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Randy Johnston and Brian Tankersley, CPA.CITP, CGMA review Tax1099, powered by Zenwork Inc., an IRS authorized e-filing and compliance platform.

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Randy Johnston and Brian Tankersley, CPA.CITP, CGMA review Tax1099, powered by Zenwork Inc., an IRS authorized e-filing and compliance platform.

Use the player below to listen to the podcast.

Recently I walked into the lobby of a national coffee and donut chain and saw what has become common place all across America, an extra-large sign about job openings, I guess the national chain figured the larger the sign the more people they would get. Alas, this sign like many other physical signs and recruiting efforts by firms is focused on all the wrong things and not effective.  These failed efforts simply add to the growing problems of staffing shortages. 

These signs, like many accounting job posting are stuck in the past.  Stop me if this sounds familiar, your recruiting efforts focus on compensation and go into lengthy details on benefits; 401k plan, health care, paid time off, flexible schedule, and competitive pay.  For many this is the same job posting that has been used for going on 30 years and it was built on the originally flawed assumption that benefits and perks is what get people to work for a company.

When it comes to people looking for a job, research shows that compensation and benefits are the basics that will get them in the door, they are not deciding factors. Rarely do you see a company with a benefit package so truly remarkable that people want to work for that company. 

This concept is not some new age concept, starting in the early 1990s research was showing that exciting and meaningful work was the main factor for employees in deciding where to work.  The results of those early studies from the 1990s have been further collaborated up to today.  Employees view compensation and benefits as a given and truly care about meaningful work or purpose.

Think about this 401k plans were implemented in 1978 and today are commonplace in even smaller companies.  For the majority of those in the workforce they have never had a job that didn’t offer a 401k plan.

Clinging to the past

Too often when companies go to recruit, they fail to focus on what really matters and instead focus on the givens, just like the failed job posting by the national coffee chain. 

I personal experience I still remember, for most accounting firm job interviews, even up to 2010, partners in the firm would tell me a major benefit to working at the firm is that I would have my own computer or laptop.  To me this was always an odd statement.  For me, a millennial, I do not remember when I first got my own computer.  Contrast this to the baby boomer generation, many of them didn’t get their own first computer until they were in the workforce and to them, having your own computer is a major deal.

If you wish to actually attract, retain, and engage top talent, it starts with the first step of attracting and to do that takes a new brand approach.

Follow the science

While nationally staffing shortages have become a recent headliner, for us in the accounting profession, this issue has been felt for years and has no signs of going away.  As we discussed we need to shift our focus when it comes to recruiting and follow the science.

As leadership thought leader Dan Pink often says, today we see a mismatch between what the research shows and common business practices.  We cling to the past with the same negative outcome and wonder why things don’t change.

To attract people to your organization, it all starts with exciting and meaningful work, focus on that in your job posting and not benefit packages.

Looking Different

As I was wrapping up this article, I went out to breakfast Sunday morning, nothing like a good breakfast before a deadline to get the ideas going.  Again, I saw another large job posting as I walked into the restaurant, but this one was completely different. 

It simply said, “Are you interested in doing something rewarding?”.  No mention of benefits or 401k plan or time off, they didn’t touch on the basic as they are assumed.  They focused on getting your attention.  In doing some research at breakfast, I found out the job posting was for a local independently owned retirement community.  Their website talked all about a culture focused on people doing rewarding and engaging work. 

Perhaps the owner of the nursing community is a fan of Dan Pink or maybe he just figured it out on his own.  Attracting top talent is about appealing to the possible workforce with the exciting about working for the company.

As you shift into your fall efforts to recruit, you can follow the same path as before with the same unsatisfactory outcome, or you can follow the research and focus your recruitment efforts on what makes your company rewarding, exciting, and unique.  Now if you don’t know the answer to those questions that is another problem for another article to solve.


Garrett Wagner, CPA.CITP, is the CEO and co-founder of the C3 Evolution Group

The Securities and Exchange Commission (SEC) last week approved changes made by the Public Company Accounting Oversight Board (PCAOB) in June to existing rules for audits that involve multiple auditing firms.

Gary Gensler

“Over the years, the growing complexity and international operations of public companies has led auditors increasingly to rely on other auditors—working across different firms, countries, and even languages—in completing an audit. Last year, for example, 26 percent of all issuer audit engagements used multiple auditors, and more than half of large accelerated filer audits used multiple auditors. Given the challenges that such multi-firm audits present, it is important that there be robust standards for how lead auditors supervise, communicate with, and coordinate with other auditors on the audit engagement,” SEC Chair Gary Gensler said in a written statement on Aug. 12.

