AICPA Town Hall – January 30, 2025

Theme: Tax Bill Discussion Draft, Risk Management Strategies, & AI Tools for Tax Practices
Hosts & Key Speakers:

• Erik Asgeirsson (President & CEO, CPA.com) – Host
• Susan Coffey (CEO – Public Accounting, AICPA) – Host
• Mark Peterson (Exec. VP, Advocacy, AICPA)
• Melanie Lauritsen (Tax Policy Lead, AICPA)
• Lisa Simpson (VP-Firm Services, AICPA)
• Michael Cerami (VP, CPA.com)
• Ashley Francis (CEO, Francis Group)
• April Walker (Tax Team, AICPA)
• Stan Sterna (VP, Aon)
• Sarah Ferencz (Risk Control Director, CNA)

1. Episode Overview

This AICPA Town Hall is a comprehensive update on major policy, tax, and technology developments shaping the accounting profession as 2025 gets underway. The hosts and expert guests break down the implications of recent executive orders, IRS and regulatory changes, the latest bipartisan tax bill “discussion draft,” risk management strategies—especially around billing and collections—and practical insights into leveraging new AI tools in tax practice. The episode delivers both high-level context and practical, actionable guidance for CPAs in public practice and industry.

2. Key Discussion Points and Insights

Washington, DC Update: Executive Orders, IRS, and Economic Backdrop

[00:10 - 18:00]

• Executive Orders & Administration Change

  • New administration has issued an aggressive, broad set of executive orders.
  • Implications for federal agencies (notably IRS, SEC, Labor Department), including hiring and regulatory freezes (“unchartered territory” per Melanie).
  • Impact on the IRS: Hiring freeze with plans to reallocate existing staff for the tax filing season. Historical evidence suggests such freezes undermine IRS performance [10:13].
  • Regulatory freeze includes pulling or delaying recent IRS proposals, with review for further DEI (Diversity, Equity, Inclusion) impacts.

  “Every facet of the IRS operations will be affected… It could jeopardize the improvements that the agency has had in these last couple of years.”
  —Melanie Lauritsen [11:16]

• Deaths, Deficits, and Political Jockeying

  • Treasury Secretary confirmed; upcoming nominations (e.g., IRS Commissioner) will influence ongoing agency actions.
  • March 14th deadline for government funding looms, with unfinished business on the debt ceiling and budget negotiations. Tight Congressional majorities mean complexity and unpredictability.

  “You’ve got to get a budget done first. That’s supposed to be transmitted to the Hill the first Monday in February… The budget gives you the parameters, the size of that reconciliation bill, which is where the tax package is going to end up.”
  —Mark Peterson [20:48]

Spotlight: Tax Bills and the New Tax “Discussion Draft”

[20:41 - 27:17]

• Reconciliation Process & Legislative Uncertainty

  • Legislative calendar and budgetary headwinds make timing and scope of tax changes uncertain.
  • Republican leadership debate whether to combine or separate major policy priorities (tax, defense, border, energy).

• Bipartisan Tax Bill “Discussion Draft” Announced

  • A bipartisan draft from Senate Finance Chair Ron Wyden (Democrat) and Ranking Member Mike Crapo (Republican) was released to solicit feedback and enhance inclusion prospects in any final tax legislation.
  • Around 65 provisions, with roughly 20% endorsed by AICPA.

  “It really is going to make a difference, particularly for our members and also taxpayers… laying the foundation to try to simplify some of those processes.”
  —Melanie Lauritsen [24:48]

• Key Provisions:

  • Disaster trigger relief: Enables IRS disaster relief at the governor (not just presidential) declaration level—“huge” for taxpayers and preparers.
  • Preparer regulation reborn post-Loving case—signaling bipartisan agreement, major support from industry.
  • Other highlights: Simplified estimated payments, SAFE act for extensions, “mailbox rule” for e-filed returns, partnership basis shift rules.

Technical & Regulatory Updates: IRS, BOI, Circular 230

[27:44 - 30:42]

• BOI (Beneficial Ownership Information) Filing

  • Current status: Filing remains voluntary due to a nationwide injunction; AICPA advises preparation and communication with clients.

• Circular 230 Proposed Regs

  • Updates offered on language (Loving case), contingency fee rules (AICPA disagrees with IRS’s zero-exception stance), and valuation report standards.

• IRS Developments

  • E-filing expansion, introduction of chatbots in e-services.
  • Ongoing review and potential “scrubbing” of IRS Internal Revenue Manual and audit technique guides for DEI language.

