Accounting
Tax season nears its end, but uncertainties linger
The 2024 filing season, which began with a hint of uncertainty, has progressed into one of the smoothest in recent memory — but the uncertainty still exists, fueled by court decisions and pending legislation.
The legislation was “pending” at the beginning of filing season and is still pending, while court decisions called into question the Corporate Transparency Act, which, although not a tax issue, is front and center for many accountants that deal with small businesses which come under the purview of the act’s beneficial ownership information reporting requirements.
Accountants are hesitant to become involved with questions regarding BOI reporting; depending on the jurisdiction they may be charged with practicing law without a license, since they are called on to interpret definitions under the act as to beneficial ownership. Despite this, they routinely are expected to interpret the complexities of the Internal Revenue Code and have done so for decades without the benefit of a law degree. Add to this the fact that their professional liability insurance may or may not protect them — again, depending on the jurisdiction in which charges might be brought against them.
The American Institute of CPAs, in a letter dated April 3, 2024, to Treasury Secretary Janet Yellen and the director of the Treasury’s Financial Crimes Enforcement Network, Andrea Gacki, voiced its concern that small businesses will be caught off guard with the new filing requirement, and failure to file could result in steep civil and criminal penalties.
“The recent NSBA v. Yellen court case which found the Corporate Transparency Act to be unconstitutional has only compounded confusion, with most entities believing they no longer have a furling requirement,” said the letter.
“Based on these strong concerns,” the letter continued, “we ask that you suspend all enforcement actions until one year after the conclusion of all court cases related to NSBA v. Yellen, and further believe that FinCEN should take no retroactive enforcement for non-compliance during this time. The portal can remain open, and small businesses may voluntarily report BOI, but no small business should be compelled to file nor should any small business face enforcement for failure to comply until after the courts have worked through this complex case.”
Failure to address the situation will lead to “rampant noncompliance” in the small-business sector, according to Roger Harris, president of Padgett Business Services. “And it will not help us catch money launderers or child traffickers.”
Still in limbo
Still pending is the Tax Relief for American Families and Workers Act of 2024, which passed in the House. It contains taxpayer-favorable alterations to the Child Tax Credit and a trio of lapsed business provisions: bonus depreciation, research and experimental expenditures, and the business interest deduction limitation, and is awaiting action in the Senate. The general feeling is that the TRAFWA will be “pending” all the way through the November elections, but will eventually pass in one form or another.
Depending on the client, this could be a pretty significant delay, according to Ryan Losi, executive vice president of Virginia-based CPA firm Piascik.
“It has caused heartburn for some companies in the tech industry or pharmaceuticals,” he observed. They have to capitalize expenses rather than include them as deductions, which can make the difference between making a profit or paying tax on taxable income that doesn’t exist. It was supposed to pass in February, but Republicans held the bill up because of immigration issues. Now, it looks as though nothing will happen until after the election. So maybe tax season won’t be so smooth because you have to file based on current law, not what you think it will be.”
“Things started to normalize in late February when people recognized that maybe the tax bill would not pass that quickly, and the IRS said not to wait, that they would fix refunds automatically if the bill passed,” he added.
Filing season statistics show that “do-it-yourselfers” were up by 1% over a year ago, as of March 29, but that’s probably not entirely accurate, according to Mark Steber, chief tax officer at Jackson Hewitt. “The IRS is increasingly concerned with ‘ghost preparers,’ those who prepare a return for a fee but don’t sign the return,” he said.
“The IRS has seen repeat self-prepared returns coming from the same address,” he remarked. “In some cases, the taxpayer doesn’t even know that the person sitting next to them in a tax pro’s office doesn’t even work in the office — they pull out their computer, ask a few questions and agree to meet at a Starbucks around the corner.”
Looking forward
Other than these few issues, the season has been smooth. But it may be the last for a while, according to Steber. “A new 1099-K, the presidential election, expiring Trump provisions all converge, so we may have seen the last of the “normal” seasons for a while,” he said.
This is an election year and even though tax season is nearly behind us, Congress might make retroactive changes which they may instruct the IRS to implement, or some returns might have to be amended to receive benefits, according to Tom O’Saben, director of tax content & government relations at the National Association of Tax Professionals. “Pay close attention to the news,” he advised.
April is filing extension time, according to Losi. “Our cutoff is March 25. If they don’t have all their information together by then, they’ll have to extend,” he explained. “We’re in the process of contacting all our clients with large items and will try to get a sense of the taxes they paid in prior years. If the client is in a refund situation, we can file the extension easily and electronically and without needing more information. Or if they have a balance due, we have to decide how much is due. If it’s a large balance due, we have to decide how to pay it. Most have their money tied up in illiquid assets, so they might have to give it a tweak or two.”
