CSTC Orange County Chapter Monthly Newsletter

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1 CSTC Orange County Chapter Monthly Newsletter January, 2012 President s Message Are we ready for 2012? It is already here and it seems like 2011 flew by at an accelerated rate of speed. As we head into another tax season, please remember our Quickfinder Workshop to be held on Friday, January 6, 2012 at the Phoenix Club. Our own John Keil, EA will present the Individual QF seminar and Ruth Godfrey, EA will present the Business QF seminar. This is an excellent opportunity to tune-up our Quickfinder research skills, right at the start of tax season, so we re ready to find quick answers to our tax questions all season long. Our January meeting topic will be a roundtable discussion on the upcoming tax season and challenges we face. Please contact Alex if you would like to be placed on the agenda. Happy New Year! Respectfully Submitted, Lynnette Perkins EA, President Orange County Chapter CSTC Speaking of opportunities, I would like to take this opportunity to congratulate Alex Schneider on being elected President of our Orange County Chapter. Congratulations also to all of the members, of our chapter Board of Directors, on their election as Officers/Directors for I also wish to thank the 2011 Orange Chapter Board of Director members for their dedicated service during the past year. Thank you to: Sasi Batalon, Barbara Eidlhuber, Linda Morlang, Michael Mergen, Sondra Cates, Rosemary Garrido, Ray Mew, Daniel Palacios, Fred Saah, Rick Jenkins, and Alex Schneider. An honorable mention to Cindy Conrad for handling our chapter s . Thank you all for your years of service to CSTC OC and for making our chapter events so successful and beneficial to our members! I would also like to take this opportunity to thank you, our OC Chapter members, for allowing me the privilege of serving as your President for the past years. It has been my honor to serve with all of the dedicated OC BOD members as well as with all of the Society Officers and Directors. I ve learned a lot from all of them. Most of all, I ve learned how much hard work is involved in running our Chapter and Society programs and events for the benefit of our members. I now gladly turn over the Gavel to your new President, Alex Schneider, and look forward to serving with him during 2012 as your Past President. Last month, we had a great Holiday Party at the Phoenix Club. Thank you Linda Morlang and Rosemary Garrido for organizing the party We enjoyed good food, drinks, fellowship, and our traditional gift exchange/steal. Holiday music was provided by our new member David Keil. A good time was had by all as we celebrated the Holiday Season. This month, we will install the new 2012 Officers and Directors of the OC Chapter BOD, and present membership awards to our long standing members. We will also distribute Quickfinders and The Tax Books to members that preordered. Speaker & Topic Round Table Discussion: Upcoming Tax Season and Challenges In addition to the Round Table Discussion it is time again for: The Installation of New Officers and Directors Please join us as we say thank you to our outgoing officers and directors and welcome our new officers and directors for the 2012 tax year. CTEC: 1000-CE-3507 Hours: 1 Federal This presentation, if qualified, has been designed to meet the requirement of the director of Practice of the Internal Revenue Service; The California State Board of Accountancy and the California Tax Education Council, including Code 31 of Federal Regulation 10.6(g). This does not constitute an endorsement by these groups. A listing of additional requirement to renew tax preparer registration may be obtained by contacting CTEC at PO Box 2890, Sacramento, CA , phone CTEC at or on the Internet at Page 1

2 CSTC Newsletter Month, year CSTC Newsletter January, 2012 Upcoming Events TAX SEASON BRUNCHES We will have three Sunday brunches this tax season to share our general and specific tax problems and software issues (and solution). Bring your appetite and camaraderie for a lively roundtable discussion Each person to order what they wish individually from the menu Mimi s Cafe on E. 17th Street, Tustin, CA (17th at the 55 Freeway) Sunday, February 12th at 10 am (1 hour federal CPE) Sunday, March 4th at 10 am (1 hour federal CPE) Sunday, March 25th at 10 am (1 hour federal CPE) No RSVP required. Info: Ray Mew (714) or Michael Mergen (714) Classified Ads Free to members. Submit to Editor, fax, Word format, please. MORTGAGE COMPANY When it's time to purchase or refinance... Mulberry Street Mortgage Company wants to help. We are locally owned and operated and provide all processing in-house, free prequalifications and competitive rates. Getting approved for a mortgage has never been easier. For more information please call: PAM DUNN (714) Society Address 2011 Board of Directors Lewis Street, Suite 106 Garden Gove, CA Tel (714) Fax (714) President Lynette Perkins Vice President Alex Schneider Secretary Barbara Eidlhuber Treasurer Ray Mew Past President Rick Jenkins Director Sasi Batalon Director/Newsletter Sondra Cates Director Rosemary Garrido Director Michael Mergen Director Linda Morlang Director Daniel Palacios Director Fred Saah x105 CSTC Mission Statement To promote professionalism by providing quality education events for tax professionals, by creating and encouraging networking opportunities for members and by advocating professional standards and positions within the tax industry. The chapter newsletter is designed to provide accurate and authoritative information about the subject matter covered. It is provided with the understanding that the publisher is not engaged in giving legal, accounting or other professional service. If legal advice or other expert help is required, the services of a competent professional person should be sought. Statement of fact and opinion are made on the responsibility of the authors alone. They do not imply an opinion on the part of the officers or members of the California Society of Tax Consultants, Inc. CSTC Logo It is okay to use the CSTC logo on your letterhead. The conditions are: be a member is good standing, add the phrase Member of or Member since when using the logo. Page 2

