As managing partner of a 60-person firm in Abilene, Texas, whose clients are generally located in West Texas, one might wonder why I feel strongly that CPA mobility is a critical issue for the profession. By CPA mobility, I mean the ability to easily practice across state lines and serve the needs of clients without an undue licensing or regulatory burden.Although the majority of my firm's clients are located in Texas, not all are. And many of those in Texas conduct business or file tax returns in other states. It is important to our practice that we be able to deliver services beyond our state's borders on a timely basis. Unfortunately, the current system of licensing and regulation for CPAs no longer fits with the world in which we practice.

Some might think that mobility is an issue that primarily concerns larger national firms. But many CPAs from firms of all sizes are affected by this issue. Our firm conducts peer reviews in nearly 40 states around the country, and in that process, we have face time with practitioners in firms of various sizes. We hear about mobility concerns and the difficulties of the current regulatory environment from many of them.

In addition, concerns about mobility were demonstrated in a survey recently conducted by the Texas Society of CPAs. We polled our members to find out how they felt about the issue and the nature of their practices.

Our survey showed that 80 percent of public practitioners had filed tax returns in states outside of Texas in the last 12 months. Seventy-four percent had worked with clients that have out-of-state operations. We also asked our members, "How appealing would it be to you to have a 'driver's license-type model' in which CPAs can temporarily practice in a state outside of their home state without any notification or fee required?" On a seven-point scale (with seven being the most appealing), 86 percent of practitioners rated the concept a four or higher, while 65 percent rated it a six or higher.

Finally, the survey demonstrated that most CPAs are not very knowledgeable about the requirements to practice in other states. Seventy-eight percent said that they have little to no knowledge of out-of-state practice requirements. CPAs who want to comply with appropriate requirements in all the various states find that it is quite a challenge, because not all states follow the same rules.

Only a few states currently permit duly licensed CPAs from other states to practice in their state using your home state license (the driver's license model I referred to earlier).

On the other extreme, a number of states do not offer any kind of temporary licensing or practice options. The only choice is to get a regular license. The majority of states offer some kind of temporary license or registration option, or they have a de minimis exception if you practice for less than a particular number of days in the state; however, they do not all apply it equally to all types of CPA services.

Some states apply it to the filing of individual tax returns or business tax returns, and some do not. Some say that if you do not have a physical presence in the state, you need not worry. Others require you to be licensed or registered even if you never set foot in their state. Just the filing of a tax return in those states would subject you to licensure or registration! Needless to say, the fees for obtaining temporary licenses or practice privileges range widely across the states.

CPAS WITHOUT BORDERS

This system is out of touch with the global practice reality. Technology has broken down the traditional service delivery system of the past and blown it away. Our regulatory system must accommodate this new reality and develop a means for CPAs to easily practice across borders while still providing necessary public protection.

Fortunately, the American Institute of CPAs and the National Association of State Boards of Accountancy, and a number of state CPA societies and state boards, have recognized this problem and are working to improve the situation. The AICPA's Special Committee on Mobility recently issued a report calling for a federally mandated state-based mobility system, but the AICPA board has deferred on that strategy for the time being to continue to pursue a state-based approach to the problem.

In Texas, we don't think we can or should wait for the federal government to fix this situation. We also have concerns about actively asking the federal government to get more involved in the affairs of the profession.

Texas CPAs want to provide a solution. The Texas Society of CPAs has been working closely with our board of accountancy to make modifications to our state accountancy law and regulations that would ease the burden for CPAs from other states who wish to practice in Texas, while maintaining adequate safeguards for the public. Our hope is that by the time our legislature adjourns this summer, it will have passed legislation to make the improvements that we are recommending.

Of course, mobility is not a problem that any one state can solve. The changes that we are seeking in Texas will only benefit those CPAs from outside our state. Our hope is that other states will also address this issue and seek to make improvements that will provide similar relief for our CPAs who wish to practice outside of Texas. This is clearly a situation where we must all think nationally and act locally if we are going to be successful in solving this problem for the profession.

I believe that mobility matters to most CPAs and is worth our collective problem-solving efforts. I hope other states will join in this cause and work cooperatively to change this situation for the better.

Jerry L. Love, CPA, PFS, is the chairman of the 27,000-member Texas Society of CPAs, and the managing partner of Davis, Kinard & Co. PC, of Abilene, Texas.

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