WATCHING WASHINGTON’S PIGGY BANK

ADVOCACY

Budget deficits, fiscal cliffs, debt ceilings, sequestration … Who ya

gonna call? A seemingly never-ending stream of financial issues faces us and practically begs for help from CPAs to make the process more non-partisan, or at least more transparent.

Well, there is an answer: The Congressional CPA and Accountants Caucus for the 113th Congress is composed of a bipartisan group of 10 CPAs and two accountants with a goal to do just that. It is also bicameral, with 10 members from the House and two from the Senate.

The Caucus provides Congress “a forum to discuss and advance innovative policies on issues affecting CPAs, including tax administration and compliance, accounting and auditing standards. The caucus’ members will also use their accountancy experience to provide input on budgetary and fiscal issues.” Caucus membership comprises nine Republicans and three Democrats, including one female CPA. Members come from all areas of the country, hailing from California, Texas, Florida, Kansas, Minnesota, Mississippi, Ohio, South Carolina, Wyoming and Wisconsin.

CAUCUS GOALS

Rep. Michael Conaway (R-Texas), the co-chair of the caucus, said that “the members of the Congressional Caucus on CPAs and Accountants have specialized experience in budgeting, taxes and accounting (and) know what it means to draft a budget — and stick to it.” Rep. Brad Sherman (D-Calif.), his co-chair, stated that “the CPA caucus allows us to . . . share our expertise in financial accounting, budgeting and tax administration (and that) our bipartisan, bicameral structure ensures that members on both sides of the aisle in both the House and Senate get a straightforward CPA perspective to the critical fiscal and budgeting issues facing the country.”

“Fiscal sanity begins with knowing the numbers, and no one knows numbers better than accountants” said Sen. Mike Enzi (R-Wyo.), who is “working with [his] colleagues to address our fiscal crisis and to get America’s finances in order.” Sen. Ron Johnson (R-Wisc.) added that he is “pleased to be joining with colleagues on both sides of the aisle who bring … practical, private sector experience — and that Congress could use more elected officials with a background managing budgets.”

EXCHANGING IDEAS

The Caucus holds periodic roundtable discussions. Members attend as often as their schedules allow, but much work is accomplished at the staff level. Experts are invited in to brief the group in their specialty areas. David Walker, founder, president and CEO of the Comeback America Initiative and former U.S. comptroller general, spoke to the Caucus recently on fiscal cliff issues. Leslie Seidman, immediate past-chairman of the Financial Accounting Standards Board (FASB), recently discussed a number of issues including convergence. Greg Anton, CPA, CGMA, immediate past chair of the American Society of CPAs (AICPA) Board of Directors, has briefed members of the Caucus on the government’s financial statements.

RECENT INITIATIVES

The Caucus partners with the AICPA and many state CPA societies join in through grassroots efforts. VSCPA Government Affairs Director Emily Walker said the VSCPA “weighs in on issues through position letters and in-person visits with the Virginia Congressional delegation, generally consistent with AICPA positions.” She added, “It’s nice to know that as we continue to navigate through issues of importance to the CPA profession and accounting community that there are CPAs and accountants in Congress who can help carry our message.” A summary of recent and ongoing issues likely to involve AICPA and Caucus interaction includes:

FISCAL RESPONSIBILITY

According to the Government Accountability Office (GAO), “the Government’s debt-to-GDP ratio is projected to increase continuously over the next 75 years and beyond if current policy is kept in place,

ADVOCACY

Congressional Caucus on CPAs and Accountants

Source: American Institute of CPAs

which implies that CURRENT POLICY IS NOT SUSTAINABLE” (emphasis added). (For the actual reports and condensed “Citizens Guide,” visit www.fms.treas.gov/fr).

Anton founded the Institute’s “What’s At Stake” initiative (http:// www.aicpa.org/advocacy/pages/cpainsight.aspx) which reviews the federal government’s latest financial report, analyzes our current and projected financial status and disseminates the information in the hopes of promoting federal fiscal discipline. Rep Patrick Murphy (D-Fla.), “thank(ed) Greg and the AICPA for bringing much-needed attention to the role the government’s financial statements should play in the federal budget process to help us find common sense solutions to our fiscal challenges. This is important given that so many of the challenges we are dealing with are math problems. The ‘What’s at Stake?’ initiative provides valuable insight into how we can better ascertain the situation to make the best decisions for our nation’s future.” The AICPA Board of Directors also passed a resolution supporting two non-partisan efforts: the Campaign to Fix the Debt and the Comeback America Initiative.

