Armanino Launches AI Lab

An IPA Best of the Best firm, San Ramon, Calif.-based Armanino LLP (FY17 net revenue of $242.7 million) has launched the Armanino AI Lab, designed to help businesses interested in using AI technologies.

“More than 75% of companies believe AI is fundamental to their future success, but the majority of those aren’t taking advantage of AI technology today and don’t know how to,” says Tom Mescall, PIC of Armanino’s consulting practice. “Armanino’s AI Lab will serve as a one-stop shop that enables its members to harness the opportunities that AI offers without being left behind by their competitors.”

The announcement came May 20 at the Artificial Intelligence (AI) Executive Roundtable, hosted by Armanino at its offices for C-level executives to see a demonstration of AI and discuss practical ways to apply it.

The three components of AI are predictive analytics, robotic process automation and virtual assistants. Members of the Armanino AI Lab can access peer-to-peer meetings, exclusive product and vendor reviews, Armanino’s data scientists and AI developers and consultants. Members can also learn about AI best practices and execute on AI proof of concepts.

The firm says that in a survey of the Roundtable event attendees, more than 75% ranked predictive analytics as most important to their organizations. Additionally, 83% believe their data infrastructure will need further improvement to achieve the best results. Meanwhile, 60% of event attendees have not started their first initiative.

Prior to launching its AI Lab, Armanino researched the most common business cases for using AI – from finance, supply chain, customer experience and talent management to compliance and privacy.

“As we continue to build out the Armanino AI Lab, we are proud to align ourselves with many of the world’s technology and software leaders in the AI space,” says John Horner, PIC of Armanino’s data and analytics practice. “This makes it easy for clients to access our knowledge and relationships, thereby decreasing their investment time and increasing their benefits of embracing AI technology.”

Armanino has already accepted several existing clients into the Armanino AI Lab and will continue to add members. To submit your membership application, visit:

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IRS Provides Filing Extension For Returns Affected By Wolters Kluwer Outage

Wolters Kluwer has announced that the IRS has approved a filing extension for certain May 15 federal returns, which are now due on May 22.

Deadlines are extended for returns that were affected by the outage of Wolters Kluwer’s Electronic Filing System during the week of May 6 – Form 990, Return of Organization Exempt from Income Tax; Form 1065, U.S. Return of Partnership Income; and Form 1120, U.S. Corporation Income Tax Return.

The IRS is providing simple, specific instructions that return preparers must follow for any of these returns that are filed after May 15, but no later than May 22, 2019.

Wolters Kluwer says it is working with state tax agencies to obtain similar relief. Updates will be provided to return preparers as new information becomes available. Tax practitioners with questions can call Wolters Kluwer at 800.930.1753. Live chat is available at

IPA Vendor Spotlight On . . . TaxConnex

Name: Robert Dumas

Robert Dumas

Company: TaxConnex

Title: Founder and Managing Partner


  • Founded what would become the country’s largest sales tax compliance service bureau in 1996 which was acquired by The Thomson Corporation (now Thomson Reuters) in 2005
  • Served as Vice President of Operations at The Thomson Corporation until founding TaxConnex in 2006
  • Is a nationally recognized expert in telecommunications tax and a frequent speaker on the subjects of sales and use tax, as well as sales tax compliance

What is the biggest sales tax issue facing small to mid-sized business clients today?

With the recent South Dakota vs. Wayfair ruling, the sales tax world has been turned upside down. Historically, small to mid-sized businesses needed to be concerned about sales tax only if they had a substantial physical presence in a state. What determines a substantial physical presence was and continues to be challenging to determine. With Wayfair, small to mid-sized businesses now need to be concerned about sales tax if they meet certain economic thresholds defined by the amount of sales revenue and/or the number of sales transactions in a given state. These new economic nexus rules apply to all businesses – not just those selling online. A business that previously only had to think about sales tax in their home state, now can be exposed to sales tax in 30 or more states.

