How COVID Has Pulverized IRS Operations

Delays, postponements, system failures, shutdowns, and mounting backlogs.

By CPA Trendlines

Taxpayers who filed a 2019 paper return and are entitled to refunds may be in for a long wait, according to the first report to Congress from the new IRS watchdog.

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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The IRS was forced to suspend the processing of paper tax returns, and as of May 16, it estimated it had a backlog of 4.7 million paper returns, says National Taxpayer Advocate Erin M. Collins, who succeeded long-time predecessor Nina Olsen just as the pandemic was ramping up.

Although the IRS is reopening some of its core operations, it is not clear when it can open and process all the returns sitting in mail facilities, the Taxpayer Advocate Service reports.

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Avalara Launches A.I. Tool to Streamline Tax Classifications

Simplifies product classification and taxability determinations.

Seattle-based Avalara Inc., a leading provider of cloud-based tax compliance automation for businesses of all sizes, is rolling out an artificial intelligence-based tax classification tool, designed to cut the time spent by Avalara AvaTax users classifying products and taxability.

“The accurate classification of products and services has always been a bottleneck for customers in their tax compliance journey,” said Sanjay Parthasarathy, chief product officer at Avalara. “By harnessing the power of AI and machine learning, we have not only accelerated the classification process by providing a solution that helps users arrive at the right tax classification quickly and efficiently without being a tax expert, but we have also made it more accurate.” READ MORE →

Right Networks Acquires Rootworks

Joel Hughes (left) and Darren Root
Joel Hughes (left) and Darren Root

Rootworks founder Darren Root joins Right Networks as GM and VP strategy.

By CPA Trendlines Research

Signaling a move to broaden its industry footprint, Right Networks, a leader in cloud-enabled technology solutions for accounting firms and small businesses, has acquired Rootworks, which provides accounting firms with tools, resources, and guidance to create a high-performing, proactive modern firm.

Rootworks will continue to operate as an independent line of business within Right Networks with founder Darren Root serving as Rootworks general manager and Right Networks vice president of market strategy, according to the company announcement.

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Feeling the Pain? The Biggest Job Losses by Client Sector

Jobs survey pinpoints client niches suffering the most under Covid. BONUS: Infographic.

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By CPA Trendlines Research

Private sector employment decreased by 20.2 million jobs from March to April according to the April ADP National Employment Report, and that doesn’t reflect the full impact of COVID-19.

A quick scan of the data shows the hardest hit client sectors, with the smallest businesses hit particularly hard.

More Staffing and Hiring Trends:  Planning for the Coronavirus Recession |  Automation and the Future of Accounting  |  Getting and Keeping the Best: The Struggle Continues |  Headcounts Dip by 3,500 in Tax & Accounting |  Creative Perks for Remote Employees |  What Staffing Shortage? |  Hiring Trends Flash Warning Signs of Slowdown in Tax & Accounting |  Salary Survey: Top Skills Getting Top Pay

See: All CPA Trendlines Special Coronavirus Crisis Coverage

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“Job losses of this scale are unprecedented. The total number of job losses for the month of April alone was more than double the total jobs lost during the Great Recession,” says Ahu Yildirmaz, co-head of the ADP Research Institute. “Additionally, it is important to note that the report is based on the total number of payroll records for employees who were active on a company’s payroll through the 12th of the month. This is the same time period the Bureau of Labor and Statistics uses for their survey.”

The Details by Company Size and Business Sector:

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Receipt Bank Raises $73 Million

Debt and equity infusion to be used for expansion and product development.

By CPA Trendlines Research

London-based Receipt Bank, which fields machine-learning software that fetches financial information from multiple sources, digitizing and categorizing it for more than 50,000 accountants and bookkeepers, has raised $73 million in debt and equity financing for product development and market expansion.

The news follows Bill.com’s initial public offering in December on the New York Stock Exchange where it sold 9.82 million shares, raising $216 million and giving it a valuation of about $1.6 billion. Bill.com automates invoicing for 81,000 businesses.

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MGI and CPAAI to Merge

CPA firm associations combine 250 firms with $1 billion in revenues.

Left to right: Jim Holmes, International Chairman of CPAAI; Michael Parness, President of CPAAI; Clive Viegas Bennett, CEO of MGI Worldwide, and Roger Isaacs, Chairman of MGI Worldwide, celebrating the merger agreement at MGI Worldwide’s Annual Global Meeting in Dubai, UAE.

CPA Trendlines

MGI Worldwide, a global network of independent audit, tax, accounting, and advisory firms, headquartered in the U.K., and CPA Associates International, headquartered in the U.S., have announced that they will merge, effective Jan. 1, 2020.

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BKR Adds Three Firms

Ecuador, El Salvador, and Edina, Minn.

By CPA Trendlines

BKR International is adding Elias & Asociados, San Salvador, El Salvador; GW Carter, Ltd., Edina, Minn.; and Auditores Externos Varela & Patiño Cia. Ltda., Guayaquil, Ecuador,  to its roster of 160 firms with 500 offices in 80 nations. READ MORE →