Why did I pursue an Iowa “Licensed Public Accountant” designation? LPAs are an obscure lot, in that we only really exist in 3 states (Iowa, Delaware and Minnesota).
I was told anecdotally by another LPA in Iowa that my achieving the LPA designation makes me the 126th active LPA in Iowa. I haven’t verified exactly how many LPAs there are in Iowa but I have no reason to doubt what this person said to me.
I don’t expect the LPA designation to set my world on fire with new clients.
If the Enrolled Agent designation is the equivalent of Liechtenstein, then the LPA designation is Luxembourg.
But it does allow me to practice as a public accountant in Iowa. Indeed, I can do anything a CPA can do except for audits.
Obtaining the LPA designation is the first step in me trying to open up more revenue streams for my firm. I don’t want to get pigeon-holed as “just” a tax preparer. While I don’t foresee major tax reform anytime soon, the fact is that Congress could always pull the rug out from the tax prep industry.
If all I do is prepare tax returns, my business is at the whim of whatever Congress does with tax law.
So I’m trying to open up two other revenue streams:
- Accounting services: even if income taxes were to completely go away, there’s always going to be a need for accounting services. That’s why I pursued the LPA designation and converted my tax prep business to a public accounting firm.
- IRS representation: there’s a lot of rhetoric from politicians about how a nationwide sales tax would make the IRS go away. But let’s be realistic — there will always be an IRS in some form because there will always be a tax system in some form. That means there will always be conflicts between taxpayers and the IRS, and there will always need to be professionals to help deal with the IRS. I am planning, in the next few years, to attend the three-year “National Tax Practice Institute” program offered by the National Association of Enrolled Agents. NTPI is an intensive program that teaches EAs the ins and outs of IRS representation.
Doing this will ensure that I have multiple revenue streams. If the tax prep stream ever goes away, I have other sources of revenue.
I don’t think tax prep will ever go away, but I do think the days of high-volume tax prep are going away. If I ran a business that depended on preparing hundreds or thousands of simple tax returns in order to survive, I’d be worried about the future. But that’s another post for another day.