Tax Section Odyssey

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Tax Section Odyssey

Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.

  1. JAN 30

    Navigating professional risk: Identifying conflicts of interest and high-risk clients

    On this episode, Nicole Graham, Risk Consultant — Aon, and Stan Sterna, Vice President — Aon, the national administrator and broker for the AICPA Member Insurance Programs, discuss identifying high-risk clients and managing conflicts of interest. They share their experiences and insights on professional liability risks, client acceptance and continuance protocols and the importance of maintaining objectivity and ethical standards in the accounting profession. What you’ll learn from this episode: Why it’s critical to have and follow client acceptance and continuance protocols. How to properly manage a conflict-of-interest situation within a firm. Best practices on termination of client relationships. The importance of having an engagement letter in place particularly when dealing with high-risk clients. AICPA resources Client Termination Practitioner Checklist and Notification Letter Terminate a client relationship by following these helpful practice management reminders and then formally communicate the termination to your client. Say “I do” to engagement letters This podcast centers around the importance of engagement letters for tax practitioners.    Client Continuance Evaluation Tool Tool designed to help CPA firms determine whether or not they should continue working with a client or terminate the relationship.   Transcript April Walker: Hello, everyone, and welcome to the AICPA's Tax Section Odyssey podcast, where we offer thought leadership on all things tax-facing the profession. I'm April Walker, a lead manager for the Tax Section, and I'm here today with Nicole Graham and Stan Sterna. They are both with Aon, and I'm going to let them tell you a little bit about what they do. We're here together recording, which is always exciting to be able to do that in person at Digital CPA in Denver, and they are doing a session called identifying conflicts of interest and high-risk clients. I thought, that sounds really interesting and something our listeners might want to learn more about. Stan, we'll start with you. Tell us a little bit about your background and where you're coming at this session. Stan Sterna: Sure, thank you, April. I have a legal background. I started off practicing law, about 34 years ago, I'm dating myself. My entire career has been defending professional service firms and then an opportunity to take a position with Aon, who is the national administrator and broker for the AICPA Insurance Program, of which CNA is the underwriting partner, the carrier and had worked with Aon for a long time and they wanted me to come over and serve as a risk control consultant for not only the program but also for some of the larger firms as well. I came over about 2016 and I currently advise firms on professional liability risks, cyber risk. I'm also involved in doing presentations like I am here today at Digital CPA and other industry events, writing articles for the Journal of Accountancy, as well as other publications. I like to look at ourselves as risk advisors as not somebody that puts a stop sign up and says, don't do anything or don't do something. It's giving folks in the accounting profession the tools in order to manage the risk while providing services and expanding and growing their practice. April Walker: Nicole, what's your perspective on this topic today? Nicole Graham: Well, I am here to scare everyone just a little bit. April Walker: That's okay. Nicole Graham: But I'm Nicole Graham. I am like Stan, a recovering attorney. I was in litigation practice for almost 18 years. For the majority of that time, I represented professional service firms in professional liability litigation and also disciplinary actions. I did that for a long time and decided to take off the boxing gloves, stop fighting every day, and instead take all those lessons learned and now try to work with firms proactively to avoid some of those pitfalls. April Walker: Let's talk about identifying high risk. High risk could mean different things to different people. Stan Sterna: I think the first thing you need to do, April, is you have to have client acceptance and continuance protocols in place. That's vital to identifying, is this client a right fit? You have to have that process, but as part of that process, you have to identify initially what is the risk appetite of the firm. What is your ideal client? It could be by industry, it can be by size. It could be by geographical location. It could be by the amount of revenue they make if it's a company or income. Identifying what is your ideal client, I think, is the first step. Then you have to not only, and I think this is important, evaluate a client when they're coming through the door to see if it fits the risk appetite at a firm, but also you have to continually and regularly monitor the client and whether or not the client is still a member or still fits within your risk appetite. That's what we call client continuance. Sometimes client acceptance, everybody does client acceptance and might not be in one shape or the other, might not be the best client acceptance. April Walker: It's not formal maybe. Stan Sterna: Everybody's evaluating even folks that don't have written criteria or developed any concrete parameters. In some subconscious level, you're thinking, is this somebody that I want to work with or have as a client? But on the other hand, continuance seems to get short changed, especially in the tax area. One of the things that we've seen when we've dealt with a tax claim is situations where you have a client who maybe doesn't pay on time, or the client is constantly providing information at the last minute, and you're scrambling and you have to get extensions. But yet, when the client came in the door, it seemed like a perfect fit for the firm. You're not re evaluating the situation, whether it's the demeanor of the client, the way they cooperate or maybe just circumstances change with the client that at least should be the impetus for looking at the client and rethinking is this client a good fit for our particular firm? Unfortunately, we've seen a lot of claims in the past, both Nicole and I, where continuance was the issue and not monitoring, is this a potentially high risk client? I think, in the tax area, one of the biggest risk flags or red flags is not paying fees and/or not giving information on time. Unfortunately, when people don't pay fees and they're constantly either slow paying or they want to pay a fraction of it, if you pursue those fees, a lot of clients will turn around and point the finger at the accountant and say, well, there was something that you did that I didn't like, and that's the reason why I'm withholding fees. A lot of them it's a ruse to be frank with you, a client ruse in order to avoid either paying the fees or have some leverage in negotiating the fees. April Walker: Sure. Stan Sterna: Folks people are dedicated to the profession and I'm sure there's a lot of folks out there that absolutely love what they do and they love their clients, but for the most part, people aren't doing tax work for free. This is not a hobby. April Walker: This is not nonprofit. Stan Sterna: You should get paid. We've seen plenty of circumstances in the past where you know it's a problem client. Every time you say, well, I'm in the midst of preparing your returns for this year, I need to get paid from last year, and they'll put it off because they don't necessarily want to get in a situation where they're going back and forth with the client. Some folks will look back and go, well, the founder of our firm brought that client and it's a legacy client, and yeah, they don't pay, or yes, they're always questioning what I'm doing. They always want to, and these are other red flags, take shortcuts when preparing their taxes or giving you incomplete information. Then you continue to say, look the other way and muddle through it and file a return with the best information available. Keep your fingers crossed. April Walker: That's not a good risk plan. Stan Sterna: That's not a good risk risk plan. In that situation, you should really look at that individual. It could be a friend. It could be a legacy client and decide, do we really continue together on this path in a tax preparer client relationship? Is it in my best interest to do that? April Walker: These are good things. I'd like to pivot a little bit now and we'll talk about with Nicole, and certainly a high risk client could be, or another way of looking at it would be a conflict of interest. Talk to me Nicole a little bit about what kind of conflict of interests do you see that are problematic and how practitioners can recognize that, and also, take the next step as far as what do they do if they identify something as conflict of interest? Nicole Graham: A conflict of interest is really just being able to identify and manage situations where there are competing interests or relationships. CPAs are required to maintain and protect their objectivity when they're providing client services. That is paramount to their duties to their client under the code of conduct, and something that we have to protect. Nicole Graham: The way that the conflict of interest comes up is you have clients that could be adverse to one another. April Walker: A divorce situation? Nicole Graham: Correct. Or you have business partners who are going through a business dispute and you represent both of the business partners. We see that a lot. When you look at these relationships and competing interests, you have to ask yourself questions. Am I able to remain objective while providing service to both affected clients, you also need to make sure that you are not putting your personal interest before client interest because there are your own self-interest or the interest of interests that your firm has or that cl

