ISSUE 3, 2024 OFFICIAL PUBLICATION OF THE NEBRASKA SOCIETY OF CPAS NO SLOWING DOWN TRANSFORMATION OF THE PROFESSION, WORKPLACE & TECHNOLOGY CONTINUES PAGE 8
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BOARD OF DIRECTORS KELLY J. MARTINSON CHAIRMAN (402) 827-2054 Lutz Omaha BRIAN M. KLINTWORTH CHAIRMAN-ELECT (402) 423-4343 HBE LLP Lincoln HEATHER E. BARR DIRECTOR (402) 729-4129 Endicott Clay Products Co. Fairbury LAURIE ANN J. BUHLKE DIRECTOR (308) 382-5720 Contryman Associates PC Grand Island LORRAINE A. EGGER IMMEDIATE PAST CHAIRMAN (402) 965-0328 CyncHealth La Vista MEGAN C. HOLT DIRECTOR (402) 972-4578 Mutual of Omaha Mortgage Omaha JUSTIN M. HOPE DIRECTOR (402) 691-5538 Eide Bailly LLP Elkhorn SHARI A. MUNRO AICPA ELECTED REPRESENTATIVE (402) 963-4316 Frankel LLC Omaha DR. THOMAS J. PURCELL, III DIRECTOR (402) 490-4207 Omaha DANA J. WEBER WEST NEBRASKA CHAPTER PRESIDENT (308) 635-3008 Dana J. Weber, CPA Scottsbluff JONI SUNDQUIST NESCPA PRESIDENT & EXECUTIVE DIRECTOR joni@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 OFFICERS BOARD MEMBERS NESCPA STAFF JODI M. ECKHOUT SECRETARY (308) 995-6151 Woods & Durham Chartered CPAs Holdrege GRANT H. BUCKLEY TREASURER (402) 444-1872 Buckley & Sitzman LLP Lincoln 4 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
26 22 C O N T E N T S 12 ©2024 Nebraska Society of Certified Public Accountants | The newsLINK Group LLC. All rights reserved. The Nebraska CPA is published six times each year by The newsLINK Group LLC for the Nebraska Society of Certified Public Accountants 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 (855) 747-4003. ISSUE 3, 2024 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 No Slowing Down Transformation of the Profession, Workplace & Technology Continues By Joni Sundquist, Nebraska Society of CPAs 10 Here to There: Successful Transitions By Accounting Practice Sales COUNSELOR’S CORNER 12 Tax Tip: Nonqualified Deferred Compensation Red Flags By Peter Langdon, Koley Jessen 14 2024 NESCPA Course Calendar 16 Corporate Philanthropy A Guide for Certified Public Accountants By Sunni Kamp, Omaha Community Foundation 17 In Memoriam 18 The Corporate Transparency Act Why Reporting Companies Shouldn’t Wait to File in the Wake of CTA Challenges By Kaitlyn E. Mattox‚ Katie L. Kalkowski & Hannah Fischer Frey, Baird Holm LLP 22 Why Aren’t There Enough CPAs in the Pipeline— and What Can We Do About It? By Lexy Kessler‚ CPA‚ CGMA, National Pipeline Advisory Group 24 Accounting Employer Checklist 26 AI Can Be a Weapon for Hackers What Businesses Should Do By Matthew P. Miller, Principal, Advisory, Cyber Security Services, KPMG 29 NASBA Task Force Considers New Path to Licensure By Natalie Rooney 32 Members in the News 33 Firms in the News 34 Welcome New Society Members 35 2024 NESCPA Advertiser Index
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NO SLOWING DOWN PRESIDENT’S MESSAGE TRANSFORMATION OF THE PROFESSION, WORKPLACE & TECHNOLOGY CONTINUES BY JONI SUNDQUIST, NEBRASKA SOCIETY OF CPAs “PIPELINE” HAS BECOME QUITE THE buzzword throughout the profession. The work done thus far through AICPA’s National Pipeline Advisory Group (NPAG) and NASBA’s Professional Licensure Task Force, as well as within state CPA societies and other related organizations, has been thoughtful and inclusive. These evolving efforts aim to tackle the talent shortage and attract more people to a rewarding career in accounting. Although they differ, both initiatives focus on sustaining and improving the profession while creating long-lasting solutions to benefit future generations of accountants. At this time of great change and transformation, I am excited to be a part of NASBA’s State Society Relations Committee, where I am able to learn and share with some of the best and brightest who represent the CPA profession. In this issue of the Nebraska CPA, you will find two articles starting on pages 22 and 29 that discuss the efforts of the AICPA and NASBA in greater detail. In addition, I encourage you to take a look at NPAG’s “Accounting Employer Checklist” on page 24. AICPA Spring Meeting of Council Many forces are shaping the profession and creating uncertainty today, but each of us has the power to make a difference. That was one of my key takeaways from the recent AICPA Spring Meeting of Council, held in Orlando, Fla., May 21‑23. A quote from futurist Dan Burrus, presented at the meeting, perfectly captures this concept: “Change always comes to us from the outside in, forcing us to react, manage crises, put out fires. In contrast, transformation comes from the inside out, created by you and your team.” Joining me at the AICPA Council meeting were Society Chairman and outgoing AICPA Designated Council Representative Kelly Martinson of Lutz, Society Chairman-Elect and incoming AICPA Designated Council Representative Brian Klintworth of HBE LLP, Society Past Chairman and AICPA Elected Council Representative Shari Munro of Frankel LLC, and Society Board member and AICPA At-Large Council Representative Kelly Mann of AuditMiner. Congratulations to both Klintworth and Mann on being newly elected members of the AICPA Council. “The AICPA Spring Council meeting was another great opportunity to connect with other CPAs on current issues impacting our profession, particularly the pipeline discussions that have been part of the last few Council meetings,” said Kelly Martinson. She found one of the most thought-provoking sessions to be on the subject of artificial intelligence. “We’ve all been exposed to it in some fashion; some more than others. I think a lot of us are thinking about how we might be able to use it for client work, gaining efficiencies with this tool,” she explained. During the meeting, we learned that spending on AI software is projected to grow to $297.9 billion by 2027, with a compound annual growth rate (CAGR) of 19.1%, according to Gartner. However, the technology research company estimates that more than 90% of employees are requesting GenAI training but less than 10% of employers are providing it at a satisfactory level. “I was intrigued by the discussions during this interactive session,” said Martinson, “and the many ways AI could enhance the operational aspects of a firm or organization. It feels like one of those areas where ‘the possibilities are endless.’” Brian Klintworth, Joni Sundquist, Kelly Mann, Shari Munro, and Kelly Martinson attended the AICPA Spring Meeting of Council in May. 8 Nebraska CPA
