Contra Costa Lawyer March 2015

Contra Costa

LAWYER Volume 28, Number 2 | March 2015

Tax Edition Same-Sex Marriage ... Same Taxes? page 8

You’ve Got (IRS) Mail! What Happens When Your Tax Return is Chosen for Audit page 12

Marijuana Taxation Without Legalization page 22

The headline says one thing. The story says something else. You want someone to help you make sense of it all.

That’s where we come in.

the novak group at ubs financial services, inc. bringing confidence to your financial decisions.

Perry A. Novak Senior Vice President, Wealth Management

UBS Financial Services, Inc. 2185 N. California Blvd., Suite 400 Walnut Creek, CA 94596 (925) 746-0245 perry.novak@ubs.com Perry is an active member of CCCBA, currently serving on the board of the Business Law & Corporate Counsel Section. The Novak Group has been providing wealth planning and asset management services to affluent families, business owners and professionals since 1983. Please visit us at: ubs.com/team/thenovakgroup

MARCH 2015

Neither UBS Financial Services Inc. nor any of its employees provide legal or tax advice. You should consult with your personal legal or tax advisor regarding your personal circumstances. ©UBS 2012. All rights reserved. UBS Financial Services Inc. is a subsidiary of UBS AG. Member SIPC.

Contra Costa 2015 BOARD OF DIRECTORS Nicholas Casper President Elva Harding President-Elect Philip Andersen Secretary Amanda Bevins Treasurer Stephen Steinberg Ex Officio Ericka Ackeret Dean Barbieri Oliver Bray Mary Carey Wendy McGuire Coats Michelle Ferber

Peter Hass Reneé Livingston David Marchiano Laura Ramsey Katherine Wenger James Wu

LAWYER Volume 28 Number 2 | March 2015

The official publication of the

B A R A S S O C I A T I O N

FEATURES ADDITIONAL OFFSHORE COMPLIANCE ALTERNATIVES ANNOUNCED

by Jenny C. Lin

SAME-SEX MARRIAGE ... SAME TAXES?

CCCBA EXECUTIVE DIRECTOR Theresa Hurley | 925.370.2548 | thurley@cccba.org

by Chastity A. Schults

CCCBA main office 925.686.6900 | www.cccba.org

Barbara Arsedo Emily Day

YOU’VE GOT (IRS) MAIL! WHAT HAPPENS WHEN YOUR TAX RETURN IS CHOSEN FOR AUDIT

LRIS Coordinator Systems Administrator and Fee Arbitration Coordinator

Dawnell Blaylock

Communications Elizabeth Galliett Coordinator Education and Programs Coordinator

Jennifer Comages

by J. Virginia Peiser

CONTRA COSTA LAWYER

INCORPOREAL PUNISHMENT: CORPORATE SUSPENSION AND FORFEITURE FOR TAX NONCOMPLIANCE

Membership Coordinator

CO-EDITORS EDITORIAL BOARD Harvey Sohnen Suzanne Boucher

8 12 15

by Jason Galek

925.258.9300 925.933.1500 Nicole Mills Patricia Kelly 925.351.3171 925.258.9300 David Pearson BOARD LIAISON 925.287.0051 Candice Stoddard 925.942.5100 Samantha Sepehr 925.287.3540 COURT LIAISON Andrew Verriere Stephen Nash 415.699.0646 925.957.5600 James Wu PRINTING 925.658.0300

IMMIGRATION REFORM INSIDE THE WORLD OF TAXES

MARIJUANA TAXATION WITHOUT LEGALIZATION

by Angelica Lopez

Steven’s Printing

by Christina Weed

925.681.1774

PHOTOGRAPHER Moya Fotografx 510.847.8523

The Contra Costa Lawyer (ISSN 1063-4444) is published 12 times a year - 6 times online-only - by the Contra Costa County Bar Association (CCCBA), 2300 Clayton Road, Suite 520, Concord, CA 94520. Annual subscription of $25 is included in the membership dues. Periodical postage paid at Concord, CA. POSTMASTER: send address change to the Contra Costa Lawyer, 2300 Clayton Road, Suite 520, Concord, CA 94520. The Lawyer welcomes and encourages articles and letters from readers. Please send them to contracostalawyer@cccba.org. The CCCBA reserves the right to edit articles and letters sent in for publication. All editorial material, including editorial comment, appearing herein represents the views of the respective authors and does not necessarily carry the endorsement of the CCCBA or the Board of Directors. Likewise, the publication of any advertisement is not to be construed as an endorsement of the product or service offered unless it is specifically stated in the ad that there is such approval or endorsement.

