Originally published by Robert Storace.
On Friday, the 50 states and the District of Columbia announced they had reached a $575 million settlement with Wells Fargo over state consumer protection claims.
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Originally published by Jack Townsend.
In Kimble v. United States, (CFC 2018), here, the Court of Federal Claims (Judge Braden) drank the Government’s kool aid on FBAR willful penalties, holding Kimble liable for the maximum willful penalty. (The drank the kool aid analogy may be a little strong for some uses of the term, see Urban Dictionary, here.)
I won’t recount the facts but, suffice it to say, they were not good facts for Kimble. Some of the facts are recounted in the excerpts from the legal discussion below.
Key holdings:
1. Kimble was reckless sufficient to invoke the FBAR civil willful penalty. Here are the key excerpts (bold-face supplied by JAT):
The relevant stipulated facts in this case are as follows:
• Plaintiff did not disclose the existence of the UBS account to her accountant until approximately 2010. Stip. ¶ 43.
• Plaintiff never asked her accountant how to properly report foreign investment income. Stip. ¶ 44.
• Plaintiff did not review her individual income tax returns for accuracy for tax years 2003 through 2008. Stip. ¶ 46.
• Plaintiff answered “No” to Question 7(a) on her 2007 income tax return, falsely representing under penalty of perjury, that she had no foreign bank accounts. Stip. ¶ 48.
In the court’s judgment, stipulations ¶¶ 46 and 48 together evidence conduct by Plaintiff, as a co-owner of the UBS account that exhibited a “reckless disregard” of the legal duty under federal tax law to report foreign bank accounts to the IRS by filing a FBAR. See Godfrey, 748 F.2d at 1577; see also Norman v. United States, 138 Fed. Cl. 189, 194 (Fed. Cl. 2018) (determining that a taxpayer was “put on inquiry notice of the FBAR requirement when she signed her tax return”) (internal quotations omitted), appeal docketed, No. 18-2408 (Fed. Cir. Sept. 18, 2018); see also Jarnagin, 134 Fed. Cl. at 378 (“A taxpayer who signs a tax return will not be heard to claim innocence for not having actually read the return, as he or she is charged with constructive knowledge of its contents.”) (citations omitted). n23 Although Plaintiff had no legal duty to disclose information to her accountant or to ask her accountant about IRS reporting requirements, these additional undisputed facts do not affect the court’s determination that Plaintiff’s conduct in this case was “willful.”
n23 A May 23, 2018 Memorandum the IRS Office of Chief Counsel distributed to IRS program managers states that, “[t]he standard for willfulness under 31 U.S.C. § 5321(a)(5)(C) is the civil willfulness standard, and includes not only knowing violations of the FBAR requirements, but willful blindness to the FBAR requirements as well as reckless violations of the FBAR requirements.” Burden of Proof and Standard for Willfulness Under 31 U.S.C. § 5321(a)(5)(C), PMTA-2018-13, at 1 (May 23, 2018). For a comprehensive discussion of how other federal courts have construed whether a FBAR violation is “willful,” see Hale E. Sheppard, “What Constitutes A ‘Willful’ FBAR Violation?,” 129 J. TAX’N 24 (Nov. 2018) (collecting cases).
For these reasons, the court has determined, viewing the evidence in the light most favorable to Plaintiff, that there is no genuine issue of material fact that Plaintiff violated 31 U.S.C. § 5314 and that her conduct was “willful.” See 31 U.S.C. § 5321(a)(5) (2004); see also RCFC 56.
Practitioners should note that this rather cryptic holding seems to put at risk all taxpayers who on the Forms 1040 checked “No” in the foreign account box on Schedule B. Of course, Kimble’s facts beyond that Schedule B check mark were consistent with the willful penalty but as the Court posited its conclusion perhaps the “No” answer only would suffice.
2. The Court rejected the Colliot and Wahdan holding s that the willful penalty was limited to $100,000 because the FBAR regulations had not been revised. The Court held that the IRS could impose the willful penalty in the maximum amounts allowed by the statute.
