Volume 2, Issue 5 January 2010
Inside This Issue: Greetings from President . . . . . . 1 From the Exective Director . . . . . 3 New from the Kansas DOR . . . . . 5 News from AICPA . . . . . . . . . . . 6 Legislative Startup & Update . . . . 7 Legislative Reception . . . . . . . . . . 8 What is BIG/E? . . . . . . . . . . . . . . 9 Don’t Empty the Trash . . . . . . . . 10 “20 up to 40”: Class of 2010 . . . 12 Roth IRA Conversions . . . . . . . . 17 Member Profile: Rodd Miller . . . 20 Member News . . . . . . . . . . . . . . 22 New Members . . . . . . . . . . . . . . 22 Chapter News . . . . . . . . . . . . . . 23 By Laws Changes . . . . . . . . . . 24 Calendar of Events . . . . . . . . . 25 Classified Ads . . . . . . . . . . . . . . 26 KSCPA Advertising Rates . . . . . 28 Statements of fact and opinion are made by authors alone and do not imply an opinion on the part of the officers or members of the KSCPA. Publication of an advertisement in the e-Newsletter does not constitute an endorsement of the product or service by the KSCPA e-Newsletter or the KSCPA. Copyright ©2010 KSCPA. All rights reserved. Editors: Mary R. MacBain, Editor-in-Chief; Lauren R. Tice, Design & Copy Editor Contributing Writers: Gary Allerheiligen, CPA; Marlee Carpenter, JD; Renee Goetzka, CPA; Dr. Robert Spencer; Joan Wagnon; Jason Whaley, CPA Landscape photography: Kevin Sink Design: Rhodelander Graphic Design The Kansas Society of Certified Public Accountants, Inc. 100 SE 9th Street, Suite 502 (66612-1213) P. O. Box 4291, Topeka, KS 66604-0291 Phone: 785.272.4366, FAX: 785.272.4468
Greetings from President Allerheiligen Greetings in the New Year, There are always decisions to make when a new year arrives, and one that I hear now is “Do we call the start of the new decade ‘twenty ten’ or ‘two thousand and ten’?“ Yes, a new decade has arrived, and there is hope on the horizon. There will always be different viewpoints, however, and we will settle into “twenty ten” or “two thousand and ten.” One thing that is still the same is when it comes to helping organizations make deciGary C. Allerheiligen, sions, chart their future course of action and KSCPA President adapt to the changing environment, CPAs are the trusted advisors. This was never more apparent than in the first decade of the twenty-first century. Not only did we face recovery from the World Trade Center attack, which heralded a major modification in how our security is handled, but we dealt with what is referred to as “accounting” scandals that brought about a new standardsetting, governing body and new services for the profession. Then, we left the decade with the worst economic recession since the “Great Depression.” CPAs are present throughout the economy and this decade proved that we are invaluable members of the team, whether in public practice, business & industry, government, education, or consulting, and whether or not we function in the typical role of a CPA. The foundation of the CPA profession is high ethical conduct, integrity, independence and objectivity — something we are reminded of each day as we practice our “trade.” As the President of the Kansas Society of CPAs, and Chair of the Executive Committee, I work with the leaders who are elected by the members to conduct the strategic planning process, to set direction for the KSCPA team, and to set the tone of the organization for this year that will be woven into the organization’s future landscape. My personal objective this year is to grow our membership and to enhance member value. The KSCPA team worked diligently this past year to do just that. It was very evident at the Annual Meeting and corresponding events held in November that member value is Number One on the list of the KSCPA team. If you didn’t have an opportunity to participate in these events, we invite you to get involved this year. (... continued on page 4)
SPACE FOR AD
From the Excutive Director Dear Members and Friends, Happy New Year! The holiday season is over and it is time to get back to work. The KSCPA team is very excited about all that is being planned for this upcoming year, but in order to know where we are going, we have to remember where we have been. So, with the New Year upon us, I thought it only appropriate to include a year-end review in pictures. After all, a picture is worth a thousand words. We look forward to creating more memories with you this year! Best regards, Mary R. MacBain Executive Director, KSCPA
Skyscapes | January 2010
(Continued from page 1... ) Like
anything else, there is no value unless you take advantage of the opportunities that are presented. As a member of the KSCPA, there are many opportunities for you to participate in the leadership, serve on committees and task forces, participate in professional development activities as a speaker, guide our legislature by actively engaging in these activities, work with student members, and encourage our high school students to pursue the CPA profession. We are forming audit and tax committees, so please let us know if you would like to serve on these. The first meeting will be at the Leadership Summit on the morning of May 13 in Wichita. As we start into busy season, the KSCPA team will keep you up to date as to what is happening in the legislature on the website and through special e-mail alerts. They are working to improve the website and you will soon see a new look; it will be more efficient for you to transact business with the KSCPA. The newsletter went through many changes over the last year. First, it is now regularly released and there is a publication plan. It is now electronic, and, based on feedback from our members, we are publishing the newsletter in a new format — easier to read and print. The newsletter is just that — news about our members, articles of current interest, and information about events of the KSCPA. The website is where you will find more permanent information including articles of great length, a member directory, information about the
chapters and how to become a member, the complete professional development catalog, legislative podcasts, the bylaws, and members of the leadership and various committees. Many exciting events are being planned for this year, so please read “Skyscapes” to stay informed. I encourage you to be an active member of the KSCPA. We are all busy, especially now, but there is no better way to appreciate who we are, to maintain our influence in our organizations and communities, to have input, to network, and to stay abreast of important issues than through membership in the KSCPA. I appreciate your support and looking forward to serving in my continuing role as President of the KSCPA. Best wishes for a great New Year! Gary C. Allerheiligen, CPA President
From KDOR & BOA KDOR Changes for Upcoming Tax Filing Season Tax Operations no longer has funding to print and mail tax materials as we have in the past. As a result, we are taking a different course of action beginning this fiscal year by eliminating paper where we can, and further promoting our electronic services. • Personalized Tax Booklets. Only Individual Income and Homestead filers that 1) FILED A 2008 KDOR-PRINTED FORM and 2) HAS A CURRENT ADDRESS ON FILE will receive a 2009 personalized tax booklet (with forms and/or voucher). As a costsaving measure, these booklets have been reduced in size with fewer instructions and less forms. Full, detailed instructions will be available on our web site. • No personalized booklets will be mailed to Fiduciary, Corporate, Small Business, Privilege or Franchise tax filers. • Forms printed by KDOR in two-color ink cannot be scanned in our automated equipment due to the varying types of printers used to download them. This creates a great deal of manual work and KDOR does not have funding to hire temps this fiscal year to manage that additional work. Consequently, 2009 tax forms (printed in color) for the tax types listed in this section will no longer be available on the web site for use in filing returns — however, our instructions will contain an “EXAMPLE” of each form for use as reference only. If they desire a paper return, they will need to obtain a scannable form from KDOR. Taxpayers will be limited to one form per person. • Personalized Estimated Tax Forms. Only Individual and Corporate estimated tax filers that 1) FILED KDOR-PRINTED VOUCHERS FOR 2009 and 2) HAS A CURRENT ADDRESS ON FILE will receive personalized vouchers this year. As a cost saving measure, these vouchers will NOT include return envelopes and we will no longer provide them upon request. Taxpayers must address their own envelope if they choose to mail their payment.
• Tax Forms for Paid Preparers. Tax professionals who charge for their services can purchase KDOR tax forms if they choose to file paper. Preparers who are listed in our forms database will receive the order form. • Tax Forms for Distribution Sites. KDOR will no longer supply tax orms to distribution sites (i.e., banks, libraries, Dillon’s stores, etc.) for access by our Kansas taxpayers. These sites will instead receive a poster to display, promoting our electronic file/pay services.
Helpful phone numbers: Taxpayer Advocate Bob Clelland — 785-296-2476
Wager Earner Chad Sullivan — 785-296-0990
Director of Taxation Steve Stotts — 785-296-5811
Electronic Filing Manager
Gary Centlivre — 785-291-3772
Secretary of Revenue Joan Wagnon — 785-296-3041
Skyscapes | January 2010
From AICPA & IRS Get Involved at the National Level — Apply to serve on AICPA committee The AICPA is currently accepting applications from now until May 1, 2010 for the 2010-2011 committee year. You can access this application by going to their website and clicking on “volunteer”. The KSCPA has consistently had members serve on AICPA committees over the years. Contact Mary MacBain for further information. According to their Volunteer Services Overview, “The AICPA organization consists of volunteer groups and staff working together to achieve the Institute’s objectives. Volunteer Groups help present the standards of professional practice, promoting the interest of CPAs, serving as a
spokesperson for the profession, and providing appropriate services to members. An effective volunteer group structure can generate sound group judgment, provide continuity of thinking, and help bring together a cross section of member knowledge and experience. It also provides for leaders of the profession. The most important reason for organizing a volunteer group is the need for member guidance and representation.” Additionally, the Volunteer Services Overview heeds caution for those who commit to becoming a volunteer. It says, “New volunteers should be aware of the time commitment volunteer
group service entails. Considering attendance at volunteer group meetings, travel, and time for assignments and other meetings, members can expect to spend about 60–80 hours on volunteer work during the first year. Of course, the amount of time each volunteer member spends on volunteer group activities varies; with each year of service, a member’s time commitment often increases. By accepting appointment to the volunteer group, a volunteer member shows his or her willingness to devote the necessary time and effort to volunteer work.” The AICPA generally reimburses expenses of committee members.
