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- [00:01]
A
Welcome to the AICPA Town Hall Series, your resource for the latest news and updates on pressing issues facing the accounting profession.
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B
Good afternoon and welcome to the AICPA Town Hall. I'm Eric Ouskerson, one of your hosts for today. We've got a great program. Today is March 26, 2026, and we've got a lot to discuss. We're going to kick things off with Mark Peterson and the DC Update. We're plenty going on down there. Then we're going to have a leadership discussion with Lisa Bodell. There's a lot of skills that you can bring to the workplace to simplify things. There's a lot of unneeded meetings, a lot of complexity in business management. And we're going to have a discussion around Lisa Waddell with some really good tools on how you can drive simplicity in the firm, or if you're in business and industry, in your company, or if you're in government or education and in those areas as well. We're then going to have a technical update with Melanie Lauritson. And then Lisa Simpson is going to lead a discussion with our Aon team about risk management. And it's going to be very timely, some timely topics related to tax season. And then we'll be closing with our open forum. So now let me bring up Mark Peterson, who's in our D.C. office. Mark, first we sometimes we talk about the weather. It's going to reach 70 degrees here in New York City. It's a sunny day, a lot of energy in the city. How are things in D.C. it's beautiful.
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C
Everybody's showing up from across the country to see the cherry blossoms, which makes it a little tougher to get home. But we love having them.
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B
Well, so flowers are blooming, but there's, there's a lot of and we're talking about simplicity after you. But there's a lot of complexity in Washington, D.C. right now.
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C
No, there, there are and there's, you know, two things. Obviously, everything, the partial government shutdowns on everybody's mind, which is hit Department of Homeland Security, tsa, you know, the airport lines is what everybody's focused on. But that also impacts fema, Coast Guard and then E verify. So think about background checks when you're doing employment. So it is broader than just tsa. So this week they were both the House and the Senate were back fits and starts of conversations of maybe getting into a deal. I would say that they're in a fit right now more than a start. And so some of those conversations have deteriorated they're going to have to reset. What they're up though against is a two week congressional recess for Passover and Easter. And both the leaders of the House and Senate have said that they're not going to let them go home unless they get a deal. So that puts a lot of pressure to try and get this resolved. The long lines at the airports and constituents making phone calls as well as again FEMA and the Coast Guard put a lot of pressure on getting this done. And there is a point, you know, listen, it's very political. We're in the political season. You get to a point though where they're mad at everybody. And so, you know, I'm hoping that they get something done here. I anticipate they work through the weekend. The prediction markets are saying mid April, Eric, so we'll see. Every day it gets longer, there's more pressure building. And then keep them together over recess also adds the pressure.
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B
Well, I was hoping, Mark, that it was going to be solved by the town hall, so give you one less topic to address. But hopefully it's not mid April. Hopefully it's definitely done by next weekend. So we'll stay tuned.
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C
Well, and the prediction markets, I'm not sure if they figured out that there's a lot of these members that want to get home to go campaign. One of the other issues that's out there is the idea of reconciliation. Now if you recall, that is how HR1 passed. Lots of major legislation has passed through it. It's a narrow procedure at which you only need a simple majority. That is a big deal in the Senate where normally you need a 60 vote majority. This is 51 votes in order to get something done in the Senate and then a majority in the House. The focus on it will be defense spending. They'll do a defense supplemental. There's more conversations about other things that may get included. That is significant for us because it becomes a vehicle, a vehicle for maybe some of our priorities, but also a vehicle where they may look for pay fors or funding through provisions that we may not like. You'll recall for a While that the salt PTEP was NHR1 until they were successful at getting it pulled out. So the odds of that it's being discussed more, Eric. I would say the odds are still long. One of the reasons is even with reconciliation a simple majority, you still have to have the majority. The speaker is struggling to get folks back to town. We're talking about a couple seat majority. If you've announced your retirement, if you maybe lost your, your Primary there are, you know, every day. It's a human institution. Miss a flight, feeling under the weather. So they've got to be able to get the simple majority in both the House and the Senate. They're going to work in earnest. I think we're going to focus on it. There's a real question, though, whether they could get it off the House floor and the Senate. Now, I mentioned election season. This. It's already started. Primaries have started. This reality of the narrow majorities and if people don't show up at creating challenges is real. And again, it started right now, well before November.
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B
Well, it can't get any more slim, Mark.
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C
I know it can't. So this is an issue we've talked about in the past, Eric. It's super important for the profession. It's about accounting, getting into stem. There's legislation that's been introduced in the House and the Senate bipartisan way that would basically put STEM. Put accounting into STEM. For K12 career awareness. There are resources that they can tap into for STEM career awareness and K through 12. We add accounting to that. It would really help the pipeline, particularly at the beginning. There has not been a lot of policy pushback on this, but we have to have overwhelming support to make our case for them to move it. Please, please, Town hall community, log in. Reach out to your member of Congress. We have templates. We make it as easy as we can for you. Let them know you care. And this is a good thing for Main street and Wall street and capital markets.
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B
Yeah. Thanks, Mark. And you got the link to call to Action, the QR code, and we'll also be including this information in next week's town hall newsletter.
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C
Thank you.
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B
Well, Mark, here, this flashback's another acronym for us to potentially learn related to the tariff refund process. I know this is just starting to get in flight, but it looks like some agencies are really beginning to think through how this will be done.
