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Keeping Up With Tax Laws — No. 1 Concern of Practitioners

Keeping up with federal tax law changes is, as we know, an absolute must. And the smaller the firm, the more difficult the task.

October 17, 2011
Sponsored by CPE Link

In a recent AICPA survey, solo practitioners and smaller firms cited keeping up with tax laws and their growing complexity as a major issue. The AICPA article pointed out that the survey was last taken in 2009 “in the immediate aftermath of the economic meltdown,” so the issue of client retention was at that time the No. 1 concern.

But this year, because federal tax laws seem so mercurial and shifting, it has been tough to get a firm grasp on them and keeping up with tax changes has risen to the top of the charts.

In an effort to assist, in early September the Internal Revenue Service (IRS) and the Department of Health and Human Services decided to reach out to small employers and their professional service providers about the Small Business Health Care Tax Credit. The credit — which was part of last year’s Affordable care Act — targets organizations that have 25 or fewer employees.

The IRS’s outreach campaign works primarily with the tax software industry, insurance agents, brokers and carriers who work with small businesses, and practitioners who provide webinars and other educational offerings.

Changes Keep on Coming

In mid-September President Obama said tax cuts for millionaires and billionaires helped add to the enormous debt the country faces, and presented his fourth package of cost-cutting plans for the year.

Obama’s most recent plan includes tax increases for corporations and for some individuals that could amount to about $1.5 trillion in tax hikes over the next decade, primarily aimed at the very rich. The new plan includes the “Buffett Rule,” named after billionaire Warren Buffett, would disallow the extremely wealthy from enjoying lower tax rates than the middle class.

Buffett has suggested that the country’s mega-wealthy residents pay more taxes than they have in the past, adding that he believes it’s unfair that his tax rate is lower than his secretary’s.

One of the other murky federal tax areas practitioners must navigate involves unmarried couples who cohabitate. A letter sent to IRS Commissioner Douglas Shulman and signed by 74 members of the House of Representatives urges that the IRS move fast to settle “serious issues” faced by domestic partners and same-sex couples, many of whom still aren’t sure how to pay their 2010 taxes.

Help for Tax Practitioners

In response to the demand for this year’s tax update programs, CPE Link has scheduled 25 live webcasts covering individual and corporate tax updates. Sessions run from November 14 through January 13 and include four expert speakers to help practitioners get up to speed: Vern Hoven (CPA, EA), Dennis Gerschick (Attorney, CPA, Chartered Financial Analyst), Albert Grasso (tax attorney) and Eva Rosenberg (MBA, EA). For those who prefer to study at
their own pace, self-study versions will be available by late November.

Rosenberg, who is also known as the Internet’s Tax Mama, points out that practitioners must have top-notch ethics, conduct thorough research, be up on the latest technology and combine “the skills of a diplomat” with mind-reading.

And since it’s impossible to tell how federal tax laws are going to change in a year, or even in a few months, Rosenberg urges practitioners to “always make notes about conversations with the IRS or with clients. You never know what will be significant later.”

Her list of things to keep track of include the date, time, all contact information — phone, fax, e-mail, etc. — as well as a summary of key discussion points and any agreements or “to-do” items and their deadlines.

CPE Link instructor Dennis Gerschick also urges practitioners not to let the “tax tail wag the dog,” and points out that minimizing taxes should not override the goal of making money. The overriding goal of most investors is to maximize their after-tax income, taking into account their risk tolerance. With the overwhelming complexity of changing tax laws, that is a daunting task.

Concerned about the cost of training? CPE Link offers a Value Pass for individuals and a Firm Advantage Pass for firms that make keeping up to date affordable for everyone. CPE Link is ready to educate practitioners on this year’s tax changes. 

Are you ready for tax season?