Renew today and continue to take advantage of the advocacy for the profession, connections with your professional peers and discounted CPE. Renew by May 1 and receive a free four-hour ethics course.

CAMICO Insurance Tip of the Month: Requesting Payment for Legal Costs

CPA firms often ask whether they can request payment from the client for copying costs related to responding to a document request/subpoena, or costs related to a CPA\’92s appearance at a deposition or trial.

If the firm wants to be in a good position to request payment, it should include an appropriate provision in the engagement letter. The provision should stipulate that the client is responsible for the costs incurred by the firm as a result of being subpoenaed or receiving a document request related to any services provided to the client by the CPA, other than matters for which the CPA is named as a defendant by the client. The same is true for the CPA\’92s appearance at a deposition or trial. The firm may state in the engagement letter that the client is responsible for paying the current hourly rate for the CPA\’92s appearance or testimony.

CAMICO provides engagement and disengagement letter review services to its policyholders who are interested in including these and other provisions in their letters. For more information about CPA firm insurance issues, call CAMICO at (800) 652-1772 or go online.

CalCPA Service Award Nominations Being Accepted

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

Nonwage Withholding in My FTB

In the Tax Preparer Tour of MyFTB, the FTB shared that taxpayers and their representatives can access a variety of account information in MyFTB including estimated payments and credits such as nonwage withholding.

Potentially 16 million individuals could register for a MyFTB account. Of these 16 million individuals, the FTB has identified up to 131,000 individuals whose MyFTB accounts will not be viewable because they have multiple nonwage withholding credits. The FTB is continuing to make enhancements to the system so all taxpayers with nonwage withholding credits will be able to view their accounts on MyFTB by early summer.

If you\’92re unable to access your client\’92s MyFTB account information, contact the Tax Practitioner Hotline at (916) 845-7057.

New Guidance on Lease Accounting

The Financial Accounting Standards Board issued an Accounting Standards Update (ASU) intended to improve financial reporting about leasing transactions. The ASU affects all companies and other organizations that lease assets such as real estate, airplanes and manufacturing equipment. The ASU will require organizations that lease assets\’97referred to as \’93lessees\’94\’97to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases.

Under the new guidance, a lessee will be required to recognize assets and liabilities for leases with lease terms of more than 12 months. Consistent with Generally Accepted Accounting Principles, the recognition, measurement and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as a finance or operating lease. However, unlike current GAAP\’97which requires only capital leases to be recognized on the balance sheet\’97the new ASU will require both types of leases to be recognized on the balance sheet.

IRS Resources @ Your Fingertips: EITC Due Diligence

The IRS has introduced a set of tools\’97IRS Resources @ Your Fingertips\’97to provide practitioners with access to specific information and support their day-to-day work.

The first in the series is tailored to EITC Due Diligence, and includes information on due diligence requirements, a toolkit, answers to FAQs and professional letters, among other resources.

If you have any questions about the IRS policies, practices and procedures associated with EITC Due Diligence, email the EITC Program Office. Please do not send any personally identifiable information about yourself or your clients.