pa-natp news - national association of tax … john p, ea, cma 07/87 kistler, ronald j, pa 07/86...
TRANSCRIPT
1
Board of Directors Executive
Committee
President
Kathy Bowman, EA
717-273-2742 [email protected]
Vice President
Patti Blum 814-968-5919
Treasurer
Sue E. Bure, AFSP
724-763-3049 accountingbysue@wind
stream.net
Secretary
Joyce Jones
724-924-9722 [email protected]
Contents
Chapter News 1 – 4
Year in Review 4 – 10
Office Mgmt. 10 – 12
Federal News 12 – 13
PA News 13 – 15
Local News 15 – 17
Adv. Rates 17
President’s Message
In a short while, we practitioners will be starting another
tax season. I am not sure how it will go with all the
clients asking about the tax law changes on the horizon.
It will be an interesting year.
I want to thank outgoing Board Directors Rebecca Mangold and Paul Pascuzzi
for their time serving the members. You both did a tremendous job on the Board.
The membership voted in Joyce Jones, Walter Douglass and Andrea Basalyga-
Phillips to a three year term on the Board. Welcome!
At our Annual Conference in Carlisle, (see photos elsewhere in this newsletter) I
was proud to announce the Award of Excellence went to David Fleming for his
continued dedication to the Chapter.
The Education Committee, chaired by Dave Fleming, will be holding their next
meeting shortly to iron out the details of 2018 educational events. Please contact
Dave or myself with your suggestions.
I hope to see you at one or all of the events. In the meantime, have a great tax
season.
May the beauty of the holiday season touch your heart and enrich your life.
Kathryn Bowman, EA
President PA-NATP
PA-NATP NEWS
www.panatptax.com [email protected]
Volume 29, Issue 2 January 2018
“Adding the Value of State & Local Benefits to the Power of your National Membership”
2
**********************************************************************
2018 Calendar of Events
PA Chapter events in bold type
We are in the process of seeking approval from National for our events and will publish them as soon as
they are approved.
National events in italics August 7-10, 2018 NATP National Conference Tues-Fri Anaheim Marriott, Anaheim, CA
July 22-25, 2019 NATP National Conference Hilton Chicago, Chicago, IL
PA-NATP Mission Statement
To unite those engaged in the practice of preparing Federal, State and Local Taxes
To foster and promote NATP’s contributions toward the high standard of the tax preparation
profession
To promote and protect the interest of tax professionals everywhere for the public benefit
To promote and maintain high standards of conduct in the tax preparation profession as
expressed in the Code of Ethics and the Standards of Professional Conduct of the National
Association of Tax Professionals
To work with the National Association to provide and promote continuing tax education
programs for all members of the Association, particularly on issues and changes in the tax laws
of the Commonwealth of Pennsylvania
Get Involved in Our Chapter!
Included with NATP membership
Getting involved in your Chapter is a great way to stay up-to-date on state and local tax issues and
network with tax professionals in your area.
Here are some Chapter opportunities available to all members:
Register for local education seminars on state and local tax topics. The PA Chapter is holding
events in September and October plus the Annual Conference in November.
Volunteer and share your state and local tax expertise with other members.
Attend state Chapter meetings where members can exchange ideas, solve problems and discuss
issues with other state members.
Reach out to fellow members for support or advice about state and local tax issues.
For more information or to contact our Chapter, visit http://panatptax.com.
3
2017 PA-NATP Board of Directors Kathryn Bowman, EA (18) President
Lebanon, PA 17042 717-273-2742
Susan E. Bure, AFSP (19) Treasurer
Manorville, PA 16238 724-763-3049
Patti Blum (19) Vice President
Sheffield, PA 16347 814-968-5919
Joyce Jones, EA (20) Secretary
New Castle, PA 16101 724-924-9722
Troy Clawson (18)
Youngsville, PA 16371 814-563-7047
David Fleming, EA (18)
Fairmount City, PA 16224 814-764-3371
Mary Jane Stump, AFSP (18)
Kutztown, PA 19530 610-683-9319
Holly Whiteside, EA (18)
Warfordsburg, PA 17267 717-294-6659
Charles C. Evans, Jr (19)
Downingtown, PA 19335 610-873-2073
Tina Pitman, CPA (19)
Chambersburg, PA 17202 717-504-8808
Walter M. Moyer (19)
Philadelphia, PA 19144-3348 215-238-0230
Walter Douglass, AFSP (20)
Schwenksville, PA 19473-2344 610-246-5724
Andrea Basalyga-Phillips, EA (20)
Nicholson, PA 18446-0416 570-466-3195
(xx) indicates year term will expire
New Board Member’s Bios
Walter started his own business of tax preparation in 2009. His areas of expertise are
transportation, education, warehouse workers, mechanics, real estate rentals/vacation homes, sole
proprietorship, and small businesses.
On a personal level, Walter is married to Karen for over twenty-five years. They have raised three
wonderful children. Together, Walter and Karen enjoy traveling and bicycling. He is a retired
member of the Teamsters Union and a member of the Boy Scouts of America earning the rank of
Eagle Scout.
Walter Douglass, AFSP, received his Associates of Science Degree in
Business Administration from Montgomery County Community College
in 2008. From there he moved on to Temple University where, thru
one and two classes at a time, he earned Bachelors of Business
Administration from Temple University 2016.
