CPA Practice Advisor - 17

FEATURE

HOW

SIMPLIFICATION HAS COMPLICATED
THE TAX OFFICE OF THE FUTURE

THE TAX CUTS and Jobs Act of 2017 has simplified the tax code in many ways,
including an increase in the standard deduction for individuals, removal of
corporate Alternative Minimum Tax and an increase in bonus depreciation.
The result of simplification creates less subjectivity for tax departments, advisors and practitioners. While creating many opportunities for experienced tax
professionals to excel, this effect, in combination with advancing technologies
like Artificial Intelligence, automates routine processes that may ultimately
replace new tax associates' daily tasks. So where does that leave tax practices
and their entry level associates?
It's time to reinvest in tax associates and advance
their skillsets earlier than the normal path allows. AI
is quickly becoming the new tool and starting point
for public accountants and other tax practitioners. Its
purpose is to provide efficiency and to arrive at new
opportunities by allowing the associate to focus on
more qualitative tasks. The reinvestment starts with
higher education institutions and businesses vetting
their traditional curricula and training programs and
adding an increased focus on technical applications,
data analytics, business context and client service.
AI is incredibly effective at recognizing trends and
patterns due to the ever-evolving data it collects over
time. We see this in our everyday interactions with
Siri, Alexa and Google Home, which can produce quick
answers to technical questions. With the creation
of Natural Learning Processing (NLP), AI can read
documents and produce an output from said information, such as K-1 aggregation, with an increased data
processing rate. Because of these capabilities, AI has
replaced significant aspects of a tax associate's daily
role, specifically forecasting, speed of research and
data processing. While tax associates are capable of
managing AI, there should be more to the entry level
tax job. To create a more effective tax associate in the
AI world, it's time to adapt.
Universities and businesses can, and should, fill
the gap by reassessing education and training and
placing an increased focus on applying technical skills
to real world scenarios. In order for the next generation
of tax professionals to succeed, it is important for
new associates to have a better understanding of
the "real" world of tax. It begins with the building of
foundational knowledge of how tax-specific statutes,
regulations, administrative pronouncements, and the
like, affect advisory projects and strategic planning.
Associates should come to a firm with the working
knowledge of how to appropriately employ their skills

and apply them using a firm-wide technology in order
to produce a result or conclusion on a given issue or
task. Technology advancements are ever-changing,
and as a result, improving associates' ongoing technical
skillsets will leave them more successful.
While every case is different, a normal day for an
entry level tax associate involves compiling, transforming and analyzing data. With the simplification AI brings
to the table, many tasks assigned to associates have been
absorbed. Still, it's just as important for associates to
adapt and understand what the data means as applied to
a specific task. While it's true that AI can spot patterns
and trends, what it lacks is the ability to qualitatively
analyze data. Associates will need to provide their clients
with the context behind the analyses utilized to arrive
at their conclusions. If contested, taxing authorities will
expect a substantive analysis.
An introduction to the tools an associate will
use is another way universities and businesses can
improve the skillset of associates as they enter the
workforce. Microsoft Excel is one of the most used
programs in accounting and tax modeling. However,
entry level associates may know only the very basics,
making on-the-job learning a must. To offset this
potential gap in knowledge, universities should require
advanced Excel courses and businesses should also
offer continuing education courses focused on Excel.
Now, as stated earlier, technology is ever-changing,
and Excel may become a thing of the past for accounting and tax professionals. As such, businesses should
increase investments around their efforts to train
entry level associates on the latest technologies
adopted by the firm. This creates a chance to build on
an associate's data analytics and technology skills and
the understanding of various issues facing businesses
and the industry. In-depth, hands-on training will
increase the efficiencies in engagements by reducing
inconsistencies and the overall misuse of technologies.

By Ryan Gamble, Managing
Director; Philip R. Pulliam,
Director; and Lauren Pozna,
Associate, Riveron.

One key aspect to those trainings should be the ins
and outs of how to solve "common" problems. IT
support is only one group that may slow down an
engagement if they're not able to respond quickly. One
workaround is to effectively train around the solutions
of common problems and stress the importance of
self-reliance and to avoid complete dependence on
AI. Human judgement will always be important and
can never be replaced by AI.
Now that entry level associates have gone through
technical and technology training, what's the missing
piece? The business context behind it all. Businesses
can strengthen their associates by providing a solid
foundation of how the accounting practice runs, relevant client industry knowledge and the overview of
clients themselves. These basic pieces of information
can turn the data dump on an associate's desk into
valuable information used for key decision making.
Two great learning opportunities are tax planning
and issue identification.
Intangibles like client service also round out the
tax associate's skillset. This is usually taught and
refined at the managerial level, but why not start at
the beginning? Associates in the tax offices of the
future will be more client-facing than data crunching. Key points to discuss are appropriate ways to
interact with clients, how to handle difficult situations,
conversations and clients. These are all great skills to
work and improve on from the moment an associate
walks through the front door. In the age of increased
reliance on technology, clients will always prefer a
human adviser to lead them through the hard facts.
Data is the biggest asset in contemplating certain
tax issues. Having the understanding to produce, use
and deliver data is the tax practitioner's ultimate goal.
Once associates meet with a client, they should be given
access to up-to-date and firm-specific technology training, an education on the business and the industries
that their firm and clients support and the opportunity
to put their increased client service skills to use.
Tax associates of the future will not get left behind
because of AI. Rather, with the right preparation from
universities and a rich learning environment that sets
them up for success in the workforce, an associate
should be able to leverage AI to springboard ahead
and provide value immediately with an advanced
skillset. ■

JUNE 2019 ■

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