    34 min

  2. JAN 23

    Leveraging technology for a better client experience

    In this episode, Brian Davis, owner of One Stop CPA, discusses how technology has transformed the way his CPA firm operates and interacts with clients. Brian highlights the importance of using technology to provide a top-notch, virtual client experience. He shares insights on tools that have enhanced client engagement and streamlined his firms’ operations. What you’ll learn from this episode: Examples of ways to use technology to enhance a client’s experience How remote work and serving clients virtually has worked for his firm The benefits of offering subscription model billing The importance of investing in client education as you introduce new tools and processes AICPA resources Tech stack wars in 2024 | Reimagining Your Tax Practice — With the amount of technology products out in the market, how do they perform in reality? Hear from Jason Staats on the latest products available for practice management and more on this archived Reimagining Your Tax Practice session. Transitioning to a tax-focused CPA financial planner | Reimagining Your Tax Practice — Tax return compliance is continuing to become more of a commodity. Your clients see you as their trusted adviser and ask about a range of topics that affect their financial well-being. In this Reimagining Your Tax Practice archived session, learn more about practitioners who offer financial planning services and how that has impacted their practices. Transforming Your Business Model…Technology — The Private Companies Practice Section (PCPS) is developing tools around technology designed to help firms not only identify elements of their current business model that may be holding them back but also offering solutions to help them adapt in this changing environment. Transcript April Walker: Hello, everyone, and welcome to the AICPA Tax Section Odyssey podcast, where we offer thought leadership on all things tax, facing the profession. I'm April Walker, Lead Manager for the Tax section, and I'm today with Brian Davis. Brian is the CEO of One Stop CPA, which is a firm that focuses on tax, tax planning, and advisory. We're going to hear more about that. Brian, let's start off with telling me a little bit about your firm and how you got started and what you think, are your distinguishing characteristics. Brian Davis: Definitely. Well, excited to be here. Thanks for having me. Definitely, so my firm is One Stop CPA. It's a traditional small firm. We do compliance. I'm a CPA. We do tax compliance, tax planning, we do accounting services. It's a team of five, including myself, some onshore, some offshore. And the thing that I think distinguishes our product in our service that we deliver to our clients is how we deliver it. We use technology and pair it with insights. We pair it with traditional advisory things that we're giving the clients, and we try to give them that feel as if they're getting in person, top-notch experience because all of the clients that we work with are all virtual. So that gives us the ability to work with a remote team. It gives us the ability to deliver the clients nationwide. I think it's a little, I think it's definitely helped me grow business, get me a little bit more work-life balance, all the above. April Walker: All positive things. So for those who are listening, I mean, I think COVID taught us a lot of things - that we don't always have to be in person, although it's lovely to be in person. I love being next to people. But we don't have to be in person with our staff, with our clients. Maybe talk a little bit about that, how you still get that really great relationship with your clients and your staff, even being remote. Brian Davis: Sure, yeah. Definitely. COVID changed a lot within my firm. I went out on my own in 2017. This was pre-COVID. I went out for a lot of the reasons that are popular now, but back then it was not as popular as it's becoming. The commute to work, having to meet in person just to get a tax return signed, mailing off things. All these different things, I saw them as, these are not the values that customers appreciate. They're looking for me to help them do so many other things, save them, strategize on how to lower their tax bill, how to help them grow their business, how to go for an exit one day. I want to sell this, we can have that on a phone call. I could actually deliver even better results to you. I just started to think, before COVID, it was a little bit tougher to sell clients on this service. It was a lot of teaching. You have to tell your client, hey, well, you have to e-sign your returns, so go to your email. And it's like, I'm not used to this. This is not how we do things with our last accountant. After COVID, of course, that exploded. A lot of clients would reach out to us and say, yeah, if you could get this done for us remotely, that'd be great. So from there, I also switched over to the subscription model around  March 2020. When we made that switch because it's hey, well, we want to serve you guys, and we want to give you all the things that you now need to do remotely. So technology is a big part of that. The way you educate your clients, the way they feel. Because you're losing a little bit of the touch when they're not in person. I can't offer you a drink when you come to the office, but there's even things now where you could send a client a gift card. Here's a five dollar Starbucks gift card, so we could out grab a coffee. There's all these cool little ways where you can just make that customer feel so good, even though we're doing it all the time. April Walker: We're going to talk a little bit about while we're here together, talk about technology. So maybe talk a little bit about where you see those biggest friction points with your clients and how you think technology or how you've explored technology helping some of those friction points. Brian Davis: Definitely. I made all the mistakes when I started my firm. I would do compliance-only work. I would do tax prep only, and I would have different segments of clients that I would deal with in different ways. Well, this person likes to sign in person. This person likes to drop off a package in the mail. When you look into this technology, when we look at things as a firm, it's always well, these clients wouldn't adopt it. These clients wouldn't like it. I wouldn't be able to attract these style of clients. But when you meet a client, and you say, hey, this is our portal. This is how we do business. Take a good look at it, give them a free trial, maybe if you're seriously considering them, and then try to do a test. Did you see this message that I just sent you there? Here's a template. Did you get it? Cool. So that's how we communicate. Believe it or not, nowadays, more and more people, no matter their level of skill and technology, if you could simplify it for them, they appreciate that. Whenever I'm looking at new technology, I'm looking for, I love the new features and how I could make all this money using it and save time. But it's also, will the client feel a disconnect or will they feel like I'm throwing them into the tech dark hole? You could lose a good client because they don't feel that personal touch. Even though we're investing in different technologies and moving to greater things that help us on the back end, we also want to at the same time, if not even more important, when you're making sales, when you're delivering, you want to make them feel comfortable with your tools. If your tool is so hard for them to navigate, it's going to create that for them. April Walker: That's right. What are some exciting things that you have implemented lately around technology? Brian Davis: Definitely. Well, I'll highlight two of my favorites. They know that they're my favorites. TaxDome is my client portal that I use. Before TaxDome, I was doing the spreadsheet and notepad method of workflow management, which is not the right way. April Walker: Maybe in Excel spreadsheets. Brian Davis: Excel spreadsheets. Before that and then implementing TaxDome, it helped me map out how I want to grow the team, how I see myself. Like, which task within this job that we're doing, do I want to, one day off load to somebody, so that I could free up more time for myself to do sales, do client services, help people do like advisory one on one because that's where the value is to the client. They don't care if you're in the back turning out bookkeeping and entering in numbers on your 10 key. They want to know the results, and it's the client experience. So TaxDome is great because when I started it, I was slow to implement. I would pick a few clients, test out on myself. I'm a client, too. I would test out my firm's tax return process and say, Hey, what went smoothly? What can we tweak and make better before we go live with this with everyone? But the feedback I would get from clients is this is so great. I love how easy that was. It's on the app. I can download an app. Everybody knows how to download an app. April Walker: Most everybody, yeah. Brian Davis: Most people. If you're going to work with us, you got to be able to e-sign your return. That's one of the things TaxDome makes. I was getting the feedback that clients really like the experience, and I like the back office side of it, which there are other options out there. I just know that doing TaxDome, clients loved it. Another one is spotlight reporting. A lot of clients are used to seeing their QuickBooks reports black and white, ledger. What's more fun than watching that with the client and just going through a list of fixed assets? Here's your security department. They don't want to see that. You got to make these numbers kind of come alive for the clients have a discussion. Spotlight Reporting connects directly to your QuickBooks file, your Zero files, and you can create your own advisory dashboards. A lot of clients I

