May|June 2014 | Vol. 10 No. 3 A publication of the Wisconsin Institute of CPAs | www.wicpa.org
Getting
into gear
WICPA Chair
Jean M. Hansen, CPA, MBA, CGMA
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A publication of Wisconsin Institute of CPAs | www.wicpa.org
May/June 2014 Vol. 10 No. 3
6 Features
Columns
6 Getting into gear Jean M. Hansen, CPA, MBA, CGMA gets rolling as the new WICPA chair. By Cynthia M. Hodnett
26 TAX Creating a course of action for clients facing insolvency CPAs can play a key role in advising their clients facing financial hardships. By Nathan Roth, CPA
12 A leader among many Kelly M. Sics, CPA, CGMA hones her leadership skills locally and nationally. By Daniel N. Davidson 18 Great leadership: The ultimate retention tool Avoid these common leadership mistakes and boost employee retention. By Jeff Kortes
28 HUMAN RESOURCES It’s so hard to say goodbye: Duties of employers and employees upon termination Consider these do’s and don’ts for a smoother transition. By Erik K. Eisenmann 30 TECHNOLOGY Technology: Nonprofits Protect your nonprofit clients against IT threats by following these steps. By Robert Cedergren, CPA, CGMA, CITP, CISA, CISSP
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28 Departments 2
Odds & Ends | news briefs
3 Outlook | chair’s letter 5 Spotlight | from the editor 11 In Touch | president & ceo’s message 21 Memorials | departed members 22 Kudos | members in the news 23 Membership Matters | member benefits
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On Balance
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Odds & Ends 2013 Apex Award for Publication Excellence
2014–2015 WICPA OFFICERS/BOARD MEMBERS Chair Jean M. Hansen, CPA, MBA, CGMA Chair-elect Martin D. Verhelst, CPA Past-chair Robert A. Gruber, Ph.D., CPA, CGMA Secretary-treasurer Joy L. Hertlein, CPA, CGMA Directors Lucien A. Beaudry, CPA, J.D. Kyle J. Beld, CPA Greta C. Diercks, CPA Katherine L. Hauser, CPA, CGMA Matthew A. Los, CPA Kelly M. Miller, CPA Scott D. Miller, CPA, ABV, PFS, CVA Gregory L. Ryan, CPA Wendi M. Unger, CPA AICPA Council Karla E. Blair, CPA Nicholas S. Lascari, CPA, CEA, CGMA President & CEO Dennis F. Tomorsky, CPA, J.D., CGMA Vice President of Communications Amy E. Gaeth Vice President of Membership & Marketing Barb Gamez Editor Cynthia M. Hodnett Copy Editor Joan Bahr Design & Layout Angela Wade Advertising Manager Ellen Engel Printing Marek Printing Join us online!
On Balance is published six times a year by the Wisconsin Institute of Certified Public Accountants (WICPA). Change of address should be sent to: Membership, 235 N. Executive Drive, Suite 200, Brookfield WI 53005; Phone: 262-785-0445 or 800-772-6939 (WI/MN); Fax: 262-785-0838; email: jessica@wicpa.org. Statements and opinions expressed are those of the authors and not necessarily those of the WICPA. Publication of an advertisement does not constitute an endorsement of the product or service by On Balance or the WICPA. Articles may be reproduced with permission. © Copyright 2014 On Balance.
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Oshkosh CPA firm joins Shawano CPA firm Malkowsky, Hergert & Company, LLP in Oshkosh has joined KerberRose S.C. in Shawano. Gregory G. Malkowsky, CPA, Philip E. Hergert, CPA and their staff remain at their office at 1750 West Pointe Drive in Oshkosh.
GASB offers guide for pension standards implementation
GASB Statement No. 68 (tinyurl.com/gasbguides) is available to help state and local government financial statement preparers and auditors as they implement its new standards for accounting and reporting for pensions. This resource provides authoritative guidance that has been prepared by GASB’s staff and cleared by the board for issuance. The standard takes effect for reporting periods beginning after June 15, 2014.
Regulatory Compliance Associates joins Wipfli LLP Chicago-area Regulatory Compliance Associates, Inc. has joined Wipfli LLP as the result of an agreement between Wipfli and Regulatory Compliance Associates, Inc., also known in the financial institutions industry as “REGCOM.” REGCOM offers proactive regulatory risk management products and services to the financial services industry. The group joined Wipfli’s office in Oak Brook, Ill. It serves their clients as members of Wipfli’s Financial Institutions Practice, which serves more than 600 financial institutions across the Midwest.
SVA acquires Appleton accounting practice SVA Certified Public Accountants, S.C. merged its Appleton office with the tax and accounting practice of William P. Merrick, CPA in January. Merrick, of Appleton, had his practice for more than 20 years. His expertise includes tax planning guidance for closely held businesses and individuals, and trusts, gifts and estates. The acquisition allows Merrick to devote more time serving his clients by turning the administrative functions of running a practice over to SVA. Plus, it allows SVA to expand its client base in the Fox Cities.
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{ Outlook | chair’s letter }
“Today’s CPA is expected to have the knowledge and practice far beyond the number cruncher era of the past.”
Cutting edge of distinction
T
he speed in which today’s business climate moves is incredibly fast. No one knows this more than the highly respected certified public accountant. When you think of a CPA, cutting edge probably isn’t something that immediately comes to mind. But it should. CPAs are cutting edge business professionals. Today’s CPA is expected to have knowledge and practice far beyond the number cruncher era of the past. The CPA certification does differentiate itself and offer significant benefits and career distinctions. Business communities are starting to demand this certification to ensure overall skills and competencies desired. After all, CPAs understand the language of business.
Credible
Ideally, the overall goal of the CPA is to add value, make a difference and provide credible business solutions to add profitability to his or her clients. Communication is key to developing one’s ability to work well with all levels of clientele. When becoming a CPA, you are committed to lifelong learning, which also adds that competitive advantage to stay current and relevant with today’s changing business climate.
