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Volume 9, Issue 2 - August 2016
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Chapter Education 
& Events

Click here   for a list of upcoming Chapter meeting times, locations and education topics.
Joke of the Month

The income tax has made liars out of more Americans than golf.

-- Will Rogers, Actor
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Contact Info:
 
Webwww.csea.org
Phone: 916-366-6646
Fax: 916-366-6674
Email: info@csea.org
  
Are You Doing Enough to Protect Your Clients and Yourself from Data Theft?
The "Protect Your Clients; Protect Yourself" campaign, a joint effort between the IRS, state tax agencies, and the private-sector tax industry, is intended to inform tax professionals about their responsibilities and common sense steps they can take to protect their clients from identity theft and to protect their businesses.

Why should tax preparers take these extra steps? Tax preparers play a critical role in protecting taxpayer data. And as we all know, data breaches are increasing in number and scope, which also increases the potential for stolen identity information to be used to file tax returns. 

As a tax preparer, your business involves maintaining, sharing, transmitting, or storing taxpayer data, and it is your legal responsibility to have safeguards in place to protect client information. Taxpayer data is defined as any information obtained or used in the preparation of a tax return.

D ata security includes all aspects of your business including administrative practices, facility protection, computer security, personnel and information systems.  Protect yourself and your clients by taking these critical steps:
  • Assure that taxpayer data, including data left on hardware and media, is never left unsecured.
  • Securely dispose of taxpayer information.
  • Require strong passwords (numbers, symbols, upper and lowercase) on all computers and tax software programs.
  • Require periodic password changes every 60 to 90 days.
  • Store taxpayer data in secure systems and encrypt information when transmitting across networks.
  • Ensure that email being sent or received, that contains taxpayer data, is encrypted and secure.
  • Make sure paper documents, computer disks, flash drives and other media are kept in a secure location and restrict access to authorized users only.
  • Use caution when allowing or granting remote access to internal networks containing sensitive data.
  • Terminate access to taxpayer information for anyone who is no longer employed by your business.
  • Create security requirements for your entire staff regarding computer information systems, paper records and use of taxpayer data.
  • Provide periodic training to update staff members on any changes and ensure compliance.
  • Protect your facilities from unauthorized access and potential dangers.
  • Create a plan on required steps to notify taxpayers should you be the victim of any data breach or theft.
  • Complete a risk assessment to identify risk and potential impacts of unauthorized access.
  • Write and follow an Information Security plan.
  • Consider performing background checks and screening individuals before granting access to taxpayer information.
Putting these taxpayer data safeguards in place will enhance your clients' customer confidence and trust in your business. For more tips and links to additional information, read IRS  Publication 4557, Safeguarding Taxpayer Data.

Register now to watch the free IRS webinar, Protect your Clients; Protect Yourself from Data Theft, on August 17 at 10:00 a.m. PT, and earn one hour of CE.  Topics include:
  • Security Summit initiatives for FY 2017, including enhancing tax professional awareness of client data safeguards.
  • Legal requirements and best practices to better protect taxpayer information.
  • Emerging scams from an IRS Criminal Investigation expert.
  • Outline steps tax professionals should take if they suffer a loss of taxpayer data.
  • Plus opening remarks from IRS Commissioner John Koskinen and a live Q&A with IRS subject matter experts.
Two Great State Education Events Coming Soon
CSEA is offering two powerful education events in September and October:

California State Tax Agency Representation Workshop (CSTAR) - September 28-30, 2016
CSTAR, which is held at the CSEA State Office and via webinar, presents a concise overview of state tax audit collections and appeals policies and procedures. This is an ideal foundation for you to enhance your skills whether you only do occasional representation with the state or representation is an ongoing part of your practice. Participants will receive tips to improve their understanding and competence in taxpayer representation on the state level as well as learning advanced level representation techniques with the FTB, BOE and EDD through actual case study presentations with tax agency personnel.

State Tax Agencies Liaison Meeting (STALM) - October 21, 2016
STALM is a one-of-a-kind event that takes place at the FTB Headquarters, where you will receive a behind the scenes tour of the facilities. By attending this event, you will be a part of the growing relationship that exists between CSEA, its Members, and the State Tax Agencies that non-Members don't get to experience.

