On Balance Magazine - Jan/Feb 2024

January | February 2024 | Vol. 20 No. 1 A publication of the Wisconsin Institute of CPAs | wicpa.org

Once a Girl Scout, Always a Girl Scout Michelle Goetsch, CPA | 8

Plus: CTA and BOI reporting | 12 Entity selection in Wisconsin | 18 SBIR program issue | 32 Workforce of the future | 34

Retirement Plan Services

Business Checks & Accessories

ERP Simplified.

Zetley Law Offices, S.C.

A publication of the Wisconsin Institute of CPAs | wicpa.org

January | February 2024 Vol. 20 No. 1

8 Features

Columns

8

26 WEALTH MANAGEMENT Roth IRA conversion considerations Learn some of the most common things you’ll want to consider when discussing Roth IRA conversions with your clients.

By Brian Ellenbecker, CFP, EA, CPWA, CIMA, CLTC

Once a Girl Scout, always a Girl Scout Michelle Goetsch, CPA, MBA, was destined to eventually become CFO of the Girl Scouts of Wisconsin Southeast. Handling her Girl Scout troop’s finances in high school was a foreshadowing event. But her current job is much more diverse than just finance.

By Marcia Tillett-Zinzow

22

12 CTA/BOI reporting — risk management considerations for CPA firms A high-level overview of the Corporate Transparency Act (CTA) and its relationship to the Business Ownership Information (BOI) Reporting Rule.

By CAMICO’s Loss Prevention Team

32 TAXATION Unexpected tax bills hinder innovation for SBIR grant recipients New rules contradict and hinder the government’s goal of stimulating technology and innovation via the Small Business Innovation Research (SBIR) program.

By Lenny Smith, CPA, MSA

18 Business entity choice after Wisconsin Act 258 and the CTA Find out about the impact of these new laws on business entity selection in Wisconsin and whether entity choice has changed as a result.

By Joseph W. Boucher, CPA, MBA, JD and Julijana L. Englander, JD

34 LEADERSHIP The future of work: Trends and solutions The traditional 9-to-5 office grind is fast becoming a relic of the past as remote work and hybrid workforces take center stage.

By Prashant Kothari

22 What employers should understand about today’s accounting students Discover the unique attributes and preferences of the young professionals who have come of age in a rapidly changing and technological world.

By Colleen Sump

wicpa.org

38 HUMAN RESOURCES Challenges and solutions: Can social media help?

A discussion of talent acquisition challenges facing the CPA profession and how social media has become a powerful way to reach large numbers of viable candidates.

By Timothy Allen, MBA, PAFM

34 Departments 3

Outlook | chair’s letter

4

In Touch | president & CEO’s message

28 Kudos | members in the news 30 Welcome | new members 37 Memorials | departed members

On Balance

January | February 2024

1

On Balance is published five times a year by the Wisconsin Institute of Certified Public Accountants (WICPA). Change of address should be sent to: Membership, W233N2080 Ridgeview Pkwy, Suite 201, Waukesha, WI 53188; Phone: 262-785-0445 or 800-772-6939; Fax: 262-785-0838; email: comments@wicpa.org. Statements and opinions expressed are those of the authors and not necessarily those of the WICPA. Publication of an advertisement does not constitute an endorsement of the product or service by On Balance or the WICPA. Articles may be reproduced with permission. © Copyright 2024 On Balance.

2023-2024 WICPA OFFICERS/BOARD MEMBERS

INSIDE STAFF

Chair Matthew J. Schaefer, CPA, CGMA

President & CEO Tammy J. Hofstede

Chair-elect Ryan J. Hanson, CPA, CGMA

Design & Layout Brett Stallman

Past Chair Steven A. Pullara, CPA, CGMA

Advertising Sue Daniels

Secretary/Treasurer Lucien A. Beaudry, CPA, JD

Editor Marcia Tillett-Zinzow

Directors Christopher M. Cholka, CPA, CGMA Jessica B. Gatzke, CPA, MST Tori M. Morrow, CPA, CGMA, MBA Donna R. Scaffidi, CPA Stacy A. Stinson, CPA

Printing Special Editions

AICPA Council Ruth A. Kallio-Mielke, CPA Neil R. Keller, CPA/ABV, CVA

Join us online!

Check out our featured member benefit providers M3 Insurance M3 is a top insurance broker and risk management firm in America. We’re leaders in the products we represent and the industries we serve. M3 is an extension of your team, providing world-class resources to help you manage risk, purchase insurance and provide employee benefits.

Spectrum Investment Advisors Spectrum Investment Advisors co-sponsors the annual Retirement Plan Investment Seminar, which offers WICPA members CPE credits at a nominal cost. WICPA members can work directly with Spectrum to receive plan consulting services for their retirement plan program as well as individual wealth/asset management services.

von Briesen & Roper von Briesen’s tax team handles any type of matter that may present a significant tax issue. We partner with CPAs to successfully address any state, local, federal or international issue.

These affinity partners and more can be found at wicpa.org/discounts.

2

On Balance

January | February 2024

wicpa.org

OUTLOOK | CHAIR’S LETTER “Our membership continues to have a wide range of diverse thoughts and ideas to create solutions for our profession’s obstacles.”

The Importance of Member Involvement

By Matthew J. Schaefer, CPA, CGMA

V

olunteering our time for different organizations, initiatives, events and committee functions can be a challenge with our busy lives. As the days progress through the year, we continue to manage our work responsibilities, family obligations and the occasional Badger game into our weekly schedules. I am filled with gratitude that our membership has continued to give of their time to WICPA activities and initiatives and balance the demands of work and family.

Our membership continues to have a wide range of diverse thoughts and ideas to create solutions for our profession’s obstacles. The conversations with WICPA members, accounting industry professionals and other stakeholders over the past few months have also provided me an opportunity to listen and try to understand those concerns and opportunities. These discussions have been multifaceted and include concern over regulatory issues, work-life balance and pipeline solutions.

The AICPA has traditionally organized at least two meetings during the calendar year that provide AICPA Council members and state association staff a forum to meet in person for robust discussions on issues related to the CPA profession.

The AICPA Fall Business Meeting was held in Pasadena in October and was attended by association representatives from multiple states and jurisdictions, including Guam and Puerto Rico. The agenda included technological trends, marketing initiatives, pipeline acceleration plans and more.

There is typically a large amount of content to review over this two-day meeting. Participants are actively involved in floor surveys, open-forum discussions and roundtable debates. The issues and concerns that were provided by our WICPA membership were discussed through these surveys and discussions. In particular, employee retention and benefits, firm and industry hiring trends, and the understanding of generational needs in the workplace were discussed in depth in multiple forms.

wicpa.org

There is more work to be done with these initiatives and campaigns on both the state and national levels. The WICPA will continue to work with stakeholders in education, public and private industries, and governmental offices and agencies on these issues. The continued participation by our WICPA membership helps provide solutions and drives the passion for those interested in the profession.

Matthew Schaefer, CPA, CGMA, the 2023–2024 chair of the WICPA board of directors, is senior vice president/chief credit officer for the Bank of Wisconsin Dells. Contact him at 608-254-3624 or mschaefer@dellsbank.bank.

On Balance

January | February 2024

3

IN TOUCH | PRESIDENT & CEO’s MESSAGE “CPAs need to inspire the next generation by sharing the wide variety of career paths available in accounting and explaining that earning a CPA license is worth the time because it can lead to a rewarding, long-term career.”

Leveling Up With Accounting and Influencing the Pipeline

By Tammy J. Hofstede

T

he WICPA was excited to be part of a national campaign with state CPA societies across the country to have CPAs recognized by a governor’s proclamation and raise awareness of the accounting profession among high school students during the month of November.

With trends continuing to show fewer students choosing to pursue accounting as a career, the declining CPA pipeline and attracting/retaining talent are among the most important issues facing the CPA profession today.

CPAs need to inspire the next generation by sharing the wide variety of career paths available in accounting and explaining that earning a CPA license is worth the time because it can lead to a rewarding, long-term career. These are messages that need to be spread, and you are the best people to spread them.

The WICPA Level Up With Accounting campaign in November brought 23 CPAs into 32 high school classes and career fairs around the state, reaching 1,036 high school students. Members went into classrooms to help students better understand opportunities in the CPA profession. The WICPA Educational Foundation supplied presentation materials, talking points and PowerPoint presentations as well as resources and swag for the students.

Members discussed their career journeys, what an average day looks like for them, and how they use their skills to solve problems. They also explained that accountants work in all types of organizations — with data and people — and drive business decisions and strategy. They told students that accounting is a career in which they can change their

4

On Balance

January | February 2024

paths at any time, including starting their own businesses as they grow professionally — and make an impact on the environment and in communities.

In our second campaign, we reached out to the membership to promote accounting and their organizations by hosting activities at their office locations to discuss accounting careers and give students exposure to the profession. These activities have the ability to influence the CPA pipeline for future staffing needs.

Submitted activities were provided to the high school accounting teachers who attended the annual High School Educator Accounting Symposium to assist them in applying

wicpa.org

Our outreach efforts in schools are not limited to November and CPA Month. Our Level Up With Accounting campaign makes it easy to present to schools throughout the year. We continue to encourage members to sign up for high school presentations and to host accounting students at their organizations or firms. You can find the forms at wicpa.org under “Give Back.”

If you are already involved in outreach of any kind, we want to hear about it so we can include your efforts in our analytics. Please email me with your information.

Even if you can’t volunteer, please help spread the word about your great profession. Introduce students to the world of accounting, where they will enjoy financial comfort, job security and the ability to make a difference no matter what industry they choose. Or make a donation to the WICPA Educational Foundation at wicpa.org/give/edfoundation to help support and fund accounting awareness initiatives for students and educators. for $2,500 accounting awareness grants awarded by the Educational Foundation. Teachers will use the funds to provide students with opportunities to see different accounting roles and careers. We currently have 19 organizations signed up — but we need more!

YOU can make a difference!

Tammy J. Hofstede is president & CEO of the WICPA. Contact her at 262-785-0445 ext. 4518 or tammy@wicpa.org.