You can learn more about the Gen AI landscape and opportunities for the profession in CPA.com’s new Generative AI toolkit at www.cpa.com/sites/cpa/files/2023-11/ GenAI-Toolkit-CPAcom.pdf. In addition, Martinson enjoyed hearing the incoming chairman of the AICPA, Carla McCall, describe her journey in the profession. “Her energy is contagious and inspiring,” declared Martinson. McCall will be presenting on the “State of the Profession” during day one of the Nebraska Society of CPAs’ Fall Conference, scheduled for Oct. 29-30 at the Riverview Lodge at Mahoney State Park in Ashland. “It was also pretty cool to be in the room when Barry Melancon announced his retirement,” she said. “Barry’s updates have always been one of the most interesting portions of the Council meetings, and this was no exception.” Brian Klintworth found his first time attending the AICPA Spring Meeting of Council as a representative of Nebraska to be an interesting and educational experience. “Of particular note, work done by the National Pipeline Advisory Group on putting together a plan to help continue to develop a strong pipeline of accounting talent for years to come is exciting, and I look forward to being involved in work at the local level to help continue to strengthen the pool of future accountants serving Nebraska and beyond.” He added that “a lot of the conversation focused on trends that are continuing to change the direction of our profession, including increased consulting and advisory work, the role of technology and AI in our business, and continuing changes in how we serve our clients in the best way possible. I am always excited for ways that our profession can become better, and I think that we have a lot of great changes in the works!” Shari Munro remarked, “I am always invigorated after attending an AICPA Council meeting. Our profession is full of intelligent, talented, and committed CPAs. While we are currently faced with a shortage of people entering our profession, I believe this challenge will only improve our profession as we work together to solve our issues and enact real change. We must ensure we remain our client’s most trusted advisor and continue to fulfill our responsibilities to the financial and capital markets that rely on us,” she added. Munro expressed gratitude to the members of the National Pipeline Advisory Group for their diligent work in analyzing the pipeline problem and creating a strategy report to guide us through these challenging times. “I invite all CPAs to take the Pipeline Pledge at accountingpipeline.org/participate and make a commitment to the future of our profession and its members of tomorrow,” she said. You will find NPAG’s executive summary and draft strategy report at accountingpipeline.org/draft-report. Kelly Mann found the AICPA Spring Meeting of Council to be an insightful experience. “I learned so much more than I was expecting,” she said. “I was particularly impressed by the analysis conducted by the National Pipeline Advisory Group on the shortage of accounting talent and the potential solutions they proposed. Inspired by their efforts, I took the Pipeline Pledge and am committed to raising awareness of our profession’s value,” emphasized Mann. Suggested activities might include visiting a local middle school, participating in a high school career fair, hosting a networking event for accounting majors, or mentoring a CPA candidate through the licensure process or their first year in the workplace. “Additionally, the unveiling of the new PCPS Firm Business Model Transformation toolkits was a highlight,” noted Mann. “These resources are poised to be immensely beneficial to our members as we navigate the evolving landscape of our profession.” You’ll find all the Private Companies Practice Section (PCPS) toolkits at aicpa-cima.com/topic/firm-practice-management. Special Session on the Horizon Gov. Jim Pillen has announced that the Nebraska Legislature will be convening for a special session focused on providing property tax relief for Nebraskans. The Governor has told legislators to clear their schedules from July 26 to Aug. 15. During the special session, Nebraska’s state senators will consider broadening the tax base and changing the laws that govern the property tax process. Your Society will be keeping a close eye on the work of the Legislature as the session unfolds. For an excellent breakdown and estimated revenue of Nebraska’s 100-plus sales tax exemptions, visit the Nebraska Examiner at bit.ly/NE-Sales-Tax-Exemptions. Please feel free to reach out to me with your thoughts and issues of concern. Together, we will help shape and safeguard the profession while navigating the many challenges and opportunities ahead. Joni Sundquist is president and executive director of the Nebraska Society of CPAs. You may contact her at (402) 476-8482 or joni@nescpa.org. AICPA Chairman Carla McCall, Society Chairman Kelly Martinson, Society President Joni Sundquist, and AICPA CEO Barry Melancon at the AICPA Fall Meeting of Council. Melancon announced his retirement at the Council meeting in May. McCall will be presenting on day one of the Nebraska Society of CPAs’ Fall Conference, held Oct. 29-30 in Ashland. 9 nescpa.org