AICPA Supports IRS Plan to Register All Tax Preparers, Expresses Concern Over Wider Plan to Certify Non-CPAs Washington, D.C. (Jan. 4, 2010) —
The American Institute of Certified Public Accountants supports a proposal announced today by the IRS to regulate U.S. tax preparers by requiring nationwide registration of paid tax return preparers in 2011. The IRS’s goals are to enhance compliance and elevate ethical conduct of tax preparers which are consistent with the AICPA’s code of conduct and tax standards. “The AICPA worked closely with the IRS during the public comment period leading up to this proposal and we believe this change will foster greater compliance with the tax code and better, more reliable service for U.S. taxpayers across the board,” said AICPA President and CEO Barry Melancon. “However, we have concerns about the IRS plan to provide tax preparers who are not already CPAs, enrolled agents or attorneys with a certification based on limited qualifications,” Melancon said. “A new IRS examination process may cause confusion among taxpayers about the relative qualifications of tax return preparers.” The IRS plans to conduct a campaign to educate the
public about the need to regulate tax. The American Institute of Certified Public Accountants supports a proposal announced today by the IRS to regulate U.S. tax preparers by requiring nationwide registration of paid tax return preparers in 2011. The IRS’s goals are to enhance compliance and elevate ethical conduct of tax preparers which are consistent with the AICPA’s code of conduct and tax standards. “The AICPA worked closely with the IRS during the public comment period leading up to this proposal and we believe this change will foster greater compliance with the tax code and better, more reliable service for U.S. taxpayers across the board,” said AICPA President and CEO Barry Melancon. “However, we have concerns about the IRS plan to provide tax preparers who are not already CPAs, enrolled agents or attorneys with a certification based on limited qualifications,” Melancon said. “A new IRS examination process may cause confusion among taxpayers about the relative qualifications of tax return preparers.” The IRS plans to conduct a campaign to educate the public about the need to regulate tax preparers and the AICPA will work with the IRS to help it implement the recommendations to meet both the public interest and CPA practice requirements.
Legislative Update Legislative Startup By Marlee Carpenter, Bright & Carpenter Consulting KSCPA Governmental Affairs Representative
During most legislative sessions there is a theme or topic that emerges to overshadow, or cast a shadow, on each and every other issue in play. The “noise makers” of previous sessions have included school finance, workers’ compensation reform and the building of coal plants. Other sessions have focused on topics such as tax reductions or transportation. As of now, the 2010 legislative session is shaping up to be remembered for the impact the dire budget situation will have on every aspect of government. After budget cutting during the 2009 session and two rounds of allotments made by Governor Parkinson, the state is still in a significant fiscal hole. How will the lack of funds shape the upcoming session? Our legislators will have no other choice than to look at programs for elimination, cuts that can be made, and agencies to downsize as well as taxes and fees to increase. Given the scope of that process, the regular session, which begins on Monday, January 11, will be contentious and may easily continue past the allotted 90 days. Some key programs up for close scrutiny include: • social service programs • education funding • infrastructure • transportation improvements Some key revenue enhancements up for close scrutiny include: • elimination of sales tax exemptions • rollback of recent tax reductions such as the franchise tax and estate tax • sales taxes on services • decoupling from federal tax laws
Marlee Carpenter (left) & Natalie Bright (right)
While federal stimulus dollars will again help bolster the Kansas budget, they will be reduced from the FY 2010 levels and will almost be non-existent in FY 2012. Therefore, this cannot be viewed as a long-term solution for Kansas. How can the KSCPA make a difference? With so many cuts on the table, legislators will be looking to leaders in the business community for input on proposals and insights as to how specific legislation may negatively or positively impact business. With a strong voice, the KSCPA can help to remind legislators that businesses have “skin in the game,” and that taxes, credits and fees will make a difference to the bottom line of real businesses and employees. As a KSCPA member, your voice needs to be heard in Topeka. Your input and participation in the process will be a key as we provide expertise and illustrate the case of how proposed tax changes will affect Kansas businesses and individuals. Throughout the session, we may contact you for your expertise in testimony or background. We look forward to working with you to help obtain the best possible results for business in Kansas.
Channels of Communication In order to keep you informed of KSCPA lobbying activities, KSCPA has established a number of communication channels dedicated to just information related to the legislative session. Here are the many ways for you to stay connected: Twitter — Follow us on Twitter @KSCPAlobbies to get semi-daily, brief updates on what Marlee and Natalie are working on, any progress that is being made, and announcements of urgent issues needing immediate attention of our members.
KSCPA Website — Each week, Marlee and Natalie will put together a podcast that is uploaded to the “legislative issues” section of the KSCPA website. Newsletter — Every month during the legislative session, either Marlee or Natalie will write a more detailed update with the happenings of the session. This is published in the newsletter and archived on the “legislative issues” section of the KSCPA website.
E-Mail Action Alerts — In the event that members need to take action right away, the KSCPA will send out e-mails alerting members. These e-mails include information on what is going on and who members should contact. No matter what channel of communication you choose to follow, Natalie Bright and Marlee Carpenter, our lobbyists, and Lauren Tice, Membership & Communications Manager on the KSCPA team, will work collaboratively to keep you informed.
Skyscapes | January 2010
Please Join the “20 up to 40” Leadership Program Participants in Welcoming
Members of the 2009 Kansas Legislature Members of the United States Congress Key Legislative Staff and
Members of the Kansas Society of Certified Public Accountants For the KSCPA’s
2nd Annual Legislative Reception Thursday, January 28, 2010 5:00 p.m. – 7:00 p.m. at the Kansas Society of CPAs 100 SE 9th Street, Suite 502 (Core First Bank Building) Topeka, KS 66612 Hors d'oeuvres and other refreshments provided by the 2,600 Members of the Kansas Society of Certified Public Accountants
Your RSVP is respectfully requested by Thursday, January 21, 2010 Telephone – (785) 272-4366 E-mail – firstname.lastname@example.org The Kansas Society of CPAs is dedicated to implementing strategies that enhance the well being of our members, the accounting profession and the general public.
What is BIG/E? Even though the KSCPA has always identified members in various sectors, only this year did it change its membership dues categories to include Business, Industry, Government and Education (BIG/E); recognition of the important role CPAs play in BIG/E. This category replaced what was formerly known as “members not in public practice.” As you can see below, 35% of our membership consists of individuals in this category. Also, we have been fortunate enough to have several of our members tell us what they enjoy most about being a CPA in their field. CPAs in Business, Industry and Government are part of an organization’s team. They are generally the financial expert and provide information and advice to
management so that they can make decisions. In addition, they are often leaders such as Chief Financial Officers, Controllers, Accounting Managers, even CEOs and company Presidents. CPAs in academia educate our students to become professional accountants, help them prepare for the CPA exam, and guide them in making decisions about which sector to pursue. A strategic initiative of the KSCPA is to grow this sector and to continue to enhance value to BIG/E members. To make this happen, we need your help. If interested in joining a task force to help develop the member value of KSCPA for those in BIG/E, please contact email@example.com.
BUSINESS Lori Green, Chief Financial Officer Peruvian Connection Ltd.
2% – Government 3% – Education 30% – Business & Industry 65% – Public Practice & Other
“Working as a CPA in business is very rewarding for me. As the CFO, I work very closely with our Company’s owner and founder, as well as all of the other members of our senior management team, and enjoy getting involved in nearly all aspects of the business. Virtually everything we do as a Company has some financial impact, so I am very much a part of the decision making. The strategic direction of the Company is so critical, especially in these extremely difficult economic times, so this is an area that I focus on as well.”
EDUCATION Richard Dinkel, Controller Koch Industries, Inc.
“As the controller of a large global business what I enjoy most is the constant change, challenge, and complexity. The world we operate in today requires us to continuously build on our skills and knowledge and develop the ability to collaborate effectively with people inside and outside the company. To be an effective controller and key leader of any business it’s not enough to just be good in accounting, you have to push yourself to be well versed in many disciplines. It translates to lots of work, but it’s very rewarding.”
GOVERNMENT Dr. Michael Lane, President Emporia State University
“I enjoy the opportunity to help students achieve their goals and dreams for their future. Whether in a business curriculum, education, sciences, or the arts, we help students to achieve the innermost dreams.”
