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A
Welcome to the AICPA Town Hall Series,
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your resource for the latest news and
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A
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. Today is July 23, 2026. We've got a great program for you. I'm coming to you live from New York and with me is Mark Koziel, who you all well know. And Mark, it's been board week. We got, we got plenty to talk about. It's going to. It's going to be a number of different topics, but one item we will be covering is a professional update with you.
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C
Absolutely. I will just give it a quick couple of minutes. What we talked about at the board and the fact that it all started with member feedback, Rise 2040, what our members are telling us and letting that shape the strategic direction of the AICPA and the profession.
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B
Well, I'm looking forward to that, Mark, but we're going to kick things off, I mean, just really quickly cover the agenda, but we're going to kick things off with Rob Nichols, who the CEO of the American Banking association. And that's going to be a really interesting discussion. Then we'll be doing the profession update. We have Mark Peterson here with us in the New York studio as well, and he's going to be providing the DC update. We'll have a technical update, then we're going to have open forum. But with that, let me. We've already seen him a couple of times here. Rob Nichols is with us here in the studio. Let me introduce Rob. He actually has been on a town hall. Rob and the American Banking association were great partners for us during the pandemic. You can see the bottom bullet here. Rob really played a leading role for America and the banking community during the whole pandemic shutdown and the PPP program. We all know that really well. It really played a huge role in keeping businesses going in America. But Rob's got a great background early in his career as the Treasury Department, also led the Financial Services Forum. And you've been leading the American Banking association over the past decade. So, Rob, it's great to have you with us.
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A
Eric and Mark, thank you so for including me. I look forward to the conversation. And I did really appreciate the partnership during PPP as we worked together to administer that 800 billion in grants to small businesses and merchants. That was, that was a lift.
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B
Yeah, it really was great. And you, I, we put a call in to Rob. I've known for A number of years put a call into Rob. Rob was a great partners, really. It was a really great public private partnership. And I, I just think it's a time that I look back on, I'm really proud of, I'm proud of how we worked with you, the banking community, how we worked with the elected officials.
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A
Yeah, it was great. It was great indeed.
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C
You know, we have such a, such a collaboration between our members and the banks and the banking system for small business. That's what makes it so fantastic.
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B
So why don't we, I think many know a lot about the American Banking association, but for those who don't, why don't we have one slide here? Kind of. You have 150 years. You're, you're, you're slightly older than the AICJ. 15 years old or 16 years older,
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A
1111 just celebrated our 150th year anniversary. The first 100 years. It was headquartered here, ABA in New York, last 50 in Washington D.C. about 400 employees. We represent 4300 banks that are active in the United States, headquartered in the United States. That represents about 2 million women and men who work in the U.S. banking system.
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B
Well, the banking market has been evolving just like the firm market here in the US So why don't you talk a little bit earlier. You and I were talking about this, you know, what's going on with consolidation, you know, where, where was, where was the banking market maybe 10 or 15 years ago? You talked about, there's, there's some good M and A, bad M and A. Love to hear some insights.
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A
So state of the industry. First banks are well capitalized, not seeing a lot of loan losses. So we're in a position of strength at the moment. And so that's a positive thing. When I started at ABA, Eric, there were about 6,100 banks 10 years ago. There's now, as I said, 4,003. So there's been a trend around consolidation. And I'm frequently asked, is consolidation good or bad in the US Banking system? There's a little of both. So for example, if there are two banks that have complementary cultures and complementary geographies and they merge to create scale so they can deliver their products more efficiently and effectively in the local marketplace. That's great. That is great. However, when you see bank consolidation because of lack of succession planning or a regulatory impairment, that's where you get a little frustrated. So there's good M and A in the banking sector and there's bad M and A in the banking sector and
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B
just a Little bit about the spectrum of banks from the smallest banks, I mean the largest banks in the nation. You just were with one of the largest banks in the nation today. They're members as well.
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A
Yes, that was with the senior leadership of JP Morgan, that's our nation's largest bank. And we have 8G SIBs which are the globally active banks supervised in a special way. And then we have a number of regional banks. Then we have about 30 or 40 regional banks. Then we have about 100 what are called mid sized banks. Those are banks between 10 billion and 100 billion in asset size. And then you have the bulk of the US banking system, 4,000 and change banks that are all under 10 billion in asset size. Really true community banks. That is the really lifeblood of the US banking system. Ton of agricultural banks in the heartland of America. About 1500 or so banks that really focus and specialize in ag and farm lending. And these can be banks. Eric and Mark with three, four branches, 35 employees.
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B
Well Mario, I bet you know a lot of our members are close to those 4,000 banks.
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C
They absolutely are. And they're interacting with their clients and their client relationship with those banks and the, you know, the lenders, the lending managers that they have there. But I'm also interested because, you know, you talk about that consolidation and you think about tech, right? ATMs were going to replace the teller.
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A
Yep.
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C
And with the consolidation you would think there'd be this reduction of people in the banking system. How does that look?
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A
So it's a really interesting question. So in the last 30 or so years, there's been 2 million women and men who've worked in the US banking sector. That number has been static. The type of jobs of course change. But when Excel came out, everyone said, oh, they're going to. Banks are going to shed a lot of people. And then when ATMs were created, everyone's like, oh, the branches are going to go away and all the tellers are gone. No, the types of jobs change we anticipate with AI, there'll be some of that too. But no, we've been at about 2 million jobs. But yes, like every other industry, the types of jobs will evolve.
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C
We say that time and again with CPAs especially, you know, everyone talking about AI replacing the accountant. We heard the same thing with Excel when that came out. But what's interesting though is it seems like most of the banks and of all sizes, they're getting back into the relationship business. Are you seeing that?
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A
Yes, absolutely. Well, in fact, that's how Branches are morphing. A lot of people say, oh, with all the, you know, digital technology, branches are going to go away. Branches are not going away. As a matter of fact, what's happening in the branches is changing. So they're a lot more consulting. It's more like a. It's like an Apple Genius bar. So when you come in, you're in your 30s, you have questions. You've never had a mortgage, you've got some questions. You don't want to do that, you know, through a mobile app. You want to go in and talk to someone and say, what are the questions I need to think about as I apply for my first mortgage? So they're more consulting, advising versus doing some of the bread and butter transactions. A lot of those are happening digitally.
