Tax preparers say the biggest challenges for their practices in the second half of 2023 come down to two words, both of which the industry expected to be a nagging concern. Again.
"Our biggest challenges continue to be talent and technology," said Jolie Karp, a CPA and partner at Stephano Slack in Wayne, Pennsylvania. "Finding and hiring new staff has become increasingly difficult as we have seen a significant decrease in the college students majoring in accounting and very little movement of the current talent pools in CPA firms. On the technology side … we find ourselves needing to dedicate more time and resources as auditors to understand the client's technology climates."
"One of the top challenges every accounting firm faces today is the ability to hire high-quality candidates," added Mary O'Connor, partner-in-charge of forensic and valuation services at Sikich, a Top 50 Firm based in Chicago. "The disruption of technology in our industry is another challenge that has been on Sikich's radar. Over time, our teams have transitioned their focus toward strategic, high-level consultation rather than more mundane compliance services. The diversity of our teams, and the incredible range of service offerings, have allowed us to successfully make the transition to technology-enabled professional services."
"We'll continue to navigate talent shortages and technology by focusing on the retention of current talent, managing workflow and efficiencies, and staying informed on current technology," Karp said.
Crybabies
Staffing has been the bane of firms for at least a quarter century, consistently making top-10-problems lists professionwide. The long-documented shortage of accountants and tax preparers is a confluence of retiring baby boomers, overconfident presumptions about technology, overly specialized accounting education, and a perception of the profession as at best dull and overworked, and at worst prone to financial scandals.
Talent pool concerns have emerged as the most pressing issue for all but the smallest firms, according to research by the American Institute of CPAs. Staffing problems that were center stage
Firms have tried or been advised to try various approaches to the problem, from easing the rigidity of new partner buy-in programs or broadening diversity to simply raising partners' retirement age or starting their own tax prep school to cultivate talent.
After all these years and advice, patience might be running thin.
"The staffing shortage is problematic, particularly quality staff," said John Dundon, president of Taxpayer Advocacy Services in Englewood, Colorado. "I'm addressing it by disengaging clients that cause my system stress. I am [also] done hiring and training crybaby millennials that expect an award for each incident-free file closed."
Tax laws and 'sirens'
Preparers seem to feel it's almost a challenge to simply hone their practices and tax plan with clients before the second season and preparing for Tax Day 2024 — the latter of which will be, as of now, eight months closer to the likely sunset of major provisions of the Tax Cuts and Jobs Act.
"Our biggest challenge continues to be planning around the tax laws expiring in 2025," said Bruce Primeau, a CPA and president of Summit Wealth Advocates, in Prior Lake, Minnesota. "We're encouraging clients to convert pre-tax dollars to their Roth IRAs, to take advantage of lower tax rates. We're also considering whether our wealthiest clients should be reducing their taxable estate since the estate tax exemption is set to be reduced."
"We would all like our business to run more smoothly and look to the gods of technology. There's some tech that seems to be getting mixed reviews in the tax community about making your practice more efficient," said Morris Armstrong, an enrolled agent and registered investment advisor at Armstrong Financial Strategies in Cheshire, Connecticut.
"At times I feel like Odysseus listening to the sirens during demos and pitches," Armstrong said. "It's helpful that there are groups in social media where you can see some pros and cons."
"The second half [of the year] is really about me and the clients I want to keep — and perhaps some that may be better served elsewhere," Armstrong added. "Of course, I'm also taking the time to become better educated in the Tax Code and the ways of the IRS. That goes without saying: The world of taxes is a world of intricacies."