    28 min

  3. 12/19/2024

    Finding your passion for tax with Tony Nitti

    "The tax industry is a gift for people who want to learn and grow and be challenged. There's never going to come a day where you close volume two of the code and say, 'I figured it all out, I know what it all means now.’” Tony Nitti, Partner — EY National Tax   In this final episode of 2024, Tony Nitti shares his journey within the tax industry, emphasizing the importance of finding one’s passion, investing in oneself and overcoming personal challenges. Listen as Tony shares his personal experience and practical advice for career growth and fulfillment in the tax profession.   What you’ll learn from this episode:   ·       Finding Your Passion: The importance of identifying and nurturing your specific passion within the tax industry, whether it's the law itself, client relationships, or running a firm. ·       Invest in Yourself: The value of investing in your knowledge and skills by learning, writing, and teaching the tax law. ·       Overcome Challenges: Strategies for attracting and retaining talent in the tax industry by providing intellectual challenges and growth opportunities. ·       Try hard things: The benefits of overcoming fears of public speaking and using writing as a tool to communicate complex concepts and share your passion.   Resources S Corporation Shareholder Compensation: How much is Enough?, The Tax Adviser, August 2011 Note: This was the article referenced in the podcast written by Tony. In August 2012, it was the winner of The Tax Adviser’s 2011 Best Article Award.   Transcript April Walker: Hello everyone, and welcome to the Tax Section Odyssey podcast where we offer thought leadership on all things tax facing the profession. Today, I'm excited to be here with Tony Nitti. Tony is a partner at EY National Tax and he's a frequent guest on the show. We were just chatting about we think this is maybe the sixth time he's been with us. We appreciate you being with us. Our topic today is not a techie topic. It is a soft topic, but I think an important one. Tony, you did a session at National Tax which was just a couple of weeks ago, on finding your passion in tax and it incorporated some technical topics. But today, we're just going to lean right into the finding your passion. I think we, as listeners, we just want to hear your story, tell us more about how you started and got where you are today at National Tax at EY, which is pretty impressive, I must say. Tell us more, Tony. Tony Nitti: It's good to be here with you, April. I will also say I admire your bravery, because like you said, we just did this National Tax a couple weeks ago, or at least a shorter version of it you just went charging full speed ahead and said, let's do a podcast before we get our hands on those evaluations. We might just be doubling down on a disastrous decision. April Walker: Never know. Tony Nitti: Nobody wants to hear, but that's not the hope. Obviously, the hope is that something here will resonate with people who are listening who maybe are just struggling to find their center and find their passion within their careers. But if it's all right with you, I always want to address what I consider the elephant in the room of the conversation like this before we get started. When we talk about this passion for tax, when we did it at National Tax, when we're doing it today, we're talking about a specific type of passion for this industry. What I mean by that is this idea that people are lured to the tax industry as I certainly was by a desire to live in and learn the law. Because we take one look at that tax law and we realize that it's something that's not solvable, and we want to spend our careers being challenged and being forced to grow and learning that law and apply it to our clients. But that's not the only passion you can have in a tax industry. This passion for law, you probably need to learn the law regardless of your passion, but I've met many people in my career who have a very different passion than me. People whose passion is client relationships, building a relationship that lasts for decades, other people whose passion would be to run a firm someday because they want to prove that accounting can be done differently. Those are extremely valid passions and we don't mean to discount them, but we're focusing today on a passion for the law. Learning and applying the law, and we're doing it for two reasons, I think. Number 1, at the AICPA, we're keenly aware of the challenges we have attracting and retaining talent. And specific to retaining talent, we just see all these good people at all levels of experience, leave the industry and as they're on their way out the door, they say, You know what, I got into this industry because I wanted to work in the law. I wanted to solve complicated problems for sophisticated clients and be forced to think on my feet. Instead, for the first four years of my career, all I've done is prepare the same 30 tax returns every year. I haven't seen anything new in 18 months, I'm bored out of my mind, I'm going to go try something completely different. That should never happen. It should never happen in this industry because the tax industry, it is a gift for people who want to learn and grow and be challenged. I think we've all been around long enough to know that there's never going to come a day where you close volume two of the code and say, I figured it all out, I know what it all means now. That day is not coming and so we should never lose people because they're bored, because they're not being challenged. But we do, I assume for two reasons. One is the reason we want to tell ourselves when things aren't going well. It's not to say it's not appropriate sometimes. But this is the reason we want it to be and we want it to be because we're not getting a fair shake. We're getting a raw deal. We work for the wrong firm or the wrong people, and we're not getting the type of work that we enjoy. That may be possible. If you're in a situation like that, the beautiful thing about the industry today is there's more change available to you than ever before. We're not tied into geographic regions. There are purely remote firms. You can change your situation in a heartbeat. But there's also a second possibility. That's a possibility that people don't want to embrace as much. But there's a possibility that we're not in a terrible situation, we just haven't let it be known to the people we work for, the people we work with, what we're passionate about. We haven't shown what's meaningful to us and proven to people that this is the type of work that I want to do. That leads to the second reason we're focusing on this specific type of passion for the law. That reason, April is I'm not Tony Robbins, I'm not a paid motivational speaker. The only thing I have to offer your listeners is my experience, and my passion for this industry, there's no two ways about it is rooted in the law. I'm not someone who has a passion necessarily for forging client relationships that last 40 years. I'm not someone who ever thought I would run my own firm. My passion is constant intellectual stimulation, growth, learning that law. The only thing I have to offer people until I become a paid motivational speaker someday and go through the five step training program is my life experience, what I've learned in this career. That's why I just want to address that because I feel bad. I can't tell someone with other types of passions how to reconnect with their passion in tax,  because I only know my experience at this point. But the hope would be that my experience can help some people because I am a good example of someone who got into this industry for a specific reason, like I said, this desire to learn and build expertise in the law. And then quickly went down the wrong path that so many of us do, and I arrived at a crossroads where I was ready to leave this industry four or five years in because I wasn't growing. I wasn't the person I wanted to be. I wasn't doing the type of work that lured me to this industry and I had to make a conscious decision at that point to say, if I'm going to stick it out in this industry, I am going to make what I'm passionate about the centerpiece of my career and hope that it pays off. That was, again, a proactive conscious decision, and it paid off in ways that I would have never seen coming because what I found is the more I showed people what I was passionate about, the more I made my passion the centerpiece of my career, the more the industry rewarded me with more of the type of work I was passionate about. We can talk about that process. But that decision being something that I decided to do proactively, I also ended up learning lessons later in my career that were taught to me that I didn't decide to do. That I learned the hard way, that had made all the difference as far as understanding, that in life, in our careers, it's probably best to leave no stone unturned. To try different things, to find out what you're capable of, what you might be passionate about, and just say yes to new opportunities. It's been a mix of making a proactive decision to invest in myself and we can talk about that. And then being taught through just the harsh reality of life that you're probably best served to say yes to as many opportunities as you can to just constantly move the goal posts on what you love and what you need out of your career to be happy. With that long rambling introduction.... April Walker: I think it's good. You don't have to convince me because I think some of the themes in your story will apply to a lot of people, even if, like you said, their passion is not necessarily your direction or whatever. Let's get into it. Tony Nitti: That would be the hope. Like I said, it's always uncomfortable because I only have my own experience to talk about, you end up

