Printer Friendly
The Free Library
14,550,258 articles and books
Member login
User name  
Password 
 
Join us Forgot password?

A new tax court? Also, state legislators discuss outsourcing, disclosure.


AB 2472 (Wolk) and SB 1424 (Burton) would establish an administrative California tax court to decide sales and use, insurance and income tax appeals.

[ILLUSTRATION OMITTED]

According to according to
prep.
1. As stated or indicated by; on the authority of: according to historians.

2. In keeping with: according to instructions.

3.
 the authors, the tax court would increase public confidence in the tax systems' fairness, ensure fair and equal treatment for taxpayers and provide a legal forum for tax dispute resolution similar to the U.S. Tax Court.

California tax court decisions would be published and could provide guidance to similarly situated similarly situated adj. with the same problems and circumstances, referring to the people represented by a plaintiff in a "class action," brought for the benefit of the party filing the suit as well as all those "similarly situated.  taxpayers.

The bills would not eliminate the Board of Equalization In communications, techniques used to reduce distortion and compensate for signal loss (attenuation) over long distances. , which would continue to adopt regulations, establish policy issues, administer other taxes and hear some property tax disputes.

All major tax appeals would go to this proposed tax court consisting of five judges appointed by the governor and confirmed by the Senate. Proponents believe that these appointed judges would not be subject to the political pressures that elected Board of Equalization members may experience.

The proposed tax court, while an administrative body Noun 1. administrative body - a unit with administrative responsibilities
administrative unit

Inland Revenue, IR - a board of the British government that administers and collects major direct taxes
, would function much like a court. CPAs and other non-attorneys must be authorized to practice before it, which requires passing an exam, or complying with qualifying procedures that would be developed.

Appeals from the tax court would go to the Court of Appeal rather than Superior Court. The Franchise Tax Board also would be able to appeal to the Court of Appeal, which it cannot do now.

Opponents say the current system is open and less formal, and CPAs, enrolled agents, taxpayers and attorneys resolve tax disputes in a relatively uncomplicated administrative procedure and hearing process that would become a captive, specialty practice for a select few members of the state bar.

The California Judicial Council is concerned that the Legislature may not have the constitutional authority to create a new court that bypasses the Superior Court appeal process.

CalCPA has expressed concerns that the hurdles set for practice by the proposed court may deny CPAs the opportunity to represent clients. CPAs routinely represent clients in IRS An abbreviation for the Internal Revenue Service, a federal agency charged with the responsibility of administering and enforcing internal revenue laws.  appeals, but very few represent clients in U.S. Tax Court.

If the bills pass in their current form, clients would be deprived of a cost-effective method of resolving tax disputes.

AB 2472 proponents have advised CalCPA that they will provide for CPAs to continue to represent their clients. Without such a provision, CalCPA will oppose the legislation.

Labor groups and the California Society of Enrolled Agents support the bills. The California Taxpayer's Association, BOE BOE Based on Experience
BOE Board of Education
BOE Boletín Oficial del Estado (Spanish)
BOE Bank of England
BOE Board of Equalization
BOE Board of Elections
BOE Barrel of Oil Equivalent
BOE Bind on Equip
 members, the Farm Bureau, the California Manufacturers & Technology Association and Price-WaterhouseCoopers oppose the bills, which must pass four policy and two appropriations committees, and obtain governor approval prior to enactment.

CPAs Mandated Reporters

AB 2474 (Wolk), sponsored by the Yolo County District Attorney and several senior groups, would require CPAs, banks and other financial experts, including real estate and title agents, to immediately report any suspected cases of elder financial abuse. Failure to do so would be a misdemeanor subject to six months in jail and fines, or if serious physical harm occurs, the CPA (Computer Press Association, Landing, NJ) An earlier membership organization founded in 1983 that promoted excellence in computer journalism. Its annual awards honored outstanding examples in print, broadcast and electronic media. The CPA disbanded in 2000.  could be subject to one year in jail and additional fines.

The bill contains many general requirements and no definitions. CalCPA and many other groups oppose the bill because it could encourage over-reporting and civil litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute.

When a person begins a civil lawsuit, the person enters into a process called litigation.
 by disgruntled dis·grun·tle  
tr.v. dis·grun·tled, dis·grun·tling, dis·grun·tles
To make discontented.