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Professional
Leading others is about building trust, connecting ideas with other departments and levels and influencing teams. CPAs translate complex information into critical knowledge. Interpreting data and creating opportunities — basically looking beyond the numbers to best shape financials decisions and results. Today, many polls still rank CPAs among the most trusted professions. They are held at very high ethical standards and maintain a certain level of professional conduct.
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Advocate As advocates to individuals and business, CPAs serve as strategic advisors and partners. They assist in business growth and improve the overall business plan of an organization. Strategy is becoming more about connections and access to information that can be converted to bottom line income and successful outcomes. CPAs make a lasting difference in the lives of the people they serve with their can-do attitude. A CPA career path allows you to make sense of today’s fast-paced, changing and complex business world. After all, this profession is constantly changing. Success today is based on your ability to change faster than your competition, customers and business climate. This is exactly why CPAs are “cutting edge” business professionals. “May the force be with you!” You are not alone.
Jean M. Hansen, CPA, MBA, CGMA is CFO/ vice president-finance at Manitowoc Tool & On Balance May|June 2014 Machining LLC. Contact her at 920-682-8825 ext. 114 or jhansen@mantool.com.
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On Balance
May|June 2014
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{ Spotlight | letter from the editor } “Publications such as USA Today and U.S. News & World Report have recently listed accounting majors among those most likely to score jobs after graduating.”
It’s a fine time to be an accounting
grad
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raduation season is here and so is a bright future for many accounting majors. Publications such as USA Today and U.S. News & World Report have recently listed accounting majors among those most likely to score jobs after graduating. This trend is illustrated in the U.S. Department of Labor’s 2014 “Standard Occupational Classification,” which lists accountants and auditors among the five most in-demand jobs. Plus, the Bureau of Labor Statistics projects a 6 percent increase in job growth for accountants by 2020. It’s also reflected in the most recent report from the American Institute of CPAs (AICPA) “2013 Trends in the Supply of Accounting Graduates and the Demand for Public Accounting Recruits.” According to the report, there’s a strong and growing demand from accounting firms that are looking to hire accounting majors, “with a record 40,350 accounting graduates hired in 2012 and 89 percent of those firms forecasting the same or increased hiring of graduates in 2013.” The WICPA is responding to this growth by offering opportunities for future CPAs, including supporting local chapters of the Beta Alpha Psi international honors society for accounting and other business professionals, career fairs on college campuses and awarding college scholarships to accounting majors. The organization also provides opportunities for its 162 non-CPA college student members, including volunteering with the Young Professionals and Accounting Careers committees. Promoting the accounting profession is also a goal of new WICPA Chair Jean M. Hansen, CPA, MBA, CGMA. In this issue of On Balance, read about Hansen’s efforts and other members of the 2014–2015 WICPA Board of Directors. The board members have expertise in areas including industry, education, tax, auditing
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and nonprofits. Their knowledge and passion about the profession readies them to lead the organization into the future. Speaking of CPA leaders, read about Kelly M. Sics, CPA, CGMA. Sics discusses her career and being an emerging leader in the profession. She was one of 38 young CPAs from across the U.S. selected last fall to participate in the AICPA Leadership Academy in Durham, N.C. Also read how effective leadership can be the ultimate retention tool, a CPA’s role in advising clients facing insolvency, and an employer’s and employee’s responsibilities regarding terminations.
Cynthia M. Hodnett is editor of On Balance magazine. Contact her On Balance at 262-785-0445 ext. 3004 orMay|June 2014 cynthia@wicpa.org.
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etting
When I’m riding my ATV observing nature’s beauty, I don’t have to be the
nto gear same Jean who works at MTM...
Jean M. Hansen gets rolling as new WICPA chair By Cynthia M. Hodnett
R
iding an all-terrain vehicle around her family’s cabin in northern Wisconsin helps Jean M. Hansen CPA, MBA, CGMA escape the
demands of her position as CFO/vice president-finance at Manitowoc Tool & Machining, LLC in Manitowoc. “When I’m riding my ATV observing nature’s beauty, I don’t have to be the same Jean who works at MTM (Manitowoc Tool & Machining),” Hansen said. “It allows me to tune out the day-to-day challenges in helping run a growing business. I can just be free of those responsibilities and enjoy doing something different.”
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Raring to go Hansen’s love for ATVs is similar to the one she has for the
Hansen has also given back to the profession by teaching
profession. With nearly 20 years as a CPA, Hansen’s career journey
several accounting courses at her alma mater, Silver Lake College
has taken her from public accounting to industry. Now, Hansen is
in Manitowoc, from 2002–2009. She also volunteers her time as
gearing up for her role as 2014–2015 chair of the WICPA Board of
a finance committee member to a local community nonprofit
Directors.
organization.
A WICPA member since 1996, Hansen currently serves on
A willingness to encourage others and share her knowledge are
its Finance and Membership Advisory committees. She also
among Hansen’s leadership traits, said Mary A. Cisler, accounting/
previously served as a board member.
HR manager at MTM. The two women met when Hansen
“After you’ve worked for so many years in this profession, there comes a point in time in your career when you want to do more
interviewed Cisler for a position at the company in 2009. “She is a very driven person, and I believe that having her serve
to give back in other areas,” she said. “It was time to become more
as the WICPA chair will not only give her the ability to expand
involved in the WICPA. My motto is to pay it forward to the
her skills and abilities, but to also pass those traits on to upcoming
profession when possible.”
accountants and/or CPAs,” Cisler said. “She wants others to
Hansen said many of her goals as board chair reflect the
succeed and will help them reach their goals. Something else about
organization’s 2009 strategic plan, which she helped develop.
Jean is that she learns something new each day and is not afraid or
This plan includes increasing membership, boosting member
discouraged to teach others.”
engagement and promoting the profession. “If I were encouraging someone to join the WICPA, I would tell them about the benefits that the WICPA offers: CPE, conferences,
Others have said Hansen’s easy-going demeanor and humor complement her leadership style. “In my line of work, every once in a while you have a client
all of the networking and opportunities that can help their career,”
whose call or email you just dread returning. Jean’s never been
she said. “It’s a one-stop shop for information. If somebody has a
one of those,” said attorney Bruce B. Deadman, who has known
question or wants data about something, there’s someone else out
Hansen for 10 years. Deadman works with Hansen on various HR
there who has already done the research and has developed the
and employment law-related projects for MTM.
answer.”
