I would like to submit my name as being less than enamored with the new Form 990 that the IRS has visited upon hapless not-for-profits. I noticed that your article “The Redesigned Form 990” (March 09, page 72) featured the use of the buzzword “transparency.” It seems that any reporting changes imposed on the public are always labeled in the interest of transparency. The unethical conduct of a few always visits punishment upon the masses.

I fully recognize the abuses that take place in the not-for-profit field, but most of the information called for in the new Form 990 is also presented in the Labor-Management annual Form LM-2 having to do with purpose, payments to principal officials, etc. In my opinion the questions about the number of forms W-2 and 1099 filed borders on the ridiculous. There are three questions regarding program accomplishments and organizational purpose. The Form LM-2 could be shared and avoid the time and painful effort required to fill out the 990.

When I contacted our Alabama congressional representative to complain about what I consider overkill in the reporting requirements imposed by the new Form 990, his response was, “We have no control over the Internal Revenue Service.”

James A. Johnson, CPA

Florence, Ala.

I read with interest the article on “Representing Clients With Tax Delinquencies and Deficiencies” (“Tax Practice Corner,” April 09, page 65), as this is part of my practice. Of particular interest was the paragraph on abatement of penalties because that is often a key concern of delinquent clients. The authors indicated that penalties can be abated for “reasonable cause,” citing mental illness and medical problems as examples.

While it is true that mental illness and medical problems can constitute reasonable cause, the bar for abatement on these bases is high. The taxpayer must be “incapacitated,” to the point where she or he is unable to perform the required functions to prepare a tax return during the relevant time period (that is, when the tax return is due and for the time period after that until the return is filed). If the taxpayer is delinquent with respect to several years of tax returns, the long-term incapacitation required for abatement as a result of mental illness or medical problems will be almost impossible to establish in the majority of cases.

Robert A. Ladislaw, Esq., CPA

New York

Authors’ reply: The reader makes an excellent point. If the client is delinquent in filing multiple tax returns, it will certainly be more difficult to meet the standard of reasonable cause. Moreover, general medical problems, not feeling good, stress or being overworked will likely be insufficient causes to meet the standard of reasonable cause. However, the facts and circumstances of each case will dictate whether a request for abatement of penalties should be submitted. In cases involving one or only a few years of delinquent returns, the authors have been successful in having penalties abated for such diverse reasonable causes as adult attention-deficit disorder, depression following the death of a spouse, alcoholism and, even in one instance, divorce.

A request for abatement of penalties should include a well-written letter detailing the reasonable cause and documentation supporting the underlying facts: letters from doctors, medical records, death certificates, insurance records or a police report if the medical excuse resulted from the taxpayer’s being a victim of a crime. The abatement request should also clearly show how the medical problems directly led to the taxpayer’s inability to pay the tax or file the return when due.

A taxpayer likely will succeed in getting penalties abated for late filing of a return if the facts show, for example, that close in time to the due date of the tax return his wife had been in the hospital for three months, which resulted in the taxpayer having to care for his four small children while also trying to keep his self-employed business from collapsing.

When tax resolution options (such as an offer in compromise or bankruptcy) that will eliminate the IRS debt are not available and the client is left with either a full-pay or an installment payment option, depending on the circumstances of the particular case, an abatement of penalty request is a resolution alternative that should not be overlooked by the tax professional. It is a relatively easy task to submit such a request. Nevertheless, penalty abatement requests should not be frivolously submitted.

Donald L. Ariail, CPA, DBA

Marietta, Ga.,

Michael M. Smith, Esq., CPA

Atlanta,

and L. Murphy Smith, CPA, DBA

College Station, Texas

[Editor’s Note: The authors’ affiliations were inadvertently omitted from their original article. Donald L. Ariail, CPA, DBA, is an associate professor at Southern Polytechnic State University. Michael M. Smith, Esq., CPA, is a shareholder at Baker, Donelson, Bearman, Caldwell & Berkowitz; and L. Murphy Smith, CPA, DBA, is a professor at Texas A&M University.]

I read your article “Closing the Gap in the Supply of Accounting Faculty” (March 09, page 36) with another grimace on my face, as I have each time the AICPA has addressed this issue in recent years.

The gap could be easily closed once the accreditation agencies come to the realization that professionally qualified individuals can do just as well in the classroom as doctorally degreed individuals. I understand that each of the authors is a Ph.D. or Ph.D. student, and thus sees only one solution to the problem—to get more students into Ph.D. programs. The accreditation agencies also have the same slant.

However, when everyone comes to the realization that a practitioner with a master’s degree and 10 or 20 years of experience and a love of teaching has his or her own special gifts to bring to the classroom, then perhaps the gap could be successfully bridged.

