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Features Columns
6 Teamwork makes the dream work
From team sports to work teams, Heather Acker, CPA, stresses that CPAs are all in it together, and everyone needs to do all they can to build the CPA pipeline.
By Marcia Tillett-Zinzow
12 Accounting and STEM
The AICPA and all 54 state CPA societies are urging the U.S. Department of Homeland Security to recognize that accountants are members of the STEM community.
By AICPA and
CIMA
16 A crucial window for estate planning
Find out how to help your clients plan for the estate and gift tax changes that may be coming as soon as Jan. 1, 2026, unless new legislation occurs before then.
By Daniel F. Rahill, CPA/PFS, JD, LL.M., CGMA
22 Litigation and forensic services: Specialized services CPAs can provide
Learn the types of legal disputes that may require financial experts to provide financial analysis and expert opinions on behalf of their clients.
By Lisa Cribben,
CPA/ABV, ASA, CMA
26 LEADERSHIP
4 steps to having productive accountability conversations
Holding people accountable can be difficult when both parties are emotionally primed. It’s important to get constructive conversations started on the right foot.
By
Rich McLaughlin, MA
28 TAXATION
The IRS has the tools to help scam victims … so why aren’t they using them?
The IRS is keenly aware of government impersonation scams targeting seniors and defrauding them of their life savings — but they still tax the losses.
By
Robert B. Teuber, JD
32 NOT-FOR-PROFITS
Vulnerable targets: How not-for-profits can prevent money laundering and fraud
The risk of fraud is a serious concern for all types of businesses but can be particularly crippling to a not-for-profit organization.
By Kasia White
36 HUMAN RESOURCES
Growing opportunities for women in accounting
Women accountants and auditors are now in the majority. Supporting and empowering them is one of the keys to workforce retention.
By Amanda Klein
On Balance is published five times a year by the Wisconsin Institute of Certified Public Accountants (WICPA). Change of address should be sent to: Membership, W233N2080 Ridgeview Pkwy, Suite 201, Waukesha, WI 53188; Phone: 262-785-0445 or 800-772-6939; Fax: 262-785-0838; email: comments@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 2024 On Balance
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Directors
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OUTLOOK | CHAIR’S LETTER
“The exposure draft process is your opportunity to provide feedback to those responsible for writing the laws and rules that govern the profession.”
YOUR Opinion Matters!
By Ryan J. Hanson, CPA, CGMA
As part of efforts to address accounting’s talent needs and expand access to accounting careers to more candidates, the American Institute of CPAs (AICPA) and the National Association of State Boards of Accountancy (NASBA) have proposed changes to the profession’s model law.
The Competency-Based Experience Pathway would allow CPA candidates to demonstrate their professional and technical skills in the workplace after earning a bachelor’s degree and meeting their state’s requirements for accounting and business courses. The AICPA and NASBA released an exposure draft outlining the proposed pathway on Sept. 12. That comment period1 is open through Dec. 6.
Separately, the NASBA board of directors approved for exposure Uniform Accountancy Act (UAA) Model Rule changes updating the definitions to reflect the additional pathway for licensure and the experience required for the issuance of an initial certificate under the proposed additional pathway.
The AICPA and NASBA are seeking input2 on the proposed changes through a comment period that will remain open until Dec. 30.
The exposure draft process is your opportunity to provide feedback to those responsible for writing the laws and rules that govern the profession. Your responses will determine if these changes are implemented as is or amended. If the UAA is amended, each state will consider the changes and decide whether or not they will adopt the recommendations.
We ask that you consider some specific issues as you review these proposals, including whether you believe these will help the pipeline issue or whether other options should be explored.
1 https://nasba.org/blog/2024/09/11/aicpa-and-nasba-seek-input-on-proposed-additional-pathwayto-cpa-licensure/
2 https://nasba.org/blog/2024/09/26/aicpa-and-nasba-seek-input-on-proposed-amendments-to-theuaa-model-act-and-rules/?nocache_login=1727456856
CPA candidate employer/supervisors: This proposal would ask more of those verifying the experience of CPA candidates. When reviewing the program please think about how you would ensure (in a way that you would be comfortable signing off on their experience) that staff you directly manage could obtain the competencies listed.
DSPS/Accounting Examining Board: This proposal would ask more of those verifying the experience requirements of CPA candidates (namely DSPS and the Accounting Examining Board), potentially prolonging the licensing process.
Current CPAs: This proposal would change the provisions that allow CPAs to practice in other states. When reviewing that language, think about how your ability to serve out-of-state clients or engage with CPAs in other states may be impacted.
Educators: These proposals retain the current pathway while adding a new pathway, which may become attractive to some students and employers. When reviewing the language, please keep your own program in mind and consider how your current curriculum might have to adapt to fit the needs of students pursuing each of these pathways.
The WICPA board of directors will discuss these proposals during their next meeting. We would appreciate any thoughts you would like to share related to these proposals. Please provide your comments to the AICPA and NASBA and also share your thoughts with WICPA President & CEO Tammy Hofstede at tammy@wicpa.org.
Ryan J. Hanson, CPA, CGMA, is senior vice president and chief financial officer for Pekin Insurance and the WICPA 2024-2025 board of directors chair. Contact him at 309-478-2746 or rjhanson@pekininsurance.com.
TOUCH | PRESIDENT & CEO’s MESSAGE
“It’s
time to inspire the next generation and share the wide variety of career paths available in accounting and why being a CPA is worth the time and effort.”
November Is Accounting Careers Month
It’s Time to Tell YOUR Story!
By Tammy J. Hofstede
The WICPA is very excited to once again partner with state CPA societies across the country to raise awareness of the accounting profession among high school students. This November is Accounting Careers Month, which is dedicated to helping students better understand career opportunities in the accounting and CPA profession. Last year, we reached nearly 1,200 high school students across the state and set goals even higher for this year. The WICPA also has once again received a proclamation from Gov. Tony Evers, declaring November Wisconsin’s Accounting Careers Month.
It is more important than ever to recognize the importance of CPAs to our communities and businesses and to support outreach efforts to future CPAs. The pipeline is one of the most important issues facing the CPA profession today, with trends continuing to show fewer students choosing to pursue accounting degrees. It’s time to inspire the next generation and share the wide variety of career paths available in accounting and why being a CPA is worth the time and effort.
While efforts at the national and state levels continue, you can make a significant impact. You know that being a CPA or an accountant is more than just numbers and regulations. It’s a career path that requires dedication, hard work and passion. Telling your story and sharing your passion for the profession can be a powerful tool for inspiring future generations of accountants. It also gives you the opportunity to reflect on your own journey and celebrate your accomplishments.
You can provide guidance, advice and encouragement to help young people navigate the profession and find their own paths to success. Sharing your story promotes the value of the profession and removes those common misconceptions that accounting is boring or unexciting. Students need to know that
no matter what their interest, an accounting degree can help them work in any industry they’re passionate about.
As part of Accounting Careers Month, I urge you to give back to the profession and volunteer some of your time this November to going into high schools to talk about the career opportunities available in accounting. We have made it very easy for you to participate — in just three easy steps! This is all you need to do:
1 Reach out to your own contact, or send our pre-written letter to one or more high schools where you’d like to speak.
2 Schedule a day and time with the school(s) and/or teacher(s) to speak to a class.
3 Then let us know by completing the Accounting Careers Month Volunteer Form you’ll find at wicpa.org/Careers Month.
Once we receive your form, we’ll provide everything you need, including a presentation, resources and fun gifts for students and educators.
Our outreach efforts in classrooms are not just limited to November. You can connect with local schools throughout the school year!
YOU can make a difference! Get involved and inspire the next generation of accountants. This is how we will change the image of the profession, how we will attract talent and how we will grow the pipeline.
To learn more about Accounting Careers Month — and to volunteer — visit wicpa.org/CareersMonth.
Tammy J. Hofstede is president & CEO of the WICPA. Contact her at 262-785-0445 ext. 4518 or tammy@wicpa.org.
CPA Appreciation Month Proclamation
WHEREAS; certified public accountants (CPAs) play an important role in ensuring the fiscal health and well-being of people, businesses and institutions across Wisconsin; and
WHEREAS; charged with providing accounting and auditing services, management advisory services, individual and corporate tax assistance, financial planning, and litigation and forensic consulting, CPAs are essential to the vitality and prosperity of the state; and
WHEREAS; by maintaining and enhancing their skills through continuing professional education, CPAs uphold high standards of ethics, professionalism, and knowledge; and
WHEREAS; CPAs in Wisconsin use their unique knowledge and experiences to provide reliable financial counsel that protects and promotes the prosperity of businesses, the stability of government operations, the success of higher education institutions, and the confidence of investors throughout the country; and
WHEREAS; as the demand for skilled CPAs continues to grow, the state of Wisconsin recognizes the importance of encouraging the state’s youth and young adults to pursue careers in accounting, which offer diverse opportunities for professional growth and development; and
WHEREAS; this month, the state of Wisconsin recognizes all certified public accountants and organizations, including the Wisconsin Institute of Certified Public Accountants, for their commitment to the fiscal health of the state and their work to support individuals, communities, and businesses;
NOW, THEREFORE, I, Tony Evers, Governor of the State of Wisconsin, do hereby proclaim November 2024, as
ACCOUNTING CAREERS MONTH
throughout the State of Wisconsin, and I commend this observance to all our state’s residents.