Registration for both events is coming soon, so be sure to save the dates!
Get All Super Seminar Session Materials at a Special Rate
Get Member pricing on CSEA's 2016 Super Seminar USB flash drive, that includes all 24 Super Seminar session materials in a PDF search and print format. This valuable reference material from your
favorite industry experts on timely topics will help power your tax practice, expand your knowledge and arm you with real-world solutions. Click here for a complete list of session titles and speakers included.

Member Pricing: $159
Non-Member Pricing: $183

Click here to order your 2016 Super Seminar USB flash drive now!
Member Resources
Take Advantage of this Free Member Resource
CSEA's exclusive Member benefit of a free subscription to Checkpoint Open Access gives you time-saving tools that are relied upon by thousands of professionals to understand complex information, make informed decisions and work more efficiently - just in time to help with fall filing deadlines!
  • PPC'S Five-Minute Tax Briefings are quick-read summaries of tax developments delivered to your email inbox daily.
  • Primary Law provides access to the primary sources you need and use the most during compliance work, including the Internal Revenue Code and IRS/Treasury Regulations.
  • Form/Line Finders lets you link directly to line-by-line explanations of common forms (and schedules) for individual, partnership, corporate, estate, trust, gift, tax-exempt organization and employee benefit plan returns.
  • Tax and Financial Calculators gives you access over 100 useful calculators from auto to business, credit cards, investments, loans, mortgages, personal finance, retirement and tax, that will provide you with quick answers to challenging questions in an easy to use and understand format for you and your clients.
  • Tax Extenders Legislation lets you easily access information on the more than 50 individual and business tax deductions, tax credits and other tax-saving laws that have been on the books for years but technically are temporary because they have a specific end date, including an overview of key tax breaks that were extended by the new law. 
Click here to begin your free access.

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Timely Information for Members
California Enrolled Agent magazine has engaging stories and timely information to improve your practice and get the most from your CSEA membership. The July/August issue gets you up to speed on:
  • Planning for Incapacity: POAs - Not Just for the Elderly;
  • IRS Trends and Programs;
  • Advocacy - From Your Back Yard to the State Capitol;
  • and much more!
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Get Discounted Pricing on Tax Reference Guides
CSEA Members get discounted rates on these popular products:
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Update Your Member Profile
Now is a great time to review your Member profile and make sure it has your correct contact information. You can also claim up to 19 different areas of tax expertise, so that taxpayers searching for an EA with a particular skill can easily identify you in CSEA's "Find an EA" search tool. To get started, just log in to "My Profile" from the Membership tab on www.csea.org .
 
Don't forget to update your NAEA Member profile as well. Both CSEA and NAEA carry out advertising campaigns throughout the year, directing the public to their "Find an EA" search tools. By updating your profile in both locations, you have a better chance of standing out from the crowd! To update your NAEA profile, just log in to www.naea.org and select "My Account" from the Membership tab, and then click on "Profile."  

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Search for Job Opportunities
Are you a tax professional seeking employment? Are you looking to buy or sell a tax practice? Check out CSEA's  Classified Ads .

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Take Advantage of CSEA's Expert Tax Research Service
Many of your clients have filed for an extension! If you're stumped by a tough tax question, get answers from CSEA's Tax Resource Specialist, Joe Calderaro, EA at Member discounted rates. For details, call the CSEA office at 916-366-6646 or 800-777-2732.

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Get Tax News You Can Use
Click here to get breaking tax news updates from the IRS, FTB, BOE and EDD!
Meet with Your Legislators This Summer
Our state legislators will be on recess beginning September 1, which means they will be in their district offices. This is the perfect time to meet your legislators, and craft a relationship that will benefit the Enrolled Agent profession, enhance your professional clout, and provide an opportunity to make business connections. Legislators serve their constituents - you and the taxpayers you serve are constituents. Make your voices heard. Advocate!

If you are uncomfortable meeting with your legislator or don't know where to start, your CSEA Legislative Affairs Committee has your back. There are materials available to help you connect with your legislators and make district visits simple. Your Legislative Affairs Committee contacts are Chair Vicki Mulak, EA, CFP® and Vice Chair Jenny Wettemann, EA. In addition, there is a wealth of information on the  Advocacy  section of the CSEA website. Still not sure? Ask someone in your Chapter who has already made a visit to accompany you. I'd offer to go with you, but I'm off to meet with my legislator!

