The Journal Entry - October 2013

1the journal entry | October 2013

www.uacpa.org

Looking at the Future with the UACPA's New CEO

October 2013, Vol. IV | Succession Planning

Susan Speirs, CPA, CGMA

Helping Clients Plan AheadJeff Pickett, CPA/ABV and Rick Hoffman, CPA/ABV

2 the journal entry | October 2013

Mission

The UACPA Leadership supports and challenges members through advocacy, professional education, leadership develop-ment, networking, and community service, to help them succeed in a competitive and changing world.

Vision

At the UACPA, our vision is to be a world-class professional association essential to our members.

We unite a vibrant community of CPAs to enhance the success of our members and champion the values of the profession; Integrity, Competency, and Objectivity.

Values

AdvocacyThe UACPA represents the profession at the legislature and other regulatory bodies and promotes the value of the CPA to employers, the business community, and the public at large.

Leadership & ServiceThe UACPA provides leadership and service within the profes-sion, within the UACPA and within the community.

Professional DevelopmentThe UACPA supports and encourages continuing education and leadership development.

Professional CommunityThe UACPA reinforces peer accountability to encourage mem-bers to maintain integrity and high ethical standards. We provide member to member networking opportunities and networking opportunities with other professions. We value belonging to a distinguished organization and believe that we serve as the primary resource and point of contact for Utah CPAs.

Diverse Population OutreachThe UACPA believes in reaching out to under-represented populations, those returning to the profession or choosing it as a second career, and other professions.

president ............................................. Kent L. Thomas

president-elect ..................................... Paul O. Skeen

vice president ....................................... Jonyce Bullock

secretary .................................................. Mark Palmer

treasurer ................................................ Kyle J. Pexton

member-at-large ................................ Hollie S. Andrus

immediate past president .................... Roger Beynon

ex-officio ............................................ Susan A. Speirs

ceo ........................................................ Susan A. Speirs

editorial staff ....................................... Amy Spencer

The Journal Entry is published quarterly, by the UACPA1240 E. 2100 South, Suite 500Salt Lake City, UT 84106tel: 801-466-8022 toll-free in Utah: 1-800-676-2776e-mail: [email protected] or log on to www.uacpa.org

Send address changes toUACPA1240 E. 2100 South, Suite 500Salt Lake City, UT 84106email: [email protected] log on to www.uacpa.org to update your address and member profile online

Cover photo - Kristan Jacobsen, kristanjacobsen.com

UACPA Statement of PolicyCPAs have common problems and interests. This magazine has been

created to share information relating to the practice of accounting.

The opinions, views and articles expressed in this magazine are not

necessarily those of the Utah Association of Certified Public Accoun-

tants. This magazine should not be deemed an endorsement by the

UACPA or its committees or editorial staff of any views, opinions or

positions contained herein. Because of the complexity of tax laws and

accounting transactions and the changing status of the law, as well as

variations in practices and procedures among accountants, informa-

tion in the magazine should not be used, acted or relied upon, as a

substitute for independent accounting or legal research and advice.

Mission,Vision,Values ExecutiveBoard


in this issue | October 2013

New Members ......................................................................................4

Movers & Shakers ................................................................................4

President's Message ............................................................................7

Cover Story: Gearing Up to Wind Down .........................................9

By the Numbers: Succession Planning ........................................... 12

Leadership in Succession Planning ................................................. 13

Transition, Retention and Partner Succession ............................... 16

Helping Clients Realize Successful Liquidity Events .................... 19

Same Sex Marriages and Federal Taxes .........................................21

What CPAs Need to Know About the New LLC Law ...................23

UESP Savings Plans Help with College and Taxes ........................26

Trends in Sales and Use Tax for Remote Sellers ............................27

Unrelated Business Taxable Income Compensation .................... 31

Meet a Member: Talon Stringham ..................................................33

2013 UACPA Awards ........................................................................34

UACPA Staff Profile: April Deneault ..............................................37 Event Photos.......................................................................................39

Education ............................................................................................42

12

feature story

The New CEO of the UACPA Talks Succession Planning

CPAs and the New LLC Law

Transition and Partner Succession

7

23

16

33

Meet the 2013 UACPA Award Winners


Congratulations to the following individuals/CPAs who were approved for membership or affiliate status in the UACPA as of August 15, 2013.

Fellows Jesse Aldous Draper, UT

Garrett Behling Mantyla McReynolds LLC

Burke Bess Tanner LLC

Kelly Bryson Farmington, UT

David D. Butler Leucadia Financial Corpo-ration

Bradley Carter Ernst & Young LLP

Scott Christensen Barrick Gold of North America, Inc.

Kaela Cornwell HJ & Associates LLC

Collin Davis St. George, UT

Mark Gold Rio Tinto

Eric Jensen West Jordan, UT

Savithry Mahalingam Salt Lake City, UT

David Mantyla Mantyla McReynolds LLC

Dane Peterson Deloitte Tax LLP

Brittiney Simmons Niederhauser & Davis LLC

Jeffery Sorensen Lake, Hill & Meyers PC

Fei Wu Wisan, Smith, Racker & Prescott, LLP

Non-CPA Professional Affiliate Nathan Johns Arches Health Plan

Student AffiliatesSouthern New Hampshire University – 1 University of Utah – 8 Utah State University – 1 Weber State University – 1

NewMembers Movers&ShakersJason Hunter, CPA, a Tax Manager at Mantyla McReynolds, was among 38 young CPAs selected to participate in the AICPAs 5th annual Leadership Academy held in Durham, NC Sept. 29 through Oct. 3. Hunter was selected from a group of more than 120 candidates recommended and

reviewed based on their work history, licensure information, professional volunteer activities, community service, and awards and honors. AICPA Chair Richard Caturano refers to this elite group as “the best and brightest young minds in the accounting profession.” Hunter joined Mantyla McReynolds in 2007 and specializes in tax planning and strategy for small and medium size companies and their owners as well as high net worth individuals. He received a bachelor’s degree from Utah Valley University and a Masters of Accountancy from the University of Utah in 2010.

Attorney David York of York Howell has been selected for the 2013 “Top Rated Lawyer” lists by American Lawyer Magazine for the September issue of The American Lawyer & Corporate Counsel. York has been selected based on his achievements in Trust and Estates

based on high peer review, high ethical standards and an overall

top-quality legal ability. York has represented clients in estate planning, tax, business planning and non-profit entities. He graduated from the S.J. Quinney College of Law and earned his Bachelor’s of Science from the David Eccles School of Business, both at the University of Utah. York Howell is a boutique law firm specializing in tax and estate planning, asset protection, business structuring and succession development.

Tanner LLC was recently honored as one of the "Best of the Best" accounting firms by INSIDE Public Accounting’s with their annual Top 50 CPA Firms list for 2013. This recognition is given to distinguished firms across the

Jason Hunter

David York

New Members/ Movers & Shakers


Movers & Shakers

In less than a year, Eide Bailly has made a big splash in Utah. On Sept. 1, Salt Lake City-based Hansen, Barnett & Maxwell joined Eide Bailly to create the first regional CPA firm in Utah.

Two other Utah firms have joined Eide Bailly this past year — Ogden-based Schmitt, Griffiths, Smith & Co. in Nov. and Salt Lake City-based Lake, Hill & Myers in July. The addition of HBM brings Eide Bailly’s Utah staff to 125 and raises its total staff to 1,300, including 194 partners.

Eide Bailly said this growth is part of their strategic plan to expand west of the Mississippi and better serve mid-market clients. Managing Partner/CEO Dave Stende says, “Our goal is to continue a high level of growth because it provides opportunities for our people and adds services for our clients. As the first regional firm in Utah, we stand out now as a clear option for clients who want personal service with high partner involve-ment and, at the same time, national-firm business solutions.”

Bob Bowen, managing partner at HBM, said his firm had been pursued by other regional firms, but they chose Eide Bailly because the two firms have similar cultures. “We feel strongly that our culture is a large part of our success, and Eide Bailly shares those core values,” Bowen says.

The Firm serves clients across all industries, but has developed strong niches in health care, financial institu-tions, non-profit, construction, manufacturing, and real estate. Eide Bailly is one of the 25 largest CPA firms in the country, with total revenues of $171 million for the fiscal year ending April 30. They have 22 offices in 10 states and serve more than 49,000 clients nationwide.

Hansen, Barnett & Maxwell join Eide Bailly, Utah's First Regional Firm

country based on their overall superior performance on more than 70 IPA criteria. With excellent planning, strategy and execution, Tanner stood out among more than 500 firms that participated in the 23rd IPA Annual Survey and Analysis for Firms. Michael Platt, publisher of IPA says these firms “represent the pinnacle of high-performing accounting firms in the U.S. and demonstrate the right combination of vision, planning, training, and execution to deliver superior performance.”

The Utah State Bar recently presented their annual awards in Snowmass Village, CO and recognized their Committee of the Year as the Budget and Finance Committee where UACPA member Ray O. Westergard served as Chair. The committee is responsible for preparation, presentation, and

integrity of the financial statements of the Bar, appropriate budgeting, accounting, and financial reporting policies and practices, and internal controls and procedures designed to assure compliance with accounting standards and applicable laws and regulations. The committee, composed of Utah attorneys and CPAs, operates with nine volunteers.

Mantyla McReynolds has received the prestigious 2013 Alfred P. Sloan Award for Workplace Effectiveness and Flexibility. As part of the national When Work Works project administered by Families and Work Institute (FWI) and The Society for Human Resource Management (SHRM), the award recognizes employers of all sizes and types in Utah and across the country. FWI president Ellen Galinsky says the Salt Lake-based firm ranks among the top 20% of employers national in terms of its programs, policies and culture for creating an effective and flexible workplace. Mantyla McReynolds was evaluated for their programs and practices and a confidential employee survey offered insight on the key ingredients of an effective and flexible workplace. Applicants are measured against national norms from the National Study of Employers.

Ray O. Westergard


Movers & Shakers

Larson, CPAs Team Up for Ragnar

Larson, CPAs brought together a team of 12 employees — six men and six women — to compete in the Ragnar, the Wasatch Back's 198 mile run on June 21 and 22. The team alternated running relay legs ranging from three to 11 miles on the road that spanned from Logan to Park City. Laron, CPAs managing partner Dennis Larson says, "I've run a lot of races, this was not like any of them. It was not about the individual, it was about the team, a team that participated in an event with 17,000 of its closest friends and was more about cooperation and camaraderie." The team included, Dennis Larson, Mark Nichols, Deann Ballard, Margo Andersen, SheriLynn Erickson, Marie Marvin, JoLene Lewis, Andy Miller, Jordan Toone, Jim Phillippi, Kaden Douglas, and Lindsey Orien. Larson, CPAs is a full service accounting and business advisory firm with five offices in Utah and Nevada, specializing in statutory accounting, tax planning and preparation, small business consulting and accounting, not-for-profit, and government auditing.

Squire Makes a Splash at the Foam 5K

Employees from Squire & Co. participated in the 5K Foam Fest at This is The Place Heritage Park on Aug. 31. In addition to running, the group was faced with challenging obstacles that brought them together through mud crawls, 50-foot foam slides and wall climbs. Thirteen participants from Squire included the following and their guests: Jordan Peterson, Rachel Moon, Amy Jolley (Scott Jolley), Sarah Rosborough, Shara Sumnall (Justice & Jasper Sumnall), Rob Shaw, Bryan Bostrom, Jonyce Bullock (Greg and Kaylee Bull-ock), Tory Norman, Brandon Allfrey (Christy Allfrey), Brittany Brown (Kyler Brown), Kevin Johnson and Bry-ant Armstrong. Squire & Co. is a Utah-based firm who has been serving businesses for more than 40 years.

