September 2011

Life is filled with unexpected twists and turns, and many of them lead to unpleasant places.

CPE Link instructor Arthur Joseph Werner teaches a calm, rational approach when helping clients navigate life’s rocky road. It’s important for the practitioner to understand clearly — and thus help the client understand — the tax and non-tax issues related to divorce and what he calls other “bad situations.”

Personal bankruptcy, cancellation of debt, foreclosure, repossession and reporting of bad debts all require expert handling. Werner teaches just what planning considerations and potential problems practitioners should watch for.

In the often messy areas of personal relationships, there’s a lot to take into consideration. Werner points out that practitioners must be up on the latest surrounding support issues and tax treatment of back child support, as well as less conventional problems.

The odds are very good that practitioners will have more than a few clients facing such issues. According to the latest U.S. Census Bureau report, marriages in the country hit an all-time low in 2009, the most recent statistics available.

In some states there are more marriages but also more divorces. For example, in North Carolina 19 marriages took place for every 1,000 of the state’s women in 2009, compared to a rate of 17.6 marriages for women throughout the country as a whole.

However, women in North Carolina had a divorce rate of 10.3 percent per 1,000, up from the country’s overall 9.7 percent. Other Southern states also had relatively high marriage and divorce rates.

Couples who live together, or who do — or do not — have premarital agreements, present a completely separate set of tax and non-tax issues that must be managed. Also on the table are married versus unmarried tax rate comparisons, head of household status and marital property rules.

Werner is a shareholder in the lecture firm of Werner-Rocca Seminars. His areas of expertise include business, tax, financial and estate planning. He’s also an adjunct professor of taxation at Philadelphia University.


Many of our parents and grandparents had the security of knowing that when they hit their pre-determined retirement age they’d be handed a commemorative gift, feted with a cake, and comforted with a lifetime of retirement checks.

For most of us today, that’s not the case. People are living longer and working longer, and most companies have abandoned corporate retirement accounts, turning control — and responsibility — over retirement funds to each individual.

Baby boomers are now facing very high stakes. In years past financial experts created retirement plans that ended at age 85; today they’re looking ahead to 90 or 95 years. At 65, the average life expectancy in this country is another 12.4 years for women and 10.3 years for men.

CPE Link instructor Anthony J. Rocca
points out that practitioners need a solid understanding of the vast estate and financial planning issues affecting the baby boomer generation, including the mistakes this group often makes.

For example, while many of us fully expect to work well into the traditional retirement years, that kind of thinking can be a pitfall because it can keep baby boomers from making the planning choices they should. In addition, health factors need to be taken into consideration. We may feel like we can conquer the world at age 50, but unexpected health problems, overwork, lack of sleep — any number of factors — can change all that a decade later.

Long-term care costs can also wipe out a lifetime of savings. My parents, for example, lived frugally and saved with the zeal of people who were young and impressionable during the Great Depression. They paid off their home and had what seemed like a comfortable amount in savings, but before the end of their lives it had all been spent on assisted and long-term care.

Added to all the uncertainty is the volatility of domestic and foreign stock markets and ever-changing federal tax and health-care laws.

Rocca teaches in his upcoming webinar how practitioners should determine each individual’s needs, what the risk management issues are, the factors affecting estate and financial planning, and the changing workplace.

It’s been a long, tough haul for the construction industry. Extended slowdowns in home sales and construction have taken their toll, and other factors — banks’ debt exposure, stock market volatility, national and foreign politics — have just exacerbated the problem.

The good news is that in some places the industry may have hit bottom. In California’s Silicon Valley, for example, the most recent quarter’s growth resulting from new construction recorded a small improvement over historic lows in 2010.

CPA Link instructor Rebecca Ogle teaches on the latest, hottest topics on that front. For example, Ogle says, joint ventures and investments in entities other than subsidiaries will generally use one of three methods of accounting. Ogle teaches which of them — equity method, cost method, or fair value method — should be used when, and why.

An Accounting Standards Update was issued in June to “improve comparability, consistency and transparency,” Ogle says, and explains the other reasons as well.

She also teaches the fine points of multi-employer plans in which “two or more unrelated employers contribute, usually pursuant to one or more collective bargaining agreements.”

The construction industry touches nearly every other business realm, and its participants are numerous: contractors, commercial project owners, residential developers, subcontractors, architects and engineers, lenders and surety companies, to name a few.

With all the problems faced in day-to-day business dealings, it’s more important than ever to be on top of the very latest in accounting and tax changes for the construction industry.

Ogle is a principal in the construction and A/E team at Somerset CPAs. She provides clients with audit and tax expertise that she has gained during her 10 years in public accounting. She received the “Five Under 35” award from the Indiana CPA Society in 2006.

As individuals and businesses weigh whether to be PC- or Mac-based, one of the major issues is what crucial computer tools will still be functional, and how hard it will be to learn new ways of using them.

I’ve been through two company-wide PC-to-Mac conversions, with all their accompanying temper tantrums and confusion. The old familiar shortcut keys no longer worked, the pathways through systems that we could once do in our sleep now had unexpected twists and turns.

One by one, staff members had to re-learn basic applications in a new format.

One of those key business applications is QuickBooks, but CPE Link instructor Shelly Robbins says there’s no reason to fret when Mac-based clients come your way. Robbins says QuickBooks/Mac 2011 is “multi-user capable and much more user-friendly” than earlier ways of converting QuickBooks to Mac.

