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September 2012 Archives

Federal court in California invalidates DAD tax shelter

The Internal Revenue Code sets up a system of incentives for taxpayers relating to the payment and minimization of taxes. Payment is encouraged through the threat of penalties, while the Code dangles various carrots in front of taxpayers that can reduce their final tax bill. Examples include popular deductions, such as those for charitable donations and home mortgage interest payments.

California institutes sales tax for certain online purchases

For years, California residents have used online shopping for its ease, convenience and lack of sales taxes. While purchasers can still reap the benefits of having goods shipped directly to their home or office, they can no longer avoid paying sales taxes on items bought from larger retailers.

What consequences can Californians face for delinquent tax debts?

Twice every year, the California Franchise Tax Board publishes a list of the 500 state residents who owe the greatest amount in income taxes. The state Board of Equalization has a parallel list, published every quarter, which tracks debts owed on sales and other taxes.

Offshore tax evasion probe nets new records from Credit Suisse

One month ago, we included a story on our California blog about Swiss banks providing employee information to the U.S. government. That disclosure by five banks, including Credit Suisse, HSBC and others, instigated a furor among that country's banking community as many bankers perceived the release of their names as a betrayal of confidence.

Lawyer admits to fraudulent letters used to lower clients' taxes

Reducing one's tax liability is a goal anyone in Southern California can warm up to, and given the Tax Code's notorious complexity, there are many ways one can use its multitude of provisions to lower one's tax bill. Creative attorneys and tax professionals have been finding ways to draw up innovative tax strategies for many years.

IRS pays reward to banker who showed offshore tax evasion at UBS

Just how much does a whistleblower stand to gain if he discloses valuable information on tax evasion and other illegal tax practices? As much as 30 percent of the total taxes the Internal Revenue Service recoups as a result of the information. For those who pull back the curtain on particularly large instances of tax evasion, a very handsome payday may be their reward.

Medical marijuana dispensary costs not a business expense

There is an unusual interplay between federal and state laws. While states have the ability to enact their own laws, when there is a conflict, federal laws control. For example, medical marijuana dispensaries are a completely legal business in California. However, federal law still considers marijuana a controlled substance regardless of the purpose for which it is used.

Will 2 percent payroll tax holiday expire by end of 2012?

For most working Americans every penny counts -- especially during this economic recession where salaries are down but many daily expenses remain high. So for many Californians who earn a salary of $50,000 per year, an extra $20 per week actually does make a difference. That amounts to just over $1,000 per year.