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C
You can run that question through AI, by the way. But they still want to see the person that be able to give them
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A
that when you get to the complex stuff. Absolutely, absolutely.
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B
Well, we're going to get in a little bit more about that in a minute. But there's a lot of parallels here from it was much more transactional going into the bank, you know, making a deposit, doing a withdrawal, and now it's more advisory. Same, same with the firms. In some ways, it's moving from transactional to advisory. Well, let's just share a little bit. We've got a couple slides here. I want to talk about what you're focused on right now in 2026, but this is a slide that kind of shows some of the kind of things that you've thought about over the past couple of years, I would assume.
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A
Yeah, these are a lot of, lot of areas of public policy that we've been focused on. We've had, you know, a very positive set of rule changes. So from a policy standpoint, Eric, you know, number one, we're trying to do what we are calling regulatory. Right, sizing. So not deregulation, but just making the regulations more tailored for banks. So let's think less about just the size of bank as a manner of supervision, but rather the business model and risk profile and the type of activities. So we think that's important. And then there were also some rules that were intended for larger banks that were being applied to the small mom and pop banks. And so changing that rules that really weren't fit for purpose is something we've been really focused on the last couple of years.
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B
And that's almost from the Dodd Frank to today.
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D
It's like.
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A
Yeah, yes, yeah. So Dodd Frank had some important components to it for sure. And then there was some overshooting there also that we've been working for years to, again, to right size. The regulation. No one wants deregulation. You just want it appropriately calorie for the caliber calibrated. Excuse me, for the business model activity and risk profile of the bank. Unfortunately, Dodd Frank, it was just based on asset size alone. And that's not the best determinant from a supervisory standpoint.
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B
Well, there's one thing that I think this community would like to hear about is this Scam act in Congress. I mean, something that they actually, they, they're concerned about with their clients. So you're, you share a little bit about this. I know you're pretty passionate.
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A
Absolutely. So there's around. Fraud and scams are insidious in the US Marketplace. And we're talking hundreds of billions of dollars. Everyone knows someone who's been subject to fraud. And so we're doing a lot of things to work on that. The Scam act would require social media companies to do their fair share to take down the fraudulent and scam ads. So right now, banks are kind of the goalie, to use a World cup analogy. We're the goalie defending the customers and the clients, but we need the whole ecosystem to get involved. So a lot of these scam, a lot of these scams are created on the social media marketplaces and there's billions
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of dollars in advertising and then.
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And the three of us get them through this device. And so we're trying to get the social media companies to the table to do their fair share. And the mobile phone carriers, we get these fake texts all the time offering insurance, or it's China or whatever it is. They're scams. They are scams. So we need those two industrial sectors to do their fair share because right now it's just banks, you know, doing all the defensive work.
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B
And sometimes the firms get dragged into it with the client getting caught up in a scam.
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A
Absolutely. So we're just trying to get the whole ecosystem involved in fighting scams and fraud. So that's what the Scam act is. And it's been not only introduced here in Washington, D.C. it's super bipartisan. But my colleagues from around the world are also introducing similar legislation in their parliaments.
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C
That's great. In fact, I just got an email from my bank today about, you know, scam, you know, watch out for the, for these scams that are coming now. And I think the banking profession, the banking industry has done a good job of trying to at least make Awareness.
- [11:13]
A
We have two other campaigns, very briefly, that we're running. One's called Banks Never Ask that. You can go to a website, banksneverasthat.com and where we're trying to educate and tutor and teach the American people what banks would or would not ask. We would never ask for your password, for your PIN number for those things. Banks never ask that. So to the extent we can coach people not to click on those is helpful. And then the other one is called Practice Safe Checks. So we're encouraging the American people not to use checks because that has a higher rate of fraud than digital payments. But to the extent you're going to continue to, and some Americans want to, we teach them how to write checks more carefully. That makes it harder for the bad actors to take the check, change the payee name or the amount. We're also working very closely with the US Postal Service to harden those blue boxes that all the criminals are breaking open and then stealing the checks and then washing them.
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B
Wow, that's good, Mike. I mean, in the irs, it's all, you know, you're always thinking about, you know, tax fraud.
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C
Yeah.
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B
You know, so I think this is, it's something that, you know, our DC team, we can think about this and
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C
I think partnering, I think we can help get that message out for our members out there listening to that. I think it'd be great for them to inform their clients that you have that banks never ask that.com and send their, their members there so that they. Because they, our members hear about it
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B
when it's too late.
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A
Yes.
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C
And same with the bank at that point. So I think all that proactivity we could do as a professional would be great.
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A
That'd be great. And it's, the campaign is run through hum and influencer. So it's funny. And it's actually won a bunch of awards as a campaign. So check it out. Banks Never Ask that dot com.
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B
Well, so here you've got, you kind of mentioned a couple of these items already, but I think there's a few that you did not.
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A
Yeah. So two others. So we talked about regulatory. Right. Sizing and some of those issues. The SAFE Act, Eric and Mark, is another important piece of legislation we've been working on for about seven years. So when I started at ABA, only 10 states had legalized cannabis. We're now at 40, 80% of the United States has legalized cannabis. And yet because banks are federally regulated, so even if you're in a state where it's legal, banks are caught in the state federal inconsistency. So this would just create a safe harbor so that banks in the states, my home state of Washington was the first to legalize banks can do business not just with the dispensary or the manufacturer of the product, but with the accountant, with the lawyer and all the secondary companies and individuals and businesses that want to serve the cannabis sector that can't now. So this is an important piece of legislation. We've got it through the House, we just need to get it through the Senate.
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C
Excellent.
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A
And then lastly, Eric, the Clarity act, this is one that we're working on right now. And this is the dialogue of the banking sector and the crypto sector. Crypto sector wants to offer yield, interest and rewards on payment stablecoin. There's a reason they call it payment stablecoin and not deposit stablecoin. They want to offer yield, interest and rewards like bank like stuff on this payment rail. Congress doesn't want them to. They found a little loophole in the Genius Act. We're trying to close that loophole in the Clarity act and that's, we're debating this right now.
