The AICPA & CIMA National Tax Conference will take place on November 11 and 12 in Washington, DC. Join Brandon Lagarde, Tax Partner at EisnerAmper, and April Walker, Lead Manager on AICPA & CIMA’s Tax Practice & Ethics team, to learn more about what to expect from the upcoming conference. Conference sessions will feature topics such as: The impact of election results on tax legislation: Investigate the potential legislative outlook based on the recent election results and how it might affect tax policies. Tax Cuts and Jobs Act (TCJA) expiring provisions: Provisions of the TCJA are scheduled to sunset at the end of 2025; learn more about how to prepare and explore planning opportunities. Practical tax strategies: Sessions at the conference will cover various tax tactics, including gifting and income tax planning strategies, for clients who are not currently subject to estate tax. Ethical dilemmas in tax practice: A session will discuss common ethical dilemmas faced by tax practitioners and provide insights on how to handle them. The future of tax practice: Investigate the importance of transforming tax practices with year-round advisory services and how to implement these changes in a tax firm. AICPA resources AICPA & CIMA National Tax Conference — For tax practitioners, there’s no better place to get immersed in current events than the AICPA & CIMA National Tax Conference; in-person and virtual options are available. Reimagining your tax practice — Join us for free upcoming live roundtable sessions to tackle today’s top practice management issues with insights and tips from pioneers in the tax community. TCJA expiring provisions — This detailed, downloadable resource offers an in-depth look at the expiring provisions under the TCJA and other recent legislation. It categorizes changes across individual tax, estate and gift tax and business tax provisions, organized by year of expiration. Transcript Neil Amato: Welcome back to the Journal of Accountancy podcast. This is Neil Amato with the JofA. I'm excited to be joined for today's episode by two top flight tax experts in this special collaboration episode with the Tax Section Odyssey podcast with our guests, we're discussing the AICPA & CIMA National Tax Conference which begins November 11th in Washington. Those guests, April Walker, lead manager with the tax practice and ethics team and host of the aforementioned Tax Section Odyssey. Also Brandon Lagarde, tax partner at EisnerAmper and Chair of the Tax Conference Planning Committee. We have a lot to get to. We're excited to have you on. First, a quick welcome, April and Brandon, thanks for being repeat guests on the JofA podcasts. April Walker: Thanks so much for having me Neil. I'm excited to be here. Brandon Lagarde: It's very exciting to be here Neil. Thank you for having me. Neil Amato: Yeah, we're glad to have you both on as I said, the Tax Conference is November 11th, less than a week after election day. Brandon for you first, tell me what you're looking forward to about this event which is at the Omni Shoreham Hotel in Washington? Brandon Lagarde: Yeah. I'm looking forward to just go into DC. It's going to be a week after the election, hoping that we know who the president will be and what the makeup of Congress will be at that time. Again, it's going to be a great atmosphere, a great opportunity to go to the nation's capital, to hear from some of the best tax minds out there. Neil Amato: April, I know you're a repeat attendee at that conference. You're also running sessions, recording podcasts, taking part in panels. What do you look forward to from the event? April Walker: It's always a busy conference for me and I love being in DC and it's very exciting for me to be there, like Brandon said right after the election. Speaking of that, really what I'm looking forward to most is hearing more about what the potential legislation outlook could look like based on those results, based on those election results. I think we'll hear more about we've talked a lot about the Tax Cuts and Jobs Act, the TCJA, that it potential expiration, what that means. We'll really be able to dig into that at the conference. I'm excited about that. Neil Amato: It's almost like we planned this. My next thing was going to be the TCJA. Some of the provisions of that Act, the Tax Cuts and Jobs Act, are scheduled to sunset at the end of 2025. Clearly, there is a lot of uncertainty about the provisions right now as we record and the first part of October. But I imagine that topic is going to be a popular one at the conference. Brandon, What do you think? Brandon Lagarde: Yes, absolutely and that's why, again, being there at the heart of it all after the election and getting to hear from presenters and speakers about just what the future holds for tax professionals, end of 2024 is going to be really important for us. 2025 is going to be incredibly important for tax practitioners to understand and remind ourselves of here are all these provisions that we've been dealing with for the last seven years that are going to expire. What's going to happen? Where are we going to be? A lot of planning opportunities, lot of reason to get in front of clients to learn about what we have in the horizon. Again, that's why this conference, particularly just the time of the year. It is in the election cycle, and heading into 2025, 2026. It's probably the most important conference that's ever taken place. This is just a really important time for us to get together and to really try to figure out what's going to happen. Of course, we're not going to know exactly at that time, but at least start to have a better understanding, a clear picture of what we can expect and what should we be talking to clients heading into 2025? What are some things that need to be doing? Because you can't just turn on the switch in November of 2025 and start to really think about this. Right now is really the time to get ahead of it and remind ourselves what provisions are expiring? What do we need to start thinking about planning opportunities to get ahead of it? That's what's at stake at this time. April Walker: I love Brandon that you're setting the bar really high. The most important conference of all time. Here we go. Neil Amato: Yeah, that's great and because it's the most important conference of all time, we will include a link to the conference registration page with the agenda information and all of that in the show notes for this episode. One of the items on that agenda is being led by Marty Finn. He's a previous guest on the podcast. He has a session on tax and financial planning. When estate taxes don't matter. Now not to steal Marty's thunder. But can you give me a little preview of the highlights of that session? Brandon Lagarde: Certainly. We will spend a lot of time at this conference again, learning about the estate tax world and the sunset provisions and trying to navigate that. But the reality is a lot of our clients are not subject to estate tax. A lot of our clients are not having to worry about the sun setting provisions. We thought it was important to have sessions that not just focused on the top 1% of our clients, but to the 99% or to the large majority of our client base. Things like gifting strategies, what we need to be talking to clients about, who aren't necessarily dealing with the estate tax. Income tax planning strategies around that. Really just as practitioners, what do we need to be talking to clients about? We're not super focused on just estate tax and the ultra wealthy or the wealthy. That's one thing that we really try to work hard as committee in this conference is to find sessions that have a very practical application. That we can take away tips and tricks and things to our client base and back to our hometown and not just focused on the very academic discussion that a lot of tax practitioners like to have. That they can relate to. Try to have sessions that are very practical in nature and the Marty session is definitely one of those. He's going to do a great job giving some really good tips and tricks to people to bring home. Neil Amato: I liked the practical part you mentioned, and that leads me into another session that I want to ask you about. This is one that April is taking part in with Dan Moore and Mark Gallegos.The title of the session is Tax Practice makeover, transforming with year-round advisory services. Tell me some more about that session. April Walker: Yeah. I'm really excited about that session. A lot of what I do here at the AICPA is try to help practitioners think about the future, the future of Tax Practice, the future of what a firm could look like. So we had this idea to do like a makeover of a practice. We're going to talk about some of the different aspects of a practice that you could make over- billing, client focus. One of those is about adding advisory services. We'll talk more about that. So come and join us and learn how you could do a makeover of your practice. Neil Amato: That's great. Now another session with an intriguing title, this is you, Brandon and you April, test your tax ethics IQ. Now one that sounds like one that people have to do some homework on or some pre-reading, maybe I don't know, but tell us about that session. What's a flavor of it that you can tell attendees about now? Brandon Lagarde: We're going to try have fun with this session. Play some games that have come up with like a quiz atmosphere. I think April going to try bring a buzzer for people to buzz in and answer our questions. But really focus on ethical dilemmas. We're faced with ethical dilemmas daily, with clients who are either trying to push the boundaries a little bit or just get into some situations where they find themselves in a bad place. We're constantly being asked to address the situation with our client base. Whether you need amended return for XYZ reason. Can you take on a client because of what's going on? Do you need a fire a client? Because they may be trying to push the envelope a little bit. Really, there's a lot of ethical dilemmas that we face as practitioners. This is really a time for us to again, have some fun with it. To the extent that ethics is fun. We're going to try to test the audience and see what they think. It's always amazing if you ask a room of people what they think about certain tax ethic issue or are really just a tax topic. In a room of 100 people, there are probably 100 different opinions on what should be done. I think it can be fun. We're going to try have fun with it. Again, I really trying to also provide some education so if you find yourself in these situations, here's some things to consider. But again, April and I, we hope to have fun with that. April Walker: Just come visit us. There is no pre-work. To answer your question, Neil, there is no pre-work to the session. We'll take a lighthearted take on a potentially tough, dry subject. Neil Amato: Great, and this quiz is not graded. You still get the CPE as long as you're showing up, right? April Walker: Absolutely. Neil Amato: Well, good. One of the themes that I'm hearing is providing advice on the topic of expanding services beyond just, "Hey, we're going to do taxes for someone." But if someone said to you, maybe after a session, "Hey, I really liked what you said there. But gosh, I'm a smaller firm," or "It's only me. I don't know where to start." What do you tell them? April Walker: What I would do, if they came up to me and I hope they do. You can come up to me at our booth. You can come up to Brandon and I if you see us. We will likely be posted up in the bar at the Omni. Come see us anytime. But what I would tell you, we talk to small firms all the time. One thing I recommend them is come to a session that I do that's on the computer. It's not live at the conference, but it's called Reimagining your tax practice. I'm really more about re-imagining and having makeovers and that sort of thing it seems like. But in those sessions we really talk about the nitty-gritty. Sometimes it's hard to think about this big process of going from X to Y. We like to talk in those sessions about practical ways. I like to focus on the practical. How to actually get where you're going, or how to change things in your practice or how to change how you're operating. That's probably what I would say if you came up to see me wherever you might find me. Neil Amato: This has been great. We've mentioned session by Marty Finn. We've mentioned some sessions you are taking part in. Of course, we've mentioned that key acronym these days, TCJA. Brandon, in closing. Anything you'd like to add as we wrap up this Tax Conference preview episode. Brandon Lagarde: Yeah. Certainly. A couple of other terms you'll hear out there. AI, which we have a session. Transforming your tax practice. One thing we like to emphasize about all of our conferences, but certainly this one is, there'll be lots of sessions with lots of smart people talk speaking at these sessions with great content. A lot of times your challenge is which sessions do I go to. Because it's such a great hour, hour-and-a-half of content. You'd have to choose. At the moment, you do have to pick a session. But you have access to recordings of all the sessions after. I often go back and watch sessions that I wasn't able to attend because of that great content. It's just a wealth of information. Again, you get a little parting gift when you leave. Not only do you meet up, making new friends, meet people at the conference, talk about challenges you're facing with your colleagues and also hear some of the best speakers in DC and have a great time there. But you also get to have access to all the recordings after and watch the sessions after that you missed, and that is invaluable to have access to that content. Neil Amato: April, how about you? Anything to add in closing? April Walker: I think one thing that's really important about this conference being in DC, and we haven't mentioned yet, is the ability to have IRS speakers that come and speak to us. We're going to have the taxpayer advocate, Erin Collins. We'll have other IRS speakers scattered throughout the conference.That's another opportunity to really hear where they are on certain things and be able to ask them questions. Neil Amato: Yeah. That's great. It's a good reminder that there is that access to IRS officials every year at this conference. Really thank both of you for your time. Again, look forward to the conference November 11th, Brandon, April. Thanks for being on the JofA podcast. Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices. This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home base for staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you’re not already a member, consider joining this prestigious community of your tax peers. You’ll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.

