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Star Catcher—CalCPA Service Awards Taking Nominations

January 20th, 2015

The nomination period for CalCPA’s annual service awards is open through March 31. 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.

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

CAMICO Tip of the Month: Advising Both Parties in a Negotiation/Transaction

January 20th, 2015

It’s often not advisable to help clients resolve disputes. Any scenarios that can create opposing or disappointed factions are potential trouble. For instance, friendly divorcing couples don’t always stay friendly, and they may blame the CPA when they’re disappointed with an outcome. The same is true with business partners. Advice is sometimes perceived as favoring one partner to the detriment of another.

Divorcing spouses present a potential conflict of interest when they ask their CPA to provide advice and services to both. Although representing both spouses is not prohibited, it’s usually not a good idea. The CPA should also avoid complacency regarding disclosure—informing each party of your conflict of interest—as a form of protection. It could be later argued the client’s consent was not “informed” by a third party such as an attorney. It may be appropriate to disengage from one or both parties, even though that might create additional challenges.

For more information about CPA firm insurance issues, call CAMICO at 1.800.652.1772 or go online.

Self-employed Insurance Deduction Under the Affordable Care Act

January 20th, 2015

For purposes of the self-employed health insurance deduction, California conforms to the federal deduction for self-employed health insurance premiums, including the amount deductible for self-employed taxpayers who are allowed the IRC Sec. 36B refundable credit for coverage under a qualified health plan. California also conforms to the federal amount deductible on Schedule A for any out-of-pocket costs for health insurance paid or incurred by individuals who are allowed the IRC Sec. 36B refundable credit.

Due to the complexity of the Affordable Care Act, some initial draft forms and comments by the FTB indicated that the amount of the federal credit could be deducted from California AGI. However, after a complete review of the new federal law, the FTB has determined there is no difference between federal and state law with respect to the amount that self-employed taxpayers may deduct for health insurance premiums, including taxpayers who are allowed the IRC Sec. 36B credit.

Learn more.

IRS Report: Taxpayer Service Levels to Fall to New Lows

January 20th, 2015

National Taxpayer Advocate Nina E. Olson released her 2014 annual report to Congress, which expresses concern that taxpayers this year are likely to receive the worst levels of taxpayer service since at least 2001 when the IRS implemented its current performance measures. In the preface to the report, Olson emphasizes four points:

  • The budget environment of the last five years has brought about a devastating erosion of taxpayer service, harming taxpayers individually and collectively;
  • The lack of effective administrative and congressional oversight, in conjunction with the failure to pass taxpayer rights legislation, has eroded taxpayer protections enacted 16 or more years ago;
  • The combined effect of these trends is reshaping U.S. tax administration in ways that are not positive for future tax compliance or for public trust in the fairness of the tax system; and
  • This downward slide can be addressed if Congress makes an investment in the IRS and holds it accountable for how it applies that investment.

Reminder: New Business Entity E-file Requirement

January 20th, 2015

The new business entity e-file requirement law (AB 2754) became effective Jan. 1. Any business entity that files an original or amended tax return prepared using tax preparation software is required to electronically file their return with the FTB, unless a waiver is granted. The FTB may grant a waiver if the business entity is unable to comply with the requirements due to, but not limited to:

  • Technology constraints: The inability of the tax preparation software used by a taxpayer to electronically file the tax return due to software limitations or the complex nature of the tax return.
  • Where compliance would result in undue financial burden.
  • Circumstances that constitute reasonable cause and not willful neglect.

Upcoming Foundation Events: Advanced Planning Institute Jan. 29-30

January 20th, 2015

CPA Day at the Capitol: Help the Profession Be Heard

January 6th, 2015

Jan. 21 will be the next CPA Day in Sacramento, and the time has come to register and make arrangements to come represent yourself and your profession at the Capitol. Last year’s CPA Day was a big success. The halls of the Capitol were filled with CalCPA members discussing the importance of the profession in California, how CPAs can be resources for legislators and their constituents, and the important legislative issues that emerge each year.

Please join CalCPA this year to ensure that your voice and the voice of the profession is heard by all the legislators. Register for CPA Day 2015 or learn more.

New 2015 Laws Impacting the Accounting Profession

January 6th, 2015

SB 1467 took effect Jan. 1. Some of the impacts it has on the accounting profession include:

  • Academia: SB 1467 authorizes the California Board of Accountancy, by regulation, to allow experience in academia to qualify as general accounting experience for the one-year, general accounting experience requirement necessary for CPA licensure.
  • E-mail: SB 1467 authorizes the CBA to collect, but not require, a valid email address at the time of application for, or renewal of, a CPA license. By law, these email addresses shall not be considered public records and the new law would prohibit these email addresses from being disclosed pursuant to specified provisions of law, unless required pursuant to a court order.
  • Mobility (Practice Privilege): SB 1467 requires that an individual who holds and is exercising a practice privilege in California must notify the CBA of any pending criminal charges other than a minor traffic violation, in any jurisdiction, in writing within 30 days of the date the individual has knowledge of those charges.

Other laws affecting 2015 include:

  • AB 1702: Prohibits a delay in processing of an application or a denial of a license of an individual who has satisfied any of the requirements needed to obtain a license while incarcerated, who applies for that license upon release from incarceration, and who is otherwise eligible for the license on the sole basis that some or all of the licensure requirements were completed while the individual was incarcerated.
  • AB 2720: Requires the CBA and other boards, under the Bagley-Keene Open Meeting Act, to publicly report any action taken, as well as the vote or abstention on that action by each member present for the action at a board meeting.
  • AB 2396: Prohibits a board within the Department of Consumer Affairs from denying a license based solely on a conviction that has been dismissed pursuant to certain penal code provisions. The bill would require an applicant who has a conviction that has been dismissed pursuant to those provisions to provide proof of the dismissal.

 

CalCPA Committees: Connect | Share | Grow

January 6th, 2015

Use your talents at the statewide level—serve on our CalCPA committees for 2015-16. From estate planning to technology, and from personal financial planning to taxation, there’s a committee meeting your interests and expertise. Work with your peers on projects that increase members’ technical knowledge, enhance the profession’s image and draw the best and brightest into accounting—all while you build leadership skills and make valuable contacts.

The application deadline is Jan. 15. Committee appointments will be made later that month and the committee term is May 1-April 30. And we’ve redesigned the process to make it easier and faster for you.

Please note: If you serve on a state committee and would like to continue, reapplication is necessary.

Accounting for Identifiable, Intangible Assets in a Business Combination

January 6th, 2015

The Financial Accounting Standards Board issued guidance intended to improve private company financial reporting regarding accounting for identifiable intangible assets in a business combination. FASB Accounting Standards Update No. 2014-18, Business Combinations (Topic 805): Accounting for Identifiable Intangible Assets in a Business Combination, is based on a consensus reached by the Private Company Council. The new guidance allows a private company to elect an accounting alternative for the recognition of certain intangible assets acquired in a business combination. In this alternative, a private company would no longer recognize the following separate from goodwill:

  1. Customer-related intangible assets unless they are capable of being sold or licensed independently from the other assets of the business, and
  2. Noncompetition agreements.

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