B (6:27)

Mark, you threw another acronym out into the ecosystem. Arpal. And ARPAL is the association for Responsible Professionals Licensing. Did I get that right, Mark? Alliance. I'm sorry, Alliance. Apologies. So that's a new one. You're going to hear more about that because this is a pressing issue that's becoming more and more of a hot topic. So you'll hear more.

C (6:48)

Yep. Sorry about the acronyms. I don't always remember all what they all said.

B (6:52)

Nor do I.

C (6:52)

Exactly. All right, another big topic because it's top of mind. It was in the top five here in a variety of ways. And you know Mark, and Mark Peterson in his update today to council, along with James Cox, who represents our or state regulatory. They talk quite a bit about, you know, what we're hearing in the marketplace. In addition to all of the headlines and everything out there, we've said it on town halls time and again. Stop reading the headlines.

D (7:20)

Right.

C (7:21)

And we have support around tariffs. We have a tariff dedicated page. We have a dedicated page around the government shutdown which Mark will talk a little bit more about. And so a lot of the discussions we're having now with with members and members with their clients is the fact that, okay, here is the tariff revenue over however many years and you have it based on the president, whether Republican or Democrat. But the big thing is, you know, the tariff revenue is going up as we see it, and it is having impact actually on what the reduction of the deficit was. And I had some members yelling at me when I said we were very supportive, supportive of the HR1 bill passing. And that was because of all the pro business pieces that were in there. And they said, well, how dare you say that when the deficit's going to be so impacted. And this is where I say you kind of got to look at the picture holistically, right? So you have, you know, you, you have tax, increased tax deductions, but then you also have increased tariffs. And businesses are benefiting from the tax deductions, but they're seeing an increase in costs from the tariffs. And so what is the net net for your client and for your business if you're in bni? I think you really have to look at it holistically to understand all of this regime and the things that are coming at us this year. How does that, how does that affect me and what do I need to do with it? So, you know, again, we're keeping an eye on it. We have the tariff dedicated page. Things change by the day. I've given up on having a summary slide of what all the tariffs are because I'll be wrong within 12 hours of some new change that happened or some new true social post that happens and people just automatically think that it becomes fact. So we'll keep from doing that, but we are keeping an eye on the tariffs. I think having those strategic discussions with your clients and with businesses. And I'll say, you know, again, I've given the example of a friend of mine, you know, small business manufacturer in Morganton, North Carolina, and he's been overpaying on his tariffs. And he and I talked a lot about it. He is going to get the refund, but it's going to take an incredibly long period of time because he had to pay originally. DHL charged him for the entire product, not just the metal portion of the product. And so that is how he was overpaying on it. And I think there's opportunity for all of us to take a look at those things as we go forward. All right. Trusted advisor role, never more important. I'm not going to go through this line by line, Lisa, so don't worry. I'm not going to put us an hour over, but I do think there's some highlights here. And many of you who have been on these town halls for a period of time, we've shown this on a very regular basis. And so some of the pieces that I really want to highlight out of this would be first and foremost under legislative priorities. You see their state anti regulation. And this has been a majorly large topic that we have talked about for a period of time. So that whole idea of ARPEL that we were talking about other professions associations and us having a dedicated session, we had a panel, it was myself, Dan Dustin from nasba as the two representatives of the accounting profession and we had two other associations that are part of Arpel, their CEOs to talk about Arpel, the benefit of Arpel. What is Arpal up to and how is it benefiting what. What it is that we're trying to do? And I believe we've talked about Florida in the past. We have, right? Yeah. So Florida definitely had legislation that made it much farther than anywhere else. And we talked a lot about the fact that we have to stay diligent, attentive. And I ask you, please, if your state society reaches out to you to try and go to see who you know in your state legislature or if you're willing to volunteer to go up to your state legislature for, for a visit to talk about these things, even if you don't think your state is being impacted by anti regulation. We have to plant the seeds well before anything gets put into a potential bill. And if we don't do that, we will be at risk. And I think some of our smaller states who have less legislative support than some of the larger states may be the most at risk. So we ask you to please get involved. It's an important aspect of who we are as a profession. And you know, we've seen the success of that council. In May, they went up to the Capitol Hill right after the House bill passed ptep, we were able to pivot and put that on the list. So that is just great proof of how advocacy works. But, and this was said at our Engage conference, we had a special session and speaker said, you know, if, if you don't speak up, if you don't show up, they can ignore you. And I think that's where we as a profession need to focus on. And I think the other big piece of this that we talked about yesterday at the council meeting, really around the administration and what's kind of happening there. We've had a number of meetings and I focus a little bit on the SEC because I had the privilege of meeting with the SEC chair and the chief accountant. But they've also been reaching out to a number of our member firms too. So I've had member Firms reach out to me to say, hey, I'm meeting with the SEC chair, you know, what do I need to know? And as a large part of that, it's really been the fact that the SEC wants to understand the inspection process and how what firms are up against with that. But they're also looking to open the capital markets and they want to see more businesses going public, which means that we also need the auditors to be able to do it and making sure that we have the ecosystem. So big part of that conversation, you know, I thought it was encouraging. So, you know, we'll continue to have that interaction. Sue Coffey, she meets with the chief accountant constantly, although, you know, not many of us are meeting with anybody in D.C. currently, or so we say publicly. But you know, it's something that I think is really important as a profession and I think it's a great opportunity for ecosystem and how we continue to bring trust to the profession.

