Accounting Today - June 21 2010

Vol. 24 I No. 8 I June 21-July 18, 2010
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The Governing Council of the American Institute of CPAs rolled through a stacked agenda during its Spring Meeting of Council here — a three-day event that was highlighted by approval to expand the institute’s membership categories and the start of discussions to sharpen its strategic vision.

Barry Melancon, the AICPA’s president and chief executive, touched on a dizzying

Council expands AICPA membership, revisits vision

BY LIZ GOLD / SAN DIEGO

number of issues affecting the profession during his “State of the Profession” report, starting off his keynote by addressing the “bad reputation” CPAs have had in regards to embracing change. “It’s a huge falsehood,” he told attendees.

He listed eight initiatives the institute has
been strategically focusing on — people,
competency, advocacy, brand activity, op-
erational excellence, thought leadership,
international, and competition and risk.

the green movement ; private vs. public standards; and tax change. “It’s unlikely to slow down, [and] it’s all interrelated,” he said.

The mantra that echoed throughout the meeting was “redefining the landscape,” as Melancon spoke on how the institute will focus its future strategies.

During the meeting, members were

See COUNCIL on 34

Scenes from April 15 (clockwise from top): Advertising tax prep in Tigard, Ore.; lining up at a post office in New York City; looking for forms in Springfield, Ill.; and a postal worker collecting last-minute returns in Pembroke Pines, Fla.

All PhO TOS © AP WIde WOrld

2010 post-mortem

Lessons from tax season

Confusing legislation and the economy shape filing period

BY ROGER RUSSELL

The recession defined this year’s tax season in a number of ways, including legislation designed to stimulate the troubled economy, as well as hiring and engagement practices, according to veteran practitioners. Legislation such as the Making Work Pay and First-Time Homebuyer Credits, as well as changes in income levels for IRA conversions, both affected and confused a number of taxpayers during the filing period.

interest-free loan in 2008 legislation and then morphed into a refundable credit for homes purchased in 2009. It was successful in stimulating home sales, but one of Whitlock’s clients found out the hard way the consequences of ceasing to use the home as a principal residence prior to the end of the 15-year recapture period.

“Our firm did about 800 individual re-
turns,” reported Beanna Whitlock, owner of
San Antonio-based Whitlock Tax LLC and
former director of National Public Liaison
for the Internal Revenue Service. “This year
we had far more people who wound up ow-
ing than in the past, and it’s always alarm-
ing to someone who is a first-time ower. …
Some got caught in the Making Work Pay
Credit where they already received the $250
[the amount of the credit] because they had
their withholding reduced while they were
receiving Social Security benefits. That also
happened to government retirees and those
receiving veterans’ benefits.”
“Six months after she bought the house,
she met the ‘love of her life,’ moved in with
him and rented her house out. What a sur-
prise when she found that $7,500 was due
immediately because she had converted
her home to rental property,” Whitlock
said. “This underscores the fact that there
is virtually no financial decision you can
make that doesn’t affect your taxes. Tax-
payers have to be educated to always talk
to their tax professional first, before they
make these decisions.”
Changes in the First-Time Homebuyer
Credit also confused some taxpayers, add-
ed Whitlock. The credit originated as an
A surprise was also in store for a Cali-
fornia resident who was transferred to San
Antonio during the year, recounted Whit-
lock: He had paid $350,000 for his house,
but sold it for $128,000 on a ‘short sale.’
“Under federal law, there’s a million-dol-
lar exclusion for cancellation-of-debt in-