COCPA NewsAccount – September/October 2018 by Colorado Society of Certified Public Accountants

NEWSACCOUNT COLORADO SOCIETY OF CPAs â&#x20AC;¢ SEPTEMBER/OCTOBER 2018

The Wayfair Decision PAGE 8 What Up? News on the IRS Front? PAGE 16

Women to Watch 2018 PAGE 18

September/October 2018 | www.cocpa.org

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NewsAccount | September/October 2018

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Contents Features 8

The Wayfair Decision: We Were Wrong The U.S. Supreme Court ruled that we’ve all been wrong in thinking that physical presence in another state was necessary before we had a sales tax filing obligation in that state.

Feeling Weighed Down? It’s Probably Because Your State Tax Burden Just Doubled Each Coloradan’s tax burden jumped from $4,000 to $9,800 in one fell swoop. Here’s how it happened.

What Up? News on the IRS Front With recent dramatic changes to federal tax law, frustration levels have the potential to skyrocket.

28 Departments 2

Congratulations 2018 Women to Watch On August 24, the COCPA, in collaboration with the AICPA, honored five individuals with the 2018 Women to Watch Award. Congratulations to these outstanding COCPA members.

Managing Client Expectations for IRS Refunds What causes delayed refunds, and what actions can practitioners take when a client is experiencing a delay?

Dress for Your Day: What are CPAs Wearing to Work? Navy suits, power ties, hose, and pumps are relics of a bygone era, especially here in Colorado. So, what are CPAs wearing to work today?

Chair Column

Movers & Shakers

In Memoriam/ Classified Ads

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September/October 2018 | www.cocpa.org

CHAIR COLUMN

NEWSACCOUNT

A bimonthly publication of the Colorado Society of Certified Public Accountants Vol. 64, No. 3 September/October 2018

Officers

Victor A. Amaya, Chair Benjamin T. Hrouda, Vice Chair Christopher J. Telli, Treasurer Tawnya Y. Ramirez, Immediate Past Chair Mary E. Medley, Secretary

Directors

Kristine M. Brands, Renny Fagan, Dana J. Miller, Georgia Z. Phillips, Matthew O. Rolland, Randy L. Watkins

Editorial Board

Jack Allgood, Alan D. Bennett, Steve Corder, Peggy Jennings, Georgia Z. Phillips, Lori Anne Reinwald, Laura J. Theiss, Barbara J. Tedesko, Steve Van Meter, Michael D. West, Charlie Wright Mary E. Medley, President/CEO Natalie G. Rooney, Contributing Writer Ariana Cassard, Blue Ocean Ideas, Design NewsAccount (ISSN #10899952) is published bimonthly by the Colorado Society of Certified Public Accountants, 7887 E. Belleview Ave., Suite 200, Englewood, CO 80111. NewsAccount is published in January, March, May, July, September, and November and reports information, news, and trends in the accounting profession. The Colorado Society of CPAs assumes no liability for readers’ business decisions in reference to advertisements or other information included in this publication. Membership dues include a $10.00 one-year subscription to NewsAccount. Periodical postage paid in Englewood, CO, and additional mailing offices. POSTMASTER: Send address changes to NewsAccount, Colorado Society of Certified Public Accountants 7887 E. Belleview Ave., Suite 200 Englewood, CO 80111 Net press run = 6,924 copies; sales through dealers and carriers, street vendors, and counter sales = 0; paid or requested mail subscription = 6,852; free distribution by mail = 0; free distribution outside the mail = 17; total free distribution = 55; total distribution = 6,869; office use, leftovers, spoiled = 55; returns from news agents = 0; total sum = 6,924; percent paid and/or requested circulation = 99%. 303-773-2877 • 800-523-9082 Fax: 303-773-6344

NewsAccount is available online at www.cocpa.org.

Change Our Mindset, Change Our Profession BY VICTOR A. AMAYA, CPA, COCPA CHAIR OF THE BOARD

s I read accounting news and talk to CPA colleagues around the state and country, I’m struck by some of the undeniable changes that will impact fundamentally how we do business as a profession. Change can be awkward, hard, and even scary, but that doesn’t mean we should avoid looking at new ways of doing things — or even do new things altogether.

They’re concerned that client changes over the course of the year may mean their pricing somehow will be wrong. My response? You’ve had contact with your clients throughout the year to understand the challenges they may face in the future. As a result, you’ll know what they need to work on and can incorporate that into your pricing.

I see several recurring themes for our profession: the number of individuals sitting for the CPA exam, the impact of technology, and the culture/impression of the profession overall.

Exploring new pricing models presents great opportunities to deepen your relationships with your customers and become more proactive. I’m not advocating for the hours metric to go away completely, but it should be a datapoint, not the be all and end all of everything.

In late July, U.S. unemployment was 3.9 percent. The accounting profession always seeks to attract the right talent, but at 3.9 percent unemployment, finding and keeping those individuals becomes even more challenging. As a profession, we’ve got to have a change in mindset to attract the right talent into not only our firms and businesses but also the profession in general. The hard truth is that doing things the same old way isn’t going to attract the candidates we want or need. Over the past few years, we’ve seen an upward trend in the number of students choosing to major in accounting, but the number of accounting majors choosing to sit for the CPA exam is pretty flat. Why? Multiple variables are at play, certainly, but I think one of the biggest reasons our profession is seen as less attractive to the younger crowd is this: It’s considered old school. We haven’t really embraced or shown a “cool factor.” Many firms still rely on antiquated metrics for measuring production — hours spent in a seat versus using new metrics that are in line with the technology already here or on the horizon. Assessing employees by these older metrics tends to punish those individuals who are more efficient overall. For example, if you bill by the hour, but are efficient and get a job done faster, you leave money on the table. This traditional way of doing things isn’t going to be appropriate for the newer generations. Some CPAs in public practice don’t fully understand the concept of value pricing (or pricing up front or flat-fee pricing).

New technologies may arrive in two, five, or ten years — we just don’t know. But what we do know is that repetitive tasks are being automated, and some aren’t prepared for the change and what it might mean to their business structures. New graduates aren’t going to be doing the same things we’ve been doing because automation will handle those tasks. Young professionals are going to be client-facing and doing higher level work at a much younger age than we were. We have to start looking within and asking how we can structure ourselves to meet the future. Consider this: Last year, Credit Karma prepared one million tax returns for free. How? Why? Because people were willing to hand over their personal information in exchange for that free service. Gathering the information was more valuable to Credit Karma than the cost of preparing the returns.And it was all above board. Both parties got what they wanted. The takeaway for CPAs: Someone out there (and most likely many someones) is willing to do what you do for a fee for free. I don’t see that trend disappearing. This all tells me that we must embrace technology. It’s here, and it’s still coming. We have to leverage it to achieve a higher level of value add. That means not simply doing more tasks for our clients and customers but also doing higher level work for them. Let the technology do the repetitive work so

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If we don’t do it, someone else will, whether that person is a CPA or not. we can concentrate on the more complex information our clients and customers seek. They want more advice, guidance, and face time with us. This isn’t easy to do in the current models because we’ve got our heads down, working. I encourage you to embrace and rethink the accounting business model. How could it change if we start meeting the demands of the market? Believe me. If we don’t do it, someone else will, whether that person is a CPA or not.

I don’t profess to have all the answers to any of these issues, but I do know we are an intelligent group of professionals with a lot of great ideas. What might happen if we embrace change enthusiastically? We might have happier clients and customers. We might have happier employees. We might be seen as a more attractive profession. Who can argue with that trifecta? Email Victor Amaya at vamaya@mycpadvisors.com.

San Luis Valley Chapter

September/October 2018 | www.cocpa.org

MEMBER UPDATE

COCPA.org: A Work in Progress BY MARY E. MEDLEY, CEO

n mid-July, I attended Interchange, the annual conference for state CPA societies and AICPA staff where I heard Helio Fred Garcia, president of Logos Consulting Group. He reminded the audience that in difficult situations, we tend to ask the wrong questions: What should we do? What should we say? Both focus on “us” rather than on the issue and “them.” Instead, Garcia encouraged us to ask: What would reasonable people (those who matter to us) appropriately expect a responsible organization (person) to do in this situation? Great advice, no matter the situation. The response to that right question involves five critical elements: acknowledgement; expression of caring for those affected; a statement of values; description of the approach to the issue; and a commitment to update on progress, share results, and keep people informed. In that spirit, we have listened to your feedback regarding the new cocpa.org, the website your COCPA team launched in late May. I write to share with you why we launched the new system; what we’re doing to address the issues you’ve raised; and to ask for your patience. We undertook this development and implementation to streamline processes for members and staff, implement an easier platform to enhance over time, add online chat for member service, and upgrade member data security. I know the transition has been rough and not what you should expect from your professional association. Those of you who continue to struggle with simple tasks like logging in and accessing functions and resources you use routinely are understandably frustrated. This is not the result we intended or expected when we launched the new website and back-office system nor the result we consider good enough. We are committed to fixing the glitches, simplifying the pro-

cesses, and improving your experience as quickly as possible. We are working closely, daily, with the system developers to resolve problems, improve functionality, and restore features like LINK. You may have encountered difficulty in using the new “login via email link,” which was designed to be more secure. We heard you when you asked for a login code rather than a link, and we implemented that feature in late July. Please give it a try, if you haven’t already. We also know you may be unable to receive the email with a login code, and we’re addressing that problem, case by case. If you’re experiencing this, please use the new chat feature on the website or call, 303-7732877 or 800-523-9082, so we can help. You don’t have to be logged in to use the chat; you’ll be asked for your name and email address so one of us can contact you. Along with the new website, we introduced the option to renew your membership through subscription, either monthly or annually. This isn’t required, however; you still may renew annually with check payment. Note that we do not keep any credit or debit card information in the system. All payments are processed through Stripe, an independent, secure payment processing software platform — another security feature. We undertook all these changes with one goal in mind: to serve you better. We know we’re not there yet, and we apologize for any difficulty you’ve experienced as we’ve made this transition. We commit to keeping you up to date as features are implemented and processes are streamlined. That’s what reasonable people appropriately can expect from this responsible organization. Email Mary E. Medley at mary@cocpa.org.

LeadFit Celebrates 7th Year LeadFit is designed for CPAs and CPA-track accountants looking to grow professionally and personally. Participating this year are: Alicia Gelinas

Michael Morris

Haleigh Gonzalez

Chris Nickels

Meghan Hendershopt

Kelsey Taylor

Hans Henschen

Charlotte Vangsnes

Shawna Jewell

Traci Woller

Maria Montoya For information on how you or a colleague can apply for the 2019 class, contact Terry Cervi at terry@cocpa.org.

NewsAccount | September/October 2018

NOT-FOR-PROFIT REPORTING

Donor Reporting No Longer Required for Non-501(c)(3) Organizations BY DEB NELSON, CPA

n July 16, the IRS released Revenue Procedure 2018-38 which announced that organizations exempt from tax under Section 501(a) of the Internal Revenue Code, other than those classified within Section 501(c)(3), are no longer required to report names and addresses of their donors on Schedule B — Schedule of Contributors as part of Form 990-EZ or Form 990 returns submitted to the IRS. This revised reporting requirement will apply to returns for taxable years ending on or after Dec. 31, 2018. Previously, all types of tax-exempt organizations were required to provide names and addresses of donors to the IRS as part of an annual tax filing. The threshold for including donors on Schedule B varied, depending on the type of tax-exempt organization. For example, most organizations were to include donors who gave more than $5,000 during the year, but Section 501(c)(7) social clubs, 501(c)(8) fraternal beneficiary societies, and 501(c)(10) domestic fraternal societies were required to include those who gave more than $1,000 during the year. Exempt organizations are required to make their tax returns available to the general public. While donor information has been disclosed to the IRS on Schedule B, the public inspection copy includes a redacted Schedule B which removes the names and addresses of contributors and only reports the dollar amounts and description of the donation. However, private foundations under Section 509(a), including trusts classified as Section 4947(a)(1), and Section 527 organizations, have always and will continue to be required to provide donor information to the general public on Schedule B of the Form 990-PF. The new rules will eliminate the need to provide this information in the IRS version of the Form 990 for the affected entities. Legislation related to this disclosure topic was introduced in 2016 as part of the “Pre-

venting IRS Abuse and Protecting Free Speech Act.” That legislation was more far-reaching and was intended to revise reporting to exclude names and addresses of donors from all 501(c) organizations. Proponents of that legislation and similar efforts were looking for assistance in safeguarding what they considered to be sensitive data held by the IRS. However, this legislation was never enacted. According to the new Revenue Procedure, the IRS does not need personally identifiable information of donors reported on Schedule B in order to carry out its responsibilities. The new Revenue Procedure also says that the requirement to report such information increases compliance costs, consumes IRS resources in connection with the redaction of such information, and poses a risk of inadvertent disclosure of information that is not open to public inspection. As a result, these organizations will now file Schedule B with the names and addresses portion blank, like a public inspection copy. All organizations must continue to keep donor names and addresses in their books and records in case the IRS would request this information as part of an examination or other request. This revised reporting has no impact on organizations that are tax-exempt under Section 501(c)(3). While this change is an official change of IRS procedure, it will not be welcomed by everyone. The change already has drawn opposition statements and comments. However, until there is a modification or elimination by the IRS, the changes that Revenue Procedure 2018-38 carries will need to be considered by affected taxpayers. Deb Nelson CPA, is a partner with Eide Bailly, LLP, Minneapolis, Minn. Contact her at dnelson@eidebailly.com. Originally published on Eide Bailly’s website, eidebailly.com. Reprinted with permission.

