Feb Mar 2013 Magazine

ALABAMA CPA MAGAZINE I FEBRUARY / MARCH 2013

Governmental Relations/Tax Issue

2 THE ALABAMA CPA MAGAZINE

This month’s magazine is designated as our governmental relations issue. As I have told most of you when I visited with you around the state, I have not been involved in politics at all for most of my life. It just always seemed a little unscrupulous to me. And is there any wonder that it seemed that way, with all the things we hear about our governments and our government officials?

The federal government has not had a budget for at least three years. We avoid fiscal cliffs with last minute band-aids. We are running annual deficits of over 1 trillion dollars on gross revenue of only 2.4 trillion dollars. We keep going further and further in debt. There is a debt ceiling in place but, instead of its slowing the debt increases down, we just raise the ceiling every time we approach it. It is scary to think how many states, counties and cities are insolvent.

I want to blame the politicians. After all aren’t they the ones that got us in the mess and aren’t they the ones that are keeping us in it? However, after much soul-searching, I have decided it is as much my fault as anyone else’s. What have I done to try to help solve the problem? Nothing – other than complaining.

I can no longer afford the luxury of doing nothing, and neither can you. We must get involved. Before you jump to any conclusions, no, I am not considering running for a political office. What I have decided to do is to reach my elected officials and let them know what I, and many others like me, am thinking. I encourage you to do the same. Our leverage is what will happen at the polls if they do not start making positive changes.

The decisions that must be made to put our nation’s finances in order require tough choices. The only way our leaders will be willing to act is if the public is fully engaged and educated on the facts regarding the true state of affairs. You can do your part by educating yourself, and others, using the various tools and resources available on the internet.

Now, before I make an enemy of every politician in the country, let me say there are many concerned, thoughtful, caring, sincere officials trying to solve our governments’ problems. We should applaud and thank them; they truly need our support. Unfortunately, there are many who seem to focus on the next election and lobbying solely for their own constituents, no matter what the cost.

It is past time for you and me to get involved. As a starting point, look at Carl Jamison’s article on page 3 about why he became involved with the Business Council of Alabama. And then read Marty Abroms’s report on the Alabama CPA PAC Board of Trustees meeting last week on page 5. He outlines several ways in which ASCPA members can have a direct impact. Go to meetings in your local area and let your elected representatives know where you stand and what you expect of them. Be part of the solution yourself, or at least provide valuable feedback to those who can effect a solution.

As always, I am available for your questions and concerns, [email protected].

Steve

The AlAbAmA CPAmAGAZINe

Alabama Society of

Certified Public Accountants

P.O. Box 242987

Montgomery, Alabama 36124-2987

1-800-227-1711

334-834-7650

www.ascpa.org

OfficersSteven A. Shelton, Chair

Renee B. Hubbard, Chair-Elect Don McCleod, Vice-Chair

Dr. Lowell S. Broom, Secretary-Treasurer

John P. Shank, Past Chair

BOard Of directOrsTuan P. Blank

Roger F. BryantJames R. L. Carroll

James Adam CauseyAllison D. EdgeAllison H. Guice

Mark E. HieronymusR. Rush Letson IIIBradford A. LynchAmanda N. Paul

Gerald G. Pentecost, Jr.Lewis T. Shreve

Ronald W. StokesChasity L. Sweatmon

Douglas C. Moseley, Young CPANicole Cunningham, Young CPA

aicPa cOuncil MeMBersWilliam H. Carr

E. Lamar ReevesSteven A. Shelton

Jimmy L. Williamson

Past Chair, AICPA

The Alabama CPA Magazine is published by Alabama Society of Certified Public Accountants as a membership service to Society members. Views and opinions appearing in this publication are not necessarily endorsed by the ASCPA. The deadline for submitting materials for publication is the first of the month preceding issue date.

Jeannine P. Birmingham, CPA, CAE, CGMA

President and CEO

Diane L. Christy, Editor

Alabama State Capitol

message from the Chair...

THE ALABAMA CPA MAGAZINE 3

Q Why is it important for CPAs to advocate for the profession?

A Many professions, such as insurance professionals, bankers and attorneys give unique perspectives and expertise to busi-ness. CPAs can tie all of those perspectives to their own area of expertise in a way that benefits all.

Q how have you been proactive in the past?

A It started with my membership in The Exchange Club, a club my grandfather was active in beginning in the 1920’s. From there, I’ve been active in First Tee, the Alabama Golf Association, President of Indian Hills Country Club, the Chamber of Com-merce, The University of Alabama’s President’s Cabinet, DCH Hospital’s Foundation Board of Directors, past Chairman of the Tuscaloosa County Industrial Development Authority, past Chairman of ProgressPAC and now, Chairman of the Business Council of Alabama.

Q Why did you decide to get involved with the bCA?

A Being involved in ProgressPAC gives you the opportunity, on a local level, to interview candidates, and make recommen-dations to the [BCA] Board on which candidates to support. Having the opportunity to recommend candidates who are pro-business was all the reason I needed. While serving as the chair of our local [Regional Advisory Committee], I called Mr. Canary, the President and CEO of the BCA, and told him if there was ever an opening from our area on the state board of the BCA, I would like to serve. My involvement locally with the ProgressPAC and RAC led to my election to the BCA Board; now I am serving as chairman.

Q What are your goals as bCA chair in 2013?

A Well, in the first part of the year, the legislative agenda is always our foremost priority. Once the session is over, we will be fo-cusing on our education initiatives to support better education throughout our state. Without an educated workforce, it’s dif-

ficult to compete globally; and in order to

move forward in today’s world, you must

be prepared to compete globally.

