The American Institute of Certified Public Accountants (AICPA) recently released its CPA Firm Top Issues Survey that took a look at “significant challenges facing practitioners.” But Rian Wilhite, of Peisner Johnson & Company LLP, says the AICPA survey should have focused instead on what issues keep leaders of CPA firms up at night.
For Wilhite that is “missing or understating some liability—some liability that isn't on the balance sheet, but should be”…such as nexus exposure.
To illustrate his point, Wilhite uses an example involving a CPA firm’s longtime client approached with a buyout offer. As part of the offer, the buyout firm “issued a nexus questionnaire to the company and discovered they had nexus for sales tax all across the nation based on the activities of independent sales reps,” Wilhite writes. The potential liability, for the past three years? Roughly $15 million, according to Wilhite. Understandably so, the CPA firm, which had been giving the company “giving clean opinions all along for the last 30 years, had “palpitations,” Wilhite notes.
“Thankfully, all’s well that ends well and this situation was resolved satisfactorily because of a series of actions including taking advantage of the SSTP amnesties and strategic voluntary disclosures,” Wilhite writes.
Given the number of developments on the sales tax nexus front in recent months, his example is a timely, cautionary tale for practitioners everywhere.
In other developments,
Nexuspocolypse, nexusmageddon, nexusapalooza… Daniel De Jong of the Tax Executives Institute, Inc. ponders these titles as he reviews Connecticut’s new economic nexus rule.
For an in-depth look at cloud computing, check out a new article written by Kendall Houghton and Maryann Luongo, both with Alston & Bird.
The Tax Foundation’s Laura Lieberman reports on how the Texas “Pole Tax” failed to live up to expectations.
Philip M. Tatarowicz has joinedState and Local Tax practice at the Washington, D.C. office of Morrison & Foerster LLP.
By Priya D. Nair
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