Legislative Insider

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

Prepare NY tax returns? You may need to register

2009-10-07T11:09:09-04:00

If you provide tax services in New York state, listen up.

A new law passed as part of Gov. David Paterson's budget requires all tax preparers who provide tax services in New York to register with the state. The law provides an exemption for New York CPAs, but out-of-state CPAs would still be required to register.

According to the New York State Department of Taxation, tax preparers must pay a $100 registration fee if:

they "were paid to prepare 10 or more New York state tax returns in 2009 and will prepare at least one personal income tax return in 2010," or
they "will be paid to prepare 10 or more tax returns for 2010."

The New York State Society of CPAs is supporting "clean-up" legislation that would exempt *all* CPAs and their staffs from the requirement. The legislation has been introduced in the New York Assembly as A. 8556 and in the state Senate as S. 5710.

For the time being, though, out-of-state CPAs are still bound by the requirement, and the state Department of Taxation is offering details on how to register and pay the $100 fee.

Stay tuned. We'll update you on progress to exempt out-of-state CPAs as developments warrant.

MACPA representing CPA interests -- all summer!

2009-09-08T06:56:00-04:00

Did you know we have been actively representing you all summer?

Here is a summary of what we did during our summer vacation:

We set our 2010 legislative agenda.
We monitored and testified before the Maryland Business Tax Reform Commission.
We advocated changes to the Maryland franchise tax law.
We attended IRS tax preparer regulation hearings.
We stated to the IRS our position on tax preparer licensing -- specifically, to protect your CPA rights and prevent public mispercpetion.
We advocated to the FTC about the "red flag" rule and attempted to get CPAs exempt.
We monitored and advocated to Congress about tax patents, proposed consumer financial protection legislation and other national issues with the AICPA.

We have testified and attended several hearings of the Maryland Business Tax Reform Commission, which was enacted during the special session of the Genral Assembly in Senate Bill 2, the "Tax Reform Act of 2007." The commission has had several hearings in which its members discuss significant business tax reforms like combined reporting, gross receipts taxes and value-added taxes, Here is a story from the Baltimore Business Journal about the last hearing I attended. Our State Tax and Legislative Executive committees have been critical to our efforts, and we all owe them a debt of gratitude.

Here is a copy of our letter to the IRS and a copy of our comments to the FTC.

Protecting your license and continued proactive advocacy is the number one thing MACPA members want us to focus on, based on our last round of professional issues updates attended by more than 1,500 CPA members. Come attend our fall series of professional issues updates for the rest of the story. The updates are worth four hours of free CPE. View the schedule and register here.

How do you think we are doing? Post a comment and let us know.

Resources:

Information for tax pros from the Maryland comptroller's office
The scoop on Maryland's new tax law: Summary of $1.4 billion Tax Act in 2007
Maryland corporate reporting requirements
Maryland's economic hits just keep on coming
CPA Day in Annapolis: Jan. 20 at the Governor Calvert House, 8 a.m. to 1 p.m.
MACPA federal and state tax listservs ("like having a tax partner down the hall"): Members only -- login required

Check our our catalog for a comprehensive list of upcoming tax programs to keep you on top of these changes.

MACPA sets preliminary legislative agenda

2009-08-03T06:43:00-04:00

Our legislative executive committee chaired by Allen DeLeon (DeLeon & Stang) met and established our preliminary legislative agenda for 2010.

Stop sales taxes on accounting, consulting, and tax services.
Oppose combined reporting (until Maryland Business Tax Reform Commission issues report) .
Stop tort/civil liability reforms that lead to lawsuit abuse.
Support the State Board if it introduces 120/150 CPA exam legislation.
Stop efforts to repeal mandatory peer review by unlicensed accountants.
Monitor potential changes to Maryland Tax Preparer Act by unlicensed groups

We were hoping for a quiet session as this is an election year, but we are anticipating these issues and believe we need to stay vigilant as these issue are significant to your CPA license and practice rights in Maryland.

We also planned the agenda for our CPA day in Annapolis scheduled for January 20, 2010 at the Governor Calvert House in Annapolis - click CPA Day in Annapolis registration(includes 2 hours of free CPE).

See pictures from prior CPA days here and CPA Day pics on Flickr - Bill Sheridan

Legislation: Be Proactive not Reactive - message from AICPA Chairman Ernie Almonte at our Board Planning Session in January, 2009

Blog post from 2009 CPA Day - Are you a participant or a vicitm?

Article from 2008 Maryland CPAs Answer Legislative Call

Mobility momentum - 44 & counting!

2009-06-05T09:29:25-04:00

More great news! With the passage of Oregon, New Hampshire, and Alabama we are now at 44 states that have passed "mobility" making it much easier for CPAs to hold-out and practice across state lines, especially in the tax preparation area.

In our town hall / professional issues updates the most popular topic is without a doubt CPA licensing and in particular Mobility.

Mobility is the right to practice temporarily across state borders with three important principles:

No notification or forms to file
No fee or other requirements
No escape - automatic consent to abide by the State law you practice in

We covered mobility in-depth in our earlier post titled, What is this mobility stuff all about and our post Mobility questions? Get your answers here we cover this hot topic.

This is significant for three important reasons:

This is significant value to every licensed CPA as it reduces or eliminates the need for costly licenses in multiple states to use the title CPA or prepare taxes and other multi-state services
It demonstrates the power of advocacy and value of being represented by your State CPA Society
It shows the power of collaboration - this effort involved the major national organizations for the CPA Profession - AICPA, NASBA, CPA-SEA (State Executives Association) and the Accountants Coalition (representing the five largest firms).

More Resources:

Maryland State Board of Accountancy guidance on Mobility

CPA Success post on our mobility bill

Lots of work to do on the final day of the General Assembly

New proposal for CPA Exam (120-150 Hour) passes State Board

2009-06-05T09:04:21-04:00

The Maryland State Board of Public Accountancy approved a proposal to change the requirements to sit for the CPA Exam.

The proposal would change the requirements from 150 hours of education to a modified model that would allow candidates to sit for the exam after completing 120 hours of college education (meeting the accounting or "group I requirements) and then receive their license upon completion of the 150 hours (and all group 2 & 3 requirements).

According to the Board, this change is necessary for two iimportant reasons: 1) To allow students to sit closest to the time when they have completed core accounting technical subjects; and 2) to keep Maryland competitive with our surrounding states (all of our surrounding states have enacted this clause and the total is now over 29). MACPA's own Richard Rabicoff and several of our student members were at the hearing to provide their feedback. See Richard's post on our TCPA blog

The Board did a comprehensive outreach to educators, students, and the CPA profession. results from MACPA townhall meetings indicate almost unanimous support for this proposal. Pictured above is the feedback session with students that the Board held in April. You can read the Board's account of this process and recommendation in their new newsletter The Account Balance.

I want to acknowledge the Board's leadership under Chairman Tom Chambers for running a very effective study and feedback process as they considered this proposal.

This proposal will now go to the DLLR for consideration to be introduced as Department legislation in the 2010 session of the Maryland General Assembly. Our Legislative Executive Committee and Board of Directors will disucss and form MACPA's position on this in upcoming meetings.

What do you think?