Senate Drops Carried Interest Curbs to Secure Sinema's Vote

A provision to make it more difficult to claim reduced tax rates on carried interest income has been dropped from the Senate's reconciliation bill at the request of Arizona Democrat Sen. Kyrsten Sinema.

House Taxwriter Walorski Dies in Car Accident

Rep. Jackie Walorski, R-Ind., a member of the House Ways and Means Committee since 2017, was killed in a car accident August 3. She was 58.

IRS Tech Targets S Corp Officer Compensation

The IRS is deploying technology and big data to combat compensation under-reporting. What does this likely mean for you and your S Corps? That Reasonable Compensation challenges will likely occur outside the traditional exam process. A chal...

Digital Assets: Discussion from Baruch College Financial Reporting Conference

The second day of the conference kicked off with a panel on digital assets. Beth Paul, Deputy Chief Accountant, PricewaterhouseCoopers Accounting Services Group, moderated the discussion. Alicia A. Manders, assistant director of technical a...

Spanish Prosecutors to Seek 98-Month Prison Term for Shakira

Spanish prosecutors told a Barcelona court they will seek a 98-month prison term and a hefty fine if Colombian pop singer Shakira Mebarak is found guilty of tax evasion.

U.K. Lawmakers Call for ‘Affordable’ Resolution of Loan Charge

A cross-party group of parliamentarians has asked Chancellor of the Exchequer Nadhim Zahawi to set up a “fully independent” review of the controversial loan charge and to work toward a “genuinely affordable settlement opportunity.” The APP...

Qualified Business Income Deduction and the Self-Employed

The Tax Cuts and Job Act of 2017 (TCJA) included a new 20% deduction, known as the Qualified Business Income (QBI) deduction under IRC Section 199A, for sole proprietors and owners of pass-through entities for tax years beginning after Dece...

Qui Tam Suits: A Dust-Up Over Government Intervention

Roxanne Bland is Tax Notes State’s contributing editor. Before joining Tax Analysts, Bland spent 17 years with the Multistate Tax Commission, where she worked with state revenue agency representatives to draft model legislation pertaining t...

Firehouse Subs Founders and IRS Dispute Share Valuation

Robin and Chris Sorensen, the brothers who founded the restaurant chain Firehouse Subs, are fighting the IRS over the value of shares they contributed and sold to their living and family trusts. At issue in Sorensen v. Commissioner is whet...

Tax Provisions of the Marijuana Regulation and Taxation Act

On March 31, 2021, former New York Governor Andrew Cuomo signed the Marijuana Regulation and Taxation Act (MRTA), creating a new Tax Law Article 20-C that legalizes and taxes the sale of adult-use marijuana by persons age 21 or older. Broad...

Shakira Faces Tax Fraud Trial in Spain After Rejecting Plea Deal

Colombian pop singer Shakira Mebarak has rejected a plea deal offered by Spanish prosecutors that would have let her avoid trial on charges of evading €14.5 million in taxes.

The Taxability of Third-Party Food Delivery Services

Two years into an unprecedented global pandemic, the impact of coronavirus (COVID-19) is still felt in many industries. The hospitality industry continues to be one of the hardest-hit. Although hotel occupancy is steadily rising as summer t...

Current Developments at the SEC

The final session of the first day of the conference was focused on current developments at the SEC. Lindsay McCord, chief accountant, SEC Division of Corporation Finance, served as moderator and discussion leader. Jonathan Wiggins, senior ...

Greetings from your New CEO

I want to take a moment to introduce myself to you. I am Calvin Henry Harris Jr., CPA, your new NYSSCPA Chief Executive Officer. It is an honor to serve the first and oldest state CPA society in America, and I am excited to join the Society...

Russia’s Revenue Roller Coaster

Since its invasion of Ukraine on February 24, the Russian government has denied access to a lot of financial statistics, but the data we can see show that Russia’s tax revenue in the first five months of 2022 was sky-high. Calendar year 202...

OECD’s Deputy Director of Tax Policy to Retire in 2023

Grace Perez-Navarro, deputy director of the OECD Centre for Tax Policy and Administration, is retiring from her post next year.

The ABCs of the Taxation of Virtual Currency

With new technologies come new forms of assets and, eventually, new rules for the regulation and taxation of such assets. Beyond the current frontier lies the land of the digital assets—cryptocurrencies, non-fungible tokens, and the like—th...

Opening Remarks from the SEC and FASB: Richard Jones and Paul Munter

Richard Jones is the Chair of the Financial Accounting Standards Board (FASB). He began his term as the eighth chair of FASB in July 2020. Prior to that, Jones was a partner at Ernst & Young and served as the firm’s chief accountant on tech...

Having An HSA While on Medicare

Health savings accounts can be tricky, especially when you are on Medicare. Not only do you need to meet certain criteria to have one, but you need to meet the same requirements to keep contributing to it.

Highlights from the 20th Annual Baruch College Financial Reporting Conference

The 20th Annual Financial Reporting Conference was hosted virtually by Baruch College on May 4 and 5, 2022. The longstanding conference brought together—via videoconference—representatives from leading regulators, standards setters, prepare...

