News

Franklin Man Convicted in Romney Tax Fraud Scheme

A federal jury in Nashville has found Michael Mancil Brown guilty of engaging in an extortion and wire fraud scheme involving former presidential candidate Mitt Romney’s tax returns, the Humphrey on the Hill blog reports. The Franklin man was convicted of six counts of wire fraud and six counts of using facilities of interstate commerce to commit extortion for his scheme to defraud Romney, the accounting firm of PricewaterhouseCoopers LLP and others, by falsely claiming that he had gained access to the PricewaterhouseCoopers internal computer network and had stolen tax documents for Romney and his wife, Ann D. Romney. A sentencing hearing will likely be in August.

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Memphis Tax Law Firm Opens Nashville Office

Monypeny & Associates, a Memphis-area tax litigation firm, announced today it will open a Nashville office in the Fifth Third Center. The Nashville Post reports Tyler DeWitt, a principal attorney and CPA with the firm, will oversee the Nashville office.

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Register Today for the 135th Annual TBA Convention

Join us on June 15-18 in Nashville for the 135th Annual Convention! Registration for the 2016 TBA Convention includes:

  • free access to all TBA CLE programming;
  • the Opening Reception;
  • the Bench Bar Programming and Luncheon;
  • Law School and general breakfasts;
  • the Lawyers Luncheon;
  • the Thursday evening Joint (TBA/TLAW/TABL) Reception;
  • the Thursday night dinner and entertainment at the George Jones Museum;
  • and the Friday night Dance Party.

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Court Upholds Tax Variance on Verizon Parent Company

The Tennessee Supreme Court today upheld a decision by the Tennessee Department of Revenue to impose a tax variance on the parent company of Verizon Wireless and ruled the Commissioner of Revenue was within his authority to impose the variance. The lawsuit, filed in 2007 by Vodafone Americas Holdings Inc. and its subsidiaries, asked Tennessee to refund nearly all state franchise and excise taxes it had paid from 2002-2006. The company claimed the apportionment formula in Tennessee’s franchise and excise tax has been incorrectly applied. The Commissioner of Revenue then decided to impose on Vodafone a tax variance that required the company to pay franchise and excise taxes by a formula that varied from the standard apportionment formula in Tennessee’s tax statutes. The trial court and the Court of Appeals both upheld the Commissioner’s decision to issue the tax variance. Read the majority opinion in Vodafone Americas Holdings, Inc. v. Reagan Farr, authored by Justice Holly Kirby, and the dissent by Justice Jeffrey S. Bivins.

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Mentoring Program Seeking Volunteers

The TBA Mentoring Program is seeking volunteer mentors from across the state in the area of tax law. Those participating in the program will commit to a formal mentoring relationship for one year, with a requirement to meet face-to-face at least once a month. For more information, visit the TBA Mentoring Program webpage or contact TBA staff member Kate Prince, 615-277-3202.

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Revenue Rulemaking Process Update

The Department of Revenue has begun the formal process for issuing updated rules for sales tax, franchise and excise tax and business tax, as well as a small number of administrative rules. Over the past several months, the Department has been in the process of receiving and evaluating informal feedback from parties who previously contacted the Department expressing interest in the process.

On February 25, the Department filed a Notice of Rulemaking Hearing with the Secretary of State. That filing can be found here. The Department anticipated the need for new or updated rules due in part to recent legislative changes. Additionally, a number of obsolete or outdated rules need to be updated or repealed.

The rulemaking hearing will be held on April 26 at 1 p.m. Central Time at the Andrew Jackson State Building in Nashville. The hearing will be held in Hearing Room 201. Oral or written comments are invited at the hearing. Additionally, written comments from the public may be submitted to Department prior to the hearing.

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National LGBTQ Task Force to Co-Host Free Webinar on Tax Issues

Experts from the National LGBTQ Task Force, the Human Rights Campaign and the National Women's Law Center will be hosting a free webinar about tax issues for the LGBTQ community. The webinar is scheduled for March 3, at noon Central. Register today to reserve your spot.