JAT Comments:
1. The Court’s holding on the civil willfulness standard adopts the “reckless” rubric as constituting willfulness for civil penalty purposes. This seems to be the way courts are going now. See e.g., Bedrosian on Appeal; Interesting and Potentially Important Opinion on Jurisdiction in FBAR Penalty Cases (Federal Tax Crimes Blog 12/21/18; 12/22/18), here.
2. Kimble joined OVDP but apparently opted out of the civil penalty structure of OVDP. (The Court’s language on this is a bit fuzzy, saying at one point that she attempted to withdraw from the OVDP (a withdrawal is different from opting out of the civil penalty structure and suggesting that Kimble had negotiated a Closing Agreement that was never signed).) The overall sense is that Kimble opted out (under the OVDP definition) which meant that she was still in OVDP (thus obtaining the relief from criminal prosecution benefit) and was audited under the opt out procedure.
3. The Court held that it had jurisdiction under the Tucker Act. 28 U.S.C. § 1491(a)(1), citing Jarnagin v. United States, 134 Fed. Cl. 368, 375 (Fed. Cl. 2017). After it did that, it added this paragraph (one footnote omitted):
The September 8, 2016 Claim For Refund is sufficient to satisfy Congress’s administrative refund scheme. See 26 U.S.C. § 7422(a) (“No suit or proceeding shall be maintained . . . until a claim for refund or credit has been duly filed [.]”); see also 26 U.S.C. § 6511(a) (establishing time limits for refund claims). n20
n20 See Court Appendix, infra, for the text of 26 U.S.C. § 6511(a). Plaintiff filed the September 8, 2016 Claim For Refund approximately one month after she paid the IRS the full amount of the assessed penalty, well within the 2-year and 3-year time limits set by 26 U.S.C. § 6511(a). Compare Compl. Ex. A with Stip. ¶ 70. Therefore, the court does not need to determine whether Section 6511 applies to an administrative claim requesting refund of a FBAR penalty assessed, pursuant to 31 U.S.C. § 5321(a)(5).
This raises an issue I mentioned earlier. See Bedrosian on Appeal; Interesting and Potentially Important Opinion on Jurisdiction in FBAR Penalty Cases (Federal Tax Crimes Blog 12/21/18; 12/22/18), here as to whether the IRC requirements for refund (including Flora full payment and claim for refund and denial or lapse of 6 months) apply. In this case, according to the facts, Kimble did pay the full amount of the penalty and did file a claim for refund, apparently on the IRS form for claims for refund. (The Court does not give the form number but described it as “Claim For Refund And Request For Abatement with the IRS.”)
4. The Court found that on 5 of 6 of the amended returns submitted in OVDP:
Kimble also did not amend her answer to Question 7(a), although income from both the UBS and HSBC accounts was included on amended Schedule B for each of those years. Stip. ¶ 59. Alice Kimble proffered no explanation as to why her answer to Question 7(a) for those years was never amended. Alice Kimble Tr. 82:15.
Kimble was one of the early applicants under OVDP. I can only recount my experience and anecdotal inquiries to other practitioners. When the OVDP process was new (in 2009) I had the return preparers prepare the amended returns and delinquent FBARs. When the drafts were given to me for review before submission under OVDP, some of them answered “No” to the Schedule B foreign account question, even though the returns reported the income and the FBARs reported the accounts. I caught the problem in each case and had the Schedules B corrected before we submitted the OVDP package. My informal inquiries to others confirmed that, during the early stages, this was not an uncommon phenomenon.
5. I previously wrote on the Kimble case: Government Pushes the Envelope on the Meaning of Willfulness in FBAR Willful Civil Penalty (Federal Tax Crimes Blog 7/15/18), here.
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Originally published by gbaumgartner.
Commercial trucks are a common sight on our Texas roadways. In fact, according to the U.S. Department of Transportation, there are more than 130 million commercial trucks on our roadways and Texas is one of the states with the most trucks. Safety on our roads is a major concern. Truck drivers and trucking companies must follow the laws and regulations that are in place to ensure safety and help protect the public from harm.
FMCSA Regulations for 18-Wheelers
The Federal Motor Carrier Safety Administration (FMCSA) provides rules and regulations that must be followed by drivers and owners of 18-wheelers.
There are many additional laws in place that detail mechanical maintenance, load securement, and transportation of hazardous materials. Trucking companies and drivers are responsible for following the laws. If they fail to do so and an accident occurs, they could be considered negligent.