THANK YOU to our CPA Appreciation Month Level Up With Accounting Volunteers!

Curtis Bach Emma Barrett Mark Beckman Bailey Boe James Dietsche Janet Egan Trae Finnegan Amy Gumtz

wicpa.org

Brooke Hanke Chad Helminger Monika Knapp Prashant Kothari Isabel Kumar Linda Leikness Amanda Linehan Janelle Marotz

Kayla Nabbefeld Lauren Price Doug Rogers Sali Sheafor Barbara Stransky Natalie Van Den Bosch Denise Vandenbush

On Balance

January | February 2024

5

Wisconsin CPA Exam Credit Relief Request The WICPA has been continuously working with the Wisconsin Accounting Examining Board to reinstate exam parts lost during COVID and to develop a process for applicants to request relief from the time of COVID and for any good reason going forward.

The Wisconsin Accounting Examining Board will accept written requests to reinstate lost parts of the CPA Exam. This includes exam parts lost between January 2020 and May 2023, related to COVID. Please follow the exact instructions below.

Your letter should be emailed to tammy@wicpa.org and will be sent to a direct contact at DSPS. Letters should include the following information: 1. Refer to Accy 2.304(5) Rule where it states: Accy 2.304 Candidates for examination.

(5) The board may on a case-by-case basis extend the 18-month period of credit for sections of the Uniform CPA Examination passed, or the duration of the 18-month rolling period, upon the applicant showing to the board’s satisfaction that the inability to pass all sections of the examination within the 18-month period was due to one of the following: (a) The sickness of the candidate or a member of the candidate’s immediate family if the candidate substantiates the illness by a doctor’s certificate. (b) A death in the candidate’s immediate family if the candidate provides proof of death. (c) Temporary military service. (d) Other good reason deemed acceptable by the board.

2. Request a waiver to reinstate lost parts of the CPA Exam (list each and original date of passing each part).

3. Provide a valid reason (be as detailed as possible with reasons why you did not complete the remaining parts of the Exam).

4. Recommend a reasonable time that you will be able to complete the remaining parts of the Exam for the Board to consider.

DSPS will notify you of the Accounting Examining Board’s decision, and if approved, will also relay the decision to NASBA.

We would like to continue to assist and follow the success of applicants asking for exam extensions from DSPS/Accounting Examining Board. Please contact me with your updates.

Tammy Hofstede, WICPA President & CEO, at tammy@wicpa.org or 262-785-0445, ext. 4518.

6

On Balance

January | February 2024

wicpa.org

UPCOMING WICPA CONFERENCES YO U R S O U R C E F O R K E Y U P DAT E S & I N S I G H T S O N T I M E LY I SS U E S

SUCCEED

IMPLEMENT

LEARN

NETWORK

SAVE THE DATE!

Business & Industry Spring Conference

Business & Industry Fall Conference

Financial Institutions Conference

Tax Conference

School District Audit Conference

Accounting & Auditing Conference

Not-for-Profit Accounting Conference

Accounting Technology Conference

Thursday, March 21 Brookfield Conference Center & WICPA CPE Livestream Tuesday, May 14 WICPA Office & WICPA CPE Livestream Wednesday, May 22 WICPA Office & WICPA CPE Livestream Thursday, Sept. 12 WICPA Office & WICPA CPE Livestream

Tuesday, Oct. 22 Brookfield Conference Center & WICPA CPE Livestream Monday, Nov. 11 - Tuesday, Nov. 12 Brookfield Conference Center & WICPA CPE Livestream Thursday, Nov. 21 WICPA Office & WICPA CPE Livestream Tuesday, Dec. 10 WICPA Office & WICPA CPE Livestream

WICPA members save up to $150 on registration!

Registration opens approximately eight weeks prior to a conference. View conferences currently open for registration at wicpa.org/conferences. wicpa.org

On Balance

January | February 2024

7

Photography by Rick Swearingen 8

On Balance

January | February 2024

wicpa.org

ONCE A GIRL SCOUT, ALWAYS A GIRL SCOUT

By Marcia Tillett-Zinzow

W

“It’s fairly broad. It’s more like chief financial and administrative officer role, because I oversee accounting and finance, and also IT, business services, property and sometimes human resources. Working there, it’s just nice that everyone is connected to the same vision and working in the same direction — to help girls be their best selves.”

Prior to being promoted to CFO in 2017, Goetsch was finance director for GSWISE, a position that was more narrowly focused on finance and accounting. She described it as “more transactional,” digging into the finance processes and procedures and trying to make them more efficient.

“We implemented a couple new systems while I was finance director, so it was working through the system aspect of it, too,” she said.

But perhaps her most interesting project as CFO was a nonfinance one born of necessity during COVID. Goetsch and the GSWISE COO brainstormed a way to get out into the community and bring the Girl Scouts to the girls instead of making anyone come to a place where they could be exposed.

“We designed the Girl Scout Mobile,” Goetsch said.

“It’s an eye-catching, bright green box truck with an awning on it. I took it to the Franklin Library ‘Trunk or Treat’ for Halloween. I parked it there, put the awning out, set-up the

wicpa.org

Photo provided by Michelle Goetsch

hen Michelle Goetsch, CPA, MBA, served as treasurer of her Girl Scout troop in high school, she had no idea she would one day be handling all the finances for Girl Scouts of Wisconsin Southeast (GSWISE). Today, she is CFO of that organization, and in that role, she wears many hats.

Goetsch shows off one of her most interesting projects as GSWISE CFO.

billboard sign, and played music from the speakers — and there’s a TV on the outside of it so we can play little videos or have a PowerPoint presentation going. It’s been fun and definitely creates awareness.”

The industry decision Before she went to GSWISE, Goetsch worked for S.C. Johnson in Racine, first as a cost accountant, then moving up to global internal auditor, accounting supervisor, HR & benefits finance manager and, finally, sales finance manager.

“They have a rotational accounting and finance program, so I served in six different roles in my 11 years there,” Goetsch said. “I started out as a cost accountant, and in that role I supported the Ziploc® home storage brands. The plant was in Bay City, Michigan. As soon as I started, I had an

On Balance

January | February 2024

9

“

When I was looking at potential majors at UW–Madison’s Wisconsin School of Business, I chose accounting — the language of business.

accounting — the language of business,” she said. “I was always a kid who liked things organized and as efficient as possible, so accounting was a good fit.”

The Girl Scouts’ Camp Alice Chester.

office with a window, and then within my first month I was taking the company plane to Michigan. I thought, OK, this was a good decision!”

In college, she had struggled a bit with whether to go into public accounting or industry after graduation. She said that the vast majority of the accounting majors were going into public accounting, and it made her question her desire to go straight into corporate accounting. To aid her decision, she did internships in both sectors: PwC for public accounting and then S.C. Johnson for the corporate accounting side — and that turned into a full-time job.

After the internship experiences, going into the industry sector was essentially a no-brainer for Goetsch, whose decision to become an accountant was forged right after high school, when she was working for her grandfather’s friend who owned a small business. Her grandfather worked there as part-time controller, so Goetsch witnessed many different aspects of business, including sitting in on her grandfather’s collection calls and accounting efforts. The experience sparked in her a general interest in business.

“So then, when I was looking at potential majors at UW–Madison’s Wisconsin School of Business, I chose

10

On Balance

January | February 2024

She also was a kid who liked to travel. In high school, she went on a trip to Australia with her Girl Scout troop and, as a student of the Japanese language, spent a summer in Japan.

In college, she took advantage of Study Abroad and spent a semester studying at the Copenhagen Business School in Denmark. She and the friends she made there went on other trips, as well, feeding Goetsch’s passion for travel.

“When I turned 25, I had been to 25 different countries,” she proudly said.

Goetsch entered the University of Wisconsin’s five-year Master of Accountancy (MAcc) degree program in 1999 and graduated with a Bachelor of Business Administration degree in accounting in 2003 and then the MAcc in 2004.

“My dad’s college advice was to get some letters after my name,” she recalled. “So getting my CPA checked that box, and I doubled down then with an MBA. I suppose you could add CNAP, too, for certified nonprofit accounting professional.” She said she doesn’t use those letters after her name, but it was a certification she earned when she moved into the nonprofit sector. She also has a certificate in international business.

After college graduation and before starting her fulltime job with S.C. Johnson, Goetsch took the first part of the CPA Exam. The remaining three parts were squeezed in between working and going to school at Marquette University to earn her MBA (which she received in 2010).

She passed all four parts of the CPA Exam on the first try, crediting both UW–Madison and the Becker CPA Exam Review course for preparing her to succeed.

“I spent quite a few evenings sitting with the Becker Review course,” she said, “and when I was done, I was glad to get that time back!”

wicpa.org

Camp Alice Chester in East Troy offers many activities for the scouts.

All in the family

“She worked in the resource center and the shop, helping out volunteers and parents. In fact, I still remembered the phone number there. I don’t know my son’s cellphone number, but I can remember the number for Girl Scouts because I used to call my mom there when I was little,” she laughed.

One of the reasons Goetsch made the job change from corporate to nonprofit had to do with her passion for community service. She had been struggling with being busy at work, raising two children, and also wanting to be involved in the community. “I think it’s pretty easy to be able to use finance and accounting skills to help other organizations,” she said.

She had enjoyed using her expertise to volunteer as treasurer of both her church council and her sons’ school’s Parent Teacher Organization as well as serving as a mentor through the Marquette University Business School’s mentorship program. And she wanted to do more service activities. But she also loved spending time with her family: Sons Wyatt (10) and Jackson (12) are involved in numerous sports as well as volunteer activities through their

wicpa.org

Photo provided by Michelle Goetsch

S.C. Johnson uses “a family company” as its tagline, and in Goetsch’s case, that was literally true. Her husband, Rob, got a job there six years after Goetsch had been working there. So while they were both there, S.C. Johnson was the Goetsch family’s company. Then came a job change — but the tagline would still fit with her new job because her mother had also worked for the Girl Scouts when Goetsch was a child.