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C
They are. It's really. It's four steps which we've laid out here. It's just getting started. There's a portal. There's about 330,000 importers that were on 52 shipments that could be impacted to try and deal with the $166 billion that came in through those tariffs that were overturned. IPA, the, you know, U.S. international Court has said the administration has to move towards refunds, but it's complicated. Phase one is putting together the portal. Then they have to figure out, you know, there are still tariffs and fees and, you know, shipping dues and all those Types of things have to be separated from what was in effect because ipa, then there has to be a review of that and then they've got to figure out how they actually get the payments out. So that is all rolling. They're thinking that they'll open up to start to take refund requests mid April, but there are other challenges that are going to occur. There may have to be some rules promulgated. They'll have to do that in a right, in the right way in order to get it done. Questions are coming up, but the process is starting and we will keep everybody as updated as we can.
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B
Yeah, I mean, this is something just like we've done with PPP with ertc, all the other programs. We'll definitely be bringing the town hall community in the latest, the latest information and processes on how to go through these steps. So at this point though, no action required because it's still forming.
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C
Yeah, not yet. I think that the thing you have to think about with that as well on tariffs, Eric, is that some countries on the reciprocal side, they're still negotiating their deals. So they may land on a deal outside of these refunds and then we'll see some of these other authorities that the President could use are still in the mix, you know, for. We talk about lack of productivity of Congress, but stuff does get done and it's important for the town hall community to know this. So there's legislation that we've been focused on that is was marked up or considered yesterday in the House Ways and Means Committee. You know, one related related to natural disasters, another to IRS service and a dashboard that really makes it transparent into what is the backlog that you're looking at and the potential delays, those passed in a bipartisan way at some point, if there's time in the House floor, they'll make it to that process. Whether they make it to the President's desk this year is a question. But what I will tell you is when these bills get passed, they get considering committee, they get bipartisan support, they get stacked on a shelf. And then when there's an opportunity for a big bill like HR1 last year, they get included in that. And so it's really important that we are supportive. We get them into the process, we get them considered. Even though the outcome may take a little while, things are slow at the federal level.
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B
Well, we always gotta be talking about AI in every town hall. I think this is our AI slide.
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C
It is, it is. So the White House just rolled out their plan. This has been on top of executive Orders and a lot of the, of the announcements that they've made, the real focus is innovation. We've said this before on town halls. It's about, you know, not being a barrier to innovation, mostly about competition with particularly China. And how do they do that? One of the things is they're focusing on specifically, not their philosophy is we don't want to enter innovation and we need to address some issues like child safety, but we want to do it specifically, not sweeping. So there's, they're putting a little more meat on the bone as it relates to that. They're very focused on preempting state laws and regulations because they're concerned about a patchwork that would slow this down. Focusing on the data centers, you know, expediting permitting as it relates to that, making sure that they can deal with the energy uses, which is a real local public policy issue and political issue. So we're getting more meat on the bone as they, as they move forward with their plan.
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B
Yeah, I think there's opportunity here for the profession, as we've spoken in previous town halls, to play a role with some of the rules and regulations that come out. And then we also think the last town hall we mentioned a resource that we have when you're selecting a potential AI vendor, steps that you want to go through to think about how they're managing their AI policies. So this is all this. I think this, this. I think this is a good step forward.
- [11:33]
C
It is, it is. We're getting our arms around it. I think if you think about the breadth of it, we're talking about everything from, you know, breaking ground on data centers in a state all the way to how do you utilize it and the guidance and the help that we're trying to give here. Okay, so FAT Financial Action Task Force, this is all about anti money laundering and terrorism financing. And so FATF is a non law enforcement. So it is an international organization based in France that goes out and does mutual evaluation. So it goes into a country and it meets with their regulators, in our case primarily Department of Treasury, and it assesses all of the safeguards related to money laundering and any terrorism funding. And then it basically puts out a list or a report that makes recommendations for weaknesses or puts you on a blacklist or a gray list. North Korea's on the blacklist, Syria's on the gray list. It's really about market pressure. Kind of name and shame if they see significant gaps. We have had. This is in 2016 was the last time the US went through this. One of the things that came out of that was legislation, the Corporate Transparency act, which led to an issue we all know about which was the beneficial ownership information requirements that were very onerous on small business. And the administration for the most part off ramp those last year so we could get recommendations. They're just recommendations. It would be up to Congress or the administration to implement them. We actually had our interviews with treasury and Fatfire last week. We talked about the layers of regulation and our requirements, you know, as practitioners and CPAs really to help them understand what it is and how we guard against money laundering. They may identify some gaps, they may come back and say, hey, we don't, we still think there's an issue related to beneficial ownership. But the real question is is how does treasury react to that? And we will, we will ongoing contract conversations with Treasury. Treasury feels really good about where the profession is and what we're doing. But it will stay close to it because it can have a real impact on us in 26 and then for, for international folks, you know, they'll be going through UK next year.
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B
Well, this 254 page report dropped last week.
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C
Yeah, treasury put out their financial statement. This didn't get much press but it's obviously, you know, a big deal. So the debt and deficit is becoming a recurring conversation. It's a challenge in a election year. It's always a challenge for seated politicians because you got to make tough choices. But we are getting to a point where it's coming up more and more. It's not just the United States, it's global. But we really have a very specific issue here and the numbers are significant. Forbes, when this came out, one of the reporting from Forbes, I thought put it well, if you figured a household with that is earning annually $52,000 a year, spending $72,000 a year and sitting in a financial hole of $1.3 million to put it at kitchen table terms. So what are we going to do about it? Well, we've had a proposal out there. This is another call to action. We had it up last. Town hall, we'd love you to engage your member of Congress which isn't picking whether, you know, program should be cut or where tax should be set. It just says focus Congress on the financial statement. We have credibility as a profession there. So town hall, please log on, let your member of Congress know this is a big deal. And I think at some point in one of these town halls, Eric, we should carve out some time to have this fiscal responsibility conversation.
