The IRS isn't sure where your clients' data is going

The IRS has data-sharing agreements with more than 1,100 outside organizations and can't fully account for all of them. This week we look at what that means for accountants, why clients are forming their own financial opinions before they call you and how to actually build a firm you can step away from.

Before you dive in, check out how a unicorn startup CFO vibe coded his own month-end close software.

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AI isn’t the real threat to the future of accounting, according to David Perez, CEO of Tax Maverick. It’s actually uniformity; firms that rely too much on summaries and standardized compliance work derived from AI can’t differentiate themselves. Instead, you must incorporate human intelligence (HI), like judgment, context and empathy. 

Clients also expect accountants to deliver strategic insights. They want you to be curious and proactive. Rethink your firm’s client experience and consider incorporating a structured discovery process and mid-year planning sessions.

Why this matters: Not only is AI software taking care of data analysis on your end, your clients may also be getting their own ideas from ChatGPT. Being proactive ensures you’re working ahead of those online queries and delivering your own analysis with Human Intelligence (HI). (Inside Public Accounting)

The IRS shares taxpayer information with over 1,100 external organizations–and they’re not sure who those companies are and what they do with the information, according to a recent government report. Dr. Christine Gervais, CPA, warns accountants and tax preparers of the potential backlash from clients if this story gets reported in major news outlets. If the IRS doesn’t know what happens to taxpayer data, the natural next question is, “Does my accountant?”

Gervais recommends proactively preparing a response and ensuring internal protocols are up-to-date. Review your Written Information Security Plan (WISP), train your team and create a brief explainer on your firm’s data privacy practices for clients.

Why this matters: Being proactive with client communications builds trust and confidence. As Gervais says, it also ensures your reputation isn’t tied to that of the IRS. (Insightful Accountant)

Number of full-time workers who perform at least some work at home (Bureau of Labor Statistics)

When you take off from work, you want to really check out. Alisa McCabe, owner of First Steps Financial, shares multiple frameworks to build the team and systems you need to leave the firm in good hands. First, make sure you can answer yes to these three questions when hiring for every role in your firm: do they get it, do they want it and do they have the capacity?

Then you can empower team members to make decisions you feel good about with a few more questions: is it right for the client and the company, does it support the firm’s strategic priorities and does it align with our core values? 

Why this matters: Whether you’re preparing for vacation or simply hoping to step away from the everyday operations of your firm, put the right people in each role and give them the skills they need to operate independently. (Financial Cents)

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The Net Gains is written and curated by Lauren Ward and edited by Bianca Prieto.