Wrapping up
The filing season began with tax professionals thinking they had lost clients to the new IRS Direct File, but they were only waiting in the wings, according to Beanna Whielock, former IRS director of national public liaison, and now executive director of Tax Pro Fellowship.
“Taxpayers hate taxes. Only if they think they are getting a refund, rebate CTC or some other funds do they get in early to file,” she said. “Most have owed, either because they took a second job to make ends meet and were insufficiently withheld or they followed IRS guidance on completing the Form W-4 and were underwithheld. Then the taxpayers who did strange things began to come in. While only energy credits seemed to be a saving grace, they were few and far between because people are hurting in the economy.”
With the end of the season in sight, overall it’s gone pretty well, according to Harris.
“There have been some minor hiccups here and there, but compared to most recent filing seasons it’s been relatively smooth,” he said. “The problem every year has been late 1099s, and it seems as though there are more corrections this year than in the past. For example, people don’t realize that their financial advisor has invested their money in a limited partnership with an ownership interest in an oil well in Oklahoma. They bring in all their information at the end of March, get their return filed and then show up two weeks later with the additional information. Or they might leave it for the IRS to fix, since the preparer might cost more than the tax that is due. It’s frustrating, because it creates additional work for the preparer and for the IRS.”
Tax season 2024 has mirrored last tax season in that it felt like “business as usual” — essentially what tax season has typically been like, according to Jim Guarino, managing director at Top 100 Firm Baker Newman Noyes.
“One of the larger surprises was the increase in overall investment income, especially in terms of their interest income and U.S. government interest,” he said. “Interest jumped during 2023 and individuals were the recipients of this increased interest income, but it led to smaller refunds or a balance due on retirement account values at December 31 of the preceding year.”
“Tax professionals at this time of year have come to appreciate one general rule of thumb: Expect the unexpected,” he concluded. “Living by that mantra helps us to navigate and weather the storm that is certain to come every January.”
Accounting
Developing future leaders in accounting: the new imperative in an AI and automation driven era
As technology continues to automate routine tasks, the role of finance professionals is evolving, demanding deeper capabilities in critical thinking, communication and business acumen.
Many of PrimeGlobal’s North American firms are focused on cultivating these skills in their future leaders. Carla McCall, managing partner at AAFCPAs, Randy Nail, CEO of HoganTaylor, and Grassi managing partner Louis Grassi shared their views with PrimeGlobal CEO Steve Heathcote on the need for future leaders to balance technological proficiency with human-centered skills to thrive.
AI is transforming the sector by streamlining workflows, automating data analysis and reducing manual processes. However, rather than replacing accountants, AI is reshaping their roles, enabling them to focus on higher-value tasks. In the words of Louis Grassi, AI can be seen as a strategic partner, freeing accountants from routine tasks, enabling deeper engagement with clients, more thoughtful analysis, and ultimately better decision-making.
Nail emphasized the importance of embracing AI, warning that those who fail to adapt risk being replaced by professionals who leverage the technology more effectively. HoganTaylor’s “innovation sprint” generated over 100 ideas for AI integration, underscoring why a proactive approach to adopting new technologies is so necessary and valuable.
McCall advocates for an educational shift that equips professionals with the skills to interpret AI-generated insights. She stressed that accounting curricula of the future must evolve to incorporate advanced technology training, ensuring future accountants are well-versed in AI tools and data analytics. Moreover, simulation-based learning is becoming increasingly crucial as traditional methods of education become obsolete in the face of automation.
Talent development and leadership growth
As AI reshapes the profession, firms must rethink how they develop and nurture their future leaders. To attract and retain top talent, firms need to prioritize personalized development plans that align with individual career goals.
HoganTaylor’s approach to talent development integrates technical expertise with leadership and communication training. These initiatives ensure professionals are not only proficient in accounting principles but also equipped to lead teams and navigate complex client interactions.
Nail underscored the growing importance of writing and presentation skills, as AI will handle routine tasks, leaving professionals to focus on higher-level analytical and decision-making responsibilities.
Soft skills are the success skills
While technical proficiency remains vital, future leaders must also cultivate critical thinking, communication and adaptability — skills McCall refers to as the “success skills.” McCall highlights the necessity of business acumen and analytical communication, essential for interpreting data, advising clients and making strategic decisions.
Recognizing teamwork and collaboration remain crucial in the hybrid work environment, McCall explained in detail how AAFCPA fosters collaboration through structured remote engagement strategies such as “intentional office time,” alcove sessions and stand-up meetings. Similarly, HoganTaylor supports remote teams by offering training for career advisors to ensure effective mentorship and engagement in a dispersed workforce.
McCall emphasized why global experience can be valuable in leadership development. Exposure to diverse markets and accounting practices enhances professionals’ adaptability and broadens their perspectives, preparing them for leadership roles in an increasingly interconnected world.
