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The IRS has gained specific authority to tackle syndicated conservation easements that are deemed abusive. Initially, the IRS faced legal challenges regarding the adoption of guidance for these easements. While the Tax Court initially supported the IRS's position, the 11th Circuit reversed it, stating that the IRS failed to meet the requirements of the Administrative Procedures Act (APA). In response, the IRS has shifted its guidance to proposed regulations that comply with the APA. Legislation has also been enacted to limit losses claimed on syndicated conservation easements. The recent Tax Court decision in the Valley Park Ranch case has reversed the IRS's previous position, potentially causing trouble for the IRS in all circuits. Looking ahead, the IRS can continue revising its regulations, aided by reporting requirements, to identify abusive easements.

 

Accounting Today

Leaders from the Alabama Legislature and private sector support a plan to offer tax credits and grants for affordable childcare options. The bill, HB358, aims to remove barriers to working and increase labor participation in Alabama. The legislation would provide tax credits to employers for investments in childcare centers, tax credits to private childcare centers, and grants to nonprofit centers for expansion or improvements. The total cost of the program is capped at $25m the first year and $30m the following two years. The bill moves to the Senate after passing unanimously in the House. Supporters argue that childcare is crucial infrastructure for families to access work opportunities. Toyota North American executive Karen Johnston emphasized the importance of affordable and reliable childcare in maximizing workforce participation in manufacturing.

 

Al.com

A California bill proposing a 5% tax on digital advertising to fund youth mental health services has passed its first committee. The bill, introduced by Assemblymember Diane Papan, aims to impose the tax on companies with at least $100m in global annual gross revenue. The tech industry has strongly opposed the bill. The tax, if implemented, could generate significant revenue. The bill will now be heard in the Assembly Committee on Revenue and Taxation.

 

Bloomberg Tax

BEPS Pillar Two, also known as Base Erosion and Profit Shifting, will have a significant impact on multinational companies. This new tax law establishes a global minimum tax rate of 15%. Companies with a turnover greater than €750m will be subject to new data reporting requirements and additional global tax compliance rules. The implementation of BEPS 2.0 Pillar Two will increase the pressure on tax teams, as they will need to collect more data from multiple sources and departments. It is crucial for businesses operating in multiple countries to prepare for the complexities that BEPS 2.0 Pillar Two will bring. The BEPS framework aims to prevent profit shifting from higher-tax countries to low-tax nations. While BEPS is a set of nonbinding rules, many countries have adopted it through legislation. The upcoming changes will make tax planning more complicated, with tighter deadlines and more stringent audits. Organizations must assess the potential impacts, advise stakeholders, and comply with the new rules. BEPS 2.0 Pillar Two will introduce new complexities into tax forecasting and reporting processes, emphasizing the need for automation and purpose-built tax planning solutions.

 

Accounting Today

BILL Accounting Firm Automation Opportunity Report

Automation has become widespread across diverse industries. For accounting firms, it collects scattered information and transforms it into valuable insights, increasing productivity and empowering firms to better advise their clients.

In this report, more than 1,000 accounting firm professionals shared their opinions on the impact of financial automation on their firms. Of them, 89% said automation in financial operations makes their firm more profitable and efficient. Dive in to gain insights on:

• How automation boosts client advisory services (CAS) delivery and results
• The benefits of a unified automation for AP, AR, spend, and expense management
• The effect of automation on the competitive landscape 
• Areas of opportunity to expand financial automation

Download The Survey

 

AICPA & CIMA have released their “Redefining Finance for a Sustainable World” white paper, the latest iteration of their Future of Finance research program. It suggests that a clear divide has opened up between accounting and finance professionals who work as business partners and those who don’t. Sixty percent  of accounting and finance professionals surveyed say they identify as finance business partners, and 84% of those are extremely optimistic about the future of the profession. Of the 40% who say they don’t identify as finance business partners, only 15% say they are optimistic about the future of the profession. There is also a split in attitudes to automation with 92% of accounting and finance professionals in non-business partnering roles fearing being automated out of existence compared to 67% of those in business partnering roles.

 

CPA Practice Advisor

Becky Livingstone in CPA Practice Advisor highlights a number of marketing initiatives that can help firms stand out during the summer months. She suggests that firms sponsor local events, host informative workshops, participate in charity events, refresh your website, enhance social media engagement, and utilize email newsletters. Additionally, she says CPA firms should consider offering special promotions such as initial consultations, discounts on bundled services, and referral bonuses. She adds that the summer can be used to deepen relationships with existing clients through personalized check-ins, client appreciation events, and sending customized gifts.

 

CPA Practice Advisor

EY Canada has appointed François Tellier as managing partner for Eastern Canada and office managing partner for Montreal, effective July 1st 2024. He succeeds Anne-Marie Hubert, who is retiring after spending more than 35 years with the Big Four accounting and consulting firm. Ms. Hubert has served as Eastern Canada leader since 2015.

