← AICPA Town Hall
AICPA Town Hall
Federal shutdown, IRS changes and the state of digital assets in accounting
01:01:48
Topics include: Federal shutdown update Tariff and trade updates Exploring the evolving digital assets accounting landscape Latest technical guidance Speakers: Erik Asgeirsson, President...
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- [00:01]
A
Welcome to the AICPA Town Hall Series, your resource for the latest news and updates on pressing issues facing the accounting profession.
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B
Good afternoon and welcome to the AICPA Town Hall. I'm Eric Ouskerson, one of your hosts for today, and I'm thrilled to be with Mark Koziel, the CEO of the aicpa, live here in New York. So, Mark, it just is a lot of stress right now with the government shutdown. I know you're talking to a lot of members. We're going to be bringing Mark Peterson up in a second. But you and I, you know, we reflect back on, you know, the government, not the government, the business shutdown during the pandemic, a lot of anxiety. And you can, you know, we learned a lot of lessons then on how to, you know, work through these difficult times.
- [00:48]
C
And I think that just highlights how important these town halls are. In fact, I've gotten a couple emails from members in the last 48 hours asking about, you know, what's AICPA's position on this, what's happening with the government, the IRS. And I said, tune in Thursday. We're going to have as much as we know at that point in time. So I do think it's critical for us to have this conversation and for us to provide as much support as we can. And the big thing is I keep telling members, you know what, there's going to be a lot of headlines. Headlines sell subscriptions. What we have to do is navigate between the truth and myth that's out there, and hopefully we can help navigate that. Hopefully, we have a way to keep our members in tune on a regular basis.
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B
Well, Mark, I'm really looking forward to today's Town Hall. We've got a lot of we're going to cover the government shutdown. Mark Peterson is going to be joining us in a minute, but I'm looking forward to the feedback from the town hall community to really get the pulse of how they're seeing this issue. So what we're going to be doing today is we're going to open up with Mark Peterson the DC Update. Then Lisa Simpson is going to provide a technical update. And following that, we're going to have a great discussion related to digital assets in the state of crypto. We had the blockchain symposium this week, Mark, here in our New York office. And then we'll close with the open forum and closing remarks. So with that, here's the agenda that I just reviewed. Let's bring Mark Peterson up in our DC Studio. Mark, great to see Us. You can see the New York backdrop here and we see the DC Backdrop in your studio.
- [02:22]
D
Yep. No, we're here. We're here. You know, Eric, we've been on a lot of town halls where we've talked about the potential of a government shutdown, and then it ended up not happening, even though we discussed being prepared for it. Now here we are, and so we do have a lot to share.
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B
Well, Mark, you did. You said in the last town hall the government was still open, and you said it was more likely than not that this was gonna happen. So let's take the town hall community through what is happening.
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C
Yeah, he's two on the year, by the way. He said one bill. He got that in July and now he said shutdown is going to happen. Two for two, Mark.
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D
I know. I wish I was wrong on this one, Mark. Yeah. So let me just set the table because it's going to make a difference about how we potentially pull out of this. So again, regular order for getting the government funding is The House passes 12 appropriations bills, the Senate passes 12. They reconcile the differences between those bills, the agencies get funded, and that all happens right before October 1st. Recent history, though, they just haven't been able to get that done. So that's why we've come close to these shutdowns, you know, over the last six, eight years. They may get several of the of the bills done, but they'll have to do some funding mechanism for what is remaining unfunded, either through a continuing resolution for a period of time, which is a current level funding for what isn't appropriated, or they package together a big appropriations bill and what they call the omnibus. Well, what happened is they don't have the work done. They've got about three of the 12 bills done in order to get regular appropriations done. We got to the end of the fiscal year and there were two alternatives that were put out. One was just a clean extension. That was the Republican offer. We're gonna do a clean extension until October 21st. Doesn't solve the problem. It just buys us some more time to get those appropriations done. The House actually voted on that in September before and then left town because basically they said the House has passed this. It was a partisan vot. One Democrat crossing over to the Republicans and sent it to the Senate and then they went home for the congressional work period, basically saying now the Senate has to deal with this. Well, The Senate requires 60 votes. The Republicans don't have 60 votes. So it has to be a bipartisan package. The Senate, since Then has seven times, potentially one more than that have tried to pass that clean extension to buy more time in order to get those bills done. They have not gotten the votes to do that. They have picked up several Democrat senators. Fetterman Mastos has crossed over in order to several other senators have crossed over for that clean extension because of the pain caused by a shutdown. However, they don't have enough. Now their alternative, which the Democrats are arguing is that they want a package to go along with an extension. Now their extension again only gets you until Halloween, you know, or excuse me, November 31st. And so basically what they want is a trillion dollar package to go with it. So we'll keep it open. But the current offer was a trillion dollars to backfill Medicaid reforms that came from the HR1 obv. They want to put funding back into PBS. They want, and this is probably important of the most important thing because it's where the negotiations are probably going to end up. Permanency to the tax credits for ACA Obamacare tax credits. Okay. The premiums so permanent. That's again a significant package. One other thing was to prohibit the ability for the Republicans to come back and do a rescissions bill which mean to impound or withhold funding that had been authorized by Congress. So the Republicans have said no to that. Now, during this period of time of shutdown, there have been several Republicans in the Senate that said, well, what about a shorter term extension of those tax credits? Not permanent, but a period of time. So far the Democrats have not, have not bid on that offer. They're still insisting on permanent. That's the political stakes that they're making in the negotiations. Both sides today feel like they are on the right political ground, which leads me to believe that we're probably going to be in the shutdown through next week. Now we do have some big dates that are coming up. Obviously October is a big October 15, a big date for tax preparers with a deadline. But it's also when the military gets paid. And even though essential employees like their traffic controllers and the military and our security and our border security, there are essentials are still required to come to work, they'll start to miss those pay deadlines. So that is a huge inflection point on negotiations. And it's really when we've seen in previous shutdowns the pressure increase on trying to get a deal. And you know, this is an example of prime political brinksmanship. I hate to say it, don't want to sound skeptical or cynicism. Give you some cynicism, but the reality is they're trying to assess what position to have to get the best outcome for the best deal for where they think they are, whether it's the Republicans or the Democrats, which puts you in kind of this shutdown, which we could see last for a little while now. There's a couple things that could happen that could get us out of this one. One would be again I mentioned permanent on the ACA fix related to those tax credits. There could be a negotiation where something was put on the table for a period of time that would buy enough votes from Democrats who would see it hard to pass up. Republicans would have to agree to putting that on the Senate floor. Ultimately, House Republicans would have to agree to, they could say we're really close to a breakthrough. We're very close to a breakthrough in negotiations. So what we're going to do is we're going to do another short term extension for a week or two in order to work through those negotiations that would open up the government for a period of time. So there are ways that we could kind of get our way out of this. But honestly, it's kind of day to day. The House is supposed to be back. They've been out since they voted on their legislation for the short term extension. They've been out. They're going to be coming back next week. The Senate has been in, working through things and again in the middle of these discussion and they have been bringing up votes to keep the government open, but they don't have a majority, a 60 vote majority on either side.