The vote on June 21 by the PCAOB was a long time coming. First proposed in 2016, the PCAOB issued additional rule proposals and held comment periods in 2017 and 2021 regarding the planning and supervision of audits involving other auditors.

“Today’s amendments to the auditing standards on the supervision of audits involving other auditors demonstrate a thoughtful and thoroughly considered approach to rulemaking,” SEC Commissioner Mark Uyeda said in a written statement on Aug. 12. “These amendments culminate a multi-year effort to ensure that stakeholders had opportunities to provide feedback to the Public Company Accounting Oversight Board as it considered and refined the amendments before finalization.”

After unanimously approving the changes on June 21, the PCAOB said the amended standards strengthen existing requirements and responsibilities that apply to the lead auditor in planning and performing audits that involve outside auditors. These include increasing the lead auditor’s involvement in and evaluation of the work of other auditors and aligning the applicable requirements with the regulator’s risk-based supervisory standards—with the goal of better-quality audits.

The PCAOB also approved a brand-new auditing standard, AS 1206, Dividing Responsibility for the Audit with Another Accounting Firm, that provides guidance for situations when the lead auditor divides responsibility for a portion of the audit with another audit firm and therefore does not supervise the work performed by that firm.

Gensler, who was critical of the PCAOB last month for being too slow to update existing auditing standards, praised the board last Friday for its work on updating the rules on the use of other auditors—the first standards the audit regulator has adopted since Erica Williams took over as PCAOB chair in January.

“I look forward to the additional standard-setting work the PCAOB will undertake to live up to its founding vision under the Sarbanes-Oxley Act,” he said. “If Sarbanes-Oxley, signed into law 20 years ago, meets its full potential, trust in our markets can grow—and that benefits investors and issuers alike.”

Top 100 accounting firm Sax LLP announced on June 29 that it had picked up New York City-based tax and accounting firm David Weiss CPA PLLC. The deal became effective on July 31.

Sax acquired a firm that has provided personalized financial guidance to individuals and businesses for more than 35 years, with expertise ranging from traditional tax management and accounting to more in-depth services, such as audits, financial statements, and financial planning.

“This is an exciting time for David Weiss CPA as we move forward with Sax to enhance our capabilities and services for our clients,” David Weiss, partner of David Weiss CPA, said in a written statement. “This partnership with Sax is an excellent match as we both strive for the same goals and operate with the utmost professionalism, skill, and drive. Together, with our combined expertise and resources, we will continue our collective growth and deliver meaningful results and solutions to those we serve.”

The newly combined firm under the Sax banner has strengthened its presence in the New York market with high-quality tax and accounting services, as well as a large portfolio of consulting services, that provide value to businesses and high-net-worth individuals, Sax said.

“In my time as managing partner of Sax, we have seen our firm grow by 137%, and a good portion of that is attributed to successful mergers and acquisitions. When identifying potential partners, it is mission critical to Sax leadership that we find the right fit,” said Joseph A. Damiano in a written statement. “Our intention is to expand our size and reach, but also to reinforce our team culture and service philosophies that got us to where we are today. We found a tremendous match with David Weiss CPA. Not only are they aligned with Sax where it matters most, but their highly capable professionals and high-caliber expertise takes us another step further in the New York market, and as a firm overall.”

As a result of this acquisition, Sax is now a 47-partner firm with 237 total employees. The firm has three offices between New York and New Jersey, and has a remote team that spans 14 states. Sax intends to open its first international office in Mumbai, India by the end of the year.

Parsippany, NJ-based Sax was No. 84 in INSIDE Public Accounting’s ranking of the top 100 firms in the U.S. for 2022. The firm generated $55.5 million in revenue during its most recent fiscal year.

By Vanessa Kruze.

Congress passed the Inflation Reduction Act of 2022, which includes a provision to increase the R&D Tax Credit from a maximum of $250,000 to $500,000. CPAs who service startups that conduct research should make sure that they are prepared to discuss this tax credit with their clients, as the legislation may double the maximum amount of credit available. However, it is unlikely to actually double the credit that the average company will receive.

My firm analyzed over 625 startup tax returns, and found that only about 2.5% of early-stage, VC-backed startups will qualify for the additional tax credit. Most startups just don’t have enough R&D to get more than a quarter of a million in payroll tax credits! So, while this legislation does incentivize research, on the margins it’s not a game-changer for most VC-backed startups. 

