CSTC Newsletter

August 2019

In This Issue...

  1. From the President
  2. 2019 Fall Tax and Accounting Forum
  3. Value of CSTC Membership
  4. August 2019 Chapter Events
  5. Welcome New CSTC Members
  6. Legislative Advocacy
  7. Become a CA Registered Tax Preparer (CRTP)
  8. News from the IRS
  9. 2019 Membership Survey Winner
  10. Exhibiting at the 2019 Latino Tax Fest
  11. Join CSTC!

CSTC Member Benefits

CSTC members have access to benefits such as free payroll processing services for your tax practice, and the opportunity to earn new revenue through their flexible partnership options.

CSTC is pleased to include the VeriFyle ProTM premium secure online document and message sharing service at no cost to CSTC members!

Wolters Kluwer: Discounts on Tax, Accounting & Audit Resources, Software, Information & Services. 

 CSTC members receive the TaxBook WebLibrary at a special price

Other Member Benefits Include:

$ Savings on all Society Educational Events

$ Savings on Contact, Correspondence & Self Study Education

$ Savings with member specialty CSTC Connects (previouslyYellow Pages) list

$ Savings with E & O Insurance, plus specialty coverage relevant to your profession

$ Online CSTC Find-a-Tax Consultant search to help promote your business!

$ CSTC Member Listserv

Office Depot has partnered with us to provide exclusive savings in-store and online, plus fantastic additional benefits. This program is all about providing preferred pricing to our clubs, and the savings extend to almost every item.

Savings include 20% to 55% off item office supply core list, 20% to 55% off retail on cleaning  & break room items, 10% off branded; 20% off private brand  ink & toner core list, Average 10% off  retail on 200 technology core items, Free next-day shipping on orders of $50 or more, and SIGNIFICANT savings on copy & print. Become a CSTC member to sign up for our Office Depot Small Business Savings Program, administered by Excelerate America.

We are a professional full-service tax advisory firm in San Diego. Our goal is to provide a level of service for our clients that will exceed expectations in every possible way. We strive to offer a diverse level of services in order to meet the needs of the diverse community we have been working in for more than 30 years.

TaxMama's® EA Exam Course prepares tax professionals to do so much more than just pass the IRS' Special Enrollment Examination. This is in-depth course teaches tax law from the ground up. It explains how tax returns work, with examples of basic 1040s, Schedule Cs, 1065s, 1120s, and 1120Ss; you learn tax law, tax research, client representation for audits, appeals and collections. 


If you are interested in buying or selling a practice, contact us today! ATB is operated by Enrolled Agents ensuring a complete understanding of our profession. Please give us a call at (855) 428-2225 or visit us online at www.ATBCAL.com for more information and to view our current listings.
CA DRE 02002824


CSTC Mission

CSTC advances professionalism within the tax industry by:

  • Providing quality education
  • Creating networking opportunities
  • Advocating professional standards


From the President

Today I will Choose to be Happy  
Dear friends:

My wife Cheryl and I recently read a great personal development book called "The Traveler’s Gift" by Andy Andrews. The book was gifted to me by a friend. I waited months before finally reading it. Doing so changed my life. The book, written like a clever historical fiction, is short and easy to read but inspiring and very powerful.

The chapter titled “Today I will Choose to be Happy” tells part of the story of Anne Frank’s life and the conditions she and her family endured as Dutch Jews in hiding during the Nazi occupation of Holland. Anne along with her sister, parents, and a few others, lived in tiny multi-room hiding place attached to a warehouse. They had no chairs to sit on, only a dirty mattresses to sleep on.  Periodically the Nazi patrols would come by and bank and tap on the walls trying to find hidden entrances. During the tapping and searching, everyone had to remain perfectly silent to avoid detection. Detection would get them sent to a concentration camp. What a terrible way to live. 

Living under these conditions would give anyone reason to complain and be justifiably miserable. Anne, however was not miserable nor did she complain. Describing her situation, Anne said “I do not complain. Papa says complaining is an activity just as jumping rope or listening to the radio is an activity. One may choose to turn on the radio, and one may choose not to turn on the radio. One may choose to complain, and one may choose not to complain. I choose not to complain.”

According to Anne, and I believe this to be true, our very lives are fashioned by choice. First we make choices. Then our choices make us.

