AZ CPA May 2014

AZ

CPA MAY 2014

The Arizona Society of Certified Public Accountants

Shine a Light on You! Learn Techniques to Showcase your Value

www.ascpa.com

CAMICO is the preferred provider of the ASCPA

www.camico.com/momentum

CAMICO representative Scott Schmidt scott.schmidt@stuckeyinsurance.com

Momentum.

CAMICO is constantly taking its unparalleled insurance and risk management services further. Enhancing services, products and solutions for CPA firms since 1986, we have been building value and providing even greater benefits and options for policyholders for 28 years.

We specialize in CPA firms. This is all we do, and we do it better than anyone else. With our Accountants Professional Liability program through Liberty International Underwriters, we can provide your firm with even greater capacity, options, flexibility and benefits.

Find out for yourself why more CPA firms are choosing CAMICO.

Accountants Professional Liability coverage is underwritten by CAMICO Mutual Insurance Company and/or Liberty Insurance Underwriters Inc. Liberty Mutual currently carries an A.M. Best rating of “A (Excellent).” Actual coverage may vary and is subject to policy language as issued. ©2014 CAMICO Services, Inc. License #0C09618.

2 AZ CPA y MAY 2014

ADP adp130129a Proof 1 - ASCPA

With ADP , new revenue opportunities are right under your nose. ®

Refer Your Clients

■

Run Your Own Payroll

■

Sell Your Payroll Base

Looking for ways to grow your business? ADP can help with end-to-end payroll and integrated HR resources. Refer your clients to our payroll services, offer our payroll solutions directly to your clients or sell us your payroll base. Count on our 60+ years as the payroll leader to help you drive growth and profitability.

Learn more with the free strategy brief, “Growing Your Business with HR.” Go to accountant.adp.com/grow

HR. Payroll. Benefits.

ADP is a preferred provider for the Arizona State Society of CPAs. For more information on our benefits programs, call 408.477.8992 today.

ADP®, the ADP logo and RUN powered by ADP are registered trademarks of ADP, Inc. Copyright © 2014 ADP, Inc.

MAY 2014 y AZ CPA

3

AZ

CPA MAY 2014

Volume 30 Number 4

Government Panhandling? The Department of Economic Security’s Recent Uptick in Unemployment Insurance Audits

15

Practitioners need to be aware of regulations when handling work classification audits and appeals.

by Paul J. Valentine & Steven M. Brechner

Is Windows 8 in Your Future?

17

New update removes obstacles to upgrading.

by Thomas G. Stephans, Jr.

Features

Get the Most Out of Your Membership

New ASCPA Board of Directors

10

It’s renewal time here at the Arizona Society of CPAs and time to consider all the great benefits you have to gain with your membership.

Get That Promotion — Shine a Light on Yourself

12

Doing a great job may not be enough — here are some tips for standing out in the workplace.

by Maribeth D. Renne, CMF

Arizona Society of Certified Public Accountants 4801 E. Washington St., Suite 225-B Phoenix, Arizona 85034-2021 www.ascpa.com

4 AZ CPA y MAY 2014

Columns & Departments 6

Chair’s Message by Anita Baker, CPA

7

Focus on Members

9

A Dash of SALT by James Busby, Jr., CPA

22 Classifieds 23

In the Black ... Adventures in Accounting

20

AZ

CPA

The Arizona Society of Certified Public Accountants

President & CEO

Cindie Hubiak

Editor

Patricia Gannon

Copy & Advertising Deadline The first of the month one month prior to publication date.

Board of Directors Chair Chair-Elect Secretary/Treasurer Directors

Anita Baker Rob Dubberly Greg Nelson Gary Fleming Randy Fletchall Diane Groover Sandra Hieb Mike Holt Bill Judge Adam Miller Molly Montgomery Jennifer Nordstrom Vanesa Romero Jared W. Van Arsdale Craig Van Slyke

Immediate Past Chair Karen Abraham AICPA Council Members Jim Buhr Rick Goldenson Chapter Presidents Southern Chapter Northern Chapter Southwest Chapter North-Central Chapter

Flo Zenblu Jennifer Nordstrom Jayne Wright Richard Joliet

AZ CPA is published by the Arizona Society of Certified Public

Accountants (ASCPA) to provide information, news and trends in the profession of accounting. It is distributed 10 times a year as a regular service to members of the Society. The ASCPA, its members, board of directors and administrative staff assume no responsibility for advertisements herein. The ASCPA and the above people also assume no liability for business decisions made by readers in reference to statements and/or claims in advertisements within this publication. Opinions expressed by correspondents and contributors are not necessarily those of the ASCPA.

Arizona Society of CPAs 4801 E. Washington St., Suite 225-B Phoenix, AZ 85034-2021 Telephone (602) 252-4144 AZ Toll-Free (888) 237-0700 Fax (602) 252-1511

www.ascpa.com

Join us as we honor Rick Goldenson as a Life Member and Kathy Savage of NAU as the Excellence in Teaching Award Recipient

CPAs

ASCPA Annual Meeting May 14 If you like TED Talks, then you are sure to enjoy what we have in store for you at the ASCPA Annual Meeting. In addition to honoring our Life Member and Excellence in Teaching Award recipient, we will offer a different kind of program — Ignite CPAs — a fast-paced event where six CPA speakers present a topic, giving them five minutes of fame. Join us at the Arizona Biltmore Resort on May 14 for this fun and informative event.

Register at www.ascpa.com

AXIOM

Financial Advisory Group, LLC

Wealth management for high income, high net worth individuals and highly profitable business owners.