4
Welcome New Members
The PA Chapter is honored to welcome these new members
May
Hetrick, Elizabeth M Johnstown
June
Dettinger, Jeri Beth Dallastown
Douglas, George IV Carlisle
Henry, Veronica, EA, ATA Mohnton
Herzing, Susan Ann St Marys
Nelson, Timothy Philadelphia
Winkler, Jill Wellsboro
Ziff, Robert A Morrisville
July
DeVore, Colleen Girard
Rebitch, Ed, CPA Delmont
August
Barchetti, Lawrence P Uniontown
Bevan, Lissa A Delmont
Clippinger, Joshua B Carlisle
Georgiou, John E Stroudsburg
Gupta, Manoj Reading
Kent, Lori Somerset
Kramer, Kathleen J, EA Pittsburgh
Lackovic, Victoria Silverdale
Lawton, Ahmad Philadelphia
Lawton, Kristal Philadelphia
Moran, Carlos Philadelphia
Palmer, Danielle F, EA Woodlyn
Totten, Peter Yardley
September
Devonshire, Lisa Lancaster
Loeffler, Douglas Lancaster
Palmieri, JoAnn Pittsburgh
Rooney, Bernard P, Jr, EA Holland
Springer, Joseph, CPA Elysburg
Sulla, Njeri Erie
Weinheimer, Heather M Monongahela
October
Dommonick, Chatman York
Cicero, Shiloh Bellefonte
Cosentino, Steven M Reading
Juzwa, Mark Canonsburg
Mattern, Kathy Hazleton
Potteiger, Karen Duncannon
Quickel, Ray York
Willis, Vicki L, EA Knoxville
November
Antus, Katherine R Erie
Blaskovich, Lisa, CPA Pittsburgh
Burgio, Salvatore M Yardley
Burzawa, Jeffrey W, ATA Greensburg
Buttacavoli, Craig Lebanon
Denlinger, Diane, EA Paradise
DiMase, Logan Beaver Falls
Holtgrefe, Susan, EA Erie
Hunter, Shakara Erie
Lambert, Marilou T, EA Valley Forge
Lawler, Martin G, EA Carbondale
Osterried, David Washington
Savoca, Sam Bethel Park
Signorelli, Bobbie Jo Rochester
Spells, Amber M Pittsburgh
Wilson, Joanne Girard
Andrea Basalyga-Phillips, EA, graduated from the University of Scranton with her BS in
Accounting. She prepared taxes on a part-time basis while a controller for a Convenience Store
Franchise.
In 2004 she left her position to pursue her passion of preparing taxes fulltime becoming an
Enrolled agent in 2005. Along with taxes she also does accounting and payroll services. She
has been a member of NATP since 2003.
In the off season her husband and her have a Marina/RV park in the Finger Lakes. The perfect
way to relax after a stressful tax season!
5
2017 Year In Review
Our chapter was formed in the summer of 1987,
so we are currently celebrating 30 years of active
service. Our membership has consistently grown
to the present day level of over 1100 members.
The following list of 73 members has been with the
chapter since its inception in 1987.
Congratulations to them for their long service to the chapter and the tax profession.
Name, Designation Year Joined NATP
Alexander, Edward J 10/87
Allison, Ronald C 10/86
Anderson, John G, EA 10/87
Beilstein, Robert L, EA 07/86
Bogart, William H, EA 04/84
Bollinger, James R, AFSP 02/87
Bowman, Kathryn A, EA 09/87
Bowman, Robert N 06/86
Brackbill-Speese, Janet L 10/87
Brandt, Denise E, EA 06/86
Brott, Buddy M, EA 11/83
Burman, Douglas 11/85
Cantanzaro, Mary Ann, CPA 11/87
Chein, Mary Agnes, CPA 11/86
Christ, Arlan R, EA 06/86
Cohen, Murray J, CPA 12/84
Cohick, Jeffrey S, EA 12/84
Colaizzo, Anthony L 10/86
Cosentino, Terry S, EA 08/86
Cutter, Paula, EA 06/86
De Grano, Frank A, EA 07/86
Dise, Galen, EA 12/83
Dysard, Ronald 12/87
Erbe, Penny Ann, EA 06/87
Ferrari, Frances L, CPA 07/87
Flach, Robert D 10/87
Fritz, Gloria J 11/86
Fultz, Marvin C, EA 10/86
Good, Ray H, EA 09/87
Grabenstein, Daniel E, EA 08/87
Guarry, Richard C, CPA 01/85
Hall, Dennis R 07/86
Haraschak, Stephen J, EA, ATA, ATP
06/86
Hornbaker, Shelby J, EA 12/87
Ickes, Neil J, CPA, CFP(R) 11/86
Jones, Robert L 08/87
Name, Designation Year Joined NATP
Justice, Arlene M 02/84
Katzman, Saul L 12/87
Keksz, John P, EA, CMA 07/87
Kistler, Ronald J, PA 07/86
Kitchen, K John 07/84
Kloss, Joseph G, AFSP 12/83
Lash, Diane E, EA, CFP(R) 11/83
Laudenslager, Keith I, CPA 07/86
Lodovico, Eugene 10/85
Martin, Jeanette, EA 12/87
Mather, W Cotton, CPA 07/86
McCracken, Barbara M, EA 10/87
Miller, Jon D 08/84
Morton, Nancy C 12/87
Murray, Christpher J, CPA 10/87
Newbert, Elizabeth, EA 12/87
Nugent, Robert R, EA, ATA, ATP 10/87
Opaska, Susan M, EA 04/86
Opaska, William E, CPA, EA 04/86
Pezzano, Joseph 01/87
Raines, Janet E, AFSP 10/84
Rex, Mary 11/87
Rossetti, Anthony F, EA 07/86
Schnader, Jack E, EA 01/85
Shaffer, Gene P 06/86
Slowik, Mary Ann, EA 11/86
Smalley, James T 10/87
Schollenberger, Kenneth D, AFSP 10/87
Starr, Charles W, EA 11/86
Stuchell, Darlene 07/86
Swiantecke, Margaret, MST, CPA 07/86
Tavormina, Mark A 10/85
Thimons, Ted, EA 10/84
Wadsworth, Joan, EA 07/86
Wendolowski, Eugene J 06/86
White, Richard F 09/87
Wuktich, John 06/86
6
In Memorandum…
Lake V Richart, II – By Shawn Bernheisel (with substantial contribution by Carrie Campbell
and Jeffrey Cohick)
Lake V Richart II (1942-2017) Picture from his tax office.