Keynote Fireside Chat: A Conversation with PCAOB Chair Erica Y. Williams

The conference concluded with a “fireside chat” with newly installed PCAOB chair Erica Y. Williams. Williams was sworn in as the chair of the PCAOB in January 2022, coming from Kirkland and Ellis, where she was a litigation partner. Previou...

Tax History: Will Slumping Stocks Doom Mark-to-Market Tax Reforms?

There’s nothing like watching an actual expert school a snarky columnist on Twitter. It happened last week when Samuel D. Brunson, a law professor at Loyola University Chicago, explained some basic income tax to Matthew Yglesias, a smart, p...

Expanding Options for Providing Attestation Services

In September 2020, the Auditing Standards Board issued Statement on Standards for Attestation Engagements (SSAE) 21, Direct Examination Engagements. Its provisions are effective for assertion-based and direct examination engagement reports ...

Historic Rehab Projects at Risk From State Credit Lapse, Pillar 2

The expiration of Minnesota’s historic tax credit puts historic building rehabilitation projects there at risk, and similar projects nationwide may face head winds if proposed global minimum tax rules remove incentives for investors to help...

Dutch Finance Secretary Wants to Investigate Uber Tax Avoidance

Dutch State Secretary for Finance Marnix van Rij said he wants to investigate whether the Dutch tax service followed correct procedures in reviewing Uber’s tax affairs and inform the parliament of the Cabinet’s findings.

Seeking Truly Global Financial Reporting Standards

For decades, leading standards setters have advocated a single set of global financial reporting standards. After large strides were made in converging U.S. GAAP and IFRS in the first decade of this century, progress seemingly stalled. The ...

Reading the Tea Leaves on Retirement Legislation

Last year marked the centennial of the inclusion of tax incentives for employer-sponsored retirement plans in the code. For the 101st anniversary, passage of large retirement savings tax legislation that refines the system is looking increa...

FASB Streamlines Income Tax Accounting

Recently, FASB issued a new Accounting Standards Update (ASU 2019-12), Simplifying the Accounting for Income Taxes. The new standard amends section 740 of the Accounting Standards Codification (ASC), eliminating some problematic exceptions ...

Finding Financial Experts for Audit Committees

Regulatory and market pressures have led to increased responsibilities for corporate audit committees, as well as greater demand for such members to possess financial expertise. Companies have responded by offering a wider variety of compen...

Former IRS Officials Skeptical of Foul Play in Comey, McCabe Audits

Former IRS officials familiar with the highly selective audit process that ensnared two top rivals of former President Trump say the IRS is likely innocent of wrongdoing, despite the seemingly impossible odds.

Rettig Requests TIGTA Investigation of Comey, McCabe Audits

IRS Commissioner Charles Rettig has requested an investigation into how the agency selected the returns of two top former FBI officials for intensive audits.

Working from Home: State Income Tax Complications

The coronavirus (COVID-19) pandemic triggered an exodus of workers from their comfortable offices to the safety of their homes and other remote locations. For some, this displacement is temporary and will end when the pandemic subsides; for...

Qualified Charitable Distributions May Reduce Retirement Taxes

Required minimum distributions may increase your tax bracket in retirement, but there is a way to help manage your tax exposure and help great causes: qualified charitable distributions (QCDs). At 72, you are required to take distributions ...

Connecticut Governor Seeks to Lure Businesses Post-Roe

The governor of Connecticut has issued an open letter to businesses, touting the state’s protections for reproductive rights and its pro-growth environment and tax stability to lure businesses from states limiting access to abortion.

Wielding the Brussels Effect: A Self-Help Approach to Pillar 1

Sometimes you read something in Tax Notes that causes you to stop and do a double take. The people who write for the publication are not immune from this phenomenon. The latest occurrence came as I read Elodie Lamer’s recent article on Hun...

How Independence and Commercialism Can Coexist

This article is an updated and expanded version of one written by this author seven years ago (“Can Professionalism and Commercialism Coexist in CPA Firms? Putting the Public Interest before Increased Profits,” The CPA Journal, February 201...

Implementing CECL During the Pandemic: Unexpected Consequences Revealed

The much-anticipated and -deliberated changes to the accounting for financial instruments ushered in by ASU-2016-13, Financial Instruments–Credit Losses, happened to take effect during an unprecedented economic crisis brought about by the C...

After Taxes Now, Tax-Free Later: Roth 401(k)

Tax-advantaged has quite the ring to it, doesn’t it? Unlike the tax-advantages a traditional 401(k) offers—funded with pretax wages—a Roth 401(k) is funded with after tax wages. Income tax has already been paid so when it comes to withdrawi...

The State of the Profession – Predictions for 2022

To complement the data-driven analysis presented in the Rosenberg Survey (see page 20), the authors assembled a virtual roundtable of observers from around the profession to give us their predictions for the 2022. What will this new year br...

Continuing Professional Education “Disruptor” Reaches 10 Years

CPAacademy.org, the U.S. leader in free online continuing education for accounting professionals—with over 400,000 members and more than 17,300 courses—celebrated its first 10 years in business this month. Founded in 2012 in a converted gar...

Exploring the Gender Gap: Does it Begin Earlier than Expected?