Q What are the top issues for CPAs right now?

A Of course the American Taxpayer Relief Act of 2012 – the ‘Fiscal

Cliff Bill’ and how that will affect our clients, is definitely a top is-

sue. Then there are the fiscal and financial pressures of four years

of a bad economy to deal with along with several others, such as

healthcare reforms, etc.

Q how can individual members of the Alabama Society

be effective in advocating for the profession?

A Do an exceptional job at what you do, be ethical, do the right

thing, and give great service to your clients. This promotes our

profession more than anything, in my opinion.

Q how can support of the Alabama CPA PAC aid in

that process?

A Anytime you can get people involved in the process of electing

good candidates, it helps. Some can give time, but almost all can

give financial support. I imagine most don’t, but in my opinion,

they should.

Q What advice do you have for younger professionals in

terms of advocacy?

A Get out in your community. Get yourself known. Volunteer with a

cause that means something to you.

Q There are a record number of CPAs who will be serving

as members of the U.S. house and Senate this year.

What impact will their presence have on the complex

financial issues facing Congress?

A They will bring a business perspective to their co-legislators and

help them to make more objective decisions in fiscal matters.

Carl Jamison Takes Advocacy Seriously

GOVeRNmeNTAl RelATIONS

The Business Council of Alabama’s new chair is Carl Jamison, managing partner of JamisonMoneyFarmer in Tuscaloosa. He answered some questions about the value of advocacy.


S O L U T I O N S

Every position has its own set of expertise, challenges and goals.Whether it’s shortstop or baseman, you have to play to your strengths,but this isn’t a one-man sport and we understand the essence of teamwork.

We believe that when you connect the right person to the right joband the right individual to the right company, it’s like a hand in glove. We’re here to help you find that ideal person to play on the team, and to make sure they can help the team PERFORM FOR SUCCESS.

www.itacsolutions.comTECHNOLOGY | CORPORATE PROFESSIONAL/CLERICAL

GOVERNMENT/ENGINEERING | ACCOUNTING/FINANCE Providing temporary/contract, contract-to-hire, and direct hire staffing solutions.

Birmingham | Mobile | Huntsville | Nashville

L O O K I N G F O R A T E A M P L A Y E R ?

Presented by

Alabama Society of Certified Public Accountants

2012 LegiSLAtorS’ tAx guide

legislators’ Tax Guide

is Now Available!

The 2012 Legislators’ Tax Guide was distributed to members of the Alabama

House of Representatives and Alabama Senate in the week pre-ceding the opening of the 2013 Legislative Session on February 5.

It is an invaluable tool for legisla-tors and their CPAs, containing the legislative calendar and guidelines for allowable deductions.

If you have a member of the Ala- bama legislature as a client and want to request a copy, please send an email to VP Communications Diane Christy, [email protected], 334.286.5752. As always, we owe a debt of gratitude to ASCPA Life Member Kee Ruland of Mobile for his help in updating the Tax Guide each year.

Annual Tax hotlines Include huntsville in 2013

The ASCPA’s largest outreach to the general public is scheduled for four Alabama cities in February.

CITY DATE TV STATION LOCAL COORDINATOR

Mobile February 5 WKRG Lamar Reeves

Birmingham February 12 WBRC Beth Arnett

Huntsville February 18 WHNT Andy Cornelius

Montgomery February 19 WSFA ASCPA staff

For many callers, this is the first time they’ve talked to a CPA and they take full advan-tage of that opportunity. The time will fly – the phones ring non-stop, peaking as the phone number crawls across the TV screens at home. The questions are challenging and some-times heartbreaking. There will be about a hundred years’ worth of tax expertise on hand to help with the tough questions, so don’t think you’re alone. It is actually a lot of fun – why else would many practitioners come back year after year. It’s like Jeopardy for tax geeks!

The Alabama Society will provide a light supper and all you need to bring is your current tax guide.

This is a true community service – uplifting and humbling at the same time.Communications Coordinator Lacey Williams is assembling the volunteer lists for each

city. Contact her at [email protected], 334.386.5753 to sign up.

TAx TIme


As CPAs, unless you work in govern-ment, I think there is a natural ten-dency to shy away from politics and

legislative matters and stick to what we do best – accounting, bud-gets, analytical analysis and helping business owners address busi-ness and personal fi-nancial issues. I learned the hard way that, when it comes to Alabama, you can choose to get proactive with politics

and legislative and regulatory matters or you can choose to be a victim of them. So, for the good of my clients, the ASCPA and the CPA profession as a whole, I chose to be involved.

So have my fellow ASCPA Alabama CPA PAC board members – Chuck Adams, Gary Anglin, Roger Bryant, Jo Chateau, Jim Ellis, Darren Hipps, David Kassouf, David Scott, and Jim Story.

We have an exciting year planned out for 2013! We met on January 16 in Birmingham. To kick off the meeting, we invited Mark Col-son of the Business Council of Alabama to give our Board an overview of issues on the BCA’s agenda. Because of their experience and larger staff, Jeannine and our board of trustees will continue to use BCA’s resourc-es to keep you informed.

There are two open seats on the Ala-bama CPA PAC board of trustees, one for Montgomery and one for Auburn. We welcome your contacting us if you’re in-terested in serving the Society in this way. [Contact information for Jeannine Bir-mingham and Marty Abroms is at the end of this article.]

Key items on the agenda were:• Adoption of an updated logo for

Alabama CPA PAC. • Officially change the name to Alabama

CPA PAC • Endorsement of Jim Barton for senate

district 35 seat.• Discussion of fundraising options and

tactics for the 2014 elections.