Lake V Richart II, a charter member of PA-NATP passed away on November 16, 2017. Lake was born
in Delray Beach, FL and is survived by his companion Joyce, daughter Sharon and husband Seth, son
Andrew and wife Sherry and 3 grandchildren. Lake’s interest in accounting began nearly five decades
ago. In 1971, while working a full-time job, Lake started a part-time tax practice in Camp Hill, PA.
The service became known as “Richart’s Tax Service” and continued to grow into a full-time practice.
While the tax practice grew so too did Lake’s interest in the developing tax world and assisting others
to learn tax law.
Between 1971 and 1988, Lake juggled duties of his full-time occupation with his growing tax service.
In his personal and business life, Lake was an early adopter of technology, embraced change and
innovation, and loved learning as well as sharing knowledge with others. These aspects became
especially important as he incorporated them into his tax practice. As computers began to
revolutionize the business, Lake’s office became a test site for computerized tax software. His
feedback and early use were important to the development of computer technology long before other
tax practices began to make the transition.
In 1988, Lake’s tax service evolved into a full-time practice and relocated to New Cumberland, PA.
His practice expanded to include several full-time and seasonal staff including PA-NATP member,
Carrie Campbell. Over time, Lake was increasingly interested in sharing his tax knowledge with
others. One of Lake’s post-tax season passions was educating taxpayers and preparers about tax law
and bookkeeping. He hosted seminars and created tax and bookkeeping booklets for taxpayers and
preparers. Seminars were held at Harrisburg Area Community College (HACC) and throughout central
Pennsylvania.
Soon after converting into a full-time tax practice, Lake’s love of educating others led him to a
organization which was in the process of forming; the PA-NATP. Lake became a charter member and
was active for many years following chartering. Not surprisingly, he was involved in the planning and
execution of early tax education, seminars and conferences hosted by PA-NATP. Moreover, Lake was
an active board member and served as treasurer during his time with PA-NATP.
During the 1990’s, Lake and Carrie wrote a tax organizer for the owners of child care facilities. HACC
became aware of Lake’s child care organizer and contacted him to make a filmed presentation called
“Record keeping For Child Care Providers” to be used by the college. Over the years, Lake helped
write other child care and tax related books. He assisted Tom Copeland, a renowned tax and child
care business specialist and blogger, with the writing of several projects. Lake was later contracted
by the PA Department of Education to present tax and bookkeeping information throughout central
Pennsylvania.
Lake V Richart II embraced change throughout his life with his ability to adapt in all aspects from
careers to technology. Lake was extremely driven and detail oriented which allowed him to be
successful as a tax preparer. Lake’s wealth of knowledge and willingness to teach his friends and
colleagues in the industry left an impression on many. He will be dearly missed for his contributions
to the tax industry, PA-NATP and those who had the opportunity to engage with him!
7
Chapter Members at National Conference
NATP CONFERENCE WASHINGTON DC
By Denise Brandt EA
To all those members who missed National Conference I must say this year was fantastic and slightly
different. Before I left I noticed Chapter Showcase was not on the schedule, which made me a little
skeptical. This country girl drove herself into the big city. Three minutes from the hotel and 45
minutes driving in a circle I “ARRIVED”. Valet and the bellman were awesome along with hotel
registration.
Two weeks before conference I retired my flip phone and bought one of those phones which is
smarter than me. NATP had a conference app last year which they had again this year. Not being a
social media person, I had no idea what to expect. Easy download of the app and I was in
communication with members attending conference. You can chat with other attendees, share
pictures, plan your day, evaluate classes, etc. I am sure there is a lot more to the app than what I,
the novice user, knew about.
This year I volunteered and received the best job in the world.
Sunday, I greeted members, guiding them to the registration desk,
later handing out conference bags. Monday and Tuesday morning
greeting and guiding members to their classes. This was just as
good as Chapter Showcase. I probably saw 80% of the attendees
which made my week.
Sunday evening was the conference kickoff and announcement of
the Chapter Awards and the Tax Professional of the Year. This
really was a lot of fun seeing everyone you have not seen for 12
months.
months.
