IRS: Woman claims 19 non-existent children

The Associated Press

Published: Monday, Aug. 15, 2011 - 9:38 pm

Last Modified: Tuesday, Aug. 16, 2011 - 7:40 am

LOS ANGELES– The Internal Revenue Service says a 40-year-old Northern California woman is facing charges that she helped prepare false tax returns and obtained fraudulent Social Security numbers for at least 19 non-existent children.

Norma Coronel was indicted on 35 counts earlier this year in Los Angeles.  She was arrested July 12 in Livermore and made her initial court appearance in Los Angeles on Monday.

The IRS says Coronel claimed that all the children had been born to her at a Los Angeles hospital on Dec. 11, 2002, then obtained fraudulent Social Security numbers for them and claimed them as dependents. Hospital records show she gave birth to one child, a boy, on that date.

Coronel faces up to 143 years in prison and $5.6 million in fines if convicted of all charges.

San Mateo County strikes 128 properties from Williamson Act list

By Julia Scott

julia.scott@bayareanewsgroup.com

Posted: 08/09/2011 03:57:25 PM PDT

Updated: 08/09/2011 03:57:26 PM PDT

REDWOOD CITY -- Property tax discounts will no longer accrue to 128 rural San Mateo County landowners whose parcels were removed from a list of properties kept in agriculture under the state Williamson Act, though it's unclear what fiscal benefit the county will derive from the move.

The county Board of Supervisors voted 3-1 Tuesday, with one member absent, to annul the Williamson Act contracts of 128 out of 540 contract-holders, many of whom have been in the state program since 1967. Those cut from the rolls aren't farming their land and therefore don't qualify for the tax breaks, according to county staff.

The county lost its annual state Williamson Act reimbursements in 2007 when it became clear that too many landowners were unfairly taking advantage of a law aimed at conserving land from development through farming. A state audit called for sweeping changes to the program.

"We fell out of the compliant group and we need to get back in," said Planning Director Jim Eggemeyer.

Tuesday's vote will allow those cut from the program to appeal the decision within 60 days, at a cost of roughly $470. An appeal would automatically stay the county's action for three years.

But considering the list was drawn up based on surveys the landowners themselves returned to the county, Eggemeyer said his staff is confident the parcels in question simply do not meet the stringent -- and, some would say, anachronistic -- definitions of commercial farming under the Williamson Act.

For instance, cattle ranching is considered a legitimate agricultural use, but horse ranching is not. Timber harvesting falls outside the accepted definition, but farming that produces even the smallest amount of profit generally makes the cut. Meanwhile, multimillion-dollar properties like Martin's Beach in Half Moon Bay get massive tax breaks because part of one parcel is used to grow hay.

And then there are the gray areas. Half Moon Bay property owner Gilbert Gossett had two parcels that fell within the Williamson Act. Gossett grows apples on one 15-acre parcel, but Tuesday's vote struck his larger piece of land from the Williamson Act. He said he will likely appeal.

"There are in fact two English holly trees (on my land) from which I received $125 last December selling English holly at the farmers market," Half Moon Bay resident Gilbert Gossett told the supervisors Tuesday. "I need to know what's happening, because if I have to clear the upper parcel and put it back into agricultural use, that has to be done fairly soon."

County officials aren't sure how much property tax the county could reap from the 128 parcels, especially because Proposition 13 has kept the values of many of the same properties well below market rate.

There's also the fact that Gov. Jerry Brown cut all funding for the Williamson Act for the first time in state history this March, which means counties won't be reimbursed for the tax breaks they dole out, regardless of whether they reform their local programs to bring them into compliance. Roughly half of California's privately held farmland is under Williamson Act contracts.

The Williamson Act program is still on the books, but Supervisor Carole Groom wondered aloud about the merits of initiating a mass contract nonrenewal at a time when it might not bring value to the county.

"If we do all this work and the state decides to discontinue the Williamson Act, what will we have gained or lost?" she said before voting against Tuesday's action.

Amazon gathering anti-tax-law signatures outside retail stores

August 6, 2011By Andrea Chang and Marc Lifsher, Los Angeles Times

Amazon.com Inc. is giving bricks-and-mortar retailers yet another reason to fume.