Previous research has established that women suffer from the impacts of the “gender gap” in the middle to late stages of their career. This gender gap manifests itself as reduced pay and reduced advancement opportunity for women relative to...

CPAJ News Briefs: Tax & Accounting Update

Tax & Accounting Update provided by Thomson Reuters

Forté Capital’s Selected Statistics: Economic & Market Data

The yield curve has settled back into a normal shape, having been inverted from the 2-year to the 10-year at the beginning of April. This transitory recession signal is a reminder that as the Federal Reserve increases rates in order to figh...

Retirement Savings: Consider a Roth IRA

A Roth individual retirement account is a brilliant way to save for retirement. Much like a traditional IRA, a Roth IRA allows you to invest and for it to grow tax-free. One great advantage this type of account has is that it also lets you ...

Smoke and Mirrors - Race and the Black CPA

Change is in the air for accounting. Many promises have been made about increasing diversity, particularly for Black accountants. But have all the projects, initiatives, and reports lived up to expectations? Or has it been a shell game?

Inventories, Inflation, and Supply Chain Disruption

I think we’re going to see a new era in how we manage this type of thing. My hope is people are going to give more thought to the importance of carrying inventory and safety stock so that we can survive some of these disruptions, especially...

New International Accounting Ethics Standards

In September 2018, the International Ethics Standards Board for Accountants (IESBA) issued a new International Code of Ethics for Professional Accountants, which was recently revised with changes effective in 2022. The AICPA Code of Profess...

Department of Labor Position on Cryptocurrency Investment in 401(k) Plans

Many 401(k) plan sponsors mistakenly believe that they have no liability for investment fund options made available to participants in core investment menus and self-directed brokerage accounts.

The Risks Facing the CFO

Business risk is defined in generic terms as the exposure a company must consider that may lower its profits or lead it to fail. This definition will suffice for purposes of this discussion, especially because it clearly lays business risks...

The New Working World of the COVID-19 Pandemic

The coronavirus (COVID-19) pandemic created a new working world for businesses, accounting firms, and government. Most offices, including CPA firms and the PCAOB, pivoted to remote work. Unprecedented labor shortages meant auditors had to d...

Examining Recognition & Measurement of Financial Assets/Liabilities: ASU 2016-01

Accounting Standards Update (ASU) 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, became effective for financial statements beginning after December 15, 2017. One of its key provisions was a change in the...

Growing Today’s Accounting Businesses

Over the past 20 years, many public accounting practices transformed into accounting businesses, with some even becoming multifaceted professional services organizations. The shift was precipitated by the emergence of effective, low-cost s...

Using Data Visualization To Help Uncover Fraud

Reasons to Pursue Entrepreneurship in Retirement

Filling the time retirement allows is never the same for everyone. For some the relaxation is important and long overdue. Others may struggle to fill that free time, even with travel or hobbies. To feel fulfilled starting a new business may...

The Tax Implications of Disability Income

The Centers for Disease Control and Prevention (CDC) reports that 61 million adults in the United States have some type of disability affecting mobility, cognition, hearing, or vision (https://bit.ly/3ujKOlv). According to the Council for D...

Government Accounting and Auditing: Clearing a Cloud of Confusion

An estimated 3,000 audit practice units in the United States engage in state and local governmental audits. Most of these (65%) are members of the AICPA’s Governmental Audit Quality Center (GAQC), a voluntary membership center that serves a...

Why Retirees are Targeted Most by Scammers

Annually, an estimated 3.5 million retirees fall victim to financial exploitation. Scammers take advantage of elders due their vulnerability. Those who are 80+ are the most at-risk group for scammers. Ruthless and always on top of trends an...

Recent California State and Local Tax Developments

CPAs need to be aware of current tax developments in key states to properly advise entities doing business in multiple jurisdictions. Below is an overview of some key developments in the state of California. On February 9, 2022, California...

A First Look at the Addenda to the 2021 OMB Compliance Supplement

The guidance and requirements that auditors must follow to perform single audits, including program specific audits, are included in the U.S. Office of Management and Budget’s (OMB) annual Compliance Supplement. Although the supplement is w...

The Battle of Assumptions in Facebook's U.S. Tax Court Case

Recent testimony in the U.S. Tax Court's Facebook v. Commissioner trial highlighted a problem with the U.S. cost-sharing regulations, which establish valuation rules for a type of related-party intangible property transfer that has long bee...

New Reporting and Disclosure Requirements for Contributed Nonfinancial Assets or

Almost all not-for-profit organizations rely on contributions to help fulfill their mission. Contributions can either be in the form of financial assets, such as cash and investments, or nonfinancial assets, generally referred to as gifts-i...

Compulsory Payments Under the Final FTC Regulations

New final foreign tax credit regulations have generated much controversy by limiting the kinds of foreign taxes that are creditable, but other changes made by the regulations also deserve careful attention; in particular, changes to the lon...

‘Flat Sum’ Settlements: An ‘End Run’ Around New York’s Reporting Requirements?

In computing a state resident’s adjusted gross income for personal income tax purposes, New York, like many states, starts with the individual’s federal adjusted gross income and makes certain additions or subtractions to arrive at the indi...

