Tuesday, January 21, 2014

Federal Government Opts for Online Approach to Tax Filing


By Dallas Lawyer Joe B. Garza

Just like other laws, laws about the IRS get more complex, and oscillate in order to (ostensibly) benefit (and disappoint) different groups of taxpayers. This year, you can expect to see a few changes to federal income tax, including adjustments for inflation, new regulations for same-sex families, and even some penalties for {not paying for health insurance either through the government or through a private insurer. One defining mark of the 2014 legislationtax season may be its delay by several weeks, something that can be attributed to the infamous government shutdown back in 2013. But, this season will also initiate the birth of a totally different style of tax change — not only the amount we pay, but in how we file.

2014's 'Improved' Federal Tax Policy

A few weeks ago, the IRS announced the release of a “newly revised comprehensive tax guide,” or, as others call it, Publication 17: a resource that aims to help people file their taxes more easily this year. Publication 17 touts greater interactivity and in-depth review of what it calls “tax-saving opportunities.” In addition to the guide's new features is material on the American Opportunity Tax Credit, affecting current college kids and their parents, and also Child Tax Credit (CTC) and Earned Income Tax Credit .

Administered by the IRS for nearly 70 years, the new version of the tax guide will still contain content on how to report income, capital gainst, IRA’s and other fundamental educational material. Still, at nearly 300 pages, it seems unlikely that many taxpayers will make the time to review Publication 17. Given the increasing complexity of Federal income tax, it's no surprise that the IRS would disclose updates to the forms on an almost daily basis.

Less Personal Interactivity

Publication 17 proves a big transition away from face-to-face help resources, and many more online tools created to assist people in getting through tax season in 2014.

Tighter IRS budgets — resulting from sequestration 2013 — mean that there are far fewer resources for face-to-face tax filing help. Rather than having human interaction, those filing taxes will be referred to a variety of online resources, including nearly 13k partnering volunteer sites, and resources on the IRS's offical website - like the IRS 'Free File' program. Even basic help requests will now be answered on the Internet or via one of the IRS' many hotlines. With such online assimilation becoming so ubiquitous, it makes sense that the government would start offering more of its material online.

More Resources Are Available on the Internet

Though many people will certainly be frustrated by less help in the form of interaction with a representative, many others will be happy to learn they can handle more tax-related problems on the web than ever. Now, taxpayers are able to look at and complete their tax forms on the web. Additionally, the IRS will also continue to post Employee Identification Numbers through IRS.gov. Finally, to avoid fielding taxpayer inquiries about the status of income tax refunds over the telephone, the IRS now handles all related questions online as well.

Thursday, January 2, 2014

Joe Garza Attorney Discusses Halliburton Supreme Court Case

Oil titan Halliburton Co just requested that the US Supreme Court revisit an important Supreme Court Case, Erica P. John Fund v. Halliburton. To be certain, The Fund is among Halliburton's shareholders. The Fund’s years-old courtroom battles with the oil company comes from the allegation that Halliburton falsely represented key info involving its shareholder activities, like overstating revenue and mitigating liabilities. Crucially, the Fund has attempted to have its action against the defense (Halliburton) as a class action lawsuit (CAL) - a form of lawsuit that is made on behalf of a certain group who have been offended by the same injury. A class action suit would allow the Fund to litigate on behalf of all Halliburton shareholders, therefore increasing the money on the table in the lawsuit.

The New York Times just published a topical analysis of the case that the Court will have to decide in the Halliburton case, should it agree to hear the case. The New York Times publication illustrates how many lawsuits like the one involving Halliburton and The Fund revolve around the concept of “reliance”, which says the litigation - or in this particular case, the shareholders behaved in reliance on the company's dishonest conduct. Supreme Court precedent has viewed reliance expansively. In order to suggest reliance, a shareholder involved in the CAL need not read a prospectus and the fraudulent statements it contains. Instead, courts consider any allegedly criminal statements made by a corporation that is also accepted by the public that affects the financial value of the corporation as being thrown into the total price of the its securities. The court justifies this view based on the basis that markets will price securities with all information that is currently available, something that is widely accepted in the study of finance. Nevertheless, even though most investors/shareholders do not thoroughly review financial records and prospectuses made publicly available by the companies in which they invest; plaintiffs involved with the CAL can still demonstrate “reliance” so long as they have purchased securities of the business. As more and more shareholders are capable of showing their reliance, these suits become easier to assemble.

In its court request to re-open the case, Halliburton has hinted that it will likely argue that the current interpretation of reliance is far too expansive. They will claim that the Court should interpret reliance as requiring shareholders to do more than merely purchase securities; for instance, requiring them to review a financial statement or fraudulent prospectus. This kind of an argument will probably receive enthusiastic backing from the business community.

As the Times article mentions, last year four members of the Court in an unrelated case stated that they were willing to overrule the conventional, nebulous meaning of “reliance.” If the Court hears the Halliburton case, the most important question will be about whether Halliburton can find a decisive fifth vote from the Court.

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