Accounting
CBIZ CPAs readjusts after Marcum acquisition
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
“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
“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
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
“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
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.”
By any other name; poor Service; a saga continues; and other highlights of recent tax cases.
Rockford, Illinois: Tax preparer Gretchen Alvarez, 49, has pleaded guilty to preparing and filing false income tax returns.
She operated the tax prep business Sick Credit Repair Tax and Legal Services and represented herself as an income tax preparer. Alvarez did not have a PTIN and admitted that in 2019 and 2020 she misrepresented taxpayers’ eligibility for education credits and deducted fictitious business expenses from their taxable income to reduce tax liabilities and inflate refunds.
The tax loss totaled $356,881.
Sentencing is Sept. 17. Alvarez faces a maximum of three years in prison and a fine of up to $100,000.
Bangor, Maine: Paul Archer, a Florida resident formerly of Hampden and Orrington, Maine, has pleaded guilty to attempting to evade federal taxes and engaging in fraudulent transfers and concealment in a bankruptcy proceeding.
He operated an online marketing business for software installation, earning several million dollars from 2013 through 2015. After an IRS audit in 2016 assessed a federal tax debt totaling some $1 million, Archer concealed and transferred assets through two LLCs he controlled and began using third-party bank accounts to evade paying the tax debt. From April 2018 through November 2019, he transferred and concealed assets and income by using a series of bank accounts held in the names of Max Tune Up LLC; Stealth Kit LLC; his father; and his spouse.
In March 2019, Archer filed for Chapter 7. In his paperwork and court statements, he falsely claimed less than $50,000 in assets; a single checking account; no other assets or property interests; no recent asset transfers; and no connections to any businesses or memberships in any LLCs.
He faces up to five years in prison and a fine up to $250,000 on each of the two charges to which he pleaded guilty. Any sentence will be followed by up to three years of supervised release.
Fort Wayne, Indiana: Rakita Davis, 45, a former IRS employee, has been sentenced to two years of probation and ordered to pay $55,213.61 in restitution to the Small Business Administration after pleading guilty to wire fraud associated with pandemic relief.
Davis falsely claimed gross income for a business that did not exist when she applied for two Paycheck Protection Program loans in 2021. Employed by the IRS when she applied for the loans, Davis lied that she was the sole proprietor of a catering business when no such business existed. She received PPP funds that she spent on such personal items as jewelry, airfare, luxury car rentals and vacations.
Charleston, West Virginia: Business owner Luther A. Hanson has been sentenced to three years of probation and fined $5,000 for willful failure to pay over taxes.
From at least 2015 to September 2020, Hanson, who
Hanson admitted that prior to June 30, 2015, he and the two employees agreed that he would begin treating them as independent contractors. He also admitted that he knew this arrangement would relieve him of paying the employer portion of the employment taxes and of the employees’ withholdings. Neither employee changed their job duties.
He admitted that he knew that neither was an independent contractor while he paid each by check throughout their employment. Hanson further admitted that he did not pay the trust fund taxes to the IRS nor the employer’s share of employment taxes for the two employees each quarter during the arrangement.
The court previously determined that Hanson owed $146,771.37 to the U.S. after his scheme; Hanson paid that amount before sentencing. One of the employees paid a portion of the taxes owed, resulting in the adjusted figure of restitution Hanson owed.
Oakland, New Jersey: Business owner Walter Hass, of Hewitt, New Jersey, has been sentenced to four years in prison for his role in a $3.5 million payroll tax scheme.
Hass owned and operated a shipping and logistics company and since 2014 has operated the company under three different names. He failed to collect, account for and pay over payroll taxes to the IRS on behalf of each of these companies from 2014 to 2022, a total of at least $3.5 million.
Hass used company money to fund his personal lifestyle, including the purchase of luxury vehicles, high-end watches and jewelry, designer clothing, tickets to sporting events, home renovations, vacations, water sports vehicles and extravagant meals.
