The Washington CPA 2021 Spring by Washington Society of CPAs

THE

WASHINGTON CPA

Volume 64, Number 4

SPRING 2021

Noncompliance with Laws and Regulations What the NOCLAR Guidance Means for CPAs

LA R

7 of the Most Common Expense Scams (and how to stop them) Cross-Border Tax Issues for Inbound Companies Microaggressions: What are they and how you can respond?

THE WASHINGTON CPA SPRING 2021

www.wscpa.org • memberservices@wscpa.org Tel 425.644.4800 902 140th Ave NE Bellevue, WA 98005-3480

BOARD OF DIRECTORS Jared M. Theis Chair Thomas J. Sulewski Vice Chair Diane Pietrowski Treasurer Andrew Brajcich Secretary Amanda V. O’Rourke Immediate Past Chair Kimberly D. Scott President & CEO

Sara E. Bailey Joyce Lee Aaron R. Dawson Bill Reed Sarah Funk Leslie A. Sesser Lowel J. Krueger Susan L. Thomson Kris Lambright Bonnie Tse CHAPTER BOARD CHAIRS Laurel Cohen Bellingham Area Charles Meyerson Everett Area Darin Johnson Olympia Area Allison McClure Seattle/Bellevue Area Kathryn Casbon Spokane Area Fabian Benabente Tacoma Area Anthony Adams Tri-Cities Area Connie Olson Tri-Cities Area Veronica Raquel Martinez Yakima Area

Jeanette Kebede Kaitlin Brake

Editor Art Direction

The Washington CPA is published by the Washington Society of Certified Public Accountants for its members. Views and opinions appearing in this publication are not necessarily endorsed by the Washington Society of CPAs. The products and services advertised in The Washington CPA have not been reviewed or endorsed by the Washington Society of Certified Public Accountants, its board of directors, or staff. The Washington CPA (USPS 009754) is published four times annually by the Washington Society of Certified Public Accountants, 902 140th Avenue NE, Bellevue, WA 98005-3480. $12 of members’ annual dues goes toward a subscription to The Washington CPA.

CONTENTS

On the Cover 7 of the Most Common Expense Scams 12 (and how to stop them) Cross-Border Tax Issues for Inbound Companies 14 Microaggressions: 16 What are they and how can you respond Noncompliance with Laws and Regulations: 19 What the NOCLAR Guidance Means for CPAs

Spotlights A Message to Our Membership 4 Meet the Nominees for the 24 2021-2022 WSCPA Board of Directors Creditworthiness Verifications for 38 Clients Who Recieved PPP Loans

Departments Membership News 6 Leadership Lens 8 Washington CPA Foundation 10 WSCPA Peak Firms 23 Upcoming CPE 30 Classified Ads 34 CPAPAC 36

Periodicals postage paid at Bellevue, Washington and additional mailing offices. Cover Graphics Image © iStock/smartboy10 POSTMASTER: Send address changes to The Washington CPA, c/o WSCPA, 902 140th Avenue NE, Bellevue, WA 98005-3480.

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@WashingtonCPAs

The Washington CPA Spring 2021

Message to Our Membership We are more than 12 months into a pandemic that has upended the CPA profession in a way that did not seem fathomable at the beginning of 2020. While this time has been filled with uncertainty, new challenges, and drastic shifts in the tools and ways in which we work, our CPA community continues to show incredible strength and resilience as we adapt to the new normal. While you’ve been shifting to serve families, businesses, and your industries during this pandemic, we too have been rapidly shifting to address the most important needs of you, our member. Though we have not been able to meet in person in more than a year, we have been able to preserve, and even expand, WSCPA’s core programs and services. Below you can find a summary of the changes we have made so far in response to the pandemic.

Pivoting to your greatest needs At the onset of the pandemic impact, WSCPA quickly aligned advocacy efforts to focus on the needs of CPAs. During the first few weeks we appealed to Governor Inslee to include accounting and financial services in the list of essential services, ensuring CPA firms could continue to advise and serve clients and businesses. In addition, we joined the AICPA and other state associations in advocating to extend the tax filing deadline. As shifting information and new directives came through with lightning speed regarding Paycheck Protection Program (PPP) loans, Employee Retention Credits, stimulus guidelines, phases, and vaccinations, the WSCPA responded with critical updates to members through digital communications, our COVID-19 Business Resource Center and Resource Group. Our Education team also released 8 pop-up CPE webinars providing just-in-time content to help members advise their clients and organizations on how to take advantage of the PPP loans, apply for forgiveness, and more. To help ease the financial burden of members and small firms, the WSCPA extended the membership term for all members by three months and supported several members with hardship and unemployment dues discounts. In addition, we reduced prices on live CPE seminars and conferences—both of which were offered virtually—to reduce barriers to licensing requirements and critical information and updates. To help members grapple with the challenges of the pandemic, isolation, and burnout, we launched a new Mental Health Resource Center for CPAs.

The Washington CPA Spring 2021

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dashboard helped track CPE hours, which may have come in handy with the new 20-hour CPE requirement for Washington licensees that took effect in 2020.

Connecting safely Since March of last year, we have worked tirelessly to provide engaging events 100% virtually. Our dedication to keeping you, your families, and your staff safe and healthy by complying with state and federal guidelines continues to be at the forefront of planning. Our Conference and Technology team brought our members our first-ever virtual Annual Meeting with record attendance and a full year of rich, virtual conferences and programming that included full days of CPE education, exhibitor engagement, and opportunities to connect with peers. The Tacoma Chapter brought us Paint and Sip Nights, hosted by our own CPA Bob Ross impersonator. From the comfort of home, masterpieces were created! Their third event will be on May 15; be sure to register early as space is limited. Learn more at wscpa.org/paint. Stay and Play: Thursday Night Trivia provided members the opportunity to display their trivial knowledge! With the invitation open to all, members were able to play against friends, family, and colleagues and all for a good cause. Generous sponsors collaborated with the WSCPA to provide a contribution to the winning team’s charity of choice.

Moving technology forward In March 2020, we were already prepared to roll out a new membership resource, WSCPA Connect, without knowing just how invaluable an online member community would be during the next year and beyond. Connect includes an easy-to-search member directory, direct messaging, and the ability to join and engage with resource groups and committees. Join the Diversity and Inclusion Resource Group to identify tools and discussions on moving diversity and inclusion forward. Want to engage with female peers and allies to facilitate change in and out of the accounting profession? We have resources and empowerment through community in our Women’s Initiatives Resource Group. If you miss coffee meetings, engaging with students at your alma mater, or being able to guide new professionals in your firm, consider engaging with our informational interview network called Coffee and Conversations. As a new professional, you can find valuable mini-mentoring and guidance in 30-minute virtual meetings with Coffee and Conversation leaders. The WSCPA user portal also got a major makeover this year with updated functionality. Our new and improved CPE catalog helped thousands of members find on-demand self-study, or virtual webcasts and webinars while our new member

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We know our membership is incredibly varied and professionals have different needs. Communicating updates that are relevant to you is not a one-size-fits-all approach. We launched our new member newsletter, Present Value, with this in mind. This upgraded member newsletter gets smarter as you engage with it and will highlight the content most pertinent to you. Additionally, we launched a new Knowledge Hub, a library of free downloadable content of white papers, webinars, product guides, case studies and more— brought to you by industry leaders and financial industry service providers.

Looking ahead At the heart of these changes is a shared commitment to protect the core tenets of WSCPA membership: shared connection and community, professional education that keeps you moving forward (and compliant), and advocacy for the issues that affect the CPA community and the clients you serve. We know much has changed in the last year and while we continue to adapt to these changing times, that commitment will not. In closing, I’d like to share that I am proud to serve this community and humbled by the WSCPA staff, board, volunteers, and members who work so tirelessly to serve this community. Despite all the challenges of the last year, these dedicated individuals continue to step up and move us all forward. Thank you for your continued support, valuable feedback, and for joining us in looking ahead to what’s next.

Monette Anderson is the WSCPA Director of Membership. You can contact her at manderson@ wscpa.org.

The Washington CPA Spring 2021

MEMBERSHIP NEWS

Upcoming Events WSCPA Annual Meeting

The Joy of Painting (and Sipping)

1 CPE Credit | Virtual | June 3

Tacoma Area Chapter Networking Event

Free to WSCPA Members

Virtual | May 14 | 6pm-9pm

The COVID-19 pandemic has magnified the importance for individuals and businesses to be prepared for a crisis. With the rollout of vaccines and the COVID-19 pandemic beginning to see its sunset, there are many lessons to be learned from it.

Back by popular demand, our Bob Ross-esque virtual paint and sip, live on Zoom! Registration includes a 5x7 canvas, full set of brushes, a recipe list of spring-inspired cocktails, set of paint to create your masterpiece, and shipping fees. Get ready to log on with your peers where, “We don’t make mistakes. We just have happy accidents.”

During this year’s Annual Meeting keynote, Patrick Hardy, the world’s leading expert in small business and family disaster preparedness, will share the many crisis communication lessons that we can learn from the COVID-19 pandemic. He will reveal the keys to successful crisis communications that you can implement in your organization. Register for the annual meeting at wscpa.org/meeting

COVID Fallout and Biden’s Key Tax Proposal Bellingham Chapter Event Virtual | June 8 | 12pm-2:30pm Join the Bellingham Chapter and the Skagit Bar in presenting an update on how COVID has changed transactions and employment. We will also cover key points of Biden’s key federal tax proposals and stimulus provisions. Register at wscpa.org/fallout

WSCPA Membership Renewal $300 Amazon Gift Card Drawing! We’re giving away THREE $300 Amazon Gift Cards! To enter, renew your WSCPA membership and sign up for auto-renew by midnight on May 31st. Questions about renewing or your member benefits? Contact us at memberservices@wscpa.org or 425.644.4800.

The Washington CPA Spring 2021

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MEMBERSHIP NEWS

Check out the WSCPA’s new AI-powered newsletter, Present Value! We know WSCPA members are incredibly varied and professionals have different needs. Communicating updates that are relevant to you is not a one-size-fits-all approach. We launched our new member newsletter, Present Value, with this in mind. This upgraded member newsletter gets smarter as you engage with it and will highlight the content most pertinent to you. Watch your inbox on Thursday mornings for this new resource. Don’t recieve WSCPA emails? Sign in to your My WSCPA dashboard and update your communication preferences.

Have you logged onto Connect yet? Collaborate, socialize, and celebrate with your fellow members via the WSCPA website with Connect—the WSCPA’s private community. The Connect platform gives you the ability to find and chat with members from across the state, collaborate within various groups, or quickly ask for advice from this community of more than 6,500 members. If you haven’t already done so, take a moment to visit Connect today! Visit wscpa.org/connect

Make your firm or practice visible in our Find A CPA directory! Help prospective clients find your firm by enrolling for free in the Find A CPA directory. Firm administrators can enroll by contacting memberservices@wscpa.org or 425.644.4800. Visit wscpa.org/findcpa

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Imperfect Foods - 35% off first order. Costco - Join Costco as a new member and receive a $30 Costco Shop Card! San Juan Kayak Expeditions - 15% off published rate on Sunset Tour, 2-Day Orca Quest, or 4-day Island Adventurer. Flatbike - 10% off all full-size folding bikes (mountain, hybrid, road).

Visit wscpa.org/passport for more discounts.

