Disclosures Nov/Dec 2012

BROUGHT TO YOU BY THE VIRGINIA SOCIETY OF CPAs NOVEMBER/DECEMBER 2012 I VOL. 25 NO. 6 I WWW.VSCPA.COM

20 Going solo: Real advice from those who’ve been there

24 Identity theft and the IRS

14 2012 Virginia Tax Toolkit

TAX SEASON

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INSIDE this issue

FEATURES

2012 VIRGINIA TAX TOOLKIT 14E-filing, conformity, new and revised tax credits and much more are covered in this year’s round-up of pertinent Virginia tax season changes.

’I WANT TO START MY OWN PRACTICE’ 20 There’s a lot of chatter on Connect, the VSCPA’s online member community, and it’s a great place to get your questions answered. Check out what a few members had to say when one CPA asked for advice on becoming a sole practitioner.

A CASE OF STOLEN IDENTITY 24 A lot of processes and procedures at the U.S. Internal Revenue Service actually contribute to tax-related identity theft. A concerted IRS effort to target criminals this year is a step in the right direction, but there is still a lot of work to be done.

ARTICLES LIFE LESSONS 7

Grandma’s basic proverbs are actually wise business words.

SAY GOODBYE TO BINDERS 8Electronic course materials are here to stay.

BETTER BILLING AND COLLECTION 10Get the money you are owed.

ADVERTISERS INDEXAudimation Services Inc. p. 37 • Beth A. Berk, CPA p. 13 • CPE Link p. 9 • Digital Benefit Advisors p. 22 • Keiter back cover • PNC BANK inside front cover • Poe Group Advisors inside back cover

SECTIONS

BACKTALK 2

LINE ITEMS 4

DATA DRAFT 6

SELF-ASSESSMENT 30

SUPER CPAs 32

VSCPA NEWS 36

MEMBER NEWS 40

VSCPA EDUCATIONAL FOUNDATION 42

CLASSIFIEDS 43

I AM 44

disclosuresis published bimonthly for members of the Virginia Society of CPAs. Our mission is to enhance the success of CPAs.

DISCLOSURES • NOVEMBER/DECEMBER 2012 1

Welcome to the tax issue! Approximately half of VSCPA members are in public accounting. That’s why we devote one issue a year to tax-related topics. Check out the 2012 Virginia Tax Toolkit on page 14, which includes important changes for the 2012 Virginia tax year. On page 20, read a few VSCPA members’ wise words on striking it out on your own. And on page 24, learn why the U.S. Internal Revenue Service isn’t helping the war on identity theft.

VIRGINIA SOCIETY OF CPAs

4309 Cox RoadGlen Allen, VA 23060Ph. (800) 733-8272Fx. (804) 273-1741www.vscpa.com

disclosures http://disclosures.vscpa.com

EDITORIAL STAFF

Jill EdmondsManaging [email protected] HansenCommunications & Marketing [email protected] Lambert, CAEVice President, Member & Public [email protected] KnightonContributing [email protected]

EDITORIAL TASK FORCE

Joan D. Aaron, CPALindsay S. Andrews, CPAAdam G. Chaikin, CPADavid L. Cotton, CPAGary D. Dittmer, CPAElizabeth M. Helle, CPAClare K. Levison, CPAGeorge D. Strudgeon, CPAThomas L. Visotsky, CPA

DEADLINES

Articles and advertising for future issues are due by 5 p.m. on the following dates:

Mar./Apr. 2013 Dec. 15, 2012May/June 2013 Feb. 15, 2013July/Aug. 2013 Apr. 15, 2013Sept./Oct. 2013 June 15, 2013Nov./Dec. 2013 Aug. 15, 2013

Statements of fact and opinion are made by the authors alone and do not imply an opinion on the part of the officers, members or editorial staff.

The Warren GroupDesign / Production / [email protected]

BACKTALK you said it

2 DISCLOSURES

Get in touch At the Virginia Society of CPAs, we love to hear from you. Whether it’s a quick email to a staff member, chat on the phone, Disclosures letter to the editor, tweet, blog comment or something different altogether, let us know what you’re talking about, how you feel about different issues affecting CPAs and how we can help.

FROM THE VSCPA FACEBOOK PAGE >>

What advice do you have for accounting majors? Be sure that when you take that new job, you REALLY fit into the company interpersonally. This is an IMPORTANT thing to which I paid insufficient attention early in my career.

AL CARPENTER, CPA Carpenter, Francisco & Associates, Roanoke

It is a great profession that qualifies you for numerous opportunities. Explore all your options and find your niche. After 35 years I still love what I do and I am still learning.

STEPHANIE SAUNDERS, CPA Saunders & Saunders PC, Virginia Beach

FROM THE VSCPA FACEBOOK PAGE >>Great turnout at last night’s VSCPA Roanoke Chapter student night. An impressive group of future CPAs from Ferrum College, Radford University, Roanoke College, Mary Baldwin College and Virginia Tech attended this popular event!

FROM THE VSCPA LINKEDIN PAGE >>I urge the Commonwealth of Virginia Board of Accountancy to adopt a rule that prevents non-CPAs from using the phrase “Member of AICPA” or anything like it in their promotional materials, business cards, letterhead, etc. etc. In my opinion, allowing non-CPAs to tout such membership could easily mislead the public into mistakenly believing the non-CPA is in fact a Certified Public Accountant licensed in the Commonwealth of Virginia. A similar rule should be adopted for displaying membership in the Virginia Society of CPAs and other state CPA societies.

BILL BROWN Holland & Brown, LLP, Richmond

The @IRStaxpros sale of my info is creating an avalanche of spam, not to mention them having way too much of my information. — @VPAIGE

Great to see so many members this morning at the 42nd Annual Accounting & Auditing Conference in Roanoke — @VSCPAEMWALKER

VSCPA member Jamie Walker, CPA quoted in AccountingWEB article about CPA volunteers — @TINALAMBERT

Get in touch At the Virginia Society of CPAs, we love to hear from you. Whether it’s a quick email to a staff member, chat on the phone, Disclosures letter to the editor, tweet, blog comment or something different altogether, let us know what you’re talking about, how you feel about different issues affecting CPAs and how we can help.

BLOG: www.cpacafe.comCONNECT: http://connect.vscpa.comTWITTER: @VSCPANews, @FinancialFitLINKEDIN: http://tinyurl.com/VSCPALinkedInGroupFACEBOOK: www.facebook.com/VSCPA

From theTWITTERSPHERE >>

Still need to fulfill your 2012 Virginia ethics requirement? Save yourself some time and do it from the convenience of your own computer! Choose from:

Webcast replays — View a taping of a live broadcast from 9 – 10:40 a.m. on any of the following dates: •Sept.19 •Oct.25 •Nov.27 •Dec.19

Online, Self-Study — Take the ethics course at your own pace any time beforeDec.31,2012,whereveryouhaveInternetaccess.

*Bothonlineoptionscost$60/membersand$75/nonmembers.

Online Learning: Ethics 2012 — Your License Depends on It!

Formoreinformation,includingdiscounted groupwebcastoptions,call(800)341-8189 or visit www.vscpa.com/Ethics

Make your annual contribution today

at www.VSCPAFoundation.com.Educational Foundation

VSCPA

VIDEO: Scan this code to hear

firsthand from 2011 VSCPA Minority

Scholarship Recipient Adrienne Essiaw

If not you, then who? The VSCPA Educational Foundation Needs Your Support

Each year, the VSCPA Educational Foundation rewards nearly $44,000 in scholarships to the most deserving accounting students in colleges and universities across Virginia. Your tax-deductible donation to the VSCPA Educational Foundation will help the brightest students across Virginia to continue their accounting studies and ultimately enter the CPA profession! Show your support by contributing online at www.VSCPAFoundation.com or mailing your annual contribution to VSCPA Educational Foundation 4309 Cox Road, Glen Allen, VA 23060

1. BUILD A LEARNED PROFESSION for the future by integrating accounting research, education and practice for students, accounting practitioners and educators.

2. MEET FUTURE DEMAND FOR FACULTY by making doctoral education more of a possibility and by exploring alternative pathways to terminal degrees.

3. REFORM ACCOUNTING EDUCATION so that teaching is respected and rewarded as a critical component in achieving each institution’s mission.

4. DEVELOP EDUCATION MODELS for curricula and learning resources, and develop ways to easily share them. Enhance faculty development opportunities in support of sustaining a robust curriculum.

5. IMPROVE THE ABILITY TO ATTRACT high-potential, diverse entrants into the profession.

6. CREATE WAYS TO COLLECT, ANALYZE AND DISSEMINATE INFORMATION on current and future markets to accounting professionals and accounting faculty.

7. ESTABLISH AN IMPLEMENTATION PROCESS to address these and future recommendations by creating structures and ways to transition accounting change efforts from episodic events to a more continuous, sustainable process.

Read more on the Pathways Commission’s findings at www.vscpa.com/Pathways_Commission_Report. n

4 DISCLOSURES • NOVEMBER/DECEMBER 2012

LINE items

Charting a strategy for the next generation of accountants, as the Pathways Commission on Accounting for Higher Education aspired to do, is no easy feat. The Commission came to its final conclusions this year in a comprehensive report outlining far-reaching recommendations.

A jointly sponsored initiative of the American Institute of CPAs and the American Accounting Association, the Pathways Commission has been working since 2010 to study the future structure of higher education for the accounting profession, as well as develop recommendations to engage and retain the strongest possible community of students, academics, practitioners and other knowledgeable leaders in the practice and study of accounting.

The Commission landed on seven recommendations, each containing its own objectives (and facing its own limitations). In abbreviated form, the recommendations are:

PATHWAYS COMMISSION FINAL REPORT >>

Mapping the accountants of the future


LINE items

In September, Gov. Bob McDonnell approved the revised fee proposal from the Virginia Board of Accountancy (VBOA), moving the proposal into the public comment stage. The proposal, titled “Licensure Fee Adjustment,” had been approved by the Secretary of Commerce and Trade office July 11, 2011. The Attorney General’s office and the Department of Planning and Budget had previously signed off on the changes.

Major fee changes include:

>> LICENSE RENEWAL: Currently $24. New fee $60 per person and $75 per firm.

>> LICENSE APPLICATION: Currently $24. New fee $75 per person and $100 per firm.

>>LATE LICENSE RENEWAL: Currently $25. New fee $100 per person and $100 per firm.

>>LICENSE RESTATEMENT: Currently $250. New fee $350 per person and $500 per firm.

You’ve still got a little time left if you’d like your voice to be heard: The public comment period will run through Nov. 7. A chart of the fee changes is available at www.vscpa.com. n

COMMENT PERIOD IN FEBRUARY >>

Get ready: New VBOA fees are coming

And the reward is nearly $50,000.

In August, the U.S. Securities and Exchange Commission (SEC) announced it is paying out its first reward under the new whistleblower program.

A whistleblower who helped prevent a multimillion-dollar securities fraud will receive nearly $50,000, equal to 30 percent of the amount collected in an SEC enforcement action against the perpetrators of the scheme. That figure is the maximum percentage payout allowed by the whistleblower law.

The whistleblower, who did not wish to be identified, supplied documents and other information that enabled the SEC to advance its investigation at a rapid pace. A court ordered more than $1 million in sanctions, of which approximately

$150,000 has been collected, and at press time was considering whether to issue a final judgment against other defendants. Any increase in monetary sanctions ordered and collected would lead to additional payments to the whistleblower.

The Dodd-Frank Wall Street Reform and Consumer Protection Act granted the SEC the authority to pay financial rewards to whistleblowers providing new and timely information about violations of securities laws. A whistleblower’s tips must lead to a successful SEC enforcement action with more than $1 million in monetary sanctions to be eligible for a reward. Sean McKessy, chief of the SEC Office of the Whistleblower, said that the office has received approximately eight tips a day since the program was established in August 2011. n

Blowing the whistle finally pays

The mandatory one-credit course in personal finance that the VSCPA lobbied for over a period of years now has textbooks to call its own. In August, Virginia Gov. Bob McDonnell announced the release of two interactive digital textbooks intended for use with Virginia’s recently implemented economics and personal finance course.

The iBooks textbooks, “Economics” and “Personal Finance,” were developed by the Virginia Department of Education in accordance with the Virginia Economics and Personal Finance Standards of Learning. Combined, they contain 2,600 pages of digital content, including interactive components and self-grading assessments. An iPad with iBooks 2 is required for use.

The course is required for high school students, beginning with those entering ninth grade in fall 2011. n

>> FINANCIAL LITERACY EDUCATION GETS DIGITAL BOOST


TOURISM DATA IS GOOD NEWS >>

Virginia is (still) for lovers

It looks like tourists continue to make the Commonwealth a travel destination. Tourism revenue in the state saw an 8 percent increase from 2010 to 2011: $20.4 billion over $18.9 billion. Other facts about Virginia tourism:

• Virginia tourism supported 207,000 jobs in 2011, an increase of 2 percent over 2010.

• On average, every $98,567 spent by domestic travelers in Virginia during 2011 generated one job.

• State and local taxes gleaned $1.3 billion in tourism-related taxes in 2011.

