MACPA Statement // October 2012

THE FUTURE IS NOW: XBRL emerges as career nicheStudents, employers say knowledge of the data-tagging language provides an edge in the job market.PAGE 6

October 2012 | Maryland Association of Certified Public Accountants, Inc.

STATEMENTMACPA’S

LEADERSHIP IS DEAD. LONG LIVE LEADERSHIP.

PAGE12

ADMINISTRATION

Amy Stumme [email protected]

Becky Conley [email protected]

TECHNOLOGY

Doug Shaner [email protected]

COMMUNICATIONS

Amy Moran [email protected]

Bill Sheridan [email protected]

FINANCE

Margaret DeRoose [email protected]

Laura Swann, CPA [email protected]

MEMBER SERVICES

Julianne Part [email protected]

Jeannie Richardson [email protected]

Ashlee Stem [email protected]

PRODUCT DEVELOPMENT

Akesha Brown [email protected]

Debbie Zizwarek [email protected]

TECHNICAL SERVICES

MaryBeth Halpern [email protected]

Cora Edwards [email protected]

PROFESSIONAL DEVELOPMENT

Dee Sullivan [email protected]

Pamela C. Devine [email protected]

Chris Dougherty [email protected]

MaryBeth Drusano [email protected]

Jared [email protected]

Joann Francavilla [email protected]

Megan Gratz [email protected]

Emily Trott [email protected]

Donna Lewis [email protected]

Amy Puente [email protected]

Paige [email protected]

Meredith Senio [email protected]

Laura Dorsey-Shaner [email protected]

Andrew Hood [email protected]

2012-2013 BOARD OF DIRECTORSOFFICERS

Anoop N. Mehta, CPA, Chair

Byron K. Patrick, CPA.CITP, MCSE, Incoming Chair

Marianela del Pino-Rivera, CPA, Secretary/Treasurer

Allen P. DeLeon, CPA, PFS, Immediate Past Chair

DIRECTORS

Samantha Bowling, CPA

Lisa Cines, CPA

Shane Grady, CPA

Kara King Bess, CPA

Michael Manspeaker, CPA

Joselin R. Martin, CPA

Amy Myers, CPA

Robert Tarola, CPA

SENIOR STAFFMACPA EXECUTIVE DIRECTOR

J. Thomas Hood III, [email protected]

MACPA DEPUTY EXECUTIVE DIRECTOR

Jacqueline E. G. [email protected]

DIRECTOR OF FINANCE AND ADMINISTRATION

Skip Falatko, [email protected]

CONTENTS

WE WANT TO HEAR FROM YOU! See below to submit content

Bill SheridanMACPA Dulaney Center II 901 Dulaney Valley Road Suite 710 Towson, MD 21204

For content submission: [email protected]/[email protected]

P: 410.296.6250 F: 410.296.8713Toll free: 800.782.2036

The MACPA reserves the right to edit all submissions for grammatical style and / or length.

Statement of fact and opinion are made by the authors alone and do not imply an opinion on the part of the officers or members of MACPA.

The Statement is published four times a year by the Maryland Association of Certified Public Accountants, Inc.

Bill Sheridan, EditorAshley Stearns, Graphic DesignerAmy Moran, Advertising Sales

October 2012 | Maryland Association of Certified Public Accountants, Inc.

CHAIR’S COLUMN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

FEATURESThe Future is Now: XBRL emerges as career niche . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6Leadership is dead. Long live leadership. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

DEPARTMENTSNews & Views . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16Professional Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18Tax Corner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20Business & Industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24Personal Financial Planning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28High Tech Solutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

MEMBER NOTES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

CLASSIFIEDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

1OCTOBER 2012

10.17 • MACPA Columbia Center http://cpa.tc/111102 • 111102

10.22 • TBDhttp://cpa.tc/141077 • 141077

10.3 • MACPA Columbia Center http://cpa.tc/111139 • 111139A

11.19 • JHU - Montgomery, Rockvillehttp://cpa.tc/111181 • 111181

10.24 • JHU - Montgomery, Rockville http://cpa.tc/111180 • 111180

11.19 • Comfort Inn Conference, Bowie http://cpa.tc/111105 • 111105

1.4 • MACPA Towson Center http://cpa.tc/111127 • 111127A

11.8 • Sheraton Columbia Hotel http://cpa.tc/111104 • 111104

1.4 • Online Webcast, Internethttp://cpa.tc/17436 • 17W436

10.15 • Online Webcast, Internet http://cpa.tc/17416 • 17W416

11.12 • Dutch’s Daughter, Frederickhttp://cpa.tc/111186 • 111186

Self study texthttp://cpa.tc/735215


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A PRACTICAL GUIDE TO TRUSTS

AACC: PENSION UPDATE

CLOSELY HELD BUSINESS TAXATION: SMART STRATEGIES

THE ULTIMATE TAX RESEARCH COURSE

THE BEST ESTATE & FINANCIAL PLANNING TOPICS OF 2012

THE COMPLETE GUIDE TO THE PREPARATION OF FORM 1041

AICPA’s ANNUAL TAX UPDATE: CORPS & PASS-THROUGH

THE COMPLETE GUIDE TO PREPARING FORMS 706

1041 PREPARATION INTRODUCTION - WEBCAST

THE ULTIMATE TAX RESEARCH COURSE

2011 CORPORATE INCOME TAX RETURNS WORKSHOP

1041 PREPARATION LINE-BY-LINE - WEBCAST

AICPA’s ANNUAL TAX UPDATE: CORPS & PASS-THROUGH ENTITIES

1.11 • Mount Cont Studies Cntr, Frederick http://cpa.tc/111113 • 111113A

11.29 • MACPA Towson Centerhttp://cpa.tc/111119 • 111119

1.29 • Online Webcasthttp://cpa.tc/17423 • 17W423

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TAX CUTTING MOVES FOR INDIVIDUALS

INDIVIDUAL INCOME TAX UPDATE

INDIVIDUAL INCOME TAX UPDATE

core tax specialty tax

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11.12 • Dutch’s Daughter, Frederick http://cpa.tc/111186 • 111186



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AICPA’s ANNUAL FEDERAL TAX UPDATE

THE ULTIMATE TAX RESEARCH



1.4 • MACPA Towson Center http://cpa.tc/111127 • 11127A



12.17 • J. Kings (Kaufmann’s) Gambrillshttp://cpa.tc/141078 • 141078

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AICPA’s ANNUAL TAX UPDATE:CORPS & PASS-THROUGH ENTITIES

UNDERSTANDING THE REINSTATED FEDERAL TAX

AACC: FEDERAL TAX UPDATE

AICPA’s ANNUAL TAX UPDATE:CORPS & PASS-THROUGH ENTITIES

11.15 & 11.16 • Martin’s West, Baltimore http://cpa.tc/donfarmer2012indiv • 211000

CPE

16DON FARMER’S 2012 INDIV. INCOME TAX WORKSHOP

2012 INDIVIDUAL INCOME TAX WORKSHOP Don Farmer’s

11.15-16

Are you prepared for the upcoming tax season? Get in shape at

FAST TRACK B r o u g h t t o y o u b y C C H a Wol te rs K lower bus iness

1040

12.5-6 • Turf Valley, Ellicott Cityhttp://cpa.tc/1040dec • 211001

CPE

16MACPA 1040 FAST TRACK

1.8-9 • Mariott Hunt Valley Innhttp://cpa.tc/1040jan • 211003

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16MACPA 1040 FAST TRACK

11.2 • Martin’s West, Baltimore http://cpa.tc/donfarmer2012corp • 111000

11.20 • Crowne Plaza, Timonium http://cpa.tc/111134 • 111134A

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DON FARMER’s 2012 CORPORATE/BUSINESS INCOME

TAX UPDATE: PASS-THROUGHS, CORPS, PARTNERSHIPS, & LLCs

2012 CORPORATE/BUSINESS INCOME TAX WORKSHOP

Don Farmer’s

11.2

10.23 • Martin’s West, Baltimore http://cpa.tc/2012practitioner • 121010

CPE

082012 PRACTIONER’S CONFERENCE

YOU are not ALONE2012 Pract i t ioners’

Conference

12.7 • Martin’s West, Baltimore • 111001http://cpa.tc/donfarmer2012update

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08DON FARMER’s 2012 TAX UPDATE

2012 TAX UPDATEDon Farmer’s

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10.26 • Martin’s West, Baltimore http://cpa.tc/2012pfpconf • 121007

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Financial life is complicated.That’s why you, financial planner, are here.

11.7 • Martin’s West, Baltimorehttp://cpa.tc/121004 • 121004

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08ADVANCED TAX INSTITUTE - ESTATE PLANNING

2012 Advanced Tax InstituteMastering the Complex Port ions of Tax Law

lawyers CPAs

CPExpress - Select (On-Demand) Webcasts

LEGEND

MACPA TAXONOMYYOUR SINGLE SOURCE TAX EDUCATION SOLUTION

specialty tax

27th ADVANCED PERSONAL FINANCIAL PLANNING CONF

Financial life is complicated.

3.5 • Comfort Inn Conference, Bowiehttp://cpa.tc/111110 • 111110

9.28 • Dutch’s Daughter, Frederickhttp://cpa.tc/111146 • 111146A

1.3 • Dutch’s Daughter, Frederickhttp://cpa.tc/111130 • 111130A

11.26 • MACPA Columbia Centerhttp://cpa.tc/111137 • 111137A

3.6 • MACPA Towson Center, Towson http://cpa.tc/111112 • 111112

10.24 • JHU - Montgomery, Rockvillehttp://cpa.tc/111180 • 111180

1.29 • MACPA Towson Center, Towsonhttp://cpa.tc/111011 • 1110113.6 • Online Webcast, Internet

http://cpa.tc/17467 • 17W467

10.29 • MACPA Towson Center, Towsonhttp://cpa.tc/111142 • 111142A

12.13 • MACPA Towson Center, Towsonhttp://cpa.tc/111108 • 111108


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DELVING INTO THE TOP 12 ISSUES FOR PARTNERSHIPS, LLC & S-CORPS

LLC AND PARTNERSHIP TAXATION: BEYOND THE BASICS

FORM 990: MOVING BEYOND THE BASICS


THE BEST ESTATE AND FINANCIAL PLANNING TOPICS OF 2012

THE CHOICE OF ENTITY RIDDLE: KEY TAX & BUSINESS IMPLICATIONS

FORM 990: AICPA’S ANSWER TO UNLOCKING TAX COMPLEXITIES


BASIS/DISTRIBUTIONS FOR PASS-THROUGHS: AN IRS HOT SPOT

CHOICE OF BUSINESS ENTITY

THE CHOICE OF ENTITY RIDDLE: KEY TAX & BUSINESS IMPLICATIONS

2.20 • Webcast; Martin’s West, Baltimore http://cpa.tc/17485 • 17W485

3.5 • Comfort Inn Conference, Bowiehttp://cpa.tc/111110 • 111110

10.30 • MACPA Towson Centerhttp://cpa.tc/111144 • 111144A

3.6 • MACPA Towson Centerhttp://cpa.tc/111112 • 111112



10.3 • Clarion Conf Center, Hagerstown http://cpa.tc/111199 • 111199


10.22 • Hella’s Restaraunt in Millersvillehttp://cpa.tc/141077 • 141077

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MULTISTATE INCOME TAX: SIMPLIFYING THE COMPLEXITIES


MULTISTATE INCOME TAX: SIMPLIFYING THE COMPLEXITIES


EMPLOYEE BENEFIT & RETIREMENT PLANNING: DEFFERED COMP

LONG TERM CAREINSURANCE ISSUES

AACC: PENSION UPDATE



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ESTATE DOCUMENT WORKSHOP

ESTATE, FINANCIAL, & TAX PLAN-NING: NON-TRADITIONAL CLIENT

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08THE BEST ESTATE AND FINANCIAL PLANNING TOPICS OF 2012

10.23 • Martin’s West, Baltimore http://cpa.tc/2012practitioner • 121010

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082012 PRACTITIONER’S CONFERENCE

YOU are not ALONE2012 Pract i t ioners’

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ADVANCED TAX INSTITUTE - CURRENT TAX ISSUES

ADVANCED TAX INSTITUTE - STATE & LOCAL TAX ISSUES


lawyers CPAs


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08ADVANCED TAX INSTITUTE - REAL ESTATE AND PARTNERSHIPS

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08THE ULTIMATE TAX RESEARCH COURSE


SPECIALTY TAX CONT.

