Legislative Insider

It's a start - Maryland has two CPAs in the Legislature

2012-01-16T13:04:05-05:00

Maryland ranks in the top fifteen states with the most CPAs in the legislature. We have two CPAs, both are MACPA members, who are serving as delegates in the 188 member Maryland General Assembly.

You may not think that it is a lot, but it is a start.

One Democrat and one Republican. Both in the House of Delegates (total - 141 members).

Delegate Brian Feldman is the Democrat from Montgomery County and serves on the House Economic Matters Committee. This is the Committee that hears all accounting legislation proposed by us and/or the Maryland State Board of Public Accountancy. Brian has been involved in almost every major issue we have had in the CPA Profession since he was elected in 2002. He as recognized last summer after our historical victories in 2011.

Delegate Gail Bates is the Republican from Howard County and serves on the House Appropriations Committee. Gail has sponsored several attempts to fix tax issue like decoupling of Maryland's taxes from federal (depreciation & estate tax). She was also featured in our Maryland CPA video to explain the exciting possibilities in CPA careers.

Both of these legislators are CPAs and members of the Maryland Association of CPAs and we are proud to have them. We hope there might be more CPAs in the legislature in the future.

We hope you are joining us for CPA Day in Annapolis where we take several hundred CPAs and descend on Annapolis to meet with legislators. Be sure to say hello to Brian and Gail.

Did you know there are eight CPAs in Congress (none from Maryland yet) and they have formed a CPA Caucus to begin to weigh in as a group.

It's a start!

The four biggest issues facing Maryland CPAs in the legislature this year

2012-01-10T05:24:42-05:00

What are the four biggest issues facing CPAs and small businesses in the upcoming 2012 meeting of the Maryland General Assembly?

Taxes - all types of individual and corporate taxes;
Taxes - gross receipts, combined reporting, and sales tax on services;
Taxes - Sales taxes on tax, accounting, and consulting services; and
Overreaching Liability Reform (aka Tort) which will increase frivolous lawsuits and your insurance premiums.

The writing is on the wall. Maryland continues to face a structural deficit of $1 billion (remember the Thornton unfunded educational mandate?), the federal ARRA recovery money to states has run out, and the state has an ongoing structural deficit that must be closed (we have a constitutional balanced budget requirement).

The good news is that our legislators listen and they trust CPAs (the mosted trusted advisors to business).

Bottom line is do you want to be a victim or a participant?

if you want to have a say, come to CPA Day, it is that simple. Here is where you can register and this year we will feature advice from Delegate Brian Feldman (one of two CPAs in the legislature) in thr morning and Comptroller Peter Franchot in our free CPE slot (while the legislators are in session 10:00 am - noon).

Here is where you register for CPA Day in Annapolis (January 12, 2012 7:30am - 1:00pm (free to MACPA Members features 2 hours of free CPE, breakfast & lunch).

Five hours of your life to look your legislators in the eye and tell them what our issues are and how we want them to vote. I guarantee they will listen and that we will be successful. See what we achieved last year and why we need record turnout again!

Stay home, be a victim, and complain about how bad the legislators are and be prpared to get out your wallet.

If not you, who will come and represent your districts?

If not now, when?

I hope you will join us in our 112th session advocacting for you!

See Bill's post about last year's CPA day - Maryland CPAs save the world... again!

and Adrienne Gonzalez at Going Concern What happens when 150 CPAs storn the capital?

and Sharon Gubinsky's blog post CPA Day in Annapolis, Maryland recap

Comptroller Franchot on things that go together

2011-12-16T08:00:00-05:00

Each December, Maryland's comptroller and the MACPA break bread and talk about how they can work together to improve the lives of Maryland's taxpayers and preparers alike.

This year, MACPA Finance Director Skip Falatko was on hand to witness the goings-on. He filed the following report. Skip?

======

Collaboration, financial literacy, and fiscal responsibility were some of the themes emphasized by Maryland Comptroller Peter Franchot at the MACPA’s annual Comptroller’s Luncheon.

The event gives the tax preparer community a chance to get to know the professionals who manage those agencies. Attendees included MACPA members, tax attorneys, and staff from the Maryland Comptroller’s Office, State Department of Assessments and Taxation, and Division of Unemployment Insurance.

Comptroller Franchot addressed the group and thanked CPAs for their past efforts working with the Comptroller’s Office on combined reporting, the proposed computer tax, and e-filing.

