140,300 new accounting and auditing jobs predicted by 2026

Approximately 140,300 new jobs for accountants and auditors are expected to be created by the year 2026, according to a new forecast.

The Knowledge Academy, a training and qualification provider, analyzed the findings from a Glassdoor report, “What’s Ahead for Jobs? Five Disruptions to Watch in 2018,” and estimated the number of jobs expected to grow the most by 2026. It found that the U.S. will see large growth in tech-related roles in non-tech industries such as finance, consulting and retail. However, many traditional jobs will also increase through the ranks as technology continues to develop.

The expected job gains come despite fears that artificial intelligence and automation will eliminate jobs in many sectors. AI is already helping the accounting, auditing and financial sectors, as well as many others. A recent study by the Pew Research Centre found that 48 percent of Americans are somewhat worried their job could be taken over by a robot and 25 percent are very worried at this prospect. Despite those fears, the unemployment rate is at its lowest point since 1969. According to the U.S Bureau of Labor Statistics, the unemployment rate in October was 3.7 percent, with the number of unemployed people in the U.S. around 6.1 million.

Besides accounting and auditing, other sectors are expected to gain an even greater number of jobs by 2026, according to The Knowledge Academy. They include home health and professional care aides (1.1 million new jobs), waiters, food service and cooks (907,700 new jobs), registered nurses (437,000 new jobs), software developers (253,400 new jobs), janitors and cleaners (233,000 new jobs), operations managers (205,900 new jobs), medical assistants (184,600 new jobs), nursing assistants (164,000 new jobs), and construction laborers (153,300 new jobs).

Senate panel advances IRS commissioner and introduces IRS reform bill

A closely divided Senate Finance Committee advanced the nominee for the next Internal Revenue Service commissioner, Charles Rettig, by a vote of 14 to 13, but he awaits a vote by the full Senate.

Rettig is a tax attorney at the Beverly Hills law firm Hochman, Salkin, Rettig, Toscher & Perez, P.C. who has spent most of his career representing clients before the IRS. If he is confirmed by the full Senate, he would succeed acting commissioner David Kautter, who is also the Assistant Secretary of the Treasury for Tax Policy. Kautter has been acting commissioner since the end of John Koskinen’s term last November. Rettig would be coming in at a time when the IRS is dealing with the massive tax cuts law that Congress passed last December.

“For the IRS to implement the biggest tax overhaul in a generation, it is essential that the agency is fully staffed and led by a strong, capable commissioner,” said Senate Finance Committee chairman Orrin Hatch, R-Utah, in a statement. “The job of commissioner is further complicated by years of mistrust and scandals at the agency. Chuck Rettig is the right pick to both implement tax reform and restore trust in the IRS. I am pleased that the committee advanced his nomination, and I look forward to the Senate acting quickly on his nomination so he can get started on the hefty tasks he will be charged with as the agency’s leader.”

However, Democrats on the committee voted against confirming Rettig, in part as a protest against the IRS and the Treasury Department’s decision this week to let 501(c)4 tax-exempt organizations, such as political action groups, avoid listing the names of their donors (see Many political tax-exempts no longer required to report donors).

“The Trump administration has taken a qualified nominee and dumped him right in the middle of a dark-money political firestorm of their own creation,” said Sen. Ron Wyden, D-Ore., the ranking Democrat on the committee. “And a radical change in tax law regarding transparency and disclosure has dragged the IRS and Treasury into a swirling set of questions about the president’s foreign financial ties and motivations. As a result, this nomination is no longer an isolated debate that can begin without context.”

Despite their differences, Hatch and Wyden agreed to introduce bipartisan legislation Thursday aimed at reforming some of the IRS’s administrative practices, echoing legislation that already passed the House in April.

The Taxpayer First Act is also based on two 114th Congress bills (S. 3156 and S. 3157) that passed the Finance Committee unanimously in 2016. It aims to increase taxpayer protections and electronic filing; enhance whistleblower protections; reform policies concerning IRS employees; increase scrutiny of IRS audit criteria; and support prevention of identity theft and tax refund fraud.

“Ensuring the IRS has greater flexibility and bringing it into the 21st century continues to be a top priority – especially with the largest rewrite of the tax code in more than three decades on the books,” Hatch said in a statement. “We’ve been working hand in glove with the administration to ensure a proper and seamless implementation of new policies and are confident this bill will streamline the agency in a way that protects taxpayers from fraud and abuse, increases electronic filing and supports IRS employees.”

