Georgia Society of CPAs â€˘ January/February 2010
Responding to the Request for Comfort Letters
Sustainability – The Greener Side of Accounting When I saw Sustainability on the agenda at the AICPA Fall Council meeting I was not really sure what the session would be about. As a freshwater trout fisherman, coastal boater and occasional camper, I am very interested in environmental issues. I just did not expect to see it on the agenda at AICPA Council, and I believe these thoughts were shared by at least some of those sitting around me. A couple of hours later I had a different opinion. The session opened with an excellent video address to Council by Prince Charles of Wales. One of his many causes, and one that he is keenly passionate about, is sustainability. In a broad sense, sustainability is the capacity to endure. In ecology, the word describes how biological systems remain diverse and productive over time. For humans, it is the potential for long-term maintenance of wellbeing, which in turn depends on the wellbeing of the natural world and the responsible use of natural resources. There is now abundant scientific evidence that humanity is living unsustainably. Returning human use of natural resources to within sustainable limits will require a major collective effort. To put this in financial terms, the ultimate source of all economic capital is nature’s capital, and we are consuming that capital as if it were income. Accountants know this is not sustainable. In his presentation, Prince Charles made an eloquent case for accountants’ roles in reversing this trend. There is an urgent need for new reporting systems; systems that provide better information to show that acting for the long term is also the best financial approach; in other words, a framework for reporting sustainability performance in economic terms. It is the accountant’s role and responsibility to provide this additional and better information, and to show that acting for the long-term, and in the best interests of communities and the environment, is also the right financial approach and not just an expensive luxury to be discarded rapidly in times of economic downturn. (HRH Prince Charles of Wales). This is why, in 2004, Prince Charles launched his Accounting for Sustainability Project. Earlier this year he hosted an Accounting for Sustainability Conference in London that AICPA President Barry Melancon attended. To date, sixteen major accounting bodies from around the world, including the AICPA, are committed to the project. The presentation to AICPA Council was, in effect, the beginning of the roll out of an awareness program for the AICPA membership. Over the past decade, sustainability has moved in from the fringes of the business world toward center stage. Major business publications like Fortune, Forbes, Business Week, The Economist and Inc., are running feature articles on companies’ sustainability efforts. Various organizations and publications are developing sustainability indexes to rank companies’ performance. A very strong example that the interest in sustainability is not just a passing fad is the stance Wal-Mart has taken saying sustainability is one of the most important opportunities for both the future of their business and the future of our world. They publicly state that they intend to become a better company by looking at every facet of their business - from the products they offer to the energy they use - through the lens of sustainability. They are committed to source products from responsible factories and reduce their footprint on the environment. This is huge! When Wal-Mart mandates sustainability practices for its suppliers, it passes through to its suppliers’ suppliers and so on. This is where small business becomes deeply involved. The three components of sustainability are economic, environmental and social. Whereas these three components have historically been viewed as being in conflict, businesses are now focusing on the intersection of these interests. Companies are coming to realize that there are economic benefits to a business approach that embraces and manages risks deriving from economic, environmental and social developments. For corporate management, finding the right balance among competing economic, social and environmental goals is the essence of responsible leadership. Management’s performance in achieving this balance can be quantified and used to identify and select leading companies for investment purposes. Major corporations like Lowes, GE, Wal-Mart and The Walt Disney Company are reporting on their sustainability programs. These stand-alone reports are the first step in sustainability reporting. Connected reporting will be better…reporting that connects a company’s sustainability efforts to its financial performance. This, clearly, is where accountants can shine. National CPA firms are already promoting their expertise in assisting clients in this area. I believe that it is an opportunity for all of us. Even small businesses can reap economic benefits from being green, and we have an opportunity to help show them how. Robert Prator Chairman, 2009-2010
GSCPA Officers 2009-2010 Chairman Robert L. Prator
Chairman-Elect Royce B. Duncan
Secretary/COO Gary L. Julian
Treasurer Scotty C. Jones
Immediate Past President Stewart H. Carlin
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GSCPA Directors 2009-2010 State-wide Directors (First of Two-Year Term) Larry M. Cohen Denise W. Grove David E. (Bo) Jackson Marlan L. Nichols Darrell J. Thaw
State-wide Directors (Second of Two-Year Term) Colin E. Blalock Michael P. Levine Kay S. Proctor Joseph R. Spradlin
Current Accounts The Georgia Society of CPAs in every issue
Responding to Requests for Comfort Letters
Member and Chapter News
Five Reasons Accountants Are Terrified of Blogging Geni Whitehouse, CPA, CITP, CSPM
You Are Invited to the House of Blogs
Top Five Ways a CPA Can Be Sued Chris Piety, Esq.
Update on Changes Regarding GSCPA/AICPA Ethics Enforcement Procedures Christine K. Peterson, CPA
Can An Estate Tax Be Retroactive? Jay Starkman, CPA
Seeking to Justify the Librarian Following the Technology Outsourcing Explosion Trey James
Economy Brings Fee Issues to the Forefront Michael Davenport, JD
Five Marketing Tips for Small Accounting Firms Hugh Duffy
Who’s In Control? Determining If An Employer Is Part of a Control Group Carol McBeth, CFS, CRPS®, AIF®
Current Accounts is a publication of the GSCPA, published six times per year. Member subscriptions are complimentary. Members may submit address changes and corrections to the Member Services Department at 404-231-8676, Opt. 4. Materials submitted as advertising or publicity are subject to acceptance for publication at the sole discretion of Current Accounts. Advertising deadlines are the first day of the month prior to the publication date (February 1 - March/April issue) and sold on a space availability basis. For advertising rates and availability, contact email@example.com. The editorial staff welcomes submissions of manuscripts on topics relevant to CPAs. Email the submission in the body of the email or as a Word document attachment to firstname.lastname@example.org. Desired length is 1000-1200 words. Please include contact information.
