AICPA Advocates on Identity Theft and Tax Simplification
While you were busy with tax season, the AICPA was feverishly advocating for you on a variety of topics. Two topics in particular, tax-related identity theft and tax simplification, were on our agenda.
In a recent letter sent in response to Chairman Baucus’ Tax Reform draft proposal, the AICPA provided comments advocating for the much needed reform of information statements (W-2s, 1099s, etc.), and generally supporting the accelerated filing of these statements, along with the request to immediately transfer information from the Social Security Administration (SSA) to the Internal Revenue Service (IRS). We believe this will provide the IRS with the first line of defense to reduce tax return identity theft by allowing the agency to properly match the information shown on information statements with amounts reported on tax returns.
The AICPA also supports measures to close the tax gap by making the tax code simpler. For example, the AICPA supports the proposal to expand information reported on Form 1098, Mortgage Interest Statement. We think that additional information, such as the unpaid balance and address of the property, will assist taxpayers in complying with the mortgage interest limitations.
The AICPA also supports the simplification of higher education tax incentives which make it easier for students to determine which educational incentive they are eligible for, as well as simplify reporting requirements for educational institutions. Both simplification measures will decrease the opportunity for dishonest tax return preparers to take advantage of confused taxpayers regarding credits or deductions they can legally take. For example, if the taxpayer understands the higher education tax incentives or the mortgage interest limitations, a deceitful preparer won’t be able to trick the taxpayer into receiving thousands more in refunds by unrightfully claiming the lifetime learning credit or increased mortgage interest deduction.
The AICPA is always advocating on members’ behalf with federal lawmakers and regulators to ensure that the CPA voice is heard. While actively working to address issues like tax-related identity theft and tax simplification, we are also continually advocating for the CPA credential as a whole and highlighting the qualifications, expertise, and integrity that a CPA offers his or her clients. We believe CPAs are the premier provider of tax services and to maintain that reputation, we will continue to advocate for you and your clients!
CPAs Are More Valuable Than Ever!
By Susan Allen, CPA, CITP, Project Manager – Taxation, AICPA
You, the CPA, are passionate about providing high-quality services in the most upstanding and ethical manner. You worked hard to obtain your college degrees and pass the rigorous CPA exam. Annually, you take educational courses to maintain your professional expertise and status. And, while you are in the trenches fighting for your clients every single day, you rely on the AICPA to be your voice in front of legislative bodies, public interest groups and other professional organizations, so that effective tax administration is achieved.
Research conducted by the AICPA over the past 20 years proves that CPAs are among the most respected and trusted financial professionals. However, not all tax preparers are CPAs who share in the CPA mission and ethical compass. With the disparity in qualifications, standards, and ethical requirements in the tax profession, it is imperative that you emphasize your CPA credential. Tax season is over, but clients rely on you to be a year-round trusted advisor. Below are a few tips to highlight your value:
- Educate your clients on what being a CPA means. Let clients know about your education, licensing, and professional standards. You might be surprised that many clients do not fully understand the difference between an Enrolled Agent (EA) and a CPA, for example. An EA, in most cases, must pass a three-part exam and a basic compliance check. A CPA, however, has far more extensive requirements, including: (1) meeting the 150-hour requirement (usually this means having a master’s degree in accounting or taxation), (2) passing a four-part examination that embodies a full scope of accounting, auditing, economics, tax, and law concepts, and (3) working under a CPA (most states require one to two years of work under a CPA).
- Show that you care. Stay in touch with your clients year-round and don’t rely on tax deadlines to initiate client contact. Emphasize your willingness to help on all tax-related matters, such as identity theft. Identity theft is a very scary experience for clients. Be sensitive to your client’s concerns and address the problem from start to finish. For additional guidance and resources on identity theft, visit our Identity Theft Information and Tools page.
- Share your client success stories. CPAs have the ability to help clients deal with increasing tax complexity which is an extremely valuable skill. As you talk to clients, incorporate how you’ve helped others. This is especially important if you find yourself helping a new client pick up the pieces after a return was prepared by a less-than-qualified preparer. Clients find credibility by hearing about your prior work.
- Encourage your clients to share their stories of how you have helped them. The more clients/consumers that boost the CPA name and credential, the better! Plus, testimonials on your firm website are great to showcase your value. Consider encouraging your clients to participate in the AICPA’s CPA Powered communications/social media campaign. This campaign is designed to promote the CPA profession and its contributions to peoples’ lives, not only for tax return preparation, but with tax and financial planning as well.
As the CPA Horizons 2025 Report showcases, the CPA profession has a bright future but will need to respond quickly and competitively to the shifting ground on political, economic, social, technological, and regulatory fronts. So, be open to change, be flexible, but know that you are an elite member in a highly reputable profession.Firm Spotlight - Kentner Sellers LLP