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2024-25 ASCPA BOARD OF DIRECTORS
Sarah Propper, Chair
Paul Perry, Chair Elect
Cathy Dover
Jennifer Forrester
Bruce Fryer
Matthew Hilburn
Kendra James
Brian McLeod
Jeremy Mosteller
Amanda Paul
Joseph Wynn
Dennis Sherrin, AICPA Council Rep
Jamey Carroll, AICPA Council Rep
James White, Jr., Past Chair
CHIEF EXECUTIVE OFFICER
Jeannine Birmingham, CPA, CAE, CGMA
Bruce P. Ely
Sherry Chesser, CPA
James E. Long, Jr.
John P. Maloney, CFA
Michael Reese, J.D., LL.M
Greetings ASCPA Members and Happy 2025.
I am happy to share with you an article written by my colleague Selene Norman, AICPA. Selene and I were discussing the value of government relations, specifically grassroots lobbying, and the following unfolded. My gratitude to Selene for sharing her wisdom. I hope that this message will inspire you to get involved with Alabama legislative efforts.
As lawmakers begin paving a path for the 2025 legislative session, it is imperative that state society members understand the value of maintaining a strong relationship with their state lawmakers and the importance of grassroots advocacy. The Alabama Society of CPAs in conjunction with AICPA would like to create a multi-step plan for how members can become better advocates for their state societies by using grassroots advocacy tools and by building stronger relationships with their state legislators.
Key Functions of Grassroots Advocacy
Grassroots advocacy is an effective tool to use for campaign management, lobbying efforts, and overall membership participation. In recent years, digital and in-person grassroots advocacy efforts have played a significant role in shaping public opinion and influencing policy. Although there are multiple
ways to carry out grassroots advocacy efforts, an effective tool that has gained popularity is the use of digital grassroots advocacy. Digital grassroots advocacy enables organizations to launch successful social media and email campaigns to reach more people and it allows for widespread engagement on key issues by mobilizing members quickly and effectively.
Although digital and in-person advocacy efforts are important, it is vital that an organization establishes the meaning behind their campaign. Some key functions of grassroots advocacy should focus on timing, lobbying, and creating an effective message behind your campaign. Within grassroots advocacy, timing is everything, and it is imperative that you use time to your advantage. Because the 2025 legislative session, both state and federal, will be picking up momentum in the upcoming months, it is important that you start your advocacy efforts at the beginning and duration of the legislative session, to ensure that your issue is visible to state lawmakers. In tandem with timing, opportunities like Lobby Day can also be used to raise awareness about a bill that you are presenting, and it can be used to strengthen relationships with your state legislator. To run a successful Lobby Day, it is important to start planning at least six months in advance, have members reach out to legislative staff to plan their own meetings, and prepare a packet of materials for each legislator. Finally, the message behind your campaign must be effective and well thought out. If you are presenting a bill state legislators are going to look for an effective message that is well defined and can benefit their constituents.
Importance of Relationship Building with State Lawmakers
Building relationships with state lawmakers is crucial for any type of advocacy work because it provides opportunities to work closely with legislators, get bills introduced, and ultimately get bills signed into law. Opportunities like Lobby Day and other in-person meetings will help you to build meaningful long-lasting relationships
with state legislators and their staff members. Although it is important to engage with state lawmakers while the legislative session is taking place, it is also important to remember that a considerable amount of advocacy work can be done when the legislature is not in session. One great opportunity for engagement between sessions can be found working with an interim study committee or a working group that meets during and after the legislative session. Another great opportunity to maintain a strong relationship with your state lawmaker is through a call to action. These calls to action are a great way to engage directly with state lawmakers on important issues.
For more information regarding grassroots advocacy and tools for the 2025 legislative session, please contact Selene Norman (selene.norman@aicpa-cima.com)
In conclusion, I would like to announce that ASCPA has begun a new lobbyist relationship with member Rob Pearson, CPA. Rob will represent the Society at the Alabama Statehouse, House and Senate committee meetings, and various governmental affairs meetings. Rob will also work with me to plan an ASCPA Lobby Day, tentatively set for April 24th. To learn more about Rob and this new ASCPA role, see page 13.
