The American Institute of CPAs has faced a hectic year dealing with problems like the last-minute fiscal cliff deal that delayed tax season, along with the after-effects of Superstorm Sandy and the impact of changes at the Internal Revenue Service that made life difficult for many tax practitioners.
Jina Etienne, director of taxation, member service and tax ethics at the AICPA, addressed a number of the AICPA’s concerns during a wide-ranging keynote speech on the final day of Accounting Today’s Growth & Profitability Summit in Orlando, Fla., on Tuesday. She noted that Superstorm Sandy struck during last year’s Growth & Profitability Summit, and then the country faced the fiscal cliff, deficit and debt ceiling talks, and the recent government shutdown.
The AICPA also had a busy season testifying before Congress this past year, first about the fiscal cliff and its impact on the upcoming tax session. “There was a storm last fall of tax law changes,” said Etienne. “I thought no matter what, they'll get it done by the end of the year. But when did they pass the law? On January 2.”
The certainty about areas such as the alternative minimum tax and the post-Bush tax rates were both good news and bad news. The fiscal cliff deal led to a severely compressed tax season, and Etienne pointed out that seven of the forms needed by many tax practitioners weren't even available from the IRS until March. She encouraged practitioners whose clients’ taxes were affected by the delay to file Notice 2013-24 with the IRS to get late-payment penalty relief.
Etienne noted that the AICPA is developing proposals for the IRS to streamline and harmonize information reporting systems, particularly with a view to the due dates of 1099, W2 and other forms, to avoid similarly compressed tax seasons. With so many businesses filing such information forms relatively late in tax season, it puts more pressure on practitioners and leads to late tax filings.
The AICPA also made progress on developing its own Financial Reporting Framework for Small and Medium-sized Entities, or FRF for SMEs, Etienne pointed out. She emphasized that it is not the same as the work of the Private Company Council established by the Financial Accounting Foundation and the Financial Accounting Standards Board. The main objective is for a business to be able to use FRF for SMEs to report on operational performance, “what you own and what you owe,” Etienne noted. It functions as a non-GAAP Other Comprehensive Basis of Accounting, or OCBOA. The framework was vetted using CPAs and AICPA staff before rolling it out, Etienne added. In addition, the AICPA has recently developed an online toolkit for FRF for SMEs for CPAs that can be downloaded from the AICPA’s Web site.
The IRS shut down some of its most popular e-services this year, Etienne noted, which led to lots of calls to the AICPA asking what happened. The AICPA is asking CPAs to send in any problems they experience with the IRS such as the missing e-services and expanded waiting times, to a section of its own Web site, and it will report on them to the IRS to see if it can do something about reopening the affected services or addressing other problems.
Etienne cautioned that with the recent government shutdown, the IRS is still dealing with a backlog of problems leading to expanded IRS wait times, so CPAs should be careful to distinguish those types of recent issues from earlier delays and glitches.
The AICPA has also been doing some surveys of trends in the accounting profession, including succession planning. The AICPA found that while Baby Boomers are predominantly leading firms right now, Generation X will be taking over from them soon. The Millenials are also looking for positions at firms as more members of Gen Y join the profession. The AICPA found that 46 percent of firms have a formal succession plan, up from 35 percent in 2008.
The AICPA has seen demand for skills from younger people such as helping clients manage data. “We need to be helping our clients with data, harnessing the data and providing intelligence,” said Etienne. “CPAs have a skill set that helps them deal with that, to provide a consulting service from their practices.”
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