Photography by
Mark Hines
Teamwork Makes the Dream Work: Heather Acker, CPA
By Marcia Tillett-Zinzow
Heather Acker, CPA, recipient of the WICPA’s 2024 Woman to Watch Excellence Award, is managing principal of Risk Advisory Services for Baker Tilly LLP. The Wisconsin native was born and raised in Madison, where she still resides, and graduated from Waunakee High School in 1993 and then from UW–Madison in 1997 with a BBA degree in accounting.
In high school, she was team- and sports-oriented, having participated in two state championship teams (girls volleyball in 1991 and girls basketball in 1993). “I also played softball,” she said with a smile, “but no state championship there.” In college, she was originally a finance major with an eye on law school. Then she got some advice to add accounting as a second major for “marketability.”
“In 1997 I took on an internship in public accounting that hooked me immediately into this profession,” Acker said. She recalled that back then CPAs wore business suits to the office and to clients’ offices five days a week, exclaiming, “It was a treat to wear jeans to the office on Saturdays during busy season!”
During her internship (with Baker Tilly), Acker was instantly drawn to the challenges and rewards of working with clients and the teamwork that came with working in public accounting.
The CPA Exam: What a difference from today
Seeking an early leg up, Acker decided to take the CPA Exam during her last semester of college. “This was when the four sections of the exam were completed during two days in November,” she noted. “A few weeks before I took the exam, however, I had somehow become aware of a Wisconsin state statute surrounding CPA licensing that required a college degree be obtained prior to or within a specified number of days from taking the exam.”
On doing her due diligence, she noticed that the exam dates and the UW–Madison graduation date were just one day greater than the statute allowed.
“This prompted my first experiences working with a state agency and the legislature to make changes to that regulation,” she said. “Ultimately, it resulted in my eligibility for the exam and eventual CPA license.”
The real happy ending came when she passed all four sections on the first try and became a proud CPA shortly thereafter.
When Acker began her career with Baker Tilly, the firm was known as Virchow, Krause & Co. LLP. Headquartered in Madison, Virchow Krause had a few satellite offices elsewhere in Wisconsin, employed 300 people and averaged about $25 million in annual revenue. On June 1, 2009, the firm formally changed its name to Baker Tilly Virchow Krause LLP and became the only U.S. member of the Baker Tilly International network to be branded as Baker Tilly. As of February 2024, Baker Tilly International employed more than 43,000 individuals in 141 territories and declared a combined revenue of $5.2 billion.1
The journey to leadership
Acker’s pathway from intern to partner began with specializing in government audits and the eventual expansion of her client base to include Illinois as well as Wisconsin.
“I developed a strong appreciation for the financial and operational complexities in the government environment and had the opportunity to work with some amazing, and very impactful, clients and team members during those years,” she said.
Her expertise with government audit issues led Acker to apply for and serve on various AICPA committees, where she participated in the standard-setting process on the front end — expertise she would bring to bear with her clients and team members. Her role at Baker Tilly would expand to include additional broad audit leadership responsibilities, and she eventually became the partner in charge of Baker Tilly’s technical team for the public sector. This led to another post as the firm’s Central Region Assurance Leader.
In 2019, Acker was elected to Baker Tilly’s board of partners and has helped guide the firm through many strategic decisions over the five years since. In 2020, she began her current role as managing principal of Risk Advisory Services, which, she noted, is a national consulting team with more than 400 people serving clients across the country.
“In each of these roles, I’ve found my greatest career fulfillment through teamwork — whether as a new team
1 https://en.wikipedia.org/wiki/Baker_Tilly_International
member learning the ropes of the profession, in teams of peers within and outside our firm, with clients trying to solve problems together, or in leading groups of people,” Acker stated. “It’s been an amazing journey I’ve been proud to participate in.”
After completing over a decade of service on AICPA committees, Acker has passed the torch to others at Baker Tilly who now serve in those roles.
The CPA pipeline
As we’ve all heard or read by now, the number of individuals sitting for the CPA Exam has dramatically declined, and staffing shortages have become a huge problem for CPA firms. The AICPA has previously reported that the number of CPA Exam candidates plunged between 1990 and 2021 by nearly 50%. And Bloomberg reported in March that an analysis of data from the Bureau of Labor Statistics showed the number of accountants had shrunk by 340,000 from five years ago.
As fewer young people enter the profession and baby boomers continue to retire, the problem will only get worse — unless dramatic measures are taken soon.
“It’s concerning because the demand for CPA skills is expected to continue rising,” Acker stated. She believes all CPAs should own some responsibility for how future talent is attracted — and she has suggestions.
“First and foremost, we need to highlight the versatility of the CPA profession,” she said, noting her own career journey as an example.
“I started in government audit and now lead a large team of consultants with backgrounds in IT, risk management, finance and many other areas. I’m just one of many at Baker Tilly who have pivoted to different roles.”
Acker noted that she has also watched friends and network contacts outside public accounting take on a variety of roles, such as C-suite leader, motivational speaker, estate planner and entrepreneur.
“One of my current team members is even a professional soccer referee!” she exclaimed. “Our skills align and overlap with many other business functions.”
Another important step CPAs can take, Acker said, is to engage with high school students — such as volunteering at career days, talking with extended friends and family, and proudly sharing their own career journeys.
“Having raised two teenagers, I know from experience that students are choosing their career paths far earlier than we were decades ago,” she said. “We have to get to them earlier than we have in the past.”
“
Having raised two teenagers, I know from experience that students are choosing their career paths far earlier than we were decades ago. We have to get to them earlier than we have in the past.
Acker stresses the importance of focusing on the CPA pipeline. Her son, Adam, is a senior accounting major at UW-Madison.
“
CPAs are trusted business advisors and regulatory problem-solvers and are essential to our capital markets. Few other professions have such profound business impact in the public and private sector.
Her third suggestion is for CPAs to highlight the meaningful impact of the profession. “As leaders in our profession, let’s engage together with how to reignite meaningfulness and excitement in our profession,” she said. “CPAs are trusted business advisors and regulatory problem-solvers and are essential to our capital markets. Few other professions have such profound business impact in the public and private sector.”
Finally, Acker encourages her fellow CPAs to open their minds to how they can all participate in improving the profession.
“We can help shape our future work environment, enabled by technology advancements and modernized approaches,” she said. “The stark reality is that things are already changing — for example, long hours of busy season are no longer a badge
of honor in public accounting, and more positive changes can and will come. We can all help make them happen.”
On the family side
Outside the professional realm, Acker considers herself “a football wife.” Her husband, Justin, coaches football at Waunakee High School and has seven state championship titles under his belt. “So, football has been a big part of our lives,” she said.
The whole Acker family plays sports. You already know that Acker played basketball, volleyball and softball in high school. Son Adam, now a senior accounting major at UW–Madison, has kept the family busy with baseball since he was about 5 years old, Acker said, and now plays on the UW club baseball team. Daughter Emily, now a freshman mechanical engineering major at UW–Madison, played basketball and soccer throughout high school.
Aside from sports (and accounting), the other family love is travel — to places including Italy, Malta, Iceland, Norway, Hawaii and Alaska. “When we’re not getting ready for a trip, I love planning future trips,” Acker said. “I have lived in Wisconsin my whole life, but I’ve loved seeing the world through travel.”
Now that the kids are out of the house, do the Ackers consider themselves empty nesters? Not really. “Our two dogs, Sunny (a 13-year-old yellow Lab) and Lexi (an 8-yearold beagle/bulldog mix), are still there to keep the house lively and ‘balanced,’” she laughed.
Marcia Tillett-Zinzow is a Wisconsin-based freelance writer and editor. Contact her at mtzinzow@icloud.com.
The Acker family attended the 2024 WICPA Member Recognition Banquet where Heather received the Woman to Watch award. From left: Adam, Heather, Justin and Emily.
Photo by Janet McMillan
Jacob Barthels, CPA, has been advanced to the role of director by CliftonLarsonAllen (CLA) in Sheboygan.
Nate Bartz, CPA, has been promoted to partner in Wipli’s manufacturing, retail and distribution practice. He is in the firm’s Wausau office.
Bradley Bermke, CPA, has been advanced to the role of manager by CLA in Sheboygan.
Bruce Berndt, CPA, CGMA, founder and CEO of Berndt CPA in Madison, has been honored with the prestigious 2024 People’s Choice Award for Best Accountant by the Wisconsin State Journal
Scott Blazek, CPA, has joined Vrakas CPAs + Advisors in Brookfield as an audit principal.
Hunter Bolson, CPA, has been promoted to senior associate at Hawkins Ash CPAs in La Crosse.
Katie Czarnecki, CPA, has been advanced to the role of director by CLA in Milwaukee.
Jason DeBrabander, CPA, has been promoted to supervisor at Hawkins Ash CPAs in Green Bay.