If it is true that our lives are fashioned by choices we have made, then it must also be true that happiness is largely dependent on our being OK with the choices we have made. Though our lives may be much different than we had imagined or planned, we can still be happy. If someone like Anne Frank could live a happy life while hiding under terrible conditions, then I can be happy living the abundant life that enjoy. It seems easy to complain. We all do it. But, does it do us any good? Does it do anyone any good to complain? 
What if we were grateful for all that we have - life, breath, conscience - and then we were super grateful for the extra things like family, friends, good health, money, and freedom. Do you think we'd be happier? I believe so. Today I choose not to complain. I will not sing because I am happy, I will be happy because Ising!  
Thank you for your contributions to CSTC, your neighbors, family, and friends. 
Here is my new motto, "Life itself is a privilege, but to live life to it’s fullest — that is a choice!"
Gary Quackenbush
CSTC President

Save the Date for the 2019 Fall Tax and Accounting Forum in Sacramento!
September 20-21, 2019
Topic: Non-profits

The California Society of Tax Consultants (CSTC) provides quality tax education for tax professionals, including CTEC-registered preparers, Enrolled Agents, CPAs and attorneys. CSTC's 2019 Fall Forum will be held September 20-21, 2019 at the Courtyard by Marriott Sacramento Cal Expo in Sacramento, CA. It will focus on tax and accounting for non-profit organizations.

Schedule coming soon! 

The Value of CSTC Membership

What is the Value?

Recently I was working a membership table for our organization. I was speaking with a potential member who asked me “what is the value of joining?”  The first thing I did was point to the sign detailing all the member benefits and started to talk about how the membership pays for itself if you take advantage of those benefits, which is true!

But I stopped myself and said, “you know what, the value of this organization truly is in the relationships you develop with other members.”

After we had closed down the table for the night I began thinking about what that really means. Since the day I joined I have had the support and encouragement of countless members, some whom I have known literally my entire life (if you know Stephen Bruce you probably know that story), and others that I had only just met. As I grew both my practice and my knowledge, my ambition grew with them, and I found yet more support for each new goal I set.

When I passed my first EA exam the first person I called was my CSTC mentor. I called my husband second (don’t tell him that). When I wanted to move my business out of my home into an office I was welcomed into the office of two CSTC colleagues who never hesitated to offer their knowledge and support. When I said I wanted to try my hand at speaking I received nothing but kind words, encouragement, and faith; faith which I hope has been proven to be well placed.

What I realized is that when you join this group what you get is not simply a place to get quality continuing education, not simply a place to seek assistance and advice, not simply a powerful ally for the tax industry.

What you get is an entire organization that will cheer you on in all of your endeavors because the more each of our members succeeds, the more we all succeed. And that is priceless.  

Article by Shannon Hall
Fall Forum Chair

August 2019 Chapter Events

August 1, 2019
Topic: Mileage Deduction After TCJA
San Gabriel Valley Chapter Meeting
2 Federal Tax Law Hours

August 6, 2019
Topic: Ethics: Understanding Recent Update of the Due Diligence Penalty
East County San Diego Chapter Meeting
2 Ethics Hours

August 7, 2019
Topic: California Tax Updates for 2019
Temecula Valley Chapter Meeting
2 California Hours

August 8, 2019
Topic: California Tax Updates
North County San Diego Chapter Meeting
2 California Hours

August 10, 2019
Topic: Reasonable Compensation and Effects on Business
San Francisco Bay Chapter Meeting
3 Federal Tax Law Hours

August 14, 2019
Topic: Tax Exempt Organizations and the TCJA
Orange County Chapter Meeting
2 Federal Tax Law Hours

August 15, 2019
Topic: Due Diligence After TCJA
San Diego Chapter Meeting
2 Federal Tax Law Hours

August 16, 2019
Topic: Summer Workshop; Mortgage Interest Calculations After TCJA and R&D Credits
San Diego Chapter Seminar
4 Federal Tax Law Hours

August 17, 2019
Topic: Ethics and California Seminar
San Gabriel Valley Chapter Seminar
4 California Hours
2 Ethics Hours

Topic: A Triple Play for Tax Preparers: Delving into Section 199A; Depreciation; and Character
North County San Diego Chapter Meeting
8 Federal Tax Law Hours

August 21, 2019
Topic: After Tax Season Breakfast
Temecula Valley Chapter Meeting
Hours TBA

Topic: Partnerships and Form 1065
Inland Empire Chapter Meeting
2 Federal Tax Laws

Topic: Ethics & Choice of Entity
San Jose Chapter Meeting
1 Federal Tax Law Hour
2 Ethics Hours

August 27, 2019
Introduction to Audits and Schedule A - Itemized Deductions and Schedule B - Interest and Ordinary Dividends
Central Valley Chapter Meeting
3 Federal Tax Law Hours
2 Federal Update Hours
1 California Hour

Click here to view the CSTC calendar.

 Welcome New CSTC Members!

Please help us in joining our newest CSTC Members!

