A tax credit for investments in low-income areas could spur long-term job creation in overlooked parts of the country — with the right changes to its rules, according to a new book.

The capital gains deferral and exclusions available through the “opportunity zones” credit represent one of the few areas of the Tax Cuts and Jobs Act of 2017 that drew support from both Republicans and Democrats. The impact of the credit, though, has proven murky in terms of boosting jobs and economic growth in the roughly 7,800 Census tracts qualifying based on their rates of poverty or median family incomes. 

Altering the criteria to focus the investments on “less traditional real estate and more innovation infrastructure” and ensuring they reach more places outside of New York and California could “refine the where and the what” of the credit, said Nicholas Lalla, the author of “Reinventing the Heartland: How One City’s Inclusive Approach to Innovation and Growth Can Revive the American Dream” (Harper Horizon). A senior fellow at an economic think tank called Heartland Forward and the founder of Tulsa Innovation Labs, Lalla launched the book last month. For financial advisors and their clients, the key takeaway from the book stems from “taking a civic minded view of investment” in untapped markets across the country, he said in an interview.

“I don’t want to sound naive. I know that investors leveraging opportunity zones want to make money and reduce their tax liability, but I would encourage them to do a few additional things,” Lalla said. “There are communities that need investment, that need regional and national partners to support them, and their participation can pay dividends.”

READ MORE: Unlock opportunities for tax incentives in opportunity zones

A call to action

In the book, Lalla writes about how the Innovation Labs received $200 million in fundraising through public and private investments for projects like a startup unmanned aerial vehicle testing site in the Osage Nation called the Skyway36 Droneport and Technology Innovation Center. Such collaborations carry special relevance in an area like Tulsa, Oklahoma, which has a history marked by the wealth ramifications of the Tulsa Race Massacre of 1921 and the government’s forced relocation of Native American tribes in the Trail of Tears, Lalla notes.

“This book is a call to action for the United States to address one of society’s defining challenges: expanding opportunity by harnessing the tech industry and ensuring gains spread across demographics and geographies,” he writes. “The middle matters, the center must hold, and Heartland cities need to reinvent themselves to thrive in the innovation age. That enormous project starts at the local level, through place-based economic development, which can make an impact far faster than changing the patterns of financial markets or corporate behavior. And inclusive growth in tech must start with the reinvention of Heartland cities. That requires cities — civic ecosystems, not merely municipal governments — to undertake two changes in parallel. The first is transitioning their legacy economies to tech-based ones, and the second is shifting from a growth mindset to an inclusive-growth mindset. To accomplish both admittedly ambitious endeavors, cities must challenge local economic development orthodoxy and readjust their entire civic ecosystems for this generational project.”

READ MORE: Relief granted to opportunity zone investors

Researching the shortcomings

And that’s where an “opportunity zones 2.0” program could play an important role in supporting local tech startups, turning midsized cities into innovation engines and collaborating with philanthropic organizations or the federal, state and local governments, according to Lalla. 

In the first three years of the credit alone, investors poured $48 billion in assets into the “qualified opportunity funds” that get the deferral and exclusions for certain capital gains, according to a 2023 study by the Treasury Department. However, those assets flowed disproportionately to large metropolitan areas: Almost 86% of the designated Census tracts were in cities, and 95% of the ones receiving investments were in a sizable metropolis. 

Other research suggested that opportunity-zone investments in metropolitan areas generated a 3% to 4.5% jump in employment, compared to a flat rate in rural places, according to an analysis by the nonpartisan, nonprofit Tax Foundation.

“It creates a strong incentive for taxpayers to make investments that will appreciate greatly in market value,” Tax Foundation President Emeritus Scott Hodge wrote in the analysis, “Opportunity Zones ‘Make a Good Return Greater,’ but Not for Poor Residents” shortly after the Treasury study. 

“This may be the fatal flaw in opportunity zones,” he wrote. “It explains why most of the investments have been in real estate — which tends to appreciate faster than other investments — and in Census tracts that were already improving before being designated as opportunity zones.”

So far, three other research studies have concluded that the investments made little to no impact on commercial development, no clear marks on housing prices, employment and business formation and a notable boost in multifamily and other residential property, according to a presentation last September at a Brookings Institution event by Naomi Feldman, an associate professor of economics at the Hebrew University of Jerusalem who has studied opportunity zones. 

The credit “deviates a lot from previous policies” that were much more prescriptive, Feldman said.

