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Hearings continue into missing IRS emails

The saga on the IRS inquiry over tea party tax exempt applications continues.   This week IRS Commissioner John Koskinen appeared before the House Ways and Means Committee on June 20 and the House Oversight Committee on June 23 to defend the agency’s handling of employee emails. 

Before the Ways and Means Committee, Koskinen rebutted accusations that former IRS official Lois Lerner destroyed her computer in 2011 to avoid prosecution for targeting conservative groups seeking nonprofit status. Koskinen told lawmakers that the hard drive on Lerner’s work computer crashed before the current Congressional investigations began and the agency’s information technology department could not repair it.

Koskinen also indicated that the IRS Tax Exempt and Government Entities Division plans to restart audits of Code Sec. 501(c)(4) organizations that were selected for examination but set aside. "I think it is unfair to them to leave them in limbo, that they deserve to have closure," Koskine…

Hearings continue into missing IRS emails

The saga on the IRS inquiry over tea party tax exempt applications continues.   This week IRS Commissioner John Koskinen appeared before the House Ways and Means Committee on June 20 and the House Oversight Committee on June 23 to defend the agency’s handling of employee emails. 

Before the Ways and Means Committee, Koskinen rebutted accusations that former IRS official Lois Lerner destroyed her computer in 2011 to avoid prosecution for targeting conservative groups seeking nonprofit status. Koskinen told lawmakers that the hard drive on Lerner’s work computer crashed before the current Congressional investigations began and the agency’s information technology department could not repair it.

Koskinen also indicated that the IRS Tax Exempt and Government Entities Division plans to restart audits of Code Sec. 501(c)(4) organizations that were selected for examination but set aside. "I think it is unfair to them to leave them in limbo, that they deserve to have closure," Koskine…

Newport Beach Businessman Sentenced to Over 2 Years for Sales Tax Evasion and to Pay Restitution to Board of Equalization

Life's not always a beach, even for the Beach Cruiser business "Let It Roll" owner in Newport Beach and Costa Mesa.  On June 13, 2014, the Orange County Superior Court sentenced a local businessman, Douglas Lachman, to 27 months for sales tax evasion, according to a press release issued by the California Board of Equalization.  The business was a bike sales and rental shop that focused on the beach cruiser market for tourists.  Between 2002 and 2009 there was about $7 million under-reported sales, though this resulted in  a sales tax loss of only $553,478.

The State Board of Equalization is the California tax agency responsible for the administration of the sales taxes (among other types of taxes). The case was prosecuted by the Orange County District Attorney's Office, which is a reminder, as we know all too well from our experience in California Audits of Medical Marijuana Tax Dispensaries, tax problems can come from all sides and the state (and cities) wants that …

Newport Beach Businessman Sentenced to Over 2 Years for Sales Tax Evasion and to Pay Restitution to Board of Equalization

Life's not always a beach, even for the Beach Cruiser business "Let It Roll" owner in Newport Beach and Costa Mesa.  On June 13, 2014, the Orange County Superior Court sentenced a local businessman, Douglas Lachman, to 27 months for sales tax evasion, according to a press release issued by the California Board of Equalization.  The business was a bike sales and rental shop that focused on the beach cruiser market for tourists.  Between 2002 and 2009 there was about $7 million under-reported sales, though this resulted in  a sales tax loss of only $553,478.

The State Board of Equalization is the California tax agency responsible for the administration of the sales taxes (among other types of taxes). The case was prosecuted by the Orange County District Attorney's Office, which is a reminder, as we know all too well from our experience in California Audits of Medical Marijuana Tax Dispensaries, tax problems can come from all sides and the state (and cities) wants that…

The Southern California Criminal Tax News Round-Up

The Southern California Criminal Tax News Round-Up

IRS Suffers Defeat in Appeals Court as Jury's Finding of Return Preparer Penalty Reversed

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 presentat…