One of the most difficult challenges for tax practitioners over the past few years has been trying to stay abreast of tax legislation changes and communicating those changes to clients. Finding efficiencies and best practices is the order of the day, since the pace of change seems unlikely to slow. The AICPA Tax Practice Management Committee is composed of a mixture of sole practitioners and practitioners in top-tier U.S. CPA firms. They answered a few questions about best practices or tips related to this important topic.
What are your best practices and tips for how you as a sole practitioner or small firm go about staying on top of the tax law changes?
Jeffrey D. Solomon: We utilize updates from the AICPA and our state society. In addition, subscriptions to feeds (BNA, in our case) help keep us up to date as well. We subscribe to notifications from larger law firms and accounting firms, which help supplement our knowledge and understanding of new tax legislation. Of course, taking timely CPE and then communicating that throughout the office helped as well.
Jackie Meyer: Don't be a jack-of-all-trades. ... Being a generalist on new tax law changes will not allow you to maximize strategies for your clients. Pick the strategies that will have the most positive impact for your client base and become the specialist in those Code sections. For example, Meyer Tax, The Concierge CPA, specializes in high net wealth, and so we knew that the child tax credit wouldn't have an impact on our clients, while the ERC [employee retention credit] could substantially still help a few businesses. We then selected one staff member to prepare those claims.
Daniel T. Moore: We have developed the routine of dividing and conquering the tax updates. For individual tax returns, we break down the Form 1040 and assign the different topics to staff members. It is their job to review their topic and watch for and review updates. For example, we have someone assigned to itemized deductions. They will review those sections and watch for any new legislation or significant changes. In addition to our research programs and updated manuals, we also sign up for IRS e-News subscriptions. Staff will also review sources such as Twitter, tax blogs, and news articles for updates.
Jennifer S. Korten: Fortunately, I have been involved as an AICPA volunteer for some time and have lots of contacts from this, which provided a great deal of information. I attended almost every AICPA Town Hall, almost every EY "Tax in the Time of COVID-19" biweekly presentation, and many other webinars that I came across. I found the AICPA presentation extremely timely and useful. The EY presentation was good for current updates and IRS updates, although there was quite a bit in the middle that did not apply to my practice. I also read the daily [Thomson Reuters] Checkpoint Federal Tax Updates and [AICPA & CIMA's] CPA Letter Daily. I shared anything useful with my business partner and other sole/small practitioners I know. As a two-person CPA firm, it was exhausting, and keeping up made it difficult to get work done.
How did your CPA firm work to stay on top of the tax law changes (and keep staff up to date) over the past two years? What specific sources of information did you find the most helpful?
Chris Wittich: We assigned a team of partners/managers to follow the changes and coordinate efforts. The team was meeting daily at one point, then twice weekly, then weekly as the pace of new information slowed. One person was in charge of that group, and that group coordinated all of our updates internally and externally.
The best source of information is always the actual bill itself. Although certainly lengthy and time-consuming to digest, our best insights definitely came from reading the actual bills as they were coming out. The team was sure to have one representative at the AICPA Town Hall to get information weekly. #TaxTwitter proved to be a valuable resource as well, with breaking news and providing analysis of some of the more challenging provisions. The team itself had a variety of departments represented. Discussions and decisions made by the team were key as we developed our approach for explaining to staff and clients.
Brandon Lagarde: Following #TaxTwitter and the many talented tax professionals on Twitter helped me stay on top of the most relevant changes over the past two years. Crowdsourcing of knowledge and experience helped identify issues that I may not have thought of and allowed me to better service clients and my firm with the most up-to-date tax knowledge. Our firm also subscribes to several tax-specific news outlets such as [Bloomberg Tax] Daily Tax Report and Tax Notes.
Jesse Palmer: For both TCJA [Tax Cuts and Jobs Act, P.L. 115-97] and COVID legislation, select members of our National Office Tax team developed a running list of projects (e.g., [BKD] Thoughtware articles, internal memos, templates, flowcharts, internal/external webinars, podcast episodes) with tasks/due dates assigned to each person. The group met at least weekly to review project status of current tasks, evaluate whether new items should be added to the list, and reassign or reprioritize tasks if necessary. Information sources we leveraged included:
- Legislative text/JCT [Joint Committee on Taxation] reports;
- Tax Notes;
- RIA Checkpoint and Bloomberg Tax research platforms;
- AICPA articles;
- Thoughtware/presentations from other firms; and
- Informal communications with peer firms.