B (13:44)

Mark, really quickly before we move away from the state licensing issues that you were talking about. When I talked to people in the audience after our sessions on the anti licensing movement, it's hard for them to understand why anyone would want to take away regulations around the licensing of CPAs, around the licensing of doctors and other professional careers like that. So can you give a little bit more insight into what's driving that?

C (14:16)

You know, there's actually both sides of this in the argument. So Democrats and Republicans in the first introduction of deregulation actually happen in a Democratic administration because they are saying that we're preventing access and opportunity for underdeveloped communities to be able to have access to that type of career going forward. And if you, if you remove some of the regulations, a lot of it is around licenses and some of the requirements, barriers to entry and some things that may not make as much sense to have licensed or however the state has to regulate it. But then you have the Republican aspect of just this whole DOGE aspect and how we're going to have less government and less influence. And so that's what currently hit this year with Florida. We've also seen some indication of that in Nevada. So us staying on top of it becomes really important. So again, reach out to your state society, they're well versed on it, or reach out to us. We have a lot of support on that as we go forward. All right, to finish up last piece, we talked about workforce development and I thought this was an interesting survey. I was in Illinois with the Illinois Society back about a month or so ago and they invited me as part of this readiness survey that they did the readiness divide, and they went out and they surveyed young professionals and their managers to find out if there were differences in thinking of how prepared the young professional was. And in most instances, the young professional scored themselves much higher than their manager did, which is really that kind of readiness divide. And we're seeing that. And so I do think this is something we need to continue to work through and really try and help that young professional as we go forward. So a lot of good activity around.

B (16:02)

That, Lisa and obviously this is a subject close to my heart. I'm a member of my college, my university's executive advisory council for the accounting program. And we're talking a lot about how can academia change their curriculum or focus on different skill sets to get them ready for what's next. It's changing every day with the advancements in technology. But just keep this on your radar and be thinking about how you can help support the development of these types of skills that the managers are saying are lacking. Mark We've got Stephanie Otero coming up later in the program and we've asked for your feedback throughout this entire session.

D (16:43)

Session.

B (16:44)

You'll find an open field survey box in the upper left corner of the screen where we're going to ask you if you're in a small firm, give us some specific suggestions for what you would like small firm support to look like. And Mark, I know that's been a theme that's come across your desk via email. So I just wanted to make sure that you all know that you've got that opportunity for the rest of the hour to give us that feedback. Upper left corner of your screen. All right, let's move into the always boring DC Update with Mark Peterson. What's going on, Mark?

D (17:19)

Well, it was going to be the state of play, but it's actually the lack of play. So let me just kind of let you know where we are and how we got here. Headed into the end of the fiscal year, end of September, the House of Representatives September 19th passed a clean cr, clean contained resolution. It is really just kicking government funding down the road in order to get that appropriations work done. Okay. Then they left town. It had to go to the Senate. Well, it got to the Senate. Senate requires 60 votes. Republicans don't have 60 votes, they have 53. So that means it has to be bipartisan in nature. The Democrat counter proposal for that clean extension was permanent extension of the ACA Obamacare premium tax credits, about a trillion dollars going back into Medicaid from reforms that were made under HR1, putting funding back into PBS and then actually prohibiting the utilization of a rescissions package to undo any of that spending. Well, that was a hard no from the Republicans. And so that is where they have locked up on those two deals. The Republicans have tried 12 times on the Senate floor to get votes for that clean CR to kick the can down the road to November 21st. They have failed. And those votes have not changed very much. Okay. So that leads to me to believe they're not getting very close to a solution. The inflection points in shutdowns are really, it's payday, it's paychecks. So, you know, when the troops don't get paid on the 15th, it's a big deal. They still have to go to work. There are special employees with tsa. There are traffic controllers. How it's going to hit some of the nutrition programs, you know, wic, that's another example. So the politics around a shutdown and they're all different. Since I've been in D.C. i've been through a bunch of them. They're for different reasons. The players are different. They've been under Republican leadership, they've been under Democratic leadership. The circumstances change and who gets the blame? There is no winner to a shutdown. But the politics is you want the other side to take the blame and you want to get as if you're in the minority. I don't care if it was Republican or Democrat. You have very few moments of leverage. And so this is one of them. But it's a high stakes gamble. So kind of on the side of those two offers, there have been several attempts to try and break through. The leader of the Senate, Thune, had said if Democrats want to vote on the ACA premiums, open up the government with this continuing resolution till November 21 and we'll then have a vote on the premiums. Democrats don't like that deal because they need 60 votes for that too. And they don't have those. So, sure, we open up the government, but then we don't get this. That's why it's trying to be tied together. You know, again, the politics around this is the Republicans and this is what they're saying is, you know, we voted to keep the government open and it's up to the Democrats in order to work with us to keep it open. Democrats are saying we're the defenders of health care and you need to negotiate with us. And we want President Trump in these negotiations. And so that has been kind of the State of play. They've tried to run a defense appropriations bill on the Senate floor which would at least get the troops funded, but that was voted down because it wasn't paired with other initiatives. So it really is high stakes negotiation. The challenge I'm seeing right now is where's the escape? Where's the off ramp where you could kind of see a deal coming together, a group of Democrat senators and Republican senators getting together to pull together something, a counteroffer. Okay, maybe not permanent ACA premium tax credits, but how about two years? And a lot of this comes down to just cynical politics of who's taking the blame. There are a couple things that could happen, okay. I don't know exactly when. I think again, these inflection points. November 1st is going to be a big one. You know, it'll be open season, open enrollment. So the pain will have occurred related to those healthcare premiums. Right. And so the Democrats won't have won the policy debate, but they may win. They feel that they win the politics. So does that change their position on keeping on voting for some type of resolution to keep the government open? And again, none of these, our long term solutions, these are kicking the can down the road. So they could put another offer out there that is, we'll do three months to negotiate. That gets us into tax season. We'll do a full year. Well, there's some appetite from some for doing a full year. But if you're a proprietor, it took all your authority away from you. And if this is the point of leverage where you get your opportunity for your policy, you've given it away. So you know, those kinds of ideas are in play. There's one other I should mention, because it's getting some press, is this idea of using the nuclear option. So the nuclear option is a procedure at which you basically flank that 60 vote requirement. Okay, it's been utilized. First time it was utilized was by then Democrat Senate leader Harry Reid for nominations frustration because Obama nominations were not getting confirmed. The next time it was used By Republican leader McConnell was for a Supreme Court nomination. It is possible and it could be used and there are some voices that are calling for it. But it's very dangerous to use a procedure like this because the 60 votes helps protect the minority and actually forces some bipartisanship. So it's great if you're in the majority at that moment in time, but at some point you won't be and you've given up that. And if it becomes a simple majority, one vote majority in the Senate, we see That a lot. We don't see a lot of 60 votes. So it really does break down the bipartisan requirements. Now. Things will move much quicker, much more quickly, but they're not going to be bipartisan in nature. It's available. The leaders have said they're not interested in it. I think it's possible, but unlikely.