What Causes Truck Accidents?
Many truck accidents are caused by the negligent actions of the driver or company. Some of the most common problems are driver fatigue and driver distraction. Although drivers are required to take breaks and to drive only for specific periods of time, the rules are not always followed. Drivers may try to earn more money by taking an extra shift or trying to drive further than allowed in a day.
When a truck accident happens, it is often in your best interest to seek legal guidance from a reputable Houston truck accident attorney. Your lawyer will take the steps necessary to protect important evidence in the case. For example, driver logs may show that the driver broke the law and drove for too many hours. However, trucking companies may lose some of this data if your lawyer does not take quick action.
Laws are in place to govern trucks and protect the public. If the driver or the trucking company failed to follow the law, they are likely negligent in the accident. You may be owed compensation for your injuries and damages.
Contact our experienced Houston truck accident law firm today to discuss the details of your accident. Call 281-893-0760
The post What are the Laws Governing Commercial Trucks? appeared first on Texas Truck Accident Attorney.
Curated by Texas Bar Today. Follow us on Twitter @texasbartoday.
Originally published by Angela Morris.
The proposed uniform bar exam has a lot going for it, with plenty for current and prospective law students to be excited about.
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Originally published by Brenda Sapino Jeffreys.
Firm and office managing partners talk about strategy for 2019 as the Texas market digests big change in 2018 caused by mergers, an influx of out-of-state firms and a wild lateral hiring market.
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Originally published by Haynes and Boone Benefits Group.
On December 14, 2018, Institutional Shareholder Services (“ISS”) issued its updated FAQs related to its U.S. Compensation Policies, effective for shareholder meetings occurring on or after February 1, 2019. There were some notable updates with respect to executive compensation and nonemployee director compensation, which are briefly discussed below.
Problematic Pay Practices
ISS had previously identified certain “problematic pay practices” that are likely to result in a negative say-on-pay vote recommendation. ISS has issued some notable updates:
ISS has now made it clear that an amendment is considered “material” for purposes of problematic pay practices if it involves any change that is not merely administrative or clarifying.
Nonemployee Director Pay
In 2017, ISS stated a policy providing for potential adverse vote recommendations for the members of a company’s board of directors responsible for approving or setting nonemployee director (“NED”) pay in the event that ISS determines there is an established pattern of excessive pay levels without a compelling rationale or other clearly explained mitigating factors. The FAQs provide some updates to ISS’s methodology for evaluating NED pay. In consideration of the methodology change, ISS will not issue adverse recommendations under this policy until meetings occurring on or after February 1, 2020.
The post ISS Issues U.S. Compensation Policies FAQs for 2019 appeared first on Haynes and Boone Blogs.
Curated by Texas Bar Today. Follow us on Twitter @texasbartoday.
Originally published by Brenda Sapino Jeffreys.
Mid-level associates are a hot commodity in Texas’ hot lateral market.
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Originally published by Bob Kraft.
From Medium.com comes this lovely little explanation of why we say certain things in a certain order.
Ever wonder why we say tick-tock, not tock-tick, or ding-dong, not dong-ding; King Kong, not Kong King? Turns out it is one of the unwritten rules of English that native speakers know without knowing.
The rule, explains a BBC article, is: “If there are three words then the order has to go I, A, O. If there are two words then the first is I and the second is either A or O. Mosh-Mash, chit-chat, dilly-dally, shilly-shally, tip top, hip-hop, flip-flop, tic tac, sing-song, ding dong, King Kong, ping pong.”
There’s another unwritten rule at work in the name of Little Red Riding Hood, says the article.
“Adjectives in English absolutely have to be written in this order: opinion, size, age, shape, color, origin, material, purpose — and then the noun. So you can have a lovely little old rectangular green French silver whittling knife. But if you mess with that word order in the slightest you’ll sound like a maniac.”
That explains why we say “little green men” not “green little men.” And if you think you’ve outsmarted the rule with “big bad wolf,” because its order breaks the rule, which should be “opinion(bad)-size (big)-noun (wolf).” You didn’t, because the first rule about the I-A-O order supersedes this secondary rule.
