News

TBA Releases Senior Handbook for Lawyers, Public

The Tennessee Bar Association today released The Legal Handbook for Tennessee Seniors to help Tennesseans better understand federal and state benefits, new health care laws and a wide range of other issues of importance to older citizens. It is available for download on the TBA website and will be the subject of presentations across the state starting this week and continuing during March. TBA members also may use the handbook in counseling their clients and may customize the front page to add their own firm’s logo and branding. In addition, the TBA will offer CLE sessions to equip members to make optimal use of the handbook in their practices.

The handbook, a project of TBA President Cindy Wyrick, was produced by the Public Education Committee and a host of volunteer lawyers under the leadership of Knoxville lawyer Angelia Nystrom. “As difficult as it is to fathom, an average of 7,000 Americans are becoming senior citizens each day,” Wyrick said in announcing release of the handbook. “This trend is expected to continue for years, so it is important that we do something meaningful to assist this rapidly growing, but typically underserved, segment of the population.”

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If You Did It, Flaunt It With a TBJ Announcement

The Tennessee Bar Journal has a new opportunity for lawyers and firms to promote outstanding achievements, new associates, new partners, mergers, awards and any changes within the firm. Now, Professional Announcements are available at special, lower-rate pricing. You can tell more than 12,000 of your peers about your accomplishments by placing an announcement in the Journal. For information or to place an announcement, contact Debbie Taylor at 503-445-2231 or Debbie@llm.com. To have an announcement placed in the April issue, please contact her before Feb. 18.

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GOP Continues Court Attack on ACA

Two members of the Tennessee congressional delegation are taking part in a court challenge to President Barack Obama’s health care reforms. Reps. Marsha Blackburn, R-Brentwood, and Phil Roe, R-Johnson City, are part of a friend-of-the-court brief that contends the various taxes in the Affordable Care Act (ACA) are unconstitutional because they were added by the U.S. Senate. Under the Constitution, measures raising new revenues must originate in the House of Representatives. However, the district court that first considered the case dismissed their argument saying, “The Supreme Court has long held that … revenue bills are those that levy taxes, in the strict sense of the word, and are not bills for other purposes which may incidentally create revenue.” The Leaf Chronicle has more.

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DOJ Files Suit Against Memphis Tax Company

The Department of Justice on Tuesday filed a lawsuit in federal court against Stephanie Edmond of Tax Factory, a Memphis tax preparation business, WREG reports. The complaint alleges Edmond and workers at the Tax Factory submitted returns with bogus credits, phony businesses and fabricated expenses in order to get clients higher refunds or lower their taxable income. The complaint says that a federal agent identified more than 2,300 returns with potential problems, with an estimated tax loss of $9.7 million over the last three years. Edmond’s husband, Kevin Williams, has denied the allegations.

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Disbarred Lawyer Pleads Guilty to Tax Evasion

Campbell County lawyer Johnny V. Dunaway pleaded guilty Monday to hiding more than $1 million in income from the IRS from 2006 to 2009. He now faces an April 23 sentencing hearing. The charges carry a maximum penalty of three years in prison, Knoxnews reports, but observers say Dunaway likely faces far less time under sentencing guidelines because he has no criminal history and his plea agreement caps the amount of loss to the IRS to $400,000. Dunaway, who lost his law license in October, is free pending sentencing.

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Magazine Predicts 12 ‘Hottest’ Practice Areas

The September issue of The National Jurist predicts the 12 "hottest" practice areas for the next decade. Those deemed to be “super hot” were health care, administrative, intellectual property and family law. Food and drug law, tax litigation, privacy law and compliance law were ranked as “hot.” And employment, energy, manufacturing and immigration law were judged “somewhat hot.”

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Obama Endorses Corker’s Mortgage Plan

President Barack Obama has endorsed a bipartisan Senate effort Tennessee Republican Sen. Bob Corker helped craft that seeks to strengthen America’s housing finance system and shield taxpayers from bearing the brunt of future economic meltdowns. Some five years after the mortgage crisis struck government-sponsored enterprises Fannie Mae and Freddie Mac and required a $200 billion federal bailout, Obama said it’s time to reduce government’s risk in any future crisis. Corker told the Chattanooga Times Free Press that it gives him "hope that we actually deal with Fannie and Freddie before the political season begins this January and makes it very difficult for anything to occur.”