 

Consulting

A pair of new surveys from S&P suggest that the U.S. economy lost momentum in April. The flash U.S. manufacturing purchasing managers index (PMI) slipped to a four-month low of 49.9 in April from 51.9 the previous month, while the flash services PMI fell 0.8 points to a five-month low of 50.9. Both readings were close to the 50-mark separating expansion from contraction. “The U.S. economic upturn lost momentum at the start of the second quarter,” said S&P chief business economist Chris Williamson. “The more challenging business environment prompted companies to cut payroll numbers at a rate not seen since the global financial crisis [in 2008-2009] if the early pandemic lockdown months are excluded.”

 

Bloomberg

Market Watch

Sales of newly-built homes in the U.S. rose in March, posting the biggest increase since December 2022. The Census Bureau said that new home sales rose 8.8% from February to 693,000. On an annual basis they were 8.3% higher. Sales increased in all regions of the country, but were strongest in the South. Prices also rose, with the median price hitting $430,700, from $400,500 a month earlier. New home builders have been offering incentives such as reduced mortgages and discounts on upgrades to move houses. “The new home market has been an outsized share of the housing inventory, so homebuilders have been able to attract prospective homebuyers who are seeing very limited supply in the existing home market,” said Lisa Sturtevant, chief economist at Bright MLS. “Many builders have been able to pivot to meet demand by building smaller homes. Many homebuilders are also able to offer concessions and rate buydowns to make a new home purchase more attractive.”

 

Market Watch

US News and World Report

Washington Examiner

More people are turning to Earned Wage Access apps, such as EarnIn, Empower, and Dave, to access their wages before payday and cover expenses. These apps provide short-term loans to workers in between paychecks, allowing them to pay bills and meet everyday needs. While proponents argue that these apps help individuals manage their finances and avoid payday loans, critics claim that they are payday loans in disguise, trapping users in a cycle of borrowing. The costs of these loans are not always transparent, with high APRs and mandatory fees. Some employers have integrated these apps into their payroll, offering different costs and fee structures. The Earned Wage Access industry has seen significant growth, driven by financial insecurity and the need for short-term liquidity. As regulation efforts increase, states are moving to subject Earned Wage Access to the Truth in Lending Act amid calls for more transparency and worker protections in the industry.

 

U.S. News

The Massachusetts Supreme Judicial Court has upheld a tax assessment on Outfront Media LLC for its use of Massachusetts Bay Transportation Authority (MBTA) outdoor advertising signs. The court ruled that Outfront's exclusive right to sell advertising on MBTA signs and retain profits above guaranteed minimum payments constituted "use" of the property "in connection with a business conducted for profit," making the signs taxable to Outfront. The court distinguished Outfront's advertising business from service providers to the MBTA, stating that Outfront exercised significant control over the signs.

 

Bloomberg Tax

The Commodity Futures Trading Commission (CFTC) is investigating banks, including JPMorgan Chase, Bank of America, and Citigroup, to determine if they have been suppressing whistleblowers. The CFTC has requested non-disclosure agreements and employment and customer agreements from the banks' swaps and clearing businesses. The U.S. Securities and Exchange Commission has also increased oversight in this area and imposed fines on non-compliant companies. JPMorgan previously paid an $18m civil penalty for violating whistleblower protection rules. Damian Williams, a top enforcer of criminal malfeasance on Wall Street, has encouraged whistleblowers to come forward and report wrongdoing.

 

Reuters

U.S. companies will no longer be able to enforce noncompete agreements on employees, following a rule approved by the Federal Trade Commission (FTC). The ban aims to increase job mobility and prevent restrictions on workers' ability to switch jobs for higher pay. The FTC argues that noncompete agreements harm workers and the economy by reducing job churn and limiting the hiring ability of other businesses. The rule, which received support from the majority of the 26,000 comments received, will take effect in six months unless blocked by legal challenges. Business groups have criticized the measure, claiming it exceeds the FTC's authority. The U.S. Chamber of Commerce plans to sue to block the rule. Noncompete agreements are already banned in three states, including California.

 

The Baltimore Sun

The Biden administration has unveiled a new labor rule that extends mandatory overtime pay to an estimated 4 million salaried workers, going further than the previous Obama-era rule. Under the rule, employers will be required to pay overtime premiums to workers who earn a salary of less than $1,128 per week when they work more than 40 hours in a week. The salary threshold will increase over time, reaching $58,656 by 2025. The new rule is expected to face legal challenges. Opponents argue that it violates federal wage law and includes lower-paid supervisors and professionals who typically wouldn't be eligible for overtime. Many major business groups have called for a delay in changes to overtime pay regulations due to inflation and worker shortages.

 

Reuters

The race to integrate artificial intelligence (AI) into the workflow of CPAs is no longer a futuristic concept, but a current reality, write Chris Stephenson and Eric Hylton in CPA Practice Advisor. The pair suggest that while larger accounting firms have made substantial strides in using AI to augment their services, smaller CPA firms may feel overwhelmed by the pace of technological advancement. However, they state it is important for CPA firms to move at their own pace and focus on what enhances their unique edge. Prioritizing swift, high-impact projects can also lead to success. By addressing common problems such as cash collection and document processing, CPA firms can gain traction for further digital innovation. Effective adoption of AI depends on being strategic rather than being the first to adopt, the authors adds.

 

CPA Practice Advisor