The ASCPA Board and Staff wish you the very best as we begin a new year. If you have suggestions or questions, please feel free to connect with me at jbirmingham@alabama.cpa.
Happy New Year!
I hope everyone enjoyed the Holiday Season as much as I did and spent lots of time with family and friends. I always love the holidays, but this one was special for me. We have a senior in our house and his graduation date is looming. While I am excited for him to spread his wings, this momma is cherishing every moment I have with him under my roof!
This issue of connections is about tax and government relations. As trusted advisors to businesses, individuals, and organizations, CPAs play an essential role in navigating the complex landscape of tax laws and regulations. However, the intersection of tax policy and government relations is an area of increasing importance for the profession. With legislative changes, evolving tax regulations, and shifting political priorities, CPAs must remain informed and engaged to advocate for policies that foster growth, fairness, and compliance. Here at the society, we have some exciting initiatives related to government relations. One of our members, Rob Pearson, has been contracted to serve as the ASCPA liaison with the state legislature. Rob will also use that position to foster awareness with our members on how ASCPA is advocating for our members through legislation.
In fact, our executive leadership recently had dinner with Representative Kerry Underwood, who is also a CPA. We got to learn from him how the process works in our local state legislation and did a deep dive into his experience and knowledge - which was fascinating. He also joined us for our board meeting the next day, and was joined by Commissioner of Revenue Vernon Barnett with the Alabama Department of Revenue. Both Representative Underwood and Commissioner Barnett praised the CPA community for their hard work and involvement in the legislature. We got to hear from Representative Underwood how exemplary our state board is when it comes time for sunset hearings. (Way to go Boyd!)
But, truthfully, CPAs are more than just number crunchers. They are trusted advisors who help clients interpret and apply complex tax laws. Those tax laws are constantly evolving, shaped by both federal and state legislative bodies.
As policies continue to change, CPAs are uniquely positioned to offer expert perspectives on the impact of those change. They can also help shape the policies themselves.
CPAs often find themselves at a crossroads of government policy and taxpayer concerns. Legislative bodies often look to professionals in the field to provide insight on how proposed laws could impact business, individuals, and the overall economy.
I encourage all of you to get involved, whether at the local level in your communities or the state level. ASCPA will have some opportunities in the future with legislative committees that will work with our liaisons to strengthen government relations and help influence positive policy changes. This advocacy helps ensure the voice of the profession is heard, and that policies enacted are both practical and beneficial to our members and clients.
I hope everyone has a happy, healthy and prosperous year; I can’t wait to see what 2025 holds for us all!
2025 ASCPA Annual Meeting
Tuesday, June 17
The Club, Birmingham
Hear from a great line up of speakers this year at ASCPA’s 106th Annual Meeting. Attendees will hear from experts in the field on topics including top technology trends, a 2025 Legislative recap, cyber happenings and enforcement, and quality management standards. Attendees will also hear an ethics sessionqualifying them for 1.0 Ethics CPE!
Register by May 21 to take advantage of an early registration discount.
Table Sponsors are available now!
To secure a table for your organization contact Megan Hughes at mhughes@alabama.cpa.
Bruce Ely Bradley
Anoop Mehta, CPA AICPA, Past Chair
Sherry Chesser, CPA Landmark CPAs
Randy Johnston K2 Enterprises
Alfonzo Alexander Alexander Success Group
Our System of Quality Management
Sherry Chesser, CPA Member, Landmark CPAs
Ensuring accurate financial reporting to safeguard the public interest is a cornerstone of the public accounting industry. The profession has agreed that self-regulating policies and procedures are vital for ensuring high standards, reducing risks and fostering continuous improvement within the industry. The AICPA has introduced a new suite of quality management standards that guide firms to design, implement and operate a system of quality management that is risk based, tailored specifically for the operations of each firm, avoiding an ineffective or inefficient cookie-cutter approach. The new standards also introduce more robust leadership and governance requirements, as well as enhanced monitoring and remediation processes. These standards were written to be scalable for smaller firms and firms with less complex engagements, with the objective of ensuring that all firms are able to achieve a robust system of quality management, devoid of inefficiencies.
