August 2017 Print


Improving the tax industry, one professional at a time

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President's Message


by Rodney Couts, EA



Being the holder of massive amounts of taxpayer data, it should be no surprise that the tax preparation industry is a prize target for identity thieves. Our inboxes are flooded daily with bogus attempts by these thieves to get us to open the door to this data. Make the wrong move, and the error has the possibility of bankrupting most tax practices. 

Protecting your practice, and your clients’ data, should be one of the highest priorities as we prepare for the coming tax season. Here are five tips to set you on the right path.  

Limit email use!  If you are using email to send sensitive client data and completed tax returns, even if it's password protected, you could be living on borrowed time. Once a hacker gets your email credentials, they can wreak havoc with your account, including client data.  

To address this problem, CSTC has partnered with VeriFyle to offer members free access to an extremely secure method to communicate and share information with your clients. VeriFyle operates outside of email to completely protect and control how you communicate with your clients. Many practitioners spend upwards of $400 a quarter to use similar services, but CSTC offers the service free of charge to its members. If you have not yet signed up, go to the CSTC website and register. Check out the free training also.

Use two-factor authentication.  Historically, entering a password was the only way you could restrict access to accounts. But we’ve learned from data breaches at Target, Yahoo, Anthem Blue Cross and the Office of Personnel Management that gaining access to account credentials, including passwords, appears to be fairly easy.

With two-factor authentication, a code is required in addition to your password to access your account. That code is messaged to your personal handheld device. Without the code, no one can access your account. Yes, it adds a little more work, but it’s an easy fix to protect you and your business.

Stop savings passwords in your browser. You’ve seen the prompt, “Would you like to save your password for this site?” It’s tempting to do, but remember this: If a hacker accesses your computer, all they have to do is click on a site, like your bank, and they get instant access.  They can then change your password and you are instantly locked out of your account and the hacker can do as they please.

While using a password organizing app may seem like a great idea, these too have been breached. So what do you do?  Keep your passwords written down and in a safe place, like a safe or locked cabinet. Until there’s a failsafe way to store passwords, the old fashioned way is probably one of the safest in today’s world. Just don’t leave them in the open, like under your keyboard.

Ramp up the length of your password. We’ve been led to believe that our passwords should consist of a letter, number, uppercase letter and a special character. But researchers have proven that using a long phrase for a password instead of a twisted set of characters is much more secure. The main reason is that if a hacker can’t crack your password quickly, they’ll move on.

Computer security specialists have calculated it would take 550 years to crack the password “correct horse battery staple,” all written as one word. It could take as little as three days to crack the password Tr0ub4dor&3.

The great thing is, it is probably easier to remember a long phrase than to try to piece together the mishmash of characters we thought we would remember when we first created the password.

Get Cyber Insurance. If you get breached, you are required to notify your clients that your systems have been hacked (think mailing costs, printing, etc.). In most cases, the company that gets breached also ends up paying for a credit monitoring service for their clients, often for a period of up to three years. Then there’s the damage done to client relationships and the effect it can have on your business. This could easily bankrupt an unprotected business.

A Cyber Insurance policy will pay for many of these costs, but be aware that not all policies are created equal. Many policy applications will spell out what the insurer wants from you in order to insure your business. Going uncovered is no longer an option. Do comparison shopping and know what is and isn’t covered before buying a policy. 

These are five things you can do today to better protect your business. I also suggest spending a little money on a malware detection program. Malwarebytes is a program that is extremely effective at blocking intrusion attempts. While the free version is good for a while, you are better off getting the Premium version to ensure your program is always up to date and running in real time.

Now go and sign up for VeriFyle. It’s just one way that CSTC is making sure your membership is working for you.  Thank you for being a member!


We informed you earlier this summer that the CSTC management team of Executive Director Bev Switzer and Barbara Eidlhuber, Executive Assistant, are retiring from their positions. We are acknowledging them with a Staff Appreciation and Retirement Party on Sunday, September 17, 2017 in Long Beach.  Visit the CSTC Calendar of Events for details on this great event.