A high ropes course is the newest feature at the camp.

church, husband Rob coaches soccer, Goetsch and her husband play tennis, and the family likes to take skiing/ snowboarding vacations in the winter. She wondered how she could fit all of this in and still have some time to help other organizations.

“And then the Girl Scouts position popped up — the Girl Scouts that I’d been so connected to growing up,” she said. “The idea of working for them and having that nice two-for-one of community involvement and getting paid for it — that’s the greatest aspect about the job.”

Marcia Tillett-Zinzow is a Wisconsin freelance writer and editor.

Contact her at mtzinzow@icloud.com.

On Balance

January | February 2024

11

Corporate Transparency Act/Beneficial Ownership Information Reporting Risk Management Considerations for CPA Firms

By CAMICO’s Loss Prevention Team

T

he Corporate Transparency Act (CTA) was enacted Jan. 1, 2021, as part of the National Defense Authorization Act, representing the most significant reformation of the Bank Secrecy Act and related anti-money laundering rules since the U.S. Patriot Act. The CTA is intended to address and guard against money laundering, terrorism financing, and other forms of illegal financing by mandating certain entities (primarily small and medium-sized businesses) to report “beneficial owner” information to the Financial Crimes Enforcement Network (FinCEN).

The CTA authorizes FinCEN, a bureau of the U.S. Treasury Department, to collect, protect, and disclose this information to authorized governmental authorities and to financial institutions in certain circumstances.

This article is intended to provide a high-level overview of some of the key CTA provisions and address significant issues, critical unknowns, and potential risks facing accounting firms.

What entities are subject to the new CTA reporting requirements?

Entities required to comply with the CTA (“reporting companies”) include corporations, limited liability companies (LLCs) and other types of companies created by a filing with a Secretary of State (SOS) or equivalent official. The CTA also applies to non-U.S. companies registered to do business in the U.S. through a filing with a SOS or equivalent official. Since the definition of a domestic entity under the CTA is extremely broad, additional entity types could be subject to CTA reporting requirements based on individual state law formation practices.

12

On Balance

January | February 2024

“

This article is intended to provide a high-level overview of some of the key CTA provisions and address significant issues, critical unknowns, and potential risks facing accounting firms.

There are a number of exceptions to who is required to file under the CTA. Many of the exceptions are entities already regulated by federal or state governments and, as such, already disclose their beneficial ownership information to governmental authorities.

Another notable exception is for large operating companies defined as companies that meet all of the following requirements: • Employ at least 20 full-time employees in the U.S. • Gross revenue (or sales) over $5 million on the prior year’s tax return • An operating presence at a physical office in the U.S. As currently promulgated, the CTA has an exemption for any public accounting firm registered in accordance with Section 102 of the Sarbanes-Oxley Act of 2002 (firms registered with the Public Company Accounting Oversight Board). However, other public accounting firms could be deemed reporting companies subject to compliance with the CTA.

wicpa.org

Who is considered a “beneficial owner” of a reporting company?

A beneficial owner is any individual who, directly or indirectly, exercises “substantial control” or owns or controls at least 25% of a reporting company’s ownership interests.

An individual exercises substantial control if the individual (i) serves as a senior officer of the company; (ii) has authority over the appointment or removal of any senior officer or a majority of the board; or (iii) directs, determines, or has substantial influence over important decisions made by the reporting company. Thus, senior officers and other individuals with control over the company are beneficial owners under the CTA, even if they have no equity interest in the company.

In addition, individuals may exercise control directly or indirectly through board representation, ownership, rights associated with financing arrangements, or control over intermediary entities that separately or collectively exercise substantial control.

• All new reporting companies — those formed (or, in the case of non-U.S. companies, registered) on or after Jan. 1, 2024 — must report required information within 90 1 days after their formation or registration.

CTA regulations provide a much more expansive definition of substantial control than in the traditional tax sense, so many companies may need to seek legal guidance to ultimately determine who are deemed beneficial owners within their organizations.

• All existing reporting companies — those formed or registered before Jan. 1, 2024 — must report required information no later than Jan. 1, 2025.

Phase-in of reporting requirements

Penalties for noncompliance

As currently promulgated, the CTA’s reporting requirements will be phased in in two stages:

Penalties for willfully violating CTA reporting requirements include (1) civil penalties of up to $500 per day that a violation FinCEN issued a final rule on November 29, 2023, extending the deadline for companies created or registered in 2024 to file initial beneficial ownership information (BOI) reports to 90 calendar days after their formation or registration (was originally 30 days).

1

wicpa.org

On Balance

January | February 2024

13

“

is not remedied, (2) a criminal fine of up to $10,000, and/or (3) imprisonment of up to two years. A safe harbor from the penalty is available to reporting companies that file corrected reports with FinCEN no later than 90 days after submission of an inaccurate report (31 U.S.C. 5336(h)(3)(C)).2

Considerations for entities as they begin to prepare for the CTA With the CTA introducing a new and expansive reporting regime, now is the time for entities to assess the new rules’ implications on their organizations. As entities begin this evaluation, the following guidelines (which are not meant to be all-inclusive) should be considered: • Is the entity subject to the CTA, or does it qualify for exemptions?

• If the company is not exempt, how should it calculate percentages of ownership interests to determine whether any owners meet the 25% ownership threshold? In many companies with simple capital structures, the answer will be obvious. It may be much less obvious, however, for companies with complicated capital structures (given the expansive definition of “ownership interest”) or companies in which some ownership interests are held indirectly — for example, 2

14

With the CTA introducing a new and expansive reporting regime, now is the time for entities to assess the new rules’ implications on their organizations. through upper-tier investment entities, holding companies or trusts.

• How should a company begin to assess and determine each person who exercises substantial control over it?

There may well be multiple people who qualify, given the expansiveness (and vagueness) of the substantial control definition.

• What new processes and procedures should a company put in place to monitor future changes in its beneficial owners and reportable changes on existing beneficial owners that will require timely updated reports to FinCEN? Note that the types of information that must be provided to FinCEN (and kept current) for these beneficial owners include the owner’s legal name; residential address; date of birth and unique identifier numbers from a nonexpired passport, driver’s license or state identification card (including an image of the unique identifier documentation).

https://www.federalregister.gov/d/2022-21020/p-223

On Balance

January | February 2024

wicpa.org

• Caution: Keeping current with the information that needs to be provided to FinCEN will be a significant trap for reporting companies, as they will need to rely on beneficial owners to timely update them on reportable changes to their information (e.g., ownership changes, moves, marriages, divorces, etc.). Reporting companies must file updated or corrected reports within 30 days of reportable changes or discovery of inaccurate information in previously filed reports. As a result, a company’s operative documents may need to be revised to include provisions related to the CTA, such as representations, covenants, indemnifications and consent clauses. For example, the operating agreement may require: o a representation by each shareholder, member or partner, as applicable, that it will be in compliance with or exempt from the CTA; o a covenant by each shareholder, member or partner, as applicable, requiring continued compliance with and disclosure under the CTA or to provide evidence of exemption from its requirements; o an indemnification by each shareholder, member or partner, as applicable, to the company and its other shareholders, members or partners, as applicable, for its failure to comply with the CTA or for providing false information; and o a consent by each disclosing party for the company to disclose identifying information to FinCEN to the extent required by law.

Potential risks to the CPA of helping clients prepare for the CTA There has been much discussion and debate within the accounting community about whether CPAs are in a position to provide guidance and advice to their clients regarding whether an exemption applies or to ascertain whether legal relationships constitute beneficial ownership. The overarching concern is that CPAs and nonattorney tax professionals providing assistance to clients in this arena could be deemed engaging in the unauthorized practice of law (UPL). As each state has its own definitions of what services are considered UPL, this is an area of some risk to the accounting profession. As of the date of this writing, no state has yet to provide clarity as to whether providing advice to clients regarding the CTA would or would not be viewed as UPL. From a risk management best practices perspective, CAMICO strongly encourages CPAs to tread carefully as it relates to advising clients regarding the CTA and the filing of beneficial ownership reporting and instead advise clients to seek guidance from qualified legal counsel.

wicpa.org

“

From a risk management best practices perspective, CAMICO strongly encourages CPAs to tread carefully as it relates to advising clients regarding the CTA and the filing of beneficial ownership reporting ...

Risk management tips • Familiarize yourself with the Corporate Transparency Act and the beneficial ownership reporting requirements and stay current with any further guidance promulgated

by FinCEN. For details on specific CTA provisions, refer to the Beneficial Ownership Information Reporting Rule, available at https://www.fincen.gov/boi.

For additional information regarding the CTA’s beneficial ownership reporting requirements, refer to FinCEN’s Frequently Asked Questions document at https://www.fincen.gov/boi-faqs.

• Tread carefully to reduce the likelihood of an accusation of practicing law without a license! Performing services for clients that are outside of the purview of your licensure or your competencies poses significant liability and insurance coverage risks. It is best to refer such services to other professionals than to face the consequences of allegations of falling short of professional standards of care.

On Balance

January | February 2024

15

However, if contemplating providing CTA-related services to clients, we strongly encourage you to document your due diligence efforts to confirm that your state has not deemed these services to be the unlicensed practice of law. Note that engaging in the unauthorized practice of law is not covered by the CAMICO policy, so we encourage you to also contact us so that we can help you evaluate the risks associated with these services as well as assess any potential coverage issues.

• DOCUMENT, DOCUMENT, DOCUMENT o Inform and advise your clients in writing regarding the new beneficial ownership reporting requirements under the CTA and your recommendation that they seek legal guidance. CAMICO offers a client notification template for this purpose. o Modify engagement letters to include language that specifically disclaims the firm’s involvement in assisting clients with CTA compliance. See CAMICO’s below suggested engagement letter language for this purpose:

reporting of beneficial ownership information is timely filed with the Financial Crimes Enforcement Network (FinCEN) as required by the CTA. As <Firm> is not rendering any legal services as part of our engagement, we will not be responsible for advising you regarding the legal or regulatory aspects of your company’s compliance with the CTA, nor are we responsible for the preparation or submission of Client’s beneficial ownership information reports to FinCEN. If you have any questions regarding Client’s compliance with the CTA, including but not limited to whether an exemption may apply to your organization or to ascertain whether relationships constitute beneficial ownership under CTA rules, we strongly encourage you to consult with qualified legal counsel experienced in this area.