Source: “The Economic Impact of Domestic Travel on Virginia Counties 2011,” Prepared for the Virginia Tourism Corporation by the U.S. Travel Association

STUDENTS (AND PARENTS) REJOICE >>

Virginia college tuition increase is at decade lowAfter years of painful tuition increases, students at Virginia’s colleges and universities have something to celebrate this school year. In-state tuition at public colleges experienced the lowest tuition and mandatory fee increase in the last 10 years. The average increase of 4.1 percent is a 5.6 percent drop over last year’s increase of 9.7 percent. Here’s a snapshot of average tuition and fee increases for in-state undergrads over the past decade:

1

3

5

7

9

11

13

15

17

19

21

23

25

200520042003 2006 2007 2008 2009 2010 2011 2011–

2012

2012–

2013

21.5%

19.3%

10.5%

8.2%

9.9%

6.3% 6.5%

5.1%

13.1%

9.7%

4.5%

DATA draft

15.5 BILLIONThe number of remittances processed each month by U.S. businesses, according to NACHA — The Electronic Payments Association.

Source: “2012–2013 Tuition and Fees at Virginia’s State-Supported Colleges and Universities,” State Council of Higher Education for Virginia

>> BY THE NUMBERS

The “Virginia is for Lovers” travel slogan, now more than 40 years old, is the longest-running travel slogan in the United States. Its popularity has been confirmed: Forbes named it one of the top 10 tourism marketing campaigns of all time, and it was inducted in 2009 into the National Advertising Walk of Fame.

>> DID YOU KNOW?

In the past 18 months, organizations and business owners have downsized to protect their future; so have many American families. As corporate America combs through expenses to reduce or eliminate, families have reverted back to the basics of needs vs. wants. For many of us, in business or at home, this is a new era from the heyday of the good economy. This downturn has forced a reflection on our finances and ultimately, our lives.

In my personal financial reflection, I hear my grandmother’s voice with her own unique approach to imparting wisdom: “Land sakes, child, you don’t have the brains you were born with.” It’s been years since I heard those words, yet they certainly have a different meaning to me today. She was an amazing story teller but imaginably had more wisdom than any formal education could have provided her. In the continual circle of life, and business, her wisdom is more relevant today than I could have ever imagined.

Is there more to learn from an old woman’s proverbs?

A trip to the grocery store yielded “A penny saved is a penny earned” and

“Buying on credit is robbing next year’s crop.” We probably won’t find either on a business school syllabus today, but perhaps they are lessons that should be included. I also remember her saying, “A small leak will sink a great ship.” She (like Benjamin Franklin) wasn’t referring to the Titanic, but to small expenses. Collectively, small expenses can create havoc in a business. How many of these “proverbs” can be applied to today’s business environment?

Consultants across the country are paid top dollar to guide businesses on the most innovative techniques for proper planning, budgeting, etc. We could have arrived at the same conclusion with “An ounce of prevention is worth a pound of cure” and “A stitch in time saves nine.” Whether in an attempt to save costs or as a result of poor planning, many organizations neglect to be proactive when searching for professional advice. “Advice after mischief is like medicine after death,” she would say.

How can we improve our businesses by simply applying the basic proverbs we grew up with? At the end of the day, it all comes back to the basics: The foundation

that makes our businesses strong.

“Common sense is genius dressed in his working clothes.” While so much time is spent on the complex corporate strategies and shortcuts to get ahead, have we lost the value of common sense?

If any proverb could have saved our economy, perhaps it would have been, “Don’t count your chickens until they’ve hatched.” As they say, hindsight is 20/20.

So where do we go from here? Professionally or personally, we create our own paths. We can learn from our mistakes, those of our competitors, even from our childhood memories. But keep in mind, “Following the path of least resistance is what makes both men and rivers crooked.” Just because everyone is doing something doesn’t make it right. n

Reprinted with permission from Yount, Hyde & Barbour.

ESSAY

Life Lessons: Basic Proverbs Can Apply to Business BY JENNIFER FILES, CPA

JENNIFER FILES, CPA, is a manager with Yount, Hyde & Barbour’s Forensic Accounting and Litigation Support Team and the Non-Profit

and Governmental Team, in the firm’s Winchester office. Contact her at [email protected].


While experts continue to debate the U.S. economy and the current phase of the “recession,” most admit the current changes are but a snapshot in the economic circle of life.

A factor in making this decision was cost savings; however, it was not the only consideration.Electronic materials are not only more efficient, but also more effective than paper materials — once participants fully understand how to use them. Here are some of the benefits of electronic materials compared with paper materials:

EASIER TO USE FOR FUTURE REFERENCE

You can store electronic materials on your PC or office server and easily use them for future reference through keyword searches. Trying to find that tax law change or Excel tip covered in a seminar you took a few months ago? With electronic materials, you simply type the keywords in the desktop search tool and find the exact information you need in seconds. Compare that to digging through the stacks of CPE materials located in the corner of your office.

EASIER TO TAKE NOTES

The free Adobe Acrobat Reader X (10) now has enhanced commenting tools, including sticky notes and highlighter tools. Participants can use a laptop, a tablet or even a smartphone to insert comments, highlight passages of interest or take notes.

EASIER TO ACCESS

When a PDF document is annotated using a PDF tool, the

information is much easier to access than when similar annotations are made in paper materials. You simply open the file and can either scroll through a list of annotations, search the annotations or print a list of the annotations.

EASIER TO STORE

Instead of taking up shelf or floor space like paper manuals do, electronic manuals can be stored on a local drive or a file server. This makes them easier to find and allows participants to keep materials for longer periods.

EASIER TO SHARE WITH OTHERS IN THE OFFICE

With paper manuals, sharing content with others meant either loaning someone your CPE manual or copying the relevant pages. With electronic materials, you can go back to the office and “extract” relevant content so that it can easily be shared with others in the office who might benefit.

IMPROVED COMMUNICATION

Because materials are not being photocopied, participants can view the materials in full color, which can help improve communication.


CPE

Say goodbye to the binder manual Electronic course materials have many advantages.BY WILL FLEENOR, CPA, PH.D.

Some state CPA organizations, like the VSCPA, have decided to use electronic, not paper, materials for their conferences and some seminars.

MORE UP-TO-DATE MATERIALS

Author submission deadlines can be “softer,” since there is no need to print and ship. Further, when last-minute updating is needed (for example, due to a last-minute tax law change), the authors can easily provide participants with updated materials — in some cases even as late as the day of the course.

MANUALS CAN STILL BE PRINTED

Anyone who prefers paper (and there will still be many who do) can print the manuals prior to the course and bring the printed materials with them. For conferences, attendees who wish to print will end up with less to tote around because they will have the ability to print only those materials for the sessions they plan to attend.

HELP KEEP SOCIETY COSTS DOWN

Eliminating printed materials clearly saves money and wear and tear on staff and equipment. As a bonus, such action is also environmentally friendly. n


Choose from a robust curriculum of 30+ webcast topics each month and 1000+ hours of self-study.

Enjoy CPE savings for a full year!

Get More For Your Money

www.cpelink.com/value-pass or call 800-616-3822.

WILLIAM C. FLEENOR, CPA, PH.D., is a shareholder in K2 Enterprises who has conducted CPE for CPAs in 48 states. He has published articles in the Journal of Accountancy and The CPA Journal, and received the “Accounting Educator of the Year Award” from the American Institute of CPAs (AICPA). Contact him at [email protected].

For the last two years, the VSCPA has offered an electronic materials option for all conferences and most seminars. Visit www.vscpa.com/ElectronicMaterials or scan the QR code with your smartphone for more information.


BY RANDY R. WERNER, CPA, JD, LLM/TAX

PRACTICE management

Better Billing and Collection: Protect Your Business TodayYou’ve done the work — now make sure you get the money you are owed.

Even better: Those same steps will help improve the quality of your practice,

attract a better client base, generate more fees and improve collection and cash flow.

Client screening is the first step toward controlling losses and enhancing your clientele, services and fee structures. The basic process utilizes a checklist to flag problem clients. Some of the questions include:

There are basic steps that can be taken to avoid or manage almost all billing and collection problems.

• Is the client the kind of client the firm would like to have?

• Does the client demonstrate integrity?

• Is the client financially viable?

• Why did the client choose our firm over other firms?

• What does the client like about our firm that causes them to stay with us?

• Are the client and engagement still a good fit for our firm?

If the client or engagement is not a good fit, do not accept the engagement. Due diligence is also essential to client screening and should include the following steps:

• Performing background and credit history checks

• Obtaining and assessing the quality of references, and obtaining additional references to check, if necessary

• Checking with the previous firm after obtaining permission from client

Learn to recognize higher-risk engagements and plan your billing and collections according to the risk before you begin. Buy-sell transactions, public offerings and initial public offerings, limited partnerships, financial services

and real estate and construction engagements all tend to be higher risk.

ENGAGEMENT LETTERS

Engagement letters document the firm’s understanding with the client and serve as the firm’s first line of defense in the event of a dispute. The engagement letter should limit your scope of services by employing words that limit your responsibility and avoiding words that expand it.

To reduce “payment resistance,” involve your clients in the design of the engagement letter, and communicate your billing and payment policies during the initial client interview. Services should be priced for their value. Underbidding or discounting

rates to win work can stretch resources to their limits, increase the chances of shortcuts being taken in the work and expand your exposure to malpractice disputes.

The engagement letter documents the expectations for the engagement, including billing and payment terms. The letter, and all other documentation, can be used later to rectify selective client memory.

The following are some additional recommendations:

• Use standardized letters that may be modified and tailored to fit each of the engagements.

• State estimates, if applicable, and clarify that they are not fee quotes.


PRACTICE management

>> CAMICO CAN REDUCE YOUR RISK EXPOSURE

CAMICO is the exclusive VSCPA sponsor for professional liability insurance, which

provides comprehensive coverage for CPAs. CAMICO is a mutual insurance

company created by CPAs for CPAs, and offers policyholders access to a wide

range of practice and risk management knowledge

and tools. Learn more under “Insurance Options” in

the “For Members” section of www.vscpa.com.

If the client or engagement is not a good fit, do not accept the engagement. Due diligence is also essential to client screening.

• Use retainers and retainer replenishment for clients that are slow-paying, financially stressed or new to the firm (until they have established some credit with you). Remind clients that retainers are not an estimate of the total cost of the engagement, do not earn interest and must be paid before work begins.

• Always include a stop-work clause and enforce the clause to prevent unpaid fees from building up to the point where you believe you can no longer walk away from them. When the unpaid fees become so large that the firm wants to sue for them, the client has little to lose by suing the CPA for malpractice. The legal fees incurred as a result of the lawsuits, and the billable time lost by the firm, almost always exceed the amount of fees owed to the firm.

• Include the terms for fee collection. Late charges are legal but should be a reasonable amount, such as 1 percent per month or 10 percent per annum. Do not use the term “interest,” which brings into play the laws and regulations governing interest charges. Consider offering discounts for early payment (e.g., if paid within 10 days).

• Include mediation and arbitration clauses, which are effective for avoiding lawsuits over fees. Mediation is effective for all disputes, and arbitration is effective for fee disputes only.

When the engagement expands beyond the terms of the engagement letter, the CPA’s exposure to liability also expands. Provide a new letter, or an addendum to the existing letter, to include additional

specific services with an estimate and a confirmation that the client wants the added services at the fees estimated.

Follow-up letters are invaluable for documenting with the client any significant discussions and preventing disputes. Emails and faxes are generally good forms of documentation, but email messages should avoid any ill-advised comments that a plaintiff ’s attorney can later use to the firm’s detriment.

BILLING TIPS

If the bill or its description of services is unclear, clients will be inclined to put it aside and to call about it later, lengthening the time it takes to pay the bill. Bills that are standardized, clear, concise and descriptive are more likely to be paid sooner.

Different services often require different billing practices. Consider alternative fee structures, such as hourly rates, fixed fees, value pricing, refundable advance retainers and replenishment, or a combination of structures. All professionals with the firm should be accountable for their timesheet and billing deadlines, but their billable time should be protected by using administrative staff with appropriate training and support to prepare bills and collect payments.

Timely billing leads to better collections. It’s sometimes best to bill more frequently than monthly, as smaller bills are generally paid sooner than larger ones. If you need professional help for billing practices, don’t hesitate to get it.

COLLECTION TIPS

Communicate frequently with the client and gently remind the client of future services needed. Speak to the person in charge of authorizing the bill payment when it’s due. If it’s a large balance due, call 10 days before the due date to be sure the invoice has been received.

Collection calls are relatively effective, inexpensive, immediate, personal and informative. Staff should be trained on the rules under the Fair Debt Collection Practices Act, which prohibits unintentional harassment of debtors. Anger management and mediation training will also help staff deal with difficult people.

Once you have sent 30-, 60-, and 90-day letters, turn the account over to a professional collection agency to avoid spending valuable time and resources on deadbeats. If a client offers a reasonable partial payment, take it and consider disengaging. This will free up more of your valuable time to pursue better clients who pay their bills on time and in full. n


RANDY R. WERNER, CPA, JD, LLM/TAX is a loss prevention specialist with CAMICO (www.camico.com), the nation’s largest

CPA-focused program of specialty liability insurance for CPAs. Randy responds to CAMICO loss prevention hotline inquiries and speaks to CPA groups on various topics. Contact her at [email protected].

Attention CPAs: Whether A Decision Maker Looking To Upgrade Your Talent,

Or A CPA Looking to Upgrade Yourself/Your Skills, Ask Yourself:

Who really chose who in joining your company?

Are you/your professional staff really at the right level where you should be/you need them to be?

Are you/your staff in a position that truly suits your/their personality,

values, and professional and personal needs?

Why leave your future to chance?