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C
We just want them to have proper
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regulation if they're going to, if they're going to offer.
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A
Yeah, well Congress doesn't want to for fear that deposits would leave a bank and then get parked in a payment rail where it doesn't create economic growth through lending. So Congress said we don't want that to happen. We're cool with payment stablecoin. It's an important innovation, let's be clear. But they can't be able to offer interest on it because then if money leaves a bank deposit gets parked there. That's money not being lent to the local community. Sure. That's the big difference. And so that's what we're litigating at the moment. That's called, that's the Clarity Act.
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B
Well, now you've got a lot, Mark, I was going to let you maybe tee this up because obviously we're always thinking about tax policy and this is kind of the, the list of ABA backed tax provisions.
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C
Yeah. So I don't know if you want to go do a quick summary on this. I have a couple questions on it because again there's a lot of commonality here where you know, Mark Peterson will talk about some of the things that we're working on. You know, your R and D costs. It's there. And the permanent section 179A and then also the other one that caused great interest. Oh, the 100% expensive for equipment and machinery, especially for small business. I mean that's like.
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A
Couldn't agree more. I mean when I think about, you know, what we've done around expensing and R and D and the pass throughs is so important. I mean, one out of three banks in the US is family owned. One out of three. So you know, they're small businesses really these smaller banks. They're just small family owned businesses, just like a number of your members as well. So we've long had a big team at ABA focused on making sure the fiscal policy is properly calibrated. Always thinking about lending, always thinking about things that we can achieve to allow banks to, you know, to do more lending, particularly to small businesses and the agricultural sector as well. And, and so we've had some successes obviously in the one big beautiful bill, as you both know, those. A lot of these provisions have expiration dates. So we're going to be back at it together not too long from now.
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C
Yep.
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B
And how do you, how's lending doing? I mean, how's lending? I mean it's, it's, I mean it was, it seems like things have died down. I mean a lot of, a lot of concern just on level of interest rates. Maybe people are getting more accepting of them right now. But how's, how's lending going?
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A
Overall sector is incredibly strong as I said at the top now. But then you can look and unpack that onion a little bit. You know, home sales for example, there's a lot of people who don't want to sell their home because they don't want to reset a mortgage at a six when they have one out of three. So there's some supply, demand and equity. We're working with the home builders, the realtors and the mortgage bankers to see if there's policy solutions that we, that we can help create. We haven't come up with the silver bullet yet, but the overall sector is strong. We're not seeing a lot of loan loss provisioning. So no, the sector is in a position of strength at the moment, interest rates being where they are. If you're a borrower or you're a saver, you're really excited or you're frustrated. So there's two sides to where the interest rate, two sides to that coin. So for every person who's frustrated at the rate, there's someone who's pretty excited about it.
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B
Yeah, well, we talk. Go ahead, Mark.
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C
Yeah, I was Gonna, I'm sorry, HR1. Right. So there were some tax provisions in there that should hopefully put Money into the economy. Do you see, like, business lending increasing, you know, small business loans for equipment and the like, or R and D?
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A
What do you see on the business side? We have. The administration is also in the process of trying to champ as they go into the midterms, try to champion some of these successes in. In that tax bill. But yes, we see lending. You've seen a lot of bank quarterly earnings over the last two weeks, and they've all shown super positive activity on the business side as well.
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B
That's great. Well, let's talk. We can't. We already hit the. Said the AI word earlier. But what are you doing right now? How are you helping? You said you have 4,000 banks with under 10 billion in assets. What's the average employee size of those? But you're leaning in and trying to help them think through this massive change we are doing.
- [18:29]
A
We have three work streams around AI now, the first, as I suspect a lot of what your members are doing, and that's coming up with an employee use policy. When is it okay to use AI in your bank and when is it not okay to use AI in the bank? So that's number one. Excuse me. The second is helping banks, particularly smaller banks, not JP Morgan and Goldman Sachs, but those 4,000 other small banks.
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B
What's the average size of some employees you count in those?
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A
Oh, these are. These are 500 million in assets. 35 employees.
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B
35 employees, yeah.
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A
Yeah.
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B
So lines up with a lot of. Lot of the midsize, smaller, three, four branches.
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A
Yeah, that's it. So the second work. So the first work stream is helping banks come up with an employee use policy. 2 second work stream is helping banks, particularly the smaller ones, come up with commercial use cases for AI. How should they use AI? AI to make money? Is it help around a small business lending algorithm? What have you? And it's not a monolithic answer. What might make sense for one bank of Eric might not make sense for bank of Mark. So helping those banks figure out how to use it in the commercial local
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B
marketplace, Huge opportunity around analytics, obviously.
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A
Yeah, definitely. So that's the second one. The third one is a little scary.
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C
Eric.
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A
So your viewers may have seen, it was about six weeks ago when Mythos got loose. That's Anthropic's model, and it escaped its containment. Well, the White House reached out to us and said we would need to work very closely with you. They also reached out to head of the aviation sector, the utility sector, et cetera, want to work very closely with you to assess the vulnerabilities of the banking sector and come up with defenses and patches against a rogue AI event. Let's say Methos decided to shut down all the ATMs in the United States tomorrow. Think about what would ensue following that. So we're working with the highest levels of government on the defense side, the national security intelligence side, to come up with the whole critical financial infrastructure and protect it. So we can't be subject to a rogue AI event. So those are our three work streams around AI.
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B
They're all important. I mean, the third one's national security
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C
and it's not even necessarily rogue, as much as it could be.
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A
Terrorist activity. 100%.
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C
All of it?
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A
Yes, 100%. So that's a big one. We're about six weeks into that.
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B
Well, Nat, we talked about a little bit earlier, but when you think about the evolution of technology, you said from Excel to ATM to now to AI, these businesses, this is what we see with the firms. They need more advisory support, they need more strategic support, they need more capital. So not trying to lead the witness here, but where, so where do you see this AI movement doing what it's going to do to your 2 million plus workers in the banking marketplace and what they're going to do for. What's it going to do for value?