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You may attend a Don Farmer seminar for an additional $49. The CPE Season Pass is valid for programs scheduled, for one year from date of purchase. NOTE: The following AICPA programs are not included: Financial Planning & Analysis Conference, Service Organization Controls School, Business Valuation School, COSO School, Oil and Gas Conference and CGMA Exam Review.

TO PURCHASE YOUR CPE SEASON PASS, VISIT

seasonpass.cocpa.org. For a company subscription, call the COCPA Member Services team at 303-773-2877 or 800-523-9082.

September/October 2018 | www.cocpa.org

REGULATORY UPDATE

Mediation May Save Your Certificate BY SIMON MOLE

ecently enacted Colorado House Bill 18-1224 gives Colorado Department of Regulatory Agencies (DORA) licensed professionals the right to insist on mediation with a mediator of their choice in any action to suspend or revoke certification.

when everyone is mad at each other that you should think to mediate. Successful early mediation can protect more than your certificate; it can protect a business relationship and your wider reputation in social media and elsewhere.

The Colorado General Assembly has observed that “mediation typically achieves a resolution in a matter of hours. Taking less time means expending less money on hourly fees and costs.” At the heart of HB 18-1224 is a requirement that the hearing officer or administrative law judge shall order mediation. At the licensee’s request, the judge must allow a public or private mediator chosen by the licensee.

ABOUT MEDIATION Mediation brings parties together to resolve their differences through discussion and problem-solving. The goal is to achieve “winwin” solutions. The mediator is a neutral third party who helps facilitate the dialogue but is not the final decision-maker or judge. Mediation can resolve disputes quickly and effectively without the anxiety of litigation.

The majority of cases before the Colorado State Board of Accountancy come as a result of the Board itself. However, some are initiated by members of the public, and these should prompt an early recourse to mediation, i.e. before DORA is ever involved. A client who feels ignored, or whose tax returns have not been completed, may complain to DORA about your professionalism. Perhaps the client has not paid or has been difficult to deal with. It is precisely

By offering a safe environment for parties to express their needs and interests, discuss options, and reach a mutually agreeable resolution, mediation can preserve important relationships. Mediators assure the fairness of the process, facilitate communication, and maintain the balance of power between the parties. Mediation sessions are confidential and voluntary for everyone. Even when mediation is court ordered, all that is really being asked is that parties make a good faith attempt to

resolve the issues in dispute. The process typically involves one or more meetings between the disputing parties and the mediator. It also may include one or more confidential sessions between individual parties and the mediator (a “caucus”). Either party may withdraw at any time. Generally, a signed agreement is binding; in some cases, court approval may be necessary. During mediation you may choose to be represented by an attorney. Mediators may not give legal advice or interpret the law. If parties arrive at a mutually satisfactory resolution, mediators may assist in drafting settlement agreements or “Memorandums of Understanding.” These set down the terms to which everyone has agreed. If mediation is unsuccessful and an agreement cannot be reached, it is as if mediation never happened. Parties may still pursue all legal remedies. To learn more about mediators and mediation, contact Simon Mole, President, Mediation Association of Colorado, 4 Dry Creek Circle, Suite 100, Littleton, Colo. 80120, 303-818-6787, simon@coloradomediation.org, coloradomediation.org.

Four Named to State Board

ov. John Hickenlooper appointed the following individuals to the Colorado State Board of Accountancy, effective Aug. 1. The State Board of Accountancy regulates certified public accountants and reviews applications, gives examinations, grants certificates and permits, and acts on complaints against CPAs. Of its seven members, five must be actively licensed CPAs, and two must be non-CPA “public” members. •

For a term expiring, Aug. 1, 2021: David Wayne Gestner, Denver, to serve as a member of the public resulting from the resignation of Kyla Armstrong-Romero

•

For terms expiring, Aug. 1, 2022: Richard Garth Ferrell, Aurora, to serve as a member of the public, reappointed; Paula Mann, CPA, Gunnison; and William Pierce Trummer, CPA, Morrison

Continuing on the State Board are Johnnie Bejarano, CPA, Michael Kraehnke, CPA, and Christine Noel, CPA. We extend our thanks to retiring members Kurt Kofford, CPA, and Judy Thomas, CPA, for their service to the public and the profession.

NewsAccount | September/October 2018

Revisions Proposed to Colorado Rules

n November 2017, the Colorado State Board of Accountancy began a comprehensive review of its rules, which had been in effect since July 1, 2013, to determine what changes were needed. Proposed revisions were finalized at the State Board’s Aug. 1 meeting. A rulemaking hearing has been set for Sept. 19, Sept. 19, at 10:30 a.m. (during the regularly scheduled State Board of Accountancy meeting), 1560 Broadway, Conference Room 1250C, Denver, to consider the proposed revisions. The public hearing is open to all, and interested parties will have an opportunity to make brief comments at the rulemaking hearing, unless the Board determines otherwise. Written comments should be submitted regarding any of the listed rulemaking matters no later than

Sept. 18 at 5 p.m. All submissions will be considered. Rules under consideration may be changed or modified after public comment and hearing. To attend via webinar, register at https:// attendee.gotowebinar.com/register/3151161135558792963. To view the proposed revisions, go to https://www. colorado.gov/pacific/dora/Accountancy_ News#Sept19. The proposed revisions focus on streamlining and simplifying the rules and include: • Updating references to specific editions of standards and the AICPA Code of Professional Conduct • Striking outdated sections such as the educational requirements for examination and certification on or before June

30, 2015, when the 150-hour education requirement became effective • Deleting the requirement for three semester hours in business, technical, or accounting communications • Deleting the requirement that an applicant for Retired Status be up to date on CPE at the time of retirement • Combining the requirements for reactivation of a Retired or Inactive Status Certificate or reinstatement of an Expired Certificate, based on the length of time the applicant was retired, inactive, or expired To submit written comments or for further information, contact the Colorado State Board of Accountancy at dora_accountancyboard@state.co.us.

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September/October 2018 | www.cocpa.org

TAXATION

The Wayfair Decision: We Were Wrong BY BRUCE M. NELSON, CPA

es. We were wrong. On June 21, 2018, the U.S. Supreme Court ruled that we’ve all been wrong in thinking that physical presence in another state was necessary before we had a sales tax filing obligation in that state. The Court held that South Dakota could impose a sales tax filing obligation on any remote seller whose only contact with the state was annual sales of $100,000, or 200 separate sales transactions of any amount. [South Dakota v. Wayfair, Inc., Dkt. No. 17-494 (U.S. Supreme Court, June 21, 2018)] The decision reverses 51 years of precedent. HOW DID WE GET HERE? In 1967, the U.S. Supreme Court held that National Bellas Hess, a Kansas City mail-order catalog company, did not have to collect Illinois sales or use tax on its sales in the state because it did not have any physical presence in the state. The company’s only connection with Illinois was deliveries made through common carrier or the U.S. mail. The Court held that physical presence was the necessary bright-line test for sales tax collection. [National Bellas Hess v. Illinois, 385 U.S. 809 (1967)] In 1992, North Dakota challenged the Bellas Hess decision by assessing Quill Corporation, a national office supply provider with no physical presence in North Dakota, use tax on its remote sales in the state. Quill protested that its only connection with the state was through common carrier and U.S. mail and that Bellas Hess prohibited North Dakota’s tax imposition. The state argued the physical presence test was archaic and should be replaced by an economic presence test. [Quill Corp. v. North Dakota, 504 U.S. 298 (1992)] Specifically, North Dakota suggested the test should be whether a taxpayer engaged in “regular or systematic solicitation” in the state, meaning three or more advertisements within 12 months. After all, according to North Dakota, what with cell phones, fax machines, satellite transmission, and online communication, a company could do business in a state and never be there. The Court declined to adopt an economic presence test and, while admitting the physical presence test was a bit artificial, the test “encouraged settled expectations” thereby fostering business growth and reducing litigation. The Court also expressed

concern regarding the compliance burden of filing sales tax returns in thousands of jurisdictions. The Court saw this burden as an impediment to interstate commerce and suggested that since Congress had the authority to regulate interstate commerce, the question might be better addressed by that body. The Quill case put the states in a bind. They had a use tax they couldn’t efficiently collect from their own citizens and now they couldn’t require remote sellers to collect it for them. What to do? The states began by annually introducing legislation in the U.S. Congress that would allow them to require remote sellers to collect sales and use tax. Every year the legislation died in committee. Next, several states initiated the Streamlined Sales Tax Project (SST). The SST, in an effort to respond to the Court’s concern over complexity and its impact on interstate commerce, provided rate simplification, uniform definitions, state level administration, uniform sourcing rules, and uniform audit administration. The SST started strong with 23 states becoming members, and there it stalled. The biggest states — California, Illinois, New York, and Texas — declined full membership leaving most of the population of the United States unaffected by the SST and thereby failing to get the national simplification the SST believed was needed. (Colorado also is not a member of the SST.) States then began to nibble away at the definition of physical presence. New York initiated “click-through” nexus whereby remote sellers were deemed to have physical presence in a state by compensating in-state vendors through sales made via the vendor’s website. Massachusetts, Ohio, and Rhode Island stretched the definition of physical

NewsAccount | September/October 2018

They had a use tax they couldn’t efficiently collect from their own citizens and now they couldn’t require remote sellers to collect it for them. presence to include “cookie” nexus — that a vendor’s placement and storage of internet cookies on a consumer’s computer constituted physical presence in the state. Colorado introduced “tattle tale” nexus in 2010 that required remote sellers not to collect the state’s tax but to warn customers that they owed use tax on their purchases and then turn in their names to the state so the state could go after them. The Colorado law was challenged all the way to the U.S. Supreme Court where, while upholding the state’s law, Justice Kennedy opined that the “legal system should find an appropriate case for this Court to reexamine Quill.” Several states took Justice Kennedy up on his comment and introduced what became known as “Kill Quill” legislation. South Dakota enacted legislation setting a sales volume threshold that would trigger a filing obligation absent physical presence in the state. South Dakota’s law, Senate Bill 106, effective May 1, 2016, provided that a remote seller had nexus with the state if its annual gross sales in the state exceeded $100,000, or 200 or more separate sales transactions of

any amount. The state crafted its legislation to “fast track” it through the courts, and, by April 2018, the U.S. Supreme Court heard oral arguments and issued its opinion in June. THE WAYFAIR DECISION – WHAT DO WE KNOW? In a 5 to 4 decision, the Court held that out-of-state sellers must comply with South Dakota’s law that requires them to file sales tax returns if their annual gross receipts in the state exceed either $100,000 or 200 separate sales transactions of any amount regardless of whether the seller had physical presence in the state. In short, any seller must begin filing sales tax returns in South Dakota simply by making a certain number of sales into the state. Nothing else is required. South Dakota argued that the states were losing money because of Quill, that it put brick-and-mortar stores at a disadvantage, that the physical presence test was archaic, and that the complexity that may have existed in 1992 is gone now because software makes compliance easy. Wayfair argued that states need to simplify their laws before requiring collection and that the states already were receiving 75% to

80% of the sales tax due from remote sellers because 19 of the top 20 online retailers already were collecting tax in almost all the states. Wayfair insisted that software does not mitigate the compliance nightmares of filing in thousands of jurisdictions (an argument many who file income tax returns in 40+ states may find persuasive). Finally, Wayfair warned that overruling Quill would open the door to possible retroactive assessments against taxpayers. Given the technological changes and the enormous increase in online sales, many observers expected the Court to throw out Quill, but most were surprised when the Court said not only was Quill incorrect today, but also it was wrong from the beginning. The Court called the physical presence test “artificial,” “arbitrary,” and “formalistic,” that it created market distortions, an “online sales tax loophole,” and “a judicially created tax shelter.” The Court held that the physical presence test was not necessary to meet the substantial nexus requirement established in Complete Auto Transit, Inc. v. Brady, 430 U.S. 274 (1977). Finally, the Court looked favorably upon South Dakota’s law because it (1) cre-

ated a threshold for sales, thereby protecting small sellers; (2) it was not applied retroactively; and (3) South Dakota was a member of the SST thereby providing remote sellers some compliance simplification. It is unclear if the Court intended those elements to be necessary for a law to pass constitutional muster. THE WAYFAIR DECISION – WHAT DON’T WE KNOW? First and foremost, while the Court ruled that South Dakota’s law was sufficient to meet the substantial nexus test of Complete Auto Transit, it did not provide a new nexus standard. Does it have to be $100,000 in sales and 200 sales transactions? What about $50,000 in sales? Or $10,000? What about 100 transactions? Or maybe just 50? The Court noted that the taxpayers in Wayfair were large retailers with “extensive virtual presence” who had availed themselves “of the substantial privilege of carrying on business” in the state. What exactly does that mean and what is its significance? Does it mean that small remote sellers should be treated differently? For the past 51 years, taxpayers and tax administrators have been arguing CONTINUED ON PAGE 10