Lynn Jenkins, 2nd District Representative State of Kansas “As a CPA in the United States House of Representatives, I have a more detailoriented approach to finance that allows me to challenge the perspective of many serving in Congress. Before entering public service, I spent nearly twenty years practicing public accounting and helping individuals and businesses balance their books, plan for their future, and comply with financial reporting and tax laws. At a time when our nation is trying to restore stability in our financial markets and prosperity in our economy, my professional experience as a CPA gives me unique capabilities. I am using those abilities to do all I can to restore fiscal responsibility to the federal government.”
Skyscapes | January 2010
Don’t Empty the Trash (unless your data is protected!) by Dr. Robert Spencer
Wait!!! Before you hit that delete key, consider if that file might come back to haunt you in another life! That’s right — what happens to those files you delete? I mean, what really happens to them? Hundreds of computer systems are recycled each year to fellow employees who take them home and, perhaps, end up selling them at a flea market (where some fairly sensitive information has turned up in the past few years). Other old computers are thrown into the dumpster with hopes that the neighbors don’t notice (it is illegal to dump electronics due to harmful components in most computer systems). The consequences of throwing out old computers and computer peripherals, cell phones and other electronics cannot be ignored. They contain heavy metals such as lead, mercury, cadmium and beryllium; the effect of these metals on our environment is unknown. But, that’s beside the point. While you shouldn’t shirk your duty to the environment, it is more important to maintain security for the data of your business. After all, when you destroy, throw away, give away or sell old hardware, have you truly removed all of the sensitive data on those devices, or could it come back to haunt you? To make sure it doesn’t, here is some helpful advice to consider before you pitch that old computer. If it has been thrown away, it’s fair game. That old computer system may still hold critical information on its hard drive; this is trash that could quickly become a treasure to someone else. You’d expect someone who retrieves this kind of information to be considered a thief, but reading someone else’s data is not necessarily against the law. Back in 1998, the U.S. Supreme Court ruled that privacy can be waived with discarded materials. In other words, if you leave it on the curb, or throw it away, it is fair game for anyone else to retrieve. In other cases, you may be exposed around the office simply by assuming that the files you deleted are now gone and can’t come back to haunt you —think again. Let’s understand what happens when you delete a file, how the data can be accessed, or even how the entire file may be brought back to life even after you have deleted it.
Hitting the delete key is not enough. Deleting obsolete data is a lifecycle management task that is often performed incompletely or incorrectly, if at all. First, simply deleting a file usually only marks it for deletion. The file is listed in the Trash Can (Mac) or Recycle bin (Windows), but these files are not deleted until you “empty” the icon. Even then, this action only marks the file space as available for use in the directory; the data is not actually removed. Typically, what happens in the Windows world is that the first character of the file name is changed to a question mark. This tells the operating system that this space is now available if needed. (Obviously the process is slightly more complicated, but I do not want to put you to sleep before you finish reading.) Prior to writing new data into this occupied space, the file can actually be undeleted, and the once deleted blocks of data can be easily recovered. Also, even after parts of the old file, called blocks, are written over with new file information, some, if not all, the data from the deleted file may be recovered! There are a number of free downloadable utilities which can be used to recover some or all the data blocks of supposedly deleted files.
“Deleting a file does not erase the information; it merely erases pointers to the information.”
This means that deleting a file does not really erase the information; it merely erases pointers to the information, putting the files themselves into an electronic limbo where they can be easily retrieved by skilled computer criminals, or perhaps just the curious minds, or perhaps computer forensic specialist. Programs that help you erase disk drives. Now you know that simply deleting the files are not good enough, you must either remove the disks and destroy them, or at the least, use reformatting programs that meet the minimum DOD guidelines. A few programs that comply with government-accepted standards include:
Proper Disposal of Computers To do your part in considering the environment when trying to eliminate those old computers you may have around your office, consider these options: #1 Turn obsolete into brand new. In many areas of the country, you can now take obsolete IT equipment down to the local recycling center along with your old paper files (a great place to take those accounting reports from last year!), newspapers and magazines. Recycling centers do not typically guarantee data security with paper documents, and they are usually hard-pressed to extend anything similar to computers and peripherals. Before you drop them off, shred the paper files and remove the hard disks from computers. To do this, just open the case and destroy the enclosed components (hammers work great and allow you to take out a lot of personal
frustration!). Going the local recycling route certainly requires the user data-wiping utilities, a potentially costly and time-consuming effort. #2 Don’t think trash, think cash. Several environment-conscious companies, such as IBM and Dell, are helping the computer industry get up to speed with other industries where trade-ins, buybacks or just picking up old equipment has been the norm for decades. While many manufacturers and resellers will only accept large amounts of hardware for recycling or credit, quality asset recovery services are changing these practices. Now it is easier than ever for SMBs to find qualified recyclers who will accept small quantities of outdated hardware. This is a great option for those of you who consult with a number of clients may advise them on how
http://wipedrive.com http://safechaos.com/cs.htm http://www.active-eraser.com http://www.sharewareconnection.com/titles/ dod-5220-22-m.htm It may not be optional — it’s the law! Recent legislation at the municipal, state and provincial levels in the United States and Canada is now addressing issues related to both data privacy and untreated computer waste. In many parts of North America, recycling computers is no longer just a good idea, it’s the law! Failure to properly dispose of sensitive information could possibly result in fines and legal action, not to mention the embarrassment to you if your firm appears in the morning paper. On the federal level, bills such as the U.S. National Computer Recycling Act would require recycling and safe disposal of all old computer equipment nationwide. While these new regulations are a boom to the environment and privacy, they may pose serious compliance problems for SMBs that are already stretched thin in their efforts to understand and abide by laws covering workplace safety, privacy, tax, and zoning requirements and long-standing environmental codes. The final decision. In the end, the decision is yours. Several states currently require you to report to customers or clients if you believe any sensitive information has been leaked or stolen from your organization, and may hold you responsible if the leak can be traced back to you. To further protect your existing data files, as well as those you may be discarding, you might also consider encrypting all your disk drives immediately, so that data is not accidently lost. Some of the • • • •
to destroy and discard old equipment — or you might even make a few dollars doing it for them with little effort. IBM’s asset recovery solutions division, for example, pays fair market value for working notebooks regardless of the make or model. In addition, this program includes shipping costs for old computers as well as guarantees of comprehensive, secure data overwrite on all disk drives. Rather than wait until computers and peripherals become so obsolete as to be utterly worthless, SMBs can plan in advance to recycle these devices quickly and responsibly. And when regulatory compliance turns into unexpected windfalls for future hardware purchases, learning to let go can become a pretty attractive proposition.
best disk encryption utilities may be found at www.pgp. com and other sources of data encryption software such as www.truecrypt.com, a free utility will help you secure your information. Whatever you do, it is time for planning and action, and now you know why it is important to consider ramifications of hitting that delete key. Dr. Bob Spencer is an internationally recognized writer, lecturer and consultant. You may e-mail him drbob@tsif. com, or visit him at Twenty Seconds In the Future, www. tsif.com. Bob is associated with K2 Enterprises, www. k2e.com.
Skyscapes | January 2010
KSCPA Announces “20 up to 40” Class of 2010 The KSCPA is pleased to announce that participants of the Class of 2010 have been selected and several sponsors have been confirmed for the “20 up to 40” Leadership Program. This program was created to help young (under the age of 40) professionals develop their leadership style by examining major leadership philosophies. Additionally, it is designed to help motivate leaders to apply the skills they have learned to their professional and personal lives. In other words, “20 up to 40” provides young professionals with the opportunity to network, socialize, and learn from fellow colleagues and facilitators as well as bring vision, ideas and strategies to the KSCPA. These young professionals are on the road to becoming our new generation of leaders. Our inaugural class was a huge success and we are confident that this year will be just as great. The 2010 program consists of five sessions. It begins in January with a visit to the Board of Accountancy and runs through November with participation in the Leadership Summit at the Annual Meeting. This year’s program would not be possible without the contributions of our sponsors. The contributions are used to defray the cost of highly-regarded, nationallyrecognized facilitators. So far, ten firms have committed to supporting the Class of 2010. These firms include: • Adams Brown Beran & Ball, Chtd. • Allen Gibbs & Houlik, L.C. • BKD, LLP • Berberich Trahan & Co., P. A. • Bever Dye LC, Attorneys at Law • Boomer Consulting, Inc. • Grant Thornton LLP • Kennedy and Coe, LLC • MAS Software Solutions, Inc. • Swindoll Janzen Hawk & Loyd, LLC Sponsorship opportunities are available through January 31. Contact firstname.lastname@example.org.
Sponsors of the “20 up to 40” Leadership Program invest in the future of the KSCPA. Like most associations, the KSCPA could face diminishing membership both in terms of numbers and leadership participation. This translates to CPAs in Kansas losing influence in communities and State government unless we begin to develop our young professionals into leaders who are aware of and participate in the activities of the KSCPA. The “20 up to 40” Leadership Program has been designed to do just that. Additionally, sponsors receive a vast array of benefits. These include: attendance of one representative to any of the sessions to experience the program first hand; promotion at each event, in the newsletter, and on the website; recognition by the Executive Director at presentations to Chapter meetings; an invitation to the final dinner prior to the Leadership Cabinet in November; and acknowledgment at the KSCPA Annual Meeting. If you are interested in becoming a sponsor, please fill out and remit the sponsorship form on our website.