This podcast conversation with digital asset specialist Kirk Phillips, CPA, CMA, CFE & CPB, Managing Director — Global Crypto Advisors, focuses on demystifying IRS Rev. Proc. 2024-28, which provides guidance on transitioning from universal basis tracking for holders of digital assets and a safe harbor deadline of Jan. 1, 2025, to determine how to allocate any unused basis in digital assets. Phillips shares recommendations for tax practitioners around communicating with clients and the need for careful planning and documentation to meet the safe harbor provisions. What you’ll learn from this episode: Understand more about Rev. Proc. 2024-28 and what it means for holders of digital assets. Hear about the safe harbor provisions provided in the revenue procedure. Learn the importance of the Jan. 1, 2025, deadline for making a reasonable allocation of unused basis. Find out about the challenges of documenting and reconciling cost basis related to digital assets. How to communicate and prepare individuals and businesses for the upcoming changes related to reporting of digital asset transactions.  AICPA resources Digital assets and virtual currency tax guidance and resources — Sharpen your tax knowledge on digital asset and understand the tax complexities and strategies involved with virtual currency and cryptocurrency. AICPA advocacy resources AICPA makes recommendations for digital asset transactions regulations, March 7, 2024 Other resources Rev. Proc. 2024-28 — Guidance to allocate basis in digital assets to wallets or accounts as of January 1, 2025 Final Regulations 2024-07-09 — Gross proceeds and basis reporting by brokers and determination of amount realized and basis for digital asset transactions Transcript April Walker: Hello everyone, and welcome to the AICPA's Tax Section Odyssey podcast, where we offer thought leadership on all things tax facing the profession. I'm April Walker, a lead manager from the tax section, and I'm here today with Kirk Phillips. Kirk is a CPA and it has a lot of other designations behind his name. But he's also more importantly for today's discussion, a specialist in the world of digital assets and crypto. [He's] been in it for a long time. Our goal today, Kirk, is to demystify some of this latest guidance that we've gotten from the IRS. We're definitely not going to be able to demystify all of it in the time we're just going to spend today. But there are some important deadline related items, so we want to make sure we're covering those. Kirk is on the AICPA's Digital Asset Tax Task Force. And for the past few months, we've actually been meeting weekly, which is unusual for a task force. Because really we've been discussing one thing, Revenue Procedure 2024-28. What it actually said, what it meant. Just really delving into that, the details of all of that. That's going to be the topic of what we're going to talk about today. What that means for tax practitioners and holders of digital assets. Especially like I said, there are deadlines around this safe harbor. Kirk, to start off. Welcome. Let's talk about I mentioned the deadline and let's talk about the significance of that January 1, 2025 deadline for making that reasonable allocation of unused basis. That's what the Rev Proc says. Talk to us a little bit about what that means, what you're thinking about, what practitioners should be doing now to prepare for that date. Kirk Phillips: Sure. Thank you so much April for having me on the podcast. I love talking digital assets and crypto, whether it's tax-related or otherwise. I'm excited to help demystify this Rev Proc. One of the key things here is that and why this is so important is we both have a short timeline. Because we're already nearing the last quarter of the year 2024. It's also very challenging - it's a onetime exercise that we have to go through and on a short timeline. That's why this is critical and that's why we're here today to talk about that. One of the key things here is that prior to this Rev Proc that the taxpayers would do their accounting for the digital asset transactions, which would be their trading or their sales, and it could be other related transactions as well. But basically they would do all the accounting on a universal basis. The question is, what does universal basis mean? Universal basis means that whether you have one wallet or one exchange account or you've got 37 wallets and six exchange accounts or even something more crazy than that, you would for the most part, more than 99% of the time people would use specialized tax software because that's really the only way to get the job done. You would connect all those things and or import your transactions into the software and it would essentially co-mingle all those transactions. I like to say as if it was one wallet or as if it was a single exchange. But it's not simply for the tracking purposes, all the transactions are simply dumped together and you perform one set of accounting. That's what the universal [method] is. Now, you can no longer use universal. You have to do a wallet by wallet, account by account basis. Which means that if you, again using those same numbers I did in my example there. If you had 37 wallets, that means you essentially have to do 37 different sets of accounting for those. I think that without knowing even anything more about it, an accountant hearing that would say, "Wow," immediately that sounds like that could be challenging, that could be a lot more work, and so on. There could be issues around that. And all those things are true. Because of this short timeline between now and the end of 2024 and essentially we're talking here at the end of September, so we got one-quarter left to do this. The important thing here is if you have any channels to communicate with your clients, the first thing to do would be to communicate with them and let them know, "Hey, there's this Rev Proc 2024-28." Maybe, perhaps even provided a link if you want to, and or read that yourself in detail at least once. But there's a lot of other things that you can lean on in AICPA guidance, of course. But just to send that out, in other words, you don't have to know it in detail before communicating. You should start the process communicating right now to say, "Hey, there's a lot to unpack here. I'm just letting you know there's going to be more that's coming. Be on the lookout. We're going to do a series of blogs on this or whatever it is you do or a newsletter, segments, and things like that. I think that's probably the number one thing to start off with is start the communication now, because this is not a one-shot communication thing. This is a series of communications that you're going to need to do. Whether you're just providing value to non-clients or you're working with current clients, you're going to need them to be thinking in steps and increments along the way. April Walker: Yeah. That's a lot of what we've been talking about over the past couple of months. Who this actually applies to you and who needs to really take notice of this? I think that's a great suggestion. Our listeners might be thinking, "Hey, I didn't know that we are not allowed to use universal method of basis allocation anymore. Did that come from the revenue procedure or where did that come from?" Kirk Phillips: Well, that actually came from the digital asset broker regulations. But then what happened is in the process of those becoming final and the fact that universal [tracking] comes to an end. And we have to do the wallet by wallet approach. What arises from that is a onetime exercise of how do we get from one thing to the other thing? How do we get from point A to point B? April Walker: The Sec. 6045 regs, which are long and complicated. Again, like Kirk said, we'll continue to create resources around all of this information because it's a lot to unpack. In the revenue procedure, it talks about a safe harbor. As we're transitioning between universal and wallet by wallet, the procedure provides a safe harbor. Let's talk about what are the key criteria that qualify you for using that safe harbor and give some of the requirements for it and so talk a little bit about that. Kirk Phillips: Sure. That's one of the big things here is what are those key criteria for the safe harbor? Of course, another thing is we're wondering what is it actually a safe harbor from? There's going to be more to come on that. Because that's actually not super clear and usually that is when it comes to safe harbor. The critical things here are that you have two methods that you can follow in this universal transition process. From universal cost basis tracking. In that transition process you can use a specific units method or you can use a global allocation method. In either case, you need to do some work before the end of the year arrives at 12-31-24, or before January the 1st, whichever way you want to say that. Those two methods are two distinct ways of doing it. You might say that the global allocation method is more straightforward and less work or less complicated. But let's just unpack those briefly. There's more to dig into on these, but this is a brief touchpoint. Let's start with global allocation. Global allocation, I like to think of it as more like a recipe. There's more than one way to get the "cake baked". Because you've got your grandmother's recipe and you've got your own style and you've got things like that and things in the cookbook. So you can arrive at a different cake, but if you follow the recipe, you're going to get the same cake. Basically, another way I like to say it too, is if you come up with a global allocation, which is simply saying, "You know, what I want to do is I want to allocate my Ethereum, my ether. And I want to take some low-cost basis. Maybe you could say, "I want to use my oldest cost basis and I want to apply it to my oldest wallets." For Bitcoin, I had only two Bitcoin wallets and one of them, it's only collected Bitcoin, received Bitcoin, it hasn't sold any. Say, you want to allocate maybe what's already there. Whatever it is, you're really defining a process. You're not actually going through with the process, you're simply defining it. The key distinction about global allocation is, if you define the process and if you were to give it to, let's say another CPA, they will come up with the same answer. If you give it to CPA A, CPA B, or CPA C, they should all come up with the same answer. It's very systematic. That's the distinction there. Now with the specific units, it's simply user's choice. Like in baseball, it's a fielder's choice. It's user's choice. It's however you want to allocate it specifically. Again, you have to follow the date. You can't break the date in the basis or a specific lot based on the date that it was purchased. You can't break that up. At that level that's as granular as you can get. If there was a lot or a tranche of Bitcoin or whatever, AVAX, or just pick your favorite coin and that was purchased on a certain date. You can't break up the date because the date piece has to be maintained and be consistent. Anyway, that's really just a user's choice scenario. That's the difference because you can't give that method to three other CPAs and have them come with the same result because that's not what it is. It has nothing to do with following a process. It's simply just a user's choice. Now the key thing on the dates there is that the specific units method has to be conducted and finalize before the end of the year, before the last day of the year. With the global allocation method, you just need to come up with the formula for doing it by the end of the year. But you actually can apply the formula to get the allocation after that. That's a super important point right there. Under global allocation, you also have until either the original due date or even the extended due date of the tax return if you did not conduct a transaction. The key is not having any transactions. You've got to put a halt to your transactional activity until you apply the global allocation method. But it does buy you more time to do it. You just gotta be careful because that's how you could throw off the safe harbor. And ruin the safe harbor if you don't put a halt to the transactions before doing the allocation. April Walker: You mentioned in one of our discussions is about what is this a safe harbor from? Based on our best discussions and where we think we are now, what do you think about that? What is it a safe harbor? What is our alternative if we blow this safe harbor. Kirk Phillips: That's a great question. It looks like it would be a safe harbor prospectively from this day forward or the end of the year exercise that we're talking about forward. We're not sure about retroactively. It mentioned if you don't follow the safe harbor, you can incur penalties and interests. As I recall that's about as deep as it goes. You could draw an inference from that and say, if I don't follow the safe harbor, does that mean that all of my transactional activity, all my reporting for the prior years could be recast and recalculated under different cost basis method. And therefore end up with a different tax liability than you originally calculated. Those things can be worst-case scenario. We just don't really know. April Walker: Usually when you have a safe harbor, you have rules of what to do and how to document that you have met that safe harbor. Again, things we've struggled with. Seems like a simple question right? But I'm telling you a lot of smart people in the room, this is not a simple question.  Kirk, as we know it now, what types of documentation do we think will be good enough to substantiate that we have met that safe harbor as of 1/1/25. Kirk Phillips: That's right. You could actually take an action. You could perform your allocation, and you could do this all before the end of the year. The question is, how do you prove that you've done it before the end of the year? People have talked about, well, you could have files saved that because you can look and see what a file date is, the modification date of a file. But then you could also later open up the file, not even change anything but potentially open a file, change the modification date. If that was something that is being looked at, then that could be an issue there. This is really where it comes into use in your CPA skills to figure out what's a good way to document. We're already good at that. Even in the world of not knowing, you can come up with "well I think I should do this" to document. One of the things is if there's a way to send an email to yourself. Time stamping on emails is one way to do things like that. Just in the larger world of documentation. Like I said, everybody is relegated to using specialized crypto tax software. You might as well say everybody uses crypto tax software. Then the question is, which one do you use? Because they're all different. They all have issues and so on. But hopefully regardless of the software, it would allow you to export an end of the year holdings report or an inventory report. That's essentially what it is because the data is in the software and if that's going to be one of the key things is, can I get that report? Let's just assume that you do. The first thing you do is to export that report. That's going to be the basis and the starting point for doing an allocation. Let's fast forward just a second. Let's say you go through the allocation however long that happens and let's say you're done. For example you could say, let me attach that file now. Again, figuring out how do you document. You could attach that file in an email or you're copying [yourself] with your client and maybe there's other members in the firm as well. Maybe there's a specifically designated digital asset person who want to get copied. But nonetheless, that would create an email timestamp on it and that document is attached to it. That's one way that you can actually document that these things were done ahead of time. I guess if we want to dive into documentation further again, I was talking about that inventory being a starting point. Regardless of whether you use this global allocation that we spoke about or specific units allocation. You would need to take the starting point of the ending balances or the inventory and then you need to take your wallets. Then you need to then allocate the basis that's in the wallet. Because remember it's on a universal basis. Now you're trying to allocate it on a wallet by wallet. You then need to go through it, but it's difficult to describe it without seeing a visual. But basically you would allocate all of the inventory that starting to all of the current wallets that you have. Again it depends on what method you're using. But at the end of the day, what you're trying to achieve is you want to get a proof. We all love proofs, and this is one way to do it. What's the proof? The proof is the check total. It could be a check total per asset, for example that you've allocated all the Bitcoin, you've allocated all the ether, you've allocated all the Solana, the AVAX, the whatever. You've allocated everything so that the check totals on the top match the check totals on the allocation. That's how you know that you've done it and it is complete and correct. Is by doing the methodology that is like that. Because if you don't do that then there's really no way to know that it's complete. You got to have checked totals and arrive at the same numbers and then that's how you do it. Again it can be challenging because it's depends on what's the quality of the data that you're starting with. One of the big challenges is I think all the software has different types of issues, limitations, certain features some have that others don't have and things like that. The first thought might be from the accountant mindset oh, if I split this inventory report out it's accurate. But the thing is, it's most likely not accurate. There's going to be issues with it. You're actually starting with something that's not solid in the first place, which creates a whole other set of challenges. But we can't dig too far into that one right now. April Walker: I was just went back into my way back machine and I was doing proofs and doing double underlines and I was getting really excited. I think that's a great point. If you are using software for yourself or for your clients, you need to, just like with everything we would say, you're not printing it out and then just putting it in a file or somewhere and never looking at it again. You got to make sure that it's not garbage in, garbage out situation. Again, lots of potential steps in this seemingly simple, allocate your basis comment. Another thing we've talked about is the role of brokers. Because eventually in the years to come, I'm sure you're aware, there's going to be in a form 1099-DA. And there's going to be reporting of digital assets and then hopefully there's going to be at some point, [cost] basis on those forms. Again, happy little world the basis is going to be equal to what you think it is and everybody's happy. I think we know that it's going to be much more difficult than it sounds, but let's stay simple for the moment. Let's talk about how that revenue procedure 2024-28 impacts how a broker might communicate with your clients regarding interactions with brokers and how this might be a help eventually. Kirk Phillips: That's all a great question and it's interesting how just the broker side of things, what were the centralized digital assets exchange. Because that's what we're talking about. It's just the two ways of saying it. But just to be clear what we're talking about because we have decentralized exchanges. Then the other side of that is the brokers and the centralized exchanges. And so that creates a whole another set of unique things and considerations with the brokers. And how they're going to report basis because they're the ones that are required to do it right now. We don't have it on the self custody side. I guess the overarching thing is you could end up with perpetual mismatches. And when I say perpetual, they could go on forever - definition of the word. But it could go on for a very long time. Just to make a point there, you have a perpetual mismatch between what you have been tracking with your crypto tax software and what the broker actually has on file. If it was Coinbase, for example, Coinbase and the assets that are on Coinbase were actually purchased there. Coinbase is going to have a record in that scenario. Then your tax software may have under the universal method have already spent some of that basis. Because again, those transactions are treated as if it was all one big wallet. You've got a mismatch off the start, even if you do a proper allocation on your own side, you may not even know what the broker has. So the question is, how can you communicate with the broker and let them know? The centralized exchange services or these brokers, they can receive user provided basis, but they're not required to, but they may accept it. If you have some that accept it, that may be one path that you could try to match up what you have from your allocation and communicate that to the broker so it matches up. But again, that's not going to be perfect because not every centralized exchange is going to do that. Only some of them are. Even in cases where they do provide that as a courtesy to their customers, that's not a magic wand either. If there's other things that can happen there, we could get into the weeds further on that. But one of the things is when you transfer in tokens to a broker, that they don't have any cost basis there. Again, if you wanted to report it because they're accepting it, yes. Otherwise they wouldn't have the information. There's just no way for them to know. If you think about the different assets that they may have in your account, they're going to have some that they know the basis for which would be the ones that you traded with them. Then they're going to have other transferred in assets from customers and they're not going to have any basis information on that. That just exacerbates the issue of what basis they have, what information they have and what's getting reported. You're going to have basically you could have 1099-DAs and so on that get reported on your behalf or the basis information is not correct. I think you know what is going to happen in those cases. You can imagine the challenges of trying to reconcile. That's what it was going to come down to is creating a really challenging reconciliation process with what the broker reported and the software with the software not really having features enough to give you reconciliation, the ability to reconcile to the degree that we're talking about. April Walker: We've talked a little bit about there are times certainly where you get it 1099-B and the basis that the broker reports, doesn't match for this or that reason? It can be inherited and who knows a couple of different scenarios. But generally, you can rely on what the basis is. I'm not sure that's going to be the case in this situation. But again, we're just scratching the surface on some of these complex issues. More from an issue highlighting, you can recognize that this is coming. Kirk, This has been great, we've covered a lot of great information, gives us some good takeaways as we're wrapping up listening to this podcast and what can practitioners do in the next quarter coming up or then as they're starting working on a 2024 tax returns. Kirk Phillips: Yes, I've got some great key takeaways and key points here. Then again, these things will be some of the stuff that I was suggesting in the beginning where you incorporate it into your blogs and newsletters, etc. This ongoing communication that's going to be critical. One of those could be strategically setup and tee up this allocation process in such a way that it is less complicated and has less issues. There's really going to be a strategy that could alleviate some of that. It's not relegated to whatever challenging process is going to be for any specific client. One way you can do that as potentially consolidating wallets. If there's an example, like I said, the client that's got the 37 wallets and the six exchanges. You can consolidate those down. Now whether it whittles down to a single wallet, probably not, with that many for various different reasons. But if you could go from, say, 37 and six, what's that? Forty three. If you go from 43 and you're able to whittle that down to say four or five. You're automatically going to have less challenges and the less complicated allocation process. Really strategically consolidating assets and wallets is one way that could make this process easier. And then also similar and in conjunction with that could be to take the assets off the exchange. Because again, if you don't have the ability to communicate with that particular broker because they're not receiving user provided information. If you take the assets off the end of the year, and then you put it back, they're going to have a zero basis. Again, that's its own issue, but I think it's the lesser of the evils, if you will. It's a better scenario for them to have a zero basis because then you're going to report something for it. Rather than they have some number and you have some different numbers. It's kinda like cost basis cleansing and you could call it that. The other thing here is the third key takeaway. I talked about all crypto software has limitations and challenges and issues, all different from one another. You really need to know [whether the software can help]. For example, if a software provider is going to provide some tooling to be able to help in this process, they may actually provide it to the user. And say, hey, you could just click a box here and we're going to lock down the inventory. Then we're going to do this reallocation for you and you think to yourself, that's great. I don't have to do any of the work, but you're still going to need to check that. You can't just rely on that. Then furthermore, if there is anything [available] like that, the question [comes] back to safe harbor. Does just checking a box, is that an action that proves that I took an action, a timely action, and allows me to be in the safe harbor or not. I think one of the best takeaways is, regardless of any of these pathways, is that you got to have a workpaper of some sort. And it says, I examined this. Here's a work paper that shows I did the work. Because it's one of the things that the software doesn't lock down the previous inventory. Find out what software the person uses. Because you may know or you may not know. It depends how you work with the client. [You need to] really understand what is that software provider doing to handle this. That's another key thing. This is really a big, interesting brain teaser for CPAs who were in the digital asset space. April Walker: For sure and we appreciate you taking a walk with us down, at least to start or the path and more to come. Kirk, this first time you've been with me on this podcast. We call it Tax Section Odyssey. We think of it as an Odyssey, a journey toward a better profession. In doing that, I like to get a glimpse of my guests other journeys outside of the world of tax. What's something on your travel bucket list? Something you have planned. Give me something to add to my bucket list. Kirk Phillips: Yes. I will be going to Orlando in about a month to see my sister and I don't get to see her much. But one of the things I like to do is backpacking. I am involved with Scouts and I discovered backpacking in 2021 for the first time. I just love going on the Appalachian Trail and all different kinds of trails,  whether it's with Scouts or other things. That's one of the things I like to do a lot. April Walker: Nice being outside and in nature and there's some beautiful places to hike for sure. You'll have to share some pictures from your hike when you're back with us. Thanks again, Kirk. This was very informative for me, as it always is. I didn't give a shout out to our digital asset page, but I will certainly put it on the resources. Again this April Walker from the AICPA Tax Section. This community is your go-to source for technical guidance and resources designed especially for CPA tax practitioner like you in mind. This is a podcast from AICPA and CIMA together as the Association of International Certified Professional Accountants. You can find us wherever you listen to your podcasts and we encourage you to follow us so you don't miss an episode. If you already follow us, thank you so much and please feel free to share with a like-minded friend. You can also find us at aicpa-cima.com/tax and check out our other episodes, as well as getting access to resources mentioned during this episode. Thank you so much for listening. Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices. This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home base for staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you’re not already a member, consider joining this prestigious community of your tax peers. You’ll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.

