Presentation at the Maryland Association of CPAs Chesapeake Tax Conference on September 27th by MACPA CEO, Tom Hood, CPA. Covers the latest updates on federal and state tax changes and laws facing Certified Public Accountants.

1. Survivor’s Guide to the Tsunami of Tax (and other) Changes Chesapeake Tax Conference September 27, 2010 Tom Hood, CPA.CITP CEO & Executive Director Maryland Association of CPAs

2. Remember this?

3. Being in business today feels like being in permanent whitewater 3

4. You feel overwhelmed by the rapid and turbulent pace of change and uncertainties in business today

5. You need new skills and new approaches to ride these waves of change Photo: Pratt’s surfing page

6. Today we will present the survivor’s guide to the tsunami of tax (and other) changes facing CPAs

7. Massive legislation in a very short time Dodd-Frank Wall Street Reform & Consumer Financial Protection Act Patient Protection Act Small Business Tax Relief Act

8. The Federal Issues FTC Red Flags rule – privacy & identity theft Tax Preparer Registration & PTIN issue Patient Protection Act & 1099’s Sub S. Employment Tax Issue H.R.5297 - Small Business Jobs and Credit Act of 2010

9. The State Issues Maryland Privacy Act Maryland Tax Preparer Regulations Maryland Consumer Protection & Debt Counselors Sales Tax on Accounting & Tax Services Combined Reporting

10. Why we are here and what we are doing about it C P A

11. Connecting our members to their Profession, each other, and the community

12. Connect Connect to the Profession Connect to each other Connect to our community Drive the market to our members

13. Connect to students to fill the pipeline and promoting the CPA Career

14. Connect – drive the market to our members

15. New social media tools allow us to connect to more members in more ways MACPA won 2 out of top 10 Biz blogs in MD MACPA social media efforts featured in J of A and won 3rd place in Mobbies,Top 75 Biz blogs & Top 50 Accounting blogs

16. Protect – the public interest and the CPA license and brand

17. A useful framework to understand the CPA profession The CPA profession is part of the bigger infrastructure that supports the US free market system. Like the pipes under urban streets, it is often invisible until it breaks.

18. Our infrastructure for regulating the US financial markets has been created from a series of reactions to crises and changes and is in need of repair. Dodd-Frank Wall Street Reform and Consumer Protection Act Sarbanes-Oxley Act Financial Regulatory Reform Single audits DOL audits Audit quality

19. The (infra) Structure of the CPA Profession State Boards of Accountancy issue licenses and regulate CPAs

20. US Treasury MD Comptroller MD Comptroller MD Comptroller CAQ Courtesy of the Maryland Association of CPAs – 2008 edition Drawing by Carol Kirwan, CPA

21. Where do major changes come from?Most changes come from regulators and standard setters Us – Associations MACPA & AICPA Them – Federal & State legislators Infrastructure OR New laws, regulations & regulators

23. 47 states passed legislation in three (3) years

24. Maryland enacted it in 2008MI RI CT *PA IA NE OH NV NJ UT IN IL DE CO WV CA VA KS AK MO KY MD NC DC TN AZ OK NM AR SC AL MS *GA TX LA FL CPA Mobility Enacted 46 PR CPA Mobility Enacted Only for Other Mobility States – GA, PA, MA Awaiting Governor Signature - 1 * GU U.S. VIRGIN ISLANDS In Process CPA Mobility Legislation Pending - 2 22

25. An example - CPE Regulations involved all levels – law, regulations, and procedures Maryland Senate & House passes bill Maryland Governor signs into law A Bill SB 128 From State Board Law Maryland State Board of Public Accountancy Clarify thru regulations And enforce the law

26. An example of “us” - The 120/150 Hour CPA Exam Bill (HB 1137) Changes the requirements to sit for the CPA exam to allow you to sit for the Exam upon completion of 120 hours (and the requirements of section 1 & 3) and get licensed upon completion of the final 30 credit hours (and the requirements in group 2)

27. A tale of two bills…

28. The clock runs out at midnight

29. Recent example – The Dodd – Frank Wall Street Reform and Consumer Financial Protection Act of 2010 Crisis hits news HR 4173 Bureau of Consumer Financial Protection 848 pages! 533 regulations 60 studies 94 reports

