As I share my parting thoughts as the Chair of the AICPA Tax Executive Committee, I reflect on the whirlwind of the past two years. We anticipated a rough one, but there were certainly additional curveballs along the way.
When I assumed the role as Chair in May 2019, the Tax Executive Committee was focused on completing the review of final Treasury guidance from the Tax Cuts and Jobs Act (TCJA). We didn’t expect major legislation anytime soon since significant tax law changes aren’t usually passed in presidential election years.
We dealt with pesky (although important) miscellaneous issues, some international and some domestic, regarding the TCJA. The IRS released instructions to reduce qualified business income (QBI) by charitable contributions. Where did that come from? The AICPA pushed back stating charitable contributions weren’t business expenses.
Then, the world pivoted to the COVID-19 pandemic. My daughter, a doctor at the Centers for Disease Control and Prevention (CDC), urged us to cancel our international trip to attend my cousin’s wedding. We knew then that the coronavirus outbreak was serious.
Community and business shutdowns were soon ordered, sending CPAs to work remotely, creating a new host of challenges including offsite data security, socially distanced client interactions and virtual staff collaboration and problem-solving. But we persevered.
Congress added to the workload by passing the Families First Coronavirus Response Act with new mandates and concepts in refundable credits. Congress also added the Coronavirus Aid, Relief and Economic Security (CARES) Act along with the Paycheck Protection Program (PPP), requiring CPAs to divert focus from income tax return preparation to assist clients with applying for forgivable loans. We also eased into a new employee retention credit.
We advocated for delaying the 2019 tax filing deadline and provided COVID-19 tax resources. After some stumbles (and more AICPA advocacy), the IRS and the Treasury Department were on-board for a three-month tax filing and payment postponement. It was helpful, but compounded system errors pushed the IRS further behind.
Meanwhile, the IRS issued guidance to deny the deductibility of expenses from PPP forgiven loans, necessitating more advocacy to overturn the decision. We succeeded.
While CPAs focused on assisting clients in these new matters, mail piled up in semi-trailers at IRS service center parking lots. Although taxpayers paid their tax liabilities, the computers didn’t know the taxes were paid. Automated notices were received by many taxpayers, alarming clients further and adding yet more workload and stress. The IRS struggled to maintain consistent operations. The AICPA requested and obtained penalty relief. Even though Oct. 15, 2020 eventually arrived, we received no breather from other work postponed.
Then, the 2021 tax season became another roller coaster (or Tower of Terror) ride. We had an inkling of what to expect after the Consolidated Appropriations Act, 2021, was enacted on Dec. 27, 2020. But the American Rescue Plan Act implemented additional retroactive provisions that threw some curveballs our way.
Over-worked and overwhelmed, CPAs had few options other than to ask for a postponement of the April 15 due date. The AICPA Tax Policy and Advocacy team advocated on behalf of tax practitioners and asked for an extension of the April 15 filing deadline. Although we got this moved to May 17, we labored over the inconsistent application of the extension when it came to the first quarter estimates for 2021 that were still due on April 15. But, again, we persevered.
My firm defaults to partners retiring at age 62, but I asked if I could stay on so that I could assume the prestigious honor of Chair of the AICPA Tax Executive Committee. I appreciated the opportunity. I can’t imagine sitting on the sidelines through the unprecedented filing season (two times over).
The end of this month brings my service as Chair of the AICPA Tax Executive Committee to a close. I’ll assume the Immediate Past-Chair position. Jan Lewis, CPA, a partner with Haddox Reid Eubank Betts PLLC in Jackson, Mississippi, takes the reins for the next two years. She has been a volunteer for the AICPA for over 13 years, serving on Council, chairing the Tax Practice and Procedures Committee and serving on the Tax Executive Committee, in addition to volunteering for other groups and committees.
The AICPA Tax Division with its advocacy and practice support made a difference. Our volunteers made a difference for the profession, for our members and for good tax policy despite a pandemic swirling around us. And, we will continue adapting and thriving as we move forward.
On behalf of the AICPA Tax Division, I thank all of you for your membership and support.
Chris Hesse is the Chair of the AICPA Tax Executive Committee, which has the authority to speak on behalf of the AICPA in tax matters. He is a principal with the National Tax Office of CLA (CliftonLarsonAllen LLP).