MSCPA is Going to the House of Lords!

Herriges Margaret 2014

Margaret Herriges, MSCPA Communications Director

by Margaret Herriges, CAE, IOM | MSCPA Communications Director

What’s on your bucket list? Travel, adventure, fabulous experiences? Me, too, but I recently received an invitation that is beyond what I would have ever had the audacity to add to my bucket list: I’ve been invited to represent the Montana Society of CPAs at the House of Lords.

Did you go back and reread that last sentence? Yes! I said THE House of Lords! You know, Parliament . . .  in ENGLAND . . . how crazy is that?! Now that I have your attention, let me elaborate.

Houses-of-Parliament

You may know that MSCPA has international members. These are accounting professionals who want/need the recognition of what they do in countries that might not use the CPA designation but who do the same kind of work and have a similar designation from their own country. MSCPA has had a 30+- year relationship with the Association of CPAs International to help these accountants. When an international accounting professional applies for MSCPA membership, they apply through the CPAs International and this organization vets them on our behalf.

The head of this organization is Dr. Anthony Edwards. Dr. Edwards is amazing: a consummate professional with a zest for life and a kindness that comes across international phone lines. He’s an Honorary Life member of MSCPA and has long charmed the staff whenever he calls, sharing what life and work is like in the U.K.

A short time ago I received a call from Dr. Edwards (always a treat). He explained that an auditor regulation bill was recently signed into law in the United Arab Emirates. THIS is a very big deal. In a relatively young country—just 45 years old—this is a sophisticated and progressive step to being a country that recognizes the value of an audit. As he explained, I was thinking he must want me to publish this information in our newsletter, eConnect, about this momentous event—a great idea! But he went on to tell me that CPAs International was planning on celebrating this accomplishment with the help of their sponsor, the Baroness Caroline Cox, from the House of Lords and they would like ME to attend! Seriously! A farmer’s daughter from rural Montana, invited to be the guest of the Baroness and the Association at the House of Lords on May 4th!

invitation_mrs-herriges-002.jpg

To say I was stunned doesn’t start to explain it! Thrilled, amazed, excited and so incredibly honored is a start. I’ll practice sounding British and say I am gob smacked by this opportunity! In addition to the invitation itself, I have also been asked to make a short speech at the event, explaining the relationship with the International Association and our 56 out-of-country members that make MSCPA a player in the global accounting market.

When I received this invitation my first thought was: I need a passport! I’ve never traveled outside the United States. My second thought: will the MSCPA Executive Committee give me permission to do this?  Luckily the passport process went quickly because the Executive Committee graciously said YES!

This will all happen on May 4th.  My husband, Chris, and I will leave Helena on May 1st for an adventure I would never have had the courage to even dream about. I will be sharing pictures and blogging about this experience on MontanaCPAs.org and I invite you to share the experience with me by subscribing to our blog, MontanaCPAs.org.

Members of the Montana Society of CPAs are an amazing group of people. I get to tell your story on a world stage and I am so incredibly honored for this privilege.

TEMP Queen ElizabethI’m now amending my bucket list. I think I need to be a little more courageous with my dreams moving forward. I mean, how am I going to top being a guest at the House of Lords? Perhaps my bucket list should include an audience with the Queen?

Cheerio!

Sing Along! It’s Harvest Time!

Margaret Herriges, MSCPA Communications Director

By Margaret Herriges, CAE, IOM |  Communications Director

I’m a farmer’s daughter and since I started working for MSCPA nearly 17 years ago, I’ve equated tax season with harvest: there’s a lot of work to be done and you only have so much time to do it.

Growing up, we’d take my dad a treat around 4:00 pm; something to sustain him and motivate him to keep working. It was that “pause that refreshes”. Similarly, each tax season we try to do something a little offbeat and fun for our members. It’s our way of supporting you and motivating you through this busy season. In the past we’ve done Tax Season Mixology and last year we found some pretty outrageous tax season memes. This year we’re going to help you burn that midnight oil with some groovy tunes. Welcome to our Tax Season Playlist!