Jared Heimerl, CPA, has been promoted to partner in Wipfli LLP’s tax services, construction and real estate practices. He is in the firm’s Green Bay office.
Peyton Hietpas, CPA, has been advanced to the role of senior by CLA in Appleton.
Patrick Hoffert, CPA, has been appointed as the first-ever managing partner at Reilly, Penner & Benton LLP in Milwaukee. The appointment signifies the firm’s dedication to leadership development and succession planning.
Allyson Hofstede, CPA, has been promoted to senior manager at KPMG.
Riley Hutter, CPA, has been advanced to the role of manager by CLA in Green Bay.
Maria Ideker, CPA, has been promoted to senior manager at Hawkins Ash CPAs in La Crosse.
Amy Kiefer, CPA, has been promoted to manager at Hawkins Ash CPAs in La Crosse.
Mitch Klieforth, CPA, has been advanced to the role of BizOps senior by CLA in Green Bay.
Kaitlin Kubiak, CPA, has been promoted to manager at Hawkins Ash CPAs in Green Bay.
Max Lehner, CPA, has been advanced to the role of senior by CLA in Milwaukee.
Nicole Malueg, CPA, has been promoted to senior manager at Hawkins Ash CPAs in Manitowoc.
Tony Moore, CPA, has been promoted to senior associate at Hawkins Ash CPAs in La Crosse.
Emily Morgan, CPA, has been advanced to the role of director by CLA in Green Bay.
Brian Palm, CPA, has been advanced to the role of director by CLA in Wausau.
Tom Pamperin, CPA, CEO and president of Premier Community Bank, has been added to the Wisconsin Bankers Association Wall of Honor in acknowledgment of his outstanding contributions to the banking industry and commitment to community service.
Emily Podewils, CPA, MSA, has been advanced to the role of BizOps assistant controller by CLA in Milwaukee.
Ken Rojas, CPA, has been advanced to the role of BizOps CFO by CLA in Milwaukee.
Nathan Roth, CPA, has joined Andaloro, Smith & Krueger LLP, Waukesha, in their small business tax and accounting practice.
Lindsey Sabelko, CPA, has been promoted to partner in Wipfli LLP’s tax services and financial services practices. She is in the firm’s Eau Claire office.
Jack Sauer, CPA, has been advanced to the role of manager by CLA in Appleton.
Aycha Sawa, CPA, CIA, has been named chief financial officer for the Milwaukee Public Schools’ Office of Finance. She was previously comptroller for the City of Milwaukee.
Emily Schuettpelz, CPA, has been advanced to the role of senior by CLA in Green Bay.
Andrew Smith, CPA, has been advanced to the role of manager by CLA in Madison.
Ashlyn Smith, CPA, has been advanced to the role of manager by CLA in Madison.
Nicholas Speel, CPA, has joined Hawkins Ash CPAs as a tax manager in the firm’s Neenah office.
Erik Sylte, CPA, has been advanced to the role of director by CLA in Eau Claire.
Victoria Thayer, CPA, has been named one of Ignition’s Top 50 Women in Accounting for 2024. The program sifted through
Patrick Hoffert
Bradley Bermke Scott Blazek Peyton Hietpas
Allyson Hofstede Riley Hutter
Mitch Klieforth Max Lehner Emily Morgan
Bruce Berndt
1,250 nominees from 29 countries around the globe to choose 50 women accountants whose resilience, leadership and mentorship inspires others.
Amber Tigert has joined Sentry, a mutual insurance company based in Stevens Point, as a senior internal auditor.
Derek Vandermoss, CPA, has been advanced to the role of manager by CLA in Appleton.
Dave Willert, CPA, has joined Acuity Insurance in Sheboygan as tax director.
Jessica Wolenec, CPA, has been advanced to the role of senior by CLA in Madison.
FIRM NEWS
Berndt CPA in Madison has been named One of the Best CPA Firms to Work For by Accounting Today. The firm was also named the 2024 People’s Choice Award winner for Best Accounting/ CPA Firm by the Wisconsin State Journal
Wegner CPAs, headquartered in Madison, has proudly announced the firm’s 75th anniversary. Since its founding in 1949 by Robert E. Wegner in Madison, the firm has grown from a sole proprietorship to a multi-office, multi-state operation, serving clients across diverse industries from seven offices in 13 states. Wegner currently has 178 employees, including 17 partners.
Email your announcement and photo in JPG format to mtzinzow@icloud.com.
have the opportunity to impact thousands of students and educators in Wisconsin.
Through your contribution to the WICPA Educational Foundation, you can help us reach students and educators in high school and college to create awareness about the accounting profession.
As the end of 2024 draws near and you are thinking about tax planning, consider donating to the WICPA Educational Foundation.
Questions? Contact Tammy J. Hofstede, WICPA President and CEO at tammy@wicpa.org.
contribute, visit wicpa.org/EF.
Andrew Smith
Emily Podewils Nathan Roth Jack Sauer Ashlyn Smith Erik Sylte Victoria Thayer Derek Vandermoss
Brian Palm Jessica Wolenec
Accounting and STEM
By AICPA-CIMA
On Aug. 1, the AICPA and all 54 state CPA societies — including the WICPA — sent a letter to the U.S. Department of Homeland Security (DHS) requesting DHS recognize accounting under the “T” for technology in Science Technology Engineering Math (STEM) education. The letter specifically requested that the accounting Classification of Instructional Program1 (CIP) code be added to DHS’s STEM designated degree program list.2 Included with the letter is an extensive white paper laying out the case in detail as to why accounting has always been and should be formally designated as a STEM profession by the federal government. The white paper leans heavily into the new skills accounting students are acquiring to both use existing tools and to develop new technology tools that drive change and advancement in the accounting profession. We anticipate DHS will release the updated STEM CIP code list next summer. Following is an excerpt from the white paper.
1 https://nces.ed.gov/ipeds/cipcode/browse.aspx?y=56
2 https://www.ice.gov/sites/default/files/documents/stem-list.pdf
Executive summary: Accounting and STEM Accounting, at its core, is an information technology for financial performance measurement, reporting and optimization, paired with risk assessment and management. Accounting has always incorporated STEM skills into its practice. However, over the past decade, as technology and data have transformed the financial system, it has demanded a significant shift in what skills and knowledge professional accountants use to best serve their clients. Beyond traditional accounting skills in database management, statistics, mathematics and risk assessment, today’s accountants must also be proficient with new and emerging technologies like artificial intelligence (AI), machine learning, data analytics, crypto assets and blockchain. With such added knowledge, accountants are well equipped to enhance their capacity to protect the interests of their clients and the capital markets as a whole.
“
STEM instruction is not optional but necessary for degree-granting accounting programs to maintain their accreditation.
In short, accounting is increasingly and inexorably rooted in the STEM ecosystem. By virtue of their education, licensure and practice, accountants are members of the STEM community.
Accounting education and STEM
As the financial ecosystem has become deeply integrated with technological advances, accounting schools have responded by updating the competencies and skills accounting students learn.
STEM instruction is not optional but necessary for degree-granting accounting programs to maintain their accreditation. Although U.S. degree-granting accounting programs vary in their precise curricula, a 2024 survey of U.S. accounting schools conducted by AICPA suggests that:
• U.S. accounting programs require at least one course in at least 12 topics widely considered to be STEM.
• The vast majority of accounting programs require coursework in STEM topics.
• The majority of required courses at most accounting programs contain STEM content.
The AICPA study also found that the STEM content of accounting academic programs equals or exceeds that of some programs classified under CIP codes defined as STEM by the DHS.
Accounting
professional licensure requirements and STEM
Accounting graduates who sit for the Uniform CPA Examination must demonstrate facility with multiple STEM disciplines to earn their licenses in every state and territory. Data and technology concepts are woven throughout all sections of the CPA Exam, which covers aspects of IT infrastructure, from platforms and services to security, confidentiality and privacy, as well as the foundational skills needed to build and develop technology.
In response to the changes to the CPA Exam, AICPA and NASBA have developed the CPA Evolution Model Curriculum3 “to assist faculty who want to prepare their students for the CPA profession.” The curriculum includes
3 https://nasba.org/wp-content/uploads/2021/06/Model-curriculum_web_6.11.21.pdf
multiple modules and topics that cover STEM content, including financial data analytics and information technology.
Accounting profession’s use of STEM-related research, innovation and technology
As the financial system has embraced new technologies, the accounting profession has taken steps to ensure its practitioners are well positioned to handle and analyze data in more sophisticated ways. Many public accounting firms have developed patented technologies — including software apps or other analytical tools — that allow accountants to better and more quickly perform risk assessments.
Accounting professionals develop software that facilitates financial analytics, financial data processing, knowledge management, data visualization, effective decision communication, statistical inference and dynamic modeling of financial data.
At the university level, degree-granting accounting programs prioritize original research and innovation initiatives that engage students in solving real-world problems, which provides tangible, ongoing benefits to the U.S. and global financial systems. Faculty and students have published research on blockchain, audit efficacy and data
security. In many degree-granting programs, students use analytical tools such as regression analysis, data analysis techniques, visualization tools and new technologies to solve case problems. Further, accounting school graduates have gone on to develop apps to improve audit efficiency.
