2015-01 Newsletter
WAA Update January 2015
In This Issue

From the President
Tax Language
POA Rejection Issue
Legislative News
NSA Update
Chapter News




Around the State

Chapter Events

We have four active chapters around the state.  These chapter officers have been diligently working to bring relevant education to the chapter members and with creating a quality collaborative peer meeting environment. 
Go to www.waa.org/chapters to find out what is happening in your chapter.

Our Leadership

Board of Directors



Chapter Listservs

All WAA members have been subscribed to their chapter listserv based on the chapter listed in their profile.  Download these listserv instructions to learn how to subscribe if you do not currently have a chapter affiliation listed on your profile, to unsubscribe, or to change the email address you want subscribed to the listserv.

Membership Dues

The non-deductible portion of WAA membership dues for Active and Associate members is 26% for this fiscal year. This amount is attributable to lobbying activities.

In Memorial

If you are aware of a WAA member who has passed on please contact [email protected].

Job Board

Looking for Work or a New Employee? Check Out Our WAA Job Board!

Click here to learn more and see current jobs and resumes.

Editorial Content

The principal aims of this publication are the advancement of the accounting profession and communication among our members. Opinions expressed herein are those of the individual writers and not necessarily those of WAA or the Editor. Please submit articles and comments to [email protected].

The deadline for submissions is the 15th of the month of publication.

The mission of the Washington Association of Accountants is to promote and protect the right of every member to practice accounting and taxation; to provide the services and professional education necessary to maintain and improve professional competence.

From the President

by Charles Grass

Happy New Year!

Our Washington Association of Accountants Leadership Program recently had a conference call discussion of the book The One Thing, by Gary Keller and Jay Papasan.  The Amazon description reads, in part; People are using this simple, powerful concept to avoid overwhelming distractions in their personal and work lives so they can focus on what matters most. …. YOU WANT LESS. You want fewer distractions and less on your plate. The simultaneous demands of work and family are taking a toll. And what’s the cost? Second-rate work, missed deadlines, smaller paychecks, fewer promotions—and lots of stress. AND YOU WANT MORE. You want more productivity from your work. More income for a better lifestyle. You want more satisfaction from life, and more time for yourself, your family, and your friends. In The ONE Thing, you’ll learn to • cut through the clutter • achieve better results in less time • build momentum toward your goal • dial down the stress • overcome that overwhelmed feeling • revive your energy • stay on track • master what matters to you The ONE Thing delivers extraordinary results in every area of your life—work, personal, family, and spiritual. WHAT’S YOUR ONE THING?

So, how does this apply to WAA? What is ‘the one thing’ for WAA?  WAA does a number of things; we sponsor leading tax continuing education seminars, our monthly chapter meetings have lunch speakers on a variety of topics throughout the year and mini-seminars in the fall, our meetings and website facilitate connecting with other professionals, our website offers education, professional development and support benefits from a variety of vendors and we advocate for our members.  Of all that WAA offers accounting and tax professionals, the One Thing that sets us apart from other state associations would be our advocacy for the non-CPA’s right to practice in particular and our monitoring the state board and legislature for issues of concern to our members.  And when the need arises, speaking up and advocating for our members, professions and our clients. 

A recent example of this is work being done by our lobbyist, Gary Smith of the Independent Business Association.  Gary brought to WAA Leadership’s attention that appeals of Department of Revenue Audits are taken by DOR agents.  See Michael Vaughn’s article on this conference.  I attended both Tacoma and Seattle chapter meetings last week.  Discussions were held at both about the proposals to cause DOR appeals to be separated from the DOR exam section for independence and transparency.  Both meetings were supportive of WAA, through IBA, advocating for appeals being separate.  I expect that Gary will be asking for our support in the form of letters and testimony.  When the call comes, please take 20 minutes to make that your ‘one thing’ that makes tomorrow, next week, next month…,  better for all of us.  

