CBIZ and Mayer Hoffman McCann had been operating under an alternative practice structure long before many other firms began adopting one, but the acquisition last year of Marcum LLP prompted a name change and a number of adjustments.

Last July, Cleveland-based CBIZ announced it would be acquiring New York-based Marcum in a $2.3 billion megadeal between two Top 25 Firms. CBIZ is a publicly traded company, but has been affiliated with the CPA firm Mayer Hoffman McCann in an alternative practice structure since 1998. MHM spun off its tax and consulting practice that year and merged it with Century Business Services Inc., which became known as CBIZ Inc., while the audit practice retained the Mayer Hoffman McCann name and was often referred to as CBIZ MHM. Last August, after acquiring Marcum, Mayer Hoffman McCann P.C. announced it was changing its name to CBIZ CPAs P.C. In part, the change was made to reflect the practice of other firms that have more recently begun to operate in an alternative practice structure after receiving investments from private equity firms. EisnerAmper, for example, split its attest and non-attest sides in 2021 after receiving an investment from TowerBrook Capital Partners and called the non-attest side Eisner Advisory Group.

“Obviously the alternative practice structure has had a greater visibility with the private equity acquisitions of firms,” said Andrew Gragnani, president of CBIZ CPAs P.C. “We had been in an alternative practice structure with CBIZ now for about 25 years, and there were not many players in this arena. And now there are a number of players, so the alternative practice structure has received a fair amount of commentary from the SEC.”

CBIZ MHM decided to change the name of the auditing firm in the wake of the Marcum acquisition. “The reason why we made the change was in conjunction with the Marcum transaction,” said Gragnani. “As we looked at the landscape of firms that were in an alternative practice structure, and there was some confusion in the marketplace regarding the naming convention of Mayer Hoffman McCann, which had been in place for 25 years, we felt to better align ourselves with CBIZ that a name change was necessary. We had to execute those name changes in the 51 jurisdictions in the United States. And then upon closing the Marcum transaction, this was even more of a significant decision for us, to further reduce confusion in the marketplace with Marcum. It’s been very well received internally and externally. We’re excited about the alignment that we have, and we can be very clear in terms of how we continue to be an alternative practice structure, and how we are aligned or affiliated or work together with CBIZ to service clients together.”

The move may also help ensure compliance with the Public Company Accounting Oversight Board’s new quality control standard, QC 1000, which the Securities and Exchange Commission approved last year.

“As it relates to the QC 1000 standard, in an attest-only firm like ourselves, that puts an even greater emphasis on the APS structure, and ensuring that not only do we comply with all those state licensing requirements, but that we meet the requirements of QC 1000,” said Gragnani. “We have, since the Marcum transaction, changed our organizational structure to what we believe meet the requirements. We have already engaged in discussions with the PCAOB regarding what it is we are doing with respect to QC 1000. That’s part of their outreach program. We are trying to ready ourselves for this, as now with our Marcum transaction, we will have over 200 issuer clients, so this is a significant initiative on our part. We have dedicated individuals that are charged with the execution of this so that we could be ready by the implementation date.”

The SEC has independence requirements for auditors, and state licensing boards generally require independence of a CPA firm from a publicly traded company. There are also rules for alternative practice structures from the American Institute of CPAs, which the AICPA is considering revising in light of the increase of private equity investment in recent years. Earlier this month, the AICPA announced that its Professional Ethics Executive Committee has set up a group known as the Alternative Practice Structures Task Force that has already reached some preliminary conclusions about revisions to the independence rules.

CBIZ has been informally providing advice to other firms that have more recently begun operating in an alternative practice structure. “We’ve been doing this for such a long time, and we have a lot of experience,” said Gragnani. “One of the takeaways is there’s uncertainty with respect to what happens with private equity-owned firms, in terms of the exit strategy of the PE firm. CBIZ has been in this for 25 years. We know what we’re going to be doing for the next 25-plus years. We’re not going to be changing. At least, I don’t believe CBIZ will be changing its structure. We have been engaging with other firms to kind of ‘information share,’ if you will. I think the biggest areas are independence and legal that would be applicable to the other firms to ensure that there is appropriate personnel on the CPA firm side to provide the necessary support and guidance that a CPA firm needs.”