All of these programs and more advanced tax topics are available as on-site programs. Please contact Pam Devine at [email protected] for more information.

STATEMENT4

CHAIR’S COLUMNLEGISLATORS NEED A DOSE OF FINANCIAL LITERACY, TOO. CPAS CAN HELP.BY ANOOP N. MEHTA, CPA, CGMAVICE PRESIDENT AND CFO, SCIENCE SYSTEMS AND APPLICATIONS, INC.

CPAs from coast to coast have spent a great deal of time recently talking about the financial literacy – or lack thereof – of American investors.

The MACPA, the AICPA, and state CPA societies across the country have repeated the warnings – that children don’t know the value of a dollar, that working adults aren’t saving nearly enough for retirement, that consumers are piling up an alarming amount of personal debt. Time and again, we’ve called on CPAs, as trusted financial advisors, to spread a simple but powerful message: Live within your means. Pay down your debts. Save.

Consumers aren’t the only ones who need a crash course in finance. Politicians everywhere are struggling mightily when it comes to money management.

That’s the implication in a new report titled “The Financial State of the States.” Published by the Institute for Truth in Accounting (TruthInAccounting.org), the report casts an accountant’s trained eye on the financial statements of each state in the nation, and the results aren’t pretty. Forty-nine of our 50 states have balanced-budget amendments, and in spite of that, 46 states have dug themselves some pretty nasty financial holes.

The culprit, according to the report, are “outdated accounting policies” that allow states to shift the cost of current policies (like employees’ retirement benefits) to future state budgets.

“States are not properly accounting for these promised benefits over the long-term,” the report states. “They only focus on what is payable in the current year, so setting money aside to pay for future benefits is not required in the states’ budget planning. This pushes current costs onto to the future.”

The ITA prefers a method called “Full Accrual Calculations and Techniques” (or FACT) that “would require governors and legislatures to recognize expenses when incurred regardless of when they are paid.”

When viewed through the FACT lense, state financials get pretty ugly:

• Only six states have what the ITA calls a “taxpayer surplus” – that is, they have adequate surpluses available to pay their obligations. The rest operate under “taxpayer burdens” – the amount each taxpayer would have to pay back to the state in order for the state to break even.

• Maryland is the 11th worst state in the country, with a taxpayer burden of $17,300.

• The problem will only get worse. “States are not held to the same accounting standards as most businesses and publicly traded companies,” the report states. “Therefore, states do not have the proper tools to balance their budgets. In fact, every year most states go even deeper into debt.”

The logic is simple: When you incur an expense, you report it. I’m not sure when we lost sight of that basic truth, but kicking the can down the road like this is hurting us dearly.

It could hurt even more when 2013 comes around.

That’s when we’ll arrive at the so-called “fiscal cliff” – the deadline for reducing the nation’s budget deficit through a combination of tax increases and mandatory spending cuts. For states like Maryland, whose budget depends heavily on federal allocations, those federal spending cuts could be disastrous.

That outlook seems rosy when compared to the federal government’s finances. In a new video titled “What’s At Stake? A CPA’s Insights into the Federal Government’s Finances,” AICPA Chair Greg Anton says the most accurate picture of the United States’ financial condition is found not in the country’s budget, but in its financial statements. They reveal staggering deficits and future liabilities that imperil not only our financial well-being, but that of generations to come.

“We need to utilize some of the same principles in managing the U.S government as we do in managing today’s most successful businesses,” Anton says in the video. “... The AICPA is joining its voice with many who have called for a new fiscal accountability movement in this country. ... We call on everyone to join in a public dialogue to make this a national priority.”

You see where this is going, don’t you? Individual states and the federal government are facing unprecedented financial problems. They’ll be looking for any help they can get to clean up this mess.

Are you up to the task, CPAs?

Your expertise and business acumen are needed more now than ever to help achieve sound financial standings. The stakes are certainly higher than they’ve been in recent memory.

Really, who is better qualified than a CPA to raise awareness and protect the public’s interest by helping our elected officials straighten out this mess?

THE JOB BEGINS AT CPA DAY

Mark your calendars for Jan. 16 and make plans to join us in Annapolis for the 2013 edition of CPA Day. The more CPAs who are there, the stronger our collective voice becomes – and the more knowledge we can pass along to our elected officials.

Those attending will receive a free briefing on what CPAs need to know about MACPA advocacy, along with an update on the Maryland legislative and regulatory environment worth two free hours of CPE. Plus, you will have an opportunity to have lunch with your legislator.

Don’t miss the most important event of the MACPA’s year. Get details and register at MACPA.org/CPADay.

LEGISLATORS NEED A DOSE OF FINANCIAL LITERACY, TOO. CPAS CAN HELP.BY ANOOP N. MEHTA, CPA, CGMAVICE PRESIDENT AND CFO, SCIENCE SYSTEMS AND APPLICATIONS, INC.

Opportunity rarely knocks. Life isn’t that easy. Instead, it hides and waits. Our job is to find it and recognize it for what it is.

Those who do are rewarded handsomely.

As Exhibit A, consider Jeff Petka, a 31-year-old accountant with Atlanta-based energy giant Southern Co. In 2009, Petka was walking down a Southern Co. hallway with his supervisor, Bonnie Westbrook, when he caught sight of something familiar on a screen in a conference room.

“Hey, I know that,” he told Westbrook. “That’s Dragon Tag.”

Indeed, it was. Dragon Tag was an XBRL tagging and validation tool produced by Rivet Software. (The company has since replaced it with an updated version called the Crossfire Financial Reporting Platform.)

Petka had learned how to use Dragon Tag while studying XBRL as part of an accounting information systems (AIS) course taught by Ernest Capozzoli, Ph.D., at suburban Atlanta’s Kennesaw State University.

Petka’s XBRL knowledge paid off. He immediately gained a spot

on Southern Co.’s XBRL team, and when the team’s leader took another job in the company, the XBRL ball fell into Petka’s hands. He has been running with it ever since.

“I’ve taken over the XBRL side at Southern Co. and have helped it grow,” said Petka, who is working on earning his CPA. “(Knowing XBRL) has improved my career exponentially. It has given me a valuable niche in the company.”

‘SERIOUS DEFICIENCY OF XBRL-KNOWLEDGEABLE PEOPLE’XBRL, or extensible business reporting language, is not new. Supporters have been touting XBRL’s potential for years. After a three-year phase-in, the SEC now requires all U.S. public companies to file their financial reports using XBRL.

The SEC mandate has created a lot of extra work for public companies. XBRL tagging is complex (see sidebar, “What’s All the Fuss About XBRL?”) and, while a slew of software tools make it possible for non-tech gurus to apply the tagging, doing so properly requires knowledge of accounting standards, especially GAAP, in addition to understanding XBRL. It’s difficult to find professionals

proficient in both areas, creating opportunities for CPAs.

In early April, data from XBRL US, a spinoff of the AICPA that now consists of a consortium of organizations with an interest in XBRL, showed that more than 8,000 public companies had filed more than 30,000 XBRL submissions since the SEC’s mandate first went into effect in 2009.

Many public companies outsource their XBRL tagging duties. A group of businesses, known as filing agents, handle most of the outsourced XBRL tagging and filing, said Michelle Savage, vice president, communications for XBRL US.

One of these filing agents is Merrill Corp., a St. Paul, Minn.-based company that provides outsourced XBRL services to more than 700 clients. Mike Schlanger, a Merrill vice president who heads the company’s XBRL efforts, said that accountants who have XBRL experience on their resume have a competitive advantage when seeking jobs at public companies and at companies such as his.

“Every company that does XBRL filing employs accountants,” said Schlanger, and these companies

B Y B I L L S H E R I D A N A N D J E F F D R E W

STATEMENT6

THE FUTURE IS NOW: XBRL emerges as career nicheStudents, employers say knowledge of the data-tagging language provides an edge in the job market.

Editor’s note: The following article was originally published in the Journal of Accountancy, June 2012. Copyright American Institute of CPAs. All rights reserved. Reprinted with permission.

7OCTOBER 2012 SEE XBRL ON PAGE 10

are likely to flag any resume that lists XBRL knowledge or experience.

Schlanger, citing competitive concerns, would not release the number of accountants Merrill employs, but he did say that Merrill has on staff more CPAs than the vast majority of U.S. accounting firms. Of the accountants hired for Merrill’s XBRL team, only one had previous XBRL experience. The rest had to learn the language.

There are signs that XBRL education is slowly starting to spread. Michael Becker heads up the XBRL operation at Business Wire, which counts parent company Berkshire Hathaway, Pfizer, and Papa John’s among its 80 or so clients. Becker has nine accountants on his XBRL team. Two of his last three hires have had XBRL experience.

“Today, you are actually seeing accountants on the market who have XBRL expertise,” Becker said. “That’s a big difference.”

Still, XBRL remains a big opportunity for accounting students and even CPAs in the field.

“It’s worth someone to investigate (XBRL) and probably invest some time to gain some expertise because there is a serious deficiency of XBRL-knowledgeable people in the CPA world,” Schlanger said.

There are no clear numbers as to how many public companies are doing XBRL in-house and how many are outsourcing the work, according to XBRL US’s Savage. That’s because the XBRL documents submitted to the SEC say only which software tool was used to do the tagging, not who did the work.

Becker foresees public companies

increasingly taking the work in-house, but not in the near term. In the meantime, companies such as his will be keeping an eye out for XBRL-knowledgeable accountants, especially CPAs.

A COMPETITIVE ADVANTAGEXBRL education isn’t confined to the classroom.

Just ask Thomas Hood.

The Salisbury (Md.) University senior learned XBRL on the fly while helping the Maryland Association of CPAs (MACPA) become one of the first private, nonprofit groups in the nation to file its internal financial reports via the XBRL Global Ledger framework. Hood, son of MACPA CEO Tom Hood, volunteered to learn XBRL and tag the MACPA’s transactional information accordingly, and in 2011, the association published a white paper about its XBRL initiative in the hopes of helping other private organizations make the leap to XBRL.