Matthew Curley: Our firm assigned individuals to be in charge of various changes — one person was PPP [Paycheck Protection Program], one was ERC, one was HHS PRF [the Health and Human Services Provider Relief Fund], and one was general news. Anytime a development came out, the person was responsible for dissemination and comprehension, and if clients had questions, we would be able to direct them to the in-office expert.
We utilized AICPA Town Halls, Thomson Reuters daily news updates, and direct releases from the IRS, as well as numerous publications and news sources to ensure we received all relevant information in a timely manner.
What proved to be an effective way to train and update staff at your firm as law changes and guidance were coming out?
Meyer: The Concierge CPA team hosts a Facebook group called "Accounting Firm Influencers," so we were very lucky to be able to crowdsource tax law updates in real time and even hold town halls for accountants and clients. This helped us understand major changes while not having to do all the research ourselves.
Wittich: The aforementioned "appointed" team from our firm would send update emails internally multiple times per week as necessary to keep staff informed of the new law, the developments, the key areas that required immediate consideration when filing tax returns. The team would also create client-facing emails that would go out through our client email lists and would create webinars that could be viewed live or on recordings by both staff and clients. The combination of frequent detailed emails with the webinars and having live Q&A proved reasonably effective at training the staff, but it was definitely an information overload for the younger staff who didn't have all the background necessary to really understand changes to tax laws they maybe didn't fully grasp in the first place.
Lagarde: With the rapid pace of change over the past couple of years, we would hold weekly or biweekly staff meetings (via Zoom, of course) to educate our staff on the latest news and happenings. We also encouraged staff to read the daily news alerts from our research provider, RIA Checkpoint.
Palmer: Internal email communications were generally the most effective way to update our tax professionals, but we also held periodic internal webinars to go into more details on specific provisions. We created pages on our intranet site specifically for COVID and TCJA to have one central location to house all our internal materials/resources, as well as links to other websites with helpful information. For PPP/ERC, we identified "champions" in each office to attend weekly calls and then share that information with their office. This group initially was focused on just PPP but later expanded to include ERC, SVOG [Shuttered Venue Operators Grants], and RRF [Restaurant Revitalization Fund]. This champion group also could use the weekly calls (in addition to an internal SharePoint collaboration page) to bounce questions off each other and share best practices.
Kasey Pittman: I'm a strong believer in not recreating the wheel. I found having a team dedicated to tracking tax law changes, absorbing, processing, and disseminating relevant information to client-servers, creating tools, and being a resource available to answer complex questions relating to the changes is critical in times like these (in the TCJA, COVID legislation, and Biden tax plan era). I have found this approach leads to more substantive information and insights into the law and its application, as well as uniformity of application within the firm. Incorporating law changes and taking advantage of government programs (whether enterprise zones, PPP loans, net operating loss carrybacks, etc.) have proved invaluable to businesses over the last several years.
Many public accounting firms are stretched for resources, and pulling hours away from compliance to focus on legislation may seem impossible — [but] I would argue it is imperative to providing the service your clients need in the current legislative environment.
Michael Whitmore: Our firm held regular staff meetings (most often virtual). During these meetings, a staff member would present a synopsis of a piece of the new legislation to the department. This person would then become the go-to person on the issue.
Moore: We have implemented Slack to post updates to the entire office. We established channels based on our research topics. Staff will post updated information along with any tips or relevant information when they find it.
What ways did you communicate with clients about law changes that you found particularly effective?
Solomon: We have a biweekly newsletter that provided articles to update clients on the recent changes. In addition, we contact clients that were impacted by the changes to discuss how they were affected.
Wittich: Webinars were definitely the best way we connected deeply with clients. We had a lot of blogs, and those were nice to reference when clients had questions on specific topics we had already addressed. The feedback from clients was that the webinars were the most effective way that we reached them. Client emails were helpful, but I think mostly helpful in alerting clients to the next webinar. We were wading through so many complex topics; an email or a blog just doesn't do it justice. Having the video format really helped clients understand the issues and our suggestions for how they should move forward. We also held industry-specific webinars, blogs, and emails, which were also effective. Helping clients sift through the information and highlighting the pieces that were most likely to impact them was key.
Lagarde: We held webinars fairly regularly to educate our corporate clients and our nontax professionals within the firm. We also prepared several articles and tax alerts that were emailed to clients and posted on our website.
