Attn: Mr. Timothy L. Christen, Chairman

American Institute of CPAs

Dear Mr. Christen:

Because of major and harmful changes in the makeup of the American Institute of CPAs, I am compelled respectfully and sadly to resign from the institute, and would like herein to explain my reasons for doing so.

The AICPA has been neglecting the CPA brand while promoting far less prestigious brands and sub-brands. In the process, it has changed from a proud professional membership organization to a watered-down industry business group. The CPA profession has suffered a degradation in standing as the AICPA leadership followed a minority clamoring for new brands and ignored our proud history. One consequence was Congress creating the Public Company Accounting Oversight Board in 2002, thus ending over 100 years of self-regulation.

Your claim of a “landslide” 86.5 percent approval for the Chartered Global Management Accountant and partnership with the Chartered Institute of Management Accountants is misleading. Unmentioned on is that the vote was 48,945 out of 56,560 cast — from over 412,000 members (of which I suspect well under 400,000 are CPAs). It was no accident that only 12 percent of membership voted. This ballot was skewed with thousands of CGMA designees conjured into existence in 2012 by offering CGMA to AICPA members without an examination. CIMA won’t reveal its membership vote, rumored to be 7 percent participation. Obviously this vote was not an authentic poll of the sentiment of the members.

The disastrous 2001 Cognitor ballot had 134,000 or 39 percent of all members casting ballots, and that vote was 62 percent against. Back then, the AICPA mailed a paper Cognitor ballot to each member. CGMA was an online ballot with only e-mail notification. Had I not read the May issue of The Journal of Accountancy cover to cover, as is my practice, I would not have been aware of the balloting. I saw no mention in the June issue, nor in any issue of The Tax Adviser. Undoubtedly, I was not alone in failing to receive that e-mail.

The AICPA’s proliferation and encouraging use of non-CPA initials — PFP, FVS, IMTA, NFP, CGMA — reminds me of Professor Theodore von Schwarzenhoffen MD AD DDS FLD FFF&F, the foil in Laurel & Hardy’s The Music Box. Compared with the CPA credential, these are anemic credentials with few participants, other than the heavily promoted no-CPA-required CGMA. This violates the spirit of the 1936 merger of the American Institute of Accountants and the American Society of Certified Public Accountants, when the institute agreed to restrict its future members to CPAs.

The CGMA succeeds in fulfilling 1999 AICPA chairman Robert Elliot’s controversial and counter-productive Vision Project, “[We must] think carefully about either the breadth of the CPA license or who will qualify as institute members. We have to change one, or we are destined to become the Institute of People Licensed to Do Audits.” A critic complained, “[This] exemplifies how a profession can attempt to change without substantial advances in its underlying knowledge base, but instead with a repositioning of claims to knowledge.”

Few members are aware that the AICPA today operates (formerly CPA2Biz) as a for-profit commercial subsidiary. What professional 501(c)(6) utilizes a for-profit and advertises it as, “An AICPA Company”? The AICPA has turned a professional membership organization into a business such that the CPA profession is now often referred to as the accounting industry.

I was so excited to join the AICPA 38 years ago, when only CPAs could join. It was a privilege that was respected and hard-earned. By straying from the CPA brand, the AICPA is headed toward irrelevance, much like the American Medical Association, which once represented 85 percent of doctors and today represents less than 30 percent. The National Association of State Boards of Accountancy for the first time enumerated that there are 664,532 actively licensed U.S. CPAs. The AICPA today represents only 50 percent of the profession. Younger CPAs are not joining at the same rate and with the same enthusiasm as did members of my generation.

The AICPA was significant when all its members were CPAs. Since the AICPA has become a commercial non-exclusively-CPA enterprise, I feel that I must, with deep sorrow and regret, not renew my membership.

Thank you for taking the time to consider my message. I pray that the state societies do not follow the AICPA in admitting non-CPAs.

Jay Starkman

Via e-mail



I had the occasion recently to handle the desk audit of a tax client, that audit coming out of a Southern Internal Revenue Service office (for various reasons, I’ll be no more specific than to indicate that it was in the South). The exam focused on essentially two areas of my client’s tax return — medical expenses and business expenses claimed on Form 2106. After having completed this exam, I truly have to wonder what is going on with the IRS — if the mindless budget restrictions by Congress are part of the problem (undoubtedly they are) — and am curious as to whether other practitioners are experiencing the same. To be a bit more specific:

As to medical expenses, despite the obviousness of the nature of the expense, the agent was arguing that it was cosmetic, not medically necessary, and therefore not deductible. I got letters from doctors indicating the nature of the procedures and that they were medically necessary. That apparently was not good enough for the agent, who insisted that the doctors expand upon their letters, and give further support as to why these procedures were necessary. I was able to do so, and eventually satisfied the agent — but to say that she was over the top in her unreasonableness would be to understate the offense.

As to the business expenses, despite a detailed log, despite support via credit card statements with the appropriate entertainment (meals) marked off, despite indicating who and the business purpose for each of these meals, the agent wasn’t satisfied. She insisted on more supporting detail — for instance, the credit card slip itself, rather than the statement. From my experience, very few people keep those slips — and besides, they provide little to no relevant information not already on the monthly statement. In addition, I pointed out to the agent (and cited the IRS’s own regulations) that as to the meals that were under $75 (and the vast majority of them were), I was giving her more support than that to which she was entitled and which the IRS requires. When it came to other entertainment, such as, for instance, taking clients out on a golf outing, the agent protested that the locations of the golfing were in nice places, where one might go on a personal vacation. Virtually quoting the language the agent used in her report, these various expenses “could have been personal.”

There were also a couple of other lesser issues, which were eventually resolved — but initially the explanation and support provided were ignored by the agent, sometimes ignored multiple times in our correspondence.

Ultimately, without any justification or support for her position, other than that is what she wanted to do, the agent chose an arbitrary percentage of expenses that she was willing to accept as business. I appealed her decision, and had a telephone conference with the appellate agent. We were able to come to a more reasonable agreement — but even then, there appeared to be little if any sense of fairness and adherence to the rules. Rather, gentle coercion to settle versus an explicit threat of exposing my client to the expense and uncertainty of litigation. I was able to bring this matter to a close — but without the slightest pretense of intellectual honesty or it being the right thing. Simply, it was an expedient judgment call as to the route of least resistance.

So the question arises whether what I’ve experienced was just a fluke, an aberration, or whether it represents a new and disturbing reflection of how the IRS is conducting itself.

Kalman A. Barson, CPA/ABV, CFE, CFF

Via e-mail

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