Hood’s hands-on XBRL work with the MACPA helped him earn a position with the SC&H Group, an accounting and management- consulting firm in Sparks, Md.

For more on the MACPA’s XBRL experience, see “MACPA Project Serves as XBRL Case Study for Private Companies, Nonprofits” at http://cpa.tc/13m.

CHALLENGES AND OPPORTUNITIESAs the SEC mandate takes hold, better trained XBRL taggers and improved tools are helping to reduce errors. In addition, a recent XBRL US demonstration showed new data-mining tools that searched XBRL tags in SEC filings and, in under an hour, identified

$1.5 trillion in taxable foreign income that had not been taxed.

With XBRL’s potential as a technology beginning to be realized, educators are shoehorning XBRL into their accounting curricula with increasing frequency. At Salisbury University, where George F. Summers, Ph.D., has been teaching XBRL as part of his AIS course since 2009, the goal is twofold: keep the school’s accounting program on the cutting edge and give students a leg up in the marketplace.

“I don’t think a lot of accountants are using XBRL yet,” said Summers, an assistant professor in Salisbury’s Department of Accounting and Legal Studies, “and (our) students will be in a far better position to climb the ladder quickly, or at least be more comfortable grasping these changes.”

XBRL knowledge also could prove attractive to CPAs in the field who are looking for a competitive edge and a new challenge. In addition, a basic understanding of how XBRL works and what it can do could prove important for management accountants and other executives in a variety of organizations.

“(XBRL) is a disruptor in the education community from an accounting standpoint, but it goes well beyond accounting,” said Kennesaw State’s Capozzoli. “It’s a blend of activities that managers need to be aware of, too. I think managers need to understand what this means, and you can’t do that through abstraction or being three steps removed. You have to understand what the people in the organization have to do to create that filing in an XBRL format.”

The folks at Salisbury have embraced that idea. At about the same time that Summers began

incorporating XBRL into his class, Kathleen Wright, CPA, Ph.D., chair of Salisbury’s Information and Decision Sciences Department, introduced XBRL into her Global IT Management course as a way of exposing students to “the opportunities afforded globally via XBRL.”

“Since XBRL is a global phenomenon, I thought it would

be great to show (students) how technology can enable transparency,” Wright said. “This is a real global opportunity for students to learn some skills that will be valued around the world.”

The early signs are encouraging. Wright’s students are raising

eyebrows during job interviews simply by mentioning XBRL. “They’re the first students some of these interviewers have talked to who even know what XBRL is,” Wright said.

The Baltimore office of McGladrey & Pullen regularly recruits at Salisbury, offering full-time jobs to between five and six students each year, said John Muto, CPA, a manager in the accounting firm’s assurance practice. The students’ understanding of how XBRL works, while not the primary reason they receive job offers, is a factor in making the students attractive to McGladrey, Muto said.

Not every student immediately grasps XBRL’s relevance. On the day he introduces his students to XBRL, Summers typically sees two reactions. “It starts off positive. These kids have grown up in a cyberworld. Interactive technology is something they’re very much used to. They get it, and understand it, and appreciate it.”

The bubble bursts shortly thereafter, when the heavy lifting of tagging, documentation, and validation begins. “Eyes quickly start to glaze over,” Summers said with a laugh.

For some students, though, XBRL is a revelation.

Angela Baskerville, a mother of two young children who worked as an accountant to help pay for school, heard Wright speak about XBRL at Salisbury and immediately was hooked. She approached Wright and asked how she could learn more.

Wright put her in touch with XBRL expert Gianluca Garbellotto, who chairs the XBRL Global Ledger Work Group for XBRL International and founded Iphix LLC, a company that provides

XBRL-related consulting and training services. Baskerville joined Iphix in 2011 and has worked extensively with WikiAccounts and XBRL Convergence, applications that allow users to map their charts of accounts and trial balances to XBRL taxonomies (the set of definitions for XBRL tags) and generate XBRL GL instance documents. She also has helped create XBRL taxonomies, which she called “a highly educational experience.”

“Having worked in accounting, I am all too familiar with the inefficiency of data management and what Dr. Wright described in her lecture as ‘spreadsheet hell,’ ” Baskerville said. “I could immediately see the value in streamlining data management using XBRL, and especially XBRL GL. I also recognized that, regardless of whether or not organizations choose to use XBRL internally for data management, the SEC requirement for filing in XBRL format necessitates expertise in the area and, therefore, creates job opportunities.”

GET STARTEDThat type of response from students will be far more common going forward. XBRL isn’t a fringe technology anymore. It’s here to stay, and it’s revolutionizing how data is interpreted and shared. Students who get in on the ground floor have a decided advantage, but how do you get in on the ground floor?

The key is to get started, Petka and Hood said (see “XBRL Tips”). Knowing a thing or two about XBRL will give you a competitive advantage—for now. As XBRL takes hold and more people learn how to use it, that advantage will disappear. That means the best time to learn XBRL is as soon as you can. That’s what Petka did, and he believes he made a great career

XBRL TIPSWant to dip your toes into the XBRL pond? Here are some ways to get your feet wet:

• Get as much hands-on experience as possible. If you work for a company that does XBRL filings, volunteer to help the XBRL team with researching new tags or reviewing existing tags.

• View public company XBRL filings at sec.gov to see which tags companies use in their financial statements and to see how accounting concepts are represented in XBRL.

• Examine the taxonomies, or set of tag definitions, used by companies in various industries. You can view the U.S. GAAP taxonomy for free on fasb.org (direct link: tinyurl.com/3hdqgau). Fujitsu and other vendors offer free tools that allow academics to view and extend taxonomies.

• Explore XBRL Global Ledger by going to xbrl.org/gltaxonomy and studying some of the annotated instance documents.

Sources: Jeff Petka, Southern Co.; Thomas Hood, Salisbury (Md.) University.

XBRL CONT. FROM PAGE 7

move.“I feel I will always be employable with this experience,” he said. “I love Southern Co. and hope to retire here, but if something happened and I lost my job, I feel that I could find another job fairly quickly.”

Bill Sheridan is chief communications officer for the Maryland Association of CPAs. Jeff Drew is senior editor for the Journal of Accountancy.

XBRL translates long-form financial data, both from the tables and the footnotes in financial reports, into a format that computers can read and understand.

To best understand how XBRL works, think of it as another language that public companies and the CPAs assisting these companies must learn — at least enough to understand and vet it. That’s no small task, given the complexity of the XBRL taxonomy — the set of definitions for the “tags,” or descriptions, attached to each piece of data. The tags translate the raw information in financial reports into a computer-readable format.

Then there’s just the sheer amount of data. Each filing can contain tens of thousands of data elements, each of which must be XBRL-tagged. The tags establish the type of data and its relationship to other pieces of data. For example, XBRL tagging would allow computers to recognize net income and understand that it is produced by subtracting expenses from revenue.

The technology’s promised benefits — greater company control of data definitions, exponentially improved efficiency for analysts and investors — are just beginning to be realized. Improvements in XBRL creation and validation software are making it possible to develop tools that allow analysts, investors, and others to extract key information from public company data far faster than they could before.

For example, say that an analyst wants to compare intellectual property (IP) spending for the first quarter in the technology sector. Today, the analyst, or an assistant, would have to dig into each of the technology companies’ 10-Q financial filings for the first quarter, track down the IP spending number, and record it in an Excel file. It’s a process that could take hours. With XBRL and the SEC’s common XBRL taxonomy for GAAP, public companies would use the same tag for IP spending. An analyst could then run an XBRL search for that tag among technology sector companies and have the results compiled in a matter of seconds.

Mike Schlanger, head of the XBRL division for Merrill Corp., compares the current XBRL cycle with the one public companies went through when they were ordered to convert to filing financial and other statements through the EDGAR system.

“This was the paper-to-electronic conversion,” Schlanger said. “When that occurred, everyone was up in arms because someone moved the cheese. … Three to four years in, everyone (was) still grumbling, and the SEC opened up sec.gov, and this was (1996), when the web was really emerging, and all of the sudden everyone said, ‘Wow, this is great stuff. I can get every single public filer’s information at my fingertips.’

“XBRL is the same way. … 18 months to two years from now, when the tools are there and the data’s better and the quality’s better, everyone is going to look back and say, ‘How could we have lived without this?’”

What’s all the fuss about XBRL? — Jeff Drew

LEARN MORE ABOUT XBRLThe Business Learning Institute offers a number of XBRL-related programs, including:

• Introduction to XBRL: Revolutionizing Business Reporting: http://cpa.tc/1ct

• XBRL and the New Era in Financial Reporting: Moving Beyond Theory:

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If you have 10 or more employees, BLI programs can be brought directly to you . For more information, contact CLS Manager Pam Devine at [email protected] or (443) 632-2321.

The only constant these days is change.

That’s a cliche, sure, but it’s also the reality of doing business today. Technology, globalization, workforce demographics, succession planning, regulation, and the economy are conspiring with other forces to rapidly accelerate the rate of change today.

Keeping pace means that the very notion of leadership is changing as well. In an increasingly networked and social world, leadership has shifted from command-and-control structure to one that emphasizes communication and collaboration.

That shift is the focus of the MACPA’s Leadership Academy, a twice-yearly program that is giving a new wave of CPA leaders the skills they’ll need to help their clients and businesses successfully navigate an increasingly complex business environment.

Chief among those skills, says MACPA Executive Director Tom Hood, is collaboration.

“Some important new research, including the CPA Horizons 2025 Project and IBM’s Global CEO Study, has identified collaboration as the most important skill for leaders today,” said Hood. “We teach that as a core skill, both strategically and practically. Our goal is to teach future CPA leaders how to be collaborative leaders,

how to engage others to think with you.”

The results to date have been remarkable.

With the help of a facilitated strategic thinking program called Insights to Action, the Academy’s first two classes learned important new strengths-based leadership skills, then looked to the horizon and determined that CPAs must become more global-minded, proactive, future-focused, balanced, and tech-savvy to maintain their competitive edge.

Getting there, they say, will require a brand new set of skills and characteristics. Among them: Unity and flexibility, the ability to collaborate and crowdsource, a mind shift from history to possibility, and a new tech-focused mindset.

In short, it’s not your parents’ CPA profession.

“Leadership is more than just simply being the boss,” said one Leadership Academy participant. “It has become very interactive and is always evolving. It is learning how to communicate with employees, learning their strengths and weaknesses, and capitalizing on them.”

The hard part with any visioning project, of course, is that the future is a moving target. As soon as you

set your sights, some unforeseen shift – what leadership guru Emmanuel Gobillot would call “clear-air turbulence” -- knocks you and your best-laid plans for a loop.

Past Leadership Academy participants, though, took that into account. Part of their learning centered on the notion of strategic thinking, which they called “the ability to think strategically all of the time – to be nimble enough to alter your course in mid-stride to navigate an ever-changing landscape.”

That’s a skill that will serve them well as they climb the leadership ladder. So, too, will perhaps the most important skill they now possess in a changing and complex world -- the ability to constantly learn new skills.

“We had a great group of diverse young professionals representing organizations of all sizes from all corners of Maryland and beyond,” said Hood. “They proved that diverse thinking produces amazing results. They’re bright, energetic, willing to participate, and proved to be good, strategic thinkers. As I work with these young professionals, it’s obvious that the profession’s future is bright.”

