How IRS' New Rules to Restrict Political Lobbying Through 504(c)(4) Organization Impact CPAs?

Recently, the Treasury Department and the IRS has proposed to spell out specific activities for the 504(c)(4) organizations that are considered to be political.  The intention of this proposal is to reduce the financial influence that political lobbyists can exert on political campaigns by hiding behind the tax-exempted non-profit organizations.

As a CPA, I am surprised it takes the IRS this long to make such a proposal.  As most taxpayers know, any expenses spent on political lobbying is not tax deductible. But contribu­tions to civic leagues or other section 501(c)(4) organizations, while generally are not deductible as charitable contributions for federal income tax purposes, they may be deductible as trade or business expenses, if ordinary and necessary in the conduct of the taxpayer’s business.  (This is where it gives a lot of flexibilities to the political lobbyists to fund their politicians buddies.)

Under the current rule,  companies and wealthy individuals can donate lots of money to these 504(c)(4) organizations and receive huge tax deduction while financially supporting certain political candidates they affiliate with.  On their books, it's usually under the "advertising and corporate sponsorships" or "marketing" expenses to promote their products or services" to the communities blah blah.

In my opinion, this practice allowed under the current law is unjust.  The more tax deduction the companies and wealthy individuals pay, the more the IRS need to either cut my future social security benefits or increased my current income tax, which it already did.  The more financial influence big money can exert on politicians, the more the system is going to be skewed to benefit the big money at the expense of little me. 

As a CPA, I welcome this new proposal from the IRS.  But even if this proposed new rule is passed, it will only be effective if only CPAs and auditors who are advising these heavily politically involved 501(c)(4) organizations and their donors, are competent and ethical enough to advise their clients against misclassifying and misallocating political donations as non political expenses on social causes.  In my career as an auditor, I had seen CPAs liberally classify a lot of non-deductible expenses as deductible; many are so outrageously misclassified that I can't believe my own eyes .  Making sure that donations are classified properly are much more difficult than just proposing a new law.

Gimmicks in Government Economic Statistics and Gimmicks in Accounting

I always wonder why the Government keeps reporting GDP growth and low inflation and yet, I keep having a hard time getting jobs and I am seeing everything cost a higher % of my paycheck than ever. ( Okay, former paycheck. Now I don't even have a paycheck anymore.)

Now that I had quit my job I have a lot more time watching old TV shows and reading up on the internet, I am not surprised to read on the internet that the Government has been manipulating the formulas of all economic statistics to understate inflation and to overstate economic growth.  According to the following chart published by Shadowstats.com, inflation would have been a few percentages higher if the government hadn't eliminated, since 1990,  certain costs of goods from the formula.

A second chart below pubished by Shadowstats.com shows that economic growth would have been a miserable negative if only the government hadn't tempered with the statistical formula of GDP.

It seems to me that, to keep the music going, and to keep certain people's pockets funded either by their jobs, their clients, their banks, their investors, their voters, gimmicks are frequently used by the government and also certain accountants to fudge the numbers to their advantage. With all these misleading overstatements and understatements everywhere, I can't help wondering if any economists or accountants out there knows how to correctly measure or account for anything anymore?  Why are there always so many gimmicks involved, be it inventory valuation, intangible assets impairment, revenue recognition, and economic data of all sorts. I hope I am just being over cynical due to the fact that I haven't had a new job offer yet.  Otherwise, the world is just too disheartening.

First Day As An Unemployed CPA

One advantage of not having a job anymore is that I can stay up late and do whatever I like, such as blogging.  I'm actually feeling very liberating today and am relieved that I won't have to attend the series of audit planning meetings end of this month like my other colleagues who are still working at my firm.

Today is the first day in my life since I graduated college that I have nowhere to go...  Yes, just plain sitting at home and watching TV shows on Netflix all day long, "The Vampire's Diaries - Season 1".  I hadn't watched any TV since 2008.  Today for the first time, I am watching Season 1 of a hit TV series that began several years ago.   At a time when Vampires were really popular, I was so busy working my butt off in public accounting that I was totally unaware of the buzz about Vampires.  Today, I felt like I had just returned from out of space and started to discover that the world had changed a lot, beginning with TV.  I don't know any of the cast members in "The Vampire's Diaries" at all.

While Vampires suck out blood from people, public accounting sucked out several years of my precious life.  In my opinion, it's worse than being beaten by a Vampire.

Anyway, the TV series is unexpectedly good. I really love it. I am so happy that I now have plenty of time to watch all the episodes.  I'm happy that I'm living again. Happy unemployment everybody!!! For those of you who are still slaving in public accounting, quit your job now and reclaim your life before you literally die of heart attack at your desk (like one of my former co-workers a while back....)