• Financial Planning • Investments • Retirement Plans Armando G. Roman, CPA/PFS MBA Managing Principal

Gainey Ranch Financial Center 7373 E. Doubletree Ranch Rd., Ste. 170, Scottsdale, AZ 85258 (480) 367-9000 • www.axiomcorp.com Registered Representatives offering securities and advisory services through Independent Financial Group LLC, a registered broker-dealer and investment advisor. Member FINRA/SIPC. Independent Financial Group, LLC and AXIOM Financial Advisory Group, LLC are not affiliated. Office of supervisory jurisdiction: 12671 High Bluff Dr., Ste. 200, San Diego, CA 92130.

MAY 2014 y AZ CPA

5

Chair’s Message

by Anita Baker, CPA

ASCPA…Built to Help You Succeed Becoming a CPA was very important to me when I graduated from college with my accounting degree in 1985. That was a busy year as I was a newlywed and starting a new job at a public accounting firm. However, I spent most of the summer and fall studying for the CPA exam so I could achieve my goal of becoming a CPA. I am proud to be a CPA and it is the foundation that has given me the credibility to serve clients in a professional role.

The CPA brand was rated number one in a survey of more than 2,000 financial professionals conducted by the AICPA. More than 90 percent of decision makers and investors are satisfied with their CPA. The attributes that they note as important include: competence, integrity, objectivity and a focus on client needs. These attributes build the foundation that helps all of us succeed in our careers.

It is truly an honor to be the chair of the ASCPA and to work with the Board of Directors, CEO and Society staff to continue to build the Society to help you succeed. I want to specifically thank Karen Abraham for her leadership and friendship this past year. Karen is a great example of a CPA with the key attributes noted above, which have been integral in her leadership of the profession, as well as a health care organization in the midst of the ever-changing and complex health care reform laws.

The Society’s core purpose is to enhance the success of our members and lead our profession. Our profession is getting more complex with accelerated changes impacting our ability to comply with standards and regulations. The foundation of quality that we have built is being challenged by regulators and we must take action to ensure that we continue to enhance the CPA brand and our ability to self-regulate and advocate for our profession.

Early in my career, I decided to

6 AZ CPA y MAY 2014

specialize in auditing employee benefit plans. Focusing on this industry allowed me the opportunity to chair the Executive Committee of the AICPA Employee Benefit Plan Audit Quality Center. Through this experience, I learned the importance of education, tools and resources to assist CPAs in maintaining the quality of their practice. Currently, I am serving as chair of the AICPA Ethics Technical Standard Department of Labor (DOL) Subcommittee. This subcommittee reviews deficient audits that are referred to the AICPA by the DOL and sanctions AICPA members who do not comply with standards and/or regulatory requirements. Unfortunately, there are too many practitioners who don’t have the education or experience to audit employee benefit plans or other highly regulated industries, and the regulators are finding them through their audit and inspection programs.

The DOL’s Employee Benefit Security Administration’s (EBSA) office of the Chief Accountant is currently conducting a study to assess the quality of employee benefit plan audit work. The study is focusing on the auditor’s compliance with professional auditing and accounting standards and regulatory requirements. The study is expected to be completed sometime in 2014 and a public report will be issued early next year. Prior audit quality studies have found significant deficiencies with

ERISA audits. There already has been legislative action that would allow the Secretary of Labor to modify GAAS and GAAP for ERISA audits. It would also give them civil enforcement authority over CPAs that perform ERISA audits, including authority to assess penalties and sanction ERISA auditors for failing to meet professional standards or auditor qualification requirements.

The legislative outlook for this action is uncertain; however, it reveals certain policy options that the DOL may pursue in response to audit quality concerns.

Tomorrow’s profession may look completely different if we don’t address quality concerns. The AICPA is taking steps to enhance the practice monitoring system of the future. The goal of increased public protection will be met through enhanced audit effectiveness, including earlier detection of engagement deficiencies and systems that capture and include all firms and engagements that are subject to review.

I am hopeful that during my year as chair we will continue to enhance the CPA brand. Our Board of Directors and the Society staff are available to help you navigate the future, build your career and ensure your success as a CPA. AZ CPA

Focus on Members Sharlynn Garza, CPA, Leslie Lee, CPA, and Samantha Mahlen, CPA, from Henry & Horne, LLP, recently earned their Certified Public Accountant designations.

Craig Lohman, CPA, partner with Lohman Company, PLLC, was recently named as secretary/treasurer for the Mesa Chamber of Commerce Board of Directors. In addition, he is also a member of the Chamber’s Executive Council.

The ASU W.P. Carey School of Business accounting program was ranked #16 in the listing of the 30 Best Accounting Programs in the U.S. by The Accounting Degree Review.

Tanya Perry, CPA, CFO & Senior VP of Goodwill of Central Arizona, served as a panelist on “Perspectives on Women in Leadership” for the Arizona Women’s Leadership Forum.

Henry & Horne Employees Give Back — Henry & Horne, LLP employees took part in a weekend of service in honor of Dr. Martin Luther King, Jr.’s birthday. Team members spent a Saturday morning picking citrus from trees at Sahuaro Ranch Park in Glendale as part of Project Vitamin C. Donna Laubscher, CPA, Pamela Wheeler, EA, Andrea Hejnal-Hilger, CPA, and Austin Bradley, CPA, teamed up with Volunteer Income Tax Assistance (VITA) through the Valley of the Sun United Way to teach classes on preparing tax returns. Candace Tooke, CPA, and her family took part in a food-packing event for Feed My Starving Children.