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DOJ to Investigate IRS' Potential Rights Violations

Attorney General Eric Holder said the FBI's criminal investigation of the Internal Revenue Service could include potential civil rights violations, false statements and potential violations of the Hatch Act, which prohibits federal employees from engaging in some partisan political activities. Holder announced that the Justice Department was investigating the IRS after the agency acknowledged that agents had singled out conservative groups for extra scrutiny when they applied for tax-exempt status. "I can assure you and the American people that we will take a dispassionate view of this," he said. "This will not be about parties, this will not be about ideological persuasions. Anybody who has broken the law will be held accountable." The Memphis Daily News has the story.

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Senate Passes Internet Tax Bill

The U.S. Senate passed the Marketplace Fairness Act yesterday by an easy 69-27 vote. But the bill faces an uphill battle in the House, the Memphis Business Journal reports. The measure would allow for the collection of state sales tax on most Internet purchases. Under current law, retailers have to collect taxes only in states where they have a physical presence. The bill also attempts to address concerns that the new requirement will burden small businesses by exempting retailers that sell less than $1 million worth of goods. Some online retailers say that exemption is too small. In a statement issued after the Senate vote, for example, eBay pledged to push the House to raise this exemption to $10 million in sales or 50 employees.

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Baker Donelson’s Tax Chair Steps Down

Chattanooga lawyer Carl E. Hartley has stepped down as head of Baker, Donelson, Bearman, Caldwell & Berkowitz’s Tax Department after serving in the position for 10 years, the firm announced today. He has been succeeded by Alton E. Bayard III, a shareholder in the firm’s Baton Rouge office. Hartley, also a shareholder, will continue to focus on federal, state and local taxation, as well as corporate law and non-profit organization matters. A 1973 graduate of the University of Tennessee College of Law, Hartley also previously served as chair of the Tennessee Bar Association’s Tax Section.

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Senate Moves Closer to Requiring Online Sales Tax

The U.S. Senate easily cleared a procedural hurdle yesterday to allow final consideration of a bill that requires most online retailers to collect state sales taxes. Under current law, online merchants only have to collect taxes in states where they have a physical presence. A vote on final passage is expected later this week. Observers note, however, that prospects for the bill are a bit more complicated in the House, where conservatives are likely to oppose any measure viewed as a tax increase. The Washington bureau chief for The Business Journals explores the dynamics.

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Justice Seeks to Shut Down Tax Prep Group

U.S. Justice Department attorneys were in Memphis federal court this week seeking to shut down a Memphis-based business that operates tax preparation companies. The civil action was filed Tuesday against Mo’ Money Taxes and four other connected businesses: MoneyCo USA LLC, Caymau Service Bureau LLC, Marquis Taxes and Southern King Taxes. The filing also names two business owners and a manager as defendants. The Justice Department alleges that the companies promote and encourage “the preparation of false and fraudulent income tax returns,” the Memphis Daily News reports.

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IRS, DOJ Crack Down on Tax Violators

The IRS and Justice Department tax lawyers are pressing efforts to combat tax fraud, identity theft and offshore tax evasion, WCYB reports. With the April 15 tax filing deadline fast approaching, the DOJ says it is aggressively pursuing tax violators, despite forced spending cuts. Kathryn Keneally, assistant attorney general for the Tax Division, said government prosecutors achieved a 95 percent success rate in all civil and criminal cases they litigated in the past year.

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Income Tax Ban to Go Before Voters

A proposed constitutional amendment to ban a state income tax in Tennessee passed the House on Monday and will go before the voters next year, the Memphis Daily News Reports. The chamber voted 88-8 in favor of the measure, sponsored by Republican Rep. Glen Casada of Franklin. The amendment would also ban payroll taxes by the state or local governments.

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Taxpayer Relief Act Affects Estate Planning

In his Tennessee Bar Journal column this month, Knoxville lawyer Eddy R. Smith explains how estate planning is affected by the American Taxpayer Relief Act of 2012. Read his column and review the related chart showing the combined federal estate tax and Tennessee inheritance tax exposure for estates through 2016.

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Fiscal Cliff Averted, New Tax Laws in Place -- Are You Ready?