“Even if she has a knotty, tough or even potentially unpleasant
Hansen also plans to continue an effort led by 2013–2014 WICPA Chair Robert A. Gruber, Ph.D., CPA, CGMA to research other options for members to earn CPE credits.
subject to discuss, she always does so with grace and good humor,” he said. “In other words, she doesn’t take herself too seriously.” Working with numbers came very natural to Hansen as a child.
“A possibility could be that if you work on a project at work,
However, while her children were growing up, she decided to
you’re increasing your knowledge base,” she said. “While we don’t
attend college. She wasn’t sure whether to study accounting or
get CPE for that now, maybe there’s a way to document it so
nursing, since at that time she was a certified nursing assistant.
you can get some CPE credit for it in the future. I think that is the direction that a lot of long distance learning institutions are moving to — providing a more convenient way to get knowledge verses sitting in a classroom setting.”
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A drive to succeed
On Balance
May|June 2014
“I realized that a career in accounting, and potentially as a CPA, would open up a lot of doors,” she said. Hansen graduated from Silver Lake College in Manitowoc with a Bachelor of Arts in Business Administration-Accounting in 1993.
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She earned her certified public accounting license three years later.
“Never be afraid to accept a challenge. Nothing is impossible,” she
In 2001, she earned a Master of Business Administration with an
said. “Most times, the highest level of growth occurs when things are
emphasis in international finance from the University of Wisconsin-
not working as planned and you experience failure. It gives you the
Oshkosh. She also has a Six Sigma Black Belt certification.
chance to knock the dust off and try again, never give up.”
Her accounting career started at an area CPA firm. However, her career includes various accounting-related positions at local manufacturing companies and industries including plastic injection molding and road construction and highway maintenance. For the past eight years, Hansen has worked at MTM, where her responsibilities include overseeing the finance, accounting, human resources, purchasing and information technology departments.
Besides riding her ATV, Hansen also enjoys painting, reading and playing with her two young granddaughters: Grace and Jade. But the hobby that is exciting and lets her live in the moment is riding her ATV, which she has done for many years. It allows her to spend time with her husband, Jeff, and their two adult children: Sarah and Dane. “Everyone has that one thing that gives them pure enjoyment, and for me it’s riding my ATV,” she said. “It’s something that I enjoy doing
Going the extra mile
as much as I love accounting.”
Hansen credits her continued growth in her career choices for providing her the rewards of being a seasoned CPA professional.
Cynthia M. Hodnett is editor of On Balance magazine. Contact her at 262-785-0445 ext. 3004 or cynthia@wicpa.org.
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{ In Touch | president & CEO’s message } “Taking charge of your career requires research, intentional planning and developing written action plans for your career journey.”
Planning your career path: It’s your job
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A
t every stage of your working life, you have opportunities to survey the road you are on and make decisions regarding your direction and goals. With the brutal winter finally behind us, now is a great time to give intentional thought to your career path. Building skills and experience is critical to advancement, regardless of age or position. While technical skills may be the key to early promotions, other critical skills like leadership and communication become more important for mid-career and executive opportunities. Intentional career planning requires you to think about the skills you have, and the skills you need to develop. It’s easy to become complacent in a comfort zone with the knowledge that you have mastered the skills required in your current position. Taking charge of your career, however, requires research, intentional planning, and developing written action plans for your career journey. These action plans should require you to inventory your skills, and seek opportunities to work outside the areas where you already have expertise. Your action plans should also describe how and when you will develop the new skills you identify as needed for your advancement. A few large employers provide “career pathing” resources for employees to chart their career course, along with the opportunity to both select educational opportunities and influence the types of assignments that will help achieve their goals. This concept is relatively new to employers, however, and most employers assume their employees are looking out for themselves. Ideas to consider for your own career path planning include listing specific job titles you would like to have at various points in time, and then describing the types and timing of educational content required to reach those milestones. Identifying specific projects and assignments that would expose you to both mentors and skill building opportunities would also be appropriate, since not all skills are learned in a classroom. Writing down a summary of volunteer positions that could accelerate your introduction to certain skills would provide another way to achieve career success.
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Let your supervisors and others know you prepared a career plan. Ask them for input and the chance to work on projects to develop the specific skills you need. Sharing your plan, requesting assignments and specific training will help you reach your career goals, and demonstrate your planning skills and motivation.
Dennis F. Tomorsky, CPA, J.D., CGMA is president & CEO of the Wisconsin Institute Balance May|June 2014 of CPAs. ContactOn him at 262-785-0445 ext. 3014 or dennis@wicpa.org.
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Photography by Angela Wade
“I come from a family of very strong women. My grandma, mom, aunts and female cousins are all very independent and have a take-charge attitude, and I think I followed their example...�
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aLEADER among MANY Kelly M. Sics, CPA, CGMA hones her leadership skills locally and nationally By Daniel N. Davidson
Kelly M. Sics, CPA, CGMA is only 34 years old but is already so accomplished in her career that she was selected this past October to participate in the American Institute of CPAs (AICPA) annual Leadership Academy. Sics was among 38 young professionals from across the U.S. chosen from more than 120 candidates recommended by their employers, CPA state societies or both.
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“I decided on this career when I was very young.”
She and other attendees, all younger than 36, learned leadership theory and strategic planning techniques, and developed tools for handling complex management challenges. They also discussed important issues facing CPAs and the accounting profession. “(Attending the Leadership Academy) taught me a variety of different leadership skills and methods, the most important being that a great leader means surrounding yourself with people who have talents in areas in which you may not,” she said. Sics uses what she learned at the academy in her current role as director of finance for the Wisconsin Dental Association (WDA) in West Allis. There, she is primarily responsible for managing the company’s finances. A WICPA member since 2004, Sics also hones her leadership skills by chairing the WICPA Accounting Careers Committee and serving on its Young Professionals Committee. In 2010, she received the WICPA Outstanding Young Professional Award.
