We’re now a week into the new year, is it starting to feel like it for you? This is how I feel.
Rebecca Chen, who has worked in the industry herself, wrote this for Yahoo! Finance. The headline is a bit disappointing however the article is not:
Tax prep fees are rising because accounting is not a ‘cool’ career
American taxpayers had to pay at least 20% more on average to get their taxes done last year — and accountants aren’t thrilled about it either.
Tax professionals charged an average of $218 for new clients in 2023, a 25% jump from $174 in 2021, the National Association of Tax Professionals found in its 2023 Tax Fee report. Tax pros also bumped repeat clients’ fees to $205, a 22.7% increase from $167 two years ago. This is based on the most common fee structure, where clients are charged a minimum fee plus costs based on the complexity of their return.
Experts are attributing the double-digit price increases to an industry-wide PR crisis. Firms need to raise prices because they can’t find enough staff to work, and they can’t find staff because many college students still believe accountants sit in dark basements punching numbers into calculators.
We kind of touched on the issue of fees in this article last week: ‘Why Does This Profession Think There Ought to Be No Client Left Behind?’
Here’s some news from the AICPA via CPA Journal:
Firms had a strong fiscal 2022, but number of accounting majors drops sharply.
Accounting firms had a good fiscal 2022 with median growth rate of 9.1% in net revenue over fiscal 2021, according to a 2023 survey by AICPA and the Chartered Institute of Management Accountants (CIMA). This eclipses the 4.2% growth rate from two years ago when some firms were struggling with the COVID-19 pandemic. The AICPA’s Private Companies Practice Section (PCPS) and CPA.com undertake a benchmarking survey every two years. The AICPA looked at several key performance indicators of public accounting firms. “Our data shows accounting practices taking steps to improve entry-level pay and firm culture, with some firms, for example, reducing chargeable billing hours for their staffs,” stated Lisa Simpson, AICPA & CIMA’s vice president of firm services. “We’re also seeing strong revenue growth in service areas beyond traditional tax and audit areas, such as client advisory services and business valuation. A sharper focus on business model transformation continues to make the profession more attractive as a career.”
“Business model transformation” ain’t it, Lis. SHOW US THE MONEY.
Deloitte is granting access to its unfortunately named “PairD” chatbot to more people:
Deloitte is rolling out a generative artificial intelligence chatbot to 75,000 employees across Europe and the Middle East to create power point presentations and write emails and code in an attempt to boost productivity.
The Big Four accounting and consulting firm first launched the internal tool, called “PairD”, in the UK in October, in the latest sign of professional services firms rushing to adopt AI.
However, in a sign that the fledgling technology remains a work in progress, staff were cautioned that the new tool may produce inaccurate information about people, places and facts.
Users have been told to perform their own due diligence and quality assurance to validate the “accuracy and completeness” of the chatbot’s output before using it for work, said a person familiar with the matter.
Matthew Roberts talks about Tax Court deadlines and IRS errors in Forbes:
Of course, as with any imposed deadlines, people are going to miss them. And the 90-day deadline is no different. For example, in Nutt v. Comm’r, 160 T.C. No. 10 (May 2, 2023), the Tax Court dismissed a case for lack of subject-matter jurisdiction where the taxpayer had electronically filed a petition five minutes late in the time zone where the court was located (Washington, D.C.). It did not matter that the petition was filed timely in the time zone where the taxpayer was located (Alabama). In Sanders v. Comm’r, 160 T.C. No. 16 (June 20, 2023), the Tax Court similarly dismissed a case for lack of subject-matter jurisdiction where the taxpayer electronically filed the petition a mere eleven seconds late.
The biggest ERC mill in the country is accused of FLSA violations in a new lawsuit:
A Des Moines business that generated $1 billion in revenue helping companies collect pandemic-related tax credits threw lavish parties for executives before laying off half its workforce in violation of federal law, a lawsuit claims.
The lawsuit seeks unspecified damages for Menaugh and at least 100 other former employees of Innovation Refunds who were laid off in September 2023. The court has yet to decide whether to grant the plaintiff’s request for class-action status. The company has yet to file a response to the lawsuit.
The company’s corporate communications director, Allison Jackson, said Thursday that Innovation Refunds has no knowledge of any pending lawsuits against the company.
The article dives quite deep into Innovation Refunds’ whole shtick:
At its peak, Innovation Refunds employed close to 1,000 people, although its primary service, tied to the pandemic-related tax credits, had a short shelf life. As a result, the lawsuit claims, Innovation Refunds employed a very aggressive growth strategy and encouraged employees to “process as many applications for the Employee Retention Credit as possible.”
The company allegedly paid bonuses of $10,000 to every employee once the company submitted credit applications for 10,000 customers. The largest bonus promised to employees was $100,000, payable to all workers hired by March 31, 2023, if Innovation Refunds was able to close 50,000 “lifetime” deals with clients.
In addition, the lawsuit claims that employees of Innovation Refunds frequently worked more 40 hours per week. Although the company paid overtime to its workers, it allegedly failed to include in the calculation of that pay the nondiscretionary, performance-based bonus payments that were a significant portion of the workers’ regular compensation.