Sam Dodin
Orange County South Chapter

Erica Hayashi
Inland Empire Chapter

Anthony Parent
Greater Long Beach Chapter

Ignacio Rojas
Inland Empire Chapter

Tiffany Warren
Inland Empire Chapter

Legislative Advocacy

CSTC has been the leading Association in supporting legislation to provide protection for our profession, to support our profession, and to enhance our profession. CSTC continuously leads our industry through legislative advocacy, educational opportunities, and professional inclusion.

CSTC works closely with a Legislative Advocate in Sacramento to keep an eye on important bills that would effect tax payers and small business owners.

Please click here to view the bills that CSTC is currently monitoring.

Become a California Registered Tax Preparer (CRTP)!

The California Society of Tax Consultants offers two options for those looking to become a California Registered Tax Preparer (CRTP).

Both courses teach you the fundamentals of federal tax law. And it doesn’t just teach you the law--you also learn how to apply it in your review questions and learning activities by preparing practice tax returns.

ONLINE - All year round we offer an online QE course that you are able to purchase at any time and complete at your own pace. Click here or the online QE course box below to learn more. 

IN-PERSON - Starting in September, 2019, we will be offering an in-person course for the 60 hour QE Education. The course will start on September 9 and continue every Monday and Thursday until November 21, 2019. Click here or the in-person QE course box below to learn more.    



The Qualifying Course is powered by The Income Tax School.


July 31, 2019
IRS, Treasury issue guidance on making or revoking the bonus depreciation elections 


WASHINGTON — The Internal Revenue Service today issued a Revenue Procedure (LINK) allowing a taxpayer to make a late election, or to revoke an election, under section 168(k) for certain property acquired by the taxpayer after September 27, 2017, and placed in service by the taxpayer during its taxable year that includes September 28, 2017.

The Tax Cuts and Jobs Act made several changes to bonus depreciation. For example, the additional first year depreciation deduction percentage was increased from 50 to 100 percent. The property eligible for the additional first year depreciation deduction was expanded to include certain used depreciable property and certain film, television, or live theatrical productions; the placed-in-service date was extended to before January 1, 2027. Finally, the date on which a specified plant is planted or grafted by the taxpayer was extended to before January 1, 2027.

There are three additional first year depreciation deduction elections. A taxpayer can elect not to deduct the additional first year depreciation for all qualified property that is in the same class of property and placed in service by the taxpayer in the same tax year.   Secondly a taxpayer can elect to deduct 50-percent, instead of 100-percent, additional first year depreciation for all qualified property acquired after September 27, 2017, and placed in service by the taxpayer during its taxable year that includes September 28, 2017.

Finally, a taxpayer can elect to deduct additional first year depreciation for any specified plant that is planted after September 27, 2017 and before January 1, 2027, or grafted after and before those dates to a plant that has already been planted.  If the taxpayer makes this election, the additional first year depreciation deduction is allowable for the specified plant in the taxable year in which that plant is planted or grafted. 

The Revenue Procedure applies to these elections for the taxable year that includes September 28, 2017.  If a taxpayer did not make these elections timely for that taxable year, the Revenue Procedure allows the taxpayer to make late elections by filing an amended return or a Form 3115 for a limited period of time.  If a taxpayer did make these elections timely for that taxable year, the Revenue Procedure also allows the taxpayer to revoke the elections by filing an amended return or a Form 3115 for a limited period of time.

Updates on the implementation of the TCJA can be found on the Tax Reform page of IRS.gov.

July 30, 2019
EA Inactivation and Termination Letters

This year’s enrolled agent renewal cycle has finished and we are now beginning our annual clean-up of those who have SSNs ending in 0, 1, 2, or 3 and did not renew.

Those who did not renew during the 2016 and 2019 cycles will be moved to terminated status. (2,700+)

Those who did not renew during the 2019 cycle will be moved to inactive status. (4,900+)

Letters will be sent to all beginning this week advising them of our action.

Anyone in inactive status can still submit a late renewal for approval; with proof of CE.

Anyone in terminated status must re-take the Special Enrollment Exam to apply for re-enrollment.

If an EA disagrees and has a record of previously renewing their EA status, they should contact 855-472-5540 

July 26, 2019
IRS has begun sending letters to virtual currency owners advising them to pay back taxes, file amended returns; part of agency’s larger efforts


WASHINGTON — The Internal Revenue Service has begun sending letters to taxpayers with virtual currency transactions that potentially failed to report income and pay the resulting tax from virtual currency transactions or did not report their transactions properly. 

