A California state Senate committee canceled a hearing on a bill to allow out-of-state accountants to provide tax services in the state without first notifying the state's Board of Accountancy.

The committee will reportedly hear a compromise bill sometime next week. The bill, in its original version, had already passed through the state Assembly last month by a wide majority.

Several taxpayers groups, as well as state Attorney General Bill Lockyer, have spoken out against the bill, saying that it could make it easier for accounting firms to market improper tax shelters without proper oversight. Proponents of the bill, including the state Board of Accountancy and the California CPA Society, have said that their intention is merely to eliminate unnecessary red tape for neighboring accountants to provide basic services across state lines.

The 15-member Board of Accountancy licenses and regulates California's 75,000 accountants. In the wake of Enron, the state began requiring out-of-state accountants to fill out a four-page form, asking, among other questions, whether they had been convicted of a crime, investigated, or disciplined for conduct in their home state.

The revised bill will also instruct the board to examine whether the state's $100 permit fee is too high. It remains up in the air what a compromise bill might hold for changes to the state's audit documentation process.

Previously on WebCPA:

California Examining Its Own Accounting Regs (June 20, 2006)

Doon Handed Reins in Calif.; NYSSCPA Names Honorees (May 16, 2006)Calif. Board to Refine New Practice Requirements (Feb. 27, 2006)

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