    59 min

  4. 12/13/2024

    Tax talk 2025 — Policies, provisions and perspectives

    Note: This podcast episode was recorded Nov. 20, 2024, and since then, the U.S. House of Representatives races have been called, giving the Republicans 220 congressional members and the Democrats 215. This balance could change depending on potential special elections if some members of the House are appointed to positions within President-Elect Trump’s administration. In this episode of the AICPA's Tax Section Odyssey podcast, Kasey Pittman, CPA, MST, Director of Tax Policy ­— Baker Tilly US LLP, discusses potential upcoming tax legislation for 2025, focusing on the complexities and challenges of extending the Tax Cuts and Jobs Act (TCJA) and other tax provisions.   What you’ll learn from this episode: The potential complexities and challenges of extending provisions of the TCJA and other tax legislation. The implications of a unified government and the reconciliation process for passing tax legislation. The financial constraints posed by the national debt and the importance of managing the deficit. The influence of individual policymakers and the importance of state and local tax (SALT) deductions. Potential revenue raisers like tariffs and ending the employee retention credit early, and their impact on the overall tax legislation. AICPA resources Planning for tax changes — CPAs need to not only brace for tax law changes such as the TCJA and expiring provisions but also be proactive in planning for them. Tax advocacy — Advocacy is a core element of our purpose and value proposition. It is a strong mechanism for promoting trust and confidence in the CPA and CGMA credentials around the world.   Transcript April Walker: Hello, everyone, and welcome back to the AICPA's Tax Section Odyssey podcast, where we offer thought leadership on all things tax facing the profession. I'm April Walker, a lead manager from the tax section, and I'm here today with Kasey Pittman. Kasey is the director of Tax Policy with Baker Tilly's National Tax Office. Welcome, Kasey. Kasey Pittman: Thank you for having me. April Walker: I thought we'd spend a few minutes today setting expectations for tax legislation for 2025. First, a little bit of a spoiler, tax legislation is likely, right, but what it will actually entail is probably a lot more complicated than just a straight status quo extension of TCJA. Kasey, let's set the stage a little bit and talk about what we know about the makeup of the government and what that will mean for upcoming legislation. Kasey Pittman: I think going into the election, the vast majority of people assumed we were going to wind up in some divided government. We knew it was very likely that Republicans would capture the Senate. The math there was not very good for Democrats, just in terms of how many seats were up, and one of the Democratic-turned-independent retiring senators from a deep red state was almost a certainty to flip. I think the general thinking was that either Democrats would capture the White House or the House, and neither of those things came to fruition. We are sitting here in the 2024 election was a Republican sweep. We've done a lot of worrying about things that we can let go of, and I think probably we'll touch on that a little bit later in the podcast. But the margins aren't very big. Trump captured the White House actually by a good margin in terms of both electoral votes and total votes in the country. It looks like Senate Republicans will have the majority with a 53-47 split between Republicans and Democrats. The house is currently unknown. We know that the House has captured 218, and that's what you need for the majority. There's 435 seats. 218 is literally a one seat majority. There are five races outstanding, and probably threeish, maybe four of those are likely to go Republican. We're just waiting on final vote counts. In the House, we're looking at a few vote margin, in the Senate, we're looking at a few vote margin, and that can make legislating really difficult. One of the themes we touch on here as we go through is reconciliation. When you have a unified government, and a unified government is one where one party has both chambers in Congress, and the White House, which is what we're going into in 2025, there's this process that you can use for certain types of legislation, fiscal legislation called reconciliation. What reconciliation does is it allows you to overcome the filibuster in the Senate. You actually only need a simple majority, like 51 votes in the Senate to pass a bill, but anybody can hold up a bill with a filibuster, and you need 60 votes to end debate and force the vote on the floor. But this type of legislation doesn't require that, so we can move forward with a simple majority. However, there are a lot of limitations to the reconciliation process. Everything in a reconciliation bill has to be financial. It needs to deal with spending or revenues and it can't be