500 SOUTHLAND DRIVE BIRMINGHAM, AL 35228, SUITE 120

(205) 547-2996

www.AlabamaBusinessValuations.com

ALABAMABUSINESS

VALUATIONSLLC

A Report from the Alabama CPA PAC board of TrusteesChair Marty Abroms, CPA

The board of trustees has set a goal of raising $5 per dues-paying member in fiscal 2013, resulting in approximately $25,000 for the PAC.

As Carl Jamison said in his article on page 3, some of you may be able to give your time to be active in your local area and assist us in knowing which candidates to support. But ALL of you can help by con-tributing to the Alabama CPA PAC.

We use PAC funds to help elect candi-dates who are interested in working with us.

With a contribution, you can take pride in knowing that you did all you could to make sure that you have a voice at the State-house. PAC contribution information will be sent out in the spring.

Don’t forget about participating in our legislative key person program on the state or federal level, too. If you are the CPA for a state legislator, for a U.S. representative or senator, or have a personal relationship with one of them, sign up to be their key person. It simply means that you provide the most direct channel to that person when issues of critical importance to the profes-sion arise. Contact Jeannine Birmingham, [email protected] or 334.386.5750 for for more information about the key person program. I welcome your feedback, too: Marty Abroms, [email protected], Abroms and Associates, 256.767.0740.

GOVeRNmeNTAl RelATIONS

Marty Abroms

A L A B A M A

CPA PAC


PROfeSSIONAl DeVelOPmeNTleadership Academy Update

The word is out on the street and it’s over-whelmingly positive: the Alabama Society of CPAs’ Leadership Academy offers

unparalleled quality and value. Class II held its third session on January 18 and the pace (and volume) of each meeting continue to build. Scott Bradbary and Joe Fehrman of The Rain-maker Companies keep the energy high and the learning intense.

Applications for Class III were solicited dur-ing the fall and were offered to the Young CPA Network of the Mississippi Society at the sug-gestion of Vera Reed of Horne, LLP.

“We have offices in Alabama, Mississippi

and Tennessee and I didn’t want any of our up and coming professionals to miss out on this opportunity. After Jason Saulters of our Mobile office graduated from Class I we were commit-ted to getting more young staff involved. This is a tremendous resource for us.”

Working through executive director of the Mississippi Society Jack Coppenbarger, two members from the Young CPA Network will attend and an additional Mississippi CPA will come through Horne.

That brings the total number of participants to 35 and also includes two from Connecticut, two from Ohio and two from Tennessee. These

out-of-state participants come to us via Robin Brothers at The Rainmaker Companies. Having Rainmaker on board to provide the curriculum and session leaders was a smart decision for Class I. But now it’s evident that the relation-ship has progressed beyond client-vendor. Troy Waugh, Rainmaker CEO, expressed it this way.

“We are delighted to continue working with the ASCPA on Class III of their Leader-ship Academy. The value of providing firms with a program to groom their brightest talent is tremendous. The ASCPA has recognized what firms need for growth and now offer this resource to develop future leaders. This spe-cialized training encourages younger profes-sionals to take the next step in making a dif-ference in their organizations. They acquire the skills needed to lead in today’s fast-changing workplace, and to offer succession options for a shrinking pool of seasoned partners.”

Class II will graduate on May 2 and Class III will begin on May 3. Both days coincide with the annual Leadership Retreat of the AS-CPA Board of Directors. Firm or organization decision-makers who are interested in learning more about the Leadership Academy are invit-ed to sit in on a session. Contact Diane Christy, [email protected], 334.386.5752 for details.


ChAPTeR ROUNDUP

Mike Reibling has a lot of energy. And you can tell this about him just by the way his words jump off the page. He’s a builder,

a sports fan and a man with goals that stretch into the future. He’s had accounting and financial management jobs with hospitals and newspapers; been in public accounting and now he’s a sole proprietor. His niche is business valuation, liti-gation support and expert testi-mony, which he sees as part of

the same creative force he expends on his building projects.

Reibling went to high school in Boone County (Florence), Kentucky. He discovered accounting as a high school senior and decided to major in it af-ter being recruited to play baseball at Florida State University. He played all four years on scholarship and was graduated from the School of Business in 1970.

“It was both a great time to be on a college campus and also a strange one. I was playing a lot of baseball and also enrolled in ROTC (Reserve Officers Training Corps). Towards the end of my ROTC career, we’d be drilling on the field with our M-1s and there would be folks yelling at us and pro-testing the Viet Nam war.”

Reibling’s chosen army specialty was the medi-cal service corps. He was stationed at Fort Sam Houston and his unit was ready to head overseas when the Army decided there were too many sec-ond lieutenants (his rank at the time) in the same job code. He elected to transfer to the National Guard to complete the balance of his military obligation.

“I was part of a Guard unit out of St. Petersburg and found a job at a vocational hospital in Tallahas-

MIkE REIBlIng, Mobile Chapter Presidentsee. I had a nice office, but there wasn’t very much for me to do. I went to a hospi-tal in Sarasota as a staff accountant for a couple of years, became a CPA and then into public accounting.”

Reibling moved again, this time to At-lanta, where he worked for Allstate as part of a travelling audit team. He met his wife Rene’ during that time and headed to Texas for a job with an up-and-coming insurance company. He ended up with the Ft. Worth Star-Telegram as a financial executive before joining the Mobile Press-Register in 1987 as controller.