Each year CSEA holds Jim Stern Legislative Day, when EAs from all Chapters gather at the State Capitol in Sacramento and carry our message to the legislators. While this day is incredibly important and effective, not everyone can travel to Sacramento to participate. Plus, we need to keep the message about EAs and the issues we face in front of legislators all year round, not just once a year. This is why district legislative visits are so important.

This article was submitted by Joyce Cheng, EA on behalf of the Legislative Affairs Committee.
Hot Topics
Preparer and Taxpayer Concerns Aired at Public Forums
Since February 2016, the National Taxpayer Advocate's office has held eight Public Forums on Taxpayer Needs and Preferences throughout the United States, with several more planned through the end of 2016. Each of the Forums included at least one attorney, CPA or Enrolled Agent who actively represents small businesses and individuals in their community. In the preface to her mid-year report to Congress, National Taxpayer Advocate Nina Olson stated,

"Although the National Taxpayer Advocate has been charged by Congress to be the voice of the taxpayer inside the IRS, what we heard at the Public Forums were the voices of real taxpayers and their real representatives. They are compelling, articulate, and clear about what they need in order to comply with the tax laws."

Some of the concerns addressed by the mid-year report include:
  • Building a Future State before the IRS current state of taxpayer service is fixed.
  • The implications of granting access to taxpayers' online accounts to unregulated return preparers.
  • The increasing workload for VITA sites and the compression of the filing season for professional tax preparers.
Click here to read more, including comments from CSEA Member Jennifer MacMillan, EA, Chair, Internal Revenue Service Advisory Committee (IRSAC).

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New IP PIN Authentication Process
The IRS' " Get an IP PIN " tool now has a stronger authentication process which aligns with federal information security standards to protect taxpayer information. The Identity Protection Personal Identification Number (IP PIN) is given to taxpayers who are confirmed identity theft victims and also to certain taxpayers who opt into the program. The six-digit IP PIN adds an additional layer of protection for the Social Security number.

This multi-factor authentication process is expected to help prevent automated cyber attacks. Taxpayers must verify their identities using a more rigorous Secure Access process that requires them to have immediate access to an email address, account information from a credit card or other loans types and a text-enabled mobile phone. New and returning users must follow the Secure Access steps outlined in  Fact Sheet 2016-20, How to Register for Get Transcript Online Using New Authentication Process .

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Voluntary Certification Program for PEOs
The voluntary certification program for Professional Employer Organizations (PEOs) is now open. A professional employer organization, sometimes referred to as an employee leasing company, is an organization that enters into an agreement with a client to perform some or all of the federal employment tax withholding, reporting, and payment functions related to workers performing services for the client. 
 
To become and remain certified under the new program, PEOs must meet tax status, background, experience, business location, financial reporting, bonding and other requirements. Click here for more information and to begin the application process.

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PATH Act Expanded Due Diligence Requirements
Effective in 2017, the Protecting Americans from Tax Hikes (PATH) Act requires the IRS to hold the refunds on Earned Income Tax Credit (EITC) and the Additional Child Tax Credit (ACTC) related returns until February 15, although the IRS will process returns as usual. 

The PATH Act also extended due diligence to returns claiming the ACTC and the American Opportunity Tax Credit (AOTC). Last year due diligence only applied to the EITC. The $500 penalty for each failure to meet your due diligence for one or more of the credits is now adjusted for inflation. The penalty for tax year 2016 is $510.

Prior to the new law,  Form 8867, Paid Preparer's Due Diligence Checklist was required solely for the EITC and submitted with each return containing the credit. The form now includes CTC/ACTC and AOTC as part of the checklist procedure. The revised Form 8867 is now in draft format and available for public comment.

Visit the EITC Hot Topics for Return Preparers webpage for more information and updates.

