AICPA News – Sept 1, 2022

The winners of the 2022 awards are:

Bea Sanders/AICPA Teaching Innovation Award

The 2022 Bea Sanders/AICPA Teaching Innovation Award for innovative teaching practices in the first accounting sequence (first- and second-year studies) was given to Wendy Tietz of Kent State University, Tracie Miller-Nobles of Franklin University, and Jennifer Cainas of the University of South Florida.

The team’s submission, “Data Cleaning Projects for Introductory Accounting,” includes seven “extract, transform and load” (ETL) projects with accompanying interactive dashboards designed for introductory courses.

George Krull/Grant Thornton Teaching Innovation Award

The winner of the 2022 George Krull/Grant Thornton Teaching Innovation Award for innovative teaching in junior- and senior-level accounting courses is Kimberly Young of Greenville Technical College in South Carolina for her “Escape the Mundane Review,” an escape room-type activity for students to complete in groups.

An honorable mention was given to Hagit Levy-Shalev of Baruch College for her submission, “Randomized Data Analytics Case Studies.”

Mark Chain/Federation of Schools of Accountancy (FSA) Teaching Innovation Award

The 2022 Mark Chain/FSA Teaching Innovation Award for innovative graduate-level accounting teaching practices went to Perry Moore of Lipscomb University. His submission was “Using Monopoly as a Practice Set,” a simulation enabling students to develop an audit program, conduct an examination, and issue an audit opinion.

AICPA Comments on Tax Provisions in Senate Reconciliation Legislation

The AICPA submitted a letter to Senate Finance Committee and House Ways and Means Committee leadership regarding tax policy issues in the Senate reconciliation legislation released July 27 (the Inflation Reduction Act of 2022). The letter highlights some of the key issues the AICPA has identified, including with regard to:

• Sec. 10101. Corporate Alternative Minimum Tax
• Sec. 10201. Modification of Rules for Partnership Interests Held in Connection with the Performance of Services (Carried Interest)
• Sec. 10301. Enhancement of Internal Revenue Service Resources

The AICPA believes that the Corporate Alternative Minimum Tax proposal contained in Section 10101 violates numerous elements of good tax policy and may result in unintended consequences that must be carefully considered.

However, if the tax is enacted, the AICPA recommends that the effective date is delayed until after the later of taxable years beginning after December 31, 2023, or the date Treasury issues proposed regulations to provide taxpayers with the needed time to fully analyze and comply.

While the AICPA is not taking a position on the adoption of the modification of the carried interest rules in Section 10201, should Congress move forward with the carried interest changes, we suggest several technical clarifications or modifications. The suggested changes are outlined in the letter.

In its letter, the AICPA urges Congress to commit, in a bipartisan manner, to determine the appropriate level of service necessary for the IRS and provide adequate resources for the agency to meet those goals – either as part of a reconciliation package or in a separate vehicle.

AICPA Addresses Level of Service with Practitioner Phone Line

The AICPA submitted a letter to the Internal Revenue Service (IRS) addressing the plummeting level of service for the Practitioner Priority Service (PPS) telephone line and providing recommendations for improvement. Despite recent efforts by the IRS to ease the burden the backlog has caused for taxpayers and practitioners, the AICPA notes that service levels for the practitioner priority service phone line had been in continuous decline for several years.

The AICPA submitted comments on the specific PPS line challenges and provided suggestions for improving the experience for tax practitioners and IRS customer service representatives in the following areas:

• Power of Attorney (POA) Issues
  • If, at the start of a PPS call, the practitioner indicates that his/her POA likely is not on file, provide a fax number to the practitioner at the start of the call.
  • Where a delegated POA is presented and appears in order, do not require the first POA be posted to the central authorization file before recognizing the delegated POA.
  • Ensure PPS customer service representatives are consistently educated in proper taxpayer business entity titles.
  • IRS should allow use of POAs that are signed by the taxpayer and the representative calling in – even if it is not yet signed by the other listed representatives.
• Transcripts
  • Restore providing internal screen-print type transcripts over the phone during PPS calls.
  • Restore the IRS message line (transcripts).
  • Eliminate the “law line” – the line used to provide interpretations of law.
• Accounts Management versus Automated Collection System
  • Restore the ability to grant cycle holds with accounts management staff.
  • Empower automated collection systems to resolve more account issues.
  • Authorize PPS customer service representatives to grant 180-day holds where correspondence was sent in.
• General Recommendations
  • Staff the PPS line again with highly trained, highly empowered personnel.
  • Discontinue asking practitioners for their social security numbers and birth dates.
  • Enhance the new automatic return call system.
  • Empower PPS customer service representatives from one line to handle all types of calls, whether Business Master File, Individual Master File or Exempt Organization.
  • Require that all PPS customer service representatives accept and consider submission of correspondence, documentation and other communication by taxpayers or their representatives through e-services or facsimile.
  • Allow PPS customer service representatives to process and post extensions.
  • Provide more supervisor availability.
  • Enable PPS customer service representatives to handle international issues and international taxpayers and enable representatives to apply first-time abatement in international situations, such as international penalties.
  • Prohibit PPS customer service representatives from answering a call when their shift ends within the next 15 minutes.
  • Investigate certain systemic call answering issues.

