member Q & A

Jeffrey R. Hoops
Chairman, Tax Division Oversight Committee
Member, Committee Operations Committee
Member, Mergers and Acquisitions Committee
Member, Committee Coordinators

Q: How long have you been a CPA? Where did you go to school? What made you decide to become a CPA?
A: I have been a CPA since I passed the auditing section of the exam in November 1976 and completed the experience requirement. I have a BBA in public accounting from Hofstra University and an MS in taxation from Long Island University (C.W. Post). I was a business major in college and decided to get a degree in accounting after I took the required accounting course.

Q: What are your primary functions and responsibilities?
A: Since I joined the E&Y tax department in 1975, I have been involved in serving a wide variety of corporate and individual clients. Serving clients continues to be my primary responsibility. I am also actively involved in recruiting and counseling our staff members.

Q: The Enron collapse has drawn a lot of attention to the profession. How has this scrutiny affected the way you do your job, if at all?
A: Enron has not really affected my job as a tax professional. However, in my role in the New York State Society of CPAs and as a partner in a Big Five firm, I spend a fair amount of time lately meeting with New York state officials helping them to understand how our profession works, and helping them to determine an appropriate state response to the Enron situation.

Q: What kind of changes do you expect to see in the profession as a whole as a result of the Enron case? Do you think this will result in new regulatory powers for New York state? Will the New York State Board for Public Accountancy have more disciplinary/regulatory control over the profession?
A: Obviously, our profession is getting a tremendous amount of scrutiny from both the federal and state government. This will undoubtedly result in new rules governing audit practice. My hope is that, in spite of the Enron publicity, our legislators and regulators will take the time to advocate meaningful and effective reform for our profession. My concern is that the federal government and state governments will enact conflicting or incompatible rules. We live in a world where almost every business operates in multiple states and multiple countries. If every state had scope of services rules governing CPAs, in addition to the federal rules, complying with the rules would be difficult and inefficient for both our firms and our clients. I think the reforms suggested by the Society, such as strengthening the state board for public accountancy, are important steps that New York state can take to restore investor confidence in our profession.

Q: What are the most pressing issues facing the Tax Division Oversight Committee in the coming years?
A: The most pressing issues facing the TDOC are the most pressing issues facing our members who work on tax matters. These include workload compression, relations with the Internal Revenue Service and dealing with all the yearly tax law changes.

Q: The U.S. House of Representatives recently passed a law making the 2001 tax act permanent. Should the law, in its entirety, be made permanent? If not, what aspects should Congress “sunset” in 2010?
A: Unfortunately, effective tax policy and government budget needs rarely go hand in hand. My view is that enacted tax law changes should be made permanent. If legislators find that a tax rule is not effective, it should be changed. There is no good tax policy reason why items such as the R&D credit and the estate tax should be phased in and out on a regularly scheduled basis. This unnecessarily complicates things and causes taxpayers to lose faith in the system. Unfortunately, our legislators need to fit the changes within budget constraints.

Q: What are the chances for full repeal of the Alternative Minimum Tax (AMT)?
A: The AMT is a perfect example of a tax law that needs to be changed. Almost everyone agrees that the AMT is too complicated and does not address the problem it was originally aimed at. Even the IRS’ Taxpayer Advocate believes that AMT repeal is critical. Yet, the amount of revenue that will be lost if the AMT is repealed is significant, and no one can find an acceptable revenue offset.

Q: Do you believe the public has an accurate understanding of what the CPA brand represents? Do you think it’s necessary to better market the CPA image to the general public? If so, what can state societies do to accomplish that task?
A: I actually think that in spite of recent events the business community has a very positive image of CPAs and that we are still viewed as a trusted business advisor. If a business person has a solid and long-standing relationship with his or her CPA, Enron will not change that relationship one bit. At the same time, I am a firm believer in continuing to promote the CPA brand. I hope the state Society uses every opportunity to get our image of knowledge, insight and especially objectivity out in the marketplace.

Q: What are some of the significant developments that have taken place over the last five years in your work? How much has technology contributed to those developments?
A: Aside from regular tax law changes, the most significant developments in my part of the profession have been technology, technology and technology. Computerized tax return preparation, processing and tax research have really freed tax professionals to spend more time doing what is most important: giving useful advice to our clients.

Q: What are some of your core objectives for the coming year professionally? What do you anticipate to be your biggest challenges?
A: Next year will undoubtedly be an important year for our profession. Our response to the Enron situation will have an important impact on how we do business and how the business community views us. As you know, I have been nominated president-elect for the 2002–2003 year. If I’m elected or not, I expect to have an active role in restoring the public’s confidence in us and our profession.

Q: With respect to the entire accounting profession, what are the advantages of working in practice versus working in industry? Conversely, what are the disadvantages?
A: I have spent almost 28 years in public practice and no years in private industry, so I’m probably not the best person to compare the two. But, I can say that I have always enjoyed working with the wide variety of businesses and people that public accounting offers.