2026 ISSUE 3 OFFICIAL PUBLICATION OF THE NEBRASKA SOCIETY OF CPAs President’s Message A Time to Listen, Reflect, and Shape Our Future PAGE 8
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BOARD OF DIRECTORS KRISTEN VANWINKLE PRESIDENT & EXECUTIVE DIRECTOR kristen@nescpa.org KELLY EBERT VICE PRESIDENT kelly@nescpa.org MICHELLE LYONS STAFF ACCOUNTANT & OFFICE MANAGER michelle@nescpa.org LORI VODICKA MEMBERSHIP & CPE ASSISTANT lori@nescpa.org NESCPA STAFF OFFICERS JODI M. ECKHOUT CHAIRMAN Woods & Durham, Chartered Holdrege JUSTIN M. HOPE CHAIRMAN-ELECT Eide Bailly LLP Elkhorn HEATHER E. BARR SECRETARY Endicott Clay Products Co. Endicott GRANT H. BUCKLEY TREASURER Buckley & Sitzman LLP Lincoln BOARD MEMBERS DERRICK J. BLUM DIRECTOR Iron Horse CPAs & Advisors PC Norfolk LAUREN E. BOND DIRECTOR Deloitte & Touche LLP Omaha LAURIE ANN J. BUHLKE DIRECTOR Contryman Associates PC Grand Island NICOLE L. COOPER DIRECTOR Project Harmony Omaha MARK F. DUREN DIRECTOR Lutz Omaha LORRAINE A. EGGER AICPA ELECTED REPRESENTATIVE Ashland RICHARD D. GIFFORD WEST NEBRASKA CHAPTER PRESIDENT Richard D. Gifford, CPA Scottsbluff BRIAN M. KLINTWORTH IMMEDIATE PAST CHAIRMAN HBE LLP Lincoln KELLY A. MANN AICPA AT-LARGE REPRESENTATIVE AuditMiner Gretna JILL R. TRUCKE DIRECTOR University of Nebraska-Lincoln Lincoln 402-817-1000 endacotttimmer.com The wealth transfer legal professionals. Kent Endacott and Patrick D. Timmer are both fellows in the American College of Trust and Estate Counsel, the nation’s top trust and estate attorneys. 4 Nebraska CPA
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24 C O N T E N T S ©2026 Nebraska Society of Certified Public Accountants | MBR Connect™. All rights reserved. The Nebraska CPA is published six times each year and is the official publication for this society. The information contained in this publication is intended to provide general information for review, consideration and education. The contents do not constitute legal advice and should not be relied on as such. If you need legal advice or assistance, it is strongly recommended that you contact an attorney as to your circumstances. The statements and opinions expressed in this publication are those of the individual authors and do not necessarily represent the views of the Nebraska Society of Certified Public Accountants, its board of directors, or the publisher. Likewise, the appearance of advertisements within this publication does not constitute an endorsement or recommendation of any product or service advertised. Nebraska CPA is a collective work and as such some articles are submitted by authors who are independent of the Nebraska Society of Certified Public Accountants. While the Nebraska CPA encourages a first-print policy, in cases where this is not possible, every effort has been made to comply with any known reprint guidelines or restrictions. Content may not be reproduced or reprinted without prior written permission. For further information, please contact the publisher at (801) 676-9722. ISSUE 3, 2026 EDITORIAL: The Nebraska Society of CPAs seeks to reflect news and relevant information to Nebraska and other news and information of direct interest to members of the Nebraska Society of CPAs. Statement of fact and opinion are made on the responsibility of the authors alone and do not represent the opinion or endorsement of the Nebraska Society of CPAs. Articles may be reproduced with written permission only. ADVERTISEMENTS: The publication of advertisements does not necessarily represent endorsement of those products or services by the Nebraska Society of CPAs. The editor reserves the right to refuse any advertisement. SUBSCRIPTION: Subscription to the magazine, a bi-monthly publication, is included in membership fees to the Nebraska Society of CPAs. PRESIDENT’S MESSAGE 8 A Time to Listen, Reflect, and Shape Our Future By Kristen VanWinkle, President, Nebraska Society of CPAs STATE BOARD REPORT 10 A Simpler Way to Report CPE Is Here What Nebraska CPAs Need to Know By Megan Petersen, CPE Coordinator, Nebraska Board of Public Accountancy 12 CPE Course Calendar STATE TAX BRIEFING 13 2026 Nebraska Tax and Incentive Updates By Nick Niemann and Matt Ottemann, McGrath North Law Firm COUNSELOR’S CORNER 16 Knowing When — and How — to Say Goodbye Disengaging from a Client Under Nebraska Law By Nick Bjornson and Kristin Krueger, Attorneys, Koley Jessen 18 Purchase Price Allocation By Hannah Fischer Frey, Partner, and Dane Hansen, Summer Associate, Baird Holm LLP 20 Financing the Acquisition of a Tax and/or Accounting Practice A Practical Market Guide By Accounting Practice Sales TRANSFORMATION TRENDS 22 Transformation Without Change Fatigue How Intentional Progress Creates Sustainable Momentum By Donny Shimamoto, CPA, CITP, CGMA, Founder & Inspiration Architect, Center for Accounting Transformation 24 CPA: Where Trust Meets Expertise By the American Institute of CPAs 25 Members in the News 30 2026 NESCPA Advertiser Index 31 Welcome New Society Members 31 In Memoriam 18 8 6 Nebraska CPA
Once again, The Best Lawyers in America® has recognized 46 McGrath North attorneys in the full range of specialty practice areas key to supporting businesses of all sizes across a broad range of industries, and 27 attorneys have been recognized for 10 years or more! McGrath North invests time, energy and resources to build a culture of professional excellence and integrity that produces results for our clients to make lives better. INSPIRED BY EXCELLENCE. COMMITTED TO SUCCESS. SEE THINGS DIFFERENTLY. Collaborating with companies and CPA firms on: State Tax Audits • State Tax Appeals • State Tax Planning • State Tax Incentives State Business Incentives • Site Development Incentives • Property Tax Appeals Nick Niemann, JD State & Local Tax & Incentives Attorney Partner, McGrath North (402) 633-1489 nniemann@mcgrathnorth.com www.mcgrathnorth.com | www.nebraskastatetax.com | www.nebraskaincentives.com Matt Ottemann, JD, LLM State & Local Tax & Incentives Attorney Partner, McGrath North (402) 633-9571 mottemann@mcgrathnorth.com