Staff CEO COO Editor/Designer Assistant Editor
Gary Julian Deborah Reeder Jamie Etzbach Elizabeth Kistler
The Georgia Society of CPAs Atlanta Financial Center, North Tower 3353 Peachtree Road NE, Suite 400 Atlanta, GA 30326-1414 404-231-8676 Fax 404-237-1291
One Profession. One Voice. One Profession. One Voice.3 3
responding to requests for comfort letters "As a practitioner I have been very concerned regarding the pressure we CPAs are receiving regarding comfort letters for mortgage lenders or underwriters. The liability of issuing such a letter is great. Most clients do not realize that this would be issuing an opinion and therefore an attestation engagement. Most clients, lenders and underwriters do not understand what we are supposed to do by professional standards to issue such a letter. This article explains what is and is not permitted under the standards. The article is an explanation, which the practitioner can forward to the client, lender or underwriter as a clarification for the procedures involved and less costly alternative procedures." T. Farrell Nichols, managing partner, Nichols, Cauley & Associates, LLC CPAs continue to receive requests from clients, lenders and loan brokers for “comfort letters” in which the CPA confirms client information such as the client’s self-employed status, verification of income from selfemployment, profitability of a client’s business and the impact on a client’s business if money is withdrawn to fund the down payment on a real estate purchase. The letter at issue is usually associated with statedincome loans, which are mortgages that do not require borrowers to document their income. Such loans usually are sought by self-employed people and individuals with investment income or with sales jobs of varying commissions. Lenders, lacking documentation to support borrowers’ income claims, take on the risk that borrowers’ claims are inadequate. To gain more comfort in extending loans, some lenders look to the borrowers’ CPA for assurance or comfort about certain information. Most lenders will simply ask the CPA to write a letter indicating that the prospective borrower is selfemployed or is employed in a certain profession. Others may attempt to shift the burden of responsibility for due diligence onto the borrower’s CPA and provide a script of what they want the letter to say. Such a letter provides third-party verification of details in the application and could transfer some of the potential liability to the CPA in the event of default on the loan. There are a few issues with this type of letter that should concern CPAs. First, the proposed letter asks the CPA to attest, when the CPA has not specifically been engaged for that purpose. The report would be issued to a third party that has not contracted with the preparer for that specific purpose. 4
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According to Auditing Standards Board Statement on Standards for Attestation Engagements No. 10, Attest Engagements, an attestation engagement is called for if the client wants a written report providing assurance about a specific subject. Of course, performing an attestation engagement is not prohibited in the case of a lender’s comfort letter request, but CPAs must follow the procedures required in an attestation engagement. The client will likely not want to incur the expense of a formal attestation engagement. It is also important to know what is not permitted under the standards. AT Section 9101, Attest Engagements: Attest Engagements Interpretations of Section 101, No. 2, paragraph 25 states that practitioners should not provide any form of assurance that an entity is not insolvent or would not be rendered insolvent upon a proposed condition, or that an entity has the ability to pay debts as they mature. A lender may want the CPA to make an assurance that the applicant’s withdrawal of the funds for a down payment or other purposes would not put a financial strain on the applicant’s self-employment business. Any representation to that effect could be construed to be a comment on solvency and would thus be prohibited under the standards. The types of services permitted in a CPA attest report include an audit, a review or a compilation of the applicant’s personal financial statements. The CPA may also report on pro forma financial information or perform an agreed-upon procedures report, as long as those procedures do not provide any assurance on matters of solvency. The important thing to consider is that this type of engagement requires many procedural steps, which take
time and result in significant fees to the client. If the CPA takes the time to explain to the lender what is involved in presenting a comfort letter in light of professional standards and the related cost to the applicant of issuing any attestation letter, the lender may be convinced to withdraw its request for a comfort letter. As an alternative, the CPA may offer to send a copy (with the client’s written authorization) of the client’s tax forms directly to the lender with a simple cover page stating, “Please find attached the tax forms I prepared for Client for the past two years.” Sometimes the broker does not want the tax forms in the application file because the forms do not provide enough information or may provide information that might cause the loan to be rejected. Another option is to provide the lender with a CPA letter that basically makes no assurances, therefore limiting the CPA’s liability. The letter merely says that the CPA prepared the tax forms and that the lender should not construe the letter to be an audited CPA representation.
Although from a risk management perspective it is preferable to avoid confirming any client information to a lender or broker, a CPA, not wanting to alienate or offend a client, may be tempted to send off a quick letter to the lender confirming that the client is self-employed, or retired, or earning a living from the activities addressed on the tax return. The CPA should be careful about sending such a letter. Does the CPA really know everything that is occurring with that client? Does the client have other activities on the side that the CPA is not aware of and that conflict with the information on the tax forms? A CPA is certain about what he or she puts on tax forms. Saying anything else in the letter advances the tax engagement to a new level. When asked to provide a comfort letter for a client, a CPA can best avoid risk by sticking to the professional standards and not caving in to pressure from a client or lender. While clients need to have the flexibility to obtain credit, the responsibility for underwriting the loan lies with the lender, not the CPA.
One Profession. One Voice.
you are invited to the house of blogs Thought About Blogging? The GSCPA Wants to Hear From You! On January 15, 2010, the Georgia Society of CPAs will unveil a new, exciting communication platform - the House of Blogs! This blog and the blog posts will be open to all members from leadership to students and the regularly updated posts will by the members to the members. All areas of the GSCPA will be represented from chapters to sections to hot accounting topics. Visitors will have the opportunity to choose which area of the house to visit, or you can take a tour of the entire property. As a GSCPA blogger, you are welcome to contribute once, weekly or monthly - whatever fits your schedule. These posts can be about anything and everything - blog about the CPA profession, review an article, tell a story or just blog about your golf game. We are giving you a stage and a voice. Think of blogging as a casual conversation among friends. Let us know what you are passionate about; what inspires you in and out of the office. If you are interested in blogging or you have an idea for a possible post, please contact Elizabeth Kistler at 404-504-2941. The blog launches on January 15, 2010. Keep an eye on your email for the official announcement and a direct link to The House of Blogs.
The Garage If the house feels a little crowded, head on out to the Garage, which is located on the right-hand side of the blog page. The Garage is an open forum for discussion about anything and everything. Feel free to talk about personal or business to fellow GSCPA members and nonmembers alike. Different from blog posts, discussions in the Garage are short, succinct statements similar in nature to "The Vent" in the AJC. Does something have you frustrated and you want to get it off your chest? The Garage is the place to sound off.
five reasons accountants are terrified of blogging Geni Whitehouse, CPA, CITP, CSPM So you want to start blogging. Or more likely, you have just found out that you are expected to start blogging. This usually happens when someone in marketing decides that your firm needs to add a blog to your web site. They ask volunteers to step forward and everyone steps back â€“ except you. Maybe you have written an article or two on cost segregation or charitable remainder trusts and now there is documented proof that you can form complete sentences. That makes you the best candidate for the role of firm blogger. No matter how you have arrived at your blogging assignment, it probably feels like a chore. You have lived through numerous failed newsletter projects and know how much of a hassle it is to write content even once a quarter. You probably figure blogging will require tons of research and more long nights at the office. Fortunately, you have got it all wrong. Done properly, 6
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blogs should give you an excuse to leave the office, to follow your passion, and to tell your story. They can change your perspective and help you form connections with clients in a way you might not imagine. Rather than requiring hours of technical research, blogs merely require a few minutes of intense curiosity and constant observation. They should be fun to write and interesting to read. Blogs are all about forming a personal connection with an audience. They should reflect your voice. It is doubtful many clients are going to get so excited by your charitable remainder trust post that they share it with their neighbor. However, what Monty Python fan will be able to resist sharing your witty post about accountants as lion tamers with their fellow Monty Python lovers? The goal of a blog is to create content that makes people hungry for more so they return to your site and share
information about you with others. How many links to videos have you received from friends? How many links to IRS Circular E have you gotten from friends? The following five myths often prevent accountants from blogging. Myth #1: Blog posts should be written on a regular schedule Actually, this is a terrifying thing to tell an accountant, but there is no schedule. Good blog posts happen when the spirit moves you and you have something interesting to say. Forced blog posts, written on a regular schedule, are easy to spot and rarely reflect the author’s personality. Example: This is a blog written by an aspiring CPA – she only posts when she has time, but she has a huge following. http://www.thecookingaccountant.com/ Myth #2: Blog posts should be on official topics like taxes and FASB 107. If these are your topics of choice, put them in a newsletter or article. Better yet, buy a subscription to a technical newsletter that is ghost written on your behalf. Do not waste your time writing a blog post that no one will read. Blog posts should be about life, which means you have to actually have a life – one that involves something other than work. They can be about anything that interests you and inspires passion. They could be on subjects like fishing, cycling, jogging, eating, comedy, books, sports, music - whatever you enjoy enough to talk about is the right subject for a blog. If you have a chance to observe people, places or events in your local community that is even better. Example: This is a blog written by a CPA with a passion for photography – he just happens to be in the heart of Napa Valley with plenty of photo opportunities http://blog.bdcocpa.com/ Myth #3: Blog posts have to be flowery and well written. If that is what you are like in person, then yes, your posts should reflect your style. If you use exactly the right word and enjoy a philosophical debate on the meaning of life, then that is what should be on your blog. However, if you happen to be a hushpuppy fanatic from Greenville, South Carolina, then your blog should reflect that. Blog posts should be conversational rather than formal. Descriptive vivid words are best, but long technical sounding expressions and acronyms should be reserved for paid research projects. Just to be clear, it is not encourages that you use four letter words and make irresponsible statements, because clearly that is not in your best professional interest. Your posts should ring true – if you are angry about some crazy tax law change, then express your anger. Example: This one is well written but not flowery. http://www.cpamarketingcenter.com/blog/ Myth #4: Blog posts have to be long or contain a fixed number of words. They can be short or long. Some great blog posts contain a single sentence, while others just include a photo with a caption. They should be as brief as possible but long enough to convey your message. If they get too long, no one will read them. Example: Here’s a short blog post written by a CPA who just happens to be in a Country Western band. http://blog.rina.com/2009/08/28/
Myth #5: No one cares about my interest in _________________ (insert your favorite subject here.) Even if you are the only person on earth with a love of the striped mud turtle, your blog post on that subject is likely to spur more interest and conversation than any newsletter article you have submitted in the last 20 years. People will read about interesting subjects – and those subjects can be used to make a point that relates to your accounting services. People will be fascinated (and frankly, shocked) to know that you have an interest in something found in nature. When you write a blog post, you will want to take your observations of the mud turtle and connect them with a service you offer – maybe a mud turtle is as overlooked and misunderstood as the equity section of a balance sheet. Maybe this turtle’s slow pace reminds you of a client who does not worry about being the biggest, but steadily works on providing excellent customer service. He does not stick his neck out, but he continues to focus on his areas of expertise. Example: This blogger builds off of his interest in running and biking to make his points http://blog.colegavlas.com/ Now that you know the myths are not true, it is time to sit down and figure out what subject will excite you enough to write about it. When you start looking for material, you will find it everywhere you go, so rather than being a chore, blogging actually becomes more like a game. As an added bonus, when you step away from the computer and take time to appreciate the view outside of your office, you will have more energy to apply to your work –blogging is a lot cheaper than therapy. Geni Whitehouse, CPA, CITP, CSPM is the countess of communication at Mentor Plus. She is a frequent blogger on a number of different web sites, including www.evenanerd.com. She specializes in making boring subjects from Sales Tax to XBRL interesting and is the author of “How to Make a Boring Subject Interesting: 52 ways even a nerd can be heard.” She is responsible for helping a number of accountants find their authentic voice through blogs. Contact her at email@example.com.