To achieve an appropriately tailored system, the valuable tool of risk assessment is a required component of the standards. As part of the risk assessment process, firms must identify and assess risks specific to their accounting and audit practices. Based on the identified risks, firms develop responses appropriate for their unique circumstances. These responses are tailored to the specific risks of each firm, rather than common risks faced by the industry, and there is no “one size fits all” approach. During risk assessment, firms may discover that they have responses with no related risks, risks with no responses, too many or too few responses to a risk.
The AICPA has embarked on an extensive campaign to encourage members of the professional community to collaborate and support one another through the implementation process. This initiative is designed to provide firms with educational tools and resources designed to help them navigate the new standards without feeling overwhelmed. The primary focus of this campaign has mainly been on the risk assessment process, which is not only required to be performed, but also to be documented. Firms are encouraged to brainstorm both internally and externally with their counterparts, including peer reviewers, to gain different perspectives on risks and responses.
Concerns regarding how peer reviewers will critique documentation of the risk assessment process have arisen. After the AICPA’s Auditing Standards Board approved the standards, the AICPA’s Peer Review Board began addressing the peer review standards, guidance and checklists that will be affected by the new quality management standards. Final conclusions have not yet been communicated; however, firms can be certain that they will not be in accordance with standards if they fail to perform and adequately document risk assessment. The judgment of a firm is indispensable and crucial to the risk assessment process; however, peer reviewers play an important role in ensuring that this judgment is appropriately and effectively applied. Peer reviewers will evaluate whether firms have considered relevant quality risks and developed quality responses, addressed objectives set out in each component of the standards and included specified responses required by the standards.
The monitoring and remediation component is expanded and enhanced to provide a focus on monitoring the entire system of quality management, allowing firms to assess the effectiveness of their quality monitoring systems and strive for continuous improvement. This component also provides a robust remediation framework for evaluating findings, determining the root causes of deficiencies and implementing corrective actions. The risk assessment component will provide limited value if appropriate monitoring and remediation do not occur to ensure the system of quality management is performing as intended.
All components of the quality management standards are intended to be integrated and interconnected. The
monitoring and remediation component applies to the entire system, while the risk assessment component identifies risks and designs responses for the other components in the system.
Implementation of the new quality management standards is a significant task that requires careful planning and effort. Preparation, risk assessment, system design, implementation and training could take up to twelve months or more. It is imperative that firms develop a timeline with implementation goals and complete them as scheduled to ensure that the standards are implemented by December 15, 2025.
Although implementation of the new standards is required, the overarching goal is to position the profession to uphold its commitment to clients and the public, while preserving the ability to self-govern in an efficient and effective manner.
Sherry Chesser is a partner in Landmark CPAs with offices in Arkansas and Arizona. Sherry served as a member of the Auditing Standards Board and participated in the drafting of the quality management standard. Currently, Sherry is a member of the AICPA Peer Review Board, and she is a member of the Partners in Peer Review Committee (ASCPA Peer Review Committee). Sherry also is the chair elect for the Partners in Peer Committee.
Sherry Chesser, CPA Member
Landmark CPAs
For more information, visit the AICPA resource page here: www.aicpa-cima.com/resources/landing/a-journey-to-quality-management
Some Unofficial Predictions for Spring 2025 Alabama Tax Legislation
By Bruce P. Ely and James E. Long, Jr.
Each year we are asked to predict the tax-related bills that died in the last session but will likely be re-introduced in one form or another, and the tax issues that we expect to see addressed for the first time, in the upcoming legislative session of the Alabama Legislature. Because of the November elections, Alabama’s 2025 Regular Session starts a bit later than normal— February 4, 2025. Here is our list as of December 21, 2024, which is no doubt a moving target. Oftentimes we will not see some of the more important tax bills filed until a few weeks (or less) before the session convenes:
House Bill 36 to amend the Simplified Sellers Use Tax Program (SSTP) to increase the rate from the current flat 8% to a combined rate much closer to the average rate charged by retailers within most municipalities in our state, e.g., 9.3%, and to allocate the incremental revenue differently than the current populationbased formula. That bill died last session but Rep. Chris England has announced he will try again in February at the request of several large municipalities..
We expect that a bill will be introduced to reduce the state sales tax on “food” from 3% to 2%, even though less-than-stellar Education Trust Fund (ETF) growth did not trigger the automatic reduction that many hoped for, and clarifying how much municipalities may reduce their respective tax rates.