The accounting profession’s connection to the development of new technologies is further reflected in the field’s deep engagement in the patent system. The Cooperative Patent Classification the extent to which accounting is driven by innovation and new technologies by including a full section on patent classifications for accounting, as well as other related topics. In addition, a review of patents issued under this subsection reveals numerous patents issued in the last 20 years to accounting firms for their development of new technologies to assist in accounting.
Conclusion
In recent years, the accounting profession has significantly increased its involvement in the development of technology and statistical tools, providing better insights into financial
These shifts underscore the extent to which accounting is a STEM profession that harnesses science, statistics and technology to maintain the country’s competitive edge.
INSPIRE FUTURE ACCOUNTANTS
PROMOTE ACCOUNTING & YOUR ORGANIZATION!
Step up and shape tomorrow’s accounting professionals by hosting high school students at your organization. The WICPA Educational Foundation’s Accounting Awareness Grants provide funding for high school educators to bring students to you for a presentation or activity to learn more about accounting. By volunteering to host a class, your organization will:
Spark interest in the accounting profession
Strengthen the CPA pipeline with future talent
Showcase your internships & job shadow opportunities
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A Crucial Window for Estate Planning: Preparing for 2026 Changes
By Daniel F. Rahill, CPA/PFS, JD, LL.M., CGMA
The Tax Cuts and Jobs Act of 2017 (TCJA) brought about substantial changes to the tax landscape, significantly increasing the lifetime estate and gift tax exemption amounts ($13.61 million for individuals and $27.22 million for married couples). However, these exemption amounts are set to expire on Jan. 1, 2026, and — absent new legislation before then — will revert to approximately $7 million for individuals and $14 million for married couples, subject to inflation adjustments.
This pending reduction creates a “use it or lose it” scenario for individuals and families with taxable estates, and failing to capitalize on the current exemption could result in a substantial financial impact. Given the federal estate tax rate of 40% and an expected exemption reduction of $7 million, this reversion would result in tax liability of up to $2.8 million per individual or $5.6 million for a married couple transferring their estate to heirs.
The IRS has clarified that benefits utilized under the current exemption won’t be subject to future reduction or “claw-back,” meaning that proactive estate planning can lock in a permanent tax advantage, making now an opportune time to act.
Estate planning for the mid-affluent
Contrary to common belief, the benefits of estate planning aren’t exclusive to the ultra-wealthy. The mid-affluent — individuals and married couples poised for significant asset growth — should also consider their future tax exposure. A mid-affluent couple with a $10 million estate today could see their assets grow well beyond the future exemption thresholds due to compounding investment returns. Historically, assets such as those tracked by the S&P 500 have seen an average annual return of 7.3% over the past 30 years. Such a rate of return could double an estate’s value every decade. Thus, estate planning is imperative for those who may not currently exceed the exemption but may in the future.
Sports fans have no doubt heard the famous quote often attributed to hockey legend Wayne Gretzky: “Skate to where the puck is going to be, not where it has been.” The same philosophy applies to estate planning — don’t plan based on where the estate stands today; create a plan for where the estate will likely be in the future.
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Don’t plan based on where the estate stands today; create a plan for where the estate will likely be in the future.
Strategic estate planning for the affluent
For your clients in higher wealth brackets, specifically those with estates worth more than $20 million, estate planning becomes even more critical as 2026 approaches. The scheduled reduction of the estate and gift tax exemption underscores the need for meticulous planning, particularly for those whose assets far exceed the current $27.22 million exemption for married couples.
A nuanced approach for a couple with $30 million in wealth involves one spouse fully utilizing their $13.61 million exemption by transferring assets either directly to beneficiaries or into trusts. This maximizes the current exemption of one spouse, ensuring that a significant portion of the estate is protected from future estate tax. The second spouse retains their exemption, which, even after the anticipated reduction, offers another layer of tax shelter. The second spouse also has the option of using a portion of their exemption, thereby removing future appreciation from their estate. This strategy balances the benefits of current tax law with the need for financial flexibility and security.
Core estate tax planning techniques
Regardless of estate value, there are numerous techniques and account structures available to help your clients minimize estate tax consequences. Following is a summary of the most common ones.
Lifetime and annual gifting: As essential tools in the estate planner’s toolkit, these strategies facilitate the transfer of wealth to the next generation while minimizing the estate’s tax
exposure. Lifetime gifting removes assets from the estate, potentially shielding them from estate taxes on future appreciation. Concurrently, annual gifting leverages the IRS’s exclusion amounts, currently $18,000 per recipient ($36,000 per couple), to systematically reduce an estate’s taxable value. Beyond the annual exclusion gifts, direct payments of tuition or medical expenses have no gift tax limitation at all. Thus, annual gifting offers a methodical approach to estate reduction that can have a significant financial impact on clients over time.
Spousal lifetime access trusts (SLATs): SLATs offer a strategic avenue for one spouse to support the other while also achieving estate tax savings. By establishing a SLAT, assets are transferred into an irrevocable trust for the benefit of the spouse and potentially other family members. This move effectively removes the assets from the grantor’s estate, mitigating estate tax exposure. The beneficiary spouse can access the trust’s income and, in certain situations, the principal for needs such as health, education, maintenance or support without compromising the tax benefits. The grantor also has the option to pay the tax burden on the grantor trust, allowing the trust to grow tax-free and further reduce their future taxable estate. This trust allows for significant asset protection and growth outside the estate, enhancing future financial security for heirs.
Grantor-retained annuity trusts (GRATs): Utilizing GRATs involves the grantor transferring assets to a trust, retaining the right to receive annuity payments for a
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Regardless of estate value, there are numerous techniques and account structures available to help your clients minimize estate tax consequences.
predetermined period, which is typically two to 10 years. At the end of the trust term, any remaining assets pass to the designated beneficiaries (often family members or heirs).
GRATs are particularly effective in low interest rate environments or when assets are expected to appreciate substantially. The key advantage of a GRAT is the potential for asset appreciation to exceed the IRS’s assumed rate (the Section 7520 rate), allowing the excess to pass to beneficiaries free of additional taxes. However, it’s also crucial to note that if the grantor passes away during the trust term, the remaining assets might be included in their estate, potentially negating some of the GRAT’s benefits.
Notably, legislation has unsuccessfully targeted GRATs for several years, including the Getting Rid of Abusive Trusts Act, which aimed to tax property transfers between the trust and
the grantor of the trust. Previous legislation also targeted the “zeroed-out” GRAT, otherwise known as the Walton GRAT. This is a GRAT in which the value of the gift to the beneficiaries is reduced to zero; put more simply, it allows a grantor to transfer appreciation of value tax-free to beneficiaries at the end of the trust term. Of course, these legislative proposals illustrate the urgency of why it’s imperative to plan ahead.
Intentionally defective grantor trusts (IDGTs): IDGTs are very effective tools for transferring wealth, especially for appreciating assets like family businesses or real estate. By designating a trust as “intentionally defective,” the grantor separates the income tax responsibility from the estate and gift tax implications. This allows the assets within the trust to grow tax-free because of the grantor’s payment of the income taxes, which further reduces the estate size indirectly.
Transferring business or real estate assets to an IDGT in exchange for a promissory note allows the assets to grow outside the grantor’s estate while the trust repays the note with business income. This method effectively moves appreciable assets out of the estate without immediate tax consequences.
Another advantage of IDGTs, like other irrevocable gift trusts, is the ability to utilize a “swap power,” enabling a grantor to swap assets of equivalent value between their personal estate and the trust. By swapping nonappreciated assets to the trust for appreciated assets, the grantor can actively manage the trust’s holdings to ensure they receive a step-up in basis upon the grantor’s death, minimizing capital gains taxes for heirs.
Qualified personal residence trusts (QPRTs): QPRTs enable the transfer of a primary or secondary residence into a trust, significantly reducing the gift tax consequences by discounting the value of the residence based on the term of the trust and the grantor’s retained interest. At the end of the trust term, the ownership transfers to the trust’s beneficiaries outright or in further trust.
This strategy not only lowers the estate’s taxable value by removing the residence and its future appreciation but also allows the grantor to continue living in the home for a specified period of time, typically 10 to 20 years. Should the grantor outlive the term, they can remain in the home by paying rent to the trust’s beneficiaries, further reducing the size of their estate by removing additional assets from the estate’s tax calculation. However, should the grantor pass away within the trust’s term, the tax benefits could be reversed, negating the tax benefits of the trust.
Charitable remainder trusts (CRTs): CRTs are excellent vehicles for supporting charitable causes while providing income and tax benefits for the grantor or other named beneficiaries. By transferring assets into a CRT, the grantor secures an income stream for a term of years (not to exceed 20 years) or for life, with the remainder interest designated to charity at the end of the trust term or at the death of the last
beneficiary. Additionally, CRTs offer immediate income tax deductions based on the present value of the remainder interest and potential savings on capital gains taxes, making it an attractive option for those with appreciated assets.
