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Your go-to source for expert insights, industry updates, and exclusive CalCPA content. Stay ahead with practical guidance, pro tips, and must-know trends—all designed to fuel your success.

Stay ahead with essential CPA resources

Navigating Change, Client Expectations and Professional Risk Under OBBBA

The One Big Beautiful Bill Act ushers in some of the most significant tax law changes since the Tax Cuts and Jobs Act—and can also create traps for the unwary.

A New Year of Momentum

A new year is here—and the future of the CPA profession is full of opportunity. See what’s ahead for our community.

2025 Fast Tax Facts

Our annual, easy-to-use guide of federal and state tax information is back—and packed with updated tax rate schedules, essential facts and figures to help you breeze through tax season.

Fast Tax Facts 2025

CalCPA Weighs in on National CPE Standards Update 

CalCPA recently submitted comments on a national exposure draft proposing updates to the standards that govern Continuing Professional Education for CPAs.

Golden State wisdom straight from the experts

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Looking for an old article or a past issue from California CPA magazine? You're in the right spot!

Part articles and archives

CPAs: Making Sense of What Comes Next campaign

The One Big Beautiful Bill Act (OBBBA) ushers in some of the most significant tax law changes since the Tax Cuts and Jobs Act. While many provisions are designed to simplify or stimulate economic activity, they also create traps for the unwary. CPAs need to remain alert to compliance challenges, client misperceptions and liability exposures as the IRS and state taxing authorities continue to issue implementing guidance.

As professionals who help CPA firms manage risk, we recognize that major tax legislation is a leading source of malpractice claims. OBBBA introduces both planning opportunities and new stress points that can easily evolve into disputes if expectations are not clearly communicated and documented. Although not meant to be all-inclusive, this article highlights several current risk areas and practical strategies for managing them through communication, documentation, and engagement-scope clarity.

Depreciation and Expensing Provisions: The Timing and Documentation Trap

 for property placed in service after Jan. 19, 2025, and the increased 

Section 179 expensing limit to $2.5 million

 (with a $4 million phase-out threshold) are welcome, but the effective dates create traps for accurate application.

Determining when an asset was “acquired”—based on the binding contract date—remains one of the most frequent sources of bonus depreciation errors. This rule, unchanged under OBBBA, still governs when property qualifies as newly acquired for purposes of the 100 percent deduction. Eligibility depends on both when the asset is placed in service and when the binding purchase contract was executed. Property acquired under a contract signed before Jan. 20, 2025, is treated as acquired under prior law and may qualify only for the reduced bonus percentages in effect at that time. 

From a best-practices perspective, practitioners should obtain and retain supporting documentation—such as contracts, invoices or purchase orders—confirming both the contract date and the placed-in-service date to avoid potential risks associated with timing errors. The IRS enforces these transitional rules strictly, and missteps can easily lead to audit adjustments and potential professional liability.

Taxpayers who benefit from increased bonus depreciation and Section 179 expensing may assume those tax benefits will continue in future years, even though these provisions are temporary. Without proactive communication, clients may be unprepared for the higher tax liabilities that will follow once the provisions sunset after 2028 and normal depreciation patterns resume. 

This misunderstanding can create frustration or even allegations of poor planning. CPAs should confirm in writing how clients intend to time asset purchases, emphasize that these accelerated deductions are temporary, and remind them of state conformity differences that may sharply limit the benefit. Engagement letters and planning correspondence should frame projections as estimates subject to change. Clear, written communication—supported by signed client acknowledgments—remains the best safeguard for managing expectations.

Research and Development Costs: The Retroactive Burden

OBBBA restores immediate expensing of domestic Section 174 R&D costs for tax years beginning after 2024 while foreign research must continue to be amortized. This makes it important to distinguish domestic from foreign research activities; misallocating these costs can result in material errors, particularly where research is spread across multiple locations or functions.