Tell us about the activities going on with you or your firm. Send us pictures with details so we can let other UACPA members know what you do outside of the profession.

Send info and press releases to Amy Spencer, [email protected] or call 801.834.6633


Succession planning is a timely topic for Utah's CPAs as more than 37 percent of UACPA members are 55 or older

and another 23 percent fall within the 45 to 54 age group. The vast majority of these CPAs will retire within the next two decades. When we think of succession planning, we ask ourselves “How do I replace myself in my firm or at my job?” While an important consideration, there are other impor-tant questions to ask, such as, ”How do we ensure that those already in our firm will stay around to take over?” and “What can we do to create an environment that will attract the best and brightest graduates who are motivated to help us win and retain new clients?” The majority of those who will retire in the next 20 years are Baby Boomers and the key decision makers in businesses. Their attitudes about work and other life priorities, while admirable and to a great degree responsible for much of the economic growth in America since the 1980s, is quite dif-ferent from those of later generations. There may be room for debate about whose priorities or attitudes are better, but that is the subject of another discussion. My point is that if my firm or company has a culture based on my priorities and attitudes, and they are significantly different than what a new generation of workers wants to have in their work experience, they will either join my firm and leave after they have enough experience to progress to the next stage of their career or they simply won’t join at all.

When confronted with change, we typically ask, “What’s in it for me?” In the case of making changes to attract and retain the best in the profession, there are two answers. First, we will

help to establish the accounting profession as a first choice for the best and brightest by providing an environment where CPAs can thrive by using their knowledge and skills with technology in conjunction with the type of social, interac-tive and purposeful team setting that they enjoy. This will attract them – if they like what they experience, recruiting will be simple because they will use social media and their power of persuasion to do it for us. Second, if we provide a diverse and fair workplace where individuals are rewarded, acknowledged and promoted based on performance rather than conformance, we will be able to retain many who are now joining our profession yet who leave at rates sometimes double the average — specifically women and minorities.

By creating a diverse and rewarding culture, with a broad base of experienced and motivated staff, management and partners, it will be easier to attract and retain an increasingly diverse client base. If we are growing and retaining our clients and have bright graduates clamoring to join our firm, finding the right individual(s) to take the reins as we retire will not be a problem. We will also be increasing the value and provide a solution in which the owners, the firm and the clients win.

Good luck as you navigate the choppy waters of firm succes-sion. The UACPA staff can help you with research materials and resources, please reach out to them, as they are a bright and helpful group whose job and desire is to help you, the UACPA member.

Thank you, Kent L Thomas, CPA UACPA President

president’s message

President's Messagepreparing a new generation for unexpected roles in their careers


President's Message


Feature storyGearing Up to Wind Down

Over the last four months, I have been reflecting upon my own career, from the beginning to the most un-

expected twist of transitioning from public practice to the CEO of the UACPA. Among life’s many curve balls, I sud-denly found succession planning – a hot topic among CPA firms right now – as a reality that needed to be dealt with immediately. Becoming a CPABefore graduating high school, I was geared towards study-ing something in the medical field. That all changed when I took an accounting class and marketing class during my senior year. My teachers brought to life some of the base-line principles of how business worked and some of the opportunities that having good solid business background, especially accounting, could bring to any career. Rather than declaring myself a biology or pre-med major in col-lege applications, I boldly declared myself as an accounting major and never looked back.

Upon graduation from Weber State University, I found my-self working with small businesses at Haynie & Company, a regional accounting firm. I was trained well by the partners and staff and learned not only to apply the things I studied in college, but also the intangible skills of how to obtain cli-ents, work with them, grow their businesses and work with all their counterparts integral to their success.

The firm also required that employees get involved in out-side activities that contributed to the profession and com-munity. After licensure dues were paid to the AICPA and the UACPA, I joined the Tax Symposium Committee. Many committees, task forces and years later, I was nominated to be president of the UACPA. During this period I had moved from working for a regional public accounting firm to working for industry and then working for myself.

Around this time the CPA profession, as well as many other professions, was struggling with the concept of flextime and how to handle the needs of working mothers who were juggling a career, family and life in general. Steve and I had two kids and we wanted to be able to participate in their activities and events as they grew. Coming from a long line of educators, it was important for me to be able to help out in school once they began school so I needed to lay the ground work well in advance; our profession was still heav-ily dominated with males so I knew that a trail was going to

succession Planning and the way life changes can affect your Plan

by susan speirs, cpa, cgma


have to be blazed well in advance. This has proven to be an invaluable experience as I had opportunity to consult with other small businesses regarding flex time, how I managed to juggle everything – and sometimes not. What was even more interesting was that men wanted to get in on the ac-tion and have flex time to do things with their children as well whether it was in the schools or on the soccer field.

For me, going out on my own best facilitated the needs of our family and enabled us to charter our own flextime path while others did the same. My initial thoughts were that I would work with my own clientele until my children were in school full-time and then go back to the “firm life” as it was, but I discovered others were looking at what I was doing and found it not only intriguing but perhaps work-able in their own scenarios as well. I had the opportunity to help lay ground work with a few public accounting firms as they worked with their own employees who needed flex-time and establish initial parameters that have ultimately lead to a way of life in the employee structure of many small businesses and firms.

Giving Back My grandmother was one of my biggest mentors. She always told me to give back to my profession and my pro-fession would give back to me and serve me well. She was correct!

Reflecting over the last 28 years of my own professional career and involvement with the UACPA has given me insights into the opportunities we have as a profession and

an Association. Across the board, we are bludgeoned with regulations, deadlines, technology and myriad challenges while trying to carve out a real life for ourselves and loved ones.

The UACPA provides great value in its ability to enable members to network with each other and gain insights, knowledge and resources at a level they might not obtain elsewhere. Our Association has become a credible source with regards to legislative issues. More and more, we are being contacted with requests to serve on legislative com-mittees and task forces in areas of taxes and budget issues, strategic planning and deconstruction and re-construction of current models used in the various infrastructures our state has in place with regards to finances and revenue streams. Our members’ input is valued as we provide non-partisan thought and advocacy in the business community and public at large as we deal with proposed regulations on a statewide platform.

Our association offers new members the opportunity to mentor and champion other CPAs and participate in leadership opportunities that will carry them through the rest of their careers regardless of the direction they take. As a professional organization, we understand that members entering into the profession will probably not remain in the first job opportunity they employ upon graduation. The UACPA acts as a hub for all members as they move from one employment opportunity to another or from one facet of the profession to another in an environment that gives


them stability.

As CEO of the UACPA, I would like to re-enforce the value of membership as the go-to place for current members, new members and prospective members. We will continue to challenge members through our advocacy efforts, provide professional education resources, leadership development opportunities, networking and community service. We will continue to provide opportunities for CPAs to continue to succeed in our ever changing and competitive world. Looking Ahead As I’ve had the opportunity to transition from CPA in public practice to CEO of the UACPA, I found myself faced with the overwhelming thoughts about passing my clients to someone else. I should add, I’ve lived the succession plan-ning process and have pondered what I would do differently.

Like many, I subconsciously figured I would die with a tax return in one hand and a calculator in the other. Based on my experience of the last four months, I would not recom-mend leaving your planning to this fate.

I’ve been fortunate to know many practitioners and to have worked with a brokerage firm to help me move my practice and interview buyers in a manner that will be beneficial for my clientele. This has been a pretty emotional process – a few tears have been shed as I’ve broken the news to clientele that I’m moving on to a new facet and am turning them over to another that will be able to serve them better and help them achieve their own financial and business goals.

Succession planning is tough at best for anybody to think about. However, if I had a magic ball and knew what I know now, I would have started planning three or four years ago by implementing a contingency plan of who should take care of my clientele in the event that something happened to me. Interestingly, over the last year, my plan was to revisit merging my practice with another as I needed help in my office and wanted to improve efficiencies with additional technology.

Being an “empty nester” provided an array of opportunities to expand and merge my own practice. Both our kids are in college and my goal was to either expand my own practice or merge in with another. But who would have guessed that I would be doing something completely opposite of what a typical public practitioner does? Selling my practice was

nowhere on my horizon.

I've learned that many public practitioners are dealing with succession planning in a huge way as the “Baby Boomer Bubble” continues to expand and the pool of CPAs that want to remain in public practice contracts. Recent surveys by the AICPA have indicated that 78% of firms do not have client transition expectations with financial penalties for retiring partners if they are not completed. There is a trend by more and more firms that client transition expectations are built into partner agreements. For example, at least a two year notice of completion of client transition upon a manda-tory date of retirement.

Where many firms have unfunded retirement revenue streams, successful handoff and retention of clients is about the only way a retiring partner will be able to receive pay-ments from clientele post retirement. A well-executed client transition plan is not only the best protection for the firm and retiring partner, but also for the client as they need to be comfortable with the individual taking care of their financial needs and build the trust necessary to progress. A New Chapter Taking this leap in my career wasn’t an easy decision, but I look forward to working with all of you and taking my expe-rience as a CPA to enhance the profession through this ter-rific organization. As the year comes to a close, think about where you are in your own career and what avenues you need to take to shore up your practices and businesses as life takes you down a sometimes chaotic and twisted road. ■

Susan Speirs, CPA, CGMA is the CEO for the UACPA. Previously, she operated Susan Speirs & Associates, LLC and has been in the public accounting industry for 28 years. The former UACPA president currently chairs the Federal Funds Commission under the Utah State Legislature. She is on the Utah Council of Economic Education, the Utah State Board of Education Council of Economic Education and the Jump$tart Coalition. She can be reached at [email protected].

Feature Story


Numbersby the

These numbers reflect responses from 509 multi-owner firms who participated in the 2012 PCPS Succession Survey

Succession Planning

46 percentage who have a written, approved succession plan in place.

source: http://www.aicpa.org/interestareas/privatecompaniespracticesection/strategyplanning/center/downloadabledocuments/successionsurveymulticomm.pdf

15 percentage of those who know they have a problem, but don't know how to get started putting together a plan.

79 percentage who expect succession planning to be a significant issue for their firm in the next 10 years.

20percentage of firms who say retired owners are still active in the community and serve as an ambassador to the firm.

42 percentage of senior partners who feel that younger members of the firm are not ready for leadership positions. This is the primary concern hampering firm's succession strategy.


Leadership in Succession Planning: Who's Steering the Ship

As CPAs, we pride ourselves on our status as trusted advisors to our clients. This often places us right in

the middle of conversations about business succession. Should the client sell to a third party? Have they considered a charitable remainder trust? Should they create an ESOP? Should they gift the business to their heirs?

Working together with attorneys and others, we craft beautiful succession planning documents complete with sophisticated legal structures, elegantly prepared and executed. We’ve considered all the angles and made all the right tax moves. But what happens when there is insufficient leadership bench strength to allow the organization to continue to thrive and grow?

One of the biggest oversights that I find in succession planning is leadership succession. There are real reasons why this gets overlooked.

It’s Hard to QuantifyPerhaps this gets overlooked because it is much more difficult to quantify and plan for. Clients cannot simply plug a bunch of assumptions into a spreadsheet and reach the correct conclusion on how to deal with leadership succession.

It’s UncomfortableSometimes, we don’t talk about it because it’s uncomfortable. It means talking about strengths and development areas for key staff. It requires us to render difficult judgments and can sometimes involve painful conversations. This is especially challenging when we throw family-owned and managed businesses into the mix. We Don’t Know Where to StartLeadership succession is a relatively rare event during the life cycle of many businesses. A lack of familiarity with key

by dan griffiths, cpa


aspects of the process can lead to the paralysis of inaction. So where should we start?