September/October 2018 | www.cocpa.org

TAXATION CONTINUED FROM PAGE 9 over the scope and application of physical presence and substantial nexus. For the next 50 years, they may be arguing over the scope and application of economic presence and substantial nexus. The South Dakota statute alone raises a few questions. When it says 200 transactions, are those only taxable transactions or all transactions? What if I have 250 sales transactions, but they are all exempt resale sales? What about sales through marketplace providers such as eBay, Etsy, or Amazon? Do they count? For example, if I sell $70,000 of goods myself and Amazon sells $40,000, have I exceeded the $100,000 threshold? How will Amazon know that I have exceeded my 200 sales transactions and that it should start collecting tax on all of my sales now? Or will marketplace facilitators have to collect tax on all sales? Does the $100,000 threshold apply to the facilitator, or to each of its users, or to both? Like the Quill and Bellas Hess decisions before it, Wayfair raises as many questions as it answers. HOW WILL STATES REACT? Many states already have adopted legislation similar to South Dakota’s, and it is only a question of when compliance begins. States with legislation echoing South Dakota’s include Hawaii, Indiana, Iowa, Illinois, Kentucky, Louisiana, Maine, North Dakota, Rhode Island, Utah, Vermont, and Wyoming. Other states with differing and higher thresholds include Alabama, Connecticut, Georgia, Massachusetts, Minnesota, Mississippi, New York, Ohio, and Tennessee. It is certain that other states will hop on the proverbial bandwagon, but when they do, will they all follow South Dakota’s lead? After all, $100,000 in gross receipts and 200 sales may be sufficient for a state with 900,000 people. Should the threshold be higher for states such as California, Florida, and New York? Will any of the states apply the law retroactively? According to South Dakota’s Attorney General Marty Jackley, 38 states have indicated they will not apply their laws retroactively. There are 45 states with a sales tax so that means we have seven who have not indicated what they will do. It also should be noted that the governors from states without sales taxes — New Hampshire, Oregon, Montana, Alaska, and Delaware — have initiated actions intending to do all they can to undermine the implementation of Wayfair. According to these governors, it is bad enough that vendors will now have to collect taxes for states in which they do not 10

get to vote, but it is even more distasteful for vendors in states that do not even have a sales tax. WILL CONGRESS ACT? No one knows, and, given that it is an election year, it seems unlikely. That said, the House Judiciary Committee began hearings on Wayfair on July 24. Chairman Bob Goodlatte (R-Va.) is a leading opponent of the Wayfair decision. If some state applies the ruling retroactively, the uproar may prompt Congress to do something. What about income tax nexus? Wayfair is a sales tax case, but the arguments advanced by the majority in the Court are equally applicable to income tax nexus. Courts in many states have already upheld factor presence standards for income tax nexus. Colorado, for example, provides that a remote seller who has $500,000 in sales, or $50,000 in property, or $50,000 in payroll in the state must file an income tax return. Other states that have factor presence standards for income tax nexus include Alabama, California, Connecticut, Michigan, New York, and Tennessee. So does Wayfair mean we now have the same substantial nexus standard for income tax as for sales tax? Some have wondered if Wayfair supersedes the federal statute, Public Law 86-272. That law provides a safe harbor from income tax nexus for those whose activities in a state are limited to solicitation of sales of tangible personal property and the orders are accepted and fulfilled from outside the state. The answer is “probably not.” After all, Congress is specifically delegated the power under Article 1, Section 8, Clause 3 of the U.S. Constitution to regulate interstate commerce, and it did so through enactment of P.L. 86-272. Wayfair doesn’t seem to challenge that. But, Wayfair only addressed interstate commerce. What about sales from overseas? For example, how will states enforce sales tax compliance against the Chinese e-commerce giant Alibaba? Will some remote sellers simply move overseas? WHAT ABOUT COLORADO? Lastly, the Wayfair decision raises questions regarding Colorado’s home-rule cities. For sales tax purposes, Colorado cities fall into one of two buckets. There are state collected cities that largely piggyback off the state both in what they tax and exempt, and those whose returns are filed with the state return. The other bucket is the 70+ home-rule cities which, like other states, have autonomy

NewsAccount | September/October 2018

over their sales tax. These cities have their own separate registration, licensing, forms, auditors, and tax base. In brief, the homerule cities are just like separate taxing states within the state of Colorado. It is no secret that this is the key reason for Colorado’s sales tax complexity and compliance nightmare. In fact, it has often been said that if you want to see what America will look like without Quill, come to Colorado. The question is whether a home-rule city could successfully enact a threshold similar to South Dakota’s sales threshold. It would seem that given their size, most cities would want a lower threshold. While cities cannot become part of the SST, they could promise no retroactivity. It is unclear what that path would look like, and the hurdles may be significant. One possible solution is for the state to provide a separate, second, sales tax compliance regime for remote sellers. Alabama has enacted such a program called the Simplified Sellers Use Tax Program. It allows remote sellers to file a single return with the state and collect sales tax at a flat eight percent rate. As an incentive, sellers are allowed to keep two percent of the sales tax they collect, and they don’t have to concern themselves with reporting local taxes. Alabama divides the local portion of the tax among its localities based on population. Finally, can Colorado’s home-rule cities successfully argue that their collection authority is nationwide? One reason home-rule cities have autonomy under the Colorado constitution is because sales tax is deemed to be a matter of “local concern.” However, all the arguments advanced by South Dakota for requiring remote sellers to collect taxes are arguments that undermine the concept of local concern. After all, if a Colorado city can force somebody in South Carolina, who has no connection to the city except through online sales, to charge and collect its sales tax, is its taxing authority still a matter of local concern? Who knows? We’ve been wrong before. Bruce M. Nelson, CPA, is Director of State and Local Taxes at EKS&H LLLP. Contact him at bnelson@eksh.com.

Barron’s Top 1200 Advisors

M.J. Smith & Associates offers INSTITUTIONAL INVESTMENT MANAGEMENT SERVICES TO THE INDIVIDUAL INVESTOR It’s no secret that institutional investors apply a lot of intellect to the money they are managing. From corporate pension plans to endowments and foundations, sophisticated investors demand clear and disciplined investment processes created by investment management consultants who work in their clients’ best interests. But we think institutional investors shouldn’t be the only ones to benefit from written investment policy statements, transparent portfolio management costs, avoidance of conflicts of interest and a comprehensive investment monitoring process. That’s why, at M.J. Smith and Associates, we treat individuals the same way we treat institutions – with honesty, integrity, objectivity, and a clear, understandable process. Whether the portfolio is simple or sophisticated, every investor needs a trustworthy advisor. And it’s our pleasure and privilege to be of service. We specialize in: •

Providing low-cost and tax-efficient investment platforms

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Integrating tax reduction strategies into clients’ overall financial strategies

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Dealing with liquidity events, retirement, sale of assets, inheritance, ect.

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Serving women in transition (death and divorce)

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Preparing the next generation to be good stewards of wealth

2009 - 2018* Mark Smith, Principal CFP®, CPA/PFS, CIMA®

Forbes’ Top 200 Advisors 2016 - 2018* Mark Smith, Principal CFP®, CPA/PFS, CIMA®

Financial Times Top 400 Advisors 2014, 2017* Mark Smith, Principal CFP®, CPA/PFS, CIMA®

5613 DTC Parkway, Suite 650, Greenwood Village, CO 80111 | 303.768.0007 | www.mj-smith.com M.J. Smith & Associates is an independent registered investment advisor. Securities offered through RAYMOND JAMES FINANCIAL SERVICES, INC. member FINRA/SIPC. *Raymond James financial advisors do not provide tax advice. You should discuss any tax matters with the appropriate professional. Barron’s annual ranking of the nation’s “Top 1,000 Financial Advisors” (changed to 1200 Advisors in 2014). Source: Barron’s “Top 1,000 Financial Advisors,” March, 2014. Barron’s is a registered trademark of Dow Jones & Company, L.P. All rights reserved. The rankings are based on data provided by over 4,000 individual advisors and their firms and include qualitative and quantitative criteria. Data points that relate to quality of practice include professionals with a minimum of 7 years financial services experience, acceptable compliance records (no criminal U4 issues), client retention reports, charitable and philanthropic work, quality of practice, designations held, offering services beyond investments offered including estates and trusts, and more. Financial Advisors are quantitatively rated based on varying types of revenues produced and assets under management by the financial professional, with weightings associated for each. Investment performance is not an explicit component because not all advisors have audited results and because performance figures often are influenced more by clients’ risk tolerance than by an advisor’s investment picking abilities. The ranking may not be representative of any one client’s experience, is not an endorsement, and is not indicative of the advisor’s future performance. Neither Raymond James nor any of its Financial Advisors pay a fee in exchange for this award/rating. Barron’s is not affiliated with Raymond James. Source: Barron’s “Top 1,200 Financial Advisors,” March, 2018. Barron’s is a registered trademark of Dow Jones & Company, L.P. All rights reserved. The rankings are based on data provided by over 4,000 individual advisors and their firms and include qualitative and quantitative criteria. Data points that relate to quality of practice include professionals with a minimum of 7 years financial services experience, acceptable compliance records (no criminal U4 issues), client retention reports, charitable and philanthropic work, quality of practice, designations held, offering services beyond investments offered including estates and trusts, and more. Financial Advisors are quantitatively rated based on varying types of revenues produced and assets under management by the financial professional, with weightings associated for each. Investment performance is not an explicit component because not all advisors have audited results and because performance figures often are influenced more by clients’ risk tolerance than by an advisor’s investment picking abilities. The ranking may not be representative of any one client’s experience, is not an endorsement, and is not indicative of advisor’s future performance. Neither Raymond James nor any of its Financial Advisors pay a fee in exchange for this award/rating. Barron’s is not affiliated with Raymond James. The Forbes ranking of America’s Top Wealth Advisors, developed by SHOOK Research, is based on an algorithm of qualitative and quantitative data, rating thousands of wealth advisors with a minimum of seven years of experience. Ranking algorithm is based on quality of practice, including: telephone and inperson interviews, client retention, industry experience, review of compliance records, firm nominations; and quantitative criteria, including: assets under management and revenue generated for their firms. Investment performance is not a criteria because client objectives and risk tolerances vary, and advisors rarely have audited performance reports. Rankings are based on the opinions of SHOOK Research, LLC which does not receive compensation from the advisors or their firms in exchange for placement on the ranking. Research Summary (as of July 2016): 11,235 Advisor nominations were received, based on thresholds. 4,000 Advisors were invited to complete the online survey. 2,500 Advisors were interviewed by telephone. 425 Advisors were interviewed in-person at the Advisors’ location. Final list of the top 200 Advisors was then compiled based upon the quantitative criteria. Research Summary (as of September 2017): 19,872 Advisor nominations were received, based on thresholds. 4,504 Advisors were invited to complete the online survey. 4,432 Advisors were interviewed by telephone. 923 Advisors were interviewed in-person at the Advisors’ location. Final list of the top 250 Advisors was then compiled based upon the quantitative criteria. Raymond James is not affiliated with Forbes or Shook Research, LLC. This ranking is not indicative of advisor’s future performance, is not an endorsement, and may not be representative of individual clients’ experience. Neither Raymond James nor any of its Financial Advisors or RIA firms pay a fee in exchange for this award/rating. The FT 400 was developed in collaboration with Ignites Research, a subsidiary of the FT that provides specialized content on asset management. To qualify for the list, advisers had to have 10 years of experience and at least $300 million in assets under management (AUM) and no more than 60% of the AUM with institutional clients. The FT reaches out to some of the largest brokerages in the U.S. and asks them to provide a list of advisors who meet the minimum criteria outlined above. These advisors are then invited to apply for the ranking. Only advisors who submit an online application can be considered for the ranking. In 2014: roughly 1,500 applications received; 26.6% (400) were selected for the final list In 2017, roughly 790 applications were received and 400 were selected to the final list (50.6%). The 400 qualified advisers were then scored on six attributes: AUM, AUM growth rate, compliance record, years of experience, industry certifications, and online accessibility. AUM is the top factor, accounting for roughly 60-70 percent of the applicant’s score. Additionally, to provide a diversity of advisors, the FT placed a cap on the number of advisors from any one state that’s roughly correlated to the distribution of millionaires across the U.S. The 2018 11 The FT is ranking may not be representative of any one client’s experience, is not an endorsement, and is not indicative of advisor’s future performance. Neither September/October Raymond James nor any of its Financial Advisors|paywww.cocpa.org a fee in exchange for this award/rating. not affiliated with Raymond James.

GOVERNMENTAL ACCOUNTING

Feeling Weighed Down? Itâ&#x20AC;&#x2122;s Probably Because Your State Tax Burden Just Doubled BY NATALIE ROONEY

NewsAccount | September/October 2018

For a long time, Colorado’s finances looked pretty darn good…on paper. Then, thanks to GASB 68 and a few other inputs, things changed, and each Coloradan’s tax burden jumped from $4,000 to $9,800 in one fell swoop. Here’s how it happened.

heila Weinberg, CPA, is founder and CEO of Truth in Accounting, whose mission is to compel governments to produce financial reports that are understandable, reliable, transparent, and correct.