Risk Management: Billing & Collections

[32:06 - 42:39]

• Core Message:

  • Unpaid fees are more than a cash flow problem; they signal deeper issues (client financial health, going concern, relationship friction) and can escalate into professional liability risk.

  “If your client’s not paying you, they could be either lazy and they need to be reminded, or maybe they’re not happy. That’s probably an issue you’re going to want to address sooner rather than later.”
  —Sarah Ferencz [33:54]

• Best Practices:

  • Client vetting and acceptance (credit checks, upfront payments/retainers for risky clients).
  • Robust engagement letters (explicit billing/collection protocols, suspension/termination for non-payment).
  • Timely billing and proactive communication (“don’t wait months after tax season to bill”).
  • Use of retainers, phased billing, and leveraging other staff for collections (“let someone else be the bad guy”).
  • Settlements: Accepting partial payments often preferable to litigation.

• Billing Narratives:

  • Avoid “block billing” (unclear, lump-sum entries violate risk management).
  • Reference engagement letters in invoices.
  • Flag out-of-scope work early; get written approvals and fee adjustments.
  • Train staff on proper billing protocols.

AI for Tax Practice: Opportunities & Limits

[43:02 - 56:38]

• AI Landscape:

  • Major announcements, including new advanced open-source models (e.g., Deepseek from China), suggest rapid evolution.
  • CPAs face increasing tax law complexity, bandwidth pressure, and client demand.

• Panel: Michael Cerami, Ashley Francis, April Walker

  • Benefits:
    • GenAI increasingly able to handle tax research and information synthesis—great for filtering massive changes and new regulations.
    • Productivity and accuracy boosts are “promised”; enables more meaningful work for CPAs (mundane/routine tasks automated).
    • Key: Use as an "80/20" tool—AI does the heavy lifting, but practitioners must provide the final 20% of human professional judgment.

  "We are getting closer to this situation where once AI can do the tax research side, everything after that is so much easier. …Still can’t, on its own, reliably do math."
  —Ashley Francis [46:43]

• Limitations:

  • AI models don’t always get answers 100% right; still require professional review.
  • Should be used as augmentation, not replacement, for expertise.

• Best Practices for Implementation:

  • Use AI for micro-tasks (micro-prompting), validating outputs carefully.
  • AI can help transform parsed legislation into summaries, client checklists, emails, and articles—major efficiency gain in communication.
  • Encourage experimentation “responsibly,” especially with research-focused tools (BlueJ partnership offers discounted access; see Feb. 12 webinar).

3. Notable Quotes & Moments (with Timestamps)

• On role of CPAs amidst change:

  “It's the intersection of the trusted advisor, which is a lot about sorting through… how do you sort through what matters for a client and what to focus on? ...There’s just a lot of instability.”
  —Mark Peterson [03:46]

• On IRS hiring freezes:

  “Historically the IRS has not performed great when there has been a hiring freeze... every facet of the IRS operations will be affected, which could indirectly affect the tax filing season and ultimately it could jeopardize the improvements…”
  —Melanie Lauritsen [11:16]

• On tax bill draft's significance:

  “We are so excited for this package… particularly for our members and also taxpayers and really starting to lay the foundation to try, to try to simplify some of those processes...”
  —Melanie Lauritsen [24:48]

• On risk with unpaid fees:

  “Unpaid fees can signal more than just financial risk. Maybe your client’s having some financial difficulties … it complicates that relationship.”
  —Sarah Ferencz [32:18]

• On AI in tax:

  “Think of it as an 80/20 device … AI gives us 80%, we’re still required to be the 20% in the mix no matter what.”
  —Ashley Francis [48:45]

4. Important Segment Timestamps

• DC & Executive Orders Overview: 00:10 – 18:00
• Tax Bill & Legislative Update: 20:41 – 27:17
• Regulatory/Technical Section: 27:44 – 30:42
• Risk Management – Billing & Collections: 32:06 – 42:39
• AI Tools and Strategies for Tax Practice: 43:02 – 56:38

5. Resources & Next Steps

• For More: Resource links, regulatory updates, and risk management guidance are available in the episode slides (download via CPA.com).
• Upcoming AI Webinar: Feb 12, 2025 (on BlueJ tax research tool).
• Newsletter & On Demand Episodes: Subscribe at cpa.com/townhall.

6. Tone & Takeaways

The episode is direct, practical, and collegial—acknowledging anxiety while offering clarity and actionable advice. The panel encourages practitioners to stay focused, adapt to change methodically, and experiment safely and strategically with AI. Trusted advisory, measured judgment, and continuous learning remain central values as technical and policy environments rapidly evolve.