Accounting as a STEM career; more on ‘Dirty Dozen’ tax scams

The AICPA supports proposed legislation that would categorize accounting as a STEM career, with STEM standing for science, technology, engineering, and mathematics. Diana Deem, CPA, CGMA, an AICPA director of congressional and political affairs, shares more about the thinking behind and the AICPA’s support for the bill. Also, hear from the JofA’s editor-in-chief, tax, about the annual IRS list of “Dirty Dozen” tax scams.

What you’ll learn from this episode:

• More about the Accounting STEM Pursuit Act, recently introduced in Congress.
• Examples of how accounting has transformed since one of Deem’s early roles.
• Insight into the annual IRS list of “Dirty Dozen” tax scams and why this year’s release of the list is different.
• The reasons that stimulus payments are one focus of scammers.
• Summaries of JofA articles on business continuity planning as a tool to fight fraud, and Supreme Court news related to taxation of remote workers.

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, a JofA senior editor, at Neil.Amato@aicpa-cima.com.

Transcript:

Neil Amato: Welcome to the Journal of Accountancy podcast. This is senior editor Neil Amato. On this episode, I’m joined by Diana Deem, an AICPA director of congressional and political affairs. Diana is a CPA who holds the CGMA designation. We’re talking today about technology, education and legislation — all in one conversation, focusing on the bipartisan Accounting STEM Pursuit Act. You’ll hear that after this brief word from our sponsor.

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Amato: Diana, first, can you talk about why it is appropriate accounting be included as a technology profession under STEM, with STEM meaning science, technology, engineering, and mathematics?

Diana Deem: Sure. So when I think about accounting and I think about technology, which is where we want the accounting profession to land under STEM, I think all the way back to the beginning of my career, when the first personal computers were brought to our office. There was a total of three of them and they were literally personal computers with floppy disks — you know, none of the kind of ability to save tons of data that we do nowadays. And that was back in the early 1980s.

Even then, CPAs were early adopters of technology. We used spreadsheets and data-entry tools and software like Lotus 123 to help our clients be more efficient and to find ways to grow their businesses. As we all know, the business community and the business world is rapidly advancing its use of technology as blockchain, digital assets, and artificial intelligence become more and more prevalent across everything. And so is the accounting profession [advancing its use of technology]. Now, more than ever, there is a clear and logical overlap between accounting and technology. The profession continues to find new and expanded ways to utilize technology to serve in the public interest.

CPAs are technology leaders. They manage and analyze big data. They ensure data security, and of course they work alongside IT professionals. All of these and other things help businesses thrive in this increasingly complex and ever-changing world, where we live.

I’ll also add the COVID pandemic really showed the resilience of the profession to pivot, to move to using new technologies, to using new techniques in audits, for instance, to remotely audit clients, to allow them to maintain rigorous and accurate audits, and also to continue to communicate with their clients, sharing information and documents and, importantly, keeping everybody safe.

Amato: What would the inclusion of accounting as a STEM profession accomplish for the profession and for the public?

Deem: Including accounting a STEM profession helps to accomplish and grow the pipeline of diverse talent that will help the profession itself and will also help businesses — whether those businesses are accounting firms or finance functions of other businesses — to reflect what communities actually look like today. There is no question that more work needs to be done to increase racial diversity and ethnic diversity in the accounting profession, which is critical to the public interest.

This bill just a step in the right direction. Although undergraduate enrollments have been at all-time highs, they’re already softening, and the accounting profession’s staffing issues today could become a long-term problem as a high percentage of the current workforce actually retires.

In terms of what this bill does, it will add activities to promote the development, implementation, and strengthening of programs to teach accounting to allowable list of grant funding under the Elementary and Secondary Education Act, the ESEA. With a focus on increasing access to high-quality accounting courses for students through grade 12 who are members of groups that are underrepresented in accounting careers. We all know that teachers and what they talk about with the students influence students, in terms of what careers they go into. And because teachers often emphasize STEM fields, student interest in those occupations will increase.

So we see this bill as an important step to making sure that a greater proportion of students, particularly those from diverse and underrepresented communities, learn accounting as a career path.

Simply put, this bill will increase exposure to the fact that accounting careers give people access to cutting-edge technologies, such as artificial intelligence, and also the ability to pursue in-demand skills, whether they decide to stay in accounting long term or not. If someone decides to go into public accounting or work inside the finance function, they need to be well-versed in areas such as cybersecurity, information technology, systems controls, and use emerging technologies, such as blockchain and data analytics, all things that are important in today’s environment. And the environment frankly demands it.

The bottom line: It’s exciting to enter the accounting profession, and thanks in part to this legislation, public accountants and management accountants will continue to be highly sought after as advisers and employees.

Amato: So you’ve mentioned the bill. The bill is the Accounting STEM Pursuit Act of 2021. Can you tell me more about it and the path it will take on Capitol Hill? Where does it stand now, and where is it expected to head?

Deem: Sure. The bill was just introduced, and it’s a bipartisan bill, because this is a nonpartisan issue. It was introduced by Rep. Haley Stevens, who is a Democrat from Michigan, and Victoria Spartz, who also happens to be a CPA, and a Republican from Indiana. I’m pleased to say the bill has been endorsed by the Center for Audit Quality, the Diverse Organization of Firms, the National Association of Black Accountants, and an organization called NAF, which is a STEM school organization.