B (23:34)

Yeah. We've got a lot of government agencies that we engage with on a regular basis. And we'll talk. You'll see us a click through here. Last week, we did an AICPA special edition that dove into details around a lot of what we're doing with other agencies. If you were not able to join us, hopefully some of y' all took the day off on October 16th. Go catch that. Because it's a really good look at the breadth of our outreach to other agencies. In addition to just the irs. Is there anything you want to hit on? And I've got a quick LMB update.

D (24:12)

We had the dream team together for this. So we're going to talk about the IRS and Treasury. The SEC is, we call it a shutdown, but elements of the government are still working. So Edgar at the SEC is working their online service. They are taking incoming issues related to filings. There's just no response outgoing. So there is activity there. Department of labor has been 75% furloughed. So it is kind of the bare minimal essentials that are going on there. If there is data that is created that is utilized by these agencies, that's all been paused. Omb, everybody's waiting for the compliance supplement that was delayed and now is obviously delayed. So that's something that we're working through. HUD, 84% of their workforce has been furloughed. You know, there are certain grants and there are certain programs that have been funded. And so if that funding is in the, in the pipeline, they may be functioning. If you're waiting for approval, that's not happening. You know, the banking regulators, the same thing there. The issue is really going to be about that economic data that comes through those agencies that, that, you know, is utilized in other decisions. All of these agencies had deadlines. They have compliance requirements that the longer this goes, the more challenging it will get. We have recommendations that we're going to hear about for the IRS to try and provide some relief. We're going to see if we can come up with those for other agencies, too, as we get into specific problems. And so it's really important to hear from the town hall community about what they see coming down.

B (25:47)

That's Great. Mark mentioned the omb. We reached out to the OMB last week again for an update on the, on the circular, the compliance supplement, but no response yet. But I do want to let you know that our governmental Audit Quality center is creating a resource hub that basically lists what states are doing in terms of deadlines for submission of those reports because some, some firms are moving ahead with the draft that's been made available and some are waiting. But there's a trickle down effect of that, that weight because that could impact other state level compliance situations. So check out the government allotted Quality Center. It'll be early next week, but that resource will be out there and available for you. All right. And again, I do just want to recommend that you watch that prior town hall because we've got a lot, a lot of great feedback and because it covered so many different subjects. We also have the resource center Mark that your team and others are keeping up.

D (26:48)

All the teams that are involved are working very hard to get as much information as we can. You know, we work with these agencies very collaboratively and so they're interested in sharing the information they have to the extent they know. And that's challenging in this environment because there's a lot of uncertainty. But we're doing the best we can to get it up and posted and available to the membership. The other thing again is we're part of that feedback loop and so to the extent we're hearing issues coming in from practice, we can get that into the agencies. So to the extent they could address the issues, we maybe will be able to find some relief. We're going to update this with the best information we have as quickly as possible.

C (27:25)

I think that's an important point to highlight is the fact that not even the agencies themselves have a general understanding of what this means and they're all still trying to navigate it. But our teams are speaking to their counterparts on a very regular basis to stay up to date as best we possibly can. So this resource center that is the go to again, forget the headlines, the press, you know, the resource center is there to give you up to date where we stand on all these agencies.

D (27:56)

That's right.