incidentally related to those. That has to be its primary purpose. Tax provisions are perfect for this. It cannot increase the deficit outside of the budget window. The budget window is typically 10 years. Then inside that budget window, you can only increase or decrease the deficit by the amount in the reconciliation instructions. Reconciliation instructions are set again, by a simple majority on a budget resolution in the House and in the Senate. That number can be hard to define. We also can't touch Social Security, by the way, which is why you never see Social Security in a reconciliation bill. However, that number is really difficult to come to an agreement on sometimes, and I predict that we're going to face some issues just in getting to that budget reconciliation number before we even start to put together the bill. April Walker: That's a great summary, and we used reconciliation before to actually pass TCJA and some other legislation in the past few years, but it's still not how I grew up learning how law was passed. It's a little bit interesting and that's a great summary. Kasey, I led with saying, we don't think it's going to be a straight extension of TCJA and some of the other proposals that have been thrown out throughout campaigns. Talk through a little bit about specific provisions, what they're scoring out at, why they may or may not be included in this legislation. Again, I don't think we have to say this. This is all just speculation on our part. We will have to see what we will see once it turns to 2025. Kasey Pittman: Some of it is really speculative. We're guessing, they are educated guesses based on history and based on what influential policymakers are telling us. For many months, Republicans have really optimistically been planning for reconciliation, hoping to capture both chambers, hoping that Trump would be in the White House. They've been planning. Honestly, there's been a ton of organization inside the House Ways and Means Committee around it. What I said just a minute ago was that I think we're going to have trouble getting to that number, and here's why. If we want a blanket 10-year extension of the Tax Cuts and Jobs Act, all these taxpayer-favorable provisions, they're mostly taxpayer-favorable and we'll get into that in a second too. It's going to cost $4.6 trillion. Just for benchmarking for everybody, our national debt, which is the sum accumulation of all the deficits we've ever run right now is $35 trillion. That's really impactful because each year, honestly, I believe since Clinton, we've run at a deficit and some of the Clinton years too. But each year, since I was in middle school, we've run at a deficit, which means we're spending more money than we're bringing in, and part of the reason we're spending more money than we're bringing in is because we have to pay interest on all this debt. It's really come to a head over the last couple of years for two reasons. One, our debt skyrocketed. Recently, TCJA added to it. COVID certainly didn't help it at all. Then additionally, because we've had such high inflation, the Fed has increased interest rates and that's the rate that we pay to service the debt. In FY 24, which ended at the end of September. This year, we paid over a trillion dollars just to service our debt, not paying down our debt, just paying the interest on our debt. That's more than we spent on defense spending for the entire year. It becomes a liability if our debt is too large. Particularly, we like to compare it to our GDP. This year we ran a $1.8 trillion deficit. Over a trillion of that we could say is attributable to interest costs. Anyway, here we are. We've got $4.6 trillion to extend the TCJA. Then we've got a whole host of other campaign proposals that Trump made on the trail. No SALT, and we'll get to SALT in a second. No SALT, no tax on tips, no tax on overtime, no tax on Social Security benefits. There's family caregivers credit for home caregivers. There's just a number of things, and some of them are hard to score because there's not a lot of details around the policy yet. They're more on the idea than the actual detailed policy phase at this point but those are a lot and estimates are 8-10 trillion with the Tax Cuts and Jobs Act plus all of the other campaign promises, and that is just wild as compared to our current national debt and the fiscal responsibility that I think a lot of policymakers and Americans really are focused on. Do I think that Senate Republicans and House Republicans are going to come together and say, let's write a $10 trillion bill that's not paid for at all, that increases the deficit? No, I don't. We still have deficit hawks in the Republican Party, we have people who are really concerned about it and for good reason. That's going to be a struggle. I want to say SALT is really important here. Republicans are fairly united in the general extension of Tax Cuts and Jobs Act. There's a lot of campaigning this cycle on it. It'