• Prepare your own firm for compliance if you are deemed to be a reporting company under currently promulgated CTA guidance.

Management is responsible for Client’s compliance with the Corporate Transparency Act (CTA), if applicable to its business, and for ensuring that any required

CAMICO policyholders with questions regarding this communication or other risk management questions should contact the Loss Prevention Department at lp@camico.com or call our advice hotline at 800-652-1772 and ask to speak with a loss prevention specialist.

Join the WICPA Educational Foundation Board!

The WICPA Educational Foundation is seeking members to serve on its board of directors.

Some of the opportunities include: • Assisting in efforts to attract students to the profession.

• Providing strategic governance in accordance with the WICPA Educational Foundation mission.

• Acquiring new leadership skills.

The WICPA Educational Foundation plays a pivotal role in supporting programs to improve awareness and perceptions by educating students and educators about the exciting opportunities available to accounting professionals.

To apply, visit wicpa.org/EFBoardApplication through March 1, 2024.

16

On Balance

January | February 2024

Questions? Contact tammy@wicpa.org.

wicpa.org

WE WALK THE TALK. CAMICO knows CPAs, because we are CPAs.

Created by CPAs, for CPAs, CAMICO’s guiding principle since 1986 has been to protect our policyholders through thick and thin. We are the program of choice for more than 8,000 accounting firms nationwide. Why? CAMICO’s Professional Liability Insurance policy addresses the scope of services that CPAs provide.

Includes unlimited, no-cost access to specialists and risk management resources to help address the concerns and issues that you face as a CPA. Provides potential claim counseling and expert claim assistance from internal specialists who will help you navigate the situation with tact, knowledge and expertise.

Does your insurance program go the extra mile?

Visit www.camico.com to learn more.

CPA PROFESSIONAL LIABILITY INSURANCE AND RISK MANAGEMENT SOLUTIONS

Harris Hauptman Senior Account Executive T: 800.652.1772 Ext. 6727 E: hhauptman@camico.com W: www.camico.com Accountants Professional Liability Insurance may be underwritten by CAMICO Mutual Insurance Company or through CAMICO Insurance Services by one or more insurance company subsidiaries of W. R. Berkley Corporation. Not all products and services are available in every jurisdiction, and the precise coverage afforded by any insurer is subject to the actual terms and conditions of the policies as issued. ©CAMICO Services, Inc., dba CAMICO Insurance Services. All Rights Reserved. wicpa.org

On Balance

January | February 2024

17

Business Entity Choice After Wisconsin Act 258 and the CTA

P

rior to 1994, business entity selection in Wisconsin and around the country was much more limited, as fewer choices were available for entity structure. Business owners faced a choice: They could either pay lower taxes and receive more tax flexibility at the cost of assuming unlimited liability or enjoy limited liability in the corporate model and be subject to the double income tax regime of C-corporations. While some businesses chose limited partnerships, these were typically used for real estate tax shelter investments or for family estate planning, making them a niche choice.

By Joseph W. Boucher, CPA, MBA, JD and

On Jan. 1, 1994, Wisconsin established limited liability companies (LLCs), which dramatically changed the choices offered for business entity formation. As you can see from Exhibit A, “Business Entities – A Brief History,” and Exhibit B, “Wisconsin Entity Formation by the Numbers,” there have been enormous changes in business entity choice over the last 30 years.

Exhibit A

Julijana Englander, JD

18

On Balance

January | February 2024

wicpa.org

Exhibit B

What impact does the passage of Wisconsin Act 258 and the Corporate Transparency Act (CTA) have on business entity selection? To find the answer, let’s look at what should be considered when choosing a business entity.

We ask each client the following questions when selecting a business entity: 1) What is the nature of your business?

2) Where is capital coming from?

3) How many owners are there going to be, and how actively will they be engaged in the business?

4) What do you expect future growth to be?

5) How do you expect to exit from the business?

Exhibit C highlights the three key factors to consider before choosing a business entity: limited liability (Who wants unlimited liability?), favorable taxes (Who wants to pay higher income taxes?), and flexibility (Can the entity structure change should the need arise?).

Exhibit C

wicpa.org

On Balance

January | February 2024

19

Nature of the business Businesses of all kinds face questions about entity selection — from tech startups, grocery stores and manufacturing companies to more specialized businesses with licensed professionals, like CPAs, lawyers, doctors and other highly regulated industries (such as insurance and banking).

Funding and capital For businesses that have outside funding or are backed by venture capital, the investors often dictate the business entity form to be used, such as a C-corporation formed in Delaware. In these instances, tax issues become less relevant — the investors want simplified nonpartnership tax treatment so they know exactly what they are going to get as an investor going forward.

Specialized real estate transactions are another example of capital coming from outsiders, and these transactions often utilize real estate tax shelters. Typically, these are formed as LLCs instead of limited partnerships — providing limited liability, simple formation and management of the business, and favorable income taxes. Limited partnerships are still used in specialized real estate transactions, but they require more complicated structures than simple LLCs.

Ownership For questions about ownership, clients must consider the following: • Are the owners the people who work in the business?

• Are the owners third-party investors?

• Are they a combination of both?

If ownership is limited to the people working in the business day to day, then a simple LLC is likely the best entity choice, acting as a current version of a general partnership that provides limited liability. For owners who manage the day-to-day operations of the business and are in a specialized field, such as medical professionals, lawyers or CPAs, they are typically limited to using either an LLP, an LLC or a service corporation.

Future growth When predicting the future of a business, consider whether there is going to be a steady and significant flow of income.

If that will be the case, then using an S-corporation may be advantageous. If the annual income will be inconsistent, then partnership tax treatment may be the best choice.

Exiting the business Ultimately, what are the owners’ intentions for the business’s future? How are the owners going to exit the business? When they retire, are they going to sell to a third

20

On Balance

January | February 2024

party? Or is there a possibility some owners will retire and others will buy them out?

How these questions are answered will impact the choice of business entity. For example, if the goal is to sell to third parties, then minimizing the income tax gain on the sale is paramount. For owners who intend to engage in an asset sale, choosing a C-corporation as their entity structure may lead to double income taxation. If owners wish to maximize their income tax flexibility, then choosing to structure their business as either an S-corporation or an LLC taxed as a partnership is advisable, as there should only be a single level of tax.

Wisconsin Act 258 and the CTA How have Wisconsin Act 258 and the CTA impacted this discussion? They are a big distraction. As far as Wisconsin Act 258 goes, most people do and will consider the changes a welcome update. Act 258 modernizes Wisconsin’s business entity law, it harmonizes each business entity statute with the others, and it makes the state a more attractive place to do business.

Additionally, Act 258 changes the formalities for running a business. Some changes are particularly beneficial for small businesses; for example, written operating agreements are not necessary — businesses may operate using oral or implied agreements. As for single-member LLCs (in other words, sole proprietorships) or two or three people owning a business as general partners using an LLC, this change could be of great benefit.

However, as lawyers, we usually recommend there be a written operating agreement to clarify the key terms, rules and structure for the organization. For LLCs with more than two or three owners, each member/owner essentially has a veto right over certain decisions, such as bringing in new owners and selling the business.

Other than changes to operating agreements, the other significant change involves required annual reports. All annual reports must be filed online with Wisconsin’s Department of Financial Services, and all notices for the annual report are now sent electronically. We are very concerned that business owners will be unaware of this change or miss the filing notice. As a result, they may miss completing and filing annual reports and subsequently be administratively dissolved, which will be problematic for the businesses and the business owners.

As far as the CTA, small businesses are not exempt. See Exhibit D for what the Act covers and who is subject to reporting. The CTA does not force businesses to change form and should not impact choice of business entity because all nonexempt businesses — whether corporations, LLCs or LLPs — must comply.

wicpa.org

Exhibit D

So, has business entity choice really changed because of these new laws? Our answer is no. For small LLCs with multiple owners, the businesses should still have a written operating agreement to clarify certain veto rights. While the CTA will not impact the choice of entity for a business, businesses will need to take affirmative steps to comply with its reporting requirements.

As accountants, you have annual opportunities to meet with clients to advise them of these changes and talk about filing annual reports. In fact, accountants should check to make sure that the businesses have not only filed the required

wicpa.org

annual reports but also that the businesses have not been administratively dissolved.

Accountants may also be called upon to assist businesses with their CTA filings and aid in compliance. These are good marketing opportunities that should not be missed.

Joseph W. Boucher, CPA, MBA, JD, is a founder and shareholder of Neider & Boucher S.C., a Madison law firm. Contact him at 608-661-4535 or jboucher@neiderboucher.com.

Julijana Englander, JD, is an attorney at Neider & Boucher S.C. Contact her at 608-441-2527 or jenglander@neiderboucher.com.

On Balance

January | February 2024

21

What Employers Should Understand About Today’s Accounting Students

By Colleen Sump

T

he accounting profession is seeing a lot more of Gen Z, the first digital-native generation to enter the workforce. These young professionals, who were born after 1996, will make up 30% of the workforce in just a few short years. To successfully attract, recruit and retain this talent pool, employers need to understand the unique attributes and preferences of these young professionals who have come of age in a rapidly changing and technological world.

While juggling high school and college, Gen Z students experienced a global pandemic, political and civil unrest, a growing climate emergency, school shootings and various economic crises. These challenges shaped and influenced what this generation not only wants from their careers but also what they want from their lives, including career growth opportunities, competitive compensation, a healthy work-life balance, and a strong company culture that reflects their values.

22

On Balance

January | February 2024

Career growth and professional learning opportunities This generation is interested in upskilling and has a strong desire to stay relevant so they can advance as quickly as possible. The pandemic has strengthened their ability to learn on their own, but they also expect to be coached and trained at work. More specifically, accounting Gen Zers see a future world of work that is connected and transformed by technology, so they want access to training in new technologies and to be seen as the early adopters within their organizations. They are also looking for career development to be personalized since they have grown up with customized experiences, from playlists to newsfeeds.