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UT Law Students Offer Free Tax Preparation Help

Students at the University of Tennessee College of Law will offer free tax preparation help through the IRS Volunteer Income Tax Assistance program. The VITA program, which runs through April 14, offers free tax help and electronic filing to persons with disabilities, limited English-speaking taxpayers and more. Assistance is available from 5-7 p.m. on Tuesdays and Thursday in Suite 157 of the College of Law. Call 865-974-2492 for more information.

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Due Dates for Tennessee Franchise and Excise Tax Returns, Business Tax Returns and Hall Income Tax Returns Announced

Due dates for certain Tennessee franchise and excise tax returns, business tax returns and Hall income tax returns have changed to Monday, April 18, instead of Friday, April 15, to be consistent with the Internal Revenue Service federal income tax filing deadline for most of the country. For more information, please read important notice #16-02, which just posted to the Department of Revenue’s website.

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New Important Notice On 1099K Filing Requirement

The Tennessee General Assembly recently enacted legislation which requires payment settlement entities, third party settlement organizations, electronic payment facilitators and third parties acting on behalf of payment settlement entities to file duplicate federal 1099-K information returns with the Department of Revenue. You may read more about this requirement by reading notice #16-01 here.
 
More information about the 1099-K filing requirement, as well as a link to the 1099-K filing portal, may be found on the Department’s website.

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Department of Revenue Issues Letter Ruling #15-08 on the Tennessee Sales and Use Tax

The Department of Revenue has issued Letter Ruling #15-08, which provides guidance on the application of the Tennessee sales and use tax to remotely accessed software. You may view the ruling here.

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Rutherford County May Increase Tax to Cover Judges' Salaries

The Daily News Journal reports the Rutherford County Commission may raise the litigation tax by $3.65 to cover the salary and benefits of General Sessions Court judges. "It's a user fee," Lisa Nolen, county finance director, said of the proposed increase. General Sessions Court judges received an annual salary of $158,636 in the previous fiscal year that ended June 30. This fiscal year's salary for General Sessions Court judges Ben Hall McFarlin, Barry Tidwell and Toby Gilley is $161,175. State law set the salary and required a 1.6 percent increase due to inflation.

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State Recovers More than $1M in Misused Taxpayer Dollars

The Tennessee Comptroller of the Treasury announced today that the department uncovered more than $1.1 million in confirmed thefts, questionable costs and shortages in public funds statewide from July 2014 to June 2015, the Nashville Business Journal reports. The comptroller credits anonymous tips to its online and telephone hotline for identifying the misused taxpayer dollars.

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Important Notices Added to Department of Revenue Website

The Department of Revenue has added an important notice regarding Remotely Accessed Software. You can read the notice here.
 
The Department of Revenue has updated information regarding Remotely Accessed Software Direct Pay Permit. You can read the notice here.
 
In addition, they have added a new form related to the Remotely Accessed Software Direct Pay Permit.  You may view the form here.

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Updated Retail Accountability Program Information

The Department of Revenue’s Retail Accountability page has been updated. You may read the information here.

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Tennessee 16th in Business Tax Code Ratings

Tennessee has the country's 16th best tax code for business, according to the 2016 State Business Tax Climate Index released today by Tax Foundation. "Increasingly, elected officials and economic development offices are using their states' index scores to promote business relocation because they recognize that a good score on the index is a valuable proxy for the state's overall competitiveness,” Jared Walczak, Tax Foundation policy analyst, said. Read more from Nooga.

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New Case Added to Supreme Court Fantasy Challenge

A new case has been added to the Tennessee Supreme Court Fantasy Challenge. Learn about legal issues involving the purchase of property at a tax sale in the Mortgage Electronic Registration Systems Inc v. Carlton J. Ditto, et al case before the Supreme Court. 