IN EVERY SUCCESSFUL SALE OF AN ACCOUNTING PRACTICE, a good transition is essential. And to have that, both the buyer and the seller must be involved. Almost all major failures in a transition come from either a buyer or a seller not doing the basic things. These are the things that will get you from here to there successfully: 1. Seller and buyer work together in notifying the clients. Selling a practice is not like selling a house where the seller may never see the buyer. In a practice sale, both parties must contribute after the closing or there will be disaster. 2. Seller speaks well of the buyer and encourages the clients to use the buyer. The seller does have power over the clients, at least initially, so must believe in the buyer or should not sell the firm to that buyer. 3. Seller and buyer communicate well and often with clients about the change. Lack of regular communication is a deal killer. Both buyer and seller should be honest with clients and communicate in various ways and often to assure clients of quality continued service. 4. Buyer is competent and experienced. The fact is that not all accountants have the experience or skills to own a business and do the back-breaking work to keep clients happy. Sellers need to do due diligence on the buyer. 5. Buyer responds well to clients and gets back to them promptly. Keeping clients in a sale involves the same thing it takes to keep clients happy anytime. Clients want to feel important and to have their solutions met in a fair and timely way. This is a stressful time for them, and they need some extra handholding. 6. Seller does not continue to do work with the clients, indicate he/she will in the future nor recommend they go to someone else. Just as there are bad buyers, there are bad sellers. It is unethical and irresponsible to continue to do work for clients when you have sold that work to the buyer, regardless of whether the seller is within the bounds of a formal non-compete agreement or not. 7. Buyer keeps as much the same as possible, at least for the first year or two. It is a huge temptation for buyers to want to do it “my way.” Rapid and/or large changes in staff, location, prices, culture, and so forth will drive off clients. Go slow with changes. 8. Seller and buyer make sure employees are on board with the change. Employees are often worried about the change, just like clients, and need assurances and encouragement. Both buyer and seller need to identify possible defections ahead of time and deal with them. 9. Seller and buyer communicate any known dissatisfaction and move quickly to find a solution. Clients and employees will grumble because no one likes change. The seller needs to support the buyer in helping keep clients in the flock. If you’re searching for assistance in valuation, negotiations, and finding the right buyer, Accounting Practice Sales is a global leader in marketing tax and accounting firms. Contact Trent Holmes at Accounting Practice Sales at (800) 397-0249 or trent@aps.net. HERE TO THERE: SUCCESSFUL TRANSITIONS BY ACCOUNTING PRACTICE SALES In every successful sale of an accounting practice, a good transition is essential. 10 Nebraska CPA
Delivering Results - One Practice At a time 800-397-0249 www.APS.net Trent Holmes Trent@APS.net Experiencing: • Stress? • Lack of Sleep? • IRS induced Nausea? Tax Season Cessation Program Ready To Sell Your Practice? WE CAN HELP YOU!
COUNSELOR’S CORNER TAX TIP: NONQUALIFIED DEFERRED COMPENSATION RED FLAGS BY PETER LANGDON, KOLEY JESSEN THE INTERNAL REVENUE CODE (THE Code) includes various provisions governing employee benefits and compensation arrangements. One such provision is Code Section 409A, which applies to nonqualified deferred compensation. Nonqualified deferred compensation is defined as “any [arrangement] that provides for the deferral of compensation. . . .”1 An arrangement provides for the deferral of compensation if a service provider (e.g., an employee) obtains a legally binding right to compensation in one taxable year that is, or may be, payable in a later taxable year.2 The application of Section 409A is intended to be sweeping in nature and, as a result, it has broad application. The hallmark of Section 409A is the rigidity of the application of its rules and the draconian penalties thereunder. Therefore, practitioners should be aware of the primary rules that come into play when an employer desires to modify compensation or bonus structures that are subject to Section 409A, such as the prohibition on the acceleration of payments, the prohibition on substitutions, and the subsequent deferral rules. Section 409A generally prohibits the acceleration of any payment that is to be paid pursuant to the terms of a nonqualified deferred compensation plan, whether or not such acceleration is contemplated under the terms of any such plan.3 In other words, once a plan or arrangement that is subject to Section 409A includes provisions for the timing of payments thereunder, the timing or structure of those payments generally cannot be accelerated. A common issue that arises under the anti-acceleration rules is a drafting error in which the plan or arrangement that is subject to Section 409A specifically includes that the sponsoring company may unilaterally accelerate payments. The inclusion of this provision would constitute a documentation error under Section 409A. If such a provision is acted upon, then it would also be considered an operational failure. Both of which would be subject to potential penalties and would need to be corrected pursuant to the correction procedures under Section 409A. As an example, assume a company sponsors an annual bonus