpayers

In light of the ongoing uncertainty and challenges caused by the spread of the coronavirus pandemic, the AICPA called for the U.S. Department of the Treasury and IRS to provide more extensive relief to all taxpayers.

Noting its appreciation for the agencies’ efforts to extend the tax filing and payment deadlines announced in the recent Notice 2020-18, the AICPA is nevertheless stressing the importance of providing additional relief. The AICPA recommends:

Postponing all deadlines and providing additional time to make payments. The AICPA believes taxpayers who do not have an April 15 payment or filing date are inherently disadvantaged and would similarly benefit from a deferral. The group argues that these individuals and their advisors need additional time for filings, tax payments, estimated taxes and gathering pertinent information to include in those filings or payment calculations.

Providing appropriate filing and payment relief for all filers and taxpayers (including tax-exempt organizations and fiscal year corporations) for tax returns, information returns, elections, claims for refund and other correspondence. The AICPA says relief should also apply broadly to all types of taxes (including payroll, excise tax, estate, gift and generations-skipping transfer tax, etc.), noting that deferment of other taxes that are not income taxes is necessary to aid both businesses and their employees.

“With shelter-in-place orders issued throughout the country and a spreading pandemic, there is a significant list of filing and payment challenges left unresolved,” says AICPA Vice President of Taxation Edward Karl. “We urge the Treasury Department and IRS to grant additional relief in these uncertain times and offer our assistance in identifying specific areas in need of FAQs or formal authoritative guidance.”

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AICPA Calls for Tax Relief for Individuals and Businesses Amid Coronavirus Pandemic

The AICPA is urging the U.S. Department of the Treasury and the IRS to provide relief to all taxpayers in light of the uncertainty and challenges caused by the coronavirus (COVID-19) pandemic.

The AICPA made the following recommendations for individuals:

  • Extend certain deadlines falling on or after March 15, 2020 and before Oct. 15, 2020 to give individuals additional time to file and make payments through Oct. 15, 2020.
  • Provide an automatic extension to Oct. 15, 2020, without the need to file any forms or request an extension.
  • Waive late payment penalties if at least 70% of an individual’s current tax due is paid by April 15, 2020 and waive interest through Oct. 15, 2020.
  • Waive underpayment penalties for 2020 estimated tax payments if paid by Sept. 15, 2020.
  • Extend the IRA contribution deadline.

The AICPA made the following recommendations for businesses:

  • Extend certain deadlines falling on or after March 15, 2020 and before Oct. 15, 2020, to give businesses additional time to file and make payments through Oct. 15, 2020.
  • Provide an automatic extension without the need to file any forms or request an extension.
  • Waive late payment penalties and interest through Oct. 15, 2020.
  • Provide appropriate relief for all businesses and tax-exempt organizations regarding elections and filings (including payroll, excise tax, etc.).

“We are hearing from our members that they and their clients are experiencing great uncertainty about this year’s tax filing season. Our recommendations will help give taxpayers, large and small, much-needed relief in the midst of this fast-moving emergency situation,” says Edward Karl, AICPA vice president of taxation.

AICPA Survey: Coronavirus Concerns Grow Among Business Executives

Business executives’ outlook for the U.S. economy rose sharply in the past quarter, but concern is growing about the potential global fallout from the spread of coronavirus.

This is according to the first-quarter AICPA Economic Outlook Survey, which polls CEOs, CFOs, controllers and other CPAs in senior management roles.

Some 61% of respondents expressed optimism about the U.S. economy’s overall outlook over the next 12 months, up from 50% last quarter. But responses in the final week of the survey, following dramatic stock market declines as the coronavirus spread, were decidedly more pessimistic.

Most businesses said they have seen no impact from coronavirus yet, although 21% reported at least a slight impact. Those impacted said they had seen some combination of supply chain interruptions (10%), factory shutdowns in China or other affected regions (7%), and decreased sales to China (5%) or other markets (3%).

Some 7% of business executives said their companies had made a minor downward adjustment to their profit and revenue forecasts due to virus concerns, while 51% said they had made no change but were closely monitoring the situation.

Forty-two percent said they didn’t expect to have to make any coronavirus-related adjustments, but – like the U.S. economic optimism question – responses late in the survey cycle showed much less confidence.

The AICPA survey is a forward-looking indicator that tracks hiring and business-related expectations for the next 12 months. In comparison, the U.S. Department of Labor’s February employment report, scheduled for release tomorrow, looks back on the previous month’s hiring trends.

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AICPA Survey: Flexible Work Arrangements Can Help CPA Firms Recruit and Retain Women

U.S. CPA firms that offer modified work arrangements have significant advantages in terms of recruiting and retaining female employees, according to the AICPA’s 2019 CPA Firm Gender Survey.