Yours in Service,
Charles Grass, President


Tax Language



by Kathy Jolly

One of the things I appreciate most about my WAA membership is my affiliation with colleagues who really speak my language. Those of us who have tax practices are now entering our “busy season” and WAA members really understand the true meaning of “busy season” and “tax season.” They know that when a client wants to ask a “quick question” it really means that they want some tax advice right away and they don’t want to be billed for it. We all know Pub 17 is not the bar on the corner where everyone knows your name, and while it is printed and distributed by the IRS, it cannot be relied upon in an IRS audit. A QuickFinder© is a life saver most days and “tax returns” are diligently prepared by us for our clients - not money back from the IRS. And “shoebox” is not in our vocabulary.

At WAA Chapter meetings I never have to worry about referring to my clients by schedule or form number – “She’s a schedule C,” “He’s an F,” or “They are an S-Corp.” Enough said! We all know without saying anything that if a client shows up at our office on April 10th with an NOL, several PTP K-1’s, and thinks they may have to file an FBAR, they are automatically going on extension.

I’ve completed 25 tax seasons, which is a little scary to admit out loud, and I still get excited to start every year. This year it is  thrilling with new lingo – ACA, premium tax credit, Marketplace/Exchange, minimum essential coverage, and (my personal favorite) shared responsibility payment, just to name a few. And what about the new forms like 8962, 8965, and 1095-A, B, & C – because one letter is never enough either!

So, if you are still reading and this just went from “amusing” to “a little overwhelming” know, once again, you are not alone. Your fellow WAA members are going through the same things. If you are struggling with a tax issue, shoot off an email to another member who has expertise in that area. If they can’t help, they’ll try to put you in touch with someone who can. If you are an NSA member, I encourage you to check out NSA’s Tax Talk. I have been following for many months now, and often find very practical solutions there from fellow preparers from all over the country.

I look forward to May and June when I get to see many of my WAA friends again and share our best/craziest client stories. I hope you all have a successful tax season and “many happy returns.”

Written by P00003235

Kathy Jolly


Systemic Problems with the IRS

by Gary Bowe, EA, Deer Park, WA


As practitioners, while representing taxpayers, we may occasionally encounter procedures or policies that unnecessarily delay the resolution of a tax matter or that may create unneeded burdens for you or your client.  Beyond resolving your specific case, we are stakeholders in the tax systems, and you should consider taking a few minutes to provide information that may improve the situation for all concerned.


Occasionally, we encounter problems that can affect more than just your specific client.  It may be that there is a process or procedure being utilized that if changed, could more effectively serve taxpayers, practitioners, and/or the service.  It could also be that the procedures the IRS follows are not consistent with existing law or with IRS procedures as stated in the Internal Revenue Manual.  It could also be that a policy could be in place that while perhaps technically correct, serves no useful purpose.


In these cases, practitioners should consider utilizing the resources of the National Taxpayer Advocate Service (NTAS).  Systemic issues must:


  • Always affect multiple taxpayers;
  • Don’t apply to just one taxpayer;
  • Involve IRS systems, policies, and procedures;
  • Involve protecting taxpayer rights, reducing burden, ensuring fair treatment, or providing essential taxpayer services.


This is NOT a forum for presenting specific case information.  The normal Taxpayer Advocate Service should be used for single client issues.


Recently, a client received a notice from the IRS requesting additional supporting information for a credit claimed on the tax return.  The requested information was submitted to the IRS along with a Power of Attorney, Form 2848.  The IRS rejected the Power of Attorney as incomplete because it did not include an entry in the "Licensing Jurisdiction..." box of the signature line in Part II, Declaration of Representative, of the Form 2848.


I am an Enrolled Agent and received my EA status in 1983.  In the 30+ subsequent years, I have submitted many, many Forms 2848, and I would hazard to guess that none of those POA's have included an entry in the Licensing Jurisdiction box and, none had previously been rejected for that reason.


