Episode 32: Hiring the Next Generation of Tax Talent

Transcript

IRIS LAWS

We have a very special guest this week coming to you from Wake Forest University. We welcome Professor Jim Willis, who will talk with us about what employers need to know when it comes to hiring the next generation of tax talent. From your one stop for tax updates and analysis, I'm Iris.

LANCE JACOBS

And I'm Lance.

IRIS LAWS

It's Tuesday, August 11, and this is “Tackling Tax.”

Before we get to our much-anticipated guest, I wanted to formally welcome our new co-host to the podcast, Lance Jacobs. He is my colleague here at the firm's Washington National Tax Office, focusing on state and local tax. Before coming to the firm, he's been an adjunct professor at American University, an attorney, as well as managing director at multiple accounting firms.

So, my favorite part about Lance, though, is his witty banter, as you will hear today, and seemingly endless music references, which hopefully he will scatter in here every now and then. So, without further ado, welcome to the podcast, Lance! I am so excited to work with you on this.

LANCE JACOBS

Well, Iris, I've been told my entire life that I have a face made for radio, and since the podcast is basically the modern form of radio, I feel like I finally achieved my highest and best use. I'm really excited to do this is going to be so much fun!

IRIS LAWS

Thanks, Lance. Let's dive right into today's episode. I am so excited to be spending some time today with one of my mentors. We go way back and I still credit the direction of my career to our partnership tax class at Wake Forest. So, I could not be happier to introduce Professor Jim Willis. Jim joined Wake Forest as a professor of practice in the School of Business in August of 2013, after spending over 40 years in the accounting profession.

He served as Dean of the Wake Forest Master of Accounting program and has won no less than six teaching awards. Basically, in my humble opinion, he's everyone's favorite professor. So, prior to joining Wake Forest, Jim served as executive vice president and chief financial officer of a large multifamily real estate company. And prior to joining that company, Jim spent 24 years in public accounting, most recently as the partner in charge of tax services for one of the top 10 public accounting firms in the country. So with that, welcome to “Tackling Tax,” Jim.

JIM WILLIS

Thank you. And it's always great to see you, Iris. And I should also say I'm not surprised at how fast you have advanced in your career because you were one of those students I still remember as being exceptional. So, congratulations.

IRIS LAWS

Oh gosh. Well, high praise coming from you. I'll take it and run with it. So, thank you so much. But to get this started, I did figure we could kick this off with maybe the elephant in the room that I'm sure most, you know, listeners are expecting us to talk about, and that's AI. I've talked to clients who are, you know, not only considering AI when they're considering their hiring practices and how many people to hire, but also, maybe more importantly, they're worried about how AI is influencing their workforce and their new hires’ ability to think and think critically. So,

I guess my question for you, Jim, is how are you responding to AI when it comes to your curriculum?

JIM WILLIS

Yeah, that is a really interesting question. Obviously, AI is having a major impact on higher education. To your point of critical thinking, we're having to balance students’ need to learn to think critically, to gain technical knowledge, but we also know when they leave, when they graduate from the program, they will be expected to use AI in their careers.

So, they have to know how to properly use AI, but you can't use it to do all the thinking for you, because then you will leave with a master's degree and not know how to do anything but go ask a question of AI. So, a good example of this; I'm working right now on updating my tax research course, because AI is going to have a significant impact on how we do technical tax research and writing.

So, what I want the students to understand, first of all, is AI often doesn't give you the right answer. So, you have to have enough technical knowledge to know when to challenge AI. But what AI can do is gather all the information you need and help to summarize it. The last project I assigned in my research course is a technical tax question that there is no answer to.

So, historically, what the students have had to do is wade through various cases, rulings because there are cases or rulings out there going different ways—they're in different circuits, different courts. So, they've had to wade through all of that and develop their recommendation to the client and explain to the client what the risks are. So, AI can help them gather.

Now they can throw all those cases into AI, or they can say, AI, go gather all these cases, summarize them for me. Now they can decide which ones are relevant to their question, and they can come up with the final answer. Which, I read an article recently that called it the last mile problem, right? AI can't solve the last mile problem.

It can get you all this data, it can get you all this information. But you as the professional have to understand the client's situation. You have to understand all the nuances, how it all comes together, and come up with that final answer.

IRIS LAWS

Well, and you have to make sure that the court cases it finds are real, right? I've seen so many instances of, you know, attorneys going to court with court cases that aren't even real in there. I know, Lance, you’ve pointed out a few of those to me in jest before, but so true.