Examining the Ethics Education Requirements for CPA Candidates

Although ethics is undoubtedly at the core of what it means to be a public accountant, there has long been dispute and divergence about how to ensure that new entrants to the profession possess the requisite ethical training to be licensed ...

What You Need to Know About Cryptocurrency and Your Retirement

Started as a small project, cryptocurrency has become a large and continuously growing part of the finance industry. These blockchain tokens are making way into retirement planning slowly. Recently, some major companies have opened their do...

CPAs’ Role in Food Relief Organizations after COVID-19

This article considers the role CPAs take in nongovernmental nonprofit organizations and explores the opportunities for CPAs to help nonprofit food relief organizations face the challenges presented by the coronavirus (COVID-19) pandemic. T...

Employee Turnover Is Impacting Not-for-Profits Too

Many CPA firms are losing more than 25% of their staff each year, which is more than double the national average (Carolyn Kmet, “CPAs: Why They Leave, Where They Go,” Insight, Fall 2018). Shockingly, the direct costs associated with replaci...

Smartphone Apps Raise New Ethical Issues on Client Data Security

Tax professionals need to carefully examine what they do with their smartphones and how they use social media programs to ensure that they don’t accidentally disclose confidential client data. It might not take a John Doe summons to identi...

A Fireside Chat with Joanne S. Barry

Let’s start at the beginning. What is the story of how you came into the NYSSCPA? How did you get your start? My undergraduate degree was in English/Journalism and my early career included communications positions in the not-for-profit and...

CPAJ News Briefs: FASB, PCAOB

FASB, PCAOB News provided by Thomson Reuters Checkpoint

Keys to Successful Remote Audits of Not-for-Profit Organizations

The coronavirus (COVID-19) pandemic made remote audits a necessity rather than a luxury. CPA firms have adapted to the new environment, but challenges still remain with any client, perhaps especially not-for-profit organizations. The author...

SEC Enforcement Actions Support Critical Skills-based Ethics Training

The question of how to teach ethics has plagued academics for generations, with some even wondering whether it can be taught at all. Steven Mintz, an expert in ethics education, captured the landscape of ethics education in accounting in a ...

The Four ‘Ps’ of a Successful Business Presentation

Among the phrases that likely send shivers down the spines of many young CPAs is, “next week, you’ll have to make the presentation.” Rather than embracing the opportunity, too many CPAs dread the thought of delivering a presentation in fron...

Quick Check: How Ready for Retirement are You?

Retirement readiness is not an overnight success story. It is not a simple formula either. It takes dedication, hard work, and good strategies. Why? Because it is simply not just retirement savings. Read this article for a quick check to as...

An Outdated Sterotype? Accounting Compared with Competing Professions

The popular accountant stereotype portrays a person who lacks creativity, sitting alone crunching numbers. Those within the profession know that this portrayal is inaccurate and that the accounting profession encompasses a wide variety of s...

Paycheck, Culture, Work-Life Balance

Millennials are the future of the accounting profession. Much has already been written about their generation’s preferences and the implications for employers. To attract and retain employees, however, it is important for employers to under...

Defining Client Service

The buzzword in CPA firms these days is advising: How do we get our firm to do more advising, how do our teams become advisors, and how do we sell advising to our clients?

The CPA Evolution Project Realigns the Professional Certification

Accounting—at least as an independent field of study—is becoming obsolete in today’s technology- and analytics-focused world. Its value lies in its interdisciplinary applicability and position as a foundational business curriculum. In recog...

Leading the Way on Sustainable Development

In the past decade, sustainability has moved from the periphery to become central in the global efforts to promote economic development, foster trade, and lift people of all nations out of poverty. The UN has blazed a trail, as its Millenni...

An Interview with SASB Chair Jeffrey Hales

Sustainability is an increasingly important topic for the accounting profession. Recently, the editors interviewed Jeffrey Hales, the Catherine W. and Edwin A. Wahlen, Jr., Professor of Accounting at Georgia Tech and the current chair of th...

The ESG Reporting Journey: Take the First Steps … Before It’s Too Late

Environmental, social, and governance (ESG) reporting is no longer considered a soft investment. Market demand and regulatory guidance are coalescing quickly. Consistent and transparent financial reporting standards have helped investors me...

State of the Profession

The seventh annual 2021 NYSSCPA–Rosenberg Survey identifies trends from the national 23rd Annual Practice Management Survey and provides profitability and growth data of participating New York CPA firms. This survey reflects how our profess...

How Inflation Silently Robs Your Retirement

Even with careful retirement planning, one risk that is often not planned for well-enough is inflation. Inflation alone can hit retirement assets the hardest. The budget retirees begin with will change easily within the first 5-10 years—eve...

Forté Capital’s Selected Statistics

One of the driving factors in both the economic picture and the capital markets is the expectation of rising interest rates. The Federal Reserve has now confirmed that it will begin raising rates in March 2022, and it will at the same time ...

Market Volatility: Invest Smart, Know the Risks

Investing into the market for retirement funds is a risky business. Retirees often purchase individual stocks or invest in financial products such as mutual funds, exchange-traded funds (ETFs), or even variable annuities. There are other op...

Book Review: Advice for a Successful Career in the Accounting Profession

Jerry Maginnis has written a book that should be on the bookshelf of anyone in the accounting profession, from interested students to experienced practitioners.