Bill Sheridan is the MACPA’s chief communications officer. You can reach him at [email protected] or at 443-632-2314.

STATEMENT12

LEADERSHIP IS DEAD. LONG LIVE LEADERSHIP.THE KEYS TO SUCCESSFUL LEADERSHIP HAVE CHANGED. THE MACPA’S LEADERSHIP ACADEMY PROVIDES THEM.

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Leadership development is the single biggest challenge – and the biggest opportunity – facing organizations today. This two-and-a-half-day program will equip participants with the resources they need to forge relationships, expand their competencies, and empower them to become leaders.

Participants will learn to identify and leverage their own unique leadership strengths, discover what those strengths mean, and understand the implications of how they affect their personal lives, careers, and the CPA profession.

You’ll find further details and an application to attend at MACPA.org/Content/leadership-academy.aspx.

With the Financial Accounting Foundation’s decision in May to create a Private Company Council, it appears U.S. GAAP is on the road to being modified for private companies. The AICPA, most of the state CPA societies, many of America’s private companies, and thousands of other stakeholders now eagerly await changes in accounting standards where appropriate.

But what about the millions of private companies that do not need financial statements prepared in accordance with GAAP? How can they get less complexity, more relevance, and cost-benefits for their financial statements?

The AICPA is working to improve financial reporting for owner-managed, for-profit companies that do not need GAAP financial statements. A new self-contained financial reporting framework for small- and medium-sized entities (FRF for SMEs) is under development for release next year.

An exposure draft is expected this fall.

“In many cases, U.S. GAAP is unnecessary and, therefore, not the best solution for a small- or medium-size enterprise,” said MACPA Chief Executive Officer Tom Hood. “The new framework promises to be a straightforward, concise way to accurately convey a private company’s performance, what it owns and owes, and its cash flow.”

The new framework will be a blend of accrual income tax methods and traditional accounting methods and offer an additional basis for a non-GAAP accounting system (the others being cash, tax, regulatory and contractual). It will use only relevant financial reporting topics (no comprehensive income, for example) and simplified principles (fewer disclosure requirements and no complicated derivative accounting or stock compensation rules).

It is intended as a less complex and less costly option for businesses in any industry that don’t need to use U.S. GAAP, but want their financial statements prepared in a consistent, reliable manner and in accordance with a framework that has undergone public comment and professional scrutiny.

The framework is being developed by a working group of AICPA members and staff with years of experience serving small- to medium-size entities.

FRF for SMEs will be available for use as soon as it is issued in the first half of 2013. The Financial Accounting Foundation has publicly supported the AICPA project, calling it “important and complementary.”

Watch for an exposure draft of the framework this fall.

For more information, visit the AICPA’s Financial Reporting Center at aicpa.org/FRC.

STATEMENT16

NEWS & VIEWS

AICPA developing new financial reporting framework for small- and medium-size entities

AICPA SEEKS INPUT FROM CPAS ON NEW FRAMEWORKThe AICPA wants to gain insights from CPAs as it develops the financial reporting framework for small- and medium-size entities.

The AICPA is exploring CPAs’ awareness and use of non-GAAP accounting systems, the types of guidance they would want in implementing the new framework, and what resources would help them educate private company financial statement users about its benefits.

Respond to a brief online survey at aicpa.org/OCBOA-survey.

The survey will be open through 2012. Responses are anonymous.

NEWS & VIEWS

MBP&F TEAMS WITH BALTIMORE REC CENTERSEmployees with Mister, Burton, Palmisano and French, LLC, ventured to Carroll Park in Baltimore to conduct a soccer clinic and after-school activity for three Baltimore recreation centers – Ella Bailey, South Baltimore and James McHenry. The program is supported by a partnership between the recreation centers and the Lutherville Timonium Recreation Council Soccer Program (LTRC). More than 40 kids attend the program on a weekly basis in the fall. Standing from left are Jeff Jacobson, Michele Armstrong, Jordan Miller, Greg French, Donny Horensky, Frank Linkous, Leah Dawson, Brian Hellman, Steve Roenick, Jeanne Martin, and Karen Farinetti. Kneeling are Brian Shepley and Shawn Zeigler.

Being a CPA requires a commitment to lifelong learning, and that means more than simply complying with our state boards of accountancy licensing requirements or clicking a box to validate attendance in a webinar. It also extends beyond watching webcasts, self-study, or going to seminars and conferences in person.

The CPA Horizons 2025 report identifies lifelong learning as one of the 10 insights and directions of the accounting profession.

“Current educational framework must evolve at the same pace with the changing dynamics of business, government, and our profession,” the report states.

The new educational framework must be designed to develop pathways that reinforce and extend the learning experience, particularly in this complex and changeable business environment. Research shows that within 30 minutes of completing a course and not applying the new learning immediately, participants will have retained only 58 percent of the material. After 48 hours, the retention level drops to 33 percent; after three weeks, it drops below 10 percent.

The creation of collaborative learning communities will help extend the formal learning experience, increasing retention, and strengthening knowledge. This movement to collaborative learning communities mirrors

a current trend in business outlined in the book The Experience Economy. Consumers are looking for (and willing to pay for) transformational, life-changing experiences. Learning experiences can be a differentiator in order to receive value beyond commoditized training events.

We are living and working in a world where change is a constant. Collaborative learning experiences enable us to ensure that our learning exceeds the rate of change (or, as Tom Hood would say, L > C). Rather than just learning from your own reading and research, work assignments and job experiences, you can accelerate the learning process (and stay ahead of change) by collaborating with colleagues and peers on a continuous and structured basis. This involves planning to learn, asking great questions, listening and making connections, sharing openly, taking action, reflecting on your actions, and transferring your learning to other colleagues, all in real time. We are seeing the early stages of collaborative learning with the use of social media, but more structure and discipline can truly make CPAs lifelong learners.

“Transitioning to real-time learning will change the way CPAs learn and help them adopt and adapt quickly and knowledgeably to ever-changing circumstances,” the CPA Horizons 2025 report states. Real-time collaborative learning will provide smaller increments of education that are

relevant, more easily digested, and more rapidly implemented.

Collaborative learning communities can also reduce attention blindness, which is defined as “the basic feature of the human brain that, when we concentrate intensely on one task, causes us to miss just about everything else.” This complex, highly digital, interconnected world creates numerous opportunities and challenges that will be missed by those who do not share knowledge and experience.

The collective knowledge existing outside of the organization far exceeds the aggregate knowledge within the organization. As the KeySo Global Aggregate and Collective Knowledge Whitepaper from June 2011 states, “Those who don’t collaborate in the collective will lose knowledge of the current and future needs and wants of their customers. They will also be unprepared to meet threats of new innovations and entrants.”

A futuristic example of the benefits of a collaborative learning community is demonstrated in the following scenario:

Pepé Le Pew, Inc. (PLPI), a French company, purchased Spacely Space Sprockets, Inc. (SSSI) on Jan. 1, 2014. PLPI’s stock is traded on the NYSE Euronext exchange and their financial statements are prepared using international financial reporting standards (IFRS). SSSI has been instructed to convert their

STATEMENT18

The new CPE: Collaborative learning communitiesBY PETER A. MARGARITIS, CPA, CGMA, MACC, AND ROBERT DEAN, CPA, CHIEF LEARNING OFFICER

NEWS & VIEWSPROFESSIONAL DEVELOPMENT

accounting system from U.S. GAAP to IFRS by Dec. 31, 2014.

As IFRS is not mandated in the United States, how is SSSI going to effectively and efficiently convert their systems to IFRS?

If other U.S. subsidiaries of foreign parents that converted from U.S. GAAP to IFRS share best practices, a more streamlined and cost-effective implementation would occur. An IFRS collaborative learning community would help SSSI and those who are part of the community in a number of ways:1. Learning IFRS standards, interpretation, and guidance.

2. Increasing retention and knowledge of IFRS standards, interpretation, and guidance.

3. Sharing of best implementation practices between members.

4. Promoting discussion of implementation issues due to the issuance of new standards.

As identified in the CPA Horizons 2025 report, integration and collaboration are core competencies for CPAs, and “CPAs will need to build effective strategic alliances while working collaboratively to provide multidisciplinary solutions to complex problems.” Collaborative learning communities will become essential business tools that lessen attention blindness, reduce implementation costs, and save time. Participating in a collaborative learning community will be fun, exciting, and inspirational, leading to an increase in the collective knowledge of the entire community.

Footnote1. Davidson, Cathy, N., Collaborative

Learning for the Digital Age, The Chronicle Review, August 26, 2011

Peter A. Margaritis, CPA, CGMA, MAcc, is the CEO of IFRS Education and Training, LLC. IFRS Education and Training, LLC delivers high-quality IFRS programs to CPAs, accountants, and business leaders. He is a past chair of the Ohio Society of CPAs’ executive board of directors and an instructor with the Business Learning Institute.

Bob Dean, CPA, is a senior executive in learning and talent management. He has been a catalyst in aligning learning and talent development with business strategy for three major professional services firms and now works as a business innovation consultant to professional services organizations. Bob is also an instructor with the Business Learning Institute.

BY MICHAEL E. KITCES, MSFS. MTAX, CFP, CLU, CHFC

The end of qualified dividends for small business owners

With the looming “fiscal cliff” at the end of 2012 comes a wide range of tax increases that are scheduled to occur at the start of 2013.

One of the most dramatic is the treatment of dividends, which will nearly triple from a current maximum rate of 15 percent to a top rate of 43.4 percent (or higher when accounting for high-income phaseouts).

In the case of small business owners with closely-held C corporations, this presents a unique planning opportunity, because clients can actually control the timing of dividends, choosing to extract cash and profits from the business by the end of 2012 instead of waiting for 2013 and beyond. Given the magnitude of the scheduled tax increase, it might make sense to do so.

While some clients may adopt a wait-and-see approach until the election and potential end-of-year tax legislation, the reality is that it’s prudent to at least begin planning now, because getting this wrong for a business with $1 million in accumulated profits could cost the client a whopping $284,000 in lost taxes.

TECHNICAL RULESPrior to the implementation

of Jobs Growth and Tax Relief Reconciliation Act of 2003 (JGTRRA, also known as the second Bush tax cut), dividends were taxed as ordinary income,

in a manner similar to interest income from bonds. Accordingly, the dividend tax rate varied with the individual’s ordinary income tax brackets. With the passage of JGTRRA, new rules were implemented for certain “qualified dividends” that would be eligible for favorable tax treatment.

If dividends were qualified – which required that the business be a domestic C corporation (or, in some situations, a foreign corporation traded on a U.S. stock exchange) and that the stock be held for at least 60 days before / after the dividend date (90 days for preferred stocks) – the dividends were eligible to be taxed at the individual’s long-term capital gains tax rate, rather than the higher tax rate for ordinary income. When the rules were implemented in 2003, this immediately (and, in fact, retroactively to the beginning of that year) reduced the individual’s qualified dividend tax rate from his / her ordinary income tax bracket to either the 15 percent (or 5 percent for the bottom two tax brackets) long-term capital gains tax rates.