- [21:21]
A
Yeah, so I don't think there's going to be significant employee displacement. The types of jobs are going to change. Just it's been morphing for the last 20, 30 years. I think that morphing and that evolution will simply continue. And we'll have more technologists, we'll have more people doing cyber, for example. And so I think the numbers will be reasonably static. You know, will there be some attrition along the way? Perhaps like in every other industrial sector, but I don't think we'll be more significantly subject to that than any other industrial sector.
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C
And the attrition would be temporary and then rebuilt into something else.
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A
Like you said.
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C
The jobs will change.
- [21:56]
A
The jobs will change. Absolutely will change. And we have some offshoring like every other, like every other sector. But the bulk of those 2 million jobs are here in the United States.
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B
Well, we just had our Engage conference. We had 200 exhibitors there, tech companies. It was like, you know, 4,000, 5,000. It was over 5,000 total attendees. I mean, so I'm sure you must have an influx of fintech. So how's that, you know, helping? And how are the banks, these, you know, 4,000 plus smaller banks navigating all these fintech options.
- [22:30]
A
Great question. So when I started at Aba 10 years ago, the rhetoric from the fintech sector was a little chippy. We're going to drive you out of business and send you the way of the dodo. And then they realized, oh my gosh, no, we can't do that. We want to partner with banks. So what we're doing is two things, Eric. Number one, we have basically kind of a due diligence team that meets with almost every fintech in the United States that wants to partner with and collaborate with banks to enhance the customer experience. So we have a team that meets with them and does fintech assessments and we send out white papers, you know, by the dozen saying here's a brand new fintech, here's why we think they're fantastic and you should consider them. So we have that group and we have another group. It's almost like shark tank. We do early stage capital investments in fintech companies. So we have, we're the, we believe we're the only trade association in the US that has a venture investment wing that I started about.
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C
We have an accelerator.
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B
There you go.
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A
So we now will put, take early stage investments in fintech companies that want to partner with banks. Done a number of those. And so those two divisions are always assessing the marketplace so we can come up and we've created a big partner network of all of these companies, hundreds of companies that want to partner with banks. But I will say that those relationships are great. And the rhetoric has totally shifted in the 10 years that I've been there.
- [23:52]
B
Yeah, I think we've, you know, that this community knows as well. I mean, over the last 10 or 15 years we've had the startup accelerator program. We really cultivate our dialogue with the tech ecosystem. I say I wake up every day and I think about what's going on with the firms and members of business and industry. But I also wake up and think about the tech community and I've got a lot of relationships with leaders there. And the capital, it's exciting, the capital that's coming in to the market. Well, I want to close up here, questions from both of you on, you know, how you look at the banking community, look at the firm community, they're both trying to be trusted advisors to their clients. I mean, there's opportunities, I think even with this session for us to think about ways to, we did it during the pandemic, but just to connect the banking community in the CPA community.
- [24:42]
C
I think there's no better way inside of your local community practicing In Buffalo, we did have relationships with the bank, relationship manager, with our clients because our clients wanted us talking to them. And I do think it's an important collaboration piece, whether it's networking events locally or us at the, at the national level figuring out ways to make, you know, small business easier to deal with. I think all of that is a great opportunity.
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A
Yeah, I think all of the above. The two industries work hand in hand and have to and must and should and do so. Any, any ideas of collaboration and. But we're all for them.
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B
Well, I mean, it's been a busy session. We've had over 100 questions, comments come in. I was even thinking today we could have done a poll just to kind of get insights on how they are working with their local banker. But this has been a great discussion. Thanks for coming here to New York to be with us. Just great connecting with you and we're going to have you back on sometime much sooner than how long we waited the last time.
- [25:47]
A
Yeah, yeah, that sounds great. Thank you so much for the invitation. It's great to be with you both.
- [25:51]
C
Thanks, Rob, Good to see you.
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B
Thank you very much. So we're now going to move to a profession update segment with Mark Kozil. Mark, we're going to talk a little bit about what happened over the past couple of days during the AICPA board meeting. It was a real active discussion, a lot of passion. Let me bring the slide up here. And this slide here kind of highlights the hot topics that you were talking about with your board. Maybe tell them a little bit about the board. And then these are topics that we've been pretty front and center with in events over the past couple of months.
- [26:33]
C
Yep. We have a board made up of small firms, large firms, business and industry influencers. It's a really dynamic board, trying to get the sample representation from across all that we do and in that, you know, so I'm in this role now just over 18 months. 18 months and 23 days, but who's counting? And in those 18 months, you know, we were, it was important for me to listen to members and we were getting that feedback. But we also stood up the Rise 2040 project to do strategic thinking out 15 years like we've done. We did it in 2011 with CPA Horizons. We did it in the late 90s with the vision project to update that. And so I have, I have been on an extended strategy for the AICPA since I came in. And now that we have the RISE information, we are going to, for the really the first time we are going to take that feedback from members and that's going to drive direction for us and for the profession. And from that, just a couple of key themes, hot topics that came out of that and some of the strategies that we presented to the board this week. The trusted business advisor and the modernization of that. We've talked about Trusted advisor for a long time. It's funny, Rob, talking about it, how the bank is trying to be that trusted advisor and they are. I think there's a lot of ways that we could collaborate and each be the trusted business advisor in the banking community and in the CPA community. But we need to modernize that. We need to look at it by segment of the types of work that we do to become more of an intelligence and foresight ecosystem to help our members with what's happening down the road and what critical information do we need. So that is a big part of how we're going to continue to expand that our engaged 365 communities that we propped up this year. We will continue to prop those up in the specific areas. Tax has been really strong. Some of our business and industry groups have been really strong as well and they're really participative. We're going to continue down kind of service lines in this upcoming year. But then look to how do we create industry related communities on the different industries that people may be practicing in and then finally enterprise data governance and creating foundations around that so that we're able to help our members with data governance and assurance over data governance. So that is AI is in that data governance as well. What are the things that we need to do for the near term and into the future. And then on the next slide, you know, when we talk about the strategic vision and I mentioned Rise 2040, I hope all of you take advantage of scanning that QR code there's on the bottom right and taking advantage of the fact that the Rise 2040 report is out there. This has collected from 6,000 plus professionals. We're now over 8,000 in the last 45 days thanks to Engage and a few other things that we've done. So it is a good representation of our community. And from that information now we created a navigator tool. It is an AI based tool. Tom Hood, who's been running this project for us. I just had a meeting with him today. He started to go through there was an SME survey that was done by Mark Peterson's global advocacy team and he uploaded that SME survey into the Navigator tool and asked it to Say, okay, I'm a small practitioner who serves the SME market. Here is a report about what SMEs are focused on. Tell me what I need to do differently. And it gave them all that information and it said, would you like a strategic plan around that? Yeah, absolutely. So creates a strategic plan from it. At the end of that it says, would you like us to give you some sample marketing tools for that? I mean, that Navigator tool is a member of the aicpa. This is a game changer. And so small firm, large firm, CFO controller you put in there. What should I be focused on in the next three years? What are my top three priorities? It's going to help you do that. It can help you establish the priorities and the strategy for your organization as we go forward. Whether it's tax, audit, client accounting services, being a cfo, all of that is going to be incorporated into it. Very excited about it.