Implementation of Critical Audit Matters

On October 23, 2017, the SEC approved Auditing Standard (AS) 3101, The Auditor’s Report on an Audit of Financial Statements When the Auditor Expresses an Unqualified Opinion. This standard requires some of the most significant changes to th...

CPAs: Want to Stay Connected to the Profession in Retirement?

There’s a fork in the road when it comes to retirement. You leave behind your career to begin a new fulfilling chapter in life, but how do you fill your time? Some travel, others spend those years making hobbies a lifestyle or help raise th...

Nine Valuation Mistakes for Business Owners to Avoid

Whether or not a business owner plans to sell or transfer their business in the next few years, obtaining a proper business valuation is critical. A professional valuation performed by an accredited specialist, based on accurate modeling an...

Center for Audit Quality and Critical Audit Matters

Accounting trend observers report that audit and assurance services regarding environmental, social, and governance reporting, as well as cybersecurity risks, continue to be prominent issues for auditors. Retaining and recruiting talent als...

Asset Acquisition Accounting: Understanding the Available Guidance

A business combination is a transaction or event by which an acquirer obtains control of a business (i.e., the acquiree). If the acquisition of an asset or asset group (including liabilities assumed) does not constitute a business, however,...

Understanding Financial Independence, Retire Early (FIRE)

Brought to light from the 1992 book Your Money or Your Life by Vicki Robin and Joe Dominquez, the Financial Independence, Retire Early (FIRE) community was born as a movement that analyzes spending in terms of working hours as the ‘payment....

CPAJ News Briefs: FASB, IASB

FASB, IASB News provided by Thomson Reuters Checkpoint

The Variety of Career Opportunities Offered by the Accounting Profession

In my role as an executive in residence at Rowan University in southern New Jersey, I have had the opportunity to meet with many students and discuss their future.

The Variety of Career Opportunities Offered by the Accounting Profession

For decades, leading standards setters have advocated a single set of global financial reporting standards. After large strides were made in converging U.S. GAAP and IFRS in the first decade of this century, progress seemingly stalled. The ...

Working Smarter, Not Harder: Leveraging Your Life Insurance Policy

An unconventional strategy for retirement, to maximize your life insurance policy is premium finance. Premium finance is where policyholders will pay substantial premiums via borrowing from a third-party lender—tying up the bank’s money ver...

Making SELF a Priority

Listen in to this interview between CPAacademy.org founder, Scott Zarret, and Roger Knecht of Universal Accounting. You'll hear the story of their personal and professional journeys. Scott and Roger will review choices made and how they are...

An Introduction to Lattice Allocations

The invention of the system of equations method (i.e., the reciprocal method) was a significant step in the allocation of service department costs to production departments. Compared with the two other methods commonly in use—the direct met...

The Many Skills of the CFO

The demands placed on CFOs and their related financial organizations are driven by the many hats that they wear in discharging their responsibilities. As summarized in our prior column, “The Five Hats of the CFO” (October/November), these a...

Advocating for CPAs for 125 Years and Counting

As we enter our 125th year of representing and advocating for CPAs, I can’t help but be struck by the footprint we have made on the profession over multiple generations. From the moment our founder, Charles Waldo Haskins, championed new leg...

How Long is a Year? A Deeper Look at 52/53-Week Reporting Conventions

Although many businesses operate on a fiscal year distinct from the calendar year, some use a distinctive 52/53-week fiscal year. This reporting convention can enhance the comparability of periods and the convenience of reporting timeframes...

The Complexity of Sales Taxation of Information Services

The proper taxation of “information services” under the New York Sales Tax Law can raise complex and costly issues resulting in difficult audits and even litigation. Three recent tax cases in New York nicely illustrate the painstaking and l...

COVID-Related Tax Resources

In addition to the human health, remote work environment, and technology challenges presented by the coronavirus (COVID-19) environment, tax practitioners have had to absorb and apply several tax law and related changes in the past two busy...

The Five Hats of the CFO

The increasing complexity of business, whether it be from technology or globalization, has placed more responsibilities on an entity’s CFO and financial organization. In addition, these enhanced responsibilities have driven a need for CFOs ...

How ASU 2016-16 Changed the Treatment of Intra-Group Asset Transfers

This article reviews the changes made by ASU 2016-16 pertaining to intra-group asset transfers and provides several illustrations seeking to assist CPAs and other accounting professionals in applying the new standard for intra-group asset t...

Accounting for Operating Leases

This article examines the initial impact of the adoption of ASU 2016-02 (ASC Topic 842, Leases), which requires lessees to record assets and liabilities for operating leases. Under prior standards, operating lease payments were simply expen...

A New Approach to Finally Stop the Hackers

Everyone knows that hacking is a huge problem that typically results in the theft of large amounts of confidential information. But they don’t know a major cause of the problem: many organizations use only software-based procedures instead ...

A Survey of Tax Analytics and Automation Technologies

Tax departments are always looking for ways to streamline their processes and procedures, and provide greater value-added services to management. Tax analytics and automation technologies present new opportunities to corporate tax departmen...

