Social media bans, "cancel culture," and the importance of owning your marketing channels
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Regardless of what you think about our former U.S. President, Trump’s social media bans remind us of the importance of controlling your communication channels. And that raises some questions when it comes to the new “.cpa” domain.
You’ve gotta have money to make money, which is why the IRS is missing out on tax revenue from 1099-K non-filers. Elsewhere in the federal government, the DoJ is claiming victory after Visa called off its purchase of Plaid.
In smart marketing moves, Deloitte made a deal with non-profit Tax Analysts to make the latter’s extensive federal tax law library free to all. And BKD may have created the first good “tax is fun” movie. No, really.
Mint fans, rejoice: Intuit says the cult favorite personal finance tool is set for a comeback. Avalara is also currying favor with its sales tax prep tool for accounting firms. And Microsoft and Ernst & Young are making game developers happy with a blockchain technology that can pay them in real time.
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📵 What we can all learn from social media bans (that has nothing to do with politics)
Since the riots at the Capitol on January 6, most of the major social media platforms have taken steps to delete and block accounts run by former president Donald Trump, at least temporarily. That includes Twitter, Facebook, Twitch, and YouTube. Trump is now unable to utilize the direct communication channels he favored as a politician and president to reach and his followers.
The bottom line: There are two lessons here. First, don’t violate the terms of service of private social media companies. Second, be sure to own at least one of the major channels you use to communicate with your followers. That means encouraging your clients and prospects to subscribe to your email list, or even give you their phone numbers so you can directly text message them. Maintain a website on a domain that you own.
Social media companies can ban you, make it harder for your followers to see your content, or, like Facebook a few years ago, force you to pay to get your page updates into your followers’ news feeds. When you also own some of your own marketing channels, you reduce the risk that one of these big tech companies could make it harder for you to get new clients.
💻 Individual accountants can now buy “.cpa” domains — but should you?
Many accounting firms jumped on the chance to apply for websites with the shiny new “.cpa” domain ending the moment the application process opened back in November 2020. As a refresher, unlike “.com” or “.net” domains, “.cpa” domains are controlled by CPA.com, a subsidiary of the AICPA. And on January 15, 2021, the gates were opened to individual accountants looking to claim their own “.cpa” domain name. But should you jump on the bandwagon?
The bottom line: On the pro side, having CPA.com as the gatekeeper for “.cpa” domains ensures that anyone who has one really is a Certified Public Accountant or a CPA firm. However, it also means that CPA.com has a lot of power over your website, email, and any other services connected to your domain. And losing a domain can be catastrophic.
According to the terms of service, CPA.com can cancel or transfer your ownership of your “.cpa” domain for violating any of its policies at any time, at its sole discretion. And you won’t have any recourse if this happens. Which is how this ties back to the story above about Trump’s social media bans. Even if you think that you’ll never get “cancelled,” it’s still a good idea to own your marketing channels.
This is perhaps why many firms are purchasing .cpa domains and forwarding them to their existing websites rather than migrating everything over. It’s a way to protect their brand without taking on additional risk.
⚖️ The IRS can’t afford not to investigate 1099-K non-filers
Another week, another story on how failure to fund the IRS is preventing the IRS from generating funds for the country. A report issued by the Treasury Inspector General for Tax Administration (TIGTA) based on an audit of the 2017 tax year found that the IRS is not investigating businesses and individuals that have failed to file Form 1099-K. This form reports income paid through merchants like PayPal. According to TIGTA’s findings, the IRS either failed to identify non-filers who owed these taxes, or failed to investigate those it had flagged as non-filers. TIGTA identified 314,586 business taxpayers in that first group — the ones the IRS didn’t even flag — with a total of $335.5 billion in 1099-K-eligible income.
The bottom line: The report specifically cited lack of resources as the reason the IRS hasn’t been able to investigate this particular type of missing tax revenue. The report also estimated that if the IRS only looked at businesses with $1 million or more in Form 1099-K income and individuals with $100,000 or more in Form 1099-K income that failed to file or underreported, the agency could potentially assess an extra $5.723 billion in taxes. This likely isn’t news to anyone who knows how stretched the IRS is these days — but you’d think it would be yet another motivator to Congress to fund the only part of the government explicitly designed to make money.
👨🏽⚖️ Visa and Plaid call off merger rather than fight the Department of Justice
In January 2020, Visa raised eyebrows and furrowed others when it announced plans to buy up-and-coming fintech and online payments company Plaid for $5.3 billion. Fast forward a year and the deal is off, thanks to the Department of Justice, which filed an antitrust lawsuit over the proposed merger on November 5, 2020. Instead, Plaid CEO Zach Perret says that Visa will become an investor, helping Plaid build out its financial services.