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The Washington CPA Spring 2021

Serving in the State of Busyness Jared Theis I am sure (or at least hoping) that I am not alone in feeling that there are more things to do – personally and professionally – than there is time in the day. The end of each day generally leaves me with equal parts frustration and motivation to make tomorrow better than today. Yet, when I stop to think about all that has happened each year, I am always surprised and pleased with how much has been accomplished. In addition to serving on the WSCPA Board of Directors, providing accounting advisory and capital markets readiness services to clients for my day job, being a husband and dad for my family, and trying to keep our chickens, ducks, cats, and dog in order on “the farm” in Spokane Valley, I also serve on the accounting advisory boards for Eastern Washington University and Washington State University, including also as chair of the latter. Probably sounds a bit crazy, but I love it. People often ask me: “Do you like serving on boards? And doesn’t that take up a lot of your time?” In short, the answers to both are simply, “Yes.” (Albeit those who know me will admit that my answers are never short thanks to the gift of gab!) Many of us serve across our communities, families, and workplaces, and we all do it for different reasons, even out of necessity. A colleague of mine once advised me, “Don’t just pick a cause for your résumé or because you feel compelled to give back. Find something you care about, so you can both benefit from the involvement.” For me, I enjoy serving because it helps me fulfill part of that motivation to make tomorrow better than today, not just for me, but for my kids’ generation and future generations. I have a passion for this profession and the impact it has on our communities. I want it to continue to flourish and provide equal opportunities to anyone and everyone that wants to be a part of it, just like it has for me and my family. Even more

The Washington CPA Spring 2021

so, I have a passion for helping students and our younger generations to have opportunities, achieve their potential, and find success in life, whether that’s in our profession or something else. The joy and appreciation that I see in students when they land that job offer, or receive that scholarship that lifts a financial burden, makes the time investment worth it and provides the motivation to do it again. Recently, I had lunch with a couple of friends in Spokane, who are also CPAs (and members of the WSCPA!). We were commiserating about our busy schedules, especially all the “important” meetings to attend that seemingly made the days longer. One of them shared a quote by Charles de Gaulle, “The graveyards are full of indispensable men.” We laughed, but it was also a good reminder that even though everything seems important or essential in the moment, someone else can always pick up and take over where we left off. We all live in our own state of busyness, but we can choose how we spend our time to provide fulfillment and that sense of accomplishment. With that said, I feel very thankful and fortunate to have been the chair of the WSCPA for this past year. It’s certainly been marked with significant and unprecedented challenges, but I’ve appreciated that experience and how it has helped me to grow both personally and professionally. I am also proud of what the Society has accomplished over the past year, and the direction that it is headed. Only time will tell, but hopefully I’ve helped make the Society and our profession better tomorrow than it is today. I know one thing: Tom Sulewski will be a great chair and can turn my shortcomings into successes!

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LEADERSHIP LENS

And most of all, I would like to thank you, our members, for all your support and involvement with the WSCPA and our great profession. We strive to the provide the best experience possible to our members as noted in “A Message to our Membership” from Monette Anderson, Director of Membership, on page 4 of this edition. As always, please feel free to reach out to any of the board members or staff to let us know how we can serve you better.

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LOOKING FOR WAYS TO GET MORE INVOLVED WITH THE WSCPA? Join a resource group, committee, chapter board, or participate in student outreach activities! Contact memberservices@wscpa.org to learn more.

Illustrations: ©iStock/mspoint

As this will be my final column as chair of the WSCPA, I also wanted to take an opportunity to thank a few folks. Firstly, I would like to thank my wife, Krystal, for supporting me and our family throughout the years – I wouldn’t be able to do this without her. I would also like to thank KPMG for allowing me the time to serve, and my fellow board members for their support and participation throughout this past year as chair to help make many of our strategic initiatives come to fruition. And a tremendous thank you to the WSCPA staff who make everything possible – this was a very challenging year, but I am so impressed at the flexibility and dedication that this team provided to ensure the best experience possible for the members.

Jared Theis, CPA, is an Accounting Advisory Director in the Seattle office of KPMG LLP and chair of the WSCPA Board of Directors. You can contact him at jtheis@kpmg.com.

The Washington CPA Spring 2021

Thank you to this year's Washington CPA Foundation contributors that allow us to do the critical work of investing in our accounting community through initiatives that promote awareness and access to the CPA profession. The support of individual Foundation contributors provide scholarships for future CPAs and help us provide grants to local organizations working to diversify the CPA pipeline. These contributors donated to the Washington CPA Foundation between March 2020 and February 2021.

EXECUTIVES CIRCLE

$500-$999

Pat L. Bohan, CPA, CGMA, CGFM Richard D. Greaves, CPA Richard E. Jones, CPA, CGMA James R. Ladd, CPA, CGMA Kris L. Lambright, CPA, CGMA William A. Simer, CPA Edward D. Thomas, CPA

LEADERS CIRCLE

$250-$499

Andrew M. Brajcich, CPA, JD, LLM

NAMED SCHOLARSHIPS & $5,000+ ENDOWMENTS

Jolene G. Cox, CPA

Clark Nuber Accounting Scholarship

Mark A. Hugh, CPA

DP & C Black Accounting Scholarship

Kiu Joyce L. Lee, CPA, CFP

EY Accounting Scholarship

Glenn M. Light

KPMG LLP Accounting Scholarship

Moses S. Man, CPA

Moss Adams LLP Accounting Scholarship

Sandra J. Moss, CPA

PwC Accounting Scholarship

Gerhard G. Mueller, PhD

Rich Jones Accounting Scholarship by Deloitte

Diane Pietrowski, CPA

Roy J Polley Memorial Endowed Scholarship

Kelly A. Reid

Sambataro Family Foundation

Kimberly D. Scott, CAE

Shimer Family Foundation / Deloitte Accounting Scholarship

Leslie A. Sesser, CPA

TrueBlue Inc

Peter J. Stirling, CPA

Scott E. Eschbach Sarah K. Funk, CPA, CGMA Charles E. Hallett IV, CPA, CGMA

Thomas J. Sulewski, CPA Jared M. Theis, CPA

SENIOR EXECUTIVES CIRCLE $1,000-$2,500 FIRM CONTRIBUTIONS Weldon T. Burton, CPA

Jacqueline L. Davidson, CPA, CGMA

Brantley Janson Yost & Ellison

Charles N. Ill, CPA

Johnson Stone & Pagano PS Moss Adams LLP (Seattle)