Picture this – take 300 to 400 tax professionals who have not seen each other for 12 months and
put them in one huge room … you can just image how loud the room was. Mixing the awards with
the initial gathering might need a little tweaking for the future.
Tony Brigmon was our keynote speaker Monday morning. What an excellent way to start the week.
Music truly can change the way someone is feeling. He energized, enriched and engaged us using
music. From now on, during tax season, I am going to have music on in my office versus the stock
market; Bob Marley’s “Don’t Worry be Happy”.
Members having fun!
Monday thru Thursday offered attendees fantastic
education and awesome networking with members.
For me there was not one of the sessions I attended
which stood out to be better than the other, they were
all above average and were fantastic. Tuesday and
Wednesday the exhibit hall was opened, offering
attendees time to meet with their current vendors or
find new software and services.
8
Monday night the MD/DC/DE Chapter organized a dinner cruise. I did not go on the cruise; I
volunteered to help load the buses. All the members who joined this event had a blast. The
pictures were fantastic. Tuesday night was the charity auction which is one of my favorites. The
Charity this year was KEENGreaterDC.org. Their mission is to empower youth with disabilities by
providing fun, fitness and friendship which is led by volunteer coaches. NATP members donated
over $26K to the charity at conference. Wednesday night we all were on our own, which gave me
some down time with some dear out of state friends who I only see once a year at conference.
Thursday members from our state chapter enjoyed a fantastic lunch and networking opportunity.
Chapter Education Seminars
September & October
Thursday night was different and a lot of fun. NATP staff really stepped out of the box for our
farewell reception offering members the Moonlight Trolley Tour. The worse part was waiting
to be loaded on the trolleys. After you were on your trolley the tour was awesome. Hopefully
next year staff will take a similar idea, tweak it a little and end conference with a bang.
If you could not attend the conference this year please note the dates for next year in
Anaheim, CA, August 6 to August 9, 2018. I have never been to Disney in CA, now I must
decide if I want to go a few days earlier or stay a few days later.
The 2017 education events started off on September 7 with an Elder Care Law and 1041/PA41
seminar in State College. Attorney Julie Steinbacher and EA Linda Bleil were the instructors. The
event was very successful as the participants rated it very good to excellent and requested future
seminars with these instructors.
The next seminar was held on September 20 – 22 in Erie. The first two days consisted of a basic
tax course in Federal Tax preparation while the third day focused on PA and Local tax forms and
information. We offer this seminar from time to time as an excellent way for new employees or
preparers to learn the fundamentals of tax preparation. Kath Bowman and Patti Blum were the
instructors.
The third seminar, Farm Succession Planning, was held October
20 at the Shady Maple Complex in East Earl, Lancaster County.
This seminar was unique because it involved members of the
farming community as well as the general public and NATP
members. This is the first time our chapter reached out to other
non-members and was commended by National for this effort.
Dave Fleming taught the morning session for NATP members
with a line by line review of Schedules F & J. The second session
covered succession planning for the farmers with Mike
Hosterman of AgChoice Farm Credit as the instructor.
9
After the smorgasbord lunch Michelle Kirk of PA Farm
Link shared her real life experience of the necessity of
having a properly prepared plan. Then Mike conducted a
workshop so everyone had an opportunity to complete a
real life example of a succession plan. The final session
was led by Attorney Gary Heim who discussed the legal
and tax implications of a successful plan. The event was
very successful with high evaluation marks and requests
to hold another seminar like it.
Displays by PA Farm Link and our Chapter.
30th Annual Conference in Carlisle November 2 - 3
Experience at Annual Conference – By Shawn Bernheisel
The Pennsylvania Chapter of NATP recently hosted its annual conference at the Comfort Suites in
Carlisle, PA. The annual conference is a great way to bolster tax knowledge and connect with
other Pennsylvania tax preparers. The annual conference featured presentations about
Pennsylvania and Federal tax topics. These presentations provided a clear and concise
understanding of some very complex tax topics. While the presentations challenged us
throughout the week, our board of directors made sure to provide some fun activities to engage
us socially. These activities included an annual Toys-for-Tots gift drive and Poker Night. It was a
busy but fun conference for all attendees.
Kelly Nokleby, EA NATP Nat’l Rep
During this year’s annual conference, presentations included Pennsylvania
and Federal topics on pertinent information and updates. David Braden,
CPA (PA Department of Revenue) kicked things off by providing an in-
depth update on PA tax law. In addition to the updates, Mr. Braden
addressed concerns regarding ID Validation Letters and those pesky
Schedule C audits everyone encountered throughout the summer.
Kenneth Perry, CPA (PA Department of Revenue) provided information
concerning PA sales tax law as it relates to the audit process. Mr. Perry’s
presentation shed light on many issues including income subject to PA
sales tax, PA sales tax exemptions and preparing for and engaging in a PA
sales tax audit. Federal topics were equally engaging and relevant. Patti
Blum (Vice President of PA-NATP) spoke about ethics and the importance of applying ethics as we engage with our clients.
Jaye Tritz (NATP Instructor) provided detailed instruction on
the gig economy as it relates to Uber, Lyft, Airbnb, VRBO and
other web-based platforms and “apps.” Many of these apps
are becoming more widely utilized and an important source of
income for an increasing number of tax clients. Ms. Tritz
explained how these apps operate and provided the tools
necessary to properly account for the income and expenses
they generate. As cyber and data security relate to the
modern tax practice, Ms. Tritz spoke about the importance of
implementing and updating data security at our tax practices.