LLeadership transitions are a natural opportunity to pause, reflect, and ask an important question: Are we providing the value our members need today, and what will they need tomorrow? As I begin serving as president of the Nebraska Society of CPAs, one of my highest priorities is listening. While I’m proud of everything our Society accomplishes, I also recognize that our profession continues to evolve. The expectations of today’s CPAs aren’t the same as they were five, 10, or 20 years ago. If we want to remain relevant and valuable, we need to continually evaluate how we serve you. That starts with hearing directly from our members. I’d like to ask you a few simple questions: What does your NESCPA membership mean to you? Which benefits do you value the most? Where are we missing the mark? What challenges are you facing that the Society could help address? If you could add one new member benefit, what would it be? Your answers will help shape the future direction of our organization. The Society has a strong foundation. Each year, we provide nearly 100 courses and conferences along with access to thousands of webcasts to support your professional development. We advocate on behalf of the profession before the Nebraska Legislature and regulatory agencies, helping protect the CPA license and advance policies that benefit both our members and the businesses they serve. This year alone, we tracked 19 legislative bills (many relating to tax policy), including the successful passage of Nebraska’s alternative pathways to CPA licensure. Beyond education and advocacy, we create opportunities for members to connect, develop leadership skills and strengthen the profession through committees, conferences, networking events, and volunteer service. Through the NESCPA Foundation, we continue investing in the future by awarding more than $100,000 in scholarships annually to students pursuing accounting careers, and this year, we’re excited to expand scholarships to community college students planning to transfer to four-year institutions due to a very generous member donation. We also continue enhancing our Member Benefits program, identifying valuable products and services, expanding health insurance options, and strengthening our 100% Membership Firm program to better support firms and businesses across Nebraska. Those are accomplishments worth celebrating, but they shouldn’t prevent us from asking how we can do even better. The accounting profession is changing rapidly. Technology, workforce expectations, regulatory changes, talent shortages, and evolving client needs all present new challenges and opportunities. Our Society should evolve alongside them. I believe the best ideas don’t always come from the boardroom; they come from members working with clients, leading organizations, teaching students, serving in government, and navigating these changes every day. PRESIDENT’S MESSAGE A TIME TO LISTEN, REFLECT, AND SHAPE OUR FUTURE BY KRISTEN VANWINKLE, PRESIDENT, NEBRASKA SOCIETY OF CPAs 8 Nebraska CPA
That’s why my door is always open. Whether you have an idea for a new member benefit, feedback on an existing program, thoughts on professional development, or simply want to share your perspective, I want to hear from you. Your input will help ensure the Society remains a trusted resource that delivers meaningful value for every member. The Nebraska Society of CPAs exists because of its members. Together, we have an opportunity to build on our strong foundation while thoughtfully shaping what’s next. I invite you to share your ideas, your feedback, and even your challenges. Your voice will help guide our priorities as we continue evaluating how we can provide the greatest value to our members and strengthen the profession across Nebraska. Thank you for your continued support of the Society. I look forward to listening, learning, and working alongside you as we shape the future of NESCPA. Every Member. Every Day. Those four words are more than our motto; they’re our commitment. Every decision we make, every program we develop, and every service we provide should reflect our dedication to serving each member, every single day. Kristen VanWinkle is president and executive director of the Nebraska Society of CPAs. You may contact her at (402) 476-8482 or kristen@nescpa.org. YOUR SOCIETY, YOUR VOICE How can NESCPA serve you better? Scan the QR code to take our quick survey and share your feedback. https://www.surveymonkey.com/r/ LTM2CDT 9 nescpa.org
I STATE BOARD REPORT A SIMPLER WAY TO REPORT CPE IS HERE If you have ever wished there was an easier way to report your Continuing Professional Education, your wish is about to come true. Beginning this fall, the Nebraska Board of Public Accountancy (NBPA) is introducing a streamlined CPE reporting process through Certemy, the same secure licensing platform Nebraska CPAs already use to manage their permits. The new process replaces the old course-by-course data entry approach with something far simpler: upload a spreadsheet, review your information, and submit. That is really it. The Board has heard from licensees for years that the existing reporting process was time-consuming and tedious. This change is a direct response to that feedback, and the Board is excited to finally deliver a better experience. WHO IS AFFECTED FIRST? The new reporting process will roll out in two phases, following Nebraska’s even/odd birth-year renewal cycle: Even birth-year CPAs will be the first to use the new system, reporting their CPE earned during calendar years 2025 and 2026 in Certemy starting Dec. 1, 2026. So, if you have an even birth year, now is a great time to start organizing your CPE records. If you have an odd birth year, your transition is just around the corner as well. YOUR REPORTING TIMELINE AT A GLANCE DATE MILESTONE Oct. 1, 2026 Board emails all even-year CPAs the new CPE reporting form/spreadsheet and instructions. Form/spreadsheet also available at nbpa.nebraska.gov. Dec. 1, 2026 CPE reporting task is assigned to your Certemy account. Jan. 31, 2027 Deadline to submit your CPE report. Reports received after this date are subject to a $100 administrative fee. BY MEGAN PETERSEN, CPE COORDINATOR, NEBRASKA BOARD OF PUBLIC ACCOUNTANCY What Nebraska CPAs Need to Know 10 Nebraska CPA
