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Key Political and Policy Trends Taking Shape

From the governor’s race to a wealth tax proposal, our recent Capitol Beat covered the trends shaping California's policies—and what they mean for CPAs, their clients and business professionals.

Part 1: What California CPAs Need to Know about the Kwong Case

Part 1 of this two-part series explores how a federal court may have reopened refund positions many practitioners already wrote off. The key is understanding what the cases held—and what they didn't.

Part 2: A Practical Kwong Workflow for California CPAs

Part 1 of this two-part series covered what the Kwong and Abdo cases held—and what they didn't. Now here's a workflow that turns Kwong into a client-service project—from pulling the penalty report to filing a defensible protective claim before July 10, 2026.

Supporting Aspiring CPAs This Graduation Season

The future of the profession starts with today’s students. Discover how CalCPA is helping students turn career goals into reality through financial support, practical guidance and experiences that connect them with accounting professionals

Golden State wisdom straight from the experts

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Looking for an old article or a past issue from California CPA magazine? You're in the right spot!

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CPAs: Making Sense of What Comes Next campaign

SACRAMENTO, CA and PHILADELPHIA, PA | JUNE 16, 2026

 — The California Society of CPAs (CalCPA) and nationally recognized Forbes columnist, keynote speaker and small-business authority Gene Marks, CPA announced a strategic partnership that will bring Marks’ voice to today’s trending business and technology topics.

Building on his longstanding relationship with CalCPA, Marks will provide a steady stream of exclusive insights and analysis to help CalCPA members and the public stay ahead of the trends that are reshaping the accounting profession and the businesses they serve.

A nationally recognized columnist, author, CPA and business owner, Marks is a Forbes technology columnist, frequent media commentator and sought-after keynote speaker who helps business leaders understand the economic, workplace, policy and technology developments impacting organizations today.

“CPAs have become indispensable strategic advisers to their clients, particularly as businesses grapple with the opportunities and challenges created by AI, workforce changes, economic uncertainty and evolving technology,” said Denise LeDuc Froemming, president and CEO of CalCPA. “Gene has a unique ability to translate complex trends into practical, actionable insights. This partnership will provide our members with timely information they can use to strengthen their firms, better advise clients and identify new opportunities for growth.”

As part of the partnership, Marks will participate in CalCPA Town Halls throughout the year and contribute written and video insights covering areas such as business and economic trends, AI, workplace developments and the economy.

“Being a data driven profession our knowledge as CPAs can significantly help our firms, clients and companies run more productively and profitably,” Marks said. “My partnership with CalCPA will focus on making sure that our members are up to speed on the political, economic, policy, workplace and technological trends that are impacting both the profession and their clients so that they can continue to provide the highest level of service.”

Marks has spent more than 25 years on the front lines of small and midsized business, advising companies, writing for Forbes, The Hill, The Guardian and Entrepreneur, and speaking at more than 70 live events per year.

His practical approach translates complex trends into clear, actionable guidance—the kind that helps a CPA walk into a client meeting prepared, not playing catch-up.

Through this partnership, CalCPA members will gain ongoing access to expert analysis, practical business intelligence and forward-looking perspectives designed to help them lead with confidence in an increasingly dynamic environment.

 is the largest state CPA society in the country, representing and supporting certified public accountants and related professionals in California.

, is a nationally recognized business expert, technology consultant, bestselling author and Forbes technology columnist. He is the founder of 

, a technology and consulting firm serving small and midsize businesses nationwide. Marks is a frequent commentator on business, economic and technology issues and regularly speaks to organizations across the country on AI, workplace trends, business growth and emerging technologies.

CalCPA Partners with Nationally Recognized Business Expert Gene Marks to Deliver Year-Round Insights

Nationally recognized CPA, author and Forbes technology columnist will provide exclusive content, timely thought leadership and actionable strategies to CPAs and finance professionals across California.

