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Advocacy

2020 Legislative & Regulatory Agenda

Overview: This proposed legislative and regulatory agenda was developed with input from the NYSSCPA Legislative Task Force, and will serve as the action plan for staff and volunteer activities this session. 

S.5661 / A.7765 – Electronic Signature Authorization 

ISSUE: 

Under current New York State law, filers are able to use an electronic signature to file their own NYS tax returns and under federal law, tax preparers are able to use an electronic signature to file a federal tax return to the IRS on behalf of their clients. However, tax preparers filing a NYS tax return on behalf of clients may not use an electronic signature. New York and Hawaii are the only states that prohibit this. 

The partial adoption of electronic signatures for NYS tax returns is inconsistent and the proposed legislation would align the tax return process for tax preparers with what is already acceptable for federal tax returns. 

BACKGROUND: 

Leading into the 2019 legislative session, we continued discussions with the New York State Department of Tax and Finance (NYSDTF) regarding acceptance of e-signatures on certain NYSDTF authorization forms. Our analysis led us to believe that NYSDTF has the authority to take this action. To that end, we began a dialogue with NYSDTF staff and the Acting Commissioner. This dialogue continued in good faith with NYSDTF on the possibility of conducting a business analysis and risk assessment in 2019, which NYSDTF informed us is needed to move forward. 

In May, Senator John Liu and Assemblyman William Magnarelli introduced legislation authorizing NYSDTF to accept e-signatures on certain NYSDTF authorization forms (S.5661 / A.7765). This would essentially override NYSDTF’s discretion on the topic and mandate that NYSDTF allow this practice. While NYSSCPA did not push for this introduction due to our good faith dialogue with NYSDTF, we decided to make the advancement of this legislation a priority as session wound down. From May until the close of the legislative session, we worked hand in hand with both Senator Liu and Assemblyman Magnarelli to move this bill. We lobbied majority members in each house and relevant staff. Our efforts led to the bill passing in the Senate in waning days of the 2019 legislative session. In the Assembly, we learned that NYSDTF concerns prohibited the bill from advancing. 

In October, members of the NYSSCPA Board of Directors met with the new Taxation Commissioner in Albany. 

The Commissioner’s team clarified their concerns. We have drafted language changes to the bill that have been presented to Senator Liu and Assemblyman Magnarelli. We are optimistic that the bill can advance in the new session. 

Below is the bill history for both the for A.7765 and S.5661 

A.7765 (Magnarelli) 

  •  5/20/19 – legislation introduced in the Assembly 
  •  5/20/19 – legislation referred to the Assembly Ways and Means Committee 

S.5661 (Liu) 

  •  5/10/19 – legislation introduced in the Senate 
  •  5/10/19 – legislation referred to the Senate Budget and Revenues Committee 
  •  6/17/19 – legislation discharged from the Senate Budget and Revenues Committee and committed to the Senate Rules Committee 
  •  6/17/19 – legislation was advanced through the Senate Rules Committee and ordered to Third Reading 
  •  6/17/19 – legislation was passed in the Senate (Vote Y: 48/N: 14) 

Non-CPA Ownership Legislation – A.2919 / S.3842 

ISSUE: 

New York State law prohibits non-CPA Ownership of firms. New York and Hawaii are the only two states with this prohibition. 

As CPA client work becomes more complex, non-CPA professionals are increasingly vital to high quality work. IT professionals, policy experts, data analysts and others reach a professional ceiling. Firms are unable to offer long-term incentives and growth opportunities, which often results in the loss of these valued employees to neighboring states, where the opportunities they are looking for are available. Expanding opportunities for ownership in New York State will level the playing fields, provide increased job opportunities and strengthen the economy. 

BACKGROUND: 

NYSSCPA continues to play a supportive role in advocating Non-CPA ownership in New York. The legislation continues to pass in the Senate and continues to stall in the Assembly’s Higher Education Committee. 

Below is the bill history for both the for A.2919 and S.3842 

A.2919 (People-Stokes) 

  •  1/28/19 – legislation introduced in the Assembly 
  •  1/28/19 – legislation referred to the Assembly Higher Education Committee 

S.3842 (Stavisky) 

  •  2/19/19 – legislation introduced in the Senate 
  •  2/19/19 – legislation referred to the Senate Higher Education Committee 
  •  4/30/19 – legislation advanced through the Senate Higher Education Committee 
  •  5/7/19 – legislation passed in the Senate (Vote Y: 59/N: 2) 

Occupational Licensing 

ISSUE: 

An antiregulatory movement now sweeping the country is calling into question the need for certification/licensing across occupations, directly threatening the value of the CPA license. Already, 39 states are considering some form of occupational licensing reform, adding to bills already passed. 

BACKGROUND: 

There are cogent points to be made in this position; research shows that, from the 1960s to today, the number of jobs requiring a license has exploded from 1 in 20 to 1 in 4. Such rules originally applied only to learned professions such as physicians, attorneys, architects, and, of course, CPAs. (In fact, the first law regulating the accounting profession was introduced right here in New York in 1896.) Today, however, these requirements have come to encompass such diverse jobs as hair braiders, auctioneers, and home entertainment system installers. Occupations and the learned professions are viewed the same. 