It Starts with Assessment

It’s hard to know how to get where we’re going unless we know where we are. Organizations need to assess where their key up-and-coming leaders stand relative to where they need to be in order to assume greater responsibilities. The 360-degree leadership competency survey and assess-ment can play an important role.

These tools gather input from peers, supervisors and subordinates to provide a more complete picture of the leadership attributes of key successors as experienced by others throughout the organization. This is a critical data point in understanding the leadership bench strength at the organization.

It’s important to select a tool that uses “normed” data sets. This compares the results for the leader being assessed with the results for thousands of other similar leaders who have been assessed at other organizations. It answers the ques-tion, “How do our leaders stack up compared with other leaders throughout the world?” It also makes it much more difficult for the individual being assessed to dismiss the data in their assessment.

Craft a Plan

Once we know where we stand today, we need a plan for improvement. Individual development planning is critical in any leadership succession plan. What does the potential successor do well? What are some areas for development that have been highlighted in the assessment? Set goals for how they can improve.

The foundation of a solid development plan is good goal setting. Goals should be objective, measurable, and time-bound. Things like “Be more strategic” or “Show more empathy” do not meet any of those criteria. Be specific and then create an action plan with steps for achieving the goals.

Don’t bite off too much at once. Two or three solid goals that provide focus are far better than ten goals which dilute that focus and make it less likely that meaningful progress will be made.

Think About Structured Coaching

Coaching helps ensure that key emerging leaders stay focused on their development objectives. These individu-als were identified as likely successors for a reason. They’re probably very good at what they do which means that people are constantly asking them to take on other projects and initiatives. Without regular follow up from a coach, leadership development goals will often take a back seat to the crisis du jour.

Be sure to provide some structure to ensure that regular coaching is taking place. One of the best ways to increase the likelihood that regular coaching meetings take place is to keep things very simple. This can truly be as simple as setting the expectation for monthly 15-minute coaching sessions. Create a very simple template to guide conversa-tion during the sessions and keep things focused on what’s most important. Here’s a simple example of what could be included in each monthly check-in:

1) Three things that are going well

2) Three areas for improvement

3) One very specific goal for the next 30 days (that is likely supportive of an aspect of the individual development plan)

4) One thing the coach can do to help and support during the next 30 days

Don’t over think this. Don’t try to complicate the coaching sessions. Keep them focused and supportive of the indi-vidual development plan.

it's important to select a tool that uses "normed" data sets. this compares the results for the leader being assessed with the results for thousands of other similar leaders who have been assessed at other organizations.

Leadership in Succession Planning: Who's Steering the Ship


Succession Planning

It Takes TimeRemember, leadership development takes time. Most often, improvement in key leadership competencies is incre-mental. Ideally, companies will begin the assessment and development planning process at least two years prior to any leadership succession event.

A Note About Family-Owned & Managed Businesses

Family-owned and managed business can have unique dynamics. To help ensure a successful leadership transi-tion, encourage these businesses to recruit or develop at least one non-family professional who can be part of the executive team. Often, this non-family role is played by the CFO or controller. This individual can help provide impor-tant diversity of perspective and some measure of stabil-ity during any leadership transition. Even for non-family businesses, it’s important to consider the successor in the context of their team, paying careful attention to surround-ing them with people who have complementary strengths.

Leadership Matters

One true measure of a leader is their success in cultivat-ing leadership attributes in others. What are we doing to encourage our clients to focus on leadership succession, not just ownership transfer? It’s in their best financial interest to do so. Let’s be sure that in our haste to assist with the trans-actional aspects of succession planning, we don’t overlook the vital role of leadership in any successful transition. ■

Dan Griffiths, CPA, CGMA is the Director of Strategic Planning at Tanner, LLC. Dan is a graduate of the 2010 AICPA Leadership Academy and in 2011-2012 served as the chair of the Young CPA Network Committee for the AICPA. Dan has been active with the UACPA and in 2011 was recognized as the Outstanding CPA in Business and Management. He was recently selected to serve as Utah's elected member of the AICPA Governing Council.

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CPA firms are wrestling their way through partner retirements and the accompanying succession issues

in numbers that the profession has never seen before. It’s the Baby Boomer Bubble, up close and personal. Our suc-cession planning should focus on replacing that retiring partner’s contribution on several fronts. Depending on the role of the retiring partner in the firm we will experience varying levels of pain surrounding things like replacing significant knowledge or technical expertise, backfilling a block of hours to get the work done and shoring up voids left in firm leadership. These are all significant issues and deserve a plan of their own. But the biggie and the focus of this article is the transition of client relationships.

The premise that underlays this discussion is that most of the firms that I work with and somewhere around two thirds of all multi – partner firms out there have an un-funded partner buy out or “retirement” plan. That means that retirement payments over an extended period of time will (hopefully) come from the continued operations and profits of the firm. The currency that the firm will use to pay out that retiring partner is really the annuity revenue stream from the clients that they used to serve. A successful handoff and the retention of those clients is the only way that the unfunded plan has a chance to survive.

If you buy into the critical importance of client transition

and retention, then we should expect that most firms have developed both a pretty good transition process and some well defined requirements for the retiring partners. Unfor-tunately, more often than not, that is not the case. The 2012 Succession Survey conducted by PCPS and the Succession Institute reported that 78% of firms do not have client transition expectations with financial penalties for retiring partners, if they are not completed.

If you are one of those firms in the 78% bucket, the balance of this article will give you some ideas on how to do a bet-ter job with client transition. Please pull out your partner agreements, dust them off and see if they even deal with this critical issue at all.

First make sure that you have a mandatory retirement date for partners. I dig into that topic a lot deeper in another ar-ticle, but the point here is that there is a target date (for in-stance age 65) that we all know is coming that is controlled by the firm. There is no way to create an effective transition plan without everyone knowing when it is.

I recommend that the client transition process begin at least two years before the partner’s expected retirement date. The reason is that for the largest clients and/or the ones with the closest relationships to the partner, you re-ally need at least two cycles for a successful handoff to the

Transition, Retention and Partner Successionby gary adamson, cpa


client should be grouped into categories based on the expected ease of transition and specific steps determined for each group. for the easiest ones, it may be just a phone call from the partner talking about the upcoming retirement and who will not be handling them, others may be an introductory meeting, other will require a much more significant time commitment with shadowing in meetings and the year-end process.

successor. In every partner’s book there are some easy ones and some very difficult ones. The easy ones may include 1040’s or small business clients or hopefully a number of accounts where another partner or senior manager is already very involved. The tougher ones are almost always where very close personal relationships and friendships have developed over the years. Here’s the critical point – it is usually more about the retiring partner letting go and facilitating the handoff than it is about the client accepting it. Just because the client has a new person to handle their account doesn’t mean that the friendship with the retiring partner ends.

The transition plan specific to the partner should be devel-oped with the managing partner. Clients should be grouped into categories based on the expected ease of transition and specific steps determined for each group. For the easiest ones, it may be just a phone call from the partner talk-ing about the upcoming retirement and who will now be handling them, others may be an introductory meeting, others will require a much more significant time commit-ment with shadowing in meetings and the year end process. You’ll know that you have been successful when the client is calling the new partner and the retiring partner has less and less to do. I really like to see the workload of the retir-ing partner almost gone during the last six months of the transition period. During the two year transition period there should be quarterly update meetings with the manag-ing partner to review the completion of the plan.

The previous discussion assumes that there is a qualified

person at the right level with a fairly good personality match that can step into the relationship. Please make sure that a part of your plan is to free up the right people to be able to take the key relationships of the retiring partner. I see too often that the right partner in the firm to take that really large important relationship is already full.

So, we try to give it to managers or the retiring partner hangs on to it or we come up with some other bad answer. It may not be intuitive that you need to create even more transition issues moving clients to make room, but to make sure that you have the best home for some key accounts that is in fact what the firm needs to do.

Now, to the most controversial question. The trend by more and more firms is to build the client transition expectations into their partner agreements: i.e. a two year notice and the completion of a written transition plan with the manag-ing partner. If the retiring or departing partner fulfills the expectations then a successful transition of the clients is a lot more likely and there should be no penalty for any subsequent losses. However if the partner does not meet the firm’s transition expectations and clients depart within a relatively short period of time (say two years) then the partner suffers a reduction in retirement payments. This is not where the majority of firms are today but it is where they are going.

As the Baby Boomers march toward retirement the likeli-hood of multiple partner payouts within your firm in-creases. A well executed client transition plan is the best protection for the firm and the best insurance a retiring partner has that they will receive those unfunded retire-ment payments down the road. ■

Gary Adamson is the President of Adamson Advisory, specializing in practice management consulting for CPA firms. He is an Indiana University graduate and has extensive hands-on experience as the recent managing partner of a top 200 CPA firm. Learn more at www.adamsonadvisory.com.

Succession Planning


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Helping Clients Realize Successful Liquidity Events

After spending a lifetime building a business, some business owners, due to a lack of planning,

don’t have a business that can be sold or they severely minimize the business value upon sale. Sadly, this sort of fact is likely to be discovered once it is too late. If the business owner has finally decided to sell the business, the owner does not want to wait another three to five years to prepare the business for sale. Thus, the owner is forced to either work several years longer than desired, or to dispose of the business for a much lower amount than expected.

CPAs are well suited for helping their clients avoid this predicament. The relationship between the CPA, as the business owner’s trusted business advisor, combined with the CPA’s financial expertise, can be applied in helping business owners prepare their company for a sale.

Exit Plan The first thing the CPA should consider is asking about the owner’s exit plan. When does the owner want to

retire or sell the business? Does the owner plan on selling the business internally or externally? If internally, are there people internally who are prepared to take over the business, from both financial and leadership perspec-tives? If externally, are there logical acquirers who may be able to realize synergies from the transaction? By asking a business owner these questions, CPAs are able to ensure that the business owner is at least thinking about the exit plan. These questions will likely prompt further discussions about the next steps in the liquidity event process.

Value Second, the CPA should ask about the value of the business. Does the owner know how much the business is worth? If so, what is the basis for the value? Business owners frequently have a number in mind which may or may not be tied to the true value of the company. Simi-larly, business owners oftentimes rely on industry “rules of thumb” for their business. Reliance on such rules can

by jeff pickett, cpa/abv and rick hoffman, cpa/abv


Helping Clients Realize Successful Liquidity Events

misstate the value of the business if the rule of thumb is not accurate or if the business is not typical for the industry, thereby potentially leaving money on the table. If the owner doesn’t know the value of the business or if the basis upon which the owner determined the value is flawed, the CPA should recommend that the business owner obtain a third-party valuation. If performed by a qualified valuation professional, a valuation will not only help the owner understand the value of the business today, but it can also help the owner and the CPA to identify areas to increase the value of the business. These areas of improvement can occur in a variety of ways, many of which may result in additional work for the CPA (e.g., tax planning, benchmarking, etc.).

Teamwork A successful liquidity event requires multiple advisors, including CPAs, attorneys, financial planners, valuation professionals, business brokers or investment bankers, and more. CPAs should know professionals in each of these areas who they would be comfortable recom-mending to their clients. Based on these relationships, the CPA should recommend that the business owner assemble a team of advisors appropriate for the transac-tion three to five years in advance. While the owner may feel like this is overkill, doing so in advance will ensure a successful transaction.

Planning Planning is the step where the rubber meets the road. Once the CPA has helped the business owner assemble

the right team, the business owner is in a position to take the appropriate steps to prepare for the sale. These steps may include the following:

• Finding ways to increase the value of the business prior to the sale.

• Decreasing potential tax exposure through appropriate income and estate tax planning techniques.

