Blog Timeline – Page 72

News

Pumping Up the CPA Pipeline with AICPA Legacy Scholars Program

Post author By FFC
Post date February 19, 2016

Pumping Up the CPA Pipeline with AICPA Legacy Scholars Program

College can be very expensive – I’ve got reams of cancelled checks to my student loan provider to prove it – but it’s also the best way to increase one’s chances of economic mobility. A college degree is essential if you’re planning to earn a CPA license.

The AICPA has long been committed to ensuring that there is a strong supply of talented CPAs in the pipeline to help the profession continue to meet the needs of U.S. capital markets. One of the ways the AICPA does this is through our AICPA Legacy Scholars Program.

The program, established in 2011, awards recipients with a one-year scholarship. It uses on-campus service work to help them develop the soft skills, including leadership and communications, needed to thrive in the accounting profession. Scholarship recipients plan, promote and execute specific on-campus events each semester that promote the value of the profession to others. To date, more than 300 students have participated in the AICPA Legacy Scholars program

The AICPA Legacy Scholars program comprises four distinct awards:

AICPA/Accountemps Student Scholarship

AICPA Foundation Two-Year Transfer Scholarship

AICPA John L. Carey Scholarship

AICPA Scholarship for Minority Accounting Students

The AICPA recently announced that the AICPA Legacy Scholars application is now available for the 2016-2017 school year. The deadline is April 1.

I sat down with Samantha Mitchell, who is closely involved in the day-to-day management of the AICPA Legacy Scholars program, to find out more details about the program and additional insights for students.

James Schiavone: What role do on-campus events play in the AICPA Legacy Scholars Program? Why are those important?

Samantha Mitchell: As recipients of one of the AICPA Legacy Scholarships, our Scholars not only receive financial support but they are building and strengthening their soft skills. Through the process of planning and executing on-campus events, the Scholars are developing their communication, time-management and leadership skills. Completing these projects will better position them for life after graduation by giving them experience many of their peers won’t have.

JS: How has the AICPA Legacy Scholars Program evolved over the years?

SM: Great question! We are always looking for ways to improve and enhance the program. One recent change was shifting the projects our Scholars perform to on-campus events that talk about the possibilities of a career in accounting and the benefits of the CPA. This change gave us the opportunity to unify the program, and allowed us to provide our Scholars with additional on-message resources to help their events be successful.

JS: AICPA Legacy Scholars are Student Affiliate Members of the AICPA – what does that mean?

SM: The AICPA is the leading professional organization for CPAs. Being an AICPA Student Affiliate Member means students are part of that network. They get access to content to help them reach their goal of becoming a CPA. Plus, they’ll have exclusive scholarship application opportunities, discounts on conferences and special products. And luckily for them, it’s free to any student currently enrolled at a 2- or 4-year college or university.

JS: Anything you would like to add?

SM: If you’re planning to pursue your CPA, want to enhance your soft skills and would like the support of the AICPA behind you – check out the AICPA Legacy Scholarship application! Applications are currently being accepted online. You can view the full details and eligibility requirements at ThisWayToCPA.com/AICPAScholars.

James Schiavone, Senior Manager – Public Relations, American Institute of CPAs

CPAs Well-Positioned to Help Manage Cybersecurity Risk

Post author By FFC
Post date February 18, 2016

CPAs Well-Positioned to Help Manage Cybersecurity Risk

Cybersecurity is becoming a critical issue as consumers increasingly entrust their most confidential information – including Social Security numbers, tax identification numbers and financial information – to companies that store this data electronically. As companies look for third-party assessment and verification of their cybersecurity risk management program, CPAs are well-positioned to provide these services – and the more comprehensive definition of attest that many states have adopted ensures that only CPAs can provide cybersecurity attest services in accordance with the AICPA’s high standards.

Attest services are those services that are limited to licensed CPAs and can only be performed by licensees through CPA firms. They include audits, reviews of financial statements and examinations of prospective financial information.

In 2014, the AICPA and the National Association of State Boards of Accountancy released a more comprehensive definition of attest in the Uniform Accountancy Act (UAA) that restricts all services performed under the AICPA’s Statements on Standards for Attestation Engagements to CPAs – including attest services like SOC 1^®and SOC 2^® on security, availability and privacy controls. Under the previous definition, only services performed on financial statements were restricted to CPAs.