- [09:13]
B
Well, Mark, a lot of questions are coming in. We've already, I know we've got this side poll we've already had over, I think close to 2,000 people take it.
- [09:22]
D
You might absolutely. Well. And you know, I mean there's, it's, we're going to talk about the agencies and you know, it's tough not to focus on the irs, but other agencies, agencies are impacted and the profession, who works with those agencies or compliance requirements are impacted. Government contractors, work stops on contracts and oftentimes the payments stop as well. Now there's one of the other complicating factors which you've probably read about, Mark, and Eric, is there's some discussion about, well, will there be previously for furloughed federal employees, there had been back pay. There's questions about whether that will happen. I think there's a general consensus that it will happen, but it kind of adds some drama to the stakes of the negotiation. I mentioned Air traffic controllers, that's always a big one. But there's other programs, nutrition programs, wic, Women Infants and Children. They start to feel the pinch. And there's discussions about is there a way to deal with them or the military pay is another big, big one.
- [10:21]
C
And Mark, so you mentioned military pay. Military pay is 1015. Civilian pay is $10.10. That's only a day away. That is the air traffic controllers. I believe that's also tsa. So, you know, there's been some news press out there about air traffic controllers already calling in sick and the like. So you see that on that side. But I think for us looking at the profession and the agencies that were most affected by it, it's good to get that update as best we can right now.
- [10:51]
D
Right. And we had prior to the shutdown, we talked about this, Mark, last town hall where we had been in ongoing discussions still are with the IRS about what's the contingency plan, you know, what is their plan for should there be a shutdown. We've got an upcoming deadline. We also have to get ready for the next filing season and implementation of HR1. So that's awful lot of work in the tax community. Right. And so they did put out a contingency plan that basically had they had five days of funding to work through it where they were going to, you know, be able to keep prepare for the filing season for next year's filing season, continue their modernization efforts, continue implementation of HR1. That time ran out, they have announced furloughs of close to half. We're going to talk about this, about some of the suggestions we have, but close to half of the irs, again, we're in constant discussion with them about we understand they have to do what they need to do during a shutdown, but we also have to figure out for taxpayers and preparers that are dealing with this, you know, how do you deal with those services? Great.
- [12:07]
B
So, Mark, you want to talk about some of the AICPA advocacy efforts and Mark Kozali, even some of the input that's coming in from the membership.
- [12:16]
D
Absolutely. So we called for them to keep all employees 100%, make them all essential. Right. Keep everybody there, keep everybody working. We know that they've announced furloughs. They have tried to give us some comfort that they're going to really focus on service on the departments that they need in order to continue to process to make sure that we can get through this filing season and be prepared for the next one. You know, we appreciate they're Working on us, they're working with us. We appreciate the fact that they, you know, are focusing in those areas. It's still hard to believe that if you take 50% of the employees at an agency out of play, there isn't going to be an impact. We hope that it's minimal and they can focus on the absolute most clear and present issues. But we also have to be all prepared for the fact that we're going to feel an impact. One of the things that we've discussed in working with the Tax Executive Committee and, and the, and, and the leadership at the Tax Executive Committee and really playing off what Mark suggested from our experiences coming out of COVID and PPP are what are the things that we can practically recommend that they could do to provide some level of relief? And so we will be issuing a letter that will be going to the IRS that will be giving those suggestions, will be going to Secretary Bessant that will give him some suggestions of things like, you know, provide targeted underpayment and late payment, late penalty relief, implement efficient, reasonable cost penalty waivers, discontinue compliant action, compliance action, and cease automatic collection activities and obviously maintain online accounts and services. Those are things that don't require a statutory change. Right? It does. In order to pay the military, they're going to have to do something legislatively. The IRS can make these changes and kind of treat this like we treated things during COVID and during some of those circumstances where the reality is we gotta shut down. We understand that, but how can you deal to provide some relief with some very acute issues that we know the profession and taxpayers are gonna be dealing with?