Shannon Euliss — Lewis Hooper & Dick, LLC “Leadership provides a direction and motivates all those who are willing to participate. I believe enhancing my leadership skills will allow me to be better network with clients, potential clients, and colleagues and will make me a more rounded and knowledgeable person to better contribute to the CPA profession.”
Kate Grant — Kirkpatrick Sprecker & Company, LLP “Participating in the “20 Up to 40” Leadership Program will assist in developing new relationships state wide and expand my knowledge base. Being able to share knowledge, information, and experiences with peers will create better and stronger CPAs within our state….Participating in the “20 Up to 40” Leadership Program will provide me with the tools and the ability to improve myself and expand my horizons.”
Introducing the “20 up to 40” Class of 2010 As part of the application process, each applicant was required to submit an essay explaining why a leadership role in professional and community organizations is essential to their career and success as a CPA. Each applicant gave impressive responses and we wanted to share them. So, to introduce each of the participants, we have decided to include one in its entirety and highlights of the rest.
Jamie Buer — Olathe Chamber of Commerce “The KSCPA leadership program would provide me an opportunity to get to know others outside of my local network and help to further develop the leadership skills I possess, so that, in the near future, I can become one of the local leaders and grow as an individual and in my career as a CPA.”
Tanya Dowell — Seward County Community College/ Area Technical School “I am in a leadership role everyday in my classroom and how I handle situations in the classroom and outside of the classroom is how I earn the respect of students and others> The respect earned from participating in and leading professional and community organizations is an important part of success as a certified public accountant. Our profession relies upon the respect of the community in order for all of us to succeed.”
Caroline Eddinger — Lowenthal, Webb & Odermann, PA “Along the way, I have also been cognizant of my need to give some of my time and energy back to the community. I am a firm believer that everyone should get involved in a local organization to help effectuate positive changes in their own community. I strive to be a positive role model for my children, and hopefully other professionals.”
Amber Goering — Pickett Chaney & McMullen LLP “I have found over the years while teaching different seminars, studies, and courses, that I learn a great deal more studying in preparation for the event than I do attending the event.”
Gregg Goodwin — Bever Dye LC, Attorneys at Law “While there are many organizations that offer glimpses into the problems and issues affecting the entire community, taking a leadership role in professional organizations is one of a few options available to determine what is happening in the profession as a whole. A member gets a broader sense of the profession’s and community’s needs and direction by actively participating in these organizations.”
Reid Hash — Kennedy and Coe, LLC “It is my responsibility to take these opportunities to develop my knowledge, increase my ability, and maintain the honor of the profession and public interest so our next thirty years are as successful as our last. The leadership situations in the field are as numerous as the clients we serve. Whether disclosing an unpopular note on a financial statement or speaking in front of a high school accounting class, we must maintain our independence, public trust, and pure excitement for the integrity and honor of the position.”
Julie Hunke — Kennedy & Coe, LLC “My workplace and co-workers have been my source of knowledge and mentors for the past several years, but I believe taking on a leadership role within a professional or community organization will provide opportunities that I will not have within my workplace.”
Skyscapes | January 2010
Jill Kruse — National Cooperative Refinery Association “Knowing your job might be enough to get the work done, but great things can happen when a team is motivated to do better. Successful individuals and successful companies know that traits such as honesty, integrity, respect, and kindness can make all the difference in business. Leaders and team members that possess good values and are active in their communities often get better results from their teams than those who do not.”
Patrick Lowrance — Allen Gibbs & Houlik, LC “One thing I have noticed when attending various KSCPA functions is that the majority of those who attend are more seasoned professionals who may have an abundance of knowledge and contacts to pass on to the younger generations. The best way to utilize this information is for the younger generations to become involved by participating in committees or equivalents so they may work closely with those more seasoned professionals. I believe that type of opportunity would benefit both generations and the organization as a whole.”
Brandon Robinson — Grant Thornton, LLP “As baby boomers near retirement, younger generations will be charged with filling those leadership roles. Such a charge requires leveraging of those leaders that have come before, while maintaining an understanding of the requirements and needs of a new generation of accountants.”
James Myers — James V. Myers, Chartered “Now, as I get older, I see the value and importance of the Society and I have a desire to get involved in the Society. The older generation has put their efforts into the Society for my generation and now is the time for me to put my efforts in the Society for the next generation.”
Jessica Torluemke — Adams Brown Beran & Ball, Chtd. “Success as a CPA goes well beyond the simple number crunching. Success involves communication skills, problem solving, leadership skills, and relationship building. These skills can all be better developed by being involved in a leadership role in a professional or community organization, which is an integral part of being a successful CPA.”
Jennifer Wulf — Decrane Aerospace “It is my goal to provide a positive role model for the high school and college level students to become interested in and continue their education in the accounting field. In addition to being a positive role model, it is also important to me that this generation of youth be knowledgeable about financial-related matters beginning at an early age.”
Lorin Haas — Hampton & Hampton “As a professional in a small community, the necessity of leadership roles is critical and, yet, somewhat arduous due to the small number of local professional organizations. I believe that involvement in leadership promotes a sense of community, whether that community is defined as the city in which you live or the profession with which you work.”
Brian Nyp — Lowenthal, Webb & Odermann, PA “I am interested in the legislative process and would enjoy gaining further insight on the role in which the KSCPA serves in crafting and shaping legislation. Understanding the role of leadership and the legislative process are essential to my growth as a CPA and as an informed citizen of the United States of America.”
Teresa Seymour — Peterson Peterson & Goss LC “As my growth as an individual CPA continues, I hope that I am able to gain the leadership qualities necessary to achieve my full potential in this profession.
Thomas Thornhill — Fiser Group, PA “I believe that being active in your community as a professional is important because it helps to foster a better business community. Through the exchange of ideas and information, people in the same field can help to educate each other on best practices for our clients”
Not pictured — Lorin Haas, Brian Nyp, Thomas Thornhll, and Teresa Seymour
Tim Russell — Grant Thornton, LLP
A special thanks to our sponsors…
“Though I have only been in this profession for a little over a year, in my short time I have learned there are a few things that are key to being successful in this profession. First, you need to be able to serve clients efficiently and effectively. Their time is as valuable as ours and we need to be able to respond to their needs in a positive way. Second, you need to be able to establish yourself as someone who can lead others. For any organization to be successful there must be a strong foundation of leadership at the top. As one of the younger individuals in my office and in the profession, I have been looking for ways to get involved and put my leadership skills to good use. While attending Kansas State University I was able to participate in Beta Alpha Psi as a Vice President. Through my involvement with this organization I was able to help lead and grow our chapter. During this experience I realized how important good leaders are to the success of an organization. If our chapter would not have had a strong leadership team, who put in the time and effort necessary, our chapter would have failed to meet our goals. By caring about our organization and being enthusiastic about what we were doing we were able to recruit new members and grow our chapter into something that will be sustained into the future. My experience in this leadership position also taught me that I can be someone who leads others. I do not want to be on the outside looking in, but would rather be at the forefront of what is taking place. I believe that for me to be successful as a CPA, the profession as a whole needs to continue to prosper. The only way this is going to happen is if we can recruit quality individuals into our profession who can lead us into the future. The sustainability of our profession is not a one person job; it will take the collective efforts of all of us. I heard recently that 80% of the members of the KSCPA are 50 years or older. This tells me that over the next decade there are going to be significant changes in the leadership structure of our profession. We need to take it upon ourselves now to increase the recruitment of quality individuals into our profession. I believe the best way we can do this is by taking on leadership roles in professional and community organizations. If we can establish ourselves as community leaders, who are also CPA’s, then high school and college students will be able to recognize that being a CPA is more than just crunching numbers, it is about leading and sustaining communities. If we can let students know that being a CPA is a prestigious and rewarding career, then we will be more likely to recruit the types of individuals our profession needs. I feel that if I am selected for the “20 up to 40” program it would jump start my ability to work on this initiative. I can see myself as someone who leads this profession into the next generation. I have a strong passion for the profession and want to get that message out to others. I feel that we should not be content with where we are at, but should rather look at where we can go.”
