Busy season roundup — The results are in

By April Walker, CPA, CGMA, Lead Manager — Association of International Certified Professional Accountants

April 26, 2019

tax season word cloud

If you’re still licking your battle wounds from this year’s tax season, know that you aren’t alone. In the AICPA Tax Section’s annual post-tax season survey, 90% of respondents indicated this filing season was more challenging than previous years. Several seasoned practitioners even noted that this tax season was the most challenging of their career. While looking backward can be paralyzing at times, examining the challenges that you faced will hopefully lead to lessons learned and ways to improve going forward.

We asked practitioners what were their top pain points this tax season. Here’s what they said:

  • The number one challenge for practitioners was unsurprisingly tax reform confusion — trying to stay abreast of the new rules and guidance as well as helping clients understand the impacts of the changes. Several commented about how frustrating it was to still be receiving guidance as tax season was happening. Also, a good bit of the time, typically used to prepare for the season, was spent getting up to speed on the new law.    
  • Although a distant second, 47% of responders said tax return software challenges was a hot-button issue. Waiting for updates, fixes and the inability to rely on software diagnostics made for a tough season.
  • Workload compression, which has been the top issue in our previous surveys, is still a major concern. Many expressed continued frustration with the delay in receiving Forms 1099, compounded with the other issues noted above, made for a tax season that felt extremely compressed.
  • While Form 1040 changes didn’t make the top of list for concerns, several responders commented that the changes added extra time explaining tax returns to clients and didn’t seem to be an improvement in the form itself.
  • On a positive note, it seems issues related to identity theft have decreased as only 2% of responders considered this a major concern this tax season. Despite the reduction in concerns in this survey, we still know identity theft remains a serious issue, though additional security measures seem to be helping.

Top pain points

Tax reform confusion

77%

Tax reform software challenges

47%

Workload compression

45%

Changes to the Form 1040

30%

Uncertainty about future legislation

29%

Managing client expectations

26%

Additional due diligence requirements

17%

Staffing

15%

Issues related to the government shutdown

7%

Other

4%

IRS service issues

3%

Cybersecurity/identity theft

2%

Diving deeper, practitioners commented that their biggest challenge was effectively applying new tax provisions (most notably Sec. 199A) and ensuring that tax software was providing the correct results.

A majority expressed that they encountered clients with a variety of comprehension of their tax situation. Some clients were prepared while others were surprised by their tax situation this year. Explaining these changes to clients was also an issue as noted by 32% of respondents.

Not surprisingly, practitioners saw an increase in extensions filed this year compared to the previous year.

When asked if practitioners expected an increase in client engagements/revenues in comparison to the prior year as a result of tax law changes, there wasn’t much difference in growth from last year’s results.

Neutral. I had some growth and some attrition and ended up similar to prior year.

45%

Yes, the growth was primarily from gaining new clients.

25%

Yes, the growth was primarily in new services for existing clients.

20%

No, I had a decrease in client services/revenues.

5%

Some other notable challenges that practitioners faced included dealing with state conformity issues and concerns about errors made on returns and how to adequately address them. Additionally, practitioners struggled with the changes in the withholding tables that didn’t adequately cover clients’ liability, with a majority expressing that their clients would benefit from the underpayment penalty relief waiver.

With all the hurdles from this tax season, there’s no doubt you’ve earned a well-deserved vacation. When you return, there will be lots more work to do with extended returns and lingering questions from tax law changes. The AICPA Tax Section is here to help. Please join us on May 9 at 1pm ET for our annual post-tax season webcast, Tax Practice Quarterly: Hot Topics in Tax Practice Management (a free CPE event for Tax Section members). We’ll provide more lessons learned from this past tax season and tangible strategies to help you improve your firm's practice management.