31. Publications

32. Web

34. Modified provision to audit broker-dealers (PCAOB)

35. Exempted CPAs from CFPA registration due to existing licensing and oversight

36. Stopped excessive liability exposure for auditors (aiding & abetting)

38. to peaceably assemble

39. to petition the Government for a redress of grievancesBill of Rights - submitted to the states for ratification on September 25, 1789 and adopted on December 15, 1791

40. MACPA was the third professional association in the US protecting its members As soon as several of the inhabitants of the United States have conceived a sentiment or an idea that they want to produce in the world, they seek each other out; and when they have found each other, they unite. From then on, they are no longer isolated men, but a power one sees from afar, whose actions serve as an example; a power that speaks, and to which one listens. – Alexis de Tocqueville Alexis de Tocqueville 1835

41. MACPA’s survival guide to the Tsunami of Tax (and other) changes Federal Tax Policy Task Force Federal & State Tax Committees Listservs (federal & State) Blog – www.cpasuccess.com Blog – www.cpalegislativeinsider.com Support our PAC Attend CPA Day in Annapolis – January 19th, 2011 Strength in Numbers!

42. The Federal Issues FTC Red Flags rule – privacy & identity theft Tax Preparer Registration & PTIN issue Patient Protection Act & 1099’s Sub S. Employment Tax Issue H.R.5297 - Small Business Jobs and Credit Act of 2010

43. Remember this?

44. Tax Preparer Registration

45. MACPA Fed & State Tax listservs

46. Health Care & 1099 issue

47. Health Care & 1099 issue

48. Health Care & 1099 issue

49. Health Care & 1099 issue

50. The State Issues Maryland Privacy Act Maryland Tax Preparer Regulations Maryland Consumer Protection & Debt Counselors Sales Tax on Accounting & Tax Services Combined Reporting

52. Maryland Individual Tax Preparer Act

53. New Corporate Reporting Requirements

54. Peer Review Requirement – October 1st

55. New CPA Exam Requirements

56. New CPE regulations

57. Mandatory e-file

58. New Non-Profit Audit Requirements > $500,000

59. MD Independent Contractor LegislationCPA Day in Annapolis January 19, 2011

60. MACPA 2011 Agenda Pass 120/150 legislation Stop Sales Tax on Accounting Services Exempt CPAs from Debt Counseling Bill Stop Trial Lawyers attempts at Tort Liberalization – Comparative Fault Pass Safe Harbor legislation

61. Our State Tax Committee takes a proactive position in General Assembly

62. Achieve – enabling our members to deliver high quality services & achieve success

63. Economy Globalization Technology Workforce & demographics Regulations & Standards Keeping you ahead of the latest trends and issues facing Photo: Pratt’s surfing page

64. Social Media tools to keep you ahead of changes

65. The IRS is on Twitter are you?

66. The AICPA is on Twitter are you?

67. The MACPA is on Twitter

68. Two innovations in Tax you should know about in the CPA Profession Financial Literacy eXtensible Business Reporting Language (XBRL) – SBR – Standard Business Reporting

69. Despite major challenges, the CPA profession has maintained its trusted advisor status with the public and investor communities Both Investors and Business Decision Makers rate CPA’s at the top of all professions, right after physicians.

70. Accounting Firms Most Trusted Advisors Generally speaking, how believable do you normally find statements made by someone who works for one of these organizations or groups “Echo Boomers” (18-34) rated accounting firms highest– 74% Source: Harris Poll, May 18

71. CPAs most profitable small businesses

72. Are you an untouchable? We hope to help you become one… A Washington lawyer friend recently told me about layoffs at his firm. I asked him who was getting axed. He said it was interesting: lawyers who were used to just showing up and having work handed to them were the first to go because with the bursting of the credit bubble, that flow of work just isn’t there. But those who have the ability to imagine new services, new opportunities and new ways to recruit work were being retained. They are the new untouchables.

73. MACPA’s survival guide to the Tsunami of Tax (and other) changes Federal Tax Policy Task Force Federal & State Tax Committees Listservs (federal & State) Blog – www.cpasuccess.com Blog – www.cpalegislativeinsider.com Support our PAC Attend CPA Day in Annapolis – January 19th, 2011 Strength in Numbers!

74. The only question for leaders Have I made you feel stronger and more capable? Source: Emmanuel Gobillot - LeaderShift

75. Tom Hood, CPA.CITP CEO Maryland Association of CPAs Business Learning Institute (443) 632-2301 E-mail tom@macpa.org Web http://www.macpa.org Blog http://www.cpasuccess.com Connect – Protect - Achieve