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?