The Washington CPA Spring 2021

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WASHINGTON CPA FOUNDATION

SENIOR CONTRIBUTORS

$100-$249

Monette Anderson

Daniel W. Fisher, CGMA

Eric D. Milhem, CPA

Christopher J. Rieke, CPA

Abby M. Bailey, CPA, CFE

Dean A. Granholm, CPA, CGMA

Louis H. Mills, CPA

Gordon R. Roland, CPA

Diane Bingaman, CPA

Stephen J. Hopps, CPA

David S. Nelson, CPA, CTRS

Thomas P. Sawatzki, CPA

Sidney H. Boles, CPA

Loren D. Hostek, CPA

Kristine T. Nelson, CPA, MPAcc

Jay T. Shilhanek, CPA

Kai F. Bottomley, CPA

Waylon P. Jones, CPA, CGMA, CFE

Terence V. O’Keefe

Walter R. Smith

Robert W. Bowman, CPA

Michael J. Kander, CPA, CIA

Amanda V. O’Rourke, CPA

Rebecca B. Stevens, CPA

Arthur E. Campbell, CPA, CMA, CGMA

Michelle Kline, CPA

John I. Payne, CPA, CTP

Duy-Linh Ta, CPA

Suzanne C. Chaille, CPA

Marcella M. Kulland, CPA

Candice A. Pfluger, CPA

Manu K. Talwar, CPA

Joseph h. Choe, CPA

Luellen H. Lockwood, CPA, MBA, EA

Daniel A. Powers, CPA

David E. Trujillo, CPA, CGMA

Robert M. Cole Jr, CPA, CGMA, MA

Peter S. Margitan

Debra L. Rankin, CPA

Dorothy R. Wagsholm, CPA

Bonnie L. Curran, CPA

Mary D. Marino, CPA, CGMA, MBA

Andrew L. Read, CPA

Hayden B. Williams, CPA, CGMA

David L. Dierst, CPA

Elizabeth D. Masnari, CPA, CISA

Bill Reed, CPA, CGMA, MBA

Beth A. Wroe, CPA

Thomas G. Donaghy, CPA

Arthur D. Miles, CPA

James D. Reisdorf, CPA

SUPPORTING CONTRIBUTORS

$1-$99

Cindy J. Alm

Chris A. Davies, CPA, CMA

Stroud W. Kunkle, CPA

Christopher P. Rasmussen, CPA

Michael R. Ammerman, CPA

Joseph P. Deacon, CPA

Irene R. Laible, CPA

Jeffrey J. Reddy, CPA

Alex T. Anderson, CPA

Brenda L. Dean, CPA, CIA

Carol M. LaMotte, CPA

Margo D. Reich, CPA

Laurie J. Anderson, CPA

Wesley L. Delaney, CPA

Kenneth L. Larson, CPA

Donald L. Rodman, CPA, MBA

Todd S. Arkley, CPA

Billie Devore, CPA

Joann E. Lee, CPA, MSTax

Lenore D. Romney, CPA, CFE, CVA

Stephanie C. Artino, CPA

David A. Dorn, CPA

Kenneth C. Lewis

Harvey J. Rothschild III, CPA, MBA

Gordon P. Asheim, CPA

Thomas J. Eby, MBA

Kevin S. Li, CPA

Richard H. Russell

David G. Bembridge, CPA

Leon F. Ficker, CPA

Ying Liu, CPA

Craig S. Ruthford, CPA

Susan E. Bettis, CPA

Clifford M. Frederickson, CPA, CGFM

Marla D. Lockhart, CPA, MAFM

Claire E. Sadlier, CPA

Jennifer L. Bixel, CPA

Melinda Gause, CPA

Aaron Lockling, CPA

Susan J. Sanders, CPA

Bruce E. Bixler

Dr Susan Gill

Deborah M. Loober, CPA

Rachel Schoessler

Brady W. Borel

M R. Gilmour, CPA, CFP

Jessica J. Lustig, CPA

Harold G. Shapiro

Megan Y. Brady, CPA

Eleanor E. Gittelman, CPA

John F. Lynch, CPA

James W. Shepperd

Firm Contribution

Randolph V. Glein, CPA, PFS

Peter L. Madison, CPA

Ralph Siegel

Rustin P. Brewer, CPA

Brian G. Gosline, CPA, JD

Anthony T. Mai

Robert G. Silva, CPA, CFE

Brian R. Bronk, CPA

Alan L. Gray, CPA

Michael J. Mansfield, CPA

Janis H. Simpson, CPA

David A. Brown

Gerald L. Greer, CPA

Carrie A. Martin, CPA

Thomas R. Skoda

Christine B. Brunner, CPA

Vaughn S. Hagen, CPA

Sam S. Martin, CPA, MBA, CFP

Orphalee Smith, CPA, PFS

Cheryl L. Bush, CPA

Rex H. Harder, CPA

Donald W. McHargue

Douglas D. Springer, CPA, PFS

Yasmin L. Caldwell, CPA

Nancy E. Hayes, CPA

James W. McKean, CPA

Joy S. Stenehjem, CPA, CFP

Christopher M. Carlson, CPA, CCIFP

Sandra J. Heffernan, CPA

Bruce I. Mitchell, CPA, MBA

Marie G. Sweet, CPA

Debra L. Carlson

M S. Heidema, CPA

Donald W. Mitchell

David E. Thompson, CPA, ABV, CVA

Maria T. Carrion-Ochoa, CPA, CGMA

Paula A. Henderson, CGFM

Thomas P. Nicholas, CPA

Susan L. Thomson, CPA

Julie A. Castle, CPA, CMA

Jacqueline J. Henry, CPA

Natalie Novak, PHR

Mark E. Ulloa, CPA

Rebecca A. Cates, CPA

Donald J. Hess, CPA

Christine R. Oatman, CPA

Robert A. Underhill, CPA, JD

Danny B. Clark, CPA

Robert C. Hoglund, CPA

Donald G. Oellrich, CPA, MEd

Susanne W. Vickerman, CPA, MSTax

Alton R. Cogert, CPA, CGMA, CFA,

Shyh-Ing Hong, CPA

Bradley W. Orser, CPA

Richard A. Volk, CPA

R D. Collier, CPA

Michael K. Hutchinson, CPA

Joanne L. Ort, CPA, MPAcc

Valerie J. Weller

Craig S. Connell, CPA

D M. Jones

Elisha M. Palmer, CPA

William L. Wells

Gordon R. Craig, CPA, CFE, CIA,

Kraig A. Jones, CPA

Fred S. Peck, CPA

Alan K. Williamson, CPA

Jay F. Cramer

Brett J. Jordan, CPA, CGMA, CIA, CFSA

Hwan J. Perreault, CPA

Azucena A. Wingard

Jennifer B. Cravens, CPA, MAC

Arthur Y. Kageyama

Jack B. Person, CPA

Natalie Wittrock

Ying Cui, CPA

Laura A. Kelley

Michael C. Plato, CPA

Aileen G. Zacarias, CPA

Alan R. Dance, CPA

Jo A. Kelly, CPA

Martha R. Prestin, CPA

Stephen G. Dashiell, CPA

Kristin L. Knopf, CPA, CGMA, MBA

Tiffanie A. Ranta, CPA

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The Washington CPA Spring 2021

FINANCIAL MANAGEMENT

7 of the Most Common Expense Scams (and how to stop them) Barbara Doane Most employees are inherently honest. They realize that the risk of imperiling their career over a couple of hundred more dollars in their pocket isn’t worth it. However, a small section (about five percent, studies show) of your employees don’t agree. They maybe feel entitled, aggrieved, or simply think they can get away with swindling the company by turning in false expense reports. If your organization is still using spreadsheets and hard-copy receipts to submit and process expenses, finding fraudulent expenses can be almost impossible. It often requires the finance team to spend hours reviewing each expense report to cross-check each transaction. Organizations that deploy expense automation solutions can easily stop fraud in its tracks, by using smart technology to prevent false expenses from being submitted, and providing intelligent solutions for spotting potential fraud. Here is a selection of the most common ways that employees try to commit expense fraud, and how they can easily be prevented with an expense management solution.

The Mileage Mischief Scam Few expense approvers want to go the length of verifying that a personal vehicle mileage submission is correct. An extra 58 cents per mile may not seem much, but it can easily add up to hundreds of dollars for road warriors who inflate the amount of miles they drive. How to stop it: An expense automation system can be integrated with Google Maps, so employees simply need to enter their start and finish addresses. It then calculates the distance to automatically create an expense line item. In addition, an image of the map (and the route) is included with the expense item. This level of automation makes it difficult to try and “pad” the mileage claim without the map clearly showing the deviation.

The Mini-Bar “Mistake” Scam Unless you have the money (but not the brains) of Warren Buffett, buying drinks from the hotel mini bar is rarely a good choice. For that reason, many companies prevent hotel mini-bar purchases from being reimbursed. That’s why many people try to sneak it by their finance teams by simply submitting an unitemized hotel bill. How to stop it: Mandate that all hotel folios are fully itemized when being submitted. This was previously a huge headache, which involved breaking out a calculator and typing in multiple line items for each hotel folio. That’s no longer the case. Employees can now be prompted to itemize hotel bills, and can do so with a single click. The expense solution can automatically read and parse data from HTML or PDF hotel folios, and create individual line items for easy approval (or in this case, denial).

Illustration: © iStock/ Aryo Hadi

The Washington CPA Spring 2021

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FINANCIAL MANAGEMENT

The Duplicate Receipt Dodge Scam

The Meal for Two Switcheroo Scam

The employee submits their meal receipt the week they buy the meal. Then, two months later… oops they “forgot to submit it on time” so resubmit the same receipt. Finance will never notice, right? Wrong.

One of your managers and their team member go out for dinner, while on a business trip. This ends up being somewhat more... liquid than your policy allows. To try and cover their tracks, the manager just says “you submit this, I’ll approve it, and nobody will ever know.”

How to stop it: Don’t rely on sharp-eyed and elephant-memoried finance staff to remember that they have already approved that expense. An expense management solution can automatically detect if a receipt has already been submitted for reimbursement, and flag to the employee that they’ve already done so. If the dastardly diner still tries to press “submit,” it will simply block the user from doing so.

The Restaurant Tip Snip Scam Just because the submitted restaurant receipt has a handwritten 20 percent tip on it doesn’t mean that the employee actually left that. They could have left 10 percent or even nothing, and the approver would never know. Over the course of a year, this could quite easily add up to hundreds of dollars if left unchecked. How to stop it: Automatically match credit card transactions with receipts submitted in the system. Therefore, if the receipt shows a 20 percent tip but the credit card shows less, this can be automatically flagged to approvers.

The Sneaky Ticket Cancelation Scam Many companies allow their employees to buy refundable, changeable, full-fare air tickets, in order to maximize flexibility. Travelers have been known to take advantage of this by purchasing both cheaper, restricted tickets and high-priced unrestricted tickets for the same flight. They then submit the expense for the high-priced ticket, get it refunded, and travel on the cheaper ticket. For a cross-country flight this can be a $1,000 or more difference. How to stop it: Mandate that air tickets are purchased using corporate credit cards. Not only can this provide valuable rebates for the organization, but it also makes it impossible for employees to benefit personally from canceling an expensive ticket.

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How to stop it: Expense solutions can integrate with HR systems so that managerial hierarchies can be configured into the system, and also mandate that the cost of any meal be allocated between diners. As a result, organizations can implement a “boss’ rule,” whereby the most senior person at a meal is required to submit the expense, in order to eliminate possible approval collusion. If a junior employee tries to submit the expense and allocate part of it to a manager, this will automatically be flagged.

The Tell-tale Threshold Trick Scam Many organizations don’t require a receipt to accompany an expense under a certain threshold – often $25 or $50. Sneaky employees can try to exploit this loophole by submitting receipt-less expenses for just under the limit, claiming that they lost the receipt. How to stop it: Leading expense automation solutions contain sophisticated analytics capabilities. These allow finance teams to drill down into expense items and easily spot patterns and anomalies in visual dashboards. Finance teams can use these tools to spot trends such as receipt-less expense submissions, and then investigate these with the individuals.

So, while your employees may think they are smarter than their approvers, they certainly aren’t smarter than a sophisticated expense management system.

Barbara Doane is Senior Director at Emburse, a global leader in expense management and AP automation solutions.

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INTERNATIONAL TAX

Cross-Border Tax Issues for Inbound Companies Mike Smith, Kyle Dawley, and Jill Boland

For many inbound companies, U.S. tax law can present a significant challenge. The decisions made today about global tax structure, financing of U.S. operations, and intercompany transactions can have far-reaching — and sometimes unintended — tax implications. Consider these strategies to help avoid typical pitfalls.

Tax structure (and restructure) opportunities To start, the tax structure of a U.S. company impacts: • Federal and state tax reporting requirements • Ability to claim certain deductions and foreign tax credits • Eligibility for relief under applicable income tax treaties • U.S. customers’ withholding and reporting obligations Therefore, business owners need to understand the ramifications under federal and applicable state income tax law of classifying a U.S. company as either a pass-through entity or a corporation.

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For example, a foreign company may form a U.S. entity that is classified either as a pass-through entity or corporate entity under U.S. tax law. A domestic pass-through entity with only one owner is considered disregarded as a separate entity for purposes of U.S. tax law and is treated as a branch of the foreign investor. When a foreign corporation has a U.S. branch, that corporation is subject to federal (and frequently state) income tax on the taxable income generated by the disregarded entity and must file a U.S. corporate income tax return. It is not uncommon for a domestic pass-through entity to have more than one owner creating a partnership. If a U.S. LLC is used, the LLC is treated as a partnership for all purposes of U.S. tax law and this structure may create an added complexity of the LLC being a hybrid entity if the foreign jurisdiction classifies the U.S. LLC as a corporation under its law. While the partnership is not itself subject to U.S. federal income tax at the entity level, it is required to annually file a U.S. partnership return on which it reports the taxable income generated during the tax year. A foreign corporate partner of a U.S. partnership is required to file its own U.S. federal income tax return and must include its distributive share of partnership income on that return. Foreign corporations that are considering an investment in a U.S. partnership may be well-advised to consider investing through

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a U.S. blocker company, rather than investing directly in a U.S. partnership or LLC. In such a structure, the U.S. blocker company, rather than the foreign investor, would be subject to the U.S. income tax return filing requirements as the direct partner in the partnership. Additionally, with a U.S. blocker company acting as the direct investor, a foreign corporation would not be subject to the new U.S. withholding and reporting requirements that arise when a foreign partner transfers an interest in a U.S. partnership (see discussion of Section 864(c)(8) below). Note that a foreign corporation may also choose to form a U.S. corporation as a subsidiary. The foreign corporation can incorporate an entity under state law. In such a case, the U.S. entity would be subject to tax on its taxable income and would need to file a federal corporate income tax return. One potential tax benefit available only to domestic corporations is the foreign-derived intangible income (FDII) deduction for corporations that sell goods and services to non-U.S. customers. Evaluate the supply chain of the domestic corporation’s revenue stream to help determine whether to form a U.S. corporate subsidiary.

Financing U.S. operations The capital structure a U.S. company adopts can significantly impact the taxation of its operating profits and the repatriation of such profits to its foreign parent. Federal income tax law generally favors debt over equity funding because: • Interest expense is tax deductible, whereas dividends are non-deductible • Interest payments typically attract lower withholding tax rates than dividends under most U.S. tax treaties • Repayments of principal under a debt instrument can be made tax-free Nevertheless, the compliance requirements for debt financing can be more onerous than equity funding, due to stringent documentation standards and a litany of interest expense deferral and disallowance rules, such as Section 163(j). The interest expense limitation under Section 163(j) can be a significant consideration for funding inbound U.S. investment. Generally, a U.S. taxpayer is not allowed to take deductions for a business interest expense to the extent the expense exceeds 30

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INTERNATIONAL TAX the transaction is effected. As noted above, foreign investors in a U.S. partnership may choose to structure their U.S. partnership investments through a U.S. blocker corporation.