In addition, because the qualified dividend tax rate was tied directly to the long-term capital gains tax rate, subsequent changes to the latter rate affected the former, too. Since the 5 percent long-term capital gains tax rate for the bottom two tax brackets dropped to 0 percent in 2008, the qualified dividends tax rate moved down in sync.

The qualified dividend treatment was originally set to expire at the end of 2008 but was extended until 2010 (by the Tax Increase Prevention and Reconciliation Act of 2005) and then extended again through the end of 2012 (under the Tax Relief Act of 2010). If Congress does not act, the qualified dividend rules will lapse at the end of this year, reverting dividends back to ordinary income treatment.

OWNERS OF CLOSELY HELD BUSINESSES

While the shift in dividend tax treatment may affect some investor preferences for dividend-paying stocks, clients who are owners of closely held businesses have a unique tax planning opportunity in light of the scheduled lapse of qualified dividends. After all, a closely held business that is a C corporation is eligible for qualified dividend treatment, if it is, in fact, a C corporation, as the 60-day holding period requirement is easily met by what is typically a multi-year (or even multi-decade) holding period -- except, unlike stocks held in a portfolio, with a closely held business the client has some control over the timing of when dividends are paid.

Thus, for example, the owners of a closely held C corporation that has $1 million of accumulated earnings that could be held in the business or paid out as a dividend will face a maximum federal tax liability of $150,000 in 2012 on that dividends, and $434,000 in 2013 (given a top ordinary income

20 STATEMENT

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tax bracket of 39.6 percent, plus the new 3.8 percent Medicare unearned income contribution tax). The potential $284,000 difference (or more, when accounting for itemized deduction phaseouts for high-income individuals that also returns in 2013) represents a real loss in wealth for any business owners who ever hoped / intended to distribute the funds as a dividend to owners at some point down the road.

TIMING DIVIDENDS AROUND TAX LAW CHANGES

As a result of the huge differential in tax treatment between 2012 and 2013, there is a tremendous incentive and opportunity for business owners of closely held C corporations who can control the timing of dividends to make any available dividend distributions before the end of the year, rather than simply keeping the money inside the business to try to defer the impact of dividend taxation.

The reality is that while there is benefit to deferring tax payments as long as possible by keeping it inside the business, that benefit is dwarfed by a near tripling of the dividend tax rate. Mathematically, the affluent client who keeps $1 million of earnings inside the business to defer that $150,000 of dividend taxes (at today’s rates) would need to grow the money at 189 percent just to make up for the leap to a 43.4 percent top tax rate. Earning 189 percent of cumulative growth on cash in the business will probably be difficult; even earning a generous 1 percent money market yield, it would take 107 years to break even.

While the incentive is to extract cash out of the business as a dividend before the end of the year to avoid the tax increase, in some cases this may create a difficult challenge between balancing the desire of owners to save on dividend taxes and the needs of the business to keep cash for future business needs or contingencies. Clearly, extracting so much cash that the business itself has difficulties is not positive in the long run, although in at least some situations, the business owners could potentially contribute cash back to the business again at some point in the future (receiving an associated cost basis adjustment), if it became necessary.

Notwithstanding the delicate balance, though, the financial ramifications of leaving cash in the business to be distributed at much higher tax rates in the future makes it worthwhile to carefully consider just how much money really needs to remain in the business.

FUTURE TAX LAW CHANGESThe reality is that Congress

could intervene and change the law before the qualified dividend treatment expires; in fact, it has already extended qualified dividends twice, although the current fiscal environment clearly makes extending qualified dividends more difficult because of the impact it would have on government revenue.

In addition, given the election environment, it seems highly unlikely any tax laws extending qualified dividends could feasibly occur before a lame-duck session in December at best. As a result, many clients and planners are preparing for the possibility of

extracting cash out of the business now, but waiting until later in the year to actually pull the trigger.

On the other hand, it’s notable that there is a significant risk for increases in the dividend tax rate even if qualified dividend treatment is extended, due to the fact that long-term capital gains rates are scheduled to rise in 2013 (to which the taxation of qualified dividends is anchored). That means even the qualified dividend tax rates could still rise from 0 percent / 15 percent to 10 percent / 20 percent.

Furthermore, higher income individuals will also face the 3.8 percent Medicare unearned income tax on dividends as well in 2013, especially now that the health care legislation has been upheld by the Supreme Court. The return of the phaseout of itemized deductions and personal exemptions further increases the qualified dividend tax rate on high income earners.

Thus, even if qualified dividend treatment ultimately is extended, the top tax rate on such dividends would still rise from 15 percent to 23.8 percent (or even higher with phaseouts), which may be more than enough incentive for many businesses to consider distributing any available cash as a dividend.

Michael Kitces, MSFS, MTAX, CFP, CLU, ChFC, is a partner and the director of research for Pinnacle Advisory Group, a private wealth management firm located in Columbia, Md., that oversees approximately $1 billion of client assets. He is the publisher of the e-newsletter The Kitces Report and the blog “Nerd’s Eye View” through his website www.Kitces.com. Follow Kitces on Twitter at @MichaelKitces.

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FROM THE AICPA

Health care act brings opportunities for CPAs in business and industry

When President Obama signed the Patient Protection and Affordable Care Act (PPACA), he ushered in one of the most dramatic and controversial health care reform initiatives since the passage of Medicare more than 45 years ago.

In pursuit of its goal of addressing rising health care costs and provider access, the PPACA has raised the demand for specialized professional skills and knowledge as well as new internal business processes. Organizations need expert insights to understand legislative provisions and explain them to employees, as well as policies and procedures to ensure compliance with current and future requirements.

CPAs performing management accounting duties on behalf of business and industry have an opportunity to take on a leadership role within their organizations, guiding management as it navigates the way through the intricacies of PPACA legislation, and helping maintain smooth, continuous and successful operations.

Recognized by the new Chartered Global Management Accountant (CGMA) designation, created by the AICPA and the Chartered Institute of Management Accountants (CIMA), CPAs in business and industry can distinguish themselves as PPACA authorities through their extensive education, training and experience

in finance, management and regulatory affairs.

EXPANDED ROLE AND HEIGHTENED PROFILE

The far-reaching scope of the PPACA extends beyond health care providers and insurers to include organizations representing virtually every industry, size and geographic area. The PPACA’s broad application presents vast opportunities for CPA CGMAs to further improve operational efficiency and performance and showcase the full extent of their capabilities, value and contributions.

“Employee morale, productivity, recruitment and retention are only a few of the issues that are heavily impacted by an organization’s ability to successfully implement the new health care reform legislation,” said Paul Shillam, controller with Pacific Medical Centers. “CPA CGMAs’ combined financial and non-financial expertise and insights into workplace dynamics are guiding organizations to legislative compliance, a well-informed management team and an engaged workforce.”

Although the degree of the PPACA’s impact depends largely on the size of the employer, there are a number of key responsibilities that are uniquely suited to the expertise of CPA CGMAs and are in strong demand by managers at organizations across the country.

These responsibilities include the following:

IDENTIFY AND RESPOND TO ADDITIONAL COSTS

PPACA implementation has a number of penalty provisions that need to be identified and addressed. Management will need help to fully understand the complete range of possible penalties, explain the consequences of penalty-related decisions, and create strategies for avoiding and mitigating penalties whenever and wherever possible.

Included among PPACA provisions is the $2,000 per-person penalty that applies to large employers that fail to offer health care coverage to employees. Employers may make this decision for financial reasons: It may be less costly to pay the penalty than offer health care benefits, which, according to the Kaiser Family Foundation, average $4,508 for employee-only coverage and $10,044 for employee and family coverage. Other penalties include $3,000 that is incurred when an employee enrolls in a qualified health plan that allows a premium tax credit or cost-sharing reduction to the employee.

EVALUATE THE FULL IMPACT OF COVERAGE DECISIONS

CPAs in business and industry counsel their organizations on the bottom-line ramifications of failing to provide employees with

NEWS & VIEWSBUSINESS & INDUSTRY

STATEMENT24

health insurance coverage and help reach decisions that best serve the organization and its employees.

Ramifications may include increases in employee compensation to offset the expense employees will incur for private insurance and additional payroll taxes. Other consequences can include employee recruitment challenges, declines in employee retention and overall satisfaction, and damage to the organization’s brand and reputation.

ASSIST WITH PROCESS AND PROCEDURAL CHANGES

The PPACA includes a number of provisions that result in changes to existing systems and procedures that can be more successfully accomplished with CPA, CGMA guidance. For example, Section 9002 of the PPACA expands reporting requirements for employer-sponsored health care benefits on employees’ IRS Form W-2 at year-end. Human resource and payroll systems will need to be updated to capture the cost of employer-sponsored insurance benefits effective for calendar year 2011, and extended to 2012 by the IRS.

CONTRIBUTE TO HIRING, COMPENSATION AND BENEFITS DECISIONS

As implementation of PPACA moves forward, organizations need professional expertise in fully understanding the legislation’s impact on hiring decisions and compensation and benefits packages. Among the human resource responsibilities that are undergoing drastic changes

(and require close CPA CGMA involvement) are evaluating employer-sponsored insurance benefits; attracting employees; weighing the advantages and disadvantages of full-time, part-time, temporary and per-diem team members; and addressing potential changes to compensation structures.

ANSWER TAX QUESTIONSThe PPACA contains numerous

tax provisions that will impact individuals and businesses of all sizes. One impact that higher-income taxpayers are likely to notice is the 3.8 percent increased tax on investment income, which translates to an overall 18.8 percent tax on capital gains for 2013, versus 15 percent in 2012.

AICPA Tax Manager Kristin Esposito suggests taxpayers consult with their CPAs to determine whether they should sell assets or take other steps to minimize their liability.

“If income rates revert to pre-2001 levels in 2013,” Esposito cautioned, “there will be an even higher tax on any portion of investment income, e.g., interest and annuity payouts, that is taxed at individual income rates.”

KEEP LEADERSHIP UPDATED ON LEGISLATIVE CHANGES

Similar to other legislation of its magnitude, the PPACA must be viewed as a process rather than an event. In the years ahead, laws that have been passed may be modified and new laws will take effect, and the key to complete compliance is being prepared and proactive.

Upcoming laws may address issues ranging from clarifying the PPACA’s intent to being more specific with respect to compliance provisions, particularly those pertaining to enforcement and penalty provisions.

CGMAs play a dominant role in keeping the organization abreast of the latest legislative developments and explaining their impact on the organization and its members. From holding face-to-face meetings with the management team to preparing briefing reports for board members, CPA CGMAs are senior leaders’ valued resource for the news and information that help keep operations PPACA compliant and successful.

To learn more about the CGMA designation, visit cgma.org or MACPA.org.

25OCTOBER 2012

Richard J. Princinsky & Associates has been MACPA’s Preferred Provider of employee benefits and HR services for over 20 years and is ready to help you start making changes now that will position your company for the changing landscape of health care reform. For more information on a customized cost impact analysis, free to members for their company and clients, call 410-773-4300.

BY EDWARD E. SHARKEY, ESQ.

New JOBS bill opens door to crowdfunding for small business

The JOBS bill passed into law in April opens a new source of funding to small businesses and startups.

The bill allows companies to raise as much as $1 million each year through public “crowdfunding” without having to register a public offering.

The SEC is now working on the rules to implement the act. Those rules should be ready by early 2013.