Election Day may have come and gone in California, but the issues extend far beyond the ballot box. As California moves into the second half of the legislative year, lawmakers are navigating a packed agenda that includes budget negotiations, high-profile elections, affordability challenges, insurance market instability and a potentially groundbreaking wealth tax proposal.

These and other issues were the focus of a recent CalCPA Capitol Beat, featuring CalCPA Vice President of Advocacy and Public Affairs Jason Fox, and Missy Johnson, director of government affairs at Nielsen Merksamer, who examined the political and policy developments shaping California’s future—and why business leaders, taxpayers and financial professionals should pay close attention.

California’s legislative session has reached a pivotal point. With budget negotiations underway, lawmakers are rapidly approaching the final stages of the 2026 legislative calendar.

The state budget remains a top priority, as legislators must meet constitutional deadlines while balancing competing fiscal demands and policy priorities. Once the budget process concludes, lawmakers will break for a brief summer recess before returning for what Johnson described as a “mad dash to the finish” before the Legislature adjourns at the end of August.

For businesses and CPAs, this compressed timeline means that significant policy proposals can advance quickly in the coming months.

Governor’s Race Draws Significant Attention

The race to succeed Gavin Newsom as California’s governor remains one of the most closely watched contests. The campaign has generated substantial discussion around candidate visibility, voter recognition and shifting political dynamics. While polls offer an early snapshot, California’s large electorate and lengthy vote-counting process make definitive predictions difficult. Republican Steve Hilton and Democrat Xavier Becerra are on track to be the top two vote getters, edging out Democrat Tom Steyer, and move to the general election in November. 

The outcome will be important politically and from a policy perspective. California governors play a major role in shaping legislative priorities, budget negotiations and regulatory policy.

For professionals across industries, understanding the priorities of the next administration will be critical as new economic and tax policies emerge.

Legislative Turnover Could Reshape Sacramento

Beyond statewide offices, California voters are also helping determine the future makeup of the Legislature.

Several long-serving lawmakers are leaving office due to term limits or pursuing other opportunities, creating numerous open seats in both the Senate and the Assembly.

Johnson highlighted several competitive legislative races that could influence the ideological makeup of the Capitol, particularly in districts where demographic and political changes have created new opportunities for both parties.

Affordability and Insurance Remain Front-Burner Issues

One of the strongest themes discussed during the program was affordability. While housing costs continue to dominate public conversation, Johnson pointed to another challenge increasingly affecting Californians: the state’s insurance market.

“I think being insurance commissioner is the hardest job in California right now,” she said.

The issue touches nearly every aspect of the economy. Rising homeowners’ insurance costs, difficulties obtaining coverage and growing concerns about wildfire risk are affecting consumers, businesses and housing development.

The issue also directly impacts family budgets through higher auto and property insurance premiums, making it a significant contributor to the broader affordability conversation.

Perhaps no policy issue drew more discussion than the cluster of competing ballot measures around taxation. A proposed "billionaire's tax"—targeting roughly 220 ultra-high-net-worth Californians—has gathered enough signatures to potentially qualify for the November ballot but faces strong opposition from Gov. Newsom's office and well-funded opposition groups.

Two countermeasures have also qualified for the ballot. One would require state audits of programs before certain tax increases could take effect, while the other would protect personal property, pensions, and retirement savings from new taxes. Beyond their stated policy objectives, both measures contain provisions that would effectively nullify the wealth tax proposal if approved by voters. As a result, they are widely viewed as both policy measures and political tools designed to undermine the wealth tax. The fact that they are tied to concepts generally viewed favorably by voters adds another layer of complexity to the political landscape surrounding the initiative.

Add to the picture the growing voices of opposition to the wealth tax, including from other labor groups such as the California Teachers Association (CTA), which has qualified its own initiative to make existing high-income tax rates permanent, and may have concerns with sharing the ballot with the wealth tax.

