A group of private business owners have filed suit in a dispute with the IRS over reimbursement for their involvement in a sting operation to identify people filing fraudulent tax returns. "I think it is unusual for the IRS to use a private business in a sting operation," Betty Williams wrote. "If the plaintiffs are not made whole, this is simply a very sad story." Learn more in the Northern California Record, here.
The US Supreme Court issued its decision in Franchise Tax Bd. of California v. Hyatt on April 19, 2016, affirming the jurisdiction of the Nevada courts but limiting the damages it could award against the California tax agency. This decision lays to rest a case in which taxpayer Gilbert Hyatt sued the FTB in Nevada for abusive audit and investigation practices. The original award was for nearly $500 million. However, because Nevada limits damages that can be awarded against its own state agencies, the taxpayer may only be granted up to Nevada's $50,000 limit.
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.
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.