Title agency review rules
Working with the Ohio Department of Insurance, The Ohio Society was successful in changing proposed Insurance rules requiring annual “reviews” of title insurance agent escrow accounts (3901-7-01 of the Ohio Administrative Code). As written, any CPA providing the service would have violated professional standards. Thanks to the input of several Society member experts, the language was revised to meet AICPA professional standards for agreed-upon-procedures reports, allowing Ohio CPAs to both meet the needs of their clients and comply with their professional requirements. The new rules took effect Jan. 1, 2007.
Audit work paper confidentiality (HB 9)
In response to the “Coingate” scandal, three legislators sponsored language that, if adopted, would have reversed longstanding, current law by making the work papers created by CPAs in the course of conducing public entity audits through the Auditor of State’s office public records. The Society was successful in educating legislators about the significant harm that would be caused by such a change to taxpayers, clients and CPA firms, and the provision removed from the legislation before it was passed in December 2006.
Gramm-Leach-Bliley privacy notification exemption (SB 2856)
The Financial Services Regulatory Relief Act (SB 2856) signed into law Oct. 13, 2006, exempts CPAs from the privacy notification requirement under the Gramm-Leach-Bliley Act (GLB). Under the new law, CPAs will no longer be required to prepare year-end privacy notices to clients.
In coordination with the AICPA and other state CPA societies, The Ohio Society of CPAs led the fight to exempt CPAs from the GLB privacy notification requirement.
Ohio income tax residency requirements; increase in contact periods (HB 73)
The Ohio scored a major victory when the Ohio General Assembly passed legislation revising Ohio income tax residency standards and expanding state income relief to Ohio’s active-duty military. The legislation increases the number of contact periods from the current 120 with a bright-line standard of 182 contact periods, eliminating the additional thirty contact periods currently allowed for medical and/or philanthropic purposes. The Ohio Society successfully fought against eleventh-hour efforts to remove the contact periods language and replace it with “days”, a practice dating to 1993, when the Society led the effort to change Ohio law to use contact periods when determining residency so as to avoid incidental contact from counting against the amount of time non-residents can spend in Ohio.
Statute of limitations for tax collection (HB 390)
After much heavy lifting with opponents and legislative leaders, Society-backed legislation creating a statute of limitations on the collection of assessed taxes became law. Sponsored by former State Representative and current Auditor of State Mary Taylor, CPA, an Ohio Society member, the legislation establishes a seven-year statute of limitations in which the state must begin judicial proceedings after an assessment is issued and within four years after an assessment becomes final, whichever is later.
ORC and IRC uniformity regarding treatment of charitable pension distributions (HB 699)
The Ohio Society led efforts to bring the Ohio Revised Code (ORC) in line with the Internal Revenue Code (IRC) regarding the treatment of charitable distributions from independent retirement accounts (IRAs). Congress established tax-free IRA distributions for charitable purposes through the Pension Protection Act of 2006. However, the ORC did not recognize the tax-free distributions for the purposes of Ohio income tax and required taxpayers to add distributions back to adjusted gross income. Under HB 699, the “add-back” provision no longer exists and the ORC now mirrors the IRC.
Ohio attorney general rules impacting charitable entities
During the summer months of 2006, working with Attorney General Jim Petro, the Ohio Society was successful in its efforts to amend rules proposed by his office that would have negatively impacted Ohio CPAs and the charitable entities with which they work. If adopted, the proposed rules would have, among other things, required mandatory audit partner rotation every five years; restricted the audit firm from providing any other services to the charitable entity, such as tax return preparation; and put harmful caps on executive compensation for entities such as private universities and nonprofit hospitals. All were removed before the rule was adopted.
Data breach legislation (HB 104)
The increased use of electronic communication to send and receive sensitive, personal financial information has made the Internet a prime tool for identity theft. While Congress continues to consider proposals that would create a national data breach notification law, Ohio passed HB 104, which requires consumer notification for breach of personal information.
The Ohio Society worked closely with a coalition of business interests to pass commonsense data breech legislation effective Feb. 17, 2006 that balances the rights of the consumer with those of business, and takes into special consideration small businesses and sole proprietors when outlining the steps that most be taken to inform clients when personal or financial data is breached.