February 2008 | Los Angeles Chapter Bulletin

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CalCPA NEWS

Introducing
the Financial
Leadership Forum

The Forum, a new program of CalCPA and the California CPA Education Foundation, will enhance the support provided to finance executives and business leaders with tailored resources and programs.
   Membership is an exclusive benefit for business and finance professionals who are CalCPA members.
   Find your path to success in business. Check out the Financial Leadership Forum.

 

CHAPTER EVENTS

Estate Planning Committee: Annual IRS Meeting

At our February meeting, Ann C. Harper, will speak on recent developments with the IRS, items of interest to estate and gift practitioners, and she will answer questions that practitioners have sent.  Nelson Handy will be accepting additional questions only until January 15.  Please email him directly at nhandy@luce.com.

Speakers: Ann C. Harper
Date: Wednesday, Feb. 13
Time: 11:30 a.m.–2 p.m.
Location: Olympic Collection; 11301 Olympic Blvd.; West Los Angeles
Cost: By Feb. 8: $30/members; $40/nonmembers (after Feb. 8 add $10)
CPE: 2 hours
RSVP: Online

Annual YEP Bowling Night

Date: Friday, April 18
Location: Jillian’s, Universal CityWalk
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PRESIDENT’S MESSAGE

Do the Right Thing

By Vee Cristobal, CPA

I was one of 10 siblings growing up. My parents did not have enough eyes, ears or hands to keep track of all of us all of the time. So they instilled a mantra: Do the right thing. My mother knew we would be exposed to new situations each day without the benefit of her guidance. She taught us that whenever we were in a new situation, we should ask ourselves four questions: Is this fair? Is this just? Would my behavior be the same even if someone were watching me? Am I doing the right thing?
   It was a simple formula. If the answer was yes to each of these questions, we were probably doing the right thing. If the answer was no, we needed to change our behavior.
   Simple as it is to ask those questions, the answers are sometimes complicated.
   Let’s start by looking at ethics and morality. According to American Heritage College Dictionary, ethics is the quality of being in accordance with standards of conduct; morality is the quality of conforming to standards of conduct. It sounds simple. Indeed, ethics and morality can be boiled down to a set of four questions: Is this fair? Is this just? Would my behavior be the same even if someone were watching me? Am I doing the right thing?
   As a CalCPA member and president of the Los Angeles Chapter, I try to ask myself these questions daily. They remind me to act with integrity even when no one else is watching. When I first took the professional conduct and ethics test, the answers seemed simple. Now, as I have become a seasoned CPA, watching the regulations and governing bodies shift and adopt new standards, I can see that doing the right thing is not always easy—even for ethical and moral practitioners.
   Depending on who licenses you, where you practice and the professional organizations to which you belong, the penalties and standards vary. It is tough to define the “right thing” when the regulatory requirements are always shifting. Circular 230 has different standards than the AICPA, whose sanctioning standards can change at the drop of a hat if the IRS imposes disciplinary action.
   Aggravating matters, CPAs must balance the client’s and the government’s interests. How can the client’s interests be served when the long arm of the government is threatening a sanction? Beginning this tax season, tax practitioners have a higher standard than clients, sometimes putting the practitioner at odds with the client.
   With all these rules and regulations sometimes ramming against your client’s interests, the best thing you can do is remember that the new tax season puts you in a new situation that requires you stop and ask: Am I doing the right thing? CPAs need to understand the latest rules so they can evaluate their own integrity, morality and code of ethics. When asking themselves whether something is right, practitioners should at least know what the rules of the game are.
   Consider Saly. Everyone has a client named Sally. Even when she has no receipts, Sally instructs her CPA to do it the same as last year with respect to her charitable deductions. When preparing Sally’s tax returns this year, stop and ask yourself, “Is this right?” Remember the new penalties. What would happen if you were caught? What if someone where looking over your shoulder? Would you be doing the right thing?
   We all know that we must earn the trust and confidence of our clients and the public. To become certified, we must pass the professional conduct and ethics test, which we must then renew every six years. Though some CPAs grumble at the bureaucracy, I favor the requirement, as it serves as a reminder to hold myself to the highest professional standards. The renewal requirement allows CPAs to reflect on their reputation, and it serves as a reminder to continue pursuing a reputation of high integrity, ethics and morality.
   Circular 230 revisions also serve as a reminder of our dedication to professional ethics. Make sure that you read and review the guidelines. Don’t just skim them; chew them up and digest them. Also consider reviewing your engagement letter and considering the implications of Circular 230.
   A reminder of the Circular 230 best practices guidelines:

