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CPA Advocate June 2019

by MICPA | Sep 11, 2019   ()

Hosting Standards Taking Effect, July 1
CPAs and firms need to take note that effective July 1, 2019 the new “Hosting Services” interpretation (ET §1.295.143) in the AICPA’s “Independence Rule” (ET §1.200.001) will be in place. The interpretation focuses on CPA firms who provide software solutions to clients, including cloud-based tools. For example, serving as the sole host of a client’s financial or non-financial information system could result in an impairment of independence.

Professional Ethics Executive Committee (PEEC) has approved the release of six FAQs on hosting services. Look to pages 21-23 for questions addressing issues which the AICPA receives most often.

Marijuana Regulatory Agency
In an effort to reduce the cumbersome structure of the previously developed Bureau of Marijuana Regulation, Governor Whitmer signed an executive order eliminating it and creating the Marijuana Regulatory Agency. The new agency will handle both medical and recreational marijuana in Michigan. The action creates more independence from the Department of Licensing and Regulatory Affairs (LARA) for the new agency. This new structure requires the last 12 months of financial statements rather than the three years that were previously required during the initial application process for licensure. The agency can request additional information if deemed necessary. The MICPA will continue it’s close collaboration with the new agency to ensure that our members have a firm understanding of what is required from the CPA profession in this industry.

The MICPA recognizes that many of our members are interested in engaging in this new industry and looking for guidance. As such, we are planning to hold a conference on the industry in the fall. Details will be released soon!

The attestation of capitalization on behalf of clients is a service that requires firms to participate in peer review. As firms who are not currently enrolled in the peer review program determine whether they are going to engage in this new industry, it is important that they understand the peer review requirements. Questions can be directed to the Peer Review department at the MICPA by calling 248.267.3700. 

Alternative Dispute Resolution
In December of 2017, Governor Snyder signed legislation that allows for a non-judicial dispute resolution process. This allows the Department of Treasury to settle tax disputes with taxpayers without litigation. Through the Alternative Dispute Resolution process, the Department can accept less than the full amount of tax due or increase the refund amount. If a settlement is not made, or if there are remaining issues to be settled after this process, the informal conference process will proceed. Alternative Dispute Resolution is available to all taxpayers who make a timely request for informal conference. Guidelines for the Alternative Dispute Resolution process can be found on Treasury’s website.

Since the passage of this legislation, many taxpayers are still using the Informal Conference process rather than the Alternative Dispute Resolution process. Please know that this is an option for your clients as you work to settle disputes with the Department.

Collaborative Efforts with Treasury Continue
Through past administrations, the MICPA has cultivated a strong working relationship with the Department of Treasury. As such, the MICPA participates in workgroups with the Department to the benefit of all taxpayers and practitioners in Michigan. Governor Whitmer appointed Rachael Eubanks to serve as the State Treasurer in her administration and the efforts with Treasury have continued under Treasurer Eubanks’ leadership.

The MICPA is currently engaged in a notification workgroup, which reviews notices that will be issued to taxpayers throughout the state. This group provides feedback which allows Treasury to issue clearer and more concise notices. If you have examples of notices that you think can be improved, email them to legislation@micpa.org so that they can be reviewed by the workgroup.

Source: MICPA
Source: MICPA

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