Civil Tax

Published on: December 16, 2013

Whose Property Is This Anyway – A Critical Recent Decision Affecting Tax Planning For Complex Real Property Transactions

Governments in recent years have developed some ingenious ways of financing huge real estate projects without having to front the money for it. One such method is so-called “ground lease financing” arrangements, in which private companies pay for the construction and then lease the improvements back to the government for some period of time. It’s a great way for governments to get new digs and spread out the cost, but it can lead to sticky questions when the taxman comes to collect.

Such issues were recently tackled by the Court of Special Appeals of Maryland in Townsend Balt. Garage, LLC v. Supervisor of Assessments of Balt. City, No. 2922, November 19, 2013. The wheels of the case were set in motion when the State of Maryland decided to build that big “BioPark” research complex in downtown Baltimore. As what typically happens in these ground lease financing deals, there was a mountain of leasing and subleasing arrangements in play, so try to bear with us here as we work through them…
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Published on: April 9, 2013

To File or Not to File

By Jen Tosh

File your tax returns. A week from now will be too late. It can be cumbersome, stressful and certainly annoying. But it’s one of those things in life. Do it and be done with it. Some added incentives to filing:
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Published on: January 2, 2013

Fiscal Cliff Dive Converts to Mudslide

By Jen Tosh

Politics aside (because, let’s face it, it’s all about our own, bottom-line individual/household budgets), let’s look at the impact of yesterday’s tax legislation.
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Published on: October 3, 2012

Beware of “Borrowing” Time and Money from Uncle Sam’s Payroll Coffers

By Jen Tosh

In this economy, many small businesses continue to struggle just to stay afloat and, out of desperation, find means of shuffling business funds around to pay immediately due bills and put off paying others. Some business owners have used employment tax withholding to use the government as a bank to ‘borrow the money for a short while’ during financially difficult times with good intentions to pay it back later. Others have been prosecuted for collecting employment taxes from their employees and willfully failing to pay them to the IRS. Former IRS Commissioner Mark W. Everson has stated that the “failure to pay employment taxes is stealing from the employees of the business.”
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Published on: September 13, 2012

Notice of Lien Judgment for Unpaid Sales and Use Tax in Maryland; Possible Defenses

By Steven D. Silverman

As tax defense attorneys and former IRS prosecutors, we are very experienced in resolving Maryland and federal tax problems. One of the common issues we encounter involve the failure to pay Maryland sales and use tax.

I. Applicable Statutes and Case-Law
Section 11-102(a) of the Tax-General Article, Annotated Code of Maryland, imposes a sales and use tax on a retail sale in Maryland, or a use of tangible personal property or a taxable service in Maryland, unless otherwise provided. See MD. CODE ANN., TAX-GEN. § 11-102(a)(1)-(2). Section 11-601 of the Tax-General Article, Annotated Code of Maryland, provides for the payment of sale and use tax to the Comptroller of Maryland by buyers or vendors. See MD. CODE ANN., TAX-GEN., § 11-601(b)-(c) (West 2010).

If a vendor that is liable for the payment of sales and use tax, including interest and penalties, is a limited liability company (hereinafter, “LLC”), then personal liability for the same extends to all members of the LLC if there is no operating agreement, or to those individual who manage the business and affairs of the LLC if there is an operating agreement. Id. at § 11-601(d)(2). Under Tax-Gen. § 11-601(e), a member of an LLC is not considered to be managing the business and affairs of the company solely by doing one or more of the following: (a) consulting with or advising the individuals who manage the business and affairs of the company; (b) directing the management of the company in the same manner as a director of a corporation directs the management of a corporation; or (c) voting on any matter required to be voted on by the members of the company. See id. at § 11-601(e).
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Published on: April 23, 2012

Employees or Independent Contractors? Don’t Let the Tax Consequences of an Incorrect Classification Surprise You

By Jen Tosh

Many businesses approach classifying workers as a tax strategy: classify someone who performs services for you as an employee, and the employer must withhold federal income taxes, withhold and pay social security and Medicare taxes, and pay unemployment tax on wages paid to an employee. Classify that same worker as an independent contractor, and the worker, not the business, is responsible for the related employment taxes. Seem like an easy decision? Think again. A mere label does not determine the employer-employee relationship for tax purposes, and misclassification can result in potentially crippling tax liabilities.
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