• The terms of your engagement letter should be clearly communicated with your client. Specifically, be sure to communicate the purpose of the engagement, use of your advice and the clear understanding with the client regarding the form and scope of the advice or assistance that you will render.
• Establish facts and determine which are relevant. Evaluate the reasonableness of any assumptions or representations related to the applicable law to the relevant facts and arrive at a conclusion supported by the law and the facts.
• Advise your clients regarding the importance of the conclusions reached. For example, let your clients know when they might avoid accuracy-related penalties under the IRS Code if they act in reliance on your advice.

Act fairly and with integrity. In other words: Do the right thing.
   Because this is a new year with new circumstances, tax season will be different. Our questionnaire now includes a list of questions that reminds clients to make sure that receipts and documentations are available to substantiate their deductions. This year, my firm’s goal is to complete by April 7 all taxes that we need to file by April 15. The rest will be placed on extension by April 8.
   Our chapter has a different goal to which I’m equally committed: Mission 10,000. I’m counting on you to do the right thing!
   Wishing you a penalty-free, stress-free, enjoyable and peaceful tax season.
   If you have any comments or suggestions, please e-mail me.
—Vee Cristobal, CPA
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CHAPTER NEWS

New Members

On behalf of the Los Angeles Chapter’s officers, directors and members, we extend our warmest of welcomes to our new members: Jeffrey Barnett, Chingtang Chang, Sonya Choy... [see all new members]

Volunteers Needed to Provide Tax Service

The chapter’s Taxation Committee needs volunteers for its free income tax service, which consist of preparing 2007 individual tax returns for low-income individuals.
Dates: Tuesday nights, Feb. 5, 12, 19, 26 and March 4 and 11
Location: Eastmont Community Center; 701 S. Hoefner Ave.; Los Angeles
Time: 7–9 p.m.
Info: Lanyce Mills, (562) 423-8777

Chapter Member Named to IRS Committee

Chapter member Brian Yacker, CPA, JD, has been selected by the IRS as one of 20 new members of the Information Reporting Program Advisory Committee, which provides an organized public forum for discussion of relevant tax administration issues between IRS officials and representatives of the public.
   Yacker is a partner with Green Hasson & Janks in Los Angeles.

Power by Numbers Pictures and Race Results

Check out the race results and photos online.
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CalCPA NEWS

Recognizing Achievements in Improving Financial Literacy for Youth

The California Jump$tart Coalition is looking for outstanding teachers, other educators and community leaders to honor their efforts in expanding personal finance education. Honorees will be recognized at the California Summit on Financial Literacy April 23 with awards and contributions to their organizations, including $1,000 educator awards sponsored by Citi.
   If you know of individuals who have made contributions to financial literacy among California's youth, please contact California Jump$tart Coalition Awards Committee members Karen Anderson or Norm Greenbaum by March 17.
   Reserve your place today at the Summit! Register online.

CCH Discounts

CalCPA members receive a 40 percent discount on CCH’s U.S. Master Tax Guide and the Guidebook to California Taxes.
   Plus: CalCPA members save 30 percent on all tax and accounting references from CCH. Choose from the more than 175 authoritative CCH titles that provide up-to-date guidance on federal and state taxation, legislation, tax prep, accounting, auditing, finance and estate planning.
   Go online to check out this benefit.
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RESOURCES:

Calendars:
Area Discussion Group
Technical Committee Calendars

Los Angeles Chapter Leadership

California CPA Education Foundation CPE in the Los Angeles Chapter