We recruited MSCPA Board members to help us with this and each day at 4:00 we’ll be sharing a song, complete with the YouTube link, on our Facebook page.  We’d love to hear from you! Be sure to comment if you like the song, and tell us your favorites and we’ll add those to our play list, too. Occasionally there may even be a dedication from the MSCPA staff to our hard-working members!

You don’t have to be a CPA in tax to enjoy this. We dedicate these sound bytes to ALL our members!

So work hard and may your harvest be plentiful! We’ll be here for you to help in any way we can. And if you find yourself with one of our Tax Season Playlist songs stuck in your head . . . you are welcome!

In honor of the first day of tax season 2017, January 23rd, Don’t You Worry ‘Bout a Thing by Stevie Wonder, dedicated by President-Elect Josh Herbold.

Presidentially Speaking

It seems like yesterday that we were still all smiles after a terrific annual conference in

Brenda Byrnes, President

Brenda Byrnes
MSCPA President
2015 – 2016

Kalispell and Ann Deegan wrote her last Presidentially Speaking as she left office.  However time marches on and we find ourselves deep into my term as your new president.  I’m honored to serve as President and equally thrilled to pick up where Ann and so many terrific leaders have left off.

In 2013, Past President Paul Nisbet challenged us to consider our role for the next 100 years as an association for Montana CPAs.  The board began focusing on a continuity plan that invited our newer members of the profession to actively engage with the MSCPA and that allowed us to review what we do to provide benefits.  Then Past President Ann Deegan continued that endeavor as we developed the MSCPA strategic plan and implemented the first phase of strengthening the internal operations.

Now “no pressure” as we developed the course of action for the strategic plan to go forth this year… right?  Thankfully with the aid of our excellent staff, we saw where the path leads us.  This year is about involvement!  Involving you, our members, in making this strategic plan yours.

Before you mentally run away from the word involvement, hear me out.

Involvement in MSCPA has traditionally been through volunteering within our committee structure.  We read about other strategies and took a step back from this thinking.  You see, we completely understand how busy your schedule has been, is, and will be.   We respect that you have so many things vying for your attention and we know that the barriers that impact your involvement cannot typically be removed.  So we are proposing that we move away from meetings and conference calls that happen just because “it’s the second Tuesday of the month and we ALWAYS have a committee meeting on that day.” Instead let’s become more task oriented to accomplish the goals set forth in the strategic plan.  We are working to offer you additional, flexible alternatives to volunteering on a committee for a year or more.  We are asking you to contribute your time to a task or project with a known timeline, defined skills and targeted interests.

See here for a REAL example!  It is time to plan the 2016 CPE year.  The class selection and planning is a two-day commitment in Helena on Oct 1 and 2.  We are looking for additional volunteers to represent groups such as CPAs under age 35 who are willing to speak up about the types of training young professionals need, we are looking for input from auditors and government CPAs. Your involvement is for two days only.  No other commitment is required.  However, the impact of your involvement will be felt throughout the CPE year.

Over the course of this year we will be working with each of your current committees to inventory their ongoing projects and to see how many of their objectives could be accomplished in a new format.  This is by no means the death of committees.  In fact, I see this as a rebirth for some committees that will be free to chart their course for your benefit aided by the strategic plan.

While our Strategic Plan encompasses many projects and goals, the basic structure of it contains five main points under which our committees align:

  • Membership
    • Membership
    • Industry Group
    • Financial Reporting and Technical Standards (FRATS)
  • Sustainability
    • Future of Learning
    • Legacy Foundation
    • Audit Committee
    • Future of MSCPA
  • Connection
    • Local Chapters
    • Raising the BAR
  • Professional Excellence
    • Professional Development
    • Governmental Audit, Accounting and Financial Reporting
    • Annual Conference
    • Peer Review
    • Ethics
  • Advocacy
    • Federal Taxation
    • State Taxation
    • Legislative and Governmental Affairs

Each of our current committees fits under at least one of these strategic categories (as shown above).  Depending on the project, they may cross over into another area.