The AICPA and NASBA have formed a coalition with other licensed professionals called the Alliance for Responsible Professional Licensing, which aims to educate policy makers and the public on the importance of high standards, rigorous education, and extensive experience within highly complex, technical professions that are relied upon to protect public safety and enhance public trust. 

The NYSSCPA is monitoring the issue in New York. 

A.7244 / S.5508 – Municipal Contingent Fee Audit Reform 

ISSUE: 

This issue was first raised at the committee level in 2015 and a draft report was issued in 2016. The general consensus was that a contingent fee audit arrangement raises a number of concerns for taxpayers. This type of arrangement creates an incentive for the contract auditor to assess the highest amount of tax and to interpret the statutes and regulations in an aggressive manner in favor of the jurisdiction. In addition, the contract auditor does not have an incentive to inform the taxpayer of potential overpayments, missed deductions, tax credits or refund claims. Data security is also a concern. 

BACKGROUND: 

We drafted legislation, which would prohibit municipalities from compensating private auditors on a contingent fee basis, and obtained approval of such legislation by the appropriate NYSSCPA committees. The legislation was introduced by majority members in each house of the Legislature - Senator Jennifer Metzger and Assemblyman Al Stirpe (S.5508- A/A.7244-A). Our lobbying efforts also resulted in nine co-sponsors in the Assembly. The legislation did not pass, but the bill sponsors have agreed to continue to assist NYSSCPA in getting it across the finish line in 2020. 

The legislation stipulates that any municipal corporation shall not compensate any person or entity, in whole or in part, on a contingent fee basis or any other basis related to the amount of tax, interest or penalty assessed against or collected for the service of auditing a return or report filed pursuant to, or in compliance with, any law. 

Below is the bill history for both the for A.7244 and S.5508

A.7244-A (Stirpe) 

  •  4/18/19 – legislation introduced in the Assembly 
  •  4/18/19 – legislation referred to the Assembly Committee on Local Governments 
  •  5/30/19 – legislation was amended to clarify language in the bill and recommitted to the Assembly Committee on Local Governments 

S.5508-A (Metzger) 

  •  5/3/19 – legislation introduced in the Senate 
  •  5/3/19 – legislation referred to the Senate Committee on Local Governments 
  •  6/6/19 – legislation was amended to match the Assembly clarification and recommitted to the Senate Committee on Local Governments 

CPE Reciprocity 

ISSUE: 

CPE reciprocity exempts CPAs who hold multiple state licenses from having to meet the individual CPE requirements of each state so long as the licensee meets the CPE requirements of their home state. Because this exemption encourages uniformity while removing unnecessary burdens that do not play a role in protecting the public interest, the AICPA and NASBA are encouraging state boards of accountancy to adopt this provision of the UAA Model Rules. 

The NYSSCPA will seek clarification from the State Education Department on how the NY regulations match/fail to match the UAA as stated below. 

BACKGROUND: 

The implementation of individual CPA mobility has allowed many CPAs to give up the holding of multiple reciprocal licenses in various jurisdictions. However, in certain circumstances, a CPA may choose to continue to hold more than one license.

Examples: 

  • CPA may wish to hold a license in his/her original state of licensure or because the CPA plans to return to that state at some point in the future 
  • CPA may work near a border and find it important to hold a license in the CPA’s home state as well as in the state where the firm maintains a second office. 
  • Certain jurisdictions (outside the respective state boards of accountancy) require a CPA to have an active in-state license if they are performing certain types of attest work within a particular state. 
  • CPAs may opt to hold two or more licenses when they are assigned to a limited but multi- year engagement in another state, but know they will eventually return home (e.g. publicly traded companies require partner rotations every five years). 

For all of these reasons, the UAA Model Rules seek to provide a reasonable accommodation in regard to multiple license holders’ Continuing Professional Education (CPE) requirements across state lines. 

According to UAA Model Rule 6-4, all CPAs are required to obtain 120 hours of CPE every three years as a condition of licensure renewal. These hours must include four hours of ethics-specific training and not less than 20 hours of CPE in any given year. However, a CPA is exempt from meeting multiple jurisdictional CPE requirements as long as the licensee meets the CPE requirements of his/her principal or home jurisdiction. Such a rule is a logical exemption, ensuring CPAs are continuing their CPE while also avoiding complex multi-state compliance regimes. 

Unfortunately, not every state board of accountancy has adopted this provision, and this can lead to some holders of multiple licenses having to meet multiple state CPE requirements. 

UAA Model Rule 6-5 (c) 

A non-resident licensee seeking renewal of a certificate in this state shall be determined to have met the CPE requirement (including the requirements of Rule 6-4(a)) of this rule by meeting the CPE requirements for renewal of a certificate in the state in which the licensee’s principal place of business is located. 

(1) Non-resident applicants for renewal shall demonstrate compliance with the CPE renewal requirements of the state in which the licensee’s principal place of business is located by signing a statement to that effect on the renewal application of this state. (2) If a non-resident licensee’s principal place of business state has no CPE requirements for renewal of a certificate, the non-resident licensee must comply with all CPE requirements for renewal of a certificate in this state.

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