If you’re seriously interested in making the “right” move for your next hire, I can help you. I am an actively licensed CPA in Maryland and Virginia with over 20 years of experience including public accounting (E&Y) and consulting (KPMG), financial accounting (American Cancer Society), internal audit (Moneyline Telerate), and recruiting (Acsys, formerly Don Richards). As a networker who truly enjoys helping others and sharing my career experiences to guide fellow professionals, here is how I can help you:

Decision Makers: Ask you questions, and most likely ask many more questions than other recruiters

about your company, duties involved, skills required, corporate culture and more Work with you on finding the “right” professional that is the “right fit” Provide you with valuable information about the professionals I work with,

the marketplace, what your competitors pay, and more

Career Seekers:

Guide you on career paths available in public accounting and industry Enable you to capitalize on your strengths Coach you on how to put your best foot forward to find the “right fit” Advise you when to stay in your current position if that is the right move

If you’re interested in working with a recruiter who understands your background, skills, and is genuinely interested in helping you find the “right fit”, then I welcome meeting you!

BETH A. BERK, CPA, CGMA Independent Recruiter Specializing in CPA Firm, Accounting & Finance Positions in Metropolitan DC & Nearby Suburbs/Baltimore/Richmond/Tidewater Connecting You To Your Next Hire TM Contingency & Retained Staffing Solutions matching skills, experience & values with needs

CPA Ambassador for the state of Maryland, sponsored by the AICPA and Ethics Instructor for VSCPA

Serving clients and professionals as an Independent Recruiter since March 2005

Phone: 301-767-0670 Email: [email protected]


TAXATION

Rev Up Your Tax Season: 2012 Virginia Tax Toolkit Changes and updates to the 2012 tax filing season in Virginia.

E-FILING AND PAYMENT CHANGES

Effective Jan. 1, 2013, all corporations must electronically file estimated tax payments and annual income tax returns and electronically submit final payments. And beginning with the July 2012 return (which was due August 2012), all sales and use tax returns and payments must have been filed electronically. Less-frequent filers have until the first return they file after July 1, 2013, to comply. In all cases, the tax commissioner will review waiver requests for undue hardship of the requirement, which must be submitted in writing.

FIXED DATE OF CONFORMITY

Virginia’s date of conformity with to the U.S. Internal Revenue Code (IRC) was advanced from Dec. 31, 2010, to Dec. 31, 2011, with a few exceptions — eliminating headaches for taxpayers and CPAs who would have had to make

adjustments for most 2011 federal tax changes.

For taxable year 2011, Virginia will conform to the temporary increase in the federal earned income tax credit (EITC) under the IRC. However, though the EITC increase was extended to taxable year 2012 by Congress, Virginia law does not currently conform to this change for taxable year 2011.

Virginia still disallows any bonus depreciation allowed for certain assets under federal income taxation and any five-year carry-back of federal net operating losses (NOL). In addition, Virginia will continue to deconform from certain applicable high-yield discount obligations and cancellation of debt income provisions.

COLLECTION ACTION STATUTE OF LIMITATIONS REDUCED

The period of limitations that


TAXATION

For a full report on all the changes (this list is not all-inclusive), read the “2012 Legislative Summary” from the Virginia Department of Taxation (TAX), available as a PDF at www.tax.virginia.gov. On the TAX homepage, you’ll find a link to the summary in the “Tax Policy Library” section in the left-hand navigation. The section also includes the tax code and policies as they currently stand.

>> ELIMINATING THE PAPER TRAIL

TAX may now distribute local tax forms, instructions and property tax books via www.tax.virginia.gov. Previously, it was required to furnish copies of certain forms and tax books to local commissioners of the revenue.

TAX has to make or institute collection action by levy, court proceeding or any other means available has been reduced from 10 to seven years from the date of the assessment. This is further reduction from 2010 legislation, in which the period was reduced from 20 to 10 years. The period of limitations for TAX to apply interest and penalty to a delinquent tax liability was also reduced, from seven to six years from the date of last contact with the taxpayer if no memorandum of lien has been appropriately filed.

APPORTIONMENT CHANGES

Manufacturers electing to use the single sales factor apportionment method now have amended apportionment requirements: They must maintain an employment level not less than 90 percent of the base-year level of Virginia employment for the first three taxable years after making the election.

Retail companies also face corporate apportionment formula amendments. Those companies must use a single

factor apportionment based on sales to determine their Virginia taxable income. For taxable years beginning on or after July 1, 2012, but before July 1, 2014, qualifying corporations must use a triple-weighted sales factor. For years beginning on or after July 1, 2014, but before July 1, 2015, qualifying corporations must use a quadruple-weighted sales factor. And, for years beginning on or after July 1, 2015, and thereafter, qualifying corporations must use the single sales factor method to apportion Virginia taxable income.

BYE BYE, PAPER CHECKS

If there were ever any doubt that the electronic era has arrived, then this solidifies it: Starting next year, the state comptroller will now only issue individual income tax refunds through debit cards, direct deposits or other electronic means, unless the tax commissioner determines that a check is more appropriate for a transaction or class of transactions. Currently, taxpayers may request to receive a refund in the form of a paper check or through direct deposit.

AMENDMENTS TO SUBTRACTIONS

The subtraction for certain capital gains were amended to extend the time during which qualifying investments may be made from June 30, 2013, to June 30, 2015. Also, a clarification was made that a subtraction for death benefit payments from an annuity contract is allowed, provided that the death benefit payment is made pursuant to an annuity contract with an


TAXATION

>> IRS ACCEPTS ANONYMOUS COMPLAINTS

In late 2011, the U.S. Internal Revenue

Service (IRS) issued Form 14157,

Complaint: Tax Return Preparer. The

form allows any taxpayer to report a

tax return preparer or tax prep firm for

illegal behavior and outlines 20 potential

taxpayer complaints, as well as an

“other” field.

But that doesn’t necessarily mean there

will be a barrage of complaints against

CPAs.

“I’d say the target audience is for those

taxpayers who deal with the unenrolled

preparer, which is where most of the

problems come from,” VSCPA member

Mark VanDeveer, CPA, said.

Complaints range from diverting a refund

to an unknown account to failure to sign

returns and claiming false expenses,

deductions or credits.

Tax preparers can also use the form to

submit a complaint if they believe that

someone else is using their Preparer Tax

Identification Number (PTIN) to prepare

returns.

The form can be submitted anonymously,

although it includes a non-required area

for contact information to allow the IRS

to follow up on complaints. Submitters

who are victims of fraud or misconduct

and want to correct their tax account

must complete Form 14157-A, Tax Return

Preparer Fraud or Misconduct Affidavit.

The Virginia Board of Accountancy

(VBOA), the VSCPA and the American

Institute of CPAs all accept anonymous

complaints against CPAs. Complaints

made to the VBOA are made public only

after an investigation is completed. Most

findings are published on the VBOA

website, with narrow exceptions. The

VBOA does not publish information on

complaints that are dismissed, but such

complaints are subject to Freedom of

Information Act (FOIA) requests.

insurance company, the death benefit payment is paid to the annuitant in a lump sum, and the death benefit payment is included in federal adjusted gross income.

JOINT SUBCOMMITTEE ESTABLISHED TO EVALUATE TAX PREFERENCES

A Joint Subcommittee to Evaluate

Tax Preferences has been established to undertake a systematic review of Virginia’s tax preferences, establish procedures and performance measures to evaluate the effectiveness of tax preferences, recommend a process and guidelines for establishing expiration dates for tax preferences and submit an annual report to the General Assembly and the governor containing its recommendations. VSCPA member Sen. Walter A. Stosch, CPA, will sit on the subcommittee.

FROM THE ‘IN CASE YOU WERE WONDERING’ FILE…

Now in Virginia, anyone who maintains, operates, or rents a “roll-your-own cigarette machine” at a retail establishment that enables a person to process a product that is made or derived from tobacco into a roll or tube shall be deemed a manufacturer of cigarettes. n


TAXATION

>> NEW AND UPDATED TAX CREDITS

COALFIELD EMPLOYMENT ENHANCEMENT TAX CREDIT: Sunset date extended from taxable years beginning before Jan. 1, 2015, to taxable years beginning before Jan. 1, 2017.

CREDIT FOR TAXES PAID TO ANOTHER STATE: Existing law was clarified to define the types of taxes that constitute an “income tax” for purposes of the individual income tax credit for income taxes paid to other states, and by providing examples of taxes that do not meet this definition.

EDUCATION IMPROVEMENT SCHOLARSHIPS TAX CREDIT: This brand-new credit was created for donations made to scholarship foundations, and is equal to 65 percent of the donation made to that foundation. Donation amounts must be more than $500, and no more than $50,000 in tax credits can be issued to one individual or married couple in one year. There are several requirements, including preauthorization for the credit from the Superintendent of Public Instruction.

Additionally, scholarship foundations must meet several criteria.

HISTORIC REHABILITATION TAX CREDIT: Any amount of gain or income recognized by a taxpayer in connection with this credit, which is treated as taxable income for federal tax purposes, can be subtracted from individual income, corporate income and estate and trust taxes.

LAND PRESERVATION TAX CREDIT: Federal government entities from the public or private conservation agencies or organizations that may receive a portion of the revenue from the two percent fee imposed on Land Preservation Tax Credit transfers are now excluded.

MAJOR BUSINESS FACILITY JOB TAX CREDIT: Time during which the credit may be taken over a two-year period extended through taxable years beginning Dec. 31, 2014. Also, a qualifying business can now receive both a Major Business Facility Job Tax Credit and an Enterprise Zone Job Creation Grant.

NEIGHBORHOOD ASSISTANCE TAX CREDIT: Minimum percentage of low-income persons that a neighborhood organization must serve in order to qualify for the credit program revised. Professional services eligible to include mediators, and several other expansions of the credit were made.

PORT CREDITS: Several changes were made to existing port tax credits, such as extending sunset dates.

STATE INCOME TAX CREDITS: Any legislation is now prohibited from adding a new state tax credit or renewing an existing state tax credit unless the bill contains an expiration date of no longer than five years from the effective date of the new or renewed state tax credit.

QUALIFIED EQUITY AND SUBORDINATED DEBT INVESTMENT TAX CREDIT: Cap reduced from $5 million to $3 million for the 2011 taxable year. For taxable years beginning on and after Jan. 1, 2012, the cap is $4 million.


TAXATION

>> SIMPLIFYING TAX RETURN DUE DATES IS A NO-BRAINER

Over the summer, the VSCPA wrote letters to Virginia’s U.S. congressmen and senators to support H.R. 2382 and S. 845,

the “Tax Return Due Date Simplification and Modernization Act.” The letter called the bill “pragmatic and necessary” in

light of challenges taxpayers and tax preparers face in filing accurate returns.

According to the letter: “Currently, the statutory due date for partnerships to file a tax return is the same day as

partnering trusts, many estates and individuals, and one month after the due date for corporations. As a result of these

due dates, it is almost impossible for taxpayers and practitioners to file a timely, accurate return if they have investments

in partnerships. Many are often forced to seek extensions, a matter further complicated by the fact that partnerships

sometimes also seek extensions.”

The bill may cut down on the number of extensions and amendments to corporate tax returns while maintaining the tax

liability amount for taxpayers. At press time, the bill was in subcommittees in both the House and Senate.

BY JOAN D. AARON, CPA

Virginia Department of Taxation: Operating in troubled economic times

However, what the future holds is unknown. The economy of the past few years clearly has been challenging, and TAX leadership has been seeking ways to control costs while maintaining a high quality of service. Staffing levels have declined at TAX due to budget reductions, resulting in consolidations or administrative savings.

A growth in the number of electronically filed returns has helped to mitigate the situation. Such returns involve less clerical labor than paper filed returns. There are

fewer math errors to correct, processing requires less manual labor and fewer temporary hires are needed for tasks like opening envelopes, sorting returns and organizing paperwork.

Based on past experience, electronic filings will probably continue to rise. People, even older people, are becoming (or have already become) comfortable with e-filing. For the 2012 filing season, TAX received 2,714,067 e-filed individual income tax returns, or 74 percent of the total. In 2011,

the Department processed 2,586,583 individual income tax returns that were filed electronically, or 70 percent of the total.

Taxpayers seem to especially like the fact that refunds from e-filed returns arrive more quickly than those from paper-filed returns. When direct deposit is utilized, the refund check may hit the bank account within days. Otherwise, there could be a delay of weeks.

The 2010 General Assembly session mandated budget cuts. “The budget reduction,” said Joel Davidson, public relations manager for TAX, “required us to manage attrition to generate savings. Moreover, through the years, this agency has in fact grown leaner and more efficient.”

Nearly 10 years ago, state budget reductions prompted TAX to close five of its district

Big money filters through the Virginia Department of Taxation (TAX). It collected about $14 billion in fiscal year 2010 and about $14.8 billion in fiscal year 2011.

offices, leaving only the office in Norfolk. That office served as the back-up call center if the center in Richmond was closed for any reason. The Norfolk office closed in 2009, largely because the back-up requirement could now be performed by employees working from home.

The one walk-in office where taxpayers can meet with TAX representatives is in Richmond, at 1957 Westmoreland Street, within strolling distance of a bus stop on West Broad Street. Most of the visiting taxpayers reside in the Richmond area; some of them are dependent on public transportation. Ease of access may have figured in choice of site. At the walk-in office, taxpayers can receive one-on-one assistance from a TAX representative, pay a bill or use one of TAX’s computers to file a return.

Last year, when the Richmond walk-in office moved the short distance from its existing location to its new and larger space, Davison issued a news release predicting a streamlining of services to customers, which has been realized. “Our Richmond walk-in office moved from a cramped space in an old building with limited parking to a much larger newly renovated space with plenty of room for taxpayers and ample parking. We now have enough space to provide four computers that taxpayers may come in and use to file their returns.”