- [14:28]
C
And Mark, I mean, from our tax team, have we really heard any issues around IRS and getting things filed? Because there's been some focus. People are ask, well, you guys should focus on getting the deadline extended from 10:15. I mean, that's not realistic. We've talked about that for anyone. And if we were to poll our members here, about half would say extended. About half would say don't extend it. As long as the IRS is doing what it needs to do, the systems still seem to be up and running. So what is it that we are focused on and what else can we do to make sure that we can get through this, this last filing date?
- [15:15]
D
No, I mean, that's exactly right. We're going to be really, really interested in the feedback that we get through the kind of the open comments that are coming into the town hall right now. We're reaching out through the tax practitioners and the tec and through the tax division, obviously we're hearing from firms and what we want to do is translate that into real practical things that we can recommend the IRS can do to try and, and relieve some of this. It's not realistic to extend the due date. I think that's fairly obvious. And so what we want to do is just really, really focus on what the IRS can do with their current authority quickly. That will provide some relief. Absolutely.
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B
Well, Mark, I know we want to talk a little bit more about the overall impact to the federal agencies.
- [16:07]
D
Yeah, I mean, it's not just the irs. So, you know, the sec, underneath it, the pcaob, the biggest issue with the agencies who are all going through some level again of furloughing is where they're going to focus. Now if we're waiting any agencies, what they're going to halt is putting out guidance. And so whether it's rules or guidance, those are the types of things that are going to be delayed or paused for some period of time. Interestingly, the PCAOB on the public company audit side, it's funded through fees. So it's actually its funding is separate than, you know, appropriated funds that the SEC has to deal with. Now if, as far as the PCA will be pushing through rules or pushing through guidance that requires SEC approval, that will be paused because the SEC will have shut down that program. Now on commerce and tariffs, and we're going to talk a little bit about tariffs in a minute here. There are certain programs that are shutting down or they're at least pausing because they don't have the ability to, to move forward on them with the folks that they furloughed. However, they are continuing to have the discussions related to tariffs, whether it is working on new deals or whether it is, you know, trying to consummate the deals that we have that are in play. So that kind of continues to move forward. So there still is levels of activity. It just is really depends on the agency that you're working with. Department of labor is a big one. HUD is a big one. You know, labor is going to focus on, you know, enforcement issues. They've laid off about or furloughed, excuse me, not laid off, furloughed about both HUD and Department of labor, about 70% of their workforce. So they're going to really go down to mandatory inspections. They're going to go down to mandatory grant issues related to housing of homeless as hud. Pretty much everything else is going to be put on pause.
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B
Paul, I know there's a lot of resources being put together. And Mark even mentioned this in your opening here.
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C
Yeah. So I think this is something that. And I really appreciate the AICPA team for how fast they were able to get this up and running. And hopefully it's not going to be up for long. That means the shutdown will be ended, but at a minimum, trying to get give all of our members a central source to be able to go to and say, all right, what do I need to know? What is that sense of reality I already mentioned before about? There's going to be a lot of headlines, pluses, minuses, who's at fault? We're going to blame this one, they're going to blame that one. And, you know, we just wanted to have a central source to gain the information that hopefully you need. If there is something there that you don't see. I do think that, you know, reaching out to us, any one of us, to ask for some additional information, and we can do the best we can because we just want to support each and every one of you through this time to make sure that you're able to help your clients, you're able to help your businesses out there as we navigate what's happening.
- [19:08]
D
Absolutely right. We'll do the best we can with the information we have.
- [19:12]
C
Right.
- [19:15]
D
And I mentioned tariffs. They're still plugging away at tariffs. Interestingly, there's been a little feedback related to the discussions with the who are kind of negotiating the handshake that the administration had with the eu. The EU is complaining that there are additional demands, concessions that the US is asking for, interestingly, not around trade issues, but around regulatory issues. Corporate disclosures around climate is an example. Digital regulatory requirements are kind of being added to the discussion. The EU is pushing back on that, saying regulatory autonomy is a red line. And these discussions don't include that. So there is some cracks going on in that conversation, which is a significant deal. From when you look at the breadth of all of our trading partners, getting that deal done is a big one. The other thing that's going on, Mark and Eric, is the Supreme Court just started their next session and on the docket they're looking at several of the executive orders, the presidential power that was utilized in order to call for some of the reciprotory tariffs. Right. That's country to country. And the statutes that were utilized were really emergency authority. And there's questions whether that was constitutional or not. And so the Supreme Court will be kind of focusing on that. So there's going to be a lot up in the air as it relates to a lot of these country to country reciprocal negotiations that are occurring and whether they were constitutional in the way that the statutes were used, whether it was appropriate to use the emergency authority or not. But on the other side, there's a lot of sector conversations going on related to specific industries and products. Right, Mark?
- [21:07]
C
Yeah. So that's something that I was just with my counterpart at CPA Canada just yesterday at a meeting and we were talking about this because in Canada now we've just adopted not Canadian specific, but a tariff on wood furniture and wood products that would be, I believe Canada's number one export is actually wood and wood related products. So that is very specifically a Canadian tariff. However, it's going after the product base which would be outside of what is in the current Supreme Court case.