We expect that a bill will be introduced to repeal the June 30, 2025 sunset date for the popular “overtime exemption,” and make it permanent or at least extend the current sunset date. However, beware of the budget hawks that may oppose such measure given the increased fiscal note over initial estimates.
House Bill 52 to extend sunset date for deductibility of contributions to ABLE accounts (Rep. Danny Garrett).
Senate Bill 22 triggering recapture or “claw-back” of Jobs Act incentives if a company previously awarded incentives or a “related company” violates child labor or human trafficking laws (Sen. Merika Coleman).
We expect that a bill will be introduced to allow municipalities that forfeited their authority to levy taxes and fees on residents and businesses in their police jurisdictions to re-acquire that authority by filing delinquent reports with the Examiners of Public Accounts and submission of annual reports (hopefully this time with fair notice to taxpayers).
We expect that a bill will be introduced to increase the income tax exemption for withdrawals from Section 401(k) plans and IRAs to $10,000 annually for “seniors.”
We expect that a bill will be introduced to create a Small Business Health Care Insurance Premium deduction for individuals, as advocated by several influential business trade groups..
House Bill 46 to amend the controversial Rural Physician Tax Credit statute to clarify the criteria and perhaps expand the credit to include dentists and other health care providers. This was called for by Chief Judge Jeff Patterson in a recent Alabama Tax Tribunal ruling that, as is often the case, denied the credit to what all parties agreed to be an otherwise deserving rural doctor (Rep. Ed Oliver).
SALT CORNER
Legislative and ALDOR reaction to 2025 Congressional efforts either to extend various provisions of the Tax Cuts and Jobs Act of 2017, that will otherwise sunset on December 31, 2025 or to allow the provisions to lapse or to be amended in some way, e.g., IRC Section 163(j).
Legislative and ALDOR reaction to President Trump’s tax proposals if enacted, e.g., to exempt tip income (whatever that means) from income tax.
Possibly extending the deadline to appeal either a preliminary or final assessment from 30 days to either 60 or 90 days, as recommended by the Council On State Taxation (COST) and the AICPA.
Look for our SALT Alert in late January with an updated list of these bills and proposals. If you haven’t subscribed, or aren’t sure if you’re on the list, please contact Gracie Betsill at gbetsill@bradley.com. Thanks for the opportunity to be of service to the ASCPA.
© Bruce P. Ely / James E. Long, Jr. Bradley Arant Boult Cummings LLP. January 2025
Alabama CPA PAC
The Alabama CPA PAC is a non-partisan political action committee (PAC) comprised of CPAs who uphold the political voice of the CPA profession. Formed in 1990, the CPA/PAC pools members contributions and contributes funds to friendly state legislators and candidates who support CPA and business interests and encourages and supports our own CPAs as political candidates.
By combining financial resources, the PAC is able to leverage its impact for positive results.
Your contribution to the PAC benefits the future of the profession:
• It ensures that your profession’s best interest are represented
• It supports state legislators and candidates who support CPAs and business interests
• It allows us direct access to decision makers
To make a contribution visit alabama.cpa/legislative-advocacy.
The Legislators’ Tax Guide is provided on a complimentary basis by the ASCPA to help answer our Alabama Legislators tax questions and those of you who assist legislators with their tax preparation.
The purpose of this tax guide is to examine federal and Alabama tax aspects of payments received from the state by Alabama legislators. Conclusions reached for federal taxation purposes usually will apply for State of Alabama taxes on income. By virtue of the provisions of Sec. 29-1-8.1, Code of Alabama 1975, the State Department of Revenue must accept and follow the travel expense provisions of the U.S. Internal Revenue Code as amended by the Economic Recovery Tax Act of 1981 for state legislators.
This guide is intended to deal only with the tax consequences under federal and Alabama tax laws of legislators’ per diem, expense, and mileage receipts as elected officials, and does not cover any personal tax matters (such as capital gains or losses, rental income and expenses, salary from private employment, or business income and expenses).
A copy of the latest edition of the 2024 Legislators’ Tax Guide can be found online by visiting alabama.cpa/tax-guide.