For many taxpayers, the shift back to immediate expensing of domestic R&D will require an Accounting Method Change, filed on Form 3115, along with a Section 481(a) adjustment to reconcile prior-year treatment. Errors in Form 3115 preparation are a frequent audit trigger and often lead to broader examinations. To help manage this exposure, firms should treat the preparation of Form 3115 as a separate engagement—identified in the engagement letter with its own scope, timeline and fee structure—rather than incorporating it into standard tax return preparation.

OBBBA also permits taxpayers to amend prior-year returns (2022–2024) to retroactively expense domestic R&D costs. While doing so may produce refunds, it also introduces the audit-risk-of-amendment—the risk that filing the claim opens the entire return to IRS review, not only the R&D adjustment. In other words, while the refund may be justified, amending a return effectively invites the IRS to take another look at every item reported on that return. 

Practitioners should document discussions weighing the potential benefit of the refund against the increased examination risk. Written client acknowledgment is particularly important where the refund amount is relatively small compared to the cost and risk of an IRS examination, where prior-year documentation may be incomplete or uncertain or where the taxpayer has other positions on the return that could draw scrutiny. In these situations, obtaining a signed acknowledgment helps ensure the client understands both the benefit and the associated exposure before choosing to proceed.

Business Interest Expense, QSBS and Opportunity Zones

The easing of Section 163(j) limitations through EBITDA-based calculations expands deductibility, but risk remains where intercompany debt allocations, thin capitalization or aggressive financing structures exist. CPAs should limit their role to tax compliance and planning guidance and refer clients to legal counsel or other advisers for any questions involving the terms of financing arrangements or the structure of the underlying debt.

Both Qualified Small Business Stock (QSBS) and Opportunity Zone provisions received extensions and modifications, including expanded exclusion limits. These remain complex and closely scrutinized. Practitioners should refrain from offering definitive advice until the IRS and Treasury issue regulations. Any interim planning guidance should be accompanied by written disclaimers clarifying that the advice is preliminary and subject to change.

OBBBA modifies and consolidates several energy-related credits, including provisions affecting solar investments, electric vehicles and energy-efficient property. As with prior legislation, these areas are frequently associated with aggressive marketing claims, promoter involvement and inflated valuation assumptions. CPAs should not endorse or recommend specific investment programs and should document all client communications regarding energy-credit eligibility and substantiation.

When assisting clients with credit calculations or filings, engagement letters should clearly limit the firm’s role to compliance based on client-provided documentation and disavow responsibility for the underlying economic or legal validity of these investments.

Individual Provisions: The 2029 'Tax Cliff' and Temporary Deductions

, taxpayers may claim new temporary deductions: up to $25,000 for tips, $25,000 for overtime pay (joint filers) and $10,000 for car loan interest on new U.S.-assembled vehicles. The 

 beginning in 2029, when they expire and the SALT cap reverts to $10,000. CPAs should incorporate these reversions into projections to prepare clients for higher future liabilities and avoid allegations of poor planning.

 (QBI) deduction is now permanent, but eligibility—particularly for specified service trades—must still be tested carefully. Documenting the assumptions used in determining QBI eligibility is a key risk-management safeguard.

 across multiple credits and deductions. Some examples include:

 (ERC) scrutiny reinforces the need for separate, detailed engagement letters and client representation letters confirming eligibility. CPAs must not assume responsibility for verifying eligibility—this distinction is central to malpractice prevention.

 reporting threshold increases to $20,000 and 200 transactions. This change can heighten the potential risk of income understatement and reinforces the best practice to issue engagement letters and clarify the clients’ responsibility to provide complete and accurate information for preparation of their tax returns.

 (AMT) exemption permanent but reintroduces phase-outs beginning in 2026 and expands 

 provisions to cover certain state-declared events. Practitioners should confirm eligibility, secure documentation and avoid filing claims prematurely.

OBBBA is a complex mix of permanent, temporary and transitional provisions. Effective risk management depends on communication, documentation and clear scope definition.

OBBBA presents both opportunity and exposure. By staying proactive—communicating clearly, confirming assumptions and documenting diligently—tax practitioners can help clients benefit from new provisions while minimizing professional risk. Large, accelerated deductions and temporary relief should be clearly communicated as timing benefits rather than permanent tax reductions. Clear communication, sound planning and thorough documentation remain a tax practitioner’s strongest defense.

