AICPA News is a round-up of recent announcements from the association.
AICPA Urges FinCEN to Extend Automatic Disaster Filing Relief to FBAR and BOI Reporting
Following a request to the Internal Revenue Service (IRS) for tax and payment filing relief in the wake of Hurricane Helene, the American Institute of CPAs (AICPA) has submitted a letter to the Financial Crimes Enforcement Network (FinCEN) urging them to implement a policy to offer automatic filing extensions for Reporting of Foreign Bank and Financial Accounts (FBAR) and Beneficial Ownership Information (BOI) reports to victims of major disasters.
In the past, FinCEN has provided FBAR filing relief to those impacted by disasters, however there is no mechanism for automatic filing relief in those situations, nor have they been consistent with the IRS when granting this relief.
“The AICPA recommends that FinCEN adopt a policy of automatically granting FBAR and BOI filing postponements to coincide with the IRS’s extended due dates when the IRS grants postponements under section 7508A. The relief provided by FinCEN should match the relief provided by the IRS for other filings, both in terms of the extended due dates and the geographic scope,” says Sue Coffey, CEO of Public Accounting for the AICPA, in the letter.
AICPA Comments on Dual Consolidated Losses and the Treatment of Certain Disregarded Payments
The American Institute of CPAs (AICPA) recently submitted comments to the Department of the Treasury and the Internal Revenue Service (IRS) on the proposed rules regarding dual consolidated losses (DCL) and the treatment of certain disregarded payments.
The DCL rules, under section 1503(d), prevent taxpayers from using a single economic loss to reduce both U.S. and foreign tax. Congress enacted the DCL rules to prevent a dual resident corporation (DRC) or a separate unit (including a foreign branch) from “double dipping.” Double dipping occurs when a DRC or separate unit uses a single economic loss to offset income in two tax jurisdictions.
The DCL rules primarily restrict the “domestic use” of a DCL, which is considered to occur when the DCL is made available to offset, directly or indirectly, the income of a domestic affiliate either in the taxable year in which the DCL is recognized, or in any other taxable year.
The AICPA highlighted several areas of concern in the proposed regulations. The AICPA’s recommendations include:
- Deferral of Application of these rules to at least tax years beginning on or after January 1, 2025.
- Extension of transition relief to no earlier than the tax years beginning on or after January 1, 2025.
- Withdrawal of proposed regulations by Treasury and the IRS for the removal of the stock inclusion rule.
- Deferral to Congress in enacting broader anti-hybrid rules, including those rules targeting structures that may produce deduction/non-inclusion outcome.
AICPA & CIMA celebrate finance excellence at ENGAGE UK & Ireland Finance Awards 2024
AICPA & CIMA recently announced the winners of the fourth edition of their ENGAGE UK & Ireland Finance Awards in a ceremony at Hilton Tower Bridge in London.
Sponsored by Kainos, the ENGAGE Finance Awards 2024 celebrated the accomplishments of CGMA candidates, CIMA members, and partners, recognising individuals and teams who have done outstanding work to advance the finance profession and shape its future. Each award winner was selected by a panel of judges, all of whom are CIMA members with extensive experience in the category they were judging.
This year’s winners are:
- Rising Star of the Year: Donal Murphy, Group Financial Controller at MCS Group, who was praised for being a great team player with strong people and leadership skills, and his unwavering commitment to helping his team, business partners, organisation, and community succeed.
- Finance Business Leader of the Year: Huiming Chen, Chief Financial Officer – Europe Commercial at Illumina, an American biotechnology company, was commended for successfully driving organisation-wide change in just under two years.
- Responsible Finance Team of the Year: The Finance and Systems Team at Ramboll UK & Ireland, a globally leading engineering and consultancy company, was celebrated for their widespread ESG and corporate sustainability experience, and proactive approach to embedding ESG and sustainability-related goals, including gender equality, quality education, and good health and wellbeing, into all aspects of the business.
- Digital Innovation Project of the Year: Balfour Beatty, a leading international infrastructure group, was recognised for its PANDA project, a data visualisation platform, to improve existing reporting processes, improve integrated thinking, and enhance decision-making within the organisation.
- Small, Medium Enterprise (SME) of the Year: Rare Tea Company, a sustainable loose-leaf tea company, was commended for its uncompromising approach to product quality and ethics, as well as the positive impact they have made working directly with tea farmers around the world.
- Student of the Year: Gavin Simpson, Finance Business Partner – Senior Analyst at Jaguar Land Rover, a British multinational automobile manufacturer, was celebrated for his perseverance and resilience throughout his journey towards becoming a Chartered Global Management Accountant.
- Mentor of the Year: Julie Bickerdyke, Managing Director at Moonstone FD, a finance strategy consultancy for small businesses, was recognised for her exceptional coaching skills and dedication to helping her mentees gain confidence, grow their skillsets, and achieve their goals.
AICPA Pushes Back on Treasury and the IRS Overreaching Guidance Package
The American Institute of CPAs (AICPA) recently submitted a comment letter to the Department of the Treasury and the Internal Revenue Service (IRS) in response to their release of a guidance package addressing certain basis-shifting transactions involving partnerships and related parties.
The AICPA recommends the following:
Eliminate the Retroactive Nature of the Rules – final regulations should eliminate the retroactive application of the proposed rules and state that they apply prospectively for participating parties and material advisors. In addition, the disclosure requirements under the Proposed Regulations should only apply in the year of the Transaction of Interest (TOI).