David Snider, founder and CEO of Harness Wealth, dives into technology's transformative power in tax advisory. He outlines three critical phases of tech adoption that firms must embrace. Snider emphasizes the importance of practice management software to enhance operational efficiency and client engagement. He advocates for proactive communication with clients, especially during peak tax seasons. The conversation also touches on the necessity of investing time and resources in new technologies for lasting impact in the industry.

This Tax Section Odyssey podcast episode takes a deeper dive into the Organisation for Economic Co-operation and Development’s (OECD) initiative on Base Erosion Profit Sharing (BEPS) 2.0 which sets to reform the internation tax system with Pillar 1 and 2 tax regimes. In addition to the complexity of such international regulations, the political landscape for U.S. implementation is uncertain, and potential action is needed from Congress. Cory Perry, Principal, National Tax — Grant Thorton Advisors, and Vice Chair of the AICPA’s International Technical Resource Panel (TRP), highlights that while many U.S. companies may not face larger tax bills if these regimes are adopted in the U.S., the administrative and compliance challenges are significant. The AICPA has submitted comment letters to the OECD, Treasury, and the IRS, focusing on simplification and clarification of rules. AICPA resources OECD BEPS 2.0 - Pillar One and Pillar Two — The OECD BEPS 2.0 sets out to provide a tax reform framework allowing for more transparency in the global tax environment. What you need to know about BEPS 2.0: Pillar One and Pillar Two | Tax Section Odyssey — The OECD BEPS 2.0 project is an international effort to reform the international tax system that addresses transfer pricing, profit allocation and tax avoidance. Advocacy Comments to Treasury on tax issues of OECD Pillar Two, Feb. 14, 2024 Comments to Treasury on Amount B of OECD Pillar One, Dec. 12, 2023  Other resources OECD BEPS — Inclusive Framework on Base Erosion and Profit Sharing Transcript April Walker: Hello everyone and welcome to the AICPA's Tax Section Odyssey podcast, where we offer thought leadership on all things tax facing the profession. I'm April Walker, a lead manager from the tax section and I'm here today with my colleagues Reema Patel and Lauren Pfingstag. They are colleagues here with me at the AICPA. They are international experts and legislative experts. We'll get into more of that as we're discussing. I'm also delighted to have with me Cory Perry. Cory is a principal with Grant Thornton Advisors and their national tax office. He's also, and more importantly for our discussion today but probably not more importantly for his day-to-day, the Vice Chair of the AICPA's International Tax Resource panel and Chair of the OECD taskforce. That's what we're going to be talking about today. If you are a follower and listener of this podcast, you might recall a few episodes ago we did a higher-level background on OECD's tax regimes — Pillar 1 and Pillar 2 — just laying the groundwork. Today we're going to talk more about why we think you need to be familiar with these concepts. Even though for today they may not be relevant for any of your current clients. We're also going to delve into the political landscape and where we are today and what that could mean for the US tax system related to international tax legislation. Reema, I'm going to let you take it away for the next little bit. Reema Patel: Thanks, April, Cory, welcome. I know a lot of us have been hearing about the OECD Pillar 1 and Pillar 2 for awhile now. Many countries have also implemented it this year and some are implementing it next year. I guess the most basic question we can start with is, who should care and pay attention to this? Cory Perry: Absolutely. It's a wide impact in tax, but it only impacts the largest of the large companies. I would say it has a high threshold, 750 million of consolidated revenue and two of the four preceding years and you have to be taxed, want more than one jurisdiction. We are talking about very large companies but these days, even middle market companies are easily starting to bump up against that threshold. We're not just talking about the Fortune 100. We're talking about middle market and above companies that should care and think about these rules. Obviously accountants that serve those types of companies, those larger companies. I think many of those companies themselves not even be fully aware that they're subject to these rules or may not have fully thought through how they're going to comply. The other thing I would add, there is a bit of a misconception out there that this is a corporate multinational problem. Although that is primarily where it is, it also impacts pass-throughs, partnerships and S corps that are parents within these groups can be equally subject to these rules. Rules don't always necessarily apply at that level, but they are applied to the group as a whole. I know there's a number of practitioners out there that have clients that have grown over time and might have reached this level. It's by no means going to be the majority, certainly going to be a large minority, but I suspect many will have clients out there that might be impacted or if you're in-house at your company might be impacted. Reema Patel: Like you said, it is for large corporations currently with consolidated revenues at 750 million euros and more. What are you seeing with the clients right now? Any challenges that they're being faced by technology? Gathering data points? I know you have to comply with many foreign jurisdictions as well as the US. Can you speak a little bit to the challenges that you're seeing just as a practitioner as well as from a client perspective as well for them. Cory Perry: Absolutely. Companies are really still trying to get their hands around this as are practitioners. Even the rules aren't fully baked. The OECD is still releasing new guidance every couple of months on quite a frequent cadence. So the rules continue to evolve and how companies are approaching it continue to evolve as well. As far as challenges, interestingly enough, from what we're seeing, many companies are not actually seeing larger tax bills. You'd think tax legislation, tax change like this is going to hit the bottom line and there are certainly companies out there with lower/no taxed pockets of income or that are in low-tax jurisdictions. But what I've found is the vast majority, particularly of middle market companies, are generally not in many of these low-tax jurisdictions, if at all. They are in higher tax jurisdictions, think of the US's top five trading partners- for example, Canada, Mexico, China, and Japan and the UK all have rates above or even some cases well above 15%. The idea is to reach a minimum level of 15% and once you're above that, there may not be additional top-up tax to be paid. It may not be necessarily for all taxpayers an item that's going to really be a cash tax impact. But where we're really seeing the challenge is more on the administrative and compliance side to this. It is a very significant undertaking to comply with these rules. It's just a massive effort that's required in order to get your hands around what needs to be done, get your systems updated so that you can comply and collect the information or the data at the right level, clean the data, so on and so forth. There was a lot of complex calculations that need to be done. In some cases there may be even third or four sets of books that need to be kept that you may not have been keeping our tracking in the past. The rule started out with a simple premise. It was going to be a book tax based on books. That sounds simple. But it quickly evolved into a very complex tax regimes that sits on top of all the other global tax regimes that are already in place. If it wasn't complicated enough before, now we have another layer over the top making it quite complex. That's certainly been the biggest challenge is how do you deal with all of this change and international tax complexity when you're operating across borders. Reema Patel: Definitely, I guess it just keeps piling all the time. Three sets of books, four sets of books. We don't even have CAMTI [rules] out yet. Speaking of which currently, it looks like, as we mentioned it's for large corporations, but what do smaller firms and CPAs in the industry need to know? I'm sure they're not getting into the nitty-gritty details of how to calculate pillar two taxes and all the top up taxes on different regimes. But we don't know if the threshold does get lowered, more companies will get pulled in, possibly. What should they know? How can they keep up with and at least be aware that it's out there? Cory Perry: I think at this point I would say it's more of a client service point. It's being aware of the potential risks in an area where your client might be subject to these rules. I don't expect many firms will have many clients that are going to be impacted. In fact, many firms might not have any clients that are impacted. But it's making that identification and helping those clients understand whether they are impacted. It is getting a lot of press and it's in the Wall Street Journal, it's on NPR in the morning, it's certainly in the mainstream news. Clients are interested in asking questions about it. It's understanding that it's out there, what it is and who it applies to. I think that's the most important part, I don't expect most smaller firms will scale up or hire experts in this area necessarily. But I think helping those clients with the identification - that's going to be greatly appreciated. You're highlighting a risk area for them that they might not have previously considered. Then helping them find a resource that can assist with this somewhat unique area of tax. Whether that'd be another CPA firm in the US or more commonly, sometimes these are non-US firms because right now, as we'll talk about later, the US is not implemented these rules that could certainly assist. Again, flagging these as issues, being aware of those thresholds and who it might apply to is probably the area I would focus right now and making sure that your base has been reviewed. And they understand whether they're going to be in or out these rules. Reema Patel: Definitely. I guess just building on what you said. It's been in the news everywhere. We've also heard in the news — What's the U.S going to do? The US hasn't implemented or enacted any part of pillar two regime yet. Until they do or they don't, the U.S. multinationals are going to have to comply with this. They have to comply in the foreign jurisdictions. They have to comply in the U.S. as well. But there has been limited guidance issued. [There was] a notice earlier in the year, and then the recent proposed regs on dual consolidated losses. But none of them really went into detail. It was just like scratching the surface. There's a lot of guidance that the U.S. taxpayers need. I know the AICPA's submitted a few comment letters to the OECD, to Treasury and the IRS, and you've been heavily involved in some of them. Do you want to just speak to a little bit on what we highlighted in the comment letters, some of the recommendations and concerns we raised in hoping for some future guidance. Cory Perry: Sure. You made a good point there with scratching the surface. I think there's a lot of ground yet to be covered by the IRS. As I said earlier, this is a complex system that lays on top of a complex system. The US [tax] system is undoubtedly the most complex tax system out there. There are a number of different interesting and intricate ways in which these two systems interact. The IRS is working diligently, but I think [they are] only beginning to understand where some of these issues and gaps might be in regulation. They're trying to hit the bigger ones first which they've done with then notice package and the regulations. The notice addressed primarily, but not exclusively, foreign tax credit issues and how the US is going to view these new taxes, really novel taxes that have been created under this Pillar 2 system. And how that's going to interact with the US foreign tax credit system. Then just a week and a half or two weeks ago, they also released proposed regulations dealing with a number of dual consolidated loss issues. One of the major issues they addressed was the Pillar 2 area. The dual controlidated loss rules, those very complex rules, but suffice it to say they are rules that are intended to address double-dipping of losses between two systems. Really, now that we have this overlay, we have this third system that you have to contend with where losses can be used in the U.S. and in that third system and that makes that already challenging system quite complex. I would say a detailed discussion of our comment letters is probably a little bit weedy for this discussion but I'll give some themes and some areas that we focused on in those comment letters. The first I would say is a call for simplification. That was really our focus with most of our efforts in this space. We asked for exceptions and safe harbors from application of some of these very onerous rules. We focused on areas where there wasn't much opportunity for abuse but there was a lot of opportunity to save taxpayer's and CPAs time and effort to have to do some of these calculations that might be, in some cases unnecessary. Or you could make various safe harbor type assumptions. We focus on simplification. Clarification was another area where we focused on. There's a lot of gray out there and there will continue to be. But we focused on a few areas of gray within these rules that we had identified that we thought the IRS could add clarity. Beyond those, we also provided some comments, or we're working on some comments, not just to the IRS, but also to the OECD. There we were focusing on, again, clarification and simplification but with U.S. and multinational corporations in mind. Really the focus is on some of the safe harbors that are out there. There's transitional safe harbors that allow for shortcuts, if you will, that make the work much simpler. But many of those are temporary and they're set to expire in a couple of years and we're making some comments around those. One of them being a request that those be made permanent for taxpayers in an effort to simplify this very complex system. April Walker: Thanks so much Cory. You did a wonderful job for me. Definitely not an international tax expert by any stretch of the imagination and it was made it easy to understand where we are. I'd like to pivot a little bit now and have Lauren take us away. I don't know if anybody knows but there's an election coming up in a couple of months and so I thought it would be interesting if we would talk about what does our political landscape mean for what the U.S. is going to do around this? Lauren, tell us what you know all around this area. Lauren Pfingstag: Thanks for inviting me to join the podcast, April. Cory, I think a lot of professional congressional watchers would say in this space that there's going to eventually need to be some action taken by Congress to move Pillar 2 forward. What would that look like right now? Cory Perry: It's certainly a challenge, I would say in our current environment to move Pillar 2 legislation forward. To give a little bit of background on where it's been. Historically from a political sense, the Pillar 2 rules have been a core aspect of Biden's tax platform. He attempted to move them through the Build Back Better bill a few years ago, that ultimately failed in the Senate. But they remain, and they were in his most recent greenbook, a core part of his plan. I believe they will continue to be a part of the Harris tax platform. I have no reason to believe that will change as well as the Democratic agenda going forward. It has broad support on the Democratic side. The Republicans side historically had support there but more recently they've been openly critical, I'll say of Pillar 2. They've noted their concerns in public forums and expressed frustrations with the negotiation process. There are certainly some challenges there. It's not impossible that we could see some legislation move forward in the short-term particularly if we had, for example, a Democratic controlled government. If we had a Republican controlled government, I think the chances go down. With that said, there are some other factors on the horizon that could influence this from a political perspective. The Tax Cuts and Jobs Act, tax cuts for individuals expire in the end of 2025, beginning of 2026. Many of the favorable business provisions like the GILTI rate, the BEAT rate, the foreign derived intangible rate, and a variety of others. Those are just the international ones, but those are set to expire the end of 2025 for tax years beginning in 2026. That sets up an interesting opportunity where perhaps we could see some compromise, maybe a budget reconciliation bill where it's not along party lines, depending on which way the government swings. Obviously, we might need some collaboration there. If we don't have a democratic government, we might see something later in 2026 in terms of legislation. There is a path forward although it does look like a challenging one. Lauren Pfingstag: Is it true that implementing part of Pillar 2 legislatively would potentially raise revenue over a 10-year budget window? Meaning, if Congress were to move forward with a piece of legislation that put Pillar 2 into play, that they would raise a certain amount of money that could be used to pay for other provisions and a larger let's call it end of year 2025 tax bill? Cory Perry: Absolutely yes. It would be a revenue raiser. Right now, if it's not imposed, other countries might be taxing the United States under the way these systems operate. Subsidiaries, for example, could be taxed in the U.S. if it's in an effective rate less than 15%. There's certainly revenue on the table and free revenue. If you think about it, you could tax in the U.S. or you could tax it in the foreign country. If we tax in the U.S. first, they're not going to tax in the foreign country. It is a revenue raiser. I think it was scored that way in the Build Back Better bill. It would certainly be a pay-for those types of extensions of those expiring tax cuts that I mentioned. That's why I think it could be a lever that could be pulled in those negotiations to help further the Pillar 2 legislation in US in exchange perhaps for some of those other items. Lauren Pfingstag: Particularly if the Democrats, as you said, did win control of the White House, the House and the Senate this November. I think this is more of a note rather than a question, but I think West Virginia Senator Joe Manchin, who was one of the most, if not the most moderate Democrats in the Senate, was instrumental in pulling Joe Biden's vision for Pillar 2 out of the Build Back Better bill. When you look ahead into 2025 and you think through the different Senate races, Senator Joe Manchin is retiring, you no longer have Senator Sinema from Arizona who is retiring. It's hard to pick out who in the Democratic caucus in the Senate, at least in 2025, could play, or would want to play the role of a Joe Manchin and maybe stripping that out of a democratic tax reconciliation