Health Care Reform With the VSCPA Insurance Center: IRS Defers Application of Nondiscrimination Rules for Insured Group Health Plans

On December 22, 2010, the Internal Revenue Service released Notice 2011-1, which defers application of certain nondiscrimination requirements applicable to insured group health plans under the Affordable Care Act. This comes as great relief to plan sponsors, who would have been subject to substantial penalties with no regulatory guidance to inform them of their obligations (consequences for noncompliance include an excise tax of $100 per day per affected individual, as well as equitable relief under ERISA). Read this alert to learn more about the notice and its ramifications.

CLICK HERE FOR THE FULL TEXT OF THIS ALERT.

Health Care Reform Q&A is facilitated by the VSCPA Insurance Center. Have a question? Leave a comment, or contact the VSCPA Insurance Center directly. This document is not intended to imply or provide tax or legal advice and is the VSCPA Insurance Center's current interpretation of the Health Reform Bill.

Why Ed Supports the VSCPA Educational Foundation

CPA Café recently caught up with Ed Kearney, President & CEO of Kearney & Company in Alexandria, Va. Ed has been a strong supporter of our Educational Foundation for more than 13 years, so we asked him: “Why do you support the Foundation?” Here’s what he had to say:

“I feel strongly about our profession and believe it is important for Virginia CPAs to support the education of future CPAs. We all benefit from a larger and stronger pool of Virginia CPAs.”

So, how about you? Why do YOU support the Educational Foundation?

Help Decide Who Created the Perfect Acronym for C-P-A!

The American Institute of CPAs' (AICPA) website dedicated to educating students about careers in accounting, StartHereGoPlaces.com, has just counted the last entry in the Clearly Pretty Awesome Competition, and a Virginia student is a finalist!

The AICPA challenged students to come up with the crummiest, funniest "C-P-A" jobs imaginable (think "Curb Paint Applicator" or "Cheese Pastry Auctioneer"), and man, did they deliver. You should see some of the submissions they came up with.

In fact, you can do just that. Which “C-P-A” job is the best at sounding the worst? It’s time for you to weigh in. Make your selection carefully because the winners can get laptops, iPod Touches and up to $3,000 in funds for their schools. We’re even going to use the top contender in a national ad campaign!

Click here to cast your vote today. Hurry, though! Public voting ends December 10. You’ve only got a couple of weeks to help determine whose creation is most Clearly Pretty Awesome!

Young Pros Corner: Saving Makes Cents: Starting Small

Guest blogger: Marian Millikan, CPA

As young professionals, we all know we should be saving money. Easier said than done, right? We’ve always heard people talk about how great saving is, and how important it is for the future. We’ve read the articles, talked about it with friends and family and even probably had a fight or two about spending money with a significant other.

Let’s face it, saving is hard. It’s human nature to want to enjoy the fruits of your labor and have fun with the money you earn. Unfortunately, after paying rent, credit card bills, school loan payments, food, and utilities, you may not have very much left, if any at all. There are entire books, volumes on the topic, so let’s start small. With a few basic pointers, a few philosophical coupons if you will, you can start saving.

Make the Effort

As a young professional, you CAN start small. The first step is getting in the mindset of saving. Like learning how to ride a bike, you’ll probably fall off a few times before you get the hang of it (Did you really “have to have” those Jimmy Choo’s and Prada sunglasses… well, ok, but just pick one). The goal is to start small, so as your expenses begin to decrease you can start to slowly put more money away into savings. Once you establish a comfortable level of spending, stick to it. This way, you can put most of the money you get from a future raise or bonus directly into your savings account.

Make a Budget and Stick to It

In order to figure out your financial comfort level, you need to set up a budget. This can be as simple as tracking your monthly inflow (cash you are earning) against your monthly expenses. Track this information for 1-2 months by keeping a tally of what you spend and what you earn (The VSCPA has a great template to help with this on their website). Figure out how much money you have left over after all the bills are paid and estimate the portion of that amount that you want to save. Hopefully, you have enough money left over to treat yourself to a manicure to celebrate a job well done.

If you find yourself in the red, don’t panic… just don’t get that manicure yet! Since you have tracked your expenses, you can determine what has caused you to go over budget. Sometimes you don’t realize how much you actually spend on things like going out to eat or entertainment until you actually see them written down on paper. Maybe it was those $4 lattes you drank each morning or perhaps the $3 magazines you had to pick up at the grocery store so you could stay on top of Hollywood’s latest scandal. Whatever the case may be, focus on those areas and make a conscious effort to spend less on them next month.

Out of Sight but Not Out of Pocket

You should separate your savings from your everyday funds. This will help you be able to see your savings accumulate, much like you used to feel your piggy bank get heavier when you were a kid. Now that you are older though, it’s not enough to have just one piggy bank; you need several so you can save in different ways for different milestones. At a minimum, you should have one savings account for your retirement (such as a 401k or IRA), one for short term goals (Tahiti, here I come), and one for rainy days to pay for the unexpected (so THAT’S what the oil light means).

Dividing your savings into different funds and keeping it away from your checking account will help reduce your desire to spend it all at once. With online banking, it’s never been easier to create new accounts and set up automatic drafts from your checking account. By doing this, you can immediately set aside the money you’ve decided to save on payday without even having to think about it.

The VSCPA Can Help

There are many tools you can use to help meet your savings goals. The VSCPA’s Financial Fitness Program is a financial literacy initiative that started in 2004 to help improve the financial health of Virginians. The program provides free workshops to address financial issues you may be facing in both your professional and personal lives. The program is led by CPA’s and can provide you with additional tools to get your finances back into shape. Sign up to learn more about budgeting, saving, credit, retirement planning, estate planning and more.