“It didn’t want the government to have a lot of oversay over what was going on, where the investment was going, the type of investments and things like that,” she said. “It offered uncapped tax incentives for private individual investors to invest unrealized capital gains. So this was the big innovation of OZs. It was taking the stock of unrealized capital gains that wealthy individuals, or even less wealthy individuals, had sitting, and they could roll it over into these funds that could then be invested in these opportunity zones. And there were a lot of tax breaks that came with that.”

READ MORE: 3 oil and gas investments that bring big tax savings

A ‘place-based’ strategy

The shifts that Lalla is calling for in the policy “could either be narrowing criteria for what qualifies as an opportunity zone or creating force multipliers that further incentivize investments in more places,” he said. In other words, investors may consider ideas for, say, semiconductor plants, workforce training facilities or data centers across the Midwest and in rural areas throughout the country rather than trying to build more luxury residential properties in New York and Los Angeles.

While President Donald Trump has certainly favored that type of economic development over his career in real estate, entertainment and politics, those properties could tap into other tax incentives. And a refreshed approach to opportunity zones could speak to the “real innovation and talent potential in midsized cities throughout the Heartland,” enabling a policy that experts like Lalla describe as “place-based,” he said. With any policies that mention the words “diversity, equity and inclusion” in the slightest under threat during the second Trump administration, that location-based lens to inclusion remains an area of bipartisan agreement, according to Lalla.

“We can’t have cities across the country isolated from tech and innovation,” he said. “When you take a geographic lens to economic inclusion, to economic mobility, to economic prosperity, you are including communities like Tulsa, Oklahoma. You’re including communities throughout Appalachia, throughout the Midwest that have been isolated over the past 20 years.”

READ MORE: Can ESG come back from the dead?

Hope for the future?

In the book, Lalla compares the similar goals of opportunity zones to those of earlier policies under President Joe Biden’s administration like the Inflation Reduction Act, the CHIPS and Science Act, the American Rescue Plan and the Infrastructure Investment and Jobs Act.

“Together, these bills provided hundreds of millions of dollars in grant money for a more diverse group of cities and regions to invest in innovation infrastructure and ecosystems,” Lalla writes. “Although it will take years for these investments to bear fruit, they mark an encouraging change in federal economic development policy. I am cautiously optimistic that the incoming Trump administration will continue this trend, which has disproportionately helped the Heartland. For example, Trump’s opportunity zone program in his first term, which offered tax incentives to invest in distressed parts of the country, should be adapted and scaled to support innovation ecosystems in the Heartland. For the first time in generations, the government is taking a place-based approach to economic development, intentionally seeking to fund projects in communities historically disconnected from the nation’s innovation system and in essential industries. They’re doing so through a decidedly regional approach.”

Advisors and clients thinking together about aligning investment portfolios to their principles and local economies can get involved with those efforts — regardless of their political views, Lalla said.

“This really is a bipartisan issue. Opportunity zones won wide bipartisan approval,” he said. “Heartland cities can flourish and can do so in a complicated political environment.”

Ramp, a spend management solutions provider, released a new solution within 24 hours in direct response to recent advances in AI image generation that make it easy to create extremely convincing fake receipts that could be used for financial fraud. 

Dave Wieseneck, an “expert in residence” at Ramp who administers the company’s own instance of Ramp, noted that faking receipts is not a new practice. What’s changed is that, with the recent image generation update from OpenAI, it has now become much easier, making what may have once been a painstaking effort into a casual thing done in minutes.

“So while it’s always been possible to create fake receipts, AI has made it super duper easy, especially OpenAI with their latest model. So I think it’s just super easy now and anybody can do it, as opposed to experts that are in the know,” he said in an interview. 

Rather than try to assess the image itself, the software looks at the file’s metadata for markers particular to generative AI systems. Once those markers are present, the software flags the receipt as a probable fake. 

“When we see that these markers are present, we have really high confidence of high accuracy to identify them as potentially AI generated receipts,” said Wieseneck. “I was the first person to test it out as the person that owns our internal instance of Ramp and dog foods the heck out of our product.” 

While the speed at which they produced this solution may be remarkable, he said it is part of the company culture. The team, especially small pods within it, will observe a problem and stop what they’re doing to focus on a specific need. They get a group together on a Slack channel, work through the problem, code it late at night and push it out in the morning. 

Wieseneck conceded it is not a total solution but rather a first line of defense to deter the casual fraudster. He compared it to locking your door before going out. If the front door is unlocked, a person can just stroll in and steal everything, but will likely give up if it is locked. A professional criminal with tons of breaking and entering experience, however, is unlikely to be deterred by a lock alone, versus a lock plus an alarm system plus an actual security guard. 