KEEP YOUR CERTIFICATES SECURE IN CERTEMY In addition to reporting CPE, Certemy also allows you to upload and store your certificates of completion, and the Board strongly encourages you to take advantage of this feature. Each year, the Board conducts random CPE audits. CPAs selected for an audit receive a letter and have until June 1 to submit their documentation, which must include certificates of completion for each course taken during the audit period. Storing your certificates in Certemy means your documentation is already organized and ready to go if your name is selected. Think of it as your personal digital filing cabinet for professional education records; no more hunting through email folders or digging through file cabinets when you need to prove compliance. A QUICK REFRESHER ON NEBRASKA’S CPE REQUIREMENTS While the reporting process is getting simpler, the underlying requirements remain the same. Here is a quick overview: 580 hours of CPE required every two-year reporting period. 5Four of those hours must be in ethics. 5Nebraska does not require a state-specific ethics course. Any ethics course from a qualified sponsor focused on ethical principles, professional conduct, ethical decision-making, or another state’s ethics course will satisfy the requirement. 5Up to 16 hours of personal development courses may be reported. 5The AICPA Professional Ethics Exam taken for initial certification does NOT satisfy Nebraska’s ethics CPE requirement for permit renewal. 5CPE must be earned by Dec. 31 of the reporting period and reported by Jan. 31. 5Keep your CPE documentation for at least five years. The Board also recommends (but does not require) that licensees who perform audits, reviews, or compilations earn at least 40% of their CPE hours in accounting and auditing subjects. START NOW: GETTING READY FOR THE NEW PROCESS You do not need to do anything differently today in terms of how you earn or document your CPE. Just keep doing what you are already doing. But as you look ahead, here are a few simple steps to set yourself up for a smooth experience this winter: Continue tracking your CPE throughout 2025 and 2026 using your preferred method. Download the NBPA’s CPE Reporting Spreadsheet from nbpa.nebraska.gov if you would like to use the Board’s recommended format. Log in to your Certemy account and make sure your contact information is current, so you receive the Board’s October email with instructions and the reporting form. When Dec. 1 arrives, you will log in to Certemy, find your CPE Reporting task, upload your spreadsheet and submit. That is the whole process. QUESTIONS? WE ARE HERE TO HELP The Board will send reminder emails and additional guidance about CPE Reporting on Oct. 1, 2026. In the meantime, if you have questions about CPE requirements, the audit process, or the new reporting system, please do not hesitate to reach out to me at (402) 471-3595 or megan.petersen@nebraska.gov. More information is available at nbpa.nebraska.gov. The Nebraska Board of Public Accountancy looks forward to rolling out this updated process and appreciates the patience and continued dedication of Nebraska CPAs to professional excellence. HOW THE NEW PROCESS WORKS The single biggest improvement is that you no longer need to enter each course individually. Instead, you will simply upload a spreadsheet that summarizes your CPE for the full two-year reporting period. Any of the following formats are accepted: The NBPA’s Excel CPE Reporting Template (available on the Board’s website at nbpa.nebraska.gov); A CPE tracking report exported from your firm’s internal software; A report from the Nebraska Society of CPAs online CPE tracker; or Any spreadsheet that clearly lists course titles, sponsors, dates, and hours. The bottom line: If you have been keeping up with your CPE throughout the reporting period, you are probably only a few clicks away from being done. One important note for firm administrators: Because of the way Certemy is designed, each licensee must upload their own CPE within their individual Certemy account. 11 nescpa.org
CPE COURSE CALENDAR PARTNERSHIP & S CORPORATION ESSENTIALS: REPORTING BASIS & MORE Aug. 19 Ashland | Peter Kiewit Lodge, Mahoney State Park KEY TAX ISSUES FACING BUSINESS & INDUSTRY Aug. 20 Ashland | Peter Kiewit Lodge, Mahoney State Park WOMEN IN ACCOUNTING SUMMIT Aug. 25 Ashland | Crete Carrier Riverview Lodge, Mahoney State Park FALL CONFERENCE & ANNUAL MEETING Nov. 4-5 Lincoln | Nebraska Innovation Campus Conference Center TWO-DAY FEDERAL TAX UPDATE – INDIVIDUAL & BUSINESS Dec. 7-8 Ashland | Round the Bend Ballroom NONPROFIT ACCOUNTING & FINANCIAL REPORTING Dec. 14 Lincoln | Nebraska Society of CPAs Office GOVERNMENTAL ACCOUNTING & AUDITING UPDATE Dec. 15 Lincoln | Nebraska Society of CPAs Office FEDERAL TAX UPDATE FOR INDIVIDUALS & BUSINESS Dec. 17 Lincoln | Courtyard by Marriott Lincoln, Downtown/Haymarket Learn more about NESCPA’s sponsorship opportunities by visiting nescpa.org/cpe/sponsor. FEDERAL TAX UPDATE FOR INDIVIDUALS & BUSINESS Dec. 18 Grand Island | AMGL PC REGISTER FOR COURSES AND CONFERENCES AT NESCPA.ORG/CPE. FIDUCIARY & TAX ACCOUNTING FOR ESTATES & TRUSTS Aug. 18 Ashland | Peter Kiewit Lodge, Mahoney State Park 2026: Rise & Thrive 12 Nebraska CPA
2026 NEBRASKA TAX AND INCENTIVE UPDATES A STATE TAX BRIEFING BY NICK NIEMANN AND MATT OTTEMANN, McGRATH NORTH LAW FIRM Although the 2026 Nebraska Legislative Session did not produce as many tax law changes as some policymakers had anticipated, lawmakers still enacted several significant measures affecting sales and use taxes, tax incentives, administrative enforcement practices, property tax procedures, and economic development. The session also included revisions to Nebraska’s Foreign Adversarial Company law and several new taxes and tax rate increases. Together, these measures reflect Nebraska’s continuing efforts to modernize revenue collection, refine economic development incentives, improve property tax transparency, and address emerging policy concerns. The following summarizes the most significant changes and their implications for Nebraska taxpayers and tax professionals. LB 803: FIRST-TIME HOMEBUYER SAVINGS ACCOUNTS AND PROPERTY TAX PROCEDURES Beginning in 2027, Nebraska will allow first-time homebuyers to establish tax-advantaged savings accounts to help them purchase or construct a primary residence in Nebraska. Qualified expenses include down payments, closing costs, appraisal and inspection fees, mortgage origination fees, and other financing costs associated with acquiring or building a home. Annual