Thirty U.S. jurisdictions have already adopted the new comprehensive UAA definition of attest, and more states are looking to do so in 2016. Lawmakers realize that allowing non-CPAs to issue reports using AICPA standards and language associated with CPAs presents a threat to the public interest. The profession provides a basis for the public to expect competence, expertise, quality and regulatory oversight. When non-CPAs utilize AICPA standard reporting language, there is a risk that the public will be misled into believing the same oversight and quality control is being applied.

Oversight is vital because as the amount of information stored digitally increases, so too does the amount of cybercrime. The Ponemon Institute forecasts an 82% net increase in cybercrime over the next six years. In December, President Obama signed the Cybersecurity Information Sharing Act into law in an effort to prevent data breaches and incentivize information sharing. The Commodity Futures Trading Commission (CFTC) also recently issued proposed rules on cybersecurity that would require companies to produce a standardized summary of cybersecurity test results. Currently, there is no single approach or professional standard for security assessment services. CPA firms providing attest services could help companies meet new regulations like those proposed by the CFTC.

In fact, CPA attest services have the potential to be the marketwide go-to for evaluating cybersecurity risk management programs, and the updated definition of attest protects the public by restricting attest services to CPA firms. Given the sensitive nature of the data stored by businesses today, it is essential to have a high level of independence, technical skills and objectivity when assessing the security surrounding consumer information. Attestation services all meet a set of common standards. Companies can be confident that CPAs using profession standards are complying with the AICPA Code of Professional Conduct, meeting required technical training and proficiency, maintaining independence and ensuring there is a satisfactory amount of evidence before expressing an opinion in the report. While it is management’s final responsibility to ensure consumer data are protected, an audit firm’s attestation services can provide an objective assessment and allow a company to evaluate its cybersecurity risk management program, as well as its capability to recognize and respond to data breaches.

As cybersecurity concerns continue to grow, CPAs have an opportunity to lend their professional expertise and standards to a new set of services. The accounting profession is best situated to step in and provide the independent third-party verification so many companies are seeking regarding cybersecurity – and the updated definition of attest protects the public by mandating that only CPAs guided by strict professional standards and who are party to appropriate oversight can provide these services. Learn more about the role CPAs can play in the cybersecurity landscape and access news and information at the AICPA’s new Cybersecurity Resource Center (aicpa.org/cybersecurity). Also, an upcoming webcast, February 26, 2016, from 1:00 to 2:00 pm EST, discusses cybersecurity from a governance and audit committee perspective.

Julia Morriss, Project Administrator, State Regulatory and Legislative Affairs. Julia Morriss monitors and tracks state legislation and regulation that impacts the accounting profession. She holds a Bachelor’s Degree from American University’s School of Public Affairs, with a minor in Accounting.

Cybersecurity courtesy of Shutterstock.

Two Lies & One Truth about Personal Financial Planning

Post author By FFC
Post date February 16, 2016

Two Lies & One Truth about Personal Financial Planning

Friends and colleagues ask me all the time, “Why do you specialize in personal financial planning (PFP)?” That’s easy to answer, but let’s see if you can figure it out based on a game you’ve probably heard of: two truths and a lie, or in this case, two lies and one truth.

Lie #1: PFP is only about product sales and investments.

Clients are looking for more than tax advice and tax planning. Based on my experience of working with clients, as well as networking with leading CPAs who offer financial planning and those who hold the CPA-exclusive Personal Financial Specialist credential, what clients really want is integrated advice on all of their financial affairs. This includes tax, estate, retirement, investment and risk management/insurance planning.

If you stop to think about it, any CPA is already offering 90% of what it takes to specialize in PFP; the missing link is the 10% devoted to integration. In some cases, there may be a product need such as insurance or investments, but the products are determined and driven by the financial planning process. Many successful CPA financial planners do not sell products.

Today, clients are more sophisticated and their needs are more complex. As a result, I feel they are outgrowing advisors who only manage investments or offer financial products without the education, independence and professionalism CPAs provide using an integrated, client-centered approach. By considering what individual, family and business-owner clients are already asking about beyond tax, including educating children, transferring wealth, protecting assets and funding retirement, any CPA can increase his or her value to the client.

Lie #2: CPA financial planners are not offering financial services; they’re offering tax and accounting.

If you’ve set up shop in a storefront and only want to offer tax prep, then you’re right; you’re not going to offer financial services. However, I bet you’re already offering PFP services, but you might not realize it.

Here’s a simple example. We know a tax return for a client is more than just numbers; it’s a way to identify some key life planning elements to meet financial goals. So instead of filing the return and moving on to the next client during tax season, recommend a get-together over the summer to discuss some planning options. Dig deeper into the questions your client has about retirement funding, protecting assets, transferring wealth, paying for college and more. The information from the client’s tax return will provide you with most of the information you require to prepare a financial plan.

