Tax Law

Trending topics in tax law; tips on tax planning for businesses and individuals; help and resources for tax disputes and litigation.

Tax Credits Questionable Solution to Health Care Funding

Buried within most of the variants of President Obama’s proposal for extending health care to 47 million uninsured Americans is the notion that tax credits will somehow provide the financing. Tax credits have become popular with politicians in recent years because they look, superficially, revenue neutral. They are not.  A tax credit is money the Treasury never receives, which otherwise would have gone into the government’s general operating fund. If that operating fund could not have underwritten a given subsidy after tax collection, it will experience a budgetary shortfall if it never receives the taxes in the first place.

By |Aug 24, 2009|Categories: Tax Law|Tags: , , , |

Earned Income Credit Fully Exempt in Oregon

As explained in Dana Wilkinson’s article arguing in favor of a federal exemption for the Earned Income Credit, the federal credit, created by 26 U.S.C. §32 (1994), is a refundable tax credit provided for low income workers who have dependent children and who maintain a household. A low income taxpayer can get the credit, in the form of a check or automatic deposit into a bank account, even if the amount of the refund is larger than the amount of tax paid that year.

In Oregon we have an exemption specifically protecting the Earned Income Credit and keeping it entirely exempt from exectution by a debt collector with a judgment.  This exemption also applies to the trustee in a bankruptcy case. 

By |Nov 15, 2007|Categories: Bankruptcy, Tax Law|Tags: , |

Highway Use Tax

Are Oregon highway use taxes dischargeable in bankruptcy?  Yes, if certain conditions are met, a debtor in bankruptcy can discharge taxes incurred in Oregon for use of the highways.  Claims for state and federal highway use taxes levied against truckers based on the weights of vehicles turn up frequently in Oregon bankruptcy cases.  The state is aggressive in enforcing the tax required by ORS Chapter 825.

I recently had a new client bring in collection notices for nearly $250,000 in tax assessed by the Oregon Department of Transportation as the result of a an audit of the company books.  The client had failed to properly respond to the audit notices and to pursue all of his administrative remedies.  He later spent over $25,000 in attorney fees to no avail when he tried to get a new hearing.  It is unable to continue operating trucks and has had to close his business.