- [15:33]
B
Absolutely. We need to have A full segment on it. I know there's a lot of the professional leaders that you've been working with related to this. This has been going on a decade. You've been your initial. I think the ASP initiative is a decade old. So it's a good time for us to bring this back to the town hall community. So we'll definitely do that on a future show. So Mark, thanks. A lot of questions have come in. We'll get to some of them during Open Forum. Thanks for today's update.
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C
Absolutely.
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B
With that, I would like to welcome Lisa Bodell to our New York studio. It's great to have you here live. Lisa is someone that we know well. She's spoken at a couple of digital CPA conferences. She's a best selling authority, works with corporations of all sizes, really helping them work on this philosophy of why simple wins. And there is a lot of bureaucracy in business and there's techniques that you can deploy. So I'm looking forward to this discussion, Lisa.
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D
Me too. I'm going to start by tackling that, what, 254 page report that you talked about. That's what AI is for, really. To help you with that. Yeah, Getting rid of that complexity. Right. There's too much of it and we're overwhelmed by it, so.
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B
And Lisa spoke at digital CPA in, in December and I'll tell you that I actually put some of your techniques to work as I, as I started out the year. I mean, I just hear some of the core themes of, of your work. You know, modern workplaces are drowning in self created complexes, complexity, endless reports, meetings, emails that prevent meaningful work.
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D
Right.
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B
So I know you've got a few steps here to walk us through. First off, some mindset shifts.
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D
Some mindset shifts. Well, I like to say that the first step in making a dream come true is to wake up. And part of that is to say we don't need to just manage complexity, we've got to get rid of it. And part of the good news is, I think is that a lot of it is in our sphere of control. We deal with a lot, but we think, oh, it's out of our control because it's regulated. But a lot of where we spend our day is daily stuff. And so I had a few mindset shifts that I think could help everybody. And I talked about these in our December event. The first is that I think it'd be helpful for everyone to stop organizing and start simplifying. And there's a difference. Right. We're all really good. Probably here with spreadsheets and we're all really good with calendars, etc. But like I said with Marie Kondo, it's not about organizing your closet. It's getting rid of the things that don't matter so you can actually see what's still there. I think a lot of us here could do a better job of simplifying and not just organizing. So that's number one. Number two, I think it's really important for everybody here to practice support traction, not just addition. And the reason that's important is because we seem psychologically humans tie more value to more and that's why we're always adding and building. And I want us to start thinking of sculpting and that's a really helpful thing for people that are in small practices or big. Getting rid of things is just as important to clear the way for the important stuff. The other piece is really gets to more personal and I think another mindset shift is thinking more about the compass than the clock. I would bet that if somebody asked you what you spent your day doing today, like when you go home and your wife asks you how was your day? You probably start thinking about your outlook calendar. Because we spend our day executing our calendar. That's like our badge of honor. We got through our day and I think if we stopped living in the calendar and starting thinking about more what's important, we would organize our day differently. And then the last one I would say to everybody here personally is building in time to think. Because you know, especially as you move up the ladder, it's not about just getting the little things done, it's carving out the time for the big things. And I personally, with my team, I mandate that they set a half day every week for deep work. And it force, it does two things. It forces them to carve out time and protect it. But it also sends a message that I value the deep work and the important time and I don't want them just drowning in their to do list. And I think we all could do more deep work. I think that'd be helpful.
- [19:44]
B
Yeah, because some days just go, go you. The day goes through and you've got all these meetings and at the end of the day you say, well, what did I do? Well, I was in a lot of meetings and I, I responded to a lot of emails, right?
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D
And you know what they say, it's like, I can be in meetings or I can do work, I can't do both. And so I think taking our time back would be really helpful. And there's ways to do it.
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B
Well, here, here's some of the simplification actions you can take. And actually the number three is what I did, you know, do a zombie meeting audit.
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E
You did it.
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B
And I canceled some meetings.
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C
You did.
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D
Okay, so it works, right?
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B
You definitely got to say, what's the purpose this repeating meeting? And if it's not really working, then just get rid of it. And in some ways you can take a risk, get rid of it and see what happens.
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D
That's right. And actually what you just said is so important, which is, you know, we can walk through these tips here, but the idea is you try it and you pilot it and if it works, fantastic. If it doesn't, you bring it back and you try something else. But you've got to take back your time because it's a non renewable resource, right? You never get it back. So the zombie meeting audit is definitely one of them. But a few things I think people here could try is first of all practice something called stop it. And I often do this with my team, which is I say to them, what are you going to stop doing this year? And it really, it caught them off guard because we don't think about stopping things, we think about starting things. So stopping things is a really important thing to do each week. Killing stupid rules is a really powerful technique to do with your team. So I know that we've talked about this before, getting your team together and say, if you could kill any dumb rules because we don't really question them, what would you get rid of? And you will be amazed what you come up with and your team comes up with. Zombie meetings is a great thing to get rid of because a lot of us put meetings on the calendar recurring out of obligation and we never stop them. And the last thing is if you can't get rid of stuff, put it on a time diet. You know what they say, 30 is the new 60 and everybody has ADD. So we want to make sure everybody does things shorter and make it fit for purpose.
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B
Some great insights. We've got questions coming in.
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E
Great.