LANCE JACOBS

Yeah, actually, there were not one but two cases in state tax court, or state tax administrative hearings in the last week where the judicial body pointed out to the litigants, one of whom was represented by a CPA and the other of whom was representing themselves, that they relied on hallucinated cases. So, that's a real problem that you point out.

JIM WILLIS

You know what, it's funny you say that because I read recently there have been over 1,500 cases where attorneys have gone into court with hallucinated cases. And that's where our job is to make sure that no one that graduates from our program ever does that.

LANCE JACOBS

And I think that's where your last mile analogy really is powerful, right? Because it's, whether you want to call it last mile or getting it across the goal line, whatever the analogy is, is you still have to do the bulk of the work. And I do think in your industry, as a teacher, there is a chicken and the egg problem in that you have to have students learn how to use AI, but you don't want them to use AI to replace their critical thinking skills.

JIM WILLIS

Yeah, well, it's interesting. When it comes to higher education, almost every professor—we met at the end of last semester—almost every professor in accounting, finance, everywhere said, I'm going back to paper exams. No more online exams because it's too easy to substitute critical thinking by just throwing it into AI and coming up with an answer.

LANCE JACOBS

How do you think AI is going to impact what a typical tax professional looks like in five to 10 years? And I think that's a little bit of a loaded question, because I don't think we know necessarily what AI is going to look like in five to 10 years.

JIM WILLIS

Well, exactly. And it's hard to say, right, because the pace of change is so fast now. So, who knows what it's going to look like in five or 10 years? Who knows what it's going to look like in two years? But a couple of things I would point out. And anyone who's been in the profession as long as—I've been in the profession now for just over 40 years.

So, when I started out, we were doing tax returns with a pencil and paper, right? We've seen all these changes, and every time “this” was the change that was going to cause everybody to lose their job. And it's never happened. And I don't think it's going to happen with AI.

Well, five years ago it was data analytics. It was blockchain. Now it's AI. AI is a tool, right? I think we're going to, I think we're starting to realize it's a tool. It's a very powerful tool. It's a tool that I love. I use it all the time. But also, 50% of the time when I ask it a tax question, the answer is wrong. And I have to say, are you sure about that? What about this? And AI says, oh my mistake. You're right.

But what I would tell you is I think it's going to become another powerful tool that is going to allow tax professionals to spend more time doing value-added things for clients, right, spend more time with the clients. Maybe you can go home at 6 or 7:00 during busy season instead of midnight, because we all know that's been a problem forever and it's still a problem.

Another thing that I don't think people are thinking about when it comes to accounting and tax, what I've seen called the gray tsunami that's coming because all of us baby boomers are aging out, and we're aging out at a much faster pace than new people are coming into the profession. So, what AI may help do is kind of fill that talent gap for the next five to 10 years rather than, you know, be completely disruptive and not have a place for new folks.

LANCE JACOBS

Yeah, I think, you know, I used the chicken and the egg analogy in a different context. I'm going to use it again here from a hiring perspective, when you're an employer who is hiring young accountants, what's the cost benefit of should I—and I think the answer is probably I don't want to lead you down the road—but I think the answer is doing exactly what you're doing, which is hiring the accountants who have the experience with AI rather than supplanting them with AI. But I'd be curious to get your perspective on that.

JIM WILLIS

Oh yeah. Yeah, I agree 100%. This is a very interesting area. And we're seeing this evolve in real time, right? Just in the last week or two, I've seen articles that are completely the opposite of what you read a year ago. Right? A year ago, everybody was going to lose their job. Now the firms are saying, oh, you know what?

They're starting to realize, again, AI is a tool. It's going to greatly increase productivity for their employees, but it's not going to replace their employees. I think, as you say, what you want are people who embrace AI, who understand how to use AI. In fact, I read recently a Fortune 100 executive that said what they've realized is that taking an engineer with deep technical expertise and leveraging AI with that engineer is driving incredible quality gains.

So, I think that's what you're going to see, especially in the tax profession and the accounting profession overall. But if you have a person with solid technical skills and they can leverage AI now, you know, what the experienced CPA or tax person brings is, you know, they know the nuances of their company or their client. They know all the things, the human aspect that AI can't bring. But leveraging AI with that, it's going to be really incredible.

LANCE JACOBS

I think the key word for me that you said there is human, because it's still a service business and it's still human-to-human interaction, and that can't be replaced, it seems to me.

JIM WILLIS

Yeah. And along those same lines—I agree 100%—we are also a highly regulated profession, right? So, IRS just recently came out with their guidance for tax professionals on using AI because of what we were talking about earlier. They came out and reminded tax professionals, first of all, you're required to have technical competence in an area that you're advising on, right?