About half the firm respondents reported that flexible schedules (56%), reduced hours (50%), compressed work schedules (49%) or telecommuting options (56%) helped attract employees, while about 80% of firms said those arrangements helped retain employees.

“While perspectives are changing, women are still more likely to handle duties involving child care and managing households. At the same time, many younger workers expect employers to offer them some flexibility as to where and when their work is done,” says Jacquelyn Tracy, chair of the AICPA’s Women’s Initiatives Executive Committee and partner with Mandel & Tracy of Providence, R.I. “Modified work arrangements allow women to more successfully manage their careers as CPAs and the priorities in their personal lives.”

A Pew Research Center study found mothers spend more than 31% of their day on child care and housework, compared to about 17% for fathers.

The AICPA’s biennial gender survey asks firms how they are addressing gender disparities and advance women in the profession. More than 1,100 firms, ranging from those with fewer than 10 CPAs to those with more than 100, responded to the survey, which was conducted in 2019.

In addition to asking about working arrangements, the survey also questioned firms about gender distribution on executive committees, formal programs to advance women and succession planning. The survey found that 39% of firms monitor pay parity between genders and 85% of those who monitor disparities took action to close gaps.

Additionally, one in five firms offered unconscious bias training, with 59% of the firms with more than 100 CPAs offering it.

Among other findings of the survey:

  • The larger the firm, the more likely it is to have formal mentor and sponsorship programs to help advance women and minorities.
  • Women in small firms of up to 10 CPAs comprise 53% of executive committees but only 16% of firms with more than 100 CPAs.
  • An analysis of job titles found that women were nearly equally represented or outnumbered men in CPA firms through the senior manager level, after which the ratio declines.
  • Only 44% of firms have a succession plan, down from 47% in 2017. But 6% included a gender component in their plan, up from 2%.

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AICPA Report: CPA Exam Candidates Down, Hiring of Non-Accounting Graduates Up

An AICPA report says the number of CPA exam candidates in 2018 dropped to its lowest level in 10 years while hires of new accounting graduates declined by about 30% over the last four years.

This is according to the recently released report, Trends in the Supply of Accounting Graduates and the Demand for Public Accounting Recruits. The report, published every other year since 1971, identifies key trends in U.S. accounting enrollments and graduates as well as hiring of new graduates in public accounting. The report provides projections based upon university responses for the 2017-18 academic year and firm responses for the 2018 calendar year.

Yvonne Hinson, the AICPA’s Academic in Residence, wrote in the report that enrollments in accounting bachelor’s degree programs declined by 4% since 2016, but are the second highest on record. Further declines are seen in master’s and Ph.D. programs, at 6% and 23%, respectively.

“The more telling projections,” she wrote, come from the demand side. “The marketplace continues to demand different competencies and, while accounting graduates are still being hired, firms are seeking other skill sets to expand services. We are seeing that the gap in skills required in the profession, especially as it relates to technology needs, is being met with non-accounting graduates.”

Other results:

  • Diversity – In 2018, female accounting graduates outnumbered male graduates at the master’s level. Racial/ethnic diversity has increased in accounting graduates, with a 7 percentage point increase in Hispanic or Latino accounting graduates.
  • CPA Examination – The number of CPA Exam takers increased in 2015 and 2016 in preparation of the new CPA Exam that launched in 2017. CPA Examination candidates decreased 7% between 2017 and 2018. The number of CPA Exam candidates who passed their fourth section of the exam decreased 6% between 2017 and 2018.
  • Hiring – Hiring of new accounting graduates slowed 11%. Non-accounting hires as a percentage of all new graduate hires are up 11 percentage points to 31%. In 2018, new hires assigned to audit-related services increased by 4 percentage points, while new graduates assigned to taxation declined by 4 percentage points.

Read the full report.

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AICPA Gives Auditors Some Direction on Handling Digital Assets

The AICPA has issued guidance on how to account for digital assets.

Digital assets are defined as “digital records, made using cryptography for verification and security purposes, on a distributed ledger.” Blockchain is the distributed ledger used for crypocurrency transactions.

Because the business environment is changing so quickly and various types of crypto assets are being used more frequently, the AICPA is providing nonauthoritative guidance on how to account for these assets properly under GAAP rules. Digital assets are used for a variety of purposes, including “as a medium of exchange, as a representation to provide or access goods or services, or as a financing vehicle, such as a security, among other uses,” the AICPA says.

Ten questions and answers related to the issue are included in a free practice aid, which was developed by the AICPA’s the Digital Assets Working Group.

The AICPA notes that auditors should first think carefully about the risks and whether they have the skills needed before accepting or continuing audit engagements involving digital assets.

As additional topics are completed, the practice aid will be updated.