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B
Here's a question that I was asked at Digital CPA that I'm going to repeat. What advice would you give a new leader joining your organization who wants to reduce complexity instead of adding to it? Sometimes, especially like someone newly promoted, sometimes a newly promoted. The first thing you want to do is, you know, create a lot of structure and a lot of meetings you
- [22:06]
D
definitely want to create. Structure is not bad by the way. I mean, we need structure, but it's the amount of it and how we communicate it. So if you're a couple things, if you're a new leader, one I would say clarify and communicate to your team that they should subtract just as much as they add. Like they are allowed to do it because a lot of people are fearful of it. And the second thing is, as a leader is to model that behavior because I think a lot of times what happens is people will say, I want you to simplify, but then they don't see the boss doing it. So if you're a new leader, I think actually looking at your calendar and either time boxing things so you more efficiently use your day or actually having a meeting audit with your team to get them involved and say, what's working? What should we get rid of? Sends a great signal to people that subtraction matters.
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B
Well, we've got a couple of polls here, so let's pull, push these polls. We want to just kind of get a read from the town hall community related to complexity. So how often does unnecessary complexity slow down your work? And this is. We're talking about the complexity that Lisa just described, not the complexity of the tax code or complexity of Washington D.C. that's right, yeah.
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D
Not that those aren't complicated. Well, all right, so good point here, which is we're talking about unnecessary complexity, not regular complexity. So work that adds no value. That's really what that is.
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B
So how, how much no value work slows down your. So I think we've got five, five, five options here that you can take. Don't, please don't answer in the Q and A answer via the polling.
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D
What do you think people will say? You think that they have a lot of unnecessary complexity?
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B
I think so.
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D
I think so, too. Unless they're unlike everyone else because they're human. Of course it's going to happen.
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B
So then we have one more question. So let's push the next question and I'll advance the slide here. How much impact would simplifying your day have on your work?
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D
I have a feeling that that's going to have quite a bit of impact.
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B
Well, let's hit a question. That is another question that's come in. Give a recent example of simplification that you've witnessed.
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D
Oh, my gosh. You know, it was interesting as I have two and they're very similar. I was at Vanguard yesterday, which was really interesting. And a similar thing at NBC Universal a couple weeks ago, and we did a kill stupid rule session and the team there was so on fire about let's use NBCUniversal. Apparently they have 60 reports that go out every week, and they're all exactly the same. But what happened was, is that for some reason, there's a little nuance in them and no one can unsubscribe from getting them. Someone brought this up and everyone was just like, yeah, why do we get these 60 reports? And the CEO that was of this group stood up and said, you all get 60 reports. I mean, he had no idea. And everyone's complaining, you know, and he looked right at his CTO and said, is there a way that you can stop this, this automatic, you know, dissemination? And he said, yeah, done. It's just because nobody had raised it. And so it was just a form to get that done.
- [25:16]
B
Well, we're gonna. Here's a summary of your Simple Wins book, you know, for the top themes. Another question that's come in. So you're dealing with someone who creates a lot of complexity, business complexity for you. How do you, what do you do?
- [25:33]
D
Ah, well, that happens, all that. Usually what people say to me is, it's my boss that creates the complexity. It's me, right, with my team. So what do you do? Well, first of all, you look at the rule and you have to. Or whatever it is, the complexity, and you have to give suggestions of how to change it. You can't just complain. That's number one. And then number two, you can suggest piloting, getting rid of something or piloting the change. Because what happens is people get very attached to their process and they take it personally. So if you say, I have a suggestion and can we pilot it? I think that's something that actually people are more open to hearing.
- [26:03]
B
Well, this has been a great discussion. What they could do is they could print out this slide. They could, they could leverage this slide in a, in a team meeting and say, these are, these are some concepts that, that I heard in the town hall. Simplicity is a skill. Let's leverage this. The, the, the community here is so busy. It's a busy time for a lot of practitioners with Tax season very much so. So this is, it's been. Been a great discussion with you. So thanks for being with us here in the New York studio.
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D
Thank you for having me.
- [26:28]
B
So with that, we're now. And we will be releasing those poll results on the next town hall or during our via our newsletter. So more to come on that. Melanie, it's great to have you here with us today, and I know you've got a lot to cover, so let's
- [26:46]
A
Just dive right on in. So we're going to go ahead and start with IRS operations. So a few weeks ago I gave an update that there was a Federal Vacancies Reform act in which acting IRS commissioners could not be in their positions for more than 210 days. And there was a lot of confusion as to what would happen and what authority was there. And on March 13, the IRS actually came forward with an announcement where they said, okay, there will no longer be an acting commissioner for the irs for now, that Treasury Secretary Besant will not be the acting commissioner. However, he still has all the authority and responsibility for treasury and that does include the irs. And he has appointed IRS CEO Frank Basognano and he will continue in that role. And so things are going to continue as status quo and there will not be any disruption. So hopefully that brings a little bit of peace to those that are wondering what happens with the irs. And then from there we have to look at the filing season statistics. Now those stats are from March 13 in which there was a slight like 0.4% uptick, an increase for E filed returns. But what was interesting about that was that the PREPARE returns that were E filed actually went down slightly, again 1.2%. So what that really indicates, and it's not a surprise in years where we have a lot of tax sweeping law changes, there is a lag between getting that guidance and then being able to file and doing those complex returns. So again, no surprise there. Now what was interesting is that the average refund still continues to be upward of over 10% increase. So that averages out to about $350. And