Woman frets over tax return

During the COVID-19 pandemic, American taxpayers have grappled with no shortage of bad news, including unemployment, isolation and illness. In response, Uncle Sam has attempted to lend a helping hand with direct stimulus payments, increases in unemployment benefits and other employment incentives.

But will the disruption of COVID-19 prompt taxpayers to do their part? Or will the once-in-a-century pandemic result in an epidemic of tax cheating?  

Cal State Fullerton accounting professors Ed Lynch and Jon Durrant examined these questions in their study published in The CPA Journal in February 2021: “Tax Compliance and Taxpayer Mood: Will COVID-19 Lead to an Epidemic of Tax Cheating?”  

Ed Lynch

Taxpayers Are in a Bad Mood. That Might Be Good News For the IRS. 

Recognizing that the nation’s tax system depends largely on taxpayer willingness to pay, the study looks at the impact of the moods that taxpayers are in, seeking to determine if moods are correlated with tax behavior.

COVID-19 translates to a bad mood. Perhaps surprisingly, that could be good news for the taxman and IRS – and bad news for our bank accounts – since Lynch and Durrant discovered that negative moods may lead to more compliant tax behavior. In other words, more willingness for taxpayers to pay their full share. 

That’s because people are more likely to take an analytical, detail-oriented approach in order to avoid a negative consequence when they are in a bad mood.

“It is not difficult to understand that people will behave differently if they are in a good or bad mood. But, it may be surprising to see different behaviors in a tax setting,” says Lynch.

For the study, Lynch and Durrant wanted to trigger both positive and negative emotional reactions from their participants prior to asking them the survey questions. To do this, they asked respondents to think about a politician they dislike and then describe why they dislike them, attempting to put the respondent in a bad mood.

“The literature on pessimism has shown that pessimistic people are less likely to take risks, which fits well in a tax setting. Taking risks benefits you today with a larger refund, but may hurt you in the future, through IRS interest and penalties.” 

Jon Durrant

To do the study, the researchers sent questionnaires to 160 intermediate accounting students at Cal State Fullerton. A total of 92 Titans participated, and these had an average age of 23, an average of three years of work experience and an even gender split.

Nearly a year later, the first pandemic-era tax season is in the books and a second looms. Will reality match the study? In other words, will more people pay their full share of taxes since COVID-19 is generating negative moods? 

“It’s hard to say. For us to really show if this worked, we’d need to compare pre-pandemic to pandemic period tax returns,” explains Lynch. “However, so much has changed that it would be difficult to isolate the effect of mood. For example, many people lost their jobs, so incomes are down. Additionally, there were large changes in the tax law, especially related to stimulus checks. The tax law changes created a lot of work for the IRS, it’s possible that this might affect the quality or number of audits that they are able to do. There are just so many things happening that it is difficult to say. Plus, most tax return outcomes are confidential.”  

For More on CSUF Accounting

Cal State Fullerton’s School of Accountancy gives undergraduate and graduate accounting, auditing and tax students the best preparation for today’s AI-focused, high-tech industry.

With leading researchers and instructors and an extensive business network, the school is at the cutting edge of understanding and applying the latest industry trends.

Read more of our articles on CSUF Accounting.

CSUF SMIF students and faculty pose at the SGMH terrace
CSUF investment students and mentoring faculty pose at the College of Business and Economics terrace following the Nov. 19 CFAOC competition held at the college. “I saw a leadership moment in practice before the event that exemplifies the culture and truly impressive students we are so fortunate to mentor and coach,” says Kelly Ko (lower right), finance/equity director of Titan Capital Management and a finance lecturer at Cal State Fullerton. Photo by Kelly Ko.

For the fourth consecutive year, students participating in the Cal State Fullerton Student Management Investment Fund (SMIF) were top finishers in the Chartered Financial Analyst Society of Orange County (CFAOC) competition. The Nov. 19 event featured student teams from local universities competing for the opportunity to manage about $100,000 of the CFAOC’s real-world financial portfolio.

Students from the CSUF College of Business and Economics took second place at the event, enabling the investment-focused students to manage the assets for the CFAOC for another year. The Cal State Long Beach team took top honors, while Cal Poly Pomona students came in third. Other competing groups were from Chapman University and UC Riverside and featured top-tier collegiate investment students in Southern California from both public and private universities.

The competition was held in-person at CSUF’s state-of-the-art Titan Capital Management headquarters, with faculty and staff from the College of Business and Economics hosting students and instructors from across Southern California. As sponsor, CFAOC annually provides the opportunity for schools to manage assets to fund scholarships for chartered financial analyst candidates.

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Shogo Nishiyori in front of the 2020 Tokyo emblems
“Tokyo 2020 was resilient because hard work is a traditional virtue Japanese society still holds as being glorious,” says Shogo Nishiyori ’07. “It was definitely not easy to overcome the adversity, but I believe the commitment and dedication of staff was unprecedented and the hard work paid off with the Tokyo 2020 Games being held safely and securely as initially promised.”