AICPA strongly urges the IRS to consider implementing these recommendations as part of their plan to reduce the backlog and improve services and believe that doing so will have a significant positive impact on services provided by the IRS.

AICPA & CIMA Recognize Three CPAs for Work in Government

The AICPA and CIMA have presented Elaine M. Howle, CPA, of El Dorado Hills, Calif., with its 2022 Outstanding CPA in Government Career Contribution Award, honoring her dedication to the accounting profession.

The AICPA & CIMA also presented its 2022 Outstanding CPA in Government Impact Award at the state and local level to:

• Joseph R. Morrissette, CPA, of Bismarck, N.D., with the 2022 Outstanding CPA in Government Impact Award at the state level.
• Charles W. Warren, CPA, CGMA, of Fort Smith, Ark., with the 2022 Outstanding CPA in Government Impact Award at the local level.

AICPA Endorses Congressional Letter Urging Action to Address Backlog

Throughout the COVID-19 pandemic, the American Institute of CPAs (AICPA) continuously urged actions by the Internal Revenue Service (IRS) to address taxpayer service challenges worsened by the pandemic. As it stands, the backlog of unprocessed mail, returns and adjustments at the IRS has reached a critical stage that is adversely impacting taxpayers and tax practitioners.

This week, 93 Members of Congress – led by Senators Bob Menendez (D-NJ) and Bill Cassidy (R-LA), and Representatives Abigail Spanberger (D-VA) and Brian Fitzpatrick (R-PA) – signed a bipartisan, bicameral letter to IRS Commissioner Charles Rettig, endorsed by the AICPA.  

The letter from Congress cited a report by the National Taxpayer Advocate stating that the paper return backlog increased by 1.3 million from the same point as last year and that the IRS was only able to meet 12 percent of its hiring goals for customer service representatives.

The two letters deliver similar messages to the IRS: Take steps now to reduce the backlog and improve service to taxpayers and practitioners ahead of the 2023 tax season

AICPA Releases Comments Requesting Guidance Related to Remote Work

The American Institute of CPAs (AICPA) submitted comments to the Department of the Treasury and the Internal Revenue Service (IRS) requesting updated guidance in several key areas related to employees working remotely and offering recommendations regarding the taxation of payments related to remote work.

The AICPAs comments and recommendations focus on the following areas:

1. Principal Place of Business
2. Work Arrangements: Employer-Location Based, Remote, and Hybrid
   1. Definitions of Employer Location-Based, Remote and Hybrid Work Arrangements to Define Employee’s Tax Home
   2. Facts and Circumstances Test for use in the Classification of a Remote Employee and Defining a Hybrid Employee’s Tax Home
   3. Safe Harbor for Use in Defining a Remote Worker
   4. Employee-Employer Arrangement
3. Pursuit of a Trade or Business
4. Non-Travel Expenses Incurred While Working Remotely
5. Examples

As a result of the pandemic, many companies are redefining their respective work structures – while some are moving to fully remote, others are offering their employees a hybrid structure. Many employees prefer the work-from-home format, particularly as it relates to commuting.

Additionally, many employers recognize the increased productivity and note the value of decreased office maintenance costs. Many revenue rulings and interpretations of case law are outdated, which creates unnecessary confusion and stress.

AICPA Releases Exposure Draft and Invitation to Comment

The American Institute of CPAs (AICPA) released proposed revisions to the Statements on Standards for Tax Services (SSTSs) for public comment. The proposed changes include revisions to the existing standards and three new standards. Additionally, there is an invitation to comment on the subject of quality management in tax. The combined document is divided into two separate sections – part one, the exposure draft on the three new standards and part two, the invitation to comment on the subject of quality management in tax.

Updates to the SSTSs will better reflect the issues and needs of members and the tax practices of today and in the future. They will ensure the highest ethical standards for members who provide tax services.

Comments are requested by December 31, 2022, and should be submitted via the online form or emailed to: SSTScomments@aicpa-cima.com. Written comments on the exposure draft and the invitation to comment will become part of the AICPA public record and will be available on the AICPA’s website after December 31, 2022. The changes outlined in the exposure draft, if adopted, are expected to be included in a revised SSTS document to be approved no later than May 31, 2023, and effective January 1, 2024.