B (27:57)

And speaking of up to date on where we stand with agencies, I'd like to bring in Melanie Laurenson, our vice president of Tax advocacy, who has been so incredibly informative the last few months about what's going on within with the irs. And we're also joined by Jan Lewis. Jan has been on Town hall for us several times before. She always brings such a Great practical. What's going on the mind of a firm practitioner to the conversation. That's what we love about you, Jan. That's what we love about you. So I'm going to turn it over to you too.

A (28:32)

Well, I'm going to echo the sentiment that Mark has just shared with us that there's still a lot of unknowns, but don't read and believe everything that you see out there. And as of today, Ken Keys actually came out and he said don't believe everything that's out there in the news. And he did say that there were priorities that they have. Now, as we've talked about, there have been government shutdowns in the past, but each one is a little bit unique and this one is a little bit unique in that there's been some new scenarios thrown in. So in the past when we have had shutdowns, there has been a cause of delay to start the filing season. And so I know many of our members are very worried about when will the filing season start and when will we start getting guidance. So with that, let me go ahead and kick off into the actual contingency plan. The first contingency plan dropped in September and that said that for five business day it would be 100% open and everything would be functioning. The IRS also believed that they wouldn't need a contingency plan. From there, on October 8th, they moved forward with furloughs and they furloughed approximately 46% of the IRS, which believe it or not, in the past they furloughed many more. So, so it was okay. Like Mark also said, there's never a winner in a shutdown, so it's not okay. But they are functioning. And the additional piece that was new is the reductions in force. And about 1,400 IRS employees received a 60 day notice that their last day would be December 9th. Now, the majority of the people who are furloughed and those who also received the reduction in force are coming from compliance and enforcement. So that indicates the priorities that they have. And we knew just by looking at the contingency plan and it is 167 pages long. So it's not a quick, easy read and to really understand what's happening in there. And there were a lot of unknowns as to what was happening. But as of today, again, Ken Keys, he announced his priorities and he said no tax on tips. And I already saw some questions coming in on no tax on tips. Also, no tax on overtime is a priority and the Trump accounts. And he said that guidance in those three areas were going to come out sometime in November. So that is important for us to know. We also know as of yesterday, they pulled back 45 chief counsel people back into the IRS to be able to provide that guidance. And so we are beginning to see pieces of guidance drop. It is slow in coming and I know we have a lot of pieces and there's lots of concerns that we have. But real quickly, I do want to say the priority practitioner service line, it is up and running. I'm hesitant to say skeleton crew, but go ahead.

E (31:19)

Well, they tell us it's a skeleton crew, but they tell us there are some people answering the phone. I called, it was pretty late yesterday, but I called and they answered with about a five minute hold. So that's not bad. I just, I'm worried if that's going to continue.

A (31:38)

And we have those concerns, too. We also know that they are keeping the seasonal hire employees to be able to open on time. And again, as of yesterday, they have said that they are still planning on opening on time. But that does not make me feel that much better. Jan, we have lots of concern backlogs. Can you talk about that?

E (32:00)

Well, as a tax practitioner, we have concerns on several fronts. One, of course, is HR1 guidance. There's no doubt all of us need that. We're getting calls from our clients. We've got small businesses that are trying to figure out how to report certain things. We've gotten this much guidance on tips, a little bit on the occupations that are eligible for the no tax on tips. Very much. Do we need tax on overtime? No tax on overtime. And we need more on the tips. They've updated a couple of FAQs. It is kind of hard as a practitioner to know where to go, where to look. So I do love our page that we have. Check the IRS website. You know, subscribe to the IRS newswire so that you see these when they come out. But it's drip, drip, drip. And I think that's one frustration on HR1. We need that. Okay. The other frustration, which is probably even bigger is the worry and the anxiety over what happens in a shutdown. What if I do have to send something by paper? Okay, let's say I tried to call the practitioner priority line and they couldn't answer my question over the line. Said you need to submit X for a reasonable cause request or you need to submit this to explain why you're sending this erroneous refund check back, whatever the issue is. Right now, I have, I have three identity theft cases right now. Not going to be a lot of people that are going to be able to help me. Somebody's got to process that identity theft affidavit. I do have some erroneous refund checks. I've got, I've got several disaster related issues. I'm from Mississippi. We have disasters all the time. And that causes different deadlines and maybe based on the zip code, the IRS didn't pick it up and they charged a penalty. So I think that's the concern and the never ending notices. I know the ASCPA guys, they are working tirelessly trying to constantly push the IRS and Treasury for help and guidance. And I think you're going to go over some of that because I think that's we need to push them as to what we need and that will help calm us because then what's going to happen with the backlog? And I think that's the other thing. Okay. When they do open back up, we've got a whole nother set of problems because all the things that we did try to mail off during this time, how can they catch up?

A (34:31)

And the scary part is TikTok came out with a report saying that if there was an extended shutdown, there would be three times the backlog of COVID And in Covid as a refresher, they had over 200 million backlog letters. And so they're expecting about 600 million backlog letters. So again, we have lots of concerns that there are some things that we know. So for example, we do know if you electronically filed and your return passes with flying colors and you asked for an electronic deposit that you would get your refund. Anything else that's probably on hold now?

E (35:04)

Yeah, I think a lot of practitioners, the timing of the shutdown was interesting. We had those five days where things were operating as usual. Then all of this went, you know, if you're a tax person, you kind of went into preparation mode the 5th through the 15th and you're just trying to get returns out. Now I do think we had problems in if you needed transcripts or if you needed something from the IRS, you probably experienced some issues right before October 15th. Now we've gotten past that. Again, we need help.

