Accounting
The rise of the remote accounting firm partner
When Daren Daiga’s husband had to move to another state for his job, it looked at first like her time with CapinCrouse was over.
Daiga had worked for the Indianapolis-based firm since 2013, eventually growing into a valued senior tax manager who specialized in tax-exempt organizations. She liked the firm, the firm liked her — but then her husband’s job necessitated a move to Dayton, Ohio.
In other circumstances, Daiga would have had to start looking for work at firms in the Dayton area, but CapinCrouse was loath to let an experienced manager go and Daiga herself wasn’t keen on changing employers either. Eventually, they came to an agreement that allowed her to work as a fully remote senior manager, which she did for five years before finally being promoted to partner in 2022.
“To lose a manager who knows the work and who knows the training and who knows [how to] train people and have a big impact, that would have been difficult. … I love where I worked, so I could not imagine working anywhere else and since they were able to accommodate remote workers, even fully remote workers, well before COVID … we were able to make that transition,” she said.
Daiga is a remote partner, a designation becoming more common in the wake of the pandemic lockdowns. Like remote workers in general, remote partners at accounting firms are not necessarily new, but in recent years their numbers have certainly grown. While still rare compared to their onsite counterparts, the remote partner is no longer a novel curiosity but a key part of a changing professional landscape that, increasingly, extends beyond a firm’s local geography. Experts believe they make up about 5% of the total share of accounting firm partners; if one counts those who started as on-site partners and then went remote, the estimate grows to about 10-15%.
These leaders can be found all over the country, at firms big and small, working in a variety of different practice areas and possessed of a wide range of motivations for why they chose the path of the remote partner. Some, like Andrew Pitt, a Buffalo, New York-based tax partner with Los Angeles-headquartered Top 100 Firm GHJ, wanted to change firms and had some very specific needs that, in the end, could only be met by one over 3,000 miles away.
“I knew exactly what I was looking for, so I was targeting this specific position … In looking for firms, [a recruiter and I] decided to look outside Buffalo because we didn’t think we could find what we were looking for there,” he said, noting, “It really was the culture and diversity of leadership I was looking for.”
Tabatha Broussard, a Baton Rouge-based partner at Oklahoma-based Top 100 firm HoganTaylor, was also looking for a specific kind of practice. Having already been a partner at another firm for seven years, the shift to remote work during the lockdowns opened her eyes to the career possibilities. But she didn’t want to work remotely for just anyone— she specifically wanted a firm that matched her own expertise with the energy industry, and found that HoganTaylor was what she needed.
“I wanted the opportunity to work in the field I enjoy, which is the energy industry, and HT’s energy practice is impressively developed, stacked with exceptionally smart professionals serving exciting clients, so it was kind of like ‘check that mark right there,”’ she said.
For Vivian Gant, a partner at Florida-based De La Hoz, Perez & Barbeito, the reasons were more personal: two small children. Unlike other remote partners, she is not especially far from the office, just a half-hour drive, but the way her schedule worked with her family, it was much easier to go fully remote.
“[Younger people] maybe think public accounting is just going in and getting burnt out for a few years so it looks good on your resume, then work for a private company until you die; that is not necessarily what it can be, you can still be a mom, you can still do different things,” she said.
And sometimes people become remote partners without intending it. Tom Corfin, who lives in New Hampshire, was working at a firm in the Northeast when it was acquired in 2018 by Atlanta-based Top 100 Firm Aprio. Having already worked remotely for almost a decade prior, he was well positioned to be a leader when Aprio — which had already been supportive of remote work — leaned even harder into the position during the COVID lockdown. He was officially made partner at the beginning of January 2023. “Once the pandemic hit, I didn’t have to learn to be remote … It took me probably two solid years of figuring out how to turn the switch off, how to adjust internally, how to be outside the office, the whole mentality — most people had to figure this out during and after COVID, where I was already six years ahead of the curve,” he said.
The day to day
The remote partners we spoke with reported that, in terms of their day-to-day work, there are not that many differences between themselves and their onsite counterparts. More of their meetings are online versus in-person but much of the work is the same. This is because even on-site accountants are increasingly serving clients remotely, and even if they’re not, there is still a large degree of asynchronous communication (e.g., asking for and getting specific documentation) that generally does not require physical presence. For instance, Kevin Loiselle, a tax partner with Aprio based in the San Francisco area, noted that the firm’s German clients are handled out of the Atlanta office, which works with them remotely anyway.
