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Northern California accountants tally up 2021 and where corporate finance is headed in 2022

The Business Journal asked senior accounting professionals in the region about the impact of IRS delays, best advice for clients and their best accounting jokes.

Given the backlog at the IRS, what’s been the largest impact of that on your business, and your clients?

Matthew Brewer
Matthew Brewer

Matthew Brewer: The IRS back log is created headaches for both tax preparers and clients. We have had clients receive notices, we have prepared a response and mailed it back, and the client receive second notices as the IRS has not opened the response.

It has taken upwards to one year to rectify small issues such as the IRS not extending the due date of a return due to a federally declared emergency.

Getting a hold of the IRS on the phone is close to impossible these days. It is not uncommon for an email to be sent firm wide when someone is able to get through to the IRS letting everyone know now is a good time to try.

Brewer is senior tax manager, Pisenti & Brinker LLP, 3562 Round Barn Circle, Suite 200, Santa Rosa 95403; 707-542-3343; pbllp.com.

Brewer is a graduate of Sonoma State University, where he received his Bachelor of Science degree in business administration with an emphasis in accounting. Brewer provides corporate, partnership and individual tax planning and compliance services.

He is a native of Sonoma County and currently resides in Santa Rosa with his wife and three children.

Jon Dal Poggetto
Jon Dal Poggetto

Jon Dal Poggetto: Difficulty in resolving IRS notices and processing of 2019 tax returns paper filed due to the fires in 2020.

Dal Poggetto is managing partner, Dal Poggetto & Company LLP, 149 Stony Circle, first floor, Santa Rosa 95401; 707-545-3311; dalpoggetto.com.

Dal Poggetto graduated from UC Berkeley with a Bachelor of Science degree in business administration with an accounting emphasis in 1975. He has been a partner with the CPA firms of Eisenberg & Company LLP, Touche Ross & Co. and Deloitte & Touche before founding Dal Poggetto & Company LLP on Nov. 1, 1992.

Dal Poggetto’s personal area of focus is coordinating the firm’s delivery of accounting, tax and consulting services to privately held companies and their owners. The firm serves over 400 clients, and has a particular emphasis in serving clients in the wine industry.

Mandy Flynn
Mandy Flynn

Mandy Flynn: There has been so many issues that have stemmed from the backlog at the IRS.

One of the biggest issues my clients seemed to experience was getting IRS notices for issues that had already been resolved or not being able to get a hold of anyone at the IRS to help get an issue sorted out.

Flynn is director of tax services, Mengali Accountancy, 205 Foss Creek Circle, Healdsburg 95448; 707-431-0600; mengali.com.

Flynn has been providing accounting and tax services for over ten years. She graduated from Black Hills State University in Spearfish, South Dakota in 2011 with a bachelor’s degree in professional accountancy. While in school, Flynn started work in accounting as a contract bookkeeper for a small local bookkeeping firm and then taking a job as a bookkeeper for a local wholesale meat company. After graduating, she moved to Rapid City, South Dakota, and took a job at an accounting firm where she provided outsourced accounting and tax services to many different types of business and individuals for nearly eight years.

At the end of 2019, she relocated with her family to Sonoma County. Shortly after moving, she started at Mengali Accountancy.

Tamara Hull
Tamara Hull

Tamara Hull: The largest impact for us and our clients is the problems caused by the IRS’ delays in processing our responses to IRS letters and notices. The IRS is sending second and third notices and letters without acknowledging our response to the first letter. Interest, and penalties, are adding up.

Hull, CPA, is president, Jannisse & Hull CPAs, 7599 Redwood Blvd., Suite 210, Novato 94945; 415-898-5300; jannissehull.com. Hull said she is CPA because she loves helping people understand their taxes and accounting. Hull became a CPA later in life, after spending many years doing accounting and payroll for various companies, and eventually getting her bachelor of science from UC Berkeley’s Haas School of Business.