there was a significant increase in direct deposit refunds. So last year at this point there was 48.3 million and now we're at 50.9 million. And that is due to that mandate. And I did see some questions come in. The mandate for mandatory electronic payments right now is from the IRS to the clients. There is still no guidance from the clients to the irs and we're still waiting on that. The other point that I want to touch base on are those visits to the IRS that increased about 53%, which tells you people are truly looking for guidance. And again, no surprise with HR1 having been implemented. But what was surprising is Aaron Collins recently announced some statistics and actually the calls going into the IRS, they went down by 20%. So what that tells you is people are looking for information because of the new rules and laws. However, they're looking at self sufficient quick ways of getting that information. And they're relying on the IRS.gov website. Now that actually has played favorably for the IRS because now their wait times when you call are averaging five to six minutes. Now that's according to the irs. And of course people are using like the chat bots to be able to get more information. However, the level of service has, you know, as I've always said, the level of service is something that is flawed and doesn't quite report information. But what we did learn from a Government Accountability Office report was that historically the IRS has asked for an 85% level of service during this period. But those telephone assisters, they can't do any other work. So even when it's a low volume call times, they can't do, say for example, correspondence. So what has happened is we see those backlogs coming forward and we see the effects of them after the April 15 deadline. So what the IRS is trying this year is they're aiming for a level of service of 70% in hopes that the people, once they meet that 70% can then turn towards correspondence and help with that backlog. So with that, moving on to the next slide. So if you had a client that did not provide their direct deposit information, you probably have maybe already received the CP Notice 53E of which they announced that as today, there have been 1.1 million of those notices sent out. Now that has to do with the E payment requirements from the IRS to the taxpayer. So essentially this notice, the only way to resolve the issue is by the taxpayer either creating an account or logging in. A practitioner cannot go in and create it for them and can't help them. Now with the taxpayer, they can choose to call the irs and there is a dedicated number, but that number is a recorded line. And if they, if you call, say for example, the practitioner hotline, they can pick up the phone, they can guide you as to how to create that account, but they will not take a direct deposit number. And so again, the only way to do that is through that individual online account. And there's three things that you can do. You can provide your direct deposit information and they will release that refund check to you. You can request for a waiver and they will release that refund check to you again. Or you can simply just not respond and the IRS at the six week mark will cut you a check with that. Moving on to the next slide, I just want to catch up on the Kwong case, which I brought up a couple of weeks ago in where in November the Kwong case determined that the filing deadlines during COVID during that national emergency. So that's 20July of 2023, that the effective deadlines were effectively moved to July of 2023. So that means that you have, by statute, through July of 2026 to request for a refund. If you were issued penalties, late payment, failure to file penalties, you can request that. Now, when we originally spoke, we talked about those protective claims. And that protective claim would be Most likely form 843, which is that request for that refund. Now, what's happened from our member feedback is that when you do a protective claim, you still essentially have to do the form 843, and then you have to add in other pieces of work to it, so that work becomes very time consuming. So if you're very sure and confident about your refund, you might want to move forward, which is filing Form 843. The other thing about protecting claims that you need to be aware of, if the IRS were to appeal the Kwong case, which they have not, that would be the contingency that would give you 90 days to go ahead and file that form. Or, for example, if the IRS doesn't appeal, there's a statute of limitations there, too. That would be a triggering event to force you into filing the Form 843. Now, if with the Form 843, the IRS, so we've heard, is initially rejecting them. And if those get initially rejected, that means you have to do an appeal, which starts costing money. And if you do, if that appeal gets rejected, you're talking about litigation. So there really absolutely needs to be a cost benefit analysis conversation with the client. And we're hearing some members are choosing only to move forward with larger refunds and claims. Moving on to the next slide, we have digital assets. Just a quick update for two pieces of information that came out on March 6th. The IRS said that they were going to help the brokers enforce electronic forms, 1099 DA. And there's a bunch of rules associated with it. The big takeaway for you guys? Well, first of all, it's effective for 2027, but the big takeaway is the brokers could be issuing many, many forms. It does not have to be an aggregate, which means when you are working with a client that has digital assets, make sure that they're not only providing you the 1099, but also the electronic ones that they're receiving. So there's more to keep track of. So for you to be aware, the other thing that the IRS did on March 8th is they extended a notice from 2025, essentially allowing when there's a selling or a major transaction with digital assets to be able to use alternative methods. So what that means is by default, if you were to sell an asset, a digital asset, it would be first in, first out. And the IRS has said for the next year you could actually do it in any other method. So what that means to you is if you do get a 1099 DA, but yet the client is showing different numbers for their gains or losses, it's because they have alternative paperwork or you could provide that too for them. So with that, we're going to move on into our round robin. Don't have a lot of time, but I do want to hit on a few things. The IRS did release their Dirty Dozen scams, and a lot of those are targeted towards practitioners and the Washington Tax Brief, which is one hour free CPE for members. Actually, we're going to have IRS guest speakers to talk about those scams and implications for practitioners. And also we're going to go into a deeper dive for the fatf, the issue that Marc talked about earlier. So with that, Eric, I turn it back over to you.
- [35:53]
B
Thank you, Melanie. And you and I can sort and Lisa through some of these questions and get to them in open forum. But great update. Thank you very much. So with that, Lisa Simpson, please come up. Great to see you. How's everything in Durham today?
- [36:10]
E
Oh, it's, it is springing here in Durham. It's going to be 80 degrees and we have officially, officially entered pollen season, which if you hang out in this region, you will greatly dislike. Everything's yellow, we're all sneezing, but spring's just around the corner. So we're excited.
- [36:29]
B
Well, looking forward to this session. Don't let your risk management guard down now.