B (35:33)

We do need help.

A (35:34)

So we went ahead and we put together a comment letter and we've made recommendations to the IRS. So the first recommendation is accept 100% of the IRS employees. They should be fully functioning. Again, there's no winners, not for them, not for us, not for anybody with this. But the shutdown continues. So with that we also provided some minimum, at a minimum, certain recommendations that they need. So for example to discontinue compliance actions. Jan, you've had notices come in, erroneous notices.

E (36:02)

Right. And we have to respond to them. The notices keep coming. We have one of my partners has an audit going on. He logged in for the zoom or the teams call with the agent last week and there was nothing, nobody on the other end and wasn't even informed otherwise. I know there are practitioners worried about that. And then are those exams going to be then be pushed down the road to, you know, tax season? And there's just, we just hopefully these two letters you actually done two comment letters.

A (36:34)

We have, yes.

E (36:35)

And both of them guys go to the website and look at them because they ask for really tangible help for us.

A (36:41)

And all of the recommendations that you also see on the screen screen here they are something that the IRS can actually implement. It doesn't require any legislative action. It is something that it is absolutely within their power and they can do it in a fair and easy manner. So another one, keep the online systems open because that's the lifeline that people have right now to be able to communicate with irs, a streamlined, reasonable cause waiver. Because quite frankly people should not be using the first time of eight if they're having issues and getting penalties at this time. And then of course we have targeted penalty relief or estimated and late payment penalties. So for people who are struggling with making those estimated payments because again, we need that guidance. What's going to happen with this time? Or you had a client, I believe that came to you last minute and you had to pull a transcript.

E (37:30)

Yes, and fortunately I had a power of attorney on file so I could go in and actually find, you know, find that on the website. But yes, what if you did have a client? I don't remember what payments I made. I can't find this 1099 or W2, you're not getting it right now and.

A (37:46)

The due dates returns are due. So you're estimating the best you can and you need penalty relief.

E (37:51)

And we haven't heard to my knowledge yet when e filing is going to shut down, when they're going to shut down for this filing season. We still have a few weeks that we might could get some returns in. And I do worry about the returns that were filed that aren't the nice clean returns that the IRS say were going to be processed. What if it's someone that by some chance was is going to get a paper refund check? We know that's not supposed to be happening now, but it could happen. Or you know what if somebody's they mailed in a check, has that been even posted to their account yet?

A (38:22)

Because you can still mail in checks. They haven't given us guidance and they said they would give us guidance as.

E (38:27)

We approach the next check. And have they processed the paper filed returns that had to be paper filed because they were rejected?

A (38:33)

And does that give you automatic notices too? It's just a catch 22 of going back and around with circumstances. So anyhow, so please take a look at that letter. It does have great recommendations there for the irs. I know that the IRS is looking very seriously at our recommendations. They know that we are and they have said we are a powerful voice in the industry. So again, I will reiterate, we really want to hear from you, we want to hear your pain points so we can continue to share that with the IRS to make changes and hope to improve and make things better for everyone.

E (39:02)

And on this next slide, I would say that letter number one addresses some of my pain points because I am very nervous about my business clients and individual clients. How, how are we going to report tips and overtime? How is the tips and overtime deduction going to work?

A (39:18)

We've gotten very little on that little guidance. So we did see a little bit baby information trickle. There was one FAQ for 1099 KS that you can file them if you're under the threshold because again, it goes back into to be able to take the deduction, it has to be formally filed in a reporting form. So, so that's good. But again, it doesn't alleviate the millions of questions that we have. So we are asking for a safe harbor in that area. The IRS also yesterday dropped transition relief for the car loan payments for those that are processing and reporting on that.

E (39:54)

Exactly. And that's for the lender and how they're going to report that. And Lisa, we have a new Alphabet soup. Qpvli, Qualified Personal Vehicle Loan Interest.

B (40:05)

I love it.

E (40:06)

Put that in your.

F (40:06)

I love it.

B (40:07)

We'll add that to the glossary.

E (40:09)

Add that to the glossary.

A (40:10)

Exactly. And then of course, the Senate passed the Math Error Authority. So we're hoping for that to become law very soon. And then finally, just there is nothing new, but I'm making sure you guys are aware that IRS just released new FAQs around ERC and there's nothing new information. It just is pertaining to what HR1 had in there. But they clarified a few things. Nothing new again.

E (40:31)

Exactly.

A (40:32)

So, Lisa, back To you.

B (40:33)

All right, thank you both. That was a great update, Mark.

C (40:35)

That was a lot.

B (40:36)

That was a lot. That was a lot.

C (40:39)

I just, I can't help. I'm always amazed at our federal legislative team and our tax team and all the hard work that they do. I really do hope our members appreciate it because it is a lot of work and there's a lot of navigating. And again, you know, just keep focus on those support pages that we have to make sure that you're staying up to date. Stop reading the headlines, follow the resources. Your team does great with that. Thank you.

D (41:05)

And it is best information possible. We may not be able to give you authoritative answers. Right. The best information possible.