- [21:43]
D
That's right. Pharmaceuticals are another example. Steel, auto foreign produced films which actually kind of got in the service area. So far it's been all products and not services. But that, you know, that will. That is a different inflection than what the court cases are being here. So there's still going to be a lot going on. We're going to have a lot to talk about as it relates to tariff. And then I got one other update related to the irs. So they just announced was a new CEO for the irs. This role is brand new. They had not previously had it. Frank Bisignano is actually the commissioner of the Social Security Administration and he has been tasked by Secretary Besant to actually become the CEO of the irs. This is welcome. I mean, right now there's been a lot of transition in leadership at the irs having again some leadership that can come in and try and help the IRS in a very stressed environment. Even prior to his shutdown, he's got a very interesting background, not only coming from Social Security Administration, but from First Data and JP Morgan. A lot of history with data technology. There is some questions though about this role. We don't know exactly how this role is going to perform. It's new and it's not Senate confirmed. And so there is some pushback, bipartisan pushback coming from the Senate of applauding the fact that there's a leader that's going over to the irs, but also preferring that ultimately there is an IRS commissioner that is confirmed by the, you know, the Senate Finance Committee. So, you know, we'll see how this plays out. The administration has said they will eventually submit a commissioner. There have been roles that have been acting for, you know, long periods of time, but again under duress. I think that the focus here and with the background that this new CEO role is going to have, it could be very helpful.
- [23:46]
B
Yeah, they called him on Wall Street, Mr. Fix it.
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D
That'd be great.
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B
Well, Mark, we did have that. Do you want to give a little bit more background on that poll question that some people are. A lot of people have been responding. Mark Peterson.
- [24:04]
D
Yeah, I mean, basically what we did is we wanted to ask you how you're being impacted. We've got probably in the most specific examples coming as it relates to the irs. But again, even if you're thinking about the irs, you know, open up the government is a great suggestion. But if there are specific things that we could do or suggest or recommend, we'd love that feedback. But also where you sit in your other interactions with government. Right. So if your clients are dealing with grants that are going to get stalled, if you're a contractor and you're going to have issues, if you're working with Department of Labor or HUD or any of the other agencies, really give us your feedback on those very specific pinch points. We all want the government open, we all want the agencies functioning. But should this be an extended period of time, we also want to be able to go to those, those agencies and give them again, very specific realistic recommendations of things they can do to try and relieve our pain points so that we can serve our clients and actually get the compliance that we're required to do done on behalf of the agencies and the government. So we're really looking forward to what's going to be coming back.
- [25:17]
B
Well, Mark, that was a great segment. Couple hundred questions coming in related to all that you covered. We've already gotten. I mean, so on the upper left hand side, that is where the question is. You just answer the question that Mark just reviewed real time here. We've got a few thousand ANSWERS. Top concerns, IRS operations, communication, October 15, deadline delayed funding, OMB and then TSA and FFA. So we'll be sorting through that and it is very helpful. So just your comments coming in via Q and A as well as that survey question, we greatly appreciate very much. All right, Mark, we're going to bring Lisa Simpson up right now. So Lisa, welcome. Great to see you coming from the Durham studio.
- [26:12]
A
Yeah, I've got some FOMO not being in the New York studio with you guys, but I always love our Durham studios. So happy to be here. Really quickly we are getting questions about where to find, where you can input the information about the shutdown impacts for you. This is not your typical poll question that you see. This is static and it's living in the left top corner of your screen so you don't have to rush. There's not a time limit. Just get your answers in before the end of the show today and we'll use your input to factor in where we need resources, what our advocacy efforts look like, et cetera. Mark Peterson, Mark Coziel and Eric gave us a fantastic rundown on what's going on in D.C. i'm going to hit you with another hot topic that we've talked about on several of our town halls recently, and that is the mandatory federal electronic payments. So there are two components to this, right? There is the payments to the treasury and payments from the Treasury. So right now, payments to the treasury can still be made by check. For now, the executive order that was issued earlier this year asks that those be discontinued as soon as possible, but that date has not been set in stone. Now, let's talk about payments from the treasury because we've gotten a lot of concern about, let's say, refunds on tax refunds for folks who do not have the ability to get an electronic payment deposited. And for those, we've gotten an update very recently, late September, from an IRS director who said that basically the focus is on the 2026 filing season. A quick fact is that 93% of the refunds that were issued for the 2025 filing season to individuals were made electronically. 7% is our edge case, but 7% is a pretty big number when you're looking at the volume of refunds that are issued. So a lot of the concern about that relates to international taxpayers, elderly taxpayers who may not know how to set up their accounts so that they can get these refunds. So again, the IRS has indicated that they'll focus on 2026 filing season. If a return has been filed asking for a refund and there is electronic payment information, then the IRS will send a letter to those individuals. And the focus right now is on individuals to get that banking information. If the tax preparer, if the taxpayer, excuse me, does not respond, the irs well, basically, the IRS is going to hold for six weeks while they wait for the taxpayer to respond. After the six weeks, the IRS has indicated that they will go ahead and send that refund. But that is a pretty significant delay or for a lot of us who are used to getting those payments fairly quickly. So for business taxpayers, what the IRS hopes to do is gather the bank account information from the tax returns. So similar to an individual return, they'll be asking for the bank account information. They're going to update the forms and, you know, we'll see how that works. We've given you some resources, including links to the AICPA's kind of infographic that you can use to help your clients understand the change in process if they do not have that electronic refund set up. And then some FAQs from the treasury and other resources. The FAQs, I took a quick glance, they look pretty helpful. So I would recommend that you take a look at those. And again, I know this is a hot button issue. AICPA is continuing to advocate for some parameters and for the ability for those who are kind of edge case scenarios to be able to navigate this new E payment, whether