Franchot also stressed the need for financial literacy for Maryland students by outlining an initiative to require Maryland high school graduation requirements to include a course in financial literacy. Franchot is seeking 10,000 signatures on a petition to bring to the Maryland legislature on the issue.

Franchot also promoted the concept of fiscal responsibility in state government by promoting a two-year “time-out” on any tax or fee increases in order to provide some “tax certainty” to citizens and to give them some time to “catch their breath” so the fragile recovery can continue.

The comptroller noted CPAs are viewed as objective, trusted advisors and encouraged us to talk to our legislators about these issues. A great way to do that is to attend CPA Day in Annapolis on Jan. 18. The event is free, includes two hours of CPE, and is an easy way to get to know your legislators. You can register here.

Like shoes and socks, salt and pepper, and bricks and mortar, financial literacy and fiscal responsibility go together, hand-in-glove. You can’t have one without the other. Let’s work together to help educate our legislators on the issues important to the CPA profession on Jan. 18.

Special session finishes up; redistricting is finalized

2011-10-20T07:41:00-04:00

Goodbye, special session. That was the title of a post by Baltimore Sun blogger Annie Linskey.

Why am I relieved?

As Mark Twain was credited with saying, "No man's life, liberty, or happiness are safe when the legislature is in session." When the governor announed this special session, I had flashbacks to the special session in 1997 when more than 700 bills poured in over two weeks. Remember sales tax on services?

My nightmare would not be repeated this time. The General Assembly stayed focused on redistricting despite attempts by some legislators to take advantage of the "assembly" to introduce lots of tax and other bills (more than 50, I heard). Ultimately, these were held in the rules committee and did not make it to the committees or onto the floor. The redistricting plan was signed into law by Gov. O'Malley and the special session adjourned.

Here is the Maryland Chamber of Commerce report from CEO Kathy Snyder.

So, I add my sentiments to Annie's: Goodbye, special session, goodbye.

Now we turn our attention to the 430th session of the Maryland General Assembly that will begin on Jan. 11, 2012 and meet for 90 days.

CPA Day in Annapolis is scheduled for Jan. 18, 2012. Get details and register here.

Special session convenes in Annapolis

2011-10-17T08:27:10-04:00

"No man's life, liberty, or happiness are safe when the legislature is in session." -- Mark Twain

We are ready ...

Our government affairs advisor, Nick Manis of Manis Canning and Associates sent us this over the weekend:

"As anticipated, Gov. Martin O'Malley announced through an Executive Order proclaiming and convening a special session of the General Assembly beginning Oct. 17, 2011. The special session is necessary to pass legislation establishing Maryland’s congressional districts. Maryland must pass a congressional redistricting plan prior to the beginning of the 2012 legislative session in order to conduct the presidential primary on April 3, 2012. The Executive Order may be found here.

"We expect the session to last approximately three to four days if all goes as planned. The governor had discussed introducing legislation regarding job creation but has announced that he will not proceed during the special session, but rather wait until the 2012 regular session, which will convene on Wednesday, Jan. 11, 2012."

The last special session in Maryland was in 1997, when Maryland took up slots and our budget. In two weeks, there were close to 700 pieces of legislation, including sales taxes on accounting, tax and consulting services.

We have heard that the legislators plan to stick to the agenda this time -- redistricting required by the 2010 census. According to ABC News, Maryland is one of 32 states that will not have changes in our congressional representation. (Maryland will retain its eight seats).

But, just in case, we have been preparing all summer for the risks of this special session. Our legislative executive committee and Board of Directors had us develop a strategy in the event any bad legislation shows up. We mobilized our grassroots in several town hall meetings and had a meeting with the managing partners of Maryland's major firms in September.

Stay tuned for e-mail alerts and watch this blog for any developments.

Here are some resources about the census and redistricting:

What have we done for you lately?

2011-09-17T10:42:08-04:00

How about Extending IRS & Maryland Tax Deadlines for Hurricane Relief, Passing a ban on Tax Strategy Patents, exempting Tax Professionals from the Maryland SS Privacy Act, advocating for Private Company Financial Accounting Standards and testifying in Annapolis against sales taxes on services?

In today's fast moving environment, we are constantly asking this question of ourselves and constantly striving to be even more proactive in our advocacy efforts on behalf of our members.

We like to think about it this way, will we be a victim or a participant?