One CPA from the Virginia peninsula was apprehensive when she first learned of the impending closing of her local district office. She had developed a personal relationship with its sole customer relations employee. “If that employee couldn’t help, she would refer me to someone in Richmond who could.” Things are now different. Customer services are largely provided by specially trained customer-service representatives who respond at random to telephone calls.

As previously noted, many of these people work from their home offices instead of state office space.

Though there can be hiccups with a model. I know of an accountant who asked a customer service representative to fax a copy of a certain document. “I can’t fax it”, said the representative. The reason? There was no fax machine in the representative’s home office.

Practitioners, as well as individual tax payers, have been turning to the TAX’s live chat service, which allows callers with computers to text back and forth with TAX personnel. One enthusiastic accountant said, “I really like being able to print off a transcript of what we’ve written so that I have a record for the file.” The record is likely to be easier to read and more complete than hand-written notes.

A willingness of TAX to embrace new technologies and innovate operating methods actually dates back a number of years — though it may be more noticed now than it was in the past. For instance, Virginia was the first state to offer, at no charge, an individual income tax form that could be filled out online.

Gov. Bob McDonnell has expressed pride in TAX’s long-time openness to change. In a tribute to Janie Bowen — who at the time of her sudden death in 2010 held the job of

tax commissioner, the top post in TAX — he pointedly noted, “Janie was always looking to find new and better ways of serving the citizens of Virginia. She combined a passion for service with a commitment to innovation.”

Craig M. Burns ascended to the position of tax commissioner several months after Bowen’s death. In the interim, he had served as acting commissioner.

Burns’ career has paralleled that of Bowen in several respects. Both he and she were long time state employees. (During his quarter of a century of work in Virginia government, Burns has held responsible positions with such agencies as the Virginia Retirement System and the Virginia General Assembly. He has served also as Deputy Secretary of Finance.) n

JOAN D. AARON, CPA, works part-time with Malvin, Riggins & Company, PC, in Newport News. She is a life

member of the VSCPA and serves on the VSCPA Editorial Task Force. She also served on the Virginia Board of Accountancy. Contact her at [email protected].


TAXATION

>> DAILY EFFICIENCY GROWS AT IRS

The U.S. Internal Revenue Service (IRS) is making progress toward its goal of processing tax returns on a daily basis, according to a report from the U.S. Treasury Inspector General for Tax Administration. At the end of calendar year 2011, the IRS had identified more than 122 million taxpayer accounts for daily processing and more than 148 million for weekly processing. Through April 30, the IRS had successfully processed 71 million individual returns through daily processing.


PRACTICE management

‘I want to start my own practice. Where do I start?’

In August, a VSCPA member posted a query to fellow CPAs in the taxation discussion on Connect, the VSCPA’s online community. He quickly received several replies from members eager to share their expertise. Read on to see what great advice VSCPA members had to give — and also a peek into how questions are being answered on Connect.

Real advice from those who’ve been there: VSCPA members

FROM: BRIAN KEELER, CPA

DATE: AUG. 27, 2012

Get a guide from the VSCPA or American Institute of CPAs (AICPA).That is the first thing I did many years ago and read as much as I could. Here is a link to AICPA info: http://tinyurl.com/AICPA-Starting-a-Practice.

I also got lots of help from a CPA that just started the year before that was invaluable since I could learn from some of his mistakes. Focus on the type of practice you want. Mostly tax, accounting, bookkeeping or another specialty. Try to share an office with another CPA not only to save money but also to pick his brain about day-to-day things and processes. I initially went in with very low overhead at first since I didn’t have a lot of clients starting out. Plan out your finances, because unless you have a lot of clients to begin with, you will not make money the first year and will spend a lot of time marketing for clients. Good luck!

From: A Curious CPA*Date: Aug. 23, 2012Subject: Any advice on starting a tax practice? I am very interested in starting my own tax practice and would like to learn from an experienced preparer. Any help would be much appreciated! Thank you!

*Real name withheld to protect privacy. But he’s a real CPA. We promise.

>> CONNECT TODAY!

Connect with colleagues, peers and other VSCPA members via the Society’s new, interactive member directory today. Get started on http://connect.vscpa.com and take part in the conversation!

FROM: BOB BALDASSARI, CPA

DATE: AUG. 27, 2012

Have a system in place to track projects in process.

Have a system to track due dates for various projects. Tax returns, personal property returns, business licenses, sales tax returns,

payroll returns, etc.

Talk to other sole proprietors or small firms to see which tax software they use.

Invest in a good copier/scanner/fax. Sometimes it might be a good idea to rent a high speed copier during the busy season.

Spend your time doing what you do best and hire others to do the other stuff. I know it will be difficult at first but, trust me, it will work out in the long run. Hire someone to make copies, file stuff, assemble returns, etc. Even if you have the time, spend that “available” time doing marketing, spending additional time with clients, learning the software, reading technical journals, etc. If you make copies and do filing, you will be working long hours and will be too tired to look for opportunities to help the existing clients.

Learn how to do online tax research.

Don’t take on projects that are outside your area of expertise. Find some other local CPA firms that do work that you don’t do. Some of these firms might refer clients to you if the perspective client is too small for them.

Be active in the local chapter of the VSCPA. This is a great opportunity to meet others who are in a similar situation.

Find someone that you trust who can help you in case you get sick or, for some reason, have to be out for a short period of time. Even if you are not “out” your schedule could be reduced if you have to be off to care for a sick or injured loved one.

FROM: CHERYL BIONDOLILLO, CPA

DATE: AUG. 28, 2012

First, don’t set your rates too low. Take a look at www.freelanceswitch.com/rates to get some help. Also, remember your billable hours will be a lot lower than you think because you will have a lot of administrative duties that you do not have working for someone else.

Second, be ready to live and breathe your practice and make sure your family is ready also.

Third, no matter how good your plans are, something will also go wrong. Learn to roll with the punches.


PRACTICE management

‘I want to start my own practice. Where do I start?’

VSCPA members are starting conversations online all the

time, and getting advice from fellow members who have

valuable expertise. Here are a few topics covered in Connect

over the past few months:

>> Erroneous letters from the U.S. Internal Revenue Service (IRS) that federal tax deposits were not submitted correctly

>> Hoax and phishing emails sent that look like they are coming from the IRS

>> Single sales factor guidelines

>> Corporate taxes

>> And much more

>> JOIN IN

HOT CONVERSATIONS ON CONNECT

FROM: ELIZABETH HOLTZCLAW, CPA

DATE: AUG. 28, 2012

I started my business in 1988 having left a firm with a substantial book of clients. I had one employee who was very capable and had worked as an administrator of a fairly large CPA firm from which she retired. Without her I don’t know what I would have done. There were a lot of quick changes taking place with research, software, hardware, return processing, etc. in that era. Frankly, I thought I had lost my mind to strike out as I did. I rented a two-room office space in Old Town Alexandria: one small reception room where I met with clients and my employee worked on the computer

when available. She was fastidiously neat so it worked. The other room was extremely large where I worked and my employee performed her many other tasks.

As time went by, to the admin person, I added three full-time non-CPA tax people, working on day and evening shifts during tax season. I also shared much larger office space with another larger CPA firm. My net profit was about 60%. I did a study of the benefit of my leveraging employee labor and the point at which the upward trend plateaued and started downward. After I added another employee during tax season and increased the client load accordingly, I reached my zenith. I contracted out the bookkeeping. My net reached 70%. For years I worked a lot of hours, especially during tax season. Outside of tax season, I had no employees and many individual tax extensions, fiscal year businesses and nonprofits.

Fortunately, since that time, many technological efficiencies have occurred which I embraced very readily as soon as possible, sometime too soon. However, I could see that for a sole practitioner, technology was a godsend. I remember the day I bought my first fax; what a sea change it made.I concur with all the advice that been proffered. My advice is talk to sole proprietors extensively to glean ideas and avoid costly mistakes. We’ll tell you where we went wrong and where we got it right.

FROM: JOAN CLARK, CPA, CITP

DATE: AUG. 28, 2012

I started my practice from scratch 26 years ago. The first thing I did was to get a newsletter for the current tax law changes and bought a mailing list. I sent out 450 newsletters to a few local zip codes and got 50 clients, some of which I still have today. I was more experienced with accounting than tax at the time, so was also trying for write-up clients. n


PRACTICE management

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A Case of Stolen Identity: Is the IRS to Blame? Lax IRS procedures facilitate tax-related identity theft


TAXATION

BY THOMAS E. MCKEE, CPA, PH.D., AND LINDA J.B. MCKEE, CPA, PH.D.

What most people don’t know is that there are a large number of tax-related identity thefts. Some common examples are:

• An identity thief may use a legitimate taxpayer’s identity to fraudulently file a tax return and claim a refund. The legitimate taxpayer is then surprised to find that their refund is frozen until the U.S. Internal Revenue Service (IRS) can determine the legitimate owner of the Social Security Number (SSN).

• A taxpayer may be subject to IRS enforcement action [e.g. assessment of additional taxes or liens] for unreported income resulting from an identity thief uses a taxpayer’s name and SSN to obtain a job, thereby reporting income on the

SSN that the taxpayer has not reported on their tax return.

• An illegal alien may become an identity thief by using the SSN of a taxpayer and the thief ’s own or made-up name. This creates a problem because the same SSN is now associated with multiple names. This type of use can also mess up Social Security earnings records. The situation is worse if the identity thief shares the SSN with other illegal aliens who also need a legitimate SSN. A recent article described a victim who had nearly 50 names of illegal aliens connected to his SSN. Steven Coggeshall, head of research at ID Analytics, estimates that about 40 million U.S. adult SSNs have multiple names associated with them and 27,000

U.S. adult SSNs are connected to 10 or more people.1

• An identity thief may use the personally identifiable information obtained from the IRS to perpetrate a traditional credit-based goods or services fraud.

The U.S. Treasury Inspector General for Tax Administration (TIGTA) reported a case where an identity thief complained to the IRS that his wages were being attached by levies because of a debt owed by his victim, the legitimate holder of the SSN. The IRS did eventually release the identity thief ’s tax levy but did not notify the taxpayer victim.

“The IRS has no procedures for employees to initiate a process for notifying the taxpayer whose


TAXATION

Everyone knows that a growing problem has been identity thieves who use another person’s information to fraudulently obtain credit, which is then used to acquire goods or services without paying for them. The Federal Trade Commission (FTC) estimates that as many as 10 million Americans have their identity stolen each year and it received 313,982 actual identity theft complaints during 2008. In 2009, the FTC reported that identity theft was the No. 1 consumer complaint nationwide for the ninth year in a row.


TAXATION

Social Security Number has been stolen,” according to a TIGTA report.2 In addition, “the IRS does not actively try to identify for stop individuals from committing identity theft,” stated a CBSNews.com article.3

Read below for how the IRS helps contributes to identity theft, as well as policies implemented by the IRS in 2012 to address some of these concerns.

TAX-RELATED IDENTITY THEFT: A BIG PROBLEM

The IRS National Taxpayer Advocate first recognized identity theft in tax administration as an emerging trend in 2004. The 2005 and subsequent annual reports to Congress identified identity theft as a “most serious problem.”

TIGTA recently stated “Our analysis showed that about 1.2 million Tax Year 2007 Individual Taxpayer Identification Number (ITIN) tax returns reported wages earned by ITIN taxpayers using another person’s Social Security Number.”4

By way of reference, there were approximately 3 million Tax Year 2007 ITIN tax returns so, according to the TIGTA, 40 percent of the ITIN returns involved a form of identity theft. The IRS does not routinely notify taxpayers when it is aware their identity has been stolen, so most of the taxpayers whose SSNs were used are not aware that their tax records have been compromised.

During 2009, the IRS was receiving about 800 identity theft cases per week.

They investigated about 40,000 for the year. The IRS had closed about 30,000 identity theft cases by August 2009, which left about 11,000 unresolved cases in inventory at that time.

The tax-related identity theft problem is increasing at an alarming rate. One reason is that the IRS computer systems are “unprotected” from fraudulent filing except for people who have already had a problem and have had their account “marked.” “Unprotected” in this context means that the IRS accepts data without any significant verification of authenticity of the sender. Imagine if your bank cashed checks drawn on your account without requiring strong proof of identity!

The IRS takes a “decentralized” approach to identity theft, which means that the branch of the IRS branch that discovers a problem has the responsibility to resolve it. This creates a problem for taxpayers or their legal representatives because there is not a central IRS clearinghouse to resolve a problem; rather, they may be interacting with several different IRS units.

HOW THE IRS CONTRIBUTES TO IDENTITY THEFT

UNAUTHORIZED RELEASES OF PERSONAL INFORMATION OVER THE TELEPHONE

Identity theft can’t take place without the thief having some information that lets them impersonate the taxpayer. There is a common misconception that personally identifiable information primarily includes a taxpayer’s name, SSN or bank account number. Taxpayers should be advised that it also includes other information that should be protected, such as address, telephone number, date and place of birth, mother’s maiden name and biometric data (i.e., height, weight, eye color, fingerprints, etc.).

The IRS inadvertently contributes to tax-related identity theft because of weak internal procedures for protecting personally identifiable information that resides with the IRS. In addition to the IRS losing data via lost laptop computers, they also may make unauthorized disclosures of personally identifiable information over the telephone. A recent TIGTA study revealed a 16 percent failure rate on following procedures for incoming phone calls, which translates to 44,067 calls per week with increased risk of unauthorized disclosure.5

IRS internal guidelines require personnel to authenticate callers by asking them to answer five questions concerning the personally identifiable

The IRS inadvertently contributes to tax-related identity theft because of weak internal procedures for protecting personally identifiable information.


