Crisis & Deadlock

The Spring Legislative Session yields little in terms of positives.

Again, the budget deadline came and went with the Illinois General Assembly failing to pass a State Operating Budget. State employees and some service providers are being paid with federal funds and through consent decrees and court orders, but many others remain in limbo as they continue to go without payment. The State’s list of unpaid vendors and service providers has stretched to record levels, with $6.8B owed, according to the Comptroller.

As the May 31 deadline approached, there was some momentum to pass a stopgap budget, but that was soon overshadowed by the enormity of the proposal. With budget working groups continuing to meet, I expect the House to remain in session throughout the summer.

Even with the ongoing budget dilemma, however, a number of bills advanced during the Spring Legislative Session that impact the CPA profession.

House Bill 5527 (Tax Preparer Oversight Act) was an Illinois CPA Society (ICPAS) initiative to implement the Tax Return Preparation Task Force’s recommendation to require all paid tax preparers to use a Federal Preparer Tax Identification Number (PTIN). HB 5527 also authorizes the Illinois Department of Revenue (IDOR) to share preparer information with the IRS and other states, and discipline or bar preparers. We worked closely with the AICPA to ensure that this legislation complimented pending Federal regulations. HB 5527 passed both Chambers and awaits the Governor.

Senate Bill 2434 (Firm Mobility) was an Illinois Department of Financial and Professional Regulation (IDFPR) initiative supported by ICPAS to grant licensed out-of-state CPA firms the same privileges as firms licensed in Illinois under the Illinois Public Accounting Act. SB 2434 also extends individual CPA mobility to CPA firms that perform attest services, allowing their CPAs to move seamlessly between states. SB 2434 unanimously passed the Senate but requires a substantive committee hearing in the House. We’re working on advancing this measure.

House Bill 5973 (Ban the Box-2) would have significantly reduced the IDFPR’s discretion to deny professional licenses to CPAs based on a felony conviction. We worked with bill sponsor Rep. Marcus Evans to amend the bill and remove CPAs from the list of enumerated professions because of the CPA’s public and fiduciary duty. The sponsor’s intent is to remove reentry barriers to rehabilitated prisoners.

Senate Bill 2270 (Local Government Audits) as introduced would have required local governments, community colleges and universities to rotate audit firms every five years (unless the firm rotates audit partners), competitively bid audit services, and accept the lowest competitive bid. After much opposition, SB 2270 was amended to remove the competitive bid requirement and the requirement to accept the lowest bid, but requests for proposals still must be made every five years. SB 2270 passed the Senate and has extended established deadlines in the House. We worked with the opposition, legislative staff and the sponsor to ensure their understanding of this bill’s impact on government entities and auditors.

Senate Bill 2933 (Contingent Fee Audits) authorized the IDOR to expand the dissemination of taxpayer information to municipalities and stipulated that municipalities could share that information with third parties working on contingent fee arrangements (contingent fee audits) to identify businesses with unpaid taxes. We joined other opponents in defeating this legislation.

The Spring Legislative Session has produced thousands of bills, and several hundred have moved to the Governor’s desk. Our real-time Legislative Tracking Report can be found here.

As always, we’ll be monitoring the legislation impacting you and the CPA profession, and looking for your messages about the legislation that concerns you most.