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Tuesday, January 21, 2014

IRS Unveils New Tech Oriented Tax-Filing Initiative

Capital Press

All the time, tax policy changes, get more involved, and change in order to assist (and disappoint) taxpayers. This tax season, you will likely to see a few changes to income tax policy, including adjustments for inflation, new policies for same-sex couples, and potential drawbacks for {not paying for health insurance either through a private vendor, or the federal government. One hallmark of the 2014 tax policy is its delay by several weeks, thanks to the embarrassing government shutdown back in 2013. Nonetheless, this filing season will also be the start of a completely different form of tax change — in terms of not only the amount we pay, but with the way we file.

2014's New Federal Tax-Filing Guide

At the beginning of the year, the Internal Revenue Service issued a “newly revised comprehensive tax guide,” or, as some people call it, Publication 17: a resource that should help Americans file their taxes more easily this year. Publication 17 boasts greater interactivity and tips for what it calls “tax-saving opportunities.” Among the inclusions made in Publication 17 is information on the American Opportunity Tax Credit which affects currently-enrolled college students and their guardians, as well as Earned Income Tax Credit and Child Tax Credit.

Created by the IRS since the 40's, the new issue of the guide will still include info on reporting income, capital gains and losses, IRA’s and useful content. However, at 292 pages, it's highly unlikely that many taxpayers make the time to read through Publication 17. Considering the complexity of Federal income tax, it is no surprise that the IRS posts almost daily updates to forms and instructions on their website.

Fewer Face-to Face Help Resources

The new IRS guide exhibits a major transition from in-person help resources, and more digital tools designed to help people get through tax season.

Reductions in the IRS budgets — as a result of sequestration — mean that there will be far fewer resources available for face-to-face tax submission assistance. Rather than having human interaction, those filing taxes will be referred to an array of online referential materials, including nearly 13,000 official partnering (volunteer) sites, and resources on IRS.gov - like the IRS 'Free File' program. Even the most basic questions will now be dealt with online or through one of the IRS' many hotlines. With such online assimilation becoming so ubiquitous, it's rational that a branch of the U.S. government would begin offering more of its services in the form of online content.

More Services Can Be Accessed on the Web

Though some will undoubtedly be frustrated by the lack of walk-in assistance, many others will be happy to know that they can address more tax-related problems online than ever before. Tax payers can now see and authenticate their tax forms online. Additionally, the IRS will also continue to post Employee Identification Numbers from its website. To avoid fielding taxpayer inquiries concerning the whereabouts of income tax refunds over the telephone, the IRS will now handle all similar questions online .

By Joe Garza Attorney at Garza & Harris Ltd.

Thursday, January 2, 2014

Halliburton Insists Supreme Court Take Second Look at Securities Law

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.

More by Joe Garza Attorney