CASH VS. ACCRUAL ACCOUNTING

The AICPA opposes proposals in the House Ways and Means Committee and Senate Finance Committee that would accelerate revenue collection by requiring the use of accrual accounting by all businesses exceeding $10 million in revenues. These proposals would impact many professional services sector firms such as CPAs, actuaries, architects, attorneys, consultants and engineers. Conaway and Sherman stated that “despite the disruptions this change would cause … [it] will not offer any real benefits … [and] the proposed change simply shifts a tax burden forward, increasing revenues today, but decreasing revenues in the future.”

CONVERGENCE

The AICPA continues to advocate for the U.S. adoption of International Financial Reporting Standards (IFRS) to provide transparent and comparable financial statements globally, based on a single set of highquality accounting standards. As IFRS may take some time to obtain approval from the U.S. Securities and Exchange Commission (SEC), the AICPA supports “convergence” of specific accounting standards between IFRS and U.S. Generally Accepted Accounting Principles (GAAP) in order to minimize the differences and make future adoption of IFRS easier.

THE DATA ACT

The Digital Accountability and Transparency Act (DATA Act) would hopefully do for the federal government’s financials what eXtensible Business Reporting Language (XBRL) did to corporate financials, by requiring standardized data tags. Sen. Rob Portman (R-Ohio), a lead co-sponsor of the bill, indicated that he was “grateful to Sen. Mark Warner (D-Va.) for working with [him] . . . to craft and introduce the DATA Act. For many, financial transparency may not be the most exciting topic; but it is absolutely critical to helping taxpayers know

ADVOCACY

how their money is spent, eliminating waste and fraud, and finding new opportunities for savings. … Our bill makes it easier to compare federal spending across federal agencies by requiring the establishment of government-wide financial data standards.” House sponsors of the companion bill are Reps. Darrell Issa (R-Calif.) and Elijah Cummings (D-Md). The bill has cleared several hurdles this Congress, including passing the House 388–1 and being favorably reported by the relevant Senate Committee on a voice vote. It now awaits Senate action and will then need to be reconciled with the House bill before it can be enacted into law.

MOBILE WORKFORCE

The AICPA supports the Mobile Workforce State Income Tax Simplification Act of 2013, in order to strike a balance between interests of states in collecting taxes on work done within their borders by nonresidents, and the need for businesses to be able to operate efficiently.

DUE DATES

The Tax Return Due Date Simplification and Modernization Act of 2013 would generally improve tax administration by establishing a set of due dates focused on promoting a chronologically correct flow of information between pass-through entities and their owners. The AICPA and state CPA societies continue to work to encourage members of Congress to cosponsor this legislation in the House and Senate.

CONCLUSION

The fact that the GAO says the government is currently on an “unsustainable” fiscal path means many of these issues will be with us for years to come. You may be frustrated by what has been going on in Washington, but not known what to do about it. CPAs, inside and outside of Congress, can be a valuable independent and/or non-partisan resource. You can keep up to date on national legislative and regulatory issues at www.aicpa.org/advocacy. Then, reach out to a legislator on issues important to you. Each of the 12 members of the Caucus has indicated a willingness to address these issues and accept input from other CPAs and accountants. Should you wish to contact any of them, it is best to go through either the AICPA or the designated staff in each office that handles Caucus issues. You can also contact your own U.S. congressman or senator. Your representative will likely appreciate the perspective of a CPA in their district.

In future issues of Disclosures, we will delve into the government’s financial statements and provide further analysis of the challenges our country faces. nAre you ready for health care reform changes?

Your dedicated Digital Benefit Advisors team of experts will guide you through how to make the most sound benefits decisions for your business and your clients.

Brian Marks, Executive Director P: 877.998.7272 www.digitalbenefitadvisors.com/vscpa TOM VISOTSKY, CPA, is a VSCPA past president and is currently an independent consultant in Richmond. He is also a member of the VSCPA Editorial Task Force. * tvisotsky@comcast.net connect.vscpa.com/TomVisotsky

According to legend, an ostrich will shove its head in the sand when confronted with something unpleasant. I think you’ll agree - probably not the best approach.

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