You could spend hours searching for financial salary information. Or just seconds.

[ roberthalf.com/salary-center ] +

For hiring news, industry trends and salary information, download your free Salary Guide today at roberthalf.com/salary-center.

1.800.803.8367 © 2013 Robert Half International Inc. An Equal Opportunity Employer. 0913-9013

MAY 2014 y AZ CPA

7

Greg Gierwielaniec, CPA, was appointed to the UMOM New Day Center’s Board of Directors.

Kate Forbes, CPA, received the 2014 Anchor of Hope Award from the American Red Cross — Grand Canyon Chapter.

The Arizona Community Foundation’s Latinos Unidos initiative honored Tony Astorga, CPA (retired), for his contributions to benefit the Latino community.

Dee Ann Brower, CPA, recently earned her CFF credential.

Make-A-Wish Arizona honored AAA Arizona President & CEO Mike Tully, CPA, with the 2014 Tom & Madena Stewart Lifetime Compassion Award.

Ira Feldman, CPA, wrote an article for Practical Tax Strategies on “Challenges to Family Limited Partnership Schemes in Estate Planning.”

ASCPA members John Chichester, CPA, and Kevin Yeanoplos, CPA, were part of a team running in the Del Sol Ragnar Relay, the longest of the Ragnars at 203 miles, racing from Wickenburg to Tempe. Their team finished in 30 hours and 30 minutes, making them 64 out of 321 teams. Proceeds from the race went to Alice Cooper’s Solid Rock Foundation.

Today the CPA Exam.

Tomorrow the world.

You’re taking the CPA Exam because you know what passing will mean not just to your career but your life.

Becker Professional Education knows too. Everything we do is done to prepare you, to equip you, and to empower you – which is why Becker students pass at double the rate of non-Becker candidates.* So go with the leader. Go with Becker. Then go conquer that world out there – like you know you can.

Special pricing may be available for society members.** To learn more, visit becker.com or call 877.CPA.EXAM. *Becker Professional Education students pass at twice the rate of all CPA Exam candidates who did not take a review course from Becker, based on averages of AICPA-published pass rates. Data verified by an independent third-party research firm. **This offer valid only on complete, four part course tuition price and cannot be combined with any other offers.rved. ©2013 DeVry/Becker Educational Development Corp. All rights reserved.

8 AZ CPA y MAY 2014

®

A Dash of SALT

Arizona’s Taxpayer Bill of Rights, and Role of the Problem Resolution Officer This month’s state and local tax (SALT) column highlights some rights extended to taxpayers under Arizona’s Taxpayer Bill of Rights. As Americans, we are fond of our rights as enumerated in the Bill of Rights, and everybody who has watched a drama involving law enforcement, like “Law & Order,” knows that, should the occasion arise, we “have the right to remain silent,” and that anything we say will be used against us in court. But, most Arizonans probably do not even know that Arizona has a Taxpayer Bill of Rights.

In 1986, Arizona was the first state to enact a bill of rights for taxpayers. The rights apply to taxpayers who interact with the Arizona Department of Revenue, and many of the same rights are extended to taxpayers who interact with municipalities that collect their own sales taxes. Every Arizona taxpayer and CPA should be aware of these rights, especially those whose interaction with state or city tax collectors involves more than just remitting tax.

This column focuses on some of the general provisions of Arizona’s Taxpayer Bill of Rights, and on how the Problem Resolution Officer can assist in unusual situations. Future columns will address other important rights and tools available under this law.

General Provisions Arizona’s Taxpayer Bill of Rights: • Requires ADOR to keep taxpayers’ personal and financial information confidential; • Prohibits ADOR from evaluating employees based on the amount of taxes they collect or assess; • Generally prohibits ADOR from auditing the same taxpayer for the same period twice, and from increasing the amount of an assessment once

it is issued; • Requires ADOR to allow taxpayers who owe taxes to pay such taxes under an installment plan, if necessary; • Generally limits the duration of audits to two years from the date of initial contact for the audit; and • Allows taxpayers to avoid tax and interest when relying on written advice from ADOR, and to avoid tax as well when the taxpayer received a private taxpayer ruling.

The Problem Resolution Officer The Taxpayer Bill of Rights established the “Arizona Taxpayer Assistance Office,” to be led by the Problem Resolution Officer. The Problem Resolution Officer reports directly to ADOR’s Director and his office is required to help taxpayers by: • Evaluating complaints regarding improper, abusive or inefficient service; • Resolving the most complex and sensitive taxpayer problems; • Obtaining easily understandable tax information and information involving audits and appeals procedures; and • Locating documents or payments filed with or submitted to ADOR.

Thus, Arizona’s Problem Resolution Officer is a resource to both taxpayers and CPAs in situations when things go wrong, but should not be one’s first point of contact with ADOR for routine matters. Jorge Frank is currently ADOR’s Problem Resolution Officer.

Mr. Frank can be reached at (602) 7166025 or JFrank@azdor.gov.

Arizona municipalities also have Problem Resolution Officers. They can be identified by clicking on the name of the municipality at: http:// modelcitytaxcode.az.gov/City_profiles/ City_profiles.htm Practice Tip! — For more information about Arizona’s Taxpayer Bill of Rights, consult Arizona Department of Revenue Publication 1 and ARS § 42-2051 et seq. Some comparable provisions are included in Arizona’s AZ CPA municipal tax codes as well.