He returned to public accounting in 1991 at Lawrence and Lawrence and be-came a partner there in 1998. He worked primarily in litigation support, acquiring both his ABV and CVA designations along the way. He’s been active within the National Association of Certified Valuation Analysts, serving as state president in 2009, 2011 and again in 2013.

“Honestly, building a case is just the same for me as my woodworking projects. It’s a puzzle to figure out; you approach it one step at a time until you have something solidly constructed.”

One of his backyard projects has been his Tiki Hut, a gathering place for friends and family to enjoy watching college foot-ball.

“We’ve got flags flying from teams all over the country. Anyone who wants to bring their pennant is welcome to. We had a big get-together here for the National Championship with wings, pizza, meat-

balls; somebody even brought some cham-pagne. We all had a great time.”

Why get involved with the Mobile Chapter?“I had been part of Sertoma [a service or-

ganization devoted to hearing health] for a long time, and when the local clubs disbanded I thought I’d shift my focus to working for the Mobile Chapter at the board level. As a sole proprietor, it’s a way to keep connections with the CPA community, too.”

Reibling has been invited back to FSU sev-eral times for baseball reunions and enjoys catching up with old friends. He has plenty of plans for the future, including the 22’ X 12’ greenhouse he’s currently building.

“I want to write some articles about busi-ness valuation and plan on working another 15 years. I want to get more organized [while being interviewed for this article he was having a seri-ous clean-out of his home office], maybe go on a cruise. I certainly enjoy our social life and want to spend more time helping others.”

Mike Reibling

“America Counts on CPAs™”

Alabama Society of CPAsFree on-line referral service

www.ascpa.org/public

No retirement plan? It’s not too late.

Your CPA can help plot a path to retirement and manage your assets,

no matter what they are.

2013 ADVeRTISING

Continuing to burnish the CPA brand is a priority for the Alabama Society of CPAs. Over the last two years there

have been several variations in advertising programs with support from local chapters.

For 2012/13, the advertising budget has been solely borne by the ASCPA itself, resulting in the use of one statewide and multiple central Alabama options. Here’s the breakdown:

PRINTBusiness AlABAmA July 2012, February and March 2013

montgomery Business JournAl January and February

Prime montgomery February and March

river region mAgAzine January and February

OUTDOOR lAmAr outdoor I-85/I-65 intersection

RADIOWtsu (Troy Public Radio) January 15-April 1 WtXe (Montgomery talk) December 15-April 15

look and listen for these ads and give us your feedback on their placement and effectiveness.


In preparation for the 2013 session of the Ala-bama Legislature, which begins on February 5, Alabama’s most prominent business and trade

organizations have finalized their 2013 legisla-tive agendas. Most notably, the 5,000-member

Business Council of Alabama (“BCA”) and the 4,000-mem-ber Alabama Retail Associa- tion (“ARA”) have adopted far-reaching tax legislative agen-das. The Birmingham Business Alliance (“BBA”), the state’s largest chamber of commerce, has adopted many of the same tax agenda items and a few others.

Two leading professional or-ganizations have also weighed in. The Alabama Society of CPAs (“ASCPA”) has a nar-

rowly-focused tax agenda this year but, like the BCA, ARA and BBA, advocates the passage of the Alabama Taxpayers’ Bill of Rights II (“TBOR II”) legislation outlined below. The Alabama State Bar Tax Section has traditionally led the effort on this landmark legislation, which has also been endorsed by the American Bar Association, the Council On State Taxation, the Tax Executives In-stitute, and most recently, the American Institute of CPAs.

bCA STATe TAx AGeNDAThe BCA’s broad-based 2013 state tax legisla-

tive agenda renews its support for several legisla-tive proposals from last year and adds three new items. “In keeping with long-term Business Coun-cil of Alabama policy,” BCA Senior Vice President/General Counsel Anita Archie stated, “should any tax or tax reform initiatives be proposed, BCA will not consider supporting the legislation unless it is applied fairly without levying a disproportionate burden on any individual segment of Alabama's economy. Any tax proposal must be tied to gov-ernmental accountability and the elimination of wasteful spending.” During the 2013 regular ses-sion, the BCA will actively work to:

• Enact legislation creating the Alabama Tax Ap-peals Commission (“ATAC”) as an independent state tax agency, headed by a judge selected in a non-partisan manner who has specific train-ing in state and local taxation. The legislation

Several Alabama business and Professional Associations Announce Their 2013 State Tax Agendas

By: Bruce P. Ely and James E. long, Jr., Bradley Arant Boult Cummings llP, Birmingham

would simultaneously abolish the Administra-tive Law Division of the Alabama Department of Revenue (“ADOR”). The ATAC provisions in TBOR II are based in large part on the ABA’s Model State Tax Tribunal Act, but also allow taxpayers to appeal final assessments of sales, use, rental, and lodgings taxes issued by self-administered localities or their contract auditing firms to the ATAC.

• Enact TBOR II, an update to and expansion of the original landmark legislation enacted in 1992, which among other things extends the appeal deadlines for taxpayers from 30 days to 60 days and enhances “innocent spouse” relief.

during 2013, the Bca will support efforts to:• Streamline and simplify our sales/use tax sys-

tem so that in-state and out-of-state retailers are on a level playing field and provide a single point of filing for state and all local sales and use tax returns.

• Enact legislation that provides for the repay-ment of all funds transferred from the Alabama Trust Fund to the General Fund, as authorized under Act 2012-490 and ratified by the voters on September 18, 2012; provided that (1) the elected leaders of each branch of government continue to eliminate waste and duplication of services in state government and that (2) no individual segment of the Alabama economy bear a disproportionate share of the financial burden.

• Enact legislation to establish a non-disclosure privilege for accountant workpapers.