TAXATION

information of name, address, taxpayer identification number, date of birth and filing status. One problem is that identity thieves may call the IRS multiple times, speaking to a different IRS employee each time and gaining an additional piece of personal information before they call back again. For example, if they incorrectly responded that the taxpayer’s filing status was “single” in one phone call, they would guess that the filing status was “married filing jointly” for the next phone call. In some cases, IRS employees simply asked the callers to give their word that they were the person whose information was on the IRS system!

TIGTA revealed a recent case in which, over a three-year period, employees of a private investigation firm posed as the people they were investigating to trick IRS employees into releasing sensitive information — which they then sold to other private investigators, law firms and others.

TIGTA has recommended additional authentication procedures, which the IRS has declined to adopt.

LACK OF ITIN SCRUTINY

Individual Taxpayer Identification Numbers (ITINs) have been issued since 1996 via Form W-7 to provide alien individuals, whether or not they reside in the United States, with an identifying number to use in filing U.S. tax returns. ITINs are provided to individuals who do not have and are not eligible for an SSN, and more than

14 million ITINs have been issued. An ITIN is issued regardless of an individual’s immigration status (they may be in the U.S. illegally) in order to help them comply with the tax law and does not entitle them to Social Security benefits or the Earned Income Credit.

ITINs are a weak link that can lead to identity theft. According to TIGTA, “When Forms W-7 are not effectively processed and ITINs are inappropriately issued, the risk increases that ITINs are being used to file fraudulent tax returns.”2 A statistical sample by the TIGTA, from the 1.5 million ITIN applications in 2008, found that 78 percent of the sample contained errors such as missing or illegible documents and inconsistencies with supporting documents. The IRS needs to adopt better verification procedures before issuing ITINs.

TIGTA also found that there were no IRS controls to prevent ITINs from being used by more than one taxpayer on multiple tax returns: “…more than 55,000 ITINs were used multiple times on approximately 102,000 tax returns with refunds totaling more than $202 million”.2 The TIGTA also reported that “…ITIN filers are receiving billions of dollars in Child Tax Credits and Additional Child Tax Credits intended for working families, although these individuals are not authorized to work in the U.S.”2 Furthermore, “the IRS generally does not pursue the taxes that may be due on income earned using a stolen identity.”4

This loss of taxpayer money could be prevented through better computer controls.

USING TAXPAYER SSNs ON OUTGOING CORRESPONDENCE

Another person’s SSN is the most valuable piece of information an identity thief can obtain to commit financial fraud. It is a vital piece of information that is needed to obtain a driver’s license, open a bank account or obtain credit. Approximately 130 million taxpayers entrust the IRS with their SSNs.

According to TIGTA: “For Calendar Year 2010, the IRS mailed more than 42 million notices and letters to individual taxpayers for various reasons. … Most of these notices and letters include taxpayers’ Social Security Numbers because they require the taxpayer to respond to the IRS.”6 This large volume of documents with SSNs creates a risk for individual taxpayers that their SSNs may be compromised by lost, intercepted or discarded mail.

A 2007 Office of Management and Budget Memorandum to federal agencies required that they “…establish a plan in which the agency will eliminate the unnecessary collection and use of Social Security Numbers within eighteen months.”6 The timeline means the IRS should have eliminated the unnecessary use of SSNs by the beginning of 2010, but they did not.

Why hasn’t the IRS complied with the directive to eliminate SSNs? One reason is that their internal systems


TAXATION

are too complex. The IRS has more than 500 different computer systems, more than 6,000 types of internal and external forms and more than 800 letters and correspondence.

What progress has been made? The IRS “…has redacted or truncated taxpayers’ Social Security Numbers from only a small number of systems, notices and forms.”6 The IRS focused their resources first on internal forms and “…eliminating employees’ Social Security Numbers from its systems.”

In other words, they decided to protect their employees before protecting the public. TIGTA concluded in August 2010 that the IRS will eliminate or reduce the use of taxpayers’ Social Security Numbers in the immediate future.”6

NO EFFECTIVE MONITORING OF CONTRACTOR FACILITIES WITH ACCESS TO TAXPAYER DATA

The IRS uses a large number of contractors to help administer the federal tax system, and many have access to taxpayer data. Other contractors operate systems that have access to the IRS network. Inadequate controls by these contractors can result in loss, inappropriate access or misuse of taxpayer personal data, including names and SSNs.

TIGTA found that the IRS did not have effective processes to identity all the contractors with IRS taxpayer data.7 Also, the IRS Infrastructure Security and Reviews Office reviewed 57 contractors during fiscal year

2009 and identified 268 security weaknesses. TIGTA found that the IRS did not ensure identified security weaknesses were corrected on a timely basis.7

IRS INADEQUATELY STAFFED

The IRS does not have enough staff to deal with identity theft prevention and resolution. Questionable tax returns are reviewed at one of 10 IRS Fraud Detection Centers before refunds are released. A 2008 internal IRS realignment resulted in a number of functions, including adjusting tax returns for victims of identity theft, moving from Criminal Investigation to Accounts Management.

For the 2010 filing season, the category “identity theft,” received only 27 out of a total of 248 full-time equivalent employees, a staffing rate of 11 percent of total activities. This is totally inadequate, because TIGTA calculated that the identity theft workload for fiscal year 2010 would require 104,000 staff hours — although Accounts

Management would only be allocated 27,942 hours.

In other words, the IRS is staffing one area of identity theft response at only about 27 percent of the needed manpower. This means that fewer identity theft-related fraudulent refunds will be detected and that taxpayers who are the victims of identity theft will experience longer delays and more problems having their tax records properly corrected. Since a lower risk of detection will exist, more tax-related identity theft will actually be encouraged.

IMPROPER SENDING OF TAX RETURN COPIES

Taxpayers may need a copy of their tax returns or tax return transcripts for a variety of reasons, including verifying income for child support or to obtain a loan for buying a home. To get a copy, they can fill out Form 4506, Requests for Copy of a Tax Return, or a similar form for a transcript. Copies of tax returns cost $57, but transcripts are free. Only three items of personally identifiable information (SSN, name and address of record) are required to receive a tax return copy or transcript. However, IRS guidelines require that only two of the three items be correct. That means that a person (spouse, child, maid, neighbor, etc.) could submit a request without knowing the taxpayer’s SSN and receive the requested information if they had access to the mailbox at the taxpayer’s address. If returns or transcripts are inadvertently delivered to the wrong address or stolen, then someone would

The IRS is beginning to make progress in identity theft prevention. An identity theft enforcement sweep last January targeted 105 people in 23 states, resulting in 939 criminal charges.


TAXATION

have all the information needed to steal the identity and file a fraudulent amended return.8

In recent years, the IRS has processed about 6 million return requests per year. A sample by TIGTA of fiscal year 2008 and 2009 taxpayer requests found that 43 percent were processed incorrectly, of which 24 percent contained errors that increased the risk of unauthorized disclosure. One error was that employees were processing requests even though the address provided was not the address of record. Another error was that if there was an identity theft indicator on the account, IRS employees were not required to research the taxpayer’s accounts or contract the taxpayer to confirm the legitimacy of the request before processing.8

WHERE WE GO FROM HERE

The tax-related identity theft problem is bigger than most tax preparers and tax-payers realize. Taxpayer victims of identity theft are frequently overwhelmed with the detailed and time-consuming steps required to correct their records and prevent future problems.

The IRS is aware of tax-related identity theft problems and has improved their related services and procedures. Examples of improvements are the IRS hotline for identity theft victims and the Identity Protections Specialized Unit; however, these services typically deal with tax-related identity theft after it has occurred.

The question is whether the IRS is really doing enough to help prevent identity thefts. The IRS does say that identity theft is a top priority, and it is taking actions to be better prepared. Since this article was written at the end of 2011, the IRS is beginning to address some of these concerns.

The Service is putting in place new processes for handling tax returns, new compliance filters to detect fraud, new initiatives to partner with stakeholders and a continued commitment to investigate the criminals who perpetrate these crimes.

In March 20, 2012, testimony to a U.S. Senate subcommittee, Steven T. Miller, IRS deputy commissioner for services and enforcement, said that “fighting identity theft will be an ongoing battle for the IRS and one where we cannot afford to let up.” Its Criminal Investigation Unit is focusing on investigation and detection and improving processes and filters. In January 2012, the Unit also established the Identity Theft Clearinghouse, a specialized group to work just on identity theft leads.

And on Jan. 23, 2012, the IRS, along with the U.S. Justice Department’s Tax Division and local U.S. Attorneys’ offices, targeted 105 people in 23 states in a coordinated identity theft enforcement sweep. In total, 939 criminal charges were included in 69 indictments.

Obviously, there are many, many internal areas and processes that need

to be addressed before the identity theft problem is seriously mitigated. n

Reprinted from The Tennessee CPA Journal, Jan./Feb. 2012, copyright 2012, with permission from the Tennessee Society of CPAs.

1. Sullivan, B. 2011. “What’s It Like To Share Your SSN With 50 People? Follow A Victim’s Struggle,” The Redtape Chronicles on NBC-News.com.

2. Treasury Inspector General For Tax Admin-istration. “Individual Taxpayer Identification Numbers Are Being Issued Without Sufficient Supporting Documentation.” Reference Num-ber 2010-40-005. Dec. 8, 2009.

3. Kristof, K. “IRS Policies Protect 1.2 Million Identity Thieves.” CBSMoneyWatch.com, April 27, 2010.

4. Treasury Inspector General For Tax Adminis-tration. “Procedures Need To Be Developed For Collection Issues Associated With Individual Taxpayer Identification Numbers.” Reference Number 2010-40-040. March 29, 2010.

5. Treasury Inspector General For Tax Admin-istration. “Telephone Authentication Prac-tices Need Improvements To Better Prevent Unauthorized Disclosures.” Reference Number 2010-40-045. March 31, 2010.

6. Treasury Inspector General For Tax Ad-ministration. “Target Dates Have Not Been Established to Eliminate or Reduce Taxpayer Social Security Numbers on Outgoing Cor-respondence.” Reference Number 2010-40-098. Aug. 13, 2010.

7. Treasury Inspector General For Tax Adminis-tration. “Taxpayer Data Used at Contractor Fa-cilities May Be at Risk for Unauthorized Access or Disclosure.” Reference Number 2010-20-051. May 18, 2010.

8. Treasury Inspector General For Tax Admin-istration. “Taxpayer Information is at Risk When Copies of Tax Returns and Transcripts are Ordered.” Reference Number 2009-40-140. Sept. 22, 2009.

1. ADVANTAGES OF ELECTRONIC COURSE MATERIALS DO NOT INCLUDE:a. Searching the annotations.b. Making comments via smartphone.c. Viewing in full color.d. Running out of room to store them.

2. THE FIRST STEP TO BUILDING A BETTER BILLING PROCESS IS TO:a. Clearly state estimates in engagement letters.b. Screen your clients.c. Bill more frequently.d. Always send follow-up letters to avoid disputes.

3. WHICH OF THE FOLLOWING IS TRUE ABOUT BILLING COLLECTION?a. Collection calls are usually expensive and ineffective.b. If the balance is large, it’s usually a good idea to call 10 days before the invoice

due date to ensure it was received.c. After 90 days, continue to pursue non-payers yourself.d. Staff does not need training to deal with difficult people.

4. THE FIXED DATE OF CONFORMITY:a. Was not advanced by last year’s Virginia General Assembly.b. Was advanced to Dec. 31, 2011, with no exceptions.c. Allows Virginia to conform to the temporary increase in the federal earned

income tax credit.d. Would not cause any problems for Virginia taxpayers and CPAs if it was not

addressed by legislators.

5. THE FOLLOWING TAX CREDIT CHANGE WAS MADE BY THE VIRGINIA GENERAL ASSEMBLY IN 2012:a. Only specific, finite amounts of gain or income a taxpayer receives in

connection with the Historic Rehabilitation Tax Credit can be subtracted from individual income.

b. Any scholarship foundation can participate in the Education Improvement Scholarships Tax Credit program without preauthorization from the Virginia Superintendent of Public Instruction.

c. The cap for the Qualified Equity and Subordinated Debt Investment Tax Credit was reduced to $3 million for the 2011 taxable year.

d. Qualifying businesses cannot simultaneously receive a Major Business Facility Job Tax Credit and an Enterprise Zone Job Creation Grant.

6. THE FOLLOWING IS NOT TRUE ABOUT COMPLAINTS SUBMITTED TO THE U.S. INTERNAL REVENUE SERVICE (IRS):a. CPAs can expect to see a huge increase in complaints issued against them.b. The Complaint: Tax Return Preparer form was issued by the IRS at the end of 2011.c. A complaint against a tax preparer could be failure to sign the tax return.d. Taxpayer complaints can be submitted anonymously.


VSCPA self-assessment

SUBMISSION INSTRUCTIONSYou may submit this self-assessment and make the exam payment online at www.vscpa.com/November2012DisclosuresExam.

You may also circle your answer to each question and mail this paper exam to:

CPE TeamVirginia Society of CPAs4309 Cox RoadGlen Allen, VA 23060

Fax submissions are acceptable to (804) 273-1741.

Name _________________________

Address _______________________

_______________________________

Email Address __________________

Date __________________________

Method of Payment

• Check (payable to the VSCPA)

• Credit card

Credit Card Number

_______________________________

Expiration Date ________________

Signature _____________________

Date _________________________

SUBMISSION DEADLINE: Dec. 31, 2012. Exams received after this date will not be graded and your money returned.

COST: $15 for VSCPA members / $30 for nonmembers.

Please note that this exam will not be live online until Nov. 1, 2012.