In reviewing the instructions for Form 2848 there has been a change in completing Declaration of Representative Section.  The following is an excerpt from the instructions:




"c   Enrolled Agent—Enter IRS as the licensing jurisdiction
and the enrollment card number in the block provided


The rejection of the POA for failing to list the IRS as the licensing jurisdiction appears to be a technicality used to delay the recognition of the taxpayer's representative and/or the working of the information provided to resolve the case.  The "IRS" on the form provided no additional information or verification of the representative's qualification to practice,(the Enrolled Agent designation with a valid license number should have been sufficient).  It was additionally frustrating that the returning of the POA only served to create more work for the IRS in issuing the letter and then having to re-process the POA after the 3 letters were added.


After resubmitting the POA, I decided that if this were now being adopted as "policy" by one or more units of the IRS, this represented a "systemic problem" warranting being addressed.  I then went to the website of the National Taxpayer Advocate (http://www.irs.gov/Advocate). From that page, there is a link to Report a Systemic Tax Problem.  I presented the circumstances as stated above.


The following response was received within 24 hours of the issue submission:


"Thank you for your advocacy issue submission: POA Rejection, which was assigned control number 32085 on the Systemic Advocacy Management System (SAMS).


In our research of your issue, we confirmed IRS guidance instructs employees not to reject a Form 2848, Power of Attorney and Declaration of Representative, for the reason you describe. It is likely the rejection letter was issued due to human error; however, Systemic Advocacy has shared your experience with the lead of a task force the National Taxpayer Advocate formed to work with IRS on a variety of POA-related issues."


Therefore, if a practitioner is presented with a situation where an IRS employee contends that a POA cannot be recognized for this reason, you can point out that there is IRS guidance in opposition to that position.  To avoid the potential delay, you may wish to verify that your computer software is completing the Licensing Jurisdiction box.  For those using Lacerte software, this requires putting "IRS" into the Licensing/Enrollment field of the Preparer information screen.


The point of this is that practitioners should recognize the characteristics of systemic issues when they occur and should utilize the resources of the National Taxpayer Advocate Service to report issues that need correction.  The NTAS is a valuable tool for practitioners and taxpayers and can be an effective voice in improving the taxpayer representation environment.




by Cynthia Polley

There is still time to take that last minute update course. The WAA online vendors have classes through live streaming, on-demand webcasts, and self- study. Topics in January and February include 1040 Tax Update, Business Tax Update, Affordable Care Act, 2014 Extenders Bill and much more. Visit www.waa.org.

This is a great time to mark your calendar and register early for the upcoming 2015 live seminars. Don’t wait until fall to get into the seminar groove. WAA has two seminars coming in the spring that you won’t want to miss. In May, we are kicking off the season with an 8-Hour Accounting seminar presented by Gear Up. Joe Santoro will present the recent changes in accounting regulations. This seminar is appropriate for anyone who does accounting and wants to learn the latest developments. In June, attend a one-day S-Corporation seminar presented by Hettick & Bell Enterprise Awareness LLC. This seminar goes in depth with current S-Corporation issues in which you will get answers, tips and solutions.


2015 Live Seminar Schedule

Gear Up Accounting
Everett, May 14, 2015

S Corporations
Everett, June 19, 2015 

Gear Up Business Entities
Auburn, October 26-27, 2015 

Gear Up Individual 1040
Everett, November 9-10, 2015
Auburn, December 7-8, 2015
Spokane, TBA 

Gear Up Professional Ethics
Everett, November 9, 2015
Auburn, December 7, 2015
Spokane, TBA




eTax AlertTM
Extender Bill Passed by Congress
Late as usual, Congress finally extended almost 60 expiring tax provisions to December 31, 2014. Sen. Ron Wyden, chairman of the Senate Finance Committee, who voted against the bill, criticized passage, saying that “with this stop-and-go tax extender bill, Congress is turning in its tax homework 11 months late and expecting to earn full credit.”
Yes, Sen. Wyden, but with tax season looming, taxpayers, tax preparers, tax software programmers and the IRS are all breathing a sigh of relief now that we know what law will apply on the 2014 tax returns.

