AI Won’t Replace Auditors

Artist concept of an AI-based neuronHow human-centric AI will help.

By Hitendra R. Patil and Eli Fathi

Artificial intelligence (AI) is set to transform many professions. As AI shifts from news and hype, it will significantly change how people work in their jobs.

MORE: How to Be Ready for Real Artificial Intelligence | How Accountants Can Ride the Artificial Intelligence Wave | Automation Makes It Easier for Accountants to Offer Cybersecurity | The Why, What and How of Cybersecurity for Accountants  | Blockchain: What You Need to Know Now | The What, Why and How of Artificial Intelligence for Accountants | The Client of the Future | The Rise of the Robot Accountant: Opportunity or Threat?
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The internet and cloud technologies transformed the workplace. Similarly, AI will refine, reshape and even replace many of the tasks we do every day.
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A DeSoto at the Core of the IRS

Technician checking something at data centerThe TAS makes 3 recommendations.

By CPA Trendlines Research

The Internal Revenue Service runs a pretty good business. For every dollar invested in its budget, it rakes in $300 in federal revenue, an annual total of $3.5 trillion on a budget of $11.43 billion.

MORE: What’s the Real Impact of IRS Audits? | Tough Lessons from Tax Season | Data Divers Profile Taxpayer Filing Styles | Hello, IRS? Anybody Home? | Wanna Change The Tax World? | The Big Free-File Flop | The Demise of Schedule A? | Survey: Busy Season Goes Sour | Lessons Learned: How the Federal Shutdown Hit Busy Season 2019
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How odd, then, to find that the brains of the operation is a computer system that dates back to about 1960.
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What’s the Real Impact of IRS Audits?

Blue audit button on keyboardThree types, including one that some taxpayers don't recognize as an audit.

By CPA Trendlines Research

According to Harper’s Magazine, more than half of all Americans would rather be mugged than audited by the IRS. And many Americans don’t see much of a difference between the two events.

MORE: Why Shouldn’t All Tax Practitioners Need Licenses? | Data Divers Profile Taxpayer Filing Styles | Salary Survey Shows Pay for Tax Professionals | Fixing the Tax System: Accountants Sound Off | 2 Ways the EITC Error Rate Is High
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And that’s a problem. Because fear and loathing are not conducive to voluntary compliance.
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Why Shouldn’t All Tax Practitioners Need Licenses?

Data chart

Does a 90% error rate alarm anyone?

By CPA Trendlines Research

America needs tax preparers. Without them … well, it’s hard to imagine how people would calculate any more than the most rudimentary returns.

MORE: Data Divers Profile Taxpayer Filing Styles | Who’d Like a Friend in the IRS? | Wanna Change The Tax World? | The Big Free-File Flop | Survey: Busy Season Goes Sour | Lessons Learned: How the Federal Shutdown Hit Busy Season 2019 | Taxpayer Advocate Slams Congress over Funding
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The funding of the government would fall to a fraction of what is needed to sustain the nation. Tax preparers are an essential link between the government and those who fund it.
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Data Divers Profile Taxpayer Filing Styles

Understanding retail, software & online tax service users.

By CPA Trendlines

With options like retail walk-in tax prep, software services, or online filing, how do taxpayers decide? The data scientists at the consumer research agency Exponential.com dove into the data to uncover the factors that may make someone more (+%) or less (- %) likely to utilize one of three common filing methods. READ MORE →

Salary Survey Shows Pay for Tax Professionals

Senior tax accountant averages $99k. More: City-by-city details.

By CPA Trendlines

Tax professionals know just about every detail of their clients' lives, but how much do tax professionals earn?

Korn Ferry, the executive recruiters, think they know. And they're spilling the beans.

Using what they call the world's largest such database, Korn Ferry pegs the U.S. national average of tax professional annual salaries at: READ MORE →

Fixing the Tax System: Accountants Sound Off

Join the survey. Get the results.Survey: Overhauling taxes was suggested.

You can do something. Join thousands of other CPAs, Enrolled Agents, financial planners and other tax practitioners in contributing opinions and ideas to the Busy Season Barometer. Let your voice be heard. Join the Survey; Get the Results

By CPA Trendlines Research

Respondents to the CPA Trendlines Busy Season Barometer seemed a little optimistic earlier this year, but as the season staggers into April, tax practitioners are having second thoughts. Suddenly, increasingly, the season looks bleak. Now more and more respondents foresee a downturn in revenue and profit. Fewer foresee a better year.

Cooper

MORE BUSY SEASON: Who’d Like a Friend in the IRS? | Hello, IRS? Anybody Home? | Is the IRS about to Get Beefed Up?   |  Tax Season Funnies: April Fool Is When?  |  Wanna Change the Tax World?   |  How the IRS Hides Its Legal Decisions  |  Tax Season 2019 Serves Up a Taste of the Future  |  The Biggest Reason Fraudsters Run Rings around the IRS  |  The IRS Free-File Flop  |  The Demise of Schedule A?  |   Tammy’s Tale of Tax Season Tardiness  |  How Effective Project Management Makes Your Life Easier  |  Survey: Busy Season Goes Sour  | The IRS Mess: Taxpayer’s Roadmap is a Plumber’s Nightmare

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Many blame the tax system in general and the IRS in particular. It all boils down to politics. Chris Cooper, a certified financial planner in San Diego, says.“Enact a flat tax or a VAT, and eliminate taxing income and investments. Then do away with the IRS.” READ MORE →

2 Ways the EITC Error Rate Is High

Line graph
Source: National Taxpayer Advocate Annual Report to Congress 2018 [click for larger image]
And 6 contributing factors.