One Profession. One Voice.
top five ways a cpa can be sued Chris Piety, Esq. There are basic risk management steps that every firm can take to lower their exposures to risk, such as client and engagement screening, due diligence, documentation, due care, exercising skepticism and being aware of the public standards for CPA services. The following five pitfalls are especially prone to litigation but are avoidable when risk management principles and techniques are applied effectively: Mistaking adherence to the professional standards as a substitute for “getting it right.” Juries rarely care about CPA professional standards, rules or disclaimers. What they care about is CPAs getting it right. When you are preparing tax returns, or you are engaged in a review or compilation of financial statements, you are not required to verify certain types of information. But think twice. If something looks irregular, it probably is. Investigate it, document it, communicate it and get it right. Failing to communicate with clients in writing. Failing to document important information is a common mistake that often leads to lawsuits. If it is not in writing, it may be presumed later in a court of law that it did not happen. Juries expect CPAs to document important events, advice and client decisions. The client rarely remembers that the CPA told them to stop spending beyond their means, to use the cash they have now to pay estimated tax and avoid penalties in the future or that they should not give their bookkeeper blank checks. Documentation is needed from beginning to end. It begins with the engagement letter stating what the firm is going to do, what it is not going to do, the limitations of the engagement and what the client’s responsibilities are. Document the advice you give, the information you receive and the decisions made by the client. Document a disengagement by sending the client a professional, objective and rational letter that lets the client know that the engagement is ending at a specific date. Participating in business deals with clients. Investing in business deals with clients is often a mistake, especially when the CPA also provides professional services to the business. Everyone is usually happy as long as the deal performs well. The CPA is perceived by the client as a competent advisor with the client’s best interests at heart. If the deal falls apart or takes a severe downturn, however, the client’s perception of the CPA may change. The CPA appears to no longer have the client’s best interests at heart and juries tend to sympathize with clients, especially with the benefit of hindsight and all the facts laid out by a skilled attorney. The CPA is portrayed as the financial expert who sacrificed the best interests of his client to benefit himself. Also, disclosing a conflict of interest to the client, while helpful, does not solve the problem, even if the client signs the disclosure. It can be later argued that the client’s consent was not “informed” by a third party (such as an attorney). Do not get too comfortable with disclosure as a form of protection. In the 8
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end, the question is whether there is a perception that the CPA no longer has unfettered loyalty to the client. Finally, and probably most importantly, is coverage precluded by your insurance policy if you enter into a business deal with a client and something goes wrong? Advising both parties to a transaction, or helping them to resolve a dispute. Many times CPAs are asked to help clients resolve disputes. Do not do it! Friendly divorcing couples do not always stay friendly, and guess who they blame when things do not work out the way they had hoped. The CPA. The same is true with business disputes. Disputes between owners or partners often result in advice that is perceived by one or more of them as favoring one partner to the detriment of another. This in turn results in malpractice claims. Suing your client for fees. This almost certainly will prompt a cross complaint for malpractice, escalating the situation from a simple fee dispute to a malpractice lawsuit. More importantly, your insurance policy might not cover a counter suit to your suit for fees. So think twice, and call your attorney or risk adviser for guidance. Christopher Piety is vice president of claims for CAMICO Mutual Insurance Company (www.camico.com). He is responsible for the management, negotiation, and settlement of all claims brought against CAMICO policyholders and manages the claims department’s daily operations. Copyright 2009 CAMICO Mutual Insurance Company. All rights reserved.