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AG: Electric Co-op Tax Break Unconstitutional

An attempt by the Tennessee Electric Cooperative Association (TECA) to take advantage of a little known state tax break for electric cooperatives has been shut down by Attorney General Hebert Slatery, the Knoxville News Sentinel reports. In an opinion issued on Oct. 21, Slatery said that the tax break violates the state constitution because rural electric cooperatives are not included in any of the authorized categories for exemptions. “This attorney general’s opinion comes completely out of the blue. We’re still discussing our next steps," TECA executive director David Callis said.

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Group Challenges Health Care Overhaul Origination

An appeal filed today by the Pacific Legal Foundation will present yet another challenge to President Barack Obama’s health care overhaul, the Associated Press reports. The appeal, filed in the U.S. Supreme Court on behalf of a small-business owner, says that the law violates the provision of the Constitution that requires tax-raising bills to originate in the House of Representatives. The foundation said the health care overhaul is expected to generate roughly $500 billion in new taxes by 2019.

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Cooper to Lead New Nonprofit Practice Group

Former Tennessee Attorney General Bob Copper will lead Bass, Berry & Sims' new practice group focused on nonprofits, Memphis Daily News reports. “We want clients to know that we can be a one-stop shop for all the unique issues nonprofits face, whether they’re in tax, litigation, regulation – whatever it is,” Cooper said. The practice group, which will primarily focus on health care within nonprofits, will also counsel organizations on corporate governance, employment, compensation and business transactions.

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Revenue Department Redesigns, Updates Website

The Tennessee Department of Revenue launched a redesigned website this week featuring a more streamlined and modern look. The tax section of the site also has been updated to include tax rulings, notices, compliance information and statistics.

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Armstrong Pleads Not Guilty to Federal Charges

State Rep. Joe Armstrong pleaded not guilty today in U.S. District Court to charges of conspiracy to defraud the U.S. government, attempt to evade federal income taxes, fraud and false statements, Knoxnews reports. U.S. Magistrate Judge Clifford Shirley set an Aug. 25 trial date during the initial appearance on a three-count indictment that was returned by a federal grand jury Wednesday in Knoxville.

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Court to Hear 6 Cases This Week

The Tennessee Supreme Court has six cases set for oral argument this week. Among the issues involved are termination of a mother’s parental rights by default judgment, whether the Tennessee Department of Revenue can impose a variance on the formula used to compute taxes, whether the city of Nashville can sue the Board of Zoning Appeals over a decision to convert static billboards to digital billboards, whether retaliatory taxes violate the state constitution and whether state law eliminates the distinction between medical and ordinary negligence claims when a health care provider is sued. The sixth case is an appeal of a Board of Professional Responsibility recommendation for discipline against a Memphis lawyer.

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Legislative Session Wraps Up

State lawmakers finished their work for the 2015 legislative session just before 10 p.m. last night, the Tennessean reports. Among the bills passed yesterday, lawmakers approved an additional exemption to the Hall tax on investment income, new rules for ride-sharing services like Uber and Lyft, and the use of cannabis oil to treat seizures. Among the bills that failed to advance were measures allowing undocumented immigrants’ children who grew up in Tennessee to pay in-state tuition at public colleges and universities (which lost by one vote), allowing residents of parts of cities to de-annex territory, and banning alcohol sales to people with three or more drunken driving convictions. See a break down of more legislative winners and losers from the Associated Press.

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House Leaders Use Tax Day to Pass Bills Reigning in IRS

House leaders used Wednesday's tax filing deadline to vote on a package of bills designed to protect taxpayers from potential abuse by the IRS, the Times Free Press reports. One bill would prevent IRS employees from using personal email accounts for official business. One would enact a taxpayers' bill of rights, and another would require the tax agency to fire employees caught targeting individuals or groups based on their politics. Two other bills would require federal workers and contractors to be current in their federal taxes.

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