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AICPA Announces Annual Leadership Academy Graduates

The AICPA says 36 promising young CPAs from around the country have graduated from its four-day 2019 AICPA Leadership Academy in Durham, N.C.

The AICPA Leadership Academy uses interactive workshops to give participants access to advanced leadership training, networking activities and presentations from some of the profession’s top thought leaders.

The 2019 class discussed key issues and interacted with influential leaders in the profession including AICPA Chair Bill Reeb, AICPA President and CEO Barry Melancon and Mark Koziel, executive vice president of firm services.

“This year’s Leadership Academy class is an impressive group of diverse professionals who are well-positioned to take the next step in their careers,” says Reeb. “New technology is disrupting the profession and creating new opportunities and challenges for CPAs. These talented CPAs are a great example of the forward-thinking leaders who will not only help steer us through this transition but lead us beyond it.”

The AICPA Leadership Academy is meant to serve as a succession plan for the CPA profession, ensuring a strong base of future leaders to address the challenges of an ever-changing global business environment. The event also encourages self-reflection and a thoughtful exploration of how leadership impacts their personal and professional lives.

The program was designed to strengthen and expand the leadership skills of promising young professionals while they network with a peer group of talented and motivated CPAs. The 2019 participants comprised the eleventh graduating class, and nearly 400 CPAs have now graduated from the program.

“The Leadership Academy really helped me identify what skills I need as I establish myself as a leader in the profession,” says Brittany Cummings, 2019 Leadership Academy graduate. “The program has given me the tools and confidence to navigate our changing profession successfully and strengthened my confidence that I am steering my career in the direction I want it to go.”

This year’s class included representatives from 31 states. Participants were selected from public accounting firms of all sizes, business and industry, academia and consulting firms.

The full 2019 Leadership Academy class:

  • Lauren Aldrich, Heard McElroy & Vestal, Shreveport, La.
  • Robert Allen, The Allen CPA Firm, PLLC, Houston
  • Karen Bartlett, O’Brien Shortle Reynolds & Sabotka, Rutland, Vt.
  • Jose Borbon, Kearny Bank, Fairfield, N.J.
  • Chris Brown, Beall Barlcay & Company, Fort Smith, Ark.
  • Clara Cohen, Bedrock Wealth Strategies, Elmsford, N.Y.
  • Kelly Crow, Reynolds Bone & Griesbeck, Memphis, Tenn.
  • Brittany Cummings, BKD, Springfield, Mo.
  • Sarah Flischel, Kundinger Corder & Engle, Denver
  • Jessica Foster, Cohen & Company, Youngstown, Ohio
  • Austin Foust, HoganTaylor, Tulsa, Okla.
  • Amanda Gessner, Schmitz-Holmstrom, Bismarck, N.D.
  • Matt Heo, Aronson, Rockville, Md.
  • Michael Jamison, OnTarget CPA, Indianapolis
  • Andrew Jordan, Jordan CPA Services, Carthage, Mo.
  • Shakor Jukes, Target, Minneapolis
  • Brian Klintworth, HBE LLP, Lincoln, Neb.
  • Jennifer Koffman, Bellows Associates, Plantation, Fla.
  • Ryan LaRue, StoneTurn, Boston
  • James McGettigan, Stoker Ostler, a part of BMO Financial Group, Scottsdale, Ariz.
  • Lacy McMoarn, Marcum, Portland, Maine
  • Jessica Mytrohovich, Georgia Society of CPAs, Atlanta
  • Eugene Park, HeinfeldMeech Co., Phoenix
  • Becky Peterson, Woltman Group, Sioux Falls, S.D.
  • Colin Proctor, Marshall Retail Group, Las Vegas
  • Charlene Rhinehart, CEO Unlimited, Chicago
  • Alexandria Romero, McPherson Goodrich Paolucci & Mihelich, Pueblo, Colo.
  • Adam Schrom, Bloomberg BNA, Arlington, Va.
  • Navneet Sharma, KNAV, Atlanta
  • Jordyn Sherman, Advantis Credit Union, Clackamas, Ore.
  • Ashley Sullivan, Haddox Reid Eubank Betts, Jackson, Miss.
  • Dalton Sweaney, Gray Salt & Associates, Claremont, Calif.
  • Jana Walker, Northwestern Oklahoma State University, Alva, Okla.
  • Brittany Wilson, MHP, Cheyenne, Wyo.
  • Kendall Wilson, Dixon Hughes Goodman, Raleigh, N.C.
  • Samantha Young, Cohos Advisors, Lancaster, N.H.

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AICPA Offers Guidance on Working With New Clients in Cannabis Industry

The cannabis industry offers CPAs a bevvy of prospective new clients. But the nature of the industry also opens to door to several potential challenges and pitfalls, the AICPA says.