After signing his guilty plea in October 2023, he embarked on a campaign to avoid responsibility for his conduct. He lied to the court, to the U.S. Probation Office and to the government about a purported cancer diagnosis to delay the entry of his guilty plea and his sentencing. Hass fabricated three letters from physicians asserting that he had medical conditions, including kidney cancer, that prevented him from attending court proceedings. Hass did not have cancer and attempted to travel throughout the country and around the world during this time.
Hass was also sentenced to three years of supervised release and ordered to pay $3,527,645 in restitution.
Atlanta: Attorney Vi Bui has been sentenced to 16 months in prison for obstructing the IRS in connection with his participation in the promotion of abusive syndicated conservation easement tax shelters.
Bui, who
The scheme entailed creating partnerships that bought land and land-owning companies and donated easements over that land or the land itself. Appraisers generated fraudulent and inflated appraisals of the easements, and the partnerships then claimed a charitable contribution deduction based on the inflated value. Bui knew that to make it appear that the participants had timely purchased their units in the shelters, Fisher, Sinnott and others backdated and instructed others to backdate documents, including subscription agreements and checks.
Bui anticipated that the transactions would be audited. He and others created and disseminated lengthy documents disguising the true nature of the transaction, instituted sham “votes” for what to do with the land that the partnership owned despite knowing that outcome was predetermined, and falsified paperwork such as appraisals and subscription agreements. Bui earned substantial income for his role in the scheme.
He also used the fraudulent shelters to evade his own taxes, filing personal returns from 2013 through 2018 that claimed false deductions from the shelters.
He was also ordered to serve a year of supervised release and to pay $8,250,244 in total restitution to the IRS.
The International Financial Reporting Standards Foundation has posted profiles of 17 of the 36 jurisdictions around the world that have either adopted or used International Sustainability Standards Board disclosures or are in the process of finalizing steps to introduce the IFRS Sustainability Disclosure Standards in their regulatory frameworks.
The
“Why is the IFRS Foundation publishing these jurisdictional profiles, which set out by country or jurisdiction their approach to sustainability reporting. It’s really because we see this as part of our commitment to provide transparency to the market,” said ISSB vice chair Sue Lloyd during a press briefing. “It’s all very well talking about the use of our standards, but we know that different jurisdictions have made different decisions. They’re adopting the standards at a different pace, and by providing these profiles, we want to provide clarity, particularly for investors who are going to be relying on understanding the comparability of information between jurisdictions, to alert them to the similarities and differences in approach and to describe the extent to which we are achieving the global comparability that we have been working toward with the ISSB standards.”
She noted that the ISSB’s sister board, the International Accounting Standards Board, has also been publishing
The profiles are accompanied by 16 snapshots that provide a high-level overview of other jurisdictions’ regulatory approaches that are still subject to finalization. Of the 17 jurisdictions profiled, 14 have set a target of “fully adopting” ISSB standards, two have set a target of ‘adopting the climate requirements’ of ISSB standards, and one targets “partially incorporating” ISSB Standards. The profiled jurisdictions cover Australia, Bangladesh, Brazil, Chile, Ghana, Hong Kong, Jordan, Kenya, Malaysia, Mexico, Nigeria, Pakistan, Sri Lanka, Chinese Taipei, Tanzania, Türkiye and Zambia.
Accounting Today asked Lloyd about the United States, where the Securities and Exchange Commission’s
“What we are seeing continue to be the case in the U.S. is very strong investor interest in sustainability information, including from the use of the ISSB standards,” Lloyd said. “We also have interest from companies who can choose to provide the information using our standards. Of course, many companies in the U.S. in the past have chosen to use the Sustainability Accounting Standards Board standards voluntarily, so that sort of voluntary adoption momentum is something we still see from the company and the investor side.”