Contact the VSCPA Education Team at 1-800-341-8189 for more information on how to attend.

Estate Tax Back from the Grave? Tax Cuts to Take Its Place?

As the current year quickly comes to a close, so do the Bush administration’s income tax cuts and estate tax exemptions. But Congress will surely fix that.

Maybe, but maybe not. The Economic Growth and Tax Reconciliation Act of 2001 called for a gradual rise in the estate tax exemption while cutting income tax rates. The increased estate tax exemptions and income tax cuts are both set to expire by the end of 2010.

So what happens if the federal estate tax reemerges come January 1? Estates valued at more than $1 million could be taxed up to 55 percent, plus a possible 5 percent surcharge on certain estates.
While $1 million seems like a lot, houses, retirement funds and other assets add up quickly, which means many more taxpayers could be impacted.

And will the 2003 tax cuts become permanent or will some (or all) expire? Right now it’s hard to say, considering Congress has adjourned without addressing either issue. Meanwhile, CPAs in financial planning and tax preparation are left to continue serving their clients amid this uncertainty.

Check out some recent articles on the topic, and tell us what you think about this issue:

• Congress Leaves Tax Pracs in Limbo (WebCPA)
• Bush Tax Cut Dithering Might Lead to Shrinking Paychecks (AccountingWEB)
• Op/Ed: Ending Tax Cuts Now Would Be a Mistake (SmartPros)
• Bush Tax Cuts Set to Expire — Should They? A Tax Fable to Englight (AccountingWEB)
• How Will the Expiring Bush Tax Cuts Affect You? (Forbes)
• Economists: Extend Bush Tax Cuts for Everyone (CNNMoney)

Dash for the Cash: VSCPA Members Recruit New Members

You already understand why this community is so important. That’s why you’re a member.

But what about those CPAs who aren’t members? Who don’t directly support the organization that represents them at the Virginia General Assembly? Who don’t understand the value of staying connected to more than 9,000 members across Virginia? Who are missing out on information, discounts and career resources to enhance their professional success and the overall CPA brand? 

Someone needs to tell them — and you are the best advocate for your professional association.

The VSCPA Dash for the Cash member-recruit-a-member campaign is a great opportunity for you to spread the word.

The campaign, which began October 18 and runs until November 30, aims to grow this community — but it could also grow your bankroll.

Here’s how it works:

• For every licensed CPA member you successfully recruit to join the VSCPA by November 30, you’ll be entered into a drawing to win cash prizes. There are seven chances to win: $1,000 grand prize, one $500 prize, one $250 prize, one $100 prize and three $50 prizes.
• Recruits must be CPAs licensed in Virginia to count toward your Dash for the Cash. (Although feel free to recruit students and other members, too!)
• Recruits must officially join by 5 p.m. on November 30.
• Recruits must include your member ID number on their application. Not sure what your member ID number is? Give us a call at (800) 733-8272 or check your recent Dash for the Cash e-mails.
• In order for prizes to be awarded, at least 50 new members must be recruited.
• We will announce prizes in early December — just in time for the holidays!

So begin your Dash for the Cash today, and tell a colleague what your VSCPA membership means to you. Visit http://www.vscpa.com/ for details and updates on how many new members you’ve collectively recruited.

It’s Back to School in Disclosures

I hope you’ve been able to enjoy the September/October Disclosures issue. As in the past, we focused September/October on issues related to accounting education. We also included a special section just for student members.

Since we made VSCPA membership FREE for college students this year, our student membership numbers have exploded. So it makes more sense than ever to include content, at least once a year, for students in the magazine.

But the accounting education issue is not just for students. Our aim is to educate all Virginia CPAs on what accounting students are currently facing — because these are the topics that will shape Virginia’s newest CPAs a few years down the road.

Educators Phil Umansky, CPA, from Virginia Union University, and Gabriele Lingenfelter, CPA, from Christopher Newport University, collaborated on two articles that take a detailed look into what accounting education is like in 2010. “Class Notes: Accounting Education in 2010” focuses on changes to the CPA Exam, teaching International Financial Reporting Standards (IFRS) and more. “The Write Stuff: Improving Accounting Students Writing Skills” dives into a topic worth exploring — how much writing preparation do CPAs really need anyway? Turns out, a lot.

Kudos to both Phil and Gabriele — both articles were reprinted in by AccountingWEB on September 28, 2010, garnering readers nationwide.

Special announcement: We’re excited to announce that the November/December 2010 Disclosures issue is newly redesigned. With a cleaner, sharper, easier-to-read look, and new sections, we hope you’re pleased.

Site to See: Check Out the New VSCPA Website

It's here! The new VSCPA website, www.vscpa.com, was launched today. The site has been completely redesigned and reorganized to better meet members’ needs.

As the final piece of the VSCPA’s recent rebranding project, the VSCPA website now matches the new look of the Society’s communications — simple and member-focused.

Several iterations of the VSCPA website have been rolled out since it first launched in 1996, including the most recent full redesign in 2005. As trends and technology change more rapidly than ever, industry experts now recommend a website overhaul every 24 months. It was certainly time.

Visit www.vscpa.com and take a look at the new look and layout. To become better acquainted with the site:

• Check out this quick screencast, which tours the site navigation and highlights a few new features.
• Download this flyer (PDF) with screenshots that call out popular features like the CPE Quick Search and homepage customization tools.
• Read an article that outlines some of the new tools on the site.