She finished the annual conference with information about earned income credit and maintaining
due diligence as tax preparers. An in-depth analysis of Schedule C preparation rounded out an
informative line-up of presentations.
10
The Pennsylvania Chapter of the NATP provides a member benefit of ordering tax and
related books and information at a discount from Tax Materials, Inc. and Thomson Reuters
Checkpoint. Every tax office should have these various informative tools to help in the
planning and preparation of tax returns. By ordering through us, these companies help
support our chapter with a donation for each purchase.
To order The Taxbook™ or WebLibrary products and the Quickfinder tax preparation tools,
go to our Chapter website at https://panatptax.com/. The links for the order forms are on
the right side of each web page. When you order make sure to include the promo codes so
the Chapter gets credit for your order.
Left: President Kath Bowman
presenting certificates to some
of the 30 year members.
Right: Accounting students
and instructor meeting prior to
the Annual to learn about the
tax preparation business. This
is a new program started to
encourage young people to join the profession.
In addition to receiving a wealth of tax
knowledge, attendees were treated to plenty of
time for fun and socializing. A Poker Night was
hosted after dinner on Thursday evening. Real
money was not at stake but bragging rights
were certainly on the line! Additionally, if you
were like me, you also learned a few new casino
games while having a fun time!
Toys for Tots Collection Gambling and Fun!
Similar to prior years, the PA Chapter of NATP held a fundraiser for Toys-for-Tots and requested
attendees contribute a gift. With everyone’s participation, PA-NATP was able to donate a great
deal of toys which were picked up by Toys-for-Tots at the conclusion of the conference. These
social events provided a sense of community and made the conference really special.
This year, the Pennsylvania
All attendees left the annual
to apply throughout the
updates and timing of the
make it relevant and
stimulated by the many
us all together as one tax
the annual conference, you
attending next year.
Chapter of NATP really outdid itself.
conference with fresh tax knowledge
upcoming tax season. The tax
annual conference is unique and
significant. The social aspect,
activities at the conference, brought
community. If you did not attend will certainly want to look into
Office Management
11
Firewall Protection
The following is a response to a question about firewalls in the last newsletter.
Great questions, thank you to the individual who asked.
1 – Yes I have a firewall. Since 1990 I always had some form of firewall or secured system in
my office. Prior to 1990 I had single non-network stand-alone PC. I have no idea what type of
security protection was in my system way back then.
2 – Yes I have a network with 5 stations.
3 – My IT professional ordered and set everything up.
4 – My suggestion to other tax professionals – In today’s world of those nasty hackers we
all need good firewalls. I also know no one can be good at everything, I am totally technology
challenged. If your knowledge in technology is not up to date, I would suggest hiring someone
to get the best firewall and other equipment you might need. We all need to remember this is
not our data we are securing; it is our clients’ data and life. We all need to do our best to protect
and secure their information.
5 - Yes there were problems - They had to tweak the firewall to allow certain software to work
correctly.
I contacted my IT person on these questions to be sure I was answering everything properly. I
am a tax professional, not a technology guru. I really respect and appreciate Norm, my IT guy’s
knowledge and expertise.
In December of 2015 I purchased new equipment. I was given an estimate not to exceed $16K
for the firewall, new server, backup system, installation and service. Total cost was $14133.99,
including sales tax.
The following is a recap from my IT professional Micro Air Computers, Norman Flamm owner,
located in Blandon, PA on my firewall. Awesome person:
“The name of Denise’s firewall - Dell SonicWall SOHO firewall. The SonicWall brand has been a
solid, reliable, and widely used brand for years. The SOHO model may be a newer version of their
flagship model which is better designed for companies of your size, but still carries all the
security features found in the flagship model that is designed for companies with hundreds of
workstations.”
I asked Norm “Why did you select this firewall for me?” – The following is his answer:
“Well known security features. Well accepted and a leader in the security industry. This model
also has Antivirus and malware scanning prior to the data hitting your network which gives it an
additional level of protection over just a business class firewall only. Also, as just mentioned, this
is a robust "business" class firewall unlike the "residential" class firewalls that are present in your
typical $50 - $150 router/firewall that are used in our homes and probably installed in most
businesses. A business class firewall is much harder to properly configure then your residential
firewall that has no configuration options except to turn it on or off. Just like there are different
grades of dead bolts and locks that you can put on the door of your homes and businesses, so
are there different grades if firewalls.”
Submitted by Denise Brandt, EA – Main Street Tax & Accounting Services Inc., Bernville, PA
Editor’s Note: I also use Norm for my IT service. I implemented additional security by setting up
a switch box to disconnect the Internet after the router to the server and workstations.
Whenever they are not in use, I turn off the switch. Hackers cannot locate you if you are not
online.
12
Cybersecurity
The following article is submitted by Walter Douglass of Walter Douglass Tax Service, LLC,
Schwenksville, PA.
As everyone is aware, cybersecurity is more important today than it ever has been, especially with
the IRS. We tax professionals have all the important information of what hackers want. It’s like a one
stop shopping for the cybercriminal. If you have been breached by a cyberattack and your personal or
client’s data has been compromised, you cannot just run and hide thinking this will all go away.
