Legislative & Regulatory
Legislative Team Tackles Issues in Lansing and Washington D.C.
By Michael D. Healy, Grassroots and Advocacy Programs Specialist, MACPA

It’s been a busy couple of months for legislative matters that affect CPAs. Hot button issues are prevalent at both the state and federal levels. The MACPA legislative team has taken their efforts to Washington and back home, as we hosted a major reception in support of U.S. Senator Debbie Stabenow.

A Hero to the Profession
While the MACPA has built many positive relationships with various key legislators over the years, perhaps none are as positive and fruitful as our friendly relationship to U.S. Senator Debbie Stabenow. Sen. Stabenow has been nothing short of a hero to the CPAs in Washington D.C. She was a major player in the successful effort to repeal the so-called 1099 requirement that came with the passage of the federal health care legislation. She also cosponsored legislation to ban the practice of patenting tax strategies. We are very lucky to have Sen. Stabenow, as a leader supporting our profession in Washington, on our side.

For that reason the MACPA recently hosted a reception in our Troy offices on behalf of Sen. Stabenow. She took time to sit down and talk to CPAs for more than an hour about the many issues affecting the profession and our state. The MACPA is proud to have such an ally of the profession and the reception was a great success.



MACPA Board Treasurer Ramona Pearson thanks Senator Stabenow for supporting repeal of the 1099 requirement.

 

MACPA Chair of the Board Greg Nowak expresses the need for tax return due date reform.

Senator Stabenow discusses the issues of major concern to CPAs at length. She took questions for nearly an hour, despite her staff’s concern about the time.

Advocacy in U.S. Congress
This May, members of the MACPA Legislative Advisory Group and several MACPA Board members headed to Washington D.C. to attend the meeting of AICPA Governing Council and visit with nearly every member of the Michigan Congressional delegation.

In all, a dozen MACPA member-advocates descended upon Washington D.C. delivering our message to the Michigan delegation. Federal matters are equally prevalent as state issues these days. At their meetings with Representatives and Senators, MACPA members discussed the dangers posed by tax strategy patents, the AICPA goal of revising tax return due dates, and federal tax policy simplification among the many other issues relevant to the profession in Lansing.
Soon after we met with the Michigan delegates, H.R. 1249, the patent reform bill that included the ban on tax strategy patents, was passed. The AICPA was an excellent leader in this effort on a national scale and the MACPA was eager to work with the Michigan Congressional delegation in that regard.

Left to Right: Incoming Chair of the Board John Pridnia, U.S. Congressman Hansen Clarke, Legislative Advisory Group member Walt Koziol, MACPA directors Randy Paschke, and MACPA Legislative Advisory Group member Dennis Echelbarger.

Back in Michigan Government

The Michigan legislature is currently on their summer break and the MACPA is scheduling breakfast meetings between CPA constituents and key legislators while they are home. These breakfasts are informal, however, the many legislative issues on the plate for CPAs is a common point of discussion.

A primary legislative agenda item for CPAs is the MBT technical corrections legislation introduced by Senator Brandenburg as S.B. 368 and 369. CPAs are acutely aware, the MBT is the law of record for the years 2008-2011 and the effects of the technical issues and ambiguities found in the law will remain a matter of concern to the CPA until this legislation is passed. We remain confident that action will be taken after the summer break. Contact the MACPA Government Relations Department for questions regarding content of this legislation or see it here.

Now that the experience requirement and CPA mobility legislative changes are final, the related Administrative Rules are in need if significant overhaul. The MACPA is working with the Michigan Department of Licensing and Regulatory Affairs (LARA), the State Board of Accountancy, and our members to develop the new rules.

The MACPA has become aware of a potential conflict between two vital sections of law regarding licensure of CPA firms. The Michigan Occupational Code requires CPA firms to be owned by 51% licensed CPAs while the Michigan Professional Service Corporation Act requires 100% ownership by “licensed individuals.” Initially it was thought that this may mean licensed CPA firms had to have 100% ownership by licensed CPAs. However after meeting with LARA officials it was determined that the Professional Service Corporation Act only requires that the owners be “licensed individuals” and does not specify a profession such as CPA. So ostensibly a firm can be owned by 10 CPAs and nine attorneys performing legal services for the firm, and still be in compliance. If you are unsure about your firm’s compliance, feel free to give the Government Relations Department at the MACPA a call at 248.267.3700.

An old issue has reared its head again regarding the bright line test for third-party reliance on a CPA’s work product. In 1996, the MACPA worked to pass a privity law that protected CPAs from being held liable for negative causes of a third party relying on their work product. While this law has served CPAs well, recent court rulings against CPAs have caused us to take another look at the regulations. Changes being discussed are intended to clarify the original intent of the laws. Good progress is being made in this arena.

The MACPA is also reviewing the regulations that currently allow the State Treasurer to depart from generally accepted accounting standards and procedures. In light of recent departures from GAAS by other states, the MACPA Legislative Advisory Group has initiated discussions with Governor Snyder’s administration regarding the possibility of developing specific procedures to include the utilization of an existing advisory committee comprised of CPAs. These efforts are ongoing.

The Association is currently reviewing the new Corporate Income Tax for ambiguities and technical issues that may have been carried over from the MBT. This work is taking place now so the outcome remains unclear. Some issues from the MBT are in fact carried over, such as the issues regarding disregarded entities. The MACPA is actively reviewing this legislation with the help of our membership for other similar issues.
 


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