- [36:34]
E
Yeah. So I'm excited to welcome back Sarah Farrens. Sarah is a risk control director with the Accountants Liability Insurance Program offered through cna. Nicole Graham has joined us prior to this segment on ASAPA Town Hall. So welcome back, both of you. Nicole is with Aon, our professional liability insurance provider as well, and she's a risk consultant. They both bring years of experience either in the profession or defending our practitioners. So welcome back, ladies. I think we've given away the headline about just staying focused right now as we get into the last few weeks of our traditional busy season for a lot of our audience today, keeping our eye on the ball, not letting our guard down and not making some mistakes that might cause long term damage in the future. So with that, let's Talk about one particular trend, Sarah, that you've been seeing in some of our claims history.
- [37:36]
F
Yes, absolutely. And I think three years now, it's time to call it a trend. So, you know, the program that we're all with, the AICPA Member Insurance Program, and the program insures 20,000 plus firms across the country, both from solo practitioners up to large firms. And we look at claims that were made every year against the firms that are in our program and look at what the clients or third parties are saying that the firm did or didn't do in those claims. And for the third year running now, the assertions made in tax claims and taxes, the largest volume of claims we always see every year, the assertions that were made was that the firm either failed to file a necessary return or was untimely and that filing was late. And you know, three years running now that has been our leading cause of loss for tax claims. We're really bumping up about 40% of all of our tax claims every single year for the last three years at 23, 24, 25 have made that assertion. So Lisa, I think that's enough to call it a trend by now, and an unfortunate one, but a trend nonetheless.
- [38:48]
E
And you've got some, some things for us to consider on how to avoid these.
- [38:52]
F
Absolutely. And kind of back to what Lisa was, the other Lisa was saying earlier is just keeping it simple, going back to some basics. Your workflow management system, this is, you know, this is your, your list of things, returns that need to be done and the dates that they need to be done by, you know, making sure it's complete and up to date. You know, if you're, if a return that needs to be filed isn't in there, you're not going to track it and you might miss it. And then as you get closer and closer to the filing dates, reviewing that workflow management system to make sure you're, you're on track and returns will get filed on time, allowing yourself some, some additional time, you know, the last week before a filing day deadline to, you know, pencils down and just review your returns. Review that workflow management system, having that extra time to really just make sure your I's are dotted and your T's are crossed. And then especially if a client is going to be filing the return on their own or needs to make a payment, providing some very clear bulleted highlights, instructions to the client in writing of specifically what they need to do and the date by when they need to do it to make sure that their Payment or their return, if they're filing it themselves, is not going to be delinquent either. And then we have a couple resources too, that provide some additional guidance and information.
- [40:23]
E
And I appreciate that you've called out the change in the USPS postmarks again, because if the client is filing the paper return on their own, then they have to know what the post office change is about and how that could impact them. So all great suggestions there. Let's talk about our clients that we love and adore and give and talk through some of the examples. I demanded that the untimely picture be of a beach because I just remember so many of my clients say, hey, look, I'm going out of town for spring break. I'll be back in a few weeks, we'll just catch up then. And I'm like, wait a minute, what? So you've got the untimely, unresponsive. You've got those clients that just give you bits of data, but not everything, and then those clients that have just absolutely ghosted you. And Nicole, I think you've got some tips for us on how to deal with some of these.
- [41:27]
G
I do, I do. So, so when you're dealing with your untimely or unresponsive client who's enjoying spring break on a hammock, and these are the clients that, you know, you are definitely engaged, but they have sent you nothing by the time the deadline that you ask them to provide it by. And as Sarah already mentioned, you need a review time before you go to file. And now that time's going to be severely complete, compressed, even if you get it right away. So one thing you can do is extend them. I will say that you should get their written permission before extending them. And you want to also make sure that the client understands what it means to extend and understands how that process works. So once you get them up to speed on how it works, have it have their permission in writing and then you can extend them. And there are some really good FAQs on extensions on the AICPA website. So if you need some tips on how to talk your client through it, you can find them there.
- [42:32]
E
And Nicole, we had a question come through earlier about can that written permission simply be an email from the client saying, yes, extend?
- [42:42]
G
Absolutely. As long as you have some sort of acknowledgement that they know you're going to extend and they are okay with it, that's all you need. So, yes, email is fine. Great.
- [42:52]
E
And I know we continue to have clients who are afraid of extending. They think it Makes their audit risk higher or things like that. So that's why those AICP FAQs are available to you, is so that you can help communicate with your clients and reduce some of that fear of extensions. Extensions can be your friend. They're a tool in your toolbox. So let's try to get your clients to use those. All right, so our next client is the piecemeal client, right?
- [43:23]
G
Everyone recognizes this client. They're the. They trickle in the information to you. They can't just give you everything all at once. And maybe that is just the way they are. Maybe it's something beyond their control. But one thing you can do because you want to make sure again, you have enough time to take care of their returns and give them a proper review is send them a written communication. You receive their information, see what they gave you, see what you still need, then write to them and say, these are the items I still need and you should identify them specifically. Then say, I need them by X date and then explain the consequences for their non compliance. So if you do not do this, then. So for example, I need these two items by X date. If you do not provide them, then your returns may not be filed by the deadline and you may be assessed penalties and interests by the IRS or state or local taxing authorities. And importantly, you will be responsible for paying them. And once you have that, you'll have it in writing at the deadline that you provided. If there are some they still don't have things to you, you might want to follow up in writing again that way and again reinforcing that the consequences of failing to provide the information. Because then if later the client is assessed those penalties and interests, then they can't turn around and say, well, I didn't know and I didn't know this was a possibility. You didn't tell me. And if you have this nice trail of documentation saying, no, I told you this is exactly what would happen, then you have, you know, saved yourself a little bit of a headache and maybe a claim as well.