No one really understood the true financial condition of their government. Weinberg has been keeping a close eye on states’ finances, including Colorado’s, over the years. Annually, Truth in Accounting issues The Financial State of the States, which analyzes the financial condition of all 50 states. Weinberg explains the organization started to produce this information because state and local governments were not required to put the full—or even the majority—of pension and retiree health care liabilities on the face of their balance sheets. That made it confusing for everyone, and no one really understood the true financial condition of their government. That’s why Weinberg developed a measure called a Taxpayer Burden, which is each taxpayer’s share of the government’s unfunded debt. Think of this as the amount of money needed from each taxpayer in order for the state to pay its bills. THE BIG BURDEN Two years ago, thanks to GASB 68, state and local governments, including those involved in multi-employer plans, began to report their net pension liability — the net present value of promised benefits offset by the fair value of plan assets. That change alone suddenly made state and local governments’ finances look pretty

scary, especially for local governments in Colorado, whose employees participate in PERA, the Colorado Public Employees’ Retirement Association. PERA provides pension and other retirement benefits to more than 560,000 current and former teachers, state troopers, snowplow drivers, corrections officers, and other public employees. In a perfect storm of events, PERA revised its expected mortality schedule because people are living longer. Also, it updated the expected rate of return that led to a drop in the interest rate from 7.5 percent to 7.25 percent. The impact on Colorado’s balance sheet was staggering.

in Accounting. A D grade is given to states with a Taxpayer Burden between $5,000 and $20,000. Because of Colorado’s balanced budget requirement, the taxpayer burden should be $0.”

Before all the changes, PERA’s unfunded liability was $27.9 billion, and the plan was 60 percent funded. In light of the changes, the unfunded liability nearly doubled to $50.8 billion, and the funded ratio fell to 46 percent.

“It was a wakeup call when the PERA board changed its assumptions to account for people living longer and a lower rate of return,” she said. “It saw that unfunded liability go from sixty percent to forty-six percent and realized changes were needed.”

“Plan actuaries assume pension plan assets are going to earn a certain interest rate,” Weinberg notes. “When they dropped the assumption and the assets were going to earn less, the state is now liable to pay more into the plan because the investments won’t make as much.” That assumption change, combined with the longer lifespan, means the plan is estimated to run out of assets at some point in the future, if future participants’ contributions are considered. And without assets, they can’t earn money, so the discount rate used to calculate the current value of future benefit payments was reduced to 5.26 percent.

Some of those changes came in the form of Colorado Senate Bill 18-200, which Gov. John Hickenlooper signed into law on June 4, 2018.

In addition, Colorado is one of many states that has a balanced budget requirement. The Truth in Accounting study, however, found 39 of those states push their bills onto future taxpayers. “Even though there’s a balanced budget requirement, you still have an ever-increasing ‘credit card’ debt because of the way state and local governments calculate their balanced budget,” says Weinberg. Ultimately, Truth in Accounting’s analysis summarized: “Colorado does not have enough money to pay its bills, so it has received a ‘D’ for its finances from Truth

SHINING A LIGHT ON PENSION LIABILITIES Prior to GASB 68, citizens, including taxpayers, had no way of knowing the share of their school district’s, town’s, or state’s net pension liability. Now, anyone can go to the state’s audited financial statements and see the net pension liability and the effect on its net position, Weinberg says.

The changes include: • Increased employer and employee contributions • A line item in future budgets of $225 million to go directly to PERA to help fund it • Retirement age of 64 for new hires The changes are designed to fully fund PERA within the next 30 years. “The bottom line,” says Weinberg, “is that taxpayers are continuing to pay more and more into these plans. Our point is all of these costs should have been included in prior budget calculations because this is pushed onto future taxpayers.” On June 22, the Colorado PERA Board of Trustees announced that PERA’s funded ratio had increased to 61 percent from 58 percent as a result of changes included in Senate Bill 200 and 2017 investment returns. The announcement came as part of the release of PERA’s 2017 Comprehensive Annual Financial Report (CAFR).

September/October 2018 | www.cocpa.org

STRATEGIES FOR SUCCESS

Innovation: It’s Everyone’s Responsibility BY DANIEL BURRUS

sk anyone in your organization to outline his or her responsibilities, and you’ll generally get the usual list—sales, marketing, employee benefits, and other similar tasks. Innovation? Sorry, not on the docket. That’s somebody else’s concern. This can be a dangerous mind-set. We are living in a time of transformational innovation—not mere change but game-changing digital disruption. Revolutionary business technology is rendering traditional systems and modes of thinking less relevant and, often, obsolete. Instead of workers “staying in their lanes,” this revolution calls for everyone to be an innovator across the entire organization. Here are some examples of companies that have successfully built and nurtured a pervasive mind-set of innovation. BLUE WATER OF INNOVATION Several years ago, Four Seasons Hotels and Resorts implemented a program designed to encourage innovation at all levels of the company’s 93 hotels. Entitled Blue Water, the program encouraged everyone from management to frontline employees to test various ideas to improve every customer’s overall experience. Using individual Blue Water teams at each property to help oversee activities, one area of focus was on every hotel’s pool and beach areas. During a six-month period, all Four Seasons Resorts tested innovations aimed at improving customer experiences in those particular settings. Customers were subsequently surveyed about their experiences, and all hotels submitted their best ideas. The result was a proactive program of offering guests at pools and beach areas free suntan lotion and sunglass cleaning kits. Survey responses indicated that guests consistently enjoyed this convenient gesture. Not only was customer satisfaction increased, but also Four Seasons boosted employee engagement—effectively making valuable innovation everyone’s job responsibility. CISCO’S INNOVATE EVERYWHERE CHALLENGE It might seem an impossible task to encourage organization-wide innovation when you have some 74,000 employees. But Cisco Systems has done that very thing with its Innovate Everywhere Challenge. One of the catalysts behind the program was perceived frustration from some employees 14

who felt overlooked when it came to innovation. Citing outwardly focused programs such as The Innovation Grand Challenge— which targeted entrepreneurs outside the company—employees asked for programs to pursue their own innovation as well. The Innovate Everywhere Challenge met several specific goals: • Develop the overall entrepreneurial skills of its workforce; • Encourage employees to work and collaborate across functional boundaries; and • Nurture a more innovation-friendly environment for employees who might be attracted to the collaborative, innovative environment of a start-up. Cisco encouraged broad company participation by making plans available online for all employees to review and vote on. Ultimately, nearly half of the company’s workforce participated in some manner, with more than 2,000 employees submitting more than 1,100 ideas. Winning entries, which netted cash prizes, seed money, and several months’ time off, included team-generated, third-party virtual and augmented reality technology. One program focused on helping employers recruit more disabled workers by enabling them to work remotely via Cisco collaboration technologies, along with the platform and logistics to support complex digital media campaigns. The initial Innovate Everywhere Challenge was such a success that Cisco plans to hold similar programs in the future.

NewsAccount | September/October 2018

TO ENCOURAGE INNOVATION The examples of Blue Water, the Innovate Everywhere Challenge, and others like them underscore a basic necessity regarding organization-wide innovation: It simply doesn’t occur by itself. Rather, organizations need to build environments that promote innovation. That may seem a simple matter of enticing employees with financial reward, but there’s much more to it than that. For instance, as Cisco discovered, time off is one possible option. Other companies have offered additional time working from home or regularly scheduled time on the clock to promote the importance of organization-wide innovation. In addition to garnering more innovative ideas, building a pervasive attitude of innovation will implicitly convey the message that employees are valued—that their contributions are not merely welcome but absolutely necessary. When leadership recognizes the personal and professional benefits that derive from a commitment to innovation, it fosters a powerful corporate culture that brings a significant competitive advantage. Is innovation in your job description? How about your staff’s? No matter if it’s a question of innovation or some other organizational goal, a salient principle holds true: Reward the behavior you desire. In working with all sorts of organizations, I’m often surprised how often this relatively simple yet powerful idea is overlooked. But understanding it and applying it on a consistent basis can help boost the organizational goals you wish to achieve. SELL THIS, NOT THAT Here’s a scenario of inadvertently overlooking the essential value of rewarding desired behavior. Let’s say an accounting firm has traditionally emphasized tax preparation. Every CPA in the firm knows the tax code inside and out. But the partners want to shift the organization’s emphasis to estate planning, a more comprehensive service.

CPAs make a DIFFERENCE Despite management’s direction to move toward estate planning, relatively few CPAs added the service to their existing client base within the first few months. Puzzled, management circles back to see what the issue might be. As it turns out, the company’s compensation formula still is heavily tilted toward tax preparation—the very focus management wanted to readjust. The ultimate solution is simple. The company makes estate planning more lucrative for its CPAs. In turn, those CPAs respond by placing a greater emphasis on overall estate planning rather than a tax return that needed to be prepared just once a year. INNOVATE; THEN REWARD In a sense, the partners were asking employees to innovate. And, rewarding desired behavior can prove to be powerful when building a culture that encourages innovation at all levels. In fact, it’s essential. In a recent global survey by the O.C. Tanner Institute published in the Harvard Business Review, 3,500 people from companies in the U.S., Canada, the United Kingdom, Germany, and India were asked about their employers’ attitudes about innovation. The findings pinpointed a widespread disconnect: While most employees believed that everyone within an organization should be involved in innovation, far fewer said that, in fact, they were actually involved in any form of innovation. The reason? While management often said they believed in the value of organization-wide innovation, they consistently failed to provide employees with the necessary means to pursue innovation—funding, personnel, and other practical means of support. The report concluded: “If executive endorsement of innovation comes off as largely empty talk, employees are likely to become disillusioned, perhaps cynical. Even those who are self-motivated may stop caring, unless they have the backing—material and moral support—from their leaders.” Further, a “dispiriting work environment can become a dysfunctional company: poisonous to productivity, to say nothing of radical breakthroughs.” All this boils down to the necessity of rewarding desired behavior. In the case of innovation, if you wish to nurture it at all levels of your organization, make certain suitable support, rewards, and benefits are in place to effectively encourage it. The same holds true for whatever behavior or results you wish to foster. No matter if it’s a newly introduced product or service you want your sales force to promote or a pervasive culture where innovation is everyone’s responsibility, encouraging the behavior you desire mandates a suitable reward structure. Anything short of that can come off as mere lip service. Daniel Burrus is considered one of the World’s Leading Technology Futurists on Global Trends and Innovation and is the founder and CEO of Burrus Research, a research and consulting firm that monitors global advancements in technology-driven trends to help clients understand how technological, social, and business forces are converging to create enormous untapped opportunities. He is the author of seven books including the newest, The Anticipatory Organization: Turn Disruption and Change Into Opportunity and Advantage. Burrus also is the creator of The Anticipatory Organization™ Learning System–named a Top 10 Product of 2016. Contact Rebecca Campbell, rebecca@cocpa.org, for information on the program.

2018 HEROES & HEROINES NOMINATIONS DEADLINE:

September 20, 2018 We will honor these individuals with the 2018 Everyday Heroes and Heroines Awards, to be presented at the CPAs Make A Difference Celebration, Nov. 7, at the Grand Hyatt, 1750 Welton St., Denver. If you know a CPA who should be considered, please submit a nomination. Send a narrative, not to exceed three pages, explaining why you believe the candidate should be recognized and detailing his or her accomplishments. Nominees must hold a CPA certificate and be a COCPA member. They should be “everyday” heroes and heroines who haven’t been recognized widely for their contributions. Nominees should demonstrate significant service in one or more areas: INVOLVEMENT: Describe the nominee’s level(s) of involvement, length of involvement, and time devoted to nonprofit organizations and community activities. LEADERSHIP: Describe the nominee’s position(s) held and substantial accomplishments achieved in one or more community organizations, including taking the lead in identifying and solving a problem, founding or rescuing an organization, or developing an innovative program. IMPACT: Describe how the nominee’s actions benefited the community, improved the overall quality of life, helped others overcome adversity, or served as a role model for CPAs exemplifying the profession’s core values of integrity, competency, and objectivity. For more information and to submit your nomination electronically, contact Terry Cervi, terry@cocpa.org, 303-741-8610.