James G. Busby, Jr. is a state and local tax attorney and CPA at The Cavanagh Law Firm. Busby previously worked in the SALT departments at Arthur Andersen and Deloitte & Touche. Before entering private practice, Busby was in charge of all transaction privilege (sales) tax audits at the Arizona Department of Revenue. A Dash of SALT ™ is provided for informational purposes only and does not constitute legal counseling. If you have any questions, please contact the author at (602) 322-4146 or jbusby@cavanaghlaw.com.

MAY 2014 y AZ CPA

9

Chair Anita Baker, CliftonLarsonAllen LLP

Immediate Past Chair Karen Abraham, Blue Cross Blue Shield of Arizona

Chair-Elect Rob Dubberly, KPMG

Gary Fleming, Henry & Horne LLP

Secretary/Treasurer Greg Nelson, WorldatWork

Randy Fletchall, CPA

Diane Groover, Pima Community College

Sandra Hieb, The Lavidge Company

Mike Holt, GoDaddy.com LLC

2014-15 ASCPA

Board of Directors 10 AZ CPA y MAY 2014

Bill Judge, Kitchell Corporation

Vanesa Romero Apollo Education Group

AICPA Council Member Jim Buhr, Bashas’ Inc.

Adam Miller, Barron Lighting Group

Jared W. Van Arsdale, Ullmann & Company, P.C.

AICPA Council Member Rick Goldenson, CliftonLarsonAllen LLP

Molly Montgomery Craig Van Slyke, Northern Arizona University

Jennifer Nordstrom, Nordstrom & Associates

MAY 2014 y AZ CPA

11

Get That Promotion— Shine a Light on Yourself

By Maribeth D. Renne, CMF

Hard work and dedication are admirable.They often set you apart from others. But what happens when everyone works hard and is just as dedicated? Who gets noticed then? Perhaps we can will shed some light on the matter.

12 AZ CPA y MAY 2014

John and Catherine, both wellregarded, joined a company in the same month and became good friends.

Catherine kept her nose to the grindstone – getting into the office early in the morning before the coffee room chatter, staying at her desk to work through lunch, and declining the drink after work with colleagues so she could polish a project to near perfection.

John’s been visible in the organization, making sure that he hits the coffee room. He uses those moments to get to know everyone and to listen to them talk about their children’s soccer games.

He shares client feedback that he’s received, hears insider news about the organization, and shares expertise and offers assistance to colleagues. John has built relationships with his colleagues at all levels.

When John was promoted after just 18 months, Catherine was happy for him but also confused and disappointed. She had worked circles around John. Why wasn’t senior management rewarding her hard work and dedication?

Chances are senior management doesn’t know much about Catherine or her work. John understands that working hard and being effective are important, but to be successful you must get out there and talk with others about your abilities and accomplishments. In addition to getting out and interacting with colleagues, John takes the following steps.

Lists of Accomplishments On his computer, John keeps a document titled “List of Accomplishments.”

Each time he accomplishes something, he takes a minute to type a phrase describing it.

By the end of the quarter, John has a bulleted list of accomplishments.

He then fleshes out each accomplishment to demonstrate the value that his accomplishment brought to the organization.

Once John has completed a quarterly list, he gives a copy to his boss explaining that the list is one tool he uses to manage his career that he would like to

share. John understands that while employees think that their bosses are aware of everything they’ve accomplished, in reality that is usually not the case.

A quarterly list of accomplishments keeps a boss up to date on all the innovative ways you bring value to the organization.

Make the Most of Meetings Love meetings or hate meetings, most of us are asked to attend a lot of them.

John uses meetings as opportunities to increase his visibility in the organization. He carefully reviews the agenda prior to the meeting so he can prepare and make certain he has something of value to contribute. He doesn’t want to be seen as someone who “just likes to hear himself talk,” so while he makes sure he has something to say, his comments are brief, impactful, and to-thepoint. He arrives early to the meeting so he has a good seat where he can see everyone and everyone can see him. He leaves his laptop and phone back in his office so he can fully engage with his colleagues. John is never the first one to leave the meeting, making it a habit to stick around a bit afterward. He has learned that this is a great time to pick up information that may not be widely shared in a full meeting.

Cross-Functional Committees John keeps his ears open and knows what the high-visibility initiatives are in the organization. He volunteers to be on cross-functional committees to work on those initiatives. By doing this, he becomes well-known in the larger organization, and by stretching to accomplish new tasks, he demonstrates his abilities in new areas.

Presentation Early in his career, John joined Toastmasters as an inexpensive way to develop his presentation skills in a safe environment where everyone else was there to do the same thing. Now he takes every opportunity to make presentations within his organization,

as well as externally. He knows that, even for those who don’t enjoy presenting, the more you present, the better presenter you become. He also knows that doing presentations increases his visibility and bolsters his image as an expert.

Get a Sponsor John asked a senior executive whom he admired to be his sponsor. John’s sponsor helps him get involved in highly visible projects, puts him in front of key decision makers, and talks positively about him with other executives.

In conclusion, doing a great job is just not enough. One of the most important things a mentor or coach could do to help Catherine is to identify selfpromotion strategies that she can feel comfortable with, and to encourage her to practice those strategies until they become second-nature. Even the most introverted person can discover techniques to showcase their value. AZ CPA Maribeth D. Renne, CMF, has her own leadership and career coach practice and is a senior consultant with The Leader’s Edge/ Leaders by Design. She can be reached at maribeth@maribethdrennecmf.com.

Reprinted with permission from the Pennsylvania Institute of CPAs Journal.