The R&D Tax Credit – Quick Reminder

The R&D Tax Credit provides a payroll tax credit to companies that conduct “qualifying” research and development in the United States. This credit offsets payroll taxes, so even unprofitable startups can reduce their tax burden and improve their cash flow. It is currently the most important tax credit for startups in the US, and CPAs who serve VC-backed startups should be ready to discuss it with their clients. 

The credit is roughly 10% of qualifying R&D, and was capped at $250,000. The Inflation Reduction Act of 2022 increases this cap to $500,000, meaning that startups that meet the maximum will be able to reduce their payroll taxes by half a million dollars – a substantial amount! 

The IRS defines “qualifying” R&D as research and development that passes a four part-test. Roughly, this four part test is comprised of:

Many activities conducted by the development teams at startups do NOT count under the IRS’ definitions, such as research after commercial production, studies and surveys, reverse engineering, and more. 

The specific expenses that qualify are US wages, US-based contractors, supplies and computer leases. Non-US expenses do not count. Kruze has a full playlist on Youtube that goes into details of the R&D tax credit. 

To get the credit, a Form 6765 must be completed with the federal tax return. Make sure your clients don’t file their return before including the Form 6765, as they can not amend the return and take advantage of the payroll tax credit!

The Inflation Reduction Act of 2022 and R&D Tax Credits for Startups

The Inflation Reduction Act of 2022 will double the maximum R&D tax credit that a startup can take to reduce their payroll taxes from $250,000 to $500,000. Since the tax credit is taken against payroll taxes, even unprofitable startups can take advantage of this incentive and reduce their burn rate. 

However, my firm’s analysis suggests that the vast majority of early stage companies will not see any increase in their credit amount. This is because the tax credit is calculated based on the amount of R&D spend the company has, and most early-stage startups do not spend enough to even capture $250,000 worth of a credit, let alone a half a million dollar one. 

As I already mentioned, my firm analyzed over 625 startup tax returns and found that less than 2.5% of them would be able to capture more than a $250,000 credit. When we broke down the amount of credit the startups could get by funding stage, we found that the percent of startups that could get over $250,000 in R&D credits increased as expected. We found that only 1% of seed stage startups would be eligible for more than the $250,000 in R&D credit, which was also the case for 9% of Series A and 14% of Series B startups. And the average amount extra that these startups would get was about $80,000. So the Act doesn’t really double the R&D tax credit for most startups, while it is a welcome increase for a few. My accounting firm built a free R&D Tax Credit Calculator, which we will update for the increased amount; startups can use this to estimate how much of a credit they may be eligible for. 

Of course, the Act also takes on some other important topics, not the least of which is increased funding for the IRS – something I’ve written about before


By Vanessa Kruze, Founder & CEO at Kruze Consulting, providing startup CFO consulting, including accounting, tax and HR services, to startups in San Francisco, Los Angeles, and New York City. Prior to establishing her firm in 2012, Vanessa began her career with Deloitte Tax and is a University of San Francisco alum.

CPACharge, the online payment solution developed specifically for accounting firms, has announced a new partnership with the tax-based community, National Association of Enrolled Agents (NAEA). The new partnership will provide NAEA members access to CPACharge and all associated benefits the leader in online payments provides.

“Providing a leading payments platform like CPACharge for tax professionals will create opportunities for members to grow their business and fulfill NAEA’s mission to bring a positive impact to the tax industry.”Tweet this

“CPACharge is excited to partner with the National Association of Enrolled Agents to aid in advancing members’ journey to become tax professionals,” said Dru Armstrong, Chief Executive Officer of CPACharge. “Providing a leading payments platform like CPACharge for tax professionals will create opportunities for members to grow their business and fulfill NAEA’s mission to bring a positive impact to the tax industry.”

The National Association of Enrolled Agents has been a premiere program that connects current and future tax professionals in a great network. The NAEA has proven its growth since starting in 1972 with nearly 11,000 members today in more than 30 states embodying the entire tax professional spectrum.

“NAEA’s aim is to help our members run their businesses and serve their clients using cutting edge tools and technologies. The partnership with CPACharge creates access to another premier resource for our members,” said Megan Killian, Executive Vice President of the National Association of Enrolled Agents.

By Christopher Wood, CPP.

The IRS may need to revise certain employment tax reporting forms, and the forms used to claim the qualified small business payroll tax credit for increasing research activities, after President Biden signed the Inflation Reduction Act (H.R. 5376) into law, which includes a provision increasing the research credit next year.


The Code Sec. 41 research and experimentation (R&E) tax credit first became a part of the Internal Revenue Code in 1981. After 16 extensions over 34 years, the section became a permanent provision in 2015 when the “Protecting Americans from Tax Hikes Act” (PATH Act, P.L. 114-113, Division Q) was signed into law.