"Taxpayers should take these letters very seriously by reviewing their tax filings and when appropriate, amend past returns and pay back taxes, interest and penalties," said IRS Commissioner Chuck Rettig. "The IRS is expanding our efforts involving virtual currency, including increased use of data analytics. We are focused on enforcing the law and helping taxpayers fully understand and meet their obligations."

The IRS started sending the educational letters to taxpayers last week. By the end of August, more than 10,000 taxpayers will receive these letters. The names of these taxpayers were obtained through various ongoing IRS compliance efforts.

For taxpayers receiving an educational letter, there are three variations: Letter 6173, Letter 6174 or Letter 6174-A, all three versions strive to help taxpayers understand their tax and filing obligations and how to correct past errors.

Taxpayers are pointed to appropriate information on IRS.gov, including which forms and schedules to use and where to send them. 

Last year the IRS announced a Virtual Currency Compliance campaign to address tax noncompliance related to the use of virtual currency through outreach and examinations of taxpayers. The IRS will remain actively engaged in addressing non-compliance related to virtual currency transactions through a variety of efforts, ranging from taxpayer education to audits to criminal investigations.

Virtual currency is an ongoing focus area for IRS Criminal Investigation.

IRS Notice 2014-21 states that virtual currency is property for federal tax purposes and provides guidance on how general federal tax principles apply to virtual currency transactions. Compliance efforts follow these general tax principles. The IRS will continue to consider and solicit taxpayer and practitioner feedback in education efforts and future guidance.

The IRS anticipates issuing additional legal guidance in this area in the near future.

Taxpayers who do not properly report the income tax consequences of virtual currency transactions are, when appropriate, liable for tax, penalties and interest. In some cases, taxpayers could be subject to criminal prosecution.

More information on virtual currencies can be found on IRS.gov. 

July 23, 2019

Tax professionals specializing in estate and trust returns must have a Preparer Tax Identification Number (PTIN) and renew it annually. The PTIN is required of paid professionals who prepare or assist in preparing certain federal tax returns, which includes Form 1041, U.S. Income Tax Return for Estates and Trusts. Failing to enter a PTIN or entering an expired or suspended PTIN can result in a $50 penalty per return and could cause processing delays for clients.

The IRS urged the estate and trust community, especially financial institutions offering services to clients, to ensure that staff who prepare or assist in preparing Forms 1041 have PTINs. PTINs cannot be shared among staff. Each paid professional must have his or her own PTIN. Obtaining or renewing a PTIN takes only a few minutes and can be done online. Preparers can obtain a PTIN for 2019 now and renew that PTIN between October and December for 2020. Visit www.irs.gov/ptin to start.

July 12, 2019
Time is running out for some combat-injured veterans to claim tax refunds of up to $3,200  


WASHINGTON — The Internal Revenue Service is reminding veterans who received disability severance payments after 1991 and claimed it as income that time may be running out to claim their refund.

Veterans should take action soon if they received a notice (letters 6060-A and 6060-D) and have not already filed Form 1040X, Amended U.S. Individual Income Tax Return, to claim a refund or credit of the overpayment attributable to the disability severance payment should do so soon. 

“We appreciate the service and sacrifice of our nation’s combat-injured veterans, and the IRS is pleased to help deliver refunds under this special provision,” said IRS Commissioner Chuck Rettig. “Time is running out this month for many people who qualify for this refund. We urge combat-injured veterans to take time review the provisions to see if they are eligible.”

The Combat-Injured Veterans Tax Fairness Act of 2016 provides that most veterans who received a one-time, lump-sum, disability severance payment when they separated from military service are entitled to a refund if that payment was claimed as income. The payment must have been received after Jan. 17, 1991, and before Jan. 1, 2017. Eligible veterans should have received a mailed notice from the Department of Defense in July of 2018 explaining how to claim their tax refunds.

Some veterans have yet to act    

Deadlines are soon approaching as the time available for claiming these tax refunds is limited to:

  • One year from the date of the Department of Defense notice, or
  • Three years after the due date for filing the original return for the year the disability severance payment was made, or
  • Two years after tax was paid for the year the disability severance payment was made.

Veterans claiming their refund have the normal limitations period for claiming a refund or one year from the date of their letter from the DoD, whichever expires later. As taxpayers can usually only claim tax refunds within three years from the due date of the return, this alternative time frame is especially important since some of the claims may be for refunds of taxes paid as far back as 1991. While many veterans have claimed their refunds in the past year, many others have not, and time is running short. 

Two options for claiming the tax refund:

  • Option 1: File a claim based on the actual amount of the overpayment attributable to your lump sum disability severance payment, or
  • Option 2: Choose to claim the standard refund amount listed below that corresponds to the year the disability severance payment was made. Simply write “Disability Severance Payment” on Form 1040X, line 15, and enter the standard refund amount listed below on line 15, column B, and on line 22, leaving the remaining lines blank.

