Accounting

CPAs are collateral damage in DOL freelance rule, Trump administration must intervene

Published

5 months ago

December 10, 2024

Following the pandemic, a dramatic shift in the American workforce has led to an explosion in freelance labor.

More than half of people born after 1996 are self-employed, forgoing the corporate ladder in pursuit of flexibility, autonomy and a “new American dream.” Even more complex tax requirements, such as the addition of quarterly IRS payments on estimated income, haven’t dulled the movement’s momentum, with freelancers opting to enlist qualified CPAs and accountants to help shoulder the burden instead of returning to full-time employment. However, in a chilling turn for these resilient freelancers and their trusted financial advisors, new regulations by the Department of Labor now threaten to irreparably damage the gig economy.

In late October, an Atlanta court ruled in favor of a Biden administration DOL guideline reclassifying many freelancers as full-time employees. The rule, which attempts to solve the problem of sub-par benefits that have long plagued those who are self-employed, does so by forcing companies to hire their most prolific freelancers so that they may receive employer-sponsored benefits. However, by hamstringing freelancers and employers into a work style they neither fully want, the DOL’s legislative folly risks destroying the freedom to freelance altogether. Thus, it is imperative that CPAs, accountants and other tax professionals band together with freelancers to implore the incoming administration to decisively repeal these guidelines.

The vital impact of freelance work

For millions of Americans, freelancing is a ticket to economic and geographical independence, and a way to level the playing field and uplift diverse perspectives in the workforce. None of these advantages can be easily replicated in a full-time work environment. From freelance writers broadening the perspective of publications to creatives transforming an organization’s brand, these workers infuse new energy into companies every day, in addition to contributing $1.27tn in annual earnings to the US economy.

Freelancers also contribute more in taxes than the average worker, with the addition of a 15.3% self-employment tax to fund Social Security and Medicare to the normal slate of federal, state and local tax rates paid by all full-time employees. To offset these costs and help navigate the complexities of what constitutes a deductible business expense, freelancers will often turn to a professional CPA. This is a particularly critical step considering that freelancers are audited at three times the rate of full-time employees. Thus, even as full-time employees with W2-only returns have spurned their tax preparers for online options like TurboTax, the gig economy has become an unexpected lifeline for the dwindling accounting profession.

Better solutions for freelance benefits

Despite the DOL’s misguided approach, the agency is aligned with freelancers in believing that the lack of benefits is one of the most pressing issues for freelancers today, one of the reasons why health insurance premiums are a deductible business expense on Schedule C. Without access to employer-sponsored plans, freelancers are left to fend for themselves to create a health insurance benefits package or piece together their retirement fund. They miss out entirely on many of the most prominent benefits enjoyed by full-time workers, including sick, parental and maternity leave, paid vacation, a 401(k) match and even a steady month-to-month income.

However, the accounting profession should join freelancers in imploring the next administration to let these issues be solved by the private sector, rather than through heavy-handed government action. Startups like Catch are already developing solutions to some of the biggest pain points of freelance work, including expensive health, dental and vision insurance. By acting as an administrative companion for independent contractors, Catch offers insurance rates comparable to those offered in a corporate benefits package, but for freelancers. However, in stark contrast to the DOL’s proposal, freelancers also retain their independence. If a startup can strike a balance between providing affordable benefits to freelancers while allowing them to operate independently, surely it is not too tall an order to demand that the DOL do the same.

An action plan for freelance advocacy

Almost 40% of the entire US workforce, or 64 million Americans, performed freelance work in just the past year alone. This is a figure worth celebrating not only for gig economy workers, but for every industry that benefits from a thriving freelance community, accountants and tax professionals included. However, if the DOL rule as written is allowed to remain on the books, the number of freelancers could decline precipitously in the coming years. Given the emerging, symbiotic relationship between the gig economy and their tax preparers, the accounting profession must intervene.

Taking action starts with lobbying the incoming administration for an immediate repeal of the DOL’s current rule on Inauguration Day. However, regardless of success or failure, the accounting profession should recognize its advocacy efforts are only beginning. Given the rising prevalence of the gig economy to accountants’ bottom lines, the profession should build on its momentum and push for pro-freelance legislation throughout the years to come, especially in support of self-employment tax reform efforts.

As written, the Biden administration DOL rule muddles the definition of freelance labor so that most independent contractors could conceivably be reclassified as employees. Such an expansive proposition isn’t worth the risk, and the accounting profession should join freelancers in calling for an immediate repeal in favor of a more pragmatic approach to freelance labor. To sit idly by risks negating the positive impact of a thriving gig economy on the U.S. economy and its citizens.

Accounting

GOP plans oil, gas sales to pay for Trump’s tax bill

Published

17 minutes ago

May 2, 2025

Business Finance News

House Republicans plan to raise more than $15 billion in revenue through increasing U.S. oil, gas and coal lease sales, as well as other measures, to help pay for President Donald Trump’s massive tax cut package, according to a document seen by Bloomberg News.

The document, prepared by the House Natural Resources Committee, details plans to mandate at least four sales in the coastal plain of Alaska’s Arctic Arctic National Wildlife Refuge within the next 10 years, and resume lease sales in the National Petroleum Reserve-Alaska. Republicans also plan to resume quarterly onshore oil and gas lease sales as well as mandate new offshore leases sales, according to the document.

In addition, Republicans are planning to raise revenue through required sales of coal leases and also requiring the Forest Service to conduct timber sales, while rescinding unspecified funds for agencies like the National Oceanic and Atmospheric Administration and National Park Service.