One Portland State University (PSU) student said, “I want to put my absolute all into providing the best outcome for my employer, but if the opportunity for advancement is low, that would greatly affect my motivation.”

wicpa.org

For employers – Create mentorship programs, offer online certifications and courses, and encourage attendance at conferences and seminars. Train your managers to be coaches. Consider having “stay” interviews instead of “exit” interviews. Provide real-time feedback rather than orchestrated performance reviews.

Competitive compensation Salary has always been a major determining factor as emerging professionals weigh job opportunities, but today’s students are much more financially savvy due to the abundance of information at their fingertips. Right now, a top concern for early professionals is how rising inflation is outpacing salary growth. Financial stability is an important factor for many students who choose the accounting field, so they are concerned about the current inflation situation and salaries keeping up with their ability to lead the lives they were expecting.

Gen Zers also understand that compensation means a lot more than a paycheck. In addition to the traditional benefits like retirement, vacation and health insurance, this generation is interested in additional perks like financial guidance, student loan assistance, tuition reimbursement, parental leave, backup caregiving options, and most importantly, benefits that directly affect mental health and well-being. Gen Z has grown up in tumultuous times, and they understand that their physical, mental and social well-being directly affects their ability to thrive at work and at home.

“We’re looking for companies that value us as humans,” said one PSU accounting student. “Benefits in addition to PTO, health insurance and retirement packages have the ability to really attract us.”

For employers – Think outside the box regarding compensation. When a candidate is weighing their options, this may be what convinces them to choose your offer.

Healthy work-life balance As one PSU accounting student said, “I was not born to work, pay bills and then die. I’d like to enjoy my life!”

This sentiment is shared by many Gen Zers who point to flexibility as a major factor contributing to a good work-life balance. Gen Z understands that in today’s connected world, work doesn’t necessarily start and stop at predetermined times. They want flexibility in taking time off, working remotely, and determining for themselves how to balance their personal and work lives, as long as they meet their employer’s expectations.

Young professionals also want to work a reasonable number of hours so they are able to integrate their other priorities and interests into their lives.

wicpa.org

“

Gen Z has grown up in tumultuous times, and they understand that their physical, mental and social well-being directly affects their ability to thrive at work and at home.

“We are looking for jobs that offer opportunities for growth without having to spend crazy hours at work,” said another PSU student.

For students going into public accounting, the rigorous schedule during the busy season is expected and the tradeoffs are understood, but firms should take note of this generation’s desire for a healthy work-life balance if they want to retain them past the first few years of employment.

For employers – Provide as much flexibility as possible, with options for remote or hybrid work.

Strong company culture Gen Zers are drawn to employers with strong values and a sense of purpose. They care about environmental sustainability, wealth inequality, social justice and corporate ethics. As the most diverse generation to enter the workforce, Gen Zers want employers to be able to articulate what DEI looks like in the day-to-day of their firm or business and not just have DEI as a part of their mission statement. They

On Balance

January | February 2024

23

value action over promises, so employers need to show evidence they are actively working on their DEI initiatives while also recognizing the work will be ongoing and ever-changing.

Because Gen Z is mission-driven, they are interested in doing meaningful work for organizations that reflect their personal ethics. They are taking action on matters that are important to them and not waiting for change to happen. Employers that also make efforts to create positive impacts on society will benefit from having these young professionals want to work for their organizations.

For employers – Clearly communicate your mission and purpose to potential recruits. Develop pathway opportunities for students from diverse backgrounds. Display positivity, authenticity and transparency during the recruiting process.

Develop a culture of belonging for all employees. Be charitable.

What else should employers know about Gen Z? In general …

• They enjoy being independent and getting their work done without relying on others.

• They want to feel valued for their ideas and recognized for their contributions.

• They are intentional about their career choices and are ready to move from one employer to another with relative ease.

• They want to make a difference in their workplace and in society in general.

• They are visual content connoisseurs, so using short videos on social media, in emails, and on websites is critical to reaching and engaging this audience.

• They are concerned about entry-level accounting work being taken over by technology. That said, employers can convey that although technology is transforming many entry-level tasks, they are looking to emerging accounting professionals to step into higher-value work that requires personal judgment and problemsolving skills.

The next generation of accounting professionals will not all be Gen Z; nontraditional students are returning to school to study accounting because of its reputation as a stable field with excellent growth and earning potential.

But these nontraditional students (mostly millennials) have also been affected and shaped by the same world events and technological advances that Gen Z has and are wanting similar things from their employers. Millennials have been affected by the Great Resignation as they’ve watched many of their friends and family change jobs in the last few years looking for something more — more purpose, more flexibility and more empathy. This has influenced their view

24

On Balance

January | February 2024

“

The workplace is facing a lot of disruption right now, but it is also a time of great opportunity for employers who are willing to reimagine their approach to talent acquisition and retention. of the work they want to do, who they want to do it with, and who they want to do it for.

The workplace is facing a lot of disruption right now, but it is also a time of great opportunity for employers who are willing to reimagine their approach to talent acquisition and retention. Gen Z students and early professionals are bringing an entrepreneurial spirit, a “can do” attitude, and an appetite to make the world a better place that has the potential to benefit us all.

Information for this article was derived from many sources, including the “2021 International Federation of Accountants Report,” The Deloitte “Global 2021 Millennial and Gen Z Survey,” LinkedIn’s “2022 Global Talent Trends Report,” the National Association of Colleges and Employers, as well as qualitative responses from Portland State University accounting students.

Colleen Sump is a career coach in the School of Business at Portland State University, working primarily with accounting and finance students.

This article is reprinted with permission of the Oregon Society of CPAs.

wicpa.org

THURSDAY, APRIL 25 NEW BERLIN ALE HOUSE

REGISTRATION INCLUDES 3 Games of Bowling Shoe Rental Food & Beverages

EVENT AWARDS & PRIZES* $250+ in Team Awards & Prizes $100+ in Individual Prizes Bowling Gift Card Package

For more information and to register, visit wicpa.org/BowlingNight wicpa.org

Balancean award January *Attendee must be present when awards and prizes are announced to On receive or| February prize. 2024

25

{ Wealth Management | Roth IRAs }

Roth IRA Conversion Considerations

“

A

common question I often get from clients is whether a Roth conversion makes sense for them. I imagine many of you get the same question. Most of the time, the answer ends up being more

By Brian Ellenbecker, complex than they thought, as there are a number of CFP, EA, CPWA, considerations that must be CIMA, CLTC factored into the decision.

There are tax and estate-planning considerations that sometimes span more than one generation and need to be evaluated.

This article will explore some of the most common things you’ll want to consider when discussing Roth IRA conversions with your clients.

Current tax rates vs. future tax rates The key consideration when evaluating a Roth IRA conversion is how a client’s current tax rate compares to their future tax rate when they would otherwise need to take a distribution from their pre-tax IRA. The main goal of a Roth IRA conversion is to shift money from a traditional IRA to a Roth IRA so those assets can grow tax-free going forward. However, any funds shifted are typically subject to income tax. The IRA owner is choosing to pay taxes sooner than they might otherwise have to, but if they are able to do so at a lower rate now, a Roth conversion is likely something to consider.

This article will explore some of the most common things you’ll want to consider when discussing Roth IRA conversions with your clients. the calculation. This can be an ideal window to consider converting to a Roth IRA. Planning note: If the client bought their health insurance plan from the Marketplace at Healthcare.gov, they may qualify for a premium tax credit. Any additional income from a Roth conversion could reduce the amount of the premium tax credit they are receiving.

Roth conversions vs. 0% long-term capital gains If clients find themselves in the 12% ordinary incometax bracket, some or all of their long-term capital gains and qualified dividends may qualify for the 0% tax rate. Access to the 0% bracket raises two planning points: 1. They may be better off realizing additional gains at 0% vs. doing a Roth IRA conversion. It’s hard to beat generating income and paying no tax on that income.

Gains can be realized by selling securities and immediately buying them back, essentially resetting the cost basis. There is no waiting period on realizing gains like there is with losses and the wash sale rule.1

Many clients have a window between the time they retire and the time they need to start taking required distributions (RMDs) from their retirement accounts, when they will be in a relatively low tax bracket. They no longer have employment income from when they were working, and RMDs have not yet started. If they retired early, they may not yet be collecting Social Security or enrolled in Medicare, which are two items that can further complicate

2. Roth IRA conversions may push dividend or capitalgain income from 0% to 15%. If that’s the case, the marginal tax rate on conversion income in this window will be higher than their current ordinary bracket and may even exceed what was expected to be a higher tax bracket in the future.

1

26

On Balance

January | February 2024

https://www.kiplinger.com/taxes/604947/stocks-and-wash-sale-rule

wicpa.org

beneficiary is in a lower tax bracket than the one at which your client could convert funds, a Roth conversion would not make sense.

If the IRA owner plans to leave any portion of their IRA to charity, that amount should be left in the pre-tax bucket and not converted. The inheriting charity will not pay tax on the proceeds, so the client should not incur the tax liability from a Roth conversion during their lifetime. They may even want to consider opening a separate IRA for the portion they want to leave to charity and designate that charity as the sole beneficiary.

Beware of IRMAA The income-related monthly adjustment amount (IRMAA) refers to the increase in Medicare Part B and Part D premiums someone has to pay once their modified adjusted gross income (MAGI) exceeds a certain threshold.

In 2024, once income exceeds $206,000 for married taxpayers filing jointly or $103,000 for single filers, Medicare premiums will increase. There are six IRMAA income tiers, with the premiums increasing as income rises above each tier. For IRMAA purposes, MAGI is defined as AGI plus tax-exempt interest.

Special tax attributes In some cases, a client may have special tax attributes that make a Roth IRA conversion particularly attractive.

If your client has things like charitable deduction carryforwards, a high after-tax contribution basis in their IRA, investment tax credits, net operating losses, etc., they may be able to make a Roth conversion with low to no tax cost.