“I think it’s also important to remember that the SEC just recently reconfirmed that if information on things like climate is material, there’s already a requirement to provide material information in accordance with existing requirements in place,” she continued. “And the last thing I’d note on the U.S. front is that while the SEC has indeed moved away from their proposed rule, we do see action at a state level, including, for example, in California, where the CARB [California Air Resources Board] is looking at climate disclosures, including the potential to allow the use of the ISSB standards to meet those requirements, so we see progress, but in different ways perhaps.”
The
Of the 16 jurisdictional snapshots published by the IFRS Foundation, 12 propose or have published standards (or requirements) that are fully aligned with ISSB standards (such as Canada) or are designed to deliver outcomes functionally aligned with those resulting from the application of ISSB standards (such as Japan). Three propose standards (or requirements) that incorporate a significant portion of disclosures required by ISSB standards, and one is considering allowing the use of ISSB standards. For these jurisdictions, their target approach to adoption is yet to be finalized. Once jurisdictions have finalized their decisions on adoption or other use of ISSB standards, the IFRS Foundation plans to publish a profile for these jurisdictions.
“The ISSB standards are bringing clarity to investors on the risks and opportunities lying in value chains across time horizons in a rapidly changing world,” said ISSB chair Emmanuel Faber in a statement Thursday. “A year ago, we committed to publishing detailed jurisdictional profiles describing adoption of our standards to complement our Inaugural Jurisdictional Guide. The profiles provide a detailed current state-of-play to investors, banks, and insurers who continue to struggle with the lack of appropriate, comparable and reliable information on these critical factors affecting business prospects. We have seen new jurisdictions joining the initial cohort of ISSB adopters every month, with a total of 36 today.”
The Treasury Department and the Internal Revenue Service are giving cryptocurrency brokers additional time to comply with requirements to report on digital asset sales and withhold taxes.
In
In 2024, Treasury and IRS
The IRS said it has received and carefully considered comments from the public about the transition relief provided in Notice 2024-56 indicating that brokers needed more time to comply with the reporting requirements; today’s notice addresses those comments.
In the new Notice 2025-33, the Treasury and the IRS extended the transition relief from backup withholding tax liability and associated penalties for any broker that fails to withhold and pay the backup withholding tax for any digital asset sale or exchange transaction effected during calendar year 2026.
The Trump administration has been notably more supportive of the crypto industry since taking office,
The notice also extends the limited transition relief from backup withholding tax liability for an extra year. That means brokers won’t be required to backup withhold for any digital asset sale or exchange transactions effected in 2027 for a customer (payee), if the broker submits that payee’s name and tax identification number to the IRS’s TIN Matching Program and receives a response that the name and TIN combination matches IRS records. They’re also granting relief to brokers that fail to withhold and pay the full backup withholding tax due, if the failure is due to a decrease in the value of withheld digital assets in a sale of digital assets in return for different digital assets in 2027, and the broker immediately liquidates the withheld digital assets for cash.
This notice also includes more transition relief for brokers for sales of digital assets effected during calendar year 2027 for certain customers that haven’t been previously classified by the broker as U.S. persons.
Tax Fraud Blotter: Sick excuses
ISSB standards adopted more widely across globe
IRS extends deadline on crypto broker reporting and withholding
New 2023 K-1 instructions stir the CAMT pot for partnerships and corporations
The Essential Practice of Bank and Credit Card Statement Reconciliation
Are American progressives making themselves sad?
-
Economics7 days agoJobs report May 2025:
-
Economics7 days agoDonald Trump has many ways to hurt Elon Musk
-
Economics5 days agoSending the National Guard to LA is not about stopping rioting
-
Finance7 days agoStocks making the biggest moves midday: WOOF, TSLA, CRCL, LULU
-
Economics7 days ago
Donald Trump has many ways to hurt Elon Musk
-
Blog Post5 days agoMastering Bookkeeping Tasks During Peak Business Seasons
-
Personal Finance5 days agoWhat Pell Grant changes in Trump budget, House tax bill mean for students
-
Finance5 days agoChina’s EV race to the bottom leaves a few possible winners