Geltrude & Company CPA Dan Geltrude joins Yahoo Finance Live to discuss the current accountant shortage going into the 2023 tax season and the implications for the industry and Americans looking to file their returns.
RACHELLE AKUFFO: Well, business taxes are set to rise, even as the economy shows some weakness. This according to a new report from FOX Business. Now, changes to federal taxes are set to begin in 2023 with a 15% profit-based minimum tax on corporations set to begin this year. Now, that's part of the Inflation Reduction Act. Still with many of the changes happening this year, the effects won't be reflected and likewise won't necessarily come due in this year's 2022 tax season.
Well, let's continue the conversation now because tax season is approaching. But where are all the accountants? The Wall Street Journal reporting a nationwide shortage of the profession. To cope, firms like Geltrude & Company are hiring overseas workers.
Well, joining us with more is Dan Gertrude, Gertrude Company founder. Good to see you, Dan. So did you ever imagine we would get to this point? How did we get here?
DAN GELTRUDE: No, I didn't. And then really my firm is nothing special in this regard in that we're at a point where it's not just about our ability to grow as a firm, it's about being able to handle the current workload. Over the last two years, 300,000 accountants have left the profession. So that leaves a huge hole here to be filled.
And as you know, regulations and rules just keep increasing. So there's more responsibilities on accountants to get their work done. Yet, we have significantly less people to do the work. So it's really become a problem.
And the solution really is twofold. First, more use of technology to the greatest extent possible. And then an international solution in trying to bring people on board that can help supplement our US workers.
RACHELLE AKUFFO: So then, Dan, as we talk about technology then, is it about getting more assistance for current accountants? Or is it about more reliance on some of these apps or these other services that are becoming available?
DAN GELTRUDE: Well, I think what's happening here is there is a level of work that certainly can be automated and technology can step into that. However, there is always a human factor in terms of reviewing the work. And then also there's that consultation piece with clients. It's about strategizing. And that's something that you really can't replace with technology.
So there's certainly still a huge demand for accountants throughout the country. It's just a matter of how you use those resources and then how you supplement that with technology along with international help.
RACHELLE AKUFFO: And Dan, you call this a crisis and a real threat to capitalism. Why are accountants retiring so quickly? And how might we see this play out?
DAN GELTRUDE: Well, let me go straight to what the potential crisis is. So if you don't have enough accountants to get all the work done, as well as auditors, how does that play out? Well, first and foremost, you start to say, OK, can all the tax returns that need to be filed on a timely basis, can all that work get done?
The second piece of that and perhaps even more potential for damage to the US financial system is, what happens if you don't have enough auditors in order to be able to timely file all the SEC filings for all these public companies? Because once there is a crack in the credibility of the work being performed, the timeliness and the quality of the work, what happens?
Investors start to question whether they can rely on the financial information that they're seeing for which they're making their investment decisions on. And if we ever get to that point-- and we're not there yet but we're moving in that direction-- that's when you have a true financial meltdown.
RACHELLE AKUFFO: And who would you say is most at risk? Is this-- are smaller firms more at risk of this versus, say, some of these bigger institutional companies?
DAN GELTRUDE: Well, actually it's across the board. Whether it's a large international firm or your smaller local firms, everybody is feeling the same pain. So clients are clients. The big firms have big clients and public companies. Certainly, it's a threat there, as I just outlined related to SEC filings.
And then as you go down to the local firms, you know, you expect that your accounting firm or your tax preparer is going to be able to get your taxes filed on time or filed at all. Maybe they just simply can't take on more work. So large or small, this problem has the potential to impact everyone.
RACHELLE AKUFFO: And Dan, I know we talk solutions, perhaps, when it comes to technology. But what about sort of overseas hiring as well? Would that be enough to offset the risk of the shortage of accountants here?
DAN GELTRUDE: Well, it's certainly part of the solution. Is it 100%? No, because what you also have is there's so much hiring going on internationally, we're starting to get to the point where, are there even enough accountants around the globe?
So again, I don't know why people are not drawn to the accounting profession. It's certainly a great profession and a very honorable profession. However, it just seems that people are shying away from it.
RACHELLE AKUFFO: I mean, to be fair, it doesn't sound like the most glamorous of professions, especially you know, you see everyone on TikTok. You don't really hear them gravitating towards accountancy. But there you go, there are openings, clearly, that people should be paying attention to. Dan Geltrude, always good to have you, Gertrude Company founder. Thank you for joining me in this morning.