The Alabama Society of CPAs is pleased to announce that effective January 2025 Rob Pearson, a 24-year member of ASCPA, will begin his role as Director of Governmental Affairs.
A graduate of Samford University, Pearson lives with his wife Traci in his hometown of Demopolis. In 2024 Pearson was named President of the Alabama School of Healthcare Sciences Foundation, where he is responsible for funding and building the school, which is set to open in Demopolis Fall 2026. Rob has two children and two grandchildren. His son also lives in Demopolis, while his daughter lives in Vestavia and is a professor of education at Samford.
Contact Rob at rpearson@alabama.cpa.
Meet Rob Pearson
Consider Scholarship Granting Organizations
by John Maloney, CFA
As an advisor, I’ve customized financial solutions for many individuals and families. A few years ago, I started incorporating scholarship granting organizations (SGOs), like Scholarships for Kids and c2, into those solutions. These organizations play a vital role in helping children in failing school districts by moving them into private schools, where they receive a better opportunity to succeed.
Why should you and I care about these SGOs?
First, the value and impact on kids is significant. SGOs fund private schools that choose to participate in the program, offering scholarships for children in failing school districts. Children are given the chance to receive an education that’s far better than they might receive in their zoned school district.
I’m involved in the Diocese of Birmingham Catholic Schools. According to the data in our diocesan schools, we have about 4,100 students, with more than 500 receiving SGO funding. Our schools are typically able to fund scholarships of about $6,500 per student per year, which is roughly half of what their zoned school districts receive per student in their districts. There are roughly 2,900 students in Alabama who receive SGO scholarships that make an incredible long-term impact.
Second, this is effectively a no-cost opportunity for Alabama taxpayers to help these kids. The funding for SGOs is provided by a tax credit from the state of Alabama. While I could get into technical side of how this works, the simple way to understand it is:
1. You receive a credit through the State of Alabama’s My Alabama Tax system for the amount you donate to an SGO of your choice
2. Send a check to the SGO
3. Your accountant puts this on your tax return as a credit, and
4. You receive this same amount back as a credit on your tax return for the year it was donated
In other words, you float the cash for the tax year and receive it back dollar for dollar on your tax return the following year. Essentially, you are redirecting a portion of your Alabama state tax liability to fund an education for these children.
I encourage all my clients to speak with their CPA to determine the amount they can consider giving to an SGO.
Third, SGOs offer a significant opportunity to build a bridge with our clients beyond economics. As financial advisors and CPAs, we work “with the numbers” for our clients. But when we help clients provide scholarships to kids in failing schools, we help them reach a deeper
understanding of how their money can benefit others, in this case children across Alabama.
I would argue this in turn helps us move our relationship with our clients beyond dollars and cents to a level where we are able to help our clients do good. This is becoming more important to our clients and their children, who want to know how they can use their money to impact the world in a positive way.
While the Alabama Choose Act is getting a lot of attention this year, we as client advisors can impact our clients in a meaningful way through SGOs. We can build a stronger relationship with them by helping them simply redirect all or some of their Alabama state tax liability to an incredibly worthy cause.
John P. Maloney, CFA CAPTRUST Homewood
CHOOSE Act
Alabama School Choice for a Strong Alabama
CHOOSE Act Alabama, administered by the Alabama Department of Revenue (ALDOR), is set to transform the state’s educational landscape, offering parents and caregivers an opportunity to tailor learning experiences that best suit their children’s needs.
WHAT does CHOOSE Act Alabama do?
CHOOSE Act Alabama offers education savings accounts (ESAs) for K-12 students that help empower parents with the resources and flexibility to choose educational pathways that align with their child’s unique strengths and interests. Whether through traditional public schools, private institutions, or homeschool programs, CHOOSE Act Alabama helps parents find the best fit for their children’s learning.
HOW does CHOOSE Act Alabama work?
The funds made available through an ESA can be used to pay for school tuition, tutoring, educational therapies, and other qualified education expenses at approved Education Service Providers (ESPs) throughout Alabama. Funding for eligible students includes:
• $7,000 per participating student enrolled in a participating school
• $2,000 per participating student who is participating in a home education program
WHO is eligible?