• Improving the financial position of the business by cleaning up the financials (i.e., removing owner receivables and payables from the balance sheet).

• Determining an equitable way to transition the ownership of the business to internal buyers.

• Transitioning leadership roles to the next generation of leaders within the company.

• Positioning the business as a strong candidate to compliment potential acquirers’ businesses.

Sellers that prepare for a sale put themselves in a position to be fully rewarded for their years of hard work. CPAs are in a perfect position to assist in this preparation. This type of work is very rewarding as it allows CPAs to advise their clients through one of the most important transactions in their lives. ■

a successful liquidity event requires multiple advisors, including cpas, attorneys, financial planners, valua-tion professionals, business brokers or investment bankers, and more. cpas should know professionals in each of these areas who they would be com-fortable recommending to their clients.

Jeff Pickett and Rick Hoffman are principals at the consulting firm Lone Peak Valuation Group located in Salt Lake City, Utah. Both spend the majority of their time on business valuation related consulting projects such as business valuation, damage calculations, and business consulting.

21the journal entry | October 2013 21

by edward k. zollars, cpa

The IRS issued its eagerly awaited guidance of how the Supreme Court’s Windsor decision would

be applied overall in federal taxes in Revenue Ruling 2013-17 (http://www.irs.gov/pub/irs-drop/rr-13-17.pdf).

The ruling specifically looked to answer three questions that were not necessarily clear under the IRC following the Windsor decision:

• Would the IRS use, to borrow Justice Scalia’s terms from his dissent, the state of current domi-cile, state of celebration or state of domicile at the time the marriage is entered into to determine marital status for federal tax purposes?

• Would there be a difference in dealing with IRC provisions that refer specifically to “husband,” “wife,” or “husband and wife” as opposed to those that refer only to “spouse” or similar gender-neutral terms?

• Does the treatment as married extend to couples in relationships defined by state law that are not denominated as marriage (such as registered domestic partners or civil unions) but may grant rights “as if ” the couple were married?

To answer the first question (which state’s laws control) the IRS turned initially to its analysis of common-law marriage issues found in Revenue Ruling 58-66. Under that ruling, if a couple established a common-law mar-riage in a jurisdiction that recognizes the same, a later relocation to a state that refuses to recognize a marriage unless the couple has a formal marriage ceremony does not change their status as married for federal tax pur-poses.

The IRS notes, first, that this “once married, always mar-ried even if the couple relocates” has been used success-fully for common-law marriages for more than 50 years. The IRS also finds that a uniform rule gives a simpler

Recognition of Same Sex Marriages for Federal Tax Purposes


tax administration than would be true under alternative treatments, including changes in “related party” status under various IRC provisions (for instance, IRC §318) for a couple merely by relocating to a state that did not recognize the marriage and complications for employers that operate in more than one state, greatly complicating administration of employee benefit plans.

Thus, the IRS has amplified Revenue Ruling 58-66 (the common-law marriage ruling) to cover same-sex mar-riages as well. So long as the marriage is valid in the state in which it is entered into, it will be recognized for federal tax purposes. A footnote to the ruling clarifies that the same rule would apply if the marriage were celebrated in a foreign jurisdiction that recognized the marriage.

The IRS also decided that it would not attempt to dif-ferentiate those provisions that contain a gender specific reference to parties in a marriage (that is “husband” and/or “wife”) and rather treat all such references in a gen-der neutral form. Effectively this means that where such words are found, the adviser should simply read “spouse” or “spouses” instead of the gender specific wording.

Finally, the IRS also ruled that if a state establishes a status that is not deemed married under state law (such as a registered domestic partnership or a civil union) the parties will not be treated as married for federal tax purposes. This holding is contrary to an information let-ter issued back in 2011 by the IRS regarding Illinois civil unions involving opposite sex couples issued to a national

tax preparation firm.

Finally there arises the question about what do about returns already filed or 2012 returns on extension and either not yet filed, or filed after the issuance of the Wind-sor decision. And, unfortunately, the ruling leaves some of these questions open.

The ruling clearly allows a taxpayer to rely on this ruling to file original returns, amended returns or claims for refund for any return for which the statute of limitations remains open. The ruling notes that if a taxpayer does file such a claim for refund, the return must consistently treat the couple as married for all purposes — so the taxpayer cannot “cherry pick” to exclude the value of medical insurance paid for a same-sex spouse from income but ignore dealing with negative consequences that arise due to being required to use a rate schedule of either married filing joint or married filing separately.

The ruling does note that the ruling will be applied pro-spectively as of September 16, 2013. The IRS in its FAQ released along with the ruling holds that if a 2012 return is not actually filed by Sept. 16, 2013, the taxpayer must file using either married filing jointly or married filing separately. However, a taxpayer who files before that date has the option of filing using either the married status or filling as if DOMA had not been overturned (that is, as not married).

Since a “marriage penalty” occurs in most (but not all) cases for income tax purposes, some taxpayers may now be facing a filing deadline one month earlier than they believed would apply. ■

Ed K. Zollars, CPA is in public practice in Phoenix, AZ as a partner with the firm of Thomas & Zollars, Ltd. He has been in practice for more than 20 years, specializing in tax issues for closely held busi-nesses and individuals.

the irs also decided that it would not attempt to differentiate those provisions that contain a gender specific reference to parties in a marriage (that is "husband" and/or "wife") and rather treat all such references in a gender neutral form. effectively this means that where such words are found, the adviser should simply read "spouse" or "spouses" instead of the gender specific wording.


On April 1, 2013, Governor Gary R. Herbert signed into law a new limited liability company (LLC)

statute (the “New Act”) to replace the existing LLC statute (the "Old Act"). The New Act will automatically apply to all Utah LLCs formed after January 1, 2014, and, after January 1, 2016, the New Act will apply to all Utah LLCs (regardless of the date of their formation). This article reviews several significant differences between the Old Act and the New Act to highlight issues that CPAs should be aware of when advising clients who own or operate their businesses through a Utah LLC.

An Operating Agreement is Vital Under the New Act. The New Act provides a set of default rules that will govern the LLC if the members do not adopt an oper-ating agreement. For example, if an LLC does not adopt an operating agreement, the New Act provides that each member has “equal rights” in the management and affairs of the LLC and that distributions be divided in “equal

shares among members.” See Utah Code Ann. Sections 48-30-407(2)(b) and 48-3a-404(1). These default rules work well for a two-member LLC where the members each own 50% of the LLC and the members intend that each member has equal rights to management (i.e., one member = one vote) and that distributions be made in equal shares. The default rule may have unintended consequences, however, in a two-member LLC where the parties intend that ownership not be equal. For example, if the parties intend for ownership (i.e., voting and economic rights) to be divided 90% for one member and 10% for the other member, the default rules of “equal rights” in management and “equal shares” in distribu-tions give the 10% member too much voting power and distributions and takes away the voting power and distributions from the 90% member. Utah LLCs and their CPAs should be familiar with the impact the default rules under the New Act will have on their LLC and ensure that the LLC owners adopt an operating agreement to avoid any unintended negative consequences. A robust and detailed operating agreement is the only way an LLC

What CPAs Need to Know About the New LLC Lawby mark astling


What CPAs Need to Know About the New LLC Law

can modify the New Act’s default rules and ensure that the members’ agreement is protected and upheld in the future.

In an area of particular concern for accountants, the New Act does not have a default rule for allocations of profits and losses. In contrast, the Old Act con-tains a default rule that allocates profits and losses in accordance with the members’ capital contributions. In eliminating this default rule, the New Act recog-nizes that members may contribute services to the LLC in exchange for their interests in the LLC, and that applicable tax, accounting and other regulatory requirements should provide the basis for the alloca-tion of profits and losses. Utah LLCs and their CPAs should be aware of the absence of a default rule with respect to profits and losses and take appropriate steps to clearly delineate their agreement with respect to such allocations in the LLC’s operating agreement.

Adopting a Written Operating Agreement Can Prevent it from Being Inadvertently Modified The Old Act required an operating agreement to be in writing. See Utah Code Ann. Section 48-2c-102(16)(a). The New Act allows any agreement whether “…oral, in a record, implied or in any combination thereof…” to be considered an operating agreement. See Utah Code Ann. Section 48-3a-102(16). Without a written operating agreement, a court will consider a wide range of evidence in determining what constitutes the agreement among the members, including the conduct of the members, their course of dealings, and oral statements. Any activity involving unanimous consent of the members may become part of the “operating agreement.” The best way to provide certainty with respect to the rights of the members is to: (1) adopt a written operating agreement that clearly sets forth the rights and obligations of the members and management, (2) include an integration clause in the written operating agreement to make it clear that the written operating agreement constitutes the whole agreement among the parties and that the written agreement supersedes and preempts any prior (or con-temporaneous) agreements, and (3) require all amend-ments to the operating agreement to be in writing.

Given the possibility of oral and implied-in-fact com-ponents to an operating agreement, a person becoming a member of an existing LLC should take precautions to ascertain the full contents of the operating agree-ment whether written, oral or is implied in fact.

Limited Public Disclosure of Ownership and Management. The New Act limits public disclosure of ownership and management of the LLC. Under the New Act, an LLC is formed by filing a certificate of organization with the Utah Division of Corporations and Commercial Code. The New Act requires that the certificate of organization contain only the name of the entity, the name and address of its registered agent and the street and mailing address of the LLCs principal office. See Utah Code Ann Section 48-3a-201(2). Under the Old Act, an LLC's articles of organization were required to contain the names of all managers (if the LLC was manager- managed) or the names of all members (if the LLC was member-man-aged). The New Act does not require the certificate of organization to designate whether the LLC is member-managed or manager-managed. Under the New Act, the operating agreement of an LLC contains those and other governing provisions. Since the operating agreement is not a publicly-filed document, Utah LLCs may keep certain information about its ownership and manage-ment out of the public eye.

given the complex issues surrounding the formation of an llc, the choices of law available to its members, the impact and operation of the new act's default rules and related topics, it is advisable to seek qualified legal advice from an attorney who is familiar with utah's new act and the laws of other jurisdictions in order to ensure that the needs of the llc and its owners are met.


Mark L. Astling is a Shareholder in the Salt Lake City office of Durham Jones & Pinegar. Astling advises a variety of corporate and pass-through entities and individuals on business and federal and state tax issues, including business formations, equity compen-sation, mergers and acquisitions, tax accounting, tax exempt organizations, and other tax planning matters.

Existing LLCs May Opt-in To the New Act before January 1, 2016 Until January 1, 2016, the New Act will not apply to Utah LLCs formed before January 1, 2014. On January 1, 2016, the New Act will apply to all Utah LLCs. If members of an existing LLC desire to have the New Act — rather than the Old Act — apply to their LLC before January 1, 2016, they may elect to opt in to the New Act when the New Act becomes effective on January 1, 2014. This process (known as “opting-in”) is accomplished by including an affirmative statement in the LLC’s operating agreement that the members elect to have the New Act govern the LLC and affairs. See Utah Code Ann. Section 48-3a-1405(1)(b). If an operating agreement already exists, it will need to be reviewed in order to comply with any provisions it may have relative to having the members amend its provisions. If the operating agreement is silent as to amendments, then the Old Act requires that all of the members agree to an amendment of the operating agreement. See Utah Code Ann. Section 48-2c-506.