The PATH Act also allowed qualified small businesses to apply the research tax credits against the employer’s share Social Security tax owed for each employee. Both employers and employees pay a 6.2% Social Security tax up to the annual taxable wage base ($147,000 in 2022).

Qualifying for the credit. 

A qualified small business (QSB) is defined as a corporation (including an S corporation) or partnership with: (1) gross receipts of less than $5 million for the tax year and o(2) no gross receipts for any tax year before the five-tax-year period ending with the tax year. Any other individual may be considered a QSB if the individual meets both of these requirements, taking into account the aggregate gross receipts received in all the trades or businesses.

Claiming and reporting the credit

The election and determination of the credit amount that is to be used against the employer share of Social Security tax are made on Form 6765 (Credit for Increasing Research Activities). The amount from Form 6765, line 44, must then be reported on Form 8974 (Qualified Small Business Payroll Tax Credit for Increasing Research Activities).

Form 8974 is used to determine the amount of the credit that can be used in the current quarter. The amount from Form 8974, line 12, is reported on Form 941 (Employer’s Quarterly Federal Tax Return), line 11a. If an employer is claiming the research payroll tax credit on Form 941, it must attach Form 8974 to that Form 941.

If an employer files Form 944 (Employer’s Annual Federal Tax Return), it reports the credit on line 8a and also attaches Form 8974 to that Form 944. If an employer files Form 943 (Employer’s Annual Federal Tax Return for Agricultural Employees), it reports the credit on line and also attaches Form 8974 to that Form 943.


If the QSB payroll tax credit for increasing research activities reported cannot be fully used in the first quarter after the income tax return is filed because it was limited to the amount of employer Social Security tax on wages for the quarter, the employer can carry forward any unused amount to the next quarter. If, in the next quarter, the amount carried over from the first quarter cannot be fully used, then the employer can carry forward any unused amount to subsequent quarters.

Increasing the credit. 

On August 16, 2022, President Biden signed the $730 billion Inflation Reduction Act into law. Section 13902 of the legislation allows an additional payroll research tax credit of up to $250,000 against Medicare Hospital Insurance tax for taxable years beginning after December 31, 2022. The credit may not exceed the tax imposed for any calendar quarter, with unused amounts of the credit carried forward.

The reasoning for the increase in the credit is explained in the August 10, 2022 version of the Congressional Research Service (CRS) report of the tax provisions of H.R. 5376, which notes that some small businesses may not have a large enough income tax liability to take advantage of the research credit.

IRS form revisions expected. 

During the height of the coronavirus (COVID-19) pandemic, federal legislation provided for a number of tax credits to help employers and employees during the health emergency. The IRS needed to revise a number of common payroll forms so employers could report these credits, including Form 941.

Following the signing of H.R. 5376 into law, the IRS may once again need to revise Form 941, 943 and 944 and their instructions. The Service may also need to revise Form 6755, 8974, and their instructions.

Since the PATH Act was signed into law, QSBs apply the credit against their share of Social Security tax. The Inflation Reduction Act’s increase in the credit allows QSBs to apply the credit against their share of Medicare tax. There may need to be a way to distinguish this difference on some of these forms. There may also be a need to explain this difference and provide examples for form filers in the instructions to any of these forms.

For example, the Form 941 instructions for line 11a specifically say that the credit is limited to the employer share of Social Security and the example specifies that it is the employer’s share of Social Security tax.

In addition, the IRS will likely have guidance in the near future on Section 13902 and claiming and reporting the new increase.

Comments from the Commissioner. 

On August 16, 2022, the IRS posted a statement from Commissioner Chuck Rettig on the signing of the Inflation Reduction Act, where he noted how funds from the bill will help provide the Service with more resources. Some $45.6 billion in funds from the bill are to be used for stricter enforcement of tax compliance by the IRS.

Rettig noted that, “The Act also includes a wide range of tax law changes that we will have to implement very quickly.” The Commissioner’s statement did not specifically say if that involves any of the forms used in claiming and reporting the payroll research tax credit. In response to a specific request for comment on any payroll research tax credit form revisions, a spokesperson for the IRS pointed Thomson Reuters Checkpoint to the parts of the Commissioner’s statement dealing with implementation.


Republished from the Thomson Reuters blog, with permission.

Christopher Wood, CPP is an author/editor at Thomson Reuters Checkpoint for payroll related content since June 2006. He writes articles for the daily Checkpoint Payroll Updates and maintains/updates content in the Checkpoint Payroll Library, which covers a number of publications, including the Checkpoint Payroll Guide.