Still, the broad parameters are already established. Businesses will be able to raise up to $1 million through public offerings to non-accredited investors. The expectation is that this will be accomplished through existing broker-dealers or approved “funding portals” that will register with the SEC.

With respect to disclosures, a company that wants to raise less than $100,000 will need to provide tax returns and financial statements certified by the CEO. For $100,000 to $499,000, the company’s financial statements will need to be reviewed by a public accountant. For $500,000 to $1 million, a company will need to provide audited financials.

Though the bill greatly reduces statutory protection for investors, it does limit their potential exposure. Investors with incomes of less than $100,000 will be limited to 5 percent of income or a $2,000 investment. Those who make more than $100,000 will be limited to 10 percent of income or $10,000.

The bill also raises the cap from 500 to 1,000 on the number of

shareholders a business may have before being required to register with the SEC. Businesses also are allowed to raise up to $50 million before starting the process of going public.

All of this is going to help reduce the cost and friction of bringing capital to small businesses and startups. It will not eliminate the legal and accounting costs. Issuers will need to prepare and file disclosure statements, including a description of the business and a business plan. In addition, issuers raising $100,000 or more will need a public accountant.

As the SEC formalizes its regulations, the details of this will take shape.

Edward E. Sharkey focuses on business law and litigation in Bethesda. He can be reached at [email protected] or www.sharkeylaw.com.

NEWS & VIEWSBUSINESS & INDUSTRY CONT.

New JOBS bill opens door to crowdfunding for small business

A new series for financial professionals in Business & Industry

Shape your organizat ion for better results .http://cpa.tc/QFLF

PERFORMANCE, PRODUCTIVITY AND PROFIT: CREATING THE HIGHER ENERGY ORGANIZATION Aug 23, 2012 // Greg Conderacci // Event ID: 171039

STRENGTHS-BASED LEADERSHIP FOR PERSONAL AND ORGANIZATIONAL PROSPERITY Nov 29, 2012 // Gretchen Pisano // Event ID: 171041

INSIGHTS FROM THE C-SUITE Feb 28, 2013 // Bob Tarola, CPA // Event ID: 171040

FROM TECHNICAL EXPERT TO FINANCIAL LEADERSHIPMay 14, 2013 // Alan Patterson // Event ID 171039

4 hours of CPE each quarter to share and learn with other experienced financial leaders.

AGENDA: 8-11 am – topical instruction, 11-12 noon – lunch and facilitated discussionLOCATION: Towson Training CenterPRICING: Members: $175/forum, $600/for all four // Non-Members: $225/forum, $800/for all four

QUARTERLY

LEADERS

FORUM

FINANCIAL

please join us to

Celebrate the Professionat the

Newly Licensed CPASwearing-In Ceremony

Thursday, November 1 | Event ID: 191030http://cpa.tc/2012celebration

Financial life is

complicated.

BY MAURICE OFFIT, CPA, ESQ.

Asset protection planning: Don’t leave home without it

We live in a world where there are too many lawyers and too many lawsuits. In fact, more lawsuits are filed in the United States than in all of the other countries of the world combined.

Therefore, it is not surprising that clients have a genuine interest in formulating a plan that will protect their assets from claims that could be filed against them.

Asset protection planning is the process by which a client’s assets are protected from the claims of potential creditors. Any planner who ignores asset protection planning has made an unwarranted assumption – namely, that the assets that the client owns today will be safe from the creditors of tomorrow. The sad fact of the matter is that if a claim arises and insurance coverage is either non-existent or insufficient, the client’s assets are at risk.

It is, therefore, incumbent for planners to recognize that asset protection planning is an integral part of the planning process. Any plan that fails to take asset protection planning into account may be flawed as even the best designed financial plan and estate plan is of no use and benefit if creditors are able to seize all of the client’s assets.

While asset protection planning is appropriate for any client who wants to be protected from claims of creditors, the following groups of clients have enhanced asset protection planning needs:

CLIENTS WHO HAVE ACCUMULATED SIGNIFICANT WEALTH, as wealth is often a target for unscrupulous litigation. Unfortunately, it’s easy for unscrupulous claimants to pursue litigation as:

• Attorneys can be engaged on a contingent fee basis. Unscrupulous claimants, therefore, don’t have to be concerned about the payment of substantial retainers, expensive hourly rates, or the outcome of the suit. (In a typical contingency fee arrangement, an attorney is only paid if the litigation is successful and the claim is paid.)

• The losing part in litigation is not generally responsible for the payment of the attorney’s fees incurred by the winning party. As a result, there’s no penalty for a claimant who files a suit of questionable merit.

• Punitive damages can be awarded. Unlike compensatory damages, punitive damages bear no relationship to the loss actually sustained by the claimant and consequently provide the claimant with the opportunity to recover an award that is well in excess of the loss than the claimant incurred.

CLIENTS WHO ARE EMPLOYED IN A PROFESSION THAT IS LIKELY TO PRODUCE CLAIMS.

Professional service providers (such as doctors, accountants and attorneys) have exposure

to liability for professional malpractice claims. While almost all professional service providers have malpractice insurance coverage, asset protection planning can provide supplemental protection from claims that exceed policy limits, or claims that are denied because of exclusions from coverage.

CLIENTS WHO SERVE AS FIDUCIARIES.

Fiduciaries (personal representatives of estates, trustees of trusts, guardians, and persons serving under powers of attorney) are frequently the target of litigation, but they rarely have insurance protection for the claims that are brought against them as fiduciary insurance coverage is difficult to obtain.

CLIENTS WHO SERVE ON A CORPORATE BOARD OF DIRECTORS

Stockholders of a corporation have the right to hold the corporation’s board of directors liable for mismanagement. While many corporations provide insurance coverage for their directors, there is an increasing concern that coverage may not be sufficient as stockholder claims (especially Sarbanes-Oxley claims) are on the rise.

CLIENTS WHO SELL THEIR CLOSELY HELD BUSINESSES TO REGIONAL OR NATIONAL BUYERS.Sellers of closely held businesses are customarily required to sign,

28 STATEMENT

NEWS & VIEWSPERSONAL FINANCIAL PLANNING

in an individual capacity, a sales agreement that contains pages of warranties of representations. Sellers can, therefore, be personally sued after closing by buyers who attribute their failure to achieve projections to a breach of the warranties and representations, rather than their failure to pay closer attention to the special relationships that the sellers maintained with their employees, customers and suppliers. If the buyers are regional or national in scope, the attorney’s fees that could be incurred by the sellers in defending a breach of warranty and representation claim could be prohibitive.

CLIENTS WHO CURRENTLY OWN, OR HAVE PREVIOUSLY OWNED, REAL ESTATE CONTAINING HAZARDOUS MATERIALS (SUCH AS LEAD PAINT) ARE SUED WITH REGULARITY. More than 400,000 homes were built in Baltimore city before 1978, when lead paint was

outlawed. Over the last 10 years, a staggering number of lead paint claims have been filed. To make things worse for the landlords of property that contain lead paint, the Court of Appeals of Maryland recently declared a law which limited landlord liability to be unconstitutional.

CLIENTS WHO ARE ABOUT TO GET MARRIED AND DON’T WANT TO ASK THEIR FIANCÉ TO SIGN A PRENUPTIAL AGREEMENT. Approximately one-half of all marriages end in divorce. Some clients, therefore, insist that a prenuptial agreement be signed before the marriage occurs. However, other clients prefer to avoid the hostility that often arises in negotiating the terms of a prenuptial and instead look to an asset protection plan for protection.

Asset protection plans are tailored to a client’s needs. The sophistication of the plan should be

based upon the client’s net worth and the likelihood that the client will encounter future claims.

But, for an asset protection plan to be as effective as possible, the plan should be implemented before the claim arises. Unfortunately, clients all too often turn to asset protection planning after the claim has arisen. By then, it may be too late to protect the assets. So the time to advise your clients on the need for asset protection planning is now.

Maurice Offit is a CPA and attorney who specializes in estate planning and asset protection planning. He is also one of the founders of the law firm of Offit Kurman, P.A., which has six offices throughout the mid-Atlantic region.

LEARN MORE AT THE 2012 ADVANCED PFP CONFERENCEMaurice Offit will be among the fea-tured speakers at the MACPA’s 2012 Personal Financial Planning Conference, slated for Oct. 26 at Martin’s West in Baltimore. For details and to register, visit cpa.tc/2012pfpconf

The 27th Annual Advanced Personal Financial Planning Conference Friday, October 26 | Martin’s West, Baltimore | http://cpa.tc/2012pfpconf

That’s why you, financial planner, are here.

Financial life is

complicated.

PERSONAL FINANCIAL PLANNING

Sponsored by:

STATEMENT30

IT security tops list of ‘Top Tech’ prioritiesAICPA INITIATIVE SPOTLIGHTS KEY OPPORTUNITIES FOR CPAS

Clients and employers turn to CPAs to deal with a wide variety of information technology issues, according to the 2012 AICPA Top Technology Initiatives Survey (http://cpa.tc/1dr).

The study, which found that CPAs regularly tackle IT matters as part of their day-to-day responsibilities, showcases the knowledge and foresight that CPAs bring to IT-related concerns. It also provides valuable insights into the critical issues that could pose challenges for CPAs and their clients or employers in the near term.

“CPAs play a vital role in helping organizations address the risk and opportunities associated with technology,” said MACPA Chief Executive Officer Tom Hood.

The tech-savvy CPAs who participated in the survey considered securing the IT environment to be the top technology priority for 2012, although they generally seemed confident that their organizations were equipped to address the issue.

Here is the complete list of top priorities identified in the survey, followed by percentages showing how many are confident or highly confident that their organizations or clients are handling these priorities effectively.

1. Securing the IT

environment: 62%2. Managing and retaining

data: 61%3. Managing risk and

compliance: 65%4. Ensuring privacy: 62%5. Leveraging emerging

technologies: 34%6. Managing system

implementation: 52%7. Enabling decision support

and managing performance: 46%

8. Governing and managing IT investment / spending: 56%

9. Preventing and responding to fraud: 60%

10. Managing vendors and service providers: 56%

Survey takers also characterized

the technology initiatives they believe will have the greatest impact in the coming year, with security concerns once again topping the list. The top three items were:

1. Information security2. Remote access3. Control and use of mobile

devices

These initiatives clearly share some areas of overlap. Increasing use of technology, including the proliferation of mobile devices that make remote access possible,

creates new risks to technology management.

“The ability to tap critical information on the go, virtually whenever you want, is changing the way CPAs do business,” said Anthony Pugliese, CPA, CGMA, CITP, the AICPA’s senior vice president of finance, operations and member value. “But it imposes new burdens, too.”

Survey respondents were generally optimistic that their organizations or their clients would be able to meet their technology goals for the coming year, whether that included information security, privacy or data management issues.

They did express concerns about potential data breaches caused by the loss of a smartphone, laptop, tablet or other mobile device. CPAs also questioned whether their organizations were well positioned to make the most of emerging technologies such as mobile devices and cloud computing or to have the resources to support new revenue streams from these innovations. CPAs clearly have the chance to offer organizations advice and solutions on how to address these issues.