contributions are limited to $5,000 for individuals and $10,000 for joint filers, with lifetime contribution limits of $25,000 and $50,000, respectively. Contributions, along with interest and investment earnings, are deductible for Nebraska income tax purposes, although tax benefits may be recaptured if funds are not ultimately used for qualified expenses. LB 803 also revised Nebraska’s property tax notice and hearing procedures. County assessors must continue mailing notices of changed valuations by June 1 whenever assessed values differ from the prior year. In addition, counties, cities, and school districts levying property taxes within a county must now participate in joint public hearings between July 1 and July 15. Representatives from each taxing authority, including at least one voting member from each governing body and the county assessor, are required to attend and discuss preliminary budget information. These changes are intended to improve transparency and public understanding of local budgeting and property tax decisions. LB 901: NEBRASKA’S COMPREHENSIVE TAX PACKAGE LB 901 was the Legislature’s primary tax bill and included broad changes to tax exemptions, Department of Revenue administration, economic development incentives, and tax collection procedures. Sales and Use Tax Changes The legislation repealed several existing sales and use tax exemptions, including exemptions involving certain community-based energy development projects, mineral oil used as a grain dust suppressant, research biochips, certain nonprofit transfers, game birds, and certain data center property used outside Nebraska. It also eliminated a personal property tax exemption for equipment temporarily brought into Nebraska for assembly before being shipped elsewhere. In addition, beginning with applications filed on or after July 1, 2026, waste treatment and disposal businesses will no longer qualify for incentives under the ImagiNE Nebraska Act. Department of Revenue Administration LB 901 significantly expanded the Department of Revenue’s administrative authority by authorizing new assessment, 13 nescpa.org
collection, protest, and application fees. Beginning July 1, 2026, the Department may impose collection and assessment fees generally equal to the greater of $25 or 10% of the tax liability. New filing fees also apply to protests of tax assessments, requests to waive interest or penalties, and tax sale certificate clearance applications. Beginning in 2027, these fees will be adjusted periodically for inflation. The legislation also strengthens the Department’s collection authority by allowing additional costs to be added to delinquent tax liabilities and authorizing the Tax Commissioner to register certain delinquent tax claims as judgments in Lancaster County District Court. Together, these provisions increase the financial consequences for taxpayers who fail to resolve outstanding tax liabilities. LB 901 also authorizes the Department of Revenue and the Department of Health and Human Services to share otherwise confidential information when necessary to administer their respective programs. LB 1165: GROW THE GOOD LIFE ACT LB 1165 created the Grow the Good Life Act, a targeted economic development program intended to encourage major Nebraska employers to retain headquarters operations and workforce following mergers or business combinations with large out-of-state companies. To qualify, employers generally must have maintained headquarters in Nebraska for at least 10 years, employed more than 3,000 Nebraska workers before the transaction, retain at least 90% of their Nebraska workforce, and otherwise qualify under the ImagiNE Nebraska Act. Applications may be submitted to the Department of Economic Development from Jan. 1, 2027, through May 31, 2029. Approved employers may earn wage retention credits equal to 5% of qualifying compensation paid to retained Nebraska employees earning at least the statewide average wage. Credits are subject to annual and statewide caps and may offset either Nebraska income tax or withholding tax liabilities. The program also authorizes workforce retention and attraction grants of up to $300,000 for economic development organizations assisting qualifying employers. CHANGES TO THE IMAGINE NEBRASKA ACT LB 1165 also made several significant revisions to the ImagiNE Nebraska Act. One of the most notable changes allows businesses with ImagiNE agreements to use earned tax credits to pay up to 50% of employees’ dependent childcare expenses. Unlike several other provisions, this benefit is immediately available to all businesses operating under existing ImagiNE agreements, regardless of application date. The legislation increased wage credit percentages for several qualifying projects, including increasing rural manufacturing credits from 6% to 7% and urban manufacturing credits from 4% to 5%. Quality Jobs projects may qualify for credits ranging from 6% to 10%, depending on average wage levels. Investment credits for qualifying manufacturing projects also increased from 4% to 5% for investments under $10 million and from 7% to 8% once qualified investment exceeds $10 million. Businesses qualifying under the Grow the Good Life Act that create at least 500 Nebraska positions paying at least $100,000 annually may receive additional 1% wage and investment credits for eligible new or relocated employees. LB 1165 also modified the Nebraska Advantage Act by extending the attainment period for certain Tier 6 projects while imposing a new application fee. LB 1096: FOREIGN ADVERSARIAL COMPANY REVISIONS LB 1096 amended Nebraska’s Foreign Adversarial Company (FAC) law, originally enacted in 2025. The law continues to prohibit qualifying foreign adversarial companies from receiving benefits under numerous Nebraska incentive programs, including the Nebraska Advantage Act, ImagiNE Nebraska Act, Rural Development Act, Urban Redevelopment Act, Nebraska Advantage Research and Development Act, and Nebraska Relocation Incentive Act. The legislation narrows the FAC definition by removing parent-company status as an automatic basis for disqualification. As a result, a parent company is no longer automatically ineligible because one of its subsidiaries qualifies as a Foreign Adversarial Company. However, incentive benefits must still be