CAMICO policyholders can find more information by contacting its Loss Prevention department 

 or call the advice hotline at (800) 652-1772.

As we kick off a new year, I want to start with a simple thank you. Your involvement—as members, volunteers, partners and supporters—is what makes CalCPA such a strong, connected, and dynamic community.

Looking ahead, there’s a lot to be excited about. In the year to come, we’ll continue creating more opportunities to connect, learn and grow together—across California and across generations. From signature events to local gatherings and learning programs, our focus remains on delivering content that reflects the unique industries, innovation and energy that define our members and our profession.

We’re also leaning into the opportunities ahead for the profession. Advocacy will remain front and center as we work to modernize pathways into the CPA profession, engage thoughtfully on emerging issues like sustainability and artificial intelligence, and ensure California voices continue to help shape the future at the national level.

Just as important, we’re doubling down on the next generation—expanding our campus presence, investing in scholarships and sharing the story of the CPA profession with new and broader audiences.

None of this happens without you. Your leadership, ideas and commitment fuel our work and our momentum. I’m incredibly grateful for this community and excited about what we’ll accomplish together in the year ahead.

Our annual, easy-to-use guide of federal and state tax information is packed with updated tax rate schedules, essential facts, figures and key data. Designed to help you breeze through tax season, keep this time-saving resource by your side during the busy tax season.

 proposing updates to the standards that govern Continuing Professional Education for CPAs. 

, issued by the National Association of State Boards of Accountancy and the AICPA, aims to modernize how CPE is structured and delivered across the profession.

Overall, CalCPA expressed strong support for the direction of the proposed changes. The exposure draft introduces a more principles-based framework, streamlines delivery categories, and allows greater flexibility for emerging learning technologies. Together, these updates better reflect how CPAs learn today and help ensure that CPE remains practical, relevant, and responsive to a rapidly changing profession.

The proposed standards also reinforce the importance of lifelong learning. By encouraging learning approaches that emphasize professional development and adaptability, the framework supports CPAs as they respond to new technologies, evolving client needs, and shifting business models—while continuing to uphold high standards of quality and public trust.

In its detailed submissions, CalCPA identified areas where additional clarification could help ensure the standards are implemented smoothly by providers, licensees, and regulators. CalCPA’s comments highlighted the importance of coordination between national standards and state-level regulation. Many of the concepts included in the exposure draft align with priorities currently under consideration by the California Board of Accountancy as it evaluates potential updates to California’s CPE regulations. Once finalized, the national standards are expected to inform California’s anticipated rulemaking efforts in 2026.

While supportive of the overall approach, CalCPA encouraged continued progress in future updates. In particular, CalCPA noted the opportunity to further shift CPE toward learning outcomes and demonstrated competence, rather than relying primarily on time-based requirements. A move toward a competency-based model would represent a broader change, but one that could better reflect how professional capability is developed and maintained.

CalCPA’s engagement in this process reflects its ongoing role in national policy conversations affecting the profession. By providing thoughtful, experience-driven feedback, CalCPA continues to help shape regulatory frameworks that support CPAs, protect the public, and prepare the profession for what’s ahead. 

Anyone who has worked through an audit busy season knows the all-too-familiar scene: deadlines fixed firmly in place, client data trickling in inconsistently and teams stuck at their desks wrestling with unwieldy spreadsheets long into the night. 

At the heart of this frustrating pattern lies one fundamental challenge: uncertainty.

Uncertainty pervades every audit engagement, from unpredictable deliverable quality and timing to the vast variability in the format of client data. For decades, audit professionals have simply accepted these pain points as an inescapable part of their job. But in a profession facing a technological revolution and rising expectations from both clients and employees, the age-old model of tolerating inefficiency no longer serves. 

It is time for a new, technology-driven approach that replaces unpredictability with seamless, people-centered systems.