There is a lot of great help available from the AICPA’s PFP section, including resources and learning opportunities like webcasts and the annual Advanced PFP conference.

You may also want to download a free checklist to help you analyze and identify key issues to consider as you prepare, review, and discuss your individual tax returns with clients.

Truth: CPA financial planners have a fiduciary duty to their clients.

We all took an oath at the beginning of our careers to uphold the highest standards and obey the AICPA Code of Professional Conduct. The AICPA’s Statement on Standards in Personal Financial Planning Services is built on the cornerstone of the CPA profession – the public interest – and enhances the consistency and rigor that CPAs are known for in the financial planning discipline.

The bottom line is this: we have to do the right thing for our clients regardless of how it impacts us, the clients’ advisors. As a CPA, you should position yourself as the advisor of choice; the market is evolving rapidly, clients expect more and there are more competitors for business.

I hope by now it’s evident why I specialize in PFP. Helping clients realize their financial dreams is fulfilling work, offering a tremendous opportunity to open up new revenue streams for your practice and increase the retention of clients and staff.

Tom Trainor, CPA, CA, Hanover Private Client Corporation. Tom is managing director of Hanover Private Client Corporation in Toronto, Canada. He is a member of the AICPA PFP Executive Committee.

Personal financial planning list courtesy of Shutterstock.

Gaming for Change: How Technology is Changing Financial Literacy

Post author By FFC
Post date February 15, 2016

Gaming for Change: How Technology is Changing Financial Literacy

With the financial landscape shifting seemingly every year, it comes as no surprise that consumer finance tools are also transforming and becoming more necessary. This is especially true when it comes to educating younger generations, and the AICPA’s Feed the Pig campaign knows this all too well.

Since the campaign’s launch in 2006, the promotion of our tools evolved from focusing on TV, radio spots and other traditional media to instead looking to the digital space. As much as this shift has followed advancements in technology, it has also tracked the developing needs of our audience. Young adults look to social media for socialization, news, advice, just about everything. Feed the Pig has taken our message and resources to where our target audience is already: Facebook, Twitter, Pinterest, Tumblr, and now Snapchat. Through these platforms, we can reach hundreds of thousands of people who are in need of personal finance tips.

Last week, Feed the Pig unveiled its newest endeavor with the Ad Council and Games for Change: the Feed the Pig Game Design Challenge. This challenge invites designers and commercial game studios to submit ideas for digital game concepts that will help educate the target audience, young adults ages 25-34, on the importance of saving for the future in a fun and approachable way. We hope the results of this challenge will give young adults one more tool in their arsenal that helps them realize both the importance and possibility of saving.

Feed the Pig has continually strived to engage audiences by bringing fun to learning about finances. How do you help engage your clients who are resistant to establishing good financial habits? What do you think is the most important habit young adults can develop now to help ensure a lifetime of financial success?

Samantha Delgado, Manager-Communications and Consumer Education, American Institute of CPAs.

As Estate Basis Deadline Looms, Executors’ To-Do List Spirals

Post author By FFC
Post date February 11, 2016

As Estate Basis Deadline Looms, Executors’ To-Do List Spirals

Who thinks being an executor (or trustee) of an estate is a glorified and envied position? Have you always dreamed of being an executor and having that wonderful title – and I guess a few fees? Have you ever served as an executor or trustee and wished to never be in that role again?

In case you didn’t know it already, executors have many duties and responsibilities, including:

Setting up a bank account for incoming funds and paying any ongoing bills;

Maintaining property until it can be distributed or sold, and then distributing assets and disposing of other property;

Dealing with the probate court – filing the will and an inventory of the estate’s assets with the probate court, and representing the estate in court; and

Dealing with liabilities and taxes – providing notice to creditors, paying the estate’s debts and taxes, and, starting at the end of February, preparing and filing estate basis statements with the IRS and beneficiaries.

And don’t think you’re off the hook if you’re a trustee instead of an executor, as the IRS treats the trustee in charge of the assets as an executor for estate tax purposes.

Well, now executors (and trustees) – and their tax practitioners – will have an additional responsibility: reporting estate basis information to the IRS and to beneficiaries. Congress passed a new law that requires consistent basis reporting between estates and persons acquiring property from a decedent.