Budget Season: Tech IPOs and a SaaS Tax Proposal

On the budget front, the news was better than expected. Tax revenues have come in significantly higher than projected, driven largely by California's booming tech and AI sectors. 

"California's budget has benefited greatly from those AI companies," Johnson said, pointing to anticipated IPOs from AI firms including Anthropic, and OpenAI as potential additional windfalls.

Still, the Legislative Analyst's Office has cautioned that the state remains vulnerable to economic downturns. And tucked inside the budget negotiations is a proposal that could directly affect CalCPA members and their clients: a new sales tax on software-as-a-service (SaaS). 

"If you're paying attention for clients," Fox warned, "it could be a change that happens via the budget and takes effect Jan. 1 of 2027."

Also being fought in budget negotiations: more flexibility of Pass-Through Entity Tax (PTET) credits set to expire, which CalCPA has been actively pushing to extend or make permanent through discussions with the Department of Finance and legislative budget leaders.

AI Regulation and the CPA Profession's Role

Artificial intelligence isn't just reshaping California's balance sheet—it's also driving new legislative activity with direct implications for CPAs. Illinois recently followed California's SB 53 by passing its own AI safeguards bill and went a step further by including third-party audit requirements. Fox sees this as an emerging opportunity—and responsibility—for the profession.

CalCPA has been engaging with legislators to ensure that any AI audit framework considered in the Legislature aligns with how CPAs already operate and provide assurance services, rather than creating conflicting frameworks or standards.

Profession Updates: New Licensing, CPE Modernization and Private Equity

On the professional standards front, Fox reminded members that new CPA licensing requirements under AB 1175 are on track for a Jan. 1, 2027, effective date, with simplified and more accessible education pathways. 

The Board of Accountancy is also ramping up Continuing Professional Education (CPE) audits, dramatically conducting more in the past five months than in all of last year. Members were reminded that while the CBA’s own CPE tracker will be discontinued July 1, CalCPA's tracker will remain available.

Looking ahead, Fox flagged that California's current 40-hours-per-year CPE requirement may itself be up for re-examination, with an AICPA and NASBA task force studying the right mix of hours and topics. 

What It Means for CPAs and Business Leaders

Election outcomes, budget decisions, tax proposals and affordability challenges all influence California’s economic environment and regulatory landscape. For CPAs, financial professionals and business leaders, these developments may affect clients, employers and long-term planning decisions.

With the legislative session entering its final months and November’s election approaching, stakeholders should expect policy debates to accelerate.

Looking to stay up to date on the political and legislative issues that matter? 

Be sure to sign up for our next CalCPA Capitol Beat: Oct. 6

 framework: three clocks, the Sec. 6654 trap, the California problem and the July 10, 2026, inference that is not actually a universal deadline.

Here, we’ll cover the workflow. Five steps. Most of it fits in a single afternoon if your prior-year files are clean.

A note up front: this is a screening exercise, not a guaranteed refund program. Most clients surfaced will fall away in the timing analysis. A smaller subset will warrant protective claims. That is the right shape.

This workflow is limited to penalty-and-interest screening. Separate workflows may apply to refund claims tied to original or amended returns, credits, or other filing deadlines.

Pull a penalty and interest report across prior year returns for items tied to deadlines between Jan. 20, 2020, and July 10, 2023.

This step identifies files for further review. It does not establish that any claim is timely or recoverable.

Step 2: Apply the Federal Three-clock Analysis

For each file surfaced, run the three-clock test from Part 1 of this series:

The Sec. 6511(b) lookback is the next filter but note that P.L. 119-64 added Sec. 7508A(f), which treats the disregarded COVID period as an extension of filing time for the Sec. 6511(b)(2)(A) lookback, pulling many COVID-window payments back inside the recoverable window. Still run it payment by payment, not just by return year: the extension is finite and deemed-payment rules can affect the calculation, so some payments will fall outside it.