The Marcum deal brought with it some separate issues with the SEC and the PCAOB, which had fined Marcum a total of $13 million in 2023 for its audits of special purpose acquisition companies, while requiring it to make functional changes to its supervisory structure related to the firm’s quality control system. 

“Obviously they had done some SPAC work before,” said Gragnani. “There were a handful of clients there.”

CBIZ is working to improve on the audit work that had been done for Marcum’s SPAC clients, even though it had previously exited that business. “We’re going through the process of completing all those year-end audits,” said Gragnani. “And this is a space that we had previously decided to exit from because we did not have the appropriate scale to operate, in our view, in a manner that you could justify the risk and the reward, but obviously, with Marcum having a considerable and sizable practice, we’re committed to the practice, and we’re going through that process of working with the Marcum engagement teams to not only complete those engagements, but then to go forward with those with clients.”

Some new clients are in two other risky industries, cannabis and cryptocurrency, which will be new niches for CBIZ. “Prior to the Marcum transaction, we had not been in those spaces,” said Gragnani. “But with this transaction, there is some traction in certain of those markets.”

However, CBIZ won’t be inheriting any of the clients from Asia that Marcum had been building since its merger with Bernstein & Pinchuk in 2010, which a decade later led to trouble for Marcum with the PCAOB. Marcum Asia was not included in the acquisition by CBIZ, Gragnani pointed out. “Marcum Asia was not part of our transaction, so anything that related to that, we do not need to consider or have any type of responsibility for,” he said.

While it won’t be taking on Marcum’s clients in Asia, CBIZ does have a unit in India known as BINDZ that does offshoring and outsourcing and is expanding to South Africa and the Philippines as well. CBIZ sees offshoring as a necessity given the dwindling supply of accountants in  the U.S. 

“We have seen a declining number of individuals taking the CPA exam, coming into our profession,” said Gragnani. “And with the growing aging of our profession as well, there’s a need to find alternative sources to service our clients. This is an initiative that CBIZ has encountered, and as part of our relationship with them, in our alternative practice structure, we would be utilizing those resources to perform and conduct attest work.”

He anticipates the offshoring group will provide support for other functions in the organization as well. CBIZ is also evaluating the use of artificial intelligence, but probably not for audits. 

“It’s difficult to utilize it to support audit conclusions,” said Gragnani. “We’re evaluating a number of different matters. It’s not been fully embraced in our methodology that we could say that it’s generating significant efficiencies in the audit process, but that’s obviously something that we’re all looking at.”

He’s unsure what other acquisitions and mergers might be in the future for CBIZ CPAs and CBIZ Inc., but more deals are likely to happen in the future. 

“We work with CBIZ on these transactions,” said Gragnani. “As the attest-only firm, we acquire the attest assets of any entity, so we continue to work with CBIZ, and to the extent that there is something we would evaluate that from our ability to execute it.”

It’s unclear which industry niches and services might be acquisition targets. “Right now, we’ve got a pretty wide industry expertise, and we’re trying to work with CBIZ to identify national leaders, but we’ve got deep expertise in a number of different ones,” said Gragnani. “We’re trying to work through exactly how that strategy aligns with CBIZ’s strategy so that from a go to market [perspective], we are aligned. Obviously, from an attest standpoint, we have been pretty widely dispersed without significant concentrations in a particular industry. I think, with the Marcum transaction, we now have a whole host of other industries that we can explore and determine once we evaluate market opportunities. We should be able to gain further traction in the ones that we determine make the most sense from a risk/reward standpoint.”

As financial advisors and their clients learn more about the potential tax advantages of a Section 351 ETF conversion, a new website aims to connect issuers with investors.

351conversion.com founder Matt Bucklin “cannot make money” through “transaction fees or anything like that” by providing advisors, investors and ETF issuers with informational resources and possible products to use in an increasingly popular asset migration method named for a provision of the Tax Code enabling exchanges of similar products. Securities and Exchange Commission rules from 2019 and 2020 for active management of ETFs, along with the development of financial technology, have led to a bumper crop of products offering tax deferral for investors with low-basis stocks and separately managed accounts.

“It could be a great time to diversify out of certain highly appreciated securities,” Bucklin said in an interview. He promised not to “bombard” people who sign up on his website with emails but simply “put them in touch with the ETF issuer” if a new product fitting their preferences is coming to market. “I have done a lot of online marketing, ecommerce and things, and I’ve never put up a website that gets ranked organically on Google,” Bucklin added.