“With every passing day there’s a new headline about hackers and crooks stealing taxpayer dollars and personal data,” Wyden stated. “Congress must do more to protect American taxpayers from fraud and financial abuse. This bipartisan legislation will make common-sense changes to help taxpayers and streamline administrative rules at the IRS, which will allow tax officials and agents to better safeguard the American people against financial predators.”

Tax know-how and CPA credential rank high for financial advice

Tax knowledge is considered to be the most important factor when choosing a financial advisor, according to a new survey, which also found the CPA credential to be the one most associated with financial advice.

The survey, from 1st Global, a wealth management firm that works with CPAs, found that 66 percent of affluent and emerging affluent consumers view tax knowledge as the most important factor when choosing a financial advisor. In addition, 47 percent of the respondents associated the CPA designation with financial advice, the largest of any designation included in the study. For the study, 1st Global and PopResearch polled 300 respondents with $150,000 or more in assets.

The report, “Investors, CPAs and Tax-Focused Financial Advice,” found that even though 53 percent of the survey respondents currently work with a CPA or accountant, tax-aware advice is still a key concern for them. Tax-optimized investing (58 percent), estate tax planning (45 percent) and tax burden reduction (45 percent) ranked as the top three specialties the investors who were surveyed said they seek when choosing a financial advisor.

The respondents were asked about other credentials as well, including Certified Financial Planner (CFP), Chartered Financial Analyst (CFA), Chartered Financial Consultant (ChFC), Certified Investment Management Analyst (CIMA) and Personal Financial Specialist (PFS), but the CPA came out on top. “CPAs were ranked first,” said 1st Global president David Knoch. “They actually ranked 50 percent higher than CFPs. The survey asked people to see if they could recognize professional certifications and licenses to see if they could associate them with the provision of financial advice. 

The one they recognized the most 47 percent of the time was CPAs. CFAs actually came in second at 40 percent. CFPs were third at 30 percent, and 27 percent of people said they didn’t recognize any of them. And then 7 percent recognized ChFC and CIMA, and only 4 percent recognized the PFS designation, so the CPA designation was the most recognized of survey respondents.”

Trust was considered to be more important to investors than skills or knowledge, with 90 percent of the survey respondents defining a trusted advisor as someone who had their best interest in mind. Only 10 percent named skills or knowledge as important.

“There has been a public policy debate around how financial advisors should practice,” said Knoch. “We don’t often get into the headlines about how financial advisors are compensated and levels of service, and the way to regulate it. It’s usually too boring for anyone to be talking about, but it’s actually been in the headlines more recently. 

The idea of the DOL’s [Department of Labor's] fiduciary rule for financial advisors we think has more investors asking the question, ‘How is my advisor serving me and what is their responsibility to me?’ I think it’s bringing up questions that investors may not have thought to ask.”

Despite growing access to digital interactions and information, face-to-face discussions continued to be important to the survey respondents, with 57 percent ranking face-to-face interactions as very or extremely important to them.

“Well more than half of the survey’s respondents felt like it was either very or extremely important to meet face to face with the person giving them advice,” said Knoch.

The majority of respondents indicated they would discuss investments and long-term financial aspirations with their CPA or accountant, and 74 percent said they were somewhat or extremely comfortable doing that.

The survey also revealed some generational differences, with younger generations seeking financial advice from professionals more than Baby Boomers. More than 60 percent of respondents in Generation X and Generation Y said they have a CPA and a financial advisor. In addition, younger respondents with a CPA were 6 percent more satisfied with their financial advisors.

“Gen X and millennial individuals are much more interested in becoming an educated participant in the process rather than merely delegating,” said Knoch. “The delegation behaviors are actually very boomer like. 

Integration behaviors are much more Gen X and millennial like. That does speak to Gen X and millennials hiring financial advisors more than their boomer counterparts, and in fact some other surveys have shown that to be the case. Gen X and millennials are hiring financial advisors more often than their boomer counterparts.”

CPAs could be losing out by not targeting younger clients with financial advice, according to the survey results, which found many people just doing it for themselves. “It was also interesting in this survey, as we talk about younger clients, of the 31 to 35 age cohort, 64 percent of those who had a CPA also had a financial advisor,” said Knoch. “In fact, out of the entire thing, 38 percent used a CPA, and of those, 56 percent used a financial advisor. 

For those who did not use a CPA, 72 percent of them did not have a financial advisor, so there was a have and have not element here. People who were involving expert professionals in their lives tended to have expert professionals that would help them work on both taxes and investments. They chose not to bring a CPA into their life. They appeared to be much more of a do it yourself-er when it came to getting financial services.”