• Enact legislation for state tax credits for the preservation and renovation of historic build-ings.

• Enact legislation to provide for a research and development income tax/financial institution excise tax credit, parallel to the newly-renewed federal R&D credit, with an extra incentive if a qualified research institution in the state per-forms the research.

at the same time, the Bca will oppose: • Any efforts to establish unitary combined re-porting in Alabama.

• Any attempts by state taxing authorities to re-quire disclosure, beyond those made in federal income tax returns, for uncertain tax positions or

tax shelter items. Specifically, the BCA opposes any state-specific disclosures.

the Bca will also monitor:• Efforts to regulate and set minimum standards for individual tax preparers.• Regulatory amendments related to the calcula-tion and proper utilization of tax credits for tax payments to other states and foreign govern-ments by Alabama residents.• Legislation to provide for the carryforward of capital (income tax) credits on capital projects of less than $100 million of investment and that cre-ate less than 100 new jobs.

ARA STATe TAx AGeNDAThe ARA’s 4,000+ members account for more

than 75 percent of the total annual retail sales in Alabama. Its President, Rick Brown, stated: “Re-tailers would like to see the Alabama Legislature continue its course toward streamlining state government and simplifying the state’s tax and regulatory processes.” During the 2013 regular session, the ARA will actively support:

• Legislation to “levelize” sales and use tax col-lection and remittance obligations between brick-and-mortar retailers and those that are catalog and/or internet-based.

• The creation of the Alabama Tax Appeals Com-mission (ATAC) as an independent state tax agency headed by a judge with specific train-ing in the area of state and local taxation, as described above.

• Enactment of TBOR II, as described above.

the ara will oppose:• “Band-Aid” or quick-fix tax schemes or sin-

gling-out one particular industry or segment of business for punitive tax increases.

• Patchwork tax efforts that would require unitary combined reporting for corporate taxpayers.

The ARA will also monitor any legislation that alters the sales tax paid on groceries.

bbA STATe TAx AGeNDAThe BBA supports the economic develop-

ment and business prosperity of the Birmingham region. Vice President of Public Policy Alison Howell stated that the “[p]assage of legislation such as the Alabama Taxpayers’ Bill of Rights II, economic development incentives, and other important tax credit legislation will all play an in-

James long

Bruce Ely

TAx TIme


Tales of the IRS Matching ProgramThomas Zoebelein, CPA

I am sure you have had clients who received a computer-generated notice that basically said they owe additional tax unless they can prove otherwise. Implied in this notice are the unspo-ken words “we think your preparer made a mistake”. Unfortunately, the client may leap to the

same conclusion. In fact, the tax return was prepared correctly; but now we must defend the client against the mismatching of the IRS matching program.

The matching program was designed to identify those individuals who were either not filing their tax returns or under-reporting their income. The problem is that the system catches innocent taxpayers, too. The matching system, like many of the IRS programs today, are all handled by computer software with little or no human intervention.

The problems I have observed with the matching system can be traced to 1) the accuracy of the information reported to the IRS, 2) corrected information reported is not being updated in the system (mostly broker statements), and 3) errors by the IRS computer program.

We, as preparers, have to respond to the notices despite the fact that all the information was properly included in the tax return. Billing our clients for our time is, at best, problematic. It might take multiple responses, compounding the problem. In the worst case, we responded to the no-tice in a timely manner, thought the issue was resolved, but the client still received a 90 day notice. At that point, their only recourse is to appeal in U.S. Tax Court, paying a fee to do so.

The IRS computer is programmed to wait a fixed period and then send the 90 day notice, despite receiving a timely response. The problem is that the humans who review the taxpayer responses are so severely backed up that they never see the response before the program auto-matically sends the 90 day notice.

I had six such cases at the end of last year, compared to only one in 2011 and none for the previous thirty-eight years of my career. I had to go through Taxpayer Advocate on four, but the other two clients had to pay the $60 petition fee to enter the appeals process in U.S. Tax Court.

I had another matching program case which took a single response: a client had multiple W-2s, on which the IRS picked up the income, but failed to recognize the corresponding tax withheld. Our firm had to send in copies of the all the W-2s to clear up the claim. The client did not feel he should have to pay our fee for the IRS error.

In the case where your client has received a 1099-S, I suggest that you show that amount in the tax return such that matching program can find it in the tax return (regardless if it is correct or not). You can then make adjustments to correct it to the actual taxable amount. A perfect example would be an individual taxpayer who incorporated his business (elects S). The 1099MISC is sent in the individual’s name instead of the corporation (where the income had been reported). In the taxpayer’s 1040 show the 1099MISC as income with a reversal in the same amount with a notation that it was reported in the S tax return and show the FEIN. I had this very situation come to a crisis point in December. I believe taking that simple step in the 1040 may have avoided all the drama and our time to resolve.

I do not know of a perfect method to avoid all the matching issues your client may receive in the future. After the wave of 90 day notices last year I did add this phrase to my initial response, to the IRS, “If the information we have provided is deemed to be insufficient, please consider this response t as an appeal of the proposed assessment”. I received a very quick response (within a month) and the IRS accepted the information, (you must show everything gross so they can tie their reports to the tax return). This should preserve the client’s right to go to the appeals process directly and prevent the 90 day letter.

The future of matching notices will, in my opinion, only increase both by the IRS and the states as they scramble to collect tax money to offset budget deficits. The state of Alabama has begun using discovery software which will result in inquiries similar to the IRS matching program. It in-cludes not only notices for income taxes, but also sales and use taxes.