apportioned to ensure foreign adversarial affiliates do not receive prohibited tax benefits. LB 1096 also clarifies that direct or indirect ownership, operation, or control by a foreign adversarial government may result in FAC status. Despite these revisions, significant concerns remain. The law continues to create uncertainty because even relatively small ownership interests by foreign adversarial entities may affect eligibility for Nebraska incentives. Questions also remain regarding the treatment of previously executed incentive agreements, an issue that many businesses believe creates uncertainty for Nebraska’s business climate. NEW TAXES AND TAX RATE INCREASES The Legislature also enacted several new taxes and tax rate increases. Beginning Oct. 1, 2026, LB 815 subjects dyed diesel fuel to a motor fuel tax of one-quarter cent per gallon. LB 838 imposes a 25% excise tax on certain remittance transfers to residents of China, Russia, Iran, and North Korea. Beginning Jan. 1, 2027, LB 901 imposes a 10% excise tax on retail sales of kratom products. The tax applies in addition to existing sales and other applicable taxes. LB 1067 temporarily increases Nebraska’s documentary stamp tax from $2.32 to $3.32 through Jan. 1, 2032. Additional revenue generated by the increase will support the Rural Workforce Housing Investment Fund and the Middle-Income Workforce Housing Development Fund. 14 Nebraska CPA
LB 1114 also revises Nebraska’s Tax Increment Financing statutes by expanding several definitions under the Community Development Act, including modifications affecting blighted and extremely blighted areas and redevelopment projects. LOOKING AHEAD Although the 2026 legislative session did not fundamentally reshape Nebraska’s tax system, it produced several meaningful changes affecting taxpayers, businesses, and tax practitioners. The legislation expands certain economic development incentives, modifies property tax procedures, strengthens the Department of Revenue’s enforcement authority, creates new taxes, and continues Nebraska’s evolving approach to business incentives and foreign ownership restrictions. As state leaders continue to evaluate Nebraska’s tax structure and budget priorities, additional tax legislation is likely to emerge during the 2027 legislative session. CPAs advising Nebraska individuals and businesses should remain attentive to further developments as lawmakers continue refining the state’s tax and incentive laws. Nick Niemann and Matt Ottemann are partners with McGrath North Law Firm. As state and local tax and incentives attorneys, they collaborate with CPAs to help clients and companies evaluate, defend against, and resolve tax matters and obtain various business expansion incentives. See NebraskaStateTax.com and NebraskaIncentives.com for more information or to obtain a copy of their publications, The Anatomy of Resolving State Tax Matters and the Nebraska Business Expansion Decision Guide. You may also contact Niemann and Ottemann at (402) 341-3070 or nniemann@mcgrathnorth.com or mottemann@mcgrathnorth.com. This publication should not be considered as legal, tax, business or financial advice. Only our clients may rely on any legal advice we provide. 15 nescpa.org
C COUNSELOR’S CORNER KNOWING WHEN — AND HOW — TO SAY GOODBYE Disengaging from a Client Under Nebraska Law BY NICK BJORNSON AND KRISTIN KRUEGER, ATTORNEYS, KOLEY JESSEN CPAs are wired to help. When deadlines loom and clients falter, the instinct is to step in, answer one more question, push a return across the finish line, or provide a “quick look” after the engagement has supposedly ended. But professional loyalty has limits, and under Nebraska law, failing to recognize when a client relationship has run its course can quietly extend legal exposure long after a firm believes the engagement has ended. Disengaging from a client is not just about ending the work. It is about ending the duty, and that requires clarity, judgment, and documentation. As the Journal of Accountancy1 observed, CPAs often rationalize continuing troubled relationships. A client may be a longtime acquaintance, a referral source, or a respected figure in the community. Others are “good people” going through a difficult phase, late payments, poor records, or repeated pressure to take aggressive positions. Walking away can feel personal, even disloyal. Yet the same article emphasizes a hard truth learned repeatedly: Problem clients rarely improve, and delay increases risk. Firms that avoid timely disengagement often do so at the expense of staff morale, practice focus, and liability control. 16 Nebraska CPA
Nebraska law treats accounting malpractice as professional negligence. The Nebraska Supreme Court summarized the elements clearly in Frank v. Lockwood.2 A plaintiff must prove an engagement, breach of a professional duty, causation, and damages. While Frank focused on negligent tax advice, it underscores a foundational issue, which is that a professional duty depends on professional employment. If the engagement exists, so does the duty. The challenge arises when neither party clearly marks the engagement’s end. That line is examined most closely in Colwell v. Mullen,3 where the Nebraska Supreme Court addressed whether a continuing professional relationship extends liability. The Court rejected a broad “always-on” theory and held that tolling of the statute of limitations may only occur when the professional continues providing services for the same or related subject matter after the alleged negligence. Continuity of a general client relationship alone is not enough. For CPAs, this creates both protection and responsibility. Nebraska law will not presume that an accountant owes a continuing duty simply because a client subjectively believes the relationship continues. But when the end of a specific engagement is ambiguous, or when post‑engagement services continue, courts may find that the duty never truly ended. The risks of ambiguity are illustrated by Levy v. Martin,4 an out-of-state case frequently cited in CPA risk-management guidance. There, an accountant prepared tax returns over multiple years but never formally disengaged. When earlier errors later triggered tax liability, the accountant argued that the client’s claims were untimely. The court disagreed. Because the accountant