- [45:08]
E
Y', all, I have to confess, I owe my CPA one piece of information. Seeing this slide up on a big screen is just yelling at me. So to my cpa, if you're out there watching, I will get you that one piece of information.
- [45:21]
D
I'm sorry.
- [45:22]
F
And one thing I would mention about these written communications, emails are fabulous. To document the kinds of conversations you've had with your clients, make sure you retain that email. Don't just keep it in your sent items. I was speaking to a firm the other day who was trying to locate some communications and their email retention policy had already passed. And so a lot of the communications they were trying to locate had already been purged from their system. So if it's an important communication that you want to retain in your work papers or in your client file, make sure you get it out of your email inboxes and are out of your email folders and into your documentation of record.
- [46:02]
G
Excellent point. I always stress email is not your client file.
- [46:05]
F
Yes, I agree.
- [46:06]
E
And always a reminder that if it isn't documented, it didn't happen. So we'll borrow that one from our audit friends. So lots of good tips there. What about our ghosting client, the one who's just never talk to us this entire year and we don't know are you my client or not?
- [46:28]
G
Well, if your client has ghosted you, do not extend them without their permission. And you might be thinking, well, why not? What's the harm? At least I'm protecting them. Well, first I want to say they may not be your client. They may have ghosted you because they engaged someone else you don't know. Instead of extending without authorization. I think a better idea is to document your attempts to contact them and alert them of these filing requirements, these deadlines, and what you need from them. Because you have to remember it's the client's duty to file their returns and pay the tax owed. It is not your duty and you cannot care more about their compliance than they do.
- [47:21]
E
Yeah, I think that's a great reminder. It's really hard. I know we talked about this on prior town halls. We try to have this conversation before busy, before filing season deadlines, but it's really hard. We're programmed to try to help and to do the right thing that we think would help our clients. But Sarah, we've got some of our favorite words of advice on the next slide. And, and yours is one that, that I think really resonates in this one especially. So I'm going to let you throw your favorite ism out there or.
- [47:54]
F
And these are things that, you know, just certain things that we repeat over and over. And some, and I, you know, I was at my firm for 15 years. I've been at CNA now for several years. I've been in client service my entire career, you know, career. And it's really hard not to want to take care of my, my clients before anything else. And just like, you know, when you're on the airplane and the stewardess or the flight attendant says to put on your mask first before helping somebody else. You have to take care of your number one client first, which is your firm, not your, not your actual, maybe largest or favorite client. It's taking care of your firm first. So you're able to then take care of the firm's clients. And that is something that someone said to me a while back that has really stuck with me about needing to take care of my firm first before I was, you know, so I was then therefore able to take care of my clients. So that's my favorite ism, or saying, Nicole, what's yours?
- [48:56]
G
No good deed goes unpunished. I can't tell you how many times when I was a litigator, a client said to me, well, normally I wouldn't have done this, but. Or I knew I should have gotten rid of this client, but I was trying to help and you can see how that sometimes turns out.
- [49:14]
E
Yeah. And I've seen some of the cases that go through our program and you're exactly right. They're trying to help, they're trying to do what they think is a good thing and then it ends up coming back to, to buy them. So framing everything in terms of not just a client service lens, but also that risk management lens is important. My ism for this one is that the only stupid risk management question is the one you don't ask. If you are one of those 20 plus thousand firms who are enrolled in the AICPA's insurance program, you have access to Sarah and her team of risk advisors and Nicole has Nicole and her colleague Stan Sterna, who's been on here before. They're always available to answer risk management questions. They'd rather you call than just go blindly without that support. So always reach out and ask that question because even the slightest challenge can come back and cause long term implications. So, Nicole, Sarah, thank you so much for sharing your insights today. A great reminder tied to the simplicity conversation that we had earlier. And we'll see you back at Open Forum.
- [50:35]
F
Thanks, Lisa.
- [50:38]
B
Lisa, great. Great session. You, you've got the most questions so far, so competitive y'.
- [50:46]
E
All.
- [50:46]
B
There you go. We can dig in, dig into those during Open Forum, but I know you and I, we have a couple of updates to share.
- [50:53]
E
Yeah. So I wanted to call your attention to a proposed revision to the AICPA Code of Professional Conduct. This is being issued through our Professional ethics Executive Committee, what we call peak. And it's really focused on just attest engagements and revising the definition of who is part of the attest engagement team. It's not really about changing. It's more about clarifying definitions and ensuring consistency with other professional standards. So if you're in that attest realm, take a look at the exposure draft. You've got until June 1st to get your comments in. But think about as you read, that is the definition of who is part of the attest team. Clear. Is the definition of who's not part of the attest team clear. And that can include folks like the internal auditors and at a client that are specifically defined as not being part of the attest team. So just some light reading. You got a QR code there. You can download it and give us your thoughts as to whether or not the changes are helpful. I also wanted to remind you as we head into the end of the traditional busy season for our tax practitioners that we have both burnout prevention and stress reduction resources. I know y' all are going to give me some blowback. You're like, how can I prevent burnout? It is almost April 1, but look at these stress reduction strategies that we have in the toolkit. They're simple. You know them. But sometimes you just need to be reminded to get up, walk away, take a 15 minute walk, come back, and then pick that client file back up. So just make sure that you're taking care of yourself and that's going to make you take care of your clients better. And you can protect from some of those mistakes that we talked about earlier with Sarah and Nicole.
