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Tax Controversy Archives

San Francisco Demands Over $30k in Back Taxes from Charity

Helpers Community Inc. must pay the San Francisco Office of the Assessor-Recorder approximately $31,000 in back taxes for misrepresenting the use of properties the charity owns around Golden Gate Park. The nonprofit was founded in 1953 to assist people with developmental disabilities, including providing residential care support. They have received about $100,000 in property tax exemptions since 2003 for this use. However, city officials recently found that the charity ended its residential services in 2002 and has been using the properties for storage and a high-end fashion resale boutique instead.

U.S. Tax Court Says CalPERS Benefits Excluded From Canceled Debt Insolvency Calculation

On February 9, 2017, the U.S. Tax Court released its opinion in Schieber v. Commissioner, T.C. Memo 2017-32, ruling that the lump-sum value of CalPERS pension benefits should not be included in asset calculations to determine a taxpayer's ability to immediately pay tax on canceled debt income.

BP Oil Spill Settlement Generates $15.3 Billion Tax Deduction

On Monday, a federal judge for the Eastern District Court of Louisiana approved a settlement between BP and the United States for $20 billion to settle claims related to the 2010 oil spill in the Gulf of Mexico. Of that amount, $5.5 billion represented a Clean Water Act penalty, which is nondeductible under Internal Revenue Code sec. 162(f) (barring deductions for "any fine or similar penalty paid to a government for the violation of any law"). However, $15.3 billion of this settlement qualifies for a business tax deduction.

VIDEO: Is a worker an employee or an independent contractor?

This is a question that many business owners have, and finding the correct answer is extremely important. At the Law Office of Williams & Associates, P.C. we help business owners answer this question and many others so that they are in compliance with state and federal employment tax laws.

Video: A California tax law firm with the experience you need

The tax code is highly complex. Yet, any number of mistakes and missteps may result in interest and penalties that can outweigh the cost of your initial tax liability. Under some circumstances, you could face criminal charges and jail time.

Federal Judge Allows Class Action Status in Uber Worker Classification Suit

On September 1, 2015, U.S. District Judge, Edward Chen, authorized the certification of a class action in a lawsuit against Uber Technologies, Inc. for worker misclassification of Uber drivers. The drivers claimed they were misclassified as "independent contractors," and rather are properly classified as "employees." Thus, if the court eventually sides with Uber, the ride-share company would be subject to penalties, applicable lost wages or overtime wages, California and federal law regarding unfair competition, worker benefits, and employment taxes.

Berwick V Uber California labor Commissioner decision

On June 3, 2015, the California Labor Commissioner found an Uber driver to be an employee, and thus eligible for reimbursement for mileage and other expenses while providing rides for the tech company, which claims to be engaged in the business of providing lead generation to transportation providers using its mobile application. (Berwick v. Uber Technologies, Inc., Labor Commissioner Case No.: 11-46739 EK http://cdn.arstechnica.net/wp-content/uploads/2015/06/04954780-Page0-20.pdf) Uber Technologies Inc. is appealing the decision in the Superior Court of California, County of San Francisco. This case coincides with recent federal court wage and hour claims, in which Uber and a similar provider, Lyft, are defending claims that the transportation providers are employees and misclassified as independent contractors. (O'Connor v. Uber Technologies, Inc., No. 3:13-cv-03826-EMC (N.D. Cal. Mar. 11, 2015); Cotter v. Lyft, Inc., No. 3:13-cv-04065-VC (N.D. Cal. Mar. 11, 2015))

Ninth Circuit affirms Tax Court judgment that OPIS tax shelter transaction lacked economic substance

On Friday, the Ninth Circuit Court of Appeals affirmed the Tax Court's decision to disallow a capital loss deduction on the ground that the underlying transaction lacked economic substance and was designed to create substantial capital losses. Reddam v. Commissioner, No. 12-72135 (9th Cir. Jun. 13, 2014).

Court finds settlement proceeds from mortgage fraud lawsuit were not includible in income

In a Summary Opinion, the Tax Court found that a taxpayer did not have $10,000 in unreported income with regard to settlement proceeds resulting from a mortgage fraud lawsuit. Kadir v. Commissioner, T.C. Summ. Op. 2014-43.

Taxpayers can waive the attorney-client privilege by raising good faith and state-of-mind defenses during litigation

The Tax Court recently issued an opinion in AD Investment v. Commissioner, 142 T.C. No. 13, in which the Court granted the IRS's motion to compel the production of documents. The controversy arose in the context of two consolidated Tax Court proceedings involving partnership-level actions related to a possible Son-of-BOSS tax shelter from tax year 2000.

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