- [30:57]
B
Yeah, Mark. I mean, it's been a real. I mean, this is the power of technology, power of collaborating, putting massive data sets into a large language model and allowing people to leverage all the intelligence that has kind of been, you know, sourced by the crowd, sourced from all the different committees and members that were involved in that project. There was a lot of discussion around AI across all of these topics at the board over the last couple of days. And I think, you know, rise 24, 2040 is a very important initiative, but there's a lot of other initiatives like the Profession Readiness initiative, things that we're doing@cpa.com related to practice evolution.
- [31:38]
C
Absolutely. The Trusted Advisor modernization we talk about. CPA.com has it for tax, has it for audit, has it for client accounting services, where we really kind of started and launched that. So a lot of great opportunities for us. We want to lean into our members, make it better for our members to do it. Out of the rise 2040, I think it was something like 94% were optimistic about AI being able to enhance their role, not replace their role. And I think that's what we need to focus on. You heard it from Rob in the banking community. I see it for us. I'm bullish about it. I think we have great opportunities.
- [32:10]
B
And there were, there were a lot. Mark, There were a lot of good comments about the session with Rob and just kind of us bringing. There's a lot of bankers. Guess what? A lot of people said, hey, I work for a bank. This is great having the leader of the banking association here.
- [32:24]
C
So.
- [32:24]
B
All right, well, now we're going to continue today's Town hall with our next topic, which is the DC Update. And it's fantastic having Mark Peterson here with us in New York. Obviously, Mark was at the AICBA board meeting this week and he had a presentation and but there's, there's always plenty going on in D.C. always plenty going on.
- [32:46]
E
And right now. So let's go to the picture of DC Eric. Right now we're 108 days, 107 days away from the election. We're going to save that for another town hall. But right now the theme in D.C. is jet fumes because they all want to go home for the August recess. And so the House may be getting out here in a day or two. Technically, the Senate's supposed to have a couple weeks to get some work done. I'm going to take you through that. But what they're facing is the end of September and the end of government funding. So unfortunately, we're getting into that conversation about government shutdowns. So there's a couple things playing out there. You want to go to the next slide, Eric, that we should talk about? So the first is the House actually has passed a continuing resolution, a clean one, which just extends funding into December, December 4th at current levels to buy themselves some time, obviously get back from the election. And then they would deal with this in a lame duck session. Lame duck could provide some opportunities for some of our other priorities to happen because we are running out of days. I think there are between, depending on how you count it, 10 to 12 working days for the Senate to get something done before the government shuts down. And so the Senate Republicans don't like what the House has passed. They're looking at something with a date closer to November. They want to deal with some other things in that contained resolution. So again, they're going to have to figure out how they do that either before they leave town or before the 30th, or we're going to be dealing with another shutdown. The other thing that's in the mix here is a reconciliation bill, Right. So as everybody knows, reconciliation has very tight rules about what you can use inside that process, but it allows for a simple majority coming out of the Senate. So there is a proposal that will do some defense spending related to that and some some ag subsidies and a few other things, some discussion about maybe they could do figure out the government funding within that as well, although there's still a lot of controversy between the House and the Senate whether they could get that done or not. Again, for us, that creates the potential opportunity for a vehicle to attach something that we care about. So we'll see how those both play out. But it's kind of go time right now on Capitol Hill.
- [35:11]
B
Well, you've also, you know, you got the tariff discussion occurring as well.
- [35:15]
E
Yeah, we do, we do. As everybody knows, the refunds are underway as it relates to the Supreme Court ruling on the IEPA or the Economic Emergencies Powers act that was overturned. At the same time, we're seeing what's likely to be other presidential executive powers being utilized. So a lot lack of clarity there. Refunds are coming in, businesses are trying to figure out whether actually going to just have to send the money back to the government. At the Same time, the U.S. mexico, Canada agreement, USMCA or the old NAFTA came up for review. So basically they had to reconfirm. They were going to do another 16 years. The administration said no, it's a little misleading in the headlines because they didn't throw out the deal. The terms of the deal are still in place. They're just going to go to an annual review which adds to this theme of uncertainty. At the same time, the administration just threatened 50% tariffs on Canada. They have not been opposed, but they've been threatened. And again, Canada is saying, well, that's not in the terms of what's in place for from usmca. We'll see how that plays out. Again, contributing to the uncertainty.
- [36:37]
B
Yeah, and there's lots, you know, lots, lots of questions coming in, Mark. There's, you know, questions about just, you know, what's, what's going on with the current Senate, Senate makeup, you know, some obviously Senators, you know, passing away.
- [36:52]
E
It's tight. They have, well, even the House, I mean, if everybody's there, both the House and the Senate Republicans have four seat majorities, but that means everybody's got to be there. And so right now the Speaker Johnson in the House is only working with two and Leader Johnson has to deal with who he has left. Obviously there's been some issues with Senator McConnell's health. Senator Graham passed away. His sister has actually been sworn in so she can vote. So it's close. But on any given day it's hard to get something passed. So, you know, that's going to contribute to what the fall looks like.