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Summer Surge in Robo Phone Scam Calls
The IRS has reported an increase in robo-calls where scammers leave urgent callback requests through the phone telling taxpayers to call back to settle their "tax bill." These fake calls generally claim to be the last warning before legal action is taken. Once the victim calls back, the scammers may threaten to arrest, deport or revoke the driver's license of the victim if they don't agree to pay. Some examples of the varied tactics seen this year are:
  • Demanding payment for a "Federal Student Tax."
  • Demanding immediate tax payment for taxes owed on an iTunes or other type of gift card.
  • Soliciting W-2 information from payroll and human resources professionals.
  • "Verifying" tax return information over the phone.
  • Pretending to be from the tax preparation industry.
If you or your clients receive one of these scam calls, contact the Treasury Inspector General for Tax Administration (TIGTA) to report the call. Use their "IRS Impersonation Scam Reporting" web page or call 800-366-4484. In addition, report the call to the Federal Trade Commission (FTC) via the "FTC Complaint Assistant(remember to add "IRS Telephone Scam" in the notes).

PTIN Compliance and IRS Letters
Return preparer letters are one example of the IRS' efforts to improve the accuracy of tax returns by paid tax return preparers and to heighten awareness of preparer responsibilities. Letters 5292, 4911, and 5538 focus on compliance with PTIN regulations.
 
This letter was sent out to selected tax return preparers when a review found that a number other than a PTIN was being used to identify the tax preparer. 
 
This letter addresses tax preparers that are not in compliance with personal tax responsibilities. Part of the PTIN application and renewal process includes IRS confirmation that personal federal tax filing and payment requirements have been completed. Failure to come into compliance with personal tax responsibilities can result in revocation of your PTIN.
 
This most recent letter by the IRS was sent to tax preparers nationwide in June of 2015, notifying them that although their PTIN has expired, tax returns were subsequently filed using the expired PTIN. In this case, the IRS urges tax preparers to renew their PTIN.  The IRS will be monitoring tax returns filed with expired PTINs and may impose penalties for failure to provide a current PTIN.
 
For more information, please read the letters in their entirety.
 
This article was submitted by Ana Duke, EA on behalf of the Ethics & Professional Conduct Committee. 
Society News
Board Installed, Awards Presented at 2016 Annual Meeting 
The 2016-2017 Officers and Board of Directors were installed during CSEA's 40th Annual Meeting, held July 6-10, 2016 in Ontario. Hosted by Inland Empire Chapter, CSEA Members, family and friends attended social events and Society business meetings. There were also many opportunities for fellowship and relaxation, including the 66ers Baseball Game and All-You-Can-Eat BBQ and the Member Trivia Dinner.

CSEA Members gather together for a commemorative photo of the Trivia Dinner.
 
Many Members attended the General Session on Thursday, July 7. Two CSEA Bylaws amendments were brought before the membership and were passed. The delegates considered the 2016-2017 slate of candidates as presented by the Nominating Committee. With no additional declarations of candidacy, the 2016-2017 Officers were elected as follows:
  • Douglas Pickford, EA, President
  • Torie Charvez, EA, First Vice President
  • Cynthia Leachmoore, EA, Second Vice President
  • Joyce Cheng, EA, Treasurer
  • Susie DiMaggio, EA, Secretary
  • Patricia Kappen, EA, Immediate Past President
At the Town Hall meeting which followed, participants reviewed and discussed the relevance of the major 2013-2017 Strategic Plan Goal Areas.
 
Later that evening during the elegant Grand Banquet Celebration, CSEA recognized those Members who have gone above and beyond in supporting CSEA and its Chapters during the annual Awards Ceremony, which was presided over by Teri Johnson, EA. CSEA congratulates the following award recipients:
  • Booster of the Year: Lucy Ledbetter
  • Membership Growth & Retention: William Stewart, EA
  • Thomas P. Hess: Norman Golden, EA
  • Distinguished Service: Raven Deerwater, EA, PhD
  • Chapter of the Year: Los Angeles Chapter
  • Enrolled Agent of the Year: Teri Johnson, EA
2015-2016 Los Angeles Chapter Director Pamela Price, EA and Director Antonia Enriquez, EA proudly accept the Chapter of the Year Award, as CSEA Membership Manager Carrie Clarke, left, and Awards presenter Teri Johnson, EA look on.

Following the awards presentation, CSEA's 2016-2017 leaders were formally installed by East Bay Chapter Member Lonnie Gary, EA.

2016-2017 Treasurer Joyce Cheng, EA and Second Vice President Cynthia Leachmoore, EA witness the installation of President Doug Pickford, EA by Lonnie Gary, EA.
 