This is your site, so please let us know what you think. If you have any questions, need help locating information on the site or have feedback to offer, don’t hesitate to contact us.

VSCPA Educational Foundation Annual Report Released

Interested in hearing from current and past VSCPA Educational Foundation scholarship winners? Check out the 2009–2010 annual report online for photos and videos of those who are directly impacted by the Foundation.

Plus, get an update on what the Foundation has been up to!

It's CPA Day of Service!

It's CPA Day of Service, and hundreds of volunteers are giving back all over the Commonwealth.

Accounting students (and grads) from Strayer University are volunteering this morning at The William Byrd Community House in Richmond, where they helped out during last year's Day of Service.

Thanks CPAs and future CPAs for volunteering in your communities today. We know it doesn't take a special occasion like CPA Week for you to give back. This profession has a strong history of volunteering. But it's really neat that you're making a collective impact in Virginia today!

Health Care Reform Q&A With the VSCPA Insurance Center: OTC Meds Reimbursement Changes

Question: What is changing with the reimbursement of over the counter medications from spending accounts?

Answer: The Patient Protection and Affordable Care Act (PPACA) includes a provision which eliminates the reimbursement for over the counter (OTC) medications – those that can be obtained without a prescription - from a Flexible Spending, Health Saving, or Health Reimbursement Account effective January 1, 2011. OTC medications cannot be reimbursed without a prescription after this date. The exclusion applies even if a health plan is granted the two and a half-month grace period applicable to certain plans. The IRS recently issued a Notice, Revenue Ruling and questions and answers regarding the new provision. See the following links to access these documents:

Notice: http://www.irs.gov/pub/irs-drop/n-10-59.pdf

Revenue Ruling: http://www.irs.gov/pub/irs-drop/rr-10-23.pdf

Questions and Answers: http://www.irs.gov/newsroom/article/0,,id=227308,00.html

Health Care Reform Q&A is facilitated by the VSCPA Insurance Center. Have a question? Leave a comment, or contact the VSCPA Insurance Center directly. This document is not intended to imply or provide tax or legal advice and is the VSCPA Insurance Center's current interpretation of the Health Reform Bill.

VSCPA Young Professionals Advisory Council Wants YOU!

Guest Blogger Clare Levison, CPA

If you’re a CPA who’s 35 or under, the VSCPA Young Professionals Advisory Council (YPAC) wants to connect with you. The YPAC was founded in April of this year and our vision centers around three S’s: Social, Service, and Strategy. We have lots exciting things going on in all of these areas.

Social:

Monthly happy hours are taking place on the second Wednesdays of the month in Richmond and Northern Virginia, and on other dates in various locations around the state. Be sure to join us for the happy hour in your area, and bring a colleague with you.

Service:

The CPA Day of Service is Friday, September 24 and young professionals all across the state are getting involved. If you haven’t found an organization to volunteer with yet, it’s not too late. National and regional organizations such as the Central VA Food Bank, Meals on Wheels, Habitat for Humanity, SCAN (Stop Child Abuse Now) Project Warm, and many others would love to put you to work.

Members of the YPAC are also participating in college and university career fairs in their areas to foster relationships with the students that will be future young professionals.

Strategy:

The YPAC wants you to be positioned for personal and professional advancement. That’s why our future blogs will address issues such as leadership, management, goal setting, networking, and etiquette. We’ll also be targeting CPE and networking events specifically for young professionals.

We’re excited about all of the things taking place in the VSCPA young professionals’ community. We hope you are too. Keep your eye out for a survey we will be sending to find out how we can best continue to enhance your VSCPA membership. If you’d like to volunteer with the VSCPA Young Professionals Advisory Council or the Young Professionals Task Force, contact Courtney Neal at (804)612-9441 or cneal@vscpa.com

Clare K. Levison, CPA is a member of the VSCPA Board of Directors and Young Professionals Advisory Council. Contact her at tllandckl@yahoo.com.

It's Virginia Certified Public Accountants Week!

To spotlight the value CPAs offer the Commonwealth’s citizens and commerce, Gov. Bob McDonnell signed a proclamation (PDF) recognizing September 19–25, 2010, as “Virginia Certified Public Accountants Week.” That's this week!

The VSCPA introduced a similar proclamation as part of its Centennial anniversary in 2009 and initiated the proclamation again this year to continue highlighting CPAs’ contributions.

The proclamation notes that CPAs in Virginia draw upon their unique knowledge and experiences to provide sound, reliable financial counsel to protect and promote the growth of business, the soundness of government operations, the excellence of higher education and the confidence of investors in the Commonwealth and throughout the United States.

To celebrate Virginia Certified Public Accountants Week, the VSCPA is hosting several free public service events, including the CPA Day of Service, which will unite hundreds of volunteers in giving back this Friday.

Check out www.vscpa.com/CPAWeek for more information on how you can get involved and celebrate this week.

Thanks for all that you do, CPAs. Enjoy some much-deserved recognition!

Think More Globally by Learning Locally: 2010 International Business Forum Discount Extended

In today’s global market, ignoring international business trends is no longer an option. Fortunately, saving money on the 2010 International Business Forum still is.

The $75 early registration discount deadline on the 2010 International Business Forum has been extended to Friday, September 17, which means there’s still time to save.

No matter their role, CPAs  need to understand how the global economy is changing business, and this is a unique opportunity for CPAs to learn to think globally by learning locally.