You can't just say, oh, well, I'm going to jump into AI and figure something out. You have to have a certain level of technical competence. Confidentiality is a big issue. So, I think, you know what we were talking about earlier, where you've seen these attorneys go into court and it's just a matter of time before it happens to a tax professional, but it’s already happening, right? We have to base our advice on primary authority, right?

And everyone in the tax profession knows what primary authority is. AI is not primary authority. So, we have to back check everything AI tells us back to the primary authority and make sure it's being applied properly. So, again, I think it's going to be a powerful tool, but it is not going to allow you to cut your headcount in half, I don't think.

IRIS LAWS

Hey, I think that's great news for everyone listening, honestly. But, you know, shifting from AI a little bit, just from my personal experience, at least at Wake a decade ago, over a decade ago, if you can believe it, Jim. When I was coming through, getting a CPA license was basically a foregone conclusion, at least from my class. That was my perception of it.

You know, if you wanted a top tier job, it was sort of expected that you would have that license to your name. Lately, though, I've been hearing that's not necessarily the case, just sort of anecdotally, would you say that's true or has that changed?

JIM WILLIS

I hope not. I think what we've seen is we had a major change to the CPA exam in 2024, right? And part of that was because of the drop in people coming into the profession. So, we've had several major changes, you know, I think we'll probably talk about the hours change, but the CPA exam has changed.

And what happened, that took effect in early ‘24. So, anyone who was going to take the CPA exam rushed in and did it in ‘23, because no one likes to be the first when they make a change. Although I think the change has benefited some folks. But what we've seen in 2025 was a pretty significant increase in CPA exam candidates.

I think there's tremendous value to having the CPA credential. And when I graduated 40, however many, years ago, if you wanted a good job in the business school, you majored in accounting, and that was the highest paying jobs. And everyone got a job. That changed some over the years as finance and IT and even marketing with all the data analytics and capabilities. I think we're seeing CPA is a steady, guaranteed career.

And so, I believe there's, I think there's a lot of value. The last thing I'll tell you is I just read recently in the past year, couple of years, undergrad enrollments in accounting have increased by twice as much as any other major in business schools. So, I think that's good news. I think there's value to the CPA credential. So, I hope people will continue to pursue that. You will never regret having it.

IRIS LAWS

I agree, obviously. It’s served me well, especially coming through, you know, a large public accounting firm. I think the most part, though, feeding off of that question, I think a lot of it was just the additional hours of tax-focused content that I didn't get in my undergraduate education. You know, what would you tell employers about what they can expect for someone coming out of a master's program where they have those additional hours, that additional class with you and your tax specialty courses?

JIM WILLIS

Yeah. So, obviously I'm biased, right? And I'll tell people that out front when I'm always—as you know, I'm always recruiting students into the tax program. But once again, I think there's tremendous value to having a master's degree, and especially if it's a tax specialty, if you think about someone with a four-year undergrad degree in accounting and they're going into tax, they maybe have been exposed to individual tax in one course, maybe they had a second course where they did corporate and a little bit of partnership and S-Corp, but a lot of programs, undergrad now, it's just one tax class and it's individuals. That's not nearly enough to prepare you to be successful in a career in tax, especially when you might be sitting next to an attorney, right, or someone with a master of tax degree.

So, in our program, as you know, Iris, when you do the MSA, ours is an MSA with a tax concentration. We are considering, you know, we're talking about should we look at making this a master of tax. But it's very similar. So, you get 15 hours of tax. We cover international tax, state and local tax, accounting periods and methods, ASC 740, full semester on partnerships, and then research; how to properly research and write a memo for a client.

Which, yes, AI can do a first draft of a memo. That to me is the most valuable thing about AI because the first draft is, as you know, the hardest. But how do you finalize that memo, right? But we also cover robotic process and professional ethics and data analytics. So, you're getting just so much more depth. And again, to try and give that student or that new professional a level of technical knowledge that they can properly use AI and know when to question it and when to push back and when they've gotten to the right answer.

IRIS LAWS

So, just because the CPA hours requirements changed doesn't mean necessarily that the curriculum for undergraduate has changed to the extent that they would have more tax now, it's just they are coming out with less tax experience without a master's degree?

JIM WILLIS

Really good question. We are actually going to allow some extra tax hours. But it would probably just be one more course because again, as you know in the undergraduate program there are certain classes you have to have. But if I could tell a quick anecdotal story, we had a student, an undergrad student, who took several tax classes in her senior year because she said, I'm not staying for the MSA program, but she's going into tax.