update on changes regarding gscpa/ aicpa ethics enforcement procedures Christine K. Peterson, CPA The Georgia Society of CPAs (GSCPA) and the American Institute of CPAs (AICPA) adhere to the same Code of Professional Conduct. The Code of Professional Conduct consists of two sections – the Principles and the Rules. The Principles provide the framework for the Rules, which govern the performance of professional services by members. The Code of Professional Conduct was adopted by the membership to provide guidance and rules to all members – those in public practice, in industry, in government and in education – in the performance of their professional responsibilities. In order to simplify and enhance enforcement of this code of professional conduct, the GSCPA has consistently participated with the AICPA in the Joint Ethics Enforcement Program (JEEP). The purpose of the JEEP agreement between the GSCPA and the AICPA is to permit joint enforcement of the Code of Professional Conduct with respect to a member of either or both of the organizations by allowing the two organizations to have a single investigation, and if warranted, a single set of corrective actions, a single settlement agreement or joint trial board hearing. During 2009, the membership of the GSCPA voted on a bylaw amendment that changed the way it participates with the AICPA in the Joint Ethics Enforcement Program (JEEP). Prior to the above mentioned change, the GSCPA was an Option 1 participating state society. That meant that the Professional Ethics Committee would handle the investigations of most ethics complaints made against members. The committee would acknowledge receipt of the complaint and determine whether or not there was prima facie evidence of a possible violation of the Code of Conduct. If there was sufficient evidence, the committee would send out the opening letter to the respondent, conduct the investigation, make a determination of the violation of the Code of Professional Conduct, if any, and make the recommendation for the required corrective action. The case file and proposed violation and letter of required correction action would then be sent to the AICPA Professional Ethics Committee for their concurrence. When concurrence was received from the AICPA, the GSCPA committee would contact the respondent and follow up on the conclusion of the case. Based on the newly adopted bylaws, the Board of Directors of the GSCPA elected to change from an Option 1 participating state society to an Option 2 participating state society. Under the Option 2 JEEP agreement, the GSCPA has requested that the AICPA conduct all ethics investigations of GSCPA members. The GSCPA Professional Ethics Committee will no longer be handling the actual ethics investigations of GSCPA members. Instead, the AICPA Professional Ethics Committee and their staff will conduct the actual investigation. After the AICPA’s committee completes its investigation of an ethics complaint involving a GSCPA member, they will forward their findings of violation, if any, and suggested required corrective actions to the GSCPA Professional
Ethics Committee. The case will be assigned to a committee member for review and then the committee will vote whether or not to concur with the findings of the AICPA. If the GSCPA concurs with the AICPA’s findings, then the AICPA will contact the respondent and follow up on the conclusion of the case. However, this change does not mean that the GSCPA committee’s usefulness is over. The committee will continue to perform the initial review of complaints received against GSCPA members to determine whether or not such complaints should be forwarded to the AICPA for an investigation pursuant to the JEEP agreement. The committee will also continue to respond to inquiries from members of the GSCPA and others on matters relating to ethical issues. Each month, a committee member is assigned to respond to inquiries from other CPAs and from the general public. These inquiries may be about record retention, firm names, commission and contingent fees and other ethical matters. The member responding to the inquiry will find out as much information as they can about the nature of the inquiry, and then answer the inquiry to the best of their knowledge, generally by providing the relevant Code of Conduct sections that address the issue. The committee will always advise the member making the inquiry that their response is their own personal interpretation of the Code of Conduct. If the member wants a formal response to their inquiry, then it will need to be put in writing, it will be discussed and a response will be rendered from the committee as a whole. The committee will also be responsible for initiating or reviewing proposed changes to the GSCPA and AICPA Code of Professional Conduct or the Public Accountancy Law of Georgia as it applies to the lawful and ethical conduct of accountants, and will report its recommendations to the GSCPA Board of Directors. The committee will also make ethics information available to the membership, as well as the general public, promote discussion of ethics questions at various meetings of the GSCPA and publish articles in Current Accounts of topics regarding ethics and proposed changes. The committee will also prepare and publish the necessary disciplinary actions of its members in Current Accounts. This new “transparency” of the ethics enforcement process allows for the publishing of the results of certain disciplinary actions taken. The GSCPA and the AICPA feel that greater transparency regarding ethics enforcement will help educate the membership of potential violations and help deter future occurrences of violations of the Code of Professional Conduct. The GSCPA Professional Ethics Committee is confident that it will continue to be a valuable resource to both the members of the society and the general public. Christine Peterson is partner with Peterson, Coleman & Marett, LLC in Atlanta. She is also a member of the GSCPA Professional Ethics Committee. She can be reached at firstname.lastname@example.org.
One Profession. One Voice.
can an estate tax be retroactive? Jay Starkman, CPA The estate tax expires on January 1, 2010. Congress is expected to reinstate it, probably not until later in the year. Most expect any change will be retroactive to January 1, affecting the tax liability of estates of people who died before the law was enacted. Is a retroactive tax law constitutional? Absolutely! Though the Constitution prohibits ex post facto laws, those only apply to criminal cases. So there is no impediment for our courts when tax revenue is involved. The 1864 Civil War income tax increase was an emergency war measure, which retroactively applied to 1863 income. The Supreme Court upheld its ruling: The right of Congress to have imposed this tax by a new statute, although the measure of it was governed by the income of the past year, cannot be doubted; much less can it be doubted that it could impose such a tax on the income of the current year, though part of that year had elapsed when the statute was passed. The joint resolution of July 4, 1864 imposed a
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tax of 5 percent upon all income of the previous year, although one tax on it had already been paid, and no one doubted the validity of the tax or attempted to resist it. The 1913 Tax Act was enacted on October 3, and took effect on November 1, retroactive to March 1, four days after the Sixteenth Amendment was ratified. The Supreme Court dismissed the challenge: [T]his limited retroactivity is assailed as repugnant to the due process clause of the Fifth Amendment, and as inconsistent with the Sixteenth Amendment itself. But the date of the retroactivity did not extend beyond the time when the Amendment was operative, and there can be no dispute that there was power by virtue of the Amendment during that period to levy the tax, without apportionment. Even death does not stop a retroactive tax increase. Ruth S. Dinsmore died on April 14, 1993, when the maximum federal estate tax rate was 50 percent. On
August 20, 1993, President Clinton signed the Omnibus Budget Reconciliation Act, which increased the highest rates to 53 and 55 percent, retroactive to January 1, 1993. The result was a $175,137 estate tax increase. The district court dismissed the case for failing to specify proper grounds in its claim for refund. Claiming that the retroactive tax increase was “unconstitutional and invalid” was so vague and ambiguous that the IRS could not reasonably be required to know, let alone defend such a claim. Alternatively, the court ruled that the retroactive increase in the tax rate was not unconstitutional, and did not violate the apportionment clause, due process clause of the Fifth Amendment, or the takings clause under the Fifth Amendment, and did not contravene the prohibition against ex post facto laws. Ellen Clayton Garwood died in March 1993. With a gross estate of $28,108,968.72, the additional tax was $1,320,190. The appeals court rejected the argument that the retroactive increase was an ex post facto law because that prohibition only applies to criminal enactments, and the bank avoided any possibility of criminal sanctions by paying the tax. Judge S. Jay Plager dissented, “there are times when the gap between law and justice is too stark to be ignored. This is one of them…I believe it should be unconstitutional…” An appeal to the U.S. Supreme Court was denied. Manifest Injustice New Jersey has a reputation as a notoriously difficult state for a taxpayer to prevail in a dispute with the Division of Taxation. The state enacted a law on July 1, 2002 increasing the estate tax retroactive to January 1, 2002. Cynthia Oberhand died on March 28, 2002 and her estate was assessed an additional $25,915.49 estate tax as a result of the retroactive law. The state Tax Court held that the retroactive law was constitutional. Yet, in a big surprise, it ruled in favor of the estate. The court applied the equity principle of “manifest injustice” to prevent application of a tax law which did not exist at her death. The appeals court reversed in favor of the state, saying “the doctrine of manifest injustice has no place in the judicial evaluation of retroactive tax laws.” The New Jersey Supreme Court sided with the taxpayer, agreeing with the Tax Court that retroactive application was manifest injustice. Oberhand was based strictly on equity relief because the same NJ Tax Court Judge Harold A. Kuskin ruled
three months later that this retroactive law was not manifest injustice under slightly different facts where the estate tax resulted from a disclaimer by the beneficiary. That retroactive tax was not triggered merely by the decedent’s death. When the 1894 income tax was before the U.S. Supreme Court the second time, it considered whether the tax was unconstitutional or manifest injustice. It opted for unconstitutional. Why does the constitution not protect us against a civil ex post facto law? Back in 1798, the Supreme Court considered a retroactive Connecticut probate law. The sole issue was whether that state law should be overturned as ex post facto. Justice Samuel Chase (who would later be impeached for sentencing a tax protester to death, another story in the book) wrote that the ex post facto prohibition applies only to laws which are “manifestly unjust and oppressive.” He then opined that such prohibition only applied to cases which made an innocent action criminal. This criminal ex post facto doctrine “is so well settled as to have become one of the commonplaces of American constitutional law,” declared a 1921 Michigan Law Review article. A retroactive estate tax will assuredly be challenged by taxpayers. Courts historically have denied such efforts. Getting the Supreme Court to hear such a case nowadays would be very difficult unless a lower court tries to overturn it. That last happened after a December 22, 1987 law changed an estate tax deduction, retroactive to October 1986. The Supreme Court heard the case in 1994 and overturned the appeals court decision which had ruled in favor of the taxpayer. Note: At press date, three weeks before January 1, the House had passed a bill making the 2009 estate tax permanent. It is uncertain whether the Senate will find time to consider proposals for extending or modifying the estate tax prior to January 1. Copyright © 2008, 2009 by Jay Starkman. Reprinted by permission. Excerpted from Jay Starkman’s new book, The Sex of a Hippopotamus: A Unique History of Taxes and Accounting. More stories from his book, humorous accounting videos and tax songs are available at www. starkman.com/hippo. Jay practices in Atlanta. He can be reached at email@example.com.