Many investors are looking for tax-optimized investing strategies, especially in the wake of the new tax law, although the survey didn’t ask specifically about the Tax Cuts and Jobs Act. But there's more opportunity for CPAs to offer such services in the context of the tax overhaul.

“What was interesting in this is that tax-optimized investing was the most selected category that these investors were looking for,” said Knoch. “It was interesting that while they seemed to be seeking tax-optimized advice, you have a number in this group that are not actually hiring CPAs or financial advisors to do that. Therein we think lies a tremendous opportunity for the CPA professionals in America today who may not be serving as financial advisors. 

Frankly speaking, a CPA who is not in the wealth management profession today, this survey is saying clearly right now is the time to start. These people answering this survey, 62 percent, more than any other, agreed that CPAs have the ethical standards and skills needed to serve a family’s needs.”

With 58 percent of the survey respondents seeking tax-optimized investing strategies, Knoch believes American families are looking for these services from CPAs. “For the firms that are already offering wealth management," he said, "we think now is the time to ask the question: ‘Are we playing at our best?’ The demand for these services from CPA firms may never have been higher since CPAs started offering financial services three or four decades ago.”

Filing season begins Jan. 29

Filing season will begin on Monday, Jan. 29, the Internal Revenue Service announced.

The final tax deadline will be Tuesday, April 17. (April 16 is Emancipation Day, a legal holiday in Washington, D.C.). The IRS expects nearly 155 million individual returns to be filed in 2018.

In 2017, the IRS began accepting returns on January 23; it set the date at January 29 this year to make sure that its key processing systems are ready, and to give it time to determine how late December’s Tax Cuts and Jobs Act will impact tax returns.

Many tax professionals and tax preparation chains will begin preparing returns before January 29, and many software companies are planning to accept them and then submit the returns when IRS systems open. Although the IRS will begin accepting both electronic and paper returns on January 29, paper returns will start to be processed later in mid-February as system updates continue. 

The IRS said that it expects to issue more than 90 percent of refunds in less than three weeks, but did not that it legally cannot issue refunds claiming the Earned Income Tax Credit and the Additional Child Tax Credit before mid-February.

IRS prodded to use credit card payment data to do more tax audits

The Internal Revenue Service could be auditing more tax returns where it sees big discrepancies in the payments reported on the Form 1099-K and the income reported on tax returns, according to a new report.

The report, from the Treasury Inspector General for Tax Administration, pointed to legislation that Congress passed in 2008 requiring reporting of payment card transactions, such as from credit cards, debit cards and stored value cards. In response, the IRS developed Form 1099-K, Payment Card and Third Party Network Transactions, which payment settlement entities began submitting to the IRS in 2012. The law requires payers to report annual gross payment transactions to the IRS and send a written statement containing the same information to the participating payees that received the payments.

The IRS uses the Form 1099-K to help compare gross receipts from payment card sales to gross receipts reported on a taxpayer’s return. The requirement includes not only payments via credit cards, debit cards, and stored-value cards, but also through third-party networks such as PayPal.

TIGTA reviewed a sample of taxpayers with one Form 1099-K (although it noted some taxpayers have more than one) and found a total of 20,881 taxpayers with discrepancies of more than $10,000 between the income reported on their tax returns and their Form 1099-K amounts (and reporting less than 90 percent of the amount on the Form 1099-K). The tax accounts for these taxpayers showed no indication the IRS had audited them.

“Without contacting taxpayers through a notice or initiating an audit, the IRS cannot determine the reasons for discrepancies between amounts reported on Form 1099-K and income reported on tax returns,” said TIGTA Inspector General J. Russell George in a statement. “The IRS needs to take appropriate action at all times, and particularly when the discrepancy is large.”

TIGTA recommended the IRS consider implementing compliance projects to test the use of Form 1099-K data to identify certain types of tax returns for audit. The IRS should also identify and address the reasons why tax returns with large discrepancies between the income reported on tax returns and the amounts reported on Form 1099-K were not selected for audit or other treatment, TIGTA suggested. The IRS agreed with the recommendations in the report and intends to take action, but it also disagreed with TIGTA on the magnitude of the issue.

“With respect to TIGTA’s sample cases, we not only identified the same discrepancies, but for the vast majority of those cases also identified the reasons why we did not ultimately select cases for additional treatment, e.g. additional available information indicated that they would not be as productive as they otherwise appeared,” said Mary Beth Murphy, commissioner of the IRS’s Small Business/Self-Employed Division, in a statement. “Of the 20,881 discrepancy cases identified by TIGTA, we identified the reason why 18,053 were not selected for audit or other treatment.”