3 CSTC Newsletter January, 2012 IRS FTB (TIGTA Press Release: Many Investment Theft Loss Deductions Appear to be Erroneous) (Nov. 28, 2011) The Treasury Inspector General for Tax Administration (TIGTA) reports that taxpayers may have erroneously claimed deductions of more than $697 million a year in investment theft losses that did not appear to qualify as such, resulting in revenue losses to the U.S. government totaling more than $41 million. The IRS estimates that more than 19,200 taxpayers filed tax year 2008 tax returns claiming a combined total of more than $8 billion in property income casualty and theft loss deductions. TIGTA conducted its review to assess the IRS s efforts to ensure the validity of investment theft loss deductions. The number of investment theft loss victims as a result of Ponzi schemes increased significantly in tax years 2008 and With the potentially large number of victims filing tax returns claiming these losses, IRS officials issued guidance to minimize both its administrative burden and the burden on the victims of these schemes, which are investment frauds that involve the payment of fictitious investment returns to existing investors from funds contributed by new investors. Based on TIGTA s review of a statistically valid sample of 140 electronically filed tax year 2008 tax returns on which taxpayers reported an investment theft loss deduction, TIGTA estimated that 1,788 (82 percent) of 2,177 taxpayers may have erroneously claimed deductions totaling more than $697 million, resulting in revenue losses totaling approximately $41 million. The potential revenue loss estimate was conservative in that it only represented electronically filed tax returns for one year. "The IRS did a good job of addressing the tax implications of Ponzi scheme losses and providing guidance to affected taxpayers. However, our review identified that some taxpayers may be erroneously claiming investment theft loss deductions," said Treasury Inspector General for Tax Administration J. Russell George. "Revenue losses associated with potentially erroneous deductions could be substantial," he added. TIGTA made four recommendations in its report; IRS management agreed with TIGTA s recommendations and stated that they plan to take appropriate corrective actions. Fake CPA, Partner Sentenced for Bogus Investment Scheme Sacramento The owner of a Glendale tax preparation business and his colleague were each sentenced to five years in state prison and ordered to pay $1.3 million restitution after pleading guilty to their roles in a bogus investment scheme, the Franchise Tax Board (FTB) announced. Donald R. Ford, of Glendale, and Gregory A. Edwards, of Culver City, were sentenced on November 30 on multiple felony charges including financial elder abuse, grand theft, false statements in the offer or sale of a security, and filing of a false state income tax return related to a bogus securities investment scheme. Ford persuaded senior citizen clients, whose trust he had gained from his tax preparation business, to invest in a phony investment scheme. Ford, who posed as a certified public accountant, and Edwards scammed investors by promising them high rates of return on investments. Instead, Ford and Edwards used the money on personal expenses and to fund a lavish lifestyle, which included luxury cars and expensive vacations. Ford earned more than $1.3 million in income from the unlawful scheme and Edwards earned more than $961,000 for his role in the scam. Ford failed to report this income on his 2005, 2006 and 2007 state income tax returns and Edwards failed to report his income on his 2005, 2006 and 2007 state income tax return. All income is taxable including income from illegal sources. The pair is scheduled to surrender January 30 to begin their prison sentences. Los Angeles County Superior Court Judge Robert J. Perry handed down the sentence November 30 in Department 104 of the Clara Shortridge Folz Criminal Justice Center. California Department of Justice (DOJ) Deputy Attorney General, Edward Skelly prosecuted this case. This is a joint investigation between DOJ and FTB. CPAs are licensed by the state. The public can check on the status of a CPA with the California Board of Accountancy at or by calling The IRS and FTB have issued a brochure, FTB Publication 982, How to Select an Income Tax Return Preparer where taxpayers can learn more about choosing a tax professional. FTB's criminal investigation program identifies and investigates cases of tax evasion and tax fraud to encourage compliance with California income tax laws and maintain public trust. Page 3