Grassi reminded us that an often-overlooked leadership skill is curiosity. In his view the most effective leaders of tomorrow will be inherently curious — not just about emerging technologies but about clients, market shifts and global trends. Encouraging curiosity and continuous learning within our firms will distinguish the true industry leaders from those simply reacting to change.
A balanced future
What’s clear from speaking to our leaders is PrimeGlobal’s role in fostering trust, community and knowledge sharing. McCall recommended member-driven panels to discuss AI implementation and automation strategies and share best practice. Nail, on the other hand, valued PrimeGlobal’s focus on addressing critical industry issues and encouraged continuous evolution to meet professionals’ changing needs.
The future of leadership in the accountancy profession hinges on a balanced approach, leveraging AI to enhance efficiency while cultivating essential human skills that technology cannot replicate, which Grassi highlights skills including leadership and building client trust.
As McCall and Nail advocate, the next generation of accountants must be agile thinkers, skilled communicators and strategic decision-makers. Firms that invest in these competencies will not only stay competitive but will also shape the future of the industry by developing well-rounded leaders prepared for the challenges ahead.
By investing in both AI capabilities and essential human skills, firms can not only future proof their leadership but also shape a resilient and forward-thinking profession ready to meet the challenges of the future.
As Grassi concluded, while technical skills provide the foundation, leadership in accounting increasingly demands emotional intelligence, empathy and adaptability. AI will change how we perform our work, but human connection, trust and nuanced judgment are irreplaceable. Investing in these human-centric skills today is critical for firms aiming to build resilient leaders of tomorrow. To remain relevant and thrive, professionals must prioritize developing strong success skills that will define the leaders of tomorrow.
Wipfli appoints new chief growth officer; Illinois CPA Society installs latest board of directors; and more news from across the profession.
Employment rose by a stronger than expected 228,000 jobs in March, although the unemployment rate inched up one-tenth of a point to 4.2%, the U.S. Bureau of Labor Statistics reported Friday.
Despite the mostly upbeat jobs report, the stock markets nevertheless plunged amid widespread concern over the
The professional and business services sector added 3,000 jobs, but lost 700 jobs in accounting, tax preparation, payroll and bookkeeping services. The biggest job gains occurred in health care, social assistance, transportation and warehousing. Employment also grew in the retail trade industry, in part due to the return of workers from a strike in the food and beverage industry. But federal government employment declined by 4,000 in March, after a loss of 10,000 in February, amid job cuts ordered by the Elon Musk-led Department of Government Efficiency. However, the Internal Revenue Service is
Average hourly earnings rose in March by 9 cents, or 0.3%, to $36.00. Over the past 12 months, average hourly earnings have increased 3.8%.
Trump boasted about the jobs report in an all-caps
Congressional Democrats disagreed. “Unemployment is rising, and this seems to be the last report buoyed by Democrats’ blockbuster job creation,” said House Ways and Means Committee ranking member Richard Neal, D-Massachusetts, in a statement. “Recession odds are getting higher by the day as Trump plagues our economy with the largest tax hike in decades. Wages would need to skyrocket for the people to weather Trump’s higher prices and needless uncertainty. This report doesn’t yet reflect the dangerous firings of thousands of public servants or the layoffs that started hours after he announced the Trump Tariff Tax. This administration is ruling through the lens of billionaires — sacrificing workers’ paychecks, destroying trillions of dollars in savings and retirement wealth, readying
Economists are predicting fallout from the historic tariff increases announced by Trump. “We now have more clarity on the trade policy following ‘Liberation Day’ on April 2,” wrote Appcast chief economist Andrew Flowers. “The average effective tariff rate is now above the level set by the Smoot-Hawley tariffs in 1930. This is one of the largest changes to economic and global trade policy since President Nixon’s decision to move away from the gold standard more than 50 years ago. The impending fallout from retaliatory tariffs from our trading partners across Europe and Asia will radically shift employment growth across manufacturing, retail and construction as consumer goods prices rise.”
Buffett denies social media rumors after Trump shares wild claim that investor backs president crashing market
Amid tariff sell-off, avoid ‘dangerous’ investment instincts, experts say
Stocks making the biggest moves midday: PLTR, CAT, AAPL JPM
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?
-
Economics1 week agoYoung Americans are losing confidence in economy, and it shows online
-
Economics1 week agoPCE inflation February 2025:
-
Personal Finance1 week agoStudent loans could be managed by the Small Business Administration
-
Accounting1 week agoIRS sets new initiative with banks to uncover fraud
-
Economics1 week agoWhite House denials over the Signal snafu ring hollow
-
Economics1 week agoConsumer sentiment worsens as inflation fears grow, University of Michigan survey shows
-
Economics1 week agoTexas troopers are in more and more lethal car chases
-
Personal Finance1 week agoMillions of student loan borrowers past-due after bills restarted: Fed