Tick Tock My Public Accounting Clock

I had thrown in my towel last Friday and gave my two weeks' notice.  My original plan was to hang on there until I had a new job offer.  After one year's interviewing and the exhaustion of all my paid vacation days on attending interviews,  I decide that it has got to a point where I feel so bad about waking up to go to work that I feel that I can no longer hang in there anymore.  (I have to say most of my paid vacation days were wasted on worthless headhunting firms, which I have learnt my lesson now to be more skeptical of them.)

I just realize that life is too short for me to spend one extra day, dragging myself to my car and be miserable.  I don't see how my current position at my firm is going to lead me to anywhere less miserable.  Sure, a lot of recruiters advise me to not quit my job until I have another job lined up.  Too bad, I don't have one lined up yet even though I had spent the last year looking for one. I just want my way out now before the audit season kicks in full gear and I will become stuck for another 6 months without time to attend job interviews.

As more work comes my way and more crises tossed to my desk, created by my bosses and the incompetent Controllers of their clients, I feel that it will be harder for me to focus on finding my next public accounting job or to even think about what I need to do with my career.  I feel that one more day hanging on in this firm means only one more day of my life being wasted.  I feel that it's very important for me to surround myself with the right professionals, professionals who are competent, and not complacent.  I have been looking at the people around me in this firm and in this firm's clients, all I see are very incompetent and complacent people with the exception of one of my colleagues, who told me he had been feeling frustrated and was actively looking for a new job too. I just want to leave before he does.  

So I quit.  My days at my fancy and spacious office are now counting down.  I feel relief.  I guess the fear part hasn't kicked in yet.  What about you?  Do you enjoy what you are doing at your job?  Have you ever quit without having another job lined up?

Bathtub Table Clock $43.97

Unemployed CPAs Are Plentiful in the USA

As unappreciated and underpaid as I am with my current firm, I am told that I should be grateful that I am still having a job to pay for my mortgage and support my family.  Really???? Then I look around me and start seeing how many unemployed CPAs there are, it's no wonder it's been so difficult for me to find another job to replace my current one.  What has become of the USA??  Even highly educated CPAs are unemployed??? For goodness sake, below is one unemployed CPA I spotted, I pray to God he has found a job by now, please tell me he is working now...for my profession's own good....

Click here to read about the ramblings of one unemployed CPA....

Are you feeling what he was feeling? I am, even though I am still employed.  I will put my mini me figurine inside the frame that I bought below once I find another job, so when you see a little doll sitting inside the frame below, that means I find a new job.  Until then I am admiring this cute miniature CPA office that I hang on my office's wall...It's only $140.00

CPA Credentials and Experience Don't Increase Employment Opportunties

Today, my recruiter called me that this job that I applied and went interview twice for a total of 4 hours, selected another candidate who is more suitable.  If this is my first failure in a job application, I won't feel this defeated.  Since this is my 4th rejections after a series of job applications during the last month, I am beginning to worry that my years' experience as a CPA plus my other 3-letter credentials will never give me another job opportunity and I am forever stuck with this small firm that not only offers me no more upward opportunity, but pays me less than others who are less experienced, have no management responsibility, and even no CPA credential or any credential at all.

So for those of you who think that getting a CPA license will give you advantages in job search,  think twice because from my experience, I can tell you this is a myth.  No CPA license or any credentials can give you a better pay job if you don't compromise your professional standards, if you have your own opinion and if you are a real good auditor who can find accounting misstatements and identify significant weakness in internal controls.  This is because if you are a good auditor or if you are a really good tax accountant who really knows the tax laws, then you will see your clients are doing a gazillion things that are grossly wrong and unacceptable, and then you are creating problems for your boss in the firm and putting your firm in a very difficulty position with the clients.  In addition, clients don't want to hear from you that they have this weakness and that weakness. They also don't want to hear from you they can't take this deduction or they can't take that deduction.   The clients want you to give them approval of whatever they do.  My current bosses don't like me and they see my strength as something that costs the firm extra time and even a discount in fees when they resolve my findings with the clients.


They always told me if only I didn't bring the significant issues up, they wouldn't spend time to resolve with clients and they wouldn't have to cut the fees to soothe the upset clients for whatever honest opinions I present.  And this reflects in my annual salary review in lower than average annual raise compared to my co-workers and even the associates under me. The partners never appreciated the fact that I keep them out of potential trouble that can cost them licenses and legal fees.  I guess in the big 4 they can't  pay my position lower than the people who are less qualified, and experienced than me , particularly no less than those whom I supervise. But in small firms, there is no pay scale, the partners can pay whatever they like.  This is another reason that you shouldn't work for small firms at all.