According to Robbins, businesses that often opt for Mac systems include:
* Architects and Engineers
* Graphic Designers, Interior Designers, Web Developers
* Small Retailers

Robbins’ newest project an online “Help Wanted” and Directory exclusively for people who need QuickBooks support. “There is so much work to be done in the constantly-moving and ever-expanding field of QuickBooks consulting that there is much to be gained when QuickBooks consultants team up together,” she says.

These are, of course, some differences between the Windows and Mac versions. There’s no accountant’s copy on Mac, for example, and there are limited third party app integrations. Payroll and banking are online, and functions such as progress invoicing are different.

But there’s no need for worry, Robbins says, and nothing to be afraid of. QuickBooks for Mac works just like any other Mac software and has “the ease of use you expect from QuickBooks, and the elegance and simplicity of the Mac.”

Robbins — who got her start as a bookkeeper with the first version of QuickBooks in DOS — is a QuickBooks training and troubleshooting expert. She is founder and president of Seattle-based The QuickSource.

Recent news reports revealed that in 2010, about $1 billion was spent to fight Medicare fraud. New malware has emerged that focuses on financial fraud. The former CEO of Brocade Communications has agreed to pay $845,000 to settle a fraud case with the SEC.

Everywhere we turn, fraud seems to be a major topic.

Just this week in the bank I felt — for a few moments — like a criminal when I presented an insurance check for deposit; because it had a surname on it that I haven’t used for many years I was escorted into a back office while a manager and a teller vetted it thoroughly and sternly. It was a bit embarrassing and stressful, but ultimately I was glad that they were so careful.

In business as well, controls have to be reviewed and heightened on a regular basis. CPE Link instructor Bonnie Nagayama says we should ask ourselves if our clients are doing everything they can to avoid fraud. She presents courses that outline internal controls and best practices for using QuickBooks to avoid the most common fraud schemes.

Internal controls, Nagayama says, include a “layered process that combines both accounting controls with administrative controls.” And despite the heightened awareness she advocates, the premise is that employees are basically honest.

She poses questions that every company should be asking, including how records are kept, what the process is to select and train personnel, whether duties are segregated, and where potential weaknesses are in the system.

Nagayama also offers a sample internal control letter and urges businesses to “know your employees and examine behavior changes,” and provides other tips that involve passwords, audit trails, updating the closing date monthly, and various backups.

Nagayama is a QuickBooks pro whose controller background and CPA experience provide a perfect blend to help bridge the gap between what a client wants and what the accountant needs. She has been a member of the QuickBooks Professional Advisor Program since its inception and is a member of the Intuit Speaker’s Bureau.

Financial statements can be satisfying, since they mark the culmination of lots of hard work. They can be dreaded, if we know they won’t say what we want. But a “personal passion”? That’s what they are if you’re CPA Link instructor Geni Whitehouse.

Whitehouse says that most people just don’t understand financial statements, and adds that it’s pretty depressing when “you spend your days creating something no one can understand — especially when it’s in balance and everything.”

Whitehouse’s advice is that you can’t solve the problem of financial statements that fall flat — whether they’re unintelligible, boring, or have minimal value — just by changing the medium.

For example, even if you update your presentation from a printed report to a glitzy PowerPoint, it “does nothing to improve the meaning or value of the information. Boring information on paper equals boring information on slides,” Whitehouse says.

There’s also a real danger (aside from the yawns) in presenting unintelligible data, she warns. Since many clients don’t understand the information we provide, many of our services can be undervalued and all that good, sensible advice we provide is ignored.

Whitehouse teaches practitioners how to present dynamic financial statements that also help their clients make better financial decisions.

She likens much of the information we provide to clients as a rearview mirror. In fact, she points out, what is wanted is a crystal ball.

There are some basic tools she advocates, including Excel add-ins, dashboards, reporting tools and interactive scorecards.

What the client wants to know, Whitehouse points out, is:

* What do I do tomorrow?
* Am I on the right track?
* How do I compare with others in my industry?
* How do I drive behaviors?

Whitehouse is a comedian, self-proclaimed nerd, former technology executive and CPA firm partner with a “burning love of all things techie.”

Despite our best efforts — our professional coddling, those gentle-reminders-turned-stern-warnings which seem to fall on deaf ears — there may always be some unrepentant tax delinquents on our client roster.

Unfortunately, their blasé attitude doesn’t let the financial professional off the hook, and the challenge becomes how to tug them toward the compliant path without tugging our hair out by the roots.

CPE Link instructor Eva Rosenberg points out to her clients that the problems associated with tax delinquency are huge and go beyond just hefty catch-up checks. They can include sleepless nights, emotional and physical problems, damaged relationships that can include divorce, and worse.

And tax delinquents are often who you’d least expect, she says. They can be “successful, high-power individuals” who are very conscious of how they appear to the world at large. They’re often “good looking, work out regularly, social animal” types of people.

These “rules don’t apply to me” folks may catch up and file every few years, pay huge fees, and then revert back, Rosenberg says, as they pursue their manic-depressive financial and life paths.

Their patterns often include making lots of money, then spending or losing it, then doing it again.

Rosenberg uses a 12-step “Tax Debt Anonymous” approach to help those people. The steps, although written somewhat tongue-in-cheek, are a solid, sensible approach to tax scofflaws.

They include a fearless moral inventory, the willingness to take responsibility, drawing up a list of all defaults past and present, and making direct amends.

Rosenberg, who is also known as “TaxMama,” has a wide range of live and self-study offerings. She bas been teaching Enrolled Agents Exam review courses for years, is a published author and popular speaker.