In a legal challenge that claims that a recent real estate tax measure will hurt local California businesses, two plaintiffs have initiated a tax litigation procedure that seeks to have it declared illegal. The suit alleges that the Centinala Valley high school district is attempting to raise money to hire extra teachers and expand school programs by illegally and disproportionately assessing higher local real estate parcel taxes on businesses in the district. Four local elementary school districts in the area are also named in the tax litigation procedure along with the Centinala Valley High School district.
The United States Senate recently voted to approve the Marketplace Fairness Act, a proposed federal law that would allow states to compel online and catalog retailers (called “remote sellers”) to collect sales tax on purchases made by people in the state.
When one thinks of tax fraud in California, one might think of someone hiding assets in an offshore account and not claiming the interest or dividends. Or one might think of a drug dealer or other nefarious character that does not file tax returns but drives a late model car. One probably does not think of the common everyday state worker collecting fees for documents or a Fish and Game employee collecting bribes.
Contrary to what may be considered common wisdom, tax law is not set in stone. It is updated on a regular basis as taxpayers and professionals struggle to keep up with it. Likewise, tax shelters are not illegal but can be legitimate ways to mitigate the impact of taxes upon a company's bottom line or on an individual taxpayer's bank account.
Many people in California may be unaware of all of the tools that the Internal Revenue Service has at its disposal. If you are an individual, sole proprietor or business owner, you may one day have the first-hand experience of opening a letter from the IRS in which they request more information about a tax return.
There are a number of unpleasant consequences which can occur when someone is behind on their taxes. Two issues can be involved: how much is owed and what entity is owed the taxes. As we have stated in previous posts, it is possible to achieve a compromise or workout with either the Internal Revenue Service or with the state of California.