A few of our clients might need an urgent phone call to tell them that an IRA transfer to charity is OK again or that the purchase of machinery or a business vehicle with a placed in service date before year end can reap a big tax incentive.

The following is a partial list of the items extended from December 31, 2013 to December 31, 2014. A com¬plete list is included in the text of H. R. 5771.



Individual Provisions

New Expiration Date


$250 teacher supply deduction

December 31, 2014


Exclusion for personal residence COD income

December 31, 2014


Mortgage insurance premium deduction as mortgage interest

December 31, 2014


Election for itemizers to deduct sales tax in lieu of income tax

December 31, 2014


Contributions of real property for qualified conservation purpos­es

December 31, 2014


Tuition deduction

December 31, 2014


IRA transfers to charity in lieu of RMDs


December 31, 2014


Business Provisions

New Expiration Date


R & D tax credit

December 31, 2017


Wage credit for activated military reservists

December 31, 2014


WOTC for employers hiring qualified veterans and employ­ees from other targeted groups

December 31, 2014


Increased fringe benefit allowance for transit passes

December 31, 2014


50% bonus depreciation for qualified purchases

December 31, 2014


Election to accelerate AMT credit in lieu of bonus depreciation

December 31, 2014


15-year recovery period for qualified leasehold improvements, qualified restaurant property and qualified retail improvements

December 31, 2014


Enhanced charitable deductions for food inventory

December 31, 2014


Increased expensing limit ($500,000)

December 31, 2014


Treatment of certain real property as §179 property

December 31, 2014


100% gain exclusion for qualified small business stock

December 31, 2014


Basis adjustment to S corp stock for charitable contributions

December 31, 2014


Reduced built in gains recognition period for S corporations

December 31, 2014

As a member of WAA, you receive an additional 10% OFF Western CPE Self-Study and Webcast products. Use promo codes WAA-SS (Self-Study) and WAA-LIVE (Webcasts). Some exclusions apply.





 by Sonia Smith

Being a WAA member offers many benefits to you. 

We would like to remind our members of the advantages of renewing. One major benefit is the networking aspect at our local chapter levels and at WAA sponsored seminars. Other benefits are Education: Live or Online, Professional Insurance and discounts on Quickfinder and The Tax Book just to name a few. WAA is able to sponsor great Gear Up seminars and other update/tax seminars and your membership entitles you to a discount off those seminars. As a member you are kept up to date with the legislative issues that affect the businesses of your clients and your own accounting profession. The WAA Member Benefits team is continually working on bringing new items at a great rate to our members.

If you haven’t looked at our website lately you need to check it out at www.waa.org. There are links to get the latest news and local chapter information. We would hate to have you miss these benefits. The value far exceeds the actual membership cost. Being a WAA member can contribute to your professional success. If you are up for renewal or would like to join you can do so at any time online. 

We would also like to take this time to extend a welcome to all those that have joined WAA during this year and also to thank those that continue to renew. Below is a list of the members that have joined this fiscal year. All of us are working together to help our members grow in their profession, and to build friendships and leaders in our organization.

Welcome New Members:

Yon Wyandt    Joseph Ho Michaela    Hildebrand    Alex Tsaruk
Kara Pike    Ariel Donnette    Scott Nissen    Jannell Hooper
David Rhine    Danelle Williams    Patricia Hammett    Isolde Kowaleszyn
Rod Odegaard    Audrey Evenblij    Linda Owens    Klye Jordan
Debbie Johnson    Rodger Regele    Lucinda Creasy    Monte Cromwell
James Haas    Jennifer McLeod    David Rensvold    Tran Nguyen
Betty Chappell    Sofia Zapata    Mark Mannhalt    David Stock
Michael Plato    Bob White    Mike McKinno   n Lokpal Sohal
Maria Krey    Victoria Osaula



NSA Update

by Larry Walkden

What’s in an Association?