By CPA Trendlines Research

The Earned Income Tax Credit is considered one of the most efficient federal programs for sustaining people with inadequate income. Part of the EITC’s efficiency results from the lack of an intermediary checking the qualifications of those who receive it.

MORE: Who’d Like a Friend in the IRS? | Hello, IRS? Anybody Home? | Tax Season 2019 Serves Up a Taste of the Future | The Demise of Schedule A? | Tax Refund Fury Roils Busy Season
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The tax return itself is the application for EITC. There is no other process, no pre-return vetting, no social workers. The closest thing to an intermediary is the tax preparer who makes sure the correct income is reported and the correct forms filled out.
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SIX-MINUTE SURVEY: Top Business Strategies for After Busy Season

After Busy Season, which STRATEGIC ACTIVITY will be your TOP PRIORITY?

Check one to launch the survey and get the results.

b. Focus on marketing and getting new business

c. Learning from Busy Season '19

d. Investing in new technology

e. Adding, cutting, or upgrading staff

f. Adjusting pricing strategies & billing rates

g. Changing jobs or getting a promotion

h. Fire some clients

i. Other

Yes, the survey should take only six minutes. (We timed it.)
And you'll be the first to get the special topline executive summary, just for participating. 
As always, confidentiality assured.

The Five Rules of Smart Tech

How the best managing partners stay on top of technology.

By Marc Rosenberg
Quantum of Paperless: The Partner's Guide to Accounting Firm Optimization

The duties of managing partners encompass a long list of critically important management functions. Certainly, one of these is to ensure that technology has an optimal impact on the firm’s success, profitability, and efficiency.

More Quantum of Paperless: Firms Need ‘Best Practices’ Manuals  |  Optimize Scanning Procedures  |  Why a Digital Tax Workflow System is Vital  | How Long Do You Need That File?  |  Don’t Underestimate Document Management  | Digital Communications Unify Messaging  | Hotspots the Answer for Field Access  | Check Your Bandwidth  | Remote Access Requires Planning  | Proactively Manage Application Updates  |

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This can be quite challenging because, unlike most managing partner duties, managing the technology function is a highly technical skill that most managing partners don’t have. So, they need to be smart. They need to know what they don’t know and rely on experts, both inside and outside of the firm, to guide them.

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Is the IRS about to Get Beefed Up?

TODAY'S BONUS QUESTION: Lessons from Tax Season to apply to 2020?

Trump proposes 5% boost to the IRS budget, reversing years of cutbacks and declines.

BUSY SEASON BAROMETER
TODAY'S BONUS QUESTION: What are firms learning from Tax Season 2019, that they'll apply in 2020?
Join the Survey. Get the Results.

By CPA Trendlines Research

After many years of increasing austerity—and some would say crippling austerity—the IRS may have bottomed out. Despite broad cuts proposed in the overall 2020 federal budget, President Trump has included an additional $362 million—a five percent increase—for the agency that gathers the funds that keep the United States in business.

MORE BUSY SEASON: Tax Season Funnies: April Fool Is When?  |  Wanna Change the Tax World?   |  How the IRS Hides Its Legal Decisions  |  Tax Season 2019 Serves Up a Taste of the Future  |  The Biggest Reason Fraudsters Run Rings around the IRS  |  The IRS Free-File Flop  |  Protect Your Clients’ Assets  |  The Demise of Schedule A?  |  Tammy’s Tale of Tax Season Tardiness  |  How Effective Project Management Makes Your Life Easier  |  Survey: Busy Season Goes Sour   |  When Clients Cash Out: Four Smart Financial Moves

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If Congress approves the budget as proposed (and that’s bound to be an exciting story), the IRS can begin—just begin—to recover some of what has lost over the last decade or so.

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Who’d Like a Friend in the IRS?

Four recommendations for Congress.

By CPA Trendlines Research

Do you dare dream the impossible dream? Try dreaming this one: You call the IRS.

MORE: Hello, IRS? Anybody Home? | Wanna Change The Tax World? | Tax Season 2019 Serves Up a Taste of the Future | The Big Free-File Flop | The Demise of Schedule A? | Survey: Busy Season Goes Sour | Lessons Learned: How the Federal Shutdown Hit Busy Season 2019 | Tax Refund Fury Roils Busy Season
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On the second ring, an operator answers. You tell him you’re a tax preparer. He hears your question and immediately passes your call to the right person in the right department.
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Hello, IRS? Anybody Home?

Portrait of an angry man yelling on the phoneOne solution is modeled on 311 service.

By CPA Trendlines Research

Here’s the understatement of the day, if not the century, from the Tax Advocacy Service’s Annual Report to Congress 2019:

Taxpayers Often Have Difficulty Locating IRS Personnel Who Can Provide Accurate and Responsive Information Regarding Their Cases

We’d be tempted to say, “Well, duh” if it weren’t such a serious issue.

MORE: Wanna Change The Tax World? | Tax Season 2019 Serves Up a Taste of the Future | The Big Free-File Flop | Survey: Busy Season Goes Sour | Taxpayer Advocate Slams Congress over Funding
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How serious? As the TAS report points out, “Although taxpayers are required by law to pay their duly owed taxes, they are also the agency’s ‘customers.’ The agency’s failure to adequately engage these customers cannot cause taxpayers to take their business elsewhere, but it will jeopardize the voluntary compliance on which the U.S tax system depends.”
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