Hosted by the Mid-Atlantic CPA Collaborative, a partnership between the Greater Washington Society of CPAs (GWSCPA), Maryland Association of CPAs (MACPA) and the VSCPA, this new CPE opportunity will help members tackle the complexities of new international accounting standards, financial reporting models and policies. Members will learn from international experts on these important topics:

• Paul Madden on the Australian Standard Business Reporting (SBR) program
• Olivia Kirtley, CPA, on management and oversight of international growth strategies
• BDO Seidman’s Wendy Hambleton, CPA, on international and U.S. accounting standards
• XBRL International’s Mike Willis, CPA, on the global effects of XBRL
• Judy O’Dell, CPA, CVA, on changes to private company financial reporting
• Microsoft’s Bob Laux, CPA, CMA, MBA, on sustainability in a global market
• PricewaterhouseCoopers’ Scott Thompson, CPA, on international government contracting

The Mid-Atlantic CPA Collaborative International Business Forum is Monday, October 4, 2010, from 7:30 a.m. to 4:15 p.m. (networking reception to follow) at The Mayflower® Renaissance Hotel in Washington, D.C.

The cost is $399 for state CPA society members who register by September 17. After that, add add $75. Plus, if you enroll four or more people from the same firm at the same time, take $25 off per person.

Register online or call (800) 341-8189. See you there!

What Time of Day Are You Least Productive?

Survey says late afternoon.

According to a new Accountemps survey of senior managers, late afternoon is the most common time for workers to hit a wall.

The worst times of day include 4 p.m. to 6 p.m., when 37 percent said their employees were least productive. Coming in second was 2 p.m. to 4 p.m., as cited by 28 percent of respondents.

The survey was conducted by an independent research firm and is based on telephone interviews with more than 1,000 senior managers at companies with 20 or more employees.

Managers were asked, "In general, what is the least productive time of day for employees?"

Their responses:

8 a.m. to 10 a.m. 10%

10 a.m. to noon 4%

Noon to 2 p.m. 19%

2 p.m. to 4 p.m. 28%

4 p.m. to 6 p.m. 37%

Don't know 2%

Accountemps also offereds five tips to help professionals avoid the afternoon slump and maximize productivity:

1. Plan ahead. Don't push challenging projects off until the end of the day, when your energy may wane. Use your less-energetic periods to catch up on more routine tasks, such as responding to e-mails and reading industry publications.

2. Get out and smell the roses. If you feel your energy beginning to dip, stretch or take a short walk to recharge. Try eating your meals or holding afternoon meetings outside.

3. Eat well. Remember to make time for lunch and nutritious snacks throughout your workday. Avoid high-carb foods, which can cause you to crash later.

4. Track goals. Keep a to-do list to remain focused, and ensure it's visible on your desk so you can check items off as they're completed. There's nothing more motivating than making progress on your projects.

5. Switch gears. If you're struggling to focus, take a quick break and research something new. Changing tasks can help increase your productivity late in the day.

CPAs Weigh in on Economy: Outlook Not So Good

Pessimists outweighed optimists by a two-to-one margin among CPAs serving as C-suite executives, according to the American Institute of CPAs (AICPA) and the University of North Carolina’s Kenan-Flagler Business School’s latest Quarterly Economic Outlook Survey. Here's an overview:

• Only 21 percent of the survey respondents expressed optimism about economic recovery, a sharp decrease from 40 percent who were optimistic in May and the lowest level since April 2009. Forty percent were pessimistic about the economy, up from 25 percent in the last quarter.
• Measures of optimism versus pessimism registered a combined 34 percentage-point swing toward a negative outlook, reversing the 28 percentage-point shift toward optimism recorded in the prior quarter when optimists outnumbered pessimists for the first time in two years.
• Three in four, or 78 percent of respondents believe U.S. business conditions will not return to pre-recession levels until 2012 or later. Seventeen percent said conditions would return to pre-recession levels in 2011, and less than one percent said activity would rebound this year.
• Twenty-four percent expressed more confidence about the prospects for their own organizations, a decrease from 40 percent who had more confidence in May. CPAs who are pessimistic about their own organizations rose slightly to 21 percent from 20 percent in the prior quarter.

Employment
Employment remains a top issue, which the survey touches on, too. As U.S. unemployment holds steady at 9.5 percent, 55 percent of survey respondents do not anticipate their organizations’ employment levels returning to pre-recession levels in the next year, compared with seven percent who anticipate staffing levels returning to normal in the next year. Less than one in ten, 9 percent, reported that their organizations were planning to hire in the immediate future.

Meanwhile, the Robert Half Global Financial Employment Monitor, released around the same time as the AICPA survey, expands on hiring trends.

According to the Robert Half survey, the most active hiring is expected to take place at the entry and staff levels. Employers reported difficulty finding skilled candidates for specific functional areas. Respondents cited particular challenges filling finance, accounting and operational support positions. Employers are a bit more confident about their ability to retain top talent, however. Forty-five percent of respondents said they are worried about their ability to keep top performers, down from 53 percent in 2009.

Growth
The Robert Half survey shows 83 percent of financial leaders said they were either very or somewhat confident in their companies' growth prospects for the next year. The AICPA survey results reveal only 54 percent expect their business to expand in the next 12 months.

The AICPA study focuses on CPAs' economic outlook, and included 1583 qualified respondents. The Robert Half study focuses on financial leaders' perspectives on hiring difficulties, retention concerns and other staffing-related issues, and included more than 6,300 qualified responses from 19 countries.

CPA Day of Service: T-shirt Deadline August 13!

CPA Day of Service is right around the corner — September 24.

At last year's inaugural CPA Day of Service, more than 600 volunteers pitched in to help communities across the state. On September 24, plan to roll up your sleeves for CPA Day of Service 2010!