“I think from a client perspective, it’s a lot of the same … Our German practice partners are based out of Atlanta and work primarily with contacts in Germany, so [the lead partner] is kind of in the same boat as me. She deals with calls primarily with clients around and in Germany,” he said, adding that his own client base primarily comes from Australia and New Zealand.
Daiga, from CapinCrouse, also said her day as a remote partner does not significantly differ from the day of an on-site one. The main difference is that, as a remote partner at a smaller firm, she does not have some of the office management responsibilities that others do. In fact, she is more struck by the differences between tax partners and audit partners than by remote versus onsite ones.
“Compared to the 20-plus audit partners, we have three tax partners, so not quite as many across the firm and clients. Because tax jobs are smaller jobs, you have more jobs you handle as a partner. But also audit partners who are on site may have some office management responsibilities I don’t have. … Otherwise, I don’t know if there’s a whole lot of difference,” she said.
Similarly, Gant, the DBP partner in Miami, said the main difference between being remote and being on-site as a partner is that it is easier to print things at the office. “The big thing there: I can print things. But that’s really the only difference. But I bought myself a big professional printer recently, so now I have that. There were also free sodas and coffee [at the office], but otherwise it was pretty much the same. I can do anything from my house that I can do from my office,” she said.
Remote partners raised similar points regarding partner meetings. None of them reported feeling especially left out of key communications and decisions among the firm leaders. Many said that this was because the partners would mostly meet online anyway, due to being dispersed among several offices. So while remote partners aren’t sitting in the conference room for partner meetings, neither are the on-site ones typically. Kimberly Hastings, a Colorado-based remote partner for LA-based HCVT, noted that this is largely due to the investment firms made in communications and collaboration technology.
“Technology is an amazing thing, so even when we have monthly partner meetings for various groups — I’m on multiple committees for the firm and I’m our practice lead — a lot of these calls are already happening via Teams or Zoom because you have people in different offices. So I work with partners out in Orange County, Encino, West LA, Westlake Village and southern Pasadena, so even if we were all in the office, we’d still be on Teams calls anyway since we all have different offices,” she said.
Not everything is exactly the same, though: Remote partners say they need to be more on top of maintaining connections than people who are in an office, seeing each other every day. Danielle McGee, a Michigan-based partner for Los Angeles-based Katz Cassidy, said that, as a remote leader who is responsible for managing remote staff, she needs to be more intentional in keeping contact with people, as there aren’t those serendipitous hallway moments in the office.
“Since I came on as a remote partner, we’ve hired a bunch of remote employees and now we have them in Nebraska, Colorado, Seattle and Texas. I tend to do a little more intentional outreach to them because I know if you don’t, it’s easy for someone to not feel connected. I probably do that more than the folks in the office,” she said, though she didn’t want to imply those on-site aren’t doing this as well. “They’re doing more outreach with folks in the office or folks who are local in LA.”
Hastings, the HCVT partner, raised a similar point, saying that as a remote partner she needs to be more proactive in maintaining communications than someone on site, though she also said on site partners also have to maintain contact with people too, so it’s not dramatically different.
“I do find I’m more intentional about connecting with my team because there isn’t seeing someone in the break room or scheduling a lunch. I didn’t want to lose that, because it’s really an amazing team and I want us to keep that … . But I’d hesitate to say that’s different from other partners since my team is spread out so much, so even if I were sitting in my office in Encino, I would still not be in the office with most people on most days,” she said.
Loiselle, the San Francisco-based Aprio partner, also said he had to slightly modify how he fulfills his staff development and coaching responsibilities, since he can’t be in the office all the time, focusing more on several large sessions a year versus lots of smaller day-to-day interactions.
“There is definitely a difference in terms of staff training and development because, obviously, I’m not in the office on a day-to-day basis where someone can just swing by and say, ‘I’ve got a question about this.’ … I do end up going to Atlanta several times a year to lead technical training for wider groups of people who all get together at our headquarters; that is one of the major differences I would see,” he said.
The future
The remote partner has gone from being almost unheard-of to appearing in firms across the country and, overall, those who currently occupy these positions see themselves as part of a wider trend. While technological enablement is one reason, another commonly mentioned factor is the talent shortage. More firms are experiencing difficulty finding qualified candidates in their local geographies, and so are increasingly opening their minds to remote workers who can be leaders in their organization.
“Talent is getting harder and harder to find in the accounting profession and the pipeline is shrinking and our clients are demanding more and more,” said Randy Nail, HoganTaylor’s CEO. “So we’ve got some good old supply and demand economics going on: Accounting firms need to serve their clients, and to do that you have to be open to finding talent in different places and figuring out how to make it work within their culture. We’re already doing that and will continue doing that, and I think other firms will as well.”
