Some of you may know that I serve on the Orange County Board of Trustees of an organization called Olive Crest.  Olive Crest is dedicated to preventing child abuse, to treating and educating at-risk children and to preserving the family.  It accomplishes this mission through various programs and initiatives.  You can learn more at their website: http://www.olivecrest.org.

I recently received the following note from Donald Verleur, the CEO of Olive Crest:

“Attached is a heartbreaking report released yesterday that 5 children are dying each day in the United State from child abuse – and those are only the confirmed cases.  Just 3 years ago, it was reported that 3 children lost their lives each day due to the injuries sustained from abuse.  We need to stop this trend! 

Research demonstrates that increased stress on the family can lead to neglect and abuse.  This significant jump in child deaths appears to correlate with the socioeconomic challenges facing today’s families.  It is horrific to think that our society is not taking action, but turning its back on its future generation.  If we want to make lives better in our communities, we need to act now.  And, we have the answer – a strong family!  We believe that Strong Families result in Safe Kids. 

Whether strengthening the family of origin through family preservation or education, providing foster and adoptive families, or providing a safe family for families in crisis, Olive Crest will be able to help stop the alarming trend of abuse by creating stronger families.

Most state child welfare agencies are inundated and are only able to address the most severe and blatant episodes of abuse, leaving thousands of children and their families at risk.  Olive Crest’s continuum of services, including our new Safe Families For Children program that works independent of the state child welfare system, is designed to strengthen the family and help keep kids safe. 

Please spread the word within your community, family, faith, and business networks.  Again, thank you for all you do for Olive Crest and for standing with us in the fight against child abuse.”

The full report can be found here: http://www.everychildmatters.org/National/News/Press-Release-We-Can-Do-Better.html

As we approach the time of year when many of us begin to project our income taxes and make plans to minimize them, would you consider Olive Crest as part of your charitable giving?  If you have any questions, please do not hesitate to contact me, as i would be happy to help you learn ways you can support Olive Crest with your time, treasure and talents.

The California State Board of Equalization (BOE), pursuant to newly added Section 6225 of the Revenue and Taxation Code, is now requiring “qualified purchasers” to register with the Board of Equalization (BOE).  In an effort to collect sales and use tax on internet and out of state purchases, this seems to be another effort by the state government to raise revenue to deal with the budget deficit.

In general, persons or businesses that collect at least $100,000 in gross receipts per calendar year and are not otherwise already registered with the BOE, must register as a “qualified purchaser”.  Additionally, qualified purchasers must then file a return and pay the associated tax for the 2009 calendar year by April 15, 2010.  Additionally, the BOE is requesting these individuals and businesses report and pay tax on purchases from 2007 and 2008 as well, which were due by January 31st of the following years, and is not offering any abatement of related penalties and interest.

The BOE has started sending registration forms and an explanatory letter to businesses throughout the state.  Following is a link to the notice and application recently received by Nienow & Company, LLP:

http://img202.imageshack.us/img202/1260/im451020091025113908.pdf

Please contact us if you would like assistance with registration under this plan.

State Controller John Chiang has announced that after his stress test of the Department of Finance’s cash projections, the state should be able to stop issuing IOU’s on September 4, 2009.

A complete copy of the State’s press allowance can be found here.

The California Franchise Tax Board (FTB) has announced special corporation franchise and income and personal income tax relief available to California taxpayers affected by the recent wildfires in Santa Cruz County. Taxpayers that have lost homes or suffered property damages as a result of the fires can quickly get some financial relief by immediately claiming their disaster losses on their tax returns.

The Franchise Tax Board has instructed that taxpayers claiming the disaster losses should write "California Wildfires 2009" in red ink at the top of their tax returns to alert the FTB to expedite tax refunds. Original and amended return forms for the 2008 tax year are available on the FTB’s Web site at http://www.ftb.ca.gov.

Taxpayers needing copies of lost or damaged state returns should complete Form FTB 3516, Request for Copy of Tax Return, and print "California Wildfires 2009" in red ink at the top of the request. Disaster victims can receive copies of their tax returns for free.

On June 16, 2009, the California Budget Conference Committee approved a package of “revenue raisers” to stave off the state’s budget deficit.  Some of the provisions include:

• Increasing the personal income tax withholdings by 10% beginning January 1, 2010;
• Changing estimated tax payments again to accelerate revenue. Beginning in 2010, taxpayers would be required to pay:
•   1^st quarter 30%
•   2^nd quarter 40%
•   3^rd quarter 0%
•   4^th quarter 30%
• Imposing 3% independent contractor withholding, beginning January 1, 2010;
• Requiring 7% backup withholding on interest, dividends, and other income in conformity with the federal backup withholding rules;
• Increasing tobacco tax by $1.50 per pack beginning October 1, 2009;
• Imposing a new 9.9% oil severance tax beginning October 1, 2009;
• Repealing two corporation tax breaks passed in September 2008 before they take effect: NOL carrybacks and credit sharing among affiliated corporations;
• Extending sales tax requirement to certain out-of-state sellers, such as Amazon, that pay commissions to California firms;
• Allowing the state to suspend occupational and professional licenses for delinquent taxpayers;
• Suspending the Homeowners’ and Renters’ Assistance Program; and
• Enhancing collections by requiring banks and other financial institutions to match their account records with the FTB’s delinquency account records.

A quick review of these provisions shows that, with the exception of certain tobacco and oil taxes, these provisions do not increase revenue to the state, but only accelerate the collection of taxes from one fiscal year to another.  This would seem to only defer the looming problem.

The Legislature should take up the budget package early next week, and all these provisions are subject to change, and Governor Schwarzenegger said he would veto any revenue proposals beyond those he had already included in his budget plan.  The Governor is also opposed to withholding on independent contractors.

Via Journal of Accountancy

The Treasury Inspector General for Tax Administration (TIGTA) has issued a report suggesting ways that Form 1040 could be improved to make it easier for taxpayers to avoid common errors.

The TIGTA analyzed the approximately 7 million math error notices the IRS sends out annually to narrow down the list to those that could partly be attributed to confusing wording or design of the forms.

The suggestions include better labeling of certain lines and the use of red ink to highlight important features.

Via AccountingWeb

"We have been monitoring this issue for several years and the AICPA will work closely with IRS Commissioner Shulman and his staff as they move forward. Clearly, we support the two goals of increasing compliance and maintaining high ethical standards. We have publicly expressed concerns about previous attempts to regulate tax preparers and we hope the IRS will avoid the pitfalls of those past efforts," said AICPA President and CEO Barry Melancon.

Read the full story here.

Via CPAWeb

The Internal Revenue Service has announced that the sales tax deduction available to new-car purchasers this year can also be taken in states that do not have a sales tax. This deduction can be taken by all taxpayers, either as an itemized deduction or as an addition to the standard deduction.  "This special tax break is available for people purchasing a new car this year, and that can include people in states without a sales tax," IRS Commissioner Doug Shulman said in a statement.

Via the Wall Street Journal

In a bid to gain better leverage to make sure paid tax preparers are qualified and ethical, IRS Commissioner Doug Shulman told the U.S. House Ways and Means Subcommittee on Oversight that the IRS is writing proposals that would require people who charge fees to prepare tax documents to be placed under some sort of licensing system.

Via Business Week

With upper-income tax rates set to increase in 2011, many firms are taking a look at ways to save taxes.  Traditionally, many small firm have elected to be treated as an S-Corporation due to the simplicity of compliance, among other factors.  This article from Business Week explores the trend of small firms looking into possible changes to C-Corporation status in the face of increased tax rates.