This year’s Summer Olympic and Paralympic Games in Tokyo succeeded despite COVID-19 worries persisting to the last minute. Essential to the games’ accomplishment was the hard work and dedication of the 1.9 million Japanese citizens and residents who held jobs related to the nation’s first summer games since 1964.

Among the organizers was Cal State Fullerton marketing grad Shogo Nishiyori ’07, who has developed a sports marketing and athlete management career, first in the U.S., and then in his native Japan since 2010.

Originally, Nishiyori joined the Tokyo 2020 Organizing Committee as a senior manager in the Marketing Bureau’s Sales Planning Division (Business Development).

“We were responsible for the sales of partner sponsorships and games-related events and were fortunate to have an abundance of domestic and foreign entities eager to be a part of the games,” recalls Nishiyori. “I recall being in disbelief when we realized we had 75 partners, with a year to go (in 2019). This figure was exponentially larger than any of the previous games had accomplished, and it was gratifying knowing we made our mark on history.”

The Tokyo 2020 organizing committee raised over $3 billion from national partnerships, eclipsing the $1 billion record set by the London 2012 Games.

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Brittney Delgado

Brittney Delgado’s dreams for a commercial real estate career now seem within reach. Thanks to a scholarship from an Orange County real estate professional group, Commercial Real Estate Women – Orange County (CREW), the Cal State Fullerton finance senior has received $5,000 toward tuition and books and professional networking opportunities.

“This scholarship will support me financially in attaining my MBA degree, which is most valuable to me since I can’t afford tuition on my own. This will aid me in paying for grad school,” says Delgado. “CREW is also helping me connect with successful real estate professionals. I now have more access to meet fellow women in the field, learn from them as mentors, take their advice, and support my career development.”

Once she earns her undergraduate degree at CSUF in May 2022, Delgado will apply to graduate programs at both University of Pennsylvania’s Wharton School of Business and at her alma mater, but only after getting some applied experience in the real estate world.

“I want to further expand my knowledge and network in the real estate field. I have gotten my feet wet in commercial mortgage loans and private equity work,” she explains. “In grad school, I’ll learn about niche parts of real estate, such as development, and looking into potential opportunities of real estate law. Ever since I interned with the California State Teachers’ Pension Plan this past summer as a real estate investments intern, I have been fascinated by how buildings are structured, the process of financing new constructions, and what it takes to work with an architect to bring an idea to life.”

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TradingView chart

A limited number of undergraduate finance students from the College of Business and Economics at Cal State Fullerton are eligible for free PRO accounts on the investment and global markets platform TradingView, in exchange for student investment idea generation on the platform.

It’s all thanks to an agreement between the CSUF Department of Finance and the investment and cryptocurrency platform.

TradingView is a forum for trading, charting and networking used by more than 30 million traders and investors worldwide to spot opportunities across global stock and cryptocurrency markets. A major investment platform and mobile finance app, TradingView users have shared more than 8 million custom scripts and ideas across the platform. 

“We are delighted to enter into this partnership with TradingView that will bring a first-rate hands-on stock and cryptocurrency analysis experience to the classroom,” says Arsenio Staer, associate professor of finance, who initiated the program.

If you are a finance student who can generate high-quality investment ideas and trading indicators, please reach out to your Department of Finance faculty member.

CSUF is still No. 1 in California and third in the nation for awarding bachelor’s degrees to underrepresented students. That’s the latest from Diverse: Issues in Higher Education, which published its Top 100 Degree Producers list in October.

Specific to Hispanic enrollment, CSUF ranks third nationally for bachelor’s degrees awarded, and seventh nationwide (and first in California) for business education enrollment.

Hispanic Outlook on Education’s list of 2021 Top 100 Colleges and Universities for Hispanics ranks CSUF in third spot nationally for undergrad degrees to Hispanics, up from fourth place last year.

Read more about Cal State Fullerton’s leadership in educating underrepresented students in this CSUF News article.

Seaport
Photo from Pixabay

While the post-COVID supply chain woes are truly global, Southern California may have the best visual image of the disruptions, as cargo ships in the ports of Los Angeles and Long Beach wait to unload containers.

But from workforce disruptions in key manufacturing hubs, such as Southeast Asia, to driver shortages in the U.S. and elsewhere, the clogged seaports are only the middle of the jam that threatens the global economy over the coming months.

Min Choi, assistant professor of management at Cal State Fullerton’s College of Business and Economics, sees beyond the pandemic to the high cost of labor in developed countries as the genesis of today’s supply chain woes.

“In advanced economies, labor is expensive,” she says. “Local U.S. labor is more expensive than in Bangladesh, Malaysia or Vietnam. We rely on other countries so much. We buy a lot of products like toys and clothing that are completely made in parts of Asia.”

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Judith Garcia
Judith Garcia

“It’s so important to me that I was recognized by our prestigious School of Accountancy. I feel honored that my hard work as a student is paying off. It’s a great motivator to keep going and working hard for the rest of my college career.”

These are the thoughts of Judith Garcia ’22 (accounting), recipient of the Charles B. Shellenberger Endowed Scholarship. The award, founded by the late CSUF accounting alumnus, Beta Alpha Psi charter member and Fullerton College Accounting Lecturer Charles Shellenberger, has helped Garcia pay for her books and courses in her senior year. It has also given her inspiration as she looks ahead to her CPA exams and a career opportunity with Big Four accounting firm EY.