Conclusion This article reviews several key issues that Utah LLCs and their CPAs should consider in light of the adoption of the New Act. Given the complex issues surrounding the formation of an LLC, the choices of law available to its members, the impact and operation of the New Act’s default rules and related topics, it is advisable to seek qualified legal advice from an attorney who is familiar with Utah’s New Act and the laws of other jurisdictions in order to ensure that the needs of the LLC and its owners are met. ■

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Tax


Utah Educational Savings Plan Helps Families Save for College, Save on Taxes

Help your Utah and non-Utah resident clients alike benefit from the tax advantages of saving with the Utah

Educational Savings Plan (UESP), Utah’s official nonprofit 529 college savings program. UESP account owners can claim a number of tax benefits, including a Utah state in-come tax credit for Utah taxpayers. About UESP UESP was established by the Utah State Legislature in 1996 as a tax-advantaged investment vehicle designed to en-courage individuals to save for the future costs of a higher education. It currently holds $6 billion in assets. Account owners can choose from 14 investment options that include investments in a variety of funds offered by Vanguard®, Di-mensional Fund Advisors®, the Public Treasurers’ Investment Fund, and an FDIC-insured savings account.

Tax Benefits Tax Deferred Growth Earnings on a UESP account grow tax deferred, and with-drawals are exempt from federal and Utah state income taxes if the money is used for qualified higher education expenses (tuition and fees; required books, supplies, and equipment; and certain room and board costs). The funds can be used at any college, university, or technical school in the United States or abroad that participates in federal financial aid programs for students.

Utah State Income Tax Credit/Deduction Utah individual taxpayers/residents and trusts may claim a

5 percent Utah state income tax credit on contributions to their accounts up to $1,840 per qualified beneficiary, equal-ing up to $92. For taxpayers married filing jointly, the 5 percent credit may be claimed for contributions up to $3,680 per qualified beneficiary, equaling up to $184. Even Utah-based corporations that own UESP accounts can benefit from a $1,840 tax deduction per qualified beneficiary.

To qualify for the tax benefits, the account beneficiary must be designated as such before the beneficiary’s 19th birthday. If this requirement is met, the tax benefits may be claimed for annual contributions over the life of the beneficiary’s ac-count.

Gift and Estate Planning Advantages A special provision for 529 plans allows a person to make a gift of up to $70,000 ($140,000 if filing jointly) to a single beneficiary in one year without creating a taxable gift if the person makes an election on IRS Form 709 to treat the entire gift as a series of five equal annual gifts.

See UESP on page 29

2013 Year-End Contribution Deadlines Mailed and faxed contributions must be received at the UESP office before 5 p.m. (MT), Tuesday, December 31, 2013.

Online contributions must be completed at uesp.org before 11:59 p.m. (MT), Tuesday, December 31, 2013.


Trends in Sales and Use Tax for Remote Sellers by jamie c. yesnowitz, j.d., ll.m. and chuck jones, j.d., cpa

Click-through or affiliate nexus legislation has become a popular way for states to require certain remote

sellers (i.e., Internet vendors) to collect sales or use tax on their sales to in-state residents. Click-through nexus legislation typically establishes nexus or a presumption of nexus where a remote seller pays a commission to an in-state resident for referrals that result in a certain threshold of sales to in-state customers. Affiliate nexus legislation typically establishes nexus or a presump-tion of it where the remote seller’s in-state affiliate per-forms certain activities that benefit the remote seller.

The rationale behind such legislation is that Internet vendors should not have a competitive advantage over brick-and-mortar stores. While the customer is legally obligated to self-assess the appropriate use tax due on an Internet transaction, in reality, the customer is often unaware of this obligation, and its enforcement is in-consistent and relatively rare. State tax authorities find it impractical to devote their personnel to individual audits, and attempts to audit individual consumers’ use tax compliance face privacy concerns. Therefore, states are concerned, especially in light of their budget crises, that they are not receiving the proper amount of tax due on sales to their residents.

Since 2008, following New York’s lead, the following states have enacted or implemented click-through nexus rules: Arkansas, California, Connecticut, Georgia, Il-linois, Kansas, Maine (effective Oct. 9, 2013), Minnesota, Missouri, North Carolina, Pennsylvania, Rhode Island, and Vermont. For Vermont, the legislation goes into effect if and when 15 or more other states have enacted similar legislation.

The states that have enacted affiliate nexus legislation or implemented affiliate nexus rules are Arkansas, Califor-nia, Colorado, Georgia, Illinois, Iowa, Kansas, Maine (effective Oct. 9, 2013), Missouri, New York, Oklahoma, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, and West Virginia (applicable on and after Jan. 1, 2014).

While the trend to enact click-through or affiliate nexus legislation continues, it is unclear whether remote seller collection requirements violate the Due Process and Commerce Clauses of the U.S. Constitution. Based on long-standing constitutional law, a state cannot overex-tend its reach by taxing sellers that have very little or no connection to the state aside from making sales to resi-dents there. Moreover, in Colorado and Illinois, courts have found constitutional violations in remote seller


Trends in Sales and Use Tax for Remote Sellersnexus legislation (Direct Marketing Ass’n v. Huber, No. 10-cv-01546-REB-CBS (D. Colo. 3/30/12); Performance Marketing Ass’n, Inc. v. Hamer, No. 2011 CH 26333 (Ill. Cir. Ct. Cook Cty. 5/7/12)).

But the fact remains that constitutional law and legal precedent do not directly address the changing retail landscape. Furthermore, the U.S. Supreme Court has held that only Congress has authority to regulate inter-state commerce under the Commerce Clause (Gibbons v. Ogden, 22 U.S. (9 Wheat.) 1 (1824)). As a result, congres-sional action in the form of the Marketplace Fairness Act of 2013 (MFA) has been proposed to settle the issue.

Marketplace Fairness Act

On May 6, 2013, by a vote of 69-27, the U.S. Senate passed the MFA, which would allow states to require remote (out-of-state) sellers to collect and remit sales and use tax on sales to in-state residents even if the retailer has no physical presence in the state (S. 743). Under the MFA, a member state of the Streamlined Sales and Use Tax Agreement (SSUTA) would be able to require the col-lection of tax beginning 180 days after it publishes notice of its intent to exercise its authority. In order for states that currently are not members of the SSUTA to secure collection and remittance authorization, such states would need to adopt and implement several minimum sales tax simplification requirements. The MFA would exempt remote sellers with $1 million or less in annual sales, and would require that an adopting state provide free software to remote sellers to calculate and file sales

and use tax returns.

The MFA would grant all states the ability to require remote sellers to collect and remit existing state and local sales and use taxes, if certain conditions are met. SSUTA member states would have the ability to impose the col-lection and remittance requirement provided that any changes to the SSUTA made after the MFA is enacted do not conflict with the minimum simplification require-ments stated in the MFA. A non-member SSUTA state would have the ability to impose the collection require-ment once it adopts legislation containing the required minimum simplification requirements. The MFA pro-vides a list of simplification requirements that must be satisfied, such as there must be a single entity within the state to administer all state and local sales and use tax; the state cannot impose sales and use tax collection require-ments that it does not impose on non-remote sellers, and there must be a uniform sales and use tax base among the state and local taxing jurisdictions. A non-member state could begin exercising its authority no earlier than the first day of the calendar quarter that is at least six months after the date of its enactment of legislation adopting the simplification requirements.

The federal legislation provides an exception for small remote sellers with $1 million or less in gross annual receipts in nationwide remote sales, measured in the preceding calendar year. These small remote sellers would not be required to collect sales and use taxes on these remote sales. For purposes of whether this $1 million threshold is met, the gross annual receipts from remote sales of two or persons must be aggregated if: (i) such persons are related to the remote seller under certain provisions of the Internal Revenue Code; or (ii) such per-sons have one or more ownership relationships that were designed with a principal purpose of avoiding the ap-plication of the MFA. Since the definition only considers remote sales in making the determination of who is an exempt small seller, it is possible for a seller to be exempt from the collection responsibilities on its remote sales if it had $1 million or less of total remote sales in the United States during the prior calendar year even though it had, for example, $5 million of retail sales at its store locations during the same prior calendar year.

the mfa would grant all states the ability to require remote sellers to collect and remit existing state and local sales and use taxes, if certain conditions are met. ssuta member states would have the ability to impose the collection and remittance requirement provided that changes to the ssuta made after the mfa is enacted do not conflict with the minimum simplification requirements stated in the mfa.


Tax/UESP

Jamie C. Yesnowitz, J.D., LL.M is a Principal in Grant Thornton’s State and Local Tax (SALT) practice serving as the Firm’s SALT – National Tax Office Practice Leader based in Washington, DC. Jamie has 14 years of broad-based SALT consulting experience. Jamie is currently serving as the Chair of the AICPA SALT Technical Resource Panel. Reach him at [email protected].

Chuck Jones, J.D., CPA is a Director in Grant Thornton’s State and Local Tax (SALT) practice and is based in Chicago. Chuck has over 15 years of experience working on SALT issues and currently supports the Grant Thornton SALT practice by closely following SALT developments, drafting SALT Alerts and maintaining practice tools. Chuck can be reached at [email protected].

State Responses

Two states have already responded to the Senate’s passage of the MFA. On May 28, 2013, Colorado enacted legisla-tion to implement the minimum sales and use tax simpli-fication requirements of the proposed federal MFA (H.B. 1295, Laws 2013). If the MFA is enacted into law by the federal government with the same simplification require-ments that currently are provided in the proposed legislation, Colorado intends to compel out-of-state retailers to collect and remit sales tax. On July 3, 2013, Rhode Island enacted budget legislation that includes provisions that would instantly enact remote seller legislation if adopted by federal law (H.B. 5127, Laws 2013). Specifically, upon the enactment of federal law authorizing states to require remote sellers to collect and remit sales and use taxes, Rhode Island will require a remote seller making remote sales in Rhode Island to collect and remit the tax. ■

Tools for You UESP offers tools designed to help you help your clients, including limited power of attorney, data integration solu-tions, and customized investment options. Learn more at uesp.org/adviser.

Learn More Find out why leading financial publications and experts consistently rank UESP among the nation’s top 529 plans for its low fees, flexibility, and variety of investment op-tions—perhaps most notably, UESP is one of only four plans in the nation with a Gold rating from Morningstar.*

For complete program details, including how to open and manage an account, download the UESP Program De-scription at uesp.org. To speak with a UESP representative, call 800.418.2551 or e-mail [email protected]. *Morningstar Analyst Ratings for 529 College-Savings Plans, 2012.

Important Legal Notice The Utah Educational Savings Plan (UESP) is a Section 529 plan administered and managed by the Utah State Board of Regents and the Utah Higher Education Assistance Au-thority (UHEAA).

Read the Program Description for more information and consider all investment objectives, risks, charges, and ex-penses before investing. Call 800.418.2551 for a copy of the Program Description or visit uesp.org.Investments are not guaranteed by UESP, the Utah State Board of Regents, UHEAA, or any other state or federal agency. However, Federal Deposit Insurance Corporation (FDIC) insurance is provided for the FDIC-insured savings account. Please read the Program Description to learn about the FDIC-insured savings account. Your investment could lose value.

Non-Utah taxpayers and residents: You should determine whether the state in which you or your beneficiary pay taxes or live offers a 529 plan that provides state tax or other benefits not otherwise available to you by investing in UESP. You should consider such state tax treatment and benefits, if any, before investing in UESP. ■

UESP continued from page 26


UACPA Committee/Task Force Volunteer Form

Volunteer online at uacpa.org — keyword search "committee"❑ I would like to volunteer to serve on a UACPA committe or task force

Committee/Task Force descriptions can be found online at uacpa.org, under Member Connection, Committee & Task Force where you can also volunteer. Identify the committee or task forces below. Check all that you would like to serve on (maximum 3). We will make every effort to assign you to the committee(s) of your choice. Send completed form to: UACPA, 1240 E. 2100 South, Suite 500, Salt Lake City, UT 84106; email: [email protected].