CHOOSE Act Alabama ESAs for the 2025-2026 school year are available to Alabama families whose adjusted gross income does not exceed 300 percent of the federal poverty level based on the previous tax year. $100 million dollars will be offered through the ESAs for the 2025-2026 school year.
WHEN can I apply?
Family applications for the 2025-2026 school year will open on January 2, 2025.
WHERE do I go to apply?
To determine if you’re eligible and apply, visit chooseact.alabama.gov. You’ll find frequently asked questions on the site, along with important deadlines and an in-depth parent guide to walk you through the decisionmaking, application, and funding amounts. Interested ESPs can submit their online applications through the site at any time, and there’s a handy guide for them as well.
CHOOSE Act Alabama - Explore the possibilities and embrace the excitement that comes with customized education in Alabama – School Choice for a Strong Alabama.
Missed due dates: Diligence and the lurking danger
Claims involving missed due dates are rising while IRS penalty relief is decreasing. Learn how diligence can help avoid the claim related to late or non-filing.
By J. Michael Reese, J.D., LL.M
Client AB retains the services of YZ CPA to prepare a tax return. AB provides all information requested by YZ, YZ keeps a constant dialogue with AB about status and open items, and AB — completely unfamiliar with taxes — is wholly reliant on YZ. YZ botches the due date and the IRS assesses a penalty against AB. AB requests that the IRS abate the penalty, arguing its reliance on YZ is sufficient reasonable cause. The request is denied.
If this mundane fact pattern sounds vaguely familiar, it should. It mirrors U.S. v Boyle, 469 U.S. 241 (1985). Although the professional in Boyle was an attorney, the Supreme Court in Boyle established the bright-line rule that “failure to make a timely filing of a tax return is not excused by the taxpayer’s reliance on an agent, and such reliance is not ‘reasonable cause’ for a late filing.” When a taxpayer cannot obtain penalty relief and must pay out-ofpocket, that same taxpayer may seek reimbursement from the professional they believe is responsible.
It is not breaking news to say that if your client misses a due date, any role you played in that miss will be front and center. Yet professional liability claims involving missed due dates are rising at head-scratching rates. Statistics from CNA, the endorsed underwriter of the AICPA Professional Liability Insurance Program, indicate that the share of tax claims involving a failure to timely file increased from 25% in 2022 to 37% in 2023.
At the same time, IRS civil enforcement is ramping up, and strong headwinds portend fewer penalty abatements. The warning is stark. When penalty relief for missed due dates is not forthcoming, the claim that blames the CPA for those penalties may very well be.
The simple response? Deploy some form of system that tracks and alerts you to due dates, respond-by dates, and project status, often referred to as a docket system. However, a common refrain lately from CPAs who already have such a system is that one “slipped through the cracks.” Thus, the real solution requires you first to understand that key client details can get overwhelmed by the everyday, and then pause, reemphasize diligence, and seal your proverbial cracks.
Docket. Update. Review. Repeat.
Many practitioners already understand and deploy some version of a docket system. This ranges from the humble spreadsheet to the full-bodied practice management suite that lists forms and due dates. Practitioners feverishly crosscheck their system to make sure work that was supposed to be completed is completed. On time. Yet due dates continue to be missed. Why? The first clue is awareness — do you know the due date exists?
There are myriad statutory dates beyond annual, periodic compliance. Examples include estate tax returns, income tax returns for estates, and amended returns, especially where legislation has created a time-sensitive opportunity that previously did not exist, or where the original due date was postponed. There are also state and local tax withholding forms, and foreign withholding forms such as Forms 6166, Certification of U.S. Tax Residency, or 1042, Annual Withholding Tax Return for U.S. Source Income of Foreign Persons. And like-kind exchange dates and Sec. 83(b), Sec. 754, pass-through entity tax, or passive foreign investment company elections. In M&A transactions, the seller’s tax year may end on the last day of the month, the last day of the year, or some other date. There may also be entities formed in the deal that disappear as quickly as they are created. The list goes on.
The point is this: Like any tool, your system’s ability to properly function is only as good as your interaction with it. If accurate information is not identified and placed in the system, it will not work. Your system’s precision is a reflection of how quickly and accurately you grasp the importance of information received, and how diligently you act upon it to get it into the system. Diligence, in the context of the everyday, is a distinct challenge for two reasons:
Diligence requires combined energy and focus, both of which are not always available on demand; and
Few things in day-to-day work truly stand out and force you to stop and reckon with them to the exclusion of everything else.