Why do firm leaders need to know about the recent sales tax changes?

Your clients expect you to know the new economic nexus rules. They are reading about these changes and are concerned about potential exposure. They are looking to you to guide them through the maze of uncertainty and doubt. If you’re not equipped to answer their questions, they will seek out someone that can – likely your competitor.

How can businesses handle the challenges of keeping up with constantly changing federal and local sales tax rules?

It is unlikely that sales tax will ever be simplified to the point of full automation. It seems as if every attempt to simplify sales tax adds another layer of complexity. The new economic nexus rules are a good example. One way to stay current with changing federal, state and local sales tax rules is to utilize some type of sales tax calculation software that has the taxability rules and rates built into it. These systems can be effective in certain situations, but they are not a necessity for every business. Businesses with a limited number of states in which they need to collect sales tax, or a relatively simple product line, may not need the sophistication of sales tax calculation software. There are less expensive alternatives to consider, including tax rate subscription services.

Is sales tax automation the best solution for small to mid-size business clients?

Automation can definitely play a role. But what I often see is a business attempting to put a square peg in a round hole. Some sales tax software vendors believe they have a solution that plugs in and solves all of a business’ sales tax issues.  They may refer to it as the “easy button.”  Unfortunately, sales tax compliance is not easy. We help companies determine the best way to manage sales tax for their business.

What options do firms have to provide sales tax compliance services to their clients?

Firms can either build a process internally, buy a sales tax compliance process from another firm, or partner with an independent company. We have found that most of the Top 400 accounting firms, with the exception of some of the largest national firms, don’t want to provide sales tax compliance services. It typically does not align with their standard billing rates and the risk of not filing a return or making a payment on time is too great. As a result, we see these firms partnering with sales tax specific providers like TaxConnex to bring sales tax compliance to their clients. In deciding with whom to partner, we believe there are a few key factors: (1) Will the partner uphold the firm’s commitment to responsiveness? (2) Will the partner compete against the firm for the firm’s core business including income tax work or sales tax consulting work? (3) And will the partner help maintain the firm’s reputation in the market?

Malware Attack Against Wolters Kluwer Angers Firms And Delays Work

Wolters Kluwer’s malware attack that shut down access to massive databases of tax information on May 6, is not only stopping work at accounting firms around the country but also raising fears about the safety of client data.

The company released a statement saying that it is working “around the clock” on the issue and that service has been restored “to a number of applications and platforms.”

Firms have been outraged by the delay, and nonprofit clients with a May 15 tax deadline are being impacted the most.

Accounting professionals began airing their concerns in almost 500 comments on Reddit.  One reads, “If this is indeed a crypto attack that has disabled Axcess, e-filing, support website and even the phone system, then this really means that CCH is in no position to even be offering Software-as-a-Service because such an incident would mean they don’t understand the basics of cloud security.”

No information on the specific type of attack against the company has been released. Because the company took many of its systems offline after the attack – to prevent it from spreading further ­– accountants and IT staff were initially unable to reach the company, which is based in the Netherlands. Wolters Kluwer provides software and services, including the popular cloud-based CCH products, to all of the top 100 accounting firms in the U.S., according to its website.

“CCH needs to think long and hard about how their network infrastructure is set up, just like how all its clients are going to think long and hard about whether or not to stick around,” reads another Reddit comment. “I mean my God, one chink in the armor half-way around the world brought down their entire global infrastructure. This is why you need proper network segmentation and isolation.” Meanwhile, marketing professionals were scrambling to determine the best way to communicate with clients.

Wolters Kluwer is being bombarded with questions and criticism on Twitter. Many say the company is failing to be transparent. Consider this Tweet: “Like everyone else, I don’t know what to tell my staff or my clients. Our website is hosted through CCH and even that is down. From a client’s perspective this is OUR problem. It’s impossible to even tell them what’s wrong if we don’t have a clue. This information is not enough.”