Name: ___________________________________________________________ UACPA #: __________________________________Firm/Company: __________________________________________________ Phone: _____________________________________Address: _____________________________________________________________________________________________________City/State/Zip: ___________________________________________________ Email: _______________________________________

❑ Accounting Issues/Conference Task Force

❑ Business Valuation Conference Task Force

❑ CPAs in Business & Management (BAM)

Conference Task Force

❑ CPE Approval

❑ Editorial Committee

❑ Event Planning Committee

❑ Federal Key Person

❑ Financial Literacy Task Force

❑ Financial Ready Utah

❑ Golf Tournament Task Force

❑ Non-Profit

❑ ProNet Council Sub-committees

❑ K-12 Committee

❑ K-12 Volunteers

❑ ProNet Campus Ambassadors (Collegiate)

❑ ProNet Communications

❑ ProNet CPA Inauguration

❑ ProNet Leadership Development

❑ ProNet New Professionals

❑ State & Local Government Task Force

❑ Tax Issues

❑ Tax Symposium

❑ Winter Conference Task Force

✓


The Internal Revenue Service recently completed its multi-year project on tax-exempt colleges and

universities. The Colleges and Universities Compliance Project Report was released in spring of this year and has shed light on Unrelated Business Taxable Income (UBTI) issues not only for colleges and universities, but also for the general tax-exempt community. UBTI has always been a difficult tax area for tax professionals to identify and measure. The three typical components of UBTI, regularly carried on, not substantially related to the organization’s exempt purpose and substantial in amount, often times are hard to identify. The project circulated 400 questionnaires to randomly selected colleges and universities. The IRS then selected 34 institutions for examination. The examination yielded the following results: UBTI was increased 90% for the institutions examined. The examinations disallowed more than 170 million dollars in deductions and net operating losses previously claimed on the 990-Ts as originally filed. This resulted in UBTI tax

increases of more than 60 million dollars. The disallowance of deductions was attributable to two main factors lack of profit motive and improper expense allocation. Institutions had been claiming deductions from activities that did not constitute a trade or business. Nearly 70% of the colleges and universities had declared losses in excess of UBTI and had shown recurring losses year after year. The lack of intent to make a profit rendered these activities as not being subject to UBTI. Nearly 60% of expense allocations to UBTI were misallocated according to the IRS examinations. The IRS stated that certain expenses had been claimed in the allocation of UBTI but had no direct connection to the activity. Most of the adjustments that came from these activities were for fitness, recreation centers and sports camps, advertising, facility rentals, arenas and golf. The Colleges and Universities Compliance Project also focused on executive compensation. The examination

What's New in Unrelated Business Taxable Income and Tax-exempt Organization Compensationby scott a. czaja, cpa, mst


primarily focused on the reasonableness of compensation and IRC Section 4958. IRC Section 4958 only applies to private colleges and universities not public institutions. The burden of proof as to whether the compensation is reasonable is the institution’s responsibility. However, the institution may shift the burden of proof to the IRS by following a three step rebuttable presumption process. The process includes using an independent body to review and determine the amount of compensation, relying on appropriate comparability data to set the compensation amount and contemporaneously documenting the compensation-setting process. Of the 34 institutions that were examined, about 20% failed to meet the rebuttable presumption process.

UBTI Issues from the AICPA Not-for-Profit Industry Conference

A number of sessions at the AICPA’s Not-for-Profit Industry Conference touched on “Alternative Investments” held by tax-exempt organizations and the implications and concerns they pose for the tax-exempt organization. “Alternative Investments” are defined in the negative. These investments are not one of the three traditional asset types: stocks, bonds, and cash. Examples are hedge funds, funds of funds and managed futures, private equity and venture capital, and real estate. A large majority of these investments are housed in limited partnerships. A tax-exempt organization is not taxed on the income allocated to it on the K-1; only the UBTI, if any, that would be shown on the K-1. The identification of the UBTI on these K-1s is derived by looking through the investment to determine whether the gross income from the activity conducted by

the partnership would be a related or unrelated activity if the organization conducted the activity itself.

Alternative Investments can derive UBTI either as a direct result of operations of the partnership interest or UBTI of passive income based on the debt-financed rules. There are exceptions under IRC Section 512 that specifically exclude certain passive income such as interest income, rents from real property, capital gains, royalties, annuities, and dividends. The exception to the exception is found in IRC Section 514. When a tax-exempt organization derives rents from real property which is debt-leveraged and used in a manner that is unrelated to the organization’s exempt purpose, IRC Section 514 would create UBTI for this transaction.

One speaker at the Not-for Profit Industry Conference stated that as legal counsel for a large tax exempt organization which typically receives annually over 400 K-1s, you have to take the time, at least on the significant K-1, to gain an understanding of the UBTI. He said you cannot always assume that the K-1 was prepared correctly when it comes to the categorization of UBTI. He has, on numerous occasions, had K-1s amended for the UBTI issues after a discussion of the underlying facts.| A complete copy of the IRS Final Report on Tax-Exempt Colleges and Universities Compliance Project can be downloaded at http://www.irs.gov/pub/irs-tege/CUCP_FinalRpt_042513.pdf ■

Scott A. Czaja, CPA, MST, is the Shareholder-in-Charge of Tax-Exempt Organizations and Employee Benefits at Haynie & Company. He can be reached at [email protected]

What's New in UBTI and Tax-exempt Organization Compensation

the institution may shift the burden of proof to the irs by following a three step rebuttable presumption process. the process includes using an independent body to review and determine the amount of compensation, relying on appropriate comparability data to set the compensation amount and contemporaneously documenting the compsensation-setting process.

download a complete copy of the irs final report on tax-exempt colleges and universities compliance project online at www.irs.gov


Five Minutes with Talon Stringham

meet a uacpa member

Talon Stringham, CPA was born in Blackfoot, Idaho, and grew up in the mountains and desert around Blanding, Utah. While attending Utah State University, Stringham met his wife Anna. Now residing in Bountiful, the couple have two boys who are 4- and 8-years-old. Stringham says, "I have spent most of my career to date working in the forensic accounting/litigation support/business valuation fields in Salt Lake City." What led you to become a CPA? I pursued a degree in accounting because I wanted an education in a business-related field, something that would help me understand business and that would be useful in any type of career. After I got into the program, it just seemed natural to get a master’s degree and a CPA license

Tell us about your book. Red Rock Redemption is my first novel. The story’s two main characters are each accused of murder in separate incidents. The first is

accused of killing a kid in a wilderness youth drug rehab program in South-eastern Utah. The second, an expert witness involved in a large patent infringement case in Chicago, is accused of killing a co-worker. The story evolves as they seek to clear their names and ultimately they uncover a terrorist scheme. It’s a thrilling must read!I’ve always enjoyed reading, the mystery/thriller/legal genres are my favorites. I heard a story about how John Grisham wrote his first novel while still working as a lawyer, and since I’ve always enjoyed writing too, I figured I might as well give it a shot. It’s been a long time coming, having worked on it nights and weekends for a few years, but it’s exciting to have it done and published.

Aside from writing, what are some of your other hobbies? As I mentioned, I enjoy reading, both fiction and non-fiction. I live on the edge by trading in the financial markets. I dabble in real estate. I chase little white balls around golf courses and jog the neighborhoods

of Bountiful. Soccer is big right now, too, as my sons enjoy that. Maybe this is why it took so long to finish the book! Now that you have published a book, what are some of your other goals?. Well, one book’s not enough, right? I’ve already begun work on another one. Professionally, I just started with The Cadence Group, in September, and I’m looking to grow a business valuation and consulting practice with them. At some point in my life I want to run a marathon, and my son and I are making plans to escape to Spain to run with the bulls and watch Lionel Messi play a soccer game.

What advice do you live by? Family first. Try new things. Be grateful. Give it your best. Enjoy the journey. Take risks. Be kind. Pay it forward. Be helpful. ■ Talon Stringham's 562 page Kindle eBook, Red Rock Redemption, can be purchased for $2.99 through amazon.com. Kindle apps are available on Apple's iOS software and the android platform.


2013 AwardsHonoring those who have demonstrated excePtional service to the UACPA, the CPA Profession and the community

T he Member Summit & Awards Banquet was held Friday, Aug. 23 at the Little America Hotel. Guests received

an update on the profession from AICPA Chair Richard Caturano, CPA and Pam Perlich, PhD provided a demo-graphic analysis. The event ended with an ethics panel featur-ing a CPAs of varying points in their career. The meeting was followed by the Awards Banquet where distinguished members of the profession were honored for their service to the UACPA and the community. The 2013 award recipients are as follows: Distinguished Service

Auston G. JohnsonAuston retired as State Auditor in December 2013 where he served since 1995 and was elected for four terms. The UACPA named him Outstanding CPA in Business and Management in 2002. Auston is a member of the AIC-PA where he served on the Auditing Standards Board. He also served on a

taskforce that wrote the Government Accounting and Audit-ing Guide. He is currently Chair of the Yellow Book advisory council, advising the Comptroller General of the United States in establishing Government Audit Standards. Auston was active in the National State Auditor’s Association, and is a two time past president of that organization. Since 1994, he

has been a member of the School of Accountancy Advisory Council at Utah State University. Auston is a veteran having served in the U.S. Navy from 1969 to 1973. He graduated with a degree in accounting from Utah State University.

Outstanding CPA in Public Practice Dean R. Burdick, CPA

Dean Burdick is a partner at the St. George, Utah CPA firm Hinton-Burdick CPAs & Advisors which has expanded to seven regional offices in Utah, Arizona, and Nevada. He gradu-ated Cum Laude from BYU earning a Master of Accountancy degree with an emphasis in taxation and minors in

Business, Economics and Portuguese. Before HintonBurdick, he gained four years of tax experience with KPMG in the Billings, Montana office. Burdick returned to Utah in 1985 and has directed HintonBurdick’s tax practice ever since. Dean serves on several boards and councils.

Outstanding CPA in Business & Management Carey D. Woolsey, CPA

Carey started his career as a staff audi-tor in public accounting and after nine years, turned to industry and worked as the CFO for a manufacturing firm. Three years later, Woolsey sought joined the financial professionals working at the Church of Jesus Christ of Latter-day Saints where he has been for more than 17 years. Carey received

a Bachelor's in Accounting from the University of Utah and an MBA from Utah State University. He received his CPA license in 1986 and is also a Certified Internal Auditor (CIA) and a Certified Fraud Examiner (CFE). Woolsey has been a member of the UACPA since 1987 where he has previously served as President. Carey is also a member of the Institute of Internal Auditors (IIA), the AICPA, and the Association of Certified Fraud Examiners (ACFE).


Outstanding Educator Dr. Robert L. Gardner

Robert L. Gardner, professor of ac-countancy at BYU, received a Bachelor of Arts in Spanish from BYU and served four years in the United States Air Force as a missile launch officer. After his discharge, he attended the University of Utah where he received a Bachelor of Science in accounting and an MBA. Later, Gardner went

to the University of Texas in Austin where he received his Ph.D. in tax. Gardner joined the faculty at BYU in 1978 and has served as the Associate Director of the School of Ac-countancy (1996 - 2002). He also holds the Robert J. Smith Distinguished Professorship of Accounting. Gardner has served in many capacities, including President and Trustee of the American Taxation Association. In 2006 he received the American Taxation Association’s Outstanding Service Award. Gardner has received several teaching awards, and in 2001 was awarded the BYU Marriott School of Management’s Outstanding Faculty Award. Outstanding Leadership Council Member Patsy Halladay, CPA

Patsy A. Halladay is the Chief Fi-nancial Officer of AAA Fair Credit Foundation, a national ISO 9001:2000 certified and registered 501(c)(3) non-profit organization providing financial counseling to help individuals and families experiencing financial hard-ship. Patsy graduated from the Univer-sity of Utah where she received both

her Bachelors of Science in Accounting and MBA. With 19 years of experience, Halladay is currently chairs the UACPA's Financial Literacy task force committee, has served on the Policy Council for Salt Lake CAP Head Start, and has been a member of United Way’s Women’s Philanthropic Network. Patsy has also served on the Board of Directors for Utah Jump$tart Coalition and on the Board of Directors for South Valley Sanctuary, a shelter for domestic violence. Recently she served as the float chairperson for the 2013 Days of ’47 Parade.

