Smelly Stinky Nefarious Tax Practice – New Home is SmellyStinkyEA.com which is a website where we intend to highlight several situations where egregious examples of tax practice at its worst that we believe need to be eradicated. They include:
Abuses of the OVDP Program and advisors offering US tax advice without being part of the US tax system.
“Unprofessional, incompetent or outright fraudulent conduct relating to the representation of taxpayers in connection with tax collection issues.”
Unprofessional, incompetent or outright fraudulent conduct representation in connection with California’s commercial cannabis industry.
While the basics of the regulation of US tax professionals will remain on this site, the bulk of future activity relating to this topic will be moved to the Smelly Stinky EA site.
Just to restate some of the basic observations:
Validation of Circular 230 Tax Professional Credentials
Certified Public Accountants
The first step when you consider engaging a tax professional is verification of their credentials and review of professional disciplinary history. The tools available to perform that task include cpaverify.org is a CPA lookup tool populated by official state regulatory data sent from Boards of Accountancy to a central database. The website represents the first ever single-source national database of licensed ‘ and CPA firms. Determine a CPA or CPA firm’s credentials without having to search each of the 55 Boards of Accountancy website individually. Regulation CPAs Accountants Tax Pros
Enrolled Agent Validation
The Internal Revenue Service provides a tool for the validation of Enrolled Agent credentials. Need to verify whether someone is an enrolled agent? You may email requests for enrolled agent status verification directly to [email protected]. Please include the following information in your request:
aBIZinaBOX WordPress Platform Workflows -aBIZinaBOX Inc. Cannabis Practice Group is excited to announce that starting this Friday, May 4, 2018, we are going to share a series of five blog posts where we explain how we build forms, workflow, views and platform integration on our WordPress site, and for our clients. The posts are already live, but password protected until we complete a “shakedown cruise”. The series will include:
are seeking to charge insane premiums to allegedly “bring accounting and tax firms into the light” by positioning them to use technology in their practices. The difference between “us and them” is that they are either twenty-somethings that are under the delusion that technology with giving them an advantage for marketing, platform growth, etc…to which we call
Many of the Founders involved with these businesses are decent accountants, tech people, coders, etc. What every single one of them lacks is what we have:
Between the two principal partners at this firm, we have roughly EIGHTY years of “hands-on” experience as professional accountants. We both attended the University of Texas – Austin MS Tax Program which has been ranked as a top three program in the Graduate Program in the United States for the past FORTY YEARS!
Both of us were Tax Partners at Big 4 firms…we didn’t “grow up” working from home…we worked our butts of serving some of the largest enterprise companies in the United States including Tishman Speyer Properties, Marsh & McLennan, just about every major publicly traded REIT and investment bank on Wall St.
Jordan S. Zoot had oversight responsibility for providing technology to the desktops of > 20,000 tax professionals in the United States at a point when broadband didn’t exist. He was responsible for > 350 professionals and > $400MM in net fees for a division or Arthur Andersen LLP.
By all means, go ahead and ask the people at those other firms about how much actual experience they have managing revenue and expenses or practice risk in a large practice…we know the answer.
We really aren’t looking to compete with these firms, we are settled and enjoy what we do. We are actually both committed to “giving back” to the profession that has provided tremendous opportunity to live an experience that most in the profession will NEVER have the opportunity to see. I remember hearing someone say, “If you love what you do, you won’t ever work a day in your life”. While I doubt anyone can make that statement every day, on the whole, after thirty-seven busy seasons, I can say that, and I look forward to another twenty at least, if my health and sanity will permit it.
The second challenge is doing everything we can to support businesses in the commercial cannabis industry in California. We are going to save the rest of that for another post.
aBIZinaBOX WordPress Platform Workflows
Finally, let’s not forget to ask Smelly and Stinky how much support they are getting from the Xero Partner Program in the United States.
California Combined Cannabis Business Representation Credential – CCCBRC
California Combined Cannabis Business Representation Credential – CCCBRC came to me in a dream last night. Either that, or it was a nightmare. No, it was a dream; the nightmare is the situation that those of us that represent commercial cannabis businesses in California are currently living with. The nightmare is having to deal with somewhere between a half dozen to a dozen different state agencies each of which has different rules and procedures for the representation of individuals and businesses that are involved with the cannabis industry. Don’t forget our thoughts on how NOT to become an expert.
Relevant Definitions – Circular 230 Practitioners
We need to introduce some terminology and background to understand both the problem and a very elegant potential solution. The first aspect is the concept of a relational database, a relational database management system [“DBMS”] and the key element in a database, which is a common unique identifier or “CUI”. The relevant definitions are:
Relational Database – A relational database, more restrictively, is a collection of schemas, tables, queries, reports, views, and other elements. Database designers typically organize the data to model aspects of reality in a way that supports processes requiring information, such as (for example) modeling the availability of rooms in hotels in a way that supports finding a hotel with vacancies.