Complete this 12-question test and submit to the VSCPA for 1 CPE credit. Exams will not be graded until after the submission deadline. A 75 percent or better pass rate is necessary to receive credit. After your exam is graded, you will receive either a certificate of completion via email for your records or an email notification that the 75 percent grade was not met.

7. WHICH OF THE FOLLOWING IS NOT TRUE ABOUT TECHNOLOGICAL ADVANCES AT THE VIRGINIA DEPARTMENT OF TAXATION (TAX)?a. Taxpayers will still be able to choose between refund paper checks and direct

deposit next year.b. TAX can now distribute local tax forms, instructions and property tax books via

its website.c. Seventy-four percent of Virginia individual income tax returns were e-filed in

the 2012 filing season.d. Tax practitioners and taxpayers can correspond with TAX personnel via a live

chat feature on the TAX website.

8. TO DEAL WITH A CHALLENGING ECONOMY, WHAT HAS TAX NOT DONE?a. Closed the call center in Norfolk.b. Eliminated the tax commissioner position.c. Embraced new technologies, such as e-filing.d. Utilized staff working from home.

9. WHEN BECOMING A SOLE PRACTITIONER, A CPA SHOULD:a. Start off with very low rates.b. Have a good system in place to track projects.c. Avoid asking other sole practitioner CPAs for advice.d. Take on projects outside his or her area of expertise.

10. TYPES OF TAXPAYER IDENTITY THEFT INCLUDE: a. A thief using his own name but another person’s Social Security Number (SSN).b. A thief using a legitimate taxpayer’s identity to fraudulently file a tax return and

claim a refund.c. Illegal aliens using SSNs issued to legitimate citizens.d. All of the above.

11. WHICH OF THE FOLLOWING IS NOT TRUE REGARDING THE IRS CONTRIBUTING TO TAXPAYER IDENTITY THEFT?a. The IRS has done nothing to address the problem.b. An inadequate number of staff is devoted to working on identity theft.c. Some personnel to do not appropriately authenticate taxpayers over the

telephone.d. The IRS does not adequately monitor how contractor facilities handle taxpayer

data.

12. RECENT DEVELOPMENTS IN THE WAR AGAINST IDENTITY THEFT DO NOT INCLUDE:a. A 75 percent reduction in new taxpayer identity theft over the past year.b. New compliance filters designed to detect fraud.c. A multi-state sting resulting in 69 indictments.d. Establishment of the Identity Theft Clearinghouse to follow leads.


VSCPA self-assessment

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VSCPA news

Who’s ‘super?’ 312 VSCPA members ASSURANCE SERVICES

David Acree, CPA

Kevin Allison, CPA

Steven Baker, CPA

Timothy Blanks, CPA

W. Barclay Bradshaw, CPA

Thomas Brooks, CPA

Richard Castro, CPA

Jude Covas, CPA

Robert DeLorimier, CPA

Harry Dickinson, CPA

Robert Dorr, CPA

M. Susan Einhorn, CPA

Kathleen Flaherty, CPA

Richard Garbee, CPA

Randal Gatzke, CPA

Daniel Haynes, CPA

Stephen Holton, CPA

Kevin Keller, CPA

Grant Leister, CPA

Richard Lewis, CPA

Lawrence Maher, CPA

Maria Marston, CPA

Richard Matthews, CPA

Robert Moore Jr., CPA

Paul Murman Jr., CPA

A. Marshall Northington, CPA

Andrew Powell, CPA

Thomas Puryear Jr., CPA

Justin Reid, CPA

Joan Renner, CPA

Joseph Romagnoli, CPA

Edward Schmitz, CPA

Phillip Shiflett, CPA

Neena Shukla, CPA

Kimberly Skinner, CPA

Rebecca Tiblin, CPA

Tracy Urig, CPA

Robert Vallejo Sr., CPA

Jackie White, CPA

Vaden Wright, CPA

BUSINESS VALUATION/LITIGATION SERVICES

Robert Baldassari, CPA

Gary Baum, CPA

Patrick Corbin, CPA

Murray Coulter Jr., CPA

William Duvall Jr., CPA

Martin Einhorn, CPA

Charles Equi Jr., CPA

Kristin Henningsen, CPA

Bradford Jones, CPA

Stephen Jones, CPA

Gregory Lawson, CPA

Stephen Lessels, CPA

Holly Martin, CPA

Harold Martin Jr., CPA

Dean Martinelli, CPA

Michael Moore, CPA

Michael Moore, CPA

Nancy Nunn, CPA

Robert Raymond, CPA

Every year, Virginia Business magazine partners with the VSCPA to offer a special program that highlights Virginia’s top CPAs for their important contributions to their respected profession and the prosperity of the Commonwealth.

Virginia Business sent an official ballot to Virginia CPAs asking them to identify the names of peers they consider to be the best at their craft. After the ballots were counted, more than 300 winners were selected in 12 categories. The winners are highlighted in a special “Super CPAs” report in the November issue of Virginia Business. Members of the VSCPA selected as winners include:

VSCPA news

Clifton Rutherford, CPA

Harry Schwarz, CPA

Barbara Smith, CPA

Richard Smith, CPA

Stephanie St. Clair, CPA

Peter Thacker Jr., CPA

Joseph Thornton, CPA

David Timms, CPA

Mark Vogel, CPA

Hal Young, CPA

CORPORATE TAXATION

Alan Altschuler, CPA

Michael Bell, CPA

Dale Burgess, CPA

Dian Calderone, CPA

David Chase Jr., CPA

Clark Cole, CPA

Kendall Coleman Jr., CPA

Shannon Cook, CPA

Paul Croston, CPA

Jorge Dabul, CPA

Melinda Davis, CPA

Winfred Eddins Jr., CPA

Carlton Fleming, CPA

F. Fulton Galer, CPA

L. Michael Gracik, CPA

William Howlett, CPA

Brian Keeler, CPA

Donald Knotts, CPA

David Limroth, CPA

Joseph Mastaler Jr., CPA

Patrick Murtaugh, CPA

John Neal, CPA

John Nelson, CPA

John Renner II, CPA

William Satchell, CPA

David Sharkey, CPA

Michael Skretta, CPA

Michael Straus, CPA

Kendra Stribling, CPA

Mark Tuck, CPA

James Walker, CPA

Gary Wallace, CPA

EDUCATOR

O. Whitfield Broome Jr., CPA

Howard Busbee, CPA

Bruce Chase, CPA

Robert Cochran, CPA

Elizabeth Foster, CPA

Robert Frackelton Jr., CPA

Nancy Schneider, CPA

James Smith, CPA

Douglas Ziegenfuss, CPA

EMPLOYEE BENEFITS

Courtney Barrack, CPA

Marty Boone, CPA

Richard Busofsky, CPA

Catherine Eberly, CPA

Christopher Fallon, CPA

Lisa Germano, CPA

Karl Headley, CPA

Thomas Healy, CPA

Sabrina Holme, CPA

Anna Hunter, CPA

Michelle Jones, CPA

Jennifer Lehman, CPA

Luke Martonik, CPA

Linda Meyerhoffer, CPA

Virginia Miller, CPA

James Poti, CPA

Shelloy Ranhorn, CPA

L. Samuel Saunders, CPA

Charles Snader, CPA

Sandra Wendler, CPA

Nathan White IV, CPA

J. Phillip Windschitl, CPA

Mark Wiseman, CPA

ESTATE PLANNING & TRUST

Diane Acurso, CPA

Michelle Calhoun, CPA

Claude Carmack, CPA

Joseph Cobbe, CPA

Stephanie Cooker, CPA

Richard Dail, CPA

Thomas Denson III, CPA

Helene Downs, CPA

Elaine Farmer, CPA

Janet Foote, CPA

David Gaver, CPA

Elaine Gibberman, CPA

Melvin Green, CPA

Michael Haigh, CPA

Nancy Hall, CPA

Blaine Hegner, CPA

Shawn Howard, CPA

Glenn Lankford, CPA

Kristen Lavender, CPA

Cynthia Legg, CPA

Marc Mantelli, CPA

Katherine McDaniel, CPA

Lawrence McKoy, CPA

Nathan Olansen, CPA

Roger Overton, CPA

Alvin Wall, CPA

Jack Wright Jr., CPA

William Young Jr., CPA

FINANCIAL MANAGERS, CFOs & CONTROLLERS

Stephanie Bryan, CPA

Darrell Harris, CPA

Samuel Jones, CPA

Jon Peterson, CPA

Brian Plum, CPA

Courtney Pollard Jr., CPA

GOVERNMENT & NONPROFIT

Franklin Berry, CPA

Robert Bielat, CPA

Douglas Bowles, CPA

Janet Brocklehurt, CPA

Gail Chambers, CPA

Brian Davet, CPA

Harry Fagan, CPA

Michael Garber, CPA

Stephen Gay, CPA

Mitchell Hartson Jr., CPA

Betsy Hedrick, CPA

Charles Helme, III, CPA

Denver Hicks, CPA

Leighann Hochstrasser, CPA

Joey Jones, CPA

John Kent Jr., CPA



VSCPA news

Alfred Layne Jr., CPA

John Montoro, CPA

William Pilc, CPA

Kevin Reilly, CPA

Leslie Roberts, CPA

Elsie Rose, CPA

Diane Smith, CPA

Julie Sokolowski, CPA

Lee Sullivan, CPA

Tamara Vineyard, CPA

Stephanie Widzinski, CPA

David Will, CPA

Donald Wright, CPA

INDIVIDUAL TAXATION

Susan Ackley, CPA

Shirley Baldwin, CPA

Charles Beckum, CPA

David Bowman, CPA

Beth Bradberry, CPA

William Bugg, III, CPA

Patricia Dix, CPA

Anne Elliott, CPA

Jennifer Flinchum, CPA

Gregory Forman, CPA

Harry Franklin Jr., CPA

Gary Freeman, CPA

Karen Gray, CPA

Daniel Hargrave, CPA

Henry Hortenstine III, CPA

James Jarrett, CPA

Anna Lloyd, CPA

Lawrence Martin, CPA

John Murray, CPA

F. Heath Myers Jr., CPA

Vincent Nadder, CPA

Tricia Neale, CPA

Sean O’Connell, CPA

Dianna Patton, CPA

Brad Reynolds, CPA

George Reigel, CPA

Stephen Rumble, CPA

Stephanie Saunders, CPA

Manjit Singh, CPA

Melissa Tucker, CPA

Jeffrey Ulmer, CPA

Douglas Urquhart, CPA

Albert White III, CPA

PERSONAL FINANCIAL PLANNING

David Bush, CPA

Jeffrey Chernitzer, CPA

Daniel Cook, CPA

Jerry Foster, CPA

John Frisch, CPA

Cheryl Furlong, CPA

Roger Handy, CPA

Bruce Holbrook, CPA

Carl Loden, CPA

Mary McDaniel, CPA

James Shepherd, CPA

David Updegrove, CPA

Marc Verdi, CPA

Timothy Vessell, CPA

SMALL BUSINESS CONSULTING

Robert Bishop, CPA

Alexander Bowman Jr., CPA

Joanna Brumsey, CPA

Daniel Chenoweth, CPA

Mensel Dean, CPA

George Forsythe, CPA

Mark Foster, CPA

Jay Friedman, CPA

Rachel Gann, CPA

Robert Gary IV, CPA

William Haney, CPA

William Hardy, CPA

Sirena Johnson, CPA

Robert Lewis IV, CPA

E. Jeffreys Love, CPA

William Madigan Jr., CPA

Helen Madorma, CPA

Frederick Malvin, CPA

John McDowell Jr., CPA

Kelli Meadows, CPA

Elizabeth Moffett, CPA

Brian Morrison, CPA

Randy Myers, CPA

Charles Pearson Jr., CPA

Kathleen Poorbaugh, CPA

David Reardon, CPA

Lawrence Schwartz, CPA

Glenn Shelton, CPA

James Strickland Jr., CPA

John Williamson, CPA

Everett Winn, CPA

Joanne Wolfley, CPA

YOUNG CPAs

Jeffrey Barbour, CPA

Evan Bowling, CPA

Andrew Boyles, CPA

Jason Byrd, CPA

Bryan Campbell, CPA

Angie Caruana, CPA

David Damiani, CPA

Christina Dondarski, CPA

David Falwell, CPA

Jacob Favaro, CPA

Monte Glanzer, CPA

Jason Hart, CPA

Aliaksandr Hryb, CPA

Harvey Jackson, CPA

Angela Kerns, CPA

Jennifer Manster, CPA

Andrew Martin, CPA

Joseph McCarron, CPA

Michael Mendelsohn, CPA

Amy Menefee, CPA

Jessica Michael, CPA

Nelda Middleton, CPA

Marian Millikan, CPA

Allison Parsons, CPA

Nicholas Perrine, CPA

Ryan Perry, CPA

Kimberly Priest, CPA

Ayree Rice, CPA

Catherine Saadat, CPA

Jeffrey Snader, CPA

Craig Stanley, CPA

Crystal Stewart, CPA

David Thompson, CPA

Jordan Webb, CPA

Jonathan Wright, CPA n

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Virginia Gov. Bob McDonnell has appointed two new CPA members to the Virginia Board of Accountancy (VBOA), and they are both VSCPA members: Marc Moyers, CPA and Stephanie Saunders, CPA.

Moyers, a partner with KPMG in Richmond, and Saunders, a shareholder with Saunders & Saunders in Virginia Beach, were appointed to serve four-year terms on the VBOA, with the possibility of reappointment for a second four-year term. They replaced VSCPA members Dian Calderone, CPA, and Larry Samuel, CPA, both of whom served two VBOA terms. The VSCPA nominated Moyers and Saunders for the positions.