The Board, staff and I will be working with you over the course of the next year as we discuss this concept, listen to your ideas and concerns, and take inventory of what we all do.  Then our next step is to fine tune how we implement this new concept.  We’ll also be beefing up our website to accommodate a roster of volunteer opportunities and what time commitment is involved with each.   What the outcome of this phase looks like is yet to be determined but I am looking forward to working with you to create a new system that respects your capacity to volunteer, provides valuable volunteer opportunities and effectively enhances the value of your membership in MSCPA.

It’s an exciting time to be a CPA especially a MONTANA CPA. Thank you for the opportunity to serve as your President this year.

Tax Simplification Explained

George Olsen, MSCPA Legislative Committee Chair, has been asked to represent MSCPA’s tax simplification efforts on Montana Public Radio on Friday, October 17th, during the 5:30 pm newscast. The following is a copy of his speech.  Listen for George on your local public radio station on Friday between 5:30 – 6:00 pm.  And watch for more news about our tax simplification efforts throughout the upcoming months.
George Olsen, MSCPA Legislative Committee Chair

George Olsen, MSCPA Legislative Committee Chair

Hello. This is George Olsen, a Helena CPA, representing the Montana Society of Certified Public Accountants.

The Montana Society of CPAs believes that the current Montana income tax system is unnecessarily complicated and burdensome. Simplifying the process will enable Montana taxpayers to more easily comply with the law.  This may sound crazy from people in the tax preparation business but we think that simplification is good for all taxpayers.

During the 2013 session, the Legislature passed an income tax simplification bill that was ultimately vetoed by the Governor. At least one legislator has indicated that he will again introduce an income tax simplification bill in the upcoming session.

Two important elements of simplification in the bill are that the calculation of Montana income tax will begin with the taxable income from the Federal income tax return and the filing status will be the same as the Federal return. Montana taxpayers will no longer have to decide whether to file as married filing jointly or as married filing separately.  The proposal will include tax rate schedules for single taxpayers, married taxpayers filing jointly and taxpayers filing as head of household.  The rate schedules will be designed to eliminate the current advantage/necessity for married couples to file separately on Montana tax returns.   The bill that passed the 2013 Legislature had two tax rates of 4% and 6% compared to seven rates from 1% to 6.9% under current law.

Under current Montana law there are nearly 50 adjustments to Federal income for taxpayers to consider to arrive at Montana taxable income. This will be reduced to less than 10 potential adjustments.  The higher Federal personal exemption and standard deduction will help compensate for the loss of certain Montana adjustments to Federal taxable income.

Since the Montana income tax return will start with Federal taxable income the first four pages of the Montana return will be reduced to one page. Taxpayers will no longer have to fill out a separate schedule for Montana itemized deductions.  The Montana Department of Revenue had indicated that simplification will reduce the cost of administering the individual income tax law and will reduce the number of errors and resulting need to contact Montana taxpayers.

The bill in this upcoming session will again be designed to be revenue neutral so implementing it will not reduce overall tax revenue to the state. Because of the changes, some taxpayers may notice that their income tax changes slightly.  In any change like this, some taxpayers will pay a little more and some will pay a little less.

The legislature will consider which of the many tax credits currently in the law to retain and which will be eliminated. The proposed legislation contemplates keeping such credits like the popular endowment credit to encourage charitable giving.

The Montana Society of CPAs believes that the simplification will be good for Montana taxpayers and allow Montanans an easier way of fulfilling their tax filing obligation.

Our sincere thanks to George for sharing his time and expertise to make Montana’s accounting profession better and stronger.

8 Issues That Could Change the Way We Do Business in Montana

Jane Egan, MSCPA Executive Director

Jane Egan, MSCPA Executive Director

by Jane Egan, MSCPA Executive Director

The 2015 Legislative Session is shaping up to be one that will have a major impact on CPAs, your clients and your businesses. We need to start talking about it now, you and I, so we have the greatest chance at success.

