Legislative Insider

MACPA panel testifies on 120/150 legislation

2010-03-18T07:37:48-04:00

It takes a village to protect a profession.

A representative group of key stakeholders was on hand to testify before the House Economic Matters Committee on March 17 in Annapolis.

HB 1137, State Board of Public Accountancy Educational Requirements for CPA Examination and Licensure, is a bill that effects accounting students, educators and, of course, the CPA profession. This is perfect example of the value of your association (MACPA), which has representation from all of these groups.

In the picture is yours truly (Tom Hood) with Ray Speciale, CPA (educator member of the State Board of Public Accountancy), Andrew Hood (MACPA student member and accounting student at Salisbury University), Allen DeLeon, CPA (managing partner of his firm and secretary / treasurer of the MACPA), and Dr. Jim McKinney, CPA (accounting professor at University of Maryland, member of the MACPA Board, member of the MACPA Members in Education Committee, and the MACPA's official historian).

They did a great job in testimony and there was no opposition to the bill. We hope for a quick vote out of committee, to the House floor and over to the Senate. With only 26 days left in the session, we have to make sure it moves as fast as possible.

Stay tuned!

MACPA prepares to support the MD 120/150 CPA exam requirements

2010-03-15T07:23:55-04:00

Last week during a presentation, Keeping Up with Accounting, student leaders at Salisbury University applauded our support of Maryland House Bill 1137.

Students say YES! Managing partners of Maryland CPA firms say YES! More than 2,000 CPAs who attended town hall meetings last year say YES, and the State Board of Public Accountancy has introduced HB 1137 to change the requirements to sit for the CPA exam in Maryland.

The bill will allow students to sit for the CPA exam after completing all of the accounting educational requirements (groups 1 and 3) and then complete the remaining 30 credit hours and group 2 requirements before being able to obtain their license. This change is needed to allow them to sit for the exam closer to their completion of the core accounting curriculum tested on the CPA exam.

The MACPA will be bringing a panel to testify in support of this necessary legislation on March 17 at 1 p.m. in the House Economic Matters Committee.

See our prior post, New proposal for CPA Exam (120-150 Hour) passes State Board
National information on the CPA exam
Maryland CPA Exam application information
MACPA CPA Candidate information center
Student membership (it's free)
Student Facebook page

MACPA agrees to amendments to Tax Preparer proposal in Senate Committee

2010-03-12T16:57:00-05:00

The bill passed out of committee today (with amendments that we agreed to) and is expected to go to the Senate floor this week.

After a hearing in the Senate Education, Health, and Environmental Affairs Committee, the MACPA agreed to Chairman Conway's proposed amendments to SB 555. The Chair clearly recognized our issues and eliminated the language we were most worried about. The amendment made a minor change, eliminating specific language about the proposed exam and transferring that responsibility to the newly formed Board (under the DLLR).

It retained the critical language referring to an "independent regulatory-based exam" which prevents future groups (like H&R Block and others) from self-certifying their regulated preparers. CPAs and our staff continue to be exempt from this legislation / regulation.

Other references & background:

in 2009, we defeated efforts by H&R Block to significantly change this language - see our post

There they go again! - Our talking points from last year

Day 70 of Session - Maryland Tax Preparers Legislation - The post from the original legislation adn our amendments to protect CPAs from double regulation

State Board Bill to impose civil penalty passes house

2010-03-12T06:04:00-05:00

HB 407 passed the House unanimously after receiving a favorable report by the House Economic Matters Committee last week.

This bill gives the board the ability to impose up to a $5,000 fine on CPA firms. Prior to thus, the board's only option was to revoke or suspend the firm's license to practice. It was introduced by the Department and we are neutral on this one.

MACPA testifies in house against H&R Block efforts to amend tax preparer bill

2010-03-03T15:32:00-05:00

MACPA asked members of the House Economic Matters Committee to give HB 873 an unfavorable report today. The proposed changes to the Maryland Tax Preparer legislation (enacted in 2008) are premature since the State Board of Tax Preparers has not even been formed. The bill also appears to be laying the ground work for H&R Block and others to self-certify tax preparers with their own testing and training - a provision with which we are in total opposition.

Representatives of the MD CASH campaign and the Maryland Society of Accountants joined us in opposing this bill. It has not bee nvoted on from committee yet.

H&R Block shows up again!

2010-02-16T06:03:31-05:00

H&R Block has started off with bills in the House & Senate to water down the basic examination requirements for the Maryland registration of Tax Preparers, again.

HB 873 & SB 555 would change the entry level examination requirements from an independent, national federal or state regulatory authority (regulator) to add the ability for an exam on tax preparation allowed by the Maryland Department of Higher Education.

Sounds reasonable, right?

Until you realize that the Maryland Department of Higher Education approved Block as a vocational career school. The MHEC does not perform oversight of their curriculum, does not evaluate the contents of their tax program, and does not perform ongoing review for the quality or content of their program that the law envisioned.