The crucible of the quotidian?
The second clue to why due dates are missed is the bane and reality of work: interruption. If you run a business, you are constantly bombarded by phone calls, staff interruptions, emails, digital interruptions, and other interruptions. This truth creates what is referred to as threats lurking in the crucible of the quotidian. As professors Karl Weick and Kathleen Sutcliffe explain in Managing the Unexpected (3d. Edition, 2015):
the “quotidian” refers to events that are commonplace, everyday, and recurring . . . Calling the everyday a “crucible” clarifies that those events are a recurring test filled with interruptions and recoveries that can fan out in unintended directions. Operations that we do every day are basically a bet that things that could go wrong won’t go wrong. But the actual outcome of that wager depends on how attentive we are to real-time, here-and-now activities. [Emphasis added]
At its core, the essential question is, how do you process things that “normally” happen, blend into the noise, but would scream, “WARNING: I require special attention!” if things were less chaotic?
Most CPAs are intimately familiar with receiving information, intuitively knowing exactly what needs to be done to avoid a problem, starting to do what needs to be done . . . and getting interrupted. The start-stop-start dynamic to our experience of “work” is so familiar that it feels, well, quotidian. And yet the difficulties associated with mentally picking up a task where you left off prior to the interruption are well-researched and documented. The lurking danger is that each day, several times a day, CPAs make bets that they won’t miss something that later reveals itself to be more important than they treated it at the time. They bet that if they do miss something important, it won’t come back to bite them, or that if it does bite them, they can remediate it at minimal cost and downside. Increasingly, CPAs are losing those bets. Claim statistics back this up. A resurgent IRS appears to be making the odds on those bets longer.
What can I do? Stop. Prioritize.
Full circle back to the central question — how to avoid the claim from a missed due date at a time when the risk of that claim is increasing. The short but hard answer is to stop and prioritize. Your docket system cannot do it alone. Even one with (literal) bells and whistles cannot update itself.
Someone with sufficient competence must cut through the noise and act accordingly.
Administrative staff and junior team members can help if they are extensions of you, not merely extensions of a tool. You must make clear to them the downsides associated with missed due dates — penalties, potential claims, reputational damage — and educate them on what to look for. Diligence (intentional and persistent effort), and vigilance (being attentive and alert) are both critical elements to the successful function of any docket system. And this truly is the hard part because both require time and energy. If we’re honest, sometimes it also requires a little bit of luck.
The multitude of due dates is not going away and neither will the interruptions. In reality, it is often not just one but several interruptions. At that point, the relative volume on the first siren has decreased when compared to the siren announcing the next emergency. Competing client interests and interruptions are an inescapable part of the everyday.
However, missing due dates in many cases is avoidable. It starts with diligence.
This article originally appeared in the Journal of Accountancy.
-52%: In FY23, the IRS abated civil penalties at a rate of 10.2% (45,545,154 assessed; 4,664,075 abated), a decrease of 52% compared to FY22, when civil penalties were abated at a rate of 21.3% (39,898,114 assessed; 8,510,272 abated).
Sources: IRS 2023 Data Book and IRS 2022 Data Book.
J. Michael Reese, is a risk control consulting director at CNA. For more information about this article, contact specialtyriskcontrol@cna.com.
2025/2026 ASCPA Educational Foundation Scholarships com i ng soon
Since 1967, the ASCPA's Educational Foundation has been steadfast in its commitment to supporting accounting students throughout the state of Alabama. We're excited to announce that the application period for the ASCPA Educational Foundation 2025/2026 Scholarships is approaching, commencing on January 13th, and closing on March 14th.