Wolters Kluwer issued a statement that says client data is safe. Its website says, “We have seen no evidence that customer data was taken or that there was a breach of confidentiality of that data. Also, there is no reason to believe that our customers have been infected through our platforms and applications.” (See all Wolters Kluwer statements here.)

RSM Opens Technology Experience Center

Chicago-based RSM (FY18 net revenue of $2.14 billion) announces the opening of its RSM Technology Experience Center (TEC).

RSM says it is the first of many “client experience centers” it plans to open to support its commitment to collaborative innovation for the middle market.

The RSM Technology Experience Center, based in Denver, provides opportunities for clients to work with leading RSM consultants to envision how technology can reshape their businesses. The center offers more than 30 customer immersion experiences. RSM advisors will help clients explore various business scenarios such as “efficiently addressing margin concerns, analyzing complex data, keeping data and information secure and identifying sales opportunities to demonstrate how available solutions can address potential challenges,” the firm says.

Because markets and business models vary, the RSM Technology Experience Center offers detailed depictions of the workplaces and technologies associated with various industries.

“The RSM Technology Experience Center empowers current and prospective clients to plan their digital transformation,” says Brian Becker, a national consulting leader with RSM. “Using the latest in technology, we’ve created a ‘touch it, feel it, see it’ experience for our clients to help them fully understand the power of technology supported by insights from RSM professionals. And the experience can be customized by industry – from consumer products to financial services, the RSM Technology Experience Center uses artificial intelligence and augmented reality to help clients visualize their new realities to prepare for an increasingly dynamic future.”

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Eide Bailly Acquires Xerva to Expand Data Solutions

Xerva, a data analytics and data warehouse as a service (DWaaS) pioneer, will become part of Fargo, N.D.-based Eide Bailly (FY18 net revenue of $299.2 million) on May 1, the firm announced.

“With the proliferation of big data in the market, business intelligence and data analytics services are in high demand from businesses of all sizes and industries,” explains Scott Kost, director of Eide Bailly’s technology consulting practice. “Xerva’s addition is the perfect complement to our existing client offerings because, when you think about it, Eide Bailly works in data every day – whether it’s an audit or an ERP implementation. With this expanded technology specialization, we are better equipped to help our clients understand and get the most out of their business data.”

Xerva, of Orem, Utah, was founded in 2014 with the goal to provide enterprise-level data solutions to the mid-market. Xerva says it focuses on helping clients take control of their “data chaos” and gain real business intelligence from their systems and reporting. Xerva adds more than 20 experienced staff to Eide Bailly’s data analytics team.

“We grew from the realization that mid-market companies have all of the same data challenges that Fortune 500 companies do,” says co-founder Nate Allphin. “Our team brings business intelligence to organizations that often feel enterprise analytics are out of reach.”

“As a firm, we strive to continually develop and provide innovative services and solutions to clients,” says Eide Bailly CEO Dave Stende. “Offering the right technology is an essential element to that success. The Xerva team will be a tremendous addition to our award-winning technology practice.”

The announcement comes on the heels of a number of mergers to build on cybersecurity, NetSuite ERP and Salesforce CRM practices. “This move signals a growing shift in the professional services and accounting industry to embrace technology as a key facet to long-term success and market stability – both for themselves and for their clients,” the firm says.

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Grant Thornton’s Tax Practice Embraces Data Visualization

Chicago-based Grant Thornton (FY17 net revenue of $1.8 billion) has equipped the 1,600 professionals in its tax practice with Microsoft Power BI – a data visualization tool. The firm announced that the move demonstrates Grant Thornton’s commitment to innovative technologies that benefit clients.

Using Power BI, Grant Thornton will be able to aggregate large amounts of data into graphs and charts that tax professionals can instantly understand – helping them go beyond spreadsheets. “Making Microsoft Power BI available to all professionals at every level of the tax practice reflects our belief that data is the future of tax accounting and professional services,” says Jamie Fowler, national MP of tax services.

