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Make a CalCPA Service Award Nomination

December 16th, 2014

The nomination period for CalCPA’s annual service awards is open through April. You can download forms to nominate an outstanding member or firm for the:

  • Public Service Award, which is given to a CPA who has been especially active in service to the profession and community.
  • Public Service Award for Firms, which aims to recognize firms for their public service contributions on the local, state or national level.
  • Distinguished Service Award, which is granted either on the basis of long and distinguished service or for some singular act resulting in extraordinary contribution to the profession, CalCPA and/or the community.

Candidates must be a CalCPA member in good standing and has met at least one of the following:

  • Participated in charitable, civic or religious activities that have had a long-term, significant effect on the community;
  • Been responsible for a public service project that has a positive, significant impact on the community;
  • Served in a notable volunteer capacity in local, state or national government; or
  • Served in an outstanding manner as an appointed or selected official at the local, state or national level.

The AICPA also recognizes our winners, who automatically become eligible for consideration for the AICPA Public Service Award.

The deadline for application submittal is March 31.

CAMICO Insurance Tip of the Month: Financial Interests, Accounts or Assets in Foreign Countries

December 16th, 2014

Know your clients well and note any red flags in their background, wealth status and other information indicating they may have financial interests located in other countries. Be sure to include a question pertaining to the Report of Foreign Bank Accounts (FBAR) and Foreign Account Tax Compliance Act (FATCA) in your tax planner, and make inquiries about information not initially provided to you regarding other sources of income. This may help you avoid disruptive disputes with your client and potential liability for tax penalties.

A taxpayer’s obligations to file FATCA and FBAR forms are distinct from each other and may require the same taxpayer to file both Form 8938 under FATCA rules as well as FinCEN Form 114 with the Financial Crimes Enforcement Network for FBARs. Taxpayers who have not filed FATCA or FBAR forms may become subject to the substantial financial and criminal penalties under both measures.

For more information about CPA firm insurance issues, call CAMICO at (800) 652-1772 or go online.

New Standard Mileage Rates Released

December 16th, 2014

The IRS issued the 2015 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes. Beginning Jan. 1, the standard mileage rates for the use of a car, van, pickup or panel truck will be:

  • 57.5 cents per mile for business miles driven, up from 56 cents in 2014.
  • 23 cents per mile driven for medical or moving purposes, down half a cent from 2014.
  • 14 cents per mile driven in service of charitable organizations.

FASB Proposal: Disclosures About Investments in Other Investment Companies

December 16th, 2014

During deliberations as part of the investment companies project, the FASB discussed concerns about the transparency of information about an investee fund to investors in a reporting investment company. As part of that project, the FASB initially decided that an investment company should consolidate investments in other investment companies where it has a controlling financial interest in a fund-of-funds structure.

After considering stakeholder feedback, the FASB decided not to retain the consolidation requirement and, instead, to increase transparency into investee funds by requiring certain disclosures about an investment company’s investments in other investment companies. In coming to that conclusion, the FASB decided not to require broad disclosures about investments in another investment company. Instead, the FASB focused more narrowly on improving existing disclosure requirements in generally accepted accounting principles.

The guidance in a recently proposed update clarifies the scope of disclosure requirements in current GAAP related to investments in other investment companies.

The FASB is requesting comments on the proposal by Feb. 17.

Post-appeals Mediation for Offers in Compromise Available

December 16th, 2014

The IRS is releasing a revenue procedure providing rules for the nationwide roll out of post-Appeals Mediation for Offer in Compromise and Trust Fund Recovery Penalty cases. Post-appeals mediation is available to help resolve disputes after unsuccessful negotiations with the IRS Office of Appeals and is available for both factual and legal issues.

The mediator’s role is to assist the parties in reaching their own agreement collaboratively, but the mediator does not have settlement authority over any issue. Appeals officers trained in mediation techniques will serve as mediators at no cost to taxpayers. Taxpayers also have the option of paying for a qualified, non-IRS co-mediator.

Upcoming Foundation Events: Federal and California Tax Update for Individuals

December 16th, 2014

New College Access Tax Credit

December 2nd, 2014

The College Access Tax Credit (CATC) is a new state tax credit for taxpayers who make authorized contributions of money to the CATC Fund. Senate Bill 798, which the governor recently signed, established the credit for both personal and corporate income taxes under California Revenue and Taxation Code Sections 17053.86 and 23686.

The CATC is available for taxable years 2014-16. The total amount that CEFA can allocate for the CATC each year is $500 million. To claim the credit, a taxpayer must make a contribution to the CATC Fund administered by the California Educational Facilities Authority (CEFA). Taxpayers must receive a certificate from the CEFA documenting the amount of the contribution and the credit amount in order to claim the credit on their state income tax return. The amount of the credit allocated and certified by the CEFA for a taxpayer for each taxable year is:

  • 60 percent of the amount contributed by the taxpayer for the 2014 taxable year.
  • 55 percent of the amount contributed by the taxpayer for the 2015 taxable year.
  • 50 percent of the amount contributed by the taxpayer for the 2016 taxable year.

IRS Affordable Care Act Info Center

December 2nd, 2014

Tax professionals can find answers and updates related to the Affordable Care Act by visiting the IRS information center. There, you’ll find answers for individual tax clients,  business clients and payroll clients.

GASB Views on Reporting Governments’ Fiduciary Responsibilities

December 2nd, 2014

The Governmental Accounting Standards Board issued for public comment, Financial Reporting for Fiduciary Responsibilities. The views proposed by the board, if approved, would enhance reporting of fiduciary activities by:

  • Defining when a government has a fiduciary responsibility and, therefore, is required to present fiduciary fund financial statements;
  • Clarifying financial reporting requirements for fiduciary responsibilities, including a requirement for business-type activities that serve in a fiduciary capacity; and
  • Introducing the use of a financial statement that reports the inflows and outflows of resources for all fiduciary fund types.

‘Tis the Season for Tax Fraud

December 2nd, 2014

With a new filing season fast approaching, an ongoing challenge faced is tax fraud. One aspect of tax fraud involves personal income tax returns, in which thieves file using highly suspicious W-2 forms and valid taxpayer information to obtain erroneous refund claims. This is also known as identity theft refund fraud. As tax professionals, you can help the FTB by being proactive when you suspect there may be something fishy about the return. Things to consider include:

  • During your client interview process, be aware if your client can’t answer simple questions.
  • Scrutinize your client(s) W-2(s), look to see if all pertinent information (Social Security number, federal/state employee identification numbers, wage and withhold information, etc.) is available.
  • If your client receives form FTB 3904, Request to Confirm Tax Return Filing, make sure they act quickly. The FTB mails this notice to contact potential victims of identity theft when we discover highly suspicious tax returns.

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