Seeing the big picture
For Sics, the road to these achievements was seemingly straight and direct.
“I decided on this career when I was very young,” she said. “I took accounting in high school in Menomonee Falls where I grew up and loved the topic and the teacher. It came naturally to me, and the concepts made sense.” Sics later earned a bachelor’s degree in accounting and a master of business administration degree with an emphasis in technology and training from the University of Wisconsin-Whitewater in 2001. She earned her certified public accounting license in 2004. Then, Sics worked as a staff accountant with Baker Tilly Virchow Krause, LLP in Milwaukee. But she soon decided she wanted to expand her experience beyond auditing municipalities and school districts. Consequently, she took a position as assurance manager at CliftonLarsonAllen LLP in Milwaukee, which she found more appealing. “I was able to work across all industries, as well as get a little tax experience before selecting an industry to specialize in,” she said. By 2012, Sics joined WDA, which was one of her clients at CliftonLarsonAllen. “I enjoyed working with them and contributing to the dental profession in some way,” she said. “It seemed like a natural move, a natural progression.” In addition to being responsible for overall fiscal management of the WDA, she manages the finances for its for-profit insurance agency and foundation.
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“I oversee all the IT and human resources functions,” she said. “That’s a perfect fit because of my master’s in business administration with its emphasis on technology and training.” Mark S. Paget, executive director at Wisconsin Dental Association, Inc., said Sics’ education and experience as a CPA allow her to see the “big picture” in managing the association’s finances. “Our organization is fairly large and fairly complicated, so I wanted someone who could bring a vast amount of knowledge and a strong work ethic,” Paget said. “With an annual budget of more than $6 million and 40 employees, we are comprised of a 501(c)6, a 501(c)3 and a wholly owned for-profit subsidiary, so it was important to have a CPA overseeing our five-person accounting team.”
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Setting high standards
Sics also recently earned the Chartered Global Management Accountant (CGMA) designation, which shows she is a management accountant and possesses leadership and other skills that can be used globally and are recognized globally. Beyond the office, Sics is treasurer for The Women’s Fund of Greater Milwaukee and serves on the Milwaukee Habitat for Humanity’s audit committee. Sics said her family members and friends played a role in her leadership development. “I come from a family of very strong women,” she said. “My grandma, mom, aunts and female cousins are all very independent and have a take-charge attitude, and I think I followed their example. In addition, all of my friends have successful careers and worked really hard to get where they are. “I have always focused on setting goals and achieving those goals, and even as a child I was a leader though my younger sister would say I was bossy,” she said. “I am driven, I suppose, in part because my parents set high standards, and those standards were internalized, and I set my own high standards for myself. My husband, Aaron, has been supportive of me and supportive of the standards I set for myself. And he’s very proud of me.” Despite her professional achievements, the accomplishments that Sics is most proud of are becoming a wife and mother. She and her husband, Aaron, have a 4 year-old daughter, Lana, and a newborn son, Nolan. “I really value my friends and family,” she said. “They are the most important part of my life, and I take care and nourish my friendships and my relationships with them.”
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To relax, Sics and her family enjoy spending time outdoors, especially camping. “We go all over the state, mostly to state parks,” she said. “We enjoy hiking in different parks and playing games around the campfire.” Daniel N. Davidson is a freelance writer in Milwaukee. Contact him at davidsondn@aol.com.
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We’re Moving ….but not too far!
This August, the WICPA will relocate to a new office space just west of its current location. Be sure to update your records with our new address! You’ll find us in the Ruekert-Mielke Building W233N2080 Ridgeview Parkway, Suite 201 Waukesha, WI 53188 ∙ www.wicpa.org
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memorials John W. Ethington, CPA, CFP (1956–2014) John W. Ethington, CPA, CFP died Jan. 6, 2014. He was 57. Ethington earned his Bachelor of Arts in Business Administration and Accounting from Carthage College in 1978 and his Master of Science in Taxation from the University of Wisconsin-Milwaukee in 1981. He earned his certified public accounting license in 1979. He also was a certified financial planner. Ethington was senior vice president of Robert W. Baird & Co., in Milwaukee. He also worked previously at Piper Jaffray/UBS Wealth Management and Smith Barney. Prior to his investment career, he was a CPA at Ernst & Young LLP in Milwaukee and at what is now PricewaterhouseCoopers in Rockford, Ill. The Whitefish Bay resident joined the WICPA in 1979.
Maria Fortunata “Marita” (Mancao) Kenney, CPA (1953–2013) Maria Fortunata “Marita” (Mancao) Kenney, CPA died Dec. 26, 2013, according to madison.com. She was 59. Kenney, a native of Cebu City, Philippines, was a certified public accountant in both her native country and the United States. The Aurora, Colo., resident joined the WICPA in 1997.
Mark W. Rhyan, CPA (1960–2013) Mark W. Rhyan, CPA, died Dec. 25, 2013, according to the Sheboygan Press. He was 53. Rhyan graduated from the University of Wisconsin-Madison with a Bachelor of Business Administration in Accounting in 1982. He earned his certified public accounting license in 1989. He began his career as a CPA at what is now PricewaterhouseCoopers in Denver, Colo. He later managed a Milwaukee bakery and restaurant, La Boulangerie, Inc., and Rhyan’s Restaurant with his brother, Dale Rhyan. He then returned to PricewaterhouseCoopers’s Milwaukee office as a tax manager. In 1992, he became director of tax at Sargento Foods Inc., in Plymouth. He later became chief operating officer and executive vice president of the company. The Plymouth resident joined the WICPA in 1990.
