In a recent and rather blunt article appearing in February, 2019's issue of the Journal of Accountancy, authors Matt Mitzen, CPA and Deborah K. Rood, CPA, issued warnings to CPAs about sales tax that are worth highlighting.
Here are some of the quotes that grabbed my attention.
Read the article to learn more including:
The article in the JofA is focused almost exclusively on the risks CPAs are facing around Wayfair. Risk should be acknowledged, but worrying too much about and focusing on risk can be paralyzing. I like what Chuck Yeager, who learned to face a lot of risk in his career as a test pilot, said:
“You don’t concentrate on risks. You concentrate on results. No risk is too great to prevent the necessary job from getting done.”
I feel the same way about trying to grow a tax consulting business. If all we did over the years was to avoid risk, we wouldn’t be in business today. So this news from the AICPA should spark something in your entrepreneurial spirit.
We all know that risk and reward come in pairs. The fact that businesses have so much sales tax risk now because of the Wayfair decision, presents a huge opportunity to those of us who recognize it as such. Clients need our protection, now more than ever. Can we be sued if we fail to act on this and warn our clients? Yes, but just warning them to avoid being sued is not the opportunity I’m referring to. I’m saying there’s opportunity beyond just the warnings to clients and the CYA of the carefully worded engagement letter.
"Don’t be afraid to take a big step. You can’t cross a chasm in two small jumps." – David Lloyd George
The opportunity is to really help our clients navigate the state and local tax (SALT) risks they face. After all, those are likely the biggest tax risks they face. And those are the biggest tax concerns they have right now. If you can respond to their questions about sales tax with some confidence, then they will trust you to handle all of their taxes for them.
If you merely respond to their questions about sales tax with the CYA message, of “we don’t do SALT”, then you avoided the risk (maybe) but you just lost the opportunity and you may have lost the client altogether.