The Accounting Profession and the Pandemic

When the entire world shut down because of the coronavirus (COVID-19) pandemic, the accounting profession had to adapt quickly. Not only did many CPA firms have to figure out how to provide services remotely, they also had to ensure that th...

CPAJ News Briefs: FASB, IASB, GASB

FASB, IASB, GASB News provided by Thomson Reuters Checkpoint

Book Review: Dear Accountant - Stories, Advice, and Explorations

Cece Leung’s Dear Accountant is an innovative and creative work in accounting. It is both inspiring and entertaining, and provides a smorgasbord of enriching and helpful career journeys of extraordinary people—all of whom are accountants! T...

Accounting Diversity, Equity, and Inclusion Resources

The accounting profession has a long and respectable history, and has made important contributions to business, commerce, and economies for hundreds, if not thousands, of years. The accounting profession can provide a lifetime career to any...

Medical Coverage When Working Past Retirement Age

It can be hard to know which medical insurance to use during the age of retirement when someone continues working. This is especially true when someone still has health insurance through a longtime employer. Medicare is managed by the Cente...

Five Ways for CPAs to Boost Their Technology Skills

Technology trends can encompass a multitude of different areas, such as data analytics, cybersecurity, robotic process automation, and blockchain. Because these areas have saturated all industries, learning more can promote personal develop...

Understanding CPA Mobility: How to Abide by the Rules

Although CPA mobility laws and regulations have significantly eased the process for CPAs to practice across licensing jurisdictions, recent enforcement reports of the New York Board of Accountancy suggest that at least some CPAs may not rec...

Recent Developments in FBAR Jurisprudence

Failing to report foreign bank accounts on a Report of Foreign Bank and Financial Accounts (FBAR) form can carry severe financial consequences. The civil penalty for non-willful violations of the FBAR reporting requirement is $10,000. The c...

What if an S Corp Owner can’t afford to pay Reasonable Compensation?

Depending on the company’s financial condition and business strategy, a shareholder-employee may be able to take Reasonable Compensation plus a distribution, just Reasonable Compensation, or neither. What the shareholder-employee can’t do t...

How the Next Generation of CPAs Can Restore the Public Trust

Corporate fraud has resurfaced in the headlines, troubling those who might have believed the profession had moved past its audit failures of the past decades. Thought leaders throughout the profession are using the current moment to reexami...

The Value of Incorporating Values into Recruiting and Mentoring Program

Many CPA firms are losing more than 25% of their staff each year, which is more than double the national average (Carolyn Kmet, “CPAs: Why They Leave, Where They Go,” Insight, Fall 2018). Shockingly, the direct costs associated with replaci...

To Confirm or Not to Confirm—Risk Assessment is the Answer

Bank confirmations have been a valuable source of audit evidence since the dawn of the profession. Like all confirmations, they can be both effective and efficient, but only to the extent the auditor has properly identified and assessed the...

Identifying Delaware Statutory Trusts in §1031 Like-Kind Exchanges

There is surprisingly little information available for investors who wish to identify Delaware Statutory Trusts (DSTs) as potential replacement property in their 1031 exchange. Delaware Statutory Trusts have become increasingly popular with...

Debating the Guideline Method

I read with interest the article “Using the Guideline Company Method in Valuing Closely Held Companies,” by Nicholas Mastracchio (CPAJ July/August 2020), and I applaud the authors on their informed methodology. Read comments and the author'...

Proposed European Value Chain Legislation Affects Companies Globally

U.S. business owners and their accounting professionals may be surprised to learn about a proposed European legal regime that will have a major impact on global business. Their surprise might turn to shock when they learn that businesses th...

CPAJ News Briefs: PCAOB, GASB, AICPA

PCAOB, GASB, and AICPA News provided by Thomson Reuters Checkpoint

Public Speaking Is Not What You Think It Is

Whether you are an introvert or extrovert, one thing is certain - public speaking is an important skill to build. This, of course, is no secret. After all, almost every profession requires it.

Book Review: Corporate Law and the Theory of the Firm

In Corporate Law and the Theory of the Firm, author Wm. Dennis Huber, an attorney and CPA with graduate degrees in economics and finance, challenges decades of judicial opinions, as well as accounting, economic, and legal research by provid...

Divorce and Tax Considerations

Since January 1, 2019, the tax rules for divorce instruments fall under dramatically new rules included in the Tax Cuts and Jobs Act (TCJA) of 2017. These law changes were largely made as a result of tax underreporting, meaning that the tax...

An Introduction to Structured Installment Sales

When the right set of circumstances presents itself, there may be no simpler way to defer, reduce, or completely eliminate long-term capital gains taxes when selling real estate, businesses, or certain other appreciated assets than a struct...

Material Participation as Significant Participation Activity

A recent case serves as a convenient reminder for 2020 tax return elections. In Gurpreet S. Padda, et al. v. Comm’r (TCM 2020-154), a physician met the test for significant participation activities with respect to several restaurants and a ...

Did the Tax Cuts and Jobs Act Really Lower Corporate Taxes?

The Tax Cuts and Jobs Act (TCJA) of 2017 modified several aspects of corporate income tax rules, including a key change to the treatment on foreign-generated earnings. Preliminary results from the authors’ investigation suggest the TCJA was...