DEPARTMENTS

INSIDE | by Christina Weed

20 CENTER | Officer Installation Lunch [photos] Food From the Bar Comedy Night Announcement 25

TAX TIPS FROM THE TAX LAWYER | by Christina Weed

RESTAURANT REVIEW | by Suzanne Boucher

CORONER’S INQUESTS | by Matt Guichard

ETHICS CORNER | by Carol M. Langford

INNS OF COURT | by Matthew Talbot

34 CALENDAR 38 CLASSIFIEDS

CONTRA COSTA COUNTY BAR ASSOCIATION CONTRA COSTA LAWYER

inside

his tax season will be the first time that many taxpayers encounter the effects of new provisions of the Affordable Care Act (ACA), effective January 2014. Taxpayers are concerned about how these new provisions will affect them, and they are not entirely sure what to expect. Will they be subject to a penalty? How will this affect their tax refund? And, just what is an insurance marketplace anyway?! Even though it seems the tax laws are constantly changing, tax season does not need to be emotionally or mentally taxing for taxpayers, no pun intended. With the right tax attorney,1 and through meaningful conversations with clients about their financial goals and concerns, taxpayers can get the answers they need. In this issue of the Contra Costa Lawyer, Tax Edition, we have a variety of articles that I hope will be useful and informative for tax practitioners, attorneys and taxpayers, alike. Speaking of changes, this past year the IRS introduced new streamlined filing compliance procedures for disclosure of foreign assets. Although a tax attorney should be consulted in most cases involving previously undisclosed foreign assets, Jenny Lin does a great job of explaining the new procedures for all readers, and addressing remaining concerns, in her article “Additional Offshore Compliance Alternatives Announced.” Chastity Schults’ “Same-Sex Marriage … Same Taxes?” is a great article, FAQ and must-read with respect to tax issues for same-sex couples. The article addresses real-life questions that many same-sex couples face on an annual, and even daily, basis. The article gives California, federal and multi-state perspectives, and it highlights the importance of understanding the overlap between taxation and estate planning. “You’ve Got (IRS) Mail! What Happens When Your Tax Return is Chosen for Audit”—this is the question to which every taxpayer wants to know the answer. Thankfully, J. Virginia Peiser answers this question in detail and step-by-step. While taxpayers never want to receive a letter from the IRS, at least after reading this article, you will know what to expect … and that you need to act FAST! Jason Galek’s article “Incorporeal Punishment: Corporate Suspension and Forfeiture for Tax Noncompliance” is worthwhile to read, especially if you represent

MARCH 2015

corporate clients. The consequences of failing to find out and ensure that your client is tax compliant can be catastrophic. On the other hand, how do you use defective corporate status to your advantage when it is the opposing party? Make sure to read the article to find out. I am so happy (and impressed) that Angelica Lopez, a student at JFK Law School, submitted an article to this edition. Lopez thought it would be interesting to discuss the possible impacts of “Immigration Reform Inside the World of Taxes,” and I agreed. Finally, if you know anything about me, it is probably that I eat, drink and breathe tax law. Sadly, it is an incurable ailment. Second to tax law, I enjoy getting other people excited about … tax law. So, when the CCCBA Editorial Board expressed curiosity in a certain hot topic that involved a significant amount of tax law, and in which I could also incorporate my new name, I could not resist. I really hope you will enjoy my article “Marijuana Taxation Without Legalization;” I know I enjoyed writing it. Also, please check out my “Tax Tips from the Tax Lawyer: Free Filing Services.” I hope it serves as a resource to many of your clients. I wish everyone a great (hopefully, stress-free) tax season and an even greater 2015! s 1 Taxpayers can also obtain additional information regarding the Affordable Care Act via a free podcast by visiting www.kalw.org/ rss. Radio host and San Mateo County Deputy District Attorney, Chuck Finney, Jason Galek, a tax attorney in Walnut Creek, and I discussed the Affordable Care Act and answered questions from those who called in on January 14, 2015. You can also access the direct link here: http://kalw.org/post/new-health-care-rules-taxreturns-taxes-penalties-and-exemptions.

