Approximately eight years ago, I learned about “Exponential Organizations” while attending Abundance 360, an annual conference organized by Peter Diamandis, author of “Abundance,” founder of X-Prize, and co-founder of Singularity University. Dan Sullivan’s Strategic Coach team, with conference experience, helped with the organization. That conference has grown tremendously over the years and provided insights into the convergence of various technologies, especially the future framework for organizations, including CPA firms. I have always looked outside the CPA profession for trends that will improve our profession.

Open ExO is relevant to CPA firms and their best clients. (I will explain in more detail about best clients later.) At Boomer, we have integrated much of the ExO framework into our consulting practice and Boomer Circles over the past eight years. This year, I decided to get serious and became certified as an ExO consultant. These attributes align with Boomer Consulting’s leadership, talent, technology, process and growth pillars. Let me assure you that becoming an ExO requires a unique-ability team. One individual does not have all the skills. That is true at Boomer and at your CPA firm. It is a team sport!

As CPA firms navigate an increasingly complex and competitive landscape, the need for scalable, efficient and innovative approaches to growth has never been clearer. Enter the concept of the “Exponential Organization” — a framework developed to help businesses achieve tenfold growth by leveraging modern technology and strategic principles. For CPA firms, adopting ExO attributes isn’t just a way to boost profits; it’s a pathway to attract top-tier talent and engage clients looking for forward-thinking solutions.

The ExO framework comprises 11 key elements designed to create a sustainable, high-growth environment. While each attribute is unique, they collectively build a powerful, adaptable infrastructure that can position CPA firms and their best clients for long-term success. Over the past eight years, I presented the concept to numerous firms and immediately the resistance came from within firms about how they didn’t want to be “10x” and they could not find the talent. This is part of the firm immune system that resists change.

Change the question and the ExO framework immediately becomes relevant. How do firms add 10x value to their best clients? Many firms focus too little on their top 20% of clients (who produce 80% of their revenue) and spend too much time on the other 80%. Focus on the top 20% and transformation utilizing the ExO framework serves as an inspirational and guiding roadmap. The good news is that most firms only need to focus on three or four of the attributes to transform, while startups need to focus on all the attributes.

Defining the ‘why’

At the heart of any Exponential Organization is its “massive transformative purpose” — a compelling reason for existing that goes beyond profits. For CPA firms, an MTP could be “Designing firms and their clients for success in the 21st century and beyond.”

An MTP serves as a guiding star for the firm, aligning team members, processes and services with a shared vision. This clarity of purpose is a magnetic force for talent, especially for young professionals seeking meaningful work in values-driven environments. When clients see a firm operating with purpose, it builds trust, strengthens relationships, and differentiates the firm in a crowded marketplace. Once you have defined your MTP, the attributes accelerate the execution of your vision.

1. Staff on demand: Flexibility with high-quality freelance talent. Traditional CPA firms often carry fixed overhead in the form of full-time staff. However, by incorporating a “staff on demand” model, firms can leverage a network of skilled freelancers and contractors for specific projects, allowing flexibility and cost efficiency.

Engaging external experts can reduce payroll costs, especially during off-peak seasons, and attract niche talent without the full-time commitment. This also allows firms to expand their services rapidly as they respond to new market demands. Additionally, the firm’s workforce can scale up or down as needed, keeping operational costs lean and profit margins robust.

2. Community and crowd: Harnessing collective knowledge and resources. An ExO thrives on the knowledge, resources and insights of a wider community. By cultivating a network of trusted advisors, clients and partners, CPA firms can build an active community around their services. For example, firms can create virtual communities where clients and advisors engage in real time to share insights, pose questions, and resolve issues. This community-oriented approach strengthens client relationships and provides valuable feedback, driving continuous improvement in service delivery.

Beyond clients, firms can harness the expertise of crowds to improve services and internal processes — processes that allow employees and stakeholders to suggest and vote on innovations, leading to crowdsourced solutions that benefit the entire firm.

