Tax practitioners are working harder nowadays to keep up with a changing profession, an official with the American Institute of CPAs told attendees at Accounting Today’s Growth & Profitability Summit.
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AICPA director of taxation Jina Etienne said in a keynote speech on Monday that many CPAs are now using social media such as Twitter, Facebook, LinkedIn and blogs. But while CPAs are using technology, they’re not always adopting technology in the most effective way. “It’s having an impact on our services,” said Etienne. “Revenues are staying consistent, but we’re working harder to keep those revenues.”
She noted that accounting is becoming more international. At the AICPA’s Fall Meeting of Council last week, AICPA president and CEO Barry Melancon talked about International Financial Reporting Standards and the new Chartered Global Management Accountant credential that the AICPA and the Chartered Institute of Management Accountants are jointly offering. This is now the first year of renewals for the CGMA credential, and the AICPA has already hit its target for renewals.
Meanwhile, the Internal Revenue Service announced a delay in reporting for the Foreign Account Tax Compliance Act last week, Etienne noted, because it takes time for taxpayers and CPAs to get their arms around the new requirements. There has been a blowback in IRS enforcement, with some families finding out for the first time that they have a foreign bank account after Swiss banks like UBS are forced to disclose the accounts to the IRS.
CPAs also need to protect clients from the increase in phishing attacks and tax-related identity theft. The IRS reported more than 641,000 taxpayers were affected by tax-related identity theft in 2011, Etienne noted.
The fiscal cliff is also looming large, with a host of tax provisions expected to expire at the end of the year, along with steep spending cuts in Washington due to the “sequestration” that was part of the debt ceiling deal. “How do we do year-end tax planning when we don’t know what the tax law will be?” Etienne asked.
She noted that tax practitioners are calling the AICPA every day asking about what they should do, while insisting that the Institute should have told the IRS to do something about various issues, as if it were up to the AICPA to determine tax policy. “We are in a tremendous period of uncertainty,” she said.
Health care reform is also adding to the uncertainty and placing new burdens on the IRS to help manage the program. “Tax compliance isn’t just about income taxes anymore,” she said.
Meanwhile, the IRS has been heightening the new requirements for tax preparers. “Under Circular 230, you are now required to have quality control procedures in place to ensure compliance with Circular 230 provisions,” said Etienne.
The IRS is also visiting firms to see how they’re doing at preparing taxes and making sure their clients fully comply with the tax laws. “The IRS is putting more pressure on you as preparers, pulling you over to their side to make sure you’re doing tax compliance,” she noted.
The AICPA is trying to respond to the changing demands for practitioners. The CPA Horizons 2025 project came up with a list of key insights for how the CPA profession needs to adapt over the next dozen or so years. The AICPA is also offering a Tax Practitioners Toolkit with preformatted messages and even tweets that CPAs can send out on a seasonal basis to stay engaged with clients. In addition, the AICPA is providing customizable marketing tools that CPAs can use to advertise themselves as tax practitioners with years of experience and distinguish themselves from the IRS’s new Registered Tax Return Preparer designation.
“The CPA credential is the most valued,” said Etienne. “The public trusts us. They want to trust us.”
In addition, the AICPA recently introduced an online Total Tax Insights Calculator to enable taxpayers to estimate the amount they pay each year for the most common federal, state and local taxes.
“Familiarity with technology is baked into the CPA profession now,” said Etienne.