    25 min

  5. 11/26/2024

    2025 tax preview: Perspective from an AICPA tax policy advocate

    In this joint episode with the JofA podcast, host Neil Amato discusses with Melanie Lauridsen, Vice President of Tax Policy & Advocacy for the AICPA, what tax practitioners can expect regarding tax legislation. The conversation covers key tax topics following the 2024 election, including the future of the Tax Cuts and Jobs Act (TCJA), beneficial ownership information (BOI) reporting, and disaster relief efforts. Melanie provides insights into the challenges and opportunities facing tax professionals in 2025, emphasizing the importance of staying informed.   What you’ll learn from this episode:  The latest updates on disaster relief for BOI reporting.  Melanie’s insights about the potential future of the TCJA provisions.  How IRS funding might be impacted by the new administration AICPA resources   Planning for tax changes – CPAs need to not only brace for tax law changes such as the Tax Cuts and Jobs Act (TCJA) and expiring provisions but also be proactive in planning for them.   Tax Advocacy – Advocacy is a core element of our purpose and value proposition. It is a strong mechanism for promoting trust and confidence in the CPA and CGMA credentials around the world.   Transcript April Walker: Welcome back to the AICPA’s Tax Section Odyssey podcast, where we offer thought leadership on all things tax facing the profession. I'm April Walker, lead manager from the Tax section, and today we have a joint episode with the JOA, providing information on several important tax topics, such as BOI, disaster relief, and also upcoming potential tax legislation. Let's hear more. Neil Amato: Welcome to the Journal of Accountancy podcast. This is Neil Amato with the JofA. This episode is a special collaboration between the JofA and the Tax Section Odyssey podcast. It's Nov. 19 as we're recording, two weeks since the 2024 election. With the election over, we have results. We also have questions about the future of several tax topics. Here to provide some analysis and clarity on those topics is Melanie Lauridsen, vice president–Tax Policy & Advocacy for the AICPA. Melanie, welcome back to the podcast. Melanie Lauridsen: Thank you for having me back, Neil. Amato: We talk pretty regularly, pretty much a quarterly basis. It's safe to say that even if we keep this discussion fairly narrow in scope, there is plenty to discuss, so we'll get right to it. I'm going to tease for the listeners that there will be discussion of the future of the Tax Cuts and Jobs Act. But first, I'd like to ask about BOI reporting, beneficial ownership information reporting, as that's been in the news lately as well. What's the latest from your lens, the advocacy lens, on the topic of FinCEN's disaster relief for BOI? Lauridsen: Good topic, Neil. Disaster relief is something, regardless of what it is, whether it's tax or BOI, it is critical that people are able to get it as quickly as possible in the largest scope possible. With BOI, we are grateful that FinCEN did offer disaster relief for victims of various hurricanes, most notably Hurricane Milton and Hurricane Helene, which created quite a bit of damage to the areas they hit. But, unfortunately, the scope of the relief, particularly for those victims of Hurricane Helene, is not as broad and as encompassing as we would have liked it to have been. They did offer a filing relief for those victims. However, they didn't extend it to entities that had been created prior to 2024 and therefore had a Jan. 1, 2025, deadline. We know that [for] some of the entities, it took everything away. It destroyed everything, and those entities have years to rebuild, and they really could use an extension. With that in mind, we are actually working with various state CPA societies, and we are also working with FinCEN in order to broaden the scope that was issued, in particular for victims of Hurricane Helene. Of course, we are working with people on the Hill because there are a lot of quest