The IRS issued Notice 2015-57 to delay the due date until Feb. 29 for filing with the IRS and providing to the beneficiary the new statement of the beneficiary’s basis in inherited assets. Without that transition relief, executors (and their tax practitioners) would have had the 30-day estate basis reporting requirement for any federal estate tax return (Form 706 or Form 706NA) that was filed after July 31, 2015.

As soon as the new reporting rules were enacted, the AICPA Tax Division’s Trust, Estate, and Gift Tax Technical Resource Panel (TRP) started identifying issues and offered 13 pages of comments to consider in developing guidance, including a request for IRS and Treasury to:

Extend the Feb. 29 implementation date until at least 60 days after the regulations are released;

Provide penalty relief if the executor acts in good faith and to provide reasonable cause penalty relief;

Clarify the time period (if any) that the executor has continuing responsibilities after providing the original statement;

Treat trusts as the beneficiary; and

Provide a de minimis exemption to the information reporting rules for assets or groups of assets that are not publicly traded and are of de minimis value, such as $3,000.

In addition, as soon as the IRS posted the draft Form 8971 (Information Regarding Beneficiaries Acquiring Property from a Decedent), and instructions, the TRP offered eight suggestions for improvement. For example, it asked the IRS and Treasury to:

Clarify that if Form 706, S. Estate (and Generation-Skipping Transfer) Tax Return, is filed solely for electing portability, then Form 8971 is not required;

Allow processing of the form if “unknown” is an appropriate answer, so long as the form is accompanied by an explanation, so that it is not considered incomplete, which could subject the estate to penalties; and

Add a column to the form asking if the estate tax value is used for income tax purposes.

As the Feb. 29 estate basis reporting deadline is fast approaching for estate tax returns that were filed since August 2015 (or are being filed now), I’m sure all the practitioners with estate tax clients and executors are awaiting proposed regulations and further guidance.

The official form and instructions are now available. We hope that the IRS and Treasury will consider our recommendations and issue the guidance that practitioners and executors need to carry out the intent of the law, and also make changes to the forms and instructions.

In addition to our regulatory recommendations, the AICPA is considering requesting a legislative proposal that would change the filing deadline for estate basis reporting to 30 days after the property is distributed to beneficiaries rather than 30 days from filing the Form 706. We are also reviewing the Administration’s proposal (in the fiscal 2017 budget) to add property qualifying for the marital deduction, as well as property transferred by gift, to this reporting requirement.

The AICPA will continue to monitor and advocate on this estate basis issue to help estate tax practitioners and executors understand and ease their compliance burdens.

Eileen Sherr, CPA, MT, Senior Technical Manager, Ethics and Legislative Advocacy-Taxation, American Institute of CPAs.

To do list courtesy of Shutterstock.

Young Love Birds: Take Heed of Old Marrieds on Valentine’s Day

Post author By FFC
Post date February 10, 2016

Young Love Birds: Take Heed of Old Marrieds on Valentine’s Day

How to Celebrate Love While Staying on Budget

This year, Americans will spend an estimated $17 billion on Valentine’s Day gifts for significant others, family members, and pets. (Don’t laugh—Americans spent more than $700 million on their pets last Valentine’s Day.) According to the National Retail Federation, the average person spends $142.31 on the day of love. Less likely to spend that much? Those married or coupled for more than five years. Whether they’ve lost that loving feeling or they’ve wised up about inflated prices on Valentine’s Day, young people can learn a thing or two from long marrieds and save a few bucks.

Like Uber on New Year’s Eve, florists tend to adopt surge pricing for roses on Valentine’s Day. The cost of a dozen roses is often twice as much on Valentine’s Day as it is the other 364 days of the year. If you want to buy someone flowers, consider a different type. Alternatively, buy flowers a few days in advance. Best not wait until the day after, lest your beloved think you forgot and were trying to make up for it.

Think twice before going out to dinner on the big day. Restaurants often offer prix fixe menus, and rearrange their tables to jam as many couples into the space as possible, which makes for a rushed, inflexible and possibly stressful experience. Instead of dinner, do something interactive like ice skating or going for gourmet hot chocolate. Save dinner for a less hectic night.

Create your own traditions and do something fun at home. My husband and I order dumplings from our favorite Chinese restaurant, get a bottle of pink champagne, and I make molten chocolate lava cakes from scratch. Economical, delicious, and fun.

