On September 1, 2015, U.S. District Judge, Edward Chen, authorized the certification of a class action in a lawsuit against Uber Technologies, Inc. for worker misclassification of Uber drivers. The drivers claimed they were misclassified as "independent contractors," and rather are properly classified as "employees." Thus, if the court eventually sides with Uber, the ride-share company would be subject to penalties, applicable lost wages or overtime wages, California and federal law regarding unfair competition, worker benefits, and employment taxes.
Ohio District Court rejects estate's reasonable cause argument for its late-filed estate tax return
On October 23, 2014, U.S. District Court Judge Reggie Walton dismissed two lawsuits against the Internal Revenue Service (IRS). True the Vote, an offshoot of the Tea Party-Affiliated King Street Patriots, sued the IRS claiming the IRS targeted conservative tax-exempt groups by providing greater scrutiny to their applications for tax-exempt status and delaying approval of tax-exempt status. The Court did not rule on the merits of the lawsuit, but stated "unless an actual, ongoing controversy exists in this case, this court is without power to decide it." Since the IRS is no longer screening tax-exempt applications based on political leanings, the governmental conduct is no longer an impact on the plaintiffs in the case. True the Vote received its tax exempt status from the IRS after the lawsuit was filed, and sot its complaint is now moot. Click here to read the full opinion.
Recently the District Court for the Western District of Kentucky upheld the imposition of a penalty under I.R.C. sec. 6656(a), which provides a penalty in the case of any failure to deposit a tax payment on the due date unless that failure is due to reasonable cause and not due to willful neglect. Commonwealth Bank and Trust Company v. United States, Civ. No. 3:13-CV-01204-CRS (July 3, 2014). At first glance, the ruling may seem peculiar in that it upholds the imposition of a failure-to-deposit penalty even though the taxpayer made full, timely payments to the IRS. However, the Treasury Regulations require that taxpayers who deposit more than $200,000 in taxes must use electronic funds transfer (EFT) to make deposits of these taxes. Treas. Reg. sec. 31.6302-1(h)(2)(ii).