The evening concluded with Members taking to the dance floor and moving to the rhythms of the "Paid 2 Party" DJ.
 
CSEA sincerely thanks Inland Empire Chapter for hosting the 40th Annual Meeting festivities, and for their warm welcome to all Society Members.

Check out CSEA's Facebook page for more great photos of the 40th Annual Meeting!
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Chapter Job-Alike Workshops in Progress
Each year, CSEA hosts   Chapter Job-Alike Workshops that provide an opportunity for both new and continuing Chapter volunteers to share information and ideas with their counterparts from other Chapters, and learn how to most effectively utilize the services and tools provided by the CSEA state office. All workshops are held electronically and everyone is welcome to participate:

Examination Workshop: August 10, 10 - 11:30 a.m.
Membership Workshop: August 11, 10 - 11:30 a.m.
Bylaws Workshop: August 15, 10 - 11:30 a.m.
PIA Workshop: August 15, 2 - 3:30 p.m. 
Education Workshop: August 16, 1 - 3 p.m.

Details about how to participate in each workshop will be available soon on the CSEA Calendar of Events.
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Shop Online with iGive and Support the EA Profession
Now is the perfect time to help support the CSEA Education Foundation by shopping with www.iGive.com, where a portion of your purchase benefits your favorite cause. Do you already belong to iGive? Tell your friends and fellow CSEA Members about iGive, and for every new referral, iGive will contribute $10 to the CSEA Education Foundation. It couldn't be easier - once you've joined iGive, just select the CSEA Education Foundation as your favorite cause. This promotion is good through August 31, 2016, so spread the word now!

The CSEA Education Foundation supports and encourages professionalism among current and future Enrolled Agents by offering education scholarships, and relies solely on contributions to achieve its mission. The next scholarship application deadline is December 31, 2016. Click here to learn more about the CSEA Education Foundation, download a scholarship application or make a donation.
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NAEA Photo Competition
Help NAEA assemble great photos for use in promoting the EA profession. Do you have a photo from a CSEA or Chapter event, IRS Tax Forum or the NAEA National Conference illustrating that it's a great day to be an EA? If so, send it by August 31 to Gigi Jarvis, NAEA Senior Director of Communications and Marketing at gjarvis@naea.org. The winner will receive a photo frame! Please note that contestants must be willing to allow NAEA unlimited use of the photo image.
TaxNewsTax News You Can Use!
IRS News:

PATH Act ITIN Changes -  The Protecting Americans from Tax Hikes (PATH) Act includes changes to the IRS Individual Taxpayer Identification Number (ITIN) program, including requiring some taxpayers to renew their ITINs beginning in October. In addition, ITINs that have not been used on a federal tax return at least once in the last three years will no longer be valid for use on a tax return unless renewed by the taxpayer. Also, ITINs issued prior to 2013 that have been used on a federal tax return in the last three years will need to be renewed starting this fall, and the IRS is putting in place a rolling renewal schedule. Click here for details.

501(c)4 Organizations -  Section 506 has been added to the Internal Revenue Code requiring an organization to notify the IRS of its intent to operate as a section 501(c)(4) organization. The IRS has developed Form 8976, Notice of Intent to Operate Under Section 501(c)(4), which organizations should use to provide this notification, and which must be submitted electronically. Click here for details.

New FATCA FAQ -  The IRS has published a new FAQ to the Foreign Account Tax Compliance Act (FATCA) FAQs General Compliance section regarding submission of Form 8809-I, Application for Extension of Time To File FATCA Form 8966, when an additional 90-day extension to file Form 8966, FATCA Report has been requested.

New TIGTA Brochure - The Treasury Inspector General for Tax Administration (TIGTA) has a new informational brochure providing current information about TIGTA's three major program offices: the Office of Audit, the Office of Investigations, and the Office of Inspections and Evaluations. Each section provides an overview of TIGTA's oversight of the IRS. 

Aliso Canyon Relocation Reimbursement -  As part of a relocation plan for residents living near the Southern California Gas (SoCal Gas) Company's Aliso Canyon storage field who were affected by a natural gas leak, SoCal Gas was required to pay on behalf of, or reimburse, affected residents for certain relocation and cleaning expenses. Announcement 2016-25 informs affected area residents that the IRS will not assert that these amounts are includable in gross income.