MARC MOYERS, CPA

A partner in the audit practice at KPMG’s Richmond office, Moyers started at the firm in 1977, when it was still Peat Marwick

Mitchell & Co. and the Big Four was the Big Eight. He celebrated his 35th anniversary with the firm Aug. 1 and has worked in the firm’s audit practice his entire career, currently serving as national sector leader for the firms Private Equity practice. But that doesn’t mean the job has gotten stale for him.

“The interesting thing about being with a firm like this is the breadth of functions and the different service lines available for your career,” he said. “As a result, I’ve had a variety of responsibilities in the firm. You have the opportunity to recreate your career every few years by taking on new challenges.”

And his newest challenge is his spot on the VBOA, where he’ll lend the perspective of a member of a national firm. It’s a role that’s

familiar to him — he served on the steering committee of a coalition of the major national firms.

“We had discussions about making sure that we had appropriate representation from the large public accounting firms on the board and knew that [Deloitte partner] Larry Samuel’s term was coming up,” Moyers said. “We wanted to make sure we got someone in that spot representing the national firms.”

The Staunton native and University of Virginia graduate knows he’s stepping into an unfamiliar role and anticipates a learning curve. He says he pursued a spot on the VBOA as “an interesting way to give back to the profession and get involved in a different way.”

Moyers sees the board’s main role as maintaining and protecting the value of the CPA credential.

“The CPA designation on your business card after your title really means something in the marketplace,” he said. “Having worked with many clients over the years, I know it has tremendous value to them.”

STEPHANIE SAUNDERS, CPA

Saunders, meanwhile, has followed a different career path. After graduating from Old Dominion University, she started out with

a regional firm in Norfolk, Waller & Woodhouse, which merged with national firm Price Waterhouse. She eventually became the firm’s tax manager before striking out on her own in 1982 to start her own practice with her husband, Tim (also a VSCPA member).

The firm they founded, Saunders & Saunders, allowed the couple to take control of their professional futures. But just as importantly, the move allowed them to spend more time with their three daughters.

She always stayed involved in the community, serving as a parent-teacher association volunteer while her daughters were in school. Later on, she found a way to scratch the public-service itch by volunteering with the VSCPA. She started out in the Tidewater chapter and eventually made her way up to serve as chair of the Board of Directors in 2002–2003.

“Once I got involved again, it was amazing how much more I learned, not only about the dos and don’ts, but it enhanced my professionalism and my knowledge,” she said.

As a practitioner in a small firm, Saunders relies on a network of colleagues for help with professional issues. She says one of the biggest reasons for her firm’s success has been the simple fact that they know what they do well. “We use a network of the different CPAs we know if we have a question,” she said. “We try to only do the work that we know how to do. We don’t do any type of third-party reporting. We stick to taxes because it’s what we know best.”

Saunders will bring that perspective to the VBOA, where she’s already been peripherally involved as an instructor for the VSCPA’s ethics CPE course. She’ll also represent the small-practice owner on the Board.

“The small practitioner, the trials and tribulations that they go through and trying to understand what they go through when it comes to regulation,” she said. “Regulations are fine, rulings are fine, laws are fine, but don’t make it so cumbersome that people can’t adhere to them.” n

VSCPA news

MARC MOYERS


VSCPA members Moyers, Saunders join VBOA

STEPHANIE SAUNDERS

VSCPA news

The VSCPA is seeking volunteers for the 2013–2014 membership year, spanning May 1, 2013 – April 30, 2014. Will you answer the call?

VSCPA volunteers come from myriad backgrounds, interests and areas of the profession. Your time commitment is up to you. You can volunteer in an area of expertise or gain experience in an area less familiar to you.

Show your commitment to the CPA profession and help the VSCPA in the following areas:

>> GENERAL COMMITTEES: Foster your leadership potential by serving on these committees.

>> CONFERENCE PLANNING: Work with our Education Team to develop conference agendas, create session topics, identify and secure speakers and act as moderators for VSCPA conferences.

>> LEADERSHIP APPOINTMENTS: Contribute your time through leadership positions that help govern the VSCPA.

>> LEGISLATIVE: Take part in the VSCPA’s successful legislative and advocacy programs.

>> TASK FORCES: Showcase your technical expertise and help the VSCPA develop its yearly events with these specialized opportunities.

>> PUBLIC SERVICE: Use your professional skills to help Virginia’s taxpayers through these tax- and accounting-related opportunities.

>> WRITING & SPEAKING: Sign up for one-time, short-term volunteer opportunities that involve speaking and writing on the topics you know best.

To sign up or get more information, visit www.vscpa.com/Volunteer. The deadline to sign up is Feb. 1, 2013. n

It’s VSCPA volunteer time


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VSCPA news

The VSCPA is soliciting nominations for its annual awards for 2013, which will be presented at the Society’s annual business meeting in May. For the fourth year, the VSCPA is giving out the Outstanding Member of the Year and Top 5 Under 35 Awards, and the Society is now seeking qualified nominees for both honors.

The Outstanding Member of the Year Award recognizes a CPA member who has provided outstanding service to the profession through participation in VSCPA activities, civic engagement and charitable activities that promote a positive image of accounting and the CPA profession.

The Top 5 Under 35 Award recognizes young CPA professionals who have notable professional achievements, VSCPA accomplishments on the state or chapter level, community contributions and/or dedication to the CPA profession.

Submit your nominations online at www.vscpa.com/Awards by Dec. 17. n

VSCPA awards honor the profession’s best

For the fourth year, the VSCPA teamed with Virginia’s governor to honor CPAs across the Commonwealth with Virginia Certified Public Accountants Week. Gov. Bob McDonnell issued a proclamation designating Sept. 16–22 as CPA Week in the Commonwealth.

The VSCPA holds the event to build awareness of the importance of the CPA profession and its practitioners who serve as trusted advisors to businesses, organizations and individuals and help them make sound financial decisions.

To mark the occasion, the VSCPA held a free personal financial planning workshop for the public, led by VSCPA member Elsie Rose, CPA, called “What’s the Plan?” And member Jim Cole, CPA, led the sold-out Nonprofit Finance Seminar, where non-finance nonprofit executives learned about effective accounting and business practices for their organizations.

CPA Week’s hallmark event, the CPA Day of Service, was Sept. 21. Photos and detailed information on the Day of Service were not available at press time, so stay tuned for the January/February issue.

>> CPAS GET THEIR DUE DURING VIRGINIA CPA WEEK

VSCPA CPE & NETWORKINGVisit the CPE Catalog at www.vscpa.com for the latest VSCPA seminars, conferences, webcasts, networking events and more!

>> GET IT ALL ONLINE

Dozens of CPAs convene each year to visit the Virginia Capitol on CPA Assembly Day. Would you like to see the General Assembly in action? Have the cool experience of meeting with your legislators? Then sign up for this year’s event on Tuesday, Jan. 22.

Last year’s CPA Assembly Day was a major component of the VSCPA’s successful efforts during the 2012 General Assembly session. CPAs from around the Commonwealth met with legislators to discuss issues affecting the profession, and participants observed the General Assembly in session. Both chambers introduced the VSCPA on the floor.

If you’re unable to attend in person, sign up for Virtual Participation and send an email or letter to your state legislator to make sure your voice is heard in support of CPAs. n

READY, SET, LOBBY >>

Make this the year you hit ‘the hill’

Monique Valentine, CPA, visited with Del. Rich Anderson (R-Woodbridge) during last year’s CPA Assembly Day.


VSCPA news

VSCPA member Ed Mazur receives national author award

VSCPA member EDWARD MAZUR, CPA, senior advisor for public sector services at CliftonLarsonAllen, received the Association of Government Accountants’ (AGA) Author Award on July 30.

The award recognizes the best article appearing in the Journal of Government Financial Management during 2011–2012.

The AGA Journal Editorial Board honored Mazur for his article “Our Nation’s Governors — Walking a Tightrope Without a Net,” which was published in the journal’s summer 2011 issue.

Mazur’s article details the fiscal challenges faced by our nation’s governors and explored the shared leadership role that governors can play in addressing the fiscal sustainability of the federal government.

Mazur has written for Disclosures as well. His March/April 2011 article, “At the Tipping Point? How Intergovernmental Financial Dependency Affects Us All,” was reprinted by the Journal of Accountancy. n

The VSCPA mourns the loss of:

EDWARD MAZUR

ROY EDWARDS of Norfolk. He graduated from Wake Forest University and was a member of the Norfolk Yacht and Country Club.

LOUIS LEVY, CPA, a sole practitioner from West Bloomfield, Mich. n

VSCPA staff news

DAVID BASS has joined the VSCPA as public relations manager. He previously worked for the Alliance Group.

AMALIA MELIS has joined the VSCPA as marketing and communications manager. She was previously with the Call Federal Credit Union.

RICHARD GORDON has been named education manager and JENNY HANSEN has been named marketing & communications director at the VSCPA.

President & CEO STEPHANIE PETERS, CAE, marks her 15th anniversary with the VSCPA on Dec. 1.

Community Relations Coordinator TRACEY ZINK celebrates 14 years with the VSCPA on Nov. 2.

Education Director LINDA NEWSOM celebrates five years with the Society on Nov. 13, and Communications Specialist CHIP KNIGHTON marks two years with the VSCPA on Dec. 13.

Senior Manager of Education LARITA BOZE and Public Relations Specialist HILLARY CROWDER have left the VSCPA. Good luck, Larita and Hillary! n

JENNY HANSEN RICHARD GORDON STEPHANIE PETERS

TRACEY ZINK LINDA NEWSOM CHIP KNIGHTON

NEW HIRES >>

Updegrove, Combs & McDaniel has hired LORI CALLOWAY, CPA, as a senior staff accountant in its Leesburg office.

RYAN ROBERTS, CPA, has joined Kahn, Litwin, Renza & Co. as a tax manager.

DANIEL VOLANTE, CPA, has joined the collateral review services practice at the Richmond office of Cherry, Bekaert & Holland.

PROMOTIONS >>

Brown, Edwards & Co. has named SCOTT CLARKE, CPA, and MARK

WOOLWINE, CPA, partners.

Longwood University has named KEN

COPELAND, CPA, vice president for administration and finance.

JASON DEANS,

CPA, has been named partner at McPhillips, Roberts & Deans.

PHILIP KOOS,

CPA, has been named partner with

PricewaterhouseCoopers’ Forensic Services practice.

CATHY LILES, CPA, was named office managing partner in Dixon Hughes Goodman’s Danville office.

Kozitzka Wicks & Co. has promoted LAMIA MEZOUAR, BRADLEY NICHOLS,

CPA, and IRENE WALSH to senior; CRYSTAL THOMPSON, CPA, to supervisor; and CONNIE HAMMELL, CPA, NAJI LAKKIS, CPA, and WENDY LUCIO,

CPA, to manager.

APPOINTMENTS & AWARDS >>

Dixon Hughes Goodman partner BRUCE

HOLBROOK, CPA, received the Jeff Miller Award, given by the Hope House Foundation.

JULIE HOVERMALE, CPA, has been named chief financial officer of the Better Housing Coalition.

KRIS MCMACKIN, CPA, was elected treasurer of CASA for Children’s Board of Directors.

The Hampton Roads Real Estate Planning Council announced the appointments of BARBARA SMITH, CPA, as president of the board, CHARLES ROBINSON, CPA, as second vice president and SUSAN

MESSIER, CPA, as an at-large director.

FIRM NEWS >>

Accounting Today named BRITTENFORD

SYSTEMS as the No. 84 accounting technology value-added reseller in North America.

As part of its GIVES initiative, DIXON

HUGHES GOODMAN donated 1,610,617 pounds of food for local food banks.

MALVIN RIGGINS & COMPANY has moved to a new location at 725 Middle Ground Blvd., Suite 200, in Newport News.

Richmond firm VALDERAS & FISHEL has acquired Loth Accounting Services.

WATKINS MEEGAN has moved to a new location at 6720-B Rockledge Drive, Suite 750, in Bethesda, Md.

Several VSCPA member firms were named to Inside Public Accounting’s 2012 IPA 100 accounting firms ranked by U.S. net revenue:

• ARGY, WILTSE & ROBINSON (McLean)

• ARONSON (Rockville, Md.)

• CHERRY, BEKAERT & HOLLAND (Richmond)

• KEARNEY & COMPANY (Alexandria)

• RAFFA (Washington, D.C.)

• REZNICK GROUP (Bethesda, Md.)

• WATKINS MEEGAN (Bethesda, Md.)


VSCPA news

Congratulations to the following members!

SCOTT CLARKE MARK WOOLWINE

JASON DEANS

From left, VSCPA Government Affairs Director Emily Walker; Patrick Cushing, VSCPA legislative counsel from Williams Mullen; Elsie Rose, CPA; Walter Stosch, CPA; and Gary Romer, CPA; at Stosch’s Invitational Golf Tournament on Aug. 13, 2012.