Take a look at pictures from some of the participants from last year. And be sure to sign up by August 13, this Friday, to get your official, free T-shirt!

Get started today! Here are six easy steps to service:

1. Select your cause
2. Contact your charity
3. Sign up by August 13
4. Plan your event
5. Roll up your sleeves on September 24
6. Send us pictures

If you have any questions, please contact VSCPA Community Relations Coordinator Tracey Zink at tzink@vscpa.com or (804) 612-9427. See you in September!

CPAs Prepare: 1099 Requirement Still in Place

Despite the profession's best efforts, the expanded Form 1099 reporting requirement for businesses is still in place.

On July 31, the U.S. House of Representatives failed to pass H.R. 5982, which would have repealed the section of the new health care law that requires businesses to report to the Internal Revenue Service (IRS) any purchase from a vendor of goods or services worth $600 or more during the calendar year.

The reporting requirement is included in the Patient Protection and Affordable Care Act and is effective for purchases made in 2012 that will be reported on 1099 forms filed in 2013.

In a recent letter, the American Institute of CPAs (AICPA) told Congress it would be burdensome and costly for small businesses to compile the data and prepare the Form 1099-MISC information return. Furthermore, the AICPA said the information collected on the 1099 forms would not be very helpful to the IRS in collecting any unpaid taxes that should have been paid by the vendor because it will be difficult to reconcile payments reported on the forms and income reported by the vendor.

Where does this leave you and your clients? What changes will you need to implement in terms of recordkeeping and software? What do you need to communicate to your clients?

Also, the IRS has indicated it plans to exempt from this reporting requirement any business transactions completed via credit or debit card, as such transactions are already reported by the payment processors. While the exemption might provide some administrative relief, could small businesses unable to adapt lose customers who seek vendors that don't require the additional reporting?

Read a recent article from the Journal of Accountancy for more info on this requirement, and share your thoughts, concerns and ideas here at http://www.cpacafe.com/.

American Accounting Association and AICPA Create Pathways Commission to Study the Future of Accounting Higher Education

The American Accounting Association (AAA) and the American Institute of CPAs (AICPA) just announced they have formed the new Pathways Commission to study possible future paths of higher education for those seeking entry into the accounting profession.

The importance of public, private, governmental and nonprofit accounting information to the functioning of the economy cannot be underestimated, according to the AAA and AICPA. Stakeholders throughout the economy base critical decisions on information provided by the accounting profession.

Bruce Behn, Ergen Professor at the University of Tennessee who is serving as chair of the Pathways Commission, explained that the Commission will be innovative on a couple of fronts.
"First, we plan to seek input from the full spectrum of the accounting community in our deliberations," he said. "We will use a 'supply chain' approach. Members of the supply chains will include individuals and representatives from organizations that impact the various current accounting education pathways. Our goal is to facilitate an open, transparent discussion to be supported by both technology and public discussions. Second, the Commission recognizes the difficulty of sustaining the momentum for change in the dynamic environment of accounting practice and education. The Commission's efforts are structured to continue into the future."

Accounting education is dealing with several issues, including shortages of qualified teachers with accounting doctorates, the need to revise the accounting curricula regularly in light of fast-paced business changes, university budget constraints that threaten to make the cost of education prohibitive, and the need for training in specialized areas to meet the profession's demands.

The Commission will hold its first meeting October 15–17 in Washington, D.C. Read more about the Commission online at http://www.vscpa.com/.

VSCPA Members Selected to Attend AICPA Leadership Academy

We're feeling proud today! That's because three VSCPA members have been selected among applications nationwide to attend the American Institute of CPAs (AICPA) 2010 Leadership Academy October 5–7 in Durham, N.C.

Only 25 young professionals were selected to attend the AICPA’s Leadership Academy program, which was established last year to provide the next generation of CPA leaders with advanced intensive leadership training, access to well-connected professional networks and opportunities to exercise leadership within the profession.

The attendees are all between the ages of 25 and 35 with valid CPA licenses and three or more years of experience in the profession.

Congrats to the three VSCPA members selected to attend:

• Jaime Lynn Dernar, CPA, controller with FOX Architects LLC in McLean
• Marc E. Filer, CPA, a senior staff accountant with PricewaterhouseCoopers in McLean and chair of the VSCPA Young Professionals Advisory Council
• Nicole M. McGuire, CPA, a senior auditor with the U.S. Government Accountability Office (GAO) in Washington D.C.

How Optimistic Are CFOs About the Economy?

CFOs are expressing less confidence and a bit more caution, according to the second quarter 2010 "CFO Outlook Survey," released by Financial Executives International (FEI) and Baruch College's Zicklin School of Business.

After rising for four consecutive quarters, the Q2 CFO Optimism Index for the U.S. economy experienced a nearly five point decrease (down from 58.14 to 53.60), and CFOs' outlook for their own companies fell slightly from 69.49 to 67.40.

While confidence is down, and areas such as IPO activity and the rate of capital spending remain slow, CFOs' outlook toward credit is more favorable and various findings demonstrate substantial progress since 2009.

Here are some of the survey findings:

~Regarding healthcare, two thirds (66%) plan to increase the monthly amount that their employees pay for benefits, and more than a third (34%) also plan to decrease the scope of the healthcare package.

~Regarding access to credit, less than one fifth of respondents (17%) feel that it will be more difficult to access credit over the next six months, compared to the 24 percent of CFOs who shared this sentiment when asked in the third quarter of 2009.

~When asked about the potential impact the financial regulatory reform package would have, the most-cited effect was increased banking costs (45%), followed by additional compliance and reporting requirements and costs (39%).