Now that the so-called fiscal cliff has been averted, join John Burns and Ralph Levy from Dickinson Wright as they discuss how the recently enacted American Tax Relief Act of 2012 will affect you and your clients. Among its many provisions, the act raises most income tax rates, raises capital gains and dividend rates, sets a new top estate and gift tax rate, extends a number of tax breaks and provides for permanent AMT relief. The pair will discuss these and other issues during a one-hour webcast on Monday.

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State Income Tax Ban Sent to Senate

The Finance, Ways and Means Committee voted 9-1 Tuesday morning to send constitutional amendment Senate Joint Resolution 1 to the floor of the state Senate, permanently banning a tax on personal income or a payroll tax in Tennessee. Sen. Douglas Henry, D-Nashville, cast the only vote against the amendment, stating he is against income tax in principle but believes a payroll tax is different, the Tennessean reports.

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Cleveland and Bradley County Citizens Receive Free Tax Preparation

The Cleveland City Council will partner with the IRS for the sixth year to operate the Volunteer Tax Assistance (VITA) program, which provides free tax preparation services to citizens of Cleveland and Bradley County whose household incomes are $51,000 or less. There will be four VITA sites located at the South Cleveland Community Center, Bradley Baptist Association, Kmart, and Lee University. 

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Outgoing Lawyer Critical of Knox Tax Collections Move

Knox County is changing the way it collects delinquent taxes, and the the outgoing delinquent tax attorney calls the move a misguided short-term approach with long-term ramifications. Under the plan, the Knox County Law Department will take over much of the legal duties in the Knox County Trustee's Office. Learn more on Knoxnews.com.

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Memphis Councilmen Propose Tax Increase for Pre-K

Memphis City Council members Shea Flinn and Jim Strickland will present a proposal to increase the city sales tax rate one-half percent in an effort to raise $27 million annually for Pre-K education and $20 million more to fund a city property tax reduction, the Memphis Business Journal reports. The increase would put Memphis sales tax rate at 2.75 percent, the highest rate allowed under state law. Combined with the state tax, shoppers would pay 9.75 percent on purchases.

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'Fiscal Cliff' Creates Flood of Work for Attorneys

The uncertainty of the ongoing “fiscal cliff” negotiations has resulted in a flood of work for attorneys as their clients try to plan for the future, the National Law Journal reports. Due to the potential for changes in tax rates, Medicare taxes and capital gains taxes, businesses are looking to accelerate income before the year ends to avoid uncertainty in 2013. Attorneys are presenting their clients with different year-end scenarios to prepare them better for the future.

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Tax Prep Firm and Affiliates Face More Legal Action

The U.S. Attorney’s Office in Middle Tennessee filed a civil injunction suit in Nashville against Fields Mo' Money Taxes, making it the latest affiliate of the Memphis-based Mo' Money Taxes tax preparation firm to face legal action. The Justice Department issued a news release stating the suit alleges defendants Toney Fields and Trumekia Shaw “intentionally prepare and file fraudulent federal income tax returns to obtain improper tax refunds for customers.” It says the firm defrauded the federal government of more than $5million in 2011. The Nashville Business Journal has the story.

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Hotel Tax Law Up for Senate Review

The Tennessee Hospitality Association is seeking to amend a hotel tax law and require online travel companies to pay more in taxes, a measure that would add more than $1 million to annual tax revenue. The trade group argues that online travel companies have a competitive advantage because they pay taxes in a discounted room rate rather than the retail rate. It believes that changing the language of the state law will level the playing field. The Nashville Business Journal has the story.

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AG Says Solar Tax Breaks May Be Unconstitutional

Attorney General Robert Cooper said in an opinion released today that tax breaks for the solar industry may be unconstitutional, the Tennessean reports. The 2010 law that slashed property tax bills for green energy installations was one of three tax breaks backed by former Gov. Phil Bredesen. In the opinion, Cooper said that the tax effectively gives certain business owners exemptions that are not authorized by the state Constitution.

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NY Court Rules Lap Dances Taxable

The New York Court of Appeals ruled Tuesday that since lap dancing does not promote community culture in the way dance such as ballet does, it is taxable the ABA Journal reports. Albany establishment Nite Moves challenged the state tax law when they were ordered to pay $400,000 in back taxes, claiming the law does not make a distinction between “highbrow dance and lowbrow dance.”

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