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In this issue:

  • New Module Calculates Section 199A Deduction
  • Are You Ready for California's New Wayfair Law?
  • Phishing Still Tops the List
  • Has Anything Changed?

New Module Calculates Section 199A Deduction
Last year we updated the Federal/State Tax Planner to include the new Section 199A deduction, but the calculation depends upon the user figuring their own Qualified Business Income (QBI). We have just released a new stand-alone module that will assist the user in making required adjustments to QBI.

Additionally, the Qualified Business Income Deduction module calculates the Qualified Business Income Deduction for 2018 or 2019 (based on user inputs), including commentary regarding taxable income thresholds, worksheets used, and more. It calculates the Qualified Business net loss carryforward (and REIT Dividend/PTP loss carryforward) if necessary, and produces the appropriate IRS worksheets for the user's records. Finally, it adds the computation of the "9%" reduction required for patrons of certain agricultural or horticultural cooperatives.

The module is included in the latest 2019 TaxTools and Small Business Tools updates. For more information, see your program's Help file.

Are You Ready for California's New Wayfair Law?CA Sales Tax Preparer
The Supreme Court's decision in South Dakota vs. Wayfair, Inc. has prompted many states to enact their own "Wayfair" laws, using economic presence rather than physical presence to determine sales tax nexus. Back in December, the California Department of Tax and Fee Administration (CDTFA) announced that:

[B]eginning April 1, 2019, out-of-state retailers selling above certain thresholds into California will be required to collect California use taxes on their sales into California. Today's Special Notices also impact in-state and out-of-state retailers' obligations to collect and remit district use taxes adopted by California localities. (CDTFA NR 18-59)

Future legislation may affect some details, but one thing is certain: California's new Wayfair law, which goes into effect next week, will impact many retailers, both in and out of state. Are you ready? If not, our California Sales Tax Preparer can help. Program features include:

  • Prepares monthly, quarterly, and annual returns.
  • Prints forms approved for direct submission to the CDTFA.
  • Electronically files returns. (CFS was the first software vendor certified in the CDTFA’s new Direct Transmit program.)

Click here for more information about California Sales Tax Preparer, or to order. Visit the CDTFA website for their current instructions.

Phishing Still Tops the List
The IRS has begun publishing its annual "Dirty Dozen" list of tax scams, and it should come as no surprise that phishing still tops the list. Not only do phishing scams show no sign of going away, they are becoming increasingly sophisticated, and many of them are aimed at tax professionals:

Numerous data breaches across the country mean the tax preparation community must be on high alert to unusual activity, particularly during the tax filing season. Criminals increasingly target tax professionals, deploying various types of phishing emails in an attempt to access client data. Thieves may use this data to impersonate taxpayers and file fraudulent tax returns for refunds.
As part of the Security Summit initiative, the IRS has joined with representatives of the software industry, tax preparation firms, payroll and tax financial product processors and state tax administrators to combat identity theft refund fraud to protect the nation's taxpayers.
The Security Summit partners encourage tax practitioners to be wary of communicating solely by email with potential or existing clients, especially if unusual requests are made. Data breach thefts have given thieves millions of identity data points including names, addresses, Social Security numbers and email addresses. If in doubt, tax practitioners should call to confirm a client’s identity.

Any phishing attempts involving the IRS should be reported:

If a taxpayer receives an unsolicited email or social media attempt that appears to be from either the IRS or an organization closely linked to the IRS, such as the Electronic Federal Tax Payment System (EFTPS), they should report it by sending it to phishing@irs.gov. Learn more by going to the Report Phishing and Online Scams page on IRS.gov.
Tax professionals who receive unsolicited and suspicious emails that appear to be from the IRS and/or are tax-related (like those related to the e-Services program) also should report it to: phishing@irs.gov.

For more information, see IR-2019-26.

Has Anything Changed?
Have you changed your firm name, address, email, or phone number? If so, we need to know about it. If we don't have the right address, you won't receive shipments or mailings. If we don't have the right email address, you won't receive emailed receipts or notifications (not to mention this newsletter). And don't forget that your license code is determined by your firm name and address; if you change the firm information in your software without notifying us and obtaining a new license code, there's a good chance your software will no longer function.

It's easy to inform us of changes in your firm information through your MyCFS account. Log in to your account and select "Change Firm Name/Address/Email," or click here. You can also fax changes to us at 805-522-0187 or email us through our website.

To notify us of minor changes, such as a phone number or email address, you can call our customer service department at 1-800-343-1157.

CFS Customer Service

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