Interstate Mobility and the CPA Tax Practitioner: It Does Apply to You
[ILLUSTRATION OMITTED] EXECUTIVE SUMMARY * If you are a CPA who performs only tax services, interstate CPA licensing requirements apply to you, regardless of the type of client services you perform. CPAs who perform services or serve clients located in a state without the appropriate license, permit or authorization may be subject to disciplinary action and/or fines in that state. * Most states do not require a CPA license to perform tax preparation, tax planning, or tax advocacy services. This means that tax practitioners who are not CPAs do not have to comply with the complicated licensing requirements that apply to CPAs to service clients with multiple state locations. * The first question to ask when considering whether to serve a client in another state is: Does this service fall within that state's definition of what it means to "practice public accounting"? The answer will vary, but most states include tax services in the scope of practice. * A revision of the Uniform Accountancy Act (UAA), known as "no notice, no fee, no escape," was jointly adopted by the AICPA and the National Association of State Boards of Accountancy (NASBA) in July 2007. Under this proposal, substantially equivalent CPAs may serve the needs of their clients across state lines-physically, electronically or by any other means-without having to apply or pay a fee for additional licenses, permits or practice privileges. * The AICPA, NASBA, state CPA societies and others in the profession are actively involved in getting "no notice, no fee, no escape" mobility legislation passed in all U.S. jurisdictions over the next few years. The challenge is getting jurisdictions to individually enact and implement the provision in a uniform way. Which of the following statements is true about CPA tax practice? * Interstate licensing requirements apply only to CPAs who perform attest services. * Tax return preparation, tax planning services and tax advocacy are not the practice of public accounting so can be performed wherever needed without an authorization to practice. * A CPA who doesn't use the CPA designation doesn't need to worry about interstate CPA licensing requirements. Answer--none of these statements is true. Recently, there has been considerable publicity about the difficulty CPAs face when they want to serve clients or otherwise practice across state lines. If you are a CPA who performs only tax services, you may think this doesn't affect you, but this is a gross misconception. Once you are licensed as a CPA in any state, interstate CPA licensing requirements apply to you, regardless of the type of client services you perform. [ILLUSTRATION OMITTED] In the April 2007 JofA, Scott Voynich outlined the mobility problem facing the CPA profession and explained the uniform approach solution endorsed by the Institute and the National Association of State Boards of Accountancy (NASBA) allowing licensed CPAs the ability to provide services across state lines without being subject to unnecessary burdens that interfere with their ability to provide the highest-quality services to their clients (see "Barriers to Mobility: A Crisis for Many CPAs," JofA, April 07, page 46). As practitioners who work in a large firm and regularly deal with licensing issues, we are proponents of the new revision of Section 23 of the Uniform Accountancy Act (UAA) that has become known as "no notice, no fee, no escape" (which is explained in more detail later in this article) and want to make others aware of the issues surrounding mobility, especially for tax practitioners who may be violating current accountancy laws in other states without realizing it. These issues affect practices of all sizes, from sole practitioners to large firms. [ILLUSTRATION OMITTED] INTERSTATE MOBILITY REGULATIONS ARGUABLY FAVOR NON-CPAs Consider this scenario. …