There are several steps you should take to help prevent such an attack. Although, no one is truly safe
from a cyberattack, but if you take some common-sense precautions, you can help thwart off
criminals from accessing you client’s data.
Make your passwords strong. At least fourteen characters long with capital and lowercase letters,
some numbers, and some special symbols like: $ # ^ is a great start. You should use a string of
words interlaced with these different items such as: Taxe$&etMeL0t$0f$. In the phrase “Taxes get me
lots of money”, the letter “o” is replaced with a zero. Moreover, you should also include password
protection for your internet firewall, router, printer, access to your tax software, your documents, and
any removable hardware or hard drives.
There are a few mainstream virus protectors on the market today to help stop computer viruses from
getting into your machine. You need to have one of these protectors installed on your computers and
kept up to date on a constant basis. Also consider having ad blockers installed. For this option, please
speak to your Information Technology (IT) person for assistance.
When you read your emails, do NOT click on attachments from senders you are unsure of or do not
know. These attachments may contain a program inside designed to wreck and steal your information
on the computer. Some emails have “click bait” to trick you into clicking on the link to get you open
the virus program.
If you need to send or receive private information via email, consider using a virtual private network
(VPN). Some tax software programs and commercial built websites offer this feature. Using your
email or even your phone via a text is not a good idea.
There are at least two very important websites you should visit to get more information. Search out
on the IRS website (www.irs.gov) for Publication 4557. This will get you a starter checklist of what to
do for safeguarding data.
The second is the Federal Trade Commission (www.ftc.gov). This site will assist you in identity theft,
and more importantly the Gramm-Leach-Bliley Act. These are the rules we need to follow for
safeguarding client data.
If in the event you are subject to a cyberattack, contact the PA IRS Stakeholder Liaison at (412) 404-
9151.
The bottom line is safeguarding your client’s data is not only a critical piece of your practice, it is the
law.
Federal News
I’m sure everyone is aware of the new Tax Cuts and Jobs Act of 2017 approved by Congress and signed into law by President Trump. Instead of printing all the details, you can read them
13
on the NATP website using the following links: Tax Knowledge Center\Federal Tax Information\Tax
Act Summaries\ Tax Cuts and Jobs Act of 2017, as well as the Disaster Tax Relief and Airport and
Airway Extension Act of 2017 if you need it for clients effected by the hurricanes.
As for changes for the 2017 tax return, there are only a few minor items that have expired along with the dollar amounts and COLA increases limited to the normal items that change each year.
Pennsylvania News
Common PIT Errors and How to Avoid
No e-File Attachments – Many e-file returns are sent to the department that are missing required documents. To prevent delays in processing a tax return, the department offers three ways to submit the supporting documentation. The most convenient way to provide the additional information is to submit it as a pdf attachment when the return is electronically filed.
If unable to attach the documentation to the electronically filed return, it may be faxed to 717-772-4193 or to 717-705-6651 for other states returns. If faxing the information, use the DEX-93, Personal Income Tax Fax Cover Sheet, to submit the information.
Some examples of missing required attachments include: actual copies of W-2s, actual copies of 1099-Rs that include PA tax withholding, statements of explanation, federal K-1’s, statements that show income from pass-through entities for Schedules A, B, D, & E as well as for Line 4.
W2 Related Issues – The number one error for the first half of the department's processing for
2016 returns is the W-2 is not included when it should be. There are multiple occasions when a
physical copy or photo static copy of a W-2 is required to be included with a return, The copy is
required to be provided regardless of the filing method (paper or e-filed). Here is a list of when a
copy of the W-2 is required:
1. The PA compensation reported from the employer is not the same as Box 16 of Form W-2.
2. The employer provided a handwritten Form W-2.
3. The employer reported an incorrect amount of compensation Form W-2. You must also submit
a written statement from your employer.
4. The employer withheld PA income tax on the wages at a rate that is more than the 3.07% tax
rate.
5. The taxpayer is a resident of a reciprocal compensation agreement state and the employer withheld PA Income Tax.
6. The Medicare wages in Box 5 of Form W-2 are greater than the PA wages in Box 16. If there is insufficient information available in Boxes 12 and 14 of the W-2 to reconcile the Medicare wage amount to PA wage amount, the PA-40 W-2 RW Reconciliation Worksheet must also be completed and included with the return. A copy of the W-2 RW can be found on our website.
7. The taxpayer is a PA resident working in another state or country and did not have PA income tax
withheld by the employer.
8. The W-2 includes a distribution from a non-qualified deferred compensation plan included in Box 1 of your Form W-2.
9. The W-2 shows income earned or tax withheld for another state.
10. Using federal compensation instead of PA compensation.
11. Using another state's determined compensation (Box 16) instead of using the Medicare wages.
14
Taxation of New Economies
Fantasy Sports Betting - Fantasy sports games and contests are classified as gambling and lottery winnings for PA PIT purposes. They are not based upon providing a good or service in the market place and therefore are not a business. As a result, only the cost of entering such contests is able to be used to offset any winnings. No other expenses maybe claimed. Income and wagers (cost of entering) should be reported on PA Schedule T.
Short-term Home Rentals or rooms within homes are rental or business income for PA PIT purposes depending upon the level of services provided with the rental. The income and expenses from such activities like Airbnb should be reported on PA Schedule E or PA Schedule C.