~The majority of CFOs (53%) also predict their taxes will increase. Despite expected tax increases, a large majority of CFOs (78%) remain confident that their business decisions will remain unaffected by the tax outlook.

~CFOs are expecting increases in net earnings (20%), revenue (11%) and hiring and technology spending (both at 7%) over the next 12 months. CFOs will face a number of added expenses over the next 12 months, including new costs related to taxes, financial regulatory reform and healthcare.

Read more at http://www.vscpa.com/.

IRS Proposes PTIN Registration Fees

Last week, the Internal Revenue Service (IRS) released its proposed regulations to establish fees for those applying for preparer tax identification numbers (PTIN). This is the next step in the IRS's efforts to increase oversight of federal tax preparation.

Here's what CPAs must know: Beginning in 2011, all CPAs and other paid tax preparers must either re-register their PTINs or obtain a PTIN if they sign tax returns. CPAs, attorneys and enrolled agents all must renew their registrations every three years, but are exempt from testing, criminal background checks and continuing education requirements.

According to the IRS, the proposed $50 fee would cover technology costs and compliance and outreach efforts associated with the new PTIN program. An additional, smaller fee will be added by the third-party vendor chosen to operate the online registration system.

The PTIN proposal is not without its controversy. The CPA profession finds the requirement of PTINs for non-signing preparers problematic, as there are many employees at CPA firms who would fall into this category and would thus be subject to the testing and education requirements from which CPAs are exempt.

Read the VSCPA's July 1, 2010, letter to Virginia's federal representatives and senators for more on the Society's position.

The comment period for the IRS fee proposal ends August 23, 2010. Contact VSCPA Government Affairs Director Emily Walker at (804) 612-9428 if you have questions or comments.

Dodd-Frank Act Expands Whistleblower Protections

The Dodd-Frank Act includes significant amendments to the whistleblower protection provisions of the Sarbanes-Oxley Act of 2002 (SOX) and adds new private rights of action for whistleblowers. For instance:

• It establishes a whistleblower incentive program requiring the SEC to generally pay a whistleblower in securities law actions leading to the recovery of more than $1 million a bounty of between 10 and 30 percent of the recovery.
• It amends the Securities Exchange Act of 1934 to generally prohibit employers from taking punishing acts against an employee for providing information to the SEC; assisting in certain actions relating to that information; or making disclosures that are required or protected under SOX, the Securities Exchange Act or another law, rule or regulation subject to the jurisdiction of the SEC.
• Aggrieved employees now have 180 days instead of 90 days to file a complaint with the OSHA beginning with the date of the violation OR the date the employee became aware of it.
• It expands SOX coverage to include employees of “nationally recognized statistical rating organization[s]” as well as employees of subsidiaries of publicly traded companies in specific instances.
• And more.

Check out a more detailed description of these changes and more online at www.vscpa.com.

Virginia Board of Accountancy (VBOA) to Form Peer Review Oversight Committee; VSCPA Offers Feedback

The Virginia Board of Accountancy (VBOA) is establishing a Peer Review Oversight Committee to oversee the process and review of peer review in the Commonwealth effective July 1, 2010.

To provide reasonable assurance that peer reviews are conducted and reported in accordance to the AICPA Standards for Performance and Reporting on Peer Reviews, the PROC will monitor the VSCPA Peer Review Program, which administers the AICPA Peer Review Program in Virginia.

The VSCPA Peer Review Program also undergoes a biennial oversight process conducted by the AICPA, and received clean reports on its last two oversights, conducted in 2007 (PDF) and 2009 (PDF).

In establishing the PROC, the VBOA is following the recommendation of the National Association of State Boards of Accountancy (NASBA) that all state boards perform oversight of approved practice-monitoring programs as part of their usual and customary duties when practice monitoring is a condition of licensure, as is the case for licensed Virginia firms.

Read more about the establishment of the PROC, including the VSCPA's feedback to the VBOA here.

Health Care Reform Q&A With the VSCPA Insurance Center: Preexisting Condition Exclusions

Question: What do I need to know about interim final regulations released for preexisting condition exclusions, lifetime and annual limits, rescissions and patient protections.

Answer: On June 23, 2010, the Departments of Labor, Health and Human Services and Treasury released final interim regulations relating to preexisting condition exclusions, lifetime and annual limits, rescissions, and other patient protections under the Affordable Care Act. The Regulations were published in the June 28, 2010 Federal Register. The table below contains a brief description of each regulation, its effective date, and its application to grandfathered group health plans.

Regulation	Effective for Plan Years Beginning On or After	Applies to Grandfathered Group Health Plans?
Prohibition of preexisting condition exclusions or other discrimination based on health status	January 1, 2014, or for individuals under age 19, September 23, 2010	Yes
No lifetime or annual limits	September 23, 2010	Yes
Prohibition on rescissions	September 23, 2010	Yes
Patient protections	September 23, 2010	No

For more details on these final regulations, download the full pdf available on the VSCPA Insurance Service Center’s administrator, Dominion Benefits’, website.

Health Care Reform Q&A is facilitated by the VSCPA Insurance Center. Have a question? Leave a comment, or contact the VSCPA Insurance Center directly. This document is not intended to imply or provide tax or legal advice and is the VSCPA Insurance Center's current interpretation of the Health Reform Bill.

Sales Tax Holidays: Helping or Hurting Consumers and Businesses?

Eighteen states are offering sales tax holidays in 2010, up from 16 in 2009 and 17 in 2008. Many consumers regard tax holidays as a great opportunity to save on necessities and products that improve their safety or reduce their carbon footprint.