Herbert B. Schmalz, CPA (1922–2013) Herbert B. Schmalz, CPA died Sept. 25, 2013, according to the Manitowoc Herald Times Reporter. He was 91. Schmalz earned his bachelor’s degree from the University of Wisconsin-Madison. His accounting career included a position at the former Arthur Andersen in Milwaukee from 1943–1948. After earning his certified public accounting license in 1948, Schmalz opened his CPA practice in Manitowoc. Six years later, Schmalz formed Schmalz and Stephani CPAs, with his longtime friend, Arnold G. Stephani. In 1979, they merged their firm with what is now Hawkins Ash CPAs where Schmalz continued to work as a consultant. He then joined The Cawley Company in Manitowoc as controller and treasurer until his retirement in 2005. The Manitowoc resident joined the WICPA in 1948.
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kudos Daniel R. Brophey, CPA, partner at Reilly, Penner & Benton in Milwaukee, recently retired after 40 years at the firm. Daniel R. Brophey, CPA
Kathleen Ciantar, CPA was recently hired as a senior auditor at KerberRose S.C. in Shawano. Brian Dahlk, CPA was recently promoted to manager in the Assurance Department at Wegner CPAs in Madison.
Amber Danielski, CPA, CMA
Amber Danielski, CPA, CMA was recently promoted to manager in the government and not-forprofit services department at Schenck SC in Stevens Point. Stephanie J. Geurts, CPA, CGMA was recently promoted to partner at Suttner Accounting Inc. in Oshkosh.
Michael J. Gries, CPA
Michael J. Gries, CPA was recently promoted to supervisor at Schenck SC in Sheboygan. Steven T. Grover, CPA was recently promoted to associate partner at KerberRose S.C. in Shawano. Renee C. Hilbelink, CPA was recently promoted to senior accountant in the government and notfor-profit services department at Schenck SC in Sheboygan.
Jennifer Powers, CPA
Mary B. Horton, CPA was recently promoted to manager at KerberRose S.C. in Sister Bay. Jason A. Kuehl, CPA was recently promoted to senior accountant at Schenck SC in Milwaukee. Kimberly M. LaPoint, CPA was recently promoted to senior accountant at Schenck SC in Sheboygan.
Janean A. Robenhorst, CPA Janean A. Robenhorst, CPA
Timothy J. Lardinois, CPA was recently promoted to division president, domestic tax at Spectrum Brands, according to the Wisconsin State Journal. Sandra I. Lisowe, CPA was recently promoted to senior accountant at Schenck SC in Sheboygan.
Kendall Melichar, CPA was recently promoted to supervisor at Schenck SC in Sheboygan. Jennifer Powers, CPA was promoted recently to manager at Schenck SC in Wausau. Janean A. Robenhorst, CPA was recently promoted to manager in the government and not-for-profit services department at Schenck SC in Green Bay. Justin J. Schneider, CPA was recently promoted to manager at Schenck SC in Sheboygan. Mary W. Seidl, CPA, a manager at Schenck SC in Milwaukee, recently celebrated her 10th anniversary at the firm. Ryan M. Sonnenberg, CPA was recently promoted to supervisor at Schenck SC in Green Bay. Fran Sorenson, CPA has been named wealth management trust tax officer at First National Bank and Trust Company in Beloit, according to the Beloit Daily News. Yigit Uctum, CPA, CFE, MBA was recently promoted to senior manager in the assurance department at Wegner CPAs in Madison. Mark G. Vance, CPA, tax manager at Schenck SC in Milwaukee, recently celebrated his 15th anniversary at the firm. Monica S. Vick, business development coordinator at Cooperative Resources International in Shawano, has been selected for Leadership Wisconsin Group XVI for 2014–2016. Dolores J. Wojcik, CPA, MBT was recently hired at Nohre & Co. CPAs in Eau Claire. Holly R. Zander, CPA was recently hired as a senior accountant at Honkamp Krueger & Company in Waunakee, according to the Waunakee Tribune.
Justin J. Schneider, CPA
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MembershipMatters MEMBERSHIP + BENEFITS = ADDED VALUE While networking and continuing education may be the top two reasons why you joined the WICPA or renewed your membership, there are other member benefits you may be less familiar with, but that may help you just as much. These benefits can save you time by having experts in specific areas of your business and consultants you can rely on to help you focus on what you do best — serving your clients. You already know about the discounted registration fees you receive as a member. But did you know you can save money in other areas of your business and for you personally? As a member, you also receive significant discounts, rewards and cash back from carefully selected affinity partners and member benefit providers that members routinely use.
BENEFITS FOR YOU For example, you can receive competitive rates on all your insurance needs; from professional liability, to health, disability, dental, life, longterm care, workers compensation, as well as auto and homeowners insurance with Professional Insurance Programs. In fact, WICPA members can receive 5 percent of their annual premium as cash back at the end of the year with West Bend’s Claim Free Award!
2014
Do you need assistance with individual investments or developing a retirement plan? Spectrum Investment Advisors and the Schneider
Summer
hours
The WICPA will close at noon on Fridays, June 6–Oct. 3.
Wealth Management Group of Wells Fargo Advisors offer discounted continuing education and consulting services for individuals as well as businesses.
BENEFITS FOR YOUR BUSINESS There are also a number of providers that offer business solutions and savings, such as payroll processing with The Payroll Company. Our newest benefit provider, SESCO Management Consultants also offers a variety of human resources services. WICPA members receive discounted, ongoing HR consulting with two levels of service options available. Do you offer credit card payment options for clients? If so, you may want to compare rates with U.S. Bank, our new affinity partner offering a variety of business solutions for WICPA members, including a credit card processing program that gives you a $50 credit. You and your firm can also save on all your shipping needs with savings up to 30 percent through UPS. Are you taking advantage of these money-saving member benefits? What kinds of discounts would you like to have? Email your ideas and suggestions to me at barb@wicpa.org.
Get discounts, cash back and rewards with the Member Benefit Marketplace. Visit www.wicpa.org/marketplace for programs and details.
it’s time to
renew your membership
If you have not yet renewed your 2014–2015 membership dues, visit www.wicpa.org/renew today and keep your valuable member benefits coming, including On Balance magazine. Online renewal is quick and easy. For information regarding your membership or your username and password, contact Jessica Murphy at 800-772-6939 ext. 3025 or Jessica@wicpa.org.