Sponsored by

September/October 2018 | www.cocpa.org

IRS UPDATE

What Up? News on the IRS Front BY FRAN COET, CPA

In July, COCPA member Fran Coet attended an invitation-only meeting with U.S. House Ways and Means Committee Chair Kevin Brady, hosted by Colorado Cong. Ken Buck. She attended the semi-annual IRS-sponsored Colorado Practitioners Liaison meeting. Here are her notes from behind the scenes. Note that the IRS issued Sec. 199A regulations on Aug. 8, just as we were finalizing this NewsAccount for publication.

ver 30 years ago, I was one of more than 100,000 IRS employees. I left many good friends behind in 1982, but I sympathize with the taxpayers (many of whom are clients) who characterize IRS workers as unresponsive and arrogant. The numbers support the impression: When I was there, we measured our response to taxpayer inquiries at 80 percent — not great. But it was twice as good as the current rate of 40 percent. With recent dramatic changes to federal tax law — specifically the Tax Cuts and Jobs Act (TCJA) signed last December — the frustration levels have potential to skyrocket. WORD FROM THE TCJA ROUNDTABLE In July, Cong. Ken Buck (R-Colorado 4th District) invited members of the CPA community to discuss the TCJA with Cong. Kevin Brady (R-Texas), Chairman of the U.S. House Ways and Means Committee. It was a privilege to provide “grassroots” feedback to Brady, who helped create and support tax reform. But most importantly, it was a relief to know that he anticipates the same bottleneck at the IRS that the rest of us foresee. Tax reform might be tax simplification in the long run, but right now too many questions remain unanswered, all of which were inspired by those big changes. Two issues in particular threaten to affect millions of taxpayers. First, a new deduction for business owners (Section 199A) complicates the way those owners pay taxes on the income derived from their businesses. While new deductions are always welcome, this code section resulted in confusing definitions and a labyrinth of limitations and computations. For instance, let’s say Joe the Roofer operates as a sole proprietor, using crews of independent contractors, paying no wages to any 16

employees, including himself. One year he has profit and taxable income that equals $157,500, translating into a 199A deduction of $31,500 and saving him $7,560 in federal tax. But the next year, his profit jumps by $100,000. He loses the entire $31,500 deduction simply because his business pays no wages. If he were to change his business structure and put himself on salary for $200,000, he would still be entitled to a 199A deduction of $20,000, saving him $7,400 in federal tax. What part of this makes sense? The second issue is the elimination of all meals and entertainment expenses as a deduction. But what about restaurants that provide reduced-cost meals to employees? Does the owner of a McDonald’s franchise really want all those uniformed employees to go to the Taco Bell across the street for lunch? The proposed regulations concerning the meals and entertainment issue were slated for release in August, and the proposed regulations concerning bonus depreciation and the Section 179 expensing provisions were to be released in September. The burden then is passed to the IRS, with its employees of fewer than 77,000 (a 23 percent reduction from 36 years ago). The agency we love to hate has seen its budget cut repeatedly for the past four years, and now its employees must explain major tax legislation. While the forms themselves will be shorter, the IRS has added at least seven new worksheets to support that shorter format. Some might fail to see the humor. NEWS FROM THE LIAISON MEETING The semi-annual, IRS-sponsored Practitioner Liaison Meeting was held in Denver on July 19 and attended by members of the tax, legal, and accounting professions, and employees of the IRS. Many of the IRS

NewsAccount | September/October 2018

representatives are close to retirement, and the constrictions to the IRS’s operating budget by Congress — year on year — are starting to show signs of stress in its employees and the system at large. Stakeholder Liaison Kristen Holby, on the phone from Seattle, noted that implementation of TCJA is a priority for the Service. A new group, referred to as TRIO (Tax Reform & Implementation Office), was established in January 2018 to oversee all Service-wide TCJA efforts. This group has worked on modifying the payroll withholding tables, the Form W-4, and the Paycheck Checkup Calculator. Heath Beckett, an Appeals Team Manager with Examination Appeals, reported that the Appeals division has been disappointed in the lack of utilization of the Fast Track Settlement (FTS) program, which has been available to taxpayers and their representatives nationwide since 2012. From the Collection Division, Group Manager Emil Blevins assured attendees that payroll taxes (which fund a significant portion of the government’s cash flow) continue to be the Division’s priority. Recent legislation has generated interaction between the Service and the State Department for taxpayers with “serious delinquent debt” to IRS – defined as a balance due of more than $51,000. These taxpayers have been and will be denied U.S. passports, including the renewal of an existing passport, until the debt has been paid, or the taxpayers have entered into a valid Installment Agreement (I/A) with IRS. Taxpayers are notified with a Letter 580C, and once taxpayers have been certified with the “serious delinquent debt” they will not be decertified without either full-paying the outstanding debt or completing appropriate financial information to begin the I/A

process. More than 2,000 taxpayers have already received the Letter 580C. According to Kenneth Cooper, the Territory Manager in this Area’s Examination Division, the small office audit may be solely a memory. Currently, he has only 85 IRS employees in his area that provide office audits. Examination cases will either be handled through correspondence out of the Service Campuses or assigned to field Revenue Agents. In the Examination Division, all employees are receiving training on employment taxes and will be conducting audits, when a case is opened, in all areas of taxation — not just income taxes. Most of the examinations in this Area are generated by the DIF score assigned to each tax return as it is processed. Cathy Schum from the Taxpayer Advocate’s office noted that Nina Olsen, the National Taxpayer Advocate, recently presented her semi-annual report to Congress (available at www.taxpayeradvocate.irs.gov/taxchanges), in which she focused on the changes made by the PATH Act and TCJA and the dismal

rate at which IRS has been able to provide assistance to taxpayers through phone, correspondence, face-to-face meetings, and online access. Olsen’s report also includes the timeframe IRS is using in the certification of “serious delinquent debt.” The Automated Collection System is bringing 500 newly hired representatives online. Attendees noted that some recent responses from new personnel were either incorrect or incomplete. Additional training is being provided to bring the new employees up-todate with procedures and tax law. Nancy Carver, an attorney with Area Counsel, reported that staffing in her area is full, and additional paralegals have come on board as well. Three attorneys and three paralegals have been assigned to handle the S (Small) cases in the Area (Colorado, New Mexico, Wyoming, Montana, Nevada, and Arizona). Concerning marijuana cases that arise, as a result of Attorney General Jeffrey Sessions’s Jan. 3, 2018 memo on federal marijuana enforcement policy, DOJ will pursue federal

violations regardless of state law. IRS will enforce IRC Section 280E as it is written (allowing only cost of goods sold to reduce revenue). Personnel issues across the Agency were a topic of every IRS representative at the meeting, with the notable (and maybe scary) exceptions of Area Counsel and Criminal Investigation (CI), which are both fully staffed. The number of enforcement personnel nationwide is around 33,000 — a notable reduction in force in the past five years. Budget cuts and hiring freezes have cost the Agency and those who deal with it protracted time on cases. Recently, both the U.S. House and Senate voted to increase the IRS budget for the coming fiscal year by more than $186M — but that was less than half of what the IRS had requested. The plot thickens, and the story continues. Fran Coet, CPA, is founder and owner of Coet2 CPAs in Westminster. Go to www.Coet2.com or call 303-426-6444.

September/October 2018 | www.cocpa.org

Behind every successful woman is herself.

Melissa Hooley, CPA Co-chair

On August 24, the COCPA, in collaboration with the AICPA, honored the following individuals with the 2018 Women to Watch Award. Leaders of Note have attained leadership positions within their organizations, have made notable contributions to the accounting profession, help improve their workplaces, and mentor others. Emerging Leaders have demonstrated leadership and have made significant contributions to the profession and their communities, while still on the path to the highest levels of advancement.

NewsAccount | September/October 2018

CONGRATULATIONS 2018

Women to Watch LEADER OF NOTE

KIMBERLEY HIGGINS, CPA Audit Partner, Eide Bailly LLP, Denver

Brian Callahan, CPA, and Colorado Partner-in-charge for Eide Bailly LLP, writes, “When you work with Kim, you see that she truly enjoys what she does. She is patient and kind with her coworkers and clients. She always takes the initiative in involving younger staff in the audit from start to finish — attending proposal interviews through engagement exit conferences and report delivery to boards. By doing this, she helps keeps staff engaged and excited about new opportunities. She is both a mentor and a career advisor to men and women within our firm.” Kim is widely respected in and outside the accounting profession, having focused her experience and expertise in the governmental and not-for-profit arenas for more than three decades. She has been recognized as a “Leading Woman in Accounting” by Denver Woman magazine. She is a frequent speaker and trainer on governmental and nonprofit topics for the CGFOA, AICPA, and COCPA. Currently, Kim is leading and developing Eide Bailly’s Internal Audit industry group, for which she also is writing policies and procedures. Active in her community, Kim is a volunteer for Reading Partners of Colorado and the Susan G. Komen Foundation. She also is the volunteer manager for Father Woody’s Christmas Party Committee. In 2015, Kim achieved a personal goal when she was tapped for the Juvenile Diabetes Research Foundation Board and its nominating committee. Spend any time with Kim, and you understand immediately why she has such a positive impact on the people with whom and for whom she works. She doesn’t just lead from the top; she works side-by-side with everyone to ensure the best possible outcome for all those involved. She is, truly, a Leader of Note.

CONTINUED ON PAGE 20

Barbara Seacrest, CPA Co-chair

September/October 2018 | www.cocpa.org

LEADER OF NOTE

SHARON LASSAR, PH.D., CPA

LESLIE SCHAUS, CPA

Director, School of Accountancy, Daniels College of Business, University of Denver, Denver

Director, Stratagem, Lakewood

Sheila Balzer, CPA, nominated Dr. Sharon Lassar for the Women to Watch award because she “is dedicated to and passionate about her work with and for accounting educators and students. Sharon is an advocate for all students, not just for those at the University of Denver where she is the John J. Gilbert Endowed Professor and Director of the School of Accountancy. She has served tirelessly on behalf of professors through her work with the AICPA Precertification Education Executive Committee, which she chaired in 20152017. I have been privileged to work with her.”

Leslie’s story is one of determination, variety, and constant change. She has worked in private industry and public practice, beginning her career as a bookkeeper for a general and electrical contractor while working her way through the University of Denver. She became a controller for a wholesale distributor after graduation and pursued her MBA at Regis University. The jump to public accounting came through a small boutique firm which specialized in real estate development clients. Next came work with a large Denver firm while Leslie obtained her Masters in Tax from DU. Fast forward, to 2001, and we find Leslie opening one of the first women-owned, independent CPA firms in the U.S. which she ran until merging with Lakewood, Colo.-based Stratagem in 2015.

President of the American Accounting Association’s 20172018 Accounting Program Leadership Group, Sharon chaired the Minority Issues effort of the Taxpayer Advocacy Panel, to which she was appointed by Treasury Secretary O’Neil. Her research has been published in the Journal of Accountancy, the Journal of Taxation, The CPA Journal, the Journal of Legal Tax Research, and the Tax Adviser. She served on the Educational Foundation of the COCPA and was its 2017-2018 president. Before moving to Colorado in 2010, Sharon was actively engaged with the Florida Institute of CPAs, including service as vice president and point person for transforming FICPA’s financial literacy and women’s leadership development initiatives.

Leslie has served in numerous volunteer capacities with the COCPA, the Women’s Foundation, Safe House Denver, The Denver Foundation, and Foothills Academy. She also is a member of the Community First Foundation’s Professional Advisors Council which supports professional advisors and their clients in every step of the charitable giving process. Leslie says, “It’s the constant change that makes — and keeps — this profession interesting to me. I enjoy the continual thought process needed to inform clients of their best strategies and position them to obtain their goals.” In addition, Leslie initiated a development program for the firm’s emerging tax professionals and mentors others in the firm. She is recognized by her colleagues as “a difference maker as the firm seeks to develop the next generation of leaders,” writes Jessica Lalka, Stratagem’s Director of People Development. “I know of no one more deserving of this recognition,” she adds.

COCPA CEO Mary Medley recalls, “The Colorado State Board of Accountancy had scheduled a public hearing to consider proposed rules changes. Sharon literally landed in Colorado just days before. She showed up at the hearing, thoroughly prepared, as if she’d been involved in the process from the beginning. Her testimony was thoughtful, complete, and compelling. I knew then Sharon would be an invaluable addition to the Colorado accounting profession.”

LEADERS OF NOTE - PAST RECIPIENTS

2012

2013

2014

2015

2016

2017

Mira Finé Dianne Ray Karen Turner

Peggy Jennings Lynne Lehr-Buck Sandy Shoemaker

Stacey Hekkert Tracy Huggins Judy Vorndran

Lori Gibson Katrina Salem Laura Srsich

Judy Cain Christine Noel Debbi Warden

Laurie Anderson Jane Everhart

NewsAccount | September/October 2018

EMERGING LEADER

KRISTIN HOLTHUS, CPA

DANIKA GREINER, CPA

Director of Finance and Operations, ACM LLP, Denver

Manager, Accounting Advisory Services, KPMG LLP, Denver

Kristin’s personal motto is “Get there first.” According to ACM president and managing partner Stacey Hekkert, “Kristin doesn’t wait to be asked but is always looking for ways to make sure she is ahead of the next question. When evaluating new processes or policies, her goal is to do the right thing, leading her to be innovative in her ideas while keeping the best interests of both the people and the firm in mind. I absolutely can count on Kristin being honest and upfront.”

“Danika is a leader because of her willingness to listen and help others as well as lead by the example she sets. No accounting issue or task is too difficult for her, and her willingness to give extra effort is her most valuable quality. She is passionate about what she does and puts her team and clients first,” writes Sanford Kaiser, KPMG LLP Director, Accounting Advisory Services. Hillary Fender, Director, Deal Advisory - Accounting Advisory Services, KPMG LLP, adds, “Danika also has a strong desire to stay involved with her alma mater, the University of Denver. She makes it a priority to return to DU each semester, as a guest speaker and supporter of Beta Alpha Psi meetings and events, so she can meet with students in less formal settings and encourage them to pursue careers in accounting.”