it's a refund or a tax payment. Next hot button issue is a phishing scam. October is cybersecurity awareness month. And one of the reminders of why we all need to think about that is this new phishing scam that we've learned about. And basically tax preparers are getting a note that says returns filed under your EFIN are under review and it asks you to click on a link. Don't click on that link. As a reminder, don't click on the link. So always make sure that you're keeping your your cyber awareness up and that you're reminding everyone on your team to do so as well. So lots of good tips for you here and even an IRS email address that you can submit those suspected phishing scams to. We've got a little bit of a round robin on the IRS. So quickly we'll hit this. The P10 fee is dropping to $18.75 effective October 16th. There's really quickly. The IRS is launching a two year pilot program for a mediation program around post appeals, wondering if that will be more attractive rather than continued litigation. And then I thought this was interesting and hopefully a little bit comforting to you is that the IRS has released what they're focusing on in terms of priority guidance. Implementing HR1 is top of the list, which is all good news. They're also looking at how to emphasize deregulation and burden reduction, tribal tax issues, digital assets, which we're going to talk about here a little bit more and secure 2.0. So a lot of hot topics there that I know we're looking for more guidance on. I mentioned digital assets and wanted to give you a heads up for you to start thinking about as you're talking with your tax clients or if you are a tax client, be thinking about how you're going to start reporting in your digital asset basis information. So as a reminder, tax year 2025 reporting will not include the basis. So as as a tax preparer or as a tax client, start working on that information now because it could be time consuming. You don't want to rush it because you want to make sure that you're using a consistent asset basis allocation method. So just a heads up to start working on that one. Speaking of digital assets, do you remember a few weeks ago when our buzzword was complicated? Well, this week it's digital assets. So this time I wanted to talk about some testimony that one of our Rock Star volunteers, Dr. Nut Nellen, gave before the Senate a few weeks ago. This was primarily educational and just as an FYI, Dr. Nellen is the chair of our Digital Assets Tax Task Force and she was educating the staff and the senators on some taxation implications for digital assets, asking them to consider treating them like some other types of assets. So we've given you a link to the commentary there and just trying to keep that on your radar. This is going to continue to be such a hot topic as digital assets grow and the taxation of those assets and the accounting and auditing and reporting of those assets continues to mature. I'll close with a reminder about our National Tax Conference. As you can tell, there is so much going on in the tax arena and this is a great year to consider attending the National Tax Conference either virtually or in person. And we have a new opportunity this year to ask a first time attendee to join you at 50% off for an in person conference. So just a quick reminder there. I wanted to go through this fairly quickly because we've got a good conversation, an interesting conversation coming up about those digital assets that I mentioned.
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B
Okay, look at this. We've got a very full studio here. Lisa, thank you for the, for the update. We wish you were here as well. And we're going to continue with digital assets. I guess your word of the town hall for this week. So let's get into it. We're going to welcome two guests here who have been on previous town halls, Ron Quaranta, who's been our partner for many, many years, he's a CEO and chairman of the Wall Street Blockchain alliance. And we're going to be talking about a symposium we just held with Ron. And we have Amy Beers, who's the Senior Director of Assurance and Advisory Information and she oversees all things that are going on related to digital assets at the aicpa. So great to have you Both, thank you.
- [35:28]
E
Great to be here. Eric, good to see you. Always great working with you. And Amy. Mark, always a privilege.
- [35:31]
C
Good to see you.
- [35:33]
B
So, Mark, we've been holding Marcos, this blockchain symposium now for eight years. Hard to believe it is, but you know what? We're going to. So we're going to dig into digital assets. But I just want to step back and reflect on how we were viewing blockchain back in 2018. There's some similarities to some of the talk that's going around about Genai right now. You and I were sitting, sitting at conferences. I remember sitting with a bunch of auditors and some said, you know what, this is 2018. I'm glad that I'm retiring two years because blockchain is going to put the audit profession out of business. That hasn't happened. We're going to talk about the state of digital assets and blockchain. A lot of excitement. But it's interesting. What we do at these symposiums is try to demystify what's going on. That's what we did in the early stages. But just maybe some of your reflections on this journey.
- [36:27]
C
I mean, for so many years I've heard of all these things. I don't know what we did to society to have society say that we're going to be put out of business every time there's a new technology. But blockchain was right in there. Right. So this goes all the way back to the advent of spreadsheets. I don't even want to say Excel, VisiCalc, I'll date myself on that. Well, before Excel. But blockchain, we were having those conversations, Ron.
- [36:50]
D
Right.
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C
When we first met in 2017, 18, when blockchain was coming around, that it was going to replace what the auditor does. And yet here we are and we have the genius act. So I'm excited for this update. I think it's really great for our members to get an update on what you're both hearing.
- [37:08]
B
Thanks, Mark. So we're posting some of this to social media. Lot of great discussions over this symposium. So what we're going to do is give you some of the highlights and we're going to start things off. Ron and you do a great job. We call this Crypto Year in Review. It's actually a five year look back. So one thing that just astounds me is that 65 million Americans own crypto.
- [37:34]
E
Eric, it's so amazing when we do the research and we look at some of the data and realize a growing percentage of Americans use Crypto in some way, shape or form, be it firms that have members and employees that want to be paid in crypto, be it through investments. And we begin to see it percolate through growing portions of the economy. Wall street, hence my organization really looks at how do banks treat clients and offer services, how do brokerage firms, how do retirement accounts. Retirement accounts today are spending an inordinate amount of time trying to understand how crypto can be part of the landscape for them. So again, 65 million people owning crypto. It's been a 180 since our last symposium, Eric. I think we're at a $4 trillion market cap, give or take Bitcoin's price. We were joking about it at the symposium is about 122 or something, 126 yesterday back down. So there's a certain amount of volatility.
- [38:27]
B
And a big comeback from. We all reflect on when we had the December of 2022 FTX, the collapse there, the fraud, and then you had a little bit of the crypto winner and it went down to like 17,000. Under 20,000.
