The Forecast: Partly Gloomy, Chance of Doom

Almost three in four accountants now foresee a deeper downturn for the U.S. economy.

It gets worse: Almost 25 percent of accountants forecast a “much worse” outlook for the nation’s economy over the next 12 to 18 months. And another 48 percent predict “somewhat worse.” (CPA Trendlines Research)

BUSY SEASON BAROMETER:
How accountants are battling the Coronavirus recession
Join the survey. Get the answers.

By CPA Trendlines Research

New CPA Trendlines 2020 Busy Season Barometer results bear bad tidings for CPA firms, their clients, and their families. The forecast is not good. Accountants know numbers, and the numbers they are seeing do not bode well.

MORE BUSY SEASON 2020: Busy Season Benchmarks in Free FallFIinal RS eFiling Stats: The End of Tax Season? | Say Hello to the New 24-Month Busy Season | 9 Big Ways the IRS Could Help Accountants | The Mystery of 10 Million Missing Tax Returns | Tax Pro E-Filings Down 20 Percent | IRS Web Traffic Doubles over Year-Ago | COVID Drowns IRS in New Filings |   Percent | IRS Web Traffic Doubles over Year-Ago | COVID Drowns IRS in New Filings | 2020 Tax Season Comes to a Screeching Halt | The Tax Season 2020 Dumpster Fire | Tax Pros Fall Behind 6.2% in Returns Filed
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As the U.S. braces for a summer surge in coronavirus infections, the economy is crashing – with GDP down at an annual rate of 33 percent last quarter, and a 10 percent drop from the first quarter – the worst declines in more than 70 years of record-keeping. And new jobless claims in the latest week rose by 867,000 to 17 million.

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Busy Season Benchmarks in Free Fall

Major declines in all KPIs: Clients, revenues, profits, revenue per client, and profit per client.

BUSY SEASON BAROMETER:
How accountants are battling the Coronavirus recession
Join the survey. Get the answers.

By CPA Trendlines Research

Last year’s busy season was complicated, no doubt about it. The Tax Cuts and Jobs Act and the IRS shut-down made life difficult for tax practitioners. But ultimately, they had a good year. A good 56 percent enjoyed an increase in clientele, and only 16 percent saw a decrease.

Flash forward to the annus horribilis, aka 2020. According to this year’s CPA Trendlines Busy Season Barometer, only 46 percent of accountants are gaining clients — a 10-point reversal from last year. And another 25 percent are losing clients – a 15-point swing from 2019.

MORE BUSY SEASON 2020: FIinal RS eFiling Stats: The End of Tax Season? | Say Hello to the New 24-Month Busy Season | 9 Big Ways the IRS Could Help Accountants | The Mystery of 10 Million Missing Tax Returns | Tax Pro E-Filings Down 20 Percent | IRS Web Traffic Doubles over Year-Ago | COVID Drowns IRS in New Filings Percent | IRS Web Traffic Doubles over Year-Ago | COVID Drowns IRS in New Filings | 2020 Tax Season Comes to a Screeching Halt | The Tax Season 2020 Dumpster Fire | Tax Pros Fall Behind 6.2% in Returns Filed
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It’s impressive that so many tax offices have actually expanded their clientele during such hard times. And it’s not surprising that so many have lost clients.

What happened?

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Down by 400,000 Returns – The End of Tax Prep?

Red Alert: Tax professional e-filings drop by 0.5% year-to-year, first year-to-year decline ever.

Final IRS stats for Busy Season 2020 shows professionals filed 0.5% fewer returns than last year and lost market share to DIY’ers.

BUSY SEASON BAROMETER:
How accountants are battling the Coronavirus recession
Join the survey. Get the answers.

By Beth Bellor
CPA Trendlines Research

In what may be an alarming turning point for the profession, tax practitioners finished an already chaotic and bruising Tax Season 2020 after preparing a total of 73.8 million e-filed returns – a decline of 400,00, or 0.5 percent, from Tax Season 2019 – the first such reversal on record. Ever.

Jon Baron

MORE on TAX SEASON 2020: Say Hello to the New 24-Month Busy Season | When COVID ‘Got Real’ | Tax Pros Hold eFiling Market Share as Tax Seasons Winds Down | The Top Six IRS #FAILS this Tax Season (So Far) | How COVID Has Pulverized IRS Operations | The Mystery of 10 Million Missing Tax Returns | COVID Cuts Accounting Profits | Why Busy Season May Never Be the Same Again | COVID Tests Accountants’ Entrepreneurial Talents | Pro Tax Prep Stalls to a Crawl amid Covid-Extended Season | Clients, Revenues, Profits – Trending Down, Down, Down |

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“If you are in public accounting and relying on personal return revenue, the results this year are troubling as it is the first time that professionally prepared returns actually fell from the prior year,” says Jon Baron, the longtime CEO of Thomson Reuters Tax & Accounting, and now a venture capitalist with more than a couple startups in stealth mode.

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Say Hello to the New 24-Month Busy Season

Deann Auman Hill and Mike Shost at AICPA Engage: “The 24-Month Tax Season?”

COVID chaos turns Busy Season 2020 from bad to worse.

BUSY SEASON BAROMETER:
How accountants are battling the Coronavirus recession
Join the survey. Get the answers.

By CPA Trendlines Research

Last year—the good old days!—Busy Season seemed to be about as bad as it could get. Congress enacted the Tax Cuts and Jobs Act without explaining how it was to be enacted, and then changed some things. And then the IRS shut down before the rules could be set and the new forms and schedules made available. And all of a sudden it was April 15.