By Laura Davison, Bloomberg News (TNS)

Treasury Secretary Janet Yellen set a six-month timeframe for the Internal Revenue Service to compile a plan detailing how it will deploy an influx of $80 billion in enforcement funding over the next decade.

“The work will require an all-hands-on-deck approach from the dedicated employees of the IRS,” Yellen wrote in a memo Wednesday to IRS Commissioner Charles Rettig, a day after President Joe Biden signed legislation including the new funding.

The strategic plan will provide a roadmap for what has been the largest dedicated funding stream provided to the IRS in decades. The details could also help insulate the agency from political criticism. Republicans, many whom opposed giving the IRS the extra money, have said it’s using the funding to hire an additional 87,000 auditors to target middle-class households.

In her memo, Yellen pointed to broader objectives, saying the plan “will require the agency to modernize,” by overhauling an information-technology system “that is decades out of date.” The agency will need to clear a backlog of tax returns and boost services for taxpayers, along with “training employees so they can identify the most complex evasion schemes by those at the top,” she said.

The Treasury chief also said the IRS needs to develop plans to replace 50,000 workers that are expected to retire in the next five years. That amounts to a significant chunk of the roughly 80,000 employees currently at the IRS.

Yellen said in the memo that none of the money will be used to increase enforcement activity tied to those earning less than $400,000 annually, and instead will be focused on evasion by high-earners.

The next several months are likely to be a period of transition for the IRS. Rettig, who was nominated by former President Donald Trump, faces the expiration of his term in November, and the Biden administration has not yet announced a replacement. The commissioner post requires Senate confirmation, so it’s likely the agency will be led by an acting chief for at least a few months until a new commissioner can be approved.


©2022 Bloomberg L.P. Visit Distributed by Tribune Content Agency, LLC.

By Julio Gonzalez.

If you’re an accountant like myself, you’ve heard the news: As a result of President Biden’s Inflation Reduction Act, the IRS has been granted $78 billion to hire 87,000 new employees from now until 2031, which includes replacing retirees. While all these new employees won’t be enforcement agents, some unquestionably will be, and some will be auditors, and since we do know that $45.6 billion is being directed toward enforcement, it means certainly that the IRS will be hunting for red flags in tax returns.

Because of this heightened scrutiny, if your real estate clients are interested in commissioning a cost segregation study—with all its associated tax benefits—it’s more important than ever for them to hire the right cost segregation firm. If your client’s study is undertaken by an experienced firm with licensed engineers on staff who thoroughly document their findings, create a detailed report, and are willing to mount an effective audit defense if necessary, your client is in good hands. 

A quality cost segregation firm will utilize a detailed engineering approach based on actual cost records in addition to an itemized cost estimate approach; the IRS recommends both methodologies to yield the most accurate and trustworthy results. But if the work is done in a sloppy manner and if the study’s argument for tax savings based on depreciation is based on weak or faulty evidence, then the IRS will spot red flags right away.

If you or your client would like a preview of the IRS’ demanding audit requirements when it comes to cost segregation, I recommend you consult the recently updated IRS Audit Technique Guidelines for Cost Segregation, which will show you precisely what the IRS is scrutinizing when reviewing cost segregation studies.

The Significance of Cost Segregation

If your clients who invest in real estate are unaware of cost segregation and bonus depreciation, please share this news with them. A cost segregation study is an ideal way to offset real estate taxes, and it’s easy to explain.

Without a cost segregation study, you’re forced to depreciate your real estate investment over a 27.5- or 39-year period, based on whether it’s residential or commercial, respectively. But with a cost segregation study, you can expense the building by assessing components. A study identifies for the IRS how much of the building is non-structural in nature—those are the components that are eligible for cost segregation, such as heating and air conditioning systems and lighting fixtures, which deteriorate over time.

These components are allocated a five- or 15-year lifespan, which increases the depreciation deduction, particularly in the first few years. Thanks to a cost segregation analysis, in the first year, your client could write off up to 30-35% of their building’s purchase price (except for land).

Authorize a Cost Segregation Study This Year to Get 100% Bonus Depreciation

If a client purchased a property this year, they can take advantage of the 100 percent bonus depreciation rule and write off their property’s entire purchase cost (minus land). But after 2022, bonus depreciation sunsets; the percentage of permitted bonus depreciation drops 20 percent every succeeding year until it vanishes. In 2023, 80 percent bonus depreciation kicks in for properties obtained in 2023. In 2024, properties purchased that year can only claim 60 percent. In 2025, it drops to 40 percent for properties purchased that year. In 2026, it shrinks to 20 percent for properties acquired that year. By 2027 and later years, it’s zero percent for properties acquired in 2027 and going forward.