Active in CPAFMA, the CPA Firm Management Association, Kristin served as chapter president for three years, suggesting and scheduling speakers for the local events and national meetings and annual conference. This year, CPAFMA recognized Kristin with its Emerging Leader of the Year award, given to an individual who demonstrates dedication to the CPA firm management profession through strong leadership, teamwork, and integrity, while continually developing her knowledge and experience, necessary in this ever-changing profession.

Dr. Sharon Lassar recalls, “In fall 2012, I nominated Danika for the Financial Accounting Standards Board’s Post Graduate Technical Assistant program, for which she was selected. Her mentorship of other applicants and her stellar performance while at FASB contributed to DU’s next four nominees also being accepted into the program. She set a standard of alumni assisting those following them that has become part of our legacy.”

Drop by ACM’s office in Denver some time. Everyone and everything you see has been touched by Kristin, including the space itself as she led the firm’s 2017 complete remodel of 26,000 sf, from start to finish, and delivered the results on time and on budget. This year, Kristin is leading ACM’s project to reevaluate and overhaul its firm benefit and wellness services — from RFP to implementation. In her spare time, she also is an essential participant in the firm’s 2018 brand refresh to ensure all the legal and compliance issues are handled correctly.

Danika’s strong technical skills, coupled with her desire to mentor and encourage others, make her an emerging leader worthy of the Women to Watch award. As KPMG partner Stephen Thompson puts it, Danika “demonstrates the actions and values necessary to some day in the not too distant future be a leader within the accounting profession.” Wait for it — it won’t be long.

This auditor turned director of finance and operations does so much more than space here allows. Suffice it to say, Kristin Holthus is, without a doubt, a Woman to Watch.

EMERGING LEADERS - PAST RECIPIENTS 2012

2013

2014

2015

2016

2017

Sheila Balzer Nina Currigan Megan Donohue

Jami Coulter Georgia Phillips Kelly Rodriguez Rhonda Willert

Mary-Margaret Henke Jennifer Scholz Jessica Seidlitz

Tyra Litzau Monica Martinez Shauna Shafer

Erin Breit Meghan Mahala Dack Kerri Hunter

Ksenia Popke Rebecca Kelley Andrea Geerdes

September/October 2018 | www.cocpa.org

TAXATION

Managing Client Expectations for IRS Refunds BY ANDREW M. MATTSON, CPA; GERARD H. SCHREIBER JR., CPA; CHASTITY WILSON, CPA, J.D., LL.M.; AND MARILYN YOUNG, CPA, PH.D.

n fiscal year 2017, the IRS issued $437 billion in refunds. Almost all of these refunds (98%) were issued to individual taxpayers, and this amount does not include overpayments credited to subsequent years’ tax liabilities (Internal Revenue Service Data Book, Tables 7 and 8 (2017)). To facilitate this volume of refund payments, the IRS has devoted a significant amount of resources to improving and maintaining its electronic filing and refund direct deposit systems. Indeed, from 2010 through 2016, the IRS spent on average $4 billion annually on operations support, including infrastructure and information systems, to ensure returns are processed efficiently and refunds are issued in a timely manner (Internal Revenue Service Data Book, Table 28 (2010-2016)). When these resources work as planned, a taxpayer’s refund can be issued in as little as 10 days, with most refunds paid within 21 days. Tools such as “Where’s My Refund?” and e-Services provide important feedback to the taxpayer to accurately set expectations for processing times. While these processes work well for many taxpayers,

they do not work for all refund claims. The purpose of this article is to describe reasons for delayed refunds and the actions practitioners can take when a client is experiencing a delay. REASONS FOR DELAYED REFUNDS One explanation for a delayed refund is increased scrutiny of returns that include certain refundable tax credits. The Protecting Americans From Tax Hikes (PATH) Act of 2015, P.L. 114-113, included a provision (Section 201) that prevents the IRS from issuing a refund for a tax return including the earned income tax credit (EITC) or the additional child tax credit (ACTC) until Feb. 15. The effective date for this policy change was Jan. 1, 2017. Under these new provisions, the IRS may not issue the entire refund until Feb. 15 even if the refund is only partially attributable to the EITC or the ACTC. As these refundable credits are a rich target for individuals attempting to file fraudulent returns, this mandatory delay gives the IRS more time to evaluate taxpayers’ eligibility for the credit(s) before issuing the refund.

NewsAccount | September/October 2018

During the first year of this new process, the IRS did not update “Where’s My Refund?” until Feb. 18. While some taxpayers who filed their returns before this date received a projected payment date for their refunds before the Feb. 18 update, many others received only a message that the IRS was processing their returns with no expected payment date for the refund. Once the IRS released the refunds, many taxpayers did not receive their payments until the week of Feb. 27. According to the IRS, many factors contributed to the delay, including increased processing times needed by banks and financial institutions receiving the refunds (see IRS News Release IR-2016-152). Beyond the PATH Act policy change for certain refundable credits, another explanation for a delayed refund is IRS fraud and identity theft prevention procedures. These efforts predate the PATH Act and include security filters in tax return processing to stop suspicious refund claims. As the IRS continually evaluates and updates its processes, these procedures have become more successful. For example, between 2015 and 2016, these

procedures reduced new identity theft claims by 50%, representing a reduction of 275,000 claims in one year (see IRS News Release IR-2016-152). The effectiveness of these security filters means they will be maintained and likely expanded in upcoming years. Indeed, two of the six strategic themes described in the IRS Future State initiative relate to these efforts. These themes are: (1) facilitate voluntary compliance by empowering taxpayers with secure innovative tools and support; and (2) understand noncompliant taxpayer behavior and develop approaches to deter and change it (IRS, “Future State” (2016)). In an ideal system, only fraudulent returns would be caught by the filters, and legitimate refund claims would not. However, an ideal system is an aspirational goal, and the implementation of the filters has delayed refunds for legitimate returns. ACTIONS PRACTITIONERS CAN TAKE When the filters have selected a return for further review and the IRS needs additional information, a notice is sent to the taxpayer

identifying the information the taxpayer must provide to resolve the concerns that triggered the filters. Examples of these notices include Letter 5071C and Letter 5447C. If clients attempt to fulfill these information requests on their own, the frustration prompted by the delayed refund can be exacerbated by the complex and confusing IRS identity verification process. In addition, failure to fully comply with the information request can further delay the refund. Practitioners can help clients avoid the added frustration by describing the security features to their clients before their returns are filed and instructing clients to notify the practitioner if they receive a notice. The practitioner can access e-Services and obtain an account transcript to determine the status of the client’s account. This initial action will require obtaining a Form 2848, Power of Attorney and Declaration of Representative, from the client. The transcript will include the dates of filing, assessment, payments, and other activity on the account. In addition, various transaction codes will be listed on the transcript. Knowledge of these

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transaction codes is often the key to quickly diagnosing the cause for the delayed refund. Prior to the introduction of online tools such as e-Services, revenue agents conducting field audits would visit practitioners’ offices with paper printouts of the taxpayer’s account and then refer to a fold-out document to determine the various transaction codes on the account. With the introduction of online resources, these codes can now be found on the IRS website in two places: (1) IRS Document 11734, Transaction Codes Pocket Guide, available at www.irs.gov; and (2) IRS Document 6209, IRS Processing Codes and Information, also available at www.irs. gov. The second document provides more detail on transaction codes than the first document. Most accounts with delayed refunds will have a transaction code 570, referred to as a “hard freeze.” As identity thieves developed ever more sophisticated schemes to steal tax refunds during the late 2000s, the IRS placed an increasing number of hard freezes CONTINUED ON PAGE 24

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TAXATION CONTINUED FROM PAGE 23 on accounts to slow refund payments to potential criminals. Removing the hard freeze is a two-step process that can create an added layer of frustration. Step one is the removal of the hard freeze, and step two is the approval for the payment of the refund. The key to successfully navigating the first step, when a notice has been issued, is to fully comply with the information request to address the concerns identified by the system filters. The IRS will evaluate the information provided and, if acceptable, authorize the removal of the hard freeze. The removal of the hard freeze may not result in the payment of the refund, as the authorization to release the hard freeze is a separate process from the approval of the payment. The approval of the payment requires a separate transaction code to be entered into the client’s account. That is, transaction code 570 needs to be removed from the client’s account to remove the hard freeze, and then transaction code 571 needs to be entered into the account to authorize the payment of the refund. Completion of step one does not automatically result in the completion of step two. Consequently, it is not advisable that a client attempt to navigate this process without a practitioner’s help. After step one is completed and the hard freeze is no longer in the client’s account, the practitioner will often have to contact the IRS a second time to secure the approval for the payment of the refund. Knowledge of the transaction codes can make this process easier than merely describing the issue without the code to an IRS employee. A practitioner may pursue a few other avenues for completing this second step. The first option is to contact the IRS through the Practitioner Priority Service. Alternatively, if the delay of the refund is creating a demonstrable economic hardship for the client, the Taxpayer Advocate Service (TAS) may be able to take the case. As the TAS has limited resources, recent changes in its guidelines require that it only accept cases where the taxpayer is facing an economic hardship from the issue requiring its assistance. SETTING EXPECTATIONS Refunds delayed through system filters that result in a hard freeze on a client’s account can be a frustrating experience for both the client and the practitioner. Expansion of hard freezes stopped more criminal schemes but also snared more legitimate returns in 24

the system. The false positives from filters catching legitimate returns appeared to hit its peak in 2012. Nina Olson, the national taxpayer advocate, described hard freezes in her 2012 Annual Report as “one of the most significant problems requiring improvement” and warned “that the IRS continues to harm taxpayers by unreasonably delaying the processing of valid refund claims” (National Taxpayer Advocate 2012 Annual Report to Congress, p. 95). The context of this problem is provided by the following data from the report: •

In 2012, 240,000 accounts received permanent hard freezes.

•

In the second quarter of fiscal year (FY) 2012, the IRS reported that the Questionable Refund Program (QRP) inventory had increased threefold over the previous year. As a result, the IRS was not able to work this increased inventory within 70 calendar days. This delay violated an agreement between the TAS and IRS Criminal Investigation made in 2006 when the IRS began applying hard freezes on taxpayer accounts as part of the QRP.

•

In FY 2012, the IRS Accounts Management Taxpayer Assurance Program (AMTAP) imposed a hard freeze on more than 142,000 returns because it could not complete the verification processes within the allotted time, not because the returns showed “badges of fraud.” In other words, AMTAP was using hard freezes out of an abundance of caution as an inventory management tool to prevent refund payments for returns that could not be verified, not because the returns were suspicious filings.

•

Referrals of cases to the TAS from the AMTAP freezes increased by approximately 468% from FY 2010 to FY 2012, or from 3,171 cases in 2010 to 18,012 in 2012. By 2012, AMTAP cases constituted 8.2% of all TAS cases and were the second most common issue in TAS casework.

•

Seventy percent of all taxpayers who sought TAS help with the refund freezes in 2012 were experiencing some kind of financial harm as a result of IRS actions, compared with 38% in 2010.

•

A representative sample of TAS wage verification cases closed in 2012 found that 86% of these taxpayers were facing potential adverse impacts.

NewsAccount | September/October 2018

•

Seventy percent of these taxpayers with hardships received full relief, and another 2% received partial relief.

•

In the same representative sample of TAS pre-refund cases, 53% of the taxpayers claimed and received the EITC. These taxpayers waited more than three months for a median refund of $5,175. The refunds comprised, on average, 38% of their adjusted gross income.

The large number of hard freezes described for only one tax year in the report indicates most practitioners either have experienced or will experience this issue with their clients. While hard freezes can result from a wide variety of amounts reported on a return, returns with an EITC or an ACTC will receive special scrutiny. These returns will not receive refunds before Feb. 15, and special filters are designed to prevent fraud in these specific refund claims. To reduce the frustration of a delayed refund, practitioners can set expectations with their clients by describing IRS processes that can slow the payment of a refund before returns are filed, advise clients to immediately notify the practitioner upon receipt of information requests, and obtain Forms 2848 that allow the practitioner to access clients’ transcripts. With knowledge of the process for removing hard freezes from client accounts, including the transaction codes that identify the reason for the freeze, practitioners can more efficiently navigate the IRS system and reduce the time for securing refunds for their clients. Andrew M. Mattson, CPA, is a partner with Moss Adams LLP in Campbell, Calif. Gerard H. Schreiber Jr., CPA, is a partner with Schreiber & Schreiber CPAs in Metairie, La. Chastity Wilson, CPA, J.D., LL.M., is principal in charge of dispute resolution services at CliftonLarsonAllen LLP in Minneapolis, Minn.. Marilyn Young, CPA, Ph.D., is professor of accounting at Belmont University in Nashville, Tenn. Wilson is chair, Mattson is immediate past chair, and Schreiber and Young are members of the AICPA IRS Advocacy & Relations Committee. This article originally appeared in The Tax Adviser, July 2018. ©2018 Association of International Certified Professional Accountants. All rights reserved. Re-printed by permission.