Sharing Economy (also known as the on-demand, gig or access economy) activity has increased over the last few years and any service provided and/or received should be valued as income or expensed at the fair-market value of the services or goods provided. You must report the income received from such services if you are actively pursuing clients/business in this arena. The IRS provides taxpayers with a great resource in its Sharing Economy Tax Center area on its website.
Other newer business opportunities undertaken by taxpayer such as UBER or LYFT drivers should also be reporting their income and expenses on PA Schedule C.
Schedule C Expense Reviews
Most of practitioners are aware of the department's requests for additional information and documentation to support Schedule C expenses. Many have contacted the department about the cost-of-goods-sold (COGS) requests and the volume of documentation needed to be provided when that information is requested. If the COGS expense request is received, the department will accept a computer printout from accounting software or a copy of the general ledger showing the payee, amount and date of payment in lieu of copies of the invoices to support the expenses when first replying to the department's information request. The department may request copies of invoices at later date to support some of the expenses.
In response to the volume of requests for information and corresponding concerns of the tax preparer community, the department developed a document TIPS for Successfully Filing PA Schedule C which was published in the June/July PA Tax Update. We have also begun to rewrite the language used for the hold codes requesting information. Depending on the outcome of the reviews, there may be supplemental requests or requests for information for different expense lines.
Please note the department is working the correspondence on a first-in-first-out basis and it can take 8-12 weeks or more to process mailed-in correspondence in preparation for review depending upon when the information request was sent and when the information was received. It may then take about 4-6 weeks to be reviewed. If you send in the information by registered mail you will further delay the review as every document must be individually scanned into the computer. However, if you fax in the information using the DEX-93, you avoid most of the 8-12 week processing delay.
When responding to Schedule C requests for information or any other notices requesting information, please don't send original documents. The department cannot return them. The department cannot return shoe boxes full of lottery tickets.
DEX-93 Personal Income Tax Fax Cover Sheet
As mentioned before, the DEX-93 allows correspondence to be uploaded to the taxpayer's account faster, which will allow it to be reviewed sooner. This helps stop 2nd notices from being mailed and can save you a few headaches. The form is available in pdf format on our web site. Important: Only one taxpayer's information for one tax year can be sent in a single fax transmission. Otherwise you will be causing yourself and your client issues.
15
Provision on Old Oil, Gas Leases Approved Despite Farmer Opposition
A A measure included in a state budget-related bill that cleared the General Assembly will make it
harder for landowners to get better deals for oil and natural gas resources on their properties.
Pennsylvania Farm Bureau opposed the measure, which was included in the Fiscal Code, a user
manual of sorts that accompanies the budget.
The provision allows individuals or companies that hold leases for long-out-of-use oil or gas wells
on private land to resume or begin new production without the landowners having a right to
renegotiate the terms of the lease. That could result in companies buying old, unproductive leases
and forcing landowners to accept payment under the terms of contracts that are decades (or even
a century) old.
A Amid opposition from PFB members, lawmakers removed the provision during an earlier stage of
budget-related negotiations. But the measure was put back in the legislation during the recent
flurry of activity to end a nearly four-month impasse over how to pay for state spending. The
version including the provision was ultimately approved.
“It’ It’s disappointing that, despite objections from Pennsylvania farmers, this provision was ultimately
approved by the General Assembly,” PFB President Rick Ebert. “Thank you to our members who
made their opposition known to lawmakers.” Submitted by Joyce Jones
Local News
A Seminar on Small Games of Chance Submitted by Joyce Jones
The Local Option Small Games of Chance Act of 1988 is designed to provide accountability to
nonprofit groups that follow it to the letter of the law. The intricacies of the law are quite
confusing due to the complexity and details. By following the rules, the Bureau of Liquor Control
Enforcement will not have to investigate complaints about your operations as we were told by Lt.
James A. Jones of the state police Bureau of Liquor Control Enforcement in a meeting sponsored by
the Lawrence County District Attorney's and Treasurer's offices.
Any gambling activity, by law, requires a license whether it is small games of change, bingo,
lottery, or casino gambling. All money raised in this manner must go to public use. Funds raised
by the games cannot be used by the organizations for private parties or improvements to a
building that houses them. It must meet a public need. For example, funds by an organization
though fish bowls, etc. cannot be used for a Christmas party for an organization's members'
children. However, if the funds are raised in that same manner for a Christmas party for the
public's children, then it is quite all right to use those funds. The key is "for the public use".
Exceptions to this are organizations such as fire companies, the American Red Cross and
organizations that operate solely for the public interest. Lt. Jones said, "Your goal is not to get
complaints, and the bureau's job is to respond to complaints, which could lead to fines."
Annual small games of chance licenses, available to nonprofit groups, come from the county
treasurer's office in the county in which the games occur. The cost of the annual license is $125.
Monthly licenses and specials are available for $25 each. In Lawrence County, all the fees
collected from the sale of small games of chance licenses go into the county's general fund.
A limiting factor in the act is the amount of prize money a group can pay out in any game or time
period. The limit in prizes is $35,000 a week. An individual can win a limit of $2,000 on an
individual chance. For example, Lt. Jones said a person playing pull tabs from a fish bowl can win
$2,000 on one chance. No more than $15,000 per month can be awarded in raffles. The law has limited exceptions to prize limits for groups that do not have liquor licenses. An organization
16
raising more than $20,000 in proceeds from small games during the prior year must file an annual
report with the Department of Revenue. The original law permitted only five types of games, punchboards, pull tabs, raffles, daily
drawings, and weekly drawings. But in 2012, 50-50 drawings were added by the legislature.
