Articles Posted in Uncategorized

Over the past year or so, click through or affiliate nexus has dominated the sales and use tax professional community. Contrary to popular belief this is not a new a “new” tax. Rather, the issue really boils down to whether certain online companies can be forced to collect sales and use tax in states in which they have no physical presence. In March 2013, New York’s highest court ruled that a state can make a llaw that required an online retailer to collect tax in a state in which it does not have any traditional physical presence. This click through nexus applies if a company pays commission for the in-state company’s web site for generating sales for the online retailer. There were actually two such cases, against Amazon and Overstock. Both companies believe that this ruling runs contrary to the Dormant Commerce Clause of the United States Constitution and prior United States Supreme Court rulings. Therefore, on August 23, 2013, both Amazon and Overstock filed a petition to ask the United States Supreme Court to hear the case.

While technology has changed the way we live and do business, the Supreme Court has not heard a case since 1992. This has lead to difficult planning for businesses and state and local tax professionals since the invention of the internet. We get calls almost daily dealing with nexus related issues and what a company should be doing in this era of uncertainty.

Many believe SCOTUS will take the case. After all a case like this has not been heard in some 20 years. On the flip side others believe that SCOTUS has bigger fish to fry than mundane state and local tax matters. Perhaps it is still waiting on Congress to act following the lashing it delivered in 1992. It is also worth pointing out that our partner, James Sutton, has been asked to file an amicus brief asking SCOTUS to take the case. Needless to say we will be following this one closely. For a more detailed analysis please visit our firm’s wesbite.

It is virtually impossible to turn on ESPN these days without hearing about some drama-filled story within the sports world. ESPN has done its best to morph itself into reality television by covering the real world story rather than the sports highlight. It is even more difficult to turn on ESPN or listen to any sports radio without hearing about the recent Alex Rodriguez blunder and the 12 other Biogenesis disciples that violated Major League Baseball’s substance abuse policy. But is baseball really where the problem lies?

After thinking long and hard about the matter, and after speaking to many of my informed colleagues about the substance abuse problem in sports, I began to formulate a theory that the problem was far beyond that of Major League Baseball. Further, being a Florida tax attorney by day and a sports fan by night, I decided to look into the numbers for myself to see if the problem was truly limited to baseball. As I suspected, the results of my limited inquiry were more shocking than even I expected.

Continue reading

A recent story has emerged that reminds us how tax fraud also applies to the rich and famous. On July 30, 2013, it was reported that the celebrity couple, Giuseppe “Joe” Giudice and his wife Teresa Giudice were indicted by a federal grand jury. The stars of the “Real Housewives of New Jersey” face an extensive 39 counts of various fraud including wire fraud, bank fraud, and making false statements on loan applications.

In addition, Joe Giudice was charged with failure to file tax returns for 2004 through 2008 during a period where he earned an alleged $1 million. As a Florida tax attorney, I will be following the case. Of note, among the multiple counts of fraud, the wilful failure to file a tax return is a criminal offense as well. It is always astonishing to me the number of famous figures that go years on end without filing a return. Having relatively high income makes them easy prey for the IRS, and the money at issue and positive press makes it worthwhile to pursue. I have attached a copy of the indictment for nerdy tax lawyer types that are interested to read it.

At the heart of the issue, the couple falsely reported W2’s to show salaries for securing loans, when in fact they were not receiving such income. It is not clear from the indictment, but it would seem if they claim the W2’s are correct, then they would owe tax on those amounts. Conversely, if the W2’s are not correct then they falsified the W2’s. It is also claimed that the couple owed some $3.2 million in mortgages and $13,000 to Neiman Marcus and Nordstrom, which has been feeding the reality TV craze. If convicted, the couple faces up to 30 years in prison.

As for the rest of the world, I am sure the case will be followed for other reasons. For example, Robyn Dawson comments:

Excuse me, Teresa? Hello, earth to Teresa….The indictment, 39 counts were against Joe and YOURSELF! Are you sure you’re not blonde under that brown hair of yours? You and Joe are going down and it’s time. Karma has finally got you for all of the ugly you’ve done to your family. I can’t believe you released a statement about Joe but failed to mention, you were also charged and booked into jail as well..You idiot..Now I’m sure you didn’t truly write those fake cook books. You aren’t that smart. You don’t even know how to say the word, woman in a proper sentence. LMAO

The Giudice couple released the following statement:

Today is a most difficult day for our family. I support Joe and, as a wonderful husband and father, I know he wants only the best for our lovely daughters and me. I am committed to my family and intend to maintain our lives in the best way possible, which includes continuing my career. As a result, I am hopeful that we will resolve this matter with the Government as quickly as possible

It will be interesting to follow the case. For the moment each has been released on $500,000 bond.
Continue reading

Despite the buzz of fantasy football and the regular football season fast approaching, the talk of the league during this year’s offseason has been the troubles of the New England Patriot’s, Aaron Hernandez. While I practice in the area of Florida tax controversy, the coverage of the football star’s troubles has gained my attention both from a legal perspective and as a sports fan.

As most of the country, sports fan or attorney, is aware, Aaron Hernandez was charged with the killing of Odin Lloyd on June 28, 2013. ESPN reported that Hernandez was formally charged with first degree murder, carrying a firearm without a license, 2 counts of possession of large-capacity firearm and 2 counts of possession of a firearm without a firearms ID card.

The 23 year old Bristol native argued for bail because he was a homeowner and lives with a fiancé and an 8 month old baby, so therefore, he is unlikely to flee. Leading up to the arrest, Hernandez was allegedly with Lloyd, the boyfriend of Hernandez’s fiancé’s sister. On June 16, 2013, the prosecution believes that Hernandez texted two friends asking them to return to Massachusetts. In support of this assertion, the prosecution has surveillance footage showing Hernandez leaving his home with a gun. After picking up the victim at his home around 2:30 am, Lloyd texted his sister and stated, “Did you see who I am with? . . . NFL . . . just so you know.”