Since 1986, the Illinois CPA Society has compiled the following record of achievement in legislation.
Tax Preparer Oversight Act. HB 5527 encompasses recommendations of the Tax Return Preparation Task Force. Requires state tax return preparers to place their federal Preparer Tax Identification Number (PTIN) on Illinois prepared tax returns for a uniform way to track and regulate tax preparers for the work they do. Also provides the Illinois Department of Revenue the authority to fine and bar preparers for compliance and good cause. HB 5527 is Public Act 99-0641 with an effective date of January 1, 2017.
Occupational Licensure--Criminal Convictions. (HB 5973) ICPAS was successful in working with the bill sponsor to remove certified public accountants from enumerated professional acts that would have significantly limited the Illinois Department of Financial and Professional Regulation's authority to deny licensure based on a criminal conviction.
Contingent Fee Audits. (SB 2933) ICPAS was victorious in working to kill legislation that would have required the Illinois Department of Revenue to disclose confidential taxpayer information to for-profit third party vendors working on a contingency fee basis.
Illinois Public Accounting Act Administrative Rules. The Illinois CPA Society successfully worked with the Illinois Department of Financial and Professional Regulation in updating Section 1420 of the Public Accounting Administrative Rules. The updates incorporated Public Acts 98-730/98-254. Contemporary professional practices were also included. The Joint Committee on Administrative Rules approved changes which are effective March 15, 2016.
Illinois Public Accounting Act Trailer Bill. House Bill 4707 authorizes the Illinois Department of Financial and Professional Regulation to issue provisional licenses to CPAs who relocate to Illinois, makes technical changes to the 2013 Accounting Act Update, and closes a narrow Peer Review loophole. House Bill 4707 is Public Act 98-0730.
Illinois Public Accounting Act Update. The Illinois CPA Society sponsored legislation (HB 2726) that updates the Public Accounting Act and extends its sunset from 2014 to 2024. House Bill 2726 is Public Act 98-0254.
Independent Tax Tribunal. The Illinois CPA Society supported legislation (House Bill 5192) creating the Illinois Independent Tax Tribunal to resolve tax disputes outside of the Illinois Department of Revenue. The Illinois CPA Society joined the Illinois State Chamber of Commerce's Tax Institute and the Illinois Taxpayers' Federation in drafting and supporting legislation for the creation of the Independent Tax Tribunal.
Illinois Department of Revenue Proposed Rules on Transportation and Delivery Services. ICPAS, along with other organizations, successfully halted the Illinois Department of Revenue's proposed regulations to extend the use tax to transportation and delivery services.
Open Meetings Act Exception for Internal/External Auditors. The Illinois CPA Society introduced House Bill 1277 which amended the Illinois Open Meetings Act and added an exception for narrow discussions between internal/external auditors and govermental finance/audit committees in the areas of internal control weaknesses, known or suspected frauds, and fraud interviews. House Bill 1277 was signed into law and is now Public Act 97-0318. The bill is effective January 1, 2012.
Peer Review Administrative Rules. ICPAS worked with the Illinois Department of Financial and Professional Regulation in drafting administrative rules to implement the Illinois Public Accounting Act peer review requirements. The Joint Committee on Rules approved the peer review rules.
Extend Registered CPA Sunset. The Illinois CPA Society introduced House Bill 6415 which extends the registered CPA sunset from June 30, 2010 to July 1, 2012. The bill also updates the peer review section of the Illinois Public Accounting Act to conform to AICPA peer review standards. The legislation was signed by the Governor in June, and it is now Public Act 96-0945. The bill is effective June 25, 2010.
Charitable Audits. The Illinois CPA Society supported and actively worked for the passage of Senate Bill 1970 (Public Act 96-0488) that amends the Solicitation for Charity Act. Public Act 96-0488 updates the audit requirement raising the audit threshold from $150k to $300k for charitable organizations required to file a written report, including a financial statement, with the Attorney General. The bill is effective January 1, 2010.
Partnership Tax Increase Repealed (House Bill 2239). The Illinois CPA Society was victorious in working to repeal the income tax increase on partnership income that was passed during the closing days of the spring legislative session. The legislation, Public Act 96-0835, is effective immediately and repeals a 1.5% tax increase on replacement income on partnerships in Illinois.
Mobility. Legislation became effective January 1, 2008, which extends practice privilege to out-of-state CPAs without having to file a request for temporary practice and pay a fee.
Gross Receipts Tax. The society joined a coalition of business and community organizations who opposed the gross receipts tax concept proposed by the governor's office. No legislation was introduced.
Joint & Several Liability. The society monitored legislation which would have provided for apportionment of fault under joint liability and would have increased liability risks for CPAs and CPA firms. The bill applied to parties remaining in a case at the time a final determination was made and did not apply to third party defendants that were dismissed. The legislation was opposed by the business community and was not presented to the House for final action.
Mandatory Peer Review. The Society sponsored legislation requiring public accounting firms and sole practitioners who provide audit and/or review engagements in Illinois to undergo a peer review every three years. Beginning with the 2012 license renewal period, such firms and sole practitioners will need to have undergone a peer review within the preceding three years. Results of such peer reviews will remain confidential and not subject to discovery, subpoena or introduction in a civil trial or administrative hearing.
Firms and sole practitioners performing only non-licensed services (e.g., consulting, tax and compilation engagements) will not be affected by the new legislation.
Ethics CPE. The Illinois Department of Financial and Professional Regulation delayed enforcement of the new 4 hour ethics CPE requirement until the September 30, 2009 renewal period.