As the online giant begins its quest to overturn a new California law requiring it to collect sales taxes just like its Main Street competitors, its signature gatherers are heading to popular shopping areas to obtain the 500,000-plus signatures the company needs to get the measure on next June's ballot.

Petition workers are swarming popular commercial hubs including Larchmont Village in Los Angeles, Colorado Boulevard in Pasadena and the Gaslamp Quarter in San Diego as well as Ralphs, Trader Joe's, Target and other major retailers — many of which have lost sales to Amazon.

"It's a particularly clever shot across the bows" of the big-box stores, said Bill Whalen, a research fellow at the Hoover Institution at Stanford University and a former speechwriter for Republican politicians. "It says that not only do we intend to fight you in the court of public opinion but actually we're going to come onto your front porch."

Signature gatherers have long been a familiar presence in malls and outside grocery stores and big-box retailers. The law gives these workers generous access to potential voters in commercial centers.

But that Amazon is using the foot traffic generated by conventional stores to fuel an effort to maintain its price advantage over them strikes some retailers as particularly egregious.

Sarah Hrejsa, manager of women's clothing boutique Hardwear on Larchmont, said a signature gatherer recently entered the store with a petition and pitch defending Amazon's position. She quickly shooed him out.

Collecting sales taxes is "something that we have to do," she said. "So I don't understand why [Amazon] can get away with not."

Retailers nationwide have complained for years that Amazon undercuts them by selling identical merchandise free of state and local sales taxes that can amount to as much as 10% of the sales price.

The online giant has relied on a 1992 U.S. Supreme Court decision that said out-of-state companies were exempt from collecting taxes if they had no presence in the state, such as workers, stores or warehouses. Buyers are still responsible for paying equivalent taxes, but they rarely do.

Now several states have devised strategies to challenge Amazon's exemption.

California recently passed legislation aimed at requiring the Seattle retailer to collect sales taxes from its Golden State customers because the company had advertising affiliates and related operations here. Amazon so far has refused, choosing instead to take its case to California voters with a proposed referendum that would overturn the California law and preserve its tax-free sales model.

Amazon has hired a top California political campaign consultant, Goddard Claussen West in Sacramento, which brought on National Petition Management, a signature-harvesting firm. Its signature gatherers are independent contractors who typically earn $1 to $2 per name, though some are getting as much as $3, according to Bill Dombrowski, president of the California Retailers Assn., which favors Internet sales tax collection.

As of July 29, Amazon reported contributing $3 million to the More Jobs Not Taxes referendum campaign. Dombrowski predicted the company would spend between $10 million and $20 million on the referendum campaign, which urges voters to repeal the online sales tax collection law.

"They've taken every step imaginable to try to avoid complying with law," Dombrowski said of Amazon. "They appear to be going all out to preserve their business model."

Bricks-and-mortar retailers and their allies, meanwhile, are defending the law. They're waging a public relations blitz that's sending out frequent press releases critical of Amazon as it collects the signatures before a Sept. 27 deadline. But the really big-money battle is yet to come. If the referendum qualifies for the ballot, which many retail industry veterans believe will happen, they're prepared to spend millions for television, radio and direct mail advertising to counter Amazon.

Meanwhile, early electoral skirmishes are breaking out in places such as Colorado Boulevard in Pasadena. On a recent Saturday, the corridor was packed with shoppers when a signature gatherer made his way through the crowd, waving a petition in the air and shouting, "Stop the Amazon tax! Stop online sales tax!"

When approached by a reporter, the signature gatherer refused to give his name, saying he was afraid of getting in trouble. A glance at his petition showed he had collected 10 signatures in about three hours; he said his usual rate was 12 signatures per hour.

Amazon's political consultants said they expect their referendum to easily qualify for the ballot. Nevertheless, their top referendum specialist, Chip Nielsen, said he's troubled by a labor-union-sponsored effort to scare registered voters by telling them they could become victims of identity theft if they sign a petition.

Private Equity, Oil Breaks to Be Tax Targets for New Committee

By Richard Rubin - Aug 1, 2011 9:37 AM PT

The private equity managers, oil companies and high-income earners that have been the Obama administration’s prime targets for tax increases will be in Democrats’ crosshairs in the next phase of deficit-reduction efforts.