At the July CSTC Board of Director meeting, the Board approved entering into an agreement with Sterling Strategic Management of Laguna Beach, CA to take over management of Society effective September 1, 2017. The team at Sterling submitted an impressive proposal with a great vision for the future of CSTC and exemplary record of implementing their vision with their other association clients.

We are ironing out the management transition process and we will be announcing more details as September 1st approaches. One thing you can count on is, as a CSTC member, you’ll still get the great service with Sterling you’ve come to rely upon with Bev and Barb.

We hope to see you and Bev and Barb’s party on September 17th.        


At CSTC, we want to make sure that your concerns, ideas and issues about the IRS and FTB are addressed as expeditiously as possible. There are meetings coming up with both agencies in September, so now is the time to make your voice heard through CSTC.

If you have issues that you would like for CSTC to address an issue on your behalf, please send an email to explaining the issue and how would like for it to be resolved. Also include your name and your phone number in case we need to get more information from you on the issue.  


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Words We Like to Hear


Joila!  A Word We LIKE to Hear as Tax Professionals!

Good Morning California!  And a special shout out to all tax professionals who can finally take more than a half a second to breath during the day! Season well-done!

I’m happy to sit in my office this spring, watching as flowers sprout forth bringing color to my new home in the San Bernardino County Mountains.  I must admit, I missed a good portion of the winter by hibernating at Fort Huachuca, Arizona, with my son who is in the army.  But there’s nothing better than after tax season; the calm that rushes over us, experiencing the vibrant yellows of the daffodils, the rich reds of the tulips, the calming lavender of the lilacs, and let’s not forget all the variant greens of the cedars, pines and oaks!  Heck, I don’t even mind the coyotes, cougars and black bears over at the dog park (yep, every dawn and dusk up on the hillsides!)

My tax season was very fulfilling this year.  Those of you who know me well also know that I spent the last 12 years as a caregiver for my aging mother.  Unfortunately, as her needs grew my client’s needs suffered.  By 2016 I was downright embarrassed to suggest that I was serving my client’s to the best of their needs.  How ironic that the majority of the client’s that remained with me… also served as a caregiver to someone in their own family.  I can only be thankful for those wonderful people who supported me during that rocky time.

I’m back on track with my business now… but my business recovery wasn’t my fulfilling moment!

I’ve met new tax preparers in the Inland Empire, and not all of them are as fortunate as we members of CSTC.  WE have a terrific network of tax professionals at all levels, in all specialties, willing – AND ABLE – to guide us and answer questions when we don’t know how to handle a situation.  WE should ALL be thankful for this wonderful organization!

One of my new friends had a dilemma at the height of tax season:  a client she thought would owe no tax for TY16 owed tens (and tens!) of thousands when she was through with the return!  Yikes!!!  She was ready to simply have a heart-a-stroke over this!  How could she tell her client how much he owed!  She’d had him pay dearly in the quarterlies, and yet the return still came up balance due!

I looked over the return, and I found several confusing items.  I asked about them, and she didn’t think they were correct either.  “That’s what my software tells me he owes” she said.  Well if there’s one thing I’ve learned over the past few years… software can be wrong.  I didn’t want to spend hours delving into what might be right or wrong in the software; so I gave her that simple answer our IT guys give us… “When in doubt, reboot.”

“Reboot your tax return” I told her.  Delete your return from the software.  Make certain your TY15 return is correct – AS FILED –then bring it forward to 2016 again.  Rekey your return from scratch, and see what develops.

Joila!  She’d had him pay enough tax through quarterlies that he didn’t owe a dime!  Something so simple as rebooting the return.  She’d spent days worrying about it, and in a couple of hours it was fixed.  Sometimes we just need another set of eyes to help us look through our work.

THAT’S what I love about CSTC!  When I first started out I needed ears to listen to my woes and help me work through my returns.  NOW … I can pay that help forward and trouble-shoot issues – both simple and not so simple issues – for my friends.  Finding a resolution to a tax problem through our peers is what CSTC membership is all about –“Changing the Tax Industry – one professional at a time.”

So I’m taking this opportunity to thank YOU – all CSTC members – for being there when I needed you… and for shaping me into a tax professional that can help others achieve their goal of being the best they can be!

