Many CPAs operate in their practice comfort zone. They rely on the knowledge they've acquired combined with routine CPE and rarely stray from the tax areas they know well. What happens when a CPA is faced with a client whose situation involves an area of the Code outside this zone of experience?
One option is to refer the client to another practitioner known to specialize in the topic of concern. A more adventurous choice may be to take on the challenge of using this opportunity to gain new skills and expand the scope of the practice. This latter choice may offer fiscal advantages down the road, but it needs to be carefully considered and planned with supportive resources. Here are steps to get started.
Background for this column: Several years ago, the author was approached by one of his clients, a real estate broker, who represented a number of overseas investors. This broker wanted help with preparing nonresident individual and foreign corporate tax returns for about a dozen clients. As a sole practitioner with little experience in preparing such tax returns and little knowledge of the tax law regarding taxation of investments in U.S. property by nonresidents, the author evaluated the potential for a favorable outcome and chose to go forward with developing the required expertise. Eventually employing all the resources covered here, he leveraged his new knowledge and skills in expanding a specialty area that would eventually make up 10% of his practice revenue.Decide Whether to Accept the Engagement
First, the CPA must determine whether he or she has or can obtain the competence to accept the proposed engagement. The time required to develop competence and the accompanying costs must be compared with any potential revenue from this specialty. Is the initial engagement sufficient in scope to justify the time to become proficient in this area? Are more situations that will draw on the CPA's new expertise likely to arise, either through this same source or other referrals?
An analysis of some requests may result in a decision not to pursue the engagement based on negative potential. For example, if a client is selling a business and needs specific expertise in the tax law applicable to mergers and acquisitions, the CPA may find it more advisable to refer this work to a specialist rather than learn this complicated area with little chance of repeat work. Also, the CPA may not want to accept work requiring extra study if it must be done during the filing season and he or she is already operating at capacity.
If the CPA chooses to accept the engagement, the following can be valuable assets in creating the necessary expertise to support development of a new specialty. A preliminary review of some of these may also help in deciding whether this is the right move for the practitioner.
Take Advantage of CPE Coursework
Look for CPE relevant to the subject area. The coursework should offer a broad outline of the subject area with resources for the CPA to use while working on specific client situations. For example, in the international tax area, the AICPA Store offers the following courses:
- International Taxation—Tax Staff Essentials; and
- International Taxation.
Other vendors can provide specialized training as well. Taking courses from several vendors may offer a broader perspective and additional library resources.
Consider attending a technical conference in the area of interest. For example, the AICPA and other tax groups offer annual tax conferences on a variety of topics. Those new to a subject area may find the content a little daunting. However, with additional exposure and expertise, it becomes easier to absorb the information and identify the "hot buttons" for that particular area. Conferences also present excellent opportunities for finding a mentor (see below). Speakers and other attendees at these conferences are usually happy to help other practitioners who seek their advice.
Download Practice Tools
The AICPA website offers a number of practice tools, available to Tax Section members, that can assist a CPA working in a new area. Many of these are practical checklists or worksheets that may be applied to specific clients. Examples in the area of foreign taxation (www.aicpa.org) include:
- Foreign National Questionnaire;
- Foreign National Checklist and Foreign National Flow Chart; and
- Form 5472 Practice Guide.
Having a specialty library available will be useful in solving client problems.
Check Out the IRS Website
Each area of the Internal Revenue Code requires knowledge of specific IRS forms and instructions, often with complicated rules for filing. Many times, important information can be found on the IRS website, and deciding whether a form applies to a particular client may be facilitated by sending both the form and instructions to the client. For example, the author has found using Form 5471, Information Return of U.S. Persons With Respect to Certain Foreign Corporations, an excellent way to educate clients and involve them in the process.
Many state CPA societies maintain formal or informal discussion groups and allow CPAs from other locations to participate and post questions and responses. Look at the index for these discussion groups and scroll through those items that relate to the subject at hand. Q&As can provide an excellent mechanism to learn the technical answers the CPA will encounter in a new area.
Contact Your Insurance Carrier
CPA malpractice carriers often maintain loss prevention services for policyholders. A loss prevention specialist can describe specific instances where CPAs have incurred liability by omission or commission. By understanding where the malpractice minefields lie in the new tax area, a CPA entering that specialty can avoid making costly mistakes.
Find a Mentor
A mentor can be invaluable when branching out. An attorney or a CPA with specialized training in the area for expansion would be a good candidate. A first contact might be to invite a practitioner with known expertise in the area to lunch to discuss your interest in that specialty area. Generally these practitioners will welcome the opportunity to get to know other professionals interested in their area of expertise and know the CPA will likely turn to them to request help when the CPA is stymied. This helps them to build their practice as well and broadens their contacts in their specialty area. Be mindful of the time requested of any expert, and use that time wisely. The CPA can emphasize he or she has an interest in the area and has researched the question but needs the mentor's advice on some specifics. The relationship can be mutually beneficial. The CPA can provide billable research or document preparation work to the mentor.Publicize Your New Knowledge
Once a CPA feels a level of comfort in a new practice area, it is time to publicize this expertise. Include key developments on the business website, tax update articles, or any social media used. Look for press and speaking opportunities to discuss this new area.
It can be both rewarding and lucrative to acquire specialty skills. Once a skill set has been developed, the CPA can be a resource to other professionals as well. By developing expertise in a new practice area, the CPA can expand horizons, increase income, and become a more well-rounded professional.
|Michael W. Crisler is a member and the chief manager of Crisler CPA PLLC in Hendersonville, Tenn. Steven Holub is a national director in the Professional Practice Department of Cherry Bekaert LLP in Tampa, Fla., and is a former chairman of the AICPA Tax Division Tax Practice Management Committee. Robert Caplan is a sole practitioner in Foster City, Calif. Mr. Crisler is the chair and Mr. Caplan is a member of the AICPA Tax Practice Management Committee. For more information about this column, contact firstname.lastname@example.org.