The Tax Foundation, a nonpartisan, nonprofit organization monitors fiscal policy at the federal, state and local levels, provides another prospective.

The Foundation released a report on July 26, concluding that tax holidays are, in fact, bad public policy, distorting consumer choices while favoring certain industries over others, increasing tax code complexity, and distracting from real, permanent tax relief.

What are your thoughts? Are tax holidays friend or foe? Are there ways they can be better implemented to achieve the goal, or are they working just fine?

What Do You Want to See in Disclosures?

Each year, the VSCPA Editorial Task Force convenes at the Richmond CPA Center to brainstorm topics for the upcoming year's Disclosures Editorial Calendar. On August 11, 12 CPA members of the Task Force are meeting to discuss their ideas -- and yours!

Now's your chance to propose topics that YOU think should be covered in the magazine. What's missing? What would you like more in-depth info on? The magazine is here to serve the VSCPA membership, so we want to make sure it applies to you.

Send me an e-mail at jedmonds@vscpa.com with your ideas. Of course, we're always looking for interested writers, too.

Leaders' Institute Sponsoring Firm Shareholder Responds to This Year's Event

Marty Einhorn, CPA, managing shareholder with Wall, Einhorn & Chernitzer, P.C., one of this year's Leaders' Institute sponsors, shares his thoughts on this year's event:

"I had a great time at the Leaders’ Institute in Blacksburg put on by the VSCPA. I am the managing shareholder with Wall, Einhorn & Chernitzer, P.C., an 80+ person regional CPA and consulting firm in Norfolk, Virginia. This was our second year participating in the event and we continue to feel it is a great opportunity to meet the top rising accounting talent in the Commonwealth. Our firm has sponsored the Friday evening dinner the past two years and we have invited a number of our team members to participate. We have also provided several team members to serve as group leaders for the students during the weekend event.

This is a great way for our firm to gain name recognition at many of the universities around the state and to be able to interact with these students. They seem genuinely interested in our profession and obtaining any and all advice they can receive from the other participants and CPA firms represented.

Participation in the event is also a very efficient way to recruit for the future. Whether these students decide to begin their career in our market or elsewhere, we have made an impression on them and we hope they will remember our firm for future opportunities.

Thanks to the outstanding VSCPA staff for putting on a great weekend and making a rather long drive to Blacksburg more than worthwhile!"

Health Care Reform Q&A With the VSCPA Insurance Center: Grandfathered Health Plan Provisions

Question: What do I need to know about grandfathered health plans?

Answer: On June 14, 2010, the Departments of Labor, Health and Human Services, and Treasury released final interim regulations relating to the status of grandfathered health plans under the Affordable Care Act (the “Act”). These regulations, published in the June 17, 2010 Federal Register, explain the rules for determining whether a group health plan or health insurance coverage qualifies as a grandfathered health plan, how that status is maintained, and how a grandfathered health plan may lose its grandfathered status. In addition, the preamble to the regulations provides helpful and important guidance for plans that are not subject to the Act’s mandates, such as those that cover fewer than two participants who are current employees and those that provide excepted benefits.

As part of their effort to provide as much information as possible to the regulated community, the agencies also released a Fact Sheet, FAQs, and a Model Grandfathered Health Plan Notice. Together with the regulations, this guidance provides a great deal of helpful information for employers to consider as they evaluate their plans’ grandfathered status. Knowing whether a group health plan or health insurance coverage is grandfathered is critical to determining which of the Act’s coverage mandates apply to the plan.

Health Care Reform Q&A is facilitated by the VSCPA Insurance Center. Have a question? Leave a comment, or contact the VSCPA Insurance Center directly. This document is not intended to imply or provide tax or legal advice and is the VSCPA Insurance Center's current interpretation of the Health Reform Bill.

Scenes from the Fourth Annual Leaders’ Institute

The VSCPA held the fourth Leaders’ Institute for Virginia’s top accounting students on June 25–27 at Virginia Tech, and it was another great success.

With a generous $100,000 gift from accounting and consulting firm Baker Tilly (formerly Beers + Cutler), the VSCPA established the first-ever Leaders’ Institute in 2007. The Leaders’ Institute provides a hands-on workshop program for young aspiring CPAs. The only development program of its kind in Virginia, the Institute provides rising college seniors the opportunity for vital leadership training and real-life skills to successfully transition into the competitive marketplace.

Thank you to this year’s generous sponsors for their support of this program and accounting education: Baker Tilly, Ernst & Young; Becker CPA Review; Cherry, Bekaert & Holland; Deloitte; Johnson Lambert & Co.; KPMG; National Association of Black Accountants; PBGH; RSM McGladrey; RyanSharkey; Wall, Einhorn & Chernitzer; and the VSCPA Educational Foundation.

Read more about this year’s event here, and check out more photos from the event here.

Health Care Reform Q&A With the VSCPA Insurance Center: Employee Free Choice Voucher

Question: What is the Employee Free Choice Voucher, and how will it work?

Answer: Here is a detailed summary of the Employee Free Choice Voucher and how it will be administered:

Employee has a household income less than 400% of the Federal Poverty Level (FPL) (i.e. family of four with an income of $88k).

Employer pays 100% of individual premium and 0% for dependents.

Employer must offer a free choice voucher if the employee’s contribution to the health care premium falls between 8-9.8% (9.8% could change to 9.5%) and the employee does not enroll in the company’s health plan.

The voucher must be for the amount the employer would have paid toward the employee’s health plan had he/she enrolled in the company plan.