Applying data visualization tools to tax data makes it easy for anyone to understand a company’s tax position. Moreover, it can yield unexpected business insights. “Because tax information touches almost every aspect of a business from sales to compensation, performing data visualizations as part of a tax engagement often provides revelations that go beyond taxation,” adds Fowler.

Power BI will complement Grant Thornton’s previous deployments of data-visualization software – and also serve as the foundation for new offerings. All Grant Thornton tax professionals are receiving extensive training in Power BI and related efforts.

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EY Makes Massive Investment in Blockchain Analyzer

Big 4 firm EY has announced the launch of the second generation of EY Blockchain Analyzer, a blockchain analytics tool, at the annual EY Global Blockchain Summit on April 16.

The summit featured a first-time demo of the full range of EY blockchain solutions and an overview of the technology’s integration across industries.

EY has made multi-million dollar investments into developing the second generation of the EY Blockchain Analyzer, which is expected to be available for use by EY teams in 2019 for clients who operate in the blockchain ecosystem. These developments include the support of multiple new cryptocurrencies on the platform, added functionality relevant to private and public blockchains, and a globally accessible and available platform.

Paul Brody, EY’s global innovation leader for blockchain, says, “With the second generation of EY Blockchain Analyzer, we are building a true platform solution that can be used for multiple purposes such as audit, tax and transaction monitoring, depending on client needs. From the start, we have had technologists and audit practitioners working together on this platform so we can keep our technology and audit methodology aligned and meet our professional standards.”

EY Blockchain Analyzer will provide evidence for audits in various sectors. In addition to transaction analysis, the new version of EY Blockchain Analyzer will support tax calculation for crypto-assets. EY will gradually expand the geographic coverage for tax calculation globally after the 2019 tax year.

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Philadelphia Firm Buys Majority Stake in KSM Consulting

KSM Consulting, a technology services and data-analytics consultancy, has announced that Philadelphia-based private equity firm Renovus Capital Partners has acquired a majority interest in the company, the Indianapolis Business Journal reported.

KSM Consulting operates under Indianapolis-based Katz Sapper & Miller (FY17 net revenue of $79.3 million). The firm had owned 100% of KSM Consulting, but now retains minority ownership and a seat on the board, according to the Indianapolis Business Journal.

KSM Consulting plans to add 30 employees to its staff of 135. No layoffs are planned.

The Business Journal, citing public records, says that KSM Consulting has been awarded more than $27 million in Indiana state government contracts over its decade in business.

As a result of the ownership change, president Mark Caswell has been promoted to CEO “to lead the organization into its new phase of growth,” the company said. “As we think about the next high-growth phase of KSMC, adding the support of Renovus Capital Partners will best serve our company, employees and clients.”

KSM Consulting joins Renovus’ portfolio of companies in industries that include education, technology and human capital services.

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LeaseCrunch Partnering with Moore Stephens North America

The lease accounting software company LeaseCrunch has announced that it is now a strategic partner of Moore Stephens North America (MSNA).

“In addition to delivering an expanded distribution channel for LeaseCrunch software to over 40 firms with more than 150 offices and nearly 7,000 professionals, the program offers LeaseCrunch the ability to partner with Moore Stephens North America member firms by providing products that are integrated into their member client solutions,” says Joel Hess, principal at LeaseCrunch.

“We’re always looking to deepen our bench, and LeaseCrunch delivers solutions to problems our members have faced in the past, and the tools to help them plan for the future,” says Laura Metz, MSNA marketing and communications manager.

The LeaseCrunch software is customizable to the size of the company and enables the accounting firm to either act as bookkeeper or set clients up within the system to manage their own lease portfolio. LeaseCrunch is designed to reduce the time it takes clients to prepare for an audit and for CPA firms to perform the audit.

MSNA has 43 member firms in the United States, Canada and Mexico, with 130 collective offices in most major North American markets and nine member firms on the INSIDE Public Accounting Top 100 Firms list.

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