Veterans can submit a claim based on the actual amount of their disability severance payment by completing Form 1040X and carefully following the instructions. An original return is not necessary if the information for that tax year available. Veterans without the required information to complete the Form 1040X, you can request a transcript online at IRS.gov/transcript

Option 2, claiming a standard refund amount, is the easiest way to request a refund because it does not require finding the original tax return or requesting information about the return from the IRS. It may result in a larger or smaller refund based on the actual amount from the return. The standard refund amounts are:

  • $1,750 for tax years 1991 – 2005
  • $2,400 for tax years 2006 – 2010
  • $3,200 for tax years 2011 – 2016

Special Instructions

Carefully follow the instructions in the notice mailed by the Department of Defense in July 2018:

  • Complete and file IRS Form 1040X, Amended U.S. Individual Income Tax Return, for the tax year the disability severance payment was made
  • Write either “Veteran Disability Severance” or “St. Clair Claim” across the top of the front page of the Form 1040X
  • All amended returns are filed on paper, so veterans should mail their completed Form 1040X, with a copy of the DoD letter, to:

Internal Revenue Service
333 W. Pershing Street, Stop 6503, P5
Kansas City, MO  64108 

Eligible but never received a DoD notice 

Veterans who did not receive the notice from the Department of Defense and received a disability severance payment after Jan. 17, 1991, that was reported as taxable income, can still file a claim. They must include the necessary documentation to file with their Form 1040X. Veterans should contact the National Archives, National Personnel Records Center, or the Department of Veterans Affairs to obtain the required documentation for submission with their Form 1040X. 

The IRS has posted detailed information on IRS.gov. Veterans with questions about claiming a tax refund for disability severance payment, can call the IRS toll free at (833) 558-5245 ext. 378 between 7 a.m. and 7 p.m. local time (Alaska and Hawaii follow Pacific time). 

July 2, 2019
Taxpayers should be on the lookout for new versions of these two scams
With scam artists hard at work all year, taxpayers should be on the lookout for a surge of evolving phishing emails and telephone scams.

Taxpayers should watch for new versions of two tax-related scams. One involves Social Security numbers related to tax issues. The other threatens taxpayers with a tax bill from a fictional government agency. Here are some details about these scams to help taxpayers recognize them:

The SSN scheme

  • The latest twist includes scammers claiming to be able to suspend or cancel the victim’s Social Security number. This scam is similar to and often associated with the IRS impersonation scam.
  • It is yet another attempt by con artists to frighten taxpayers into returning robocall voicemails.
  • Scammers may mention overdue taxes in addition to threatening to cancel the taxpayer’s SSN.

Fake tax agency

  • This scheme involves a letter threatening an IRS lien or levy. 
  • The scammer mails the letter to the taxpayer.
  • The lien or levy is based on bogus overdue taxes owed to a non-existent agency.
  • The fake agency is called the “Bureau of Tax Enforcement.” There is no such agency.
  • The lien notification scam also likely references the IRS to confuse potential victims into thinking the letter is from a legitimate agency.

Both these schemes show classic signs of being scams. The IRS and its Security Summit partners – the state tax agencies and the tax industry – remind everyone to stay alert to scams that use the IRS or reference taxes. Being alert is especially important in late spring and early summer as tax bills and refunds arrive.

Share this tip on social media -- #IRSTaxTip: Taxpayers should be on the lookout for new versions of these two scams. https://go.usa.gov/xyYHB

2019 Membership Survey

Thank you to all of our members who filled out the 2019 membership survey. Your feedback and suggestions have been heard and we will be making steps to improve the Society. 

Congratulations to Debra Korenic, North County San Diego Chapter member!! You have been randomly selected as the winner of a $25 Amazon gift card for completing the 2019 membership survey! 

Exhibiting at the 2019 Latino Tax Fest!

CSTC is excited to be currently exhibiting at the 2019 Latino Tax Professionals Fest. This event is being held in Las Vegas, Nevada at the MGM Grand, July 30 to August 1, 2019. Thank you to Jen Horton, 2nd Vice President and Shannon Hall, Fall Forum Chair for representing CSTC at this wonderful event.  




Join the California Society of Tax Consultants!

Click here to fill out an online application.

CSTC advances professionalism within the tax industry by:

  • Providing quality education
  • Creating networking opportunities
  • Advocating professional standards

California Society of Tax Consultants | 320 Pine Ave, Suite #1050, Long Beach, CA 90802
Phone (949) 715-4192 | [email protected]