What To Expect from a Quality Cost Segregation Firm

First off, a qualified and reputable cost segregation firm will offer a free feasibility study to assess your client’s tax situation and projected business plans to determine if a cost segregation study would be suitable for the property. They’ll also offer an estimate for how much a study would cost.

Next, if your client gives the study the go-ahead, the firm will analyze the building’s construction costs according to component or system and study construction documents. Either an onsite or remote visit will verify how the components and systems are used. As part of the study, your provider will perform a meticulous engineering review of the building’s components, classify (or reclassify) them, and give them the correct tax life assigned by IRS rules. Your provider will then identify each asset’s indirect costs. Finally, your cost seg partner will deliver to you a written report, which will furnish the asset details that substantiate the value of the classified and reclassified assets, and they will complete the required tax forms.

When Should Your Clients Have A Cost Segregation Study Done?

Your clients can only claim bonus depreciation for a property based on the year they acquired it, so they should try to have a study done during the year of purchase.Your clients should be aware that bonus depreciation can only be claimed retroactively within two tax years of when the building was placed in service.

Because cost segregation creates a baseline value for a property at the time of purchase, it’s better to have a cost segregation study done before renovations. For the purposes of the IRS, the property’s baseline value is more difficult to document after a rehab.

Don’t Leave Money on the Table

Cost segregation could be a game-changing financial solution for your clients. With the substantial tax savings a properly commissioned study could deliver, your clients could take the freed-up capital and apply it to future tax liabilities, invest it in rehabbing their current property, or even acquire a new building. Why should they leave money on the table when it could benefit their business?

But with the IRS’ new emphasis on enforcement, it’s wiser to partner with a cost segregation firm with a proven track record and staff engineers whose documentation of asset classification can stand up to heightened IRS scrutiny. You don’t want a potential dream to turn into a headache.


Julio Gonzalez is the CEO of Engineered Tax Services, The Growth Partnership, ABLE: CRM for Accountants, and INSIDE Public Accounting, the founder of Rockerbox, and the developer of the Engineered Tax Services cost segregation app.

By Aisha S Gani, Bloomberg News (TNS)

PricewaterhouseCoopers partners in the UK were paid an average of £1 million ($1.2 million) for the first time thanks to a rebound in consulting activity and the sale of part of the business. 

The professional services company said on Thursday that its revenue in the UK and Middle East grew 12% to £5 billion in the year through June. This was helped by a 33% jump in revenue from consulting, which overtook audit to become the group’s biggest business area. 

The firm said it made its biggest investment in staff pay in a decade, with half of its 24,000 workers getting a pay rise of 9% or more. About 900 partners earned on average £920,000, up 12% on the previous year, with an additional £105,000 each from the sale of its global mobility and immigration business. The Financial Times reported the news earlier. 

“I don’t see the market slowing any time soon, but we can’t be complacent,” Kevin Ellis, chairman and senior partner of PwC in the UK and the Middle East, said in a statement. High inflation, which has topped 10% in the UK, along with high employment will affect all businesses, he added. 

“We’ve invested heavily to put us in the best position to deal with these challenges which will likely reduce partner profits next year,” he said. 

PwC said client demand was strong, particularly in finance and industrial manufacturing, while customers in all sectors were looking to move operations into cloud computing. It’s the first of the so-called Big Four accountancy groups to report its earnings, with Deloitte, EY and KPMG to follow.


©2022 Bloomberg L.P. Visit Distributed by Tribune Content Agency, LLC.

Los Angeles-based MGO, a top 100 accounting firm in the U.S. based on revenue, announced earlier this month that it has merged in Nussbaum, Berg, Klein & Wolpow, a CPA firm in Long Island, NY.

As part of the deal, Nussbaum’s 73 team members, including all 11 partners, will join MGO.

“Nussbaum has a rich history in New York and is known for its deep commitment to client service. We’re thrilled to bring their team into the MGO fold,” Kevin O’Connell, CEO and managing partner at MGO, said in a written statement. “The East Coast’s concentration of wealth and emerging cannabis markets give us an opportunity to continue building value and establishing best practices through our private client services group, cannabis practice, and other industry initiatives.”

Founded in 1990, Nussbaum serves middle-market businesses and high-net-worth individuals on the East Coast, offering a range of accounting, auditing, tax, and business advisory services for closely held entrepreneurial businesses and public companies. 