My final suggestion is to make clients aware of the possibility of such notices and to include in the client engagement letter a provision which covers the time it takes to respond to an IRS or Alabama Department of Revenue inquiry. That way, the client understands that the tax preparation fee does not cover extensive responses on their behalf.

Several Alabama business and Professional Associations Announce Their 2013 State Tax Agendas

By: Bruce P. Ely and James E. long, Jr., Bradley Arant Boult Cummings llP, Birmingham

tegral role in the development of a vibrant and prosperous region and state. As an economic development organization, the BBA supports legislation that enhances our ability to recruit new businesses and industries to the region and that encourages growth and expansion of exist-ing industry.” During 2013, the BBA will support:

• Legislation that would provide income tax credits for the rehabilitation, preservation and redevelopment of residential or commercial historic structures to stimulate private invest-ment, downtown and neighborhood revitaliza-tion, and job creation.

• The proposed TBOR II/ATAC legislation which improves the tax climate of our seven-county region and state by, among other things, cre-ating a more independent taxpayer appeals process.

• Legislation that would enact an investment tax credit that encourages more early-stage com-pany investments. The goal is to launch more companies capable of generating jobs and having a positive impact on the state's eco-nomic growth.

• Legislation that would enact a research and development (R&D) tax credit to parallel the federal credit (including financial institutions).

• Legislation that implements the enabling leg-islation that Congress will pass to allow state and local governments to require the larger on-line vendors to collect sales tax from their customers in Alabama and remit the tax to the Alabama Department of Revenue as the agent for both the State and the local governments. In turn, those vendors would have a single point of filing, be subjected to only one audit, and could rely on tax rate information furnished monthly by the ADOR.

_________note: The authors and other members of the firm’s SAlT Practice group are involved in draft-ing and advocating the passage of the TBOR II legislation, as well as several of the other tax pro-posals described above.

© Bruce P. Ely/James E. Long, Jr./Justin B. Cu-reton/Bradley Arant Boult Cummings LLP. All rights reserved. Justin Cureton is a third year law student at Cumberland School of Law at Samford University in Birmingham.

GUIlTy UNTIl PROVeN INNOCeNTZoebelein on TAx



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Promotions and New Positions Community Bank announced that Poenta luckie has been promoted to market president in Baldwin County. Luckie is an Auburn graduate who has been in banking for 23 years and with Community Bank since 2008.

Smith, Dukes and Buckalew, LLP announced that Zach-ary Wolf has joined the firm as an assurance/tax senior in the Mobile office. Wolf recent-ly moved from Birmingham, where he spent three years with an accounting firm pro-

viding both audit and tax services. He has served clients in a variety of industries, including banking, insurance, broker/dealers, manufacturing, and employee benefit plans. Wolf received his under-graduate degree in 2008 from the University of Alabama and his master of accountancy in 2009 from Vanderbilt University.

Todd mcAdams has been named a partner at Anglin, Reichman, Snellgrove and Armstrong. McAdams serves as director of the firm's audit and assurance group and is responsible for financial state-ment audits, reviews, agreed-

upon procedures, employee benefit plan audits, Yellowbook, governmental, and single audits. He works with clients in industries including govern-ment contracting, technology, government, not-for-profit, real estate, construction, and manu-facturing. McAdams holds a BSBA in accounting and a master of accountancy from the University of Alabama in Huntsville.

Barfield, Murphy, Shank & Smith, LLC announced that Daniel brock and Cyn-thia hudson have been named members of the firm. Daniel Brock, CPV, CVA spe-cializes in financial statement audit, review and compilation services for clients primarily in the construction, manu-facturing and real estate in-dustries. He also performs business valuation services which are commonly required in conjunction with the pur-chase or sale of a business, succession planning, and es-

tate and gift taxes. Cynthia Hudson works on taxation issues with credit unions, businesses, individuals and not-for-profit entities. She often

speaks to not-for-profit orga-nizations and credit unions on tax-related issues.

Tammy burgin has been promoted to shareholder of Borland Benefield, P.C. She joined the firm in June of 2003 and has since been a valu-

Cynthia Hudson

Community NewsAshley lough of Aldridge Borden was rec-ognized for her service as treasurer of the board of directors for Montgomery’s One Place Family Justice Center at their annual meeting in November. The Center provides one-stop, wrap-around services for victims of domestic violence.

leighanne faught of JamisonMoney has been elected vice-chair of the Alabama State Board of Public Accountancy for the 2012/13 term. She manages the firm’s accounting and au-diting practice and has been a shareholder since 1998. She joins ASCPA members Chad Singletary (chair), Ken

Odom, Peter D’Olive and Steve Richards on the board.

Warren Averett, llC recently merged with Atlanta-based Gifford, Hillegass & Ingwersen (GH&I) and Tampa-based Pender Newkirk & Company. The merger, effective January 1, 2013, builds a stronger presence for War-ren Averett in the Southeast, while offering expanded reach and resources, additional service solutions and strengthened depth of expertise to clients. Warren Averett employs more than 725 team members and serves clients through 14 offices across Alabama, Florida and Georgia.

able manager of the Birmingham office. She has over 25 years of experience in both the public and private sectors of accounting, dealing with a broad range of industries. She specializes in providing accounting software support, tax and accounting advisory services to closely held businesses.

