Across the tax and accounting industry, almost all the jobs relinquished by men in the Coronavirus layoffs have been regained by men. The jobs given up by women, on the other hand, are still largely vacant.
Overall, the tax, accounting, tax prep, payroll, and bookkeeping sectors employed 1.02 million full-time equivalents in March 2020, before 70,000 layoffs hit in April. So far, the industry has re-filled all but 17,600 positions.
Sage study finds nearly three-quarters of U.S. small and midsize businesses expect to see pre-pandemic revenue levels by end of the year.
Sage survey: Pandemic prompts innovation
By CPA Trendlines
U.S. businesses are becoming increasingly confident they will return to pre-pandemic revenue levels by the end of 2021, according to a new survey by Sage, a market leader in cloud business management software.
“It’s no surprise the COVID-19 pandemic disproportionately affected small and midsize businesses, along with their employees and customers. As we faced unique challenges at home and work, businesses saw great success implementing new programs, offering flexible work arrangements, and prioritizing commitment to the communities in which they operate,” says Nancy Harris, EVP and Managing Director, Sage North America. “As the world begins to reopen, it is critical that these key learnings from the last year are not lost, and that organizations continue to leverage creativity and technology to foster stronger relationships with employees, customers, and prospects for continued growth.”
At the same time, if your midsized CPA firm has not at least started to move away from a general “compliance shop” to either:
a specialized niche firm that has established a brand in the marketplace that transcends size and locations, or
a professional services firm that provides advisory/consulting, accounting, tax and assurance services to marquee clients in specialized industries,
its worth or valuation in the marketplace continues to diminish from the historical one times revenue payable upon individual partner retirements over 10 to 12 years.
A super-rich individual (net worth = $500 million or more) asked us to examine a tax mitigation strategy he was using. He was quite proud of how ingenious it was and how well it worked. The complication was that some of his business dealings were under scrutiny, and he wanted to make sure his wealth planning would not cause any problems. As part of this tax strategy, he had done several things: READ MORE →
The IRS is narrowing the gap between this season and 2020, still behind in almost every area but with more deficits now in the single digits. That’s what passes for good news these days.
Meanwhile, tax practitioners are reporting further deteriorations in their busy season, with 35 percent now terming is “much worse” than the year-ago, up about 11 points from the earlier soundings on the CPA Trendlines Busy Season Barometer. Join the survey. Get the results.
On March 17, the Treasury Department and IRS announced the 2020 individual federal income tax filing due date would be automatically extended from April 15 to May 17. Since then, some 25 states and localities – but not all – announced similar extensions.
BUSY SEASON RED SHIFT:The percentage of tax practitioners reporting a “much worse” season than last year grew 11 points to 35% from before March 15 to after March 15. (CPA Trendlines Busy Season Barometer)
As of March 19, the latest data available, the service had received 76.1 million individual income tax returns, down 9.6 percent from the same period last year, when the season began 18 days earlier. It had processed 67.7 million returns, down 16.6 percent, for a current processing rate of 89 percent. READ MORE →
Tax preparers would be wise to advise their clients to e-file this year. According to the Government Accountability Office and the Taxpayer Advocate Service, the IRS is not keeping up with paper returns.
The COVID-19 pandemic is only part of the problem. Yes, of course, last year, with IRS offices shuttered and phones shut down for months, a backlog built up. By the end of the year, “IRS had a significant backlog of returns and taxpayer correspondence,” according to the GAO. READ MORE →
The accounting profession sector by sector generally looks slightly brighter, with most reporting headcount growth for the month – but losses for the year.
Exceptions include the profession overall, which is taking a 0.2 percent dip, tax preparation services up for the year 3.3 percent, and bookkeeping, up 1 percent.
IRS budget cuts lead to staff cuts, even as returns climb.
Theirs stem from money woes.
By CPA Trendlines Research
The IRS may a one-of-a-kind organization, with a unique mission, strengths, and weaknesses. But in at least one way, the IRS is a lot like many tax and accounting firms.
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It might be time to implement Plan B.
