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AICPA has expressed concerns regarding the IRS' recent guidance package on basis-shifting transactions involving partnerships. Issued on June 17th 2024, the guidance is seen as overly broad, potentially imposing undue hardship on taxpayers due to its retroactive nature. AICPA director of tax policy & advocacy Kristin Esposito commented: “Our recommendations would eliminate the retroactivity of the rules, significantly increase the $5m transaction threshold, and exclude certain types of transactions from being subject to the rules.” AICPA urges the IRS to reconsider the guidance, advocating for a more targeted approach that would ease the administrative burden on its members.

 

CPA Practice Advisor

According to the 2024 EY Tax and Finance Operations Survey, the accounting profession is facing a severe talent shortage, with 70% of CFOs and corporate tax executives feeling the impact. The survey reveals that 62% of tax and finance leaders now consider professionals without a university degree essential to their talent strategies. The U.S. is estimated to be short 340,000 accountants and auditors, exacerbated by the retirement of senior professionals. “Tax and finance functions continue to seek a new breed of professional who understands data and technology,” EY said. The survey also highlights that only 20% of respondents' time is spent on high-value activities, with generative AI seen as a potential solution to alleviate the talent crunch. 39% of respondents believe generative AI will provide a significant advantage to tax functions, enhancing their ability to hire and retain talent.

 

CPA Practice Advisor

In the world of business, effective systems are crucial for success, particularly in CPA practices, writes Withum's Edward Mendlowitz, who explains that "an effective workable system that is adhered to is essential to managing and operating an accounting practice." Many service businesses, including CPA firms, employ knowledgeable staff who require minimal supervision. However, the challenge lies in training and supervising younger staff and those aspiring to advance. Management's commitment to following and improving systems is vital. When deficiencies are identified, immediate action is necessary to implement changes. The article emphasizes that while yesterday's methods may have worked, they cannot ensure future success. Continuous improvement and adaptation are key to thriving in a competitive environment.

 

Accounting Today

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Bloomberg Tax columnist Andrew Leahey advocates for the IRS to implement EBT-style digital cards for tax refunds, particularly for those without bank accounts. He highlights the ongoing issue of stolen IRS tax-refund checks, commenting: "We need more comprehensive solutions to address this problem." Mr. Leahey proposes secure digital refund cards, in-person check pickups at post offices, and an optional mobile app for tracking refunds. These measures aim to enhance security and accessibility for taxpayers, especially the unbanked. He emphasizes that any new system must remain optional, ensuring all taxpayers have viable alternatives. Collaboration with community organizations is essential for educating taxpayers about these changes, as the need for a secure refund system is urgent given the rise in mail-related check fraud.

 

Bloomberg Tax

The IRS has announced a six-month automatic extension for certain tax-exempt organizations to file Form 990-T, Exempt Organization Business Income Tax Return. This extension applies to those who missed the timely filing of Form 8868, Application for Extension of Time to File an Exempt Organization Return. According to IRS Revenue Procedure 2024-39, "this relief means that applicable tax-exempt organizations... will be granted a six-month automatic extension." Additionally, the procedure allows these organizations to make an elective payment election on a paper-filed Form 990-T, even if they are typically required to file electronically. This relief is applicable for taxable years ending between December 31st 2023 and November 30th 2024.

 

CPA Practice Advisor

The presence of Intuit's TurboTax has stirred frustration among tax professionals and CPAs, as it competes with its own professional tax preparation systems like ProConnect Tax, Lacerte Tax, and ProSeries Tax. These systems are highly regarded, consistently ranking at the top of CPA Practice Advisor’s Readers Choice Awards. Scott Artman, chief executive of the National Association of Tax Professionals, emphasized the importance of trust in tax preparation, commenting: “The personal relationship between a tax preparer and their client is crucial.” He highlighted that professionals understand their clients' financial histories and can tailor strategies to meet specific needs, underscoring the value of personalized service in a field increasingly influenced by technology.

 

CPA Practice Advisor

Howard Steinberg, a veteran of KPMG with over 30 years of experience, has taken on the role of managing director and head of global restructuring tax services at Alvarez & Marsal. Previously, he served as KPMG International's global head of structuring, tax, and legal. His move aims to enhance Alvarez & Marsal's tax restructuring division amid a challenging economic landscape. Steinberg noted, “A multi-year restructuring cycle is likely, given the high levels of corporate leverage, elevated interest rates, disruptive technological innovation and geopolitical risks.”

 

Bloomberg Tax

Cherry Bekaert has acquired Microsoft reseller ArcherPoint, as well as an affiliated solutions developer, Suite Engine, expanding the Top 25 Firm's enterprise resource planning services.

 

Accounting Today

Crain's Chicago Business

Global public debt is set to reach $100tn, or 93% of global gross domestic product (GDP), by the end of this year, driven by the U.S. and China, according to the IMF's latest Fiscal Monitor report. Debt is tipped to increase in the U.S., Brazil, France, Italy, South Africa and U.K., according to the IMF report, which urges governments to rein in debt. “It’s time for governments to get their house in order,” said Era Dabla-Norris, deputy director for fiscal affairs at the IMF. “For all countries, a strategic pivot is needed to reduce debt risks.” U.S. government debt could reach 150% of the country’s GDP. According to the IMF’s calculations, U.S. government debt started the century at less than 60% of GDP, a proportion that has more than doubled already. According to the Fund, there is scope to increase tax revenues in both the U.S. and the U.K., where they are at a relatively low level as a proportion of economic output compared to rich-country peers. In the U.S., the IMF sees room to raise revenues from sales taxes, as well as taxes on higher incomes.

 

Bloomberg

Reuters

Wall Street Journal

An internal assessment by Citi suggests that the bank is taking years to fix regulatory issues because it has struggled to adequately train employees in risk, compliance and data roles. Citi has for the past four years been operating under two regulatory reprimands, called consent orders, and the bank must resolve these problems for the decrees to be lifted. "We continue to invest heavily in talent and training to ensure we have the right people and expertise in critical areas such as data, risk, controls and compliance,” Citi said in a statement, adding that it proactively assesses "the evolving skills needed so that we can hire" and enhance skills accordingly.

 

Reuters

True Value, a 75-year-old hardware wholesaler, has filed for Chapter 11 bankruptcy protection, and plans to sell its operations to rival Do It Best. Despite this, the company will keep its 4,500 independently-owned stores open. True Value chief executive Chris Kempa said: “After a thorough evaluation of strategic alternatives, we determined that the sale of our business was the path forward to maximize value”. The Chapter 11 proceedings include a $153m stalking horse bid from Do It Best, which aims to complete the sale by the end of 2024. CEO Dan Starr remarked that the acquisition would be a significant milestone for the hardware industry. True Value's struggles reflect broader challenges in the home improvement sector amid inflation and a tough housing market.

 

CNN

CBS News

Fast Company

Reuters

Consulting for the global financial services sector is projected to recover in 2024, with revenues expected to rise from 2.6% in 2023 to 5%, surpassing $80bn for the first time, according to a Source Global Research report. Notably, only 1% of surveyed companies plan to reduce their reliance on external consulting, while 60% intend to increase it. Peter Curry, senior research analyst at Source Global Research, stated: “Many of the concerns that troubled the sector in 2023 are still present in 2024, but this year, companies who were previously uncertain about their financial position are now beginning to loosen their purse strings.”

 

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