McGee raised a similar point by noting the declining number of accounting graduates but also added that there’s an increasing number of retirements in the field as well that is driving the greater acceptance of remote partners.
“Firms need to be open-minded to having employees that are remote. I think our field as a whole has to have trust in our employees to begin with. They have access to Social Security numbers and all sorts of personally identifiable information for our clients, so if we can trust our employees with that, we ought to be able to trust them to get their work done,” she said.
The Financial Accounting Standards Board met this week to discuss its projects on accounting for transfers of cryptocurrency assets and enhancing the disclosures around certain digital assets, such as stablecoins.
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During Wednesday’s meeting, FASB’s board made certain tentative decisions, according to a
At a future meeting, the board plans to consider clarifying the derecognition guidance for crypto transfer arrangements to assess whether the control of a crypto asset has been transferred.
FASB also began deliberations on the
The board decided to provide illustrative examples in Topic 230, Statement of Cash Flows, to clarify whether certain digital assets such as stablecoins can meet the definition of cash equivalents. It also decided to include the following concepts in the illustrative examples:
- Interpretive explanations that link to the current cash equivalents definition;
- The amount and composition of reserve assets; and,
- The nature of qualifying on-demand, contractual cash redemption rights directly with the issuer.
FASB plans to clarify that an entity should consider compliance with relevant laws and regulations when it’s creating a policy concerning which assets that satisfy the Master Glossary definition of the term “cash equivalents“ will be treated as cash equivalents.
“I agree with the staff suggestion to look at examples,” said FASB vice chair Hillary Salo. “From my perspective, I think that is going to help level the playing field. People have been making reasonable judgments. I agree with that. And I think that this is really going to help show those goalposts or guardrails of what types of stablecoins would be in the scope of cash equivalents, and which ones would not be in the scope of cash equivalents. I certainly appreciate that approach, and I think it has the least potential impact of unintended consequences, because I do agree with my fellow board members that we shouldn’t be changing the definition of cash equivalents, and it’s a high bar to get into the cash equivalent definition.”
“I’m definitely supportive of not changing the definition of cash equivalents,” said FASB chair Richard Jones. “I believe that’s settled GAAP in a way, and we’re not really seeing a call to change it for broader issues. I am supportive of the example-based approach. The challenge with examples, though, is everybody’s going to want their exact pattern, but that’s not what we’re doing.”
The examples will explain the rationale for how digital assets such as stablecoins do or do not qualify as cash equivalents and give a roadmap for other types of digital assets with varying fact patterns to be able to apply.
“We really don’t want to be as a board facing a situation where something was a cash equivalent and then no longer is at a later date,” said Jones. “That’s not good for anyone, so keeping it as a high bar with certain rigid criteria, I think, is fine.”
Stablecoins are supposed to be pegged to fiat currencies such as U.S. dollars and thus provide more stability to investors. “In my view, while a stablecoin may meet the accounting definition established for cash equivalents, not every one of those stablecoins in the cash equivalent classification represents the same level of risk,” said FASB member Joyce Joseph.
She noted that the capital markets recognize the distinctions and have established a Stablecoin Stability Assessment Framework to evaluate a stablecoin’s ability to maintain its peg to a fiat currency. Such assessments look at the legal and regulatory framework associated with the stablecoin, and provide investors with information that could enable them to do forward-looking assessments about the stability of the stablecoin.
“However, for an investor to consider and utilize such information for a company analysis the financial statement disclosures would need to include information about the stablecoin itself,” Joseph added. “In outreach, the staff learned that investors supported classifying certain stablecoins as cash equivalents when transparent information is available about the entities at which the reserve assets are held. Therefore, in my view, taking all of this into consideration a relevant and informative company disclosure would include providing investors with the name of the stablecoin and the amount of the stablecoin that is classified as a cash equivalent, so investors can independently assess the liquidity risks more meaningfully and more comprehensively by utilizing broader information that is available in the capital markets and its emerging information.”
Such information could include the issuer, reserves, governance and management, she noted, so investors would get a more holistic look at the risks that holding the stablecoin would entail for a given company.
The board decided to require all entities to disclose the significant classes and related amounts of cash equivalents on an annual basis for each period that a statement of financial position is presented.
Entities should apply the amendments related to the classification of certain digital assets as cash equivalents on a modified prospective basis as of the beginning of the annual reporting period in the year of adoption.