Year-End Tax Planning for Individuals and Businesses

There is still time in the final quarter of 2021 for tax professionals to advise taxpayers to take actions that can favorably impact tax liability for the full year and help to get ready for 2022. The American Rescue Plan Act of 2021 (ARPA)...

Transitioning to Updated Required Minimum Distribution Tables in 2022

The rules for required minimum distributions (RMD) can be challenging to navigate. New regulations that update the life expectancy tables to be used add another layer of complexity. The switch to those new tables can be simple for some taxp...

An Overview of Current Developments in D.C., Florida, and Maryland

CPAs need to be aware of current developments in key states in order to properly advise companies doing business in multiple jurisdictions. This article will provide an overview of some recent developments in the jurisdictions of District o...

A Survey of Tax Analytics and Automation Technologies

Tax departments are always looking for ways to streamline their processes and procedures, and provide greater value-added services to management. Tax analytics and automation technologies present new opportunities to corporate tax departmen...

How Businesses Can Claim COVID-19 Relief Before Time Runs Out

The COVID-19 pandemic has wreaked havoc on the United States, not just in terms of lives lost, but also in terms of the country’s ability to maintain a fully operational economy.

CPAJ News Briefs - FASB, IASB

FASB News and IASB News provided by Thomson Reuters Checkpoint

“Cohan Rule” Estimates - A Useful Tool if Properly Used

If a taxpayer lacks documentation to support items on a tax return, preparers may use estimates, following an approach long known as the “Cohan rule.” Although the rule remains useful for tax preparers, it is limited, and its application va...

Tax Software in the Ongoing Pandemic Environment

CPAs continued to deal with a global pandemic during the 2021 tax season, requiring many tax practitioners to work from home, often while balancing other responsibilities. In addition to the persistent coronavirus (COVID-19) environment, ta...

An Introduction to Blockchain

Bitcoin was introduced to the world under a cloud of mystery in January 2009. A white paper, Bitcoin: A Peer-to-Peer Electronic Cash System, published in 2008 under the pseudonym of Satoshi Nakamoto, outlined the concept; to date, the autho...

Using Sustainability Initiatives to Engage Young Professionals

Generation Z, like the millennial generation before it, is pessimistic about careers, life in general, and the world around it. However, it shares a deep concern for the environment and a desire to serve a higher purpose. Sustainability ini...

Whistleblowing Intentions for Internal Auditors

Financial fraud represents a serious threat to financial markets, and it has long been noted that whistleblowing can be an important deterrent to fraud. Because of their positions within corporations, internal auditors are uniquely position...

Quick Tips on Building Confidence for Public Speaking

Picture this… you just finalized the writing of your speech, but now, it’s time to start practicing the delivery! Translating your written words into spoken ones requires more than simply reading the words off the page. Your writing is an ...

Robotic Process Automation in Accounting Education

Not very long ago, the word robot conjured a vision of a human-like mechanical being moving around and completing tasks. Then robots moved into the manufacturing area as arms and tools. Now robots are moving into the office. Organizations c...

Step 5 of 6: Encrypt Files on Computers and Removable Media

Tax season is around the corner. If you don't have a written data security plan (or if you have one and haven't recently reviewed it), today is the day to start it. In these articles, we will walk you step-by-step through the process. The...

Growing Interest in Lifelong Learning Creates a Positive Outlook

Although the last year has spurred hardships for those in the accounting profession, the coronavirus (COVID-19) pandemic has presented a promising opportunity for future generations of accountants—a chance to become enriched in accounting p...

Standardization - The Key to Efficient Production Workflows

In a recent webinar, Joe Woodard asked attendees, "Which of the following operational areas is your biggest challenge - the area you most need to streamline? More than half of them selected processes and workflows as their biggest pain poin...

What now? Key Takeaways for Businesses Navigating the Federal Vaccine-or-Testing

On November 4, 2021, OSHA issued the long-awaited Emergency Temporary Standard (“ETS”), detailing President Biden’s COVID-19 vaccine-or-testing mandate for most large employers (with 100 or more employees).

Pragmatic Realities of Bitcoin and Crypto-Investing

Although many investors in cryptocurrencies like Bitcoin have witnessed great gains in the past year, values have also fluctuated dramatically in short order. Whether Bitcoin and other virtual currencies can retain their value over time is ...

An Unconventional Tax Saving Strategy for Parents of College Students

PART 2 - Lifetime Learning Credit The Lifetime Learning Credit (LLC) and the American Opportunity Credit (AOC) offer significant tax savings for education expenses. This second article in a two-part series for parents of college students e...

Kansas Clarifies Sales Tax Responsibilities for Remote Retailers

From a sales tax compliance perspective, the past few years have been a roller-coaster ride for companies with customers in Kansas but no physical presence in the Sunflower State. Exactly who needed to register for sales tax hasn’t always b...

Step 4 of 6: Securely Back Up Files on a Routine Basis

Tax season is around the corner. If you don't have a written data security plan (or if you have one and haven't recently reviewed it), today is the day to start it. In these articles, we will walk you step-by-step through the process. The...

An Unconventional Tax Saving Strategy for Parents of College Students

PART 1 - American Opportunity Credit The American Opportunity Credit (AOC) and the Lifetime Learning Credit (LLC) have been topics of discussion for their utility in helping to fund college education expenses. This article is the first of ...

