Taxpayer Privilege Bill Heads to Third Base.

• Author: ALLEN, BRUCE
• Position: Brief Article

Once left for dead in committee, Assembly Bill 1016 (Briggs), CalCPA-sponsored legislation to enact a state taxpayer privilege statute, recently was given new life as it breezed through the Senate Revenue and Taxation Committee on a 6-to-1 vote.

In 1999, veteran lobbyists were stunned when the Revenue and Taxation Committee defeated AB 1016 during its initial appearance on a 4-to-3 party line vote. Until then, the bill, which will conform California to federal legislation, had sailed through its hearings unopposed.

The initial AB 1016 opposition, lead by Sen. Deborah Bowen (D-Torrance), revolved around concerns that CPA-taxpayer privilege would:

* Allow taxpayers to commit tax fraud more easily;

* Impact the audit process if clients could conceal material facts from their auditors;

* Adversely affect the state's ability to discipline CPAs; and

* Create a competitive advantage for CPAs and enrolled agents over tax preparers.

SPRINGING INTO ACTION

Following its initial defeat, CalCPA's Action Network sprang into action. CPA volunteers, armed with talking points and appointments, met with senators. In teams of three or four constituents, these CPAs explained AB 1016's nuances and the importance of conformity for California taxpayers. During their visits, the CPAs reviewed other important professional issues such as national reciprocity and the upcoming California Board of Accountancy sunset hearings.

While constituents met with their senators, CalCPA staff broadcast two alerts that asked CPAs to contact Senate Revenue and Taxation Committee members. CalCPA representatives followed up with the legislators, met with Department of Finance staff and approached other associations to garner support for the measure. Additionally, to assuage concerned senators' fears, the bill was amended to provide for a Jan. 1, 2005 sunset. It also was amended to specifically state that taxpayer privilege could not be used in disciplinary matters before state licensing bodies.

A year's worth of effort culminated when the bill passed the Revenue and Taxation Committee without debate.

According to Mike Ueltzen, Government Relations Committee chair, "Although this bill is important to the CPA profession, it can be vital to taxpayers. I was impressed with our CPAs' ability to turn their senators around on this issue."

Looking forward to the sunset process and implementation of the national standardized license proposal, Ueltzen believes that the need for constituent...