Los Angeles Business and Tax Lawyer Blog

If you have a security interest in a partnership or LLC interest, you probably perfected that security interest by filing a UCC financing statement against the debtor. And if you were the first to file against most partnership or LLC interests, you had first priority upon filing. However, you would probably be shocked to find out that a party who subsequently obtains a security interest can jump your priority.

Continue reading "Security Interests In Partnership or LLC Interests" »

If you are considering requesting a private letter ruling from the IRS, there is a process which can save you significant time and expense. Prior to submitting an extensive private ruling request, you can first file a request for a pre-submission conference. This procedure allows the IRS to evaluate a brief overview of the issue, after which the IRS will recommend that you (a) schedule a conference with IRS attorneys to discuss the matter further, (b) submit a full-fledged private ruling request, or (c) not move forward with a private ruling request. You will then be able to assess the strength of your request without incurring the legal and administrative fees associated with a full-fledged letter ruling request.

Continue reading "IRS Pre-Submission Conferences" »

Los Angeles has recently seen a spate of involuntary bankruptcies. What is an involuntary bankruptcy? An involuntary bankruptcy is a bankruptcy filed not by the debtor, but by the debtor’s creditors. Thus the “involuntary” bankruptcy.

Continue reading "Involuntary Bankruptcies" »

When a bankruptcy is filed, whether it is Chapter 11 or Chapter 7, a number of different things occur. Probably the most important is that an “automatic stay” is implemented. What is the automatic stay?

Continue reading "The Bankruptcy Automatic Stay" »

Income tax treaties are good. As tax analyst Lee Sheppard noted, "a tax treaty announces to the world that a country is open to business investment." Tax lawyers are quite fond of tax treaties. Because they supersede local law, if a tax treaty applies, it is possible to give a client meaningful advice on the tax treatment of an investment in a particular country without becoming an expert on that country's internal tax rules or engaging local counsel.

Continue reading "Income Tax Treaties" »

The Internal Revenue Code contains numerous requirements for U.S. taxpayers to report their interests in foreign corporations, partnerships, trusts and estates, and certain transactions involving foreign entities.

Heavy penalties can apply for failure to file these returns in a timely manner. In most cases, the forms must be filed as part of your regular federal income tax return.

Continue reading "Tax Reporting on Foreign Entities or Activities" »

In an effort to retain film and television production in California, the state has enacted a film production tax credit, to be claimed against California personal income and corporate franchise taxes. The credit applies to costs of production starting July 1, 2009 although the credit may not be claimed on tax returns for years prior to 2011. The amount of the credit is 20% of production costs for feature films with a production budget between $2 million and $75 million, for certain mini-series or made-for-television movies and for television series licensed for basic cable, and 25% of the production costs for a television series that filmed all of its prior episodes outside California, or for an independent film (a film with a budget between $1 million and $190 million not produced by a publicly-traded company or a company in which publicly-traded companies own more than a 25% interest).

Continue reading "California's New Film Production Credit" »

California businesses with 20 or fewer employees should be aware that the state provides a $3,000 tax credit for each additional full-time employee hired during 2009. The credit applies to hourly wage employees averaging at least 35 hours per week and full-time (at least 40 hours per week) salaried employees. An employer will not qualify for the credit unless it has a net increase in full-time employees compared to its number of full-time employees for 2008.

Continue reading "California Jobs Tax Credit" »

Given that it seems like almost every company is a possible bankruptcy debtor these days, it is important to recognize that money paid by a company that ends up in bankruptcy might be subject to disgorgement. In other words, if you are the recipient of such a payment, you might have to give the money (or part of the money) back.

Continue reading "What is a Bankruptcy Preference?" »

In 2007, California enacted legislation to address the unconstitutionality of the CA LLC fee based on gross receipts assessed on LLCs doing business in California. The legislation amends CA Rev. & Tax. Code §17942, effective for tax years beginning on or after January 1, 2007, to limit the amount of gross receipts subject to the fee to only those gross receipts generated from CA sources. The legislation also limits the amount of refunds that may be claimed for fees assessed in prior years. Refunds are limited to the amount by which the fee paid, plus any interest assessed, exceeds the amount of the fee that would have been assessed if the fee had been determined under Section 17942, as amended in 2007 (limits refunds to only the excess paid on account of unfair apportionment).

Continue reading "Unconstitutionality of the LLC fees in California" »

Chapter 7 of the Bankruptcy Code is often a last resort for individuals or companies with financial problems that they cannot solve. Under Chapter 7, a Trustee is appointed to administer the assets of the debtor. The Trustee sells the assets in order to pay creditors. For individuals, some assets are exempt, and those are retained by the debtor.

Continue reading "Chapter 7 -- A Last Resort" »

Many people have taken advantage of a long-existing rule that a vehicle purchased outside of California and kept outside the state for more than 90 days after purchase is not subject to California use tax when brought into California. That rule has now been changed.

Continue reading "Use Tax on Vehicles Brought into California." »