She says, “Once I learned how to do tax planning and prepare tax returns, I never looked back. I love a good challenge – like messy books or tax returns not filed for multiple years. I also love helping small nonprofits, especially the ones that only registered for tax exempt status with the IRS because they didn’t know they also need to register with the Franchise Tax Board and the Attorney General, and file annual returns with them too. I enjoy helping cannabis businesses with their tax and accounting needs too. I grew up in Novato (go Hornets!) and still live in Marin.”

Mariya Pioszak
Mariya Pioszak

Mariya Pioszak: Anxiety — many of the issues brought up by the IRS to us and our clients are time sensitive, requiring a phone call or a letter to resolve which is hard to do when the IRS answering machine says they are not taking any more calls for the day or when their processing times are double of the time allowed to the taxpayers to respond.

Pioszak, CPA, is tax manager, Montgomery Taylor Wealth Management, 2880 Cleveland Ave., Suite 2, Santa Rosa 95409; 707-576-8700; montgomerytaylorwealth.com.

Pioszak earned her master’s degree in economics from Tver State University in Tver Russia, arrived in Boulder Colorado in 1998, and has since gained 20-plus years of comprehensive accounting experience. She started her career in financial accounting establishing and managing controllership functions including treasury, payroll compliance, sales/use/property taxes, and financial statement preparation.

Her public accounting experience comes from working with boutique CPA firms providing tax planning and compliance services to closely held businesses and high net worth individuals.

When not solving tax problems or putting together financial puzzles Mariya enjoys swimming, growing tomatoes from a seed, or flying kites with her husband and two daughters.

Andy Vedder
Andy Vedder

Andy Vedder: The biggest impact of the IRS backlog has been the opportunity cost of clients having to direct resources to past filings. We work hard with clients to be forward-looking, and opportunity focused but too often we find ourselves waiting on IRS decisions or responding to issues that should have been closed with the original filing. Taxpayers deserve a dependable partner on the revenue agency side so that they can make educated planning decisions.

Vedder, CPA, is with Linkenheimer LLP CPAs & Advisors, 187 Concourse Blvd., Santa Rosa 95405; 707-546-0272; linkcpa.com.

Vedder joined the Linkenheimer team in September of 2015 with three years’ experience in public accounting. After a successful career running his own business, he decided to pursue his higher education and studied at Santa Rosa Junior College and Sonoma State University, where he graduated in May of 2013 with a degree in both accounting and economics.

A resident of Ukiah, Vedder enjoys the rural beauty and open spaces of Mendocino County, traveling with his family and, of course, a good book.

If there was one change in the tax code you could make, what would it be, and why?

Michelle Muth Ausburn (Franklin Avery photo)
Michelle Muth Ausburn (Franklin Avery photo)

Michelle Muth Ausburn: Like many, I would make it less complicated. A simpler taxation system would be more business-friendly, boost productivity, and keep our nation’s economy more competitive on the world stage.

Muth Ausburn, CPA, is partner-in-charge for the North Bay, BPM LLP, 110 Stony Point Road, Suite 210, Santa Rosa 95401; 707-524-6588; bpmcpa.com.

A certified public accountant in the state of California, Muth Ausburn’s area of expertise is GAAP-compliant financial accounting and reporting. She spends the majority of her time working with wineries, vineyards, real estate entities, négociants, custom crush facilities, wine and spirits distributors, natural and organic food companies, and non-wine agriculture businesses.

She is a graduate of St. Mary’s College of California.

Brewer: I would remove the $10,000 cap on state and local tax (SALT).

The SALT cap unfairly limits the deduction for taxpayers who live in high tax states such as California. An itemized deduction should be allowed for amounts paid towards state income taxes, property taxes and other state and local taxes without limitation.

Dal Poggetto: I would change due dates of individual tax returns to coincide with the month of the taxpayer’s birth, to spread out the workload past April 15.

Flynn: To simplify the tax code overall. There are so many nuances and intricacies in the tax code it is near impossible to stay on top of and informed on of everything.

Hull: I would get rid of the cap on the amount of state taxes individuals can deduct.

Pioszak: Tax policy is used by the government to promote certain behaviors and discourage others. However, it takes time to implement and see the fruits of the labor.