Since that time, race night games and pools were added. Betting on the Super Bowl or other
sports pools either amateur or professional violates the federal Professional and Amateur Sports
Protection Act.
Lt. Jones stressed that if you are gambling you must have a license. Gambling is defined as an
activity that contains the elements of consideration, chance or reward. Consideration is having to
pay to get into the contest. Chance is a win outcome based totally on chance, and reward is the
opportunity to win more than you wager. Anytime a fund raiser has those three elements, a
license is required.
The Department of Revenue is required by law to audit 5% of small games of chance license
holders every year, which means that eventually the agency will want to look at an organization's
books. You must have records. He noted that the state police Bureau of Liquor Control
Enforcement website has forms available online to help eligible organizations keep records.
Below are some tips that nonprofit organizations need to know when operating small games of
change:
If your group or fundraiser is in a municipality that has not approved a small games of chance referendum, you cannot operate small games of chance there.
The only time a small games referendum can be placed on the ballot is for the primary election in a municipal election year. The next municipal election is in 2019. The governing board of the municipality or a petition can be circulated in the community with signatures of voters of that municipality can have the referendum placed on the ballot.
Organizations wanting small games of chance must have by-laws.
Roll tickets that have "Keep This Coupon" printed on one side and matching number side cannot be used for any types of raffles except for 50-50 raffles.
50-50 raffle payouts cannot exceed $2,000. Tickets must be sold individually and not in "arm's length" or similar fashion. This simplifies record-keeping and reduces chance of theft. The games must be conducted in full view of players.
If a basket, money or other item with ticket sales is based on a lottery number and all tickets are not sold for all possible outcomes, the ticket must indicate the next possible date for the drawing if no winner is picked. The organization cannot keep the money or item to be given away. It must be given out as soon as there is a winner.
Records of funds raised by small games of chance must be kept for two years from the last day of the month that a game went out of play. A club with a liquor license must keep the financial records for five years.
Unsold tickets from raffles must be retained for two years.
Pull tabs must be purchased from a licensed distributor and the club should keep a copy of the distributor's license. The PA Dept. of Revenue's website has a list of small games of chance licensed distributors.
Children under 18 are not permitted to have any part in small games of chance. They may not buy tickets, nor may they be asked to pick a number out of a basket or drawing.
No pools are allowed for sports events. Betting on sports violates federal law.
Basket raffles cannot use roll tickets. All raffles except 50-50s much have tickets with two parts; one part with the purchaser's name, address, and phone number to be kept by the organization. Both parts must have the same ticket number. The other part retained by the purchaser must have the name of the organization, the date, time, and location of the drawings, a list or description of available prizes, the organization's small games of chance license number, a permit number from the treasurer for that raffle, and the cost of the ticket. All that information is a minimum for it to be legal.
Raffle tickets must say that all unsold tickets become the property of the organization.
17
National Association of Tax Professionals – PA Chapter
PA-NATP NEWS Advertising Space Available
Your ad on these pages can reach 1200 PA tax professionals.
Classified Ad Rates
NATP Member rates, up to 100 words: Non-Member rates, up to 100 words:
1 Issue $20.00 1 Issue $30.00
2 Issues, same ad $30.00 2 Issues, same ad $45.00
3 Issues, same ad $40.00 3 Issues, same ad $60.00
4 Issues, same ad $50.00 4 Issues, same ad $75.00
Additional words flat rate 50¢ per word for 1- 4 issues, member and nonmember.
Display Ad Rates
NATP Member rates: Non-Member rates:
Full page $150.00 Full page $225.00
Half page $ 85.00 Half page $125.00
Quarter page $ 50.00 Quarter page $75.00
All ads must be prepaid and tax/accounting/financial planning
Please send your ad and check, made payable to PA-NATP, to the newsletter editor:
Mary Jane Stump
245 Broad Street [email protected]
Kutztown, PA 19530 610-683-9319
You are allowed to use the daily number to choose the winner, but if you won't sell enough tickets to cover the total universe of possible outcomes, you cannot use the daily number to pick the winner. You have to choose from stubs instead.
Sick friend benefits: These fund raisers involving small game raffles need a license, no exception.
If those holding the benefit are not eligible for licensing, they must use an eligible organization
that holds a license to conduct the raffle or game, and that organization must keep all the records
and donate the money toward the intended cause. The actual benefit dinner and any fundraising
outside of gambling are permissible, including silent and live auctions.
Night at the races: Games, disc and betting sheet packages have to be purchased by a licensed
distributor. The game itself has to be operated by the members of the nonprofit organization.
Beware of non-licensed distributors, and no one can be paid to operate the games.
Pull tabs, punchboards, and race night games must be purchased only from manufacturers
registered with the state Department of Revenue.
I know there are many professionals who may be members of nonprofit organizations and
perform record keeping duties, audits, compilations, and reviews as a service to those
organizations either as a public service or maybe for a small fee. Keeping the above listed tips in
mind will help you keep your nonprofit organization out of the limelight of complaints and in
compliance with the Local Options Small Games of chance Act of 1988. Based on the questions
asked and interest of the seminar attendees, those persons responsible to keep their nonprofit
organizations incompliance truly want to follow the law.