Online or In-Person, Preparation for an Accounting Career Continues

When Garcia arrived at Cal State Fullerton in 2018, she got involved in the Accounting Society, Sales Leadership Center and Women’s Leadership Program.

In spring 2020, life suddenly changed for Garcia and other students as courses and college life turned virtual.

But despite the uncertainty and changes of the pandemic, Garcia has benefited from a supportive network and top-notch accounting instruction.

“The best part of being a student at CSUF has been the people I’ve met. I’ve connected with a lot of fellow accounting majors, and we talk about recruiting, the various firms, and things outside of school and work. Even though we weren’t on campus, we could still connect with each other. School can be hard sometimes, so having friends supporting me along the way helped make it a lot better,” recalls Garcia.

In spring 2021, Garcia took two main intermediate accounting courses with Assistant Professor of Accounting Anthony Chen. Despite the online modality, Garcia appreciated the innovative instructional approaches that Chen employed.

“We went over real problems in class, applying what we learned in his recorded lectures. You can go over the recorded lectures a lot, but when you’re doing problems together with them and asking questions in real time, that helps solidify your learning. I feel that was a really good way of presenting it,” says Garcia.

“I am very proud of being part of the School of Accountancy. I know I sound like a nerd, but I really like accounting. It’s an interesting topic and is changing so much every day. And it’s exciting to see how the school is evolving as well.”

After graduation, she plans to pass a few sections of her CPA exam before starting her first full-time job at EY in 2023, where she interned in the summers of 2020 and 2021.

But Garcia is already planning her long-term future, too.

“Eventually after my time at EY, and I do want to stay for a good while, I see myself moving into nonprofit accounting, working for philanthropic organizations, or doing accounting for media and entertainment.”

Advice for the Class of 2022

As part of a graduating class that has experienced a once-in-a-century pandemic, new technologies, and a rapidly changing work and school environment, Garcia has this advice for her peers:

“Never stop learning. Learning is such a beautiful thing. I know sometimes school is stressful, but what makes it stressful is all the projects, assignments and deadlines. But once you take all of that away, what’s left is education. We’re so lucky to be at this great school learning such great topics from great faculty. Once we’re done with our college careers, the learning should never stop. If you’re passionate about a topic, it won’t be hard to learn about it.

But be sure to find a balance between your school self and your personal self. I made a mistake in my first few years of college by focusing so much on school and neglecting my personal life, family and friends, which I feel is not a good thing to do. You should find a balance. Obviously, don’t forget about school, but have a life outside of school, too.”

Congratulations, Judith Garcia, on your scholarship! And best wishes on your future!

Kristen Pham poses in front of images of Vietnamese refugees.
Kristen Mai Pham ’92 stands in front of images taken when Vietnamese refugees, including her family, arrived at Camp Pendleton in 1975.

After more than two decades in the health-care field, Cal State Fullerton management alumna Kristen Mai Pham ’92 launched a second career as an author, sharing her experience as a Vietnamese American.

One of her stories, “Welcome to Tent City,” a thank you to the humanitarian personnel, volunteers and U.S. Marines who helped her family after they escaped from their war-torn homeland in 1975, was featured in Chicken Soup for the Soul: My Kind (of) America: 101 Stories about the True Spirit of Our Country, published in 2017.

It was the first of her 13 published works in the iconic series to date, and three of her essays have been accepted for inclusion in the University of California, Irvine Libraries Southeast Asian Archive for preservation.

Pham discusses her writing career and how all of us can become better writers and share our personal journeys:

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A teacher instructing elementary age students in a classroom
Photo from Pixabay

When looking for new homes, savvy buyers almost always research the quality and proximity of nearby public schools. Even DINKs and single purchasers look at the school system with the belief that it will impact the value of their housing investment.

Mitchell Livy, associate professor of economics at Cal State Fullerton’s College of Business and Economics, recently examined the impact of new school openings on property values in his study, “Days and Confused: Housing Price and Liquidity Response to New Local Public Schools,” which appeared in the Journal of Real Estate Research, co-authored with Nicholas Irwin of the University of Nevada, Las Vegas.

Mitchell Livy
Mitchell Livy

“In this study, we estimated the influence of the opening of new elementary schools on nearby housing prices and liquidity. We found that both measures are positively impacted when a home is zoned for a new school, even though it is of unknown quality,” says Livy. “This research is unique in the real estate and amenity valuation literatures because we jointly estimate the price and liquidity changes resulting from the introduction of new schools.”

Livy and Irwin discovered that the sales price of homes within the area served by the new school increased by 2.4%. But perhaps even more significantly, the length of time homes were on the market declined by 48 days, suggesting that while new school openings will modestly boost home values, they may certainly make it easier to sell.

“This research improves understanding of the housing market and can inform policymakers. A home is a substantial expense and frequently a large portion of a households’ net worth,” says Livy. “Given the impact of new or changing amenities on housing prices and liquidity, it is important for policymakers to consider overall policy impacts.”