B (41:13)

Yeah. And sometimes the answer is we don't know which we've grown accustomed to for the last five years. Exactly. We're trying to make sure everyone is up to date. So with that, Melanie and Jan are running off to the airport. They stayed late just so they could join us for the AICP town hall. And I want to thank them again. But now I get the honor of introducing Stephanie Otero to our town hall audience. Stephanie is our vice president and small firm advocate within the aicpa and she made a baby debut on last week's special edition Town Hall. But this is her first full foray into meeting our town hall community and connecting with you. Stephanie, welcome. I'm so happy to get the opportunity to share you with the town hall audience.

F (42:03)

Thank you so much. Two weeks in a row, I feel very special. And can I just give a shout out to the town hall audience because so many of you sent me messages welcoming me to the community and I'm so grateful. Thank you.

B (42:14)

That's great. Stephanie, you've got a pretty diverse background, so why don't you give us a little bit of insight into how you got here, what your history is.

F (42:22)

I do. And I could talk about my love for accounting and being a CPA for hours. So I'm so glad that accounting chose me. It has led me to some tremendous opportunities in my career. And so I'm probably dating myself here, but spent about two decades in public accounting. I started off working for a mid sized firm in Palm Springs, California and that led me to eventually start my own small firm. I started with just myself in my home office when I had my first daughter and did that for about a year. And each year I just kept growing and got my own office and added staff. So ran my own firm for about 13 years. Had a team of five. Very exciting. We offered tax Services, accounting services and eventually went into auditing. I started specializing in nonprofits when I had my own small firm and family life led us to move from Palm Springs to la. My husband had a secret job. I'll say that led us to la and so I had to close my practice and wasn't quite sure what I was going to do next, but ended up being the CEO of a nonprofit organization in Southern California. And I'm so thankful that I had the opportunity to do that because I had tremendous experience. I became the face of that organization, so definitely pushed me out of my comfort zone. And from there I found the aicpa, which I'm so thankful for. I oversaw the not for profit section here for two years. And now in my new role, I'm back where I belong as VP Small firm advocate for small firms.

B (43:48)

That's great. It shows the breadth of your experience. But let's focus on your time running a small firm. What did that experience teach you about what it means to be a small farm practitioner? What did you learn from that?

F (44:00)

If there's a poster child for what not to do when running your small firm, I would be that poster child. I think I made all the mistakes and did all the things you should not do. Undervaluing my services, spreading my self care too thin, not specializing in an area. So I bring all that experience which I'm excited to for being VP Small firm advocate. So if anything, I've learned what not to do when running a firm.

B (44:23)

I love that. That's sometimes those are our best lessons and I'm proud to share all my mistakes with you. So just. Just ask what inspired you to take on this role of the small firm advocate? What interested you in it?

F (44:35)

Well, small firms are near and dear to my heart because I ran a small firm first off. But I think my career has really come full circle and being able to bring my not for profit leadership really taught me a lot about running an organization, creating networks and relationships, advocacy, and then also obviously running a small firm and being able to bring that perspective here. So I think it just all came full circle to me. So really excited.

B (45:01)

That's great. So your time leading a nonprofit organization that shaped your perspective on leadership, on advocacy, on community. So how do those lessons apply to this? You know, your time running a small firm and how you're going to approach your new role?

F (45:18)

Yes. So I think not for profits and small firms have so many similarities rather than differences. They actually have a lot in common. There is. They're learning to navigate with limited resources.

A (45:30)

Both.

F (45:30)

Right. So there's having to retain talent, have to obtain talent, how to sustain it. They're competing with larger firms. Nonprofits are competing with the private industry. Right. For profit organizations. So there are a lot of similarities there. I think that owning my own firm really taught me the foundations of leadership. And then being in the nonprofit, being the CEO really stepped me up to that next level. So I'm bringing all those perspectives, all the lessons I've learned to my new role.

B (45:59)

That's great. And you've also been a certified business coach or life coach. Tell me, correct me.

F (46:05)

So let's be real. As CPAs with our clients. We're pretty much counselors, right? Not just trusted advisors. So I just thought it would be helpful to learn additional skills in learning to empathize with clients, learning to listen. So I decided to get my certification in coaching just to learn to have those sometimes difficult conversations, especially when you're telling a client how much their tax bill is. Sometimes not easy. Easy conversations, conversations to navigate. So having the coaching certification really helped me in that area.

B (46:34)

That's great. I remember the days of having to just gently slide over a piece of paper that says, this is how much you're going to need to write a check for.

F (46:42)

Not fun, not fun.

B (46:43)

Not fun at all. You're right. So We've got over 30,000 small firm practitioners in the U.S. no one knows the exact number, but how are you going to try to connect with as many of that audience as you can? What's your approach going to be?

F (46:59)

Well, I'm going to take advantage of the PCPs, small firm networking groups and a shout out to PCPs. If you are a small firm practitioner and not a member of pcps, I highly encourage you to look at that and to consider being a member. So that's one avenue. I was at Council this week and got to meet with many state society leaders and have been talking to them about having roundtables specifically for small firms. It'll be an opportunity for small firms to really share with us their challenges, their successes, how the AIC CPA can better support them. Our first roundtable is with New Mexico State Society of CPAs. But I've talked to many other states who are also interested, interested in having roundtables. So that'll be an avenue as well as just connecting with many small firm practitioners as I possibly can. I have a race with Mark to get to all 50 states before he does. So hopefully I can achieve that with all of your help out there.