Notably, there are two types of CRTs: the charitable remainder annuity trust (CRAT) and the charitable remainder unitrust (CRUT). The CRAT provides beneficiaries with a fixed annual income based on a predetermined percentage (e.g., 7%) of the initial fair market value of the assets. A CRUT provides beneficiaries with a variable annual income based on a predetermined percentage of the trust’s assets, which are revalued annually.
In more advanced planning, CRTs can be structured to benefit multiple generations, extending beyond the grantor’s lifetime to provide for children and even grandchildren, all while ensuring that a portion of the trust’s value ultimately supports charitable causes. The maximum term is dependent on the present value of the remainder interest going to charity, which must be at least 10%. In some circumstances this multigenerational payout is used by planners as an alternative to the inherited stretch individual retirement account (IRA) where inherited IRAs are paid out over a beneficiary’s life expectancy. Since the Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019 generally limited the payout term to a 10-year period for most inherited IRAs, the stretch CRT can sometimes be used as an alternative.
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Financing life insurance policy premiums is a very effective method of paying for a large upfront premium or a series of premium payments for five to 10 years.
Charitable lead trusts (CLTs): Conversely, CLTs focus on providing immediate support to charitable organizations through annual payments for a specified period or a lifetime, with the remaining assets eventually passing to noncharitable beneficiaries.
The grantor transfers assets into an irrevocable trust, receiving a charitable or estate tax deduction for the calculated present value of the charitable payments. At the end of the trust term, the remaining assets in the trust are typically distributed to noncharitable beneficiaries, such as family members or heirs. The present value of transfer of the remaining assets to the beneficiaries at the end of the trust term is a taxable gift, which a lifetime exemption can offset. Facilitating the transfer of assets to noncharitable beneficiaries with reduced estate or gift tax consequences makes CLTs a powerful tool for legacy planning.
Dynasty trusts: Dynasty trusts, also known as generationskipping tax (GST) trusts, are designed for long-term preservation of assets across multiple generations, with the benefit of avoiding 40% estate and GST taxes with each generational transfer. For example, a grantor establishes an irrevocable trust and transfers assets into it, removing them from their taxable estate and leveraging the 2024 $13.61 million exemption (the GST exemption amount is the same as the estate and gift tax exemption). By electing to use the $13.61 million GST exemption on the gift, the assets avoid estate taxes that would otherwise be incurred when the assets pass to each future generation. However, special rules apply to
the inclusion ratios and applicable fraction formulas, depending on the type of trust receiving the GST, so extra care and planning are required when setting up the trust.
Additionally, a dynasty trust can provide income and support to the grantor’s children during their lifetimes, with the remaining assets passing to the grandchildren or other beneficiaries upon the children’s deaths. The grantor can impose certain restrictions, such as limiting access to the funds until a beneficiary graduates from college. Beyond tax benefits, GST trusts provide a shield for assets against potential future liabilities, such as divorce settlements among beneficiaries, ensuring that the wealth remains within the family lineage.
Depending on state laws, dynasty trusts can also extend for centuries. In Florida and Wyoming, for example, a dynasty trust can endure up to 1,000 years. In Illinois, the trust can last 360 years. By leveraging the grantor’s GST exemption, significant assets can be moved out of the estate, reducing overall estate tax liability and offering a durable solution for generational wealth transfer.
Irrevocable life insurance trusts (ILITs): ILITs serve as a crucial tool for estate liquidity and preserving family wealth. By owning a life insurance policy within an irrevocable trust, the proceeds from the policy aren’t included in the estate; thus, they’re not subject to estate taxes. This ensures beneficiaries receive the full amount of the life insurance benefit tax-free, providing essential liquidity for estate obligations without diminishing an estate’s value.
Typically, ILITs are funded by purchasing new policies, which avoid the three-year look-back period associated with the transfer of existing policies. For couples, second-to-die policies within an ILIT offer lower premiums and/or higher coverage given a couple’s longer joint life expectancy. Premiums can be paid through gifts to the trust, typically classified as “present interests” to qualify for the annual $18,000 gift tax exclusion by using a Crummey power tax provision.
Financing life insurance policy premiums is a very effective method of paying for a large upfront premium or a series of premium payments for five to 10 years. A loan from a bank or premium financing company allows the policy owner to borrow the cash necessary to pay the insurance premium. By borrowing, the grantor doesn’t have to liquidate assets, avoiding an unfavorable taxable capital gains event. It also leaves appreciating assets in the portfolio available for other higher-yielding investments. The loan is repaid either before death out of cash values of the life insurance or out of the life insurance proceeds upon death, leaving the interest paid on the debt as the only cost of setting up the ILIT.
Family limited partnerships (FLPs): For taxable estates, FLPs facilitate the seamless transfer of business interests to the next generation, ensuring continuity and protection of the family enterprise while minimizing estate tax exposure.
By transferring ownership interests in closely held family businesses or investments to FLPs, individuals can leverage minority ownership and nonvoting valuation discounts as high as 35%, effectively reducing the taxable value of their estates even further. FLPs are used to facilitate family business succession planning and asset protection, allowing for wealth transfer among families.
Consider a parent transferring a $20 million interest in a family business to their child through a FLP. By applying a 35% minority discount, the transfer is valued at $13 million for gift tax purposes, staying under the current $13.61 million exemption threshold and transferring wealth tax efficiently.
Proactive planning in uncertainty
Like the increased estate and gift tax exemption limits noted above, many other favorable tax changes are also set to expire under the TCJA at the end of 2025. These include lowered marginal tax rates, expanded tax brackets, and the 20% qualified business income deduction for pass-through entities, among others.
While the future of the TCJA provisions remains uncertain, proactive and strategic estate planning can help. Planning strategies may include optimized timing of income and deductions, retirement contributions, Roth conversions, loss harvesting, charitable giving and, perhaps, a reexamination
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While the future of the TCJA provisions remains uncertain, proactive and strategic estate planning can help.
of business structures, recognizing that the 21% C-corporation tax rate was made permanent by the Act. Additionally, integrating lifetime gifting, trusts and FLPs into your estate plan can offer robust protection against shifting tax policies and help mitigate the impact of expiring tax provisions and potentially higher tax rates post-2025.
Of course, it’s imperative for CPAs, financial advisors, tax professionals and estate attorneys to ensure these strategies align with their clients’ broader financial goals, so they can maximize the benefit to their heirs, minimize tax liabilities and secure and preserve a legacy for generations to come.
Daniel F. Rahill, CPA/PFS, JD, LL.M., CGMA, is a wealth strategist at Wintrust Wealth Management and a current officer and board member of the American Academy of Attorney-CPAs.
First published in Insight, a publication of the Illinois CPA Society, and used with permission.
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Litigation and Forensic Services: Specialized Services CPAs Can Provide
By Lisa Cribben, CPA/ABV, ASA, CMA
C“
PA firms are often at the forefront of offering forensic and litigation services. With their deep understanding of auditing and financial analysis acumen, CPAs are the backbone of these services. However, to provide forensic and litigation services, additional knowledge and expertise as well as a basic understanding of the increased risks, time demands and scheduling considerations are required. Litigation and forensic work involves assisting clients (often through their attorneys), providing expert advice and serving as an expert witness in court cases. Understanding the types of cases you would get involved in gives you a better perspective of the risks involved, the time commitments required, and the need to understand court processes and scheduling.
CPA firms are often at the forefront of offering forensic and litigation services.
The following types of legal disputes may require financial experts who would work for a client — often directly with an attorney — to provide financial analysis and expert opinions:
• Damages: calculating economic damages relating to negligence, injury or contract disputes
• Shareholder disputes: assisting in shareholder disputes relating to valuation or other financial disputes, such as compensation or company operations
• Fraud detection: analyzing financial records to assess potential fraud in relation to tax evasion, theft or money laundering
• Marital disputes: identifying or valuing marital assets or liabilities as well as assessing income levels to set child support and maintenance
• Bankruptcy and insolvency: valuation or analysis of financial records
• Merger and acquisition activity: assisting in financial disputes around working capital or representations and warranties
In the above cases, financial experts are performing forensic accounting; calculating damages related to a loss or contract dispute; or estimating the value of an asset, liability or business. Each of these types of expert services has its own specialized knowledge requirements and will have different potential involvement in litigation or court proceedings.
Forensic analysis and accounting
Forensic accounting is a subset of the financial analysis provided in litigation settings. Forensic accounting is the investigation of fraud or financial manipulation by performing extremely detailed research and analysis of financial information. The process of digging through a company’s or individual’s financial information can take months or even years and requires a team of specialized accountants who act like detectives trying to solve a mystery. Electronic data analysis can be an integral part of providing forensic accounting. Identifying and preserving computer data systems — including accounting records — and understanding the appropriate rules of evidence and discovery are part of forensic accounting. Forensic analysis often requires a written report on the financial findings that would be used by the attorney in negotiations with adverse parties or in court proceedings.
Damages calculations
The calculation of damages is performed in relation to general business or intellectual property for an insurance claim or an anticipated lawsuit resulting from a fire, act of terror, industrial accident, theft, fraud, contract dispute or other event. The estimate of damages may include loss of
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As with litigation and forensic services, valuation services require specialized knowledge and experience, and a credential such as the Accreditation in Business Valuation (ABV) certification is recommended.
a building or equipment, lost profits and future revenue, additional costs incurred, tax considerations or shareholder disputes. Calculation of damages in court proceedings will also require a written report outlining the methodology and assumptions to calculate the damages, and the report would be used by the attorney in negotiations with the other side or in court proceedings.
