Chapter News
By John B. McCauley
The California Court of Appeals’ decision in Dicon Fiberoptics Inc. v. Franchise Tax Board has confirmed that the FTB can audit vouchers issued by a local agency and submitted by a taxpayer to the FTB in support of its claim for an enterprise zone tax credit. However, the good news for taxpayers is that the court held that it is up to the FTB to prove that a challenged voucher was issued by the local agency in error.
This is a big deal. The disputed credit in this case was in excess of $1 million. The FTB estimated that employers claimed about $68 million in credits in 2000 alone.
Nevertheless, the FTB has apparently been concerned that vouchers are being issued for the hiring of unqualified employees. It audited, at the request of the state agency charged with administering the enterprise zone credit program, vouchers issue by a local agency in Oakland, and found that a number of such vouchers were issued for employees who did not qualify for the credit program.
Accordingly, the FTB has also challenged enterprise zone credit vouchers provided by taxpayers. The Board of Equalization, in a 2006 formal opinion, held that the FTB can deny a credit if it determines that a voucher was not properly issued by the issuing local agency.
The FTB in this case argued that it was up to the taxpayer to provide proof that the local agency validly issued the voucher. The taxpayer said that it did not have access to the required information, such as the criminal background of employees.
The court agreed with the taxpayer. The FTB can deny a credit for an improperly issued voucher, but only if it can establish that the voucher was invalid.
John B. McCauley is a tax, mergers and acquisition and general transactional lawyer in Orange County.
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Please join the Management of an Accounting Practice Discussion Group as we talk about this challenging and sometimes controversial subject. This month we’ll discuss Chapters 22–24: Partner Performance Counseling, The Art of Partner Compensation and Patterns in Partner Compensation, from David Maister’s book, “Managing the Professional Service Firm.”
Date: Thursday, July 16
Register online or for more information contact Johanna Sweaney Salt
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The chapter is seeking leaders for some of its interest and discussion groups beginning in June. Interest and discussion group chairs are invited to chapter board meetings. If you’re interested, contact chapter program associate Monica Thompson via e-mail or call (951) 242-7558.
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By Ted Collins, CPA/ABV, MBA, Litigation Section Chapter Chair
Litigation. It is something most of us wish to avoid. Yet as CPAs our skills can be invaluable to help resolve disputes in service to the public.
Our chapter’s litigation section has been quiet for the past couple of years, but I am hopeful that we can take a couple small steps this year to build momentum toward more valuable interaction. To do so I need your help. Reach out and let me know who you are and what areas you are practicing in. I would like to meet each of you either in person or on the phone to get a sense of your ideas on how our chapter can be more of a resource for you.
Litigation is a niche practice area full of sub-niches. My goal this year is to develop interaction opportunities to collectively benefit from networking with each other and other professionals.
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By Dick Savich, CPA Golf Committee Chair
The May 19 CPA Shootout at Oak Quarry Golf Course was a great success as more than 60 golfers participated and a good time was had by all. Congratulations to the following winners:
Gross flight:
First place: Team William Healey, III CPA
Second place: Vicenti Lloyd & Stutzman
Third place: Security Bank of California
Net flight:
First place: Team Tim Burns, CPA
Second place: Bowen, McBeth, Inc.
Third place: Dick Savich, Dennis Frankeberger & Lacy Marlette
Longest drive:
Male: Lorian Baca
Female: Mary Ann Quay.
Closest to the pin: Sam Pitassi
Putting contest: Jimmy Francisco
The tournament raised $4,800 for scholarships for accounting students at 17 colleges and universities in the Inland Empire. Some of the students were there to help with registration, the refreshment cart and the drawing at the end of the day. This event has been a mainstay for our scholarship fund and we encourage all to plan on being with us next May. Keep your eyes out for the date and venue. Thanks to all that participated in golfing or contributing to the drawing prizes. And a special thanks to the committee for all their hard work!
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By Johanna Sweaney Salt, CPA
The CalCPA Management of an Accounting Practice Committee had a very full agenda at its annual resort meeting May 14–15 at Tenaya Lodge in Yosemite. Here are some highlights:
Several themes emerged during a post-busy season roundtable. First, although numerous firms have made the transition to the paperless office (or less paper office) there is still tremendous interest in the process and the logistics of doing so. In a similar vein, technology and compliance with new regulations concerning encryption, etc., are always hot topics. The committee will be working on some how-to articles over the next few months to be made available to all CalCPA members.
The concept of dashboards was another area of technology that generated great interest. The committee participated in a web presentation from Thomson on its Practice CS software, which includes dashboard technology.
With many of us being concerned about environmental issues, going green is another timely issue. To that end, C. J. Aberin, electrical engineer and senior manager at KBKG Inc., discussed the tax benefits of going green. C. J. talked about recent legislation, focusing on the Energy Efficient Commercial Building Deduction. There are many opportunities for tax benefits, especially for owners, builders and developers of 50,000-square-foot and larger commercial properties.
Eileen Pastenieks and I also made a presentation based on Bill Reeb’s book, “Securing the Future: Building a Succession Plan for Your Firm.” Succession planning continues to be a critical area for many, if not most, firms, and this book is a step-by-step guide on how to begin the succession planning process.
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