One Profession. One Voice. 11
seeking to justify the librarian following the technology outsourcing explosion Trey James Remember when the hefty three-ringed tax research guides required a whole room set aside as a library with a librarian? Imagine justifying this expense to your partners today. You could not and you would not want to because the alternative is so much better than the dark woodsy library ever was. Online tax research quickly booted even the interim step from paper to CD-ROMs in favor of Internet-based services. In doing so, we were forced into an outsourced world, which turned out to be a more productive and efficient world. Though nearly all tax research is now online, some of us still use that fancy room, but now it is just to impress new recruits with stories of how we walked uphill in the snow both ways and did our research on paper, back in the good ‘ol days. Outsourcing Taboo? Mention “outsourcing” in the accounting community and the first thing that comes to mind is sending tax preparation to India. To some that is a good thought, yet many others have an immediate and negative reaction. However, since the invention of fire… oh, and the abacus… CPAs, themselves, have successfully convinced businesses that outsourcing their accounting and tax compliance functions is a good thing: “Take advantage of our experts.” “We do this all day long.” “We have the credentials.” “It’s too risky to do it on your own.” These are all good points, and the paper-based to Internet-based transition is a perfect example of outsourcing’s advantages. As with tax research, technologies of all kinds are following suit. It is pervasive. Software is being web-enabled. Servers are being virtualized. Networks are moving to the cloud and the younger generations are thankful for it. They understand it. They want it. They do not understand why we are resistant to the change.
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What is the Cloud? Firms today are moving toward the inevitable – the cloud – a model where technology help desk, hardware, software, and management can be completely outsourced. No more servers, fewer IT people, improved productivity and more time to focus on the business. If India just popped into your mind, you can rest easy. Few, if any, US-based hosting providers are opting to offshore their IT talent, so we need not worry about our precious client data traversing the globe to lands far away. Plus, learning about the provider’s operations is a straightforward piece of the due diligence process. Remember when the “web” became the catchy new term for the up-and-coming Internet? Well the “cloud” lives on the web and it is the new hip way to refer to a cornucopia of outsourced web-based technologies. The cloud is best defined as a “pay as you go computing webinfrastructure, leveraged for economies of scale.” You will often hear the cloud referred to as SaaS (Softwareas-a-Service), PaaS (Platform-as-a-Service), and even IaaS (Infrastructure-as-a-Service). What Can be Put in the Cloud? All of your software will eventually live in the cloudtax, practice management, engagement/trial balance, document management, QuickBooks™/Peachtree™, the aforementioned tax research, Microsoft Office™ collaboration tools (email, shared calendars, tasks). Nearly everything will go into the cloud; it is just a matter of time. You’d be surprised how many firms have already moved there. Small firms with two employees, large firms with hundreds of employees and everything in between. Multi-office firms and firms who need remote access are especially good candidates because everything is securely accessible via the web… from the cloud. What Does this Mean for Accountants? In short, all accounting technology will eventually live in the cloud, and we will be better for it. This transition will allow accountants to focus on what they do best. Technology is a cornerstone to most businesses in terms
of success - we cannot live without it. Why did you started your business to begin with. If ‘technology management’ or ‘technology services’ is not core to your firm’s purpose and mission, then it likely falls squarely into the ‘headache’ category. Aside from the distractions related to doing technology well, there are inherent risks to consider. Security, reliability, performance, compatibility, redundancy and obsolescence are just a few that come to mind. As a profession, accounting firms can no longer be a pioneer on the outsourced technology/hosting front. The good news is that many firms have made the transition successfully and they are asking themselves why they did not go there sooner. Their client data is far more secure in a SAS-70, type II data center than it ever was in their closet at the office. These firms now live in a world where they spend little, if any, time planning for technology upgrades or future IT expenditures, working on IT staffing issues or fretting over security concerns.
Just as in most successful transitions to outsourced services in the past, we are much better off after the change if we can just get ourselves to start the move in that direction. Of course, there is always the alternative of walking uphill, in the snow, barefoot. Think fancy threeringed binders on beautifully ornate book shelves. Trey James is the co-founder and CEO of Xcentric, which specializes in IT solutions and certified networks for CPA firms. Trey brings 18 years of experience – a blend of executive, strategic, technical and operational roles including successful roles with the regional firms, local firms and leading IT consultancies to the profession. Trey has been recognized by CPA Technology Advisor magazine as one of the ‘Top 40 Most Influential People in the Accounting Industry’, for the past three consecutive years. Trey can be reached at 678-297-0066, ext. 517 or firstname.lastname@example.org.
One Profession. One Voice. 13
economy brings fee issues to the forefront Michael Davenport, JD CPA malpractice insurance claims activity has increased as a result of the recession, and that activity includes CPAs having difficulties in recouping fees. The economy-wide trend of clients having business problems also affects cash flow and the payment of bills, including the bills owed to CPAs. With financial problems come going concern issues and bankruptcies, causing CPAs to deliberate whether it is worth trying to pursue payment from a struggling or bellyup client. If there is no money left, it is of course futile. Otherwise, the firm gets in line with the other creditors. If the CPA firm has allowed fees to build up to the point where the firm can no longer walk away from them, that is a problem that the firm can usually avoid, along with having a collection problem in the first place. How can a firm avoid having a collection problem in the first place? The best way is to communicate your billing and collection policies in your engagement letter, including stop-work and/or disengagement provisions that can be enforced if a client does not pay in accordance with the engagement letter. Bill on a timely basis, and do not allow fees to build up to the point where you can no longer walk away from them. When unpaid fees become too large, they provide an incentive for the client to sue for malpractice, especially when the CPA has sued to collect fees. Is there a better option than suing to collect fees? Claims experience shows that simple fee disputes are better resolved through mediation and arbitration than through litigation. That is why mediation is effective for all disputes as a first step, and binding arbitration - for fee disputes only - as a second step. How does the firm get the client to agree to this? The best way is to have a mediation clause for all disputes and a binding arbitration clause for fee disputes only, in your engagement letter, which is signed by the client. What are the first steps to take when a client is not paying? Good communication with a non-paying client will either spur payment or set up circumstances that will make a potential demand for arbitration more effective. This may eventually involve sending a series of three letters
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requesting payment and communication from the client: 1. The first letter politely notes the nonpayment of fees owed, requests payment and asks if there is any reason for the delay in payment. 2. The second letter is a reiteration of the first letter. 3. The final letter notes the continued nonpayment, and it requests a call to discuss payment arrangements by a specified deadline date, stipulating that if no call is received by the date, the result will be a demand for arbitration concerning the fee dispute, effective as of that date. The purpose of the letters is to show that the client, by not responding to them, did not have any valid basis to claim that the fees were not owed. Had there been any dissatisfaction with the work, the client would have communicated it when given the opportunity. Why is mediation and arbitration better than suing to collect fees? Claim experience clearly shows that suing for fees creates a high probability of a counter-suit by the CPAâ€™s client, usually alleging malpractice during the engagement in question. This escalates the situation from a simple fee dispute to a malpractice lawsuit. Why is it a good idea to first consult with my professional liability carrier before suing to collect fees? The consultation enables the risk adviser to assist the policyholder in weighing the risks and consequences of suing for fees. Lawsuits and counter-suits almost always result in the CPA spending far more in attorney fees and in lost billable time than is warranted for the fees owed to the CPA. CPA firms should be aware of all of the potential costs and consequences before committing to a lawsuit. Michael Davenport, J.D., has been a professional liability claims specialist with CAMICO (www.camico.com) since 1988. He has managed claims since 1983 and has handled accounting malpractice claims, developing expertise in avoidance and mitigation procedures related to potential malpractice claims, since 1988. Copyright 2009. CAMICO Mutual Insurance Company. All rights reserved.
member and chapter news
In recognition of her efforts to educate women about investing, Emily Sanders, president and CEO of Sanders Financial Management, has received the World of Difference 100 Award in the Entrepreneurial category from The International Alliance for Women (TIAW). Sanders was one of just 100 women worldwide who received the award this year.