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Inadequate transfer pricing In the area of transfer pricing, federal income tax law grants the IRS authority to reallocate income and deductions between controlled taxpayers (e.g., a foreign corporation and its U.S. subsidiary) if transactions between such parties are not priced at arm’s length. These adjustments can bring increased U.S. federal income tax liabilities, plus interest and penalties, without corresponding tax reductions in the foreign jurisdiction.

percent of the taxpayer’s adjusted taxable income, which closely approximates earnings before interest, taxes, depreciation, and amortization (EBITDA). Any disallowed excess interest expense is carried forward to the next taxable year.

Potential pitfalls Pitfalls can’t always be avoided, but with proper planning you should not be blindsided by unexpected U.S. tax liabilities. Section 267A The Tax Cuts and Jobs Act (TCJA) added the anti-hybrid rules under Section 267A creating a level of complexity. Section 267A restricts the deductibility of expenses paid by a U.S. taxpayer to a related party when the related party is a hybrid entity. A foreign entity is considered a hybrid entity when its tax classification (for U.S. tax purposes) differs from its tax classification for purposes of the tax law of the country in which it is formed. Therefore, you must understand the local and U.S. tax classifications not only of the U.S. company, but of all related parties with which that U.S. company transacts business.

To protect against such exposure, U.S. taxpayers should conduct transfer pricing studies that benchmark pricing on intercompany transactions against pricing on comparable third-party transactions. Your transfer pricing policy should be updated frequently, applied consistently, and comply with documentation standards mandated by federal tax law.

COVID-19 impact The Coronavirus Aid, Relief, and Economic Security (CARES) Act provided significant relief to U.S. taxpayers, which included a temporary increase of the limitation on deductible business interest expense under Section 163(j) to 50 percent rather than 30 percent. Additionally, the CARES Act allows a five-year carryback of net operating losses that were generated in a taxable year beginning after December 31, 2017, and before January 1, 2020. Federal and state tax law changes are inevitable, as evidenced by TCJA and COVID-19. Change is again likely with 2021 seeing a change in federal administration. U.S. taxpayers will need to monitor and model the variable of tax rate changes and other temporary provisions that may occur with a new political landscape. Mike Smith and Kyle Dawley are principals with CLA in

BEAT The base erosion and anti-abuse tax (BEAT), which was also added to the federal income tax code under the TCJA, functions as an alternative minimum tax on U.S. corporations that meet certain U.S. gross receipts thresholds for related companies. The BEAT provision requires applicable taxpayers to add back deductions that qualify as base erosion payments, which results in additional federal income tax liability. Section 864(c)(8) Foreign corporations with an interest in a U.S. partnership should also be aware of Section 864(c)(8), which could impose withholding tax on the transfer of the partnership interest. While there are several exceptions under this provision, you must disclose the transaction, as well as any such exceptions claimed by the foreign corporation, no later than 20 days after

Charlotte and Minneapolis offices, respectively. Jill Boland is a director with CLA in Oak Brook.

Learn more about the latest developments affecting the international tax landscape at the 2021 International Tax Conference on May 27. Find details about sessions and speakers, including Kyle Dawley, at wscpa.org/intc.

DIVERSITY, EQUITY & INCLUSION

Microaggressions: What are they and how can you respond? Aftab Erfan

First off, what are microaggressions?

Some reasons why they are harmful.

Often quick or seemingly easy to ignore, microaggressions are brief and/or subtle actions, remarks, or visual cues in our everyday interactions that communicate negative ideas or stereotypes about a group of people – usually a socially marginalized group. While they take many forms, if you’ve encountered one of the comments or actions below, you’ve encountered a microaggression: • “I love your accent! Where are you from?” • “Why am I so blind today?” • “That is so gay.” • Touching someone’s hair without consent. • Repeatedly interrupting or forgetting to include someone. • Crossing the street to avoid someone.

While they might seem inconsequential, microaggressions are cumulative to the people on the receiving end. A n d c u m u l at i ve ly, t h e ef fe c t of microaggressions can be overwhelming and damaging.

Why they are hard to address. Microaggressions are by nature small and can be easily explained away. They aren’t perpetrated by one particular population or group – they are perpetrated by many different people, and many people simply aren’t aware that they are inflicting a microaggression. In addition, microaggressions aren’t always delivered in words – they can be a gesture, facial expression, or other subtle forms of body language.

Think about this in physical terms, for example, receiving a minor abrasion like a paper cut. If you receive one, you will likely be a bit uncomfortable, but it will seem minor and you will probably heal and move on. But if you receive multiple paper cuts per day for weeks or even years, it could seriously damage your health. Other reasons why microaggressions are harmful? They are a constant reminder that someone doesn’t belong or isn’t worthy, and they also subtly normalize prejudice and reinforce it. They do real psychological damage to people who regularly experience them.

“I love your accent! Where” are you from?

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me a n r rd to u o Y “ o ha ce.” is sonoun pr

ak e p s “YouEnglish.” good

“She should smile more.”

“Why am blind tod I so ay?” www.wscpa.org

How to respond to microaggressions. Microaggressions exist from the viewpoint of the: • A g g re s s o r ( t h e p e r s o n w h o perpetrates them); • Victim (the person who is subject to them); or • Witness (the person who sees them happen). Responding to microaggressions is complex – it can take many forms and it is an ongoing process that requires continual learning. As a starting point, here is how you can respond from each of these three positions.

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Aggressor: Let’s say you’ve perpetrated a microaggression and the person on the receiving end – the victim – becomes upset with you. Consciously deciding to do the following will help you grow, though it might be difficult. • Frame the confrontation as a valuable experience of receiving feedback and recognize that this feedback is important. • Watch your fragility. Exercise agency over how much your emotions dominate the interaction. • Be aware that intentions do not equal impacts, nor do they erase impacts. • Don’t disagree with what you’re being told, particularly if it is coming from the victim. They are telling you about the impact of your actions on them. On this, they are always right. Get curious. • Thank them for what they have given you. Commit to taking it away and thinking about it. Get help to learn more – Google, read, call a friend. • Apologize, take this learning to heart, make a change, and don’t dwell on the negative emotions.

“ speakYou don’t Spani sh?”

“You’re so articulate. You don’t sound black.” o s s ’ t a “Th y.” ga

Aftab Erfan is a long-standing scholarpractitioner in the field of inclusion and social justice, currently serving as the City of Vancouver (BC) first Chief Equity Officer. Originally published to CPABC’s newsroom and republished with permission.

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Victim: Remember to take care of yourself first. Remove yourself from the situation, get help, or confront – depending on what is good for you first. • Remember it is not your job to fix the world. • Remember that you have a right to speak up to make situations safe for yourself. Don’t let them tell you that you’re being difficult. Witness: It’s important to recognize that noticing and addressing microaggressions are your responsibility as much as it is anybody else’s. • Educate yourself about the histories, realities and reactions of marginalized folks, so that you can recognize a microaggression when you see one. • Allow for the possibility that people can learn from mistakes and that aggressors are not necessarily unredeemable. • Be aware of your privilege (or lack thereof). Don’t dismiss the risk to yourself of intervening and don’t exaggerate it either. Use your privilege to take appropriate risk. • Make a response that is proportional to the wrong-doing. • Call out power if it needs to be confronted.

In general, a strategy for lessening microaggressions is to increase your knowledge of others’ perspectives. This will involve ongoing work on your part to understand your actions in relation to others. This is a complex journey of learning and growth; some of the forms it can take can include reading perspectives from identities other than yours, watching movies about broader topics, or building deep diverse friendships. You can also grow your interpersonal skills. This could involve learning and looking for social cues that signal discomfort, asking for feedback and communicating that you welcome it, and building relationships in which mistakes can be pointed out – all of these actions can help you lessen microaggressions.

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”

DIVERSITY, EQUITY & INCLUSION

Noncompliance with Laws and Regulations What the NOCLAR Guidance Means for CPAs

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Tom Neill

LA R

In February the AICPA Professional Ethics Executive Committee (PEEC) reproposed their March 2017 Interpretation, Responding to Noncompliance with Laws and Regulations (NOCLAR), in a complementary effort with the Auditing Standards Board and their exposure draft titled Inquiries of the Predecessor Auditor Regarding Fraud and Noncompliance with Laws and Regulations (amendment of AU-C section 210). This reproposal is part of PEEC’s international convergence efforts to more closely align with the standards of the International Ethics Standards Board for Accountants (IESBA).

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ETHICS Under the current AICPA Code of Professional Conduct, there is no specific guidance for members who encounter noncompliance with laws or regulations or suspected NOCLAR during the provision of services to a client, or as an employee of a business. PEEC believes the public interest is served with the inclusion of the robust guidance in the reproposed interpretations, which sets forth a member’s responsibilities when encountering a NOCLAR at a client or within the employing organization. The general objective of members who encounter a NOCLAR is to alert the appropriate parties to enable a client’s or employing organization’s management and those charged with governance to rectify the NOCLAR, mitigate the effects of the NOCLAR, or deter the commission of the NOCLAR. The interpretations state that a NOCLAR comprises acts of omission or commission — intentional or unintentional — contrary to the prevailing laws or regulations that are committed by a client, an employer, or those charged with governance, by management, or by other individuals working for or under the direction of a client or employer. Though the proposed interpretations require a member to obtain an understanding of the matter when a NOCLAR is discovered, the member is only expected to have a level of knowledge and understanding of laws and regulations necessary for the professional service for which the member was engaged or was employed to perform.

PEEC believes it would be in the public interest for members in business to have the ability to communicate a NOCLAR to an appropriate authority and, unlike the “Confidential Client Information Rule” applicable to members in public practice, the “Confidential Information Obtained From Employment or Volunteer Activities” interpretation (ET sec. 2.400.070) of the “Acts Discreditable Rule” (ET sec. 2.400.001) permits a member in business to disclose confidential employer information if “there is a professional responsibility or right to disclose information, when not prohibited by law, to … comply with professional standards and other ethics requirements.” PEEC revised the original proposed interpretation to allow both senior professional accountants in business and other professional accountants in business to report a NOCLAR to a regulatory body.

If this reproposed Interpretation is adopted by PEEC, CPAs in Washington State should take care in deliberating the reporting of a NOCLAR, as it could put the CPA in violation of State Board Rule.

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Under this reproposal, there are a number of issues that CPAs need to be aware of: • There are separate requirements for members providing financial statement attest services and members providing services other than financial statement attest services. The requirements are less restrictive for members providing services other than financial statement attest services. • The member’s responsibility throughout the proposed interpretation would be exclusively to the “engaging entity,” if not the same as the “subject entity.” If the engaging entity and the subject entity are different, the term “client” in the standard would refer to the engaging entity. • The proposed interpretation would not apply to a litigation or investigation engagement performed in accordance with the AICPA Statement on Standards for Forensic Services No. 1 or to tax services subject to the protection of Internal Revenue Code Sec. 7525. • Members in business would be permitted to report a NOCLAR to an appropriate authority unless prohibited by laws or regulations.