3. Algorithms: Driving efficiency and consistency. Incorporating algorithms is a powerful way for CPA firms to automate repetitive tasks, streamline workflows, and reduce human error. For instance, automated data extraction can simplify tax preparation by gathering financial data directly from clients’ systems, reducing the time spent on data entry and review.

Algorithms can also aid in predictive analytics for cash flow management, resource allocation, and client advisory services. By leveraging these technologies, CPA firms not only improve efficiency and accuracy, but can also shift focus to higher-value tasks such as advisory services, thereby increasing client value and profitability.

4. Leveraging assets: Shifting from ownership to access. ExO firms often move away from owning physical assets, instead opting for a shared or leased approach to minimize overhead. For CPA firms, leveraging digital tools and cloud-based platforms provides the same level of functionality without the burden of infrastructure costs.

By utilizing software-as-a-service solutions, CPA firms can avoid the hefty upfront costs of software and hardware, instead paying a manageable subscription fee for flexible access. This keeps operational costs low while ensuring the firm has access to the latest technology, all without the hassle of maintenance and upgrades.

5. Engagement: Cultivating a connected workforce and client base. Employee and client engagement play a central role in the ExO success. Digital platforms like Asana and Microsoft Teams allow for seamless internal communication, fostering collaboration and quick information sharing.

Firms can take engagement a step further by gamifying certain tasks and projects, and rewarding employees for milestones achieved. For clients, engagement can mean creating user-friendly client portals where they can track their progress, upload documents, and receive real-time updates.

Engagement isn’t only about improving experiences; it’s about creating a culture of transparency and trust. When employees and clients feel connected and informed, they are more likely to remain loyal and invested in the firm’s success.

6. Interfaces: Streamlining client and employee interaction. A smooth interface is crucial for managing the complexities of client-firm interactions. Custom portals, for example, can allow clients to access their data, track project statuses, and communicate with advisors in real time.

For CPA firms, the interface attribute focuses on making it easy for clients and employees to navigate systems and processes. A well-designed interface for employees can improve efficiency by making tools and information readily accessible, while clients enjoy a hassle-free experience that adds value to the firm-client relationship.

7. Dashboards: Real-time metrics for data-driven decisions. ExO firms rely on dashboards to monitor their progress toward key performance indicators and goals. Dashboards allow CPA firms to visualize their data in real time, helping partners and managers track client projects, financial metrics, and employee performance.

For example, a dashboard displaying revenue per full-time equivalent provides valuable insights into profitability and efficiency. By monitoring these KPIs, CPA firms can make informed, agile decisions, identifying areas for improvement and optimizing resource allocation.

8. Experimentation: Fostering a culture of innovation. The willingness to experiment is essential for innovation. CPA firms can foster a culture of experimentation by encouraging employees to test new ideas without fear of failure. This could mean piloting a new client service model, testing emerging software, or exploring AI-driven tools for client engagement.

The goal is to embrace agile principles — adapt, test, learn and improve. Small, iterative experiments allow firms to discover what works before investing heavily, reducing risk while positioning the firm as a leader in modern, innovative services.

9. Autonomy: Empowering teams to act. In a traditional CPA firm, hierarchical structures can limit innovation. ExO firms, by contrast, embrace decentralized decision-making, allowing teams to act autonomously in their respective domains. This empowers team members to address client needs proactively, make faster decisions, and deliver services that are both timely and relevant.

Empowered employees are more likely to feel satisfied and engaged, reducing turnover and attracting top talent. Moreover, autonomy helps foster a client-centered approach that enhances service quality and customer satisfaction.

10. Social: Improve teamwork, collaboration and communications. Social technologies in business incorporate the many communication tools that make conversations in the workplace smoother, quicker and way more effective. They encompass communication tools (such as social messaging and discussion forums), collaboration tools (such as cloud-based document management for sharing and real-time editing), and workflow tools (to manage tasks and activity streams.)

Implementing the ExO framework

Transitioning to an ExO model is a journey that often takes 18 to 36 months, depending on the firm’s size, existing infrastructure, and willingness to change. CPA firms can start small, experimenting with one or two attributes before gradually integrating more. Success depends on strong leadership, a shared vision, and an actionable game plan.