Skyscapes | January 2010
2010 “20 up to 40” Schedule of Events This year, there will be four, day-and-a-half sessions and one starting in the afternoon and continuing through the following morning. The 1 ½ day sessions have a late afternoon check-in on the first day followed by a full day of activities the next day. The sessions will occur as follows (speakers and special guests are subject to change):
• January 28–29 (Topeka): Kansas Board of Accountancy, Kansas Department of Revenue, Legislative Awareness, Legislative Reception, About the KSCPA, its team, and its strategic plan. 8:00–8:45am Breakfast at the KSCPA office (100 SE 9th St, Suite 502) 8:50–10:15am Attend Kansas Board of Accountancy Meeting Facilitators: Susan Sommers, Executive Director; Jeffrey Leiserowitz, CPA, Chair 10:30–11:45 House Visit “20 Up to 40” Recognition Noon–1:30pm Legislative Awareness Luncheon (711 Docking State Offices) MCs: Marlee Carpenter, & Natalie Bright, Bright & Carpenter Consulting, Inc., KSCPA Governmental Affairs Representatives Speakers: • Senator Derek Schmidt, Majority Leader, Vice-Chair, Assessment & Taxation Committee • Representative Richard Carlson, Chairman, Taxation Committee • Senator Les Donovan, Chairman, Assessment and Taxation Committee 1:45–2:30pm Tour of Department of Revenue Facilitator: Joan Wagnon, Secretary of Revenue, State of Kansas 2:45–3:30pm Senate Visit “20 Up to 40” Recognition 5:00–7:00pm Legislation Reception & “20 up to 40” Introduction — KSCPA Offices (100 SE 9th St, Suite 502) ALL MEMBERS WELCOME to attend and meet Kansas Legislators; U.S Congressional Delegation also invited. 8:30–9am Breakfast at the KSCPA office (100 SE 9th St, Suite 502) 9am–noon Speaker Presentations Speakers: • Gary C. Allerheiligen, CPA, President of the KSCPA — “Leadership in a Professional Association and the KSCPA Strategic Plan” •Trisha Spader & Lori Wenrich, 2009 “20 up to 40” graduates — “Transitioning of the Class Project” • James T. Clark, CPA, KSCPA Chair of Ethics, PAC Treasurer, & Chair of KSCPA Board of Trustees — “Professional Ethics for the Kansas CPA” • KSCPA Team — Who we are and what we do • Invited to speak: Lynn Jenkins, 2nd District Representative Noon Lunch at the KSCPA office • May 12–13 (Wichita): “Effective Group Collaboration” Presentation, Class Project Meeting, networking reception and dinner, and participation in Leadership Summit Speaker: Lauren Tice, KSCPA team, Membership & Communications Manager • July 15–16 (Hutchinson): Social event (baseball game) with “20 up to 40” committee members and spouses; “Using Technology to Lead” and networking reception and dinner. Facilitator: Randy Johnston, partial owner of Network Management Group, Inc. & K2 Enterprises; AICPA keynote speaker • September 9–10 (Lawrence): “Leadership Theories & Techniques” and networking reception & dinner. Facilitator: Dr. Gerald Graham, R. P. Clinton Distinguished Professor of Management and former Dean of the W. Frank Barton School of Business; Dr. Graham has conducted training and development programs for more than 500,000 participants in 44 states and in every Canadian Province. • November 16–17 (Wichita): Tour of manufacturing facility; Final meeting to prepare for class project presentation, graduation dinner with committee and program sponsors; Apply Leadership Skills at Annual Meeting; Presentation of class project at Leadership cabinet meeting 16
Roth IRA Conversions: New Rules for 2010 by Renee Goetzka, CPA, and Jason Whaley, CPA Reprinted with permission from the Tennessee Society of CPAs.
The Roth Individual Retirement Account (IRA) is a retirement account that, like the traditional IRA, allows tax-deferred growth inside the account. However, Roth IRAs differ from traditional IRAs in a number of ways. First, contributions can be made to a Roth IRA after the account owner reaches age 70½. Second, required minimum distributions are not mandatory during the Roth account owner’s lifetime. Third, and most importantly, “qualified distributions” from a Roth IRA are tax-free. Tax practitioners are familiar with Roth IRAs because they have existed since 1998. There is little doubt that Roth IRAs are a powerful tool for wealth accumulation. Unfortunately, to date the Roth IRA has been inaccessible for high income taxpayers due to adjusted gross income (AGI) limitations that restrict eligibility for both contributing to a Roth and converting non-Roth accounts to a Roth. There are no significant changes pending with regard to income limits for contributions. However, beginning in 2010, there are two major changes to the tax rules regarding conversions to Roth IRAs: •The AGI limitations will no longer apply for taxpayers converting eligible retirement accounts, described in IRC section 402(c)(8)(B), to Roth IRAs and; •Married taxpayers filing separate returns will be eligible to convert. Accounts ineligible for rollover include inherited IRA accounts for non-spousal beneficiaries and the amount of a traditional IRA account representing the taxpayer’s required minimum distribution for the current tax year. Taxpayers rolling over and converting traditional IRA accounts also need to remember that they can complete only one rollover per year (in which they receive the cash from the IRA) and that they must complete the rollover within a 60-day period. Alternatively, trustee-totrustee transfers are unlimited. Two-year Spread. Roth conversions will generally result in taxable income. Specifically, taxable income is created for the portion of converted funds attributable to pretax contributions and earnings. For conversions taking place in 2010 only, a special rule applies. Half (50%) of the income from the 2010 conversion is taxable in 2011, and the remaining half is taxable in 2012. Taxpayers are permitted to elect out of the two-year
spread and to include the (...continued on page #)entire taxable conversion amount in gross income on their 2010 Form 1040. The election is irrevocable and must be made by the due date of the 2010 return. The IRS has not yet issued guidance clarifying whether “due date” includes extensions. Nor is there presently any guidance regarding the mechanics of electing out of the two-year spread. Presumably this will be achieved simply by including the entire amount of taxable conversion income on the 2010 income tax return. Practitioners should be alert for guidance in this area as the 2010 filing season approaches. Taxpayers and their advisors also need to remember that taxpayers electing the two-year spread may inadvertently accelerate income from a 2010 conversion by taking a distribution from the converted Roth IRA account before 2012. (See below for a discussion of the potential application of the 72(t) penalty to the distribution). Also note that if a taxpayer is using the two-year spread but dies before 2012, a spousal beneficiary can continue to use the two-year spread by irrevocably electing to treat the remaining taxable conversion amount in income during the appropriate years. The two-year spread is a special rule for 2010 conversions only, so conversions in later years will be taxable during the year of conversion. Practitioners should keep in mind that under present law tax rates in 2011 and beyond are scheduled to be higher than 2010 tax rates. The highest marginal tax rate in 2010 is 35%. In 2011, the top rate is scheduled to be 39.6%. In addition, proposed legislation could add a surtax. When advising a client who converts in 2010, tax practitioners should consider both the client’s anticipated taxable income in 2010 through 2012 and how tax rate changes would impact the amount of tax payable on the conversion. Also remember that the repeal of the AGI limit for conversions is permanent. Clients can spread conversion income over multiple years simply by converting the desired amount in a given tax year. Traditional IRAs with Non-Deductible Contributions. When all of a taxpayer’s traditional IRA accounts consist entirely of deductible contributions and earnings, the entire amount converted to a Roth IRA is taxable. However, if the taxpayer’s traditional IRA accounts contain nondeductible contributions, determining the taxable conversion amount is more complex. The balances from all traditional IRA accounts are combined in determining the portion of the conversion amount that is taxable. Because of this special rule, taxpayers with tax basis(... continued on page 18) Skyscapes | January 2010
in their traditional IRAs who are considering converting to a Roth IRA would be wise to avoid rolling over 401(k) funds to a traditional IRA until after the conversion. For example: •Taxpayer has one traditional IRA account.It has a balance of $10,000 comprised of $9,000 of nondeductible contributions and $1,000 of earnings. If the taxpayer converts the entire account to a Roth IRA, only $1,000 (the earnings portion) would be includible in income. •Now assume that prior to completing the Roth conversion, the same taxpayer rolls $90,000 from a 401(k) to a second traditional IRA account. Although the 401(k) is rolled over into a separate IRA account, the rollover will result in more taxable income from the Roth conversion. Regardless of which account is used to complete the Roth conversion, the taxable amount of a conversion will be 91% of the converted amount, calculated as ($100,000 - $9,000)/$100,000. Even if the taxpayer chooses to convert the first IRA with a value of $10,000 to a Roth IRA, the conversion would result in gross taxable income of $9,100 since the conversion is deemed to be a pro-rata conversion of all IRAs owned by the taxpayer. Thus, this taxpayer would have received a more favorable result by waiting to roll over the 401(k) balance until after converting the first IRA to a Roth. Who should consider converting? Determining a prime candidate for a Roth conversion is difficult. Because of the number of variables that must be considered, there is no one-size fits all solution. Each client’s individual tax situation needs to be examined before a practitioner can make a recommendation. Conceptually, however, ideal conversion candidates might include taxpayers who: •Have the ability to pay the conversion income tax with funds outside of the IRA •Have NOL carryovers, charitable contributioncarryovers or reduced income in the year of conversion •Have tax basis in their IRA(s) and would recognize minimal income upon conversion due to recent market events •Expect to be in a higher tax bracket when with drawing the Roth IRA funds than in the year of conversion •Will not have the conversion income increase their exposure to the Alternative Minimum Tax (AMT) •Have considered state tax implications in the (Continued from page 17... )
