Report supports established interstate mobility principles

By Nekose Wills

The Alliance for Responsible Professional Licensing (ARPL) recently released “Licensed to Move: Pathways, Principles, and Pitfalls for Interstate Practice,” a report that examines successful mobility and reciprocity practices in state licensure that allow professionals to practice across state lines. As the coronavirus pandemic continues to create the need for mobility among medical professionals, there has been an increase in states’ using the concept of universal licensure and one-size-fits-all approaches. ARPL is advocating for careful regulatory reform, based on existing principles, that already work well for interstate practice within specific occupations.

The AICPA is a founding member of ARPL, a group composed of national associations that represent highly complex, technical professions and their state licensing boards. ARPL members are licensed in all U.S. states and territories; have established uniform education, examination, and experience standards; have created proven national mobility paths for professionals; and have more than 100 years of combined experience in creating greater flexibility for professionals. ARPL is uniquely positioned to offer best practices that could be helpful as lawmakers work to achieve interstate practice.

In ARPL’s highly technical professions, interstate practice is already working well and provides a framework for policies to support professional growth and mobility while ensuring public health, safety, and welfare, according to the report. The ARPL report explores three principles that have allowed states to responsibly accomplish flexibility and mobility:

  • Recognize mobility and reciprocity systems that work using existing model laws: ARPL suggests lawmakers look to the previously outlined models as examples of interstate practice systems that are lauded for their success, such as the model laws from the National Council of Examiners for Engineering and Surveying (NCEES) and the Council of Landscape Architectural Registration Boards (CLARB).
  • Develop substantially equivalent requirements for education, examination, and experience: Education, examination, and experience are known as the “three Es” and are important to functional interstate practice. ARPL suggests including legislative language such as “applicant has met standards substantially equivalent to or greater than required in this state” or “compare the authorized scope of practice in the state the applicant is licensed in.” They also advise states to begin working with neighboring states, or states that might bring in an influx of applicants, when implementing substantial equivalency.
  • Provide adequate public protection: In a state-sponsored regulatory system, ARPL recommends that states have clearly defined enforcement and oversight functions and that licensing boards instill confidence from both licensed professionals and the public.

Finally, the report includes two pitfalls to avoid when dealing with interstate mobility: (1) forcing acceptance of out-of-state licenses, with no assurance of minimum qualifications; and (2) creating new barriers to interstate practice, such as residency requirements. The report states that supporting strong, fruitful licensing systems is more important than simply striving for universality, and that when done thoughtfully, good licensing creates jobs in a difficult economic climate and protects the public’s physical and fiscal well-being.

In other advocacy news:

With Oct. 15 looming, some practitioners face daunting challenges. The AICPA has had informal conversations with the IRS on penalty relief ahead of the Oct. 15 filing deadline. Based on these discussions, the AICPA recommends that practitioners who have made a good-faith effort to meet the filing deadlines on behalf of their clients, but are unable to do so due to COVID-19, should write “COVID-19” in an attachment to the return briefly describing the reason they cannot meet the deadlines or, if possible, should write “COVID-19” at the top of the tax return. Find out more.

AICPA creates resources for state CPA societies to advocate on electronic signatures, electronic submission of documents, and e-file authorizations. The AICPA’s Tax Policy & Advocacy team created resources for state CPA societies to use when advocating with state tax authorities and legislatures regarding e-signatures. The e-signature resources include model language on guidance for state tax authorities to adopt before Oct. 15; model legislative language for advocacy after Oct. 15 and seeking a longer-term permanent legislative solution in 2021 and 2022; the AICPA’s chart, COVID-19 Impact on 2019 State Income Tax Return Signature Requirements; and the AICPA’s Recommendations for Administrative, Filing and Payment Relief for State and Local Taxes During the Coronavirus Pandemic, which continue to be updated regularly. A recent state advocacy success is New York’s recently issued guidance allowing e-signatures on e-file authorizations.