bill if we get to that Democratic trifecta of power. I'll be keeping my eye on that for sure. Cory Perry: I wholeheartedly agree. Keeping their caucus together was a challenge last time and it seems like it could potentially be easier at least. Lauren Pfingstag: This is obviously just holistically like a weedy, thorny topic. In my conversations across D.C., I have only met a few people, and I don't count myself among them — who really understand this. It's incredibly complicated and if you were in a room with the tax aides who staff members on the House Ways and Means Committee and the U.S. Senate Finance Committee and you could deliver one or two key messages to them about this, what would you want to tell them and have them relay to their bosses? Cory Perry: I think there's a couple of key messages and themes here. One, I would say the world is moving forward with or without us in terms of pillar 2. At some point, I think there was thought and perhaps that thought might still exist in some, but I think there was a thought that this wouldn't move forward without the US and some of the larger economies like China and India signing on. But that's shown not to be the case. It's been enacted and legislated in the E.U.. All the E.U. member states have adopted it. There's dozens of countries across the world at this point with many more being added every month. It certainly has broad international support and it's moving forward with or without us. What does that mean? I think that means US multinationals in particular might face some challenges if U.S. doesn't enact legislation. If U.S. enacts, there is a benefit from that. They would pay the tax most likely at the U.S. level. They'd be able to file returns at the U.S. level. They'd be able to work through the U.S. government to use the information exchange mechanisms to make sure the foreign countries have received the reporting that they need and not to mention it would shut off the under taxed profit rule (UTPR) which is beyond the scope of our discussion today but it's a complex rule. I'd describe it as the backstop rule. Effectively if no other rule taxes that rule comes in and imposes that tax. If the U.S. doesn't do anything, subsidiaries could be taxing the U.S. As I said earlier, the U.S. profits through that under taxed profit rule, as well as other subsidiaries of the U.S. that the U.S. could tax. There's certainly revenue opportunities that are on the table that seemingly will go to other countries if we don't act. It would also go a long way in simplifying the US's approach to compliance. Because they'll be less of a need to orchestrate the two systems if we adopted one of them and made it part of our law. I think it would be easier to coordinate the two. Just overall for those reasons I mentioned earlier it would make it much simpler for U.S. multinationals in the long run. Lauren Pfingstag: Thank you for taking again what is a difficult subject and making it digestible. That is a skill and we appreciate it. April Walker: Yes, I echo those thoughts, Lauren and I'm also incredibly grateful for you joining because you bring a different perspective, Lauren, to this conversation and very fascinating. I was listening on the edge of my seat hopefully everyone else was. And I'm appreciative to Reema. Reema is very well-versed in international tax so I'm grateful for her to be able to ask questions that I couldn't pull off. I'm very appreciative to you Reema. Cory, I'll give you the opportunity to just as we're wrapping up final thoughts on this very heavy weighty topic? Cory Perry: Just the closing note that I would leave is, if you think you're subject to these rules or you think you have clients that might be subject to these rules don't wait. Engage with your advisors or with your clients now. Review structures and start planning for pillar 2. The sooner that companies and accountants act, the better prepared that the taxpayer will be for the changes that are ahead. There's things that can be done now that will significantly reduce reporting in the initial years, simplify the overall process that may not necessarily be available if you wait. It's coming, it's right around the corner and that should start thinking about it now. April Walker: Perfect. I would be remiss if I didn't say [you can find] in our show notes a landing page on the AICPA's website where you can find resources and we're continuing to work on those resources. I will put a link to the show notes in there. Just in final closing, a little bit of a lighter topic. The name of this podcast is Tax Section Odyssey so I'd like to think about us taking a journey together, toward a better profession and in doing so I'd like to get a glimpse of my guest other journeys outside of tax. Cory, tell me a page from your travel journal or a memorable trip or something you'd have on the horizon? Cory Perry: Sure. I regularly take trips to Taiwan, that's one of my favorite countries to go to. That's where my wife's originally from. We met in college and have been married for many years now, but I have two young boys who love to travel with me, although it's sometimes challenging to travel with them, but I still enjoy it very much. We go to Taiwan usually every year, every other year to visit her family, travel around Taiwan and see Taipei. That is a reoccurring and memorable trip journey. April Walker: Wonderful. As I'm doing these I like to add to my travel list because I love to travel. Thanks again, so much I'm so grateful for Cory, Lauren, and Reema. Again, this is April Walker from the AICPA Tax Section. This community is your go-to source for technical guidance and resources designed especially for CPA tax practitioners like you in mind. This is a podcast from AICPA and CIMA together as the Association of International Certified Professional Accountants. You can find us wherever you listen to your podcasts. I encourage you to follow us so you don't miss an episode. If you already follow us, thank you so much and I encourage you to share with your like-minded friends. You can also find us at the aicpa-cima.com/tax, where you can find other Odyssey episodes as well as get access to the resources mentioned during this episode. Thank you again so much and thank you for listening. Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices. This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home base for staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you’re not already a member, consider joining this prestigious community of your tax peers. You’ll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.

In this joint episode, Neil Amato, host of the Journal of Accountancy podcast and Melanie Lauridsen, VP of AICPA Tax Policy and Advocacy discuss two recent Supreme Court decisions.   The Supreme Court ruling in Loper Bright Enterprises v. Raimondo overturned a 40-year-old precedent of deference referred to as the Chevron doctrine, affecting future rulemaking by eliminating the need for judges to defer to agency interpretations of ambiguous statutes. In Corner Post, Inc. v. Board of Governors of the Federal Reserve System, the Supreme Court ruled to alter the statute of limitations for challenging regulations, starting the clock when a plaintiff is injured rather than when the regulation is enforced.   These decisions introduce significant uncertainty for the accounting profession, particularly regarding IRS regulations and long-standing rules and emphasize the need for CPAs to stay informed and adaptable as the implications of these rulings unfold.    AICPA Resources Melancon: Supreme Court decisions are ‘big deal’ for tax pros, The Tax Adviser, Aug. 1, 2024 Supreme Court overrules 40-year-old Chevron doctrine, The Tax Adviser, June 28, 2024 Supreme Court decision on Chevron doctrine will affect tax pros, Journal of Accountancy, June 24, 2024 For a full transcript of the episode, see  Tax Section Odyssey on the AICPA & CIMA website.   

On this episode of the Tax Section Odyssey podcast episode, Dave Kirk, National Tax Partner — EY, and Chair of the AICPA’s Pass-through Entity Tax Task Force, discusses the complexities surrounding state tax refunds related to the pass-through entity tax (PTET) and delves into the challenges posed by the lack of IRS guidance, the application of the tax benefit rule and varying state regulations. Dave emphasizes the importance of consistency in handling these refunds and advises practitioners to involve taxpayers in decision-making due to the inherent uncertainties and risks.   AICPA resources   FAQ on the Federal Taxation of State Income Tax Refunds for PTET Payments — FAQ guidance on the federal taxation of state income tax refunds for PTET payments. AICPA list of taxpayer and practitioner considerations for whether to elect into a state pass-through entity (PTE) tax — Various issues should be considered when deciding whether a taxpayer can, and should, elect into a state PTE tax. Pass-through Entity (PTE) Taxes States’ Legislation and Tax Authorities’ Information and Guidance — A state-by-state PTE matrix tracking and linking to legislative updates, guidance, as well as other relevant information. State and Local Tax (SALT) Roadmap and Resource Center — Browse the reference library for the latest guidance and tools to address your state and local tax needs including tax rates, due dates, nexus, PTE tax and more. Transcript April Walker: On today's podcast, listen to learn more about how to handle refunds related to the pass-through entity tax. Hello everyone and welcome to the AICPA's Tax Section Odyssey podcast, where we offer thought leadership on all things tax facing the profession. I'm April Walker, a Lead Manager from the Tax Section and I'm here today with a repeat guest, Dave Kirk. Dave's with National Tax at EY. He is the knower of a lot of things, but specifically today we're going to talk about PTET. Dave, let's start off with, I think when we chatted before, we talked about pass-through entity tax fun with that, we're delving into a very specific issue related to it. Let's first talk about the challenges. There are so many challenges around this, the lack of guidance around PTET, but today we're going to talk about refunds and there isn't guidance really. How has that impacted our practitioners? Dave Kirk: First of all, thanks for having me again. Being the leader of the PTET Task Force for the AICPA and having to deal with this for E&Y nationally, I've probably spent 500 hours of my life on this that I'm not getting back. It's just that each state is different. You could probably group states together. It usually requires a case-by-case analysis on how the deduction was taken, when the deduction was taken, and how much money the taxpayer is getting back. The [IRS] Notice 2020-75 only talked about taking the deduction. There was not one word in that notice talking about refunds. You're right, April, there is no formal guidance from the IRS on PTET refunds. But this is also not the first time in US history where a state government has given money back to a taxpayer. Our federal tax system, as we currently know, it has only been around for 110 years or so. We do have guidance scattered throughout that last century of payments of taxes, deductions for taxes and recoveries. You might call it the common law of refunds that we would use in the absence of anything specific coming out of the government on how to deal with this. Walker: Tax benefit rule, right? It's been around for a little bit. Kirk: Yeah. There's two aspects of the tax benefit rule. There's the exclusionary aspect of it, and that's been codified about 40 years ago into Sec. 111 of the code. Then there's also the inclusionary aspect which kind of says, hey, you got a benefit for a payment back in a prior year and you have got that payment returned. That should be something, that should be Sec. 61, gross income. But where the complexity arises is, first of all, you can tell whether something is taxable or not taxable based on whether you got a benefit for it in a prior year. Okay, great. That's relatively straightforward, and I say relative with some emphasis there. But then you'd go down a very slippery slope really quick once you do determine that a PTET refund is taxable, because then you have to ask yourself, what characteristics does that taxable refund have? That is a morass that I don't think that the government ever really envisioned. I'm not envisioning any sort of guidance coming out of the government within the next 12 months on this. Walker: The last count, we have 50 states. Like you said, you can group them maybe, but each state was allowed with the IRS notice to develop their own regime which causes all kinds of fun. Which again, we won't get into specifically today. But like you said, it seems like we could the tax benefit rule and thoughts around that, or how we are going to try to provide some assistance to you with a resource that's been developed. You mentioned that you are the Chair of the AICPA Task Force for PTET. We thank you so much for all the things you do for the AICPA. In doing that, you guys have developed some really helpful FAQs around different nuances, some examples or some summary activities that can happen. Let's provide our listeners with some of the key takeaways from those FAQs. Kirk: First, states matter, and who's getting the refund matters. If you're an S corp and let's just keep this simple that you have at dentist that owns an S corp. That S corp makes $1 million and it owes PTET at the S corp level of say, $80,000. What you do assuming cash basis and assuming you pay the exact amount of PTET on December 31st, that you can deduct it. Your K-1 line 1 should be $920,000. You are going to get a credit on your local state return of $80,000. In a vacuum, you should not have a state liability equal to or greater than or less than the $80,000. In a perfect world, that's how the system works, and that's probably about as complicated as the system was ever supposed to be in the eyes of the IRS. But you know that no one ever hits their tax liability at 100 percent. You might hit by 99, 98% or 101 or 102%, but you're never exactly on the dollar. First is the S-corp. If you thought that you owed $80,000 and you made that payment in December of 2023. Cash basis taxpayer, you reduced your K1 income by the $80,000. But when you get around to filing your return and you only owe $79,000, when the S-corp files the PTET return, the S-corp is overpaid $1,000. That should be income back to the S-corp because in 2023 they deducted 80,000. They only should have deducted 79k and so they get it back. In a vacuum, next year, I'm going to have $1,000 of income on my K1 that I wouldn't have otherwise had if I wasn't in this PTE regime. Simple. Now if I deducted it on the front page of the return because I'm just offsetting my dental practice income or whatever it is, that PTET payment is no different than rents or salaries or insurance or whatever it is. Ok fine. So when I pick it up, that $1,000 refund in the next year, that should also be similar to my dental practice income, it's simply reversing a deduction. If that amount is, if I say for example, reduced passive income, maybe I'm a part owner of a dental practice that I don't practice anymore and I'm passive. Then that should come through as passive income to me because last year the deduction was probably a passive deduction. Or if I was in a business that generates QBI, qualified business income, under 199A and I deducted PTET against it last year. If it reverses, then it feels like the right answer should be it's 199A income, good QBI when I pick up my refund. But that is where the inclusionary aspect of the common law tax benefit rule would come into play. You think about it in the same way of self-employment income. Is if a partnership that you were in your subject to self-employment income on the Line 1 and your PTET deduction reduced Line 1, and that amount is refunded to the partnership, or some portion of that was refunded back to the partnership in year 2, that should probably be self-employment income. Just because the deduction reduces self-employment, you'd think that the income should increase self-employment. That's at the entity level. But then you have to think, going back to my original example, my dental practice made a million dollars and paid $80,000 of PTET. I turn around and I file my personal return and because of credits or dependent exemptions or whatever it is, I owe only $76,000 on my 1040, on state version of my 1040. I'm going to get $4,000 back from the state. Then the question is, what is that? I first start with the concept of I have $4,000 and so Section 61 says that's income, I'll live with that. Then I go to Sec. 111 and said, do I have a benefit from a prior year or do I not? If I don't have a benefit in a prior year, then this income shouldn't be income so it would probably be excluded by [Sec.] 111. But because they took the $4,000 of a deduction on the front page of the 1120-S, it reduced my K1 number. I did get a benefit even if I had an NOL that I could use and I didn't pay any tax on a prior year. It just means I used less NOL. Or that if it was passive income and I had passive losses that would be able to offset, but it would still be income to me.I still got a benefit even though I had other personal attributes that minimized that income, it would still be income. It's much harder though, to think about, look, I am getting this refund and should a state refund be QBI? Because it came from the state, it didn't come from the entity like in the first part of our discussion, should it be self-employment income? That's never been the case before that a state tax refund is self-employment income. That's just weird because itemized deductions for state taxes were never self-employment because you'd never got to deduct them from self-employment. You have all of these character questions. But that is simple when you're looking at the individual and the entity in a vacuum, and that's where we started that I'm a dentist, I own 100 percent of an S-corp and that's all I have. But as soon as I start injecting other things such as a spouse with W2 withholding or estimated payments that are made at my 1040 level or composite returns that I'm filing in other states and getting out-of-state tax credits on my local return. That gives rise to the question of if I get money back from the state, is it really the PTE credit that I am getting back or am I getting back my estimated payments? Or am I getting back my W-2 withholding or my spouse's W-2 withholding? That part, what is it, is a question that we've never really had to wrestle with in the last 100 years because taxes were always deductible in prior years, prior to TCJA. Yes, we had the AMT system and everyone knew how to do that calculation of how much of the taxes puts you in an AMT and did you even get a benefit at all? But the composite taxes, the withholding taxes, estimated payments, they were all treated the same. But now you have this special class of tax credit, deemed tax payment, whatever you want to call it, that, is almost like a hydra with multiple heads of, what is it? In the FAQs, basically say, "Look, we think that absent any guidance specifying that certain items come first, that you pick a method and you stick with it year over year." A duty of consistency. If you want to