That rule seems inviolable: “All four of a horse’s feet make exactly the same sound. But we always, always say clip-clop, never clop-clip.”
This rule even has a technical name, if you care to know it — the rule of ablaut reduplication — but then life is simpler knowing that we know the rule without knowing it, isn’t it?
The post Friday Fun appeared first on pissd.com.
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Originally published by Richard Hunt.
Website accessibility lawsuits pose a special threat to businesses facing them that goes beyond the sheer number filed. In an ordinary physical access case the cost of remediation is usually manageable – some concrete work, a new accessible parking sign, or perhaps re-hanging a restroom door. This makes a mootness defense possible and limits the damage that could result from refusing to defend at all. Ordinary cases are also local – venue will be where the business is located, making any defense easier.
For website accessibility cases these things are not true. Mootness is impossible because there are no binding standards for accessibility and it is therefore impossible without a trial to know what it takes to moot a claim. Mootness is also expensive, with full website remediation to even a non-binding standard like WCAG 2.0 AA costing in the tens to hundreds of thousands of dollars. Venue will be where the plaintiff lives – – either New York or Florida for the most part* – because any business on the web is doing business everywhere. The cases are cheap to file – it isn’t even necessary to pay for gas to drive by the defendant’s place of business. For the defense just evaluating the claim is expensive because the expertise required is less widely available and far more costly.†
The result is that early settlement of website accessibility cases typically costs at least three to four times as much as early settlement of an ordinary physical access case.†† This makes them much more profitable for plaintiffs’ attorneys. It costs them no more to file a web access case but they can coerce a settlement that pays a high multiple of any reasonably hourly rate for this kind of legal work. Just as the statutory damages available under the Unruh Act in California have driven a thriving litigation ADA litigation industry there, so the higher profit margins available for website accessibility cases are driving a nationwide expansion of the website access litigation business. This industry has almost nothing to do with accessibility for the disabled and everything to do with making money for lawyers.
There is, however, a silver lining to the cloud of website accessibility lawsuits. A few defendants, notably CUNA‡, have decided to fight back despite the expense and risk. As a result we have a handful of favorable district court decisions that correctly apply the law of standing based on Supreme Court authority along with the prospect of decisions from the courts of appeal that may limit the ability of plaintiffs to file these suits.. With any luck at all the 2019 review of significant ADA developments will include decisions from the Circuit Courts that limit standing to those who have suffered a real injury, which does not include any serial plaintiff. We may even see a common sense ruling that DOJ’s decision to ignore the Congressional directive in the ADA to create accessibility standards and coordinate them with the standards applicable to government agencies justifies a stay of all website accessibility litigation until DOJ fulfills its statutory duty and businesses know just what “accessible” means. In the meantime, the market in ADA website cases seems headed toward new record highs.
* This statistic comes from the Usablenet blog “2018 Web Access Recap.” Usablenet is a website accessibility and remediation consultant. In the interest of full disclosure I consult from time to time with Usablenet on the law concerning website accessibility.
** The number of cases filed in state courts, primarily California is difficult to determine, but would add significantly to the total.
† A physical accessibility survey for a small shopping center will usually cost less than $1000. A website review by any legitimate consultant will cost five to ten times as much.
†† This is based on my own experience with a number of different plaintiff law firms.
‡ See, for example, my blog at “Credit Union victories in ADA website litigation.”
Curated by Texas Bar Today. Follow us on Twitter @texasbartoday.
Originally published by tfoxlaw.
DECEMBER 28, 2018 BY TOM FOX In today’s edition of Daily Compliance News: Polycom receives declination with disgorgement in FCPA enforcement action. (FCPA Blog) ISIS has $400MM to spend on terrorism. (Dipping Through Geometries) Measuring corporate culture becomes more important in the UK. (Financial Times) Solo trek across the South Pole. (New York Times)
The post Daily Compliance News: December 28, 2018-the Trek across the Pole edition appeared first on Compliance Report.
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Originally published by Michael P. Maslanka.
Ignorance is always curable. In that spirit, here are questions that are commonly asked but seldom answered.
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Originally published by Kacy Miller.
The AIDA method, so effective in selling everything from beer to Chryslers, is equally applicable to lawyers.
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