plan for employees. At the conclusion of each calendar year, the bonus an employee may earn will be paid in three annual installments. However, the plan at issue also includes a provision that permits the company, in its discretion, to pay the total annual bonus earned in a lump sum. Such a provision would violate Section 409A. The same concept applies even if the plan or arrangement at issue does not contain acceleration language, but the employer pays out the total annual bonus in a lump sum in its discretion. Section 409A prohibits the acceleration of payments as a general matter. A related concept to the prohibition on the acceleration of payments is the anti-substitution rule. The anti-substitution rule provides that the payment of an amount as a substitute for the deferred compensation will be treated as a payment of the original deferred compensation.4 However, the regulations go on to clarify that a forfeiture or voluntary relinquishment of deferred compensation will not be treated as a payment of the original deferred compensation, provided, however, that there is no forfeiture or voluntary relinquishment if an amount is paid, or a legally binding right to a payment is created, that acts as a substitute for the forfeited or voluntarily relinquished amount. A frequent example of this issue arises when an employer and employee have a nonqualified deferred compensation arrangement in place that will pay an employee cash upon a specified date or upon the occurrence of an event (such as retirement, termination of employment, or upon achieving certain performance targets). After the occurrence of such triggering event, the employer wishes to substitute the existing deferred compensation arrangement and any payments thereunder for a different compensation arrangement or a grant of equity in lieu of paying such original deferred compensation. Effectuating such a transaction would violate the substitution rules under Section 409A. As a result, practitioners should be aware of this issue when an employer or an employee wishes to substitute certain compensatory payments that would constitute nonqualified deferred compensation in exchange for a different form of payment (such as equity or another compensatory payment that deviates from the original nonqualified deferred compensation plan). 12 Nebraska CPA
A final issue that frequently arises under arrangements that are subject to Section 409A is the subsequent deferral of nonqualified deferred compensation. The subsequent deferral rules apply to nonqualified deferred compensation in the event there are subsequent changes to the time and form of a payment of nonqualified deferred compensation. Although a subsequent deferral of nonqualified deferred compensation is not prohibited under Section 409A, the subsequent deferral rules provide that a subsequent change or delay in a payment or a change in the form of a payment is permissible, but only if certain conditions are satisfied.5 In order for a subsequent deferral of nonqualified deferred compensation to be valid, the following conditions must be satisfied: (i) the subsequent deferral election may not take effect until at least 12 months after the date on which the election is made; (ii) generally, the payment with respect to which such election is made must be deferred for a period of at least five years from the date such payment would otherwise have been paid; and (iii) generally, the subsequent deferral election must be made at least 12 months before the date the payment is scheduled to be paid.6 For example, assume an employer and an employee have a deferred compensation agreement in place to pay the employee a certain amount of deferred compensation each year over a period of 10 years upon such employee’s retirement. The employee’s targeted retirement date is Dec. 31, 2024. The annual installment payments will be made on each annual anniversary of the employee’s retirement with the first installment scheduled to be paid on Dec. 31, 2025. The employee desires to subsequently defer the payments so they commence at a later date. In order for the employee to validly make a subsequent deferral election, the election must be made on or before Dec. 31, 2024, and the deferred compensation payments cannot commence earlier than Dec. 31, 2030. As a practical matter, it is beneficial to discuss the subsequent deferral rules with clients at the outset of establishing a deferred compensation arrangement because the rigidity of the rules render subsequent deferrals impractical at times. Similar to the prior issues discussed, a violation of the subsequent deferral rules will result in a violation of Section 409A. In light of the foregoing, it should be noted that the penalties under Section 409A are substantial. To the extent a violation of Section 409A occurs, the amount of deferred compensation that is originally deferred is deemed to be included in the service provider’s (e.g., the employee’s) gross income. Additionally, such amount included in a service provider’s gross income is subject to a 20% excise tax (in addition to a specified interest rate penalty). So, the service provider (or the employee or contractor) is subject to liability in the event of a violation of Section 409A. Finally, additional reporting requirements are imposed in the event of violations. Although penalties are harsh under Section 409A, correction procedures are available under which taxpayers can avail themselves in the event documentation or operational errors do arise under Section 409A. Deferred compensation can be used as a great tool to attract, retain, and reward employees and contractors. Professional service providers should be aware of the benefits of deferred compensation as well as the red flags to appropriately advise clients. The rules and regulations contained within Section 409A that govern nonqualified deferred compensation are complex, but non-qualified deferred compensation is becoming an increasingly popular benefit to provide to a company’s workforce. The professionals at Koley Jessen are equipped to advise on the structure, implementation, and operation of deferred compensation arrangements to achieve the client’s goals. Peter Langdon is an attorney in Koley Jessen’s Employment and Benefits Department. With extensive experience advising clients on employee benefits, executive compensation, nonqualified deferred compensation, and general employment law matters, he is well equipped to navigate the complex landscape of employee benefits. For further inquiries, contact Langdon at peter.langdon@koleyjessen.com. ENDNOTES 1 I.R.C. § 409A(d)(1). 