- [38:41]
E
Correct.
- [38:41]
B
But look at this. I mean it's going mainstream.
- [38:44]
D
Yeah.
- [38:44]
E
And that's a reflection of a couple of important things that have happened stateside. One is certainly a lot's happened since January when from a regulatory perspective, some things have been throttled back. To understand what this means for the ecosystem and certainly this growing interest. And one of the things we've often spoken about is the accounting profession being tied to understanding 861 million crypto users worldwide, crypto trading hundreds of billions of dollars every single day. So it really is an important part of how the ecosystem grows, how the economy grows, and inarguably how the accounting profession participates in that.
- [39:19]
B
Well, clearly on this town hall we've got roughly 13,000 people. We have a lot of people that are not involved in crypto or digital assets. But the two big buzzwords at the symposium really were around stablecoins and this ETF movement.
- [39:38]
E
Yeah, absolutely. And stablecoins are one of the premier products being brought forward in the marketplace. Really, which are crypto tokens that are tied to underlying value, like US Treasuries, for example, or the dollar for example. And that means money for some of these large Wall street giants. Gold, Goldman Sachs, PNY Mellon, BlackRock Daily, all of these are offering now services. And it won't just be to high net worth individuals, it will be to their mass consumer base. We're also talking about the tokenization, Bitcoin ETFs and I want to raise one thing that Lisa raised a bit earlier around the tax implications for staking. I think it was today where particular ET exchange traded product will make staking available. Staking rewards available to their ETP holders. So again, the argument we've always put forward, aside from me arguing with my earpiece, you don't need it.
- [40:27]
B
Wrong. We're here in the studio. You can take it out.
- [40:29]
E
Is this idea that the accounting professional become ever more important in how do we value this stuff, how do we report on this stuff? The other interesting aspect, if I could real quickly, Eric, is real world asset tokenization. By mid-2025, we're looking at $27 billion that's growing exponentially over time. So you will begin to see tokenization across not just Wall street assets, but across real estate, across luxury items. There was a news item recently that luxury item is being written to a blockchain and tokenized for sale. And it realizes a lot of efficiencies and it realizes a lot of operational minimization of expenses. So this institutional adoption is driving a lot of the conversation.
- [41:10]
B
Well, the regulatory landscape has changed. We've talked about this with Mark. Peter Peterson has changed dramatically.
- [41:17]
E
It has, it has. And when we look at the formation of the Digital Asset Working Group, you know what we've often said, Eric, is it is a nonpartisan conversation when we talk about crypto. And there's a lot of stuff in the news about donations and the election. The important part is what's being developed when we look at the pro crypto executive orders, the reversal of SAB121, which in my mind really made it difficult for quote unquote, legitimate or qualified custodians to participate in this space. Even things like the SEC Crypto Task Force. It is astounding how deeply involved the SEC and other regulators were in trying to evolve the industry, protect investors, address their mandate, but allow innovation to thrive in the ecosystem. Then finally, some of the regulatory certainty. We've got a lot to do. And I know, Amy, you're going to be touching on genius. We still have a market structure bill that's a bit up in the air, but really, this is the maturation of a market, Eric, you and I have been talking about since. Since 2017.
- [42:14]
B
Well, yes, and one thing I want to note, we've had a partnership with the Wall Street Blockchain alliance for the past nine years. But Amy, we had all kinds of firms in attendance here. Also technology companies. Everyone's very impressed with the AICPA's leadership around how you do the accounting and the treatment of these digital assets.
- [42:39]
F
Right. And so we've been involved in this since the beginning of, you know, starting with the blockchain symposium. And from that initial symposium we got a lot of feedback and a lot of questions from our members about how do I account for this stuff, you know, what does it mean in my financial statement, audits, even some tax. So we kicked off and formed this Digital Asset Working group in response to those questions. And so we have formed this group of our members. They represent experts across the firms and lots of different size firms, big four down to some of the smaller firms who are really dealing on the ground with some of these issues. And we have developed this guidance and it's the Digital Asset Practice aid. And it is a live document. It's a member only benefit for our members to go to our website, download a copy of it, we keep it updated. So we have done a number of updates over the years. This year we did two updates and the practice aid is sectioned off between accounting topics and audit topics. From the accounting standpoint, we've got eight chapters covering accounting of different topics, 28 different Q&As. And this year in January, we updated the document for the new FASB asu, the Accounting Standards update that was related to crypto and tangible assets. And with that we updated the entire accounting section for this new FASB ASU, as well as adding some new Q&As related to which assets, which digital assets would be in scope of that FASB asu. Now on the auditing side, similarly, we also have seven chapters dealing with different auditing topics. We start with client acceptance. Client acceptance is really the most important aspect of whether you get into this space or not. Right. What are some of the things that you need to understand? It's really a unique space. You need to have some special skills and knowledge in dealing with digital assets and dealing with, with the technology and so does management of your client. So you know, what is their overall strategy and why are they in the digital asset space. This past month we actually updated the practice aid again. For the auditing side we added chapter seven, which is on crypto lending and borrowing. And we talked about this in the symposium, given some of the stats, Ron, that you just brought up in terms of the growth and the value of these crypto assets, there are holders out there who have these high value assets and rather than selling them and taking the capital gains, they might want to lend and take the interest or use them as collateral for borrowing. And so how do you account for that? And then how are these transactions being handled by the auditor? And we provide a table of example procedures that auditors should consider as they go through this. So next I also want to talk about our attestation subgroup. And this is where the GENIUS act comes in. Attestation is an assurance engagement that covers information that's outside of the traditional financial statement audit. And auditors use the AICPA attestation standards for these engagements rather than the audit standards. And so the stablecoin information is actually outside of that process. And so this image, I've presented it a couple of times, but this image represents a trusted ecosystem for stablecoins. What we think as a trusted ecosystem with the roof being laws and regulations that oversee the whole ecosystem. And we now have the GENIUS act and that was really groundbreaking, right? I mean the first federal law covering crypto, crypto assets. And so that not only requires that stablecoin issuers do have one to one backing on these coins, it also has a reporting requirement on a monthly basis as well as an attestation service that needs to get provided by a CPA on a monthly basis for these reports. And so looking at the foundation, you really need a good framework for reporting this information. And so we have issued the 2025 criteria for stablecoin reporting, provides a benchmark for reporting under this act and it is available on our website. And now the pillars, those are where the CPA come in, right? We support this whole ecosystem by providing assurance services over these reports that are going out to the public and providing that transparency and the public interest. And so we are working on technical Q&As for practitioners who perform engagements in this area.