Participant! Exclamation Mark!

Since 1901, we have been advocating for CPAs in Maryland about issues from the Federal, State, State Board of Accountancy,and Professional Standards areas. This summer we have been busy in all of these areas.

Here are some of the latest outcomes and successes you should know about:

Extended due dates from Hurricane Irene in Maryland. Our own Mary Beth Halpern worked with the AICPA Tax Division, the IRS, and the Comptroller of Maryland to clarify the extension confusion around the disasters of the past few weeks. Here is the latest, On September 6, we contacted IRS on behalf of our members to request clarification of news release IR-2011-88. We received this If you reply from Candice Cromling, Director, National Liaison, “Your members and their clients in Maryland will meet the criteria for relief in the Press Release IR-2011-88.” She also added – “If the penalty is not automatically suppressed at the time of filing and is assessed in a CP notice, the taxpayer should respond to the notice referring to the Press Release along with a statement about the evacuation order or severe weather warning that impacted the taxpayer and/or the preparer (could be a phone call to the number on the notice or a written response to the notice).” We are relying on the information and direction provided to us by IRS as we share this with our members. We recommend members refer back to IR-2011-88. The Maryland Comptroller followed suit agreeing to follow the IRS guidance and granted a one week extension to September 22, 2011, see their website here).
Tax Strategy Patents ban is official! After five years of work and a concerted effort the AICPA and State CPA Societies have scored another major victory for CPAs with this legislation (for more background see our prior posts here, here, and here). The new law deems any "strategy for reducing, avoiding, or deferring tax liability" to be "prior art" under the patent law, and therefore not patentable. This would disallow the now famous "Roth IRA conversion excel template" which was patented a few years ago. Worth noting is that we are one of only three types of business method patents that the US Patent & Trademark Office is prohibited from issuing. The other two are medical procedures and nuclear technology.
Clarification of Maryland Social Security Privacy Act - We received an opinion form the Maryland Attorney General that clarifies that CPAs can use client's social security numbers when corresponding with about taxes and in the tax preparation process. In part the opinion reads, "The inclusion of a Social Security number on tax forms is required by both State and federal law...As a result tax forms include Social Security numbers...it is my view that the Privacy Act does not require government documents be redacted by tax professionals for this purpose. In addition, where forms are sent to the taxpayer for review prior to filing, leaving the number in the form permits the confirmation of the accuracy of that number." This was a concern raised from members of of our state & federal tax committees and on our tax listservs. Special thanks to Delegate Brian Feldman for requesting this clarification in our behalf.
Advocating about Private Company Financial Accounting Standards - The MACPA was the only State CPA Society to form a task force to study the recommendation by the FAF Blue Ribbon Panel. The task force presented their conclusions (read the full report here) to the MACPA Board at the CPA Summit and then sent a comment letter urging the FAF to accept the recommendations to form a separate Private Company Standards Board alongside of FASB. Here is MACPA's letter Download FAF Chairman Comment Letter. We were also featured in an interview with CFO magazine here. We encourage to you write the FAF immediately (send e-mail to presidentsdesk@f-a-f.org or use the AICPA's letter tool here.
Testifying before the Senate Budget & Taxation Committee about sales tax on accounting, tax, and consulting services. Ed Ben of SC&H, prior Chairman of our State Tax Committee represented MACPA and testified against sales taxes on accounting, tax and consulting services at the hearing on July 25th. See the article from the Baltimore Sun.
Mobility and reciprocal licensing update - New York is now the 48th state to enact the "mobility" provisions of the Uniform Accountancy Act, making us the most mobile profession in the US. DC has passed it through the State Board and is awaiting the mayor's signature. That leaves only Hawaii and California, both of which are working in it. The AICPA & NASBA also recently released a great mobility tool to help you navigate multi-state compliance and licensing requirements.

Once again another great example of the Power of We! The active involvement of our members and friends at the AICPA and other State CPA Societies leads to success and protecting and expanding the infrastructure that your CPA license rides on!

So this is what we have done for you lately. What do you think?

Resources:

MACPA's Issue Alert

See the "new math" video about how this all adds up for our members

See what Managing Partner's of Maryland Major Firms said in this brief video

MACPA supports DATA Act and need for transparency and accountability in government

2011-08-29T06:58:40-04:00

" "Sunlight is the best disinfectant." - Louis Brandeis U.S. Supreme Court Justice

The government debt crisis is the equivalent of the recent Wall Street Financial Crisis and the biggest issue on the minds of Maryland CPAs.