take the position that every dollar of refund first comes from estimates and withholdings. Basically your Schedule A, taxes that are capped at 10K. Then chances are those coming back to you will not be taxable because you capped out at the 10K and you never got a benefit under the tax benefit rule. Another alternative is to say that the PTE credit comes back first, but that would almost certainly be taxable if it was deducted on Schedule E or are embedded in Line 1 of a K-1. That's probably not very common for people to take that position. But the other one would be, look, if you have $80,000 of PTET credit and you have 20,000 of withholding than $0.80 of every dollar coming back could be taxable and 20% would be associated with the withholdings or whatnot. Maybe that would not be taxable. That would be like a pro rata method. But absent guidance, it's Choose Your Own Adventure. Just don't get eaten by the dragon at the end. But that's what we're instructing our folks inside of E&Y is to just be consistent and let the taxpayer in on the discussion. Don't make unilateral decisions on their behalf. And let them know that there is uncertainty, there is risk, and that the IRS may disagree on taking estimates first and whatnot. That they should to the extent that they are running into this problem. That if I know that my PTET is being overpaid at my partnership or S corporation level, then I should take corrective measure at my personal level either, by reducing estimates or trying to ratchet down withholding of my spouse on her W2 or his W2 to try to make sure that you're not overpaying too much because you're still giving interest-free loans to your state and local governments and that still doesn't make any sense. Walker: That's a great summary of what's included and the different situations that we go through [in the FAQs]. But consistency, I think, is a good rule. Also, if we note the fact that the IRS hasn't and likely will not put out any guidance on this. I think it's really interesting that here we are in the middle of 2024 and TCJA is scheduled to sunset at the end of 2025 and we're dealing with this. It may become a moot point, but it's still very important that people are just really wrestling with this very complex issue and without guidance, it's hard to make a plan. Kirk: I think the IRS is keeping their fingers crossed, that the SALT cap expires and the TCJA and PTE regimes will just expire and everyone will go back to itemized deductions. I'm not sure that's in the cards, because even if the SALT cap goes away and that itemized deductions are fully allowed for taxes, just like was in pre-TCJA land. The PTET regime is still beneficial from an AMT perspective. I wouldn't be the least bit surprised that you're going to have maybe state societies and taxpayers and the likes start lobbying their state governments in the next year to extend the PTE regime past 2025, make it permanent. Because of the AMT benefit, regardless of what happens in Congress on the cap. Whether cap goes away, cap goes up, cap stays where it is, whatever. Because the people on the coasts, the high-net-worth individuals on the coast and in the highest tax states, California, Oregon, New York, New Jersey, Connecticut, Massachusetts. You all know where you are, Illinois, whatever, that taxes and 2% miscellaneous were the ones that put you in AMT to start with. The fact that you could get their local governments to go along with this, I don't think that this topic is going away for taxpayers or the IRS. I think that both sides, both taxpayers and the IRS need to I would say wake up to this. This is something that's in my mind here to stay for the long term. Walker: I don't know if that's good news or bad news. I'm not sure how I feel about that. It is news. That's what we're here, is to let people know. Here's something you need to not bury your head in the sand about. Any other final thoughts as we're wrapping up? Dave, any advice? Kirk: Advice is that it is a lot more complicated than people appreciate. That I know I've heard certain preparers, usually it's smaller firms, really small. Just say that this stuff it's not taxable if the state doesn't give you a 1099-G. The 1099-G has nothing to do with whether something is taxable or not. The taxability of something landing in a checking account, direct deposit, or via check. The default position is it's taxable unless you can tell me why it's not. That's always been the case in the code. I think that's the way people need to approach it. Start with taxable and let's figure out a way for it not to be. Walker: Great. That's good final advice for everyone. Dave, in closing on these podcasts you've been with me before, but I like to think about us taking a journey. We're the Tax Section Odyssey, we're taking a journey toward a better profession. But I also like to hear about my guest other journeys outside of the world of tax. I do have some insider information — I know you were just on a trip, do you want to share something about that. How did that go? Kirk: We just got back a couple of days back from 16 days in Alaska. We flew into Fairbanks, took the train down to Denali and then carried on down to Anchorage, and then got on a ship and made it all the way down to Vancouver. Walker: Nice. Kirk: I expected a lot of strange things to happen, maybe be chased by a moose or something like that. But what I didn't anticipate is when I took the train from Fairbanks down to Denali, that a spark shot off the train and started a forest fire at the entrance of Denali. Within two hours of us getting to the entrance to the park, the forest fire had spread to such a point where it burned all the power lines and the park had been is now I think just opening up after being closed for about two weeks. Ironically, I've been to the entrance point of Denali twice in my life and I've never actually been able to make it into the park. That gives me a reason for a third time to return to the interior of Alaska. Walker: Yes. I like your positivity there, rather than taking it as maybe you don't need to go back to Alaska. I don't know. I hope you were able to experience some of the loveliness of Alaska even though you weren't able to get into Denali. Kirk: Oh, it's beautiful. For those that like the outdoors. It truly is a magical place. Walker: Wonderful. Thank you again so much, Dave. I hope this was helpful and good information for our listeners. It certainly was for me. Kirk: Thank you for having me again, do it anytime. Walker: Thanks. Again, this is April Walker from the AICPA Tax Section. This community is your go-to source for technical guidance and resources designed especially for CPA tax practitioners like you in mind. This is a podcast from AICPA and CIMA together as the Association of International Certified Professional Accountants. You can find us and listen wherever you find your podcasts and please follow us so you don't miss an episode. If you already follow us, thank you so much and please feel free to share with a like-minded friend. You can also find us at aicpa-cima.com/tax, and find our other Odyssey episodes, as well as getting access to the resources mentioned during this episode, specifically the FAQs that were the focus of our conversation today. Thank you for listening. Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices. This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home base for staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you’re not already a member, consider joining this prestigious community of your tax peers. You’ll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.    

If you're advising businesses on their pending ERC claims, this is a must-listen for practical guidance on navigating the process and setting the right expectations.   Tune in to hear Chris Wittich and Dan Chodan, two experts immersed in Employee Retention Credit (ERC) matters for four years, discuss the IRS's upcoming actions for sorting and processing pending ERC claims by risk level. High-risk claims are likely to be denied, medium-risk claims require more detailed review, and low-risk claims will be processed starting soon. The IRS moratorium on processing claims filed after September 14, 2023, is still in place.   Businesses with pending ERC claims are facing critical choices about amending income tax returns due to statute limitations. The speakers advise open communication with clients about the limited options available and the importance of understanding the ethical responsibilities as tax preparers. Based on the current backlog at the IRS for ERC claims, it is important to manage client’s expectations around the processing time as the impact of potential changes in legislation.   Related resources  Previous Tax Section Odyssey episodes discussing the Employee Retention Credit (ERC): ·       Sifting through ERC questions | Tax Section Odyssey ·       ERC suspended: What happens next | Tax Section Odyssey ·       Employee retention credit and professional responsibilities | Tax Section Odyssey ERC guidance and resources — The rules to be eligible to take this refundable payroll tax credit are complex. This AICPA resource library will help you understand both the retroactive 2020 credit and the 2021 credit. Employee Retention Credit (ERC): Fact or Fiction? — Use this guide to educate yourself and others on common misconceptions surrounding the ERC. Employee Retention Credit Decision Tree — Download the ERC decision tree to help you with various decision points when working with clients to protect yourself/your firm from significant risk.   IRS resources   ·       IR-2024-169 — IRS news release on June 20, 2024, discussing the next stage of ERC work ·       IR-2023-169 — IRS news release on Sept. 14, 2023, ordering the immediate stop to new ERC claim processing. ·       IRS ERC resource center — IRS hub for ERC information, including links to guidance, FAQs and the latest news.   Transcript April Walker: On today's podcast, we're going to talk about the IRS's next steps for ERC and what that means for you. Hello everyone, and welcome to the AICPA's Tax Section, Odyssey podcast, where we offer thought leadership on all things tax facing the profession. I'm April Walker, a lead manager from the Tax Section, and I'm here today with two repeat guests. I'm happy to have with me, Chris Wittich. He is also known as @ravenoustiger. He is a partner at Boyum Barenscheer in Minnesota. I'm also delighted to have Dan Chodan. Dan is a tax partner at Trout CPA in Pennsylvania. Welcome to the both of you. Dan Chodan: Thanks for having us. April Walker: Chris, let's set the stage for what we know now. We're recording on July 2. [Let’s talk about] what we recently heard from the IRS late last week and what we know now about the IRS processing of claims or what they're telling us. Chris Wittich: On June 20th, IRS had a press release, and there was a lot of good information in there, the first time in quite awhile. I think we've gotten some insight as to what they're doing with these ERC claims. Right off the bat, they differentiate, and they say they're putting claims in three different buckets, and it certainly falls in the red, yellow and green. In my mind, the red category, the IRS is saying between 10-20% of the claims fall into what they describe as the highest risk group. They've said that a lot of these are going to be just straight-up denied in the coming weeks, so that red they're just seeing these claims. They're looking at them. They're saying these are not good claims at all. I would suspect those are like the employees don't exist, the businesses don't exist. They're claiming more in credits than they paid in wages, stuff like that. The IRS is saying 10-20% of all the claims they have, I would expect to get adjusted or denied entirely, and they're going to start working on that soon. The next category is the biggest category, and that's the yellow, as I would describe it. So they're saying between 60 and 70% of claims show an unacceptable level of risk. That's their term, not mine. That's two-thirds of the claims. They think the risk is so high that it's unacceptable and we're not exactly sure what factors they're using to determine that, but in their own words, they're going to be doing more thorough reviews, compliance reviews of those claims. Which again, that's the vast majority of the claims. The third category is a green zone. They're saying between 10 and 20% of the claims show a low-risk, and they don't say how they determined it, but you can reasonably assume that the claims are well within the payroll metrics. They might be particularly at-risk industries. A restaurant is likely to be a lower risk claim than a law firm. Based on industry or the size of the claim, or the number of quarters, they're saying, well, 10-20% of these look like they're going to be good claims, and so they intend to start processing them. It remains to be seen how quickly they really process the claims, but at least they're acknowledging that a portion of these are good claims and we're going to start getting them out. For those three buckets, the other caveat here is those are the claims filed prior to the moratorium. They haven't looked at the claims filed after the moratorium. So, those three buckets, those are just the claims they had prior to September 2023. April Walker: It's important to note, because we get this question quite a bit, the moratorium means they are not processing those claims. It does not mean that they're not accepting them. If you feel you have a good claim. We're going to get more into the statute discussion a little bit later. [I’m really not talking specifially] about statute on income tax return, but there's also a statute issue with the ERC claim itself. Again, we'll talk about how you're talking to your client about the [statutes], but the moratorium does not mean you cannot file, it just means they are not processing. Chris Wittich: The moratorium. I always explain it to clients, like you can send in your claim. The IRS will take your claim and put it on a shelf, and they promise that someday in the future they will start looking at the stuff on the shelf, and they haven't done that yet. If you have a good claim submit it, it goes on the shelf, the IRS will get to it down the road. April Walker: That's what the IRS told us, which is important to set the stage. Chris, based on this information from the IRS, what advice are you giving to businesses who are waiting? I guess there are the buckets – from what the IRS said. There's also buckets of where people are in this claim process. Walk us through a little bit about how you're sharing with your clients about expectations, I think is an important word. Chris Wittich: So for the people who filed prior to the moratorium, and we have lots of people we helped in the summer of 2023, very few, if any, of them have seen actual checks or credits getting processed. I think now what we can tell people is the IRS is going to start processing those. If you filed in the summer of 2023 and you're a low-risk claim, I would expect or hope to get processing in the next six months. For those people, I am saying, hey, it's been slow. It's been maybe 12 months and you haven't seen anything, but we're very hopeful that you will get processed before the end of the year. For the people who filed during the moratorium, and certainly we've had a bunch of those. Originally we didn't know how long the moratorium would last. Maybe it was only going to be a couple of months. My advice to them now is that I fully expect the moratorium to last until April of 2025. I think if you read in-between the lines of what the IRS is saying, this moratorium is going nowhere anytime soon. If you filed in October 2023, just after the moratorium, I'm telling them, hey, that claim is likely to sit on the shelf at the IRS until April 2025, then they're going to process them in the order they were received. Late 2025 or sometime in 2026 is my realistic expectation for when those claims will get processed. For the people who are questioning their claims, I would remind them that the withdrawal process is still available, it's still open. You can also just file a regular amended payroll tax return to undo or modify or payback your portion of a claim, if you think it is no longer a claim you want to make. Then for people who have potentially made bad claims, I would say the IRS has hinted at a second voluntary disclosure program (VDP). It's not out yet. When it comes out, the terms won't be as generous as the first time around, but there's a decent chance that a second voluntary disclosure is coming down the road so that's how I look at it. You got the good claims from before the moratorium, the good claims during the moratorium and then you've got withdrawal, regular amendment and voluntary disclosure as the options to deal with bad claims. Dan Chodan: If I can jump in there about the VDP. I think the comment has been that they were going to make that decision pretty soon. I think this month so that we should hear something on that. Anybody that might be thinking about doing it, I'd say at least hold off through the summer before making those decisions because it sounds very likely that they're going to come at least come out with something or say that they're not. One way or another, I think the IRS already hinted at that, but you bring up a really good point there Chris, and the IRS said it in this release. They are really concerned about lifting the moratorium and what that would do for the next wave of promoters, pushing for another gold rush, I think is the term that's used there. That's really the big push of the moratorium itself. To shock the system of the outfits that were doing heavy promotion. I think it's been largely successful. You got to give the IRS credit. They can't necessarily deal with a significant volume that was out there. It went from 50-60,000 claims a week. You're recently looking like closer to 12k a week that they are receiving. And that's because of this moratorium and then because you can't file 2020 claims anymore. Because after the bill with the January 31st cutoff potentially was out there, that really caused a push, for a lot of reasons, but the moratorium being the primary one. And just to reiterate what you said with that in mind, the IRS saying they want to responsibly lift the moratorium, and that absolutely means it's not going to be before there'll be any chance that funds would go out and be used for further promotion. They've said that explicitly in this. Those hoping that it would have been through the end of '23, what the first timeline could have been and it'd be lifted soon. It's certainly dragged on of course, till now and I expect that it's going to at least double in time here through next year, if not more. While they try to get Congress to act, they want Congress to pass that ERC provision that was in that bill, that didn't make it to law yet. But they want that passed in standalone or tucked into something else. That's what IRS is lobbying for. It's certainly interesting, but I am maybe a little more pessimistic on the timeline. Six months, I'd love to see something happening. But I've been telling people we're in uncharted waters and we have seen some processing. It's been a trickle during the moratorium of the pre moratorium claims getting paid. I think there's a