- [37:26]
B
It's almost amazing that they're still getting things passed.
- [37:29]
E
It's a human institution and things happen. And when the margins are this tight, it's really, really tough. Now, another issue that's going on relates to crypto. And you guys discussed this a little bit in your Rob Nichols segment that legislation is out of the House. The Senate is going to try and get it done in these few days that are remaining. There's controversy around it unrelated to our issue. Our issue is that there, there is language that we would like included that would give us some clarification about confirmations and controls around reserves. So there isn't necessarily opposition to that. But what it is is they're worried if you pull a thread will this whole deal, which is very precarious, unwind. And there are a lot of big players between crypto and the banks and others that are putting a lot of pressure on this package. But both sides want to get it
- [38:19]
B
done in the clarity acting it done.
- [38:21]
E
I don't, I think that, I think that thread is going to get pulled. It's possible because when you get to what you need is a burning platform. Right. You have to have a deadline of either going home for August or going home at the holidays in order to actually push an event. And so if it's going to happen, it's probably going to happen soon. But there's still challenges and I mean
- [38:44]
C
what's the likely August recess is here.
- [38:47]
E
We're here.
- [38:48]
C
Yeah.
- [38:48]
E
So well the sense working on it. So we'll see. It's possible, but it's a stretch.
- [38:54]
B
Well, we got a couple more slides here, Mark.
- [38:57]
E
Couple more quick issues.
- [38:58]
B
Yeah, we got, we got time and
- [39:00]
E
I, I had mentioned this ndaa, which is the Defense authorization bill, is one that's it's going to happen. It always does. It's a must pass. They'll figure out how to get enough votes for it. In that, though, is some language. I mentioned this in the last town hall, Eric, that there, the, the goal is that because there's going to be so much public funding, taxpayer money going into defense spending, that those companies that are producing arms will invest it in the production of those arms and move quickly and there won't be stock buybacks or significant executive comp. That's the goal. And by the way, that's supported in a bipartisan way. The problem is the way it's written, it prohibits capital distribution. Well, guess what? That's how partners get paid. And so although it's not focused on the firms that are, this is only relevant if you do defense consulting. This is elevated and snowballed very quickly. My team in D.C. is already having conversations about the impact on the profession. Feedback is we weren't, we were absolutely not focused on you. This is unintended consequences. However, we aren't quite sure how to fix it. Regardless of what happens, there's going to be a conference between the House and the Senate. So there are going to be several shots at getting this fixed. And this doesn't have to get done between now and leaving for recess. So got a little time to get this fixed. I'm optimistic that we'll get fixed, but it is a concern.
- [40:30]
C
How many times has legislation passed where they said, well, it wasn't intended for you, but then it was, and now
- [40:35]
B
we're going to go fix it?
- [40:36]
E
Absolutely. Most of the time.
- [40:37]
D
Right.
- [40:38]
C
Yep.
- [40:38]
B
Well, Mark Koz, I want you to comment on this as well, but why don't you? I mean, this is a big announcement that came out last week or this week from the pcob. It was.
- [40:48]
E
Yeah, well, they put out their strategic plan and they've been, they've been, you know, we've, we've, from the speeches and from the public statements, we've seen a very different direction from the sec and the direction the SEC is giving the PCAOB real focus on modernization, a different environment around inspections, focus on quality management and risk. And so I think there's a lot of opportunity here that those of you that are in the public company auditing business are going to feel, but as we say, that the clock is ticking right before there's going to be a new administration. You know, regardless of which party there could, we could see changes there. So I think they're moving ahead in earnest. There are a lot of these modernizations that we're welcoming and we're commenting on.
- [41:33]
C
Well, so, you know, for the first time in the PCAOB's history, we have a chair who's actually a CPA.
- [41:39]
E
Yeah.
- [41:40]
C
Right. And so the only requirement, I think in law is that there's at least two CPAs that are on the board. We still only have two CPAs on the board, but having it as chair. Jim Logothettis is the chair. We've met with him a number of times. We've provided feedback with him. We're getting his understanding. He even said, look, you know, the number of inspections that we have, the number of files that we look at, maybe less, maybe the same, maybe more,
- [42:05]
B
but we're going to look at them
- [42:06]
C
differently based on what we do. Yeah, we're going to do quality management up front, risk oriented only look at the risk areas and let's be more proactive about providing feedback so that the things that we do find can be corrected going forward.
- [42:20]
E
Absolutely. And well, you know, one of these points is deep in stakeholder engagement. Well, we're a stakeholder and we felt that that doesn't mean we're always going to get what we want or we're always going to be happy. But it certainly helps to be able to, to communicate.
- [42:33]
B
And there's a lot of tools that we continue to work on and put into the marketplace based on kind of helping firms with their quality management processes based on firms moving to a new modern methodology that's, that's highly risk based. So I think this is. And then what they're trying to do here is put a framework in place, Mark, to hopefully blast beyond, you know, beyond their term.
- [42:52]
E
That's right.
- [42:54]
C
And for our members it's the yo yo. Right. It's, it's the constant change of administrations that, you know, for four years it's, you know, the appropriate level of oversight and then for four years there's a accelerated level of oversight. And do I want to be in the business? Do I not want to be in the challenge? And I don't think it's helpful to the capital market, to be honest.
- [43:15]
E
It's not.
- [43:15]
B
Well, Mark, great. We'll stay, stay around and we'll, we'll have you back for Open forum. And I'm trying to sort through some of these questions now, so let's continue on. We do have Daniel Hough with us from the DC office. Good, good to see you and look forward to the technical update.
