One thing certain about taxes is constant change. While statutory changes generally occur just a few times a year, the judicial branch issues tax decisions daily, and the administrative branch issues regulations and rulings almost daily.
As a result, tax practitioners need to incorporate keeping up to date on tax changes into their daily and weekly work routines. In addition, CPA tax practitioners need to be aware of new GAAP pronouncements. Tax advisers also need to keep up to date on changes in technology to be sure they are using appropriate technology and understand the taxation of new uses of technology. Beyond all of this, tax practitioners need to keep current with new business practices that clients may be venturing into or that can help them secure prospective clients operating in these new spaces.
To keep up to date, tax practitioners need access to appropriate tools and resources and time to review and understand the information in the tax updates. While this is not work that can be billed to clients, not keeping current can easily lead to mistakes and overlooked planning ideas to share with clients or one's employer. So, extra effort is needed to develop habits or routines as well as plans for keeping up to date to better enable this important practice to occur despite challenges of time and meeting other obligations.
This column explores how to help undergraduate and graduate students understand and appreciate the importance of staying current on tax developments and how to develop habits to help achieve this important goal. Firms, corporate tax departments, and government tax agencies should find that these ideas may spark even more ideas when discussed in a work group or one-on-one between supervisor and subordinate.The importance of keeping up to date
How to adopt a habit
Maintaining currency on tax rules should be an easy sell to students. After all, how can you prepare a correct tax return or offer relevant tax planning advice if you use old law? Be sure students know the risk of client and preparer penalties as well as malpractice claims when outdated or incomplete information is used, due to failure to know that a familiar rule changed or a more appropriate one for the situation was created. Regularly providing examples of new rules from each branch of government will help students understand that their focus cannot be solely on legislative changes.
Ask students to define habits and identify ones they follow. College students already have many good habits that enabled them to enter and succeed in college. What motivates them to come on time for each class meeting and get homework completed and submitted? Can they articulate how they began and regularly followed these practices? Ask what other habits they have. For example, do they regularly check social media, exercise, and visit family and friends?
Have students find and read at least two articles on how to build new habits. Generally, habit building requires motivation and appreciation of the importance of what you will be doing. Why is it worth changing your behavior to adopt the habit?
Being realistic is also important. For example, if someone plans to get into a habit of regular exercise by running 10 miles every day, this will likely take more time than available or needed to fulfill the exercise goal and will risk causing the entire effort to fall apart. If students can explain how to develop a practical habit related to exercise or diet, it should help in designing a plan to build a habit of keeping up to date on tax and business developments.
Once students appreciate the importance of keeping up to date on tax developments and understand how to build habits, they next need to learn what resources they can readily access. Following are suggestions for helping students build their habit of keeping up to date.Suggestions for helping students build tax currency habits
Ask practitioners for assistance
- A standard request of all practitioners who visit your class should be to explain what they do to keep up to date and how they make time to do so. Also ask them to share some of the benefits they gain by keeping current and some of the resources they use.
- Have students ask a tax practitioner how they keep up to date and the resources they use. Consider also asking students to request a meeting (even virtually) to allow the practitioner to demonstrate their routine of reviewing tax news to glean necessary information. Students should also ask the practitioner if job interview questions at their firm or company include current events in the tax, accounting, business, or technology areas. They should also ask how keeping up to date is relevant in performance reviews and career advancement.
Help students find appropriate resources
- Tell students how you stay up to date and what resources you use and how you obtain them. Explain how your work benefits from this activity and how you keep up with changes not only in the tax area but also in accounting, business, and technology. Share these resources with students.
- Let students know that updates are published daily, weekly, monthly, and quarterly, and some, such as social media posts, irregularly. Help them understand how each type should fit into their plan for keeping up to date.
- Ask one of your campus librarians to explain a few of the tax resources students can access in the campus library and how to do so. Many university libraries subscribe to commercial research tools and their daily news and tax journals.
- If your textbook includes access to a commercial research tool, find out if it allows students to access or even subscribe to the daily news feature. Review the feature with students and how to use it and not be overwhelmed by the quantity of daily updates.
- Require students to search for tax news online. Point them toward newsletters from CPA and law firms, professional associations such as the AICPA and their state CPA society, and social media. Discuss how to determine the reliability and scope of these resources. The AICPA offers several free resources including Tax Insider, The Tax Adviser, Journal of Accountancy, and CPA Letter Daily. Students can also receive a broad range of information by becoming a student member of the AICPA (visit thiswaytocpa.com/join-aicpa). Your state CPA society might have a similar offer. Require students to keep a journal of what they find, or have them regularly submit summaries of items they find of interest or that tie to textbook topics.
- Have students look for tax updates on social media such as Twitter, LinkedIn, and Instagram. Tax agencies often use these tools, as do CPA and law firms and many tax professionals. Consider having them look for and sample podcasts such as those from the AICPA, Tax Analysts, Bloomberg Tax, and BKD LLP's Simply Tax.
- Have students find, or lead them to, examples of tax conferences, such as ones sponsored by the AICPA, their state CPA society, Tax Executives Institute, or enrolled agent societies. Ask them how conference topics tie to what they are studying in class. Find out if students can attend these conferences, whether in person or online. If they attend, have them report back on who attended, whom they networked with, and a few things they learned.
- Have students find resources for keeping up to date with accounting, business practices, and technology.
- Encourage or require students to work together to share and discuss what they learned. Use time in each class to randomly call upon a student to explain a recent news item of interest, how he or she found it, and why it was interesting.
Require students to develop, test, and modify a plan
- Be sure students know they are going to start developing a plan on how to keep up to date that will help them throughout their studies and career and that they will continue to modify to meet their needs and career advancement goals.
- Discuss how to design workable plans and regularly assess and modify them as needed to serve the student's needs. Have them start by looking for updates related to topics covered in the course textbook. Explain that this is what tax professionals do — focus on updates of relevance to the clients they serve rather than think they must read updates in all areas of taxation.
- Remind students to start small, such as by designating 20 minutes one day per week to find and read a tax update. Ask them how they can expand this to more days per week.
- Discuss tools they have and can easily access to help them keep up to date. For example, students likely have calendars on their smartphones and can easily set up repeating reminders to look for a journal article and to read it on a designated day each month.
- Help students know which national and local organizations offer free or low-cost student memberships. Consider requiring them to join and report how the organizations help their members stay current on tax and related subjects.
- Have students summarize and share with classmates their final plan for how they will continue and broaden their new habits for staying current in the tax area after the class ends.
Develop habits early
Any assistance offered to students and emerging tax professionals on how to develop and practice a habit to stay current on developments in taxation, accounting, business, and technology will be a tremendous benefit as students launch and advance their careers. They will have plenty of topics to incorporate into interviews as appropriate and will have greater confidence that they are ready for the workforce. A first tax class is a good place to start building a habit of staying current. For a graduate tax or accounting program, discussion and sharing among students of these habits and what resources they use should be a part of all classes to help students gain and build the critical skill and habit of keeping current.
Annette Nellen, Esq., CPA, CGMA, is a professor in the Department of Accounting and Finance at San José State University in San José, Calif., and is the immediate past chair of the AICPA Tax Executive Committee. For more information about this column, please contact email@example.com.