The bottom line: The DoJ accused Visa of monopolizing online payment processes, and argued that keeping the two companies apart promotes competition and better prices for customers. Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division described the failed merger as, “a victory for American consumers and small businesses.” Not to mention vindication for the original Visa/Plaid skeptics.
🤑 Pennylane is coming for your accounting and bookkeeping clients
Say bonjour to another startup that thinks the best accounting happens when humans and machines work together. As TechCrunch reports, French firm Pennylane has raised €15 million ($18.4 million) for its human/SaaS hybrid accounting service. A year after launching, the company already has 30 in-house accountants serving 550 customers, and €2 million ($2.5 million) in revenue.
The bottom line: It’s unclear whether Pennylane has created its own proprietary accounting software or is relying solely on off-the-shelf products. It already has tie-ins to well-known names including Stripe, Zoho, and Sellsy. Either way, it seems to have made quite a splash just a year after launching.
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💼 Avalara wants to help you offer sales tax preparation with no extra effort
The chance to expand your services but not your workload is catnip to smaller accounting firms. Maker of cloud-based tax compliance software Avalara is hoping to win your hard-earned affection with its new product, Managed Returns for Accountants (MRA). It will hopefully do for sales tax preparation what Intuit Payroll and ADP did for payroll services: make it easy to offer these services to clients, while automating everything behind the scenes.
The bottom line: Another tool to have in your toolkit, and another way to add value to the service you provide, with only minimal effort on your part. Hard to say if this is Christmas 2020 coming late or Christmas 2021 coming early, but the potential benefits more than make up for the unanticipated delivery schedule.
🍃 Mint is finally getting a refresh
The product that raised a generation of personal finance nerds is set to make a comeback.
Personal finance planner Mint was a cult product in the early ‘00s. It was one of the few options that was both available on a phone and for free, making it a popular choice for those of us who get a thrill from a carefully balanced budget, but don’t want to spend money to achieve it. In 2009, Intuit snapped Mint up and… did nothing for over a decade.
But now, Intuit is planning to put resources back into Mint, with a new team ready to take the reins and guide the product to new and better prospects. They even extended the fintech equivalent of an olive branch: Mint’s first update in years.
The bottom line: The economic fallout from COVID-19 means many people need a budget planner now more than ever — specifically one that doesn’t cost money. Another reason that Intuit has chosen to act now rather than, say, a decade ago could be the proliferation of fintech products like Venmo and online banking. These aren’t exactly the same as budget planners, but can stand in for one in a vacuum. Whatever their reasons, Intuit has a lot of ground to cover if they want to make up for letting Mint go to seed.
💱 Ernst & Young and Microsoft expand blockchain platform to pay creatives faster
Microsoft — owner of Xbox — is working to make it easier for video game creators to get paid for their hard work. The PC giant has teamed up with Ernst & Young to expand its Xbox enterprise blockchain platform, with the hope that it will speed up royalty payments to designers, musicians, and other people behind the scenes, and make that payment process more transparent.
The bottom line: Users probably won’t even realize this is happening, but it could be a game changer for video game creators. A press release from E&Y claims that the blockchain technology combined with AI will speed up digitized contracts and could see royalties paid in real time. To expand on that, if Xbox games move to an all-you-can-play monthly subscription model, this technology could be used to connect payments to, say, the number of players using a game or the number of minutes they stay on for.
📚 Explore the riches of Tax Analysts’ federal tax law library for free
Some people wonder what happened to Amelia Earhart, others wonder about the true identity D.B Cooper. But if the mystery you’ve been pondering happens to be about federal tax law, a large and helpful resource has just been laid out for you for free, courtesy of Deloitte. The industry-leading financial services firm has made a deal with non-profit Tax Analysts to make the latter’s federal tax law library available to the public. Simply visit the website and scroll through daily tax news, analysis, and research to your heart’s content.
The bottom line: Deloitte claims that this move “is in keeping with Deloitte’s mission to make an impact that matters in the communities where we live and work — in this case, making business-critical federal tax information readily available to those who need it,” in the words of the company’s chief transformation officer Chuck Kosal.
📽️ BKD made an educational tax parody video that’s actually good
Normally the news that an accounting firm has decided to make learning about taxes “fun” raises groans across the profession. So when BKD released a 30-minute — yes, 30 whole minutes — film noir feature titled “The Missing Deduction” that promised to explain Section 199A and qualified business income deduction (QBID), I was skeptical. However, the result is both educational and highly entertaining.
The bottom line: It’s great! Watch it here. “The Missing Deduction” was written by Damien Martin of the Simply Tax Podcast, and it’s obvious that he has the winning combination of a robust knowledge of tax and a sense of humor about that knowledge. Also, if you’re going to try something similar for your firm, it’s worth it to invest in a quality production.
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