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Your membership PAYS for itself with these AFFINITY PARTNERS! Discounted CPE pricing is just one way your membership saves you money. You’ll also receive significant discounts, rewards and even cash back with these carefully selected programs and services you routinely use for business and personal needs.
Provides a wide variety of quality, comprehensive and affordable insurance programs. Members receive free quotes and product discounts. Work extensively with CPAs, individual investors, attorneys and business owners on wealth management, investment planning and estate strategies. Members receive free/discounted CPE, advisory program discounts and no-cost, no-obligation consultations. Co-sponsors the annual 401(k) investment seminar, offering members four hours of CPE at a nominal cost. Receive retirement plan investor education, as well as wealth management consulting. Provides 10% discount on award-winning payroll services, human resources consulting, timekeeping solutions and an integrated 401(k) as part of their commitment to fulfilling all of their clients’ payroll needs.
Sign up for the UPS Savings Program and start saving 16% up to 30% on all your shipping needs. The more you ship, the more you save.
Provides comprehensive line of banking, brokerage, insurance, investment, mortgage, trust and payment services products to consumers, businesses and institutions. Members receive discounts on credit card processing and rewards credit cards. Members receive a discount on West Bend’s Home and Highway® program and 5% cash back on annual premiums with the Claim-Free Award.
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Log into the Member Benefits Marketplace at www.wicpa.org/marketplace for details and additional member benefit providers.
EFFECTIVE BUSINESS SOLUTIONS ADD VALUE TO YOUR CLIENTS IN WISCONSIN. Helping your business clients become even more successful means having the answers to their business development questions—from securing capital for startup or expansion to tapping international markets. Connect with the Wisconsin Economic Development Corporation and you gain access to a partner who delivers high-impact financial assistance and strong business development programs. As the state’s lead economic development agency, we work with a network of over 600 local, regional and statewide partners to provide resources and customized support that helps your clients succeed In Wisconsin®.
their facilities, WEDC offers financial assistance, including loans, grants and tax credits. For clients who need to start or expand their export strategy, WEDC’s team of market development directors and in-country trade representatives provide expertise on doing business successfully in many of the world’s fastest growing markets. To learn more about WEDC and our portfolio of customer-centric programs and resources designed to help your clients reach their full potential, call 855-INWIBIZ (toll free), email DoBusiness@InWisconsin.com, or visit InWisconsin.com.
To help technology-oriented startups grow, WEDC provides direct funding and helps to facilitate investment capital. When more mature businesses need to upgrade employee skills or expand
In Wisconsin® is a registered trademark of Wisconsin Economic Development Corporation.
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By Nathan Roth, CPA
W
e’ve all been there: Can I make it from this paycheck to the next? What happens if I lose my job or there’s an emergency that drains all of my funds or available credit, and I can’t pay for my shelter? Hopefully those days are past for you and your clients, either personally or via their businesses. However, for some, these may be recurring thoughts. Through no fault of their own (and sometimes not), unfavorable events in tandem with low funds may push them down a generally unforgiving spiral of debt. As tax professionals, we may not be able to pull them out of these tricky situations, but we can certainly help guide them. Remember, we see and hear different ideas of personal finance from hundreds of individuals, whereas our clients may only be aware of a handful or what they read in the media or books. The situation is analogous to receiving an Internal Revenue Service (IRS) notice. We see them often enough to be unfazed.
Step 1: Open up The first step is to talk with the client. Crushing debt and unfortunate circumstances are not easy to chat about, and your client may be reluctant to open up. So, as their de facto personal finance advisor, you may have to summon your professional experiences to let them know they aren’t the only one in the boat. Each person handles adversity differently, but the resiliency is in all of us.
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shutterstock.com
{ Tax | insolvency }
Creating a course of action for clients facing insolvency
Step 2: Insolvency worksheet Next, it would be wise to see if your client is insolvent or not. If you’ve known them for years, you may have an idea as to their financial status. However, asking the client and writing down the numbers paints a clearer picture. worksheet if your client is in a real bind. Keep in mind that if the IRS questions any cancelled debts left out from income, you may be asked to provide an insolvency worksheet for each of the omitted cancelled debts.
Step 3: Choosing a course of action Liquidations Sometimes the best course of action is to simplify. Ambitions may have run amok, and your client got into rental properties, established disregarded entities or various sole proprietorships and became too outstretched to focus on producing income. If it appears your client is having trouble, perhaps shield those personal liabilities from the income producing proprietorship by founding an S Corporation or C Corporation. The added liability shield does not allow failure (or success) to be mutually exclusive. On the flip side, if the client’s S Corporation or LLC liquidates and the business becomes essentially a shell, the liability shield protecting owners can be lifted and creditors can begin hassling owners to settle the business’ debts. Should the creditors succeed, the taxpayer may be allowed to deduct the payment of the claims, but only as a capital loss. Distributing or selling severely depreciated assets in an S Corporation to a closely held or family-owned business won’t be tax advantageous, either. None of those losses can be recognized and the adjusted basis transfers to be recaptured in later years.
If the restructuring were to occur on a rental property, the 1099-C amount could be excluded from income, but the amount omitted will reduce the basis by that amount. If basis in the building is less than the amount forgiven, a currently taxable event occurs.