READ MORE: How to unlock tax savings in incoming client portfolios

Bucklin came up with the idea for the site when he was speaking with Wes Gray, the founder of technology and asset management firm ETF Architect and an innovator in the approach. An influx of new products may obscure how the tool for deferring, rather than avoiding, capital gains distributions could create “a little bit more tricky scenario” if the issuer is, for example, not using sophisticated management of the tax lots in an ETF based on the differing needs of seed and second-day investors or ensuring their choice to do the conversion is “in line with how you expect your funds to be managed on the forward,” said Brittany Christensen, the senior vice president of business development for ETF service and technology firm Tidal Financial Group.

“Everyone wants the easy, ‘I’m out of all my Nvidia, and I don’t have to pay taxes on it,'” she said. “There are also other factors to consider before really making the decision to go down that path. The solicited transactions are a relatively new phenomenon and might be hitting some people’s inboxes with these marketing campaigns.”

The rules carry requirements about the level of stock concentration in the incoming assets and the need for the strategies to be the same on both sides of the transition. 

So far, the website links investors to just one product, but more are on the way, Bucklin noted. The fact that the SEC “has never gone after anyone for doing a 351 conversion yet” and the availability of “insurance protection from tax liability” show that advisors and clients who abide by the guidelines are taking a relatively low risk of regulatory pushback against the exchange, he said, crediting Gray with championing the strategy. New ETFs frequently must overcome a classic catch-22 in which they need to attract $50 million in investments to access large wealth management firms’ menus but struggle to find that seeding without being on the giant platforms.

“A lot of ETFs have launched with nothing and just hoped to gather assets, and it’s just really tough to get to $50 million,” Bucklin said. “I’ve seen some great strategies that just get stuck.”

READ MORE: 2025 wealth management trends: Private equity, new ETF debuts

As more products hit the shelf, advisors and clients should keep in mind that they “could have contributions with exposure to double tax” if the issuer and their service providers fail to account for distributions affecting early and later investors, Christensen noted. She finds that “very few people” grasp that difficulty and the need to work with an outside firm to avoid it, she said. Otherwise, they may not be able to tap into the full benefits of a 351 conversion.

“I’m probably a little nervous right now with what’s going on in the ETF space if I’m not actively trying to get into that world,” she said. “It’s a win-win for everyone and allows a newcomer to start with a ‘bring your own assets’ type of strategy. Their clients are already comfortable with how they’re investing their money.”

Elon Musk’s demand that more than 2 million federal employees defend their work is facing pushback from other powerful figures in the Trump administration, in a sign that the billionaire’s brash approach to overhauling the government is creating division.

On Saturday evening, federal workers received an email telling them to submit five bullet points accounting for their past week, due Monday at midnight Washington time. Musk had previewed the demand in a post on X, the social-media platform he controls.

Yet it didn’t take long for some of President Donald Trump’s hand-picked top officials to rebuff the effort. 

FBI Director Kash Patel, in his first full day on the job, told employees in a memo that he was in charge of reviewing bureau personnel and would coordinate any information needed.

“For now, please pause any responses,” said Patel, who was a stern critic of the agency he now leads and one of Trump’s most ardent defenders. 

In the early days of the Trump administration, when workers from the Department of Government Efficiency began arriving at federal offices, temporary leadership was running much of the day-to-day business of the government.

Now, most departments have a Senate-confirmed cabinet secretary in place, counterbalancing Musk’s proximity to the president and giving many agencies more powerful advocates who can provide a bulwark against DOGE’s directives.

The Department of Defense, run by vocal Trump defender Secretary Pete Hegseth, told its workers in a tweet to “pause” any response to the email and that the Pentagon would “coordinate” any responses “when and if required.”

Officials overseeing all or parts of the State Department and NASA were also told to refrain from replying to the email. 

Employees at the Department of Homeland Security, which includes the Secret Service and Immigration and Customs Enforcement, received an email late on Sunday saying management would respond on behalf of all workers, according to a message seen by Bloomberg News. 

Musk defended the move in a post on X early Monday, calling it a “check to see if the employee had a pulse and was capable of replying to an email.” A CNN poll from last week found that a slight majority of Americans — 54% — say it’s a bad thing that Trump gave Musk such a prominent role in his administration.