Consider beneficiaries If the client expects to leave some of their retirement dollars to their heirs, be sure to consider their tax situation before making a Roth IRA conversion. If the heirs are the ones who will ultimately be the ones to withdraw funds from the IRA and incur any tax liabilities, factor in their expected tax rate and compare that to your client’s current tax rate. If their rate is expected to be higher, a Roth IRA conversion will cost the client more in tax but could reduce the family’s tax liability over time. Conversely, if the

wicpa.org

IRMAA can be tricky because this calculation does not appear anywhere on the tax return. Tax advisors need to be aware of it, though, as it can potentially add thousands of dollars to the cost of doing a conversion. IRMAA typically hits before someone reaches the top of the 22% tax bracket.

It can come up relatively quickly if you’re not watching out for it!

Paying taxes on a Roth IRA conversion Make sure your client has a source of funds outside of their IRA to pay taxes on the Roth conversion. If they need to use funds from their IRA, that amount is taxable and potentially subject to the 10% early withdrawal penalty if they’re under the age of 59½. It creates a much larger hurdle that is difficult to overcome. If the client needs to use their IRA to pay taxes, it’s unlikely a Roth conversion will make sense.

In the right circumstances, a Roth IRA conversion can be a powerful tool to build wealth. It’s important to evaluate each client’s situation individually to determine whether or not a Roth IRA conversion would benefit them.

Brian Ellenbecker, CFP, EA, CPWA, CIMA, CLTC, is a financial planner with Shakespeare Wealth Management in Pewaukee.

Contact him at 262-814-1600 or brian@shakespearewm.com.

On Balance

January | February 2024

27

kudos

Bruce Berndt

Alex Brown

Jake Caelwaerts

Kyle Chuck

Cassandra Friese

Chris Hendricks

Adam Lembcke

Greg Metzler

Jeff Olsen

Dan Bergs, CPA, has been promoted to partner at Wegner CPAs. He is located in the firm’s Madison office.

Adam Lembcke, CPA, has been advanced to the role of principal by CLA in Green Bay.

Bruce D. Berndt, CPA, CGMA, has been promoted by Berndt CPA to the position of chief executive officer.

Greg Metzler, CPA, has been advanced to the role of signing director by CLA in Green Bay.

Alex Brown, CPA, has been advanced to the role of signing director by CliftonLarsonAllen (CLA) in Milwaukee.

Jeff Olsen, CPA, MBA, has been promoted by Berndt CPA to the position of chief tax officer.

Jake Caelwaerts, CPA, has been advanced to the role of principal by CLA in Green Bay.

Jacob Salzmann, CPA, was named a partner at Strohm Ballweg LLP in Middleton, effective Jan. 1.

Kyle Chuck, CPA, has been advanced to the role of principal

by CLA in Milwaukee.

Jessica Schwantes, CPA, has joined Vrakas CPAs + Advisors as a shareholder and the firm’s Madison market leader.

Andrew Cordova, CPA, CMA, has been promoted to senior manager at KerberRose in Rhinelander.

Jeff Stoub, CPA, MBA, has been advanced to the role of principal by CLA in Milwaukee.

Mitch Davis, CPA, has been promoted to partner at Wegner CPAs. Davis is located in the firm’s Milwaukee office.

Jonathan Swanson, CPA, has been advanced to the role of principal by CLA in Manitowoc.

Jeffrey Fischer, CPA, MBA, has joined Wagner, a Milwaukee commercial handrail company, as CFO.

Nick Vargosko, CPA, has been advanced to the role of principal by CLA in Appleton.

Cassandra Friese, CPA, has been advanced to the role of signing director by CLA in Sheboygan.

Andrea Virsnieks, CPA, has been advanced to the role of principal by CLA in Milwaukee.

Joseph Haas, CPA, has been named partner at Hawkins Ash CPAs. He is also the firm’s director of accounting and auditing.

Michelle Weber, CPA, has joined the Community Foundation for the Fox Valley Region as CFO.

Chris Hendricks, CPA, has joined Hawkins Ash CPAs as a partner focused on providing tax planning and tax compliance services to privately held businesses.

Joe Jester, CPA, has joined the Mequon office of Hawkins Ash CPAs as a tax manager.

Dale Kooyenga, CPA, formerly a Wisconsin state senator, will take on the role of president of the Metropolitan Milwaukee Association of Commerce effective Tuesday, Jan. 2. He is the organization’s first new leader in more than three decades.

28

On Balance

January | February 2024

Shane Wheeler, CPA, has been advanced to the role of principal by CLA in Green Bay. Jane Wochos, CPA, has been advanced to the role of principal by CLA in Milwaukee.

Seth Zipperer, CPA, has been advanced to the role of principal by CLA in Appleton.

wicpa.org

Jacob Salzmann

Jeff Stoub

Jonathan Swanson

Nick Vargosko

Andrea Virsnieks

Michelle Weber

Shane Wheeler

Jane Wochos

Seth Zipperer

FIRM NEWS Kollath CPA was named the 2023 Business of the Year (1-50 employees category) by Madison-based In Business magazine.

Vesta, a CPA-led advisory firm serving southeast Wisconsin communities, has expanded its service area into Milwaukee’s North Shore with a new workspace in Mequon. The new Vesta-branded workspace replaces a seasonal office in Port Washington.

Want your new job, promotion or award mentioned in Kudos?

H Email your announcement and photo in JPG format to mtzinzow@icloud.com. H

Interested?

Contact Marcia Tillett-Zinzow, editor, at mtzinzow@icloud.com.

wicpa.org

On Balance

January | February 2024

29

Welcome new members!

Get to know the newest members of the WICPA. October 1, 2023 – November, 30, 2023

Jared Anderson

Michael D. Hill Jr. NBI Inc.

Maurice D. Ash

Tyler Holentunder

Jacquelyn Bartels

Johnson Block & Co. Inc.

Chintankumar J. Bodar Emma Bonack

New Berlin Plastics Inc.

Sarah Iverson Wipfli LLP

Michael A. Janicki

UW–Milwaukee

Abbott, Stringham & Lynch

Ryan P. Boyle

Carroll University

Megan M. Cahill Mariah Calkins

Nelson & Associates S.C.

Jada M. Carerros Kaizen CPAs PLLC

Lawrence E. Collins Tiffany Crabb

Mukwonago High School

Cindy D. Dederich Jill Derr

Zhengwei Sun

Thayne I. Schmitt

Mary K. Tarman

Bella-Rose Schroeder

Holden M. Thielke

Joseph Schroettner

Cameron J. Vander Zanden

Chortek LLP

Carroll University

Abbott Laboratories

Carroll University

Fox Communities Credit Union

Michael D. Johnson

Christopher A. Shales

UW–Whitewater College of Business & Economics

Hancock & Robinson CPAs

Adam Vincent

David J. Kaminski

National Guardian Life Insurance Co.

David Kang

Kylee Skrzypchak

Brian P. Walsh

Kailey Smidel

Hunter W. Weckerly Peter E. Wick

Ryan Waeffler

Diane M. Kohl

Carroll University

Alexander T. Krainer

CliftonLarsonAllen LLP

Babel Tax & Accounting LLC

Alexandra Smith

Andrea G. Kuhne

Benjamin Smith

The Boldt Company

Ricardo E. Soto Robles

Columbia University

John J. LeRose Jr.

Faust & Smith Accounting LLC

Julia Lewandowski

UW–Milwaukee Foundation

John J. LeRose CPA

UHY LLP

Wipfli LLP

Mengyun Ye

Baker Tilly

Mary J. Dewar

Samantha N. McCabe

Catey Dingman

Jacob K. Merk

Connor Farrell

Abbie M. Mikula

Jingwen Fu

Michelle L. Mish

Johnson Block & Co. Inc.

Marquette University Ernst & Young LLP

Jessica Nigbur

Yuan Gao

UW–Stevens Point

Stacy Gebhard

Stefanie L. Nolte

Ana Glaaser

Joanne R. Obermueller

Lori Glynn

Brooke Peterson

Olivia K. Hansen

Leanne K. Pokorski

Fares Hasan

Patti A. Porth

Oconomowoc High School

Fox, O’Neill & Shannon S.C.

Olivia M. Heesch Siobhan Heiss

Ernst & Young LLP

Omunazia M. Hicks On Balance

Northwestern Mutual Citizens State Bank

Spacesaver Corp.

30

Katharina C. Schmidt

Joshua Sennes

Batteries Plus

John Chiappetta

Ryan Stratton

Meredith Jenkins

The Mooring Park Institute Inc.

Lauren M. Brothen

Trevor J. Schertler

Affinity Accounting

Milwaukee Jewish Federation

Lauren Powell Chortek LLP

Gosia Roszina

Northland CPAs S.C. January | February 2024

wicpa.org

Nancy M. Bonniwell, J.D.

Terri S. Boxer, J.D.

Robert E. Dallman, J.D., LL.M.

Thomas P. Guszkowski, J.D., LL.M.

Kenneth A. Hoogstra, J.D.

Megan L.W. Jerabek, J.D.

Thomas J. Kammerait, J.D., CPA

Sumeeta A. Krishnaney J.D., MBA

Marcus S. Loden, J.D., LL.M.

Thomas A. Myers, J.D.

Randy S. Nelson, J.D., CPA

Thomas J. Phillips, J.D., LL.M.

David J. Roettgers, J.D., CPA

John A. Sikora, J.D.

Adam N. Skarie, J.D.

Steven M. Szymanski, J.D., MBA

Robert B. Teuber, J.D.

Peter J. Walsh, J.D., LL.M.

Let’s Work Together. von Briesen’s Tax Section offers a wide range of legal services to CPAs. We are known as their trusted partner when handling the thorniest legal aspects of tax law. From tax controversies, audits, administrative appeals, professional liability, tax litigation to sometimes even changing the law – we get results. Have a grey issue you’d like some perspective on? Give us a call.

To learn more about how we can work together, please contact Dan Welytok at daniel.welytok@vonbriesen.

wicpa.org

vonbriesen.com/tax

On Balance

Daniel S. Welytok, J.D., LL.M.