Bankruptcy A last resort, but possibly the only way for your client to get out from underneath the financial burden. This is the part where that bankruptcy attorney in your rolodex is required, as practicing law as a CPA is unsavory. Either Chapter 7 (liquidation) or Chapter 13 (restructuring) are possibilities, though the latter requires a steady job, but the “easier” to obtain relief. Both are marathon processes, but both offer an answer for a beleaguered individual. In either case, insolvency can be officially determined by the courts, so those 1099-C’s can confidently be marked as “insolvent” on your return preparation software to exclude from ordinary income and flowing through to Form 982. Although bankruptcy can erase some debts, it would be
“There are limited methods to assist our clients through financial hardship on the tax side. But oftentimes, the simplest suggestion of claiming insolvency and having them reduce their withholding early in the year are the best methods.”
helpful to remind clients that past taxes are incredibly difficult to discharge. CPAs can assist by being the facilitator with the IRS to come to a payment plan agreement. It’s important to express to your client that keeping their
Finally, you must remind your client that if their established entity ceases, so do their tax attributes.
home through bankruptcy is a possibility, through either
Debt restructuring
house sales are below the allowable gain limit of taxation, the
Another option for your client if the times are tough, but they just need to get a little bit ahead, would be to go to their creditors and work out a debt restructuring. However, there’s a hidden tax attribute that they should be aware of. Should your client restructure mortgage debt and the mortgager “shaves some off the top,” resulting in a lower monthly payment, that “shave” is cancelled debt and will necessitate a 1099-C. If your client was precariously close to parity on the insolvency worksheet, they may end up liable to
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{ Tax | insolvency }
IRS Publication 4681 has a no-stone-unturned insolvency
the amount of the benefit as ordinary income.
debt restructuring or reaffirmation of the mortgage. As most corresponding loss of basis (tax attribute) may not have much of a future effect. There are limited methods to assist our clients through financial hardship on the tax side. But oftentimes, the simplest suggestion of claiming insolvency and having them reduce their withholding early in the year are the best methods.
Nathan Roth, CPA is a senior accountant at Sitzberger Hau & Co., S.C. in Brookfield. Contact him at 262-860-1724 or NRoth@sitzwidmann.com.
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It’s so hard to say goodbye: Duties of
employers and employees upon termination By Erik K. Eisenmann
T
he termination conversation can be difficult and uncomfortable for employer and employee. Unfortunately, that conversation may be
just the beginning. Even where a termination seems straightforward, i.e., the separation is amicable, and there is no employment agreement or other contract in place, both parties likely have certain ongoing obligations that may survive the term of employment and/or apply during the wind-down process.
Employer obligations First and foremost, employers have an obligation under state and federal law to pay a terminated employee any wages he or she has earned prior to termination. This calculation is usually easy for hourly employees, but for those employees who are paid on a commission or other
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shutterstock.com
{ Human resources | termination responsibilities }
EVEN WHERE A TERMINATION SEEMS STRAIGHTFORWARD, BOTH PARTIES LIKELY HAVE CERTAIN ONGOING OBLIGATIONS THAT MAY SURVIVE THE TERM OF EMPLOYMENT AND/OR APPLY DURING THE WIND-DOWN PROCESS.”
{ Human resources | termination responsibilities }
basis, it can be more complicated. As a general rule, unless there
and common law) not to disclose to others or use any of the
is an employment contract or written agreement that provides
employer’s “trade secret” information.
otherwise, an employee is deemed to have earned wages at the time he or she renders the service, even if the payment for those services, e.g., payment from a customer is received by the employer after the termination. In addition to wages, employers may have an obligation to
All departing employees generally have an obligation to return any employer-owned property, e.g., keys, access cards and electronic devices such as computers and employerissued mobile phones. Employees also generally have a duty to return hard copies of documents that contain the employer’s
compensate terminated employees for accrued but unused
confidential or proprietary information.
vacation time. Although there is no federal law that requires the
Joint obligations
payment of vacation time, state laws on this issue frequently differ. Wisconsin has no statute or regulation that requires
Following a termination, both parties would be wise to be
payment. However, the Department of Workforce Development
truthful about the prior employment relationship. Although
takes the position that if the employer has a policy or practice
neither party has any duty or obligation to provide information
of paying out vacation or paid time off (PTO) at termination,
to any third party about the employee’s employment with or
the employer has a legal obligation to continue doing so until
termination from the employer (indeed, it is often advisable for
it officially changes its policy. As a practical matter, employers
the employer not to offer any such information), if either party
should include clear language in their handbooks or policies
does choose to talk about the relationship, he or she should avoid
if they do not intend to pay out accrued vacation upon
making any untrue or disparaging comments or statements that
termination.
could lead to liability under theory of defamation.
Finally, where the employer maintains a benefit program (like group health insurance), there is a duty under the Consolidated Omnibus Budget Reconciliation Act (COBRA) to provide a departing employee with certain information regarding continuation of coverage.
Employee obligations Where an employee has signed an employment agreement,
Recommendations The burden is on the employer to be completely prepared before the actual termination meeting takes place. If there are any relevant contracts or agreements, the employer should be ready to discuss those agreements with the departing employee, and to clarify the scope of the employee’s post-employment duties and obligations. Providing this information at the time of
confidentiality agreement, or noncompete/nonsolicitation
termination can help facilitate a smoother transition and avoid
agreement, there are generally duties that extend beyond the
conflicts down the road.
termination of employment. These can be found in the terms of the agreement, and may include the duty not to solicit clients or customers, and/or the duty not to disclose the employer’s confidential information. Assuming that these restrictions
Erik K. Eisenmann is an attorney and member of the Labor & Employment Team at Whyte Hirschboeck Dudek S.C. in Milwaukee. Contact him at 414-978-5371 or eeisenmann@whdlaw.com.
contain reasonable geographic and/or time limits, they are generally enforceable under most states’ laws. Even in the absence of a written agreement, however, a
Read more: Wisconsin’s Wage Payment and
former employer. In Wisconsin, former employees have a
Collection Law: tinyurl.com/earnedwages The Wisconsin Uniform Trade Secrets Act:
continuing obligation under state law (including the Wisconsin
tinyurl.com/wistatute
departing employee has certain obligations to his or her
Trade Secrets Act, Section 134.90 of the Wisconsin Statutes,
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By Robert Cedergren, CPA, CGMA, CITP, CISA, CISSP
T
and Neiman Marcus made big headlines for good reason. The sheer amount of stolen
information was staggering. What’s worse, it’s estimated that one in three victims of data breaches can thereafter expect to become victims of fraud. Before fraud can be committed, however, data must be procured. Moreover, a data breach is the best means for stealing large amounts of personal information with far less risk than previous methods of theft such as pilfering through garbage cans or breaking and entering. Cyberattacks like the recent retail incidents are relentless and will continue in both for-profit and nonprofit organizations. The important thing to remember about cybercriminals is that they are equal opportunity offenders. Few of today’s targeted breaches are perpetrated by disgruntled, former employees or individuals bent on retaliation.