The debt-limit bill being considered in Congress today would empower a 12-member joint committee of lawmakers to seek $1.5 trillion in deficit cuts with a Dec. 23 deadline for the House and Senate to act. Democrats, who didn’t include any upfront revenue increases in today’s bill, are likely to return to their previous targeted proposals, said Chuck Marr, director of federal tax policy at the Center on Budget and Policy Priorities, a Washington research group that favors programs to assist low-income individuals.

“Theoretically, you could have revenue included in this new committee, but obviously, I think the Republicans come into it against it,” said Marr, who was an economic policy adviser to former Senate Majority Leader Tom Daschle, a South Dakota Democrat. “So we’ll have to see how that plays out.”

Obama in his budget plans has recommended taxing the profit share -- or carried interest -- earned by private equity managers, venture capitalists and others at ordinary income tax rates and not the more lightly taxed capital gains rate. He has called for ending tax benefits for oil and gas companies and for capping the itemized deductions of upper-income Americans.

The biggest barrier to including revenue in the new committee’s bill this fall will be the same one that prevented Obama from capturing any new revenue for the deal to raise the debt ceiling: Republican opposition to tax increases of any kind, including curbing tax breaks.

‘No-Tax’ Votes

Senate Minority Leader Mitch McConnell of Kentucky and House Speaker John Boehner of Ohio will each appoint three fellow Republicans to the committee, giving them the ability to exclude members who may be willing to consider new revenue.

“You end up with six no-tax-increase votes, and it’s hard to see how you do business,” said Clint Stretch, managing principal of tax policy at Deloitte Tax LLP in Washington.

One potential difference is that Democrats have insisted that failure by the committee to act or to push its proposal through Congress would trigger automatic cuts in programs that both parties favor, including defense spending.

“It really just becomes an issue of defense vs. high- income,” Marr said.

Overhaul More Difficult

The rules governing the committee’s search for deficit reduction may make it tough for lawmakers to address a broader overhaul of the tax code as part of their work.

The Congressional Budget Office’s revenue baseline assumes that the Bush-era income tax cuts will expire at the end of 2012 as scheduled. Republicans want a future revenue level equal to extending all the cuts, while the administration wants to raise about $1.8 trillion above that level over the next decade. Measured against the CBO’s yardstick, either approach would be viewed as a tax cut, not deficit reduction.

As a result, any attempt to adjust tax rates would appear to be an impossible task for the joint committee to accomplish, because those actions would be considered tax cuts compared with the tax rates already scheduled to go into effect.

“I think they can’t mess with rates, because the rates are high in the baseline,” Stretch said.

Targeted Increases

In addition, the targeted tax increases favored by Democrats are provisions that lawmakers may want to use to finance rate reductions below current levels.

In a fact sheet released July 31, the White House said Obama could require action on revenue by vetoing an extension of the tax cuts for high earners when they expire in 2012.

The congressional emphasis on deficit reduction also could make it difficult for lawmakers to enact other deficit- increasing tax cuts before the election, Stretch said. Those include an extension of the payroll tax cut that expires at the end of the year and a tax holiday on repatriating offshore profit sought by companies such as Cisco Systems Inc. (CSCO) and Microsoft Corp. (MSFT).

Supreme Court says Class Action over L.A. telephone tax

Los Angeles Times

-- Maura Dolan in San Francisco

July 25, 2011 A class action lawsuit against the city of Los Angeles for a refund of potentially hundreds of millions of dollars in telephone taxes may proceed as a result of a unanimous ruling Monday by the California Supreme Court.

The ruling, written by Justice Ming W. Chin, upheld the right of citizens to bring class actions against municipal governments for collection of allegedly illegal taxes.

The decision will affect similar lawsuits against Los Angeles County, Long Beach and Chula Vista, lawyers in the case said. The suits claim that the governments have illegally taxed telephone users. The tax appears on phone bills.

The case against L.A. was filed in 2006. The city argued that the taxpayers should have filed individual claims for refunds before bringing a class action and won in the trial court and the appeals court.

As a result of Monday's ruling, "It's possible we will consider bringing actions against other jurisdictions," said Frank Gregorek, who argued the case for the taxpayer. The class that would recover funds would include all residents who paid the taxes.

During the years at which the suit is aimed, L.A. charged users a 10% tax on their phone bills, he said. City voters later approved the tax but lowered it to 8%, he said.