Valuation of asset, liability or business
Valuation services run alongside litigation and forensic services as the legal dispute or loss may involve a loss of business or loss of business value. As with litigation and forensic services, valuation services require specialized knowledge and experience, and a credential such as the Accreditation in Business Valuation (ABV) certification is recommended. If an individual performs business valuations, a portion of the business valuations conducted will be for litigation engagements, especially for divorce or shareholder disputes. Just as appraisers would write a report to outline the value of a business, the same type of report would be necessary for litigation purposes.
Testifying is part of providing litigation and forensic services
CPAs who work in the litigation and forensic area will eventually be required to testify for a deposition or act as an expert witness in the courtroom. An individual providing forensic accounting, economic damages calculations or valuations will need to get comfortable answering questions from attorneys regarding the reports they issue and potentially being a testifying expert in court agreeing to “tell the truth, the whole truth and nothing but the truth.”
CPAs need to be comfortable working in “gray” areas
When CPAs provide forensic, litigation and business valuation services, they are often preparing analyses using their own assumptions on future performance rather than documenting results that occurred in the past. They would need to be comfortable explaining and supporting their assumptions to their clients and testifying on those assumptions for a deposition or in the courtroom. In litigation, two experts may have very different opinions on the economic damages or business value based on the assumptions they use. Therefore, a CPA who works in this area would need to be comfortable arriving at
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those assumptions and explaining their rationale, as the assumptions are based on future performance and are not documenting past performance.
AICPA Forensic and Valuation Services Section
The AICPA Forensic and Valuation Services (FVS) Section provides professional certifications for both the Certified Financial Forensic (CFF) and Accreditation in Business Valuation (ABV) designations. The FVS Section provides specialized education to help those who are interested in litigation and forensic services. In addition, the FVS Section offers “expert witness boot camps” that prepare individuals to testify. As a previous executive director for the FVS Committee and a past co-chair for the AICPA Forensic and Valuation Annual Conference, I have seen the extensive education AICPA members provide. Therefore, I can recommend that CPAs who are interested in pursuing a career in litigation or forensic services participate in these educational opportunities or get involved in the AICPA FVS Committee.
Lisa Cribben, CPA/ABV, ASA,CMA, is a partner at Hawkins Ash CPAs, a regional accounting firm with offices in Wisconsin and Minnesota. She leads the firm’s valuation and litigation services and has been providing those services for over 25 years. Contact her at 920-336-9850 or lcribben@ha.cpa.
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4 Steps to Having Productive Accountability Conversations
By Rich McLaughlin, MA
So many of the leadership teams I work with struggle with holding people accountable. It’s so hard for some that they would rather avoid having the conversation and instead come up with a workaround. The problem is that those leaders then start to lose credibility with the rest of the organization. One reason these conversations are so difficult is because both people are emotionally primed entering into it. The deliverer of the message is worried about the direction it may go,
“ So many of the leadership teams I work with struggle with holding people accountable.
and the receiver can usually tell bad news is coming and can feel their defensiveness start to rise.
Like many conversations, it’s how you say things more than what you say. You should avoid going into a “parent/child” type of conversation where you try to shame the other person into the behavior you’re looking for by using phrases such as “I’m really disappointed that you …” (judging); “Why did you do it that way when I told you …” (accusing); or “What made you think that was a good idea to …” (judging and shaming).
These types of phrases will often generate a “child” response, such as “Sorry boss, I won’t do it again” (chagrined with eyes and head down). Worse, the other person can shut down and not even hear your full message. They experience an emotional hijacking “freeze” response and are unable to hear anything further.
Getting these types of conversations started on the right foot often comes down to tone and staying out of judgement. Having delivered many workshops on hard conversations, I have come up with the following structure that involves four steps and a pause.
1) Make an appeal to “collaborate.” I’ll often say something like, “Help me with something …” or “I need your help with something …” or “Check my thinking on something because I want to make sure I’m not overreacting.”
2) State the where, when and what (behavior) you saw. For example, “Remember the meeting we had two weeks ago about you needing to bring Sara up to speed before the next requirements meeting? That meeting was yesterday, and she told me you haven’t reached out to her at all.”
3) Explain the impact of that behavior on you, the team and/or the organization. For example, “I thought when we chatted, I made it clear why we need to get Sara up to speed ASAP. This slows the whole project down, especially if you will be rolling off in a month.”
4) Ask if your telling of events is accurate. Ask, “Does that make sense?” or “Is that fair?” or “Can you understand why I wanted to talk about this?”
At this point, you need to pause and see if they are willing to own their part of this mix-up. If you start the conversation tactfully, you’re hoping they step through the door and say, “Yeah, I can see why you wanted to talk.” Or they may push back and get defensive, and you may need to start over at step one. This is about as far as you want to go in this conversation before you start the “where do we go from here” part. If they are
“ Getting these types of conversations started on the right foot often comes down to tone and staying out of judgement.
not willing to own their behavior and how it contributed to this moment, they will not be ready for any “action planning.”
After step four, sit back and read their emotional state. Sometimes, you may have to end it there and say, “It looks like you still need to process this. Let’s pick it up tomorrow, and we’ll figure out how to resolve this.” Or maybe they are ready to move right into the “where do we go from here” conversation. Rather than give them your action plan, ask them for their thoughts: “So, what do you think you need to do to get this right?” This approach makes it clear who needs to own this going forward.
I find when I use this structure it helps me have productive, tough conversations, and people appreciate and respect me more.
Richard McLaughlin, MA, is a principal at McLaughlin Consulting Services. Contact him at rich.mclaughlin@eosworldwide.com.
The
IRS Has the Tools to Help Scam Victims . . . So Why Aren’t They Using Them?
TBy Robert B. Teuber,
The scam
J.D.
he Internal Revenue Service (IRS) frequently issues alerts about scammers who have bilked taxpayers out of millions of dollars. In a June 2024 alert, the IRS further warned about the increasing number of government impersonation scams targeting seniors and defrauding them out of their life’s savings.
A government impersonation scam often starts with a phone call in which the caller purports to be from a government agency and advises the victim that their accounts have been compromised and their identity stolen. The caller offers an apparent solution: The victim should move their tax-deferred retirement savings to a series of secure government accounts to avoid losing everything. The transfers are made in multiple small denominations, which the caller explains is necessary to prevent the alleged identity thief from knowing that the victim is trying to protect their money. In reality, the accounts belong to the criminal and the small transfers are intended to avoid bank scrutiny that would reveal the fraud. By the time the victim realizes the scam, the money is long gone.
Insult added to injury
At tax time, the impact on the victim is magnified. During the scam, the victim was manipulated into making the withdrawals. Because they did so themselves, they will receive appropriate Forms 1099 that will be filed with the IRS and issued to the victim. The withdrawals must then be reported on the victim’s Form 1040, which can easily yield a liability in the tens to hundreds of thousands of dollars. Before 2018, an itemized theft loss deduction was available that could offset a portion of the federal liability. However, the Tax Cuts and Jobs Act of 2017 (TCJA) eliminated the itemized deduction through the end of 2025. No deduction exists to offset the corresponding Wisconsin tax.
The available relief provides no relief at all
The only mechanisms to assist victims are the Offer in Compromise programs. If the fraud victim has been left destitute and has no resources to pay the tax debt triggered by the crime, a compromise may be possible. To pursue a compromise with the IRS or Wisconsin Department of Revenue (DOR), the victim must prepare specific financial statements:
“
In a June 2024 alert, the IRS further warned about the increasing number of government impersonation scams targeting seniors and defrauding them out of their life’s savings.
• If the financial statements show that the victim has no equity in assets and an income that is insufficient to pay the tax, a compromise may be accepted in an amount that the IRS or DOR believes will leave the victim with enough to pay their necessary living expenses — but nothing more.
• If the financial statements show that the victim is not destitute but has some equity in their home, the IRS and DOR may compromise the tax debt if the victim pays over their remaining equity to the tax authorities. The victim will obtain a compromise only if they give away what they have left.
• If the victim has lost all of their savings but has a sufficient income stream to pay the tax triggered by the fraud over time, neither the IRS or DOR will grant a compromise, and the victim must live with the impact of the fraud for as long as it takes to pay the tax.
Wisconsin is limited by statute
Wisconsin Statute Section 71.92 grants the DOR the power to compromise a tax debt, yet the DOR has long interpreted the statute as limiting its power to compromise based solely on the taxpayer’s ability to pay. This leaves no flexibility to the DOR to use its discretion to assist fraud victims. A legislative change is necessary to save the victims from Wisconsin tax.
The IRS has tools to help but chooses not to
The IRS has the power to help but is choosing not to as a matter of unstated policy. Treasury Regulation Section 301.7122-1 provides that the IRS may compromise a debt “to promote effective tax administration where compelling public policy or equity considerations identified by the taxpayer provide a sufficient basis for compromising the liability.” Such compromises, called ETA offers, are justified under the regulation in cases where the failure to compromise “would undermine public confidence that the tax laws are being administered in a fair and equitable manner.”