    18 min

  6. 11/15/2024

    Say "I do" to engagement letters

    This podcast discussion with Michael Reese, Risk Control Consulting Director (Accountants) — CNA Insurance, centers around the importance of engagement letters for tax practitioners. Michael emphasizes the role engagement letters play in setting expectations, providing clarity and mitigating risks during engagements. He also reviews the necessity of having clear, documented agreements to minimize disputes and liability issues. What you’ll learn from this episode: The importance of engagement letters Common risks in tax engagements The role of client education and communication in managing risk How to handle quality control under deadline pressure AICPA resources Annual Tax Compliance Kit — Engagement letters, organizers, checklists and practice guides help you manage your tax season workflow. Say "I do" to engagement letters — Uncover the importance of establishing parameters of client relations and detail the scope of services to be provided. Other resources Frequently Asked Engagement Letter Questions — The Accountants Risk Control team at CNA, the endorsed underwriter of the AICPA Professional Liability Insurance Program, summarizes answers to frequently asked questions. Transcript April Walker: On today's podcast, listen to hear how you can manage your risk with engagement letters. Hello, everyone, and welcome to the AICPA’s Tax Section Odyssey Podcast, where we offer thought leadership on all things tax facing the profession. I'm April Walker, a Lead Manager from the Tax Section. And I'm here today with Michael Reese. Michael is a risk control director with CNA. Michael Reese: Good morning, April. April Walker: Thanks for joining me today. Here at the AICPA, we work really closely with Michael and his team on lots of things and lots of projects. But I'm especially grateful for the partnership that we have with his team for Tax engagement letter templates. Speaking of engagement letters, they are now currently available to Tax Section members. Of course, I will put a link in the show notes so that you're able to access those. April Walker: Today, we're going to talk about some common questions that we get, and I'm sure that you also get Michael on Tax Engagement Letters and just generally how to manage your risk as a tax practitioner. Welcome, Michael, and thank you for joining me. Michael Reese: Thank you. Hopefully, what I can provide will be of use to your listeners. These are questions we often get as well. I do want to confirm that, but it's a very important topic. Glad we're talking about it here today. April Walker: I'm positive that they will be helpful. Sometimes people get answers to questions that they don't really want to hear, but they're important for them to hear. Michael Reese: Exactly. April Walker: Just to start off, I'm wondering why you think it's crucial for tax practitioners to have an engagement letter in place not only for every engagement but before they actually start the work. Michael Reese: April, I think there's two primary answers to this question. First, setting expectations and then setting guardrails in case something goes wrong. From a practice standpoint, it's very important for both the practitioner and the client to know what's going to happen and what work is being done. Your engagement letter hopefully is going to clearly state, "This is what you've asked us to do. This is what we're doing. This is what we collectively need to do to get this completed. This is the info we need and when we need it," etc. If a practitioner doesn't have this, then they run the risk of a client coming back later and either adding services, sometimes without the added fee, or complaining that a service has not been performed. There needs to be that clarity upfront. For professional liability reasons, having that clarity helps limit your duty of care to the agreed-upon scope. This way, in the event of a dispute, the practitioner has a strong argument fo