Where the client already has a Sec. 6532 issue from a prior disallowance, 

 reasoning applies most directly. Outside that scenario, applying 

 Sec. 7508A analysis to Sec. 6511(a) administrative-claim timing is an inference from 

 reasoning, not a direct holding. Frame the position accordingly in the file.

The clients worth pursuing are those where Sec. 6511(a) is plausibly still open under that layered analysis, Sec. 6511(b) does not zero out recovery, and the dollars justify the engagement.

Step 3: Prepare the Protective Claim Carefully

For many paid penalty-and-interest items, Form 843 may be the procedural vehicle. For unpaid amounts, the request may be framed as abatement rather than refund, and in some cases another procedural route may apply. Verify the proper vehicle before drafting.

The IRS may deny the claim. That does not undermine the strategy. The government has appealed 

 to the Federal Circuit, with its opening brief due July 20, and the federal landscape may shift. A timely protective claim preserves the client’s position regardless.

Step 4: Run the California Analysis Separately

For any client with California-side penalty or interest exposure, analyze the state issue independently under California law and procedure. 

 does not itself determine California refund timing or California penalty treatment.

The practical takeaway is simple: do not extrapolate the federal 

 result into California automatically. If a file has both federal and California exposure, each side needs its own limitations and procedural analysis.

File the federal claim using the proper procedural vehicle and preserve proof of timely mailing.

File any California claim under the appropriate California procedure based on the item and posture involved.

Track aging. Federal and state agencies may take substantial time to respond.

Set client expectations explicitly. A protective claim preserves a position. It does not guarantee a refund.

Clients should understand before engagement that:

Upfront framing protects the engagement and the client relationship.

Pull the penalty report. Run the three-clock test. Sequence the claim narrative carefully. Analyze California separately under California law. For clients whose facts support a preservation filing, evaluate whether July 10, 2026, is the operative protective-claim date and file before the earliest applicable deadline.

For most California practices, this is not a mass-refund opportunity. It is a screening exercise to identify the smaller subset of files for which a protective filing is worth making before any arguable window closes.

Handled as disciplined triage, this is a useful client-service project. Handled too broadly, it creates unnecessary risk for the firm and the client.

 will benefit from the filing. The clients who do not will appreciate that you ran the analysis.

Most of us in California have heard the name 

 by now. Fewer of us have matched it against our actual client files.

, 179 Fed. Cl. 382 (2025), the Court of Federal Claims held that, under the pre-2021 version of IRC Sec. 7508A(d), the COVID-19 disaster period had to be disregarded in computing certain federal tax deadlines. That disregarded period ran from Jan. 20, 2020, through July 10, 2023.

For some clients, that may reopen refund positions we would otherwise treat as closed. In some fact patterns, the timing analysis may point to July 10, 2026, as a protective-claim date. But that is not a universal deadline, and 

Here’s what you need to know before you start pulling files. 

 applied—provided a mandatory postponement running from the earliest incident date in the disaster declaration through 60 days after the latest incident date, applied to the acts listed in Sec. 7508(a)(1)(A) through (F). For a disaster as long as COVID, that meant a multi-year window—which is exactly what gave 

The statute has changed prospectively since then. The 2021 amendment recalibrated how the mandatory period is measured. The endpoint now runs from 60 days after the later of the earliest incident date or the date the declaration was issued, ending the feature that let the period run for the full length of a long disaster. And a 2025 amendment then extended that mandatory period from 60 days to 120 days. Both changes apply only to disasters declared after enactment.

 got to use the old version because COVID was declared before the amendments took effect.

 applies to a current disaster, they are reading the wrong statute.

One more point for practitioners: If Part 2 or your internal analysis gets into the refund lookback rule, note that recent legislation—the Disaster Related Extension of Deadlines Act (P.L. 119-64)—added Sec. 7508A(f), which treats any period disregarded under Sec. 7508A as an extension of time for filing the return for purposes of the Sec. 6511(b)(2)(A) three-year lookback. That extension is what keeps a timely COVID-window claim from being zeroed out by the lookback.