The IRS’s Internal Revenue Manual Section 5.8.11.3.2.1(5) provides that cases involving the “wrongful acts of third parties” may receive an ETA compromise: “Compromise may promote ETA and allow for relief if the taxpayer demonstrates that the criminal or fraudulent act of a third party is directly responsible for the tax liability.”
The United States Senate Special Committee on Aging released a report1 detailing the significant impact of such crimes on the elderly. The report complains of the tax consequences falling upon the victims of crime and includes numerous recitations of victims’ stories. The report clearly demonstrates the substantial public policy and equity concerns arising when victims are taxed on the losses caused by fraud.
The report itself does not include an explanation for the apparent IRS policy against ETA offers. The low-income tax clinic Legal Action of Wisconsin contributed its experiences and observations to the report. The clinic had asked the IRS for an explanation as to why these victims do not qualify for relief but has not received an answer. The clinic speculates that the policy is based on the IRS’s interpretation of Congressional intent following the elimination of the theft loss deduction in the TCJA. The TCJA, however, did nothing to change the power of the IRS to grant ETA offers on public policy or equitable grounds.
A change in course at the IRS?
While the IRS has not indicated a change in its policy, perhaps the recently released Private Letter Ruling 202430010 (PLR) indicates a change of heart by the IRS. The PLR involved a victim who had been conned into making a withdrawal from an IRA. The victim requested that the IRS waive the 60-day rollover period. The IRS granted the waiver request under Internal Revenue Code Section 408(d)(3)(I), which allows a waiver “where the failure to waive such requirement would be against equity or good conscience, including casualty, disaster, or other events beyond the reasonable control of the individual.” Surely, if equity and good conscience can allow a waiver of a victim’s rollover period, the public policy and equity standard required for an ETA offer can be invoked to help victims as well.
Until the IRS uses the available tools to help victims, the victims must be satisfied that the IRS is issuing alerts about the fraud. If the IRS does not change its policy, victims will receive relief from the IRS only after they have surrendered their remaining assets and income to the government. For now, vigilance against becoming a victim is the only tool available to avoid taxation.
Robert B. Teuber, JD, is a shareholder with the law firm von Briesen & Roper s.c. in Waukesha and Milwaukee. Contact him at 414-270-2538 or robert.teuber@vonbriesen.com.
1
Richard Anheier, CPA (1940–2024)
Richard Anheier, CPA, 84, a lifetime member of the WICPA, passed away on Sunday, Sept. 15. After graduating from Hilbert High School in 1958, Anheier attended St. Norbert College, graduating in 1962 with a degree in business administration and an emphasis in accounting. In October 1969, he obtained his CPA license and joined both the WICPA and the American Institute of Certified Public Accountants. He was employed in public accounting for nine years and was then offered a chance to become a partner. However, he declined the partnership opportunity and worked for 25 years in the field of real estate development, syndication, financing, property management and construction, holding the positions of controller, vice president of finance, treasurer and executive vice president. In 1996, he started his own firm, Anheier & Company Inc., which was organized to provide interim and part-time CFO work. The function of the company eventually changed to financial turnarounds. In addition to his work, Anheier was involved with several nonprofits, including the Fox Cities Convention and Visitors Bureau, United Way and various committees of the Catholic Church. He also served as a board member of Silver Lake College for eight years. Anheier is survived by his wife, Carol; their two daughters and one son; four grandchildren; a brother and sister; and other relatives and friends.
Robert F. Kolb, CPA (1936–2024)
Robert F. “Bob” Kolb, CPA, 88, passed away on Thursday, Sept. 26. He was a lifetime member of the WICPA. Kolb’s education at Marquette University prepared him for a distinguished career as a CPA and firm owner. He passed the CPA Exam in 1958 and two years later co-founded with Larry Lauwasser, CPA, the Milwaukee CPA firm of Kolb Lauwasser & Co. Their partnership was characterized by mutual respect and admiration, which endured as they grew the firm into the largest local full-service CPA firm in Milwaukee. Upon his retirement in 2002, the firm stood as a legacy of his professional dedication and was later merged with Sikich LLP in 2019. Kolb had a deep commitment to service. He was an active member of the Metropolitan Milwaukee Association of Commerce (MMAC) and served as chairman of the Council of Small Business Executives (COSBE). He also made a global impact through his role on the board of directors for the International Group of Accounting Firms (IGAF). His expertise and leadership were recognized by his peers when he was honored with the WICPA’s Distinguished Career Award in 1998. Kolb was also deeply involved in his
community, holding leadership roles on the boards of Westmoor Country Club, Divine Savior Holy Angels High School, Marquette University and Legatus. Kolb is survived by his wife, Gerri; three sons and one daughter; 11 grandchildren; and many other relatives and friends.
Larry Maples, CPA (1946–2024)
Larry Maples, CPA, 78, passed away on Sunday, Sept. 15, after serving as a member of the WICPA for 46 years. A 1964 graduate of Sturgeon Bay High School, Maples attended UW–Madison and earned a degree in business and accounting. He served in the U.S. Army during the Vietnam War and was stationed in Thailand as a cook. After passing the CPA Exam, Maples worked as a public accountant in the state of Washington and then returned to Appleton and worked for Schenk & Associates (now CLA). Much of his career was spent working for small family-run manufacturing businesses as CFO. These included Zwicker Knitting Mills in Appleton and TriEnda Corp. in Portage. Maples also worked at Peterson Builders Inc. in Sturgeon Bay, supporting the local shipbuilding industry. A consummate salesman, he relished the opportunity to sell vessels abroad during a global sales tour that included Italy, Denmark and Russia. Maples is survived by his wife, Nancy, and her family; their son and daughter; five grandchildren; and many other relatives and friends.
Thomas Herbert Weingarten, CPA (1950–2024)
Thomas “Tom” Weingarten, 73, of Stevens Point, passed away Tuesday, July 30. He was a lifetime member of the WICPA who served on the WICPA board of directors from 2005 to 2008 and was a member of multiple committees, including Public Policy and the board of directors’ Nominations Committee. Weingarten was born in La Crosse and graduated from West Salem High School in 1968 after serving as class president. He went on to attend UW–La Crosse, graduating with a Bachelor of Business Administration degree in 1972. Following graduation, Weingarten married, and the couple moved to Stevens Point, where Weingarten began his 38-year career with Sentry Insurance. He earned a Master of Accountancy degree from UW–Oshkosh in 1976 and passed the CPA Exam in 1978. He also taught evening courses at UW–Stevens Point for two years. In 2010, Weingarten retired from his position as director of accounting and vice president of life insurance accounting at Sentry Insurance. He is survived by his wife of 51 years, Sally; three daughters; four grandchildren; a niece and nephew; and other relatives and friends.
If you are aware of a member obituary and believe it should be included in Memorials, please send a copy of the obituary or contact Marcia Tillett-Zinzow at mtzinzow@icloud.com.
By Kasia White
TVulnerable Targets: How Not-for-Profits Can Prevent Money Laundering and Fraud “
he risk of fraud is a serious concern for all types of businesses, but it can be particularly crippling to a not-for-profit (NFP) organization, for which a damaged reputation can have devastating consequences.
To avoid unwanted publicity, NFPs may be reluctant to report fraudulent acts when they occur, making the true scope of the problem ultimately unknowable. It’s estimated, however, that organizations in all industries throughout the world lose approximately 5% of revenue to fraud each year, according to the Association of Certified Fraud Examiners’ (ACFE’s) most recent global study, “Occupational Fraud 2024: A Report to the Nations.”
Brad Sargent, CPA/ABV/CFF, CFE, CFS, CIRA, CCA, CRFAC, FABFA, founder and managing member of The Sargent Consulting Group LLC — a Mokena, Illinois-based firm dedicated to business valuations, economic damage calculations, expert witness services, financial investigations and forensic accounting — says 5% is a lot to lose for NFPs. “If something like this happens, it can literally create an existential crisis for an organization,” Sargent stresses. “The entities themselves don’t want their donor bases to know because they’ll stop donating. There’s a real incentive in the NFP world to sweep these things under the rug.”
Why NFPs are vulnerable targets
According to Sargent, NFPs are more susceptible to fraud for two main reasons.
First, NFPs are more susceptible to fraud because their budgets are usually tight — they don’t allocate funds for robust accounting teams.
“These are entities that are intentionally being run not to make money, so they don’t have proverbial deep pockets like a for-profit business often does in comparison,” Sargent explains. “Being vigilant and having procedures in place costs money that NFPs just don’t have, so they’re running very lean.”
The risk of fraud is a serious concern for all types of businesses, but it can be particularly crippling to a not-forprofit (NFP) organization.
Second, everyone at an NFP is working for the “common good,” so there’s less suspicion of bad actors in these settings.
“Typically, the people that manage NFPs are much more focused on fundraising revenue to do better for the community. They’re not thinking, ‘We need more accountants to watch over our books and records because somebody could steal from us,’” Sargent says.