MAY 2014 y AZ CPA

13

WORK WHERE IT FEELS LESS LIKE A JOB AND MORE LIKE YOUR FUTURE. If you’re on the fast track for success, opportunity lives in choosing a firm that values talent and understands the desire to grow. Combining the strengths of two well-established, respected CPA firms in Phoenix— Miller, Allen & Co. and Abalos & Associates — under the REDW brand, adds up to both opportunity and growth to energetic and experienced professionals.

Find your future.

Current career opportunities available now at redw.com/careers

Albuquerque | Phoenix

14 AZ CPA y MAY 2014

602.730.3699 | redw.com

Government Panhandling?

The Department of Economic Security’s Recent Uptick in Unemployment Insurance Audits

by Paul J. Valentine & Steven M. Brechner

According to the Department of Economic Security’s (“DES”) Annual Report, the total amount of employers’ contributions in 2012 to the unemployment fund was $434 million. But, unemployment benefits paid out that year were $1.05 billion.

That means that in 2012, DES paid $620 million more than it collected. When you consider that DES Unemployment Insurance’s fund balance is a measly $4 million, DES’ enthusiasm for worker reclassification audits makes sense. Obviously no one can certainly say whether DES’ uptick in audits and reclassifications is driven by these dire financials. However, what is clear is that DES is aggressively reclassifying workers from independent contractors to employees. Such a reclassification can have catastrophic ripple effects with the Internal Revenue Service and the Department of Labor. Whatever DES’ motivations, practitioners should be aware of the applicable laws and regulations when handling worker classification audits, appeals, administrative hearings and beyond.

DES’ Two Main Strategies to Reclassify Independent Contractors as Employees DES is generally a two-trick pony when it comes to reclassification audits. It either reclassifies workers as employees under a relationship of the parties’ test that is similar, but not the same, as the IRS’ twenty-factor test. Alternatively, DES tries to establish unemployment insurance liability under the temporary service employer statute. Occasionally it pursues both.

DES Determines Whether the Workers Were Under the Direction, Rule or Control of the Hiring Party When examining the relationship of the parties test, DES’ first step is usually to make certain requests including copies of the parties’ agreement(s), interviews with the owners / workers / both, and on rare occasions a site visit. The hiring party is then caught between a rock and a hard place. On the one hand, most business owners want

MAY 2014 y AZ CPA

15

to cooperate with DES. On the other hand, agreeing blindly to DES’ requests may lead to an inaccurate classification.

For instance, the agreement may not accurately represent the parties’ business dealings (thank you Google); or the business owner and/or worker get flustered during the DES interview and give incorrect or incomplete information.

Of course it is important to cooperate with an audit; however, it is just as important to ensure that DES receives complete and accurate information. To that end, this section outlines relevant Arizona law and then provides some practice pointers on how to defend an audit.

“Employee” is defined by statute A.R.S. § 23-613.01 as individuals that are subject to the hiring party’s direction, rule, or control as to the method of performing the task. The statute then provides four exceptions, three of which are not discussed in this article since most audits focus on the first exception — whether the worker is an independent contractor.

Under this exception, DES does not indicate whether the hiring party classified the worker as an independent contractor. Instead, DES will focus on the substance of the parties’ relationship. In other words, DES examines the hiring party’s degree of direction, rule or control.

There are 12 indicia of direction, rule or control, which are: (1) Authority over individual’s assistants; (2) Compliance with instructions; (3) Oral or written reports; (4) Place of work; (5) Personal performance; (6) Establishment of work sequence; (7) Right to discharge; (8) Set hours of work; (9) Training; (10) Amount of time; (11) Tools and materials; and (12) Expense reimbursement.

DES’ regulations identify additional factors that show independent status, which are: (1) Availability to the public; (2) Compensation on a job basis; (3) Realization of profit or loss; (4) Obligation; (5) Significant investment; (6) Simultaneous contracts.

A memorandum that outlines the hiring party’s business practices with regards to the above factors provides

16 AZ CPA y MAY 2014

DES an accurate, complete picture of the hiring party’s business and its relationship with its workers. Just as important is to carefully guard communications between the hiring party and DES. Audits and even appeals have been decided solely because of an incorrect or incomplete statement made by a worker or business owner.

In order to avoid confusion, request that DES provides written questions, instead of live interviews, so that the client may provide accurate and complete responses. Additionally, such a request provides a written record of all communication between the client and DES. Establishing a written record is critical, as many of these audits are resolved several administrative steps after the initial audit. Each administrative step can take years, so it is important to document each conversation to ensure there is no subsequent contradiction.

If the appeal continues, requesting a public records request of DES’ file may provide valuable information about DES’ case file.

DES Reclassifies Workers as Temporary Service Employees A Temporary Service Employer is an employing party that contracts with clients to supply workers to perform services for the client and who performs all of the following: (a) Negotiates with clients or customers for such matters as the time of work, the place of work, the type of work, the working conditions, the quality of services and the price of services. (b) Determines assignments or reassignments of workers, even though workers retain the right to refuse specific assignments. (c) Retains the authority to assign or reassign a worker to other clients or customers if a worker is determined unacceptable by a specific client or customer. (d) Assigns or reassigns the worker to perform services for a client or customer.

(e) Sets the rate of pay of the worker, whether or not through negotiation. (f) Pays the worker from its own account or accounts. (g) Retains the right to hire and terminate workers.

DES’ position is that an independent contractor can also be a temporary service employee. As a result, the hiring party would have to contribute to the unemployment insurance fund, even though DES concedes that the worker is an independent contractor. This tortured reading of the statute provides an example of the lengths DES is prepared to take to reclassify workers.