, 162 T.C. 148 (2024), answered the threshold question. The Tax Court held that pre-2021 Sec. 7508A(d) was self-executing, meaning the postponement happened automatically without the IRS having to formally invoke it under Sec. 7508A(a). The court also held Treas. Reg. Sec. 301.7508A-1(g)(1) and (2) invalid to the extent those provisions limited the non-pension-related acts covered by the mandatory postponement to acts the Secretary had separately chosen to postpone under Sec. 7508A(a).

 did not decide was the outer endpoint of the COVID period. 

The COVID disregarded period ran through July 10, 2023. Under pre-2021 Sec. 7508A(d), the court calculated the endpoint by taking FEMA’s May 11, 2023, close of the COVID incident period and adding the statutory 60 days. The court also said it did not need to decide whether Sec. 7508A operates as true tolling or as a mandatory postponement. Either way, the suit was timely on those facts.

The taxpayer’s refund suit was timely under Sec. 6532(a)(1). Terry Kwong filed in February 2023 after the IRS sent disallowance notices in September and October 2020. Under the ordinary two-year rule, that suit was years late. The COVID disregarded period brought it back to life for tax years 2007, 2010 and 2011.

The taxpayer still lost the refund. This is where practitioners can get tripped up. 

The IRS had taken his 2016 overpayment and applied it against his 2007 liabilities. Under Sec. 6402(a), it could do that. Under Sec. 7422(d), that credit counted as a payment when allowed in 2017. Under Sec. 6511(a), he then had three years from filing or two years from payment to claim a refund. His 2020 filing missed that clock, and the favorable Sec. 6532 ruling did not reach over to rescue it.

The court also upheld his 2016 Sec. 6654 estimated-tax penalty. But the important takeaway is narrower than some summaries suggest: 

 did not provide relief for that taxpayer’s Sec. 6654 liability, and Sec. 6654 does not contain a broad reasonable-cause exception. Any estimated-tax-penalty issue still requires a separate analysis of the statutory waivers in Sec. 6654(e) and the taxpayer’s specific timing facts.

That separate Sec. 6511 ruling is at least as important operationally as the Sec. 6532 holding—maybe more.

If the COVID period is disregarded through July 10, 2023, some taxpayers may still have an argument that an otherwise expiring refund-claim period remained open beyond the ordinary date. In some fact patterns, that analysis may point to July 10, 2026, as a protective-claim date.

But that is not a universal deadline, and 

 did not itself establish July 10, 2026, as a blanket Sec. 6511 deadline.

So yes, the July 10, 2026, date may matter. But it matters only after a separate limitations analysis, not as a one-size-fits-all answer.

Refund timing is not one question. It is three:

A favorable answer on one does not carry the others. The 2016 piece of Kwong proves the point: the taxpayer won on Sec. 6532 and still lost the refund because Sec. 6511(a) was not satisfied.

If you only run one of these clocks, you will miss something.

. Take a claim outside the COVID context: A client files a refund claim within the Sec. 6511(a) window, so the claim is timely. But the tax at issue was paid four years before the claim—outside the three-year Sec. 6511(b) lookback period. The claim clears Sec. 6511(a) and still recovers nothing: the lookback caps the refundable amount at zero. Timely is not the same as collectible. For the COVID-window claims this series is about, P.L. 119-64 extends the Sec. 6511(b)(2)(A) lookback by the disregarded period, so many payments that would otherwise fall outside the window are pulled back in—but the extension is finite, so run the lookback on the actual dates rather than assume every dollar is recoverable.

The cleanest application is deadline postponement. If a claim or suit was running through the COVID window, 

The harder question is penalties and interest. There is textual support for broader arguments. Sec. 7508A(a) reaches not just whether acts were timely performed, but also the amount of certain interest, penalties, additions to tax and credits or refunds. That is the hook practitioners are using to explore arguments involving Sec. 6651 failure-to-file and failure-to-pay penalties, plus related interest, where the assessment was computed from a deadline that should have been postponed.

 squarely held that all COVID-period Sec. 6651 penalties or related interest must be abated. 

 was a refund-suit timing case. Both support deadline-postponement arguments. Neither settled every downstream penalty or interest consequence.