2 Treas. Reg. § 1.409A-1(b)(1). 3 Treas. Reg. § 1.409A-3(j)(1). 4 Treas. Reg. § 1.409A-3(f). 5 Treas. Reg. § 1.409A-2(b)(1). 6 Treas. Reg. § 1.409A-2(b)(1)(i)-(iii). Tax and accounting manager wanted immediately for Omaha CPA firm. Knowledge of tax, accounting, and auditing concepts required. Send resume to Berger, Elliott & Pritchard, CPAs, L.L.C., 1301 S. 75th Street, Suite 200 or email to info@bepcpa.com. BETTER TAX SEASON BETTER FIRM BETTER PLACE TO WORK TAX AND ACCOUNTING MANAGER 13 nescpa.org
2024 NESCPA COURSE CALENDAR DATE TYPE EVENT TITLE VENDOR LOCATION CPE/ ETHICS HOURS AUGUST 8 AA Yellow Book: Staying Compliant With Government Auditing Standards AICPA Online 8 14 TX 2024 Agriculture Tax & Accounting Conference (Co-Sponsor w/ISCPA) Nebraska Society of CPAs Online 8 15 AA/TX Critical Issues That CPAs in Industry Will Need to Face This Year Surgent Online 4 15 AA Accounting for Changes in Accounting Principles & Error Corrections Surgent Online 2 20 IT Business Continuity: Best Practices for Managing the Risks K2 Enterprises Online 8 20 AA Construction Industry GAAP Review & Contract WIP Reporting & Analytics (Co-Sponsor w/ISCPA) Nebraska Society of CPAs Online 4 21 IT Microsoft Access: Tables, Queries & Beyond K2 Enterprises Online 8 21 MA Create Reports That Matter The Knowledge Institute Online 8 21 TX Key Tax Issues Facing Business & Industry Van Der Aa Tax Ed Round the Bend, Ashland 8 22 IT QuickBooks for Accountants K2 Enterprises Online 8 22 TX Partnership & S Corporation Essentials: Reporting Basis & More Van Der Aa Tax Ed Round the Bend, Ashland 8 23 TX Year-End Tax Planning: Thinking Outside the Box Van Der Aa Tax Ed Round the Bend, Ashland 8 26 PD Women’s Leadership Series: Women’s Equality Day Virginia Society of CPAs Online 1 26 TX The Inflation Reduction Act’s Changes to Auto & Energy-Related Tax Credits Surgent Online 2 26 TX Update on the SECURE 2.0 Act Surgent Online 2 27 TX Real Estate Taxation: Critical Considerations Surgent Online 4 27 TX What Practitioners Need to Know About Estate Planning & Administering a Client’s Estate Surgent Online 3 27 AA AI & Data Analytics for Auditing: The Big Picture AHI Associates Online 2 27 MA Level V: Advanced Management & Leadership Essentials AHI Associates Online 2 28 Women in Accounting Summit Nebraska Society of CPAs Riverview Lodge, Mahoney State Park, Ashland 6 29 AA Accounting Data Analytics AHI Associates Online 2 SEPTEMBER 3-6 AA Level I: Basic Staff Training AHI Associates Online 24 11 AA Fraud Prevention The Knowledge Institute Online 8 11 ET AI Ethics: Balancing on the Tightrope Virginia Society of CPAs Online 2/2 12 AA Accounting & Auditing Update for Not-for-Profits AICPA Online 8 16-19 AA Level II: Semi-Senior Staff Training AHI Associates Online 24 17 TX How to Settle a Client’s Estate (Co-Sponsor w/ISCPA) Surgent Online 8 19 AA Avoiding Deficiencies in Peer Reviews: Focus on Engagement Quality Surgent Online 4 20 AA Audit Documentation Requirements Surgent Online 2 20 AA Guide to the AICPA Quality Management Standards Surgent Online 2 24 IT Next Generation Excel Reporting K2 Enterprises Online 8 24 AA AI & Data Analytics for Auditing: The Big Picture AHI Associates Online 2 24 MA Level V: Advanced Management & Leadership Essentials AHI Associates Online 2 14 Nebraska CPA
DATE TYPE EVENT TITLE VENDOR LOCATION CPE/ ETHICS HOURS 25 IT Data Analytics for Accountants & Auditors K2 Enterprises Online 4 25 IT Implementing Internal Controls in QuickBooks Environments K2 Enterprises Online 4 25 AA Best Practices in Not-for-Profit Accounting & Reporting Surgent Online 4 25 AA The Most Critical Challenges in Not-for-Profit Accounting Today Surgent Online 4 26 IT Improving Productivity With Microsoft 365/Office 365 Cloud Applications K2 Enterprises Online 4 26 IT Introduction to Excel Macros K2 Enterprises Online 4 26 TX Maximizing Your Social Security Benefits Surgent Online 4 26 AA Accounting Data Analytics AHI Associates Online 2 27 TX What Tax Practitioners Need to Know About Medicare Surgent Online 2 27 TX Social Security: Dispelling Common Myths With Essential Truths Surgent Online 2 OCTOBER 11 PD Presentation Skills for Success The Knowledge Institute Online 8 17 TX Federal Tax Update Surgent Online 4 17 TX S Corporations: Key Issues, Compliance, and Tax Strategies (Co-Sponsor w/ISCPA) AICPA Online 8 17 MA Level IV: Management & Leadership Essentials Training AHI Associates Online 8 17-18 AA Level I: Basic Staff Training AHI Associates Online 16 18 TX Social Security & Medicare: Planning for You & Your Clients (Co-Sponsor w/ISCPA) Surgent Online 8 21 AA Accounting & Auditing Update for Small Businesses AICPA Online 8 21 TX Advanced Taxation LLCs & Partnerships (Co-Sponsor w/ISCPA) AICPA Online 8 21-24 AA Level I: Basic Staff Training AHI Associates Online 24 23 AA/TX Construction Industry Financial Reporting, Benchmarking & Basic Taxation (Co-Sponsor w/ISCPA) Nebraska Society of CPAs Online 