A recently introduced bill, SB 640 (Hertzberg), proposes to enact a sales tax on services—including those provided by CPAs. While the bill does not articulate how such a complex shift in the tax burden would be accomplished, the introduction of this legislation keeps the issue on the radar within the public policy arena—particularly as tax reform conversations heat up.

The grassroots efforts of CalCPA members continue to be instrumental in making sure that CPAs are not unfairly treated or harmed should a tax on services proposal take a more substantive form. At CPA Day, CalCPA members reiterated concerns with sales tax on services, including increased cost to comply with the law, competitive disadvantage for California roviders, negative impact on small business and costly administrative burden, among other major challenges with imposing a tax on accounting services.

CalCPA will continue to be active in communicating to members of the Legislature the significant concerns with this proposal.

For further information, stay tuned for more updates from our government relations team or contact them via email or phone, (916) 441-5351.

Last Chance: CalCPA Service Awards Nominations Close March 31

Before March is done, nominate an outstanding member or firm for:

  • Public Service Award: Given to a CPA who has been especially active in service to the profession and community.
  • Public Service Award for Firms: Aims to recognize firms for their public service contributions on the local, state or national level.
  • Distinguished Service Award: 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.

Renew Your Membership, Win a Prize

Renew your membership by enrolling in auto renew by May 1 and be entered in a prize drawing. Members have a chance to win either a VPE 40 or an Amazon Echo. The prize drawing is subject to terms and conditions.

How it works: During the start of each membership term in May, we’ll automatically charge your credit card. After your annual membership dues payment has been processed, we’ll email you a confirmation receipt—it’s that easy.

CalCPA’s Committee on Taxation Sends Comment Letter to IRS

The CalCPA Committee on Taxation recently joined the Texas Society of CPAs and the Tax Section of the Texas Bar Association in sending a comment letter to the IRS that raises concerns California CPAs have with recent revisions to the IRS Internal Revenue Manual that limits the availability of in-person appeals conferences between a taxpayer and the IRS.

While the committee supports the IRS’ efforts to implement new technologies to reduce costs and increase efficiencies, changes should enhance the taxpayer experience—not come at the expense of taxpayer appeal rights. Face-to-face communications have been critical in resolving matters in appeals, particularly in complex cases or those where supporting documentation may not be easily shared through technology.

The subjective nature of the new guidelines for when an in-person appeals meeting will be granted could be applied differently by different appeals agents. Some may allow for an in-person meeting, while other may not. Extended discussions could focus on the merit of an in-person appeals conference rather than addressing the case at hand. Inconsistent interpretation and application of the guidelines can undermine taxpayer confidence in a fair and equitable appeals process.

Instead of advancing the appeals process, limitations on in-person meetings could reduce the ability of taxpayers and the IRS to clearly communicate their respective positions and will likely extend and complicate the resolution of the issues.

Face-to-face appeals conferences are important for California CPAs and the taxpayers they represent. The CalCPA COT encouraged the IRS to not overly restrict the availability of in-person appeals conferences.


California Competes Tax Credit Deadline Approaches

The California Competes Tax Credit is an income or franchise tax credit available to businesses that relocate to California or stay and expand in California. Tax credit agreements are negotiated by the Governor’s Office of Business and Economic Development (GO-Biz) and approved by the statutorily created California Competes Tax Credit Committee.

For Fiscal Year 2016-17, $243.3 million of the California Competes Tax Credit will be available for allocation during three application periods. For the third application period, $68.3 million plus any remaining unallocated amounts from the previous application periods will be available for allocation. Applications for the credit will be accepted at calcompetes.ca.gov until March 27. 

IRS Warns of Last-minute Email Scams

The IRS warned tax professionals of last-minute phishing email scams, especially those requesting last-minute deposit changes for refunds or account updates. As the 2017 tax filing season winds down to the April 18 deadline, tax-related scams of various sorts are at their peak. The IRS urged both tax professionals and taxpayers to be on guard against suspicious activity.

For example, one new scam poses as taxpayers asking their tax preparer to make a last-minute change to their refund destination, often to a prepaid debit card. The IRS urges tax preparers to verbally reconfirm information with the client should they receive last-minute email request to change an address or direct deposit account for refunds. The IRS also suggests that tax professionals change and strengthen their own email passwords to better protect their email accounts used to exchange sensitive data with clients.