This express podcast episode with transcript highlights recent Journal of Accountancy news coverage of student loan debt forgiveness, an AICPA letter requesting penalty relief from the IRS, and more. The article links mentioned in the episode are:
- Advice from a CPA financial planner related to student loan debt forgiveness.
- A quiz on SAS 145 and its new and revised terms, and the companion article about the standards.
- The specific requests in an AICPA letter to the IRS requesting penalty relief.
- The September issue of the Journal of Accountancy.
- A Tax Adviser article that mentions an NBA team.
What you'll learn from this episode:
- Why one CPA financial planner says people "have been in denial."
- The summary of a quiz on new and revised risk assessment terms.
- The key points of an AICPA letter to the IRS regarding penalty relief.
- Highlights of the Journal of Accountancy's September issue.
- The number of JofA podcast episodes that have been published so far in 2022.
Play the episode below or read the edited transcript:
— To comment on this episode or to suggest an idea for another episode, contact Neil Amato at Neil.Amato@aicpa-cima.com.
Neil Amato: Welcome back, listeners, to the Journal of Accountancy podcast. This is Neil Amato with the JofA. Today's episode is a quick-hitter, meant to summarize several important news topics for CPAs in more of a roundup style than with a featured interview.
On today's episode, we've got a quiz to mention, an update on the AICPA advocating for IRS penalty relief, as well as student loan debt forgiveness, a topic that's on a lot of people's minds these days.
All of that is coming up after this brief sponsor message.
Welcome back to the show. We're going to start with the topic of student loan debt forgiveness. On Aug. 24, President Biden announced a sweeping student loan relief initiative, highlighted by the promise of debt reduction of $10,000 or more per borrower. Looking beyond that headline, CPA financial planner Brianne C. Smith — who is a member of the AICPA's Personal Financial Planning Executive Committee — dug deeper and shared some other strategies that could help borrowers even more.
In a recent article written by the JofA's Bryan Strickland, Brianne Smith suggested that borrowers act now in three ways: One, by coming up with a game plan for making loan payments beginning in January. Remember, those are about to resume. Two, by making sure clients are cashing in on significant improvements to income-based repayment plans that could reduce the next payment. And three, by taking advantage of generous changes made to the Public Service Loan Forgiveness program before the Oct. 31 deadline.
So, yes, as mentioned earlier the good news of debt forgiveness for many also comes with a potentially strong dose of reality. As Smith said, people who have been in forbearance for more than two years have grown accustomed to just not paying their student loans, and they're going to have to make that first payment in January, so there's some preparation that has to take place over the next few months.
There was a pause on debt payments that began at the onset of the COVID-19 pandemic in March 2020, and it was extended multiple times, but this last time with a warning, that payments are scheduled to resume in 2023.
Smith said: "I think a lot of people have been in denial, thinking it's never going to happen, but it's pretty clear this is the last time payments will be paused." So she says that if you're resuming payments, you need to set your mindset to be prepared for this in January, which can be a hard time on the calendar to add an extra budget line, coming right off of Christmas.
Smith said that given the length of time that has passed since payments were last required, some clients have gotten used to using that money to support different parts of their budget.
You can check out Bryan Strickland's article and more of the advice from Smith on journalofaccountancy.com or by visiting this episode's show notes.
Next up is mention of a quiz on new and revised risk assessment terms under SAS No. 145. SAS stands for Statement on Auditing Standards. That refers to updates from the AICPA Auditing Standards Board, and CPA Dave Arman has both a companion article and a quiz. He writes in explaining in the intro to the quiz: "Auditors require clear understanding to determine material misstatement risks. Intelligible definitions aid that understanding. The AICPA Auditing Standards Board's Statement on Auditing Standards No. 145, Understanding the Entity and Its Environment and Assessing the Risks of Material Misstatement, provides guidance and revised definitions that enable auditors to improve their risk assessment process and their overall audit quality."
The new standard becomes effective for audits of financial statements for periods ending on or after Dec. 15, 2023. A five-question quiz then follows, and as I mentioned, there's a companion article that goes into more detail about SAS 145, which we will link to in the show notes for the episode.
Next, the JofA's Paul Bonner has coverage of the AICPA asking the IRS to expand penalty relief. A letter from the AICPA urges the IRS to expand the relief under Notice 2022-36 to include several other Code sections and forms and to extend the deadline for requesting relief to Dec. 31. The current deadline for such requests is Sept. 30.
The AICPA letter outlined requested changes that would, among other things, widen the relief to additional penalties, include more types of returns and taxpayer situations, cover more tax years, notify taxpayers who meet the relief criteria, and clarify a number of points regarding Notice 2022-36.
Next, the September issue of the JofA has published, with articles addressing the handling of sales tax nexus audits, what everyone can do to strengthen the next generation of CPAs, tips for using Microsoft Excel's Smart Lookup feature, and more.
And our tax readers definitely know about it, and it's something I don't talk about enough on this podcast, but the magazine and website for The Tax Adviser has all kinds of useful information on the topic of, you guessed it, taxes. One article that caught my eye recently admittedly did so because it mentioned an NBA team. The headline: Deferred compensation deduction and the sale of a business.
The summary of that article: A recent Tax Court case involving the Memphis Grizzlies illustrates complexities in business acquisitions that include assumption of deferred compensation costs. These include whether the buyer or seller — or neither — can deduct such compensation amounts and, if so, when. Learn more about that topic by visiting the show notes for this episode, where we will have the link to the article.
This is our 67th episode of the year. If this is your first time listening or you've been a longtime follower, we appreciate you tuning in. Admittedly, this one is a little bit different, without a main featured interview. Our podcast listenership is continuing to grow, so we hope that means that people like what they hear. Especially if that's the case, we'd love for you to rate and review the Journal of Accountancy podcast wherever you listen, and please follow us and share the show with your friends.
Those ratings and reviews help us understand what you want to hear about, and so the more specific, the better. Again, this is Neil Amato with the Journal of Accountancy. For all the content mentioned, find the hyperlinks in the show notes on the JofA episode page. Thank you for listening, and we'll talk to you again next week.