If that is true, then doesn't it stand to reason that the "solutions" could also be the same?

We think the answer starts with radical transparency, followed by accountability. You get that by giving access to the numbers or as CPAs we like to say, follow the money.

Back in the thick of the Wall Street financial crisis, Dan Roth writing for Wired Magazine ran an excellent piece, titled, Road Map for Financial Recovery: Radical Transparency Now. David Stephenson followed up with a post in the Huffington Post titled, Recovery.gov: The First Step Toward Smart Regulation. The solutions were essentially the same, use XBRL to standardize and tag the data to give it context and meaning and then set the data free for the public to access and analyze. Imagine how many ideas to reduce wasteful spending would come form that?

This is already being done at the SEC level for all public companies. It is being done by the FDIC for bank call reporting. It is a great first step. But what about government? and government spending?

To use Dan Roth's "manifesto" approach, here is what it could look like:

Set the data free - Government would tag their data to disclose the budgets and spending.
Empower all citizens - Once the data is standardized and made available, anyone can get access to the data at a level they could use to analyze and compare the expenditures and recipients and sources.
Create an army of citizen government analysts (My words - Dan had regulators in his article)

But wait there is more. Around the globe, other governments are also seeing major efficiencies from using standardized data to gain reporting efficiencies and reduce the compliance burden of businesses through XBRL.

In his post, Recovery.gov: The First Step Toward Smart Regulation, W. David Stephenson sums it up like this: "If eventually adopted not just by Recovery.gov but agencies in general, such an approach could dramatically reduce company's and local government's reporting burdens; improve regulatory oversight by giving agencies simultaneous, real-time access to the same data; and, as a bonus, help improve organization's efficiency."

Radical transparency, smart regulation, streamlined reporting, efficiency and reduced compliance costs?

Isn't this an idea that is desperately needed NOW?

There is a bill in the House and Senate that gets this started. H.R. 2146 introduced by Rep Darrell Issa (R-CA) and the Senator Mark Warner (D-VA) introduced S. 1222 in the Senate.

That is why the Maryland Association of CPAs sent a letter of support to Maryland Congressman Elijah Cummings who signed on as co-sponsor of the Data Act of 2011 (Digital Accountability & Transparency Act) Download Rep Cummings - DATA Act. We lend our twelve thousand voices to the cause to shine the light on government spending and accountability.

We hope these bills begin making their way through Congress as the summer break ends. Stay tuned.

Recommended Books:

Data Dynamite: how liberating information will transform our world by W. David Stephenson
XBRL For Dummies

Taxes on the table in Maryland. Are you ready, CPAs?

2011-08-23T18:05:11-04:00

Call it what you like — "raising taxes" or "raising revenue." Either way, it appears it'll be on the table when Maryland's General Assembly returns for its 2012 session in January.

Gov. Martin O'Malley made that clear enough during a speech to local government leaders. He says an unstable federal budget picture will force state lawmakers to consider any and all economic options — including tax increases.

"We must be willing to adapt," O'Malley said in this Baltimore Sun article. "We will have to make more cuts, and at the same time — to protect our children's future — we must be open to new revenues."

One bit of good news, if you can call it that: Lawmakers apparently won't consider a tax on professional services (like those provided by CPAs) during their upcoming special session. Beyond that — say, during the 2012 General Assembly session — is anyone's guess.

All of this should be a call to arms for Maryland CPAs.

We've been warning lawmakers for years about the consequences of taxing professional services — higher costs and lower profits for small businesses, "pyramiding" taxes on additional goods and services, a devastating hit to economic growth and development. We've been fortunate thus far. Lawmakers have listened the state's CPAs and stayed away from this particular economic option.

But the governor and the General Assembly have spoken. They'll be looking for more than just spending cuts in 2012 — they'll be looking for revenue, too. That means taxes.

Will it mean a bid to tax CPA services? Time will tell, but we need to be ready.

Step 1: Keep a close eye on what happens during the General Assembly's special session this October. The focus will be on redistricting, but don't count out some discussion on taxes. Read our legislative blog, CPA Legislative Insider, for a blow-by-blow account of the important stuff.

Step 2: Save the date for CPA Day in Annapolis. The 2012 edition will be held on Jan. 18, and given the economic climate, it might be the most important one yet. Make plans now to join us in Annapolis. Get details and register here.