Christina Weed, JD, LL.M., is an attorney at the Law Offices of Chastity A. Schults in Walnut Creek, a tax law and estate planning firm. Christina’s practice has an emphasis in Tax Law, Business Succession Planning and Litigation. Christina is the Chair of the Tax Section of the Contra Costa County Bar Association and the Cochair of the Contra Costa County Delegation of the California Conference of Bar Associations. You can reach her at christina@schultslaw.com or (925) 274-4608.

Additional Offshore Compliance Alternatives Announced by Jenny C. Lin

or almost a decade, the Internal Revenue Service (IRS) along with the U.S. Department of Justice (USDOJ) have placed a high priority on compliance and enforcement related to the disclosure and reporting of income from offshore assets. Enforcement activities have included criminal prosecutions against taxpayers, foreign banks, bankers and other professionals who assisted taxpayers in evading U.S. tax or reporting obligations. The IRS also initiated several voluntary disclosure programs (VDP) to encourage taxpayers to come into compliance. Participation in the VDPs came at a high price as to professional fees and penalties paid. The most expensive part of the programs was a 20-27.5 percent miscellaneous offshore penalty imposed on the year in the disclosure period with the highest aggregate balance/ value of foreign assets involved in noncompliance. The penalty was not subject to appeal or negotiable unless taxpayers opted out of the programs.

(2014 OVDP) for ease of reference.2 The options for a taxpayer to come into compliance are: • 2014 OVDP. • Streamlined Filing Compliance Procedure (Streamlined Procedure). • Delinquent Report of Foreign Bank and Financial Accounts (FBAR) submission procedure. • Delinquent international information return submission procedures.

2014 OVDP The 2014 OVDP applies to submissions made on or after July 1, 2014.3 It generally continues to have the same requirements as the 2012 OVDP.4 One significant difference is the miscellaneous offshore penalty. In the 2012 OVDP, the miscellaneous offshore penalty was 27.5 percent.5

In the 2014 OVDP, it is still 27.5 percent except it is increased to 50 percent6 if the foreign financial institution where the account is held or the facilitator who assisted in establishing or maintaining the offshore arrangement is: (a) currently or has been under investigation by the IRS or USDOJ; (b) cooperating with the IRS or USDOJ; or (c) identified in a John Doe Summons approved for issuance seeking information about U.S. taxMERGERS, ACQUISITIONS, SALES AND PLANNING FOR BUSINESS OWNERS payers.

On June 18, 2014, the IRS announced a welcomed modification providing alternatives for taxpayers to come into compliance. The 2012 Offshore Voluntary Disclosure Program1 (2012 OVDP) as modified is referred to as the 2014 Offshore Voluntary Disclosure Program

BUSINESS LAW HUBERT LENCZOWSKI, J.D., M.A.* Hubert@Lenczowskilaw.com * Adjunct Professor Taxation Golden Gate University Law School, LL.M. Taxation Program

1615 Bonanza Street, Suite 212 Walnut Creek, CA 94596 T (925) 280 7788 www.lenczowskilaw.com

Once the 50 percent penalty applies, it is applied to all of the taxpayer’s accounts or assets subject to penalty.7 Given the high price of entering the 2014 OVDP, this option is generally advisable where a taxpayer may have criminal exposure or may be subject to a much higher penalty outside of the terms of the program.

