Tax bill scrambles accounting industry
Jonathan Traub was supposed to spend his family vacation in Breckenridge, Colorado, skiing and roasting marshmallows.
Instead, Traub, the head of Deloitte’s tax-policy practice in Washington, has been holed up in the resort town, producing taxanalysis documents and recording podcasts for clients, trying to explain sweeping tax changes in real time.
On Monday afternoon, he explained the newest provisions of the bill in a webcast with colleagues. Then he hit the slopes.
“I snuck out with my wife to do some runs on the mountain,” Traub said. “After an hour and a half, I came back to 35 emails in my inbox.”
The sweeping tax legislation that raced through Congress was signed by President Donald Trump on Friday — just as the accounting industry was shifting into holiday mode.
The writing, rewriting and re-rewriting of the tax code has sent tax professionals into a frantic hyperdrive, with accounting and tax firms reporting an influx in clients and double the number of inquiries from prospective customers.
Late nights spent scrutinizing the new rules in the office have fueled UberEats and other food-delivery services. Christmas shopping? Forget about it. Longscheduled holiday trips are being delayed or interrupted.
PricewaterhouseCoopers, one of the Big Four accounting firms, is not rescinding its tradition of shutting down the entire firm from Christmas to New Year’s Day. But that’s basically a technicality.
“People and teams are going to have to figure out what they need to do to make sure we’re serving our clients appropriately during a difficult time,” said Len Combs, the firm’s chief U.S. auditor.
Because the tax overhaul is coming so late in the year, it is setting off a mad dash by public companies. They are required to report the effects of the new law in their financial statements to shareholders in the same quarter that the law becomes enacted, even if the measures themselves go into effect later.
Companies whose fiscal year closes Dec. 31 or Jan. 31, as is the case for many retailers, will have just a few weeks to produce quarterly and annual financial statements for investors.
“Maybe 50 percent of our clients were following the debate and knew it was headed this way, but I’ve been surprised by the numbers of clients who, by their own admissions, didn’t think this would happen,” said Kate Barton, the vice chairwoman of tax services for the Americas at Ernst & Young. “Maybe 30 to 40 percent of the heads of tax at corporate clients are scrambling to model out the new law and its impact on their businesses.”
A recent Ernst & Young webcast about tax changes for wealthy clients drew 4,671 people. One this week for corporate clients drew more than 12,000 participants, Barton said.
“This has, in some ways, been my Super Bowl,” said Dustin Stamper, a Washingtonbased director at Grant Thornton, an audit, tax and advisory firm. “It’s been the most exciting time of my career.”
At the moment, many companies are most concerned with ensuring that their year-end financial statements are accurate. They are hoping the Securities and Exchange Commission will allow some extra time to make calculations and tweak documents.