conversion year and the anticipated state tax treatment of Roth distributions (keeping in mind they may live in a different state in retirement) •Have consulted their attorney regarding differences in exposure to creditors for qualified plans vs. IRAs •Have considered the effects of conversion on their exposure to federal and state estate tax •Have a time horizon that allows maximum RothIRA earnings growth •Want the flexibility of having the option (but not the requirement) of taking tax-free IRA distributions •Want to pass nontaxable IRA assets to their heirs •Are willing to accept the risk that the United States may have a consumption-based tax (Value Added Tax (VAT), sales tax) in the future that would dilute or eliminate the tax advantage of prepaying tax now to obtain tax-free Roth earnings •Are willing to accept the risk that favorable tax laws regarding Roth IRA distributions may change in the future Recharacterizing Conversions to Roth IRAs. The ability to recharacterize (undo) a Roth IRA conversion has been available for a number of years. Tax practitioners should be familiar with the following rules: •Taxpayers have until October 15th of the year following the year of conversion to recharacterize the conversion (as long as either an extension was filed or the tax return was timely filed); •The taxpayer must contact their IRA custodian to make a trustee-to-trustee transfer from the Roth IRA to a traditional IRA (either back to the original traditional IRA or to a new traditional IRA); •Earnings/loss must be included in the recharacterization transfer. Likewise, taxpayers have long had the ability to reconvert previously recharacterized funds back to a Roth IRA. However, in order to reconvert a taxpayer must wait until the later of the tax year following the original conversion or 30 days after the recharacterization. Basket Strategy for Locking-in Tax-Free Growth. Tax practitioners should be aware of a planning opportunity using the recharacterization rules. Earnings within a Roth IRA account are calculated on a pro-rata basis, so a client cannot specifically identify individual assets within an IRA to recharacterize. Because of this, a client may want to consider setting up separate Roth IRA accounts (baskets) when converting to a Roth IRA to isolate individual investments. In the event that one or more Roth accounts falls while
the others rise within the recharacterization window, the client can choose to recharacterize only the account(s) that have depreciated. In effect, this would achieve the desired cherry picking result of only converting (and paying tax on) the asset class(es) that exhibited growth during the window of opportunity to recharacterize. An exaggerated example of how this might work is as follows: •Client has a traditional IRA worth $200,000 with zero tax basis consisting of $100,000 of stocks and $100,000 of bonds. •The client instructs the trustee to convert the stocks into Roth IRA 1 and the bonds into Roth IRA 2. •The client timely files a 2010 income tax return and elects out of the two-year spread (reporting $200,000 of conversion income on the 2010 return). •Assume that by mid-2011, Roth 1 has declined by 50% and is now worth $50,000. Roth 2 has increased by 50% and is now worth $150,000. •By October 15, 2011, the client instructs the trustee to recharacterize Roth 1 (the stock account) back to a traditional IRA. Roth 2 (the bond account) is left intact, thereby securing tax-free growth of $50,000. •The client amends the 2010 tax return to report only $100,000 of gross income from the 2010 Roth 2 conversion (versus $200,000 of gross income as reported on the originally filed return). •The client may later choose to reconvert the amount that’s left in Roth 1. In this case, the client will need to make it past the 30-day period before reconverting. Clients concerned about the possibility of another market meltdown may be comforted to know that they have this option available to manage their Roth conversions.
Five Year Holding Period for Premature Distributions attributable to Conversions. Most practitioners are aware that in order for Roth earnings to be eligible for tax-free distribution, a five-year rule must be met. However, a lesser-known five-year rule exists specifically with regard to the portion of a distribution allocable to a Roth conversion (... continued on page 22) contribution. The purpose of this second five-year rule is to prevent taxpayers from avoiding the 10 percent Section 72(t) penalty by converting to a Roth IRA shortly before taking a distribution. The five-year holding period applies separately to each Roth IRA conversion; holding periods for subsequent conversions are not tacked on to the holding period of the previous conversion. The holding period for a Roth IRA conversion in 2010 begins on January 1, 2010. If the same taxpayer made another Roth IRA conversion in 2012, the holding period for that conversion would begin on January 1, 2012. The practitioner should calculate the taxable amount of the distribution, interview the client regarding plans for taking distributions, and then examine the client’s exposure to the premature distribution penalty. The application of the second five-year rule to conversions can be an unwanted trap for the unwary. Conclusion. The media has already begun publishing articles regarding Roth IRAs. Clients have started making inquiries. Practitioners need to be familiar with the details, traps and tricks surrounding Roth IRA conversions and have some “talking points” prepared. The decision whether to convert will need to be analyzed on an individual basis for each interested client. It is likely that many situations may surface in which the detailed economic analysis indicates that a conversion makes sense, but the (... continued on page 20)
Treas. Reg. 1.408A-1, Q&A-2. Treas. Reg. 1.408A-1, Q&A-2. Treas. Reg. 1.408A-1, Q&A-2. Qualified distributions are defined in IRC Section 408A(d). IRC Section 408A(c)(3)(B). Note that IRC Section 408A(c)(3)(E) allows the AGI limit to be indexed for inflation. IRC Section 408A(c)(3)(B) was repealed by the Tax Increase Prevention and Reconciliation Act (TIPRA) of 2005, P.L. 109-222, Section 512(a). IRC Section 408(d)(3)(C). IRC Section 402(c)(4)(B). IRC Section 408(d)(3)(B). IRC Section 408A(d)(3)(A)(iii). IRC Section 408A(d)(3)(A)(iii). IRC Section 408A(d)(3)(A)(iii). IRC Section 408A(d)(3)(E)(i). IRC Section 408A(d)(3)(E)(ii)(II). IRC Section 1(i)(2), added by the Economic Growth and Tax Relief Reconcili-
ation Act (EGTRRA) of 2001 and amended by P.L. 108-27 and 108-311. IRC Section 1. “Tax on Wealthy Pays for House Health Bill”, Wall Street Journal, July 11-12, 2009 p. A3. IRC Section 408(d)(2). IRC Section 408(d)(2). Practitioners should keep in mind that a capital loss carryover will not shelter Roth conversion income, which is ordinary income. IRC Section 408A(d)(6)(A) and IRC Section 408A(d)(7), as clarified by Treas. Reg. 301.9100-2(b). IRC Section 408A(d)(6)(A). IRC Section 408A(d)(6)(B)(i). Treas. Reg. 1.408A-5, Q&A-9(a)(1). IRS Notice 2000-39, 2002-2 CB 132 and Treas. Reg. 1.408A-5, Q&A-2. IRC Section 408A(d)((3)(F)(i). IRC Section 408A(d)(3)(F)(i), as clarified by Treas. Reg. 1.408A-6, Q&A-5.
Skyscapes | January 2010
(Continued from page 19... )client
is reluctant or unwilling to convert due to the associated income tax liability. Before spending hours preparing what-if scenarios for a client, the tax practitioner might estimate the client’s projected tax upon conversion and ask: Are you willing to write the check?
About the Authors: Renee Goetzka, CPA Renee received her Bachelor of Science degree in Business Management from the University of Tampa, then worked as a Budget Analyst for six years for the Department of the Navy in the Washington D.C. area. After moving to Memphis, Renee took accounting courses at the University of Memphis (formerly Memphis State University) and became a certified public accountant. She has worked as a tax accountant in public accounting as a staff and senior accountant for the last eleven years.
Jason Whaley, CPA Jason received his Bachelor and Master of Accountancy degrees from the University of Mississippi. Jason served as a staff and senior accountant for three years at an international accounting firm. He has been with Watkins Uiberall, PLLC for seven years and became a member in the tax department this year. Jason has previously contributed articles to local publications on tax subjects.
Rodd Miller, CPA Member in Business Since 1990 Name, title, current employer, family: Rodney Miller, Vice President/Investments, Stifel Nicolaus Spouse: Elaine; Children: Noel (16), Nathaniel (13) and Grant (9) Alumni: Wichita State University with a BS in Computer Science, also attended, Kansas State University and West Point. What is your current KSCPA involvement? Member of the KSCPA, Northeast Chapter of CPA’s, and a past member of the KSCPA Board of Directors. What was your first Job? Bagging groceries at Mr. D’s grocery store in Wichita; all my friends worked there and I thought it looked fun. What was your worst job? Working in the Oil and Gas fields south of Wichita; my father lined it up for me after I left West Point (stupidly to chase a girl – my first, hard lesson in life), as a summer job to make a point. I (again, stupidly) took it as a challenge and tried to excel at it. An entire month went by before I realized I was the only guy with all his fingers on the job. I ended up working on weekends during the school year and kept the job after I graduated for a year, working only weekends and holidays. I made more money working parttime than I did working full-time at my “real” job. What are three words that best describe you? Quick, Cool & Determined
Member Profile What book (if any) are you currently reading? Integrity: The Courage to Meet the Demands of Reality by Dr. Henry Cloud What are your hobbies? Backpacking, Soccer (I’m actually keeper in an adult league; I am the oldest player by at least 20 years) and Golf. What are your favorite foods? Popcorn, Pizza & Rib-eye Steak – nothing healthy about any of them.