Yeah, we’ll dig into that one ourselves later. As I’m sure you know, the IRS issued an immediate moratorium on ERC claims back in September, citing “rising concerns about a flood of improper Employee Retention Credit claims” driven by “aggressive promoters.”
This apparently warranted its own article in Chattanoogan.com, seems they’re more hard up for news than we are:
HHM Certified Public Accountants, a full-service CPA and consulting firm with locations in Chattanooga, Cleveland and Memphis, has hired Joel Freund as director in its advisory services group; Carol Mosely and Jennifer Fryar as senior managers in its tax department; and Jon Finlay and Fatima Bracamonte as manager and senior accountant, respectively, in its audit department.
Journal of Accountancy wrote up Jason Staats’ talk at Digital CPA. You may remember Jason as the guy who hired ChatGPT to be a junior accountant for the lawls in late 2022 when hardly anyone in our sector knew what ChatGPT even was.
If a former firm partner turned artificial intelligence (AI) expert feels overwhelmed with the current rate of change related to generative AI (Gen AI) tools like ChatGPT, where does that leave CPAs charged with advising clients, work teams, or both?
“The rate of change right now is frankly exhausting,” Jason Staats, CPA, said during his session last month at the Digital CPA Conference. “It’s really hard to keep up with, and it may require a different level of investment and learning than we’ve had to make before.”
When it comes to ChatGPT and similar content-creating AI tools, Staats believes CPAs who advise others on a day-to-day basis are fast approaching a crossroads.
“I feel like anytime there’s like a big hard new thing, especially if you work with small businesses, it seems to fall on the accountants,” he said. “Simultaneously, that’s the best and the worst part of doing what we do. But it’s worth zooming out to think about how much bigger this is than just us.”
I’m so disappointed this article is the wrong CPA (Consumer Protection Authority of Oman, not Certified Public Accountant of ‘Murica). Also that’s a cart, not an e-cig. Beardo guy is getting lit.
Back on topic sorta, someone asked Boston.com’s Job Doc a question:
Q: I have seen multiple roles for the same employer. One is in accounting; one is in their warehouse and one is in purchasing. I am interested in all three, with accounting being your top choice. The way their website works, is that a candidate can only apply for one role. How do I do this?
How is this even a question? Well, let’s include it here anyway in case anyone out there confronts this conundrum at some point in their working career.
A: Often times a candidate is interested in a prospective employer and would be willing to take almost any role to join that employer. The reasons are varied, and may include the location, the industry, the company’s reputation, the product or service, or the leadership team.
Job seekers have to be careful about being too flexible. What do I mean, since flexibility is often a positive attribute? Applying to multiple roles, particularly very different roles, can appear scattered. If there were two roles of interest, and there may be some overlap, that may be more acceptable. For example, assuming you were interested in both a cost accountant role, and a financial analyst role. There are more commonalities between these two roles, vs. an accounting role and a warehouse role.
Be selective. If accounting is your first choice, apply for accounting role. If you have no interest, after a month or so, consider purchasing. A role in a warehouse seems to be a bit of an outlier based on your interest in accounting and purchasing. Don’t forget – don’t rely on job posting exclusively. Your personal and professional networks will likely be a good source of leads.
Moore Colson partner Elizabeth Miller talked to Atlanta Business Chronicle about how she left the partnership door open for women at her firm:
For many years at CPA firm Moore Colson, Elizabeth Miller was the only female partner.
She and her male colleagues knew that needed to change. With their support, Miller started GROW, an initiative to build the confidence of women in the company toward leadership.
“A lot of making it to the top is being confident. There are now seven women who sit at the table with me on daily basis and I feel so blessed. I’ve passed the torch [running GROW] to another female partner and I’m loving to watch what they’re doing right now.”
The 55th largest CPA firm in the nation with nearly $140 million in annual revenue has rebranded. Beene Gartner was founded in 1949.
Grand Rapids-based accounting firm, Beene Garter, A Doeren Mayhew Firm, has announced it has changed its name effective immediately to reflect its parent company’s name Doeren Mayhew, a top 60 U.S. CPA and advisory firm. The rebranding signifies the final transition of Doeren Mayhew’s 2022 acquisition of the West Michigan CPA firm.
For more news that’s somewhat still relevant given the glacier-like pace of the accounting news cycle, check out last Friday’s Footnotes. There’s an interesting one in there about how the past year has forced Big 4 firms to “reposition” their workforces.
Alright that’s it for headlines. Two admin items: Our 2024 Predictions for the Accounting Profession survey is still open and you, yes you, are invited to take it. Second item: Last week I invited readers to share with us why they chose not to renew their AICPA membership and to my joy and delight, we’ve received some great responses (thank you, responders). I’m a greedy SOB though and want more so get in touch if you want to tell us what you have against unsolicited insurance offers and discounts or the AICPA in general. “Doesn’t add value” seems to be the overwhelming opinion we’ve heard so far.
Have a great week, everyone!