“But that doesn’t mean that you don’t lock your door and you don’t add pieces of defense to make it harder for people to either rob your house or, in this case, defraud your company,” he said.

This isn’t to say there’s no plans to bolster this solution further. After all, the feature is only days old. He said the company is already looking into things like pixel analysis and textual analysis of the document itself to further enhance its AI detection capabilities, though he stressed that they want to be very confident it works before pushing it out to customers. 

“We’re focused on giving finance teams confidence that legitimate receipts won’t be falsely flagged. So we want to tread carefully. We have lots of ideas. We’re going to work through them and kind of solve them in the same process we’ve always done here at Ramp,” he said. 

This is likely only the beginning of AI image generators being used to fake documentation. For instance, it has recently been found that bots are also very good at forging passports.

AI fraud ascendant

This speaks to an overall trend of AI being used in financial crimes which was highlighted in a recent report from financial and risk advisory solutions provider Kroll, which surveyed about 600 CEOs, chief compliance officers, general counsel, chief risk officers and other financial crime compliance professionals. What they found was that experts in this area are growing alarmed at the rising use of AI by cybercriminals and other bad actors, and few are confident their own programs are ready to meet this challenge. 

The poll found that 61% of respondents say use of AI by cybercriminals is a leading catalyst for risk exposure, such as through the generation of deep fakes and, likely, AI-generated financial documents. While 57% think AI will help against financial crime, 49% think it will hinder (Kroll said they are likely both right). 

“The rapid-fire adoption of AI tools can be a blessing and a curse when it comes to financial crime, providing new and more efficient ways to combat it while also creating new techniques to exploit the broadening attack surface — be it via AI-powered phishing attacks, deepfakes, or real-time mimicry of expected security configurations,” said the report. 

Yet, many professionals do not feel their current programs are up to the task. The rise in AI-guided fraud is part of an overall projected 71% increase in financial crime risks in 2025. Meanwhile, only 23% rate their compliance programs as “very effective” with lack of technology and investment named as prime reasons. Many also lack confidence in the governance infrastructure overseeing financial crime, with just 29% describing it as “robust.” 

They’re also not entirely convinced that more AI is the solution. The poll found that confidence in AI technology has dropped dramatically over the past two years: those who say AI tools have had a positive impact on financial crime compliance have gone from 39% in 2023 to only 20% today. Despite this, there remains heavy investment in AI. The poll found 25% already say AI is an established part of their financial crime compliance program, and 30% say they are in the early stages of adoption. Meanwhile, in the year ahead, 49% expect their organization will invest in AI solutions to tackle financial crime, and 47% say the same about their cybersecurity budgets. 

To help combat AI-enabled financial crime, Kroll recommended companies form cross-functional teams that go beyond IT and cybersecurity and involve those in AML, compliance, legal, product and senior management. Further, Kroll said there has to be focused, hands-on training with new AI tools that are updated and repeated as the organization implements new AI capabilities and the regulatory and risk landscape changes. Finally, to combat AI-related fraud, Kroll recommended companies maintain a “back to the basics” approach. Focus on fundamental human intervention and confirmation procedures — regardless of how convincing or time-sensitive circumstances appear.

It’s no secret that more and more CPAs are offering financial services to their clients. 

In fact, financial planning questions now have a greater emphasis on the CPA exam than ever before. I find that encouraging. But if you think true financial planning is all about investments and annual returns, think again. 

Financial advisors are no longer hanging their hats on portfolio performance. They’re moving toward the holistic approach to wealth management, an approach that goes beyond financial services to account for any factor that touches a client’s financial life. The holistic approach recognizes that financial health is closely intertwined with physical, emotional, mental and social wellbeing. I’m guessing this wasn’t covered in your accounting school curriculum.

To move into this area successfully, you’ll have to do more than crunch the numbers and plug in investments. Clients and strategic partners will evaluate you based on how well you can really listen to clients and empathize with them. Those attributes are now more important than your advanced math skills, technical skills, and knowledge of the Tax Code.As Clayton Oates, founder of QA Business, wrote in the foreword of my new book Holistic Guide to Wealth Management (CPA Trendlines), “Empathy is an area we have only just begun to explore in our profession. It’s about the art of asking questions and listening. It’s about discovering new circumstances in your client’s business and personal life that were previously not discussed. Shared discovery helps create a genuine and lasting connection with your clients.”