FASB decided that entities should apply the amendments related to the disclosure of the significant classes and amounts of cash equivalents on a prospective basis as of the date of the most recent statement of financial position presented in the period of adoption.
The board will allow early adoption in both interim and annual reporting periods in which financial statements have not been issued or made available for issuance.
FASB also decided to permit entities to adopt the amendments to be illustrated in the examples related to the classification of certain digital assets as cash equivalents without the need to perform a preferability assessment as described in Topic 250, Accounting Changes and Error Corrections.
The board directed the staff to draft a proposed accounting standards update to be voted on by written ballot. The proposed update will have a 90-day comment period.
Senators introduced several pieces of tax-related legislation this week, including measures aimed at improving customer service at the Internal Revenue Service, cracking down on tax evasion and curbing the carried interest tax break, in addition to efforts in the House to repeal the Corporate Transparency Act.
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Senators Bill Cassidy, R-Louisiana, and Mark Warner, D-Virginia, teamed up on introducing a bipartisan bill, the
The bill would establish a dashboard to inform taxpayers of backlogs and wait times; expand electronic access to information and refunds; expand callback technology and online accounts; and inform individuals facing economic hardship about collection alternatives.
“Taxpayers deserve a simple, stress-free experience when dealing with the IRS,” Cassidy said in a statement Wednesday. “This bill makes the process quicker and easier for taxpayers to get the information they need.”
He also mentioned the bill during a
“I’m happy to meet with the team … and do all I can to make it as good as you want it to be,” said Bisignano.
“My bill would equip the IRS with the legislative mandate to create an online dashboard so that taxpayers can monitor average call wait time and budget time accordingly,” said Cassidy. He noted that the bill would allow a callback for taxpayers that might need to wait longer than five minutes to speak to a representative, and establish a program to identify and support taxpayers struggling to make ends meet by providing information about alternative payment methods, such as installments, partial payments and offers in compromise.
“I know people are kind of desperate and don’t know where to turn for cash, so I think this could really ease anxiety,” he added. “This legislation is bipartisan and is likely to pass this Congress.”
Cassidy and Warner
“Taxpayers shouldn’t have to jump through hoops to get basic answers from the IRS — and in the last year, those challenges have only gotten worse,” Warner said in a statement. “I am glad to reintroduce this bipartisan legislation on Tax Day to ease some of this frustration by increasing clear communication and making IRS resources more readily available.”
Stop CHEATERS Act
Also on Tax Day, a group of Senate Democrats and an independent who usually caucuses with Democrats teamed up to introduce the Stop Corporations and High Earners from Avoiding Taxes and Enforce the Rules Strictly (Stop CHEATERS) Act.
Senate Finance Committee ranking member Ron Wyden, D-Oregon, joined with Senators Angus King, I-Maine, Elizabeth Warren, D-Massachusetts, Tim Kaine, D-Virginia, and Sheldon Whitehouse, D-Rhode Island. The bill would provide additional funding for the IRS to strengthen and expand tax collection services and systems and crack down on tax cheating by the wealthy.
“Wealthy tax cheats and scofflaw corporations are stealing billions and billions from the American people by refusing to pay what they legally owe, and far too many of them are getting a free pass because Republicans gutted the enforcement capacity of the IRS,” Wyden said in a statement. “A rich tax cheat who shelters mountains of cash among a web of shell companies and passthroughs is likelier to be struck by lightning than face an IRS audit, and Republicans want to keep it that way. This bill is about making sure the IRS has the resources it needs to go after wealthy tax cheats while improving customer service for the vast majority of American taxpayers who follow the law every year.”
Earlier this week. Wyden also
The Stop CHEATERS Act would provide the IRS with additional funding for tax enforcement focused upon high-income tax evasion, technology operations support, systems modernization, and taxpayer services like free tax-payer assistance.
“As Congress seeks ways to fund much-needed policy priorities and address our growing national debt, there is one common sense solution that should have unanimous bipartisan support: let’s enforce the tax laws already on the books,” said King in a statement. “Our legislation will make sure the IRS has the resources it needs to confront the gap between taxes owed and taxes paid – while ensuring that our tax enforcement professionals are focused on the high-income earners who account for the most tax evasion. This is a serious problem with an easy solution; let’s pass this legislation and make sure every American pays what they owe in taxes.”