Exclude Certain Types of Transactions – final regulations should significantly narrow the scope of the Proposed Regulations to only capture “carefully structured” transactions that “exploit the mechanical basis adjustments provisions of subchapter K.” In doing so, the final regulations would exclude common transaction and normal basis adjustments captured under the proposed rules as drafted.
Significantly Increase the $5 Million Threshold – final regulations should reflect a threshold of at least $50 million. This Threshold should be applied on a transaction-by-transaction basis and look to gain recognition by any party.
Modify the Distribution Transaction of Interest Related Party Definition – final regulations should modify the Distribution TOI Related Party Definition to provide that in addition to being related to each other, related partners must also own 80% or more of the capital of profits interests of the partnership.
AICPA & CIMA, together as the Association of International Certified Professional Accountants, appoint Mark Koziel as next CEO
Following an extensive global search, the Board of Directors of the Association of International Certified Professional Accountants (the Association) has appointed Mark Koziel, CPA, CGMA, as the organization’s next CEO. Koziel will succeed Barry Melancon, CPA, CGMA, who will retire at the end of 2024.
Koziel is currently president and CEO of Allinial Global, an association of independent accounting and advisory firms with $6 billion in collective revenue and 268 member firms worldwide. He will begin the role in January following a handover period.
Koziel has extensive leadership experience. He became president and CEO of Allinial Global in 2020 after 14 years with the AICPA and the Association, where he served in a number of roles, including executive vice president, Firm Services. He began working in the profession at a large accounting firm, Lumsden McCormick, based in Buffalo, New York. Throughout his career he has been a consistent advocate for accountants and has developed a strong global understanding of the accounting and finance profession.
Retiring CEO Barry Melancon said: “Serving the profession over the last 30 years has been a great honor, and I have been fortunate to have played a part in its transformation. I am thrilled to see Mark appointed to the role, knowing his passion and vision for the profession and AICPA & CIMA. Mark will do a fantastic job.”
AICPA Foundation Launches the Barry C. Melancon Professional Accounting Research Fellowship
The AICPA Foundation recently announced the launching of the Barry C. Melancon Professional Accounting Research (PAR) Fellowship to support the next generation of accounting and finance professionals with the skills, knowledge and training to advance the accounting and finance profession. The Fellowship has been established as a legacy of Barry Melancon’s 30-year leadership tenure at the AICPA & CIMA as well as his dedication, advocacy and future-focused commitment to the profession.
The Fellowship aims to initially support doctoral students who are undertaking practical research to advance the science of public or management accounting practice.
During the fellowship year, Melancon PAR Fellows will perform the research identified in their applications and provide periodic updates to the Foundation Board of Trustees about their findings and the expected or actual practical impact of their research on the profession. These Fellows will also be given the opportunity to meet with individual Trustees and Association staff to discuss their ongoing research project.
Applications for the Fellowship will be open year-round with decisions announced annually — May 31–June 15 – for two research fellowships. Applications must be submitted via ThisWaytoCPA.com by March 15 for that academic year’s fellowship, with awards paid at the beginning of the Fall semester/quarter. This award will be granted to two students per year: with one research project to support the practice of public accountancy and one supporting the field of management accounting. Grant amounts will be contingent on the cost of the applicant’s research project and the financial needs of the applicant.
The inaugural Barry C. Melancon Professional Accounting Research Fellowship will be awarded in 2025.
More information about the Barry C. Melancon Research Fellowship including eligibility, application requirements and deadlines can be found at ThisWaytoCPA.com/education. Also, for those within who would like to donate to the fellowship please go to the AICPA Foundation Giving Page.
AICPA Urges Guidance for Cannabis Businesses in Advance of Transition Rescheduling Marijuana from a Schedule I to a Schedule III Controlled Substance
In May of 2024, the Department of Justice (DOJ) issued proposed language that would reschedule marijuana from a Schedule I controlled substance to a Schedule III controlled substance, subject to section 280E of the Internal Revenue Code. The American Institute of CPAs (AICPA) submitted a letter to the Department of the Treasury and the Internal Revenue Service (IRS) requesting guidance for cannabis businesses in advance of the impending transition away from engaging in a trade or business that subjects them to section 280E.
The AICPA has provided recommendations as a starting point for issuing guidance to cannabis businesses and tax practitioners, urging that they be implemented as soon as possible in anticipation of the potential rescheduling of marijuana as a controlled substance. These recommendations include:
Retroactive treatment for expenses previously subject to section 280E – the AICPA recommends that Treasury and the IRS issue guidance providing that cannabis businesses are permitted to take deductions for the full tax year in the year in which marijuana is rescheduled to a Schedule III controlled substance and, therefore, cannabis businesses are no longer subject to 280E for that entire year and future years.
Clarify issues stemming from prior section 280E disallowance – the AICPA recommends that Treasury and the IRS issue guidance clarifying the tax treatment of issues arising from no longer being subject to section 280E, including accounting year changes, partnership basis and depreciation.
Uniform tax treatment among cannabis businesses – the AICPA recommends that Treasury and the IRS issue guidance ensuring that upon the rescheduling of marijuana as a Schedule III controlled substance, section 280E apply equally to all cannabis businesses legally operating within their respective states, regardless of whether they sell medical marijuana or recreational marijuana.
Volunteer disclosure program – the AICPA recommends that Treasury and the IRS offer a voluntary disclosure program for cannabis businesses that would no longer be subject to section 280E as a result of the rescheduling of marijuana.
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Tags: Accounting