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ETHICS

What is NOCLAR? Noncompliance with Laws and Regulations

As Chair of the AICPA Uniform Accountancy Act Committee, I was invited to observe the deliberations on this proposed interpretation over the last two plus years. This reproposal is the result of that process. But I would be remiss if I did not caution CPAs in Washington State about this Interpretation. Under current Washington State Board of Accountancy Rule, WAC 4-30-050, disclosure of client confidential information without the consent of the client is prohibited. If this reproposed Interpretation is adopted by PEEC, CPAs in Washington State should take care in deliberating the reporting of a NOCLAR, as it could put the CPA in violation of State Board Rule. This would be another area where the AICPA Code of Professional Conduct, which is a set of standards that Washington licensees are required to comply with as noted in WAC 4-30-048, is contradictory to Board Rule. During the course of providing services to clients or as an employee of an organization, should you encounter a NOCLAR, you should seek guidance regarding your responsibilities under professional standards, State Board rule, and potentially seek legal advice as well. Until there are changes in State Board rule around client confidentiality, this interpretation potentially creates a trap for the unwary.

The interpretations state that a NOCLAR comprises acts of omission or commission — intentional or unintentional — contrary to the prevailing laws or regulations that are committed by a client, an employer, or those charged with governance, by management, or by other individuals working for or under the direction of a client or employer. The laws recognized by the interpretations include those generally recognized to have a direct effect on the determination of material amounts and disclosures in the financial statements. Other laws recognized by the interpretations are those that do not have a direct effect on the material amounts and disclosures in the financial statements, but compliance with those laws may be fundamental to the operating aspects of the business of the client or employing organization, to its ability to continue business, or its ability to avoid material penalties. The interpretations do not address personal misconduct unrelated to the business activities of the client or employing organization. NOCLAR Exposure Drafts – open for comments until June 30 PEEC wscpa.org/peec

ASB wscpa.org/asb

Thomas Neill, CPA, is principal at Finney, Neill & Company, P.S. in Seattle. You can contact him at tom@finneyneill.com

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PEAK FIRMS

WSCPA PEAK FIRMS The WSCPA Peak Firm program recognizes and awards special benefits to firms that sign up 100% of their eligible staff for WSCPA membership. Being a Peak Firm establishes you as a leader in the profession and provides an array of discounts and benefits. Learn more and enroll your firm at wscpa.org/peak-enroll

NEW PEAK FIRM APPOINTEES

EXISTING PEAK FIRMS HMA CPA PS

Opsahl Dawson PS

Brantley Janson

Hunt Jackson PLLC

Rettig Flyte Co

Clark Nuber PS

Hutchinson & Walter PLLC

Ryan Jorgenson & Limoli PS

Cordell Neher & Co PLLC

Jacobson Jarvis & Co PLLC

Smith & DeKay PS

Falco Sult & Co PS

Johnson Stone & Pagano PS

StraderHallett PS

FBCPA Group PS Inc

King & Oliason PLLC

Sweeney Conrad PS

Finney Neill & Co PS

Luby & Thomson PLLC

The Doty Group

Greenwood Ohlund & Co CPAs

McDevitt & Duffy PS

The Myers Associates PC

Hagen Kurth Perman & Co PS

Nicholas Knapton PS

Werner O'Meara & Co PLLC

Hellam Varon & Co Inc PS

Norris Lutkewitte PLLC Photo: © iStock/lightphoto

Bader Martin PS

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for the 2021-2022 WSCPA Board of Directors! In accordance with Article VI of the bylaws, all nominees will be declared elected by the secretary at the annual meeting unless other nominations, supported by at least one percent of membership, are received by April 1, 2021. If a contest for one or more positions develops, an election for those positions will be held at the meeting. The 2021 Annual Meeting is scheduled for June 3, 2021.

Vice Chair: Sara Bailey, CPA Term: 1 year, becomes Chair 2022-2023 | Board Service: since 2019

Sara Bailey, CPA, is a Tax Senior Manager at Moss Adams, LLP. She has practiced public accounting since 2011. Sara serves as a business and tax advisor to food, beverage, and agribusiness companies focusing on tax planning and compliance, transition planning, entity structuring, and longterm strategic solutions. Prior to her career in public accounting, Sara spent four years in the U.S. Army as a Blackhawk mechanic. Sara received her accounting degree from Central Washington University, MBA from Indiana University, and Master of Agriculture Economics from Purdue University.

Any fun new quarantine hobbies you’ve picked up? REMAINING ON THE BOARD These members currently serve on the Board of Directors and will continue serving on the Board.

Chair: Thomas Sulewski, CPA

Immediate Past Chair: Jared Theis, CPA

President & CEO: Kimberly Scott, CAE

Directors: Aaron Dawson, CPA Sarah Funk, CPA, CGMA Lowel Krueger, CPA, MBA Leslie Sesser, CPA Bonnie Tse, CPA, CIA, CISA, PMP

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It’s not really a new hobby, but I’ve enjoyed spending time at home teaching my kids how to cook. We’ve had a lot of fun spending time in the kitchen together and over the last year they have become very independent in cooking and baking! Too bad that hasn’t translated to being completely independent at cleaning up their messes in the kitchen…

What is one crazy goal you want to achieve within your lifetime? Swim in all five oceans in the world.

What’s the best advice you can give to someone who just started their career in accounting? Be vocal, always seek out ways to grow your skillset, and ask for opportunities rather than wait for them to be handed to you. Take charge of your own career path. This is an exciting career that can be whatever you want it to be, but we all need the courage to first know ourselves and what we want in a career and then ask for the opportunities to get there.

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BOARD OF DIRECTORS

Secretary: Andrew Brajcich, CPA, JD, LLM

Treasurer: Joyce Lee, CPA, CFP

Term: 1 year | Board Service: since 2019

Term: 1 year | Board Service: since 2020

Andrew Brajcich, CPA, JD, LLM, is an Associate Professor of Accounting and the Director of Graduate Accounting at Gonzaga University in Spokane. He has been recognized by students three times as the Masters Outstanding Faculty of the Year and was named by the financial literacy and education website nerdscholar.com as one of the “2015 Top 40 Under 40 - Professors Who Inspire.” Andrew previously worked in the International Tax Services Group at Deloitte Tax LLP. He loves to cross-country ski and play tennis with his wife, Alex, and two boys, ages five and two, even though he’s not very good at either.

Joyce Lee, CPA, CFP®,️ is Senior Director, Controller of Vulcan, Inc. Joyce oversees the financial operations and is responsible for developing and executing accounting and financial strategies to support future growth and development. Previously, Joyce was the CFO of Marguerite Casey Foundation, where she was responsible for the Foundation’s operation and financial strategies and oversaw its $750M+ investment portfolio. Joyce started her career in public accounting and was a principal at Clark Nuber P.S. She holds a bachelor’s degree in accounting from Western Washington University and an Executive Master of Public Administration degree from University of Washington. Joyce and her husband live with their two teens and a rescue pup.

Any fun new quarantine hobbies you’ve picked up? Running. Although I don’t find it fun, I find it necessary.

What is one crazy goal you want to achieve within your lifetime? I’d like to live in a foreign country off the tourist path for a year as a local, learn the language, and (attempt to) assimilate. Maybe some rural village in Argentina or Slovenia.

What’s your favorite thing you own and why? Tootsie Roll - not the candy and not exactly a “thing,” but the fur baby we rescued from Georgia. She might not be the most diligent “coworker” I’ve ever had, but definitely the most entertaining.

What’s the best advice you can give to someone who just started their career in accounting? 1.

Stay curious and volunteer for assignments that are outside of your comfort zone. 2. Build and nurture your professional network.

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BOARD OF DIRECTORS

Director: Norm Haugen, CPA, CCIFP

Director: Courtney Hirata, CPA, MPAcc

Term: 3 years

Norm Haugen, CPA, CCIFP, is an Assurance Services Principal at Berntson Porter & Company, PLLC in Bellevue. During his career with Berntson Porter & Company, Norm has led the Assurance Services Department, the Construction and Real Estate Practice Group and served on the firm’s Executive Committee. Norm provides accounting and advisory services primarily to closely-held businesses in the construction and real estate industries. He has held various roles in construction associations, charitable organizations and currently is on the Advisory Board for the University of WashingtonBothell School of Business. Norm enjoys traveling, nearly any sporting activity and family time.

Courtney Hirata, CPA, MPAcc, is the Senior Director of Sales Operations and Strategy supporting the Global SMB organization at SAP Concur. She has been with SAP Concur since 2014 and in her current role since 2017. Courtney oversees a team of analysts that operationally structures and supports the SAP Concur Distribution organization and provides strategic consultation and insights through data analysis. Her prior work experience includes various roles in the SAP Concur accounting and finance department, and 4+ years in public accounting at Clark Nuber. Courtney is a current board member for Jubilee Reach and an active member of the Finance Committee for Operation Nightwatch. Courtney enjoys staying active and rooting for her University of Washington Huskies with her husband Karstin.

What is one crazy goal you want to achieve within your lifetime? I’m a lifelong baseball fan, so spending a week at spring training would be awesome. It might not be crazy for most people, but for someone in public accounting it is a pretty crazy goal. Also, I would like to attend a game at every major league stadium.

Any fun new quarantine hobbies you’ve picked up? Binge TV exercising.

What’s the best advice you can give to someone who just started their career in accounting? An accounting career gives you an incredible knowledge base to impact businesses, your community and your life. Look for and take advantage of any and all opportunities to grow your skills and intellectual curiosity.

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Do you have a hidden talent? What is it? I’m not sure if this would be considered a “talent,” but I have a knack for identifying celebrities (particularly Seattle sports celebrities) when I’m out and about. I’ve had the opportunity to meet several local and worldwide celebrities because I happen to recognize them easily in everyday places.

What’s the best advice you can give to someone who just started their career in accounting? Be yourself! It can be easy to identify a “mold” or “type” of person that you think is the blueprint for being successful, but remember that you were hired because you’re you, and your unique talents, perspective and insights are valuable and will set you apart. Take every opportunity you can to learn something new. I found that especially early in my career, being willing to jump into new guidance or a newly growing area allowed me to quickly provide insight and add value in a way that set me apart.

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BOARD OF DIRECTORS

Director: Writu Kakshapati, CPA, CGMA

Director: Bryce Rassilyer, CPA, CFE

Term: 3 years

Writu Kakshapati, CPA, CGMA, is an assurance manager at Frost & Co, PLLC. She has been with the firm since February 2014. Her responsibilities include managing audit, review, and compilation projects. Writu has been an active member of the Olympia Area Chapter of the WSCPA for many years, joining the chapter board in 2015, and serving as a past chair. Writu is also a committee member of the CPAPAC, and has volunteered with the WSCPA financial literacy program in the past. Her past board experience includes serving on the board of a non-profit organization based in Seattle combating human trafficking. Her hobbies include outdoor activities, reading and learning new skills.

Bryce Rassilyer, CPA, CFE,™ is a Principal in CliftonLarsonAllen’s Nonprofit practice. Bryce oversees the nonprofit group in Bellevue, Washington, where he focuses on serving clients, team development and several national initiatives. Bryce is a current WSCPA Not-For-Profit Resource Group member and has served on the Not-for-Profit Conference Planning Committee. He serves on the boards of Children’s Therapy Center, Washington Autism Alliance and Advocacy, the Finance Committee of Kennedy Catholic High School. Bryce was recognized by the Puget Sound Business Journal as a 40 under 40 honoree in 2020. He lives in Renton with his wife (and accountant) Cynthia and their children Theodore, Olivia and Henry.

Any fun new quarantine hobbies you’ve picked up?

I also do woodworking. I picked up this hobby two years ago, not realizing it would be a fun artistic outlet.

Not really a hobby, but during quarantine I learned an ancient yogic meditation technique and have been practicing it daily. With the busy season, and working from home with kids, this has been tremendously helpful.