Awards and New Designationsedward l. Thomas, Jr., a partner with AKP & Associ-ates in Birmingham, recently completed a specialized ed-ucational program in profes-sional divorce analysis and is now certified as a Certi-fied Divorce Financial Analyst

(CDFA). As a CDFA, he evaluates the tax im-plications of dividing property and the financial impact of various settlement options for divid-ing marital property (including pensions), child and spousal support payments.

bryan R. Chandler, managing shareholder of Jamison MoneyFarmer PC in Tusca-loosa, Ala., has been elected to the vice-chair/chair-elect position of CPAmerica. Chan-dler joined Jamison Money-Farmer (JMF) in 1978, be-

came a shareholder in 1985 and has served as the firm’s managing shareholder since 2005. CPAmerica International is a member-driven as-sociation of large independent CPA firms.

membeRS In MOTIOn

Zachary Wolf

Daniel Brock

Edward Thomas

Bryan Chandler

leighanne Faught

Tammy Burgin

Todd McAdams

Alabama Society of CPAs Nomination Form

NAME of NOMINEE______________________________________________________________ TITLE__________________________________________________________________________ ORGANIZATION_________________________________________________________________ ADDRESS_______________________________________________________________________ TELEPHONE_________________________________EMAIL_______________________________ PROFESSIONAL CERTIFICATIONS_____________________________________________________ PROFESSIONAL AFFILIATIONS________________________________________________________ POSITIONS HELD (by title and date) 1. 2. 3. 4. DEGREES EARNED___________________________________________________________________ SUMMARY OF CONTRIBUTIONS (use criteria listed below) __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ (Feel free to add more information on a separate sheet.)

CRITERIA Outstanding Young CPA – recognizes exceptional service to the Young CPA board, Young CPA chapters or individual Young CPA projects. The Young CPA Board will make the selection of this recipient. Outstanding Accounting Educator – recognizes an Alabama college accounting teacher for excellence in teaching and active involvement in the accounting profession. This award includes a $1500 stipend. The nominee need not be a CPA nor hold a doctoral degree and can include those who are presently involved in administration or research. Past winners are not eligible. The Society’s Education Committee will review and make the selection of this recipient. Outstanding Member in Business and Industry, Outstanding Member in Government, Outstanding Public Service Awards – these nominees have managed processes, technology and resources to create value, have demonstrated leadership and commitment to their organization, have acted as a strategic business partner or leader, have provided vision and knowledge of board institutional issues, have understood key non-financial and cross-functional measures and principles, have championed change and non-traditional methods and approaches, have demonstrated leadership in adopting technological change. The Public Service award candidate should have the qualities listed above, but within a community service, or special project of the ASCPA, arena. These three awards are determined at the discretion of the Nominations Committee. DEADLINE FOR ALL SUBMISSIONS IS MARCH 29, 2013. All nomination forms should be sent to Executive Assistant Cindy Smith for distribution to the appropriate selection committee: [email protected], PO Box 242987, Montgomery, AL 36124-2987. NOMINATOR__________________________________________________________________________________ PHONE__________________________________EMAIL________________________________________________

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Time to tee up for two great causes!

PangeaTwo Charity Golf Tournamentbrought to you by the Alabama young CPAsWednesday, June 5, 2013

Robert Trent Jones Oxmoor Valley Courses

Benefitting The Exceptional Foundation and ASCPA Educational FoundationSponsorships and teams available. Contact Amanda Freeman, [email protected], 334.386.5751 or Lacey Williams, [email protected] or 334.386.5753.

It’s not like deer season, or turkey season – there are no targets to hit other than high grade point averages. And the rewards can

be lifelong and more rewarding than a set of trophy antlers!

Information about the scholarships went out to educators and chapter presidents in November. Included were all the documents necessary for the 30 scholarships awarded each year to outstanding accounting students.

Due to the success of the 2011 Fortune Forward capital campaign, the scholarship program expanded in 2012 to include a gen-eral scholarship at each of the 24 accredited accounting programs across the state, three endowed scholarships, and six statewide scholarships. The last six consist of four di-versity awards and two given on the basis of financial need.

Of the endowed scholarships, two are from the Kassouf family for one student at Auburn University and one at the University of Ala-bama. The third is the Pearce Bevill Minority Scholarship, given to a student at the Univer-sity of Alabama at Birmingham.

The beauty of the Educational Founda-tion’s program is that the general and endowed scholarship applications are sent from the uni-versity accounting departments to local chapter leaders. The chapters review the applications, sometimes scheduling face-to-face interviews with candidates. That process enables chap-ters to develop an even closer relationship with the colleges and universities in their area, and to foster an attachment to these young men and women. Chapters also give their own schol-arships, ensuring that even more students are rewarded for their hard work.

You can be part of this effort by contrib-uting to the Educational Foundation through the check-off box on your annual dues state-ment or by making a direct contribution to the

educational foundation Scholarship Season is Open!STUDeNT SUCCESS

Foundation. Combine business, pleasure and support of two good causes by joining the Young CPAs at their annual charity golf outing sponsored by PangeaTwo. Half of the net pro-ceeds benefit the scholarship fund. For more

information on the scholarship awards, con-tact your local chapter president. To be part of the PangeaTwo Charity Golf Tournament, call or email Amanda Freeman at the Alabama So-ciety, [email protected] or 334.386.5751.

2013 student Guide to accounting firms in alabama is is now available! Thank you to all the firms who participated in this year’s Guide. It will be distributed to students at all university programs as well as associate members (eligible to sit for the exam). Sign up now for the 2014 edition by contacting Lacey Williams, [email protected] or 334.386.5753.