never clearly ended the engagement, the client reasonably believed the CPA remained responsible for tax matters. The professional duty, and malpractice exposure, continued far longer than expected. One lesson is key: Silence is not disengagement. The Journal of Accountancy identifies common indicators that a client relationship has shifted from challenging to dangerous. These include chronic nonpayment, unreasonable pressure to take aggressive tax positions, repeated disputes over fees or scope, lack of management integrity, failure to follow advice, or mistreatment of firm staff. Importantly, the article recommends annual client assessments, ideally soon after the busy season, when interactions are fresh and red flags are most visible. Walking away early is far less risky than disengaging in the shadow of an imminent filing deadline. Many practical disengagement recommendations come from CAMICO (the accounting and auditing professionals group). CAMICO writes professional liability coverage for thousands of firms and maintains a loss‑prevention staff that reviews malpractice claims nationwide. Its guidance reflects not theory, but real claims experience. In its 2025 article, “The Dos and Don’ts of Disengaging,”5 CAMICO emphasizes that client disengagement should be treated as the “continuance” half of the client acceptance and continuance process, a step firms too often neglect. Disengagement is not about being harsh; it is about being clear. Engagement letters define the beginning of professional duty. That same letter — or a separate disengagement letter — may also define its end. An engagement letter may define when the engagement is concluded — for instance, when a certain filing is complete. In that scenario, if the client wants to continue on with the relationship, a new engagement letter or addendum may be prepared. When the end of an engagement is not spelled out on the front-end, a disengagement letter can define the end. When a firm disengages from a client relationship or engagement, firms should do so in a way that reminds clients of existing deadlines in writing, encourages the retention of a new accountant, and cooperates with the transition to a new accountant. Nebraska law does not require CPAs to serve indefinitely. But when the end of an engagement is left to implication, courts will look to conduct, and conduct often speaks louder than intent. Knowing when to say goodbye is a matter of judgment. Knowing how to say it, clearly and decisively, is essential professional risk management. Nick Bjornson and Kristin Krueger are attorneys at Koley Jessen. Nick works closely with businesses and taxpayers on complex tax matters and disputes involving taxing authorities. Kristin serves in the firm’s litigation practice and as Koley Jessen’s general counsel, advising on ethics, professional responsibility and risk management matters. They can be reached at nicholas.bjornson@koleyjessen.com and kristin.krueger@koleyjessen.com. Knowing when to say goodbye is a matter of judgment. Knowing how to say it, clearly and decisively, is essential professional risk management. 1 Amy Waldron, Clients: The End Is Near, J. of Acct. (Mar. 1, 2013), https://www.journalofaccountancy.com/issues/2013/mar/20126599/. 2 Frank v. Lockwood, 275 Neb. 735, 749 N.W.2d 443 (2008). 3 Colwell v. Mullen, 301 Neb. 408, 918 N.W.2d 858 (2018). 4 Levy v. Martin, 463 Mich. 478, 620 N.W.2d 292 (2001). 5 Duncan B. Will, The Dos and Don’ts of Disengaging, CAMICO (Apr. 18, 2025), https://www.camico.com/blog/dos-donts-of-disengaging/. 17 nescpa.org
AAsset sales typically dominate the small business acquisition space due to the key benefits they provide to buyers. First, buyers take a higher basis in the assets purchased, which is beneficial to the buyer due to their ability to depreciate certain assets and lower taxable income. Additionally, in asset sales, buyers can pick and choose what assets to purchase. This provides a liability shield for the buyer as the buyer only takes on the identified assets and does not assume the liabilities of the seller, unless it chooses to. One often overlooked process in an asset acquisition is the purchase price allocation. Purchase price allocation is the process of assigning the consideration paid by the buyer of a business to the assets sold in the transaction. In certain business acquisitions, Section 1060 of the Internal Revenue Code requires both buyers and sellers to report a purchase price allocation on Form 8594 and attach it to their income tax returns for the year in which the acquisition occurred. Most tax advisors agree that the allocations submitted by the buyer and seller should match, as inconsistent allocations can increase the risk of an IRS challenge or audit and impose its own allocation. To ensure the buyer and seller submit matching purchase price allocations, many purchase agreements contain language requiring agreement on the purchase price allocation. The Internal Revenue Code and associated regulations outline the rules for making a purchase price allocation, known as the residual method. Under the residual method, the purchase price is allocated among seven classes of assets in a specific sequence, starting with Class I assets and ending with Class VII assets: Class I includes cash and general deposit accounts. Class II includes actively traded personal property, CDs, and foreign currency. Class III includes accounts receivables. Class IV includes inventory. Class V includes real estate and other fixed assets. Class VI includes all IRC Section 197 intangibles, such as non-compete covenants, except goodwill and going concern value. Class VII includes goodwill and going concern value. Under the residual method, the purchase price is first allocated to Class I assets, then if any purchase price is remaining, to Class II assets and so on, with any residual amount allocated to Class VII assets. If an asset could qualify for multiple asset classes, it should be allocated to the lower numbered class. To be compliant with these allocation rules, buyers and sellers must allocate PURCHASE PRICE ALLOCATION BY HANNAH FISCHER FREY, PARTNER, AND DANE HANSEN, SUMMER ASSOCIATE, BAIRD HOLM LLP 18 Nebraska CPA