Several states have legalized marijuana use for recreational or medical reasons, creating a burgeoning industry of growers, distributors, and retailers such as Full Spectrum. Revenue from medical and recreation cannabis is estimated to reach $12 billion this year. Due to how big this industry is set to grow, many people are deciding to start their own careers to help them make as much money as possible. Recreational marijuana has always been popular but in recent years, its popularity has grown considerably. People can smoke the marijuana via glass pipes or like a cigarette, or it can even be put into foods. Marijuana has become very versatile and individuals can do a lot with it. These days it is as simple as making and distributing this cannabis from home through using the rosin press piece of equipment. This will make it considerably easier for people to earn money quicker in this industry. It’s important that you receive all of the information that you think you may need first before making any further decisions about your career choice. The accounting profession, similar to the legal profession, can offer its expertise to clients in the cannabis industry, such as auditing and taxation services, as well as expert guidance for avoiding fraud or theft.

With these opportunities come serious downsides, as marijuana remains illegal at the federal level. As a result, few banks are willing to deal with players in the industry, leaving it largely a cash operation. CPAs providing business advisory or other accounting services to clients in the cannabis industry need to navigate the nuances of federal and state law and to avoid being charged criminally, potentially resulting in fines, jail time or the loss of their license.

The American Institute of CPAs details the risks and opportunities for CPAs working in the cannabis industry in the latest Eye on Fraud report. It offers a review of many of the State Boards of Accountancy positions on working in the cannabis industry and highlights some of the issues and challenges facing both the cannabis industry and CPAs supporting it.

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Former AICPA Chair Joins Business Learning Institute

Former AICPA Chair Kimberly Ellison-Taylor, global executive director of finance thought leadership for Oracle, has joined the Business Learning Institute to offer a variety of courses on the intersection of emerging technologies and the future of work and finance.

Among her BLI course titles are:

  • Are We There Yet? Why Not?
  • Fingers Crossed Is Not A Path To Double-Digit Revenue Growth
  • Getting Comfortable With Being Uncomfortable
  • Inclusive Leadership: Does It Really Work?
  • Leading From The Middle
  • Why Standing Still Is Not An Option
  • Will SkyNet Become Self-Aware?

Kimberly Ellison-Taylor

“Her depth of knowledge is nearly unequaled, and her devotion to teaching and lifelong learning will help BLI clients master the skills they’ll need to succeed in a changing and complex world,” says Tom Hood, president and CEO of the Business Learning Institute and the Maryland Association of CPAs. “The skills she brings to the Business Learning Institute are exactly what we need to help our profession become more future-ready.”

It’s a homecoming of sorts for Ellison-Taylor, who was born and raised in Baltimore and served as chair of the Maryland Association of CPAs’ board of directors during the 2010-2011 fiscal year.

Ellison-Taylor’s career achievements include leadership roles at Oracle, Motorola, KPMG, Prince George’s County Government and NASA’s Goddard Space Flight Center. She has received numerous awards and recognitions for her leadership in the profession and serves as a member of the AICPA Assurance Services Executive Committee and as vice chair for the AICPA’s National Commission for Diversity and Inclusion.

AICPA, NASBA Join ‘Advanced Professions’ to Launch New Coalition to Protect Licensing

The AICPA and NASBA have helped found the Alliance for Responsible Professional Licensing (ARPL), a new coalition focused on educating policymakers and the public about the importance of rigorous professional licensing standards.

The coalition was formed to “ensure the voices and concerns of the advanced professions are heard by lawmakers amid the growing debate around licensing,” the coalition announced.

“Weakening professional licensing standards on a state-by-state basis will destroy the confidence in qualifications and completely disrupt existing mobility models for advanced professions like ours,” warns Barry Melancon, president and CEO of AICPA. “Employers will be less inclined to accept out-of-state licenses if some states have rigorous requirements and others have weak requirements. The result: it will become more difficult for CPAs to move and maintain their careers across states.”

Bills have been introduced in dozens of states around the country that would reduce state licensing requirements, not only for CPAs, but also for surveyors, architects and engineers. Some of the proposals could have eliminated the hard-fought ability for CPAs to serve clients and employers outside of their home state without getting an additional license.

NASBA CEO Ken Bishop adds, “When a CPA performs an audit of a business or government, the public must have confidence in its accuracy, thoroughness and integrity. The most effective way to maintain this confidence is to continue to have CPAs show rigorous education, examination and experience for their licensing requirements.”

ARPL members also include the American Institute of Architects, the American Society of Civil Engineers, the Council of Landscape Architectural Registration Boards, the National Council of Architectural Registration Boards, the National Council of Examiners for Engineering and Surveying and the National Society of Professional Engineers. Find more information on ARPL’s new website.

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