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October 2011 Archives

Government cracks down on DAD tax shelters

Yesterday we covered the impending expiration of the VCI 2 program which is designed to protect taxpayers with tax shelters from prosecution. In addition to helping taxpayers avoid tax fraud charges, the VCI 2 is also designed to decrease the sometimes sizeable penalties associated with underreporting income or engaging in abusive tax avoidance practices.

Time to participate in California's VCI 2 is running out

Tax fraud charges are extremely serious and can result from a variety of situations, including underreporting income. Although most of the tax fraud stories that we have covered in previous posts revolve around the IRS crackdown on California taxpayers, the California Franchise Tax Board also routinely goes after taxpayers that participate in tax shelters. A program called the Voluntary Compliance Initiative 2 is coming to an end and may mark the last chance for many Orange County residents to avoid prosecution for participating in tax shelters, or "abusive tax avoidance transactions." These include offshore accounts similar to those covered by the IRS' OVDI program.

Former D.C. tax examiner pleads guilty to tax fraud

In our last post we discussed the indictment of 55 Californians in tax fraud charges. This indictment is just one of many high profile tax fraud criminal cases being pursued against taxpayers across the country. One of the most recent tax fraud convictions happened last Thursday when a 47-year-old former tax examiner pleaded guilty to tax fraud in Washington D.C. Authorities say that the tax examiner went into almost 50 taxpayer's accounts and adjusted their refund credits. The tax examiner then routed the refunds into her personal bank accounts.

Grand jury indicts 55 Californians for tax fraud

The Internal Revenue Service considers a tax fraud to be an extremely serious crime and actively prosecutes many California residents for tax fraud every day. Many taxpayers also unwittingly assist the IRS in building a case against them by talking to the IRS too much before consulting with an experienced California tax law attorney. A tax fraud conviction can result in large tax penalties, a felony criminal record and incarceration. Tax fraud is the evasion of taxes achieved by failing to file a return, failing to pay taxes, or intentionally filing false returns.

How a construction company appealed an IRS tax lien

In our last post we discussed the basics of IRS liens, wage levies and bank levies. We also began to discuss a recent Tax Court case involving a construction company and the IRS. The company got behind on its taxes so the IRS imposed a lien and refused to subrogate it to a bank's claims arising out of a line of credit. Without the line of credit the construction company could not stay current on its tax obligation and risked closure, so the company took the IRS to court. The Tax Court sided with the construction company and held that the IRS abused its discretion in failing to subrogate its lien to the bank's claims.

An overview of tax liens and bank levies for delinquent taxes

It is not uncommon for an Orange County resident to be subjected to a tax lien or levy for unpaid taxes. A lien is type of security interest in property imposed due to a debt. A tax lien is often in the form of a wage or bank levy. A wage levy is essentially like having your wages garnished. When the IRS imposes a bank levy, it places a freeze on a taxpayer's bank account and reserves the right to use the bank account funds to pay a tax debt. Additionally the IRS may seize property or other assets that are equal in value to a tax debt.

Common tax penalties for Orange County taxpayers

Dealing with the IRS can be a daunting task for any California resident. A tax liability can arise out of a variety of situations and there several different types of tax penalties that the IRS can impose on a taxpayer. An experienced California tax law attorney can help work with the IRS to reduce or eliminate penalties. The abatement of penalties may mean a significant reduction in the overall tax burden of an Orange County taxpayer because penalties can cause a tax debt to spiral out of control.

Congressional efforts to allow tax deductions for marijuana dispensaries

This week we have covered an IRS ruling against one of California's biggest medical marijuana dispensaries which resulted in a $2 million tax debt from disallowed payroll taxes and other deductions. The CEO of Oakland's Harborside Medical Center said that the IRS' logic in disallowing his business deductions did not make sense in light of an allowed deduction for the actual purchase of pot.

California medical marijuana tax woes grow after IRS ruling

Yesterday we discussed the huge payroll tax debt issues that many marijuana medical dispensaries potentially face after the IRS decided to disallow all deductions for these businesses. The IRS' decision is based on a provision in the tax code that bans deductions based on the trafficking of controlled substances such as marijuana.

IRS to tax California medical marijuana dispensaries of business?

It is common for small Orange County business to experience payroll tax debt issues. Sometimes these businesses are forced to make hard choices to stay open and the resulting tax debt burden may be overwhelming. An experienced California tax law attorney can help California business owners deal with the IRS and determine whether the IRS properly calculated a business' tax debt obligation.