The California Superior Court struck down a regulation that imposed a de facto ban on contingent fee arrangements between businesses and consultants applying for the California Competes tax credit. The Court ruled that the regulation improperly exceeded the scope of the related statute. Ryan U.S. Tax Services, LLC v.
The U.S. District Court for the Western District of Tennessee recently upheld a class action lawsuit against an out-of-state law firm that the city of Memphis, Tennessee, hired to collect past-due property taxes. Wright v. Linebarger Goggan Blair & Sampson, 2011 WL 1100462 (W.D. Tenn. Mar. 22, 2011). A class of Memphis taxpayers filed…
Several states are turning to contingent-fee audit contractors, sometimes referred to as “bounty hunters,” as a means of increasing corporate income tax collections. Bounty hunter firms are compensated based on the tax assessed, thus encouraging these firms to aggressively assess taxpayers.
Not surprisingly, contingent-fee-based auditors are supporting legislation in several states that would require state tax agencies to enter into contingent-fee audit contracts. Contingent-fee audits are viewed by corporate taxpayers (and some courts) as unfair, hostile, and bad public policy because the auditors have a financial stake in the outcome of the audit.Continue Reading Bounty Hunters Gone Wild! States Turn to Controversial Contingent-Fee Auditors