The MSCPA State Taxation and Legislative Committees have compiled a list of bills we are already working on/monitoring and I’ll explain why they are important. MSCPA is proud to be your voice in the legislature but we need your help in three ways:

  1. Read and respond to the legislative updates we send.
    We need your input on proposed legislation and how it will affect you, your company or your clients’ businesses.
  2. Volunteer to run real life scenarios.
    If you think a bill will affect your business or that of a client’s, run the numbers and show us. It’s this type of information that has great impact on our elected officials.
  3. Support the MSCPA PAC
    Our PAC opens the door to legislators. By supporting the MSCPA PAC you can help ensure that your voice is heard and your interests represented at the Legislature. Please make your check payable to MSCPA PAC and mail to 1534 Ninth Ave, Helena, 59601 or charge to your credit card by calling Jean at 800.272.0307.

So let’s start with the first item above: please take a moment to review the bill list compiled below then let me know your thoughts.

Tax Simplification
As you are well aware, Montana’s tax system is one of the most complicated in the nation. Many legislators are very interested in working to simply our tax system. CPAs, as the tax experts, are an integral part of this process. Legislators rely on you to give them advice and we must be active participants to make sure Montana citizens—your clients and businesses—are represented in the final product.

Senator Bruce Tutvedt (Kalispell) will be re-introducing his bill from the 2013 session, SB 282. SB 282 passed the Senate and House but was vetoed by the Governor.

MSCPA’s Legislative and Governmental Affairs and State Taxation Committee members have been working with Sen. Tutvedt throughout the interim on his proposed bill. Committee members have been – and will continue to – visit chapters to talk about the provisions of the bill and get member feedback that we can share with the Senator.

Two Representatives, Kris Hansen (Havre) and Roy Hollandsworth (Brady) also introduced simplification bills in the 2013 session. We will work with them if they bring bills in the 2015 session.

Penalty and Interest Reform
The Revenue and Transportation Interim Committee has agreed to introduce a committee bill to reform Montana’s penalty and interest statutes to be fairer to taxpayers who comply with the law and to give DOR the ability to penalize the bad actors. The proposal will mirror Federal for the most part and would amend existing provisions and add new penalties for substantial underpayment of tax and for filing a fraudulent or frivolous return.

Exempt CPAs from Private Investigator License
CPAs who perform forensic accounting work in Montana are currently required to have a private investigator license.
Current law allows many exemptions including attorneys, legal intern, paralegals, law students, collection agencies and more. This bill, instigated by MSCPA, would include CPAs in the long list of exemptions from the licensing requirement.

Two-Tier to One-Tier Licensing for CPAs
Currently, Montana is one of approximately six states that have a two-tier licensing system for CPAs. The first tier you obtain the necessary education, pass the exam, take the ethics test and receive your certificate. (You cannot practice as a CPA with your certificate only). The second tier you complete the necessary experience requirement and apply for and obtain a license or permit to practice.

The two-tier system if very confusing for the public and for some CPAs. The Montana Board of Public Accountants will be introducing legislation to change to a one-tier system. CPAs will meet all the requirements (education, exam and experience) and apply for and obtain a license or permit to practice.

Enterprise Funding for the Board of Public Accountants
Our Montana Board of Public Accountants, housed in the Department of Labor, is currently funded by appropriation via the Legislature. MSCPA may instigate legislation to change the funding for the Board to enterprise funding. Enterprise funding would give the Board more oversight and greater participation in the funding of the Board activities using the funds they collect from licensing and renewal fees.

In 2008 a US Department of Treasury Advisory Committee on the Auditing Profession reported that “greater independence of state boards of accountancy would enhance their regulatory effectiveness. The Committee recommends that …states evaluate and develop means to make their respective state boards of accountancy more operationally and financially independent of outside influences.” We believe enterprise funding will advance the goal of making boards more financially independent.

Pass Through Entity Reporting
MSCPA members have been meeting with the Department of Revenue for several years to work on pass through entity reporting for non-residents. DOR will propose legislation that will eliminate the consent agreement option which would eliminate the PT-AGR and PT-STM forms. This would leave the pass through with two options: withholding or filing a composite return.