How do you achieve balance bet ween your personal and professional life? Balance? I only have a personal litmus test: 1. Is it going to make me money or 2. Is it going to lead to (you fill in the blank)… Either way, it is the excesses of life that make it interesting; my job is to drag everyone else along for the ride. What would you like to get around to doing when you have time? Learn a foreign language.
What is your favorite movie(s)? Fort Apache What is your dream vacation? A month long hike in the French/Italian/Swiss Alps What is your biggest pet peeve? Meeting someone who is determined to prove that s/he is the smartest in the room. What do you try to avoid? Public Transportation and Wal-Mart. Who is the person you most admire and why? Cecil Rhodes or Waite Phillips, both continue to influence the world long after their passing. Name one person (dead or living) you would like to meet. Why? My great, great grandfather, so I could ask him, “What were you thinking? Why didn’t you keep walking, California is only three more months to the west?!” What is your favorite song and artist/musical group? Song — Dreams/Van Halen Musical Group — With an iPod, does it matter? What is your greatest accomplishment or greatest impact you have had? Probably my involvement in Topeka Habitat for Humanity as President, Treasurer and project manager; I know I have changed the direction of the lives of not only 60 families, but the lives downstream for their children and their children’s children. If you could have any job you wanted, what would it be? The guy who rakes the beach at Waikiki; it couldn’t get any better than that.
What might people be surprised to learn about you? I married the first girl who asked me. Luckily for me, she was gorgeous and smart. What talent would you most like to have? I’d like to be able to play the piano. If you could be present at any historical event, which one would you choose? Well, the parting of the Red Sea comes to mind as pretty cool, but I’d also jump at the chance to see George Washington turn down the chance to be King. How would you like to be remembered? Really? How about as someone who lived life to its fullest…other than that you really should have something better to do that reminisce about me. Why did you choose to pursue the CPA designation? Honestly, after I graduated with a BS in Computer Science, IBM discontinued the main frame system that we had learned inside and out and introduced the Personal Computer. Realizing that I had the modern equivalent of a degree in mechanical adding machine repair, I knew I needed some skill that involved numbers and business; the CPA designation seemed to fit the bill perfectly.
Would you like to be profiled in the KSCPA Newsletter? This is one of the most widely read articles! Our members want to know more about other members. Join in the fun… send an e-mail to Mary@kscpa.org.
Skyscapes | January 2010
Member News Barry Bowers, CPA from the Great Bend Tribune: In November, Bowers attended the Sleeter Group Next Generation Accounting Solutions Conference. He specifically attended sessions that focused on taking the accounting practice on-line. He was quoted in the newspaper saying, “Today’s technology allows us to serve our clients no matter where they are located. Physical location of a business or individual is no longer an issue to providing quality and timely services. Our office will be implementing several of the new tools I was able to see hands on at the Sleeter Conference.”
John E. Diehl, CPA; Diehl Banwart Bolton, CPAs, PA from the Ft. Scott Tribune: Diehl’s fir m celebrated its 60th anniversar y this past November. Diehl began the fir m in 1949 upon returning from ser ving in WWII. Today, the fir m is better known as Diehl Banwar t Bolton, CPAs, PA and has offices in Ft. Scott, Girard, and Pittsburg. It is “a full ser vice public accounting fir m offering monthly accounting, auditing and review, financial planning, estate and trust planning, retirement plan administration and tax ser vices, both business and individual income tax preparation, and through Datamerica, systems design, implementation & programming, as well as data processing ser vices.” KSCPA would like to congratulate Diehl and his associates on the 60 years of success!
DeMaranville & Associate CPA, from the Leavenworth Times: The firm recently adopted Landing Park in Leavenworth, KS, as part of the Adopt-A-Park Program. Employees and their families were able to contribute to the program which works to help “enhance the condition and beauty of parks and improve the quality of life in Leavenworth for the entire community.”
Marshall Parker, CPA: resident of Kansas Venture Capital Inc., Marshall Parker, was profiled in the Kansas City Business Journal in December.
Ron Ahsmuhs, CPA from the Newton Kansan: The city finance director of Newton retired in December after putting in nearly two decades of service with the city of Newton. “Since Ahsmuhs arrived in Newton, the city has been awarded 18 consecutive certificates of achievement in excellence in financial reporting.” During retirement, he plans to travel and work on his golf game. Trisha Spader, CPA from the McFarren & Magnifico, CPAs, PA: 2009 graduate of the “20 Up to 40” leadership program has recently been promoted to shareholder of McFarren & Magnifico, CPAs, PA, effective January 1. Trisha graduated from Newman University in 2004 with a Bachelor of Business Administration. “At McFarren & Magnifico, Trisha is responsible for both business and individual income tax preparation and research. She prepares compilations and reviews and assists clients in the areas of bookkeeping and financial statement preparation.” Congratulations, Trisha!
We want to hear what you and/or your firm are up to! Please send any news (birth announcements, engagements, weddings, graduations, promotions, anniversaries, philanthropy projects, etc.) you have to email@example.com.
Michael Jason Bowers Lenexa Liberty University, Lynchburg, VA
New Members of the Kansas Society of CPAs — Welcome! Laura E. Baker BKD, LLP, Kansas City
Deana Eichacker Dunne Equities, Inc., Maize Reinstatement
Reid R. Hash Kennedy and Coe, LLC, Wichita
Jill Kruse National Cooperative, Refinery Association McPherson
Dr. Michael R. Lane Emporia State University, Emporia
Annette C. Thompson 22
Strategic Financial Concepts, Inc., Wichita
In Memoriam Dane A. Flora, KSCPA’s IT Consultant Employed by Brungardt-Hower and Associates Hays December 6, 2009
John T. Sheffield, Member since 1953 Wichita December 9, 2009
Chapter News Central Chapter
The Central Chapter is gearing up for tax season after having had several meetings to close out 2009. The Chapter met on September 24, 2009, at the Salina Country Club. They welcomed speaker Mary MacBain, Executive Director of the KSCPA. Mary provided the Chapter with an update of KSCPA happenings and discussed the KSCPA strategic plan. Another meeting was held on November 19, 2009 at the Prairie Dunes Country Club, Hutchinson, KS, and the Chapter welcomed speaker Dr. Dan Deines, Kansas State University. Dr. Deines spoke to the Chapter about the AP Accounting Project that he has been working on the past several years. Having realized the importance of this project on the future of the accounting profession, the Chapter presented Dr. Deines with a check for $300. The Chapter also recognized the efforts of past presidents Mike Wagner, retired, and Robert Schraeder, Lindburg Vogel Pierce Faris, as they were given awards for their service to the Chapter. The Chapter continues to grow as we have welcomed 65 new members this year. We plan to take a short break from meetings during tax season and will continue meetings in June or July 2010.
The KC Metro Chapter will be meeting on January 13 at the Double Tree Hotel at College Blvd. & Highway 69 in Overland Park, KS. They will be hosting Terry Hunt from the Kansas Department of Revenue. Hunt will be giving an update on Kansas Income Tax Forms.
The Chapter will be hosting a golf tournament in May 2010, in Liberal, and their next meeting will be in November 2010.
In September, the Wichita Chapter awarded scholarships to four Wichita State University studentsâ€”Mary Marshall, Zack Brenneis, Trista Lange and outstanding Beta Alpha Psi pledge Justin Whitehurstâ€”at the annual Beta Alpha Psi awards banquet. The Chapter will also be awarding another scholarship to a Friends University student in the spring. Each scholarship is for $750 except for the BAP pledge scholarship, which is $500. Currently, the Chapter is winding up their membership dues and has added over 50 new members. Their next meeting is January 21 where they will be hosting Beth Hogan from BKD, LLP.
Southwest Chapter The Southwest Chapter held their annual meeting in Garden City on November 4. The meeting was attended by about 22 people. The Chapter hosted Mary MacBain, Executive Director of KSCPA as their guest speaker. At the meeting, officers were elected to twoyear terms. The officers elected were: Kyle Hammel Hay-Rice & Associates, Liberal, President Mindi Ormiston High Plains Pizza, Inc, Liberal, Vice-President Lisa Axman Lewis, Hooper & Dick, Garden City, Secretary/ Treasurer
Skyscapes | January 2010
Change in By-Laws Expands to allow BIG/E Affiliate Members, Adds Student Members As of November 18, 2009, the KSCPA expanded the affiliate member program to include Business, Industry, Government, and Education. According to the by-laws, an individual may apply to become an affiliate member under the following conditions: • They do not hold a certificate as a Certified Public Accountant • AND They are employed by a CPA firm • OR they work under the direct supervision of a person who holds a CPA certificate in business, industry, government, or education • OR who they are a faculty member in a higher education accounting program in the state Additionally, applicants for the affiliate membership must be sponsored by a member who holds a CPA certificate. Affiliate members may not imply they are certified public accountants by virtue of their membership in the Society. As an affiliate member in good standing, individuals will enjoy similar benefits of a CPA member. These benefits include, but are not limited to: • Entitlement to attend meetings of the Society • Entitlement to ser ve on Society committees • Access to resources on the KSCPA’s website • Legislative awareness and support • Networking opportunities • Promoting, maintaining, sustaining accounting profession. • Discounts on professional development programs.