4 24 TX The Top Five Tax Issues in Dealing With LLCs & Partnerships Surgent Online 4 28 AA 2024 Accounting & Auditing Update for the Real World (Co-Sponsor w/ISCPA) Real World Seminars Online 8 28 AA Level III: Beginning in Charge Training AHI Associates Online 24 29-30 Fall Conference & Annual Meeting Nebraska Society of CPAs Riverview Lodge, Mahoney State Park, Ashland 16/2 29 IT Microsoft Teams K2 Enterprises Online 4 29 IT Securing Your Data: Practical Tools for Protecting Information K2 Enterprises Online 4 29 AA Interpreting the New Revenue Recognition Standard: What All CPAs Need to Know AICPA Online 4 29 AA The Bottom Line on the New Lease Accounting Requirements AICPA Online 4 29 AA 2024 Preparation, Compilation & Review Update for the Local Firm (Co-Sponsor w/ISCPA) Real World Seminars Online 8 29 AA AI & Data Analytics for Auditing: The Big Picture AHI Associates Online 2 29 MA Level V: Advanced Management & Leadership Essentials AHI Associates Online 2 30 IT Small Business Accounting Shootout K2 Enterprises Online 4 30 IT Technology Update K2 Enterprises Online 4 30 TX Multistate Income Tax Issues Surgent Online 4 30 TX Individual Income Tax Update Surgent Online 4 31 IT Testing & Auditing Excel Workbooks K2 Enterprises Online 4 31 IT Top PDF Features You Should Know K2 Enterprises Online 4 31 AA Accounting Data Analytics AHI Associates Online 2 15 nescpa.org
CORPORATE PHILANTHROPY A GUIDE FOR CERTIFIED PUBLIC ACCOUNTANTS BY SUNNI KAMP, OMAHA COMMUNITY FOUNDATION AS AN ACCOUNTANT, YOU KNOW CHARITABLE GIVING CAN BE an important part of an individual’s or family’s financial and estate plans. But it is also important to remember that charitable giving often plays a role in their professional lives as well. Many of your clients are company executives who want their company and employees to lean into charitable giving. That’s why it’s wise for you to be aware of the best practices in corporate giving. A Donor Advised Fund (DAF) is an easy tool for companies of any size to use for their charitable giving. The fund helps corporate leaders organize the company’s giving in a convenient, 501(c)(3)-qualified structure, avoiding the time and expense required to establish and maintain a separate charitable entity. The company can contribute to the corporate DAF each year, then organize donations to a single or wide range of nonprofits through a single source of funds. More and more companies are beginning to partner with DAF sponsors, like a community foundation, to offer DAFs to their employees as an added benefit of employment. The employees can fund their DAFs using a wide range of assets, including stock received as a company stock gift. Companies can also donate to an employee’s DAF as part of a corporate giving match program. Another popular corporate giving tool is a company-supported giving circle. Giving circles foster a sense of community and camaraderie among colleagues by pooling resources for charitable causes. They empower employees to collectively make a meaningful impact on issues they care about, promoting a sense of ownership and engagement within the organization. Additionally, participating in giving circles enhances corporate social responsibility efforts, demonstrating a commitment to philanthropy and social causes. Sunni Kamp is the director of corporate giving at the Omaha Community Foundation. To learn how you can partner with the Omaha Community Foundation to support your clients and their giving goals, contact her at (402) 933-4188 or sunni@omahafoundations.org. Your clients rely on your guidance to make important financial decisions. When it comes to charitable giving, we can partner with you to simplify their giving and amplify their impact. Your Partner in Philanthropy » omahafoundation.org/advisors 16 Nebraska CPA
Mark A. Anderson 1959-2024 Nebraska Certificate #4264 Society Certificate #3665 33-Year Member Neil J. Archibald 1980-2024 Nebraska Certificate #8165 Society Certificate #5708 13-Year Member John S. Elliott 1947-2024 Nebraska Certificate #2707 Society Certificate #2136 43-Year Member Eldean L. “Dean” Erickson 1931-2024 Nebraska Certificate #622 Society Certificate #420 62-Year Member Dale E. Gruntorad 1939-2024 Nebraska Certificate #0851 Society Certificate #0593 53-Year Member NESCPA Chairman, 1978-1979 Kelvin M. Kemp 1980-2024 Nebraska Certificate #7913 Society Certificate #5515 15-Year Member Stanley A. “Stan” Martin 1937-2024 Illinois Certificate #10780 Society Certificate #2630 18-Year Member Milburn M. “Mil” Sartin, Jr. 1940-2024 Nebraska Certificate #1043 Society Certificate #0736 49-Year Member The Society has made a donation to The Foundation of the Nebraska Society of Certified Public Accountants in memory of these individuals. InM emoriam 17 nescpa.org
BY KAITLYN E. MATTOX‚ KATIE L. KALKOWSKI & HANNAH FISCHER FREY, BAIRD HOLM LLP THE CORPORATE TRANSPARENCY ACT (CTA) WENT INTO EFFECT Jan. 1, 20241 and is designed to combat tax fraud, money laundering, and other illicit activities that may otherwise be hidden by anonymous company ownership.2 The legislation requires most entities formed or doing business in the United States, called “reporting companies” for purposes of the CTA, to report Beneficial Ownership Information (BOI) of the company and disclose information about who created or registered the business to the U.S. Department of Treasury Financial Crimes Enforcement Network (FinCEN).3 FinCEN has estimated that the CTA will apply to 32.6 million reporting companies, with 5 million additional reporting companies being formed annually.4 Thus, although the CTA provides 23 exemptions to the reporting requirements, the majority of businesses, especially small businesses, will be required to disclose information regarding the company and people who