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Rod Shuster:

Reimagining the Mortgage Experience for Clients BY NATALIE ROONEY

Growing up around CPAs, it was only natural that COCPA member Rod Shuster became a CPA himself. But after a traditional start in public accounting, he began putting his expertise to work in a new way — as a Certified Mortgage Lender. Now he’s sharing valuable advice that CPAs can use to help their clients with the biggest investment of their lives: their home.

od Shuster’s company, Journey Home Lending, is aptly named. While he describes it as a mortgage lending company, his focus is helping clients and their advisors navigate the mortgage journey, ensuring it is part of an overall wealth building plan.

He found he had a knack for mortgages. “It was consultative sales, financial, and working with a complex intangible product with a lot of moving parts that needed a lot of clarification,” he recalls. “I learned quickly that it wasn’t just about the best rate.”

As a third generation native Coloradan, Rod was a business major at Colorado State University with concentrations in Finance & Real Estate and Accounting. After graduation, he started his career in Price Waterhouse’s tax department, gaining valuable skills in tax and litigation. He left to join his father, Steve, in Shuster and Company, doing business valuations, litigation support, a full gamut of tax and audit work, and reviews of financial statements.

After fulfilling his year commitment to his friend, he went out on his own in the mortgage business, clearing loans through Clarion and operating as Shuster, Inc. “Clarion was just an accounting shop with warehouse lines to loan money,” Rod says. “The team would find a borrower, submit the package to one of our three hundred investors, and get it approved with very little overhead.” His financial expertise helped him become a top producer for 13 years.

After five years, Rod was ready to do something different. He spent a year recruiting for accounting and finance positions, and then he decided he wanted to be out on his own. Because of a non-compete agreement, he couldn’t recruit for a year and needed an alternative.

Clarion morphed into Catalyst, and a few career twists and turns found Rod at the helm of Catalyst as president. Eventually he moved on to Universal Lending, and then he ran the largest retail region of Eagle Home Mortgage (part of Lennar Homes). He also served on the Colorado Mortgage Lenders Association Board of Governors.

A friend in mortgage brokerage asked Rod to join him. It seemed like a great way to fill the year-long gap, and Rod agreed to help. 26

By 2018, Shuster decided it was time for a break. He took February off and then in

NewsAccount | September/October 2018

March launched Journey Home Lending, a small brokerage firm originating loans and exclusively helping clients with residential mortgages. “If you ask me at a cocktail party what I do, I’d say I run a boutique mortgage planning firm.” Rod explains. “Think of a financial planner or advisor. I’m a mortgage planning consultant. I look at the entirety of the picture as opposed to a single mortgage transaction. This unique perspective from someone who has overseen billions of dollars of mortgage loans is designed to help those who really want professional advice and concierge service. I can remove the stress from the transaction and still offer competitive rates.” MORTGAGE BROKERS VS. MORTGAGE BANKERS Rod says it’s important for CPAs and their clients to understand the difference between a mortgage broker and a mortgage banker. He has been both. A mortgage broker is independent and can shop with multiple lenders or investors to find the money to loan to the borrower.

Guidelines may be more flexible to help borrowers. A mortgage banker loans its company’s money, uses their own underwriting, and has their own rules and guidelines. Most of the loans originating through mortgage banks end up being sold to agencies such as Fannie Mae and Freddie Mac or insured by Ginnie Mae and must meet certain guidelines, such as minimum credit score. However, Rod says the mortgage bank may have rules it overlays on Fannie Mae’s rules to help protect it against risk. These overlays are where Rod’s experience is invaluable. “Consumers don’t know about these additional rules, which can create challenges,” he says. “A broker who knows which investor has tighter rules or different programs can help consumers navigate the system.” Ultimately, both transactions end with an investor. “One way, I’m brokering and not lending clients our own money,” Rod explains. “The other way, it’s my company’s money, and we’re selling it off after closing.” TECHNOLOGY AND THE INDUSTRY Just as financial planners are dealing with robo-advisers, the mortgage industry is dealing with rocket mortgages: Push a button. Get a loan. Rod says some mortgage banks are investing millions in the technology to create their own rocket mortgage programs while others are buying off-theshelf programs from third-party vendors. “Some of it is working; some isn’t,” he says. As a broker, Rod says he can shop for the technology pieces to suit his needs and pay a fractional monthly fee. “It allows me to function more smoothly and quickly. I can give Millennials that ‘rocket’ experience along with mobile apps, while the functionality is top shelf.” The key is in keeping the borrower experience from being so general and just about rates, especially with companies like Amazon and Zillow expressing interest in the mortgage market. “A mortgage transaction, from all of the consulting and review of complex prices at the beginning through closing at the end and follow up after, doesn’t fit nicely and neatly into an online checkout cart,” Rod says. “There are many things that come into play, including complexity and emotion.” TIGHT MARKET, CHALLENGING TIMES Rod says, thanks to the never-ending refinancing boom, rates collectively have come down over the last three decades. Now, 27

NewsAccount | July/August 2018

It’s about looking at the totality of the investment and the mortgage vehicle and what is the best solution for the individual client. they’re definitely going up, and short of some sort of cataclysmic event, it’s unlikely they’ll come back down in the near future. In addition, the nation’s housing market is tight, especially here in Colorado. “With little inventory, clients are house shopping so much longer and often times presenting several offers on homes,” he reports. “Loan originators are working longer with each client until they are able to buy or just get tired of looking and decide to rent.” This scenario has caused a surplus of originators and compressed margins for mortgage companies. That means layoffs and reduced commissions are creating challenges. “We continue to see more people getting out of the industry because companies can’t sustain the lower volumes,” Rod says. Thankfully, he and his small company with low overhead are in a different world. “I can adapt and survive because I’m doing my own loans.” HELPING CPAS’ CLIENTS Clients can benefit from meaningful information to make an informed decision. CPAs should refer clients to a loan originator who can help them see clearly and concisely what the loan is going to cost. An experienced originator will evaluate different loan products, the rate, and any charges or credits, and determine the best alternative. That could be a higher rate with a bigger credit and no closing costs; closing costs and a lower rate; or a different product altogether. “It’s great that someone can show the break-even, but what if, instead, we look at the total cost over the life of the loan and the length of time a client will live in the house and compare those?” Rod points out. “This is the type of information a CPA or a financial advisor would want clients to have — not just that the rate is X. That doesn’t tell me anything. It’s about looking at the totality of the investment and the mortgage vehicle and what is the best solution for the individual client.” Rod uses a total cost analysis to show options side by side in graphical form. He

encourages clients to take the information to their CPA or even bring in their CPA to see what makes the most sense for their situation. “Doing that results in the best longterm decision for clients,” he says. Most people just don’t understand their mortgage transaction. “I don’t blame them,” Rod says. “It’s complex with lots of moving parts, so many people tend to focus on what they know: the rate.” For most clients it’s hard to know what questions to ask. “It’s like asking a store the price on a television. There are many variables involved such as screen size and picture quality. Price is only one consideration.” Therefore, it’s important to work with a professional who understands the entirety of each client’s situation. Rod explains that rates are generally tied to the Fannie Mae bonds. “When bonds are up, rates are down. If you called someone when bonds were low and rates were higher at the beginning of the day and then call me at the end of the day and rates were lower, my rate would look better. While I appreciate that, it’s not about me. It’s the market. It’s more important to understand how your mortgage advisor is getting information and the technology used rather than the rate, which is changing all the time.” In addition, having someone who can navigate last minute changes and challenges is non-quantifiable. “A delayed closing creates huge issues,” Rod says. “Your clients should find someone who can meet them where they are technology-wise and do it with a secure portal that protects them from identity theft.” Yes, in this arena, too, cybersecurity is one of the biggest challenges. “For most people, this is the largest purchase they will ever make,” Rod emphasizes. “So, it’s important to understand the intricacies of the situation and to work together to develop the best solution for the client’s journey home.” Hence the name: Journey Home Lending.

September/October 2018 | www.cocpa.org

STRATEGIES FOR SUCCESS

Dress for Your Day: What are CPAs Wearing to Work? BY NATALIE ROONEY

Navy suits, power ties, hose, and pumps are relics of a bygone era, especially here in Colorado. So, what are CPAs wearing to work today? Relax, put up your Chelsea boots, and find out what’s cool and what’s not.

NewsAccount | September/October 2018

usiness casual. It’s a term that strikes fear into the hearts of many, because what is it, really? While the exact definition may be subjective, what it’s definitely not is shorts and a tee shirt, says Angela Roberts, CPA, managing director/ founder of Aclivity, a Denver executive recruiting, staffing, and consulting firm. “CPAs are still professionals, and they need to present themselves as professionals,” Roberts says. A recent Robert Half Finance & Accounting survey asked CFOs their opinions about workplace attire, and they confirmed that dressing up for work is going out of style: 61 percent said their employees abide by a somewhat casual dress code — khakis and polo shirts or sweaters. For 13 percent of them, jeans and tee shirts are the norm. As for the rest of the respondents, 4 percent said their offices are still very formal, as in suits and ties, and 21 percent describe the outfits as somewhat formal — dress slacks or a skirt with a button-down shirt.

Ginny Burkey, senior recruiter for Arrow Electronics in Denver, says what she sees these days is much different from when she began her career with the Big Eight in the early 90s. “We wore suits every day. Women always wore heels with hose and crisp cotton shirts. Men almost always wore a suit, white shirt, and tie. A colorful shirt was pretty risky back then,” she laughs. Today, Burkey says business attire for men includes a jacket — tie optional — and definitely a button-down dress shirt. Women have many more options including dresses, skirts, nice slacks, and typically a jacket or sweater. Business casual has become really casual. “In Denver, and certainly depending on your industry, casual khakis, or even shorts, and golf shirts are acceptable for men in the summer,” Burkey says. “The tech industry is much more forgiving when it comes to business attire, and it’s commonplace to see shorts and sandals in the office.” Roberts echoes that sentiment. “In Boulder, business casual really means getting dressed.” For women, Burkey sees a lot of variety around the office, including colorful jeans or cotton pants, a variety of tops and sweaters, and also bright dresses.

INTERVIEW DRESSING DON’TS Don’t show too much skin. Don’t wear dirty/wrinkled clothing. Don’t wear clothes that are too big/ small (and no shorts). Don’t wear shoes in poor condition (and no flip flops). Don’t go over the top with accessories (or hats). Don’t wear graphic tees or neon colors. *Source: Robert Half

FIRST THINGS FIRST: DRESSING FOR THE INTERVIEW Navigating the what to wear question for the first interview can be tricky. While most companies don’t want interviewees showing up in a suit, it can depend. If you’re interviewing with someone age 50+, a suit is expected. If candidates in their 40s or younger turn up in a suit, they may not be seen as cool enough or showing their personality. Roberts says dressing for a first interview comes down to the culture of the company, but in general, you can just say no to suits. For men, software companies will not expect a tie. A jacket with khakis and a button-down shirt is currently the norm for accounting positions. Suits aren’t expected for women either. Pants or a skirt with any type of blouse or a sweater set is just fine. Roberts says the CPAs she interviews still have a formal tone, unless the hiring company has specifically requested otherwise. “CPAs are professionals people look up to, and they are expected to show up for the

interview in more traditional business attire.” She contrasts that with the engineering community. “They go in with beards, backpacks, and wearing ten-year old shorts. CPAs are still handling the money. They’re held to a higher, professional-looking standard.” Roberts adds that men may still wear a suit to an interview, but there’s no tie, and it’s acceptable to wear shirts in many different colors and patterns. “The whole definition of business attire has changed considerably. The bottom line is this: If people notice your outfit, it’s probably not the right outfit. Be clean, pressed, and coordinated.” ON THE JOB Once you’re in the office, the options are numerous. For men, think long pants and a dress or golf shirt. Dress shirts come in a wide variety of colors and patterns. Golf shirts typically are tucked in. For women, choose pants or a skirt and a dress shirt, sweater set, or top and jacket — or a dress. And in possibly the best news ever for women: no hose. Tights are popular in the winter, but hose are considered an artifact of the past. “I haven’t seen hose for the last ten years,” Roberts says. “Most young women don’t even own a pair.” As for footwear, women are wearing heeled booties or ballet flats. Calf boots are common in winter. Men are stepping out in colored footwear, sometimes blue or orange rather than the standard black, cordovan, or brown. Socks are a way to show some individuality and are frequently on display because men’s trouser styles are shorter these days. Burkey says she still sees people in suits, typically for important meetings with customers, interviews, and any time they want to dress “up” for a specific occasion. These days, jeans are acceptable for both genders and regardless of age, but without (fashion) rips or tears. While some companies allow jeans only on Fridays, many now allow jeans every day. Fashion-forward tops and sleeveless shirts for women may pass muster, but Roberts emphasizes that every company has its own policy that addresses everything from clothing to tattoos. Overall, everything is more casual here in Colorado. “Your belt doesn’t have to match your shoes and briefcase anymore,” Roberts CONTINUED ON PAGE 30

September/October 2018 | www.cocpa.org

STRATEGIES FOR SUCCESS CONTINUED FROM PAGE 29 says. “Instead, you have a backpack and funky belt and shoes. People are working remotely, a half day at the office and a half day elsewhere. They’re prepared to work and then go out in their kayak in the afternoon. This is why people move here.” As a recruiter, Burkey says she gets the “how should I dress for this interview?” question a lot. “I encourage people to ask that question of their contact in the office. It’s an easy question and can really help make sure you fit in. I have worked with managers here who specifically tell me to tell the candidates NOT to wear a suit.” THE CODE Dress codes still exist, but rather than a company-wide policy, departments may adopt different options. A department full of coders may be casual and unshaven. Accounting and finance departments may want business casual, no jeans. Walk into a smaller company, and you may find everyone in jeans with no dress code at all. Burkey says Arrow has a business casual dress code. The code is outlined in the employee handbook, including a few examples of what isn’t appropriate business attire: •

