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College admission scandal sparks change for CA tax law

The college admissions scandal involved Hollywood elite and wealth parents from throughout the country. California was the location of universities and colleges implicated in the scheme as well as individuals accused of partaking in the scheme.  

In response, California lawmakers have taken a three-pronged approach to hold those involved in the college admissions scandal accountable and reduce the risk of a similar occurrence in the future. The approach works as follows:

  • Eligibility. One of the proposals signed into law on Friday, October 4, 2019 by California Governor Gavin Newsom tightens the rules on eligibility requirements that allow colleges and university to admit students that may not meet the standard eligibility requirements. Lawmakers designed this proposal to close a loophole in current law. According to lawmakers, the loophole allowed candidates with subpar applications admission into the universities.
  • Preferential treatment. A second law requires schools to inform lawmakers of preferential treatment. This will increase transparency of the admissions process.
  • Tax benefits. The third prong prohibits taxpayers from taking charitable contribution deductions or business expense deductions related to the scheme on their California state tax returns. This law is retroactive.

These laws are a small portion of 21 proposals passed into law related to higher education in California. The passage of these laws is an example of the evolving nature of the law. It is important for those who face allegations of tax crimes and other wrongdoing to keep abreast of changes in the law. An attorney experienced in this area of the law can represent the interests of the accused.

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