2013 StudentGuide to AccountinG FirmS in AlAbAmA

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OctOBer-nOVeMBer 2012 cPa eXaMinatiOnGrades from the October-November 2012 CPA Exami-

nation were mailed to candidates on December 7, 2012 and January 4, 2013. There were 203 total candidates who sat for a total of 284 sections of the examination and passed 129 sections for a section-passing rate of 45.42%. The 203 total candidates were comprised of 32 first-time and 171 re-examination candidates. A total of 21 can-didates passed. There were 35 candidates who passed section(s) to receive credit status, 48 candidates who passed a section to improve their credit status, and 99 candidates who passed no sections to remain status quo. There were 129 candidates who sat for one section of the examination, 68 candidates who sat for two sections of the examination, five candidates who sat for three sections of the examination, and one candidate who sat for four sections of the examination.

ALABAMA NATIONAL SECTION PERCENT PASS PERCENT PASS

AUDIT 62.30% 44.70%

BEC 35.90% 51.71%

FAR 42.19% 45.66%

REG 44.44% 46.27%

JanuarY-feBruarY 2013 cPa eXaMinatiOnTesting for the January-February 2013 CPA Examina-

tion will close on February 28, 2013. During the month of March 2013, testing will be closed for systems and databank maintenance. We anticipate receiving and dis-tributing the grades from the January-February 2013 CPA Examination between March 8, 2013 and April 12, 2013.

aPril-MaY 2013 cPa eXaMinatiOnTesting for the April-May 2013 CPA Examination will be-

gin on April 1, 2013 and close on May 31, 2013. During the month of June 2013, testing will be closed for systems and databank maintenance. We anticipate receiving and distributing the grades from the April-May 2013 CPA Ex-amination between June 12, 2013 and July 12, 2013.

CPA Examination scores are available on-line through the Board’s website at www.asbpa.alabama.gov/exam.htm. Examination candidates will need their “Section ID Number” and “Date of Birth” to access their scores. The Board also mails official scores to candidates as soon as they are received and processed.

The Board accepts submission of CPA Examination Ap-plications during any month of the year. If you have ques-tions, please contact Anna Baker at the Board office at

STATe bOARD NeWS334-242-5700 or in-state 1-800-435-9743. CPA Examination Application Forms, Appli-cation Instructions, and CPA Examination Qualifications may be downloaded from our website at www.asbpa.alabama.gov/exam.htm. We en-courage each CPA Examination Candidate to review the “Test Tips For CPA Candidates” and “CPA Candidate Bul-letin and Test Tutorial and Simulations” on the Exam Ap-plications page of the Board’s website.

2012-2013 reGistratiOnsOn-line registration is available for 2012-2013 for CPAs,

PAs, and Firms. The link to the on-line registration form can be found on the Board’s website at www.asbpa.alabama.gov/registration.htm. Licensees registering on-line for 2012-2013 will not be assessed convenience fees in addi-tion to the required permit or registration fee. Individual and firm registration packets for 2012-2013 were mailed to all licensees on September 24, 2012. If you have not received your packet and wish to file a paper registration, please contact the Board office or visit our website and download individual and firm registration forms and instructions. The completed individual and firm registration forms for 2012-2013, along with the appropriate fee(s), were due in the Board office on October 1, 2012. CPE must be earned during the period October 1, 2011 through September 30, 2012 and reported on this registration form. If you failed to meet the CPE requirements by September 30, 2012 due to reasonable cause, please contact the Board office to formalize a CPE completion schedule. Registrations received after December 31, 2012 will be delinquent. A $100.00 late renewal penalty is due for registrations post-marked January 1, 2013 through March 31, 2013. The late renewal penalty increases to $500.00 for renewals post-marked April 1, 2013 through September 30, 2013. After that date disciplinary actions ensue for unpaid fees, late renewal penalties, and CPE deficits. Licensees who have not already registered are delinquent and are encouraged to file as soon as possible to avoid the escalating late re-newal penalties. If you have questions concerning your 2012-2013 registration(s), please contact the Board office.

address cHanGesBoard rules require that all licensees keep the Board

advised of any change of address and/or change in busi-ness affiliation. Such changes must be in writing and may be submitted electronically by visiting the Board’s website and completing the On-Line Change of Information Form found on the “Change of Information” page. You may also submit such changes by mailing or faxing (334-242-2711) to the Board office.

By J. lamar Harris, CPA

Presorted StdUS Postage

PAIDPermit No. 131Montgomery, AL

The Alabama Society of Certified Public Accountants1041 Longfield Court

P.O. Box 242987Montgomery, AL 36124

Address Service Requested

FEBRUARY MARCH 2013

ClASSIfIeDMONTGOMERY AREA technology-oriented sole practitioner with fast-growing accounting and tax firm is seeking alliance or merger with CPA of similar situation. Also seeking CPA or CPA candidate with tax and accounting experience for full or part-time employment. Contact Sajjan Rajendra, CPA, [email protected] or 334.294.6967 for more information.

Growth-oriented Montgomery CPA firm seeking a CPA with 3-5 years’ public accounting experience in audit-ing employee benefit plans to join our team. Opportunity to work in challeng-ing and rewarding environment while maintaining healthy work/life balance. Competitive salary and benefits pack-age. Send resume to P.O. Box 1590, Montgomery, AL 36101.

Established Birmingham firm seek-ing CPA with 4 to 6 years of experience to handle small business and personal accounting and taxes for retiring part-ner. Send resume and qualifications to [email protected].

IN memORIAmSAIDIE CAThERINE BOOhAkER

EGELANDAugust 5, 1956 - January 1, 2013

Birmingham, AlabamaCertificate #2572

Don’t get sent to detention.Pay your 2012/13 dues by MArch 1 and the principal will be happy.

Questions? Contact VP Membership Betty Barker, [email protected], 334.386.5754.

Did you leave your AScPA dues in your locker?

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