While many Americans don’t check the stock market every day, the price of gasoline is one economic indicator Americans regularly pay attention to. And gas prices are on the rise, which means your summer travel budget could take a hit.
With the national average now likely to hit $3 a gallon this summer (as of today, Indiana’s state average is $3.01 a gallon), prices have increased by about 50 cents from this time last year. Assuming summer travelers drive roughly the same amount this year as they have previously between the months of May and September, that could translate to an increase in nearly $250 at the pump as compared to last summer (and over $300 from the summer of 2016).
Though the switch to summer blends typically causes a bump up in price each year, oil-rich countries like Saudi Arabia and Russia have successfully kept oil production down, and the price of crude oil is the highest it’s been in four years. Combined with President Trump’s announcement to withdraw from the Iran nuclear deal and possibly reinstate sanctions against the oil-rich country, prices are expected to steadily climb at the pumps.
This will affect the pockets of American consumers, which could affect the economy. In fact, research shows that American drivers are more likely to adjust their spending habits once gasoline prices hit $3 a gallon. Despite the implementation of President Trump’s Tax Cuts and Jobs Act, which stock market investors hoped would spur greater economic activity, consumers may find that the rising gas prices are eating into their take-home pay, ultimately affecting their summer travel plans.
Nearly three years ago, the IRS launched the tax return preparer oversight program and seeds were planted in the landscape of tax return preparation services. Today, those seeds are starting to sprout.
In June, the IRS estimated there are 717,161 PTIN holders, many of which (212,975, or 29.7%) are CPAs, outnumbering Enrolled Agents (42,895) and attorneys (31,189) combined. While CPAs have dominated the regulated tax preparation arena, that landscape is about to change. More and more people are completing the final step to becoming a Registered Tax Return Preparer, or RTRP (they have until 12/31/13 to pass the competency exam). Currently, there are 4,893 RTRPs. That leaves an estimated 338,127 “provisional preparers” who may join the RTRP ranks.
That means more competition is coming and it will influence the public perception of tax return preparers. Unfortunately, the public doesn’t really understand the difference between a CPA and other tax return preparers. We have all seen the advertisements by the big box tax preparation and software chains that inflate the qualifications of their employees. They often compare them to CPAs or perhaps they feature a CPA in the ad, implying that every customer representative will have similar qualifications.
Some believe that RTRPs will leverage their new designation as some form of implied association with or endorsement by the IRS, thus giving them an advantage in the marketplace. While the IRS has put in restrictions on advertising that leverage the RTRP designation (thanks to AICPA advocacy), they cannot possibly enforce them completely. And they can’t police informal or non-commercial promotions. If CPAs wait to counter such marketing efforts, they may find themselves in the same position as a political candidate trying to counteract a negative ad: while the ad may be false, it is hard to change someone’s mind after the fact.
That’s why it is important for CPAs to start telling their stories better, more often and everywhere they can think of. And they need to start now. Clients need to hear messages about the value of a CPA directly from their CPA. They also need to understand how they are more than just a tax return, that their CPA is available year-round and can help them plan for life’s significant milestones such as buying a house, planning for retirement, saving for college and much, much more. If we don’t start tooting our own value horn louder and longer, who will?
When do you need to start building your new value proposition? Yesterday. And how do you do this? Start by developing a value-centric firm culture, then educating your staff on the importance of value based client communications.
The AICPA has developed the Tax Practitioner Toolkit (available free) to help members better define their value and communicate it to current and prospective clients. A Toolkit Implementation Checklist is included, so you can get started right away.
Once your firm masters its story so it is infused in every client contact, networking presentation, or prospective client meeting, it will become part of who you are and what your firm represents for its clients. Once you know your value and live it every day, clients will never have to guess. They’ll automatically know that their CPA is the premier provider of tax services and they would never trust their finances to anyone else.