AICPA creates resources to assist state CPA societies in advocating for one additional month filing penalty relief. The AICPA Tax Policy & Advocacy team developed and shared with state societies  resources on advocating for one additional month for state filing after federal filing, which include a map of potentially impacted states; model legislative language for advocating after Oct. 15 for a longer-term permanent solution for all taxpayers; bullet points on why states should enact model legislative language; a chart of examples of model state legislation; AICPA state tax advocacy issues and materials on state extended filing; an AICPA sample Department of Revenue guidance bulletin providing for an automatic additional month of penalty relief (which helped with the Oct. 15 deadline penalty relief — five states granted automatic relief, and 11 states granted case-by-case relief for corporate returns filed by Nov. 16); and a chart showing states’ one-month filing relief for 2020 filing of 2019 returns. A recent state legislative success was Vermont’s enacting of legislation on Oct. 8, just before the Oct. 15 corporate extended deadline, that extended the state corporate filing by one month after the federal filing deadline.

Estate and gift tax returns and Form 3520 approved for electronic signatures. The IRS added six forms to the list of items that can be signed digitally, including estate and gift tax returns and Forms 3520, Annual Return to Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts, and 3520A, Annual Information Return of Foreign Trust With a U.S. Owner. The AICPA advocated for this change, which was implemented on Sept. 10.

Treasury and IRS take AICPA recommendations on Section 642(h). In June, the AICPA commented on IRS proposed regulations on a beneficiary’s ability to claim excess deductions pursuant to Sec. 642(h). The AICPA suggested that Treasury and the IRS correct Example 2 in Prop. Regs. Sec. 1.642(h)-5(b) to consider that the real estate taxes on rental property are part of a business activity that generally generates a passive activity loss rather than passing through to the beneficiary as taxes, which was adopted and the example was corrected in the final regulations (T.D. 9918). The AICPA also suggested that the Schedule K-1 (Form 1041), Beneficiary’s Share of Income, Deductions, Credits, etc., provide separate lines for each type of excess deduction and guidance on where the beneficiary should report the items on the beneficiary’s Form 1040, U.S. Individual Income Tax Return. There are plans to update this form.

Stablecoins and fair value measurement feature in updated guidance from AICPA Digital Assets Working Group. The AICPA added 13 questions and answers to its Practice Aid, Accounting for and Auditing of Digital Assets. The nonauthoritative guidance focuses on how investment companies and broker-dealers should account for digital assets, in addition to providing answers on topics such as fair value and stablecoins. It is based on professional literature and experience from members of the AICPA Digital Assets Working Group and AICPA staff. The new guidance is divided into five key areas: (1) meeting the definition of an investment company when engaging in digital asset activities; (2) accounting by an investment company for digital assets it holds as an investment; (3) recognition, measurement, and presentation of digital assets specific to broker-dealers; (4) considerations for crypto assets that require fair value measurement; and (5) accounting for stablecoin holdings.

AICPA presents at the Maryland Association of CPAs virtual conference. On Nov. 12, Eileen Sherr, co-director of the AICPA Tax Policy & Advocacy team, will present at the Maryland Association of CPAs Advanced Tax Institute on State and Local Tax Issues. She will address state tax teleworking nexus and withholding issues and nexus in general.

Join the next Washington Tax Brief, Nov. 12. The Washington Tax Brief is a webcast series offering updates on major tax-related advocacy about potential legislation; proposed tax law changes and fundamental tax reform discussions; the impact of COVID-19 on tax decisions; impractical regulations; and much-needed guidance. This edition is for tax practitioners who want to know how federal tax issues will affect their states.

For more information on the AICPA’s advocacy efforts, visit the JofA’s AICPA Advocacy page.

— Nekose Wills is a manager–Advocacy Communications for the Association of International Certified Professional Accountants. To comment on this article or to suggest an idea for another article, contact Ken Tysiac (, the JofA’s editorial director.

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