However, this paradox is likely short lived. The statute was amended in 2013 and the amendment explicitly excludes independent contractors from the definition of temporary service employees. The author’s position is that the temporary service employer statute has always excluded independent contractors and the amendment is simply a clarification. However, DES maintains that the amendment was not a clarification, but rather a change.

Thus DES is attempting to reclassify independent contractors as temporary service employees for any audits involving individuals that worked prior to the statute’s amendment.

Conclusion Disputing DES’ classification of workers is a lengthy process. DES has created a system whereby the odds are stacked in its favor and the lengthy appeal process weeds out all but the most determined of clients. Clients should be advised of the long and difficult process from the beginning.

Nevertheless, it is critical that practitioners protect the record at audit for subsequent appeals.

AZ CPA Paul J. Valentine and Steven M. Brechner are attorneys with the law firm of Arboleda Brechner. They can be reached at pjvalentine@abfirm.com or smbrechner@abfirm.com, or by calling (602) 953-2400.

obstacles stopping many business users from migrating Windows 8.In addition, Windows 8.1 provides a number of additional features targeted to business users, including tools to assist in managing Bring Your Own Device scenarios, enhancements to facilitate computing while away from the office, and security enhancements.

In sum, the release of Windows 8.1 should cause businesses that originally avoided upgrading to reconsider that decision.

The Last Days of Windows XP

Is Windows 8 In Your Future?

New Update Removes Obstacles To Upgrading

by Thomas G. Stephens, Jr.

One year after its public availability, Windows 8 has garnered approximately 7.41% of the operating system market, according to data released by Net Applications. Though Windows 8 share of the market pales in comparison to Windows 7’s 46% share, it does exceed – though barely – Apple’s 7.28% share. Moreover, momentum behind Windows 8 appears to be building and many anticipate significant gains in Microsoft’s latest operating system in the coming quarters.

Given this background, perhaps now is the right time to consider whether you should upgrade to Windows 8 in the near future.

Windows 8.1 Release Addresses Issues for Business Users When Microsoft released Windows 8, many business users and information technology managers immediately chose to avoid the operating system for two reasons. First, Windows 8 contains no “Start” button, creating some confusion around how to launch traditional applications such as Excel and accounting and tax applications. Second, business users would have to boot the operating system to the new Modern user interface, and then navigate to the more traditional desktop user interface found in prior versions of Windows.

In August, Microsoft released Windows 8.1 to manufacturing, and the product was available to the public on Oct. 17 and this update addresses both of the issues cited above. Users who upgrade to Windows 8.1 will benefit from a newly designed Start button to provide direct access from the desktop to traditional applications and from the ability to boot a computer directly to the desktop. With these two enhancements, Microsoft removed two of the major

Since its introduction in 2001, Windows XP has provided exceptional reliability, stability, and functionality to millions of business users. However, in conjunction with Microsoft’s stated product support policy, Windows XP was “sunset” on April 8, 2014. Microsoft no longer supports Windows XP and the company will no longer provide service packs, updates, patches, etc. for Windows XP. For this reason, virtually all business users of Windows XP should migrate away from Windows XP. Presently, Windows XP holds 33% of the operating system market and a substantial portion of these users are in businesses. If you are currently running Windows XP, the migration to Windows 8 will be a significant effort, as you will need to perform a “clean install” of Windows 8. This means that you cannot load Windows 8 on top of your existing Windows XP or Windows Vista installation. Of course, with a clean installation you will need to reinstall all of your applications and restore a backup of all of your data files once you install Windows 8. Note that a clean install is not necessary if you are upgrading from Windows 7. Rather, in this case you can install Windows 8 over the top of the existing Windows 7 installation.

What About Hardware?

Windows 8 does not place any onerous requirements on hardware.

In general, almost every computer that would have run Windows Vista and Windows 7 will also run Windows

MAY 2014 y AZ CPA

17

VA LU E D B Y T H E C O M PA N I E S W E VA LU E

2800 N. Central Ave. Suite 1725 Phoenix, AZ 85004

Provided purchase price allocation services in accordance with ASC Topic 805

Provided purchase price allocation services in accordance with ASC Topic 805

Provided purchase price allocation services in accordance with ASC Topic 805

Provided purchase price allocation services in accordance with ASC Topic 805

Provided purchase price allocation services in accordance with ASC Topic 805

Provided purchase price allocation services in accordance with ASC Topic 805

Provided purchase price allocation services in accordance with ASC Topics 718, 805

Provided purchase price allocation services in accordance with ASC Topic 805

www.kotzinvaluation.com Brian Jones 602-544-3567 bjones@kotzinvaluation.com

8. Further, many computers that run Windows XP currently can run Windows 8 without any hardware upgrades or replacements.

Specific hardware requirements for Windows 8 include the following: • Processor: 1 gigahertz (GHz) or faster • RAM: 1 gigabyte (GB) (32-bit) or 2 GB (64-bit) • Free hard disk space: 16 GB (32-bit) or 20 GB (64-bit) • Graphics card: MicrosoftDirectX 9 graphics device with WDDM driver.

If you are unsure as to whether your computer meets these specs, note that the Windows 8 installation routine will check your computer as part of the installation process. If your computer does not meet the specs, the installation process will abort and notify you of any deficiencies.

Is Windows 8 Difficult to Learn to Use?