the purchase price to assets based on the “fair value” of the assets. Purchase price allocations to Classes V, VI and VII are usually the most contested and negotiated. Purchase price allocation negotiations are often a zero-sum game in that allocations that benefit the buyer are typically detrimental to the seller and vice versa. The following sections discuss buyer and seller considerations regarding purchase price allocation negotiations. BUYER CONSIDERATIONS The primary objective for buyers is to allocate as much of the purchase price as possible to assets that can be deducted quickly against future income by allocating to assets that are depreciable or amortizable over short periods, leading to accelerated tax deductions that improve cash flow in the near term. Depending on the specific asset, buyers may be able to depreciate the purchase price allocated to fixed assets over five- or seven-year periods. Goodwill and other Section 197 intangibles, on the other hand, are amortizable over a longer period of 15 years. Thus, one of the main goals of a buy side negotiation is to reduce the amount of the purchase price allocated to Section 197 intangibles in asset Class VI and the Class VII assets of goodwill and going concern value. Buyers should also ensure that allocations to goodwill are reasonable and defendable to reduce the risk of future goodwill impairment. Additionally, buyers typically want inventory to be allocated its full fair value because purchased inventory can quickly be converted into cost of goods sold when sold, which reduces taxable income. SELLER CONSIDERATIONS The primary concern for sellers is how the allocation impacts their immediate tax liability arising from the sale of assets. Because certain assets receive tax treatment as ordinary income and other assets receive tax treatment as capital gains, the purchase price allocation directly impacts the effective tax rate of the seller for the transaction. Greater seller tax liability reduces the value sellers receive for the sale of their business while reduced tax liability increases the value sellers receive for the sale of their business. Simply, a seller’s goal is to maximize allocations to asset classes taxed at capital gain rates and minimize allocations to asset classes taxed as ordinary income. In sell side negotiations, one of the main goals is to shift allocation away from depreciable assets and assets taxed at ordinary income rates upon a sale, and towards goodwill and going concern value, which is taxed at preferential capital gain rates. Sellers should also engage in purchase price allocation discussions early in the deal process. Some buyers may suggest addressing purchase price allocation post-closing, but this is not a beneficial approach for sellers because the sellers may have nearly no leverage by that point in the deal process. CONCLUSION Whether on the buy side or sell side, effective handling of purchase price allocation can mitigate risks and optimize tax impacts for the parties. Because the allocation directly influences the tax basis of assets for buyers and determines the character of income for sellers, it can have a material impact on both immediate and long-term tax liabilities. For these reasons, parties should address purchase price allocation early in the deal process to prevent future disputes that could stunt the deal process. The purchase agreement should include language describing any agreed upon allocation methods and an agreement to submit consistent allocations on Form 8594. Inconsistent allocation filings can draw the attention of the IRS and lead to increased scrutiny and potential reallocation. To mitigate the risk of IRS challenges, both parties should maintain robust documentation, outlining any third-party assessments, and explanations for how allocations were determined. Finally, collaboration with qualified professionals, such as tax advisors, attorneys, appraisers, and other valuation experts, is essential to ensure compliance with the Internal Revenue Code and reduce the risks for both parties to the deal. An informed and well-executed purchase price allocation strategy is not just a compliance requirement but can be a key component of maximizing the economic value of the deal. Hannah Fischer Frey is a partner at Baird Holm LLP, focusing on corporate transactions, federal and state tax planning issues, and tax-exempt matters. Fischer Frey has addressed complex partnership and corporate tax issues, including business reorganizations, private equity fund structuring, business succession planning, and tax planning in mergers and acquisitions. She has been closely involved in numerous federal and state tax examinations and audits. Dane Hansen is a summer associate for the firm. For more information, call (402) 344-0500 or email hfrey@bairdholm.com. 19 nescpa.org
WHY ACCOUNTING PRACTICES ARE HIGHLY FINANCEABLE Accounting and tax practices are one of the most financeable acquisition targets in today’s market. They offer high recurring revenue, strong client retention, predictable cash flow, and seasonality. These characteristics give lenders confidence and make it possible for qualified buyers to finance the acquisition of an accounting practice using SBA loans or conventional bank financing. What this means for you as a buyer: If you are prepared and structured correctly, financing is very achievable. Most failed transactions are not due to lack of capital, but to misaligned expectations about how deals actually work. HOW ACCOUNTING PRACTICE ACQUISITIONS ARE STRUCTURED TODAY Many buyers begin the process believing they can buy a CPA firm with little or no money down, relying heavily on seller financing. In today’s market, that is not how most successful transactions are completed. Modern deal structures are typically built around three components: bank or SBA financing (primary source of capital), limited seller financing (if used at all), and buyer equity (your down payment). This shift reflects a simple principle: The buyer, who takes control of the business on day one, is expected to bear the majority of the risk. BANK FINANCING: THE PRIMARY WAY TO BUY AN ACCOUNTING PRACTICE Most buyers finance the acquisition of a CPA or accounting practice using SBA 7(a) loans or conventional bank financing. Typical structure: 70% to 90% bank financing, 10-year amortization terms, and payments aligned with the practice’s cash