- [43:35]
F
Nice to see you as well. Good afternoon everyone. So we're going to start off last town hall. We mentioned that the IRS introduced their new automatic exemption from penalty or AEP program which is going to replace their first time abatement or FTA program. So the AEP program is virtually identical to the FTA program. It still has the three year clean compliance history requirement, except that this would be automatically applied rather than required practitioners and taxpayers to request it. So AEP fully phases in by 2027 and FTA fully phases out by that date. However, there could be a lag for some taxpayers. So if you do think your client qualified for aep, then it's definitely worth looking into and seeing if they can Also if they can qualify for fta. This program is applicable for failure to file, failure to pay deposit penalties. It's specifically not available to daily delinquency penalties, penalties associated with infrequently filed returns and then information reporting dependent on another filing. So although this program is nearly identical to fta, it does raise some questions. One example is FTA provided an exception for 54, 71 and 72 forms. So if you had a late filed 1065 or 1120 and that penalty was abated, then your 5471 and 72 penalty was also abated. It's uncertain whether that same exception qualifies. Reasonable cause is another concern. IRS has stated that it will not accept reasonable cause to be eligible to overturn or reverse that AEP relief. So this is primarily concerning, let's say there's a delay in processing that results in a penalty and maybe it's not the taxpayer's fault. The IRS will apply that AEP relief and therefore the taxpayer, you know, it's used for that three year period. This was a significant consideration in our recent comment letter to the IRS on the FTA program. There's a link to that on the slide. This is a new program. We'll keep updating you as new information comes out and there's some also some additional resources on that slide. On the next slide, we're dealing with IRS operations. So we wanted to note that IRS recently removed the delinquent FBAR submission procedures from their website. We weren't quite sure what this meant, but IRS did clarify that in the end this program remains available and it's just not going to be available on their website. So the taxpayers who are eligible for that, that relief, they can avoid the late FBAR penalties if they satisfy the requirements there. On the slide and then on IRS leadership, Ken Keys had been Assistant Secretary of Tax Policy and also acting IRS Chief Counsel as of July 21st. That'll now be Kevin Salinger will assume both of those roles in acting capacity. Also note that James Gadwood has also been has been nominated to serve as IRS chief counsel. So at least one of those actings is set to be temporary. And then on the next slide we'll go into disaster relief. So for all the states mentioned listed here, the tax deadline has been extended to November 2, 2026. So you want to take a look at the start date for those for those disasters and anything in between there any deadlines in between there. The filing deadline is now November 2nd. Some of these are a bit narrower than others. Like Louisiana, that only includes four parishes. Mississippi, that only includes five counties. So you really have to take a look at the notice or the news release and those are linked on the slides there. Additionally, we've heard from numerous practitioners that the IRS has been issuing letters 916 C for qualified disaster loss claims. If you recall, these are the amended returns to claim that retroactive tax relief it dates back to 2021. That was through the FDTRA of 2023. And then HR1 also extended that a little bit. So the relief under that includes a waiver of the 10% AGI limitation. It also allows taxpayers to qualified disaster losses to the standard deduction. So the letters themselves, they're claiming, they are stating that the claim may not be processed for failure or for lack of substantiation. And from what we've heard, you know, there shouldn't have been a lot of substantiation with these claims other than amended return, the necessary forms and schedules. So that's one issue with that letter. But I think a bigger issue is that they're stating that taxpayers may file a new refund claim with that supporting documentation, which if you did file a new claim, a lot of these taxpayers, the amended returns are going back to 2021, 2022. So the statute of limitations is run. Those new claims would be denied anyway. So we've reached out to IRS for a little bit of clarification on this issue. But it seems that following up with the IRS on the existing claim, possibly reaching out to Taxpayer Advocate Service, those seem like, those seem to be like more appropriate actions versus trying to file a new claim. For more info on our disaster tax relief, we have linked the our disaster Resource center there on the slide. If you just look at the QR code that is available to our tax section members. And then on the next slide we've got our round robin issues. So the IRS has updated or enhanced their business tax accounts. There's more notices that are available on there. Designated officials can now download EIN verification notices and those can, those can be used in lieu of the letter 147C. And it also allows for submissions of offers in compromise. Then we have a TIGTA or Treasury Inspector General of Tax Administration report on the enterprise data platform. And really this is going into the this would give the IRS employees that full 360 degree view of taxpayer data that they've been talking about for quite some time now. So of the 59 data sets that they were looking to integrate, they also found nine additional ones that they've already integrated. But of the original 59, they've done all but 22. Those are set to wrap up by the end of 2026. So that integration phase for their taxpayer 360 platform is almost completed. And then finally for tax exempt organizations, the IRS released form 15644. That's allowed. That's for central organizations who are going to be giving some sort of update on their subordinate organizations, whether, whether it's additions, removals, terminations. So that that's their most recent form. And with that, I'll turn it back to Yerik.
- [51:31]
B
Thanks, Daniel. We'll bring you back for Open Forum. Thanks for those updates. So Mark Koziel and I are going to cover a couple of resources and other updates and then we're going to go to Open Forum. So first off, and Mark, this is something that, you know, we've been talking about. We want to support, you know, the broader firm. We want to support the broader financial department in business and industry. So we heard, we got a lot of feedback that at some firms, there's colleagues there that, you know, they're, they're not, they're not AICP members because they're not a cpa, but they're working on, they're part of, say, the client advisory services area or tax area, some area. And they'd like to, you know, join the town hall. So now you can have your colleagues join the town hall, go to this link, follow the process. So, Mark, that's good.
- [52:20]
C
I mean, we're seeing more and more. I mean, there, there are While we want CPAs, we want everybody to be a CPA. I keep telling all my friends, kids to be CPAs. But inside the firms today, we do have a mix of technology professionals and attorneys and, you know, and there are things that I think are important for the entire organization to hear, not just our members. And so we want to, we recognize
- [52:44]
B
that at times so they can, through that link, get complimentary access. So we're also kind of continuing to try to better understand the, the transformation that's going on in the tax area. I mean, it's going to be a dramatically changing landscape over the next few months as we start talking about the next tax season and all these technology capabilities. If you fill out this tax transformation survey, you'll have access to additional data. So I recommend that you take advantage of that opportunity. We also, Mark, this is something that a lot of people have appreciated, you restarting the print edition of the J of A. And this is summer reading. We just, these are digital. I mean, I sometimes like to say it's good to be digital. It's good to be, okay, analog at times. But here's we just put together a summary of some recent J of A articles.
