October 13 - 27, 2006
It was reported that there are at least 2 million private companies and small businesses in the whole United States. However, there are only about 17,000 businesses registered with the Securities and Exchange Commission that sell/trade shares of stocks to the public. These big SEC registered companies are serviced by accountant CPAs who are mostly employed by the big accounting firms. The two (2) million companies/businesses are serviced by accountants, who are Enrolled Agents or licensed CPAs and unlicensed accountants. There are over 150,000 CPAs in the country and at least 42,000 Enrolled Agents. If there are only 17,000 SEC registered companies to serve and we continue to train CPAs for them, then it would not be surprising to find so many CPAs who have ventured into many areas that do not do the work for SEC regulated companies. I believe the CPA profession with the large number of people in it today has lost its former value in the marketplace. Simply do the comparison of supply and demand. There are far too many CPAs in town who have been trained for SEC companies. These days you will find CPAs in real estate, in the mortgage loan business, in the financial services business selling insurance and investment products. Many obviously have found their places in the corporate employment world and in government agencies. They have received their comfort zones in the accounting department of smaller companies/firms eventhough they have trained to do the work of big SEC registered companies. There are
Siklab Newsmag 16 those who found the tax business a lucrative area of practice and have entered the tax world even as their training in taxes was quite limited. I should advice you that the best practitioner in taxes are those who are licensed as Enrolled Agents. These professionals concentrate their practice in taxation. In fact, that was their only training and they are The Tax Specialists. These practitioners were the only professionals who have been tested by the Internal Revenue Service in administrative tax law matters. They are licensed by the U.S. Department of Treasury and their practice privilege covers the entire United States, unlike CPAs and Tax Lawyers who are licensed only in their own State jurisdiction. If you will ask this columnist, more professionals must be trained and tested to become Enrolled Agents. There are not so many of them who could service the two (2) million companies in the private sector. They are in short supply, so to speak, compared to the CPAs. The Enrolled Agent’s role is quite unique and very important. They are the professionals who understand IRS administrative tax procedures. In fact, their job is to defend taxpayers against what may be intrusive actions of the Internal Revenue Service. It was what
they have trained for, and not so much in the field of general accounting (summarizing numbers) that CPAs have studied hard for and trained for the mere 17,000 SEC regulated companies. The next time you want your tax problems resolved, look for an EA (Enrolled Agent) who is trained in complex IRS tax procedures. You will be entrusting your case to a professional. And if you cannot find one, call me. The real estate market has been cooling off lately. For good reasons, I predicted that it would collapse in May but it did not and I was wrong. However, obviously buying and selling slowed down since March, 2006. My client had told me this August that her home in Palmdale, California would not sell during the past five (5) months. And she is pulling it out of the market to put it in the hands of another realtor-broker later on. Interest rate also has gone up so that those with the variable mortage interest rate have seen a big rise in their monthly mortgage payments. It may be a good time to refinance a mortgage to get a fixed rate loan. But maybe not, because many people have not yet recovered their associated loan costs that could take two years to earn back. The signs are in our midst. The real estate market bubble would soon collapse to make houses again more affordable. But then again, I could be wrong if the economic cycle has not yet finished its turn. Have you been seeing a lot of houses for sale lately. I have and buying has been slow. A realtor has informed me that the values of real estate has been declining at the rate of 2% over the last 12 months and it has now declined 24%. Let me close for now.