“This mess will get sorted out this week,” Musk said in the tweet. “Lot of people in for a rude awakening and strong dose of reality. They don’t get it yet, but they will.”

Since Trump took office last month, Musk’s DOGE team has been dispatched to access sensitive data, organized a buyout program to push employees into “higher productivity” private-sector jobs and fired thousands of probationary employees. 

Despite the resistance by Patel and others, employees of other parts of the government were told to respond to the bullet-point prompt, which was sent from the Office of Personnel Management. 

The Social Security Administration’s human-resources department told staffers in an email that OPM’s request was a “legitimate assignment,” according to a copy of the email viewed by Bloomberg News. 

At the Justice Department, a senior official emailed other agency leaders around the country, telling them to be ready to respond but cautioning care in what they and their staff share. 

“This is an official OPM email address and employees should be prepared to follow the instructions on Monday as requested but be advised that you should not respond with sensitive, confidential, or classified information,” Jolene Ann Lauria, assistant attorney general for administration, wrote on Saturday evening, according to an email seen by Bloomberg News. 

Judicial review

The OPM email was sent out so widely that it even went to some federal judges and their staffs, who under the Constitution work for a separate branch of government and don’t report to the president. 

Federal judges are presiding over the dozens of lawsuits challenging Trump’s executive actions, including Musk’s role in the administration.

The Administrative Office of the U.S. Courts, which coordinates personnel policy for the judicial branch, sent its employees a message late Saturday suggesting that they not respond to any similar communication from the executive branch, according to an email seen by Bloomberg News. 

“Most of what we do is protected by the Privacy Act as we deal with very sensitive personal information of claimants,” said Judge Som Ramrup, the president of Association of Administrative Law Judges, a union representing Social Security Administration judges. “We cannot discuss or release any information related to any case that we work on. I don’t think there’s any way to realistically provide ‘five bullet points’ about the work we performed last week.”

Employees have received confusing and contradictory instructions on how to handle the email. National Weather Service employees were first told to hold off replying to the email, and then late Sunday instructed workers to answer the request, coordinating the response with their supervisors, according to an email seen by Bloomberg News. 

Workers at the Federal Emergency Management Agency on Sunday morning received instructions to reply to email using “action verbs,” such as “planned, initiated, coordinated.” After the Department of Homeland Security, which oversees FEMA, said it would reply on behalf of the entire department, workers were told to stand down.

Musk said in a tweet on Saturday that “failure to respond will be taken as a resignation.” The Office of Personnel Management said “agencies will determine any next steps.”

OPM doesn’t have the authority, except through regulation, to order another agency’s employees to do anything, said Jim Eisenmann, a partner at Alden Law Group PLLC who advises federal and private-sector employees on employment issues.

“In any legal sense, failing to respond cannot be considered a resignation,” he said of the email.

Musk’s momentum

Trump gave Musk cover to pursue more brazen actions, posting on his Truth Social platform on Saturday that his government efficiency czar was doing a good job, “BUT I WOULD LIKE TO SEE HIM GET MORE AGGRESSIVE.”

A few hours later, Musk put federal employees on notice.

“Consistent with President @realDonaldTrump’s instructions, all federal employees will shortly receive an email requesting to understand what they got done last week,” he wrote on X.

The email that followed came from an address familiar to more than two million federal workers. It was the same [email protected] address that tried to coax them into voluntarily resigning 25 days earlier. That email, with the subject line “Fork in the Road,” promised workers they would get paid through September if they left in February. 

Only 75,000 federal workers took the offer — fewer than the 240,000 the White House had hoped. 

Like the “Fork in the Road” missive, Saturday’s email recalled past communications from Musk. The subject line — “What did you do last week?” — echoed the text he sent Twitter CEO Parag Agrawal before he bought the company and fired him. 

Some officials within the Interior Department are concerned that the administration could use their responses to Saturday’s email to justify reneging on the terms of the “Fork in the Road” retirement deal — effectively declaring their accomplishments didn’t justify continuing to pay them through September, one official said, on the condition of anonymity to discuss a private matter. 

A State Department employee who had submitted their resignation via the buyout program still received the email asking for bullet points, according to the employee and emails reviewed by Bloomberg News.

The person replied on Saturday with five bullet points referencing their support of the Trump administration’s goals — including one that noted they had already agreed to leave their job.