Realize Valentine’s Day is not a competition. There will always be someone in your social circle who makes—or receives—an over-the-top gesture on Valentine’s Day. Whether it’s jewelry, a vacation, or some other extravagant gift, don’t feel pressure to compete. Celebrate the holiday the way you are comfortable. Depending upon your relationship, that could mean doing nothing, exchanging cards, or a buying your partner a small, thoughtful gift. Bigger isn’t always better.

Focus on larger financial goals. Instead of spending money on flowers and chocolates and overpriced, potentially subpar dinners, agree to save for a larger purchase—be it a new TV, a vacation or even saving more for retirement—the gift that you’ll truly appreciate forever. This way, even if you aren’t doing much on Valentine’s Day, you’ll have the satisfaction of knowing there are bigger things to look forward to in your future.

I polled some of the AICPA staff to find out their fiscally responsible ways to celebrate Valentine’s Day. Here are my favorites:

Make your own Valentine’s Day cards. Use the $10-$12 you save to buy a bottle of wine you can share with your loved one.

If you really want chocolate, wait until February 15—when it is 50 percent off.

Check out a local park or sanctuary and go for a romantic walk.

Volunteer your time together for a favorite charity.

Check Groupon and Living Social for great Valentine’s Day deals.

Stay in and cook a gourmet meal for your plus one. The gesture will be greatly appreciated—no matter your cooking skills.

What fiscally responsible ways do you celebrate Valentine’s Day? Tell us in the comments.

Lauren J. Sternberg, Communications Manager-American Institute of CPAs.

Absurd Tax Break Requests: Darth Vader and Other "Clients" Weigh In

Post author By FFC
Post date February 9, 2016

Absurd Tax Break Requests: Darth Vader and Other “Clients” Weigh In

‘Tis the season that tax practitioners must break it to clients that no, you can’t write off that trip to the Bahamas as a medical expense (yes, we understand it reduced your stress), claim the Golden Retriever as a dependent or tell the IRS that Botox use is a legitimate business expense because it helps you sell more homes. To put this annual ritual of wishful thinking in perspective, perhaps it would help to consider what types of tax breaks some of our most famous characters in film, TV and literature would try to claim.

Below are excerpts from focus group interviews with these characters talking about the tax breaks to which they feel that they are entitled. It seems as if they didn’t all get along, and maybe it had something to do with that good versus evil thing. Or maybe it was the “but my tax break makes more sense” philosophy that can infect anyone, even the good guys.

Focus Group 1

Facilitator: Thank you all for coming here today to share insights on how the tax code could be improved and made fairer for you. Our group includes Frank Underwood, from “House of Cards,” Sheldon Cooper, star of “Big Bang Theory”, Superman, and Cruella de Vil, of “101 Dalmatians” fame. President Underwood, we’ll start with you:

Frank Underwood: Thank you, it’s a pleasure to be here. I think with so many people needing help, let’s eliminate any provisions that benefit people like Jackie Sharp. She’s the Assistant House Minority Whip and married to a surgeon – now why would they need a tax break? You really need to take a look at what she’s doing. And, I think, perhaps, I should get a deduction just for being me. Maybe even named after me.

Sheldon Cooper: Ditto what Frank said, except that I’m way smarter than he is so I should get twice that deduction. Make that five times. Plus I haven’t killed anybody.

Frank Underwood: Son, when you become the President of the United States, then we can talk about how smart you are. And I would suggest you stop wearing superhero shirts – you look ridiculous.

Superman: He can wear all the superhero shirts he wants. Got something to say about that? (Frank shakes his head.) Personally, I’d like a write-off on my Schedule C for the cape and the leotard – I am getting gouged, especially on dry cleaning, and you can’t dispute I’m providing a public service. Yes, Frank, I said leotard, get over it.

Facilitator: And Cruella de Vil, how about you?

Cruella: Puppies!!!!!

Facilitator: Can you be a little more specific – would this be a Schedule C item…

Cruella: Puppies!!!!!

Facilitator: Ok, we’ll move on then.

Frank (muttering): And they say I’m crazy.

Focus Group 2

Facilitator: Hello everyone – let me introduce you to each other – Darth Vader of “Star Wars” fame, Mary Poppins, Mr. Bill from “Saturday Night Live,” and Lord Voldemort, am I pronouncing that correctly? from the Harry P…

Voldemort: Don’t say that boy’s name or I’ll send a Death Eater to your house.

Facilitator: Alrighty then. Why don’t we start with you, Mr. Vader?

Darth Vader: I demand that the IRS let me deduct dating services. I seem to scare women off so I will need a third party to intervene. It’s absurd. I head an evil empire, isn’t that enough?

Mary Poppins: Quite right, dear.