scholarship application opens
scholarship application closes
Applicants should have a minimum of two full semesters of schooling remaining and must have completed Intermediate I and II by the Fall of 2024
All applicants must have a sincere commitment to becoming a certified Alabama CPA
Membership in ASCPA is a prerequisite for eligibility
Scholarship funds must be utilized at an Alabama-based college or university
The scholarship application process is entirely online, encompassing all available scholarships. Students simply need to check the box for the specific scholarship(s) they are applying for Applicants are obliged to obtain a faculty recommendation
Additionally, the application requires three attachments: A professional headshot
Transcript(s)
Resume
In October, BMSS Advisors & CPAs celebrated their 33rd anniversary. Over the years, BMSS has grown to have more than 345 employees in six locations. To take the best possible care of each client, the firm has expanded services, deepened areas of expertise, and equipped its people with necessary skills and knowledge. This has resulted in the creation of the BMSS Family of Companies to meet IT, cybersecurity, payroll, staffing and financial planning needs. We are immensely grateful for the trust and support of our clients and community, as well as the dedication of our exceptional team.
Again this year BMSS continued their longest tradition of the annual pheasant shoot at Selwood Farm with clients and firm friends. They were also thrilled to receive the #3 ranking in Accounting by Vault Internships for our internship program
In October the BMSS team sponsored President Killingsworth’s 4th Annual Cocky Classic Golf Tournament, and each office had a family fall festival consisting of games, crafts, and plenty of good food.
In November BMSS clients and firm friends joined the firm in Birmingham and Huntsville for their annual Spa Days.
Jackson Thornton Wealth Management (JTWM) announced that it surpassed $2 billion in assets under management (AUM) in recent weeks.
JTWM was named to the 2024 Wealth Magnets lists by Accounting Today, has been named to the CNBC Top 100 Financial Advisors List for several years, and is a frequent thought leader and contributor to state and national publications.
“We’re thrilled that 2024 has been such a dynamic year for Jackson Thornton Wealth Management,” commented Shaw Pritchett, a financial advisor and president of JTWM. “In addition to this AUM milestone, we’re celebrating our 25th anniversary, a new office in Auburn, AL and a new name/brand. We have a lot for which to be grateful and we certainly give much of the credit to our clients who have placed their trust in us for 25 years.”
With more than $2 billion in assets under management, JTWM (a subsidiary of Jackson Thornton CPAs & Consultants) has been providing wealth management services to clients throughout the country since 1999. The firm, with offices in Montgomery, Auburn and Dothan, Alabama offers wealth management, retirement planning, employer-sponsored benefit plans and consulting services in addition to collaborative tax and estate planning. Learn more about JTWM.
Leading assurance, tax and advisory firm Mauldin & Jenkins is proud to announce its inclusion in the list of 2024 Best Companies to Work For in Alabama in the large companies category. The Firm has offices located in Athens, Birmingham and Huntsville, Alabama.
This annual program was created to identify, recognize, and honor the best employers on workplace culture and business influence. To be considered, participants had to have a facility in Alabama, have at least 15 eligible employees, and be in business for a minimum of one year.
“Our recognition as one of Alabama’s Best Companies to Work For is a testament to our commitment to creating an environment where our team members can thrive,” shared Hanson Borders, Managing Partner. “We are grateful for our employees, whose feedback and dedication to excellence made this achievement possible.”
Organizations from across Alabama participated in a twopart survey process to determine the Best Companies to Work For in Alabama. The first part evaluated each nominated organization’s workplace policies, practices, philosophy, systems, and demographics, accounting for approximately 25% of the total evaluation. The second part, worth 75% of the total evaluation, consisted of an employee survey to measure the employee experience. The combined scores determined the top companies and final rankings.
This year, 35 companies were honored in the program, which concluded with the announcement of rankings on December 2nd.
Mauldin & Jenkins also just recently announced several appointments to Partner, including Sherrie Hodges, CPA. This significant achievement highlights the firm’s commitment to recognizing excellence, leadership and dedication to client service.
Sherrie, from the Firm’s Huntsville office, has more than 30 years of professional experience in public accounting. She is a key member of the Private Client Services practice. Sherrie specializes in income tax planning, preparation, and consulting, providing expert advisory services that help clients navigate complex financial decisions. Sherrie is a member of the ASCPA, the AICPA and the Firm’s Tax Committee.
Managing Partner Hanson Borders shared that Sherrie has demonstrated impressive leadership within the firm and her community. “I am confident that (her) expertise will continue to drive the Firm’s success and uphold our tradition of delivering exceptional service and value to our clients,” said Borders.
Pritchett
Hodges
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