have substantial control of the company.5 The constitutionality of the CTA is being challenged in several jurisdictions. However, these challenges are unlikely to result in widespread, substantive modifications to the BOI reporting requirements prior to 2024 year-end filing deadlines. Current Year-End Deadlines The CTA mandates that all reporting companies formed or registered to do business prior to Jan. 1, 2024, must file their initial BOI report by Jan. 1, 2025. Newly formed entities currently have 90 days from receiving notice of formation to file their BOI reports. That deadline is set to change to 30 days beginning Jan. 1, 2025. If any changes in beneficial ownership occur (e.g., the appointment or removal of a senior officer, changes to a beneficial owner’s name or address, etc.), reporting companies must update their BOI report to reflect those changes within 30 days. Congressional Action to Extend or Repeal In December 2023, the U.S. House of Representatives passed a bill to extend the deadline for reporting BOI.6 The bill would extend the reporting deadline for entities existing prior to Jan. 1, 2024, to Jan. 1, 2026, giving them an additional year to comply with the CTA’s filing requirements. It would also maintain the 90-day compliance period for newly formed entities indefinitely and alter the 30-day period for reporting changes to BOI to 90 days. The bill has been in the U.S. Senate’s Committee on Banking, Housing, and Urban Affairs since Dec. 13, 2023.7 It is still unclear whether this bill will be passed and extend the filing deadlines, but given the lack of congressional action since December, it seems unlikely. Reporting companies should be prepared to comply with the deadlines as they currently stand until instructed otherwise. Additionally, two bills have been introduced in the House of Representatives and Senate to repeal the CTA entirely.8 However, Congress has not acted on either of these bills since they were introduced on April 29, 2024, and May 9, 2024, respectively. Challenges to the CTA A. National Small Business Association v. Yellen In November 2022, a lawsuit challenging the constitutionality of the CTA was filed in the District Court of Northern Alabama by the National Small Business Association (NSBA) against Secretary of the Treasury Janet Yellen.9 The complaint alleged that in enacting the CTA, Congress exceeded the constitutional limits of its power, therefore infringing on state sovereignty. In addition, the complaint alleged that the CTA violates rights of due process, privacy, freedom from government intrusion, and free speech. In March of this year, the District Court of Northern Alabama ruled that the CTA, as currently written, exceeds Congress’ power to regulate interstate commerce. This is because the legislation is enforced on all non-exempt entities created by filing official documents with a secretary of state or similar office, regardless of those entities’ impact on interstate commerce.10 Likewise, the court found no justification or THE CORPORATE TRANSPARENCY ACT WHY REPORTING COMPANIES SHOULDN’T WAIT TO FILE IN THE WAKE OF CTA CHALLENGES 18 Nebraska CPA
source of power for enacting the CTA in Congress’ powers to oversee foreign affairs or efficiently administer taxation. As a result, the court granted the Plaintiff’s relief and deemed it unconstitutional to enforce the CTA’s requirements against those Plaintiffs. The court did not rule on the constitutionality of the CTA in regard to whether it violates other rights granted in the First, Fourth, or Fifth Amendments. In issuing its opinion, the District of Northern Alabama suggested that the CTA could be revised to be brought within the powers of Congress by limiting its application to entities whose activities “affect interstate or foreign commerce.” Thus, assuming that the CTA does not violate any other constitutional right outlined in the First, Fourth, or Fifth Amendments, the court indicated that legislation could be revised and re-enacted while maintaining coverage of most, if not all, of the reporting companies currently covered by the CTA. As a result of the District of Northern Alabama’s ruling, FinCEN is enjoined from enforcing the CTA on the members of NSBA at this time. Because the granted relief did not contemplate a broader impact on reporting companies, the CTA remains enforceable against all other entities required to report under the CTA. In fact, FinCEN issued a statement saying that it will continue enforcing the CTA as to all other reporting entities not subject to the Alabama court’s injunction.11 The decision is currently on appeal to the Eleventh Circuit. B. Other Current Lawsuits Lawsuits in Ohio, Maine, Michigan, Texas, and Massachusetts followed, alleging similar constitutional violations of the First, Fourth, Fifth, Ninth, and Tenth Amendments. Similar to the Alabama case, the Ohio, Maine, and Michigan lawsuits would apply only to the Plaintiffs of those cases. Thus, regardless of the outcomes of those individual cases, other reporting companies’ CTA obligations would be unaffected. The Texas and Massachusetts Plaintiffs, however, facially challenge the CTA, arguing that the legislation is not only unconstitutional as applied to the Plaintiffs, but as to all reporting companies.12 Thus, they seek to enjoin FinCEN from enforcing the CTA entirely. If the CTA is found to be unconstitutional in those cases, FinCEN would be enjoined from enforcing the CTA on any reporting company in the United States, effectively repealing the legislation. With each complaint that is filed, it becomes increasingly likely that the Supreme Court will have to provide a definitive answer as to Tax Practice For Sale • Within 30 miles of Lincoln, NE • 300 Individual Returns • 15 Entity Returns • $180,000 in Revenue Please call 402-613-2254 for more information. CONTINUED ON PAGE 20 19 nescpa.org