The ExO model isn’t just about growth for growth’s sake. It’s about building a firm that can thrive in a rapidly changing environment, delivering exceptional value to clients and creating a work environment where talent can flourish. CPA firms that embrace ExO attributes position themselves as agile, innovative and resilient, equipped to drive profit growth while remaining attractive to both clients and employees.

In conclusion, ExO attributes offer CPA firms a roadmap for transformation.

By adopting an MTP, leveraging assets smartly, embracing staff on demand, and fostering an environment of experimentation and autonomy, CPA firms can enhance profitability, attract top talent, and create enduring client relationships. In a world where change is constant, the ExO model provides a blueprint for sustainable success and a competitive edge in the evolving professional services landscape.

The Internal Revenue Service declined to commit to expanding its Direct File free tax preparation program nationwide in response to a report from the Government Accountability Office, as the program comes under threat from Republican lawmakers who want to shut it down.

The report, released Thursday by the GAO, found the IRS successfully pilot tested the Direct File program last tax season in a dozen states. The IRS said earlier this year that it would make Direct File a permanent option next tax season and double its reach from 12 to 24 states in 2025.

However, the program has attracted the opposition of Republican lawmakers and the commercial tax prep software industry. Last week, a group of 29 GOP members of Congress sent a letter to President-elect Donald Trump urging him to end the Direct File service. The IRS is already facing the likelihood of steep budget cuts next year. The continuing resolution that Congress will need to pass by this weekend to avoid a government shutdown includes a $20 billion cut in the IRS budget.

IRS commissioner Danny Werfel has been a major proponent of the Direct File effort, but Trump has already named a new IRS commissioner, Billy Long, three years before the end of Werfel’s term in November 2027. Werfel declined to comment on whether he plans to resign during a press conference last week. 

The GAO report found the IRS is already behind schedule with recruiting and training customer service agents to help taxpayers use it in the 24 states where Direct File is slated to be available next tax season, due in part to insufficient coordination among various IRS offices. 

The IRS limits participation in the Direct File program to taxpayers who live in certain states, facilitating coordination between federal and state tax filing. However, the GAO found the IRS could face challenges in reaching agreements with all 50 states, raising equity concerns for taxpayers who are unable to access Direct File due to where they live.

Last tax season, during pilot testing, the IRS accepted 140,803 Direct File returns in the 12 states where it was available, helping taxpayers with lower incomes fulfill their tax filing obligations. Taxpayers reported that Direct File was an easier tax preparation method than they had previously used, according to the report, and that factor contributed to the IRS’s decision to make Direct File a “permanent” option.

The IRS is planning to expand the scope of taxpayers who can use Direct File in 2025 by adding support for the premium tax credit for health insurance coverage under the Affordable Care Act, along with other tax provisions, and by allowing residents of the additional 12 states to use the federal Direct File system. 

The report also looked at the online tax filing systems used by some foreign tax authorities, including Australia, Belgium, Estonia, France, Ireland and New Zealand, as well as the U.S. territory of Puerto Rico, and found they prepopulate their taxpayers’ tax returns with information already on file, such as wages reported by employers. The IRS started offering limited prepopulation in April 2024 during the pilot phase of testing Direct File. IRS officials told the GAO they are considering additional prepopulation of taxpayer data but are still in the early stages of planning. Identifying additional data for prepopulation in Direct File and developing a plan for testing its accuracy could enable the IRS to reduce taxpayer burden, the GAO noted.

The GAO made four recommendations in the report to the IRS, including improving coordination among relevant offices to ensure the recruitment of customer support employees, opening Direct File to all eligible taxpayers in the future, and identifying additional data that could be prepopulated in Direct File and testing its accuracy. 

The IRS agreed with three of the GAO’s recommendations, but neither agreed nor disagreed with its recommendation to continue coordinating with state revenue agencies to expand access to Direct File and, as necessary, take steps to ensure the availability of the federal Direct File program to eligible taxpayers in all 50 states.

