Are Your Accounting Fees on the Rise? Here’s How You Can Help Reduce Them
U
nless you have been living under a rock for the last year, you have noticed costs in the Treasure Valley are rising rapidly. Everything from gas, materials, and equipment prices in the construction industry, to your bill at the grocery store are being affected. And now, for a variety of reasons, the prices for your accounting services are following suit. But what are the major factors contributing to this escalation and what can you do to help reduce costs? RISING COST FACTORS Inflation: You have probably already seen the impact of inflation affecting multiple aspects of your business. According to the U.S. Bureau of Labor Statistics, the annual inflation rate for the United States for the 12 months ending December 2021 was seven percent. This is the largest inflation rate for a single
50 BUILDING IDAHO • 2022 SPRING/SUMMER
calendar year in nearly 40 years. The Great Resignation: Employees are leaving their jobs at an unprecedented rate across all industries, or leaving their local jobs to work remotely for companies in states with higher wages. The effect of this trend is compounded by the fact that the accounting profession has one of the most aged workforces in the nation. The American Institute of CPAs (AICPA) estimates that over 75 percent of current CPAs will retire in the next 10 to 15 years. Changes to the Tax Code: Every year there are amendments to the tax code. Typically these are small changes and the additional time required to prepare a tax return would be modest at best. Then in late 2017, the Trump administration passed the Tax Cuts and Jobs Act (TCJA), which was effective for the calendar year 2018. It was a massive overhaul to the US Tax Code. Enter the 2019 tax season; by most estimates, the TCJA increased tax preparation time by 30 percent.
And since that time CPA firms have been in hyperdrive due to the CARES Act, Employee Retention Tax Credit, PPP Loans, and all the amended tax returns that come with an ever-changing regulatory landscape. IRS Backlog: If you have received a letter from the IRS, you are not alone. The IRS has been understaffed and underfunded for decades. Right now the IRS is sitting on literal trailer-loads of notification responses and other correspondence. On February 10, 2022, the IRS determined that they would stop sending automated notifications for most tax related issues until their current backlog has been “sufficiently” resolved. It is important to note, however, the IRS has not suspended assessing fees and penalties; they are simply not communicating the fees and penalties they are assessing and effectively creating more backlog for later. Other Regulatory Updates: The GAAP