So if you are really serious about accounting, and if you are serious about doing a good job, don't work in accounting. Unless you can bear to see your salary being lower than your colleagues who quietly and obligingly give the good news the accounting firm and the clients want to get.  Or, you have no problem working under partners who are incredibly incompetent and out-dated. This is just what I learn from my decade long practice as a CPA.

Sad puppy $12.87.

A Tempting Exodus of The Public Accounting Slavery

From what I've observed at all the small firms I've worked so far, and from what I've heard from my peers at seminars and networking events, starting an accounting practice can be the ticket for me to get out of my current misery with my employer.   I am gradually seeing the 3-step process in starting an accounting practice and I am calling it the 3 Exo "P"s:

1. Planning 
2. Practicing
3. Profiting 

Now, I just hope that I have the time to pull it off, and the courage to part the sea... no, I mean to part with my employer.

What about you?  Where is your key to freedom?

My Job as an Auditor is Literally Making Me Sick!!!!!

Before I majored in Accounting years ago, I had no clue about the downside of public accounting, and the stress level I would experience.  When I studied for the CPA exam, I was told time after time again I would make good money when I became a CPA.  Those were all lies. Driven by a false sense of hope and optimism, I studied very hard and became a CPA.

Looking back, I wish I had spent my time doing something else, like getting a job as an office manager in a Doctor's office or even an office manager in my CPA firm.  May be I should have gotten a job in the kitchen or dining room at a restaurant.  I would be making a salary not too different from what I am making now, but I would have more time with my family, to pursue my hobbies, and to sleep more, etc, etc.

I had recently found out that the office manager of my firm is paid $77K a year.  She is not a CPA, she only has an associate degree.  She is therefore incapable of providing any support at all, and if the professional staff aren't watchful, she will mess up their health insurance,  401K contributions,  paid vacation and sick days and underpay them, not intentionally but because of errors.  The worst part is she has such strong conviction of being correct that she doesn't address the mistake immediately, because she believes the professional staff are wrong!  We are all CPAs and she is an uneducated community college grad with no special skills. She can't even write an email that is more than 2 sentences long.  Yet, when there is a dispute in any calculation of benefits, she is so confident that she knows the math better than the CPAs. Unbelievable.

I am very resentful, because as an audit manager, I don't make any much more than her.  Because of her incompetence, I have to spend extra time fixing complaints from my audit staff about their time, their pay, their software problems and other administrative support issue.   Yet she gets to go home sharply at 5:30pm everyday.  When she goes home, she literally goes home.  When I go home at 7pm or 8pm, I literally am bringing work home to continue to work till midnight.  I have to do that because I have so many different engagements on hand and I am short of audit staff and also administrative support.  Many people said working in a small firm is less stressful than working in Big 4.  I had never worked in a Big 4, I foolishly turned down a senior associate position 3 years ago from one of them because they offered me a salary that was way less than what the office manager is making in my firm.  But I believe if I were a senior associate in a Big 4, I would not have to waste time dealing with administrative issues or correcting paid time off for the 1st year associates and I don't have to do anything about the quality control and ARs for the firm like I am doing now.

I can handle huge volume of audit and accounting work fine, but I can't handle  administrative work, billing, the firm's AR, computer support and also audit, all at the same time.  So before you join a small firm, think twice!!!

Meanwhile, I have been feeling shortness of breath, exhaustion, mood swings with my family, headaches etc... due to the fact that I have a lot of imminent deadlines I have to meet for my clients, and I also have no administrative support. Sometimes I woke up and I literally suffered panic attacks right before I left home for work. Like this memorial day long weekend, my firm's office manager gets to take a trip to San Diego, and I will be working at home because I have a deadline on Tuesday!! I rather take the job of an office manger in my firm because all she does is well, I really don't know what she is doing.  But the partners seem to like her.  As professional CPAs come and go, she has become the employee with the longest tenure in the firm.  No, she is not related to any of the partners. As to why she gets such a well paid position and is able to get away with her little contribution to the firm, I have been too busy to try to figure out.

Yes, I know what you are saying now, why don't I quit?  I have been so busy I have no time to even sleep, forget about finding another job.  I did manage to send several resumes out for corporate accounting positions, but have not heard anything back.  I am very eager to leave my firm and leave public accounting for good.   Until then, I can only wish myself to get well soon, physically and mentally:

Cosmos 80081 Fine Porcelain Get Well Soon Bouquet Musical Figurine, 5-1/4-Inch $35.00 Free Shipping

Controller Is No Accountant

Today while working at my client's office.  The controller shocked me when I proposed to reclassify cash advance into inventory in transit.  The controller told me not to bother because there was no difference between the two and they were all current assets on the balance sheet anyway.

So,  according to this controller, may be there is no need to report different types of current assets on the balance sheet, may be GAAP allows us to report all current assets in just one line under "CURRENT ASSETS"?????