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shutterstock.com
{ Technology | nonprofits }
Are nonprofits the next “Targets?”
he recent high-profile data breaches at Target
{ Technology | nonprofits }
Instead, criminals arbitrarily look for the path of least resistance. Therefore, nonprofit organizations with limited technical resources can expect to become the target of a data breach. Nonprofit organizations have much to lose in the event of a security breach. The financial loss can be devastating, and the reputational damage can be ruinous. As CPAs working with nonprofit organizations, you should be aware of the three
There’s still a paper trail to protect Data isn’t just in digital form, it’s also on paper. Plus, even though a data breach is a preferred method of stealing over digging through a dumpster, many data compromises still happen the old-fashioned way — through lost or stolen paper documents. Since many nonprofit organizations still rely on
biggest security realities and how to address them.
paper records, they should heed the following advice
Identity theft is just one human error away
•
from the Federal Trade Commission: business. If there isn’t a legitimate business need for sensitive, personally identifying information,
Whether it’s a stolen laptop or a lost thumb drive, breaches that put personal data at risk can lead to identity theft. Donor records can be exposed, and so
don’t keep it. In fact, don’t even collect it.
•
a locked file cabinet. Limit access to employees
Social Security numbers of employees and volunteers.
with a legitimate business needs. Control who
There have been several well-publicized cases in online because of human error. Therein lies the rub. While threats come from different sources — malware and Internet attacks — many are caused by human error. Organizations must make sure private data doesn’t go public. This requires uncompromising efforts to ensure sensitive data is protected from unauthorized disclosure. A well-trained work force and well-managed volunteer corps are usually the best defenses against identity theft and data breaches.
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Lock it. Protect the information that’s kept. Store paper documents or files in a locked room or in
can personal information about board members or the
which sensitive information was inadvertently posted
Scale down. Keep only what’s needed to conduct
has a key and the number of keys.
•
Pitch it. Properly dispose of what’s no longer needed. By properly disposing of sensitive information, you ensure that it cannot be read or reconstructed.
Certainly these recommendations apply to CDs, floppy disks, zip drives, tapes, and backups. Wipfli LLP suggests implementing a well-defined disposal process, one that’s compliant with record retention policies, legal requirements, and funder requirements.
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{ Technology | nonprofits }
What you lack in dollars, you can make up in discipline Admittedly, nonprofits operate on limited budgets, as
security measures in place, they should then reassess their efforts and update them regularly.
A lot on the line
well as restricted grant dollars that are allocated only to specific expenditures. As a result, they aren’t always able to invest in the latest security software and tools, including intrusion detection systems. Fortunately, adopting a disciplined and proactive approach to security that is cost-effective and making an investment in preventive controls are far less costly than the extraordinary monetary losses caused by a data breach. Organizations should assess their risks and vulnerabilities, plus develop and implement policies and
According to a 2008 survey by Javelin Strategy and Research, 55 percent of participants said they would trust an organization less after a breach. Nearly 30 percent said they would never again donate to or support that organization. Imagine the financial implications of losing 30 percent of your donors! With their reputations clearly at stake, nonprofit organizations must recognize the ever-present risks and take strong, proactive measures to keep sensitive data safe.
procedures accordingly. They must train their employees
Robert Cedergren, CPA, CGMA, CITP, CISA, CISSP is a partner
and volunteers and create a “culture of security.” They
at Wipfli LLP in Duluth, Minn. Contact him at 218-722-4705 or
must also establish an incident response plan. With
rcedergren@wipfli.com.
PEAK PERFORMANCE IS HUMANLY POSSIBLE What are you doing to launch your business forward? Experis™ can bring you the risk advisory, tax and finance & accounting solutions and experts that share your vision and can help you create sustained growth. Let us connect you to the experience you need and watch your company take off. Visit experis.com Contact one of our Wisconsin locations: Appleton (920) 380-0850 • Madison (608) 828-2720 Milwaukee (414) 231-1150
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Do you have clients looking for a health plan AND a tax break?
Show your clients a healthy, financial option with a Health Savings Account (HSA). Open enrollment period is still underway for Affordable Care Act health insurance plans. There’s time for your clients to sign up and take advantage of an HSA for tax year 2014. Advantages to HSAs include: • Tax-deductible — Contributions to the HSA are 100% deductible (up to the legal limit) — just like an IRA. • Tax-free — Withdrawals to pay qualified medical expenses, including dental and vision, are never taxed. • Tax-deferred — Interest earnings accumulate tax-deferred, and if used to pay qualified medical expenses, are tax-free. • HSA money is the clients’ to keep — Unlike a flexible spending account (FSA), unused money in the HSA isn’t forfeited at the end of the year; it continues to grow tax-deferred.
If you or your clients might benefit from an HSA, act today. Open enrollment period ends on March 31.
(Special enrollment periods for qualifying events available throughout the year.)
For a No-Obligation Price Quote, have your clients visit
www.UnitedHealthOne.com/CPA or call (800) 358-9728 For more resources about HSAs, visit www.HSACenter.com/CPA
UnitedHealthOneSM is the brand for personal health and related insurance products underwritten by Golden Rule Insurance Company and UnitedHealthcare Life Insurance Company. These health plans from UnitedHealthcare Life Insurance Company are guaranteed issue during Open and Special Enrollment periods only. Product availability varies by state. © 2014 United HealthCare Services, Inc. 42878a-UL-0214
The Magazine for Wisconsin CPAs A publication of the
Wisconsin Institute of Certified Public Accountants 235 N. Executive Drive Suite 200 Brookfield, WI 53005 www.wicpa.org
Are your clients possible TARGETS of a criminal or civil tax investigation?
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Recognized by colleagues as top tax attorneys in Wisconsin
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