Voldemort: A mask and heavy breathing, that’s nothing, you helmet-headed twit. What about this? (He points to his noseless face.) And my CPA said the plastic surgery won’t exceed 10% of my AGI so I can’t write any of it off.

Darth Vader (standing up): Who are you calling twit?

Mary Poppins: Gentlemen, really.

Facilitator: So what about you, Ms. Poppins?

Mary Poppins: I think it would be only proper to be able to claim sugar – it’s getting quite expensive, and as you know, it’s really the only way to get the medicine to go down.

Facilitator: Could you explain a bit more about how you would expense this?

Mary Poppins: I never explain.

Darth Vader: My empire has all the sugar you need. The Storm Troopers will bring you to the Death Star Saturday night, and we can talk about the details.

Mr. Bill: Oh no!!!!

Focus Group 3

Facilitator: Thank you all for participating – Wonder Woman, nice of you to join us, as well as Barney Fife from the “Andy Griffith Show” and Lady Macbeth, who needs no introduction. And Lassie, of course.

Wonder Woman: Since when do dogs pay taxes? Never mind. I’ve asked my CPA to appeal a decision to disallow my plane – because they can’t see it, they say it’s not tangible property. Ridiculous!

Barney Fife: I gotta ask since your plane is invisible, how do you know where you left it? I tell you what; I’d be losing that thing left and right. Yes, I would.

Wonder Woman: Yes, you probably would.

Facilitator: Let’s keep moving, shall we – Lady Macbeth? Let me guess, hand sanitizer?

Lady Macbeth: ‘Tis better to dwell in sorrow for the treasure not stolen than be haunted by the specter of the law for a temporary joy.

Facilitator: In other words, you’re better off not pushing your luck in claiming something legit to save a few bucks? Well said.

Facilitator: Ok, last but not least, Lassie?

Lassie (through a dog whisperer): I should at least get the volunteer mileage rate for all those trips to get Timmy out of that stupid well.

Ann Marie Maloney, Communications Manager-Tax, American Institute of CPAs.

<a href=”https://feeds.feedblitz.com/~/t/0/0/aicpainsights/~Stefano Buttafoco / Shutterstock.com“>Darth Vader courtesy of Stefano Buttafoco, Shutterstock.

Estate Planning for the 99 Percent

Post author By FFC
Post date February 8, 2016

Estate Planning for the 99 Percent

The CPA financial planner has a new challenge: the majority of our clients’ estates will not be subject to the federal estate tax when death occurs. If this is true, then how do we help them plan for the future, as well as convince them that planning is still important and necessary?

I call this the “new reality” in financial and estate planning. In 2015, the applicable exclusion from the federal gift and estate tax was $5.43 million, indexed annually for inflation, and the 2015 applicable exclusion from the generation-skipping transfer tax (GST) was also $5.43 million. These numbers are now adjusted to $5.45 million for 2016. Clients whose estates fall below this threshold make up 99 percent of the clients we work with in our practices.

However, we can no longer say, “I will plan your estate and save you taxes.” With estate tax savings almost a non-issue, we must adjust, motivating the client to focus on non-transfer tax and income tax aspects of planning that have a large impact on their lives.

Appreciated Assets and a New Look at Discounts

A very significant part of the value of the moderate wealth client’s estate presently consists of appreciated assets. Since these assets will not be subject to transfer taxes, avoiding capital gain taxes and net investment income taxes, and passing assets with a stepped-up basis, becomes a primary concern. Traditional estate planning techniques used to reduce the value of assets on death, such as family limited partnerships and limited liability companies formed to create valuation discounts for estate tax savings; now, they may be counter-productive to planning since the American Taxpayer Relief Act of 2012 (ATRA) was enacted.

In a sense, estate planning is upside down from what has been traditionally favored. For persons of moderate wealth below the federal estate tax exclusion, the goal of planning now is to include everything possible in an estate at maximum value. This is quite a change from the traditional notion of excluding as much as possible, and minimizing the value of whatever must be included!

This change in thinking must be embraced not only by the client, but also by the planner who must guide the client. It is an essential consideration in much of what must be done to plan estates effectively in the post-ATRA world. Practitioners have fought for many years to maximize valuation discounts for lifetime gift transfers and for the value of interests in any assets included in a client’s estate. A key component of the documentation of many gift plans and estate tax returns has been the formal appraisal of the discount applicable to the non-controlling interest in an asset or entity involved. The IRS has resisted these discounts and often challenged them as excessive. With the majority of clients no longer facing a federal estate tax, claiming valuation discounts will provide no estate tax benefit whatsoever, but will reduce the value of the basis step up, and thereby increase the future capital gain costs the client’s heirs will face.