In addition, the legislation, which is slated to receive a vote in by the committee next week, includes a measure streamlining the federal permitting process for big projects, with a goal of major environmental reviews being completed in one year.

House Republicans are aiming for a total of $2 trillion in spending reductions paired with a $4.5 trillion in reduced revenue from tax cuts.

Accounting

CLA merges in Dembo Jones CPAs and Advisors

Published

13 hours ago

May 1, 2025

Business Finance News

CliftonLarsonAllen LLP, a Top 10 Firm, has added Dembo Jones CPAs and Advisors, a firm with offices in North Bethesda and Columbia, Maryland, expanding CLA’s presence in the U.S. Capital region, effective May 1.

Financial terms of the deal were not disclosed, but CLA earned over $2 billion in revenue in 2024, while Dembo Jones earned $24 million. CLA has nearly 9,000 people and more than 130 U.S. locations, while Dembo Jones has over 80 team members and two locations. CLA ranked No. 10 on Accounting Today‘s 2025 list of the Top 100 Firms.

The deal is part of CLA’s plan to grow by $1 billion through the addition of new partner firms over the next five years.

“This is such a great time for us to embrace Dembo Jones into the CLA family,” said CLA chief development officer Scott Engelbrecht in a statement. “At CLA, we understand that independence is key to innovation and growth. Our unique partnership model allows firms to retain local identity while accessing our global resources and our exceptional professionals across the country. This approach ensures that the firms that join us can continue to thrive in their markets while benefiting from the strength of a larger firm. Our friends at Dembo Jones talk about how their clients get all of Dembo Jones when they are working together. That is exactly how CLA operates, bringing all of CLA to our clients.”

Dembo Jones has offered accounting, auditing, tax, and consulting services to businesses, government agencies, organizations and individuals for over 70 years.

“Joining CLA presents an incredible opportunity for both our team at Dembo Jones and the numerous clients who depend on our specialized services,” said Dembo Jones managing partner Brent Croghan in a statement. “Our shared values and mutual dedication to serving individuals, businesses, government entities and nonprofit organizations make this partnership a natural fit. With access to CLA’s extensive national footprint, we are now better equipped to provide enhanced resources to our clients.”

Last year, CLA added Axiom CPAs & Business Advisors, based in Albuquerque, New Mexico, Engine B, a London-based AI company, and Ronald Blue and Co, a firm with offices in Atlanta; Tempe, Arizona; Knoxville, Tennessee; and Santa Ana, California.

In 2023, CLA acquired Richard, Witt & Charles in Garden City, New York; Frost & Co. in Tacoma, Washington; and Gilmore Jasion Mahler in Toledo and Findlay, Ohio. In 2022, it did a number of mergers and acquisitions, including with Hayashi Wayland in Salinas, California, Concannon Miller in Florida and Pennsylvania, and Price CPAs in Nashville, Tennessee.

Accounting

Rehmann combines with Martinet Recchia

Published

13 hours ago

May 1, 2025

Business Finance News

Rehmann, a Top 50 Firm based in Troy, Michigan, has added Martinet Recchia, a family-owned CPA firm in the Cleveland suburb of Willoughby, expanding Rehmann’s presence in Ohio, complementing its existing office in Toledo.

Martinet Recchia dates back to 1955 when it was founded by Thomas and Richard Martinet. Richard’s son Keith Martinet remains a shareholder today, while managing shareholder Joseph Recchia joined the firm in 1998. All of Martinet Recchia’s shareholders intend to stay with the firm, along with the entire staff, and the firm will continue to operate in its current location under the Rehmann name.

Financial terms of the deal were not disclosed. Rehmann ranked No. 38 on Accounting Today‘s 2025 list of the Top 100 Firms with $219.45 million in 2024 revenue. Rehmann has 60 partners and 1,099 staff, while Martinet Recchia has four partners and 26 staff.

“We’re thrilled about this mutually beneficial business combination and what it means for our clients and their organizations,” said Rehmann CEO Stacie Kwaiser in a statement Thursday. “Both firms share similar cultural values and philosophies related to client service, striving to be good community partners, and supporting the areas in which our associates live and work. The added expertise and capacity on both sides will allow us to continue maximizing client potential in Ohio and beyond.”

Martinet Recchia offers various tax and business consulting services to the construction, manufacturing and distribution, restaurant & hospitality, and professional services industries.

“Like Rehmann, we put people first,” Martinet stated. “As a small local firm, we pride ourselves on meeting regularly with our clients in person, which has inspired their loyalty over the firm’s 70 years. Similarly, we’ve always taken care to prioritize work/life balance for our staff, and it’s their commitment—in addition to our great clients—that has made us successful. We’re excited about this new chapter, and I think if my father saw where the firm was now, he would be very proud.”

“Combining with Rehmann offers more professional development opportunities for our associates who want to advance in their careers,” Recchia added. “We’re always looking for ways to better serve our clients, and this combination gives us increased capacity and broader services in a competitive market. It will still be our associates on the end of the phone offering the same quality service, but now we’re one team serving clients in the Cleveland area.”

Last year, Rehmann expanded in its home state of Michigan by adding Walker, Fluke & Sheldon in the Western part of the state. In 2022, Rehmann merged in Vestal & Wiler in Orlando, Florida, and had several M&A deals in 2018 in other parts of Michigan and Florida.