Martha O'Brien of Edward Jones was recently named a 2009 Five Star Best in Client Satisfaction Wealth Manager by Atlanta Magazine and Crescendo Business Services. Robert Greenberger, CPA, AEP, PFS, partner with Habif, Arogeti, and Wynne, LLP, recently spoke to Schwab Investors on “Rising Taxes: What Do We Do?” and wrote an article for Smart Business Magazine titled “Plan For Change.” Clifton Lipford Hardison & Parker, LLC is proud to announce the promotion of Ken Neil to audit director and Judy Caudill to audit manager. Ken works in the firm's Macon office and Judy in the Warner Robins office. Greenberger
Carr, Riggs & Ingram, LLC (CRI) announces the addition of William “Bill” Hood as business development executive. Donna Heavener, former associate executive director for the Georgia Society of CPAs, has been promoted to executive director of the Cobb Association of Realtors. Donna worked with the Hood Society for 8 years, and the GSCPA wishes her much success in her new position. Deborah Reader, CPA has been promoted to chief operating officer of the GSCPA, and Lloyd McCreary, CPA returns to the GSCPA staff as CFO. Nicole Hudson has joined the tax group at GrossDukeNelson & Co, PC. Nicole will work with closely held businesses and owners in developing tax strategies and tax preparation. Barton Baldwin, CPA, of Mount Olive, NC, is the 2009 William Hudson H. Van Rensselaer Award recipient chosen by the National Association of State Boards of Accountancy (NASBA).
Kris Spain, CPA, has joined Frazier & Deeter as an audit partner.
Charles Webb, has recently joined the new Atlanta practice of RSM McGladrey located at 1230 Peachtree Street, Suite 1800, Atlanta, Ga. Charles is involved in the tax services group involved with tax outsourcing and special projects.
S.J. Gorowitz Accounting & Tax Services, PC in Alpharetta is proud to announce the addition of Cecily Welch, CPA, PFS, CFP®, senior tax manager to the firm. Moore Colson CPAs recently announced multiple winners for the firm’s coveted Peak Award, presented on a quarterly basis to an individual who made a significant contribution to the firm or worked on a project that is considered “above and beyond” expectations. The winners are: Billy Boyd, business assurance senior associate; Jena DiGiacomo, business assurance senior manager; Mary Alice Parker, business assurance senior associate and Brian Renshaw, business assurance senior manager.
Gifford, Hillegass & Ingwersen Baldwin LLP (GH&I) announces that Melissa Wheeler has earned her Certified Fraud Examiner (CFE) certification.
In Memoriam We sincerely regret the loss of the following members and extend deepest sympathy to their family and friends. Alex Crittenden Thomasville, Ga. E.J. “Doc” Eldridge Athens, Ga. Julius Bracken Palmer Dublin, Ga.
Rödl Langford de Kock LLP announces the addition of Gloria Kralicek and Tara Washington to the firm.
Washington One Profession. One Voice. 15
five marketing tips for small accounting firms Hugh Duffy When it comes to marketing during busy season, the common issue with smaller firms is having little to no time. During crunch time, it is a challenge to serve the needs of clients while also managing overall firm operations. As a result, marketing initiatives become just additional items on the endless to-do list. The reality is that if firms are to continue to generate quality leads, this way of thinking will not work. For practitioners that want to continuously improve the quality of their clientele and improve their practice, marketing must become a habitual activity. The following tips provide practitioners with proven marketing tactics that require very little lead-time to implement: Grassroots Marketing—Shotgun the firm’s message and image locally and consistently. While tactics may vary depending on the size of the practice, grassroots marketing efforts include signage, sandwich boards, local bulletin boards, email networks, Craigslist postings, car signage and staff incentives to bring in clients. Some firms cringe at such tactics; however, they are just temporary. Create a Referral Program—Proactively encourage existing clients to recommend services. Create a sweepstakes or other “rewards” incentives for clients who refer new clients to you. Remember, word of mouth is powerful. Many existing clients may be active on Twitter, Facebook or even blog. Develop a Top 20 Hit List—Develop a list of the 20 “best prospects” who have considered services over the past year. Personally reach out to these individuals and persuade them to consider services
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again. Send a letter, then a follow-up email and finally a phone call to meet. Seek to close a couple of Top 20 clients over a 60-day period. Take Full Advantage of Web Site Marketing—The Internet offers a huge opportunity to market a firm’s services to thousands of prospects and educate existing clients about the range of services you provide. If you have a web site that is well constructed and search engine optimized, it is much easy for the public to find you and is an effective way to attract new business. Email Newsletter—Even during the busy tax season, firms want to stay top-of-mind with existing clients and draw in prospects. Email newsletters represent an excellent way to drive people to the firm’s web site. With integrated email newsletter solutions readily available, firms can develop a monthly newsletter quickly and easily. Marketing is the key to a successful firm, and should be a priority even during busy season. By incorporating these five proven tips into a sound marketing program, firms will be pleasantly surprised by the results. Hugh Duffy is co-founder and chief marketing officer for Build Your Firm (www.buildyourfirm. com), a leading practice development firm dedicated to the accounting industry. Build Your Firm works with small accounting firms providing accounting marketing, practice management and web site development services. Hugh has 25 years of marketing experience and holds an MBA degree in marketing from the University of Rochester.
gscpa section news Management Matters - Why Some Firms Stand Out From the Crowd Presented by the GSCPA Management of an Accounting Practice (MAP) Section and the Association for Accounting Administration (AAA) Thursday, January 14, 2010 • Course No. 01614-10 8 - 11 a.m. • Maggiano’s - Cumberland Mall CPE Credit: 3 hours general • Registration: $75 for members; $100 for nonmembers Running a CPA firm is time consuming and stressful, but simply running an average firm is not the goal. To turn a firm into a successful, efficient, growing and profitable organization takes time, dedication, effort and planning. It also takes dedication to banishing complacency and embracing change. • We sell skill! • Why firms make succession too complicated. • Becoming a marketing organization that does accounting work. • Looking in the mirror - do you see what your clients see? • Mission, culture and values - why they matter. • Got technology? Join Rita Keller and your peers for a leadership workshop on managing the successful firm. A firm where the next generation of CPA firm leaders will want to stay and build their career. Speaker Bio Rita Keller, nationally known for her expertise in CPA firm management and one of Accounting Today’s Top 100 Most Influential People in Accounting for the last four consecutive years, is an award-winning and widely respected voice to CPA firm management. After 30 years of active CPA firm management, Rita has founded Keller Advisors because of her strong passion for helping CPA firms succeed. She is now solely focused on helping firms face the challenging management, operational and succession issues in today’s changing economic times.
The 2nd Annual Tax Policy Symposium - Tax Policy and the Impact of Healthcare Reform Friday, February 26, 2010 7:30 a.m. – 3:30 p.m. • St. Regis Hotel, Atlanta CPE Credit: 3 hours general; 6 hours CLE Registration: $250 To Register: http://www.law.emory.edu/index.php?id=6738 About the Symposium Healthcare reform has become inextricably linked to a number of new tax proposals necessary to fund the overhaul of our healthcare system, and fundamental tax reform remains a priority. These changes, and many others, will dramatically affect large and small businesses making it imperative for businesses and their advisors to remain informed. We invite you to join us as we examine the changing landscape of tax policy in Washington and the impact of healthcare reform. Guest Speakers David Walker, president, Peter G. Peterson Foundation, Former U.S. Comptroller General and Head of Government Accountability Office Eric Solomon, former assistant secretary (Tax Policy), U.S. Treasury Department
Additional Sections Now on LinkedIn® The Forensic & Valuation Services, Healthcare, Information Technology, Estate & Financial Planning and Real Estate sections are the latest GSCPA sections to have a group on the online networking community, LinkedIn®. The LinkedIn® groups will be used as a forum to promote section activities and discussions relevant to these areas of the accounting and auditing fields. These groups are ready to receive new members. Society membership is required; section membership is encouraged.