4 CSTC Newsletter January, 2012 CALIF SOCIETY OF TAX CONSULTANTS ORANGE COUNTY CHAPTER TAX SEASON SUNDAY BRUNCH WE WILL HAVE THREE MEETING THIS TAX SEASON. BRING YOUR QUESTIONS AND GET TOGETHER WITH FELLOW TAX PRACTITIONERS TO SHARE EXPERIENCES ABOUT THE 2011 TAX PREPARATION SEASON **EARN ONE HOUR CPE AT EACH BRUNCH** WHEN: 10 AM - SUNDAY FEBRUARY 12 TH 10 AM - SUNDAY MARCH 4 TH 10 AM - SUNDAY MARCH 25 TH WHERE: E 17 th Street Tustin CA We will order off of the menu! For more information please call: Ray Mew (714) Michael Mergen (714) The tax season brunches are a great opportunity to invite nonmember friends to one of our chapter events! Page 4

5 CSTC Newsletter January, 2012 Calendar of Events Society Events PLACE: 1340 S. SANDERSON AVE, ANAHEIM, CA COST: $33 FOR MEMBERS WITH ADVANCE RESERVATIONS $40 FOR MEMBERS AT THE DOOR, STAFF/SPOUSE $45 GUESTS OC BOARD OF DIRECTORS MEETING 4:30 PM TIME: REGISTRATION 5:30 PM DINNER 6:00 PM SPEAKER 7:00-7:50 PM BREAK 7:50-8:00 PM SPEAKER 8:00-8:50 PM Excellent Speakers & Topics for Continuing Professional Education Credits for CTEC, CPA s & EA s UPCOMING EVENTS QUICKFINDER WORKSHOP-ANAHEIM CA, JANUARY 7TH February 12th-Tax Season Brunch March 4th-Tax Season Brunch March 25th Tax Season Brunch Society Board Meeting January 13, AM Call the office for directions to the meeting. Summer Symposium Reno NV June 4 thru June 6, 2012 OTHER CHAPTER MEETINGS... Greater Long Beach Los Angeles South Orange County Last Wednesday monthly Call Shirley Blanton st Tuesday monthly Call John Caven th Tuesday monthly Call Haydee Robinson DINNER RESERVATION Please reserve place(s) for the dinner meeting of the Orange County CSTC on Wednesday, January 12th All reservations must be received by noon FRIDAY, January 7th or please call by Thursday pm January 6th. Name: Enclosed is my check payable to CSTC for $. Advance Registration $33 members only. Members at the door and Staff/Spouse $40. $45 non-members BUFFET: Garden Salad, Antipasto Salad, Ceasar Salad Cheese Tortellini in Pesto Sauce, Chicken Parmigiana CA Mixed Vegetables Vanilla Ice Cream, Chocolate Mousse Buffet will include hot rolls/bread & butter, coffee (decaf/reg/ hot or Iced Tea) MAIL TO: Fred M. Saah Name: 2501 E Chapman Ave Ste 140 Address: Fullerton CA City, ST, Zip. (714) ext 105 Registration Number: TPP EA Other Fax Name(s): Affiliation: Guests Name RESERVATIONS: Notify FRED SAAH if you wish to be on the permanent list for the year. Remember that if you are on the permanent list, you must still pay unless you notify at least one day before the missed meeting. Your reservation and payment must reach FRED by noon the Friday before the Wednesday meeting. Members not making reservations will pay $40 at the door. Guests and non-members pay $45. All reservations (permanent or not) that are no shows will receive a bill for the missed meeting. (A paid missed meeting does not qualify as a meeting for the free RIA books.) You must cancel by the Tuesday before the Wednesday meeting. Page 5

6 CSTC Orange County Chapter 1154 E YORBA LINDA BLVD PLACENTIA, CA CHAPTERS STATEWIDE OUR NEXT MEETING: Wednesday, January 11th TO: Directions to The Phoenix Club... Conveniently located off the 57 & 5 Freeways 5 Southbound exit Ball Road and follow Ball Road east to Phoenix Club Drive, follow the directions below or 5 Southbound & Northbound exit to 57 Freeway Northbound then follow directions once on 57 Freeway.Northbound 57 Freeway Northbound exit Ball Road, turn right onto Ball Road and drive east to the first signal, which is Phoenix Club Drive then Freeway Southbound exit Ball Road, turn left onto Ball Road and drive east to the first signal, which is Phoenix Club Drive then Turn right onto Phoenix Club Drive. Drive past the auto dealers to the second street on the right, Sanderson Avenue. Turn right onto Sanderson Ave, The Phoenix Club is at the end of the street on the left side. Page 6

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