B (47:52)

Alaska and South Dakota. She's looking at you. That's great. So we've covered a lot of your background. We talked about what interested you in the role. But if there's one thing that you want a small firm practitioner to remember about today, what is that?

F (48:07)

That you matter. You are not on the sidelines of this profession. You are actually the heart of our community. You are top of mind for our leadership. Marcus shared. Small firms is coming top of mind on your listening tour. It's top of mind for me. But we can only help you with your feedback. Lisa mentioned there's a question there for you to answer. I highly encourage you to answer. We will take that feedback back. It will help us to prioritize resources for you going forward.

E (48:32)

Yeah.

C (48:33)

And just your priority. It's your job.

F (48:35)

That's right. That's right. And my boss just happens to be here. So help me out.

B (48:41)

And I do want to acknowledge the the predecessors for Stephanie's role. This role was led by Jim Metzler, who many of you may know and who was just tireless in his efforts for advocacy around small firms. And then Carl Peterson, who retired earlier this year and worked so hard to get out into the field and meet as many of you as possible. State societies are going to be such an integral part of trying to connect. And you've also heard us talk about our online community forums that we've launched as a Pilot program for PCPs, corporate finance and CGMA case studies. We've just rolled out a few more pilot communities. Those are right now primarily focused on tax. So go check out that Engage 365 community platform if you haven't already. But we'll also be launching a small farm practitioner community in 2026. So we're going to let Stephanie get catch her breath, get into the new role and then we'll be opening up that community for you.

C (49:48)

Yes. So yesterday, one of our council members, small firm who again, complimentary about the town halls and when I was mentioning about us starting a small firm community on Engage365, he said Sign me up, I will do it. Right now I want to interact with other members. That's going to be Stephanie's role to stay on that. And just Lisa, as you mentioned, Stephanie's predecessors, she's going to work tirelessly too to do the same thing and is incredibly passionate about it, which is great. But you know, Jim Metzler was the first VP of small firms. Then Carl. I hired Carl. Jim Metzler hired me to the aicpa back in 2006. So there's been all this connectivity.

B (50:33)

Mark hired me and now we've hired Stephanie.

C (50:36)

So it's a circle, it is a full circle. And, you know, so we, you know, just know and understand small firms that we do care. Stephanie and I will have regular interactions so that I'm getting feedback on what she's hearing from small firms in addition to my own outreach to make that happen. So I look forward to that.

B (50:57)

So, Stephanie, if someone wants to get in touch with you, what's the best approach?

F (51:02)

So my door and my inbox are always open. I think we have my contact information there. Please connect with me on LinkedIn, reach out to me via email. I welcome and look forward to your feedback.

B (51:12)

That's great. And for those of you who provided your feedback on the very, the specific aspects of small firm support and what that means to you, we will accumulate those. Stephanie will dig into them, look for some themes, and then she's going to be working with the PCPS team as well as folks from our tax team and all of our quality centers to dig in and understand how we can get those resources available to you. So thank you for that. If you didn't get a chance to fill in the box or if the box didn't work for you, which is what I'm seeing some feedback on, please just send Stephanie a note and that'll be great feedback for us. So with that, let's turn to Open Forum. And I've been talking to Stephanie, so not paying a ton of attention to the questions, but I do know that we're getting just a lot of questions about irs, what is functioning and what is not, and mixed feedback on the practitioner service line. I know Jan said she was able to get through. There are many of you who've said, I got through, but I didn't get anything, or I got through after about a 20 minute wait, or if I called at 9am, I got in with no wait, and then someone got kicked out after two hours. So it is truly a smorgasbord of.

D (52:32)

Experience out there and there is going to be inconsistency. I mean, listen, this has been a tough year. I mean, it started out with, you know, Doge and the concept of downsizing these agencies. We're not, we're not going to pick what size an agency should be, but we need services because these are compliance requirements for taxpayers and for us. And so again, you know, that feedback, good or bad, is helpful. We were surprised about how well April went, to be honest, because of the pressure. They were, you know, putting together retirement packages. And there was a lot of discussion around another round of RIFs. So, you know, there's. We went through that phase and now we're in a shutdown. So, you know, we have empathy for the agencies.

C (53:10)

And I think, too, that the fact that they have dedicated what resources they can to the practitioner line.

D (53:16)

Right.

C (53:17)

You know, I wouldn't call the 1-800-IRS line if I were just an average taxpayer in current conditions.

D (53:22)

Right, right.

C (53:23)

So I do think that they have had the focus on that Jan mentioned it is a skeletal crew. Maybe it's some takeaway from that. If we're starting to hear feedback from members on what has been a good time to get through or what seems to be a good time and we can make those recommendations to folks.

D (53:41)

Absolutely. And then, you know, if we see a significant number of the same question, maybe we could get the answer and share that. The other thing, and Jan and Melanie mentioned this, but the notices. So the kryptonite of the IRS is paper and these communications, because it requires it to go out, and then it requires a response, and then it requires it to go out. And once that snowball gets going, it creates their own problem. And if they don't have anybody that's available to address it, don't send it out.

C (54:17)

Right. Which is part of that recommendation.

D (54:19)

Exactly. Exactly.

C (54:21)

Makes sense.