Not a member of a GSCPA Section? Please join any of the 10 sections free of charge by visiting http://www.sections.gscpa.org
One Profession. One Voice. 17
who’s in control? determining if an employer is part of a control group Carol McBeth, CFS, CRPS®, AIF®
According to IRC section 414(b) and 414(c), a group of businesses, regardless of whether they are sole proprietorships, partnerships or corporations that are under common ownership control solely based on ownership percentages are deemed part of a controlled group. The purpose of controlled group rules is to eliminate the practice of excluding non-highly compensated employees from retirement plan coverage. Identifying situations in which the plan sponsor is a member of a controlled group can be difficult and recognizing the impact of a controlled group on retirement plans is imperative for proper employee coverage. A business group that is determined to be a controlled group must be treated as a single business entity when applying many aspects of retirement law, such as non-discrimination testing, maximum benefit limits, employee coverage and service credits, for retirement plan purposes. There are essentially three types of controlled groups: parentsubsidiary controlled groups, brother-sister subsidiary controlled groups and combined controlled groups. Determining which group, if any, multiple business entities and an employer are a part of can be challenging.
Exhibit 1: Parent-Subsidiary Controlled Group
Exhibit 2: Brother-Sister Subsidiary Controlled Group Exhibit 2: Brother-Sister Subsidiary Controlled Group
Exhibit 2: Brother-Sister Subsidiary Controlled Group
Combined Controlled Group A combined controlled group consists of three or more organizations that are organized as follows: Each organization is a member of either a parent-subsidiary or brother-sister group; and at least one corporation is the common parent of a parent subsidiary and a member of a brother-sister group. The following example illustrates combined controlled group rules:
Parent-Subsidiary Controlled Groups A parent-subsidiary controlled group is a chain of corporations connected through stock ownership to a common parent corporation. If at least 80 percent of the stock (in value) of each corporation is owned by one or more of the other members of the group and the common parent company owns at least 80 percent of at least one member of the group, excluding stock owned by other members of the group, it is a parentsubsidiary controlled group. Exhibit 1 illustrates K Corporation’s stock ownership percentages of A, B and C corporations and demonstrates parent-subsidiary controlled group rules:
Exhibit 1: Parent-Subsidiary Controlled Group Exhibit 1: Parent-Subsidiary Controlled Group
• Daks Partnership, Scanner Corporation and Kiwi Corporation are each members of the same combined group of trades or businesses under common control because Daks Partnership is: > the common parent of the parent-subsidiary controlled group consisting of Daks Partnership and Kiwi Corporation; and > a member of a brother-sister subsidiary controlled group consisting of Daks Partnership and Scanner Corporation.
Brother-Sister Subsidiary Controlled Groups A brother-sister controlled group is a group of two or more Exhibit 2: Brother-Sister Subsidiary Controlled Group corporations in which five or fewer common owners (a common owner must be an individual, a trust or an estate) directly or indirectly own a controlling interest of each group and have “effective control.” By having a controlling interest, it generally means that the group owns 80 percent or more of the stock of each corporation if the common owners own stock in each corporation. Effective control generally means owning more than 50 percent of the stock of each corporation, but only to the extent the stock ownership is identical with respect to each corporation. Exhibit 2 illustrates the stock ownership of A, B and C corporations and demonstrates brother-sister subsidiary controlled group rules:
The regulations defining controlled groups are complex and precise. A plan that is maintained by an employer, within a group of employers that are under common control, must meet the requirements for a retirement plan as if one employer employs all the employees of the group. An employer establishing or maintaining a retirement plan should be aware of the controlled group rules and utilize the services of a competent tax or legal counsel to determine if the controlled group rules would affect operation of the retirement plan. As a financial advisor, it is your responsibility to be aware of and familiar with these rules before recommending a retirement plan design to your business owner clients.
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Carol McBeth, CFS, CRPS®, AIF®, is the director of Retirement Planning for 1st Global and specializes in the design and implementation of qualified retirement plans. For more information, visit the company’s web site at www.1stGlobal.com.
upcoming courses for january and february zAICPA’s 2009 Individual Income Tax Returns Workshop by Sid Kess** Course No. 01001 January 4 - 5, 2010 CPE Credit: 16 hours general Instructor: Patrick Kelley 8:30 a.m. - 4 p.m. • GSCPA Training Center, Atlanta AICPA’s individual tax workshop provides the latest practical insights from nationally recognized tax experts. Reinforce your understanding of frequently used principles and receive a wealth of tax planning tips and strategies. Learn how to apply the latest changes when preparing federal income tax returns and advise clients on new developments and taxsaving ideas for individuals. zPreparing Corporate Tax Returns for New Staff and Para-Professionals Course No. 01002 January 7, 2010 CPE Credit: 8 hours general Instructor: Robert Henkels 8:30 a.m. - 4 p.m. • GSCPA Training Center, Atlanta The objective of this course is to train new staff accountants, data processing employees, para-professionals and bookkeepers to prepare a complicated federal corporate income tax return. It is a hands-on, practical course in filling out most tax forms, with extra emphasis on form changes due to new tax law. zPreparing Individual Tax Returns for New Staff and Para-Professionals Course No. 01003 January 8, 2010 CPE Credit: 8 hours general Instructor: Robert Henkels 8:30 a.m. - 4 p.m. • GSCPA Training Center, Atlanta The objective of this course is to train new staff accountants, data processing employees, para-professionals, and bookkeepers to prepare a complicated federal individual income tax return. Over the years, thousands of new staff have received practical, hands-on experience to become familiar with most tax forms. This course covers the latest tax law changes, making it essential for your new staff. **Eligible for $30 per day discount to AICPA members. New Course z Indicates the course qualifies for CFP® credit
zAICPA’s 2009 Corporate Income Tax Returns Workshop by Sid Kess** Course No. 01004 January 11 - 12, 2010 CPE Credit: 16 hours general Instructor: Eugene J. Ristaino 8:30 a.m. - 4 p.m. • GSCPA Training Center, Atlanta This course will give you the AICPA advantage with our unique perspective on the latest tax changes. Look at the most recent tax laws and other developments affecting C corporations, S corporations and other business entities, including limited liability companies. Learn how to advise clients and employees on the latest tax planning ideas. Share marketing ideas from top practitioners based on the latest tax strategies. FASB Review for Industry** AICPA Course No. 02001 February 12, 2010 CPE Credit: 8 hours A&A Instructor; Dick Townsend CPAs in corporate management will benefit from this comprehensive coverage of recent FASB, SEC, IASB and EITF pronouncements. Gain expertise from a high-level approach to financial reporting issues backed by detailed descriptions and examples of the implementation of new standards. Your training will guide you in assessing recent FASB and AICPA standards that have a major effect on all industries and provide an understanding of the latest pronouncements and exposure drafts to enable you to develop implementation strategies.