lot in this release, but that's basically going to continue. What we've seen is the same as what it's going to be going forward. It's going to be a very slow rate and it's a very small amount. But we are saying that most all of these claims have a very high risk of being improper and the low-risk claisorryms are so small. How do you know which bucket they've put you into? You just can't expect anything. What I'm telling clients is do what the IRS is telling you to do here. You've got to wait and don't expect anything, don't spend this money in advance. If you do have a hardship case, it's been over a year. Those are the taxpayer advocate cases that can be filed and there's been success there. We've seen that for those funds that have sat around for a long time, but if it's a true hardship case that can be made, still don't consider that a guarantee, but at least you can make those cases through taxpayer advocate. That's an action that can be taken, but for those that can't make the hardship cases, it's a sit around, waiting game for very large claims that are solid. Refund litigation is part of the conversation too through the court proceedings there, but not something that the average taxpayer would be considering. Just due to the costs and the timeline and there is scrutiny to that. It isn't going to be all claims, it's just going to be the best ones and the biggest ones and those willing to fight that process. No guarantee that it will mean it's a faster process than if you had left yourself from the traditional route. Those are just the conversations around what are we doing at this point. Just to add some more color to that plan. April Walker: That's great. Dan, Thanks. I was just thinking as you were talking. Again, we do not know anything about whether this is true or not, but truly, if they push the moratorium until next spring of 2025, maybe I just had a light bulb moment, That will be the end of when 2021 claims can be filed. But I guess even more important, if there is a legitimate claim, back to our original point, can still be filed. They're put on that proverbial shelf that Chris is talking about, but it sounds and they certainly alluded to that opening up the moratorium seems like an opportunity. Dan Chodan: We should mention April [15 deadline] there. I always have to layer that with a lot of caution at this stage because that January 31st date could stick at some point. While I would say you can file them today, there's no guarantee. If the messaging continues the way that it's going, it could be another date. It could be any date. It could stick with January 31st. All these claims on the moratorium, have been sitting on the shelf. It could go all the way back to the beginning of the moratorium. that's more revenue for them in Congress to go spend somewhere else. It's not to say that you don't file if you have a legitimate claim, but you just have to be aware that there's absolutely a risk at play that this could be changed and could be changed retroactively to make sure we highlight that. April Walker: Great point and things you need to be talking about with your clients as you're thinking about it as a business yourself filing this claim. I want to talk about any experiences you've had, just in general, with not necessarily the processes and the claims, but thinking about have you had a lot of [IRS] examination communication. What's your experience been with your current claims that you have in the hopper? Chris Wittich: I've seen just a wide variety, I would say, of issues or notices related to these. Certainly, had a couple of audits, but still that's a small number. We have other issues where four of the quarters got processed, but not the other two. You call the IRS, try figure out what happened, and you get the runaround, you just can't get a straight answer. We've had notices where the IRS denies the claim because they say you didn't pay any wages, only to discover that, yes, of course, they paid wages, but the IRS lost all the payroll tax documentation; they don't have the W-2s, a lot of little one-off issues, I would say that are all over the place and it has to do with these things. A lot of these things were filed on paper, the records aren't necessarily that great. I'm sure that I have clients in what they think is the highest risk category, and they're there because they lost the W-2s, and so they think a client made a claim of $100,000, but don't have a single person on payroll. But yes, they do have people on payroll, we have all the payroll tax reports, we have all the proofs that W-2s were issued. IRS just isn't matching that up, necessarily. Just lots of issues, but they're all over the place. I haven't seen anything, at least recently that's been very systemic or consistent. My advice is always trying to confirm that the IRS has your claims. Certainly, certified mail was a good way to do that, but some clients didn't do that, so you can call the IRS and at least confirm that they received it and then deal with those one-off issues as they come. April Walker: Are you doing that on the PPS line? Chris Wittich: Yeah. We've used the PPS line for the most part, you certainly need a power of attorney to do that. Some clients just call themselves and they're calling the regular IRS line, that's so hit or miss, as to what kind of service you're going to get, but it's available just to call and confirm that they have it. April Walker: We do get that question a decent amount. Dan, do you have any thoughts to share? Dan Chodan: Sure. Yeah, I'd add to that. Once you have that power of attorney, you can get the 941 transcripts. It's going to give you the same information as a phone call, they'll tell you the date received, and once it's paid, otherwise, no updates in the process, which is just mind-boggling, of course, when he tried to explain that to a taxpayer that wow, how do I not know the status? Unfortunately, everybody's in the same boat, all we can do is prove receipt and then show when the payments are made, and those transcripts are great. As far as what I've been seeing, I've seen it all across the board just as Chris has mentioned here, there's inconsistency as I talk to other professionals, the enforcement of this is all over the map, some have moved very quickly, some really drag on, some agents are very well-versed in the process, some are missing things that are needing to be explained the rules, may be and helped through the process is a wide breath in that and what's going on, but it doesn't seem to be in a large volume. There's a team that's doing these in examinations and the processing is at a trickle, it's not a large group, and neither of those areas. Something's going to have to change going forward while the IRS puts more resources behind enforcement. Will there be a larger enforcement window authorized by Congress that's being asked for in these bills? Now at some point, the rate of processing has to pick up or it's just going to take years and years for the backlog to be cleared on all these things. There's more to come on what's going to happen, but again, is it to expect some seismic the change in the next six months or even to a year, it's probably not it, but there'll be some change on that front. There has to be given the IRS rhetoric around enforcement and then also just there will be more of a ground swell eventually that we have to do something with all these claims sitting on a shelf. April Walker: I'd like to pivot a little bit to another big question we get all the time, and this is the segment I'd like to call There are no good answers to these questions". I want to talk about them [though] and let's walk through where you guys stand with them. So statute of limitations and income tax returns. Lots of concerns here, especially as we talked about with all the delays. With delays of running out of statute for these income tax returns where either amended returns have already happened or need to happen. Let's break it down a little bit. There are businesses who haven't received their refunds, their claim has not been processed. You have told them. I know the two of you have told them, no question, they need to amend their income tax return for the period of the ERC claim, and statutes either have already run or getting ready to run. Chris, talk a little bit about talking points here. What you're talking with your clients about, trying to help them understand where they are with this. Chris Wittich: Yeah, there's definitely no good answers, and I think just being honest with the clients and telling them that upfront. The biggest thing is to discuss it with them, make sure they're aware, and then let them choose which bad choice they want to make. But the timing of the income tax statutes, they are going to close, and especially with this recent announcement, we basically know that these moratorium claims are not going to get processed before the statute closes, lots of claims or high risk, so they're not as likely to get processed before these statutes close. A lot of the 2020 statutes are probably already closed, 2021 will go next year. A lot of the time you're left with a choice which is pay tax, which you simply cannot afford to pay because you have not received the money, or let the statute run and potentially do it after the statute, which is not a good feeling, and neither of those is attractive. The third common scenario is I paid my tax already, but now my claim has been sitting for 18 months and I'm worried I'm not going to get all of it. So do I push back to those same two options again, do I amend now to take the income back out? And I'm left with the same two choices of when to pay the tax or to do it late, or do I look at some protective claim to hopefully protect me if the IRS adjusts my claim down, then I want to be able to get a refund of the income taxes, which I've already paid. I think all of those scenarios are lousy choices for a taxpayer to make. I see my role is just making sure they know all of the lousy choices available to them, and it's going to depend on their financial situation. Sometimes you simply cannot afford to pay the tax, that's just not a choice, if I'm going go bankrupt by paying the tax, I guess we're not choosing that option. So making them aware. I think it would certainly be a consideration as to how high a risk a claim do you think they have. Some claims are based on gross receipts decline that's very obvious, and all the calculations are done correctly. Other claims are based on government orders and trying to figure out what a more than nominal impact is, and there's some question as to maybe a grouping or something like that. Some claims are inherently going to seem like they're higher risk and making sure the clients are aware of that, and then just letting them go with one of these lousy options. I wish I had something better to tell them. It's kind of a depressing conversation to have with people, but it's one that you don't want to avoid because that is the worst outcome. Because if you don't talk to them about it. Dan Chodan: We can't avoid it, we need to make the recommendation to the client. Here's what the rules are, you've made the claim, here's what it is. We have to advise the rules, but we can't force someone to amend either, we have to meet our duty in that and there's the reality of their situations that will come into play and their decision. But we have to do our end of things. What will be interesting is the proposed bill that was out there to change some things on the ERC would align the income tax statute with the enforcement. There could be relief on some of this for the ones that get thrown out later, may at least not have that double whammy of inability to get the income tax back, so there may be some relief for those bad cases at some point. But right now, before these statutes run, 2020, maybe closed, 21 is still open for sure. Those ones that could be risky, I'd have those conversations. Also on our end, if we know clients that have a shaky one, they may be in a position where they don't want to wonder what Congress will do in the future, will they give us this relief or not? They may look to get that cash back on the income tax side now and then redo this in the future as needed. But at least you can lock in if you know that you're in a really sticky spot, so that's something to consider. April Walker: I told you that this was the section of no-good news and that's not generally how I roll. I generally like to provide bright light and positivity, but this is a tough one. But I think this is where you need to show that you're an advisor and show your value even if you're coming with not a lot of great news. All right, as we're wrapping up, let's see, I'll start with you, Dan. Is there any final thoughts or takeaways that you'd like to leave our listeners with today? Dan Chodan: Sure. This is a very interesting release that pushed us to have this conversation today. I think it's very telling, but also at the end of the day, we're in the same spot. The IRS has the situation where it wants it. The advertisements have disappeared. The deluge of claims is way less. It's not that they're without problems, but the IRS has been immensely successful on this already, so you got to give them some credit. This release gives us a lot of information, but when you look at it, it means what we've been experiencing is probably going to continue. We're probably going to get another doubling of the experience we've had to this point. The fact that they say the vast majority of these show risk of being inproper just really supports what has been seen, what they've been worried about all along, and is also just echoed in the compliance efforts. They said two billion dollars to date in compliance through the VDP, through withdrawal and enforcement efforts. That's a huge number. Not a huge number to the total of the program. But when you think about, that means that's what's been accomplished so far, so how much more is out there if that's what has been withdrawn, if that's what has been enforced to date, even with limited resources and small amount of audits there's a much bigger pool and it speaks to the fear and the risks that's out there. A lot more to come. If there's no congressional action at all related to this program and everything just stays as is going forward, I'd be surprised. Something's going to happen in some form, even if it's not exactly what was out there in the last proposed bill. I feel like this is going to come in some way, shape, or form in the next couple of years, and the IRS will have more releases. There'll be more twists and turns on this. More to come, unfortunately though, for those that aren't in a spot to get a taxpayer advocate referral and have a hardship claim to push this. I think you're just along for the ride until you're in that real need, unless you're going to go that refund litigation route, you're just going to have to be along for the ride here, unfortunately. A lot of other tough conversations we've been having for a while now are just going to be continuing, that we're going to have to wait and see. April Walker: Thanks, Dan. All right. Chris, what's your send-off thoughts for us? Chris Wittich: I would agree with everything Dan said. I guess I would just wrap it all the way back to the discussion that we had in April of 2023. I'd encourage you to circle back. In April 2023, we talked about the IRS OPR announcement. We talked through the Circular 230 issues, the SSTS issues, what are the ethical responsibilities of a tax preparer of a CPA. I would cross-reference those conversations with where we're at today. You want to advise your client of the rules. You want to be sure you know what the IRS is saying currently. But I would cross-reference, we got this new press release, there's some new information in there. They're clearly targeting these bad claims, so what do we do about the bad claims? There's a few solutions available now, but I also need to understand my ethical responsibility. I'm sure it'll be linked, but I would go back and take a listen to that with this new press release in top of mind. April Walker: Yes. That is exactly right. That's when we were together last to record talking about that, and none of that conversation is out of date. We're in a different place with claims, but all of that conversation is very relevant. Now, you're not going to get out of my fun question. Even though you've been with me before, you still have to answer these questions. I like to think about us taking a journey together towards a better profession. Always journeying toward that. Chris, what journeys are you taking outside of tax? I think you're getting ready a month or so to have baby number 2. I don't want to put words in your mouth. Where are you headed this summer? Chris Wittich: With a baby on the way, travel plans are limited. These days our travel plans consist of going to grandma's house or going to the other grandma's house. About 20 minutes in either direction is our maximum travel distance, but excited too. I'll be at National Tax in November. I'll be in DC. April Walker: That's fun travel, and there'll be some good hotel sleeping for the tiger. Dan, you don't have the tiny little ones running around, so hopefully you got some fun travel on the agenda. Dan Chodan: We're going to get them back to the beach this summer. They'll be really excited for that. But my favorite travel this year was a bucket list item for my wife. It was our 10-year anniversary. She always wanted to go to Nashville. Big country music fan. That was a great time. We did that. Just got back. I'll admit country music isn't all that bad after being steeped in a little more of it, so I'm coming along to it. April Walker: Okay. It's not it's not my favorite either, but Nashville is quite a fun town, so glad you were. And that was a without-kids trip? Dan Chodan: Yeah. April Walker: Those are always the best. Love the kids. Love them. You all are great. But so nice to be having adulting trip. Chris, maybe one day. Dan Chodan: Different kind of fun. April Walker: Exactly. Thank you guys so much for sitting down with me. I think this was a great important conversation. In the next stage, I feel sure we're going to talk again, so look forward to that. Again, this is April Walker from the AICPA Tax Section. This community is your go-to source for technical guidance and resources designed especially for CPA tax practitioners like you in mind. This is a podcast from AICPA and CIMA together as the Association of International Certified Professional Accountants. You can find us wherever you listen to your podcast and we encourage you to follow us so you don't miss an episode. If you already follow us, thank you so much and please feel free to share with a like-minded friend. You can also find us at aicpa-cima.com/tax, and find our other episodes, as well as resources mentioned in this episode as well as linked back to other podcast episodes as we discussed. Thank you so much for listening and stay cool everybody. Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices. This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home base for staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you’re not already a member, consider joining this prestigious community of your tax peers. You’ll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.