In the introduction, Seth Fineberg, founder of Accountants Forward, explained that as a CPA, you are your clients’ most trusted guide. “You are the one who has been helping them in their financial lives the longest,” he wrote. “And even if your client tells you they already have a financial planner, it’s worth reaching out to that planner and potentially collaborating with them as part of your service to ensure that your client is getting the best possible advice. That’s because every single year, you know what they owe in taxes and why.” 

According to Fineberg, accountants know intimately where their clients’ spending goes and may already offer basic ways for them to save on taxes. In short, “the trust is there. The data is there. Why aren’t you helping them more?” he askedI began to ask myself the same thing as I started making deeper inroads into the accounting profession. Thanks to advances in technology and increasing affordability of a virtual family office model, you can provide your clients with access to a wide range of services. Experts can be brought in as needed to provide specialized knowledge about accounting, tax, estate planning, insurance, legal, philanthropic planning, investment and administrative matters. Best of all, the experts don’t have to be in-house on your full-time payroll. Again, as the client’s CPA and most trusted advisor, you direct the relationship and remain the central point of contact. 

Estate planning to cement client relationships

When it comes to providing the family office level of care, estate planning comes top of mind. On a recent podcast I hosted, Andreas Mazabel, head of advisor sales at Trust & Will said firms that are proactively adopting estate planning are finding it a powerful way to deepen relationships and better connect with their clients’ values and the extended family’s values. He believes advisors who are not incorporating estate planning into their practice are losing clients to firms that do.

“One thing we continue to see is that clients looking for advisors want complete holistic planning,” said Mazabel. “They tell us: ‘I don’t want to go to three or four different offices to get all of my stuff done. I want to go to one trusted source who really understands my goals and my gaps and can help me build a complete plan around that.” 

Mazabel said that for many years as an advisor, his focus was on building up a client’s assets. There wasn’t much emphasis on protecting those assets or transferring them tax-efficiently to NextGen or the causes they believed in, he noted. Like Mazabel, I’ve long believed you can connect generations with estate planning. It’s a great retention tool as well as a great prospecting tool. And thanks to online estate planning tools like Trust & Will, technology streamlines the process for clients. In the past, advisors would refer clients to an estate attorney and hope they’d show up. Once there, clients would have to endure uncomfortable conversations about health care directives, powers of attorney, and death. Now they can do it from the comfort of home and have an advisor walking them through the process. By making it easier for the advisor to be involved directly in the estate planning process, Mazabel says it’s much easier to hold clients accountable for following through. 

Trust & Will’s research has found that when a person comes to set up an estate plan on the platform without a financial advisor, there’s about a 25% chance they’ll go through the process and complete it. But when they come through a financial advisor, the completion rate goes up to 75%. That’s one of the many advantages of having a trusted advisor. 

When you consider that 55% of Americans don’t have any estate documents and only 31% have a basic will, according to Trust & Will’s 2025 Estate Planning Report, I can’t think of a better argument for the power of accountability.

Speaking of statistics, my good friend Michael DiJoseph, a senior strategist at Vanguard Investment Advisor Research Center, has long studied and quantified the value that a skilled advisor brings to clients vs. clients who don’t use financial advisors. Vanguard celebrated the 25th anniversary of its Advisor Alpha Study, which has consistently shown that skilled advisors add a full 3% (300 basis points) annually to a client’s portfolio. How? By holding them accountable to their plan and helping them avoid rash, wealth-eroding decisions during times of market volatility or personal stress. Over those 300 basis points, Vanguard believes 200 of that “alpha” comes from behavioral coaching, which could include trust-building activities such as estate planning. 

According to DiJoseph, the higher the level of trust a client has in their advisor, the more likely they are to make a referral. DiJoseph’s team has taken it a step further and looked into the three main components of trust. Emotional trust was by far the most important component:

• 17% of respondents rated “functional trust” (building portfolios, doing financial planning, etc. as the single most important type of trust. 
• 30% of respondents rated “ethical trust” (advisors’ interests are aligned with theirs vs. trying to sell them something) as the single most important type of trust.
• 53% of respondents rated “emotional trust” (softer skills: actively listening; asking good questions; treating clients like people, not portfolios) as the single most important type of trust.

From my standpoint, these stats are very welcoming for a profession that hangs its hat on trust. As I discuss throughout my book, working toward that ROR (Return on Relationship) is about developing emotional trust with clients and having a greater connection with them. That’s how you can introduce estate planning into your holistic type of offering to clients. Even better, it can increase revenue and provide clients with much appreciated peace of mind.

For forward-thinking CPAs, estate planning isn’t just an add-on service; it’s a cornerstone of relationship-centered wealth management that clients increasingly expect from their most trusted advisor. Build your ROR today!