the constitutionality of the CTA. However, given that these facial challenges were just filed in late May 2024, it is unlikely that the district courts, let alone the Supreme Court, will issue decisions in time to negate the Jan. 1, 2025, filing deadlines. C. Requests for Relief by Trade Associations and Similar Organizations Over 120 trade associations have requested that Congress grant temporary relief from the CTA by suspending its enforcement and extending filing deadlines.13 The American Institute of CPAs (AICPA) similarly requested that Congress suspend enforcement and extend compliance deadlines.14 In their request, the AICPA indicates that many reporting companies mistakenly believe they are no longer required to file their BOI report due to the ruling of the District of Northern Alabama and that this may result in businesses incurring significant monetary and criminal penalties.15 Implications for Reporting Companies & Their Advisors Although there is some uncertainty surrounding the CTA, it is likely that the legislation is here to stay. Thirty countries already have similar beneficial ownership registries, including the UK, Germany, France, Italy, Japan, and Canada.16 More than 149 other countries have committed to implementing similar reporting requirements. Thus, even if courts in cases with the potential to broadly impact reporting companies, such as Texas and Massachusetts, find the CTA to be a product of legislative overreach, it is likely Congress would amend the legislation to bring it within its powers. Extensions of reporting deadlines for compliance are possible pending the Senate passing the bill contemplating such an extension, but such extensions are unlikely. Considering the significant penalties businesses could face for failing to meet compliance deadlines, such as fines up to $10,000 and two years’ imprisonment,17 advisors should ensure their clients are aware of the reporting requirements and reporting companies should be prepared to file their BOIs by their respective deadlines as the legislation currently mandates. Kaitlyn E. Mattox is a summer associate at Baird Holm LLP. Katie L. Kalkowski is an associate at the firm. Kalkowski focuses her practice on corporate transactions and general corporate matters. She counsels businesses of all sizes on a variety of matters, including entity formation, corporate governance, strategic transactions, and regulatory compliance. Hannah Fischer Frey is a partner at the firm, 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. For more information, call (402) 344-0500 or email Kalkowski at kkalkowski@bairdholm.com or Fischer Frey at hfrey@bairdholm.com. ENDNOTES 1 Beneficial Ownership Information, Financial Crimes Enforcement Network, (2024), https://www.fincen.gov/boi. 2 See 31 U.S.C §5336(e)(2)(B). 3 31 U.S.C. §5336(b)(2). 4 Beneficial Ownership Information Reporting Requirements, 87 Fed. Reg. 59498, 59584 (Sept. 30, 2022). 5 Beneficial Ownership Information, G.1, Financial Crimes Enforcement Network: frequently Asked Questions, (2024), Question C.2, https://www.fincen.gov/ boi-faqs#C_2. 6 Protect Small Business and Prevent Illicit Financial Activity Act, H.R. 5119 118th Cong. (2024). 7 Actions - H.R. 5119 - 118th Congress (2023-2024): Protect Small Business and Prevent Illicit Financial Activity Act, H.R. 5119, 118th Cong. (2023), https://www.congress.gov/bill/118th-congress/house-bill/5119/ all-actions?overview=closed#tabs. 8 Repealing Big Brother Overreach Act, H.R. 8147 118th Cong. (2024); Repealing Big Brother Overreach Act, S. 4297 118th Cong. (2024). 9 Complaint at 6, Nat’l Small Bus. United v. Yellen No. 5:22-CV-1448-LCB (N.D. Ala. Mar. 1, 2024). 10 Nat’l Small Bus. United v. Yellen, No. 5:22-CV-1448-LCB, 2024 WL 899372, at *18-19 (N.D. Ala. March 1, 2024). 11 Notice Regarding National Small Business United v. Yellen, NO. 5:22-cv-01448 (N.D. Ala.), Financial Crimes Enforcement Network (March 4, 2024), https://www.fincen.gov/news/news-releases/updated-notice-regarding-natio nal-small-business-united-v-yellen-no-522-cv-01448. 12 Complaint at 2, Black Economic Council of Massachusetts v. Yellen, No. 1:24-cv-11411 (D. Mass May 29, 2024) https://lawyersforcivilrights.org/ wp-content/uploads/2024/05/BECMA-Complaint-Filed-May-29-2024.pdf; Lawsuit Challenges the Corporate Transparency Act, NFIB (May 28,2024) Lawsuit Challenges the Corporate Transparency Act. 13 CTA Coalition Letter, (March 19, 2024) https://s-corp.org/wp-content/ uploads/2024/03/CTA-Coalition-Letter-March-2024.pdf. 14 AICPA letter, (April 3, 2024) https://www.cpa.com/sites/cpa/ files/2024-04/2024_FinCEN_BOI_Delay_Enforcement_AICPA_State_CPA_ Societies.pdf; AICPA letter, “Beneficial Ownership Information Reporting Deadline Extension for Reporting Companies Created or Registered in 2024 (Docket Number FINCEN-2023-0014; OMB Control Number 1506-0076),” (October 30, 2023) https://us.aicpa.org/content/dam/aicpa/advocacy/tax/ downloadabledocuments/2023/boi-comments-on-proposed-90-day-extens ion-final.pdf. 15 AICPA letter, (April 3, 2024) https://www.cpa.com/sites/cpa/ files/2024-04/2024_FinCEN_BOI_Delay_Enforcement_AICPA_State_CPA_ Societies.pdf. 16 Beneficial Ownership Information Reporting Requirements, 87 Fed. Reg. 59498, 59499 (Sept. 30, 2022); Snapshot of Beneficial Ownership registries in G7 Countries, Athennian (March 2024) https://www.athennian.com/post/snap shot-of-beneficial-ownership-registries-in-g7-countries. 17 Beneficial Ownership Information, Financial Crimes Enforcement Network: frequently Asked Questions, (2024), Question K.2, https://www.fincen.gov/ boi-faqs#K_2. CONTINUED FROM PAGE 19 20 Nebraska CPA
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