- [47:50]
B
So on the next slide, and just even just. We've got a number of questions coming in, but I'm just going to take a question. I have a question here on unstable coin. I mean, this is a huge emerging field. There's how many thousand stablecoins? I think there are a thousand right now there's too many. There's too many. But when you talk to the technology leaders, you talk to the banks, you talk to the financial professionals, this is going to be a different wiring of how some of finance transactions are carried out.
- [48:21]
D
Right.
- [48:21]
E
And if we go back to the original reason for stablecoins, it was to remove the volatility of crypto. And then it became rapidly the new rails for things like payments potentially or how Wall street settles transactions, for example. And take it one step further, Eric, and you and I talked about this at the symposium, when you have companies that are going to be issuing their own stablecoins, how are they going to do that? What's the value proposition for that?
- [48:45]
B
Right. A lot of this will be a niche category. I think we probably are going to be evolving this. We're thinking about this having a digital assets crypto conference because there's just so much depth. The other question that's been coming in is just a little bit of a briefer on what is tokenization?
- [49:08]
C
Right.
- [49:08]
E
And that's probably its own session, right?
- [49:10]
B
That's its own session. Right.
- [49:11]
E
Tokenization is the ability to take some asset and have it legally represented within a token that's based on a blockchain network. So we've talked about tokenization. Essentially stablecoins are a tokenization of an underlying asset. We looked at real world asset tokenization, these conversations about real estate and the luxury items I mentioned. And Ron might be able to tokenize his house one day and sell pieces of it. Again, some of the future thinking of it. But that's the fundamental premise of a token.
- [49:37]
G
Right.
- [49:37]
B
And it's also even like with maybe doing things that makes titling simpler. So there's all kinds of things that are occurring. Amy, back to you. There's questions on getting access to the practice aid.
- [49:50]
F
Yes. And so the slides have direct links directly to the practice aid, directly to our stablecoin Resource Center. On the Resource center, this is a direct link to our summary that we prepared on the Genius Act. It's a handy two page document you can download right on our website giving some of the highlights of the Genius Act. And lastly, wanted to just talk about the tax side. Lisa had mentioned some of the things that are happening in the tax area related to the IRS guidance and quite frankly, there's not enough guidance out there. And so our Tax Working Group is developing a practice aid similar to our accounting and auditing practice aid. And they're going to be dealing with, you know, some basic concepts that you can practice. Tax practitioners can go to their clients with specific questions about their involvement with digital assets. We'll summarize some of the IRS guidance and provide some best practices for some of the reconciliations that may be needed between those 1,099 DAs and the Form 8949. So this practice aid will be released right before the 10 tax conference that's coming up next month.
- [51:04]
B
Well, Amy, thank you. Just great leadership here on advancing all of this for the AICPA and the membership. And Ron, thanks, thanks for your partnership. We're going to now you're going to stay with us as we move here into Open Forum. We got hundreds of questions here. Lisa, you've been looking at them. There's one that I noticed during Mark Peterson's session that I'll start things off with and then please jump in. And Mark Koziel as well. Mark, questions about the Mark, you might even want to take this one. The SEC public company reporting, the statement of it potentially not being required, quarterly.
- [51:48]
C
Yeah. And it was interesting. I was with the SEC literally the day after that was first sent out in a truth social post that that was happening. And so the conversation was there. It's not new. This conversation did bubble up during the first Trump administration back in 2017. It was being talked about. So the question is how does this relate to businesses for the largest of companies, the big four, maybe not so much because they very much are in there kind of quarterly anyway. But is it going to relieve some, some of the burden on the smaller listed companies that are out there? And really the big thing is, and I think this is part of the understanding is remove the regulation because some industries may make sense for quarterly reporting. Other industries, it may not make sense for quarterly reporting. So by removing the mandate, let the market decide on which way is best to go on when the filing and what the investors are looking for. That's really the theory behind it. Mark, anything to add?
- [52:53]
D
No, absolutely right. I mean, they've been heading this direction in Europe for even longer. And again to your point, certain sectors, certain industries utilize it because they think that it's helpful. Others have moved away from it. And it's definitely right in the sweet spot of the agenda of this SEC and this administration to try and again help companies get into the public markets and reduce boundaries and help with competition.
- [53:21]
B
So, Lisa, you said market forces could be.
- [53:27]
A
Eric, I need to issue a retraction and correct one of my statements. Nellen, my rock star is still a rock star, but she's not a doctor. She has her Bachelor's, two Masters, her J.D. she's an academic and an author. So apologies for my misstatement, but still a rock star in my book.