Accordingly, creating asset transfers that generate significant discounts may no longer be desirable. Claiming discounts on transfers at death for minority interest or lack of marketability will only serve to reduce the value of property inherited by heirs from a decedent and the basis of property to the heirs. When there won’t be any federal estate tax at the decedent’s death, such discount claims are counterproductive.

Bringing Estate Planning Full Circle

Our job as financial planners is getting tougher and tougher, thanks to a federal estate tax-free world where so many resources are available online.

My advice is to open up the lines of communication and put your knowledge and expertise to use. But, let’s face reality: some clients may be reluctant to do much of anything beyond simply having an IRA or even life insurance; it’s your responsibility, and in your clients’ best interest, to put complex, yet practical planning to work.

More information on estate planning is included in a free excerpt on closely held businesses, taken from Steven Siegel’s The CPA’s Guide to Financial and Estate Planning, Volume 4. Members of the PFP Section, including CPA/PFS credential holders, have full access to the entire 4-volume series, including audio recordings of webinars presented to complement the Guide, as part of their membership. Additional estate planning resources are available in Forefield Advisor and on the PFP Section’s estate planning resource page.

Steven G. Siegel, JD, LLM, Siegel Group. Steve specializes in tax consulting, estate planning, and advising family business owners and entrepreneurs. He has lectured extensively throughout the United States on tax, business, and estate planning topics. Steve is the author of numerous tax and estate planning publications, including the Grantor Trust Answer Book (CCH 2016). He is an adjunct professor of law in the Graduate Tax Program of the University of Alabama Law School, and has served as an adjunct professor of law at Seton Hall and Rutgers University law schools.

Estate planning courtesy of Shutterstock.

What Do Super Bowl Commercials and CPA Marketing Have in Common?

Post author By FFC
Post date February 5, 2016

What Do Super Bowl Commercials and CPA Marketing Have in Common?

I don’t know about you, but my favorite part of the Super Bowl isn’t the first kickoff or the half-time show, it’s the commercials. They are known as being some of the best, and definitely the most expensive, in the industry. In fact, thirty second spots for Super Bowl 50 have sold for as much as $5 million apiece. Companies spend months developing commercials that will capture the audience’s attention during the game and be remembered long after the last touchdown. Brand recognition is key. However, what good is it if the viewer has a good laugh but can’t remember the product being promoted? This year’s ads are rumored to feature the likes of Christopher Walken, Alec Baldwin and Amy Schumer. Given that the Super Bowl is the most watched television event each year, it is no wonder that companies like Amazon, Budweiser and Doritos return with commercials time and time again.

The Super Bowl advertising phenomenon got me thinking about CPA marketing. Although CPA firms do not often have $5 million to spend on a thirty second commercial, there are several techniques firms can implement to raise awareness of the services they provide. In order to learn more about CPA marketing efforts, I spoke with two experts: Kari Schott from Inovautus Consulting and Brian Swanson from FlashPoint Marketing. Below are some tips on how to enhance your firm’s branding and marketing.

Personalized messaging is key. Some of the best Super Bowl commercials leave the viewer feeling as if they are being spoken to directly. Research has found that communicating 1:1 is more effective than communicating 1 to many. For CPAs, this might mean creating ads that speak to a specific audience, such as those placed in an industry association publication, and having personalized messages designed exclusively for that audience.

Know your audience. While the Super Bowl might be widely viewed, savvy advertisers know it probably isn’t the time to show ads for products that only interest a tiny percentage of the potential audience. You can apply the same logic in your marketing. Don’t spend your limited money and time on efforts that won’t reach your audience. Look for options that give you the “biggest bang for your buck.”

Do not underestimate the power of referrals and testimonials. Super Bowl advertisers employ all kinds of celebrities to endorse their products with the idea that the general public will think, “By using this product, I can be just like George Clooney.” The same goes for CPA referrals. Potential clients are much more likely to select your firm if you come recommended by someone they trust or “endorsed” by companies like theirs. Develop relationships with bankers, attorneys, insurance agents and others who may interact with prospective clients. Additionally, request client testimonials from clients in industries where you’d like to grow your business. Make the most of relevant testimonials by placing them on industry specific pages on the firm’s website and in proposals.