Even worse, this proposal would put Block in charge of creating the test, offering the test, and grading the test. Isn't that the fox guarding the hen house?

The whole purpose of putting in the language in the original bill to require an independent federal or state authority was to prevent "self-certification schemes" like the one being proposed.

We had to fight this last year and successfully defeated it in the House (HB 24) in Committee. We will need to fight this to prevent the watering down of the basic tax preparer registration requirements.

Stay tuned, we may need some help writing our legislators on this one.

Prior posts about Block:

Truth Prevails:H&R Block to stop running offending ads

Can Somebody making $7 an Hour Really Beat a CPA?

Here is H&R Block's listing on the MDHE site

Maryland Speaker Busch visits CPAs at CPA Day in Annapolis

2010-01-20T16:24:00-05:00

Maryland Speaker of the House, Michael Busch stopped in to greet a record attendance of CPAs at MACPA's annual CPA Day in Annapolis.

Over 120 CPAs arrived early for the legislative briefing and then went en masse to the "hill" to meet with their legislators. The members reported that the legislators listened to their issues.

Several major reports were brougt back from our CPAs:

There should not be any sales tax on services this session, but watch out next year.
There is unlikely to be any civil liability reform attempts by trial lawyers this year

That's two of our major issues that may be deferred. We will be looking for the 120/150 hour CPA Exam legisaltions from the DLLR and watching the developments in combined reporting. ANother area of concern is the Unemployment Tax changes being proposed - see the Maryland Chamber's report here.

While the legislators were in session, we provided a free 2-hour CPE update of the federal and state legislative, regulatory, and standards changes (and there are a lot of them!)

You can see a copy of the presentation on slideshare here

We finished the day with lunch, when over 130 lawmakers joined our CPAs by district to break bread and discuss the issues one more time.

See pictures of this event here and 2010 CPA day photos

See a great post by MACPA member Sharon Gubinsky here

Thanks to all MACPA members who joined us for this very important day!

Four things you can do to stop the tsunami of legislation

2010-01-13T07:15:45-05:00

We are facing a tsunami of legislation from the federal and state levels that is adversely affecting CPAs and businesses. Many are asking what can we do about this?

Here are four things you can do:

Leadership by membership- there is strength in numbers and both the AICPA and MACPA (and your state society) work together on both state & federal issues
Support the Profession's PACs (AICPA & MACPA's CPA/CPA)
Attend CPA Day in Annapolis on January 20, 2010 (and get 2 hours of free CPE)
Attend the Maryland CPA Summit (formerly MDBIZEXPO) on June 28th & 29th, 2010 and the swearing-in of New CPAson the evening of June 28th (More information here).

We have been successful so far on several major fronts at both the state and federal levels. Think about how much mobility (45 states so far) has helped with filing taxes in multiiple states, changes in FTC red flags rules, changes in 7216, exemption from the latest massive regulatory reforms, and much, much more. This is due to a massive effort by the AICPA and State CPA Societies working together on behalf of all CPAs.

Watch a short video of MACPA CEO, Tom Hood briefing you on the latest changes and some major successes at the federal level.

Our 2010 Legislative Agenda for Maryland:

Pass 120/150 legislation as proposed by the State Board of Public Accountancy
Stop Sales Taxes on Accounting & Tax services
Stop unnecessary changes in business tort laws (lawsuit tax)

Join us in the most significant and effective event to help us influence Maryland legislative and regulatory policy at CPA Day in Annapolis on January 20, 2010 at the Governor Calvert House Hotel in Annapolis. Registration is free and includes a 2 hour legislative and regulatory update.

Stay up with curreent legislation by subsribing to this blog (put e-mail in subscription box or use RSS feed).

Five (5) current issues every CPA needs to know now!

2009-12-16T09:19:02-05:00

What would the cost of one bad piece of legislation cost you as CPA or CPA firm?

That was a point of discussion at a recent meeting of managing partners in Maryland. Many were shocked to know that the FTC penalty was $3,500 per incident, or the added cost and administrative burden of filing for multiple state licenses to file tax returns ($100 - $300 per CPA/Staff per state), or the NY proposed registration ($100 per CPA/Staff), or even the Maryland Tax Preparer law ($250 per CPA/staff/year) in tax area.

What about Congress taking over Financial Accounting Standards setting by FASB?

The unknown costs of complying with the new federal Consumer Financial Protection Agency (CFPA)?

We are being swamped by tsunami of new legislation, regulation, and standards to the point many CPAs are felling completely overwhelmed. Here is an update on the latest developments and some success by the Professional Associations advocating for CPAs (AICPA, MACPA and many other State CPA Societies).