Restoring Confidence in the Profession. The society initiated amendments to the Illinois Public Accounting Act to restore faith in the accounting profession, including:
Requiring passage of a separate exam in Ethics as a prerequisite to receiving a CPA certificate, and that a minimum of 4 hours in ethics be included in the 120 hours of CPE required for renewal of a CPA license every 3 years;
Permitting the Department of Financial and professional Regulation to take disciplinary action against unlicensed CPAs up to and including revocation, and requiring unlicensed CPAs to register and renew their CPA certificate periodically;
Providing criminal penalties for those who take any action to fraudulently influence, coerce, manipulate or mislead any CPA engaged in the performance of an audit for the purpose of rendering financial statements materially misleading;
Moving Illinois from a two-tier certification/licensing system to a one-tier system (which over 40 other states follow) in which all CPAs—whether in public accounting, business and industry, government or education--must be licensed. The society succeeded in extending a transition period to 2010, and providing lifetime “grandfather” provisions for non-licensed CPAs registered prior to 2010;
Retaining responsibility for licensing, registration and discipline of CPAs in the department, rather than moving it to the Board of Examiners (BOE) as approved in 2002. The society succeeded in maintaining the BOE as a separate agency retaining responsibility for the CPA exam, and in obtaining concessions from the Governor to adequately staff and fund the licensing, investigation and disciplinary functions in the department;
Adopting of a notice requirement if providing both audit and certain consulting services for companies over $50 million in annual revenues and/or more than 500 employees, with the society fending off a complete ban on CPAs providing both audit and consulting services for the same privately-held clients.
Computerized CPA Exam. Passed legislation amending sections of the Illinois Public Accounting Act to provide for transition to a computerized CPA exam.
Certified Audit Program. The Society sponsored legislation to create the Certified Audit Program to allow CPAs to be authorized to conduct sales and use tax audits on behalf of the Illinois Department of Revenue and to allow waiver of penalties and interest for taxpayer who voluntarily participates.
Sunset. The society achieved early reenactment (originally scheduled for 2003) of the Illinois Public Accounting Act; the bill made several changes in the law governing certification and licensing of CPAs in Illinois, including transfer of licensing and disciplinary authority from the Illinois Department of Financial and Professional Regulation to the Illinois Board of Examiners.
Uniform Accountancy Act Changes. Restated the experience requirement for obtaining a public accounting license to recognize relevant accounting experience obtained in government, education, consulting and in the private sector;
The requirements for ownership of a licensed CPA firm were changed so that only a majority in terms of voting rights and financial interest must be licensed; and
The concept of "substantial equivalency" recognized out-of-state CPAs wishing to practice in Illinois.
Uniform Accountancy Act Changes. Provisions to allow non-CPA ownership, ease licensure requirements for CPAs not in public practice and simplify interstate reciprocity.
Funding. Secured funding for increased investigations and enforcement against sub-standard practice.
Punitive Damages. The society achieved passage of legislation to limit punitive damages against CPAs to three times compensatory damages, and to substantially raise the level of culpability required to justify an award of punitive damages.
Abolition of Joint Liability. Through legislation passed in 1992, legislation to completely abolish joint liability was automatically incorporated into the Public Accounting Act, thus extending proportionate liability for the first time to economic damages.
Registered Limited Liability Partnership. The society was solely responsible for developing and obtaining passage of a bill to create the Registered Limited Liability Partnership in Illinois, through which partners may insulate themselves for personal liability for the wrongful acts of the partnership and other partners.
Sunset. The society achieved reenactment of Illinois Public Accounting Act, including easier interstate reciprocity, unlimited selection of form of practice, three-year renewal cycle and a peer review confidentiality privilege.
Limited Liability Company. The society was instrumental in development and passage of a law creating the Limited Liability Company (LLC) form of business in Illinois and was the first professional association to amend its governing law to recognize LLCs as a permissible form of practice.
Reduction of Joint Liability. The society successfully sought legislation to eliminate applicability of joint liability to CPAs less than 25% responsible for plaintiff's damage, which for the first time, applied the reduced liability to economic injuries.
Personal Financial Planning. The society was first in the nation to include a broad exemption for CPAs from registration under state securities laws for personal financial planning services. The exemption, developed by the AICPA, is known as "the Illinois language."
150-hour Education Requirement. Illinois became the first major industrial state to adopt increased educational requirements to sit for the CPA exam.
Dedicated Funding. The society sponsored legislation to create a separate dedicated fund within the state treasury to assure that CPAs licensing fees are used for regulation of the profession rather than constituting an additional hidden tax on the profession to support other state services.
Credit Union Audits. The society was a key player in passage of the first law requiring audits of Illinois-chartered credit unions. The Department of Financial Institutions attempted to replace audits with examinations of a lesser scope conducted by its staff. The law now requires all Illinois credit unions with assets of $5 million or more to be audited by a CPA annually and those with assets of $3 - $5 million at least once every three years.
Real Estate Appraiser Licensing. The society defeated efforts to require all persons/firms doing appraisals of real estate to have a real estate license. Business valuations which include a lease or a parcel of land would have been included. CPAs wanting licenses as appraisers would have to work under a broker as a licensed salesperson for one year. The society succeeded in getting the licensing provision removed from the legislation.
Statute of Limitations. The statute of limitations on suits against CPAs was reduced from ten years (for engagements in writing) and five years (for oral engagements) to just two years.
Privity. Illinois became the first state to legislatively adopt a privity standard regulating liability of CPAs to third parties. Adoption of the privity standard was ranked as one of the top goals of the AICPA's Task Force on Accountants' Liability.