Audit Threshold
Currently the Montana law regarding the audit threshold is tied to Federal. The Federal threshold will increase from $500,000 to $750,000 for fiscal years beginning on or after 1/1/2015. The Department of Administration and the Montana Association of Counties (MACo) are interested in decoupling the Montana law from the federal requirement and inserting $500,000 as the fixed amount in the Montana code. MSCPA’s Governmental Accounting and Auditing Committee support the change.

Tax Credits
Rep. Roy Hollandsworth mentioned during the September Revenue and Transportation Interim Committee that he would be bringing a tax credit bill during the 2015 session. No specifics yet but it might be a bill that puts a sunset on all credits.

In addition to these specific bills, there are 377 bill draft requests listed on the LAWS website. Of those, 10 are probably of interest to us by reading the titles. Once the election has occurred and legislators know they will be serving, the draft requests will increase dramatically.

MSCPA is the accounting profession’s voice in the legislature.  We will track the bills we know will affect you, your clients and your companies.  We will be monitoring legislation, going to hearings and standing up for the accounting profession and Montana businesses.  But nothing is more important than your voice to your local legislators.  If legislators don’t hear from business professionals on tax and business issues where will they get their information?  Your voice, your expertise and your involvement are crucial.

So please:

  1. Read and respond to the legislative updates.
    Published in weekly issues of eConnect, emailed directly to you and/or posted on our website and social media sites. If we ask you to talk to your legislator, please take a moment out of your business schedule and tell them why an issue is important to you.
  2. Volunteer to run real life scenarios.
    Let us know how those numbers stack up for businesses and individuals. Let your legislators know why it matters.
  3. Support the MSCPA PAC
    Your donation gives power to our voice, and MSCPA’s voice is the voice of the accounting profession in Montana. Please remember—donations to PACs must come from individuals; they cannot come from your companies. We rely on your personal contributions.

We’ll be publishing video updates throughout this fall and giving you up-to-the-minute reports once the session begins in January. Technology makes participation easier than ever. You can watch or listen to floor session and committee hearings live over the internet, or watch and listen to archived broadcasts of previous floor sessions and committees. We also urge you to participate in our toll-free conference calls, every Monday at 7:00 a.m. throughout the session.

If you have questions or comments I want to hear from you. Please call 800.272.0307 or email Jane@mscpa.org.

Raising the Bar

By Hillary Rens, Chair

Greetings in this fresh new year! Your MSCPA Raising the BAR team is progressing nicely toward completion of our first year goals.

In our previous article Megan Walsh described our commitment to add younger voices to the MSCPA Board. We have accomplished this mission electing a non-voting, student advisory member. Please join us in congratulating Allison Berry of the University of Montana as she embarks on this new journey. Allison is a stellar representative of the future generation of CPAs. She intends to remain a Montana CPA and has internships scheduled with both JCCS and Eide Bailly. We are excited to have Allison’s voice on the MSCPA Board and know that she will make our team proud.

Our team has also successfully included members under age 35 on to the Annual Planning Committee. Sarah Day of Bozeman and Dan Keslin of Bozeman are the newest representatives to lend our young perspective to the committee. Thanks to Galusha, Higgins, & Galusha for allowing your staff to make this valuable commitment. Committee participation opportunities we currently are recruiting for include:

  • Federal Taxation, and
  • Government Audit Accounting Financial Reporting Committees.

If you are interested in learning more about these committees, please contact MSCPA at 800.272.0307.

Another BAR team initiative you may be interested in is the Leadership Development Program, created and championed by Anna Stitt of Anderson ZurMuehlen (Helena). A tentative kick-off of the program is planned for summer 2014. If you have a bright star in your organization this is the program to help develop them! It’s being designed specifically for CPAs on the path to long-term career growth and success. We will be recruiting participants in the near future.

If you have any questions or thoughts for the Raising the BAR committee, please feel free to contact me at hrens@stockmanbank.com or 406.234.8511. We look forward to your participation and continued support.