Unfortunately, this kind of mindset could put an organization at risk. According to the ACFE’s 2024 report, nonprofits suffered a median loss of $76,000 per fraud scheme. The study broke down occupational fraud schemes into three categories: statement fraud, corruption and asset misappropriation (the most common type). Additionally, more than half of all cases came from the following five departments: operations (14%), accounting (12%), sales (12%), customer service (9%) and executive/upper management (9%).
“The one asset that people steal and embezzle is cash,” Sargent notes. In his experience, he’s seen this among a large number of cases involving religious organizations, such as churches.
“People steal from them over and over again because who would steal from a church?” he says. “Well, if you’re the controller or the financial person at a church, and there’s money there, and you have a situation where you need that money, sometimes you give in to the temptation.”
Robert Nordlander, CPA, CFE, sole shareholder of Nordlander CPA PLLC in North Carolina, says other types of fraud in the NFP sector typically involve credit card abuse as well as check or payment tampering. Federal crimes such as money laundering are less common.
How to spot the red flags
Nordlander, who spent more than 20 years chasing tax evaders and money launderers around the world as a special agent with the IRS Criminal Investigation Division, advises CPAs to be aware of what constitutes money laundering.
In his online presentation, “Money Laundering 101 for CPAs,” Nordlander highlights the three prongs of the money laundering federal crime statute (18 U.S.C. 1956), including
concealment, spending and promotion of illegal activity. Nordlander stresses that money launderers often try to conceal the true nature of their activities by using complex transactions, multiple accounts and shell companies.
He cautions that all accounting and finance professionals should be suspicious of clients — or colleagues — who aren’t forthcoming with information or who use complicated financial structures that make it difficult to trace the source and destination of funds.
“If you know what a straight stick looks like, everything else is crooked,” Nordlander says. “If you’re a CPA, particularly an auditor, and you start seeing weird disbursements that aren’t related to the business, you have to perk your ears up when there’s a bizarre expenditure of the money.”
Questionable transactions that aren’t conducive to the business
2. Missing books and records
3. Suspicious customers or suppliers
“If you know what the industry is supposed to look like, as a good auditor, anything that’s not normal is abnormal,” Nordlander warns. “Don’t ignore the abnormal — if you see something, look into it and ask more questions.”
What can CPAs do to prevent fraud?
Dean Polales, JD, partner at Polales, Horton & Leonardi LLP in Chicago, says it’s crucial for NFP management to be aware of potential issues and work with their CPAs on how to do appropriate authentication of the money coming in and going out.
“NFPs have to have good compliance programs in effect, with respect to how they fundraise, how they value in-kind donations and whether they involve themselves in valuing the contributions they receive,” Polales stresses. “Their accounting practices should be very accurate, involving quality individuals who understand the rules and follow them.”
Becoming a victim of a crime depends on your internal processes and procedures, the audit function and accurate accounting.
– Dean Polales, JD
But that’s not always the reality. Polales, who has 35 years of experience as a trial lawyer, pointed to a famous case involving a former comptroller and treasurer of Dixon, Illinois. In 2013, Rita Crundwell was sentenced to 19 years in prison for stealing $53.7 million from the city over the course of two decades.
“This happened because there was no real compliance and audit function, and when the FBI got onto it, they found many years of Crundwell stealing money, buying horses and living the high life—nobody ever looked at it,” he says. “Becoming a victim of a crime depends on your internal processes and procedures, the audit function and accurate accounting.”
Crundwell was eventually caught when her substitute found her secret account while she was on an extended vacation. According to Polales, this is actually a creative way for organizations to protect themselves — making all employees take mandatory two-week vacations.
“If something doesn’t balance, somebody else in the organization is going to notice and report it,” he says. “A lot of people get caught that way.”
Since most fraud is an internal problem, the best way to combat it is by implementing rigorous hiring and onboarding processes, Sargent suggests. This can be accomplished by performing background checks on prospective new employees, providing in-depth job applications, calling references and running credit checks.
“If you show somebody who’s thinking about joining your organization that you’re going to investigate their résumé and their background thoroughly, you’re sending them the message
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Growing Opportunities for Women in Accounting “
Once less represented in public accounting, women have made significant strides in recent years. Between 2020 and 2023, women comprised the majority of accountants and auditors in the U.S., accounting for 60% of the workforce in 2023, according to Statista.1
This growth reflects an emphasis on gender equity initiatives in accounting and consulting firms. Developing programs aimed at retaining and attracting new professionals — through resources that foster supportive communities for women in the industry — is critical to women’s continued ability to grow and succeed.
At Baker Tilly, an advisory, tax and assurance firm, we established Growth and Retention of Women (GROW) almost two decades ago. As a signature initiative of our broader diversity, inclusion, belonging and societal impact strategy, GROW has experienced significant growth over the past few years.
Planting the seed and creating room to GROW
Established in 2007, GROW focuses on gender equity, empowering women and creating an environment where women at all levels receive support, mentorship and encouragement to reach their career goals. Initially a grassroots movement within local offices, GROW was driven by professionals dedicated to improving the attraction, development, retention and advancement of women at Baker Tilly, with a focus on addressing policy issues like healthcare, paid time off and promotions — concepts that benefit not only women but also the organization as a whole.
With Baker Tilly’s workforce tripling over the past five years, GROW has also matured, expanding across multiple offices, championing the importance of deeper connections and opportunities for women in the workforce. The GROW team now includes a steering committee focused on strategy, firmwide initiatives and progress measurement, along with an extended working group responsible for executing these strategies.
1 https://www.statista.com/statistics/1086831/share-accountants-auditors-united-states-gender/
Developing programs aimed at retaining and attracting new professionals — through resources that foster supportive communities for women in the industry — is critical to women’s continued ability to grow and succeed.
Together, these leaders bring passion, commitment and acumen to the advancement of women; and a willingness to challenge assumptions and ask questions that bolster gender equity.
Preparing for scale
Ensuring connection at the local level has always been a key priority for GROW. In 2021, GROW leaders introduced a new structure to better support the program’s goals, including local, regional and national efforts. One of the most significant changes was the introduction of seven regional pods with the intent to connect targeted, local programming with national events. The pods are organized by geography and time zone to better facilitate coordinated activities, networking and inclusivity, aligning GROW’s firmwide strategy with local champions. Pod leaders, who previously handled all GROW activities independently, now can leverage national or regional resources to engage their offices in GROW activities.
Realizing success
Retaining female talent, especially as many team members are progressing through major life milestones, creates an opportunity for Baker Tilly — and GROW — to provide enhanced support to balance and thrive personally and professionally.
Five years ago, GROW relaunched its mentorship program, which pairs female mentees with principals or directors for personal and professional guidance. The program supports individuals at the manager level and above and offers mentees the chance to self-select mentors based on their unique situations. This approach creates a safe space for learning opportunities and discussing challenges they may be facing. The program draws 180 participants annually, with many connections continuing long after the formal year-long session concludes.
In addition, the firm’s Caregivers @ BT network, a program that began with a focus on mothers, now supports all caregiver roles, creating a borderless community across Baker Tilly and serving as a platform of inclusive caregiver resources. The network provides team members a way to connect, share and laugh (sometimes cry) with each other; but most importantly, the program reinforces the idea that despite individual circumstances, we are not alone.
Through intensive feedback, the evolution of these initiatives means we are creating a culture and championing advancements in processes and policies that allow our team members to bring a more complete version of themselves to work.
Driving change
Programs like GROW improve the inclusivity of organizations, resulting in higher retention rates and overall engagement.
At Baker Tilly, we’ve seen increased national engagement thanks to local and national programming, mentorship and a sense of community. We’ve also witnessed a 52% increase in the number of women at the principal level since 2019. We are truly championing the importance of engaging in critical discussion about the benefits and tools that create a culture of success on every front. That means enabling our team members to be exceptional in their work, giving them the support to thrive in their personal lives as parents and caregivers, and ensuring they are able to care for themselves as well. Supporting gender equity in the workplace is more than just words — it is a dedicated action and the willingness to GROW.
Amanda Klein is a principal with Baker Tilly’s digital solutions practice and is also the chair of the firm’s National GROW Committee. She has been with Baker Tilly for almost 18 years and helps organizations modernize their legacy business models. Contact her at Amanda.klein@bakertilly.com.
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The WICPA hosted the Governor’s Council on Financial Literacy & Capability meeting.
More than 300 WICPA members and their guests attended the 2024 Member Recognition Banquet & Annual Business Meeting.
Clare Zempel, CFA, CBE, shares information on the market outlook at the 2024 Not-For-Profit Accounting Conference in September.
The keynote speaker for the 2024 New CPA Banquet was Dominic Ortiz, CPA, CGMA, president & CEO of Potawatomi Hotel & Casino.
Nearly 150 golfers took part in the 2024 WICPA Golf Outing at Ironwood Golf Course in Sussex, WI.
From left; WICPA Marketing Manager Erin Krings and WICPA President and CEO Tammy Hofstede at the fall 2024 Business Career Showcase at Carthage College.
New CPA Banquet attendees attempted to win prizes at the casinothemed entertainment.