Torn clothing, provocative/revealing clothing, and clothing with vulgar, obscene, or offensive language, quotations, pictures, or characters

•

Sweatshirts or sweatpants

•

Miniskirts, shorts or skirts, tank tops, midriff tops, tube tops, halters, off-theshoulder, or evening wear

•

Hats, unless required for religious purposes or to honor cultural tradition

At Arrow, showing tattoos and piercings is also discouraged in customer facing roles. “What you wear to an interview might influence how an interviewer assesses your professional judgment,” Burkey says. “If you don’t care how you present yourself in an interview or professional setting, will you care about the accuracy and presentation of your work product, or can you present yourself to a senior level manager in another department?” Burkey says working in the largest public company in Colorado, she sees a lot of variety. “People can dress how they feel comfortable. Some women wear skirts and blouses every

day, and others wear jeans with sweaters or jackets. It’s nice to be able to show a little bit of your personality in the workplace.” Tracie Wiedmaier, office manager for Moss Adams’ Denver office, says its policy is business casual with jeans allowed. The guidelines are communicated in the operational standards manual employees receive when they’re hired. “As seasons change, we send reminders to dress appropriately,” she says. “We also emphasize no athletic shoes are permitted.” When employees are out at a client site, they should dress to match where they’re going. “If it’s a bank, they may have to wear a suit.” Wiedmaier adds that she thinks people get more work done when they’re more comfortable. “But new staff need to be prepared to dress professionally for a week so they don’t hear the word ‘suit’ and panic.” Burkey’s advice: Be flexible, and know your audience. “Do some research, and anticipate what your audience will be expecting. Don’t be afraid to show a little bit of your personality, too.” DESIGNING YOUR LOOK If you do panic when you hear the word “suit,” aren’t sure what you should be wearing, or what your “look” is, experts can help. Kerry Blair, owner of The Style Studio in Denver, has been a stylist and image consultant for 16 years. “Back then, there was no ‘What Not to Wear,’” she says, referring to the television show that gave wardrobe makeovers to everyone from stay-at-home moms to executives. “There were no smartphones, no clothing in a box.” Blair had an epiphany: if people weren’t fidgeting with their clothing or wondering how they looked, they could achieve more, make more money, have better relationships, and free themselves up to focus on the more important things in life. The concept of helping people identify their look and then shopping for them is more commonplace now, but at first, she had to build an understanding of why anyone would need such a service. Blair moved from taking clients around to stores and shopping with them to opening her own store front. Now she offers clients a full-service boutique experience. She edits a client’s closet, determines what doesn’t meet the client’s personal “brand,” shops, and then brings everything needed into her own studio

NewsAccount | September/October 2018

If people weren’t fidgeting with their clothing or wondering how they looked, they could achieve more, make more money, have better relationships, and free themselves up to focus on the more important things in life. where clients can simply show up, try everything on, and decide what’s best for them. She even offers an onsite tailor and makeup services. “All of their image needs can be handled right there,” Blair says. Over the years, Blair has worked with many CPAs. Some are new partners. Some want to develop their personal brand or get promoted. Some are in a new relationship. CPAs may come in on their own, or sometimes a firm hires Blair to work with an employee. No matter how they get to Blair, she helps CPAs look the part, so they can move on to other things in life. “Like tax season,” she laughs. Blair is the first to admit that the business casual concept can be a minefield for employees, and it can be easy to make a misstep. She also says the adage, “Dress for the position you want, not the position you have,” still holds true. “My version of that is ‘dress like you mean it,’” she says. “Don’t be haphazard. Care about how you look. Don’t leave the house until you feel amazing. And keep your brand consistent.” Blair’s advice applies to young professionals as well as the executive ranks. “How you dress influences how you feel about yourself,” she says. “It’s all about feeling great. It doesn’t matter if you’re at the beginning or end of your career. There’s still an image to portray about who you are. It’s important for CPAs to dress the part and invest in themselves.”

CAMICO – Sponsored Provider of COCPA since 1998 “The COCPA chose CAMICO twenty years ago because it offered top-level expertise and support – by CPAs for CPAs. The same is true today. CAMICO consistently delivers outstanding customer service, regardless of market or economic conditions.” Mary E. Medley, CEO COCPA

Why CAMICO? • For 32 years, CAMICO has been protecting CPAs with insurance solutions tailored to the professional services and concerns faced by CPA firms every day. • CAMICO’s depth of services for CPA firms is unmatched by other insurance programs.

• CAMICO policyholders have free unlimited access to proactive loss prevention and claims handling. • Policyholders can call CAMICO as often as needed – free of charge – and consult with in-house experts on loss prevention, tax, and accounting and auditing issues.

These are just some of the reasons why COCPA selected CAMICO as the Society’s sponsored provider of Professional Liability Insurance. Alpa (Keily) Evans Account Executive T: 800.652.1772 Ext. 6720 E: aevans@camico.com W: www.camico.com

Accountants Professional Liability Insurance may be underwritten by CAMICO Mutual Insurance Company or through CAMICO Insurance Services by one or more insurance company subsidiaries of W. R. Berkley Corporation. Not all products and services are available in every jurisdiction, and the precise coverage afforded by any insurer is subject to the actual terms and conditions of the policies as issued. © CAMICO Services, Inc., dba CAMICO Insurance Services. All Rights Reserved. September/October 2018 | www.cocpa.org

MOVERS & SHAKERS Dixon and Manimbo to Attend 2018 Leadership Academy Audra Dixon, CPA, Ernst & Young LLP, Denver, and Danny Manimbo, CIA, CISA, CISSP, CPA, CCSK, Schellman & Company, LLC, Broomfield, are two of only 41 CPAs honored by the American Institute of CPAs (AICPA) as members of the Leadership Academy’s tenth graduating class. Both were selected based on their exceptional leadership skills and professional experience for the four-day program, Oct. 7 through 11, in Durham, N.C.

KRISTEN DENNIS, CPA Kristen Dennis, CPA, joined Walke & Associates, Salida, www.walkecpa.com.

STOCKMAN KAST RYAN + CO. Stockman Kast Ryan + Co., Colorado Springs, welcomed Brandon Doellingen and Robert Lange as audit consultants; Jennifer Carter and Nicole Renfrow as tax consultants; and Todd Hein as a senior tax manager. For the second year in a row, Accounting Today named the firm one of the top accounting firms in the Rocky Mountain Region.

Dixon, an audit senior, currently serves on the Educational Foundation of the COCPA Board of Trustees. She works on public and private audits of clients in the Denver area. Manimbo is a Denver-based manager at Schellman & Company (Schellman). His responsibilities include managing and growing Schellman’s SOC and ISO practices in the Mountain and West Coast regions.

WATSON & STOLL, CPAS, LLC Watson & Stoll, CPAs, LLC, Boulder, merged with Anton Collins Mitchell LLP, 4999 Pearl E Cir., Boulder, 303-440-0399.

The AICPA Leadership Academy was designed to strengthen and expand the leadership skills of promising young professionals while they network with a peer group of talented and motivated CPAs. The 2018 Leadership Academy attendees were recommended by their employers, state CPA societies or both. Candidates submitted resumes and a statement explaining how participating in the Leadership Academy would impact them personally and professionally. They also wrote an essay on, “The future will bring significant changes to the accounting profession. What do leaders have to get right in order to successfully lead?”

DALBY, WENDLAND & CO., P.C. Dalby, Wendland & Co., P.C. relocated its Montrose office to 1544 Oxbow Dr., Ste 101, Montrose, 970-249-7701. Its Rifle office has relocated to 820 Megan Ave., Unit C, Rifle, 970-625-1392.

To date, 310 CPAs have participated in the AICPA Leadership Academy, including ten Colorado participants: Tawnya Ramirez (2009), Victor Amaya (2013), Randy Watkins (2009), Ben Hrouda (2012), Diego Baca (2015), Alicia Gelinas (2011), Pat Lytle (2014), Bridget Duzzie (2015), Joanie Monaghan (2015), and Andy Baum (2017). More information about the AICPA Leadership Academy is available online at www.aicpa.org/InterestAreas/YoungCPANetwork/CPEAndEvents/AICPALeadershipAcademy/Pages/default.aspx.

KRISTINE M. BRANDS Kristine M. Brands, Doctor of Management, joined the U.S. Air Force Academy accounting faculty as an Assistant Professor of Management. Congratulate her at kmbrands@yahoo.com. JUDY THOMAS, CPA Judy Thomas, CPA, has been named Chair, Accounting and Finance, for the Anderson College of Business, Regis University, Denver. Also, she is serving on the board and as treasurer for Fitzsimons Federal Credit Union. Email her at jthomas006@regis.edu. KELLY PRITCHARD, CPA Kelly Pritchard, CPA, joined Gervais and Associates, Durango, www.gervaiscpas.com.

NewsAccount | September/October 2018

Your career should be a marathon, not a sprint. We have you every step of the way.

303.830.1120 ∙ www.acmllp.com/careers Boulder ∙ Denver ∙ Northern Colorado ∙ Laramie

IN MEMORIAM We extend our sympathy to the families and friends of the following COCPA members: Donia Knapp Member since 1986, Canon City, Colorado Daniel Rubin Member since 1984, Denver, Colorado Joseph Steinkirchner Member since 1964, Grand Junction, Colorado

CLASSIFIEDS

TAX STUDY GROUPS Boulder/Longmont Tax Study Group AT THE MEADOWS BRANCH PUBLIC LIBRARY

Tuesday, Sept. 18 and Tuesday, Oct. 23 This informal roundtable discussion group meets at the Meadows Branch Public Library, 4800 Baseline Rd., Boulder, BYO Bag Lunch. 2018 Meeting Dates: Sept. 18, Oct. 23, Nov. 27, Dec. 18. For additional information, contact Lynn M. Mitton, CPA, MT, MPA, (303) 499-7445 or email lynn@flewellingcpa.com.

Denver Tax Study Group AT THE COCPA OFFICE

PRACTICE FOR SALE, PURCHASE, OR MERGER Selling your firm is complex! ACCOUNTING BIZ BROKERS can help! We have been selling CPA firms for over 14 years, and we know how to simplify the process and bring you the win-win deal you are looking for. We have a large database of active buyers. We work with industry specific lenders ready to assist buyers with financing. We are experienced, professional, and confidential. Contact us today to receive a free market analysis or to start the sales process. Current Listing (New): Larimer County Gross $395k; Denver Area Gross $330k - Sold. Kathy Brents, CPA CBI at 866-260-2793 or Kathy@AccountingBizBrokers.com, or visit our website at www.AccountingBizBrokers.com. Boulder County CPA Firm seeking individual to purchase tax practice from retiring partner. Gross billings are in the $150k range. Practice caters to businesses and individuals. Strong tax individual needed from a CPA environment — no experience necessary in the administrative area. For further information, please contact Phil Rubeck at D&R Associates of Colorado: 720-446-7020, or email dandrassociatesofco@aol.com.

Tuesday, Sept. 25 and Tuesday, Oct. 30 This informal roundtable discussion group meets over lunch, the last Tuesday of most months, at the COCPA office, 7887 E. Belleview Ave., Ste. 200, Englewood. 2018 Meeting Dates: Sept. 25, Oct. 30, Dec. 4. Register at www.cocpa.org.

Four Corners Tax Study Group AT THE DURANGO PUBLIC LIBRARY

Tuesday, Sept. 18 and Tuesday, Oct. 16 BYO Bag Lunch. 1900 E. 3rd Ave. For dates and details, contact Michelle Sainio, CPA, CGMA, (970) 247-0506, or email msainio@durangocpas.com. Register at www.cocpa.org.

SITUATIONS WANTED Kerry L. Shackelford CPA LLC, a boutique CPA firm in Evergreen, Colo., specializes in providing competitively priced SOC1s, SOC2s, and HIPAA Compliance audits and seeks teaming opportunities with other CPA firms or referrals from firms not offering such services. Contact Kerry at 720-388-8695 or kerry@klshackelfordcpa.com if interested.

30 years experience in public accounting 25 years of service with Lang & Company, CPAs

What Would You Tell Your 22-Year-Old Self? NewsAccount is seeking your advice — from your vantage point today — about what you would have appreciated knowing as you entered the CPA profession. Send your wisdom to Mary E. Medley, mary@cocpa.org.

7 years experience as a business broker for CPAs Please call for your free consultation 303-726-7646 www.thomaslangcpabroker.com tom@thomaslangcpabroker.com Colorado Real Estate License and CPA license Member of the Colorado Society of CPAs Board Member of Colorado Association of Business Intermediaries

September/October 2018 | www.cocpa.org

Colorado Society of Certified Public Accountants 7887 E. Belleview Ave., Suite 200 Englewood, CO 80111-6076

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