A Ph.D. in accounting is essentially a degree in statistics, allowing the graduate to research. But the students in the classroom are there, in my case, to learn tax, not statistics. I believe the undergraduate and graduate tax students have much to gain from the practitioner with 10 years of actual practical tax experience.

There are many, many practitioners who have a gift for teaching and who want to give back to the profession by motivating students in the classroom and guiding them to careers in tax and auditing. Many of these individuals have discovered this gift after 10 or 15 years, or even a career in accounting—when they are at a point in their life that moving their family across the country to a Ph.D. program for one-third the salary they are currently earning is just impractical, especially given the one or two more moves following the Ph.D. program. This may work for a 22-year-old, but not a 32- or 42-year-old.

These well-intentioned individuals have excellent practical experience to share in the classroom, yet, all across the country they are not permitted to teach full time in the state and larger institutions due to their lack of a Ph.D. The only places they can teach full time are the smaller private schools or two-year technical colleges, where they can earn a whopping $40,000 a year for an annual teaching load of nine classes. I believe this is to what you are referring where your article states:

“Although PQ [professionally qualified] faculty positions are not as numerous as AQ [academically qualified] faculty positions in the United States and do not offer the same compensation and benefits that AQ faculty receive as researchers, becoming a PQ faculty member may be an excellent way for an experienced accounting professional to move into a career in higher education.”

“Do not offer the same compensation and benefits”—$40K vs. $135K—isn’t that a bit of an understatement?

Also, MBA schools across the country have developed weekend college and online MBAs. When will quality Ph.D. programs create nontraditional programs allowing experienced individuals to earn the Ph.D. degree without moving their family?

Once again, down the road, when actually facing no Ph.D.s to teach next semester’s classes, then and only then will the leaders of these institutions push the accrediting agencies to realize that professionally experienced individuals are well-qualified to teach the classes, and they can bring a career of experience to the classroom as well as employment connections, practical examples and enthusiasm for the profession. When everyone realizes this on a nationwide level at the state and larger schools, then your gap will be filled.

June Jager-Norman, CPA, MST

Sole practitioner and adjunct faculty member,

University of Wisconsin–Milwaukee

Author’s reply: Thanks for your comments to our article. You raise important and complex issues. I regret, however, that you felt our article was by Ph.D.s, for Ph.D.s. We wrote this article to inform practitioners that opportunities do exist for both academically and professionally qualified faculty—that’s why we submitted this article to the Journal of Accountancy, since the JofA is well-regarded by both the academic and professional accounting communities.

The AICPA, AAA, AACSB, other professional and academic organizations, and some colleges and universities are taking steps to address faculty shortages. We hope our article makes practitioners aware of these initiatives. The solution is not as simple as hiring all Ph.D.s, or hiring all non-Ph.D.s, but rather, finding the faculty complement that best matches a business school’s strategic mission and considers other important factors, such as accreditation and resource constraints.

Regarding your comment about differences in compensation levels between Ph.D.s and non-Ph.D.s, our intent is to point out that differences exist in compensation between Ph.D. and non-Ph.D. faculty. We did not want to mislead non-Ph.D. professionals interested in higher education careers into thinking that they would receive the same compensation and have the same responsibilities as Ph.D. faculty. Yes, some schools, generally the community colleges and small private schools, do pay in the $40,000 to $50,000 range to teach full course loads. At the same time, however, compensation for non-Ph.D. faculty varies considerably by school and geographic market.

A number of nationally ranked business schools in the Boston area hire permanent, full-time non-Ph.D. faculty. I have also seen a number of ads on HigherEdJobs.com and have read articles over the last several years about well-regarded colleges and universities across the country that recruited for full-time, permanent non-Ph.D. faculty. The AACSB Bridge Program, which receives some funding from the AICPA, also distributes resumes of Bridge Program “graduates” to AACS-Baccredited programs.

Graduates of the top Ph.D. programs, who tend to migrate to large state universities or private universities, often located in major metropolitan areas, do earn high salaries, often higher than the $135,000 existing benchmark. Top researchers will always be in demand in any discipline. Good accounting researchers use not only statistics, but also economics, psychology, accounting and many other subject areas to ask the relevant questions that help advance new knowledge of topics such as audit quality and the economic effects of companies’ accounting choices.

Training researchers requires significant faculty resources, which is one reason Ph.D. programs are small, even for fulltime programs, and is the main reason why many schools don’t offer online doctoral programs.

For professionals seeking a doctoral program with a greater practice orientation, there are also options for executive doctoral programs. Case Western Reserve University offers a well-established executive doctoral program. Kennesaw State University is now starting an executive DBA program that requires limited time on campus. Other universities are considering similar types of programs, which allow a candidate to earn a doctorate without the disruption of moving the family.

Michael F. Ruff, CPA

Norfolk, Mass.