January | February 2024

31

{ Taxation | SBIR grant funds }

By Lenny Smith, CPA, MSA

T

he Tax Cuts and Jobs Act of 2017 (TCJA) introduced significant changes to the treatment of research and experimental (R&E) expenses for tax purposes. Under the new rules, which took effect in 2022, taxpayers are no longer allowed to deduct R&E expenses. Instead, they are required to capitalize and amortize these expenses over a period of five years (or 15 years if the expenses are attributable to foreign research).

32

On Balance

January | February 2024

“

The Tax Cuts and Jobs Act of 2017 (TCJA) introduced significant changes to the treatment of research and experimental (R&E) expenses for tax purposes. wicpa.org

Development stage companies that receive Small Business Innovation Research (SBIR) grants can be significantly impacted by this change in tax law. SBIR grants are competitive programs that provide funding to small businesses in the U.S. to conduct R&E on innovative technologies or processes. SBIR grant recipients should know that grant funds are generally considered taxable income.

Thus, they must report their SBIR grant income on their tax returns and pay any applicable federal, state and local taxes.

Additionally, SBIR grant funds must be used for R&E activities related to the specific project described in the grant proposal. They cannot be used for general business expenses not directly related to the research and development of the proposed technology or process, including federal taxes.

For example Let’s say Company X receives an SBIR grant of $150,000 to perform R&E on an innovative product. Company X spends the full $150,000 on approved R&E costs, resulting in a net income of $0. However, once Section 174’s new R&E capitalization rules are applied, only $15,000 of the $150,000 in expenditures is tax deductible in the current tax year. The resulting net taxable income is $135,000, and the federal tax owed is $28,350. Even if Company X did not spend the entire $150,000, they could not use the remaining SBIR funds to pay the tax bill.

Prior to 2022, net taxable income would have been $0 (generally speaking, to keep this simple), and the federal tax bill would have been $0. The new R&E capitalization rules contradict and hinder the government’s goal of stimulating technology and innovation via the SBIR program. Without proper planning and management of SBIR funds, many startups may be forced out of business due to unexpected tax bills.

Looking forward, as the remaining capitalized R&E expenses are amortized, and no additional revenue or taxable grants are received, Company X generates losses, and these losses cannot offset the Year One tax bill in the example above. The TCJA eliminated the ability to carry-back net operating losses (NOLs), creating a permanent tax liability for Company X and implementing yet another roadblock to furthering innovation and technological advancement throughout the U.S. What if Company X had an NOL carry-forward from the prior year totaling $300,000? Again, the TCJA limited the utilization of NOLs generated after 2017 to 80% of taxable income. In our example, Company X could only

wicpa.org

“

Without proper planning and management of SBIR funds, many startups may be forced out of business due to unexpected tax bills. use $108,000 (80% of the $135,000 taxable income) of the $300,000 NOL, bringing Company X’s taxable income from $135,000 to $27,000.

To navigate the capitalization rules and recommend strategies to mitigate these “phantom” federal tax liabilities, we recommend that clients work with a tax professional who can help them explore opportunities that will enable their businesses to continue to innovate and thrive in the face of R&E capitalization requirements.

Lenny Smith, CPA, MSA, is a partner at Withum in Princeton, New Jersey. Contact him at lenny.smith@withum.com.

Please note: This article was authored under the current federal tax law in effect as of May 2, 2023. It was first printed in SumNews, a publication of the Massachusetts Society of CPAs, and is reprinted here with their permission.

On Balance

January | February 2024

33

{ Leadership | Workforce trends }

The Future of Work: T r e n ds a n d S o lu t i o n s

I

n a world marked by rapid technological advancements and a shifting talent pool, the future of work is undergoing a profound transformation. The traditional 9-to-5 office grind is increasingly becoming a relic of the past as remote work and hybrid workforces take center stage. The way we find, attract and manage talent is evolving to keep pace with these changes.

In this article, we explore the future of work, the rise of remote talent solutions, and the emergence of the hybrid workforce.

The remote revolution

By Prashant Kothari

34

On Balance

Long before the COVID-19 pandemic, the utilization of remote talent gained momentum in the 1980s, primarily within IT and business process outsourcing. Technological advancements

January | February 2024

wicpa.org

“

allowed workforces to operate from anywhere, offering cost savings through price arbitrage and the opportunity to tap into external expertise, which proved a prudent business strategy.

The COVID-19 pandemic acted as a catalyst for the global remote-work revolution, expediting an already growing trend.

The COVID-19 pandemic acted as a catalyst for the global remote-work revolution, expediting an already growing trend. Companies worldwide swiftly adjusted to remote work, and many discovered its remarkable efficiency.

Consequently, remote work has shifted from being merely a workplace perk to becoming a standard offering for numerous organizations.

Two pivotal forces underpin this transformation.

Technology stands as a primary driver, with high-speed internet, cloud-based collaboration tools, and digital communication platforms empowering employees to work from virtually anywhere. The resultant flexibility and potential for an improved work-life balance align seamlessly with the evolving needs of the modern workforce.

The second key driver is the shifting global workforce.

A study conducted by Purdue Global1 reveals a substantial quarter of the U.S. workforce comprises baby boomers. To provide perspective, a staggering 10,000 baby boomers retire daily. Simultaneously, the United States has witnessed a stark decline in birth rates2 over the past half-century. The mass exodus of baby boomers, coupled with a relatively modest influx of Gen Z into the workforce, has created an increasingly formidable challenge for U.S. employers in their pursuit of finding, enticing, retaining and effectively managing talent.

1 2

https://www.purdueglobal.edu/education-partnerships/generational-workforce-differences-infographic/ https://www.usnews.com/news/health-news/articles/2023-01-10/u-s-birth-rates-continue-to-fall

wicpa.org

Conversely, the eastern part of the world (the East) has witnessed a growth in its proficient English-speaking workforce due to rising birth rates and enhanced education.

In 2023, India overtook China as the most populous nation.3 The sizable and accessible pool of skilled, costeffective, English-speaking talent in the East has become appealing to U.S. employers seeking resources.

The rise of remote talent solutions As remote work gains prominence and local talent shortages emerge, businesses are adopting remote talent solutions to source and oversee their workforces. These solutions encompass a range of tools to facilitate remote recruitment, onboarding and collaboration, enabling access to a global talent pool. The Big 4 accounting firms were early pioneers in leveraging this global workforce trend across various functions, such as client services and

https://www.un.org/en/desa/india-overtake-china-world-most-populous-country-april-2023-unitednations-projects 3

On Balance

January | February 2024

35

{ Leadership | Workforce trends }

back-office operations. In the realm of public accounting, firms increasingly utilize hybrid and remote workforces for tasks like accounting, bookkeeping, tax, audit and payroll.

CFOs and controllers also harness remote and hybrid workforces for various accounting and finance functions.

Moreover, remote talent solutions provide essential tools for effective remote team management, including project management software, virtual team-building activities and digital communication platforms. Work models have been adapted to accommodate remote workers in different geographic locations, including those overseas.

The hybrid workforce: Finding the right balance Remote work offers benefits, but it has challenges, too — such as isolation, blurred work-life boundaries and reduced in-person collaboration. Many firms are adopting a hybrid workforce model, enabling both remote and in-office work. This model offers flexibility and retains the social and collaborative office aspects. Hybrid offshore talent pools provide the best of both worlds, addressing talent shortages and offering office-based and remote work options.

The impact on company culture In the era of remote and hybrid work, a major concern for businesses is preserving company culture. How can a sense of unity be maintained with employees spread across different locations and time zones?

To tackle this challenge, companies are adopting innovative methods to foster belonging among remote and hybrid workers. This includes virtual team building, regular video meetings and digital platforms for sharing accomplishments, which cultivates a shared culture and values.

Effective communication is even more vital in this new setting. Companies must ensure all employees, regardless of their location, have equal access to information and collaborative opportunities. Transparent communication and equitable treatment of team members are essential for a healthy and inclusive company culture.

The future of work is flexible and inclusive The future of work is undoubtedly moving toward a more flexible and inclusive model. Remote talent solutions — driven by technological advancements, a shifting global workforce, and the lessons learned during the pandemic — are reshaping how businesses find and manage their workforces. The rise of remote work and the adoption of hybrid workforces are here to stay, offering employees

36

On Balance

January | February 2024

“

The future of work is undoubtedly moving toward a more flexible and inclusive model. greater flexibility and employers access to a wider and costeffective talent pool.

To succeed in this new era, companies must adapt and embrace these changes. Emphasizing the right balance between remote and in-person work, leveraging remote talent solutions, and nurturing a strong company culture are all crucial steps toward ensuring a prosperous future for both businesses and their employees.

As we continue to navigate this evolving landscape, one thing is clear: The future of work will be characterized by flexibility, adaptability and a commitment to harnessing the full potential of a diverse and dispersed workforce.

Prashant Kothari is president of SkillBench Inc. He has more than 25 years of experience sourcing, screening, hiring, deploying and managing remote talent. Contact him at prashant@globalskillbench.com or 414-364-8955.

wicpa.org

memorials Thomas Asher, CPA, CGMA (1940–2023)

west and in Cincinnati, visiting with his large extended family in Colerain, working construction as a young man, and eating Skyline chili dogs. He attended Marquette University and the University of Wisconsin–Milwaukee and then worked for Ernst & Young as a CPA. He subsequently began two successful computer software businesses, Aardvark and then Shoreland Inc., traveling across the globe for work. Cook had a talent for remembering faces, connecting people, and providing a network of support to friends and colleagues. He was known by many for his intelligence, unique sense of humor, and love of Wisconsin frozen custard and family, especially his grandchildren. He is survived by his wife, Margaret; five brothers; two daughters and five grandchildren.