We've talked for years about the profession's mission to protect the public. Now's the time. Want to positively impact your clients, your profession, and the public at large? Keep an eye on this issue. Be ready to step up when called upon. This is a big one.

Want to learn more?
The MACPA's most recent Issue Alert offers details on this and a bunch of other important issues. Read more here.

MACPA recognizes Delegate Brian Feldman for contributions to the CPA Profession

2011-07-20T06:58:00-04:00

In a year of historic success in the legislature, one piece of legislation stood out - "Safe Harbor" legislation for Maryland CPAs.

This legislation was complicated in that it dealt with the very specific inner-workings of our Profession - Peer Review, Audits, Compliations, and Reviews. Stuff that gets messy when you only have a few minutes to explain to 188 legislators.

That is where Delegate Brian Feldman comes in. Delegate Feldman (pictured in middle with Allen DeLeon on the right and yours truly on the left) was instrumental in helping us pass this legislation as our sponsor and as a member of the key House Committee that hears accounting legislation in Annapolis - the House Economic Matters Committee.

Brian is a tax lawyer and CPA and has a great way of communicating the intricacies of our Profession in a way that his fellow legislators can understand. He is also a well known leader in Annapolis as chair the Montgomery County House delegation and sponsor of numerous successful bills. He was also the key sponsor in our mobility legislation in 2008.

Allen DeLeon, Chair of MACPA and I were proud to have the opportunity to recognize Brian for his efforts in passing the "Safe Harbor" legislation and his significant contributions to the CPA Profession in Maryland.

This moment was even more meaningful as Brian is Allen's representative and they both met for the first time at our CPA Day in Annapolis when Brian entered the General Assembly as a freshman delegate in 2002. Allen was also a "freshman" as it was his first CPA Day. Who would have thought?

Brian, thanks for your leadership and support!

Remember, CPA Day in Annapolis is January 18, 2012 - register here.

Here is the background on this important legislation:

This year, the MACPA worked hand in hand with the state Department of Labor, Licensing and Regulation, the State Board of Public Accountancy and even the Maryland Society of Accountants to pass the groundbreaking “safe harbor” legislation. The bills in question –- Senate Bill 370 and House Bill 328 -– make it clear that only CPAs may perform audits and reviews in Maryland. It also stipulates that non-CPAs who perform compilations (a) must not use SSARS / AICPA language in their reports, and (b) must emphasize they are not required to undergo peer review.

“This protects the public -– small businesses, banks and people who rely on financial statements,” said Hood. “It certainly protects our small practitioners, who are the mainstays in issuing compilations and reviews.

“Beyond that, it was grossly unfair that a licensed CPA who was doing a compilation and review for a small company had to undergo peer review and all of the scrutiny that comes with it, and yet a non-licensed accountant could do the same service and avoid peer review -– and potentially mislead the public. This legislation corrects that."

More on our legislative agenda over at CPA Success:

What's the value of your profesisonal association?

Who's watching out for you in DC?

Maryland CPAs save the world... again

CPA mobility bill approved in Annapolis

Tax Strategy Patents - one big step closer with the America Invents Act

2011-06-24T06:11:00-04:00

Remember the patent for an excel spreadsheet that calculates a simple ROTH IRA conversion we covered here a few months ago?

It is slowly making its way through Congress as part of the major Patent reform legislation and we helped. MACPA was in DC in May and have been writing our representatives on this and other key issues.

We talked about a provision supported by the CPA Profession that would make those patents unenforceable due to the public interest. Imagine that everyone who needs a ROTH IRA conversion having to go through one CPA or lawyer. That does not make sense and that is why we asked for that exception to be put into the law.

H.R. 1249 The Patent Reform Act passed the House on June 23, 2011 by a vote of 304-117. This follows the victory in the Senate on March 9, 2011 when the Senate passed their version of the Patent Reform Act (aka The Amercia Invents Act) S.23 by a vote of 95-5.

The AICPA and the State CPA Societies have continued to urge our Congressional representatives to address this issue for the past six years or more. It is great to see our issue has made it this far this time around.

The next step is for either body of Congress to pass the other's language or for a conference committee to come up with a reconciliation. President Obama has called for this reform as critical to the US competitiveness in the global economy.

Check out this great overview of the Patent Process on the White Board at the Whitehouse White Blog.