Palmer: Most of the mass communications to clients/prospects/referrals were handled through our BKD Thoughtware. We also used our Thoughtware subscriber list to share invitations to various webinars. Copies of all the communications/presentations were posted to BKD's COVID-19 Tax & Accounting Resource Center. This was similar to the Tax Reform Resource Center we created for the TCJA.
In addition to these firmwide communications, our National Office Tax and Marketing & Business Development teams created what we called "easy button" email communication templates that office tax professionals could leverage to send directly to their specific clients/prospects to provide a more personal touch.
Curley: Separate email groups for different classifications of clients (whether the client was a business client, individual only, etc.) so we could better target the information. We didn't want to send business updates to clients without businesses, and it kept from overwhelming clients with pages and pages of information if we kept it more succinct.
What will you do differently if major tax legislation is passed in 2021?
Meyer: Not panic. The best lesson learned from TCJA to COVID-19 is that constant tax law changes are the new norm, so we must continually and proactively communicate what we do know for a fact. What we don't know, we should not overanalyze or try to model out every potential consequence. We just assure clients that no matter what happens, we will always represent them in their best interest as a leading tax strategist in the nation. As we identify true changes, we will laser in on the clients it may impact and the best way to protect them.
Wittich: I think we'll continue with the team approach and the internal/external webinars and emails, with blogs to support it, but I think we'll also try and do more targeted communications for clients. If a new tax bill has certain income thresholds or provisions that will impact some industries more than others, we will try to sort/filter clients so the ones most impacted receive a different, more tailored message along with the general information we will provide. Focusing on how industries are affected by law changes proved to be quite successful the past two years, and we will try and find ways to do more of that specialization going forward.
Palmer: I think our process worked very well, and we received a lot of great feedback from clients (and others) on the timeliness and content of our communications and the expertise our professionals were able to provide, so I would not expect to do much differently. Given the potential timing of passage of the forthcoming tax legislation (including potential provisions with effective dates in 2021), it will be critical to disseminate information quickly so clients have time to digest and implement any planning that will need to occur before year end. For firms with multiple offices, I highly recommend the "champion" approach in order to leverage the training/communication responsibilities and to provide more collaboration opportunities (versus each office trying to figure it all out on their own or bombarding one person in the firm with every question).
Pittman: Proactively tracking developments in the legislation is key to implementing effective tax planning. Depending on when the bill passes, there will likely be a limited window to create and execute a tax plan before changes take effect. Of course, to the extent possible, we will try to utilize any tax planning strategies that exist under current law. We will then have to give careful consideration to tax planning strategies that the new law creates, model them, present them to clients, and then implement. As we saw with the TCJA, the currently proposed changes could turn some commonly used tax planning concepts on their head.
Whitmore: What we realized is that we did not have an effective way of communicating mass information to our clients. Most of the communication was by reaching out to clients individually. We are now in the process of putting a CRM [customer relationship management] system in place.
Korten: I already do proactive tax planning for my clients. I will have to focus on getting up to speed and understanding how the changes affect my clients, but this is no different than the past 18 months.
|Matthew Curley, CPA, is a shareholder of Walsh, Kelliher & Sharp in Fairbanks, Alaska; Jennifer S. Korten, CPA, is a partner at Kubo Korten PLLC in Seattle; Brandon Lagarde, CPA, J.D., LL.M., is a director with Postlethwaite & Netterville in Baton Rouge, La.; Jackie Meyer, CPA, CCA, CTS, doctoral candidate, is the president and founder of Meyer Tax Consulting in Southlake, Texas; Daniel T. Moore, CPA, is the CEO and founder of D.T. Moore & Co. in Salem, Ohio; Jesse Palmer, CPA, is a partner and director of Tax Quality Control at BKD LLP in Springfield, Mo.; Kasey Pittman, CPA, is a senior manager with Baker Tilly US in Washington, D.C.; Jeffrey D. Solomon, CPA, CVA, is the managing shareholder of Katz Nannis+Solomon PC in Waltham, Mass.; Michael Whitmore, CPA, is a shareholder with HMA CPA PS in Spokane, Wash.; and Chris Wittich, CPA, MBT, is a member of Boyum Barenscheer PLLP in Minneapolis. April Walker, CPA, CGMA, is lead manager—Tax Practice & Ethics, Public Accounting, for the Association of International Certified Professional Accountants. Ms. Walker is the staff liaison of the AICPA Tax Practice Management Committee (TPMC). Mr. Lagarde is vice chair and the other contributors are members of the TPMC. For more information about this column, contact firstname.lastname@example.org.