Rising Star Award Annette Andersen

Annette Andersen graduated in May 2013 with a Master's of Accounting from the University of Utah. In May 2009 she received the “Outstanding Student Award in Business” from Salt Lake Community College. Andersen served as a UACPA campus ambas-sador at the University of Utah. She organized a multi- college conference,

aided in the build-a-bike service project for ProNet and helped coordinate networking events for students. Annette serves on the committee for the Utah Chapter of the Ameri-can Women’s Society of CPAs.

Women to Watch: Emerging Leader Laura Wagner, CPA

Laura joined Grant Thornton in Salt Lake City six years ago and has served as their women initiatives champion for the last three years. Laura graduat-ed from the University of Wisconsin – Madison with a Bachelor's of Business Administration degree in Accounting and a Master of Accountancy. Laura serves as the Treasurer for the Women

Tech Council and co-founded the Salt Lake City Chapter of the University of Wisconsin Alumni Association. She recently completed a four year term on the board of the Utah Chapter of the American Women’s Society of CPAs.

Women to Watch: Experienced Leader Jodie B. Hewitson, CPA

After 10 years with Deloitte & Touche, Jodie joined Tanner’s tax team in 2007 and was promoted to Tax Partner in 2011. She is the past president and current board member of the Utah Chapter of the American Women’s Society of CPAs. She has served on various boards and committees and was selected as one of the "30 Women

to Watch" by Utah Business magazine in 2012. Hewitson graduated Cum Laude with a Bachelor of Arts in Accounting and Masters of Professional Accountancy with an emphasis in Tax from the University of Utah.

2013 UACPA Awards


Jeannie Patton Lifetime Service Bryce E. Olson, CPA

Bryce E. Olson began his account-ing career after graduating from Utah State University in 1964 with a Bachelor's in Accounting. He worked for three years with a Salt Lake City firm then worked for the Internal Revenue Service as a revenue agent for 10 years. He left the IRS in 1977 and return to public accounting and

later merged his practice with Tanner, LLC. Olson retired in April 2006 and volunteers as an accountant for a not-for profit-entity and helps as a consultant. Olson has been a UACPA member since 1966. He has served in various committees, on the Board of Directors and as the President from 1999-2000. He has also served on the Utah CPA Education Foundation.

Life Member Award Paul H. Kasteler, CPA, Auston G. Johnson, Wendy S. Martin, CPA, D. Gerald Searfoss, CPA

Paul Kasteler graduated from the Uni-versity of Utah in 1973 and opened a private CPA practice serving the tax and accounting needs of individu-als and small business clients. From 1982-84, he worked on and chaired the UACPA convention commit-tee and served as president of the UACPA's South Valley Chapter from

1987-88. In 2009, he retired from his firm, KastelerFenton.

Auston retired as State Auditor in December 2013 where he served since 1995 and was elected for four terms. The UACPA named him Outstanding CPA in Business and Management in 2002. Auston is a member of the AICPA where he served on the Audit-ing Standards Board. (Read more about Auston on pg. 34)

Wendy Martin has worked at Tanner, LLC since 1979 and served as Chief Financial Officer since Oct. 2004. She has served as the Tanner Retirement Plan Administrator and Manager in the Tax Department. She retired Sept. 30, 2013. Wendy has spent time liv-ing and working in England and has

served on a variety of boards and committees. She received her Bachelor's in Accounting in 1979.

D. Gerald Searfoss, CPA is a Professor Emeritus of Accounting from the Uni-versity of Utah, from which he retired in 2007. While at the U, he founded the Epsilon Xi Chapter of Beta Alpha Psi, and received the Masters Teach-ing Excellence award for the MAcc course he developed and taught. He is a retired partner of Deloitte & Touche

from which he retired in 1994. While at the firm he served as National Director of Accounting Standards and Secretary and Treasurer of the Deloitte & Touche Foundation. Sear-foss has chaired or served on numerous committees of the UACPA, AICPA and the American Accounting Association. Additionally, he has served on community Boards, such as United Way and The Guadalupe Schools. Searfoss received his MBA and Doctorate in accounting from Indiana Uni-versity. He currently serves as a Board member and Chairs the Audit Committee of UBS Bank USA.

Outstanding Accounting Student Awards Jill H. Aoki, CPA - Utah State University Scott N. Barney - Southern Utah University Sherry A. Hullinger - Weber State University William Liddle III - Westminster Ryan Hess - University of Utah Jordan Hales - Utah Valley University Stephanie Ann Flint - Brigham Young University

2013 UACPA Awards

37the journal entry | October 2013 37

Five Minutes with April Deneault

meet the uacpa staff

April Deneault is the CPE Manager for the UACPA. She is the veteran of the staff and has been with the organiza-tion since 1998. She has one older and one younger sister and currently lives in South Jordan with her fiancé 4-year-old daughter Olivia and 9-year-old Boston Terrier Koby.

What do you do for the UACPA? As the CPE Manager, I am responsible for all CPE related functions including, working with vendors to schedule group study events and working with the conference committees to plan the annual events.

What do you like about working for the UACPA? I love the people I work with and the relationships I’ve built over the years. It’s great to work with a group of professionals who hold

honesty, hard work & integrity to the highest level. I also enjoy planning the various conferences.

What do you do in your free time? I try to spend as much time as possible with my daughter. Time goes by in the blink of an eye and before I know it she will be 21! I enjoy weight lifting and would like to get into Olympic lifting. I love being outdoors and active in the summer. I am a huge sports fan and love watching all types of sports. I also enjoy spending time with my family.

What are your goals? Personally, to raise an independent, secure and happy child, go back to school, win the lottery, travel the world. I would love to open a doggy daycare/boarding and grooming place. Professionally, I hope to continue to grow and expand my

knowledge in the CPE field to better meet the CPE needs of CPAs.

What would surprise people to know about you? I danced from ages 3 to 18, in my very first dance recital I had a broken arm so my costume included a cast. I’ve done tap, ballet, jazz and in my last two years, I danced en pointe. I performed in many tap duets with my little sister and we took first place in several competitions.

What advice do you live by? Learn to laugh at the little things and life will be a whole lot easier. Be amused by your mistakes and failures and be thankful that you learned your lesson. And most importantly do things that you enjoy! ■

April Deneault can be reached at 801.834.6634 or [email protected]


Event Photos, UACPA Week1

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1 Bryce Olson and wife 2) Jerry Selbo and Bryan Bolander 3) Brian Sheets 4) Tim Larsen, Ray Chipman and Jonyce Bullock 5) Dan Kunkel 6) Ethics panel at Member Summit with Annette Andersen, Jill Aoki, Ray Ellison, Bob Burr, Holly Andrus and Susan Speirs moderating 7) Pam Perlich, PhD shares an economic update at the Member Summit. 8) AICPA Chairman Richard Caturano gives an update on the profession at the Member Summit at Little America, Aug. 23.

View more photos from UACPA Week on our Facebook Page: www.facebook.com/UtahAssociationofCPAs

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UACPA Event Photos

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9) Scott Reams, Johnny Jensen, Lance Mortensen, Tom Reams 10) Lance Mercer, Brent Stratton, Russ Baird, Dennis Smith, Greg Pearson, Keven Stratton, Robby Stratton, Ben Sorenson 11) Roger and Scott Beynon with Josh and Jake Mauss 12) First place winners of the UACPA Annual Golf Tournament, The Jack family Nicole, Eric, Joe, Karen 13) Cory Nielson, Paul Skeen, Matt Egnew, Steve Avis 14) Third place winners Aaron, Paul and John Neuensuander (Aaron also won the grand prize of a cruise) 15) Second place winners, Dave Madsen, Ted Madsen, Mel Glavas, Bill McMullin

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Winter ConferenCeDecember 12-13, 2013The Salt Palace Convention Center100 S. West Temple, Salt Lake City, UT CPE Credit: 16 hours $338, UACPA Members Register by 11/29/13$375, UACPA Members$450, Non-members

Save $698 on UACPA ConferencesBy simply joining the UACPA,

you save money for every class,

conference and event you attend

with us. If you only come to

conferences, you'll save almost

seven Benjamins.

That's just one of the many ways

we make your UACPA membership

count.

Learn more about membership and

benefits by talking to Tisha Smith,

801.466.8022 or [email protected]


November 15, 2013 Tanner Training Facility, 36 S. State Street, Ste 500 $243, UACPA Members Registered by 11/1/13 $270, UACPA Members Registered after 11/1/13 $330, Nonmembers

CPE: 8 Hours CPE

BusinessValuationConference

This conference covers topics of interest to CPAs, attorneys, appraisers and others who encouter business valuation issues. The day begins with a review of the AICPA business valuation standards applicable to all CPAs performing such valuation engagements, and continues with an overview of the basic busi-ness valuation approaches — asset, market, and income approaches, and the various valuation methods under each approach in determining value. Other topics cover specific and unique valuation issues applicable to compliance-oriented engagements, including (a) tax matters, such as income, estate, and gift tax compliance and charitable contribu-tions and (b) financial reporting —purchase price allocation under fair value reporting, as well as transactions (or potential transac-tions), such as acquisitions, mergers, partner and shareholder buy-ins or buyouts, and stock redemptions. The day concludes with a discussion of lessons learned by a panel of experienced appraisal professionals. Kelly Matthews will speak on the national and local economy during lunch.

Session Topics• AICPA Business Valuation Standards – A Practical Look

• Business Valuation – Back to Basics

• Valuation Issues – Tax & Estate Planning

• Economic Update

• Valuation Issues – Fair Value Reporting

• Valuation Issues – Transactions

• Lessons Learned

Presenters Lynn Hillstead, CPA

Carl Steffen, CPA/ABV, CVA, ASA, CBA

Charlotte Clark, CPA, CVA, ABAR

Kelly Matthews, Ph.D.