For a complete listing of all courses and to register, please visit the web site at www.gscpa.org and click on the Continuing Education tab. One Profession. One Voice. 19
Exclusive marketers and administrators for The Georgia Society of CPA’s insurance products Group Health: Underwritten by Blue Cross Blue Shield of Georgia Available for member firms with a minimum enrollment of two fulltime employees 100 plus plan designs to choose from including HMO, POS, PPO & HSAs Group Dental: Underwritten by Blue Cross Blue Shield of Georgia Available for firms who apply for the medical Minimum enrollment requirement of two fulltime employees Group Life: Underwritten by Greater Georgia Life. Available to all GSCPA members Group Disability: Available for CPA’s and employees of CPA firms. Low rates … Example: Monthly rate for 43-yr-old male / $6,000 monthly benefit, 90-day elimination / Own occupation to 65 = $23.80 Long Term Care: Available to members & spouses Covers 100% of Nursing Home Care along with Home Health Care Choice of daily benefit payments from $60 to $250 Optional Inflation Benefit 5% per year 3 Year to lifetime benefit Vision: Blue Cross Blue Shield GA Available to GSCPA member firms Minimum enrollment requirement of two fulltime employees Vision: American International Group (AIG) Available to GSCPA member firms & individual members Employer paid and voluntary plans (employee paid) available Let Pritchard & Jerden assist you in all your insurance needs, including: Employee Benefits Property & Casualty Personal Lines (Auto, Homeowners, Marine, Estate Planning) Firm Name
Phone Date of Birth
City, State, Zip
Return form to:
Pritchard & Jerden, Inc.
Three Piedmont Center – Suite 700 3565 Piedmont Rd. N.E. Atlanta, GA 30305-4604
Phone: Fax: Web:
(404) 238-9090 (404) 261-5440 www.pritchardjerden.com
For information: Patrick Bell (email@example.com) or Jill Bushnell (firstname.lastname@example.org) 20 Current A cco u nt s • J a n u a r y / Fe b r u a r y 2 0 1 0
2010 healthcare conference
Your Prescription for Success
GSCPA Healthcare Conference
February 25, 2010 Course No. 13010 â€˘ Cobb Galleria Centre, Atlanta CPE Credit: 8.5 CPE (including possible 6.5 hours A&A) CLE applied for
Topics and Speakers HealthSouth: A Real Life Corporate Fraud Story (A&A) Aaron Beam, Loxley, Ala. Legal Update (A&A) Glen Reed, King & Spalding, Atlanta, Ga. Healthcare Reform Panel Glen Reed, King & Spalding, Atlanta, Ga. Robert Threlkeld, Morris, Manning & Martin, Atlanta, Ga. Richard Sanders, Balch and Bingham, Atlanta, Ga. Lean Principles in Healthcare Don McCall, Dixon Hughes PLLC, Atlanta, Ga. IRS Form 990 (A&A) Eddie Phillips, Pershing Yoakley & Associates, PC, Atlanta, Ga. Hospital/Physician Alignment Using Health Information Technology Michele Madison, Morris, Manning & Martin, Atlanta, Ga.
Government Investigations and Health Care Fraud Initiatives in the Back Drop of Healthcare Reform Efforts (A&A) Rebekah Plowman, Epstein Becker & Green, PC, Atlanta, Ga. Fair Value Topic for Hospitals (A&A) Mark Zyla, Acuitas, Atlanta, Ga. Valuation and Compensation Issues when Hospitals Purchase Physician Practices (A&A) Tynan Olechny, Gates, Moore Current Accounting Issues (A&A) Wes Sternenberg, Draffin & Tucker, LLP, Albany, Ga. Fraud and Healthcare (A&A) Glen Moyers, KPMG, Atlanta, Ga.
Register for this conference at www.gscpa.org
save the date for 2010 conferences Spring Decision Makers Spring Govt Workshop Nonprofit Georgia Federal Tax Real Estate Estate Planning Southeastern Accounting Show
April 20-21 May 14 May 27 June 10-11 June 17 July 22-24 August 18-19
Fraud Financial Institutions Accounting & Auditing Fall Decision Makers Georgia Tax Forum - Atlanta Georgia Tax Forum - Savannah Government A&A
September 16 September 23 October 1 TBD November 2010 December 2-3 December 10
One Profession. One Voice. 21
SAVE THE DATE! Annual Convention and Leadership Council Meeting June 13-16, 2010 The Westin Hilton Head Island Resort and Spa
22 Current A cco u nt s â€˘ J a n u a r y / Fe b r u a r y 2 0 1 0
classified advertising business services Peer reviews for sole practitioners and small firms. I have the client base, technical skills, plus the understanding, to help your firm. Fifteen years of peer review experience with 150 firms ensures efficient work on report, engagement, and system reviews. Contact Joe W. Kilpatrick, Crescent Center, Tucker. 770-455-8706 or email@example.com. www. kilpatrickcpa.com. Business Valuations - Estate and gift matters, SFAS141/142, ESPOs, FLPs, divorces, stockholder disputes. Substantial IRS and court testimony experience. Valuations affirmed by NC Court of Appeals. Mitchell Kaye, CFA, ASA – 770-998-4642. Past president, American Society of Appraisers– Atlanta chapter. Charters Financial Analyst. Serving appraisal clients since 1981. Firm-on-firm reviews: Fowler, Holley, Rambo and Stalvey, PC is interested in performing your firm’s peer review. Personnel have 29 years review experience. Contact Richard Stalvey for qualifications, references, and a proposal. PO Box 1887 Valdosta, Ga. 31603; 229-244-1559. Income Tax Savings By The Square Foot! We specialize in Cost Segregation Studies– that’s all we do. Over three thousand studies completed. Nationwide service. Complimentary Cash flow forecasts or FREE access to our BIQ+ On-Demand Forecasting system. www.cost-segregation-studies. com or 770-476-9694.Cost Segregation Studies, LLC. Business Valuations: Formal valuations, consulting services for CPAs/ clients. Areas: Estate & Gift Taxes, Family Limited Partnerships, S Corp conversions: built-in tax gains, Shareholder Disputes, Purchase/Sale of Business. Contact Marvin T. Brown, CPA/ABV, CVA, Brown Valuation Group, for qualifications, references, and a proposal. 706-613-5313 or 770-447-1300. Mail File Box responses to: GSCPA File Box _____ 3353 Peachtree Road, Suite 400 Atlanta, GA 30326
CPA Available to perform or assist with audits, reviews, and compilations as well as individual and corporate tax return preparation or other project needs on a contract basis. References available upon request. Please contact Lauren at firstname.lastname@example.org. IRS and State Representation. Attorney & CPA available to consult with your firm or your clients on IRS and state matters. Audit, appeal, collection or criminal matters including offers in compromise, bankruptcy discharge of tax and non-filers. Practicing in Atlanta since 1982. Call Jeffrey S. Gartzman, The Gartzman Law Firm, PC; 770-939-7710; email@example.com.
mergers/office space Large Buckhead CPA firm seeks to acquire practices from practitioners in the metro Atlanta area. Please respond to GSCPA File Box 470. Local Atlanta CPA firm wishes to expand through merger or acquisition of accounting/tax practices. We have successfully completed several prior acquisitions. We also have office space available/expense sharing for practitioners either downsizing or starting new practices. Respond to GSCPA File Box No. 456. CPA with existing practice and over 20 years experience in North Metro Atlanta is seeking a position to assist in the transition of business from a retiring CPA over the next several years. An ideal position would be me working part-time or a contract position that ultimately leads to the purchase of your practice. Please email firstname.lastname@example.org.
positions available North Atlanta/DeKalb County CPA firm seeks a highly motivated individual experienced in tax and audit to begin a track which will lead to purchase of the practice within three to five years. Individual should have a practice to merge with the existing firm, and have at least five years experience as a public practitioner. Please respond to GSCPA Box 485.
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PRE-SORTED STANDARD U.S. POSTAGE PAID ATLANTA, GA. PERMIT No. 6495
Atlanta Financial Center North Tower, Suite 400 3353 Peachtree Road NE Atlanta, GA 30326-1414
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