Database Management System [“DBMS”] – is a computer-softwareapplication that interacts with end-users, other applications, and the database itself to capture and analyze data. A general-purpose DBMS allows the definition, creation, querying, update, and administration of databases.
Common Unique Identifier [“CUI”] – is a unique identifying record that has been vetted, verified, and is maintained in a secure repository such that it is accepted as a reliable means to identify an individual or item. The most common examples are social security numbers [“SSN”], driver’s license numbers [“DLN”], and vehicle identification numbers [“VIN”].
There are substantial concerns about the privacy of personal financial information such that SSN and DLN information is not the preferred choice for the purpose that I have in mind. However, the license number for an attorney or certified public accountant [“CPA”] issued by a State, or the registration number issued by the US Treasury – Internal Revenue Service [“IRS”] to an Enrolled Agent [“EA”] are other examples of such numbers.
Each represents publicly available information for a group of individuals that has already been granted the right to represent both individual and business taxpayers in every jurisdiction in the United States [collectively, they are referred to by the IRS as “Circular 230 Practitioners“]. The individuals in this group have had their personal identification verified, usually including US passport, driver’s license or state identification, fingerprints, and in some jurisdictions DNA independently verified by the issuer of their credentials. The academic credentials, and satisfaction of required examinations and experience have also been verified [we note that the deficiency for EA’s is a lack of education and experience requirement, which we have previously discussed and you can read about here.]
Additional CUI’s Which We Rejected
We are aware of additional CUI’s such as:
Preparer Tax Identification Number [“PTIN”] is an identification number that all paid tax return preparers must use on U.S. federal tax returns or claims for refund submitted to the Internal Revenue Service (IRS).
California Tax Education Council [“CTEC”] –is a registration which is unique to California [New York and Oregon are examples of additional states which have similar programs]. California law requires anyone who prepares (or assists with) tax returns for a fee, and is not an attorney, certified public accountant (CPA) or enrolled agent (EA), to register as a tax preparer with CTEC.
Both of these CUI’s represent individuals with substantially lower levels of experience, education, validation and verification than Circular 230 Practitioners. As such, while they may have some skills and provide a useful service, they are not appropriate at this point in our analysis.
Circular 230 Databases Currently In Use
Just to provide additional background on relational databases currently in use to verify or validate Circular 230 Practitioners in California that are currently in use, we have:
There are similar search and lookups provided in all of the US states and territories, and the ability to verify firms and professional service entities are available. You can read more about them here. As an outstanding example of how multiple lookups can be combined, we highlight CPAVerify.com, a project of the National Association of State Boards of Accountancy [“NASBA”].
CPAverify is an online central repository of information about licensed CPAs and public accounting firms maintained by the National Association of State Boards of Accountancy (NASBA) to provide a single-search resource covering participating jurisdictions where a person or firm has been licensed. With the widespread adoption of mobility, the need for the general public to be able to determine if a person or firm is licensed and in good standing is more prevalent than ever.
Just to provide an illustration, here is what is returned when I look myself up on CPAVerify.
Inter-Agency Databases In Use Today
There are several states that already provide comprehensive portals where tax professionals can register themselves, as well as individual and business entity clients that they represent, to obtain confidential taxpayer information as well as file tax returns and make payments on behalf of their clients. As an example we highlight several that we consider being the most advanced, secure and well executed:
View estimated payments and credits before filing a return.
Verify the exact business entity name to use when filing a return.
View payment history.
View a list of tax returns.
View images of tax returns.*
View a list and images of notices and correspondence.
Update contact information.*
View proposed assessments.
View California wage and withholding information – individual clients only.
View FTB-issued 1099 information – individual clients only.
Calculate a balance due for a date in the future.
File a power of attorney (POA).
File a nonresident withholding waiver request.
Protest a proposed assessment.*
Respond to a proposed assessment to request a 30-day deferral to file a tax return.*
Options to communicate with us:
Chat with an FTB representative about confidential matters.
Send a secure message with attachments to FTB.
Further, FTB makes the following services available to Tax Practitioners that can be reviewed here.
California Dept. of Tax and Fee Administration [“CDTFA”]– Form CDTFA-392 is already in use and common to CDTFA and the California Employment Development Department [“EDD”] though at this time, the current requirements require a separate form even if identical information is provided be provided to each agency. Further, CDTFA already has an electronic services portal that Circular 230 Professionals can access for multiple individuals and business entities after completing a Power of Attorney registration process for each. A snapshot of the main Online Services screen appears below.
California Cannabis Regulatory Agencies – Combined Access
The triad of California agencies with direct regulatory oversight of the commercial cannabis industry –
California Bureau of Cannabis Control [“BCC”] – Distribution and Retail Licenses
have already integrated their Online Licensing and Registration Portals and share all kinds of information for all kinds of licenses. The information is on the BCC website:
when a prospective applicant takes the next step and selects the Online Licensing Portal for ANY license they are taken to:
Once the log-in and authentication process is complete, BCC presents the applicant with the choice that involves all three distinct agencies:
All of which illustrates that the inter-related relational database concept linking multiple agencies is not only possible, but the California cannabis regulators have already implemented the baseline version.