So, the line to walk is this: arguing that a postponed deadline affected the validity or computation of a particular assessment is the stronger position. Arguing that every COVID-period charge is invalid goes beyond what these cases held.

What California Practitioners Should Assume

 automatically. Federal treatment and California treatment are separate questions. That means any California-side position needs independent California analysis. Federal reasoning may be informative, but it is not controlling for California purposes.

So, if a file has both federal and California exposure, do not assume the federal answer carries over.

 is not a universal July 10, 2026, deadline. It is that, for some clients, it opens a federal refund position that deserves review before the applicable limitations periods expire.

And the law is still in motion. The government has appealed 

 to the Federal Circuit, with its opening brief due July 20. That is one more reason the move is to preserve a defensible position before the limitations periods close, not to treat any single date as settled.

That review must be done client by client, with separate attention to Sec. 6511(a), Sec. 6511(b), Sec. 6532, deemed-payment rules and any California-specific issues.

 matters. Which of your clients still have time to use it?

With an understanding of the legal framework, 

 will walk you through a practical workflow that covers prior-year prep file triage, Form 843 narrative sequencing and the California angle.

 honored three exceptional women in accounting at its Elevate: Women's Leadership Forum, held May 7-8, 2026, in Huntington Beach. The annual Women to Watch Awards recognize professionals who demonstrate outstanding leadership, mentorship and community impact. 

Coleman is a nationally recognized expert in ERISA and employee benefit plan audits. She built the ERISA audit practice at Gallina LLP, later acquired by CLA, and continues to lead in that specialty at the national level, contributing to published articles, conference presentations and co-authoring an industry audit guide. She taught as an adjunct professor at Sacramento State and UC Davis for more than two decades, established scholarship endowments for accounting students and personally funds educational opportunities for young adults in Zambia.

Flood leads AAFCPAs' Commercial Outsourced Accounting and Fractional CFO practice, where she has championed the integration of automation and AI to improve team workflows and service quality. She serves on the CalCPA Board as a Council Representative, chairs the 2026 Elevate: Women's Leadership Forum and sits on the AICPA Council. She supports student development through Sierra College and the CalCPA Sacramento Chapter Scholarship Committee, and has built mentoring programs and structured career development paths within her firm.

Precious Opaleke, CPA, MSC Senior Tax Specialist, LTax

Opaleke, who built her accounting career across the U.K. and U.S., was recognized for her rapid rise in both professional and volunteer leadership. Since joining CalCPA in 2019, she has focused on mentorship and outreach, guiding students and CPA candidates through the licensure process. She chairs the CalCPA Inland Empire Chapter Estate Planning Committee, serves on the statewide CalCPA Young Emerging Professionals Committee, and graduated from the CalCPA Leadership Institute. She has also received a certificate of recognition from the California State Senate and Assembly for her community contributions.

Together, the honorees reflect the depth of leadership, expertise and community engagement shaping the future of the accounting profession in California. 

“These exceptional women are shaping the future of the accounting profession through their leadership, innovation, mentorship and commitment to service,” said Jillian Phan, 2025-26 CalCPA Chair. "Their accomplishments not only strengthen our profession but also inspire the next generation of CPAs to lead with confidence and purpose. On behalf of CalCPA, we are proud to celebrate these remarkable leaders and the impact they continue to make in their organizations, communities and beyond.”

The award recipients and CalCPA representatives are available for interviews upon request.

CalCPA Announces 2026 Women to Watch Winners

From advancing AI-driven accounting services to mentoring future CPAs to education, CalCPA's 2026 Women to Watch winners have a passion for helping others succeed and are shaping the future of the profession.