I was trying to decide exactly what to write about and I decided to answer the question why I should join multiple organizations.  As I was pondering how to state this I was talking to other State Directors and Brian Haderlie from Idaho told me about their First VP’s letter he wrote after attending the NSA leadership conference in Indianapolis last fall.  The following is a summary of the content of this letter:

He had just been installed as first vice president in June of 2014 and his board thought he should attend the NSA leadership Conference.  His First thought was no big deal it was four months away. As the dates got closer and after looking at the agenda he thought what’s the point, and there was a better way to spend money and time his and the association’s funds.

But after attending the day and a half meeting he realized how he did not understand the purpose of both organizations. The conference taught him how the associations supported and relied on each other. Attending the conference brought everything into focus. He says its shoes and socks or toothbrush and toothpaste they simply go together.

The NSA and your ASO exist solely to serve individuals and small firms within the accounting industry, so this means you and I.  The ASO serves you by providing timely continuing education events, offering beneficial product and service discounts, and by supporting the next generation of professionals through the scholarship fund.

NSA supports its members and the ASO’s by providing National leadership and by helping its members achieve success in the profession through the advocacy of practice rights and the promotion of high standards in Ethics, Education, and professional excellence.

NSA, working with your ASO, continually monitors the states legislature and the State Board of Accountancy for proposed legislation that could adversely affect our right to practice.

You can see why both your local ASO (WAA) and NSA are important to belong to and participate in. To read the full letter from Idaho’s First VP go on line to IAPAcct.com.  Call or Email Me about membership or with any questions you have. 




Legislative News

Proposal to reform the WA state Taxpayer Bill of Rights

by:   Michael Vaughn, Legislative Committee

Jeremy Saladino, Greater Seattle President-Elect

Bob McKinley, Past Sate President


During the past few months, our WAA Lobbyist Gary Smith brought to the legislation committee’s attention concerns surrounding the Taxpayer Bill of Rights.  We are currently in the process of gathering additional information on how to address this issue.

Some of the highlights include the issue that the Department of Revenue makes Excise Tax Bulletins without the benefit of any recommendations from stakeholders.  WAA would like to see the Excise Tax Bulletins open for public comment prior to issuance.  This would give valuable input into the impact of the bulletin.

Another area under consideration is concerning Technical Advice Requests.  These are issued by the Department of Revenue in response to specific requests from taxpayers for how to handle a specific situation. Many people recognize these as similar to the IRS’s Private Letter Ruling. Unlike Private Letter Rulings that are published and only apply to the specific taxpayer that requested and paid for the letter, the Department of Revenue applies the confidential Technical Advice Requests to similar situations without disclosure to taxpayers.  WAA is considering taking a stance on this practice and how the Department of Revenue should handle Technical Advice Requests during the examination process of unrelated taxpayer situations.

The final area we are looking into is the appeals process for audits with the Department of Revenue. Currently, appeals to a Department of Revenue audit are handled by an employee of the Department of Revenue. These are not independent, and often rule following the letter of the Excise Tax Bulletins or Technical Advice Requests in question.  WAA is recommending that appeal cases are heard by an independent judge, who will listen to both sides before ruling on the question.

WAA legislative committee and the WAA board would like to hear your input on the Taxpayer Bill of Rights.  

Click Here to View the Taxpayer Bill of Rights Presentation



How Does My Contacting My Legislators Help Me And My Small Business

 by Gary Smith, Independent Business Association

YOU will be the critical force to decide if the 2015 Legislature is good or bad for you and your small business.  Most small business owners do not contact their Legislators because they do not think it makes a difference and they are not sure how to contact them or what to say.