Dennis Asmus, CPA (1938–2023)

Bertren D. Figi, CPA (1937–2023)

Thomas M. Asher, CPA, CGMA, of Fond du Lac, died on Sunday, Dec. 4, 2022, the WICPA has recently learned. He was 82. Born and raised in Chicago, Asher was a veteran of the United States Naval/Air Rescue and became licensed as a CPA in Wisconsin in 1982 and in Illinois in 1986. Asher began his CPA career at Price Waterhouse (now PwC) in Chicago and later worked for Kieckhefer Aeromarine. He was a member of Holy Family Parish and Fond du Lac Noon Rotary. He enjoyed gardening, house painting, fishing, cooking, eating and working in his yard. He is survived by his wife, Diane; a son and a daughter; three grandchildren; and a sister.

Dennis Asmus, CPA, of Germantown, passed away on Feb. 24, 2022, the WICPA has recently learned. He was 83.

Asmus was raised in Fort Atkinson and graduated from Fort Atkinson High School in 1956. He then attended the University of Wisconsin–Madison and received a bachelor’s degree in American history in 1960. In 1961, he joined the U.S. National Guard and was activated into the regular U.S. Army at Fort Lewis in Tacoma, Washington. In 1964, he earned a bachelor’s degree in law and went on to earn a bachelor’s degree in accounting in 1965. Asmus took the CPA Exam and started work with Ernst & Ernst in January of 1966, finishing his career at PriceWaterhouseCoopers in June 2002. He started his own business in 2003, Dennis Asmus & Associates, with the help of his daughters. Asmus was on the boards of directors of the Boerner Botanical Gardens, the Milwaukee Tax Club, the Milwaukee Estate Planning Council and the WICPA. He was an avid reader of history and politics. He is survived by his wife of 61 years, Kay; four children; six grandchildren; nine greatgrandchildren and one great-great grandchild. He is further survived by other relatives and friends.

Donald C. Cook, CPA (1943–2023)

Donald C. Cook, CPA, passed away on Saturday, Nov. 4, 2023. He was 79. Cook grew up in Cincinnati, Ohio, and then Whitefish Bay, Wisconsin, graduating from Dominican High School. He honorably served in the U.S. Marine Corps during the Vietnam War and then traveled across the United States. Cook told many stories about his years out

Bertren D. Figi, CPA, passed away May 9, 2023, the WICPA has recently learned. He was 86. Figi was a lifetime member of the WICPA and very active during his working years. He was an active member of the (former) Southern Chapter and the Madison Discussion Roundtable group.

Figi was born and raised in New Glarus. He was certified as a CPA in 1963, and prior to his retirement, he worked in private accounting as a vice president of finance and administration. Figi had a passion for music, playing trumpet in a jazz band and with the University of Wisconsin Marching Band throughout his college days. But his true passion was his family, especially his children and grandchildren. He is survived by his four children and four grandchildren.

Robert J. (Bob) Ruttgers, CPA (1935–2023)

Robert J. (Bob) Ruttgers, CPA, passed away on Wednesday, Nov. 1, 2023. He was a lifetime member of the WICPA. Ruttgers was preceded in death by his beloved wife, Arlene.

He was the loving father of Star (Ron) Sienkiewicz and Jody (Matt) Wesley and proud grandfather of Zachary Sienkiewicz. Ruttgers grew up in Racine and enjoyed a lifelong career as a CPA, having received his license in 1963.

If you are aware of a member obituary and believe it should be included in Memorials, please send a copy of the obituary or contact Marcia Tillett-Zinzow at mtzinzow@icloud.com.

wicpa.org

On Balance

January | February 2024

37

{ Human Resources | Recruiting }

Challenges and Solutions: Can Social Media Help?

T

he public accounting profession has seen many changes over the years, from the move away from paper to changing regulations to differing views from students and others outside the profession. As we know, one of the biggest changes

By Timothy Allen, is the diminishing pipeline: the MBA, PAFM steady decline in the number of students studying accounting and the number of individuals choosing public accounting as a career. According to a recent article in the Wall Street Journal, the number of students completing a bachelor’s degree in accounting dropped by 7.8% in the 2021–22 academic year.1 This is the largest decline in a single year since at least the 1994–95 academic year.2 In addition, according to a March 2023 article by Financial Executives International, the number of students enrolling for finance or accounting degrees in U.S. colleges has decreased by 17%.3 The aging of the profession, with as many as 75% of CPAs having reached retirement age by 2020,4 only complicates the pipeline issue.

Overcoming challenges To compound the challenge to firms of fewer students entering the profession, recruiting for entrylevel accounting positions has gotten increasingly more competitive and difficult over the past few years — not to mention the competition within the industry for a shrinking number of experienced accountants. Long gone

“

As we know, one of the biggest changes is the diminishing pipeline: the steady decline in the number of students studying accounting and the number of individuals choosing public accounting as a career. are the days of firms having their pick of students and recent graduates to choose from. Instead, the student or recent graduate has a greater choice of their desired job from a larger number of viable options. It’s clear the advantage has shifted in favor of the student, recent graduate and experienced accountant. Often students are being recruited and offered internships in their sophomore year or earlier.

This has forced firms to find more creative ways to attract candidates and fill vacant roles.

In March 2023, the AICPA announced that it was “revving up high school and college efforts” as part of its Action Plan to address pipeline issues. Part of that plan is designed to develop a high school education strategy that includes dual-credit course options and the potential for AP accounting courses. The WICPA also has stepped up, with a new education section on the website for students

https://www.wsj.com/articles/accounting-graduates-drop-by-highest-percentage-in-years-5720cd0f https://www.wsj.com/articles/accounting-graduates-drop-by-highest-percentage-in-years-5720cd0f https://www.financialexecutives.org/FEI-Daily/March-2023/Why-Are-Students-Leaving-Accounting.aspx 4 https://www.thetaxadviser.com/issues/2023/mar/from-boomers-to-zoomers-transitioning-clients-for-retirement.html#:~:text=Almost%2075%25%20of%20the%20CPA,changing%20technology%20and%20 tax%20legislation.

1 2 3

38

On Balance

January | February 2024

wicpa.org

and educators (including several videos) and a pipeline campaign called Level Up With Accounting.5 At the grassroots level, many firms are exploring the development of co-op relationships with high schools and junior colleges to better provide those students public accounting career insights and opportunities.

Another potential path the industry needs to pursue to help fill the pipeline of young accountants and accounting students is to focus recruiting and educational efforts on the underrepresented communities, to expose students of color to the profession and available career opportunities, and to help them understand that as a CPA you can make an impact within the community while making a good living. And just as the internet revolutionized recruiting 20 years ago, the advent of social media has helped firms find candidates they may not have had access to in the past.

5

Social media as a tool What social media has done is allow firms to reach potential candidates where they are — online, on their phones, in their homes or even out of state. There will always be places for firms to attend on-campus career fairs and Beta Alpha Psi or accounting club meetings and to post openings to their websites and online job boards.

But to effectively reach the largest number of viable candidates, social media has become a powerful tool.

That said, it is also a crowded space with many competing messages from a diverse number of public accounting firms and private employers. This has created challenges for firms to be seen and heard. The end result of those challenges has been firms having to find ways to get creative in their recruitment. Many firms are eschewing the standard “we’re hiring” type of postings and now

https://www.wicpa.org/education/students

wicpa.org

On Balance

January | February 2024

39

{ Human Resources | Recruiting }

focusing more on the benefits of working for their firms and showcasing their cultures.

But social media isn’t just for recruiting. Using social media and other tools to help foster interest in the profession and debunk some of the long-held beliefs about the accounting profession has become commonplace for many firms. If you peruse social media on any given day, you will notice firms posting regularly, not just about industryspecific topics or firm events, but shifting to highlight firm culture, community involvement, and even what staff and partners are doing outside work — to provide a glimpse into the firm and profession that goes beyond the obvious topics of tax, audit or client accounting-related topics.

These posts spotlight what it is like to work at the firms, now and in the future, and how prospective candidates might see themselves fitting in. These types of posts serve as “public service announcements” for the firms and the profession. Meadows Urquhart Acree & Cook LLP, a firm based in Richmond, Virginia, has taken things even further.

They have created a page on their website titled “Accountants Are Fun!” where they talk about the profession in a different and novel way. They’ve even gone so far as to create a TikTok account (@accountantsarefun) and hashtag to further showcase the fact that accounting professionals are not boring bean counters who do nothing but sit behind a desk all day (www.muacllp.com/ accountants-are-fun).

If we are to change the perception of the public accounting profession (and we need to), we should continue to put out consistent messaging on social media and in face-to-face interactions, media interviews, blog posts and newsletter articles that accountants are and should be considered more than just bean counters or number crunchers who are worked to death during tax season. The shift must be toward highlighting the fact that accountants are strategic advisors, independent sounding boards, and integral to financial stability and success for their clients.

In addition to being consistent, those in the profession need to learn to get creative in their messaging and the ways they wish to communicate to potential students, current students, and those inside and outside the profession.

Continuing to complain about long hours, changing regulations and difficult clients isn’t going to help attract people to the profession.

40

On Balance

January | February 2024

“

The shift must be toward highlighting the fact that accountants are strategic advisors, independent sounding boards, and integral to financial stability and success for their clients.

Changing public opinion about a career in public accounting takes all of us. It’s going to be hard work, and it’s not going to happen overnight. However, it is not going to happen at all if we don’t start now.

Timothy Allen, MBA, PAFM, is COO at Kollath CPA, a Madison-based, mid-sized public accounting firm. He has more than 20 years’ experience in helping public accounting firms grow and operate more efficiently. Contact him at tallen@kollathcpa.com or 608-824-3002.

wicpa.org

Save The Date

Member

Recognition Banquet & ANNUAL BUSINESS MEETING

Thursday, May 9, at 5 p.m.

Brookfield Conference Center Save the date for the WICPA’s signature event of the year to: • Recognize membership milestones

• Present the 2024 Excellence Awards

• Elect the 2024–2025 Board of Directors

• Enjoy dinner, drinks and networking

Complimentary for WICPA members.

Registration is required to attend.

PRSRT STD U.S. POSTAGE

The Magazine for Wisconsin CPAs

Wisconsin Institute of Certified Public Accountants W233N2080 Ridgeview Parkway, Suite 201 Waukesha, WI 53188

PAID

Milwaukee, WI Permit No. 5845