Here are the top five issues you should be paying attention to:

Wall Street Reform & Consumer FInancial Protection Agency Act of 2009 (HR 4173)
FTC "Red Flags" rule
NY Tax Preparer Licensing
International Accounting Standards (IFRS) and pending SEC roadmap
Looming budget crises and deficits in states may bring tax increases and new policies like taxing services (Accounting & tax), gross receipts, combined reporting, etc) - See Maryland legislative agenda for 2010

Here is what we accomplished in our advocacy efforts so far:

Wall Street Reform and CFPA - some major victories!
- CPAs are exempt from this bill (eliminating additional & costly compliance)
- Eliminated proposed amendment to takeover "FASB" standard setting
- Increased liability for CPAs thru the "aiding & abetting amendment" was eliminated
- Eliminated amendment that would have created a new regulator for all financial planners (CPAs who are CFPs/PFSs, etc) was changed to a study
- Requirements for PCAOB registration & inspection of all auditors of broker-dealers was changed to exempt introducing (non-custodial) broker-dealers
- Amendment to eliminate exemption for audits of internal controls (SOX 404(b)) for smaller public companies was NOT approved
FTC "red Flags" rule - significant progress - thirty State CPA societies and the AICPA in a full court press resulted in a six-month delay in implementation of this onerous rule that caught CPAs who do taxes and other services in its net. The delay gives us time to work on the exemption or resources to make it easier to deal with.
NY Tax Preparer registration - 12/31/09 registration requirement was eliminated! NY Governor, David Paterson signed the bill late last week - another example of the power of Associations working in your behalf.
IFRS road map expected from SEC by December 21st - you can expect some significant changes in US GAAP (new major standards changes) as the FASB - IASB project works through their convergence project by 2011
Sales tax on accounting & tax services is expected to show up in the upcoming 2010 session in Maryland

Here are four (4) things every CPA can do to deal with the tsunami:

Support membership in AICPA and your state CPA Society (MACPA) - We work together and your license is regulated at both federal & state level
Contribute to the Profession's Political Action Committees (MACPA & AICPA)
Support & Attend CPA Day in Annapolis on January 20, 2010
Support & Attend the MACPA CPA Member Summit on June 18th & 29th and the swearing-in ceremony for New CPAs and build our relationship withe DLLR & our State Board of Public Accountancy

Keep in mind, there is still a Senate version and the risk of more amendments - we are watchinig this closely and will activate our extensive grassroots network of CPAs if necessary.

Get our your surfboard, it's gonna be a wild ride on this tsunami of change!

Here are some great resources for more in-depth coverage of these major issues:

More Vortex - And Maybe a Way Out- AAO weblog

House passes sweeping reforms - CPA Success

FTC Delays enforcement of Red Flags rule - CPA Success

NY exempts CPAs from Tax Preparer Registration - CPA Success

HR 4173 Wall Street Reform and Consumer Financial Protection Agency Act of 2009- FEI blog

House Passes Regulatory Reform - Journal of Accountancy

House Passes Financial Regulatory Reform Bill - Web CPA

How do you spell R-E-L-I-E-F?

2009-11-03T06:39:06-05:00

or at least "temporary relief" as the CPA profession scored a partial victory in getting the FTC to delay the enforcement deadline of its "Red Flags Rule".

At the request of Congress, the FTC is delaying the enforcement deadline for the Red Flags Rule until June 1, 2010. The FTC announced the extension two days before the rule was to have gone into effect.

According to the FTC, the rule requires certain creditors and financial institutions "to develop and implement written identity theft prevention programs to help identify, detect and respond to patterns, practices or specific activities -– known as “red flags” -- that could indicate identity theft."

With a hefty penalty of $3,500 per incident, this far-reaching new rule had many CPAs and small businesses concerned. The issue stems from the definition of "creditor" in the rule's language. It was so broad that it swept in professional services firms (CPAs) and all small businesses who do not collect fees at the point of sale.

Working collaboratively with the AICPA and many of our colleagues in other states, MACPA wrote to our congressional delegation and the FTC petitioning them to exempt CPAs. See our letter here Download MACPA Red Flags Rule Ltr to FTC. This has been a major discussion in our town hall meetings and we are pleased with the dealy by the FTC, we will continue our work to exempt CPAs completely.

Check out all of the developments and resources our editor, Bill Sheridan has gathered on our blog CPA Success. In the mean time, you can find out more about privacy protection and what it means for CPAs by listening to this MACPA podcast, featuring an interview with Marilyn Prosch, an associate professor in the Department of Information Systems Management at Arizona State University.

Want to learn more?
Here are a few other resources that offer expanded looks at security and privacy:

Security for Accountants: New Legal Requirements and Practical Solutions, Nov. 5 at the Columbia Center
2009 MACPA Technology Conference, Dec. 7 at the Sheraton Columbia Hotel
FTC "Red Flag Rule" resources
AICPA "Red Flag Rule" guidance
"Preventing identity theft throughout the data life cycle," a JofA article written by Prosch
"Outsourcing and privacy: 10 critical questions top management should ask," a Statement article written by Prosch