Reps. Stevens and Spartz are actively seeking bipartisan support for the bill, and the AICPA will continue to help with passage, or a hopeful passage at least. We’ll be educating lawmakers and staff about the bill and the important role the profession has in helping restore our country’s economic growth and continuing to protect the public interest.

We’ll be advocating for Congress to take up the bill, first in the Education and Labor Committee and then in full House of Representatives, and we’ll also be talking to people on the Senate side, to find Senate sponsors for companion legislation in that chamber.

Amato: Diana, this has been educational to me, I think educational to the listeners. Is there anything you’d like to add in closing?

Deem: Sure. The only other thing I really want to mention is not related to the bill but to the AICPA and NASBA’s CPA Evolution initiative. That’s another way that we in the accounting profession are trying to grow the pipeline and thrive in today’s business environment. CPA Evolution is intended to provide accounting students with skills and competencies required to meet the needs of the marketplace and, again, protect the public interest. It’s focused on a college accounting curriculum that’s relevant to preparing future CPAs.

And specifically, it’s to help universities transition their CPA candidates for the core-plus-disciplines CPA Exam structure that’s going to be included in the Uniform CPA Exam that starts in 2024. People can find out more information about that at EvolutionofCPA.com.

But what I really want to end with is all of these things are intertwined. It’s all about the pipeline of accountants. It’s all about making sure that the accounting profession continues to serve in the public interest and helps businesses grow and grow strategically. So, having accounting become part of STEM, growing the profession through the CPA Evolution initiative — all of these things are important to the accounting profession and, frankly, the business community’s future.

Amato: Diana, thank you very much for being on the podcast.

Deem: Thank you so much. Hope to do it again sometime.

Amato: Well, I didn’t mention it on the intro of this week’s episode, but I probably should have. It is the time of year again where the IRS lists its “Dirty Dozen” tax scams. Alistair Nevius is here. Alistair is the JofA’s editor-in-chief, tax. Alistair, first, tell us briefly what the Dirty Dozen is.

Nevius: Sure. Every year the IRS issues its list of top tax scams, which it calls the Dirty Dozen. And the IRS is basically just trying to warn people that these scams are out there and that they should be on the lookout.

Amato: What’s new this year with the Dirty Dozen?

Nevius: This year, the IRS is releasing the Dirty Dozen in four batches over the course of a week. The first notice came out on Monday, and it was focused on pandemic-related scams, and the IRS says it has seen scam artists who are using the pandemic to steal money and information from taxpayers. The pandemic-related schemes that they focused on in the first news release involved economic impact payment. That is stimulus check theft and unemployment compensation fraud.

As you know, there have been three rounds of stimulus checks sent to individuals during the pandemic, or direct-deposited, and fraudsters know that there are millions of people with extra money, and they’re going to try to scam people out of that extra money. So the IRS is alerting taxpayers to be on the lookout. And they list some telltale signs of a scam: Any text messages, random incoming phone calls, or emails inquiring about bank account information or requesting recipients to click a link or verify data should be treated with suspicion.

They also remind taxpayers that the IRS will never initiate contact by phone, email, text, or on social media asking for Social Security numbers or other personal or financial information related to economic impact payments. Another scam they warned about involves unemployment compensation. As you know, millions of people lost their jobs last year, and the IRS says that identity thieves made fraudulent claims for unemployment compensation using stolen personal information of individuals who had not filed claims. Payments made on those fraudulent claims went to the identity thieves instead of the people who received a Form 1099G. And the first sign of anything being wrong is often that the victim receives a Form 1099G, reporting unemployment compensation that they didn’t receive.

So the IRS is urging people in this situation to contact their appropriate state agency for a corrected form.

Amato: That’s a lot of good info. What else should taxpayers be watching out for?

Nevius: Well, some of the other items on the Dirty Dozen list include personal information scams such as phishing and ransomware attacks. Also ruses focusing on unsuspecting victims. These often involve fake charities or senior or immigrant fraud, and schemes that persuade taxpayers to take unscrupulous actions. These include offer-in-compromise mills and syndicated conservation easements, both of which the IRS has been focusing on. Our senior editors Paul Bonner and Dave Strausfeld are covering these scams in a series of news stories this week on journalofaccountancy.com and thetaxadviser.com.

Amato: That’s great. Be sure to check out those Dirty Dozen stories. I guess they are always one of our most popular, and I’m sure they’re going to continue to be this year with some of the new, pandemic-related wrinkles. Alistair, thanks for this information.

Nevius: Thanks for having me on.

Amato: In other news, the Supreme Court has declined to take up a case involving remote work taxation. The Court declined to allow New Hampshire to sue Massachusetts over a pandemic-related regulation that allows Massachusetts to continue to collect state income tax from remote workers who normally work in Massachusetts. Find more on that topic in an article posted June 28.

Colleague Drew Adamek, who seamlessly stepped in and hosted this podcast last week, is clearly more than just a voice. He wrote a JofA article with the headline “Fighting Fraud With Business Continuity Planning.” The article quotes several CPAs on best practices for proactively weaving in fraud risk mitigation to their business continuity plans.

Visit the JofA site for news on PPP loans, the tax consequences of nonfungible tokens, and more. Thanks for listening to the Journal of Accountancy podcast.