Legislative Update

The Nebraska Legislature adjourned April 20. Here’s an update on just a couple items of interest to the profession:

• CPA Firm Ownership Bill Approved by Governor. LB707 was passed by the Nebraska Legislature on April 12 and approved by the Governor on April 18. The bill is a “Christmas tree” bill that includes the provisions of LB894, as introduced by Sen. Matt Williams (Gothenburg) for Sen. John Stinner (Gering) on behalf of the Nebraska Society of CPAs. (A “Christmas tree” bill is a political term referring to a bill that attracts many, often unrelated, amendments.) Among other things, LB707 amends the Nebraska Public Accountancy Act (PAA) to remove certain CPA firm ownership provisions so that a CPA firm may be owned by at least one CPA and one or more non-CPAs as long as the CPA or group of CPAs hold at least 51% equity ownership of the CPA firm. In short, LB707 removes the physical “head count” requirement of CPA firm ownership in Nebraska.

Most bills passed and approved by the Governor become law three calendar months after the Legislature adjourns. However, LB707 includes an Emergency Clause and will take effect immediately.

The legislation was the direct result of a Society member reaching out to express concerns with Nebraska law during succession planning for his firm. Following discussions with both the Society Board of Directors and the Nebraska Board of Public Accountancy, a joint Society/State Board CPA Ownership Task Force was formed to examine limitations on non-CPA ownership of CPA firms found in the Nebraska Public Accountancy Act. Task Force members representing the Society included Ryan Burger of GBE, CPA, PC in Seward and Dana Weber of Dana J. Weber, CPA in Scottsbluff. Representing the State Board on the Task Force were Marcy Luth of AMGL, PC in Grand Island and Dr. Tom Purcell of Creighton University in Omaha. After research, review, and several meetings, the Task Force recommended, upon identifying no harm to the public, that CPA firm ownership provisions be amended within the PAA to remove barriers to succession planning for small firms in the state and to align Nebraska law more closely with the laws of our neighboring states.

This legislative effort was yet another great example of how the Society and State Board are working together to remove barriers within the profession while protecting the public.

• Occupational Licensing Bill Fails to Pass. LB709, as introduced by Sen. John McCollister (Omaha), did not reach the finish line this session. This bill would amend the Occupational Board Reform Act to provide specific factors be considered by occupational boards, including the State Board of Public Accountancy, when reviewing a preliminary application for an occupational license. Under the bill, to be disqualifying, a felony conviction would have had to be directly related to the nature of the occupational field and for a crime that would make credentialing that applicant a “direct and substantial risk to public safety.” McCollister said the proposal would provide a “fair chance” for individuals with criminal histories to enter occupations if their offenses were unrelated to the field they seek to enter.

Under a Government, Military, and Veterans Affairs Committee amendment, LB263 was one of two measures added to LB709. Introduced by Sen. Tom Briese (Albion), the bill would have created a framework for issuance of Nebraska occupational licenses and certifications based on credentials and work experience from other states. The good news about the bill was that credentials issued pursuant to the Nebraska Public Accountancy Act were among those exempted—thanks to meetings last summer between Sen. McCollister, the State Board, the Society, and our lobbyists. However, since the bill(s) did not move forward this session, we will likely have to address these issues again in 2023.

Visit the Society at www.nescpa.org/advocacy/news for more information and links to valuable resources.

Update on IRS Issues

In March, the Society reached out to the Nebraska congressional delegation, as part of a nationwide concerted effort, to push for meaningful relief for taxpayers and practitioners from the IRS.

As a result, 42 U.S. Senators and 65 U.S. Representatives, including Rep. Don Bacon (NE-2), signed a letter to IRS Commissioner Chuck Rettig urging the IRS and Treasury to implement recommendations from the AICPA and state societies that would ease the burden of this tax season.

Through this effort, the IRS acknowledged the challenges and frustrations of this tax season and took steps to ease some of the burden.

As of March 31, the IRS had 2.7 million returns filed in 2021 that still await processing and 2.3 million returns filed in 2022 that also remain unprocessed. Many of those returns were filed on paper, which requires IRS employees to manually type the return information into their systems. As National Taxpayer Advocate Erin M. Collins has said, “Paper is the IRS’ Kryptonite, and the IRS is buried in it.”

On April 7, Rettig updated members of the Senate Finance Committee on the IRS’ performance and longer-term efforts. Rettig’s goal is to “get healthy,” with normal processing inventories, by the end of the 2022 calendar year. He noted that upgrading the IRS’ vintage computer system remains a challenge, due to a lack of consistent, timely, multiyear funding. However, staffing at the IRS is reportedly improving, thanks to the agency’s direct-hire authority and goal of hiring 5,000 workers before year-end.

Your Society will continue to advocate on behalf of members alongside the AICPA, members of Congress, and many other organizations to urge relief and help improve IRS performance. Thank you to Rep. Bacon for his support of our efforts.