Accounting Today - January/February 2010

Throughout 2009, those in the accounting profession needed a scorecard to track
the flurry of CPA firm mergers that occurred between the start of the year and the final
refrain of “Auld Lange Syne.”
Firms such as Sikich, Citrin Cooperman, Cherry Bekaert & Holland, Friedman,
Daszkal Bolton and Marcum were among the long roster of firms that completed no-
table 2009 unions, while Baker Tilly Virchow Krause pulled off one of the year’s latest
and biggest marriages, merging with Washington, D.C.-based Beers & Cutler to form a
1,400-member powerhouse with combined revenues of $250 million.

And most of those involved with firm M&A expect that frenzied pace to continue in
2010. “The merger market is flooded with two types of firms — larger firms with an in-
satiable appetite for merging in smaller firms, and smaller firms that have a dire need to
merge up within the next few years,” said consultant Marc Rosenberg, CPA and principal
of Wilmette, Ill.-based Rosenberg Associates. “Because there are so many players, the
merger market has largely been unaffected by the recession.”
Ira Rosenbloom, chief executive of New Jersey-based consultancy Optimum Strate-
gies and former managing partner of Mintz Rosenfeld, which was acquired several
years ago by Northeast super-regional firm J.H. Cohn, also expects 2010 to be a strong
year for M&A. “The typical motivations of exit strategy, lack of succession, professional
fatigue and market competition become even more powerful each year as the members
of our profession age and the inflow of new talent lags behind.”
“Organic growth is too difficult in this economy,” said Terence Putney, of M&A broker
Accounting Transition Advisors. “So the market for mergers has remained competitive
and robust and more in favor of the seller than most forecasters predicted. That is un-

Put Q&A before M&A

BY BILL CARLINO

With the market as hot as ever, successful firms share their best practices for pre-merger due diligence

See Q&A/M&A on 37

Tax law changes — both in volume and complexity — will make this season more confusing for taxpayers and preparers alike.

“Taxpayers will be in for a surprise at how much is new,” revealed Barbara Weltman, a New York tax attorney and author of J.K. Lasser’s tax books. “They may think that because they didn’t buy a home or a car, their returns will be simple. But there’s so much there that could complicate matters.”

Tax Season Preview

Prepare for confusion

Filing season 2010: More tax law changes, longer hours

BY ROGER RUSSELL

“For example, the Making Work Pay Cred-
it, which was implemented by changes in the
withholding tables, could result in under-
withholding for a variety of reasons: They
had two jobs, their dependent had a job and
got a credit they weren’t entitled to, or both
spouses worked and each got a full credit,”
she explained. “They will be shocked, espe-
cially if they received big refunds in the past
and are counting on one for this year.”
For businesses, she observed, it’s just as
complicated. “The expanded five-year net
operating loss carryback has been enhanced
and will carry into 2010. Previously, only
small businesses could use it, but nearly all
businesses will be able to use it for 2008 and
2009 NOLs,” she said. “They have to sit down
with their advisors and determine if it’s a
good idea to carry the loss back that far.”
“There’s so much out there for tax profes-
sionals to master and for consumers to deal
with, and we’re not finished yet,” she noted.
“There may be legislation passed early in
the year with some retroactive changes. The
landscape is continually changing, making
it challenging to keep up.”
The IRS has hired so many new examiners
and agents that it is reasonable to anticipate
the number of audits will go up, she added.
“People should be very careful and vigilant
with their records. They should make sure
they have all the proof to back up the posi-
tions that they will take on their return.”
For those who might be affected by un-
der-withholding as a result of the Making
Work Pay Credit, CCH principal tax analyst
Mark Luscombe recommended trying to
pump up their January 15 estimated tax pay-
ment to help compensate. “Anytime there’s
something new like the First-Time Home-
buyer Credit, it creates confusion,” he said.