- [53:48]
B
Any other questions that you may want to raise to the group here?
- [53:52]
A
You know, we still get continued questions about the E payments. A lot of questions around trust continue to come in. So we'll take those all back to the group and continue to work on our advocacy efforts to get clarity and, you know, reasonable accommodations for some of those taxpayers.
- [54:13]
D
Absolutely.
- [54:14]
C
The other piece, just looking over your.
- [54:15]
B
Shoulder here, I know you see the questions.
- [54:17]
C
I have seen a few of them. And I will say that some of what's coming in the theme around the government shutdown was that the OMB compliance supplement hasn't been issued. It's already late. And what are the effects of that? Even now we have June 30th, year ends that need to happen. So that's definitely something I'm taking back to the team to have further discussions on. Obviously not going to get it. I would say more than likely during the shutdown. But for us immediately after the shutdown to be focused on having those conversations, saying we need some information and let's get moving on it.
- [54:52]
A
Yeah. But they've been working, pushing for that for a while, so it's definitely on the radar.
- [55:01]
B
Well, I think this has been a great town hall, Mark. I think just stepping back, a lot of questions coming in, but we'll be staying close to any announcements that come out of D.C. we do have our communication channels with the newsletter. We'll give the. We issue the town hall newsletter on Tuesday. So we'll make sure we've got current updates coming out through that medium.
- [55:28]
C
Yep. And hopefully, well, everyone will see it. If not already taken a snapshot of the shutdown resource center we have on our website, by all means, continue to check in on that. Make sure that you're staying up to date on things, trying to stay away from the headlines and more so focusing on what we know or what's going to impact the profession. That's always our number one concern. Everyone around this table and online is making sure that the profession can serve their clients, their businesses as we go forward. And we'll keep up to date on that.
- [56:02]
B
And we'll be out in the marketplace a lot. You've got the AICPA council meetings coming up later this month. Lisa mentioned the National Tax Conference, and then we're closing the year out with digital cpa. So, Mark Peterson, thank you very much. You bet, Ron and Amy, thank you. Amy and I, I mean, Amy and I at least. And I will take the town hall community through some resources here. One resource that we've been highlighting is this new AI tax research tool partnership with Bluejay. What we're trying to do is put together just some basic materials to help practitioners better understand what AI power tax research can deliver. We're thinking about how firms can package this, can bill differently for it. One way we do this is we do case studies and we've got success stories also, just demos. So, Lisa, Mark, I know you're talking to firms about just evolving capability for their tax practice.
- [57:03]
C
You know, Blue Jay gave me a little trial I just thought of. I just happened on the after the RevProc Aug 28 on section 174 I just did a little study on it and even shared it with the team and the team was working on our resources just to see how fast and how accurate it is. It was pretty amazing to see the power that's there and I hope that our members are really taking advantage of that relationship. They get a discount as an AICPA member, but more so how to be that true trusted advisor and getting paid for it from the client based on that powerful information that's there.
- [57:41]
B
The key thing about all these technologies is evolving of the workflow, your practice strategies, your client packaging of these offerings. So it's the technology plus. So I already mentioned this. We've got digital CPA coming up at the end of the year. We'll be in the basic DC area hosting it at the Gaylord right outside of dc. We've also got this very, very important initiative. I don't know if you want to cover this related to Rise 2040 for sure.
- [58:11]
C
We're doing three different webcasts around the world, really talking about the future of the profession and really setting the tone and the strategy out next 15 years. I know that sounds like a long time, but what are the hard trends, soft trends of the profession and for all of our town hall members, you have the opportunity, if you could make this webcast to be able to join in to the conversation and have your input, your thumbprint into what the future is, the profession holds and how we're going to move forward together.
- [58:41]
B
Lisa, we got some hot topics here. Yes.
- [58:43]
A
Yeah. So October has, as I mentioned earlier, Cybersecurity Awareness Month. We have a hot off the presses cybersecurity tool that I love the title. It's risk response and remediation. So I think that pretty much covers the gamut of what we all need to be thinking about, especially as CPAs who have a lot of access to a lot of valuable information. So I highly encourage you to check out that resource. October is also a month where we focus on mental health and we have a new episode coming up in a brand new webcast series for emerging professionals. It is not just for emerging professionals, but we're trying to make sure that we are increasingly relevant to them. And this one is about work life insights for emerging leaders. Highly recommend that you check that out. It is free for AICPA members and it is eligible for cpe. And of course one of my favorite offerings is our reimagining your tracks practice webcast also coming up in October. And this is on Burnout and Mental well being.
- [59:48]
B
I'll just quickly cover these final slides. Here's information about transforming your business model. Information here on how to register for this webcast series. Here's the remaining town halls. I mean the year has got five more town halls. Some of us measure it, you know, one every two weeks. So we look forward to closing out 2025 with you, bringing you the latest information and analysis that we have. And here's our different resources that we continue to work on and make available for you to best leverage all the information that we we provide. The reprodcast of today's will be on Monday, October 13th. So that's it. Mark, Great being with you here in New York.
- [60:30]
D
Thanks for having me.
- [60:31]
C
Great to see everyone.
- [60:33]
B
Lisa, thank you.
- [60:35]
A
Have a great October 15th everyone and we'll be in touch.
- [60:39]
B
Thank you.
- [60:40]
A
Thank you for your participation. You can also subscribe to the AICPA Town hall series on your favorite podcast platform, as well as watch archives on YouTube and find resources@cpa.com Townhall Tune in for live broadcasts Thursdays at 3pm Eastern Time.
- [61:01]
G
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