Arizona’s best resource since 2000 for

Cost Segregation Studies (480) 963-2872

18 AZ CPA y MAY 2014

costseg@costsegstudy.com www.costsegstudy.com

In my experience, not at all. In fact, most business users will likely perform most of their actions from the Windows 8 traditional desktop. If that is the case, users will notice very little difference between Windows 8 and prior versions of Windows. In fact, the only difference you might see is improved speed, as you will notice that Windows 8 is very fast, both in booting a computer and in performing specific tasks such as opening a file, searching a folder, and launching applications.

Those who choose to work with Windows 8 through the Modern interface will see many differences between Windows 8 and prior versions of Windows. This is analogous to a Mac user who purchases an iPad – yes, there are differences but learning how to use an iPad is a very simple process for most, just as learning to use Windows 8 from the Modern interface will likely not present many obstacles to those who decide to use the operating system in that fashion.

Summary Windows 8 has much to offer. Im-

proved speed and security, coupled with productivity enhancements make this an operating system that all computer users should look at and consider using.

Further, with the release of Windows 8.1 and the sunsetting of Windows XP, a large number of current Windows XP users will likely migrate to Windows 8 because of the “carrot and stick” combination, with Windows 8.1 being the “carrot” and Windows XP’s sunset being the “stick.” As you consider whether Windows 8 is in your future, be sure

to take into account that most users will not need to invest in new hardware in order to realize benefits from the AZ CPA upgrade.

Thomas G. Stephens is a shareholder in K2 Enterprises, where he develops and presents continuing professional education programs to accounting, financial, and other business professionals across North America. You may contact him at tommy@k2e.com.

is becoming

Their name is changing, but their team is still committed to providing the great customer service and workers compensation expertise you’ve come to expect.

Financial Planning Conference June 12

What do Alphabet Soup, TED Talks and Social Security have in common? They will all be topics at the ASCPA’s Financial Planning Conference.

Make CopperPoint a part of your team. Call 602.631.2600 or 800.231.1363 and put CopperPoint to work for you.

Sessions Include: Economy HSA Strategies Beyond SEP and SIMPLE: Qualified Plan Alphabet Soup DBs, DCs, PSPs & 401(k)s TED Talk “Getting to Know Why” and Table Discussions

Social Security Strategies – True Confessions Energize Your Office with the Right Software The Roth IRA in a Changing Tax World

Not-for-Profit Conference – June 25

Hear the latest updates on nonprofit accounting and leadership from local and national experts at the ASCPA’s Not-for-Profit Conference. You can customize your day with three choices for each concurrent session, and you will have plenty of time to build relationships with other professionals in your field.

General Sessions: Election Year Compliance Issues The Affordable Care Act – The Rubber Meets the Road

Concurrent Sessions: Advanced UBIT* Street-Smart Financial Basics for Nonprofit Accounting Sexual Harassment: How to Cover Your Assets Audit & Accounting Update*

Fraud Busting: Staying off the Front Page Staff Development Across Generations Single Audit Update Ask the Experts Economic Outlook *To make it easier to choose, some of the more popular sessions will be available in more than one concurrent session.

Register online at www.ascpa.com and click on Conferences

Get a Quote 1.888.706.4070 copperpoint.com

MAY 2014 y AZ CPA

19

Get the Most out of Your Membership Focus on your work while the ASCPA: • Monitors more than 300 bills each year that affect the accounting profession.

• Attends all State Board of Accountancy meetings to make sure your voice is heard.

• Educates legislators on the importance of passing Income Tax Conformity every year through our advocacy efforts.

Collaborate with 5,700 members on the ASCPA’s Connect site and 950 members in our LinkedIn group.

Receive a 33% discount on webcasts by watching them with your team.

Reduce travel time by taking a webcast – more than 600 CPE programs are now offered as webcasts.

Take a peek at local businesses through our Behind the Scenes events.

20 AZ CPA y MAY 2014

Access your CPE records and print CPE certificates anytime on the web.

Get customized training delivered to your office.

Attend bimonthly luncheon programs to get to know key ADOR staff members.

Show the value of the CPA and be seen as an expert through media interviews.

Get special pricing from ASCPA preferred providers including: ADP, CAMICO, and CopperPoint.

Renew Your Membership Today!

FREE! Participate in 8 free webinars led by experts in a variety of fields.

Join the referral service to gain new clients.

Listen to weekly federal tax update podcasts.

Attend conferences developed by your peers on local and national topics.

MAY 2014 y AZ CPA

21

Classifieds Business Opportunities/ Practices for Sale OUR CPA FIRM IS LOOKING TO BUY BUSINESS CLIENTS — With 30 years in the valley, we are a wellestablished and growing practice who seeks business clients of every level.

While our main firm is in Scottsdale, we have satellite offices in Phoenix and Glendale. Our firm is experienced at transitioning new clients after a sale and welcome CPAs looking to retire.

Contact craig@awcpas.com or call (480) 990-2727 with any questions about how we can help you.

Retirement-minded North Central CPA Firm — Sole practitioner looking toward retirement would like possible merger with CPA firm, with gradual take out. Contact me at cpa@wexlercocpa.com for further discussion.

Employment Accounting and Financial Reporting Senior Analyst — Salt River Project — Prepare financial statements and regulatory reports. Act as liaison and offer support to outside auditors with their annual audit and other activities. Prepare schedules and provide support to outside auditors and consultants on preparation of official bond statements. Review transactions proposed or completed transactions and determine appropriate accounting.

Assist other accounting departments as needed (reconciliation review, process improvement). Work with other departments on various projects and initiatives. Review FASB/FERC pronouncements and communicate with internal management and outside auditors to determine the proper applicability and interpretation of the pronouncements for SRP. http://www.srpnet.com.