In this joint episode, Neil Amato, host of the JOA podcast and Melanie Lauridsen, VP of Tax Policy and Advocacy for the AICPA discuss recent updates on three key tax topics: the Employee Retention Credit (ERC), Beneficial Ownership Information (BOI) reporting, and a member survey about IRS performance during tax season. Melanie highlights the IRS’s recent actions and proposed regulations regarding ERC, the implications of BOI reporting requirements, and the mixed feedback from AICPA members on IRS service improvements.   AICPA resources AICPA Employee retention credit guidance and resources — Access resources providing the latest updates on the employee retention credit (ERC). Beneficial ownership information (BOI) reporting resource center — Access resources to learn about the beneficial ownership information reporting requirement under FinCEN’s Corporate Transparency Act (CTA). Transcript Neil Amato: Welcome back to the Journal of Accountancy podcast. This is Neil Amato with the JofA. I'm joined again by Melanie Lauridsen, Vice President–Tax Policy & Advocacy for the AICPA. This is a special collaboration episode between the JofA podcast and the Tax Section Odyssey podcast. Again, welcome back. Melanie Lauridsen is our guest. She is a repeat guest. Melanie, today, as we record, it's early July, and we're going to focus in particular on three topics: The employee retention credit or ERC, beneficial ownership information reporting or BOI reporting, and then a member survey about IRS performance in tax season. It sounds like there have been more than a few updates recently on those topics. Let's dive in. ERC first: What's the latest from the IRS and what does that mean for our members? Melanie Lauridsen: Neil, thanks for having me back and yeah, there definitely have been some updates. As you know, the IRS did make an announcement around ERC and there are a couple of main points that they wanted to bring out. The first one is that the IRS made a call to action for Congress specifically asking to retroactively stop processing ERC claims. Also, the second piece of it is for Congress to extend the statute of limitations, but very narrowly defined, and it really is only for IRS assessments. In other words, if a taxpayer wants to make an amendment on their own free will, the statute of limitations will not be extended to that. But if the IRS notices something, says something, or is talking with you, and they recognize there needs to be an adjustment, then you can move forward and make that amendment. This has some implications, obviously, for our members, specifically the retroactive aspect of it. Now, they worded it differently because there's the Wyden-Smith bill, which we've talked about where that is retroactively stopping making valid ERC claims. In this case, it is that the IRS has no longer to process claims. It still has that same effect with members and does bring a little bit of nervousness to people. What that really means is that our members really need to have conversations with their clients if they have a valid ERC claim that hasn't been filed. [In] those conversations, people need to make it clear to the client that, yes, we can do the work, but there could be either the retroactively where the IRS stops processing claims, or there could be a bill that says that no longer, since a certain date, they don't have to accept claims. There's a little bit of risk associated with that. I think in the last time we spoke, we spoke about how there's an unknown around that date and therefore there's uncertainty around it, and clients need to be aware of the risks associated with that. The other important aspect of this announcement is where the IRS indicated that they have bucketed all these claims into three groups. There's the low-risk, medium-risk, and high-risk. The high-risk is where there are clear signs of error within the claim. Now, couple of things I need to make sure people understand. We don't know the criteria that the IRS is using to categorize people. They are not making that public. The other thing, too, is you cannot call the IRS and ask what bucket you're in. You just won't know. They can't help you on that front. What that means is if you're low-risk, the IRS is trying to process that claim as quickly as they can so that people can get the refunds back. If you're a high risk, they're trying to process that claim also as fast as they can to be able to deny those claims. Now, if you're medium-risk, that's the bucket where you're stuck and it will be a while before they actually look at those claims. Amato: That medium-risk bucket, do you recall: What's the approximate percentage that maybe that has? Lauridsen: I know that the IRS in their announcement gave a broader range of it, but in a conversation with IRS executives, I was told 57%. Amato: Good to know. Lauridsen: That's a big number. Amato: It is a big number. A lot of people still in limbo. And maybe lost in the shuffle: Can claims still be submitted during this period? Lauridsen: I get that question quite a bit, and there's a little bit of confusion around it. Some people think that claims, you can't file them. If you have a legitimate claim, you can still file it. The problem is centered around is the IRS going to process it or will it not be considered a valid claim? It goes back to those conversations that our members need to have with clients because we really just don't know what will happen with the claims. Amato: Does it surprise you the number that were labeled high-risk? Lauridsen: Not based on feedback that we've seen from our members and other external stakeholders. We do know that there were ERC mills out there promoting the claims and they would tell people "you absolutely qualify," when they absolutely didn't. We also know of some of our members where they flat out told the client "you don't qualify," but the ERC mills were telling them, "you do." Then they went off to the side to go get that claim because it was a lot of money for some of these people, and money was talking. Amato: Now, I guess also related to the ERC, on July 1 the IRS published some proposed regulations, so it's hot off the presses for us. What can you tell me about these proposed regs.? Lauridsen: The IRS did drop proposed regulations. These proposed regulations, they provide that the IRS will assess an underpayment of tax on any overpayment interest paid to the taxpayer on an erroneous ERC fund. In other words, not only would you need to pay back the overpayment of the interest portion that you received of a claim, but you would then also have interest penalties on top of it. One thing to note with the proposed regs. is it recognizes that the current regulations don't address the recapture of interest paid. They also note that the proposed regulations are to apply only to interest paid after the issuance of the proposed regulations, so not before. It's still very unclear as to the payments – what about the payments are already went out with or without the interest, and whether the IRS will attempt to recapture that interest? There's just still a lot of confusion around it. As we get more clarity, we will also provide that to our members. Amato: We will post some pertinent resources and also recent JofA coverage of this news and other news we mentioned. Melanie, I mentioned JofA resources, are there other resources that you'd like to recommend that maybe I'm not aware of? Lauridsen: Absolutely, Neil. The Tax Section Odyssey podcast will be doing a deeper dive around the questions that our members and their clients may have, and that should be posted around the same time as this podcast. (Editor's note: The episode Lauridsen mentioned is scheduled to publish the third week in July). Amato: Excellent. Now let's talk a little bit about BOI, beneficial ownership information, that reporting requirement. What's new on the BOI front? Lauridsen: There's quite a few different little updates here. But most recently [the] Maryland attorney general did actually provide and release an opinion on whether assistance by a CPA, with the beneficial ownership information reporting requirement of the Corporate Transparency Act, would constitute the unauthorized practice of law [UPL]. The Maryland attorney general made it very clear that the determination of UPL is fact-specific and that the opinion is only a guideline because, again, they have to take a look at each and every single case. Making clients aware of the BOI reporting requirements, guiding them through FinCEN's FAQs, through the compliance guide, helping [the client fill out] the BOI reporting form, guiding them through questions and answering questions for them — all of that is not considered unauthorized practice of law, according to the Maryland attorney general. If you were to fill out the report on behalf of a client without connecting with the client, there might be some issues there. Also, if there's just a lot of uncertainty and you know that legal knowledge is needed, a legal analysis to determine who a beneficial owner is, then you really should be turning to a lawyer to help you answer those questions. What I'm telling people is what we've been telling members all along, that a CPA will need to use their professional judgment when they engage or work with a client, and they'll have to determine where that line gets drawn as to whether or not a lawyer is needed. If it's a very complex business arrangement, most likely, you will want to include a lawyer. Again, this is all very in line with what we've been telling members, and it's also similar to what other states have said. But no other state has actually put it into writing, and there have been no other opinions. So far, Maryland is the first. Amato: Thanks for that update. Now, I understand also that I guess you're working with congressional staffers on a bill being drafted on BOI. What is that bill designed to do? Lauridsen: Actually, we are working with Congressman [William] Timmons' office and that bill actually works well with the Maryland opinion. The hope is that the bill would be able to avoid having to go to all the many multiple jurisdictions and the bill would be able to take care of all this all in one fell swoop. Specifically, the bill offers two aspects of relief which are a big concern to our members. Number one: The bill would offer a safe harbor for CPAs who do their due diligence when filing the BOI report on behalf of a client. In other words, if you get information, you have a conversation with the client, you do that due diligence, and yet the client gives you some fraudulent or false information, that you would not be held liable for that. The second piece that the bill does: The bill flat out states that services under the Corporate Transparency Act are not considered unauthorized practice of law. That really does go a long way in helping with the various states because when the federal [government] gives that nod, an indication, a lot of the states would most likely fall in line with that. Also, I do want to connect on the other types of work we're doing, not only with Congress. We have worked with a lot of external stakeholders and external coalition members because this concern is not a specific AICPA issue. This is a broader issue for all small business entities. Those two points that I brought up from the bill, those take care of the biggest pain points. But the third pain point really is the 30-day period to update the BOI report for an error or a beneficial owner's updated information. We're working with FinCEN on this since FinCEN actually has authority to make this change. Collectively, we are working with [Capitol] Hill, we are working with external stakeholders, and also FinCEN, and we've actually pulled everybody together to start having conversations so that there is awareness of what our pain points are, and what exactly we can do to be able to resolve a lot of these issues. FinCEN does have concerns, and they've made it very clear that this year they're focusing on awareness and not enforcement. Part of the reason is, so far, keep in mind we're seven months into the year, FinCEN has only received just over 2 million BOI reports. Remember, they're asking for 32.6 million, so awareness is definitely something of a concern for them. Stay tuned, there will be more to come. Amato: Thank you for that. You mentioned Congressman Timmons, that's, I guess, Rep. William Timmons from South Carolina, is that correct? Lauridsen: Correct. Amato: Great. Yes, we're talking about all these updates and potential changes and things that people want to do but currently the BOI reporting requirement, it remains the same for most small businesses, right? Lauridsen: It does and that's what makes it very scary. A lot of people have heard about the court cases where they said the Corporate Transparency Act was unconstitutional. But again, that only applied to a small sliver of the population of the members of [the National Small Business Association]. So, it's very confusing. The rules themselves are confusing. But unfortunately, everything remains the same, and people, unless you're one of those 23 exceptions, you still need to file. Amato: Moving on to IRS survey results. It's not an IRS survey, but it's a survey about the IRS. In our previous podcast, we discussed how the IRS perceived how the filing season went. The IRS released some data showing that they answered [88]% of calls that came to the IRS. The AICPA conducts an annual member survey immediately after the filing season to see how the members felt about IRS service. What does the feedback say, and is it in alignment with what the IRS said? Lauridsen: Oh, Neil. No, it's not in alignment with what the IRS said. This year, overall, the IRS did better than last year, which was also an improvement from [the] prior year. But even so, the bottom line is we are not at pre-pandemic levels. The IRS really has a long way to go for us to get to the service that we deserve. For example, the PPS line did show improvement from our members' perspective, but approximately 56% of our members were able to get through to the IRS on a consistent basis, while 29[%] of our members had hit-or-miss calls, and 15% of our members couldn't get through at all. The wait times, again, keep in mind the IRS is saying it's about three-minute wait time, those did improve. This year, only 28% of our respondents had to wait an hour or more, compared to 63% just two years ago. Yes, that's an improvement, but 28% of our members having to wait over an hour? That's a little bit painful there. The biggest pain point is the quality of service our members are getting. Is the IRS able to answer your question, or do you need to be transferred? At which all of us know that if you get transferred, you pretty much get transferred multiple times, and, of course, there's no guarantee of a resolution. Sadly, we found that only 37% of our members were able to get consistent support from the IRS, meaning a resolution, while 37% rarely or never were able to get a resolution. Amato: Among our members who are tax practitioners, are they satisfied with the service the IRS provided during filing season? Lauridsen: Neil, surprisingly, our members are feeling more optimistic about how the IRS is doing, and they've improved for the last two years with the IRS. It has definitely helped that the IRS is answering the calls. However, to your point, almost half of our membership does not think the IRS is on the right path. I should also let you know, too, that when we get these survey results, we actually communicate this directly with the IRS and we let them know. Our work is cut out for us as to what we need to be able to continue moving forward with IRS services, and we've definitely portrayed that to the IRS. Amato: Speaking of moving forward, for the 2025 filing season, what would you say are the top concerns facing AICPA members? Lauridsen: Given that it's an election year, no shocker that the number one concern for our members, and number one concern comes in about 29%, is the impact of legislative changes. What I was surprised to see was that the lack of guidance actually came in only at 17%. But I actually expect that to go up considerably once we start to see those legislative tax packages becoming law and we are going to need guidance from the IRS and Treasury. Number two on the list, coming in at about 27%, also no surprise, is the continued delay, which includes the written correspondence and processing of information with the IRS. I should also note that we did have an option on this survey for people to click "other" and fill in the response, and that came in about 5%. Overwhelmingly, everybody was talking [about] the delay of the brokerage statements and delayed K-1s, which create workload compression areas. That is definitely something that we've been monitoring and we're starting to work again, and we've been keeping an eye on it for a few years. Neil, all this is really to say that we have identified some issues. There's a lot of work that needs to be improved upon with the IRS, and we're moving forward with it. Amato: K-1 in particular, that was a term I hadn't even thought about or heard in a while, so I guess it's still out there, along with others. Melanie, we appreciate this update as we close out our July recording. Again, we're recording early July. This is due to publish in mid-July. What would you like to leave listeners with as a closing thought? Lauridsen: I think our members should be aware that we are monitoring, we definitely love hearing from them, we take it to heart, and we definitely push for their needs to be able to find resolutions. Sometimes the work is very slow. But we do start to see results and we do start to see the needle moving. Hopefully soon, we'll have some resolution with ERC and some answers and guidance, and we'll start seeing resolutions for BOI, too. Amato: That's great. Melanie, thank you very much. Lauridsen: Thank you, Neil. Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices. This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home base for staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you’re not already a member, consider joining this prestigious community of your tax peers. You’ll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.

Tony Nitti, a partner at EY National Tax and tax law expert, breaks down the significant Supreme Court ruling on Moore v. U.S. He discusses the implications of the mandatory repatriation tax and how it shapes future discussions on unrealized gains and wealth taxes. Nitti emphasizes the value of understanding both the majority and dissenting opinions for a richer grasp of tax law evolution. Listeners will find insights on historical context and the potential future of taxation in America, complete with references to landmark cases.

