This week I would like to introduce Adam Hanson. Adam is a tax manager in our Madison office who is in the middle of his eighth tax season. Adam is a CPA and has an MBA from Marquette University. He specializes in entity selection and providing compliance and planning services for closely held businesses.
In the middle of our busiest time of the year, I thought it would be useful to let one of our young professionals tell you why he loves what he does for a living!
On February 1, 2010, President Obama released his proposed fiscal 2011 budget and with it, numerous proposed tax law changes that Rick highlighted here the next day. It’s no secret that you will be paying more taxes in the near future, but should you pay them now to avoid higher future rates? Although this seems like a straightforward question for which there should be an obvious answer – its more complicated than that…and that is why I love what I do so much!
Recently, we came across an instance in which a local firm advised their client, a member in an entity which we provide tax services, to eliminate LIFO through an accounting method change and pay the taxes now in anticipation of congress repealing the method in the future. Now we don’t know the exact situation of their client, but they had pressed the issue on our client by recommending that this entity do the same and recognize the income sooner than later. At first glance, this recommendation seemed to make since, especially in light of the fact that tax rates will be going up in the future. But, as we peeled the onion, we found that accelerating the LIFO reserve would actually be a bad idea. Why? Because the most recent budget proposal provides that taxpayers who are forced off of LIFO in the future will be able to recognize the adjustment ratably over ten years starting with tax years beginning after December 31, 2011. Even with the prospect of recapturing the income at higher tax rates, we couldn’t justify the strategy for our client.
This example illustrates some of the interesting challenges and opportunities that we will be presented with in the coming years. According to many industry veterans this is one of the most difficult times to enter the profession. Rick expressed this exact sentiment when I mentioned that I’d like to write about why I think this is a great time to enter the profession.
I don’t know anyone that expects the tax code to shrink in volume anytime soon and with so many states in fiscal disarray, they’re reaching for revenue in every way they can. Congress and the IRS seem to be constantly trying to make our lives more difficult and with today’s economic climate, clients are more fee sensitive than they’ve been in my (short) career.
So, why do I think being young and in tax is a good thing? My answer is “opportunity” and “challenge”. What other profession can guarantee as much change and uncertainty in the next ten, twenty or thirty years as being in tax? As ominous as this may sound, I think it’s great! Every American will be required to face these changes with us and will be looking to us to interpret the change. We are the liaisons, the intermediaries, the bridges between the general public and most feared governmental agency. The table is set for each and every one of us to harness the opportunity.
This is the time of the year where many of question whether the late nights, loss of a social life and stress is worth it. And each year, many young CPAs or CPA hopefuls decide that it isn’t. There’s no getting around it, there will always be attrition, but in order to secure the future for Wipfli, or any firm for that matter, we need to retain our young talent. I know I’m trying to be better about emphasizing what excites me about my career and showing our staff that there is more to our jobs than a tax return.
So why did I decide to stick it out so far? Your guess is as good as mine. Why am I excited to stick it out for the next thirty years? For the opportunity and challenge.