Many audit inefficiencies often trace back to delays or inconsistencies in client submissions. Even the largest accounting firms and the most adept practitioners can’t outmaneuver the realities of incomplete, late or mismatched client data. Attempts to solve the problem by hiring extra staff, offshoring work or tightening project management may offer brief relief, but don’t address the challenge of unreliable data flow.

This inefficiency cuts into firm margins and takes a measurable toll on the people at the heart of the audit that experience long hours, burnout and eroded job satisfaction. As accounting firms face growing labor shortages and younger professionals seek more work-life balance, clinging to outdated ways of working isn’t just suboptimal; it’s a liability.

Compounding the pressure is a dramatic shift in client expectations. In their everyday lives, business leaders and finance professionals use technology that delivers instant access, flawless accuracy and intuitive convenience. When their audit devolves into repeated document requests, endless clarifications and delays caused by manual processing, they understandably lose patience. Even the best client relationships can fray if the experience feels stuck in the past.

For audit firms, this means that efficiency isn’t just about profitability: it’s essential to sustain client trust and loyalty. The cycle of endless data requests, follow-up emails and late reformatting must end.

Temporary hires, project management overhauls and outsourcing all have their place, but if the underlying unpredictability of client data remains, these solutions will always be bandages rather than cures. Further, rotating temporary staff or offshore teams often lack context on client specifics, magnifying errors and compounding frustration for both auditors and clients.

Manual spreadsheet wizardry might clean up messy datasets at the 11th hour, but this only stretches teams thin, extends deadlines and sustains the cycle of inefficiency and overtime. Left unchecked, these practices threaten staff morale and the firm’s ability to attract and retain top talent.

Introducing Predictability Through Data Extraction Tech

The real answer is systemic change that embraces technology that transforms the way client information moves from business systems to audit teams. Enter data extraction technology. Rather than waiting for piecemeal uploads and manual handoffs, modern solutions connect directly to client accounting systems, pulling a complete and standardized dataset in one swift operation.

For clients, participating in this process is as straightforward as clicking a secure link and gaining immediate delivery with fewer interruptions—and better outcomes.

Some firm leaders worry that clients will bristle at the idea of connecting their financial systems. However, real-world indicators show the opposite is true. Adoption of data extraction and automation tools has surged across the profession over the past several years. A 

 shows that nearly half of audit professionals have already implemented such technology and another third are exploring adoption.

Clients themselves increasingly appreciate the security, speed and reduction in hassle. When new tech is presented as a solution to the endless cycle of email requests and data confusion rather than just another platform, acceptance is high.

The Real Payoff: Efficiency, Retention and Better Outcomes

Embracing automation and data extraction directly addresses the pain points that have plagued audit work for years. The result? Faster project starts, fewer late nights at the office and more capacity for professionals to do complex, rewarding work. Clients experience less frustration by getting answers faster. Most importantly, the firm’s most valuable asset—its people—can focus on insight, client collaboration and professional growth.

By driving out inefficiency, data extraction technology delivers a host of benefits: stable margins in an age of fee pressure, healthier team cultures and a modern client experience that sets firms apart.

Every audit firm deals with tight deadlines, shifting standards and rising expectations, but the solution to the most persistent problem—unpredictable client data—is now within reach. The next generation of audit success stories will be written by firms that act decisively: implementing technology not just for its own sake, but in service of their people, their clients and the future of the profession.

With data extraction, uncertainty is no longer an unavoidable cost of doing business. It’s a problem solved, unlocking time, trust and value at every stage of the audit engagement.

Better Data, Better Audits

How leading firms are using data extraction software to fix unreliable client data—and create a more sustainable audit experience for people and clients alike.


Stay ahead with essential CPA resources

Golden State wisdom straight from the experts

Navigating Change, Client Expectations and Professional Risk Under OBBBA

A New Year of Momentum

2025 Fast Tax Facts

CalCPA Weighs in on National CPE Standards Update

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Professional Interest Areas

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Daily Clips newsletter

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Listen and watch...

Rise & Stride Podcast

brainfood bytes

Part articles and archives

CPAs: Making Sense of What Comes Next campaign