So, she went to work in her internship, she was working with, luckily, four MSA tax graduates, and she contacted me about a month into her internship and said, I think I'm going to come to the MSA program. And she will be joining the program this fall because, she said, I have learned that I probably need that extra year. So, I didn't have to have a master's degree.

I'm old enough that it was still 120 when I graduated, but I saw the value of it. Not everyone can afford to do it. But what I would say is if you can afford to do it right away, then find a program that you can do, you know, while you're working. Maybe at night, it takes a little longer. Took me five years. I did it at night while I worked. But you'll never regret having a master's degree.

LANCE JACOBS

I taught in the American University masters of tax program, which they unfortunately shut down. So, I know firsthand how hard it is to do what you do on a day-in, day-out basis, in part because mine was a night class and I am an extreme morning person. But it's just hard. It's hard to do it. And they closed that program down due to a lack of interest.

But I guess what I'm hearing you say is maybe that pendulum has started to swing the other way and there's an uptick and hopefully they'll restart that program again. So, am I correct in surmising that you're seeing an uptick in interest in students wanting to enroll in accounting and tax in general?

JIM WILLIS

What we've seen, other than last year, last year was an anomaly. Normally our master's program, we're a pretty big program. We have about 110 to 120 masters students. Normally about 30 of them do the tax track. Last year it was barely 20, but that's the first time in years. This year we're back up to 32, but our overall enrollments are down right around 100.

So, we're seeing, percentage-wise, a little more interest in the tax program. And again, I think that comes down to demand because the students know there is huge demand for tax. They also, I think, they also see that it’s probably one of the last areas that AI is going to take over. So, again, as we talked about the last mile or getting over the goal line, however you want to put it, you need talented humans to do all of that.

The other thing is, I think everyone knows tax is challenging, right? The jobs are not going to go away and tax is never going to be simple. Regardless of what we constantly hear, it is not going to be simple. So, you will always have work.

LANCE JACOBS

Have you seen, from an economic, from a student's economic perspective; I know I have kids who are in their early- or mid-20s and looking at them and their peers, the financial incentives were there for them to go into tech as opposed to accounting, or private equity as opposed to accounting. Have we seen that start to equalize a little bit or using my pendulum analogy again, start the pendulum back a little bit?

JIM WILLIS

Yeah, I think I would say the pendulum is moving back a little. Maybe not equalizing, but it's interesting. Like you mentioned private equity; there's a limited number of those opportunities, right? Historically—and again there's a lot of disruption right now—but historically, everyone who majored in accounting pretty much got a job. And we have a, we still have, I think it's still close to 100% placement from our accounting, you know, whether it's undergrad or MSA program. There are jobs there. Not everyone is going to, you know, everyone who majors in finance is not going to go to Wall Street.

And so, but to answer your question specifically, I've seen some pretty significant increases in starting salaries just in the last five years. You know, since Covid, most of the public accounting firms have had some pretty significant increases in their starting salaries because of the issue you point out; they're losing really good people to tech, to marketing, to finance. And I think they're starting to see the impact of that. We all know one of the hardest people to find is a really good tax senior, right? And where do you get good tax seniors? By hiring tax staff and training.

IRIS LAWS

I think that's a great point. And I guess outside of just pay, what can employers do to attract talent, right? Besides paying them a gajillion dollars, you know? What are students looking for that would set an employer apart, whether it's a public accounting firm or some of our listeners who probably are just, you know, in their own companies and need to hire in-house tax talent, and, you know, how do you differentiate yourself?

JIM WILLIS

Well, so, of course, you know, compensation still is like number one, no matter what people tell you, they're not worried about how much they make. Well, yeah, they are, especially now because of the cost of living. Go try to rent an apartment. Lance, I'm sure your kids are trying to rent an apartment. I have a lot of conversations with students who are looking in some of these larger cities and they're like, oh my gosh, I can't afford to pay my rent.

But so, compensation is important. But in just informal discussions with the students, one of the things I found really interesting is they don't want somewhere where they're going to be able to work from home. They want to be in the office, they want to be around other professionals for both career and social reasons. It's funny, I saw the head of one of the other major firms spoke and said that their biggest problem was getting their managers and partners back into the office, that the staff and seniors were all there.

And he said, you know, the firm's being run by a bunch of 20-year-olds. So, they want to be in the office around other people. A lot of them went through Covid, right, where they were isolated. So, now they want to be around people. But they also, part of that is they want mentoring. The biggest complaint I hear is that the students, when they go to work, they don't feel like anyone has the time to teach them anything, yet they're expected to do things, you know, do good work in a short amount of time with no real guidance. That's the complaint I hear.