CPA MBA LOOKING FOR CONTRACT LABOR WORK — Flexible hours and references available. Experienced in many industries. Educated at Boston University and University of Chicago. Highly skilled in Excel spreadsheets. Proficient in accounting (Quick Books) according to GAAP. Please contact brcohen@cox.net or (602) 818-7322.

EXPERIENCED CONSULTANT Keegan, Linscott & Kenon, PC — We are seeking a professional in our consulting department with 3-10 years’ experience who has the potential to be a partner in the firm. If you are a self-motivated individual with advanced technical and interpersonal skills, this job may be perfect for you! Consulting work includes litigation support projects, bankruptcy reorganization services, and fraud investigation and detection. We provide a competitive compensation and benefits package. Salary is commensurate with experience. If interested and would like to learn more about KLK’s career opportunities, email: adzik@klkcpa.com.

Renew Now

Renew your ASCPA Membership and continue your professional growth.

We also offer automatic membership renewals. Automatic renewal saves you time, and you never miss out on any of your valuable member benefits. Be sure to take advantage of your 15% discount on CPE through May 31 — only for members who renew their membership for the 2014-15 year. Renew at www.ascpa.com

22 AZ CPA y MAY 2014

Senior Tax Accountant — Eaton Cambridge — Licensed CPA with 5+ years of recent public experience in tax compliance needed for fullservice wealth management firm which specializes in tax and estate planning (special emphasis on charitable gift planning, especially for the Christian community). Medium-term ownership potential—looking for career-minded person who can expand our practice and grow with our firm. Send résumé and cover letter to bob@eatoncambridge.com.

SENIOR TAX MANAGER — CPA required. Prepare and review complex business tax returns. Part time position. Dynamic firm. Paperless environment. Highly technical. Qbooks, Lacerte, RIA and Practice CS are utilized.

Flexible hours are available. Attach resume in pdf to lams12@aol.com.

TAX AND AUDIT PROFESSIONALS – REDW — As one of the largest, full-service CPA and business consulting firms in the Phoenix metropolitan area, REDW provides a broad range of services to a diverse client base.

Our rapid growth and increasing demands for our services has created a need for highly motivated tax and audit professionals to join our Phoenix team. Successful candidates will have the opportunity to enhance their technical and professional skills, build and expand client relationships, and learn from industry leaders. If you are looking for a career instead of job and have what it takes, apply at: redw. com/careers or contact Jessica Taylor at jtaylor@redw.com.

Office Space SHARE SPACE WITH ESTABLISHED LAW FIRM — $15.50/SF, Best value in the Camelback Corridor.

Remodeled in 2012. Share conference room & kitchen facilities. Space available from 164 to 3,000+ SF. Please call 602-319-1326. WEBsite: http:// roiproperties.com/CommercialProperties.aspx

Office Space Available — Beautiful garden-style office complex located in north Phoenix with easy access to both the SR 51 and SR 101, on the west side of Tatum Blvd., just north of Shea Blvd. Interior office space available. Ample parking, conference rooms, seminar room, Receptionist, fax, copier, telephone, and internet ready. High quality interior professionally designed and decorated to create an environment of quality, comfort and trust. High-grade carpet and comfortable yet classy furniture, including a custom-made wood reception station to establish a tone of quiet success.

Full kitchen includes refrigerator, dishwasher, oven, stove and microwave.

Contact Mary at (602) 953-5000.

DOWNTOWN PHOENIX CPA ANNEX-DESIGNED BY A CPA FOR A CPA—9 were available, ONLY 3 left.

Free Rent and Free Parking. Office

Space $500 per month. Ideal for sole proprietor. Walk to Ball Park, Basketball Arena and great restaurants. Dynamic environment. Collaborate. Share resources. Class A Office. Call Lance at (602) 741-7876. www.office4cpa.com.

To

place a classified ad, go to

www.ascpa.com and go to

The 2014-15 CPE Calendar is

marketplace.

now available online at www.ascpa.com. Register

For display advertising,

by May 31 to receive a

email

15% discount.

advertise@ascpa.com.

In the Black ... Adventures in Accounting

Concept: Heidi Frei Illust.: Jack Gannon

What are you doing, Ira?

What’s New in Webcasts?

Walter Haig seminars are now available as webcasts and you can watch webcasts on your iPad or other tablets with Internet access. Sign up for CPE by May 31 to receive a 15% discount.

MAY 2014 y AZ CPA

23

Arizona Society of Certified Public Accountants 4801 E. Washington St., Suite 225-B Phoenix, AZ 85034

PRSRT STD U.S. Postage PAID Phoenix, Arizona Permit No. 952 ADDRESS SERVICE REQUESTED

Health Care Reform—You have questions, we have answers!

Along with guaranteed acceptance for health insurance under the Affordable Care Act, there are multiple ways to purchase coverage.

For those who qualify for a tax subsidy because they earn less than 400% of the Federal Poverty Line, the “Marketplace” is the mandatory enrollment vehicle. But how does someone know which plan to buy?

How can they know if they qualify for a subsidy? How much will it be? Are there any other benefits to qualifying for the subsidy? Which insurance company is the right choice? How do they access the Marketplace (previously known as the Exchange)?

The Argus Group is committed to the insurance business, and we have answers to all of these questions and more. If you and/or your clients are looking for guidance in this new world of health insurance, we would love to be the company that helps you navigate the storm.

Please feel free to give us a call at (602) 863-0080. We are here to help.

24 AZ CPA y MAY 2014