B (54:21)

Agreed. We've gotten some asks for clarification around how to get in touch with Stephanie or some of the other things that we've talked about. It's a great reminder that you can always download the resources, the slides, and get all of the clickable links. You'll find all the information and you'll be able to access those resources very quickly. If you're looking for the Engage365 community platform, we will make sure that we include that link. It's been in previous town hall slides, but we'll make sure that we include that link in next week's town hall community newsletter. So we'll get that information to you. Lots of questions about what's a small firm? And that's always a challenging question. I'm going to give you my answer, and then I'm going to let Stephanie, our VP of small firms, tell you what it is. But for me, what I've discovered over my course of 13 years with the AICPA is that it depends on your market. It also depends on staff size, revenue, and those kinds of things. So for my conversations with Stephanie, we are thinking about 30 or 30 professionals or fewer. That's a big number of firms and that's not what you would probably think of as a small firm. You might think of that as a good sized firm, especially if you're in a smaller town. So just know that we look at everything based on strata of a number of professionals. Solar practitioners have different challenges than a firm with 30 people. So we do look at all of that and don't just say if you're under 30, you're a small firm. Stephanie, I don't know if you agree with that.

F (56:04)

Yeah, I agree with everything you said. I think it's a very gray area. But Generally less than 30 professionals is what we're categorizing as small firm. But obviously solo practitioner to a firm with 30 is very different. So we want to make sure that we're meeting all your needs everywhere in between.

C (56:18)

Yeah, I think our sole practitioner community is the one that may be the largest in that small firm category. You know, as I travel around and I'm talking to firms on a very regular basis, you know, spending five years at running a firm association and firm association, we would talk about a small firm in a category. But our smallest firm is much larger than our small firm community here. But. But they would still be called small firms in that space. Right. We have the G400 community. We're going to be back here next week, Lisa, for the G400, which is basically firm number 101 to firm number 500. And that category ranges in revenue. Size is pretty dispersed on what the changes are. So in that group, the firm number 101 is. Talk about the small firm being firm number 500, top 100 firms. Firm number five says firm number 100 is small. And so. But with Stephanie's role, she is laser focused on those firms. We'll call it below 30. But it's anyone who feels like a small firm. It is a, you know, I do think it is a feeling and how you want to be. Not all smart small firms want to grow. That's one category. Some small firms want to just stay the same, stay a small firm. Other small firms want to start a small firm and be something else, as they did. I said, you know, I, I grew up in a, in a firm that we were 100 people. And I got a knock on this at Engage. When I said I came from a firm of a hundred, they're saying, they said, see, you're a large firm. You don't get it. That firm was started by a sole practitioner, Leonard Dobkins. He was still there, still showed up every day, told me exactly how he practiced and the clients and this client has with me since I started and all of that. And the firm was 40 people when I started and then nine years later we were 100. And so, you know, I've seen the evolution of that. I've lived through that. But then also have many friends who have had their own firms and talk about collaboration and things too. So, you know, I appreciate the fact that we have a lot of great support inside of of who we are as the AICPA to help small firms.

B (58:34)

That's great. So speaking of small firms, we also have a wonderful AICPA town hall community. We've shown you some numbers in the past, but I wanted to just call out that we are now a community of about 32,000 professionals. We're averaging over 15,000 engagements with the content either live or with the replays or podcast. We're so grateful for you and we're so grateful for the feedback that you give us. So thank you so much for being part of that community.

C (59:03)

And I showed this slide at the council meeting yesterday and I think people were amazed to see the type of reach that we have on that.

B (59:12)

Absolutely. We are closely approaching the December 15th effective date for the updated quality management standards. We wanted to call out your attention for a technology solution. If you're still thinking about how you're going to implement, I hope you're making progress because December 15th will be here quickly. But this is a really nice technology tool that is appropriately priced for smaller firms and might be a good thing for you to check out. So do look into that as a reminder. Our National Tax Conference is going to be a big year that's coming up November 17 and 18 in D.C. and you can watch it live online. A lot to talk about so we'll see where we are in shutdown phase. Also closing out the year for me is the DCPA Conference Digital cpa. A great event, lots of energy and we've got tracks that focus on audit CAs, tax B and I. So lots of good content for you there. Again, you can attend virtually or in person, but I'm highly going to recommend in person because it's just a great energy event. We've talked in the past about the rise 2040 and so we'll invite you again to participate in a global webcast so you can give your voice to shaping what the future of the profession is really quickly. Here's our countdown to the to year end and the remaining town halls. I want to thank everyone for joining us today. I want to thank our power hour team here at our on site desk, which doesn't look like our typical town hall desk, but thank you for for all of the insights that you've shared with our group.

C (60:49)

Thank you.

B (60:50)

We'll see you in a couple of weeks.

A (60:53)

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.

C (61:13)

This podcast is designed to provide illustrative information with respect to the subject matter covered and does not represent an official opinion or position of the AICPA or AICPA.org it is provided with the understanding that The AICPA and AICPA.org are not engaged in offering legal, accounting or other professional service. If such advice or expert assistance is required, the services of a competent professional person should be sought. The AICPA and AICPA.org make no representations, warranties, or guarantees as to, and assume no responsibility for the content or application of the material contained herein, and especially disclaim all liability for any damages arising out of the use of, reference to, or reliance on such material.