What’s one professional skill you’re currently working on? Improving my writing. I tend to be very informal in my writing and realized that this is one area I would like to see developed further.

Do you have a hidden talent? What is it?

What’s your favorite thing you own and why? My historical items and document collection from World War II. My great uncle was a war hero during the Battle of the Coral Sea and I’ve been collecting items related to the Battle for over 20 years. I want to preserve his sacrifice for our country and remind future generations of where they come from.

What’s the best advice you can give to someone who just started their career in accounting? Follow your passion – whether it’s the company or organization you work for - or the work they do. Accounting isn’t always the glamourous side of a company, but have fun and surround yourself with a fun and trustworthy team.

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BOARD OF DIRECTORS

Director: Diane Pietrowski, CPA Term: 1 year | Board Service: since 2019

Meet the Incoming Chair: Thomas Sulewski, CPA Term: 1 year | Board Service: since 2018

Diane Pietrowski, CPA, is the Chief Financial Officer at Plymouth Housing Group, a not-for-profit in Seattle providing permanent supportive housing for the homeless. A graduate of the University of Washington, Diane began her career at Loveridge Hunt CPAs, specializing in audits of affordable housing. After 13 years in public accounting, Diane served as Controller at Quantum Management Services, before joining Plymouth in 2007. Diane was a founding board member of the Affordable Housing Management Association of Washington, and currently serves on the finance committee of Path with Art. She was recognized by the Puget Sound Business Journal as a CFO of the Year award winner in 2020.

Any fun new quarantine hobbies you’ve picked up? Taking our dogs on long walks

Do you have a hidden talent? What is it? I’m a great trip planner, but my skills are totally going to waste during COVID.

What’s one professional skill you’re currently working on? I’m trying to learn how to “manage up” better, when working with my boss. I hope she doesn’t read this.

Tom Sulewski, CPA, is the Shareholder in Charge of the Audit Department for Clark Nuber PS. He has been with the firm since graduating from the University of Washington in 1990. Tom is a past board member and chair of the Bellevue Chamber of Commerce and currently serves on a number of advisory boards for local universities. He also serves as an adjunct professor and has co-chaired the fundraising gala for the University of Washington-Bothell. Tom and Patti, his wife of 28 years, have two boys, Jackson and Truman, and two dogs—a Goldendoodle, Lexie, and an Australian Labradoodle, Watson.

What’s the best advice you can give to someone who just started their career in accounting? Never, ever give up. The profession is dynamic and full of challenges you will have never seen before. Trust your history of good decision-making and solid work that got you here. Those same talents will get you through. Never, ever give up.

Do you collect anything? If so, what? As a pre-teen I collected original matchbox cars and still have them to this day. Some handed down through family, some acquired through collectors and many still with their boxes. Based on auction website values, they may need to be part of my retirement planning strategy!

Do you have a hidden talent? What is it? My talents are truly well hidden and I continue to search for them.

The Washington CPA Spring 2021

www.wscpa.org

Upcoming CPE A selection of WSCPA CPE events scheduled May - July are listed. To view the hundreds of courses and complete details, please visit the CPE & Event Catalog at wscpa.org/cpe.

Governmental Accounting & Auditing Conference Webcast, April 27-28 16 Credits

Amid budget shortfalls, shifting revenue forecasts, and a torrent of new legislation, you stand at the tiller. Your fellow citizens rely on you to keep a steady hand as you steer the ship of state through these rough, financial waters. You can do this, and this year’s Governmental Accounting & Auditing Conference will help. You’ll find the knowledge you need to chart your course to the safe harbor on the other side of the pandemic.

International Tax Conference

Webcast, May 27 8 Credits

Some say the world is shrinking due to technology and globalization. The world is also becoming more complex. The International Tax Conference will highlight the new laws, rules and trends affecting your international tax practice. Recognized experts in this field will share practical information that CPAs, tax advisors, attorneys, financial officers, and other tax professionals need to know to advise clients in today’s global economy.

Washington State Tax Conference Webcast, June 2 8 Credits

2021 brings changes in the federal administration, global pandemic, and the economy. Legislators are considering how to protect the future economy. Get updates on Washington state tax laws and Department of Revenue activities along with other significant tax changes as a result of this year’s legislative session.

The Washington Society of CPAs is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of group live and group-internet-based continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its web site: www.nasbaregistry.org For more information regarding refunds, complaints, program cancellations or other policies visit www.wscpa. org/cpe/cpe-policies or call 425.644.4800

The Washington CPA Spring 2021

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EDUCATION AND EVENTS

Online CPE

Reduced Virtual Event Pricing

DATE

COURSE TITLE

5/1

K2’s Power BI - Advanced Reporting WEBCAST

5/3

Power BI - Prepare Your Data Efficiently for Excel Analysis WEBCAST

5/4

Accounting for Digital Assets Under US GAAP Part I WEBCAST

5/5

Prix Fixe: Community Property WEBINAR

5/6

K2’s Small Business Internal Controls Security, and Fraud Prevention and Detection WEBCAST

5/6

Accounting for Digital Assets Under U.S. GAAP, Part II

5/7

Business Consulting for CPAs WEBCAST

5/10

Accounting & Auditing Update WEBCAST

5/10

K2’s Power Query - Ten Things You Need to Know WEBCAST

5/11

S Corporation Essentials: Stock and Loan Basis and More WEBCAST

5/12

Member Exclusive: Latest Trends in Personnel-Related Dilemmas: Do’s and Don’ts for Employers WEBINAR

5/14

Prix Fixe: Getting “Unstuck” from Sticky Situations WEBINAR

5/17

Washington Taxation for Service Businesses WEBCAST

5/17

Washington Tax Audits WEBCAST

5/18

Tax Practice Quarterly: Managing a Tax Practice in the Modern World WEBCAST

5/18

Winning The Fraud Battle In The Digital Age: Prevention and Detection WEBCAST

5/19

Statement of Cash Flows: Preparation Guidance and Presentation Illustrations WEBCAST

5/19

Update on Recent AICPA Standard Setting: Staying Current in a Changing Environment WEBCAST

5/20

Inventory, Expense & Payroll Fraud WEBCAST

5/21

Preventing Small Business Fraud WEBCAST

5/21

The Complete Indirect Rate Toolkit For Nonprofits with Federal Grants under the Uniform Guidance WEBCAST

5/21

Prix Fixe: Cannabis Accounting Update WEBINAR

5/22

2020 Audit & Attestation Update WEBCAST

5/22

K2’s Excel Tips, Tricks, and Techniques for Accountants WEBCAST

5/24

Measuring Audit Risks WEBCAST

5/24

Washington Sales Tax WEBCAST

5/24

Fringe Benefit Planning for 2020 and Beyond WEBCAST

5/25

Accounting & Auditing Update WEBCAST

5/25

Accounting & Auditing Update for Small Businesses WEBCAST

5/25

Creative Strategies for Buying, Selling, and Gifting a Business WEBCAST

www.wscpa.org

CREDITS

The Washington CPA Spring 2021

EDUCATION AND EVENTS

Online CPE DATE

COURSE TITLE

5/26

Blockchain and Emerging Technologies WEBCAST

5/26

Business Longevity WEBCAST

5/26

FASB's New Lease Accounting Standard WEBCAST

5/27

Achieving Balance in Work and Life Part 1 WEBCAST

5/27

K2’s Advanced Excel WEBCAST

5/28

Accounting and Tax Planning for Estates and Trusts WEBCAST

5/28

Blockchain and Cryptocurrency Fundamentals WEBCAST

5/28

K2’s Budgeting and Forecasting Tools and Techniques WEBCAST

6/1

Crucial Partnership Tax Insights: Buying or Selling a Partnership Interest and Reducing Phantom Income. Webcast

6/8

Professional Conduct & Ethics - AICPA and Washington Board CPA Regulatory Update - 2021 WEBCAST

6/8

Crucial Partnership Tax Insights Part 2: Allocating Section 754 step-ups, Unreimbursed Partner Expenses, Partner Bad Debts, Grouping Passive Activities, Admitting New Partners, Redeeming Existing Partners, Bonus Depreciation, Schedule 179 and Other Operating Issues. WEBCAST

6/9

Crucial Partnership Tax Insights Part 3: Loss Allocations and the New Partnership Audit Rules WEBCAST

6/11

Crucial Partnership Tax Insights, Part 4: Maximize Schedule 199A Deductions, Minimize Self-Employment Taxes for LLC Members. WEBCAST

6/14

Accounting & Auditing Update for Small Businesses WEBCAST

6/16

Common Deficiencies in SSARS Engagement WEBCAST

7/25

Washington Ethics and New Developments 2021 WEBCAST

6/28

Sec. 199A QBID Cutting Edge Tax Strategies, Part 1 (Planning Insights) WEBCAST

6/29

Sec. 199A QBI Cutting Edge Tax Strategies, Part 2 (Rental Real Estate ) WEBCAST

6/30

Sec. 199A Cutting Edge Tax Strategies, Part 3 (SSTB’s, Specified Service Trades or Businesses) WEBCAST

7/1

Sec. 199A QBID Cutting Edge Tax Strategies, Part 4 (Wage, Property, and Other Limits) WEBCAST

7/13

Audits of Employee Benefit Plans Subject to ERISA WEBCAST

7/21

Social Security and Medicare: Planning for You and Your Clients WEBCAST

7/22

Securing a Comfortable Retirement in the Age of Spending WEBCAST

Member Exclusive CPE Series Wednesdays, 12-1 pm

CREDITS

10 FREE one-hour webinars on a variety of topics held throughout the year. Explore the course list | wscpa.org/exclusive21

The Washington CPA Spring 2021

www.wscpa.org

CPE Webinar Series

Taking You Places You’ve Never Imagined!

Dates and topics may be subject to change.

6.25.21

Staying Well in Trying Times

7.23.21

Leadership in 2021 - What Does & Doesn’t Work with COVID-Minded Professionals

8.12.21

Selling Your Brain - Creating Access-Level Agreements

9.10.21

Practical Bullet Journal and Productivity Tools for the Busy Professional

9.30.21

Creating Strategy in a Small Business

10.29.21

What to Know Before Busy Season

11.12.21

Making Best Business Decisions for Fun and Not-for-Profit

11.19.21

Advanced Negotiations - Beyond Getting to Yes

12.3.21

Overview of Advanced Tax Strategies from a CPA Perspective

12.17.21

Five Things You Didn’t Know About Excel PivotTables

1.28.22

Last Minute Busy Season Tips

3.11.22

Protecting Your Practice - The Power of Documentation

4.22.22

Developing a Winning Firm Culture -The Tone Is Set at the Top

5.20.22

Ethical Dilemmas and War Stories - What Would You Do?

For a complete listing of Prix Fixe Courses & to register visit: WSCPA.ORG/PRIXFIXECPE21 Illustrations: Raelynn Huenefeld

CLASSIFIED ADS Mergers & Sales

Detailed advertising information is available online at wscpa.org under Resources.

Contact Sharon Olene-Marander at smarander@wscpa.org for more information.

Looking to fill a volunteer position?

The following organizations need a CPA to serve on the board of directors and/or provide other guidance on financial matters. Learn more about these and other organizations that need your help online at wscpa.org under community.