CPA Evolution Resources

According to the U.S. Bureau of Labor Statistics Occupational Outlook Handbook, there were more than 1.4 million accountants and auditors in 2019 (https://bit.ly/3DYhhSC). Based on the National Association of State Boards of Accountancy (NA...

Diversity, Equity, and Inclusion in the Accounting Profession

The accounting profession must be understanding and sensitive to the changing landscape of diversity, equity, and inclusion (DEI) in the workplace. Frankly, we can—as individuals and as firms—do more. We can be proactive about advancing the...

Five Ways Tax Preparers Can Utilize SharePoint for Their Data Security

The Internal Revenue Service (IRS) has strict requirements that tax preparers must meet to remain compliant. They must create and implement a data security plan that ensures consumer information confidentiality and security, select service ...

Internal-Use Software R&D Credits for Non-Traditional Industries

There are a number of misconceptions out there concerning the eligibility of expenses incurred in the development of internal use software for the R&D tax credit. These include a belief that internal use software development doesn’t qualif...

Step 3 of 6: Use Two-Factor Authentication

Tax season is around the corner. If you don't have a written data security plan (or if you have one and haven't recently reviewed it), today is the day to start it. In these articles, we will walk you step-by-step through the process. The...

Step 2 of 6: Use Firewalls to Shield Your Computer or Network

Tax season is around the corner. If you don't have a written data security plan (or if you have one and haven't recently reviewed it), today is the day to start it. In these articles, we will walk you step-by-step through the process. The...

Step 1 of 6: Install and Update Antivirus Software

Tax season is around the corner. If you don't have a written data security plan (or if you have one and haven't recently reviewed it), today is the day to start it. In these articles, we will walk you step-by-step through the process. The...

“More Action Can Be Taken”: IRS Aims Big Data at Officer Compensation

Just how big of an issue is S Corp. officer compensation under reporting? Big would be an understatement. The most recent estimate (TY 2011-2013) has S Corp. owners underreporting compensation by $24 billion per year, twice as much as ten y...

Claiming the 45L Tax Credit for Eligible Contractors

Since 2006, U.S. tax code allows contractors building energy efficient residences to claim the 45L tax credit. The process is a bit time-consuming for accountants and CPAs, and there are multiple steps to claim the $2,000 per home or “dwell...

Blossom Day Care v. IRS Tests 20-Year-Old Precedent

It has been about seven or eight years since we last had an S Corp Reasonable Compensation challenge come out of the tax courts. In the author’s humble opinion, that’s because there is very little left for taxpayers to test out in court. Mo...

Your Role in Client Response Times - and What You Can Do About It!

After the last tax season ended, it was disheartening to see so many practitioners express on social media that they were at their wits end with client response times. On #TaxTwitter, one poll indicated that many wanted to fire all their cl...

Fact or Fiction – How Are You Advising Your Clients?

We recently polled 993 CPAs, EA’s, and other tax professionals to find out if they could recognize fact from fiction as it applies to the IRS’s guidance on how to determine reasonable compensation. 81% believed the fiction. Congratulations ...

Don’t Get Ambushed: The IRS Is Arming and So Should You

For two decades the IRS has been preparing an assault on reasonable compensation for S Corporations. Their arsenal is now fully stocked. In it there’s everything from commonsense tools to obscure memos. Get ready. Arm yourself with facts an...

How the IRS Determines Reasonable Compensation Using the IRS Job Aid

Over the last decade the IRS has steadily and methodically tackled the compliance hassle that is reasonable compensation. According to an exhaustive 2009 GAO Report, S Corps were under-reporting shareholder compensation by more than $23 bil...

Reasonable Compensation for All Your S Corps in Three EZ Steps

“The only reason for time is so that everything doesn’t happen at once.” Albert Einstein Use time to your advantage! Here’s how one RCReports subscriber brought every S Corp he worked with into Reasonable Compensation compliance in three e...

The Impact of Coronavirus on Education in the Accounting Profession

An unexpected side effect of the COVID- 19 pandemic might benefit CPAs. Experts predict we will see lower-cost continuing education as the supply of online content increases-- something that the profession has badly needed for far too long.

Did the IRS Really Lose? Lessons From the Davis Case

The IRS usually wins when it challenges an S Corp.’s Reasonable Compensation in court. Over the years there have been in the neighborhood of 25 to 30 such cases. The IRS has come out on top in all except one: The Davis Case. What made Davis...

IRS Lays Out Steps to Keep Reasonable Comp Challenges Out of Tax Court

In a recent memorandum to its examiners and appeals agents, the IRS lays out steps to keep Reasonable Compensation challenges out of Tax Court. Great, you say, nobody wants to go to court! Not so fast. The option of filing a petition in T...

1099 or W-2 for Shareholder-Employees of S Corps? Updated for 199A

1099 or W-2? That’s the number one question Jack receives at RCReports. Read on to find out more.

How to Stress Test a Reasonable Compensation Figure

Stress testing a reasonable compensation figure is simple. The courts have listed the factors they consider when determining whether a reasonable compensation figure is indeed reasonable. We can use those factors to “stress test” any reason...