- [52:49]
B
Thanks, Lisa. And here's another resource that we just want to highlight related to tax research. At CPA.com, we focus on helping firms with tech adoption. We launched this program with Bluejay, really, to allow firms to enter into the AI era. I mean, the gen AI era. And I can tell you it's really happening. The impact is high. And one thing that we did recently with Bluejay was to just offer this simple, complimentary seven day trial in the theme of simplicity. You can sign up for this if you're in a company. If you're in a firm, you just click on this link. All you have to do is provide an email. There's no credit cards or anything like that. And just try it out, leverage it this month, Lisa, I know you've been talking to a lot of firms that have been using these tax research tools. It's answered 1 million questions. It's answering well over 50,000 questions a day. 2,000 of these trials have been started, a lot of them by small firms, firms of all sizes. Look at this. Some Firms, some individuals reporting 30 hours saved per month. So that's a lot.
- [54:05]
E
Yeah, that is.
- [54:08]
B
All right, so with that, let's move on to the Open Forum session. And Mark, I'll start off. I know we've got lots of questions here. I know, Melanie, you've been looking at the questions, but I'll kick things off with the first segment with D.C. so here, Mark, it's a question that we can't answer, but that's an answer in itself. So it's related to the tariffs. And so clearly this portal's being set up and they're the importers that paid these tariffs. What happens if you are someone who bought a product from someone that raised their prices due to the tariffs? Is there going to be a process for you to ask for some, some. Some dollars back?
- [54:52]
C
Unclear. And a whole nother level of complexity. So I mentioned 330,000 importers that they're going to be sorting through and what of the tariffs, you know, or shipping dues, all of the cost that goes into importation, you know, do you discern from. From the IPA tariffs? So that part is very complex. It'll play out as to whether actually on the consumer end there are any refunds. But we're gonna start with the first level and we'll keep the town hall up to date.
- [55:27]
B
Thanks, Mark. And then there was a great suggestion. I think it's maybe something that could have been in the works, but people want to support the STEM call to action. They said get it out on LinkedIn so they can forward it to others. So others that even though hopefully all listen to the town hall, they don't. So we'll get it out to LinkedIn.
- [55:49]
C
Absolutely. We'll get it out. And forward away, please, Melanie.
- [55:55]
A
So I saw a lot of questions coming in around CP53E where they are receiving the notice even though they owed taxes and they paid those taxes, but yet it was still asking for their direct deposit information. Actually heard of that from a few members and we followed up with the irs and so hopefully by the next town hall I'll have a response for that. Another issue that I saw a lot was with the wait times that they were waiting for more than those five or six minutes. Keep in mind that's what the IRS is reporting. And at the end of filing season, we're going to do our annual survey which will give everybody the opportunity to provide their feedback and that's going to be the real table, tangible feedback of what our members are feeling. So that survey is going to be very Important.
- [56:41]
E
Eric, can I, can I throw a ghost client question at our risk management friends? So tell us again, what's the harm in filing an extension if the client has not actually engaged you to prepare this year's return because you haven't heard from them? You don't know if you're going to be doing the return or not?
- [57:05]
F
Well, I think Nicole said it before, but I also think that you can or you're artificially potentially extending the client's statute of limitations and that may increase future audit risk for them. If they, you know, if they, if they, if they wanted to file on time and now you've created a longer statute of limitations for them, they, you might be misusing taxpayer information without their, without their permission. And they're really, they're just, they're not your client. They have not engaged you to provide services. And so I think that, you know, you are doing yourself more harm than you are doing them good.
- [57:48]
D
Love it.
- [57:49]
E
You could accidentally mess up some elections, I believe, thinking back to some of the conversations we had during the earlier town halls about some types of provisions and elections. So it's not as simple and clean cut as it sounds.
- [58:05]
G
Yeah.
- [58:06]
E
All right.
- [58:07]
B
Well, Lisa, I think, and Melanie and Mark will look at these questions as we always do, try to highlight some of them with the newsletter that goes out next week. So one question that always is coming in, Lisa, we got to work on is people, we got to figure out a way to provide these mugs. I'll take that as an action item. And it's been a great discussion today. So thanks to Sarah and Nicole, Melanie, Mark and Lisa, you and I can just go through the final slides here.
- [58:40]
E
So we're going to start with a showstopper here. Ryan Reynolds has been announced as one of the keynote speakers at our Engage conference in June. Come join me and a lot of his adoring fans. But we're also going to have, along with Ryan, the former CFO for Costco. They work very closely together and talk a lot about Ryan's entrepreneurial experiences and how having that trusted advisor at your side is such an important aspect of success. So come hang out with me and Ryan in Vegas in June. It'll be fun.
- [59:17]
B
That does sound like fun, Lisa. So I'll be there. I look forward to it. So here's our upcoming town halls. Thanks for being with us today. The next one will be April 9th and then you see the dates for the following town halls. We will be doing a live town hall from Engage on June 8th. Actually, we're going to be opening engage with a town hall. So that's going to be fantastic. Here's our Town Hall Digital Resource center where you get all these materials that we review every week. We even have Today we had a short talk with Lisa Waddell. We have our full video from digital CPAs. We try to put a lot of resources there that you can leverage. Great being with you today, Lisa.
- [60:01]
E
Final Comments Just again, remember to take care of yourself the last few weeks of busy season. Take some breaks and we'll see you in a couple weeks.
- [60:15]
A
Thank you for your participation. You can also subscribe to the AICPA Town hall series on your favorite podcast platform, as well as watch archives on YouTube and find resources@cpa.com Townhall Tune in for live broadcasts Thursdays at 3pm Eastern Time.