Conducted early this year and overseen by the AICPA Information Technology Division, the 2012 survey is based on responses from 2,259 AICPA members who are interested in

NEWS & VIEWSHIGH TECH SOLUTIONS

31OCTOBER 2012

information technology. More than 40 percent are in public accounting firms, another third are in business and industry, and the remainder are in areas such as consulting or government. The majority are managers or higher in their organizations.

According to the AICPA’s CPA Horizons 2025 project, CPAs must “understand and leverage relevant technology in conjunction with core CPA competencies to deliver superior services.”

The AICPA Top Technology Initiatives Survey provides CPAs with valuable insights into timely technology concerns. Given CPAs’ proficiency in this area, they are well equipped to deliver the services that organizations need to address technology’s risks and benefits.

MORE ON TECHNOLOGY

Tech-related news, articles and resources are available on our Web site:www.macpa.org/Technology

HIGH TECH SOLUTIONS

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R. Frank Abel, CPA/CFF, CFE an auditor employed with the State of Maryland, was the keynote speaker at the recent conferring of degrees for the Forensic Studies Program of the School of Graduate and Professional Studies of Stevenson University. Abel was recently elected to serve as vice-chairman of the Ritchie-Jennings Scholarship Committee of the Association of Certified Fraud Examiners. He also serves as a member of the Accounting Advisory Board of the Franklin P. Perdue School of Business of Salisbury University.

Jerry E. Beard, CPA, a supervisor in Ellin & Tucker’s Tax Department in Bethesda, has been appointed chair of the MACPA’s State Tax Committee.

Christine W. Colburn, CPA, vice president of CPA Relationships at Payroll Network, was honored with special recognition for her years of service on the Greater Washington Society of Certified Public Accountants’ (GWSCPA) Board of Governors at the 89th Annual Meeting in June.

Diana Boyd DeWitt, CPA, a manager in Gross Mendelsohn’s audit and accounting department, was a trainer at the National Highway Institute’s “Using the AASHTO Audit Guide for the Auditing and Oversight of A/E Consultant Indirect Cost Rates” seminar on August 21-22 in Connecticut.

Gross, Mendelsohn & Associates is pleased to announce that Chaim Fine, CPA, CFP, was promoted to supervisor. Also, Jerry Housand and Samantha Pittman, both CPA Candidate members, were promoted to senior accountant positions, and Christopher Johns, a CPA Candidate member, was promoted to semi-senior accountant.

Stegman & Company is pleased to announce that Llewellyn “Lee” Gardner, CPA, has been promoted to tax manager, and Kimberly Spacek, CPA, has been promoted to audit manager.

David A. Goldner, CPA, CFP, CVA, managing partner at Gross Mendelsohn, presented “Taxes, succession and management thoughts for architecture firms,” on June 12 at a meeting of The American Institute of Architects (AIA) Potomac Valley.

Reznick Group announced that Tricia Griffis, CPA, an audit senior manager in the firm’s Baltimore office, has graduated from Leadership Frederick County, a nine month leadership program offered by

the Frederick County Chamber of Commerce.Debra J. Hale, CPA, MSA, of Stoy, Malone & Company, P.C., has been selected as one of just 36 CPAs under age 36 to participate in the American Institute of CPAs fourth annual Leadership

Academy in Durham, N.C. this fall. The AICPA selected the 36 attendees of the Leadership Academy from more than 90 candidates recommended by their employers, state CPA societies or both.

Susan P. Keller, CPA, a principal in the Tax Department at Ellin & Tucker, has recently been appointed to the Board of Directors of Santa Claus Anonymous. Santa Claus Anonymous is a volunteer, non-profit organization that raises money to provide Christmas presents to thousands of needy children in the Baltimore metropolitan area.

Ellin & Tucker is pleased to announce Jennifer LeSage, CPA, manager in the Audit, Accounting, and Consulting Department, has been named a SmartCPA by SmartCEO Magazine in the September 2012 issue.

Councilor, Buchanan & Mitchell, P.C. is proud to announce that Valeryia V. Mikharava, CPA, has been promoted to audit senior-in-charge.

Community Bank of Tri-County recently announced that Michael L. Middleton, CPA, chief executive officer and chairman of the Board, has been named 2012-2013 Chairman of the Maryland Bankers Association (MBA) Board of Directors.

Donald S. Miller, CPA, recently joined Ryan & Wetmore, PC, as a director at the Silver Spring location.

Richard E. Morris, CPA, MST, a senior vice president and director of Tax Services at Councilor, Buchanan & Mitchell, P.C., was elected as a member to Enterprise Worldwide’s Vision Group. EW Vision Group represents a select leadership group from member firms that assist the management team at EW in identifying the most valuable programs for the needs of its 110 firm members.

Bruce Myers, CPA, retired in July after 35 years of conducting hundreds of audits. Mr. Myers headed the Office of Legislative Audits for 15 years and, prior

34 STATEMENT

NEWS & VIEWSMEMBER NOTES

to that position, was Deputy Legislative Auditor for 10 years.

DeLeon & Stang is pleased to announce that Jeanie Price, MACPA Firm Administrator member and partner at DeLeon & Stang, has received her Accredited Administrator in Accounting Practice Management (AAAPM) certification from the Association of Accounting Administration (AAA).

DeLeon & Stang is proud to announce that Iddi Sandaly, CPA, a senior accountant at the firm, has recently been named as the president of The Association of Tanzanian Community

in the District of Columbia, Maryland and Virginia. Sandaly will serve a two year term as president.

DeLeon & Stang is pleased to announce the addition of Maria Sevilla, a CPA Candidate member, as a staff accountant to the tax/audit department.

The regional CPA and advisory firm of DeLeon & Stang is pleased to announce Rich Stang, CPA, ABV, PFS, has been selected to participate on AICPA’s National CPA Financial Planning Insights

Panel.Ellin & Tucker is pleased to announce Michael

Strauss, CPA, director in the Audit, Accounting, and Consulting Department, has been named a SmartCPA by SmartCEO Magazine in the September 2012 issue.

Gross, Mendelsohn & Associates named Ed Thompson, CPA, CFE, a partner in the firm. Thompson is the director of the firm’s Manufacturing & Wholesale Distribution Group and specializes in providing audit, tax and consulting services to family-owned businesses, including manufacturers, distributors and construction contractors.

James A. Tortorella, CPA, executive vice president of Councilor, Buchanan & Mitchell (CBM), has been selected as a “SmartCPA” by SmartCEO Magazine. SmartCEO recognizes the best and brightest Certified Public Accountants in the Greater Washington, D.C. area.

The PhD Project, an award-winning program to create a more diverse corporate America, announces that Project participant Dr. Jan Williams, CPA, was promoted to associate professor with tenure at the University of Baltimore.

MEMBER NOTES

DeLeon & Stang is pleased to announce the completion of the nationally recognized Corporate Fit Challenge in July. For six weeks, 13 team members participated under the coaching of Gene Sherman and Mary Hoagland from NXS Fitness in Frederick. The challenge motivated participants to eat more nutritiously, drink more water and become more active. Overall, the firm achieved a combined weight loss of 71 pounds and 55 inches.

Throughout the month of June, Dixon Hughes Goodman of Rockville paired up with Manna Food Center, a Gaithersburg based nonprofit organization

and the largest distributer of food to those in need in Montgomery County, for a canned food drive to help fight hunger in Metro DC area. Dixon Hughes Goodman donated more than 1.5 million pounds of food, collected during their Count the Cans food drive.

Gorfine, Schiller & Gardyn, P.A. sent volunteers to the International Book Bank warehouse in Baltimore on July 27. The volunteers sorted over 15,000 books during a four-hour time period. The International Book Bank increases literacy and advances education by procuring and donating books and other educational materials to developing countries.

Gross Mendelsohn was named a Marketing Excellence Awards finalist for its website by the American Marketing Association’s Baltimore Chapter. The firm recently overhauled its old site, opting for a results-driven website that is very unlike others in the accounting profession. The Marketing Excellence Awards are presented each year to an individual or organization that plans and implements the best marketing campaign with a regional component that can demonstrate the campaign’s success with

measurable results.Gross Mendelsohn was named one of the

largest CPA firms in the nation on INSIDE Public Accounting’s “IPA 200” list. This marks the third consecutive year that the firm has been named on the list.

Hertzbach & Company, P.A. has been selected by SmartCEO magazine as a 2012 SmartCEO 100 Best-Run Company. This prestigious accolade honors 100 companies that are leaders within their industries and have experienced consistent growth.

In June 2012, Hertzbach & Company, P.A.’s Volunteer Committee organized a group of volunteers to spend the day assisting Habitat for Humanity of the Chesapeake with building a house in Brooklyn. Part of the group built a fence, while the other volunteers built a temporary wall to support the ceiling of the home.

Payroll Network was honored with the Greater Washington Society of Certified Public Accountants’ (GWSCPA) Organizational Member of the Year Award at the society’s 89th Annual Meeting in June.

Reznick Group’s Baltimore office raised $14,000 during its 11th Annual Charity Golf Tournament at Rocky Point Golf Course in Towson. More than 120 friends and employees participated in the event, which raised money for The Anderson Children Education Fund, a private educational fund established on behalf of former Reznick Group employee Gary Anderson’s children. Anderson passed away in July 2011 after a courageous battle with esophageal cancer. He was a beloved former employee, spending 13 years of his professional career with Reznick, and he was also an avid golf player.

IN MEMORIAM

Stanley P. Snyder, CPA, a partner, chairman emeritus, and former president of Snyder Cohn, passed away on July 15, 2012. Mr. Snyder retired in April after a 60 year career at Snyder Cohn.

Ronald A. J. Wilson, CPA, founder of Wilson & Associates, passed away on June 30, 2012 at the age of 67.