“This is a unique opportunity to enhance the services and client experience Nussbaum is known for by leveraging MGO’s size and international footprint,” Steve Wolpow, managing partner of Nussbaum who joins MGO as the office managing partner of the Long Island office, said in a written statement. “This is a momentous step for both our clients and our professionals, and we are excited about the future as part of MGO.”

The new MGO staff and partners will continue to work out of Nussbaum’s headquarters in Melville, NY.

MGO now has 14 U.S. offices in four states. The firm was No. 57 in INSIDE Public Accounting’s 2022 top 100 firms ranking, bringing in nearly $98.1 million in revenue during its most recent fiscal year.

The Public Company Accounting Oversight Board (PCAOB) is seeking public comment on the draft of its five-year strategic plan, which the U.S. audit regulator released on Aug. 16.

The document explains four goals the PCAOB has set to accomplish from 2022 to 2026 as part of its mission of protecting investors. The four goals are:

  1. Modernizing standards
  2. Enhancing inspections
  3. Strengthening enforcement
  4. Improving organizational effectiveness

“The people we serve are top of mind in everything we do at the PCAOB, and we look forward to hearing from the public as we move forward with our ambitious plan to protect investors,” PCAOB Chair Erica Williams said in a written statement.  

During a webinar last month commemorating the 20th anniversary of the Sarbanes-Oxley Act, Securities and Exchange Commission (SEC) Chair Gary Gensler called out the PCAOB for being “too slow to update auditing standards” that existed pre-SOX. A day later during another virtual event celebrating 20 years of SOX, Williams responded to Gensler’s criticism by saying, “Just six months into my term, we are already actively working to update more than 25 standards within eight standard-setting projects. And we are just getting started.”

Williams also addressed tougher enforcement during that event saying the PCAOB “will not hesitate to hold wrongdoers accountable for breaking the rules.”

She added: “We are just halfway through the first year of this new board. Already we’ve more than doubled our average penalties against individuals compared to the last five years. This includes the largest money penalty ever imposed on an individual in a settled case. At the same time, we’ve increased our average penalties against firms by more than 65 percent. In the past five years, the PCAOB assessed penalties against individuals less than half of the time and firms only about 86 percent of the time. This year it’s 100 percent.”

Comments on the draft plan must be received by Sept. 15 and can be submitted by email to; or by postal mail to the Office of the Secretary, PCAOB, 1666 K Street, NW, Washington, DC 20006-2803.  

All comments are made public and posted on the PCAOB website. Commenters are encouraged, but not required, to provide their name and professional affiliation. 

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By Jeannie Ruesch.

Congratulations! After a diligent search process, you found the technology solution that will meet many or most of your accounting firm’s needs; however, this is only the first part of the process. Now that you’ve identified the right solution, it’s time to implement it. Adopting new technologies comes with its own challenges—but with the right strategy, you can make this part of the process a bit smoother.

A Common Challenge

At a recent webinar for accountants on kickstarting a CAS practice with bill pay automation, participants were asked about the biggest barriers to introducing new technology at their firms. There was consensus that the biggest barrier was getting all parties on board, and this encompassed firm leadership and staff as well as clients. This mirrors what we’ve seen in recent research, showing that the challenge is fairly common across the board. This should provide relief to any firm worried that this was unique to them—because a shared, common challenge means a shared interest in a solution.

Leadership Alignment at Your Firm

Getting leadership buy-in is a crucial step to any tech implementation.  You need an executive sponsor to help shepard this change through – and the larger your company, the more important that sponsor is. However, it’s  likely your leadership team won’t be the day-to-day users of this tech, so the key here will be to show how adopting new technology will enhance your firm’s bottom line. Be prepared to demonstrate which processes will be enhanced and how this ties back to benefit the firm. This could include:

Additionally, be sure to highlight any new lines of revenue that could result from implementing new technology. For example, if employees are able to focus on higher-value work or have more time for upskilling, does this allow the firm to offer new services? It is also worthwhile to recognize how a shift away from more menial tasks to a more fulfilling workload could positively impact your firm’s talent retention and recruitment efforts.

Leadership alignment isn’t just a hurdle for accounting firms — it’s also a pain point for your clients. In a survey that recently conducted with Wakefield, 34% of respondents — in this case CFOs, finance VPs and Controllers — listed leadership not making the necessary investment as a technology pain point.

Securing Staff Understanding and Support

The best way to get your staff onboard with a planned tech adoption is to incorporate the principles of a strong change management approach. Start by creating a detailed plan for introducing this new technology and rolling it out at your firm. This should include the following:

Craft the right announcement.