Carried interest
Wyden, King and Whitehouse also teamed up on another bill Thursday to close the carried interest tax break for hedge fund managers that
Carried interest is a form of compensation received by a fund manager in exchange for investment management services, according to a
Under the bill, the
“Our tax code is rigged to favor ultra-wealthy investors who know how to game the system to dodge paying a fair share, and there is no better example of how it works in practice than the carried interest loophole,” Wyden said in a statement. “For several decades now we’ve had a tax system that rewards the accumulation of wealth by the rich while punishing middle-class wage earners, and the effect of that system has been the strangulation of prosperity and opportunity for everybody but the ultra-wealthy. There are a lot of problems to fix to restore fairness and common sense to our tax code, and closing the carried interest loophole is a great place to start.”
Repealing Corporate Transparency Act
The House Financial Services Committee is also planning to markup a bill next Tuesday that would fully repeal the Corporate Transparency Act, which has already been significantly
If enacted, the repeal would eliminate beneficial ownership reporting requirements, removing a transparency measure designed to help law enforcement and national security officials identify who is behind U.S. companies.
“This repeal would turn the United States back into one of the easiest places in the world to set up anonymous shell companies, something Congress worked for years to fix,” said Erica Hanichak, deputy director of the FACT Coalition, in a statement. “These entities are routinely used to facilitate corruption, financial crime, and abuse. Rolling back the CTA doesn’t just weaken transparency, it signals to bad actors around the world that the U.S. is once again open for illicit business.”
The Internal Revenue Service rarely penalizes taxpayers who have high balances in foreign bank accounts and fail to file the proper forms, according to a new report.
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The
Taxpayers with specified foreign financial assets that meet a certain dollar threshold are also required to report the information to the IRS by filing Form 8938. Failure to file the form can result in penalties of up to $60,000. However, TIGTA’s previous reports have demonstrated that the IRS rarely enforces these penalties.
The IRS created an Offshore Private Banking Campaign initiative to address tax noncompliance related to taxpayers’ failure to file Form 8938 and information reporting associated with offshore banking accounts, but it’s had limited success.
Even though the initiative identified hundreds of individual taxpayers with significant foreign bank account deposits who failed to file Forms 8938, the campaign only resulted in relatively few taxpayer examinations and a small number of nonfiling penalties. The campaign identified 405 taxpayers with significant foreign account balances who appeared to be noncompliant with their FATCA reporting requirements.
The IRS used two ways to address the 405 noncompliant taxpayers: referral for examinations and the issuance of letters to them.
- 164 taxpayers (who had an average unreported foreign account balance of $1.3 billion) were referred for possible examination, but only 12 of the 164 were examined, with five having $39.7 million in additional tax and $80,000 in penalties assessed.
- 241 noncompliant taxpayers (who had an average unreported account balance of $377 million) received a combination of 225 educational letters (requiring no response from the taxpayers) and 16 soft letters (requiring taxpayers to respond). None of the 241 taxpayers were assessed the initial $10,000 FATCA nonfiling penalty.
“While taxpayers can hold offshore banking accounts for a number of legitimate reasons, some taxpayers have also used them to hide income and evade taxes,” said the report.
Significant assets and income are factors considered by the IRS when assessing whether taxpayers intentionally evaded their tax responsibilities, the report noted. Given the large size of the average unreported foreign account balances, these taxpayers probably have higher levels of sophistication and an awareness of their obligation to comply with the law.
TIGTA believes the IRS needs to establish specific performance measures to determine the effectiveness of the FATCA program. “If the IRS does not plan to enforce the FATCA provisions even where obvious noncompliance is identified, it should at least quantify the enforcement impact of its efforts,” said the report. “This will ensure that IRS decision makers have the information they need to determine if the FATCA program is worth the investment and improves taxpayer compliance.
TIGTA made three recommendations in the report, including revising Campaign 896 processes to include assessing FATCA failure to file penalties; assessing the viability of using Form 1099 data to identify Form 8938 nonfilers; and implementing additional performance measures to give decision makers comprehensive information about the effectiveness of the FATCA program. The IRS disagreed with two of TIGTA’s recommendations and partially agreed with the remaining recommendation. IRS officials didn’t agree to assess penalties in Campaign 896 or with implementing performance measures to assess the effectiveness of the FATCA program.
“From our perspective, TIGTA’s conclusions regarding IRS Campaign 896 are based, in part, on a misguided premise and overgeneralizations, including the treatment of ‘potential noncompliance’ as tantamount to ‘egregious noncompliance’ that warrants a monetary penalty without contemplating the variety of justifications that may exempt a taxpayer from having to file Form 8938,” wrote Mabeline Baldwin, acting commissioner of the IRS’s Large Business and International Division, in response to the report.
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