The Newport Beach Tax Attorney blog is dedicated to tax issues serving Orange County and Southern California. Posts cover recent news and tax cases including offshore disclosures, tax litigation, IRS, and marijuana tax issues. For more on the Orange County Tax Attorney Joseph P. Wilson, visit www.wilsontaxlaw.com or 949.397.2292
The IRS suffered a major defeat last week in the Eleventh Circuit Court of Appeals, in Carlson v. United States, Case No. 12-13736 (June 13, 2014), as the appellate court reversed in part and vacated and remanded in part a decision from a Florida district court holding a tax preparer liable for penalties under Code Section 6701. The eleventh circuit held that the burden of proof was not the usual minimum of a "preponderance of the evidence" (sometimes described as "more likely than not") but the higher "clear and convincing evidence" usually applied in civil fraud cases. (Note: the clear/convincing standard is lower than the "beyond a reasonable doubt" standard.) Appellant, Frances Carlson, was a return preparer for Jackson Hewitt tax services.
Section 6701(a) of the Internal Revenue Code, 26 U.S.C., provides for a penalty to be imposed on any person:
(1)who aids or assists in, procures, or
advises with respect to, the preparation or presenta…
The LA times published an interesting article about marijuana dispensaries operating in Los Angeles. The article focuses on the interesting fact that as Los Angeles tries to clamp down on the number of marijuana dispensaries operating in Los Angeles by making them follow Proposition D requirements, more than 450 medical marijuana shops filed business tax renewals with the Office of Finance. This number is more than three times as many stores than what is estimated to be allowed to stay open. So while local lawmakers are troubled by the number of medical marijuana shops that still exist in Los Angeles, the Office of Finance has no problem cashing in on all the taxes being collected from them. The article states that Los Angeles collected roughly $2.1 million from medical marijuana tax renewals this year, an Office of Finance staffer told a City Council committee Monday.
The interesting thing about this article is that City Council is upset that these people are paying business tax…
Symbolic of what? I'll leave that to you. From
a Tax Court opinion released earlier this week, file this under Ridiculous Things
the IRS Does:
Taxpayers filed a perfectly correct return listing their
taxable social security income on the correct line. IRS received the
return and, using its big brain, decided the social security income was
nontaxable, recalculates the tax, and issued the taxpayers an additional
$548 refund. Somehow, the IRS later realized the taxpayers were right
and they shouldn't have sent the extra dollar bills, so they audited the
couple and demanded they repay the $548. When the couple declined, the
IRS issued a notice of deficiency, on which the couple appealed to the
tax court. Somehow, probably driven by the couple's righteous
indignation, the case went all the way to trial, where it was decided in
a judicial opinion. The taxpayers argued they shouldn't have to pay
for the IRS's mistake, but the court found in favor of t…
The IRS issued a press releases this week, which can be found here, alerting taxpayers to the newly adopted Taxpayer Bill of Rights, which are outlined here. Except there are no new rights and nothing can be "adopted" when it is a list of responsibilities and rights already belonging to the IRS and taxpayers. Imagine if McDonald's put a customer "Bill of Rights" on their menu, which said that, when you pay for a hamburger, we'll give you a hamburger, except when we don't, in which case you can complain to your cashier and then to the manager to see if they care. The IRS's Taxpayer Bill of Rights, included in Publication 1, which presumably will be sent to taxpayers during audits, provides the following:
The Wilson Tax Law Group is a tax firm serving the Newport Beach and Yorba Linda areas. This blog is meant to be both a service to our clients, where we can post IRS, California Franchise Tax Board, FBAR, and Orange County property tax news that may be of interest to them. It will also be a place where we will post on topics that are of interest to us and other tax professionals following hot tax topics of the moment. Sometimes, those areas will intersect, because we handle cutting edge cases including tax audits and tax planning for marijuana dispensaries (sales tax and income tax) and defending taxpayers in criminal investigations of the FBAR penalties. This blog will be constantly evolving, so please give us feedback in the comments section if you think of future topics you would like to read more about.