The biggest change I would like to see would be a limit on the frequency of tax law changes (say, no more than one every three years) and effective dates (at least six months after the date of enactment and prohibit retroactive application). It should be a policy, not a game of tag.

Vedder: I would like to see improvements made to the qualified business income deduction in line with the recent AICPA recommendations.

Reducing the complexity of the deduction opens it to more taxpayers and reduces the reporting costs. Namely, removing the specified service trade or business distinction, automatically aggregating trades and removing the loss carry-forward requirements would be substantial improvements.

More broadly, I would like to see the pace of tax law change reduced. A more measured approach to when during the year and how frequently tax law is changed will provide better results to all involved. The increasing pace of change and unnecessary complexity is a tax on business in and of itself.

What is a piece of advice you give to all of your clients?

Muth Ausburn: Invest in your people. They are your most valuable asset.

Brewer: Please reach out to us prior to making any major changes. We are here to advise you through the change and can recommend the best way to structure the transition. If we are unaware of the changes being made until we are filing your returns, we generally are unable to advise the most tax advantageous approach.

Dal Poggetto: Always feel free to call us with questions. You probably won’t get a bill, and many issues can be addressed early on in an efficient manner.

Flynn: Stay organized, and do not mix your personal and business expenses.

Hull: I’ve become a big proponent of paying your estimated taxes online in some form, especially because the IRS lost or took a long time processing some checks that were mailed in 2020.

I also advise my clients to set up online accounts with the IRS and the Franchise Tax Board, so they can keep track of their taxes.

Pioszak: Get fresh air and exercise every day, stay away from junk food, and ask your accountant about Roth IRAs. These are the best ways to stay happy and healthy physically and financially.

Vedder: I stress to clients that we are here to work with them in a collaborative manner. That means we can’t fix everything for them but, instead, advise them on the difficult decisions that need to be made.

The biggest mistake I see is a tendency to abdicate responsibility to accounting professionals when it should be a collaborative process. Taxpayers can and should work with professionals that value their knowledge and are willing to explain to them the mechanics of their tax situations.

Hiromi Young
Hiromi Young

Hiromi Young: All business owners should reach out to their CPAs or be open to hold a periodic meeting or call to discuss what is going on at your organization before having any immediate issue or concerns.

You will be surprised to be informed of upcoming changes in regulations and potential impact on their business, taxes or financial reporting from those dialogues. They will better-prepare you to address any upcoming changes and make better decisions near future.

Young is partner, Allen Group LLP, 120 Stony Point Road, Suite 230, Santa Rosa 95401; 707-806-2884; allengroupllp.com.

Young received a bachelor’s degree in business administration with concentration in accounting from Sonoma State University, and began her career with Moss Adams in 2002, establishing herself as a construction accounting expert.

Alright, maybe accountants are not known for humor, outside their own circles. So, tell us your best accounting joke.

Muth Ausburn: What’s the difference between a shy accountant and an outgoing one? The outgoing one looks at your shoes when they talk.

Brewer: Why do accountants get excited on the weekends? Because they can wear casual clothes to work.

Dal Poggetto: Late one evening just before April 15, a giant moth walks into a CPA office. The receptionist asks, “Can I help you?”

The moth replies, “I sure hope so. You see, I am gripped in a terrible melancholy. The pandemic has gotten to me, my wife wants a divorce and I am not sure I can take much more bad news in my life without having a major meltdown.”

The receptionist is taken aback, and tells the moth, “I am really sorry to hear you are having such a hard time. It sounds like you might want to talk to a psychiatrist. But this is an accounting office. Why did you come in here?”

The moth replies “The light was on.”

(Thank you to Norm Macdonald. May he rest in peace.)

Flynn: What did the overworked asset say to the other asset? I feel so depreciated.

Hull: There are three types of accountants — those who can count and those you can’t.

Pioszak:

  • For every tax problem there is a solution that is straightforward, uncomplicated, and wrong.
  • What is the definition of an accountant? Someone who solves a problem you did not know you had in a way you don’t understand.

Vedder: I will include a joke my daughter told me recently. She may get a kick out of seeing it in print, and it is a quintessential dad joke:

What do you call a cow in a band? A moo-sician.

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