Hantzmon WiebelHarris, Harvey, Neal & Co., LLPHenley & Henley, PCHenry R. Hortenstine III, CPA, PCHogan & Reed, PC, CPAsHolland & Brown LLPHomes, Lowry, Horn & Johnson, Ltd.Honeycutt & McGuire CPAsHughes & Basye, PCHunt & Calderone, PC, CPAsJay E. Reiner CPA PLLCJohn M. Watkins, CPAJohnson, Equi & Co., PLCJones, Adams & Delp, PCJones, Madden & Council, PLCJones & McIntyre, PLLCJS Morlu, LLCKeiterKositzka, Wicks & CompanyKris McMackin CPAL.P. Martin & Company, PCLane & Associates, PCLarry D. Greene CPA PCLauren V. Wolcott, CPA, PCLent & Hawthorne, PCM. Lee Winder & Associates, PCMallard & Mallard CPAs, LLCMartin, Beachy & Arehart, PLLCMcPhillips Roberts & Deans PLCMichael B. Cooke, CPA, PCMichael R. Anliker, CPA, PCMiller Foley GroupMitchell, Wiggins & Company, LLPMoss & Riggs, PLLCMurray, Jonson, White & Associates, Ltd., PCPaul Mitchell CPA CFPPBGHR.T. McCalpin & AssociatesRenner & Company, CPAs, PCRoger L. Handy, PCRubin, Koehmstedt & Nadler, PLCRussell, Evans & Thompson, PLLCRutherford & Johnson, PCSalter & Associates, PC


VSCPA news

VSCPA 100% Member Firms VSCPA 100% Member Firms show their commitment to their employees, the profession and the association. A 100% Member Firm is simply a Virginia CPA firm or company that has all of its CPAs enrolled as members in the VSCPA. Interested in being listed as a 100% Member Firm? Contact VSCPA Member Relations Director Brenda Fogg at [email protected] or (804) 612-9409.

Anderson & Reed, LLPAnderson, White & Company, PC, CPAsBarnes, Brock, Cornwell & Heilman PLCBeale & Curran, PCBeck & Company, CPAs, PCBennett, Atkinson & Associates, PCBiegler & Associates, PCBlackHeath Company, PLCBowling, Franklin, & Co., LLPBoyce, Spady & Moore PLCBritt & Peak, PC, CPAsBurdette Smith & Bish LLCBurgess & Co., PC, CPAsCameron, Moberly & Hamrick, PCCharles S. Pearson, Jr., CPACharles W. Snader, PCCherie A. James, CPA, PLCChesapeake Accounting Group PCCole & Associates CPAs, LLCColey, Eubank & Company, PCCorbin & Company, PCCraver, Green and Company, P.L.C.Creedle, Jones and Alga, PCCST Group, CPAs, PCDalal & CompanyDavid L. Zimmer CPA PCDiane Y. Smith CPA PCDidawick & Company, PCDigital Benefit AdvisorsDonald W. Coleman, CPA, Inc., PCDouglas L. Thompson, CPA PLLCDuvall Wheeler, LLPEggleston & Eggleston, PCElmore, Hupp & Company, PLCEverett O. Winn, CPA, PLCFirst Capital BankFrank Edward Sheffer & CompanyFritz & Company, PCGarland & Garland, CPAs, PCGarris and Company, PCGL Roberson CPA, PLLCGregg & Bailey, PCGregory & Associates, PLLCGurman & Company, PLLC

Scheulen, Patchett & Edwards, PCSells Hogg & Associates CPAs, PCSpencer, Hager & Mosdell, PCSpitler, Stephens & Associates PLLCStephen Merritt CPA, PCSteve Guy & Associates, PCSteve Walls & Associates, PLLCStrickland & Jones, PCSullivan, Andrews & Taylor PCTerry L. Jones, CPA, LLCThomas E. Fraley, CPAThompson, Greenspon & Co., PCTongelidis Consulting, LLCUpdegrove, Combs & McDaniel, PLCValderas & Fishel, PCVerus Financial PartnersWalkerChaney, CPAsWall, Einhorn & ChernitzerWells, Coleman & Company, LLPWilkinson Consulting & CPA PLCWilliam B. May, Jr., CPA, PCWitt Mares, PLCYancey, Miller & Bowman, CPAs PLLCYount, Hyde & Barbour, PC

The above list was compiled Sept. 7, 2012. Check http://www.vscpa.com/100Percent for a complete, up-to-date list. n

>> WE WANT TO HEAR ABOUT IT!

Email [email protected] if you have exciting news to share. The VSCPA prints news of members’ awards, appointments and promotions as well as new hire and job change announcements. Firm news, as well as mergers and acquisitions, is also welcome.

Michael Thiele grew up not far from New York City, and the city made a big impression on his chosen career path. The Far Hills, N.J., native says he’s “fascinated by the business world. New York City, big clients, skyscrapers, money, the works.”

So it was a bit out of character when he chose James Madison University (JMU) for his college

experience. Really, it was an accident of geography that led him to small-town Harrisonburg in the first place.

“I actually never heard of JMU until I passed it on the highway going to visit Virginia Tech my senior year in high school,” Thiele said. “When I was applying to schools I had two things in mind, I want to go somewhere warmer than Jersey and somewhere with a solid business school. Tech wasn’t for me so I decided to take a tour of JMU. I fell in love with it as soon as I got there and have been grateful for my decision ever since.”

The out-of-state tuition rate is a little less onerous for Thiele now that he’s received the 2012–2013 Verus Financial Partners Scholarship from the VSCPA.

“This scholarship has actually helped tremendously, not only financially, but emotionally as well,” he said. “Financially, just about every business major out there knows that accounting is one of the more costly majors to be in. Between grad school, CPA review courses and materials, and the actual Exam itself, the bills can stack up so any amount of money helps.

“More importantly, however, the emotional effects from receiving the scholarship were much more rewarding. It’s a way to praise you for how hard you have worked in college and life thus far. As college students, we don’t get to see those kinds of recognitions often.”

Thiele’s early interest in the business world wound up dovetailing nicely with his academic talents. He’s always done well in math and describes himself as “more organized than the average college male.” He wound up choosing accounting on the advice of his parents and his college advisor.

Upon arriving at JMU, he joined Beta Alpha Psi, the national accounting honors society. A friend received a VSCPA scholarship,

and Thiele took note of the recognition, applying for the Verus scholarship as soon as he was eligible.

The Verus scholarship is appropriate for Thiele, who harbors a strong interest in the firm’s specialty of financial planning.

“While my major and professional certification hint that I will probably be going down the public accounting road, I would like to keep my options open,” he said. “Over the past couple of months I have been looking into getting my CFP along with my CPA when I graduate. The field of financial planning really intrigues me, much like accounting, and I would like to have that opportunity in the future.” n

Support the Foundation with an Annual Fund donationThe VSCPA Educational Foundation continues to work toward its goals of raising money for the Annual Fund, which supports important accounting scholarships and grants while supporting the Foundation’s general mission and goals. Unrestricted gifts to the annual fund help the Foundation cover its operating expenses and ensure that it can continue fulfilling its mission of inspiring and supporting future CPAs.

To donate to the Annual Fund or any other VSCPA scholarship funds, visit www.VSCPAFoundation.com. n


VSCPA educational foundation

SCHOLARSHIP RECIPIENT PROFILE >>

Early business sense led to career choice

The 2011–2012 VSCPA Educational Foundation Annual Report is now available online at www.vscpa.com/StateofFoundation2012. The report details the Foundation’s efforts in the 2011–2012 membership year, including scholarship recipients and other donations, and includes the Foundation’s audited financial statements.

Read the report to learn about four 2011–2012 scholarship recipients and enjoy a profile of a Virginia accounting family that’s investing in the profession’s future.

>> SEE WHERE YOUR DONATIONS GO

MICHAEL THIELE


GROWTH, SALES & ACQUISITIONS

CPA PRACTICE ACQUISITIONS — Steeley & Associates is a diversified service provider operating in Washington, DC area. We seek to offer succession and continuity solutions by partnering with retirement-minded CPAs. Transitions of 1–5 years are preferred, though immediate or longer time frames will be considered. If you are a CPA considering retirement or simply transitioning to other lines of work, please call (301) 263-8519 or email [email protected]. All conversation will be kept confidential.

SELLING? CONTACT BRANNON POE with Poe Group Advisors, an affiliate of Accounting Practice Sales — North America’s Leader in Practice Sales. To learn more, please visit www.PoeGroupAdvisors.com or contact us at [email protected] or by calling 1.888.246.0974.

Our goals for every sale:1. Maximize the practice’s value.2. Simplify the process. We have a unique process… The Seamless Succession™3. Help the buyer succeed.

The cumulative effect of years of marketing exclusively to the accounting profession, combined with our time-tested system of identifying suitable candidates, topped off with experience-driven transition planning — achieves your intended results.

CURRENT VIRGINIA PRACTICES AVAILABLE: Between Charlottesville/Richmond, VA: $295,000 — High quality CPA practice. Primarily tax work with excellent staff and loyal client base. Located in charming central Virginia community, about 30 miles east of Charlottesville.

Central VA: $225,000 — High quality CPA firm in beautiful and historic Central Virginia. Primarily tax with diverse and loyal client base. Fees are well above average. This is an incredible turnkey opportunity!

Richmond, VA: $475,000 — Growing, profitable CPA firm with primary focus on accounting, payroll, business and individual taxes. There is some review work but no audit. Average fees are strong, with an increasing gross revenue trend.

Middle Peninsula, VA: $225,000 — Great CPA practice in a beautiful area. Primarily tax with an opportunity to increase services offered. No audits or reviews!

SMALL CPA FIRM located east of Richmond seeks sale or merger. The firm has a loyal client base, a long history in its present location and enjoys an unqualified or pass peer review history with the latest review completed in June 2012. Practice consists of compilations; write-up services; individual, corporate, fiduciary and tax-exempt income tax returns for a variety of businesses. Principal seeks retirement or semi-retirement over the next two years. Reply in confidence to VSCPA CC #88, 4309 Cox Road, Glen Allen, VA 23060 or [email protected].

OFFICE SPACE

CPA OFFICE SPACE AVAILABLE IN FAIRFAX, VA — A quality CPA firm in Fairfax City has office space available. Sharing of administrative staff and conference room possible. Offices have large windows and are partially furnished. More furniture available if needed. This would be a perfect fit for a sole or small CPA practitioner/firm. Great opportunity for possible future association and for a retirement-minded practitioner. Reply in confidence to VSCPA CC #85, 4309 Cox Road, Glen Allen, VA 23060 or [email protected].

NORTHERN VIRGINIA SOLE PROPRIETOR looking to rent single office within existing CPA firm. Reply in confidence to VSCPA CC #87, 4309 Cox Road, Glen Allen, VA 23060 or [email protected]..

PEER REVIEW

WE CAN PERFORM ENGAGEMENT, SYSTEM, OR PRE/POST-ISSUANCE PEER REVIEWS for your firm. We are experienced and up-to-date on the latest regulations. Call me today to perform your peer review professionally and efficiently. Charles Coker, CPA(703) 931-3290 [email protected]

CLASSIFIED ads

>> ADVERTISE IN CLASSIFIED!

Reach more than 10,000 VSCPA members and place your

classified ad today! Contact Jill Edmonds at jedmonds@

vscpa.com or visit www.vscpa.com for advertising rates.

Your connection to success

MANAGING MINNIELAND’S MONEY >>

Two minutes with Laura Tate-SmithMom of two Laura Tate-Smith, from Woodbridge, is passionate about her family. And she goes to work each day as chief financial officer of Minnieland Academy to ensure other families can be confident knowing their children’s early childhood education provider is fiscally sound. Her primary responsibilities include planning, implementing, managing and controlling all financial related activities for Minnieland She has direct responsibility for accounting, finance, forecasting, budgeting, strategic planning, property management and partnership compliance

I AM PASSIONATE ABOUT … My family. I have been married for over 21 years and have two very handsome boys ages 9 and 8.

My passion outside my family is University of Alabama football! I am an alumni of the University and normally attend a couple of games each season.

IF I WEREN’T A CPA, I WOULD BE … A teacher. Teaching has always been my second passion and I love history. So, I would have probably been a history teacher.

MY ADVICE TO ASPIRING CPAS IS … It is a rewarding and enjoyable career, but it takes lots of work. Be prepared, don’t take short cuts and document everything.

WHEN I TOOK THE CPA EXAM … I started studying about seven months before the Exam (this is when it was offered twice a year). I studied before and after work and every

weekend leading up to the Exam. The night before the Exam, I was exhausted and not very confident that I would pass. I contemplated not taking it, but my husband convinced me to take the Exam anyway. I did and I passed.

I NEVER LEAVE HOME WITHOUT … My HP 12c calculator. Even with all the new technology, I still find my 12c most useful and handy.

I AM A CPA BECAUSE … I could not imagine doing anything else. My first job was a bookkeeper at a local college in Selma, Ala. I have always enjoyed planning, structuring and building transactions, departments and companies. I find it very rewarding and get great satisfaction from planning and seeing that unfold into reality. n

I AM the vscpa


LAURA TATE-SMITH, CPA >>

Avid University of Alabama football fan Laura Tate-Smith is CFO at an early childhood education provider.

SCCPAJune12.indd 1 6/14/12 9:57:37 PM

Virginia Society of

Certified Public

Accountants

Virginia Society of CPAs4309 Cox RoadGlen Allen, VA 23060

Change service requested

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Financial Investigations› Employee Embezzlement› Management Fraud› Investment Scams› Vendor/Customer Fraud› Computer Forensics

Contact: Harold Martin | 804.273.6240 | [email protected]

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Valuation› Financial Reporting› Tax - Estate, Gift, Income› Transactions - Mergers and Acquisitions, Fairness Opinions› Stock-Based Compensation›› Buy/Sell Agreements› ESOPs

For complex valuation and forensic projects... You need the Keiter team.

Josh PruittCPA, AM, CFE

Harold MartinCPA/ABV/CFF, ASA, CFE

Asif CharaniaCPA, AM

Ethan HitchcockBrian BurnsCPA/ABV, ASA

Peter ThackerCPA/ABV/CFF, ASA, CFE

Forensic Services

Documents

Disclosures Nov/Dec 2012