Politics and passing or defeating legislation works on input from voters like you.  Legislators decide how they will vote on key issues based on what they hear from their voters like you.  Taxes, regulations, government spending, etc. are decided based on what legislators hear from their voters because it is their voters who keep them in office or throw them out of office, so they listen to their voters – YOU!

So what role does IBA serve you?  We are in Olympia when you are running your businesses.  We testify on scores of legislative bills that affect small businesses and tell legislators how affect small businesses and tell legislators how small businesses feel about those pieces of legislation and why.  While IBA does a good job at that, it requires you to contact your legislators to confirm the position IBA has delivered on issues important to you to show the issues are really important to you. 

Remember those who disagree with your position are also getting as many voters as possible to call your legislators and urge them to vote against your position.  Thus, your Legislators need to hear from you so they know for sure your position on these issues that affect you and your small business; and from a significant number of their voters who agree with you.  If you do not call them, they will assume you do not really care how they vote on the issue.  Legislators are not mind readers, they need to hear from you to know how you feel about issues that affect YOU!  So that is why you need to contact your legislators and tell them how you feel on legislation important to you and your small business.

You will greatly increase your effectiveness and your clout if you can get family members and others you know to contact their legislators on the same issues and express the same positions that you have on those issues.

Our January 16, 2015 newsletter has guidance on how to contact your legislator.


Chapter News

Greater Seattle Chapter

by Lauren Vignec

In December the Greater Seattle Chapter held our first-ever student/practitioner holiday mixer. It's safe to say everyone had a blast. A dozen excellent students and several practitioners showed up to discuss the endless possibilities small business owners have open to them. It was quite interesting to learn how the students were combining their other interests with accounting. Also, we were treated to a performance by our chapter president's dance crew, which was certainly memorable.

Join us February 4th at the Coast Bellevue Hotel at 11:30 for a presentation on 401(k) disclosure rules.

We will take a break for tax season and then return to action in May. Have a great season everyone! 


Puget Sound/Tacoma Chapter 

by Shawn Gagnon

Ringing in the New Year!  We do it right at the Puget Sound Tacoma Chapter of WAA.  Join us for our February 3, 2015 meeting and get yourself ready for busy season by joining us for an update on the Affordable Care Act..  This tax season may prove extra “taxing” with the new healthcare laws.  Join us and be prepared. 

We hope you enjoyed our January 6, 2015 meeting that featured our own Kathy Hettick, EA, ABA, ATP, RTRP.  Kathy presented onPractice Management Tools & Tricks” with  discussion on best practices for our businesses; she shared office resources and tools that work.  Also included was an update on the ramifications of due diligence and preparer penalties. This was a valuable opportunity to learn from each other and to get your office prepared for the busiest time of year. 

We look forward to seeing you there in February.


Spokane Chapter

By Lynnette Heidenreich

In December the Spokane Chapter had a very busy month.   Our speaker was Melissa Sharp from the Department of Revenue.  She spoke on alcohol and marijuana taxation.  The meeting attracted 30+ accountants and was a huge success.  Thank you Gary Bowe for bringing us Melissa.

We also hosted our annual Gear Up 1040 seminar and had a good attendance although our numbers are dwindling.  If you have any ideas or comments on Gear Up speakers, dates, context, venue or miscellaneous comments please contact me at (509) 928-1018.

In January we did not have a general meeting instead we hosted a social get together at Spokane Turbine Center on Friday, January 9th to kick off tax season.  For entertainment we watched each other fly their flight simulator.  It was a good time to see everyone and to talk about something besides taxes. 

Our next general meeting will be February 10th and we will have a round table discussion on the Affordable Care Act.  You may also bring, for discussion by the group, any issues or tax questions you may have.  Our chapter meetings start at 7:15 at CenterPlace, breakfast is included.

Have a healthy and wealthy tax season.


Washington Association of Accountants l P O Box 748, Liberty Lake, WA  99019 l 509-933-2307 l [email protected] l www.waa.org