Roger Smith, CPA

Jeff Pickett, CPA/ABV

Business Valuation Task Force


CPECourseScheduleRegister online at uacpa.org, then Education & Events or call the UACPA office at (801) 466-8022.

oct

10/2/13 4 Preparing OCBOA Financial Statements: Cash, Modified Cash and Tax Basis

Joann Cross Surgent McCoy

N/A $155 $185

10/2/13 4 Financial Statement Disclosures: Guide to Current Requirements and Developing Issues


N/A $155 $185

10/3/13 8 I See It! Bringing into Focus the New Clarified Auditing Standards


$248* $275 $330

10/4/13 8 Accounting for Deferred Income Taxes Marty Vanwagoner AICPA $248* $275** $330**

10/8-9/13 16 Tax Staff Training Level 1 - Individual Mark Patrick Nichols Patrick, CPE, Inc

$405* $450 $535

10/11/13 8 PCAOB's Risk Assesment Standards Marty Vanwagoner AICPA $248* $275** $330**

10/15/13 8 Statement of Cash Flows Marty Vanwagoner AICPA $248* $275** $330**

10/16/13 8 Annual Accounting & Auditing Update Marty Vanwagoner Surgent McCoy

N/A $180 $330**

10/17/13 8 Advanced Excel Karl Egnatoff K2 Enterprises $248* $275 $330

10/17/13 8 Top Accounting Solutions: Cloud and On-Premise Karl Egnatoff K2 Enterprises $248* $275 $330

10/18/13 8 Not-for-Profits Treated as Business Brian Sheets AICPA $248* $275** $330**

10/21/13 8 Construction Contractors: Critical Accounting, Auditing, and Tax Issues in Today's Environment

Thomas Sheets Surgent McCoy

$248* $275 $330

10/22/13 8 Revenue Recognition: A New Day is Dawning Thomas Sheets Surgent McCoy

$248* $275 $330

10/23/13 8 The Complete Trust Workshop Michael Blackburn Surgent McCoy

$248* $275 $330

10/24/13 8 OMB A-133 from A to Z Mac Curtis Surgent McCoy

$248* $275 $330

10/25/13 8 Advanced Auditing of HUD Assisted Projects Peter Bell AICPA $248* $275** $330**

10/28/13 8 Chief Financial Officer Dan Chenoweth Executive Education

$248* $275 $330

10/29/13 8 Corporate Finance Checkup - Renovate Your Analytical Toolbox

Dan Chenoweth Executive Education

$248* $275 $330

10/29/13 8 Risk Assessment Standards Marty Van Wagoner AICPA $248* $275* $330*

nov

11/1/13 8 Social Security, Medicare, and Prescription Retirement Benefits: What Every Baby Boomer Needs to Know

Michael Blackburn Surgent McCoy

$248* $275 $330

11/4/13 8 Excel Best Practices Steven Phelan K2 Enterprises $248* $275 $330

11/5/13 8 The Mobile Office Steven Phelan K2 Enterprises $248* $275 $330

11/6/13 4 New Medicine: Key Issues CPAs Need to Know About the Patient Protection and Affordable Care Act

Edward Harter Surgent McCoy

N/A $155 $185

11/6/13 4 Should Client Expenditures be Capitalized or Expensed? A Guide to the New IRS Regulations


N/A $155 $185

11/7/13 8 Auditing Not-For-Profit Entities: Superior Skills for an Effective and Efficient Audit

William Wagner Surgent McCoy

$248* $275 $330

11/7/13 8 Auditing Not-For-Profit Entities: Superior Skills for an Effective and Efficient Audit


$248* $275 $330

11/8/13 8 Latest Developments in Nonprofit Accounting & Auditing 2013


$248* $275 $330

FIELD OF STUDY

CREDIT HOURS COURSE TITLE INSTRUCTOR VENDOR

EARLY MEMBER REGISTRA-TION

MEMBER FEE

NON MEMBER FEE

* UACPA Members receive a 10% early registration discount on these courses when registering at least TWO WEEKS before the date of the course. ** AICPA Members receive an additional $30 off the price of each 8 hour course, $50 for 16 hour courses.


Education

nov

11/11/13 8 A&A Year in Review: Exploring the Latest Issues and Challenges Facing CPAs

Marty Vanwagoner Surgent McCoy

$248* $275 $330

11/12/13 8 Reading Understanding and STructuring LLC and Partnership Agreements from a CPA's Perspective

Norman Solomon Surgent McCoy

$248* $275 $330

11/13/13 8 Surgent McCoy's 2013 Annual Tax-Planning Guide for S Corporations, Partnerships, and LLCs

Norman Solomon Surgent McCoy

$248* $275 $330

11/14/13 8 Getting Ready for Busy Season: A Guide to New Forms, Filing Issues, and Other Critical Developments

Pamela Davis-Vaughn

Surgent McCoy

$248* $275 $330

11/15/13 8 Surgent McCoy's Multistate Tax Update Pamela Davis-Vaughn

Surgent McCoy

$248* $275 $330

11/18/13 8 Fair Value Accounting: Making the Complex Issues Understandable


$248* $275 $330

11/19/13 8 CFO/Controller's Roadmap to Organization Success With Integrated Planning, Forecasting, and Budgeting

Arthur Pulis Surgent McCoy

$248* $275 $330

11/20/13 8 Current Developments and Best Practices for Today's CFOs and Controllers

Arthur Pulis Surgent McCoy

$248* $275 $330

11/21/13 8 Make Money for you and your Clients: Surgent McCoy's Top Business Tax Planning Strategies


$248* $275 $330

11/22/13 8 The Complete Guide to Payroll Taxes and 1099 Issues Edward Harter Surgent McCoy

$248* $275 $330

11/25/13 8 The Best S Corporation, Limited Liability, and Partnership Update Course by Surgent McCoy


$248* $275 $330

11/26/13 8 The Best Individual Income Tax Update Course by Surgent McCoy

Michael Blackburng Surgent McCoy

$248* $275 $330

dec

12/2/13 8 Nonprofit Organization Analytical Procedures: How to Measure Success

Brian Sheets AICPA $248* $275** $330**

12/3/13 8 Shortcuts to Tax Cuts: Individual Tax, Social Security and Retirement Planning Tools and Strategies

William Taylor Surgent McCoy

$248* $275 $330

12/4/13 8 From Hiring to Firing and Everything in Between: Legal, Tax and Health Care Issues

William Taylor Surgent McCoy

$248* $275 $330

12/5/13 8 Annual Update for Controllers Ron Rael AICPA $248* $275** $330**

12/6/13 8 Redefining the Closing Process Ron Rael AICPA $248* $275** $330**

12/9/13 8 Advanced Technical Tax Forms Training - Form 1040 Issues Susan Smith Surgent McCoy

$248* $275 $330

12/10/13 8 Advanced Technical Tax Forms Training - LLCs, S Corporations, and Partnerships

Susan Smith Surgent McCoy

$248* $275 $330

12/11/13 8 The Best Income Tax, Estate Tax, and Financial Planning Ideas of 2013

Susan Smith Surgent McCoy

$248* $275 $330

12/12-13/13 16 Winter Conference Various UACPA $338* $375 $450

12/16-17/13 16 Tax Staff Training Level 2 - Business Mark Patrick Nichols Patrick CPE, Inc

$405* $450 $535

12/18/13 8 Effectively & Efficiently Reviewing Audit Work Papers: The Line of Defense Against Deficient Audits


$248* $275 $330

12/19-20/13 16 Technology Conference Various K2 Enterprises $414* $460 $540

12/23/13 8 Surgent McCoy's Handbook for Mastering Basis, Distributions, and Loss Limitation Issues for S Corporations, LLCs and Partnerships


$248* $275 $330

12/30/13 8 The Best Federal Tax Update Course by Surgent McCoy Michael Blackburn Surgent McCoy

N/A $180 $330

CPECourseScheduleRegister online at uacpa.org, then Education & Events or call the UACPA office at (801) 466-8022.


CPE Where You Want It, When You Want It!

The UACPA and our partners deliver fast and convenient CPE to your home or office.

With just a click you can earn 2 to 8 hours of CPE credit from the most experienced CPAs across the country from wherever you have a computer and Internet connection. To view a list of upcoming webcasts log on to uacpa.org, Education & Events and click on “webcasts,” keyword search “webinar.”


Power On Your Tech Knowledge

Technology Update 2013

Excel’s PowerPivot and Power View: A Dynamic Duo!

CPA Firm Tech: Maximizing Partner Income

Back up, Business Continuity, and Disaster Recovery: Why All Three?

Dashboard Reporting Tools and Techniques

The Very Best QuickBooks Features

Cloud Document Management 101

Excel 2013: Best New Features

Mobile Strategies for Success

Office 2013: What’s in it for Me?

How to Create the Virtual Office

PDF Forms: Retire the Typewriter

Excel Guru’s Toolbox

Collaborative Bookkeeping and Cloud Accounting Solutions

Tech 101: Don’t Get Left Behind

Our Favorite Apps

South Towne Expo Center 9575 S State Street, Sandy, UT CPE Credit: 16 hours

$414 - UACPA Members Register by 12/6/13 $460 - Member Standard Fee $540 - Nonmembers Register online: www.uacpa.org

Tech Topics Presented at the 2013 Conference

The 2013 Technology Conference, December 19 - 20


Accounting IssuesWhen UACPA members have questions about accounting issues, help is available from the UACPA Accounting Issues Committee. Each month, a member of the committee is assigned to answer accounting questions and help you interpret the rules as they apply to your particular situation. The following members may be contacted during the months listed.

October

Ted Rokich 801-263-3090

[email protected]

December Mark Anderson 801-532-2200

[email protected]

November

Larry Deppe 801-626-7838

[email protected]

AICPA Ethics HotlineThe AICPA Ethics Hotline provides non-authoritative guidance to members on questions related to ethics including independence. Each year it responds to more than 4,000 inquiries. The Ethics Hotline is open from 9 a.m. to 5 p.m. ET on weekdays and a staff members may be reached by dialing either (888) 777-7077, menu option #5, followed by menu

option #2, or by e-mail at [email protected].

CPE Approval – Does This Qualify?When UACPA members have questions regarding CPE Approval and whether or not something may or may not qualify, they can turn to the UACPA CPE Approval Committee for answers. Each month, committee members are assigned to answer member questions related to CPE approval, and below are those mem-bers’ names that may be contacted with your questions.

October - December

Steve Avis 801-532-2200

[email protected]

Scott L. Robinson 801-990-5918

[email protected]

Tax IssuesThe Tax Issues Committee focuses on legislative and regulatory issues and does not answer technical questions. For assistance with a technical matter, please refer to the UACPA referral tool at uacpa.org. Direct questions related to legislative or regulatory issues to [email protected]

ContactList

Classified Ads

To place your classified advertisement and reach Utah CPAs, contact the UACPA at [email protected],

Utah Practice For Sale: Cottonwood Heights CPA Prac-tice - gross $134k. Well-established practice with a high-quality client base, strong fee structure and good cash flow to owner of more than 50% of gross. For more information, call us at 1-800-397-0249 or visit us at www.Accounting-PracticeSales.com to view current listings and register for free email updates.

THINKING OF SELLING YOUR PRACTICE? Accounting Practice sales is the leading marketer of accounting and tax practices in North America. We have a large pool of buy-ers, both individuals and firms, looking for practices now. We also have the experience to help you find the right fit for your firm, negotiate the best price and terms and get the deal done. To learn more about our risk-free and confidential services, call Ryan Pannell with The Holmes Group at 1-800-397-0249 or email [email protected].

Office condo space available for rent in the Cottonwood Heights area of Salt Lake. The office space includes two large and one smaller office with a bathroom and small kitch-enette. The space is approximately 800 square feet in size. Freeway access is convenient to our location. Rental rates are negotiable. Will consider proposals which include shared administrative services, if desired. Please call Jim at (801) 561-8685, x103.

E X P E R T I S E . V I S I O N . I N T E G R I T Y .

It’s the way we work for clients. The way we run our firm. And the way we live our lives.

S A L T L A K E C I T Y | P R O V O | O G D E N | S T . G E O R G E | L A S V E G A S

Durham Jones & Pinegar is a leading law firm with offices in Utah and Nevada, offering a spectrum of

services in more than 20 specialized fields. These include Tax, Banking, Business & Finance, M & A,

Litigation, Intellectual Property, Estate Planning, Real Estate, Bankruptcy, Securities and more. Durham

Jones & Pinegar is Utah and Nevada’s representative member of World Services Group — the second

largest professional services network in the world.

Vision is more than seeing opportunities. It’s directing clients to the best ones.


Utah Association of CPAs

1240 E. 2100 South, Suite 500

Salt Lake City, UT 84106

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The Journal Entry - October 2013

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