Respectfully submitted,
Jen Horton, EA
Greater Long Beach Chapter 

Just watched a demo presentation.  Great work on bringing added value to our membership!

 Thank you!

 Daniel O. Anderson, CPA



As I was reading the announcement about VeriFyle, I started wondering "What's the catch?" and "What are they gonna try to sell me?".  All those thoughts completely disappeared when I saw your signature. Your reputation and interfacing with you these past couple years have garnered my complete trust and faith in you.   Thank you for being proactive and bringing this benefit to CSTC members.

Franklin E Uram, EA


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Calendar of Events



August 29-31.......IRS Tax Forum................Las Vegas

September 12-14..IRS Tax Forum................San Diego

September 18.......Board of Directors Meeting...Orange

 September 21.......Autumn Classic........Morongo Casino

 November 13........Board of Directors meeting...Orange

 December 7 .........Annual Meeting...................Orange

 December 7..........Tax Bridge to 2018..............Orange 


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Broaden Your Tax Knowledge
with 8 Hours of 
Continuing Education 
5 Federal Law
3 Federal Update 

CSTC Members $215

Staff of Member $240

Non Member $265 



Only Here!

A Rare Look Into

Taxation In the Virtual World


Register online  



William Rogers, MBA, CFP, EA
Over the past 18 years, he has 
   developed extensive experience in
advising e-commerce businesses.







December 7, 2017 

4 Hours Federal Update 

4 Hours CA Update 




                             10/7/17  11/7/17

Member                  $190    $215  

Staff                    $215   $240

Non-Member         $240    $265

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Welcome New Members

Nicholette Granholm, Grass Valley  Margaret Billstrom, Lakeside  Baha Eldanaf, Torrance 
  Michele Curl, El Cajon Danny Gammage, Carson
INLAND EMPIRE  Michael Van Handel, Santee Carlos Llerenas, Paramount 
Keith Elliott, Riverside  Kathleen Wing, Alpine  Tamaki Okamoto, Long Beach
Cynthia Hinkley, Lucerne Valley    Denise Roman, Santa Fe Springs
Lawrence Johnson, Colton LOS ANGELES Gabriella Sandoval, Paramount 
Martha Olmedo, Covina  Edeler Cuadra, North Hollywood   
Thomas Scheuerell, Covina  Danny Pasley, Van Nuys MEMBER-AT-LARGE
    Angie Bonifacio, San Ramon
Terry Clare, Vista  Anthony Azavedo, Irvine   
Ken Cozzens, Escondido  James Derry, Fountain Valley   SAN DIEGO 
Charlene Elliot, Oceanside   Mailien Hoang, Garden Grove   Juan Gonzales, Chula Vista 
Maureen Thielen, Temecula   Nagy Ibrahim, Villa Park   Diane McBee, San Diego
Patricia Todd, Vista   Elisa Velasquez, Anaheim   Michelle Mowrey, La Mesa 
Simone Anderson, Palo Alto Carlos Castillo, Los Angeles  Quynh Ho, San Jose
Juan Bermudez, Hayward Hsinying Lu, Walnut  Surekha Vaidya, Walnut Creek 
Kathleen Dowler, San Francisco    
Steven Haggard, Santa Rosa Marry Ann Smith, Mission Viejo Eryn Cook, Riverside 
Luz Elena Mariscal, Vallejo    
Yu Ting Tsai, Redwood City    
Curtis Wong, San Francisco    

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Technical Article


IRS e-News for Tax Professionals 

YouTube: Why Every Tax Professional Needs a Security Plan

This YouTube video explains the importance for all tax professionals of having and adhering to a data security plan.


  Don’t Take the Bait, Watch Out for the W-2 Email Scam

The IRS, state tax agencies and the tax industry urge tax professionals and businesses to beware of a recent increase in email scams targeting employee Forms W-2.

The W-2 scam – called a business email compromise or BEC – is one of the most dangerous phishing email schemes trending nationwide from a tax administration perspective. The IRS saw a sharp increase in the number of incidents and victims during the 2017 filing season.


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