Understand the importance of strategic content. There’s a reason so many ads that run during the Super Bowl are for beer and snacks: they are products that resonate with the audience and go along with the event. In order for a CPA to reach their targeted audience they will want to zero in on topics of interest to that particular group. For instance, if you are looking to reach non-profits, you might want to write articles on common challenges encountered with Form 990s or best fiduciary practices to protect non-profit filing status. Remember, you want to connect with prospects and demonstrate you understand their issues and challenges. You can post these pieces on LinkedIn or on your website.

Post and advertise on social media. Super Bowl advertisers in the modern age can post their commercials across a broad array of social media sites including Facebook, Twitter and Instagram. Additionally, consumers are likely to share ads they enjoyed on their own social networks. For CPAs, social media sites such as LinkedIn, Facebook and Twitter are great platforms for publishing your message. It is fairly simple to set up your own firm pages and post on them. There are also some paid advertising opportunities that make sense for CPAs. For example, LinkedIn-sponsored updates allow you to reach your target audience by filtering information to people based on relevant fields of study, job titles, interests and more. You can set your own budget, gauge the success of your campaign and adjust variables mid-campaign if needed.

While you are taking in Super Bowl 50 (and the commercials) consider ways your firm can harness some branding and marketing techniques of your own. But remember, raising awareness and increasing your client base does not happen overnight. It takes time to develop and build a brand, implement new marketing strategies and determine if your efforts are successful.

The AICPA has many valuable resources available to help firms promote their services. Visit the CPA Marketing Toolkit for tools on effective advertising, creating awareness and more. Additionally, the Tax Practitioner’s Toolkit’s “communicate your value” page features tips for firms of all sizes. Furthermore, you may be interested in checking out the 360 Degrees of Financial Literacy “advertising a business” webpage.

Alexis Rothberg, Communications Specialist, American Institute of CPAs.

Cam Newton image courtesy of Shutterstock

Chinese New Year Brings Business Relationship Lessons: 12 Tips

Post author By FFC
Post date February 4, 2016

Chinese New Year Brings Business Relationship Lessons: 12 Tips

Chinese New Year, sometimes known as Spring Festival, is a centuries-old celebration of the lunar New Year. Widely celebrated in China, the festival is the pinnacle event of the year, also honored across Asia, particularly in areas with large Chinese populations, including Macau, Taiwan, Singapore, Thailand, Cambodia, Indonesia and the Philippines. It is considered a major holiday in Chinese culture, and is a time for families to be together.

If you have clients or co-workers in China or of Chinese descent you may want to learn about do’s and don’ts during next week’s Chinese New Year, which begins officially Monday, Feb. 8 and lasts for two weeks. The holiday really kicks off on Sunday, with the traditional New Year’s dinner, which is thought to be the most important meal of the year.

Whether you have colleagues who celebrate Chinese New Year or not, this list of do’s and don’ts can help you have a luck-filled New Year.

Be mindful of when you schedule meetings—staff schedules may fluctuate as people begin preparing for the holiday starting around February 1.

Wish your associates ‘Gong Xi Fa Chai’ (pronounced Gong Zee Fah Chai) — “Wishing you great happiness and prosperity” — in Mandarin.

Dress in something bright on the first day of Chinese New Year. Some say it’s best to wear red, which symbolizes good luck, from head to toe to bring you heaps of luck the entire year!

Exchange mandarin oranges in pairs with friends and family. They are said to bring great wealth.

Eat or drink something sweet in the morning to bring happiness.

Buy a lottery ticket in the morning – you may win some money!

Consider sending your Chinese colleagues an e-greeting card as a thoughtful gesture.

DON’T

Wash your hair on the first day of Chinese New Year. If you do, you’ll wash away your luck.

Wear black or white clothing, which is associated with mourning. Other dark colors are thought to attract evil spirits.

Probably a good practice in the office any time of year.

Argue or demonstrate anger as it can bring bad luck.

Purchase any footwear for the entire 15 days of Chinese New Year. In certain dialects the word for shoes is a homonym for the word for evil. Buying shoes or receiving them as a gift during Chinese New Year is considered bad luck.

Chinese New Year is a time of great joy in Asian culture. For many, it may be the only time of year they travel home to be with family. Click here to learn more Chinese New Year and its rich history and traditions.

Photo: Preparations for Chinese New Year in London courtesy of Stacie Saunders, Senior Manager – Social Business and Communications, American Institute of CPAs.

Related Stories

Related Stories

Related Stories

Related Stories

Related Stories

Related Stories

Related Stories

Related Stories

Related Stories