flow. Lenders are comfortable with accounting firms, but they are underwriting both the practice (recurring revenue, staff, retention) and the buyer (experience, financial strength, liquidity). What this means for you: Preparation matters. Buyers who are organized, responsive, and financially credible move faster, qualify more easily, and are more competitive when pursuing quality practices. SELLER FINANCING: LIMITED AND SITUATIONAL Seller financing still plays a role in some accounting practice acquisitions, but it is no longer the foundation of most deals. When it is used, it typically represents 10% to 20% of the purchase price, has three-to-five-year repayment terms, and serves as a bridge, not the primary capital source. In competitive transactions, especially for high-quality firms, seller financing may not be included at all. What this means for you: Buyers should not rely on the seller to finance the deal. The strongest buyers come prepared with bank financing and view seller participation as a bonus, not a requirement. YOUR DOWN PAYMENT: WHAT BUYERS SHOULD EXPECT Most buyers should expect to contribute approximately 10% to 15% of the purchase price. This is often one of the most common questions: “How much money do I need to buy an accounting practice?” The answer depends on the deal, but this range reflects current market norms. Your down payment demonstrates commitment, establishes credibility with lenders and sellers, and ensures you have meaningful “skin in the game.” FINANCING THE ACQUISITION OF A TAX AND/OR ACCOUNTING PRACTICE A Practical Market Guide BY ACCOUNTING PRACTICE SALES What this means for you: Buyers who are undercapitalized often struggle to get deals approved or accepted. A well-prepared buyer with sufficient liquidity is far more competitive. UNDERSTANDING RISK: WHY IT FOLLOWS THE BUYER When you acquire an accounting practice, you take control of client relationships, staff, operations, pricing, and service delivery. Because of that, you also assume the majority of the transition risk. Structures that attempt to combine low down payment, heavy seller financing, and strong performance guarantees are rarely successful in today’s environment. They create misalignment and shift too much risk back to the seller. What this means for you: If you want to be taken seriously by sellers and lenders, your structure should reflect that you are prepared to take ownership of both the opportunity and the risk. CONCLUSION Financing is not just about completing the purchase; it is about setting the foundation for a successful transition. Well-structured transactions align risk with control, support stable post-closing cash flow, reinforce buyer accountability, and increase the likelihood of long-term success. Buyers who understand how to finance the acquisition of an accounting practice in today’s market are more credible, more competitive, and far more likely to close successfully. Ultimately, today’s buyer will one day become a seller. Understanding these structures now will shape better outcomes in the future. Contact Accounting Practice Sales today for a free and confidential consultation. To learn more, call or email Trent Holmes at Accounting Practice Sales at (800) 397-0249 or trent@aps.net. 20 Nebraska CPA
Delivering Results - One Practice At a time WHY APS? ~$2 billion in Deals Closed! Our best-in-class brokers will help you achieve YOUR goal! Scan Here 2+ Decades as leader in practice sales strongest lender network most recognized name in industry largest buyer pool available national exposure local expertise unmatched results! Trent Holmes Trent@APS.net 800-397-0249 www.APS.net
NBY DONNY SHIMAMOTO, CPA, CITP, CGMA, FOUNDER & INSPIRATION ARCHITECT, CENTER FOR ACCOUNTING TRANSFORMATION Not long ago, “transformation” felt like a competitive advantage. Today, for many accounting professionals, everything feels like it is in constant motion — new technologies, new expectations, new business models, new talent dynamics. Layer in ongoing regulatory changes and evolving client demands, and it’s no surprise that what once felt energizing now feels exhausting. This is what we’re hearing more and more in conversations across the profession. It’s not that accountants don’t want to transform — it’s that they’re tired, and that distinction matters. Because when transformation fatigue sets in, the risk isn’t just slowed progress. It’s stalled initiatives, disengaged teams, and missed opportunities to evolve in ways that actually strengthen a firm or finance department. The good news? This is a leadership challenge we can solve. THE REAL PROBLEM ISN’T RESISTANCE, IT’S OVERLOAD There’s a long-standing narrative that accountants resist change. But what we’re seeing through research and conversations tied to initiatives like Advisory360 and broader digital transformation studies tells a different story. Professionals aren’t pushing back on change itself — they’re reacting to the volume and velocity of change. Too many initiatives. Too many tools. Too many shifting priorities. And not enough clarity around what actually matters. When everything is labeled “strategic,” nothing feels actionable. This creates a cycle we see across firms: Leadership introduces multiple transformation initiatives simultaneously; Teams attempt to adopt new tools, processes, and expectations; Capacity gets stretched thin; Adoption slows or fails; and, Leadership introduces more change to compensate. Before long, transformation efforts stall — not because the ideas were wrong, but because they were introduced without the space to succeed. WHY TRANSFORMATION EFFORTS STALL If we take a step back, most stalled transformation efforts share a few common patterns: 1. Change Without Prioritization: Multiple improvements are often pursued at once — technology upgrades, advisory expansion, process redesign — without clearly sequencing them. The result is fragmented progress instead of meaningful momentum. 2. Adoption Without Support: Buying new technology is easy. Changing behavior is hard. Without training, reinforcement, and time to adapt, even the best tools go underutilized. TRANSFORMATION TRENDS TRANSFORMATION WITHOUT CHANGE FATIGUE How Intentional Progress Creates Sustainable Momentum 22 Nebraska CPA
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