Get a snapshot of the AICPA & CIMA ENGAGE 24 conference held in June at Las Vegas. Conference attendees share their experiences at this premier accounting event along with the knowledge that they gained from various sessions. Highlights include discussions on professional growth, finding balance, mental wellness and the importance of networking. Register now to attend AICPA & CIMA ENGAGE 25. Transcript April Walker: Hello everyone, and welcome to the AICPA's Tax Section Odyssey podcast, where we offer thought leadership on all things tax facing the profession. I'm April Walker, a lead manager from the tax section. Today's episode is a little different as it contains snippets and recordings from several participants at the AICPA and SEMA Engage conference, which was held last week in Las Vegas. I have actually been to this conference as a staff member of the association every year. I believe this is the eighth. 2020 was virtual, of course, but I've been every year and somehow it just always gets a little bit better and better to me. But rather than hear me drone on and on about how great it is, please listen to those who attended. I have with me Ashley [Francis]. Ashley was in person with me. We're recording this on Tuesday, June 11th. We were together last week at the Engage Conference in lovely, hot -- very hot - Las Vegas last week. Ashley, I'd love to hear your overall impression. How was your week at the conference? Ashley Francis: So, my overall, overall, is that I am so exhausted, but it is that good exhaustion. Like you go and you do something, and you do the things that you want to do and you have such a wonderful time. That you're tired, but it was a good experience. Walker: Wonderful, yes. Were you there all four days? Francis: Oh, I was there longer because I did one of the pre sessions. Walker: Look at you. Francis: I did the PFS live pre session, sat for my PFS certificate, and passed the test. Walker: Congratulations! Francis: Thank you! Walker: [Go] you with your new credential. Francis: I know, it's very exciting, Walker: Yeah, I think one more day might be do me in. Francis: I agree, one more day, Walker: It's wonderful… Francis: [Five]days was enough, yeah. Walker: Yeah, it's just a lot. I'm wondering in all of the sessions that you went to, if you had one particular takeaway or one session that really meant something to you. I guess meant something to you professionally or personally. That [included something] you are trying to implement into your life. Francis: Absolutely. And this is a challenging question because there were three sessions that stood out to me, that I could go back and listen to again and again, but the one that impacted me the most, I would have to say, is Andrea Miller's session on balance and mental wellness. Because I think a lot of times, especially for me, everything is just go, do the next thing, do the next thing. Without stopping to think, wait... is this next thing the thing I actually want to be doing? And so even though it was a big room, it was full of folks, her session did such a great job, having folks walk through that experience themselves in a very individual way. When I left that session, I was like, holy cow, what am I going to do with my life now? So, it was really big. I ordered [about] 30 books from the library because of it. Walker: Nice, that's always a good session that creates more work for you to do after the fact. I didn't see that session. I have a long list of sessions that I want to go back to and watch for the first time or watch again. I'm sure you know she used to be staff here at the AICPA and I loved working with her. Francis: She's great. Her career turn has been exciting to watch also. Can I give a shout out to the other two sessions that I would love? Twyla and Barbara Richardson, their session on “making wow client engagements” that was really good. And then Keila and Carrie talked about bringing in non-accountants to help support and sustain and build our firms. That one was brilliant as well because it hit on so many different, important things that we need to think about. Walker: Neither of those which I attended. again, there's so much going on, all the time, which is, not necessarily a negative of engage, but it's just. It's almost like you have FOMO. It's oh, I can't do all this stuff. Yeah. all thank you so much, Ashley, for hopping on and recording with me today. I hope to see you at, if not before, at next year's Engage Francis: You definitely will. Walker: Welcome, Brandon. I have with me Brandon Lagarde, who is a wonderful volunteer with me. [He]does a lot of different things, and he was with me at Engage last week. We had a lot of fun, but Brandon, I'd love to hear about your experience overall at the conference last week. Lagarde: Yes, absolutely. Thanks for having me. Last week was the Engage Conference, and I believe this is the 8th Engage, is that correct? Walker: yeah, that seems right. Lagarde: 8th Conference? It's been many of them, and I think I've been to every one of them, and every time I go, I'm just amazed at the scope of what is provided. It just seems every year it gets bigger and bigger. The speakers are incredible. the exhibitors are getting, better and better, and even, just so much out there. The people that are going. It’s a great experience overall. One thing we hear [a lot] about the accounting population and aging population. I was shocked to see the amount of young people at the conference and excited about accounting and excited about the practice. Also really getting to meet a lot of other people who are trying to do the same thing we're doing. Just this practicing and learning from each other and it was a great experience. Walker: Yeah, it was. It was a lot of energy and a lot of enthusiasm. And sometimes it doesn't come from the older generation. It comes from the younger generation. But I like to be a hanger on [of the younger generation]. Brandon, are there any connections you made from a networking perspective during the week that you would like to share with us? Lagarde: As I mentioned, this is my eighth Engage conference. And this is I believe the second annual AICPA Foundation Golf Tournament that was held Sunday morning before the conference kicked off. This year I looked at my schedule and I'm attempting to play golf, trying to get better and improve. And I've been told that the only way to improve is to play a lot. So, I thought, let me sign up for this tournament. So I actually played in the golf tournament, Sunday morning. Fantastic tournament- I highly recommend it to anyone who's going out there. And got to meet some really great people. You get put with three other people to play with. Didn't know these people before and played a round of golf. Had some good shots, had some bad shots, enough good shots to go back out there. We did not win the tournament, unfortunately, but we made some good friends and I continued to network with those individuals and keep in touch with them throughout the conference and ran into them multiple times. I ran into him at the Old Red event, which was an event that was sponsored by AICPA, on Tuesday night at the conference. This was another great time just to network and to listen to the band. Although, it was a little hard to network there because it was a bit loud. I tried to talk to Damian Martin a couple times, and I think we were screaming at each other at one point just because of the volume of the music. But it was a great place to just meet people. At the exhibit hall, I'm always amazed at the [number] of vendors that are there that are sure They're there to support the AICPA and their product. But it's just amazing the technology that's out there and the things that are happening. Getting to meet some of the people there and getting to make connections with some of the platforms out there and learning more about people. A lot of generative AI conversations, a lot of generative AI companies - some better than others- but, just a lot of opportunity out there to meet people. And that’s the benefit of going to something like this and going to a conference like this. It's not just tax people. It's not just audit people. It's people from all different areas of the CPA practice. At the end of the day, all we're trying to do is help our clients and help our practices improve and getting to see what's out there and getting to meet people who are dealing with the same experiences we're dealing with is you can't put a price tag on that. Walker: Yeah, I agree. Brandon, thanks for joining me for a quick little snippet of your week. It’s one of my favorite weeks of the year. I look forward to Engage 2025. What shenanigans will we get up to? Time will tell. Lagarde: We've already started, we've already started [ENGAGE 2025] to do list. Walker: Yes, we have. Things we didn't get to that we want to accomplish. Most of them are very responsible types of to dos. Lagarde: Absolutely, I already have it in my calendar next year too. I'm already down to go. Walker: Wonderful. Lagarde: [Looking] forward to it. Walker: Thanks for joining me, Brandon. Lagarde: Thank you. Walker: Welcome, Mark. Mark Gallegos was at the ENGAGE conference. We're recording this on a Tuesday, June 11th. Mark, tell me, I know it was not your first time, you've been to ENGAGE several times, but, what specifically, was a highlight for you about last week's ENGAGE conference? Gallegos: Yeah, I think from the ENGAGE conference, it's the human aspect to me. Meeting people, interacting with people, and really getting to listen and learn from others. The way I look at it is, you get to learn from experts in the field in areas that you think you know a little bit about, and you learn that you have a lot of learning and growth to go forward with. Learning on the latest trends in the profession, strategies, and regulatory updates from a tax perspective. And then, learning from these experts and staying relevant in the current tax landscape and the changing tax landscape. But also learning from others in other areas, whether it's accounting and financial planning and estate trust and areas that maybe I don't do enough work in. But it enhanced my growth opportunity while there. At the same time, you just become a more well-rounded person by being inundated with that for a week. Walker: Yeah, I know that's one thing that is possibly a negative for people about ENGAGE. It is so big and there are so many different topics. But to me, that is a positive, because you're not just meeting tax people. You're meeting people from all across the industry. I completely agree with you that the human aspect of conferences is something I'm really excited was able to survive the pandemic and come out strong on the other side. Gallegos: That's right. And I think networking within the conference, whether you're in the classes, between sessions or early in the morning or Walker: Or late at night, let's just say. Gallegos: Whatever your flavor is, or maybe all the above, I think that is a great opportunity because you're meeting people from various sectors within the profession. These valuable connections last beyond the conference. You can even be meeting potential clients, people you could work with or vice versa. And more importantly, thought leaders- people that have great ways of collaborating with others and learning how you can help them, or they can help you. I think that's a huge takeaway for me. Walker: I think so too. Thank you for sharing your insights. Hopefully, we give people who were not there a little bit of FOMO. And it will happen again next, next June. Thanks again, Mark. Gallegos: You're welcome. Walker: I have with me now Dan Moore, who was also out at ENGAGE with me last week. Dan, what's your overall impressions and thoughts about the Engage conference last week? Moore: Hey, April. Thanks for having me on today. I don't know why the feeling seemed to be different this year. I don't know if it was just the great keynote that we had kick off the conference Monday morning- Eric Weinmayer, who really spoke to me and spoke to a lot of people. But I just felt like there was a massive amount of energy. At this year's Engage, several of the speakers were just so excited to be there to get up and speak and talk to participants after their sessions. They were excited to meet up with their colleagues and go out to dinner. there just seemed to be so much. Excitement within the room. The energy was great. And I am still a week later I'm just still really excited about how the event went. Walker: Yeah, I had the same feeling I was trying to describe to my team members who unfortunately were not able to be out there with me and I said - it's just a vibe. That’s what the kids say. It just a vibe. It is hard to explain, but it’s just a good word for the energy and excitement. Moore: Our speakers were excited to be there, and that was great to see. Some were speaking on new material, some had revised and revamped some older material. [They were] just so excited to present. Everyone really kept my attention, as much as we were getting tired near the end of the week and day four. They were still keeping my attention and the energy just was everything. Walker: That's great. We know you did a lot of things during the week, but was there anything that you didn't have time to do? It's hard to make time for everything, but was there anything specific that you have on your to do list, for next year's Engage? Moore: Several things stick out in my mind. I've already started my to do list for next year's Engage of the things I want to remember to do. Some of them are directly content related. But others are the other activities that are available to you during Engage. First, it's getting up at 6am and participating in either yoga or the run. I know a group of people get together, they do a walk/run, they go out on the strip, and I didn't take advantage of that this year. So that is definitely on my to do list for next year. But also I felt like I didn't go into the conference as prepared as I wanted to really go out and explore the exhibit hall, as well as explore the solution sessions that were available with many of our vendors. We are kicking off a project within my office to reevaluate our tech stack, and I really wish I would have taken the time to. start the conversations internally within my firm so that I could go out and seek out the vendors that are on the short list of solutions that we are looking at implementing in our firm. Because what a great opportunity to meet the frontline of those technology solutions. That was the big thing that I really walked away thinking, next year, I want to take the opportunity to meet people. There's a number of solution sessions, I want to say there was probably at least 4 or 5 running every morning, also solution sessions during lunch, where you could go out and hear specific presentations from various vendors and I missed out on that opportunity. But you know what? I'm not going to beat myself up about that. That's next year. but I think it takes a lot of planning. To come to the conference, you get the exhibit hall list ahead of time. So, you can go ahead and take a look and see what vendors are going to be in the exhibit hall and start thinking about those vendors that you want to visit. You can make the list up ahead of time to seek them out and not only get to meet them, but see, hey, are they offering some sort of special pricing for attendees? And, hey, you can also fill up your swag bag. Go home with free stuff. Walker: That's right. I know that they were doing demos of certain things, and that would be cool to do. But like you said, you have to go into the conference planning exactly what you're going to do almost every minute, which is hard to do. It's hard for somebody like me to do, because I'm more of a wing-it kind of person. But if you plan, you can really take the full opportunities for what's available there. Moore: The other thing too, if you're talking to a vendor and one of their the vendor's customers, come up, you can start the conversation with another firm owner. They're like, oh, I'm using this solution. Later on, you can meet up with them, and you can say, hey, now that we're alone, can I ask you some questions, how did you implement this into your firm? What works? What doesn't work? What are some best practices you would suggest if you're thinking of implementing a new solution? And so that's also a great help. If you know a firm that said, hey, this is a great solution, but if I had to do it again, what would it be? I would have approached it this way. That connection really is invaluable. Walker: Alright, thanks so much for sharing, Dan and we look forward to hearing more. Dan is the chair of the Tax Strategies conference, he will definitely be there next year, no question. Truly, in a couple of months, we start planning for next year's conference. Looking forward to doing that. Looking forward to seeing all the new and exciting stuff we can incorporate for the 2025 conference. Moore: Thank you, April. Walker: Yep. Thanks so much. Walker: I have with me Kelly Rohrs. Kelly, it was your first time at Engage, so I would love for you to share kind of your initial impressions and also what was your favorite part about being at the Engage conference. Rohrs: Hi, April. Thanks for having me on today. The first time at Engage, first time in Vegas. I couldn't believe how big it was. There were over 4, 500 people were there. Massive. I ran into so many people, so many familiar faces. It was really just such a wonderful event. Walker: Yeah, one of my favorite things about, that just because it's such a big conference, you do run into people that you've probably only known necessarily through social media or things, so like putting a face to a name is really just the coolest thing. Rohrs: Absolutely. Totally agree. Walker: All right, any other kind of takeaways or thoughts you have about the Engage conference? Will you come back? Rohrs: I think that people think that conferences like these are for large firms, especially put on by the AICPA. People don't think that this would be beneficial for the small firm owner, but I think that is an absolute misconception. I think a lot of the classes were geared towards the small professional, the smaller firm, how to advance your firm, what sort of services. That you should provide or develop to keep up with the times and, besides the continuing education portion of it, the networking piece and meeting the vendors that were there was phenomenal. to have the two huge Showrooms filled with the best vendors in the country who are willing to, a lot of them are giving demos, handing out free demos, free months of subscriptions. That is really the power of an event like this. To take away all of these new software or to hear what other people are doing in the hiring space. It’s priceless. It's worth every penny. Walker: Yeah, it is, it's hard to describe, but it is like two giant rooms of vendors. And then also the vendors do, we call them solution sessions or education labs. And so even more you're able to get like a deeper dive into their services and things, which I think is, like you said, it’s cool and it's not something you can get just anywhere. Rohrs: Yeah. It's so much better than being behind the screen. You're in person. You're watching these people who are super passionate about what they're doing. You're building true relationships. And I don't think I met anybody I didn't like. Walker: Oh, that's always a positive. It was delightful. It was our first-time meeting in person, even though we've known each other for years. So that's always delightful to experience that. Next time we'll schedule and spend some more time together. I think we were all both just running around, crazy. Thank you so much, Kelly, for sharing your experiences with us on Engage. Rohrs: Thank you. Walker: I have with me now Damian Martin. Damian was also at the Engage conference last week. Damian, you have been at Engage a couple of times. What was your general impression about last week's conference? Martin: General impression, is just how inspired I am and, how great it is to see all the things going on in the profession and all the people in the profession, I'll have to say a highlight for me, aside from getting to hang out with my favorite tax podcast host, which is you, obviously, It was watching Tony Nitti accept the Sid Kess award and his acceptance speech and all of that. That was just, just incredible and a highlight on, on, on many fronts, I'll just say. Walker: I love those five minutes was like a lot of nuggets in there. If you have access to Engage and you can go back and listen to it, I would listen to it for that first couple of minutes. He's very inspiring, and makes you want to reach out and do bigger and better things. Martin: Yes. And I'd be remiss if I didn't say too, that it was followed by a very, very good business tax update as well. Walker: Absolutely, hang on, I wasn't just saying, Martin: Yeah. No, I know you weren't. Walker: Brian did an excellent job with the, Brian Lovett, with the business tax update, so yes, hang on for the whole session, the whole 75 minutes. Damian, did you make a networking connection? To me is my absolute favorite part about Engage, seeing people in person and, getting in that face to face connection. Did you make a connection that you'd like to talk about? Martin: Absolutely. And I completely agree, right? Like it's nice to interact, especially, remotely and whatnot. But just there, there's something to being in person and maybe putting a face to a name and all of that, that happens every year. But this is actually a connection I'll say that even goes back to last year. So last year at Engage, I reconnected with a group from the firm I started with, which is Bowman Company in Stockton, California. They were the ones that kind of gave me the chance in public accounting, got me inspired. Really the path that, that I got on to where I am today, I attribute all back to them. And then coming back this year, I have to say, it just, it warmed my heart and it just really meant a ton to me to see Daryl Petrick and, Jeannie Rusick, who are, partners at that firm, sitting in the front row at my session on Monday, for the individual tax update. It just speaks volumes about them. Back to your point about just the great people that are in this profession, and I generally walk away with, I know there's headwinds and whatever else, that you can focus on, but there's just, there's good people in the profession. So, it's really hard for me not to conclude that there's great things that continue to come for the profession as a result of people like, like Daryl and Jeannie. Walker: Well said. Yeah, I think there's a lot to be said. There's a lot of positive energy that I feel when I'm at Engage that makes me excited about the profession and about changing and evolving. Martin: That's right. Walker: Thank you so much, Damian, for sitting down with me for a quick little interview. We'll have to, we'll have to have you back for a longer discussion at another time. Martin: Happy to do it. Thank you, April. Walker: Thank you so much. Usually when I close these podcasts, I always talk about taking a journey together towards a better profession. And I ask my guest what their bucket list travel destination is. But while I didn't take the time to ask all of our guests today to answer that question specifically, I think it's safe to say that based on their discussions, we'll all be back together in Las Vegas, again, at Engage 2025. Again, this is April Walker from the AICPA Tax Section. This community is your go to source for technical guidance and resources designed especially for CPA tax practitioners like you in mind. This is a podcast from AICPA and SEMA. Together as the Association of International Certified Professional Accountants. You can find us wherever you listen to your podcast, and we encourage you to follow us, so you don't miss an episode. If you already follow us, thank you so much. And please feel free to share with a likeminded friend. You can also find us at aicpa-cima.com/tax and find our other episodes as well as any resources mentioned during this episode and others. Thank you so much for listening. Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices. This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home base for staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you’re not already a member, consider joining this prestigious community of your tax peers. You’ll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.