Now, having said that, that's been the complaint for 40 years. We all know that. We all know it's true. But that's what they're looking for is, do I have growth opportunities, do I have someone who can mentor me, and can I make enough to pay my rent? And can I come in and be around other people?

LANCE JACOBS

Yeah. I think you raise a really good point about being back in the office, because we all know that whatever profession that you go into, there's two types of skills. There's the hard skills that you're that you're arming your students with. And then there's the soft skills of learning to interact with people and internal clients and external clients. And I think in academia you probably get some of that as a student, you get some of that. But it's a different type of audience that you're interacting with once you get out. And I think you need to develop those muscles as well.

JIM WILLIS

Absolutely. Yeah. And you're exactly right. You don't develop those on a zoom call.

LANCE JACOBS

That's right. You know, you also raised an interesting question to me. And it's something that I'm passionate about. It's something that led me to start teaching at American was continuing education. And you know, depending on the size of the firm, you know, I think we do a pretty good job at our firm and most of the firms that I've been at, in making sure that our people are learning the latest and greatest, but for some people who might be at firms that don't emphasize that, what advice would you give them in terms of making sure that they're staying up to date and they're keeping their technical skills sharp?

JIM WILLIS

The main advice I would give them is just make sure that that the employees or, you know, the new employees understand that you do take their continuing education seriously. As you know, there, especially in the tax area, there are some really good tax continuing education programs out there. You know, conferences that you can go to and get really deep technical information and meet other tax professionals.

So, I would say make sure you're supporting that. Make sure you're providing them the technology they need. This is an area where I think AI can really help out too, right? Because you can go into AI and ask it for some training. This is one of the things I tell my students. One of the proper ways to use AI is if they want to take my slides from a class, put them in AI and say, quiz me on this material.

I think as long as firms are making the investment in the technology, making sure that their employees know that they will be supported if they want to go. Some of these conferences are pretty expensive, but they're really, really good and they're really valuable. I think if you don't have it in-house, you know, the bigger firms like yours have just, you know, tremendous in-house training. But if you don't have that, you can find really good programs out there.

IRIS LAWS

And I know just anecdotally, being a part of like the state societies. So, NCACPA has some wonderful free continuing education. Firms like ours give webinars that give you an hour of free CPE, that kind of thing. So, shameless plug to the state societies and our firm of course. But so, to round out this discussion, Jim, I'd love to just turn to your students who I know are the reason that you do all of this every day.

You know, if you were to speak to them for a second and if you had any advice for students looking to enter this profession, given everything we've talked about today, what would your advice be?

JIM WILLIS

The main thing I tell the students when you go to work, first of all, no one is going to wake up every day and say, I wonder what I can do to advance that person's career, right? That's your job. So, take charge of your career, take charge of your growth. Ask to join a meeting where maybe, you know a client's coming in or you know there's a big meeting in the office about some issue that you're interested in.

But the other thing is don't think any task is beneath you, right? Raise your hand when there's something; when they need a volunteer, raise your hand and say, hey, I'd like I'd like to try that. And embrace the new technologies. If you think about the disruption that's going on and all the new technologies, I think this is an area where a first-year person can leapfrog right over their old gray bosses, right? Or the more experienced professional.

But you have to do it, you know? Lance, to your point, you have to do it right, right? You have to be humble. You have to make sure that if you go, let's say you go in and you've used all this new technology to get to an answer, and it's the wrong answer. That experienced person is going to know right off the bat, right?

They're going to say, wait a minute, that doesn't sound right. So, embrace the new technology. Make sure you understand how to properly use it. Back check all your stuff. Volunteer when there's a new project or something and just, you know, take charge of your career and I think you will do great things like Iris has.

IRIS LAWS

Oh, good grief. Well, all I can say to that is, thank you so much for joining. I've loved talking to you today. Really hope that this upcoming semester goes great for you. And as always, go Deacs, right?

JIM WILLIS

Yes. Hope there's a few little nuggets of good information in there.

IRIS LAWS

Absolutely. Well, thanks for being here. And that's our show. Thanks for joining. Remember to subscribe and listen in for the next episode of the podcast. Until next time.

ANNOUNCER

The information set forth in this podcast contains the analysis and conclusions of the panelists based upon his, her, or their research and analysis of industry information and legal authorities. Such analysis and conclusions should not be deemed opinions or conclusions by Forvis Mazars, or the panelists as to any individual situation, as situations are fact specific.

The listener should perform their own analysis and form their own conclusions regarding any specific situation. Further, the panelists’ conclusions may be revised without notice, with or without changes in industry information and legal authorities.

Related FORsights