Example:
Employee premium = $300 a month

Family premium = $1,000 month

Employee enrolls in family category

Employee’s cost = $700 month ($1,000-$300) / $8,400 a year

$8,400/$88,000 = 9.5% so the employer must offer a free choice voucher to the employee

Voucher would total $3,600 for the year

Health Care Reform Q&A is facilitated by the VSCPA Insurance Center. Have a question? Leave a comment, or contact the VSCPA Insurance Center directly. This document is not intended to imply or provide tax or legal advice and is the VSCPA Insurance Center's current interpretation of the Health Reform Bill.

July/August Disclosures Goes Digital

The July/August issue of Disclosures is hot off the press and on its way to members' mailboxes, but that's not the biggest news of the month.

For the first time ever, Disclosures is now available in a gorgeous high-resolution digital format. Available at http://disclosures.vscpa.com, the digital version uses state-of-the-art page turning software, so you can read the issue online whenever you like. Features include immediate access to all links, which open in a new browser window, real-time RSS feeds of VSCPA news, the ability to easily e-mail articles to friends and colleagues and a robust search feature. We also have the capability to embed video, so watch for that in the future.

In addition, the digital version is now readable on Apple iPhones and iPads!

This is part of the VSCPA's commitment to becoming an "association of the future" -- one that stays on top of emerging trends and constantly scans the horizon for new and innovate ideas to best meet members' needs.

We'll be publishing a tutorial of the digital version in the September/October issue, but it's available now -- so go ahead and check it out! Post your comments on the new digital version here, or feel free to e-mail me directly at jedmonds@vscpa.com.

A Great Discount on a Popular CCH Resource

As a benefit of your VSCPA membership, CCH is offering a 30% discount on the New 2011 U.S. Master Tax Guide. All you have to do is order through the VSCPA partner page by August 31, and you get 30% off. You won’t be billed until the book ships, but you need to order before August 31 to lock in the discount.

This 94th edition reflects all pertinent federal taxation changes that affect 2010 returns and provides fast and reliable answers to tax questions affecting individual and business income tax. For details or to order, visit our CCH partner page at CCHGroup.com/members/VSCPA. For all your member discounts, visit www.vscpa.com/MemberDiscounts.

CPA Cafe Included in Online Accounting Degree's Top 100 List

Great news! CPA Cafe was recently listed among Online Accounting Degree's "Top 100 Accounting Advice Blogs" in the "Top Accounting Advice State Association Blogs" category.

The Online Accounting Degree website, which includes its own blog, aims to "create the most comprehensive resource for prospective accounting students to find unbiased and honest information about obtaining a college education in accounting and pursuing a career in accounting."

The list compiles a lot of top-notch blogs, many of which we at CPA Cafe visit daily.

Thanks for the mention!

Virginia Joint Legislative Audit and Review Commission Reviewing Virginia's Corporate Income Tax System

The Joint Legislative Audit and Review Commission (JLARC) is conducting a review of Virginia's corporate income tax system, as directed by the 2009 Virginia General Assembly via HJR 681. You can ensure your perspective is taken into account by taking an anonymous survey by Friday, July 2.

JLARC is surveying C-corporations and pass-through entities with ties to Virginia in order to obtain as much business input as possible.

The Commission will then report to the General Assembly on:

• The simplicity, equitability and appropriateness of the state's corporate income tax system
• How it compares to other states'
• The extent to which it affects economic development
• Potential improvements

JLARC plans to release a final report on Nov. 8, 2010.  Click here for more information or  to participate in the survey before July 2.

Recognize Top Virginia CPAs

Do you know a top-notch CPA who deserves to be recognized? Honor your colleague by nominating him or her for a Super CPA or SmartCPA award!

Super CPAs
The VSCPA is partnering with Virginia Business magazine for the 10th consecutive year to sponsor the “Super CPA” awards. This public awareness program recognizes extraordinary CPAs for their important contributions to the profession and the Commonwealth of Virginia. If you work for an accounting firm, use this ballot. If you are a CPA for a specific group or company, use this ballot. Nominations are due July 16. More info is available here.

SmartCPAs
This fall, SmartCEO will recognize more than 300 top CPAs in the Mid-Atlantic in its SmartCPA Readers Poll. Send your nominee's name, firm and practice area to dmills@smartceo.com by June 25, 2010. Multiple nominations are welcome.

VSCPA Expresses Concern Over Section 413 of the American Jobs and Closing Tax Loopholes Act of 2010

On June 14, the Virginia Society of CPAs (VSCPA) sent a letter to select members of the Senate Committee on Finance and House Committee on Ways & Means to express our concerns about certain aspects of Section 413 of the “American Jobs and Closing Tax Loopholes Act of 2010” (the 2010 Act).

The letter states: "This proposal not only threatens to result in a significant increase in taxes and complexity for S corporations and their shareholders, and for certain limited partners, but it continues the definitional blurring between capital and labor begun in the general partnership arena by further expanding laws that were clearly established to tax-only labor. We are also concerned that the proposal may reduce Social Security benefits for certain retirees."

Read the full comments here.

U.S. Departments of Health and Human Services, Labor, and Treasury Issue Regulation on 'Grandfathered' Health Plans Under the Affordable Care Act

The U.S. Departments of Health and Human Services, Labor and Treasury yesterday issued a new regulation that aims to protect the ability of individuals and businesses to keep their current health care plan while providing important consumer protections that give Americans control over their own health care.

The new regulation also aims to provide stability and flexibility to insurers and businesses that offer health insurance coverage.

Read more online at http://www.vscpa.com/, or check out a fact sheet about the regulation.