IBA Sells Privately Held Companies. Do you represent a client who is ready to retire or has taken a company as far as they want to or can? IBA is the Pacific Northwest’s oldest business brokerage (M&A) firm. We are professional negotiators with over 4000 completed transactions. Please contact us if we can be of assistance at (800) 218-4422 or www.ibainc.com

AMA Puget Sound, Seattle Arivva Center for Arts & Technology Cedar River Montessori School Facing Homelessness Helping Link / Môt Dâu Nôi The Max Foundation Tilth Alliance

The WSCPA Volunteer Opportunities page is a complimentary service for bona fide not-for-profit organizations in need of pro bono work by a CPA, or looking for CPAs to serve on their boards of directors. Submit a free listing for your bona fide non-profit organization. Learn more at wscpa.org/volunteer.

Established Profitable CPA Firm Ready for Next-Level Success: Private Practice Transitions is assisting in the sale of a CPA firm in Island County, Washington with a proven track record of growth and success. Twenty-seven years in the community, the firm is well-known for its outstanding personal service, fair pricing, and accurate and timely processing of income tax returns. Its impeccable reputation has resulted in high client retention (650 active clients, March 2021) and many word-of-mouth referrals. There are 5 employees including the owner making this a completely turnkey opportunity. This practice has a high percentage of SDE to sales (50% in 2020), positioning it as an excellent value for the right buyer. If you are interested in more information, call 253.509.9224 or send an email to info@privatepracticetransitions.com. In subject line, please include: #1142/Established, Profitable CPA Firm Ready for Next-Level Success Opportunity to Acquire Profitable Oregon CPA Firm: Private Practice Transitions is assisting a client with the sale of a long-established CPA firm focused on all areas of tax and accounting services. Located just south of Portland, Oregon, the practice is completely turnkey, with a reliable client base (more than 160 active clients as of February 20201) and low monthly rent ($575) in its current location. With one owner for the past four decades, the practice has an established name and loyal clients who rely on the firm’s personal service, fair pricing, and accurate and timely processing of income tax returns. The high percentage of SDE to sales makes this an extremely attractive opportunity for any potential buyer. Currently run as a one-person shop, the firm is small but stable and ready for exponential growth in the right hands. Ready to be your own boss? Call us at 253.509.9224 or email info@ privatepracticetransitions.com, include “1143/ Profitable Oregon CPA Firm” in subject line. Thriving CPA Firm in Northeastern Oregon: Private Practice Transitions is assisting a client with the sale of an established CPA firm wellknown for its customer service, fair pricing, and timely processing. Located in Northeastern Oregon, the firm was built on providing tax and accounting services to a tight-knit community. Income Tax Preparation makes up for 55% of the firm’s business. Thirty-five percent in payroll and 10% ‘other’ make up the balance of customer

Volunteer Opportunities

Considering Selling Your Practice? Consider all your options. We do the work. Confidential. We have buyers actively seeking practices. Call Mark Hause at (877) 345-7722 or visit our website at www.accountingpracticesales.com Accounting Practice Sales. We make dreams happen!

The Washington CPA Spring 2021

services. Operated by the full-time owner and a part-time employee, the firm is established and not only has substantial repeat business but also significant referrals from satisfied clients. As of March 2021, the firm has approximately 500 active tax clients. The firm is set up to run efficiently in a 100% paperless environment. This is a perfect purchase for someone experienced in running a business or someone interested in learning how to run a successful tax and accounting practice. If you want to learn more about the opportunity, call us at 253.509.9224 or send an email to info@ privatepracticetransitions.com with “#1138 / Thriving CPA Firm in Northeastern Oregon” in the subject line. CPA Turnkey Opportunity in Oregon-Idaho Treasure Valley: Private Practice Transitions is assisting in the sale of a long established, highly profitable CPA Firm located in the Western Treasure Valley of Oregon and Idaho. The firm’s two largest revenue streams are from Income Tax Preparation (48%) and Bookkeeping/Payroll (32%). The rest is made up of Management Advisory, Reviews, and Compilations. The Practice has shown increasing revenues year-over-year even during the COVID-19 pandemic. With average gross revenues (2018-2020) of nearly $465,000 and ~430 active clients, the firm is poised to have another successful year. The practice operates from a ~2,999 sq. ft. office building which could be part of the package deal. There are currently four staff including the owner who is willing to provide transition assistance for up to a year to help ensure the new owner’s success. With an established clientele, seasoned staff, and well-regarded reputation, this firm is a turn-key opportunity for the right buyer. For more information, call us at 253.509.9224 or send an email to info@ privatepracticetransitions.com with “#1136 / CPA Turn-Key Opportunity in Oregon-Idaho Treasure Valley” in the subject line.

Highly Profitable Oregon Tax Practice: Private Practice Transitions is assisting a client in Washington County, Oregon with the sale of a highly profitable, turn-key, private tax practice. The service breakdown is 72% Tax Preparation & Planning, 25% Accounting and Write-up, and 3% Other. In 2020, the Practice brought in over $1.2 Million in gross receipts and has approximately 550 active clients. The Practice has shown consistent YoY growth each of the last four years, is well known in the community for providing the highest level of customer service and employs nine (9) staff including the owners. Email “Listing #1113 – Highly Profitable Oregon Tax Practice” to info@privatepracticetransitions.com or call 253.509.9224 to learn more. South Eastern Washington CPA Practice: Private Practice Transitions is assisting a client, located in Eastern Washington with the sale of a busy tax and accounting practice. Tax preparation accounts for about 72% of the firm’s business and 28% comes from accounting services. The firm was established in the 1980’s, has over 600 active clients and has an excellent reputation in the community. The firm employs four staff, including the owner, in a fully furnished office. With average gross revenues of $465,000 the last three years (2018-2020), you don’t want to miss out on this amazing opportunity. Email “Listing #1115 – Eastern Washington CPA Practice” to info@privatepracticetransitions.com or call 253.509.9224. Profitable South King CountyTax & Bookkeeping Practice: Private Practice Transitions is assisting a client, located in South King County, with the sale of a busy tax and bookkeeping firm. The firm’s service by revenue breakdown is 65% Tax Preparation, 33% Accounting & Bookkeeping and 2% Other. The firm filed more than 265 tax returns in 2020 and has three staff, including the owner. The office is on a short-term lease (expiring December 2021) and is set up to run as a virtual business if desired. The owner is willing to stay on for up to three years to assist with the transition to new ownership. With weighted seller’s discretionary earnings (SDE) of more than $280,000, you don’t want to miss out on this turnkey opportunity. Email “Listing #1112 Profitable South King County Tax & Bookkeeping Practice” to info@privatepracticetransitions.com or call 253.509.9224.

www.wscpa.org

CLASSIFIED ADS (WA 1149) Everett (Snohomish County): This CPA practice for sale renders professional services in the areas of Income Tax and Write Up. The revenues for these sources of revenue are 57% and 39% respectively. The balance of the revenues consists of Compiled Financial Statements of 4%. One of the most important qualities of this firm is a strong staff that assists in providing these professional services to a varied client base. The practice has continuously invested in technology and is equipped to provide appropriate services to the client base. Any firm seeking a presence in Snohomish County or a firm looking to move to the next level of gross revenues will do well with this solid base of clients and the opportunity this firm provides. (WA 1148) Whidbey Island Area: This CPA practice has it all meaning that all the traditional services of a CPA practice are rendered by this firm. The firm is located on the beautiful Whidbey Island area and comes with an excellent reputation. The firm has long-term employees who assist the Seller in the rendering of these services. Further, these employees require little in the way of supervision and readily accept new challenges. All these qualities allow for worry free time out of the office for the Seller. The revenues for this practice are Income Tax 52%, Write Up 30%, Audits and Reviews 9%, and the balance is Consulting equaling 9%. This practice offers all these qualities plus the opportunity for rapid growth due to an underserved client community. All of this from a Seller willing to assist in the transition of the practice and who will consider any reasonable offer provided the Buyer has excellent credit, collateral, coupled with a significant down payment. (WA 1147) South Seattle: This CPA practice for sale is an extraordinary opportunity for a sole practitioner or firm to add a solid group of audit clients to their practice. The firm has a niche specialty auditing practice focusing on Labor Organizations and Employee Benefit Plans. The client base is very stable due to the specialized nature of the services rendered. Further, the clients are split approx. one half on December 31 and the balance on June 30 making for a balanced workload. The last but not the least quality of this practice is the Net Cash Flow which is an eye popping 86% annually. Any buyer would be hard pressed to find a better acquisition target

owner and is a great opportunity to move into ownership or expand your existing practice. To assist in the acquisition of the firm, the Seller will finance a significant percentage of the purchase price provided the Buyer makes a sizable down payment and has excellent credit and collateral.

(WA 1146) Northeast Seattle: This Seattle CPA practice is an excellent acquisition target for most any practice. The firm is 100% income tax and related professional services. All the clients are long time clients and substantially upper middle class which provides consulting services dealing with Estate and Trust areas. The client transition will be very efficient with the practice being paperless and no employees save the owner. The net cash flow to owner is excellent with the realization percentage equaling an eye popping 85%. The final element of this practice is the average fees which are excellent and will transition to any size practice. Any serious buyer looking for an acquisition needs to look at this firm for a quality addition to any group of clients.

SOLD

(WA 1145) Marysville/Everett Area: This tax-based CPA firm is for sale. The practice revenue mix is approx. 71% Income Tax with Write Up being the balance. The firm has a flex staff that assists the Seller with the busy season workload. Otherwise, the practice is operated by the owner in the day to day operation of the firm. This firm fits a variety of Buyers by having a solid growth and revenue potential whether as a starter practice or an excellent addition to a new or existing practice looking to make a jump to the next level of revenue. All of this is found in a firm made strong by the excellent service provided by the Owner. To assist in the sale, the Seller will provide financing but will require excellent credit and collateral be a part of the transaction. (WA 1144) Bellingham/Ferndale Area: This CPA practice is a full-service practice including attestation services in the professional services rendered. The firm revenue percentages are income tax 54%, auditing 28%, reviews 13%, with the balance being consulting engagements. The practice is filled with many long-term clients, with low turnover, who provide the practice with new client referrals, that include a high number of client’s with multiple engagements involving personal, business, and fiduciary returns. This firm provides excellent net cash flow to the

SOLD

(WA 1143) Centralia/Chehalis/Olympia Area: This CPA tax practice is for sale. The firm revenues are 100% income tax preparation providing the opportunity to grow by either adding write up services or continuing the rapid growth experienced in tax services. The profit pf the practice is excellent with approx. 75% pf fees being realized by the owner. In addition, the fees are excellent and allow for this firm to fit nicely into any practice regardless of the size of the firm. The practice is an ideal opportunity for any individual or firm looking to start or expand a firm with little to no changes. (WA 1141) Seattle: This CPA practice is unique in that it provides a wide variety of governmental accounting and attestation services. These services include performance audits, attestation services, and internal control assignments. The firm is filled with many loyal clients with long term relationship who consistently utilize the professional services of the firm. Reflecting the commitment and desire to provide the best transition possible, the Seller’s are insistent on providing a hands-on transition for the Buyer of this excellent practice. This firm offers a unique opportunity for any practitioner or firm to immediately be a force in the arena of governmental accounting services. Any firm with experience working in this field of professional services will have an advantage in acquiring this practice.