This controller is a CPA who claimed to formerly have 2 years' audit experience in a local CPA firm that has over 150 employees. Shocking......If I have my own company, I will not hire this CPA firm because their auditors seem to have very different accounting standards....If you want to know if your company is using this CPA firm, type the firm's name in the comment box below and I will respond with a yes or no....

EPIC EMR's Inefficiency Is Costing My Clients Big Times

The only advantage for me being a CPA is the opportunity to see the dirt of other professions and industries. While I think my profession is suffering from all the huge loads of excessive documentation and reporting burdens passed down by the government's forever additions of more new laws and regulations,  I am not sure if I should find comfort when I see that the physicians and the medical profession are also being tortured by excessive regulations and inefficient mandates passed down  by the government.

As a CPA, I was told by my doctor that I was a very respectful and one of the best patients he had because of the following:

1. I never went to my doctor trying to squeeze a dozen complaints in one single appointment and expected him to take care of them all in 15-20 minutes.
2. I never called my doctor in the middle of the night or on weekends to complain about my medical conditions and demand him to phone in a prescription for me without even seeing me.
3. I never gave my doctor a no-show on my appointment and I am always polite and respectful of him during the short 15-20 minutes section he sees me in the exam room.
4. I always pay my doctor's bill on time and he is always on top of my Christmas Gift list.

As a CPA, I have clients who are physicians and medical practices.  I provide them with accounting, tax planning and advisory services and I help them keep track and manage their finances.  Because of this, I know how medical practices operate.  I know how they bill to make money and where they spend the money they received from Medicare and insurance companies.  Such knowledge had made me realize that many doctors work really hard and yet they aren't getting paid for what their years of training, education and hard work deserve.  Specialists and Surgeons are in better position even though they also experience huge stress and litigation risks.  Primary care medicine that serves the majority of people like myself, is not a good profession to be in. If I have children, I will tell them not to go to medical school if they want to practice primary care medicine. I will not pay for medical schools if their goal is to become an internist or primary care physician.  They just don't make much money at all.  I have hair stylists clients who make more than these doctors on an hourly basis.

In America, the public expects that healthcare to be free, and they complain more about their $10 copay for a doctor's visit than their coffee break at Starbucks. They expect doctors to work free at nights and weekends to listen to their complaints and phone in medicines for them.  Meanwhile, these same people don't expect to go to see a movie for free. They don't expect to talk to their lawyers for free either.

When a doctor spends time at night and weekend taking phone calls from patients doing re-fills, he doesn't make a dime because health insurance and Medicare don't pay for service like this.  The doctor who does this can't bill it.  

If you think your primary care doctors are making a lot of money because you pay your insurance premium. It's not true.   There are lots of restrictions to restrict a doctor on how much to bill for what.  As their accountant, I feel sorry for the primary care doctors because most of them can only occasionally bill  $200 top for a visit. The average 20 minute visit time with patient creates an extra 2-3 hours of paperwork and documentation, thanks to EPIC EMR. When a doctor bills $200, he has to pay himself the salary, office rent, medical assistants' salary, malpractice insurance and other bills to run a medical practice.  As an accountant and tax payer and patient, it makes me sick to see how most of the money spent are not on taking care of the patients but on legal compliance and other regulatory mandated documentation garbage that is totally irrelevant to my health.

There are too many non-medical functions and incompetent people making money in between the doctors and the patients.  As if dealing with these are not enough, the doctors are forced to use this really clumsy, cluttered and totally awkward electronic medical record called EPIC.  As an accountant, I see doctors' productivity drops drastically with increase work hours by looking at the numbers since they implemented EPIC.  As a patient, I was shown by my doctor how he uses EPIC to maintain my electronic record after my visit.  I was shocked to actually see how  time consuming it is for my doctor to update my chart, and to close it.  And I am not a patient who has complicated issues.  I am a healthy young professional who is only there for my checkup...

As an auditor and accountant, the way that doctors operate with EPIC is shockingly inefficient and ineffective to me.  The only winners in this are really the company which makes the software and the non-medical people the company hires to promote,  run, maintain and train doctors how to use this tedious counter-productive electronic medical record.  There got to be a better EMR out there, is there?  

If you are a doctor who hates EPIC, you are not alone, many of my physician clients hate them too. I hate it too because as a patient, I don't want my doctor to spend more time on working the EPIC charts than spending time with me. Click the link below to see how other doctors feel about EPIC:

http://www.electronicink.com/a-better-system/an-epic-morning-in-the-exam-room-2/

So, if you are a physician currently using EPIC, and your practice's bottom line is negatively affected by it as a result of more unpaid hours, please feel free to drop me a comment and share your nightmare with me.