- [53:39]
C
It's a good reading list. And they all are primarily digital. A couple of them were in the June edition. Hopefully you all as members got the June edition print in your home or your office. We did bring that back. It's going to be quarterly and really good feedback from that. A lot of members who were really happy to get that back in hand and be able to see it and also to go to digital when they need it, but know that some of the important stories are going to be able to get in their mailbox.
- [54:11]
B
Analog still works at times. Talking digital. We've got our digital CPA in person event. It's going to be in San Diego this year. You can take an opportunity to take advantage of this Early Bird special. So let's now move to our open forum session. We got a lot of questions here. So, Mark Peterson, I'll kick it off with you. Is the SAFE act still something we can hold out hope for the extension of, of the protective estimates and then maybe a little clarification. Safe act, it seems like there's a lot of SAFE Acts.
- [54:45]
E
Lots of things get named the same. So. So this isn't about cannabis. This is actually an automatic extension from previous, if you 125% of previous year. Okay. So we've been supporting this for a long time. Practitioners love this idea. I hear about it a lot when I get off stage. Yes, there's a possibility there is a bipartisan package. We've been working with the chair and the lead Democrat on the Senate Finance Committee. It had kind of hit pause for a little while, but there are rumors that we could actually see it come out of the Senate Finance Committee before they leave in August. So it's still progressing. It's got the automatic extensions. It also has language in there related to the regulation of paid tax preparers, which is another one we've been working on for a long time to see clear verification around there and make sure that, that the responsibilities that the IRS puts on a firm make sense.
- [55:39]
C
It's good to hear from Rob, by the way, too. Some of the legislation that they want to get it passed, it's, you know, in seven years, they're still working on it. And then, so I tell our members, it's not easy. It is a long haul. We try. You're gonna sometimes hear the same proposed bill over and over again, but someday, like the reconciliation and some of the things that get in there, it takes time, but you be patient and eventually you hope to get it in.
- [56:03]
A
Yep.
- [56:04]
B
Well, Mark, we call this our new show, but there's been comments about the playing of the commercial, the CPA Trust commercial to start here. So it's great to get it out. I mean, Today we have 15 to 18,000 listeners that rival some cable shows. But their questions are, where else are they seeing it? Some people, some we've been talking about FIFA. We didn't necessarily see it on the World Cup. So what's the strategy?
- [56:30]
C
World cup, you know, it was great.
- [56:32]
B
I was upset that Argentina lost. I don't know if that's gonna, I was, I was rooting for somebody to hear about that.
- [56:36]
C
Yeah, you know, that's the thing about the commercial. We were very focused on where we wanted to be. We, we know business leaders, political influencers, politicians and regulators are all inside the news segments of, you know, early morning tv. And that's where it ran. And I will tell you so I, you know, the town hall community, we talked about it at Engage. When we did that, not everybody was happy to hear from me that we, you know, the grandmothers weren't the target audience. But, you know, I get it, they're still great clients. I still love all my grandmothers equally and I'm almost in the grandparent stage myself. But we hit and we hit big. I've had a number of policymakers that have reached out to us after they have seen it. We had a big billboard, you know, CPAs trust and tax. That was the primary one that you saw Walking into the Washington nationals games in D.C. i had a number of members from Florida to Oregon to Texas sending me snapshots of them seeing the commercial as it ran. We did a three week buy at the launch of Engage back in June. We're quiet now because the summer months now we know that it's harder to get to the, the policymakers right now. We may do another campaign in the fall, but we're doing a lot of social media around it. And also here in the office today, we are in the process of filming a documentary that will end up on CBS I think sometime in the fall in honor of the 250th anniversary of the country. How have CPAs impacted the growth of the country over those years? So we're excited about that too. Just getting out there. We are the trusted professional.
- [58:20]
B
Yeah, well said, Mark. And I even think us on this town hall, bringing in other leaders is another way to kind of get our message out there. I mean, even like today, you know, having Rob Nichols now be with us today, take that message out of the banking community. So it's connecting with others. We're enlightening round here, so both of you can kind of take a portion of this, but just guidance, you know, and advice to firms related to these tariff policies, you know, advising on them, managing them.
- [58:50]
E
We have a resource center I would definitely recommend. I'm not sure if it's in our resource center. We could send it out again. We try and keep it updated. A lot of questions that I get, again are not necessarily about the importer, but is the consumer going to see any of this? The answer is probably not. If they do, there's no mechanism. So it would be very specific legal action. But it's playing out the question business has, though, is this over? Like, you know, do I hold this in reserve because I'm going to have to pay it again anyway. So even if you're lucky enough again to get the refund and make it through the process and that is happening, lots of money's gone out, billions of dollars has gone back, but they're going to be reimposed.
- [59:31]
B
It's uncertainty. So, Mark, 15 seconds here.
- [59:34]
C
Yeah, uncertainty. I mean, that's the thing. I'm sure many clients and people who are in business industry worry about it. As Mark said, the resource center is there. As you know, like we launched this town hall back, you know, six years ago around uncertainty. You know, we will provide the information as we can. We have the, the resource center stood up for it. We are constant conversations inside of D.C. but there still are a lot of unknowns. The government doesn't know. So, you know, we, we are pushing as hard as we can. And as we have information, it's going to be propped up on that resource source center.
- [60:12]
B
Well, Mark Kozio, Mark Peterson, thank you. Danielle, thank you. Great, great being together here in the, in the New York studio. So thanks to everybody for being with us today. You know, we've got all of these different town hall resources. We'll be with you next in a couple of weeks. Hope you all are getting a little bit of downtime during the summer. We know Congress is going back to their districts and some vacations. So hopefully you'll have an opportunity for some downtime with your family and friends. Mark, I'll let you close out here.
- [60:47]
C
Enjoy the summer. Thank you for being a member and we hope you get some downtime. That'd be great.
- [60:53]
B
Thank you for your participation.
- [60:56]
A
You can also subscribe to the AICPA
- [60:58]
B
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.
- [61:14]
D
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