[dis- + gruntle, to grumble (from Middle English gruntelen; see
 clients. CalCPA recommended that educational efforts be encouraged to lessen the opportunity for financial abuse rather than mandatory reporting mandatory reporting The obligatory reporting of a particular condition to local or state health authorities, as required for communicable disease and substance abuse Infectious disease State boards of health maintain records and collect data resulting from MR of  with heavy sanctions.

Outsourcing

California legislators have introduced bills intended to reform outsourcing either by banning the state from contracting with entities that outsource to companies or individuals outside the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , or prohibiting transmission of confidential medical or financial information to workers outside of the United States.

The concerns focus on two issues--jobs leaving America and the inability of the government to enforce privacy and confidentiality laws when workers are in another country.

AB 664 (Correa) would require businesses that share confidential information Noun 1. confidential information - an indication of potential opportunity; "he got a tip on the stock market"; "a good lead for a job"
steer, tip, wind, hint, lead
 with affiliates in another country to disclose this and the country's name to consumers and clients.

AB 2919 (Ridley-Thomas) would prohibit the state from contracting for telephone support services support services Psychology Non-health care-related ancillary services–eg, transportation, financial aid, support groups, homemaker services, respite services, and other services  that involve the use of out-of-country employees.

SB 1451 (Figueroa) is an expression of interest in restricting outsourcing to other countries.

SB 1492 (Dunn) states the Legislature's intent to enact legislation to ensure that no work involving information that is private, confidential, privileged or essential to homeland security Noun 1. Homeland Security - the federal department that administers all matters relating to homeland security
Department of Homeland Security

executive department - a federal department in the executive branch of the government of the United States
 is performed at a worksite outside of the United States.

Additionally, the California Board of Accountancy is reviewing the issue of outsourcing. It is recommending that Regulation 54.1, dealing with client confidentiality The examples and perspective in this article or section may not represent a worldwide view of the subject.
Please [ improve this article] or discuss the issue on the talk page.
, be amended to require that CPAs who outsource any client service, including those located in the United States, provide clients with a written notice that information is being shared with others.

The CBA's position is that any outsourcing by a licensee requires disclosure under existing 54.1. The amendments would require the disclosure to be in writing and extra disclosures if a CPA is using services outside the United States.

At a legislative hearing on outsourcing to other countries earlier this year, Michael Ueltzen, Government Relations Committee legislative co-chair, presented testimony stressing the CPA's responsibility under current law for ensuring the security and quality of work performed by any subcontractor.

Bruce C. Allen is CalCPA's director of government relations.
COPYRIGHT 2004 California Society of Certified Public Accountants
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2004, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

 Reader Opinion

Title:

Comment:



 

Article Details
Printer friendly Cite/link Email Feedback
Title Annotation:Government Relations
Author:Allen, Bruce C.
Publication:California CPA
Geographic Code:1U9CA
Date:May 1, 2004
Words:868
Previous Article:Witnesses: do they have to keep draft reports?
Next Article:Independence standards--putting it all together.(Independence Issues)
Topics:



Related Articles
Devolution. (state-local government relations)
Constitutional federalism. (preemption of state law by the federal government)(The States' Advocate)
COUNTY REQUIRES MORE TAX REVENUE.(NEWS)
Sarbanes-Oxley, tax shelters, IRS oversight, and Canadian activities command TEI's attention. (Recent Activities).
Do ethics laws work? As legislatures continue to strengthen their ethics laws, policymakers and the public wonder about the results.
Outsourcing guidance for CPAs: hot topic has everyone from state legislators to the AICPA chiming in.(American Institute of Certified Public...
More tax amnesty? State hopes to net a bundle from wayward taxpayers in 2005.(GovernmentRelations)
NCSL Annual Meeting 2004.(The Legislative Reality)
Outsourcing saves money: sending jobs overseas can increase the productivity, profitability and competitiveness of U.S. companies.
Canadian court dismisses data outsourcing claim.(UP FRONT: News, Trends, & Analysis)

Terms of use | Copyright © 2009 Farlex, Inc. | Feedback | For webmasters | Submit articles