“We acknowledge GAO’s interest in seeing Direct File offered nationwide with expanded eligibility for taxpayers with more complex tax situations, and your recognition of the challenges we continue to explore in the expansion of Direct File,” wrote IRS deputy commissioner Douglas O’Donnell in response to the report. “The complex and nuanced nature of our nation’s tax laws require careful thought and consideration before support for any additional tax provisions can be added to Direct File to ensure nothing compromises its accuracy or usability for taxpayers.”

Expatriate advocacy groups are applauding legislation introduced this week that would implement a residence-based taxation system for U.S. citizens living overseas.

Rep. Darin LaHood, R-Illinois, a member of the tax-writing House Ways and Means Committee, introduced the Residence-Based Taxation for Americans Abroad Act on Wednesday, a bill that would implement a residence-based taxation system for U.S. citizens currently living overseas.

The bill would enable Americans living overseas to elect to be treated as a nonresident American, allowing them to be subject to U.S. tax only on U.S.-sourced income and gains.

“This is a non-partisan issue that impacts U.S. citizens with roots in districts across the country. In today’s world, Americans choose to live and work abroad for a host of reasons, and that does not mean that they should be subject to more onerous tax and compliance burdens,” LaHood said in a statement Wednesday. “I look forward to working with President-elect Trump and my House colleagues on both sides of the aisle to modernize our Tax Code to ensure Americans are not punished for living and working abroad.”

The issue received more attention this past fall during the election campaign when Donald Trump told the Wall Street Journal, “”I support ending the double taxation of overseas Americans.”

According to recent estimates, over 5 million U.S. citizens are currently living abroad, including both Americans who were born and raised in the United States but have since moved abroad indefinitely, as well as “accidental Americans,” or individuals who hold dual citizenship in the United States and a foreign country but are unaware of their status as U.S. citizens.  The U.S. is the only major country that uses citizenship-based taxation, levying taxes on individuals regardless of where they live or whether they earn income in the U.S.

The bill establishes an elective process for a U.S. citizen living abroad to be treated as a non-resident without having to renounce his or her U.S. citizenship. Under this new tax regime, an electing taxpayer would be subject to U.S. tax only on U.S.-sourced income and gains (such as income from ownership in a U.S. business), distributions from U.S. retirement and deferred compensation plans, income from assets physically located in the U.S. (such as rent from real-estate investments), and other U.S.-sourced income or gains.

The electing individual would be treated for tax purposes like a foreign individual residing outside the United States with U.S.-sourced income.

An electing individual would need to certify compliance with U.S. tax obligations for the five years prior to the election date, with exceptions for certain existing, long-term Americans abroad.

Once the election is made, it would be effective for the current and all future taxable years until terminated (either by the non-resident American self-withdrawing the election or if the individual again becomes a U.S. resident for tax purposes).

Since the election is intended for Americans living abroad over the long term, the bill requires the non-resident American to live abroad for at least three years from the election date or the election would be reversed entirely.

For purposes of Foreign Account Tax Compliance Act only, a non-resident American would be able to apply to the IRS for a certificate of non-residency to use with foreign financial institutions.

By allowing the non-resident American to establish that he or she is not a “specific United States person,” foreign financial institutions would not be required to undertake burdensome reporting requirements under FATCA, which frequently discourage them from offering banking services to Americans living and working abroad.

Similarly, the non-resident American would be exempt from certain reporting requirements (and substantial associated penalties) with respect to foreign assets and transactions, including Foreign Bank and Financial Accounts Reports, or FBARs.

To help ensure fiscal balance and prevent abuse, the electing individual must also pay a departure tax on deferred income, with certain exceptions.

An election would require the individual to pay a departure tax based on deferred income, treating all property as if sold for fair market value on the day before the election with the gains and losses taken into account for purposes of determining the departure tax.

Once the departure tax is paid, the individual’s basis in each asset subject to tax would be the fair market value (stepped up basis).

The bill provides three exceptions to the departure tax, for an individual who:

• Has a net worth (i.e., fair market value of all assets over liabilities) of less than the applicable estate tax exemption amount ($13.61 million for 2024, $13.99 million for 2025); or
• Is a tax resident of a foreign country where the individual has regularly, normally, or customarily lived for three of the past five years, and such individual certifies that he or she has been in compliance with U.S. tax requirements for the three years prior to the bill’s introduction; or
• Has not been a U.S. resident at any time since turning 25 years old or after March 28, 2010 (date that FATCA was adopted) through the date of enactment of the bill.