    31 min

  7. 10/17/2024

    Analysis, clarity and a quiz: A preview of the National Tax Conference

    The AICPA & CIMA National Tax Conference will take place on November 11 and 12 in Washington, DC. Join Brandon Lagarde, Tax Partner at EisnerAmper, and April Walker, Lead Manager on AICPA & CIMA’s Tax Practice & Ethics team, to learn more about what to expect from the upcoming conference. Conference sessions will feature topics such as: The impact of election results on tax legislation: Investigate the potential legislative outlook based on the recent election results and how it might affect tax policies. Tax Cuts and Jobs Act (TCJA) expiring provisions: Provisions of the TCJA are scheduled to sunset at the end of 2025; learn more about how to prepare and explore planning opportunities. Practical tax strategies: Sessions at the conference will cover various tax tactics, including gifting and income tax planning strategies, for clients who are not currently subject to estate tax. Ethical dilemmas in tax practice: A session will discuss common ethical dilemmas faced by tax practitioners and provide insights on how to handle them. The future of tax practice: Investigate the importance of transforming tax practices with year-round advisory services and how to implement these changes in a tax firm. AICPA resources AICPA & CIMA National Tax Conference — For tax practitioners, there’s no better place to get immersed in current events than the AICPA & CIMA National Tax Conference; in-person and virtual options are available. Reimagining your tax practice — Join us for free upcoming live roundtable sessions to tackle today’s top practice management issues with insights and tips from pioneers in the tax community. TCJA expiring provisions — This detailed, downloadable resource offers an in-depth look at the expiring provisions under the TCJA and other recent legislation. It categorizes changes across individual tax, estate and gift tax and business tax provisions, organized by year of expiration. Transcript Neil Amato: Welcome back to the Journal of Accountancy podcast. This is Neil Amato with the JofA. I'm excited to be joined for today's episode by two top flight tax experts in this special collaboration episode with the Tax Section Odyssey podcast with our guests, we're discussing the AICPA & CIMA National Tax Conference which begins November 11th in Washington. Those guests, April Walker, lead manager with the tax practice and ethics team and host of the aforementioned Tax Section Odyssey. Also Brandon Lagarde, tax partner at EisnerAmper and Chair of the Tax Conference Planning Committee. We have a lot to get to. We're excited to have you on. First, a quick welcome, April and Brandon, thanks for being repeat guests on the JofA podcasts. April Walker: Thanks so much for having me Neil. I'm excited to be here. Brandon Lagarde: It's very exciting to be here Neil. Thank you for having me. Neil Amato: Yeah, we're glad to have you both on as I said, the Tax Conference is November 11th, less than a week after election day. Brandon for you first, tell me what you're looking forward to about this event which is at the Omni Shoreham Hotel in Washington? Brandon Lagarde: Yeah. I'm looking forward to just go into DC. It's going to be a week after the election, hoping that we know who the president will be and what the makeup of Congress will be at that time. Again, it's going to be a great atmosphere, a great opportunity to go to the nation's capital, to hear from some of the best tax minds out there. Neil Amato: April, I know you're a repeat attendee at that conference. You're also running sessions, recording podcasts, taking part in panels. What do you look forward to from the event? April Walker: It's always a busy conference for me and I love being in DC and it's very exciting for me to be there, like Brandon said right after the election. Speaking of that, really what I'm looking forward to most is hearing more about what the potential legislation outlook could look like based on those result

    16 min

  8. 10/03/2024

    Demystifying IRS guidance on digital assets

    This podcast conversation with digital asset specialist Kirk Phillips, CPA, CMA, CFE & CPB, Managing Director — Global Crypto Advisors, focuses on demystifying IRS Rev. Proc. 2024-28, which provides guidance on transitioning from universal basis tracking for holders of digital assets and a safe harbor deadline of Jan. 1, 2025, to determine how to allocate any unused basis in digital assets. Phillips shares recommendations for tax practitioners around communicating with clients and the need for careful planning and documentation to meet the safe harbor provisions. What you’ll learn from this episode: Understand more about Rev. Proc. 2024-28 and what it means for holders of digital assets. Hear about the safe harbor provisions provided in the revenue procedure. Learn the importance of the Jan. 1, 2025, deadline for making a reasonable allocation of unused basis. Find out about the challenges of documenting and reconciling cost basis related to digital assets. How to communicate and prepare individuals and businesses for the upcoming changes related to reporting of digital asset transactions.  AICPA resources Digital assets and virtual currency tax guidance and resources — Sharpen your tax knowledge on digital asset and understand the tax complexities and strategies involved with virtual currency and cryptocurrency. AICPA advocacy resources AICPA makes recommendations for digital asset transactions regulations, March 7, 2024 Other resources Rev. Proc. 2024-28 — Guidance to allocate basis in digital assets to wallets or accounts as of January 1, 2025 Final Regulations 2024-07-09 — Gross proceeds and basis reporting by brokers and determination of amount realized and basis for digital asset transactions Transcript April Walker: Hello everyone, and welcome to the AICPA's Tax Section Odyssey podcast, where we offer thought leadership on all things tax facing the profession. I'm April Walker, a lead manager from the tax section, and I'm here today with Kirk Phillips. Kirk is a CPA and it has a lot of other designations behind his name. But he's also more importantly for today's discussion, a specialist in the world of digital assets and crypto. [He's] been in it for a long time. Our goal today, Kirk, is to demystify some of this latest guidance that we've gotten from the IRS. We're definitely not going to be able to demystify all of it in the time we're just going to spend today. But there are some important deadline related items, so we want to make sure we're covering those. Kirk is on the AICPA's Digital Asset Tax Task Force. And for the past few months, we've actually been meeting weekly, which is unusual for a task force. Because really we've been discussing one thing, Revenue Procedure 2024-28. What it actually said, what it meant. Just really delving into that, the details of all of that. That's going to be the topic of what we're going to talk about today. What that means for tax practitioners and holders of digital assets. Especially like I said, there are deadlines around this safe harbor. Kirk, to start off. Welcome. Let's talk about I mentioned the deadline and let's talk about the significance of that January 1, 2025 deadline for making that reasonable allocation of unused basis. That's what the Rev Proc says. Talk to us a little bit about what that means, what you're thinking about, what practitioners should be doing now to prepare for that date. Kirk Phillips: Sure. Thank you so much April for having me on the podcast. I love talking digital assets and crypto, whether it's tax-related or otherwise. I'm excited to help demystify this Rev Proc. One of the key things here is that and why this is so important is we both have a short timeline. Because we're already nearing the last quarter of the year 2024. It's also very challenging - it's a onetime exercise that we have to go through and on a short timeline. That's why this is critical and that's why we're here today to talk about tha

    28 min
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About

Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.

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  • Creator
    AICPA & CIMA
  • Years Active
    2023 - 2025
  • Episodes
    91
  • Rating
    Clean
  • Copyright
    ©2023 Association of International Certified Professional Accountants. All rights reserved.
  • Show Website
    Tax Section Odyssey

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