Third-party risk management – or the minimization of risks introduced by third-party organizations – is a critical component of all cybersecurity programs. CPAs are service providers, and many of your clients are service providers, so you may be familiar with requests to fulfill a third-party risk management program.

The $430 billion Inflation Reduction Act of 2022 appropriates about $80 billion over the next decade for IRS activities, including the hiring and training of new auditors, technology systems modernization, and taxpayer services.

When considering a merger or acquisition, tax attributes are often not a due diligence priority. Incorrect assumptions are often made about the value and utility of these attributes. An acquiring company can be surprised to find out it cannot use any of the target’s R&D tax credits following the acquisition.

Tax season is quickly approaching, and CPAs are actively preparing to meet the impending needs of their clients. This also is a time when CPAs should be especially diligent in reducing their liability risks.

A common topic on everyone’s mind this employee benefit plan audit season was implementation of Statement on Auditing Standards (SAS) No. 136, Forming an Opinion and Reporting on Financial Statements of Employee Benefit Plans, in addition to SAS Nos. 134, 135, and 137-141. In short, SAS No. 136 contains a new reporting model for audits of plans subject to the Employee Retirement Income Security Act (ERISA), as well as incremental performance requirements for those audits.

In this issue: Republicans Install Cutler as Pennsylvania Majority Leader; Study Suggests Improving Pa.’s Local Tax System; PICPA Federal Tax Webinars; and more.

Rampant retirements and career conversions are profoundly impacting many industries. While career converters are keen for reinvention, those closing in on retirement commonly have little appetite for a career makeover. So, many who can afford to exit comfortably are choosing to do so. In addition, some firms strongly encourage early retirement of high-level executives. These policies add exigency to future retirement plans. CPAs who provide succession planning services continually remind clients to prepare for “life after career.” Practitioners must personally embrace what they preach.

The Biden administration has called for a collaborative, multiagency task force to develop strategies to mitigate the global corruption threat. The DOJ expects companies to review their compliance programs to ensure they have implemented programs that are well-designed, are adequately resourced and empowered to function effectively, and work in practice.

For many owners of closely held businesses, their largest asset – and the one that is perhaps most difficult to value – is their interest in their business. With the current estate tax exemption levels set to sunset at the end of 2025 (if not before), business owners and their CPAs may need to take appropriate steps in the tax and legacy planning process.

The next generation of aspiring small-business owners is playing a major role in facilitating the generational wealth and business transition wave currently underway. This group of entrepreneurs, it seems, may be the perfect fit for business owners and their advisers who care not only about the financial prospects of a business exit, but the emotional ones as well.

With all the current disruption in the workforce, it is important to be aware of the latest trends so your firm or organization can stay at the forefront of change. While managers and executives know what is happening day-to-day in their businesses, many are unaware of the larger forces at play in the labor market.

In this issue: PICPA Appointed to Shapiro-Davis Transition Committee; Resignations Add to Pennsylvania House Majority Confusion; Pa.’s Boyle Named Democratic Leader on Budget Committee; and more.

The new corporate alternative minimum tax (CAMT) is a significant feature of the Inflation Reduction Act of 2022, which became law this past August. Estimates are that the CAMT will bring in just over $200 billion over the next 10 years.

According to one of the largest surveys of the global workforce, one in five workers planned to quit their jobs in 2022. In public accounting, turnover had already been high for several years, with upward of 20% of accounting talent lost per year by firms. Accounting professionals at all stages of their careers have been moving on.

On July 8, 2022, Pennsylvania Gov. Tom Wolf signed House Bill 1342 into law as Act 53 of 2022, culminating month’s-long bipartisan negotiations. The law marks the first change in Pennsylvania’s corporate net income tax (CNIT) rate since 1995, reducing it by more than 50% over the next nine years: from 9.99% in 2022 down to 4.99% in 2031.

In Pennsylvania, the most used entity formation structure (excluding the sole proprietor schedule C) is the pass-through entity (PTE). Though PTEs also include trusts, the focus in this column is on partnerships and S corporations (which include limited liability companies that elect either partnership or S corporation tax reporting structure). Historically, these entities have not been subject to income tax at the entity level, but rather they pass the reported tax attributes of income, deduction, gains, losses, and credits to the partners, shareholders, or members (owners). Accordingly, U.S. GAAP financial reporting seldom had ASC-740 income tax disclosure matters.

Leaders come in many forms, shapes, and sizes, but leadership always boils down to relationships and connections. An effective leader builds trust, inspires, and mobilizes people toward goals. It starts with identifying a compelling vision of a shared future rooted in core values and is followed by creating a path for the success of all.  

The phenomenon of cryptocurrency has gained steam over the past few years. The flexibility of this digital, encrypted, and decentralized form of exchange intrigues many, but it is causing consternation on how exactly to tax its use and how to mitigate some of the tax burden derived from its holdings.

In addition to federal and state income tax obligations, business taxpayers operating in Pennsylvania also may be responsible for an array of additional local taxes, depending on the localities in which they transact business. These local business privilege or mercantile taxes can be difficult to navigate for the unfamiliar taxpayer.

A series of opportunity zones created by the Tax Cuts and Jobs Act of 2017 offers those who invest in projects in these zones a new tax benefit that is unprecedented. The tax benefit could also have a positive impact on targeted communities, but there are risks associated with opportunity zone investments and the regulations involved can be complicated.