NEWS & VIEWSFIRM NOTES

ANNE ARUNDEL COUNTYSTEVEN M. COOK, CPAPATRICIA A. FRENCH, CPARUSSELL K. HENRY, CPASEAN MCELWANEY, CPAJAY S. MILLER, CPACALVIN RICE, CPAJULIA M. VAN HORN, CPACAPITAL AREA CHAPTERBERNARD BETHKE, CPACATHERINE A. BOSS, CPAJORGE A. CHRISTIAN, CPASHARON P. COLLINS, CPAJOHN V. CUFF, CPAMOHAMMED DOKA, CPASHAWN ESKOW, CPADEBRA R. FOSTER, CPARAMAKRISHNAN GANESAN, CPAJAMES P. GERAGHTY, CPAMELISSA K. HALL, CPA

LAUREN L. HER-SCHMAN, CPATRINA O. LARSON, CPAIVY LIN, CPAERNEST D. MILLER, CPAVERONICA C. NDUM, CPANADEZHDA RABINOV-ICH, CPALOGAN E. RAUM, CPAJOHN J. RIZAS II, CPACLAUDIA W. SAGRE-DO, CPAANTONY R. SMITH, CPAKENNETH M. SMITH, CPAKEVIN M. STAFFORD, CPACHRISTOPHER G. WRAY, CPAMEI T. WU, CPAEDWARD T. WUEN-SCHELL JR., CPABETHANY ZHENG, CPACENTRAL MARY-LAND CHAPTERLEAH N. ABRAMS, CPASANDRA M. ALVAREZ, CPAKATHERINE L. BAX-TER, CPA

JENNIFER J. BEN-WARD, CPAJESSE A. BLUMBERG, CPABRETT M. BOWEN, CPAMARIA LYN F. BOW-ERS, CPAKENNETH E. CALLOW, CPATINA L. CARRINGTON, CPAJULIE N. CAVANA-UGH, CPAJEFF W. CHADWICK, CPACHARALAMBOS L. CHARALAMBOUS, CPAZACHARY A. COLE-MAN, CPAALEXANDRA M. DECKERT, CPAHENRY D. DELLUO-MO, CPANATALLIA M. DZIVA-KOVA, CPAANDREW F. EBY, CPABRETT L. ENDLER, CPALAURA FREITAG, CPAAMY GARLITZ, CPANANCY J. GERATY, CPAMOLLY B. GOLDMAN, CPA

CHARLES E. HARVEY, CPAPROF. KATHLEEN M. HOUSE-GANDY, CPAANDREA N. IMHOFF, CPADANIEL S. KATIBIAN, CPAMATTHEW J. KROPP, CPASHIRLEY A. LINDSEY, CPASHELLAE D. LOUDEN, CPADEBRA N. MAZZULLO, CPAELIZABETH A. MCPHERSON, CPASTEPHEN F. MORGAN, CPABRANDON D. MUEL-LER, CPATONIKA N. MYERS, CPACYRUS L. NELSON, CPADANIEL A. NEMEC, CPAJONATHAN NEUMAN, CPAERIC M. NISLOW, CPAROBERT A. PARRACK, CPATINA M. PEACHER, CPA

NAOMI A. PINSON, CPANICHOLAS V. REGESTER, CPAJAY S. RIDDER, CPAGREGORY S. RITTLER, CPAABBY R. ROWE, CPARONIT A. RUBIN, CPAKELLY SAVOCA, CPAHOWARD S. SCHERR, CPAPATRICK D. SHER-MAN, CPAMEIRA SIMANOWITZ, CPAJUSTIN T. SNYDER, CPAJUSTIN STAPPLER, CPAJENNIFER L. VITEL-KITES, CPARICHARD J. WAL-LACE, CPAJENINE K. WARNKE, CPALYNDA B. WELLEN, CPASUSAN V. WELLENER, CPALINDSEY WELSH, CPAKA LUN WONG, CPALEONARD J. YERMAL JR., CPA

EASTERN SHORE TODD A. SMITH, CPAMID-MARYLAND CHAPTERAMANDA E. HENCK, CPAMELISSA D. HILL, CPAMICHAEL T. MCINTYRE, CPACHARLES G. PALMER, CPAKAREN D. SEYMOUR, CPASOUTHERN MARYLANDJENNIFER L. POPES-CU, CPAOUT OF STATEBELEM BOUREIMA, CPAPAMELA J. BROWN, CPALISA GAINSBORG, CPAJEFFREY A. ROGERS, CPAPHYLYP WAGNER, CPAHAROLD ZASSEN-HAUS, CPA

WELCOME, NEW & REINSTATED MACPA MEMBERS!

WELCOME, NEW CPA CANDIDATE MEMBERS!

ANNE ARUNDEL COUNTY EMMANUEL Z. CHELLEHRICHARD DISTADNINOSHKA L. JUSTAMANTENICOLE MILLERANGUEL A. NAKOVANTHONY J. PELURAKEVIN S. POERACHEL M. RILEYNATALIYA A. TODOROVA

CAPITAL AREA CHAPTER ALVIN A. FINDLAYSHANELLE Y. HOPKINSALIREZA MOTAMENISERGE NTALU-MIAKUKILA

CENTRAL MARYLAND CHAPTERLOUIS G. HUTT IIILIBAN M. JAMAJAMES G. RING IIDEVIN T. WILLIAMS

EASTERN SHORE KAREN M. BURDDANIEL A. RILEY

MID-MARYLAND CHAPTERDEVIN L. RHOAD

SOUTHERN MARYLANDOLUKOLE B. MALOMO

OUT-OF-STATEDANIEL P. DALVANO

37OCTOBER 2012

FIRM NOTES MEMBER SERVICES

Upcoming EventsNYPN CPE CLASS & FALL HAPPY HOUR (151007 & 191033)When: Thursday, Oct. 25, 3:30-5:30 p.m., 5:30-8:30 p.m.Where: 901 Dulaney Valley Road, Towson, Suite 710 MACPA’s Towson classroom and Sheraton Towson

WELCOME TO THE PROFESSION, NEWLY LICENSED CPA SWEARING-IN CEREMONY AND RECEPTION (191030)When: Thursday, Nov. 1, 5:30-9 p.m.Where: Hilton Baltimore BWI Airport, Linthicum

MACPA’S HOLIDAY SPECTACULAR, HOSTED BY NYPNWhen: Wednesday, Dec. 5, 6-9 p.m.Where: The Engineers Club, Baltimore

MACPA’S FALL LEADERSHIP ACADEMYWhen: Dec. 4-6Where: Crowne Plaza, Timonium - See macpa.org for the app.For more information on these and all NYPN events, visit www.macpa.org/NYPN

Get to know our NYPN advisory board and find out first-hand what we’re all about:Chair: Jeff Klima, SC&H : [email protected] chair / chair-elect: Nick Hollander, L&H Business Consulting : [email protected] / treasurer: Debra Hale, Stoy, Malone & Company : [email protected] chair: Diana Scatliffe, Reznick Group : [email protected]

LEADERSHIP BOARD

NYPN is an organization committed to connecting new / young professionals to the MACPA, protecting the integrity of the profession, and helping new CPAs and CPA candidates achieve their goals. NYPN is a place where new CPA professionals can make contacts in the profession, get involved in the community and get the support they need to be successful. The requirements to be a part of NYPN are CPA candidates (working on or having achieved the 150-hour threshold) or current CPAs under the age of 40 and/or licensed for fewer than five years.

1. Camaraderie 6. Commitment

2. Insight 7. Charity

3. Professionalism 8. Community

4. Development 9. Responsibility

5. Growth 10. FUN!

On Aug. 28, the NYPN Committee met at the MACPA’s offices in Towson to discuss the top issues facing young professionals and to rev up excitement and new ideas for our coming year. The NYPN Board reached out to the committee to update its strategic plan and goals and listen to the members’ input. Thank you to all that attended! MACPA CEO Tom Hood wrote a CPA Success blog post about the event, Top 7 Issues Facing Young Professional and what we are doing about it.

Read it here: http://cpa.tc/1ef.

Our Summer Happy Hours in Baltimore and Bethesda were a big success. We were happy to have such a wonderful turnout. Let’s keep the momentum going for the fall! If you are ready to

get involved, you may choose to volunteer your time at one of the upcoming accounting fairs the MACPA is attending (contact [email protected]). There are multiple dates available at various Maryland colleges. Come make an impact on the career of a future CPA. Help answer general career questions and promote the MACPA and NYPN. We will also be helping out at Junior Achievement’s BizTown on Nov. 7.

Lastly, if you are interested in joining the NYPN Roadshow team, we are looking for presenters. If your company would like to request a Roadshow presentation, contact us at [email protected].

NYPN is on Facebook, Twitter, and Linkedin. Check us out today!

you’re invited what is NYPN?

get involved

TOP 10 REASONS TO GET INVOLVED:

Activities / Professional development chair: Stephen Hohne, Hertzbach & Company : [email protected] relations / outreach chair: Jennie Hammett, Gorfine, Schiller & Gardyn : [email protected] member: Eric Nigro, GSE Systems, Inc. : [email protected] member: Barrett Young, The Green Abacus : [email protected]

NEWS & VIEWSNYPN NEWS

NYPN NEWS 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, andis 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: 301-767-0670Email: [email protected]

41OCTOBER 2012

PRACTICES FOR SALE: Northwest Baltimore Suburb Tax practice - gross revenues $194K - well-established, quality practice with good fee structure, solid client base, and experienced staff in place. Baltimore-Washington Corridor CPA Practice - gross revenues $190K - profitable practice serving a high-quality client base and exceptionally strong fee structure. Turn-key opportunity with knowledgeable staff in place to assist in transition. For more information call 1-800-397-0249 or visit www.accountingpracticesales.com to see listing descriptions, inquire for details and register for free email updates.

QUALITY CPA FIRM WISHES TO ACQUIRE PRACTICE OR ACCOUNTS in Baltimore/Washington/Annapolis area, or possible association with retirement-minded practitioner. “Top Dollar Paid.” Reply in strictest confidence to (410) 539-7100, or File No. 63-87.

THINKING OF SELLING YOUR PRACTICE? Accounting Practice Sales is the leading marketer of accounting and tax practices in North America. We have a large pool of buyers, both individuals and firms, looking for practices now. We also have the experience needed to help you find the right fit for your firm and to negotiate the best price and terms. To learn about our risk-free and confidential services, call Bradley Holmes at 1-800-397-0249 or email [email protected].

PEER REVIEWED ROCKVILLE, MD CPA FIRM interested in acquiring practice or accounts in Washington metropolitan area, from retirement-minded sole practitioner. Reply in confidence to File no. 28-91.

mergers & acquisitions

WANT TO SUBMIT A CLASSIFIED AD?To submit a classified ad, please visit our Web site under advertising, www.macpa.org/content/20909.aspx, or contact Amy Moran at 443-632-2319, [email protected].

CONFIDENTIAL ADS: Replies to confidential ads will be addressed to the file number in care of:Amy Moran MACPA901 Dulaney Valley Road, Suite 710Towson, MD 21204

Properly addressed replies will be forwarded to the advertiser unopened. Replies that are not properly addressed will be opened only to determine contents and then forwarded to the advertiser.

office space

TOWSON: 2,087 square feet of second floor office space available for lease at 660 Kenilworth Drive (directly across from Towson BMW). Landlord will build out to suit tenant’s needs. Lease rate includes full utility and janitorial service. Attractive two-story professional building with convenient and ample free parking. On-site ownership by progressive mid-sized CPA firm offering possible collaboration with the right firm. Excellent access to I-695, I-83, Timonium and downtown Baltimore. To discuss or see, call David Miller at 410-321-9558.

OFFICE SPACE IN ROCKVILLE, MD 20850 CPA firm has private adjacent office space for rent Approx 1300 sq ft. - Reception rm + 4 other offices, two are windowed; Plenty of parking + deli in building & exercise room; Rent: $3300 per mo. Full service Class A Bldg at 1455 Research Blvd E-Mail: [email protected] or call Jeff at 301-762-7755. Floorplan can be viewed: http://i49.tinypic.com/5byybt.jpg.

SOLO PRACTITIONER WITH HEALTHCARE VALUATION AND TAX NICHE in Towson has extra space. Looking for tax practitioner to either join the practice or to share space. Send info to: [email protected], or call 410-494-9430.

CLASSIFIEDS

MARYLAND ASSOCIATION OF CERTIFIED PUBLIC ACCOUNTANTSDulaney Center II 901 Dulaney Valley Road, Suite 710Towson, MD 21204 | www.macpa.org410. 296.6250 | Fax: 410.296.8713

Join us for2013

7:30am - 1:30pm | Wednesday, January 16 | Event ID: 181000

macpa.org/cpaday

Documents

MACPA Statement // October 2012