If you have the right approach when announcing this change, new technology is something that could be exciting! Rather than immediately getting into the weeds, focus first on how this will benefit the members of your team. Keep in mind that the benefits may be different based on the role of each team member: while manager-level staff may be more interested in how this technology will impact client relationships, junior staff may just want to know how this implementation will make their job easier.

We’ve heard anecdotally from many accounting firms that once their staff understood how new technology was going to reduce the amount of manual and/or repetitive work they were responsible for, the changes were immediately relatable and team members were much more receptive.

Find your champions.

Identifying key team members who can act as cheerleaders for your new tech will help maintain morale throughout the adoption process. Being a true champion, however, goes a step farther than just having a positive attitude. Empower your staff to become familiar with how the technology works and how it can be best utilized to meet your firm’s needs.

It is essential to have your team aligned and up-to-speed before new technology is introduced to clients, especially team members who are on the front lines of client engagement. Client perception of the changes you are implementing will be influenced by how your staff feels, so you’ll want to be conveying a tone of confidence and positivity.

Many technology solutions offer advanced training and/or certifications for their products. This is an opportunity for team members to carve out new roles for themselves as official or unofficial tech “experts”—which not only provides a resource for individuals who need more guidance, but also gives these champions a sense of ownership and a stake in the process, which can help with talent retention.

Plan, plan and plan again.

Review and refine day-to-day processes to account for where new technologies will play a role. Empower team members to weigh in on the process, and consider how you can align employee interests with the needs of the firm. Once a proposed process has been determined, consider a slow rollout that leaves time to tweak the process before the switch is 100% flipped.

One way to do this is to beta test the new process with a small number of trusted clients. This provides staff with a chance to increase their familiarity with the technology before it is implemented more widely, including identifying initial pain points and developing some early best practices.

Also be prepared for the inevitable momentary loss of production as your staff gets ramped up – this is normal. If you prepare for it and help them understand it’s coming and expected, you’ll be able to work through it together as they learn new workflows and new ways of thinking about and doing their jobs.

Getting Clients to Use New Technology

Similar to how important approach is with your internal team, careful consideration when you announce new technology to your clients can create excitement and acceptance when done properly. Your firm is a trusted partner for your clients, and this change is just one way you are showcasing your ongoing commitment to efficiently meeting your clients’ needs. Keep the following components of a strong announcement in mind.

In the same survey mentioned above, 40% of the finance leaders we surveyed stated that they are planning to automate financial processes in 2022. This provides an opportunity for accounting firms to act as a guiding hand for their clients during the decision-making and implementation process.

A Steady Hand for a Steady Adoption

There’s no silver bullet solution that is going to solve all of your needs—yet. In the meantime, it is important to keep innovating and to ensure that all stakeholders impacted by the solutions you choose to implement remain informed and reassured that your firm has their best interests in mind when it comes to new technology.


Jeannie Ruesch is the senior director of marketing at and has been in the accounting industry for more than seven years. She previously worked at Xero and The Sleeter Group. She has more than 20 years’ experience in brand creation and strategy, design, social media development, demand gen, and customer marketing. She’s a tech geek at heart, an author, an award-winning graphic designer, and loves finding ways to help customers solve problems.

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.

On July 11, 2022, the AICPA submitted a letter to the Department of the Treasury and the IRS calling on them to do more to ensure that taxpayers and practitioners are not subjected to another tax filing season in 2023 with unprecedented inventory levels, which would lead to delays in processing and incorrect notices and penalties. The letter provided proactive steps the IRS could take to reduce the potential for another disruptive and chaotic filing season.

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, stating,

“…we believe that the IRS must take additional steps to improve customer service issues, decrease processing delays, and work-down the backlog of paper returns and correspondence by continuing the maximum use of overtime and surge teams, as well as the continued suspension of automated notices and collections—which have been critical in reducing pandemic-related tax return and correspondence backlogs. Additionally, the IRS must improve its recruitment and retention efforts to adequately address the backlog and increase levels of taxpayer service.”

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. “It’s important for the IRS to take immediate steps to prevent another stressful and confusing tax season for taxpayers, practitioners and the IRS,” said AICPA Vice President of Tax Policy and Advocacy, Edward Karl. “Until the backlog is truly at a healthy level and the IRS’ service deficiencies are corrected, taxpayers and practitioners will continue to be unfairly and unnecessarily burdened. The common-sense steps that AICPA and Congress have urged the IRS to take now would give the Service some much-needed breathing room ahead of the next filing season.”