What Additional Features Should CCCBRC Include for Implementation?
If you have stayed with this and gotten this far, permit us to present “CCCBRC Nirvana”.
Let’s start with the BCC Online Licensing Portal and Add:
State Bar and Board of Accountancy for Circular 230 Professional Online Validation of Attorneys and CPA’s [sorry Enrolled Agents you are gonna have to send in paper forms until IRS modernizes the EA verification process]
Having taken you this far, now we swing for the fences and use Humboldt County, CA to illustrate the importance of county and municipal governments in the California cannabis regulation scheme, starting with zoning and land use which is an absolute requirement that an approval be obtained for many of the California state level licenses.
Finally, if Humboldt County doesn’t seem quite sufficient, what about land use and Chapter 5 of the Code in Los Angeles. If you would like another 4,000 words to read, you can go here.
We would really appreciate your thought and comments, particularly if you are a California Cannabis CPA or other Circular 230 Professional serving California cannabis industry clients, please consider joining our Facebook Group for Circular 230 Cannabis Industry Professionals. There you have it, the dream or nightmare of a California Combined Cannabis Business Representation Credential. Back to reality, let start by getting BCC, CDPH and CDFA to permit Circular 230 Professionals to represent licensees and applicants, and yes you can read about that issue here.
AG Sessions – DOJ Abrogates Cole Memo In a seismic shift, will announce Thursday that he is rescinding a trio of memos from the Obama administration that adopted a policy of non-interference with marijuana-friendly state laws, according to a source with knowledge of the decision.
While many states have decriminalized or legalized marijuana use, the drug is still illegal under federal law, creating a conflict between federal and state law.
The main Justice Department memo addressing the issue, known as the “Cole Memo” for then-Deputy Attorney General Jim Cole in 2013, set forth new priorities for federal prosecutors operating in states where the drug had been legalized for medical or other adult use. It represented a major shift from strict enforcement to a more hands-off approach, so long as they didn’t threaten other federal priorities, such as preventing the distribution of the drug to minors and cartels.
The memo will be rescinded but it’s not immediately clear whether Sessions will issue new guidance in its place or simply revert back to older policies that left states with legal uncertainty about enforcement of federal law.
Opponents of legal marijuana on Thursday celebrated the long-awaited action.
“It’s pretty clear that the federal policy is going to be that U.S. attorneys will have discretion and the industry can no longer hide behind the Cole memo and say that they’re protected,” said Kevin Sabet, who worked in Obama’s Office of National Drug Control Policy and now runs the anti-legalization group Smart Approaches to Marijuana. “There is an unknown here because we don’t know how this is going to be implemented.”
It was not immediately clear when Sessions will formally revoke the agreement, authored in 2013 by then-Deputy Attorney General James Cole.
The move is likely to put the federal government in conflict with states where marijuana is legal for recreational use. California on Monday became the sixth state to legalize recreational marijuana. Massachusetts and Maine are set to join those states later this year.
“It’s really the beginning of the story, not the end,” Sabet said.
Legalization has led to a booming marijuana business in some states, where wealthy growers and even hedge funds have invested millions of dollars in production and sales. Some industry analysts peg the North American cannabis market at $10 billion in annual sales.
We are watching the issue carefully and will follow up and update everyone that shares our concerns over the insane policy.
aBIZinaBOX Cannabis Practice – Launches Management Site Its 8 PM on Friday, December 15 and that means we have two weeks to the deadline for legal recreational cannabis in California. We have noticed that everyone isn’t thrilled with the legalization that they had been clamoring for….for years. The reality is cannabis is going to be … Continue reading “aBIZinaBOX Cannabis Practice – Launches Management Site”
aBIZinaBOX Cannabis Practice – Launches Management Site Its 8 PM on Friday, December 15 and that means we have two weeks to the deadline for legal recreational cannabis in California. We have noticed that everyone isn’t thrilled with the legalization that they had been clamoring for….for years. The reality is cannabis is going to be … Continue reading "aBIZinaBOX Cannabis Practice – Launches Management Site"
Bureau Cannabis Control Issues First Licenses SACRAMENTO – The Bureau Cannabis Control Issues First Licenses today issued the first group of commercial cannabis temporary licenses for retailers, distributors, microbusinesses and testing laboratories via its online licensing system. “Last week, we officially launched our online licensing system, and today we’re pleased to issue the first group of … Continue reading “Bureau Cannabis Control Issues First Licenses”
Bureau Cannabis Control Issues First Licenses SACRAMENTO – The Bureau Cannabis Control Issues First Licenses today issued the first group of commercial cannabis temporary licenses for retailers, distributors, microbusinesses and testing laboratories via its online licensing system. “Last week, we officially launched our online licensing system, and today we’re pleased to issue the first group of … Continue reading "Bureau Cannabis Control Issues First Licenses"