Expat support

The bill has received support from expatriate advocacy organizations, including American Citizens Abroad and Tax Fairness for Americans Aboard. 

“This long-awaited legislation is a critical step forward in bringing about something ACA has worked hard to achieve over many years,” said ACA executive director Marylouise Serrato in a statement. “The bill builds on Congressman [George] Holding’s Tax Fairness for Americans Abroad Act of 2018 and we’re pleased to note, includes multiple features of ACA’s RBT modeling in our Side-by-Side Analysis dated 2022 and studies.” 

She pointed out that the introduction of LaHood’s legislation aims to set the groundwork for tax language that would ultimately be included in a new bill in the next Congress. It’s not expected to be passed before the current Congress recesses. 

The ACA has drafted a side-by-side analysis of Congressman LaHood’s “Residence Based Taxation of Americans Abroad Act” which provides an overview of the structure of the bill and addresses many of the details. It describes not only what is in the bill but also what is not.

Some of the main aspects of the legislation include:

• U.S. citizens, but not “green card” holders, residing overseas (newly called “nonresident U.S. citizens”), in general, would be removed from the category of individuals subject to U.S. income tax and taxed like nonresident aliens (foreign individuals).
• Individuals need to make a one-time election and continually meet residency and other requirements.
• Electing individuals must certify under penalty of perjury that they have met all tax requirements for the five preceding taxable years and submit all required evidence.
• Individuals resident in a so-called “tax haven” country can qualify for elective RBT.
• Foreign banks can treat individuals who elect RBT as not subject to FATCA reporting rules provided they obtain a certificate of non-residency and give a copy to the bank. (This is similar to treatment of individuals who renounce US citizenship and file a Form 8854.
• There is a tax, commonly called a “transition tax”, on deferred income of certain individuals electing to be subject to the new RBT rules. The tax applies to a deemed sale of all property. Individuals with a net worth not exceeding $13.6 million ($27.2 million-married couples) are excluded. Tied to estate tax unified credit. These amounts revert to $5 million or approximately $7 million when adjusted for inflation, if the Tax Cuts and Jobs Act is not extended.  
• There are a number of exceptions, including Individual Retirement Accounts (IRA)s, which will not be subject to “transition tax.”
• A special rule, a type of “grandfather” rule, will exempt many Americans residing abroad from the transition rules.

The National Taxpayers Union also praised the bill. NTU president Pete Sepp, an advisor to Tax Fairness for Americans Aboard, which helped LaHood develop the legislation, expressed its support:

“Americans living abroad face some of the toughest financial and compliance burdens that the U.S. tax system can possibly inflict,” Sepp said in a statement. “It is long past time that American tax laws deliver fairness and relief for these citizens. Congressman LaHood deserves praise from all American taxpayers, not just those living overseas, for developing this tax reform in collaboration with TFFAA and other organizations so quickly and holistically. Now taxpayers have a head start for 2025 on addressing a problem that prominent Democrats as well as Republicans (including President-elect Trump) have acknowledged. With this legislation, we have a very effective tool for the job of righting a great wrong for taxpayers.”

LaHood worked closely with Tax Fairness for Americans Abroad in drafting the bill. TFFAA is a U.S. nonprofit organization whose board members have deep personal experience navigating the pitfalls of U.S. tax and financial services laws that affect Americans abroad. The group’s sole mission is to advocate for a U.S. tax system for Americans abroad that is based on residence and source, not citizenship.

“For the first time in our lifetimes, Americans abroad can see the light at the end of the long, dark tunnel that has cost them huge amounts in accounting fees, ruined relationships, and made it impossible for them to live normal lives,” said Brandon Mitchener, executive director of Tax Fairness for Americans Abroad, in a statement. “We thank Mr. LaHood for his leadership and look forward to working with him to collect feedback on this non-partisan approach and to help advance the bill to the president’s desk next year.”