However, affiliate members are not allowed to cast a vote during meetings. The investment of an affiliate membership is $150. This includes a $20 assessment for scholarships granted by the Educational Foundation and a voluntary $10 contribution to the Political Action Committee. Individuals interested in becoming an affiliate member can complete an application online. Also added to the by-laws is the acceptance of students as members of the KSCPA. Any individual may apply to become a student member if they are an undergraduate or graduate student at a university or college in the state with a major or degree in accounting. Student members may not imply they are certified public accountants by virtue of their membership in the Society. The student membership program is just launching, but many plans are underway including a special edition newsletter devoted solely to students in February. The cost of a student membership is $25 and applications can be completed online. Students who apply for a scholarship from the Educational Foundation may also apply for a student membership at no charge.
KSCPA Announcement KSCPA is forming two new committees and needs committee members. These committees are: • Tax Committee • Audit and Assurance Services If interested in joining one or both of these committees, contact Mary MacBain, KSCPA Executive Director, at firstname.lastname@example.org.
Calendar of Events Events Calendar of
Metro Chapter Meeting @ 11:30
20 Northeast Chapter Meeting @ 11:30
Peer Review RAB meeting @ 9am
Wichita Chapter Meeting
BOA Mtg @ 9am Legislative Reception 5pm-7pm
“20 Up to 40” – Legislative Awareness” Session; Topeka
For more information about upcoming continuing education classes please follow these links to our website: Seminars and Conferences, click here or for Webcasts and Teleseminars, click here.
Wichita Chapter Meeting
28 For more information about upcoming continuing education classes please follow these links to our website: Seminars and Conferences, click here or for Webcasts and Teleseminars, click here.
2010 Have an event you’d like to see on our calendars? Send it to email@example.com. Skyscapes | | January January2010 2010 Skyscapes
CLASSIFIEDS Auditor sought to provide financial audits and other attestation services, compiling financial statements, preparing income tax returns and performing other related tasks. Specifically will involve employee benefit plan audits. Bachelors degree in Business Administration or accounting + 2 years experience required. CPA or demonstrated progress toward CPA designation is required. Send resume to SS&C Business & Tax Services, Inc., 5825 SW 29th St, Topeka, KS 66614. Accountant— Auditor. Leading edge accounting firm seeks a highly motivated auditor to join our growing team in Manhattan, Kansas. Individual must possess skills to work in a fast-paced, team-oriented environment and have 3+ years of public accounting experience. CPA license is preferred, but not required. Bank audit experience is also preferred, but not required. If you are looking for a family oriented company with an opportunity for advancement, flexibility, and a supportive work environment, please email or send your resume along with three references to: firstname.lastname@example.org or Varney & Associates, CPAs, LLC c/o Office Manager 120 N. Juliette Manhattan, KS 66503.
Accountant - Tax Accountant. Leading edge accounting firm seeks a highly motivated tax accountant to join our growing team in Manhattan, Kansas. Individual must possess skills to work in a fast-paced, team-oriented environment and have 3+ years of public accounting experience. CPA license is preferred, but not required. If you are looking for a family oriented company with an opportunity for advancement, flexibility, and a supportive work environment, please email or send your resume along with three references to: email@example.com or Varney & Associates, CPAs, LLC c/o Office Manager 120 N. Juliette Manhattan, KS 66503. Manager—Tax Department, McDermott & Miller, P.C.— Grand Island. Grand Island office of multi-office CPA firm has opening for a technical tax person who has the skills to head up its tax department. Position requires either 8+ years of experience in taxation with a CPA firm and/or an advanced degree in taxation or a law degree combined with over 5 years of experience with a large accounting firm. CPA certificate and excellent communications skills are also required. Excellent Opportunity for Advancement and Ownership. Applicants should send resume to Norm Saale, Chief Operating Officer at: PO Box 1767, Grand Island, NE 68802 or email to firstname.lastname@example.org.
Supervisory Position. TPP Certified Public Accountants are CFO and accounting resources, certified public accountants and retirement planning specialists. TPP has engaged the executive search firm of Wood-Snodgrass, Inc to assist in recruiting a CPA to join them as a Supervisor. Ideally this person will possess the combined skilled sets of three TPP current positions —Senior Accountant, CFO/Controller & Tax Manager. Bachelor degree in Accounting, Finance, or Economics from anaccredited University. Certified Public Accountant required 4-8 years experience - mix of audit, tax and CFO/Controller type consulting Public Accounting experience a must and as recent as within the past two years. For more information, contact search consultants Stephen E. Snodgrass or William M. Wood of Wood-Snodgrass, Inc. at (913) 681-2200 or (800) 207-1958. To make an application, send resume and salary history in confidence to Wood-Snodgrass, Inc, 12980 Metcalf Avenue, Suite 130, Overland Park, KS 66213, or e-mail to steve@woodsnodgrass. com or email@example.com.
STARTING JANUARY 2010 DISABILITY INSURANCE This Disability Program was specifically built for a Certified Public Accountant. This Kansas Program has the wording of an individual “own occupation” disability contract with the prices of a discounted association program. Unlike the AICPA disability program that only pays when you are totally disabled, this new program will provide income to Kansas members if they are partially or totally disabled. You don’t even need to show income loss to qualify or receive benefits.
LIFE INSURANCE Purchase up to 500K in additional term life insurance. Spend minutes, not weeks, applying for a term life insurance. Answer a few simple, but precise, questions instead of filling out mounds of paperwork and taking medical exams. Purchase up to 30K for your spouse or 10K for your children.
DENTAL INSURANCE There are now two dental plans to choose from and both allow you to keep your current dentist. STARTING JANUARY 15th… Learn more about these group underwritten products and apply on-line at our new website
KSCPA Makes Changes to Advertising KSCPA has embraced the New Year and is making some changes. As you may have noticed, Skyscapes got a facelift, and with the new look comes new advertising opportunities. Our new format provides advertisers more space to promote their goods and services and allows them the ability to include hyperlinks within their advertisement. This gives readers the ability to click through to the advertiser’s desired website directly from the newsletter.
Why advertise with Skyscapes? When you advertise with Skyscapes, your message is distributed to our members, affiliates, and other individuals in the accounting industry. Each month, over 2,800 people receive our newsletter electronically. Recipients of Skyscapes include people of all ages from all parts of Kansas. In addition, Skyscapes is archived on the KSCPA’s website (www.kscpa.org) allowing for new members and guests to the website to view it as well. This year, KSCPA has planned to include two special issues along with our regular newsletters. These issues will include an issue in February devoted solely to students. It will consist of content that will be helpful to both high school and college level students who are pursuing a career as a certified public accountant. This is a great opportunity for organizations to advertise internship and job openings as well as services they may provide for students! Then, in November, we will have an issue strictly devoted to the Annual Meeting. It will include updated schedules and information pertaining to all events surrounding the Annual Meeting. Below is an abbreviated version of our rate card. To view a complete rate card, contact firstname.lastname@example.org.
Display Advertising Pricing includes full color. Page placement determined on a first-come, first-serve basis. To request a specific page placement within the newsletter, additional costs may apply and is also a first -come, first-serve basis.
To place your ad:
Full Page (8.5” x 11”)
Half Page: Horizontal (8.5” x 5.5”)
Half Page: Vertical (4.25” x 11”)
Quarter Page (4.25” x 5.5”)
Eighth Page (4.25” x 2.75”)
Given the size of our staff, we do not have the manpower to design your ad for you. Please create your display ad using the sizes specified on the previous page and e-mail a JPG and PDF file to email@example.com. In the email, please be sure to indicate whether you want anything in your ad linked to your website and where. Also, be sure to include your contact information and billing information (if different).
All classified advertisements are listed in the newsletter and on the KSCPA website (www.kscpa.org) in the order in which they are received. Ads on the KSCPA website are published for 30 days.
Free up to 40 words, 20¢ per word thereafter. Logos may be placed within advertisement for an additional $5.00 if linked to website or $2.50 for just the logo.
See full rate card for price breakdown. Logos may be placed within advertisement for an additional $10.00 if linked to website or $5.00 for just the logo.
To place your ad:
Send the text you would like included in your ad to firstname.lastname@example.org. If you would like your logo included in your ad, please send a JPG file of the logo you would like included. Also, indicate whether the logo should be linked to your website and whether there is a specific place you would like it linked to. Finally, include contact information and billing information (if different).
All advertisements are Net 10 upon receipt of invoice.
Kansas Society of CPAs c/o Lauren Tice, Membership & Communications Manager PO Box 4291 Topeka, KS 66604 785-272-4366 email@example.com