SOLD

(WA 1133) North East Washington/ Stevens County: This CPA firm located in North East Washington is a tax and accounting practice with a small amount of write up during the year. The practice revenues consist of income tax preparation and consulting 97% and write up 3%. The firm’s fee structure is excellent with realization rates that are the equal of any firm regardless of size. The strength of the firm is found in the cash flow to the owner that is well above the norm reflecting the excellent management practices of the Seller. This firm is the perfect fit for a professional looking for an excellent opportunity coupled with a pace and style of life that is not big city. When combined with a Seller who seeks to provide a good transition, this firm provides opportunity that many seek but few find in moving to ownership.

Visit the WSCPA Job Board! Job seekers, peruse the listings and find your next big break. Looking for talent? The WSCPA Job Board receives hundreds of visitors a month, all looking for new and exciting career opportunities. Post your opening and be seen by some of Washington's finest finance professionals.

www.wscpa.org

The Washington CPA Spring 2021

Thank You Contributors With your generous contribution to the Certified Public Accountants PAC we have continued to build vital relationships and a strong voice for the profession. As the only professional association advocating for CPAs in Olympia, your contribution ensures that the profession has a seat at the table as legislation impacting the profession moves forward. As a profession of administrative experts around tax policy we have also provided a valuable resource to legislators as they consider the implantation and impacts of various tax proposals. These contributors donated to the CPAPAC between March 2020 and February 2021.

FIRMS Clark Nuber PS Hellam Varon & Co Inc PS KPMG LLP Moss Adams LLP

AMBASSADORS CLUB ($500+)

Aaron R. Dawson, CPA Christopher W. Hesse, CPA Robert F. Woods, CPA

The Washington CPA Spring 2021

ADVOCATES CLUB ($100-$499) Abby M. Bailey, CPA, CFE Sara E. Bailey, CPA Jolene G. Cox, CPA Thomas G. Donaghy, CPA Sarah K. Funk, CPA, CGMA Dean A. Granholm, CPA, CGMA George Grayson, CPA Richard D. Greaves, CPA David D. Green, CPA, PFS, AEP, CFP Randy A. Howard, CPA Mark A. Hugh, CPA Christopher J. Hugo, CPA, MS Mitchell D. Irwin, CPA Richard E. Jones, CPA, CGMA Hubert S. Langenhorst, CPA Scott M. LaPlant, CPA Philip R. Laube, CPA Joe M. Mahimainathan Moses S. Man, CPA Mary D. Marino, CPA, CGMA, MBA David S. Nelson, CPA,CTRS Heather M. Nelson, CPA Kristine T. Nelson, CPA, MPAcc

Terence V. O’Keefe Ursula A. Perkins, CPA Diane Pietrowski, CPA Daniel A. Powers, CPA Andrew L. Read, CPA Bill Reed, CPA, CGMA, MBA Keith A. Schmidt, CPA Kimberly D. Scott, CAE Jeri L. Self-Merritt, CPA, JD Leslie A. Sesser, CPA Harold G. Shapiro William A. Simer, CPA Walter R. Smith William J. Smith, CPA, CFE, CIA Rebecca B. Stevens, CPA Leonard C. Sweet, CPA, ABV Manu K. Talwar, CPA Timothy W. Tasker, CPA Jared M. Theis, CPA David E. Trujillo, CPA, CGMA Melissa J. Webb, CPA Shayna E. Wood, CPA Cheryl K. Woods, CPA, CGMA

www.wscpa.org

CPAPAC

CPAPAC MEMBER ($50-$99) Alex T. Anderson, CPA Christie P. Anderson, CPA, MBA David M. Anderson, CGMA, CISA, CISS Laurie J. Anderson, CPA Todd S. Arkley, CPA Gordon P. Asheim, CPA Diane Bingaman, CPA Bruce E. Bixler Sidney H. Boles, CPA Adele B. Bolson, CPA Brady W. Borel Andrew M. Brajcich, CPA, JD, LLM David A. Brown Christine B. Brunner, CPA Arthur E. Campbell, CPA, CMA, CGMA Christopher M. Carlson, CPA, CCIFP Rebecca A. Cates, CPA Robert M. Cole Jr, CPA, CGMA, MA R D. Collier, CPA Michael D. Cone, CPA Craig S. Connell, CPA Gordon R. Craig, CPA, CFE, CIA Jay F. Cramer Stephen G. Dashiell, CPA Chris A. Davies, CPA, CMA Joseph P. Deacon, CPA Wesley L. Delaney, CPA Billie Devore, CPA David L. Dierst, CPA David A. Dorn, CPA Robert J. Erickson, CPA, JD Leon F. Ficker, CPA John T. Fisher, CPA, CGFM M R. Gilmour, CPA, CFP Randolph V. Glein, CPA, PFS Brian G. Gosline, CPA, JD Rick H. Graham, CPA William J. Graham, CPA Alan L. Gray, CPA Celia L. Griffin, CPA, CDFA Vaughn S. Hagen, CPA Rex H. Harder, CPA M S. Heidema, CPA Teresa A. Herrin, CPA Robert C. Hoglund, CPA Shyh-Ing Hong, CPA Stephen J. Hopps, CPA Michael K. Hutchinson, CPA Ronald A. Johnson, MBA D M. Jones Waylon P. Jones, CPA, CGMA, CFE Brett J. Jordan, CPA, CGMA, CIA, CFSA

Arthur Y. Kageyama Ryan N. Kidd, CPA Stroud W. Kunkle, CPA Kris L. Lambright, CPA, CGMA Jeff E. Leary, CPA,CFP Kiu Joyce L. Lee, CPA,CFP Ying Liu, CPA Deborah M. Loober, CPA Jessica J. Lustig, CPA John F. Lynch, CPA Sam S. Martin, CPA, MBA, CFP Elizabeth D. Masnari, CPA, CISA Harlan J. Mason, CPA Jeffrey A. May, CPA Arthur D. Miles, CPA Louis H. Mills, CPA Bruce I. Mitchell, CPA, MBA Donald W. Mitchell Mark J. Morrissette, CPA Scott D. Murphy, CPA Thomas P. Nicholas, CPA Aldryth N. O’Hara, CPA Amanda V. O’Rourke, CPA Joanne L. Ort, CPA, MPAcc Jack B. Person, CPA Joseph M. Pinsoneault, CPA Michael C. Plato, CPA Jeffrey J. Reddy, CPA Margo D. Reich, CPA Christopher J. Rieke, CPA Scott D. Rodgers, CPA, MSTax Donald L. Rodman, CPA, MBA Susan J. Sanders, CPA Thomas P. Sawatzki, CPA Daniel J. Schroeder, CPA Jay T. Shilhanek, CPA Ralph Siegel Douglas D. Springer, CPA, PFS Sidney J. Starr, CPA, CGMA, CFF Dianne J. Stoehr, CPA Thomas J. Sulewski, CPA Marie G. Sweet, CPA Terry M. Thompson, CPA Susan L. Thomson, CPA Bonnie W. Tse, CPA, CIA, PMP, CISA Mark E. Ulloa, CPA Robert A. Underhill, CPA, JD Susanne W. Vickerman, CPA, MSTax Sharon I. Vik, MBA Hayden B. Williams, CPA, CGMA Julie K. Wilson, CPA Natalie Wittrock

CONTRIBUTORS ($1-$49) Brenda L. Dean, CPA, CIA Clifford M. Frederickson, CPA, CGFM Eleanor E. Gittelman, CPA Stanley Habib Gerald E. Hubbard Kristin L. Knopf, CPA, CGMA, MBA Darcy N. Kooiker, CPA Marla D. Lockhart, CPA, MAFM

www.wscpa.org

Peter L. Madison, CPA Donald G. Oellrich, CPA, MEd Elisha M. Palmer, CPA Christopher P. Rasmussen, CPA Lenore D. Romney, CPA, CFE, CVA Rachel Schoessler Richard A. Volk, CPA Dorothy R. Wagsholm, CPA

SPECIAL THANKS TO OUR ADVOCACY VOLUNTEERS We’d like to extend a special thank you to these individuals who went above and beyond to assist us in our PAC and Hill Day efforts.

Sara Bailey Moriah Banasick Kelsey Bedient Matthew DosVoigne Dani Espinda Sarah Funk Delbert Goehner Christopher Hesse Roger Jones Writu Kakshapati Lowel Krueger Craig Landes Joyce Lee Richard Burger Mackey Moses Man Pete Miller Carrie Munson Bea Nahon Thomas Neill Tatiana Olaras Jessica Packer Ursula Perkins Rachel Roberson Jillian Robison Leslie Sesser Bill Simer Julleen Snyder Jared Theis Ed Thomas Susie Thomson Dave Trujillo Robert Underhill Greg White

The Washington CPA Spring 2021

RISK MANAGEMENT

Creditworthiness Verifications for Clients Who Received PPP Loans Duncan B. Will

Q: Our firm is receiving an uptick in requests from lenders for creditworthiness verifications for clients who received loans under the Paycheck Protection Program (“PPP”). How should we respond?

A: Many lenders, in response to economic challenges precipitated by the pandemic, have stated that they needed to have the borrowers’ accountants sign financial statements supporting borrower loan applications. Government regulations do not require this step. Camico has historically cautioned accountants not to accommodate such requests. Accommodating these requests is not required and could violate professional standards were the accountant to provide assurances regarding a borrower’s ability to repay the debt or solvency.

Instead, Camico discourages accountants from communicating directly with the lender. If the accountant were to choose to do so, then Camico has offered wording to specify the services performed, point out that those services did not contemplate accommodating this request, and indicate that the lender would need to rely on its own underwriting procedures. Prior to the issuance of SSARS No. 21 in October 2014, accountants would have been required to perform a compilation of financial statement engagement were they to provide financial statements in support of a lender’s request. AR-C Section 70 of SSARS No. 21 introduced the preparation of financial statement engagement. Accountants who perform this service typically do not issue a report and instead prepare financial statements with a legend appearing on each page which clearly states that no assurance is provided. However, accountants may issue a disclaimer report when engaged to perform a preparation of financial statements. Camico has steadfastly discouraged accountants from using the disclaimer report option, as doing so would eliminate the anonymity associated with the typical “legend” approach which does not require a disclaimer. This scenario could be the exception that defines the rule. If the lender insists on receiving a “financial statement signed by the borrower’s accountant,” CPAs may choose to accommodate the request by performing a preparation engagement and issue a disclaimer report. CPAs choosing this path will need to obtain a signed engagement letter detailing the client’s and accountant’s mutual responsibilities. Neither the compilation report nor the disclaimer report provides assurance, but the language in a disclaimer is concise, and the engagement would not subject the firm to peer review if not already subject to peer review.

An illustrative disclaimer might read: The accompanying financial statements of <entity> as of and for the year ended <Date>, were not subjected to an audit, review, or compilation engagement by <me/us> and <I/we> do not express an opinion, a conclusion, nor provide any assurance on them.

[Signature of <accounting firm/accountant>] [Accountant’s city and state] [Date]

Duncan B. Will, CPA/ABV/CFF, CFE, is Loss Prevention Manager/Accounting & Auditing Specialist with CAMICO (www.camico.com). Mr. Will leverages his more than 30 years of experience in accounting, including public accounting, forensic accounting, consulting, and audit and tax compliance, to manage the Loss Prevention department and to deliver policyholder service.

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The Washington CPA 2021 Spring

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