MORE on the 2020 SEASON: The Mystery of 10 Million Missing Tax Returns | Tax Pro E-Filings Down 20 Percent | IRS Web Traffic Doubles over Year-Ago | COVID Drowns IRS in New Filings | 2020 Tax Season Comes to a Screeching Halt | The Tax Season 2020 Dumpster Fire | Tax Pros Fall Behind 6.2% in Returns Filed
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Tax practitioners had little good to say about 2019. According to last year’s CPA Trendlines Busy Season Barometer, 46 percent said 2019 was worse than the previous year. Only 13 percent thought it was “much better.”

That was then.

This is now. And, now is worse.

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9 Big Ways the IRS Could Help Accountants

Number 9 created by gaps between many small green plastic 9'sDeadlines could change. So could options.

By CPA Trendlines Research

The Taxpayer Advocacy Service’s mission is to make life easier for taxpayers, but when it succeeds, it alleviates the burden on tax practitioners as well.

MORE: Flexibility in a Time of Pandemic | What Are IRS FAQs Worth? | The Top Six IRS #FAILS this Tax Season (So Far)
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With that mission in mind, the TAS has set itself a serious series of nine objectives for fiscal year 2021. Each one touches on the services of CPAs and tax practitioners, so it’s worthwhile to follow how successful the TAS is.
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Start Marketing Now for Next Season

No, it’s not too early to begin planning.

By Ed Mendlowitz
Tax Season Opportunity Guide

Marketing takes many forms. Further, many accountants are not trained in marketing. I also know that while most CPAs want more business, they are too busy with what they have to be actively seeking new business. Additionally, marketing can be external, internal or retentive.

MORE: 4 Reasons Not to Let Staff Go After Tax Season | Nine Keys to Success and Growth | What Kind of Accountant Are You? | COVID Tests Accountants’ Entrepreneurial Talents | Have You Gotten Where You Wanted Yet?
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External is where new clients are solicited. That takes effort, ingenuity, time and maybe even some money.
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When COVID ‘Got Real’

Tax season turns into ‘advisory season,’ and a whole new niche is born.

^ Click to play

By CPA Trendlines Research

Gabrielle Luoma, long one of the profession’s leading innovators, says the future under COVID-19 belongs to the quick and the smart, in this exclusive video interview with CPA Trendlines. Firms will need to deploy new services to attract new clients who may have not realized that they needed a firm like yours but now do.

MORE COVID CONVERSATIONS: The COVID Outlook with Darren Root and Joel Hughes: A Long, Slow Climb back to Recovery | Steven Sacks: COVID Crisis Management | Jean Caragher: How to Fight ‘Fear’ and ‘Insecurity’ | Sarah Dobek: Learning How to Operate in the New Normal | August Aquila: What Comes Next? | Jody Grunden: COVID and Client Communications | Andrew Argue: On a Mission | Martin Bissett: COVID Slams U.K. Accountants, Too | Bill Reeb: Separating the Winners and Losers |

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^ Play or download the podcast version

In this conversation, Luoma talks about what’s going on in the business, what’s going on with tax season, and what the future holds for CPA firms and the clients of CPA firms.

Speaking from her base in Tucson, Ariz., the CEO of MOD Ventures is bringing some of her DNA to regional powerhouse Beach Fleischman through a joint venture.

We started by asking about “when it got real?”

She responds, “We truly are affected by the whole world. We have clients in New York. Things changed for them rather quickly. And when they started changing, we started realizing, ‘Oh, my goodness, we’re going to have to really buckle down.’ In Arizona, we started seeing shutdowns mid-March. That’s when things really got real for us because then we started seeing that the businesses that we work with on a regular basis – we’re outsourced accounting, so we work with clients weekly, – we knew that we could be in trouble. We started working really hard on transitioning, and seeing what we needed to do to help our clients quickly.”

For PRO Members-Only: Get the transcript:

[PRO Member Bonus]
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Tax Pros Hold eFiling Market Share as Tax Seasons Winds Down

https://www.research.net/r/finaltax20
Join the Survey. Get the Results

Refunds up but barely.

BUSY SEASON BAROMETER:
Congratulations! You survived Tax Season 2020!
Today’s Bonus Question: What’s next?

Join the survey. Get the answers.

By Beth Bellor

As the extended 2020 tax season drags to a close, nearly all the touchpoints remain in the red.

MORE: Tax Pros Take Bigger Share of E-filings | The Mystery of 10 Million Missing Tax Returns | Tax Pro E-Filings Down 20 Percent | IRS Web Traffic Doubles over Year-Ago | COVID Drowns IRS in New Filings | 2020 Tax Season Comes to a Screeching Halt | The Tax Season 2020 Dumpster Fire | Tax Pros Fall Behind 6.2% in Returns Filed | Tax Pros Trail by 908,000 Returns | Tax Pro IRS Filings Lag by 532,000 | Tax Pro E-Filings Lag by 512,000 Returns | Tax Pros Kick into High Gear | Slow Start for Tax Pro E-filing | Data Points Down as Tax Season Opens | The Fight for New Tax Clients
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The Internal Revenue Service had received 142.4 million individual income tax returns, down 2 percent from the same period in 2019, as of July 3, the latest data available. It had processed 130.6 million returns, down 9.5 percent.
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Flexibility in a Time of Pandemic

Tax Advocate asks IRS to cut taxpayers a little slack.

By CPA Trendlines Research

The novel coronavirus has made a mess of many things, including deadlines. The U.S. Tax Court closed on March 19, 2020, leaving taxpayers confused about what has to be filed by when, and often tax practitioners aren’t real sure either.

MORE: What Are IRS FAQs Worth? | The Top Six IRS #FAILS this Tax Season (So Far)
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Here is a summary of key developments that tax clients may need to be aware of:
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