Foreign Earned Income for U.S. Overseas Taxpayers Webinar - The IRS webinar,  Foreign Earned Income for U.S. Overseas Taxpayers, is now available on demand..

IRS 101 Webinars for Tax Professionals The IRS Stakeholder Liaison Western Area is offering a series of webinars, IRS 101. Register now to learn valuable information as you earn CE credit.
Click here to download the flyer for additional details. Please email sl.western@irs.gov with any questions.

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FTB News: 

FTB Tax News - The August 2016 issue of TaxNews, FTB's monthly online publication, includes information about:
  • New identity theft hotline
  • FTB interest rate increase
  • "Inside FTB - Dissolution/Cancellation Process Team"
  • Outreach letters to taxpayers to claim the CA Earned Income Tax Credit (EITC)
Click here to subscribe to Tax News and news flashes to automatically receive time-sensitive information via email.

California Competes Tax Credit August 22 Application Deadline  - The California Competes Tax Credit is available to businesses that relocate to California or stay and expand in California. For fiscal year 2016/2017, $243.3 million of the California Competes Tax Credits will be available for allocation during three application periods. The Governor's Office of Business and Economic Development (GO-Biz) is hosting over 30 informational workshops on applying for the credit.

During the first application period, $75 million will be available for allocation. Applications for the credit will be accepted at through August 22, 2016. Click here for more information and to apply for the California Competes Tax Credit.

2015 Filing Season Update - Did you know that the FTB added approximately 250,000 new MyFTB registrants during the 2015 filing season and that MyFTB accounts were accessed 875,000 times? Click here for more details.

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BOE News: 

Bank Change for EFT Program - Beginning July 1, 2016, EFT payments for the BOE changed from Citibank to MUFG Union Bank, N.A. (Union Bank). Click here for new bank and payment processer details. 

Emergency Tax Relief for Business Owners Affected by Wildfires  Business owners and tax and feepayers affected by the Sand Fire in Los Angeles County and the Soberanes Fire in Monterey County may request extensions to file their returns, and ask for relief from penalties and/or interest for some taxes and fees or to replace copies of records lost or damaged. Click here for details.

Emergency tax or fee relief is available from the BOE for business owners and tax and feepayers directly affected by disasters declared as state of emergencies. Acting Governor Tom Torlakson issued an emergency proclamation for Los Angeles and Monterey counties on Tuesday, July 26 due to the effects of the Sand and Soberanes Fires.

Tax Guide for Medical Cannabis Businesses - BOE's Tax Guide for Medical Cannabis Businesses provides general guidance regarding issues relating to the sales and use tax laws and other programs administered by BOE which may affect the medical cannabis industry.Publication 557, Tax Help for the Cannabis Industry is another convenient resource.

Sign Up for BOE UpdatesClick here to subscribe to email lists and receive the latest news, including newsletters, tax and fee updates, public meeting agendas and other announcements.
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EDD News: 

California Employer Newsletter Now Available - The 2016 second quarter California Employer newsletter is now available online, with information about the phase-in of m andatory e-file and e-pay, updated e-Services for Business tutorials, the c hange of depository bank for the Electronic Funds Transfer (EFT) program , and California's unclaimed property law.

Payroll Tax Relief for Los Angeles and Monterey Counties - Employers in Los Angeles County directly affected by the Sand Fire and those in Monterey County directly affected by the Soberanes Fire may request up to a 60-day extension of time from the EDD to file their state payroll reports and/or deposit state payroll taxes without penalty or interest. For more information, visit the EDD's Emergency and Disaster Assistance for Employers web page, or contact EDD's Taxpayer Assistance Center at 888-745-3886.
CSEA Events Calendar

CSEA State Office, Sacramento, CA

FTB Headquarters, Sacramento, CA

October 22-23, 2016 - CSEA Board and Committee Meetings
Holiday Inn, Sacramento, CA

November 1, 2016 - CSEA Chapter Connection Meeting 
10 a.m. via WebEx webinar


 
Click here for the CSEA Calendar of Events.

CSEA welcomes your feedback on the CSEA News & Events. Send your comments to