CONTRA COSTA COUNTY BAR ASSOCIATION CONTRA COSTA LAWYER

Offshore Compliance Alternatives, cont. from page 5

Streamlined Procedure Taxpayers whose conduct is not willful may come into compliance through Streamlined Procedure.8 Prior to the changes announced by the IRS, Streamlined Procedure was only available to taxpayers who resided abroad and met a narrow set of criteria. Under the current rules, taxpayers who reside within and outside of the U.S. may participate if certain requirements are met.9 There are a few crucial differences for U.S. taxpayers who reside within and outside of the U.S. A taxpayer resident in the U.S. is not eligible for Streamlined Procedure if he or she did not previously file income tax returns for the most recent three years in which the return due date has passed. In addition, taxpayers resident in the U.S. must also pay a 5 percent penalty10 based on the year in the disclosure period in which the value of certain foreign financial assets is highest. The key requirement of Streamlined Procedure is that the taxpayer’s conduct must be non-willful. “Non-willful conduct” is defined for purposes of Streamlined Procedure as “conduct that is due to negligence, inadvertence or mistake or conduct that is the result of a good faith misunderstanding of the requirements of the law.”11 Other than this general definition, no other guidance is provided. Furthermore, in contrast to the 2014 OVDP, there will be no agree-

MARCH 2015

ment at the end of the case to ensure that the IRS cannot reopen issues absent certain narrow circumstances. In fact, the procedure provides that the IRS reserves its right to examine the willfulness issue as to the failure to report foreign financial accounts if the taxpayer is later selected for an examination.12 Therefore, taxpayers coming into compliance under Streamlined Procedure are advised to be careful in how the case is evaluated for submission in Streamlined Procedure and how it is presented.

Delinquent FBAR Submission Procedures The changes announced in June 2014 also provided the Delinquent FBAR Submission Procedures for taxpayers who failed to file FBARs but did not underreport income or owe additional taxes.13 This procedure was available previously under a different name. Taxpayers who qualify may file delinquent FBARs with an explanation of the delinquency. No penalties will be imposed if the taxpayer is not currently under civil or criminal examination by the IRS and have not already been contacted by the IRS regarding the delinquency.

Delinquent International Information Return Submission Procedures Lastly, the changes announced in June 2014 also continue a prior procedure available under the 2012 OVDP in the form of the Delinquent International Information Return Submission Procedures.14 This procedure is available to taxpayers who failed to file certain returns as to foreign assets and transactions if no income is underreported and no additional tax is owed. There are two significant departures from the former procedure. First, taxpayers filing delinquent information returns under this procedure must attach a statement stating facts which establish “reasonable cause.” Second, if an information return involves an entity, the taxpayer must certify that the entity was not engaged in tax evasion. Therefore, taxpayers using this procedure may run the risk of penalties if the facts and circumstances of their case are not carefully evaluated prior to choosing this path. Some taxpayers may think the risk of detection as to their noncompliance is low and decide not to take any action to correct current or past noncompliance. However, the risk of detection is increased greatly with the launch of an international data exchange service15 as part of the implementation of Foreign Account Tax Compliance Act, formally titled the “Hiring Incentives to Restore Employment Act of 2010,” 124 Stat. 71, relevant provisions codified at Internal Revenue Code § 6038D and §§ 14711474 (FATCA).16

Furthermore, there is no sign that the government is slowing down its enforcement actions. Recently, the IRS successfully sought the issuance of John Doe Summonses to eight entities, including Federal Express Corporation, DHL Express, and United Parcel Service, in order to identify U.S. taxpayers who used a certain service to establish, maintain and/or conceal foreign assets.17 Therefore, taxpayers who decide not to come into compliance are doing so at the risk that huge civil and criminal penalties may lie ahead if they are discovered. s

http://www.irs.gov/Individuals/International-Taxpayers/Delinquent-International-Information-Return-SubmissionProcedures.

See FAQ 1.2 of note 2.

See FAQ 7 and FAQ 25 of note 2 for a complete list of requirements.

Jenny C. Lin, JD, LL.M., is a certified specialist in tax law with a focus on international tax issues. She may be reached at (925) 202-2922.

See IR-2015-01 (January 12, 2015).

16 See Jenny C. Lin, “Tax Avoiders Beware: Disclosure of Foreign Assets Held by U.S. Taxpayers Underway,” Contra Costa Lawyer (March 1, 2014), for a general discussion of FATCA.

ConServAtorShiPS ProBAteS CriMinAl DefenSe

See http://www.irs.gov/Individuals/ International-Taxpayers/Offshore-Voluntary-Disclosure-Program-FrequentlyAsked-Questions-and-Answers.

See FAQ 1 at http://www.irs.gov/Individuals/International-Taxpayers/ Offshore-Voluntary-Disclosure-ProgramFrequently-Asked-Questions-and-Answers-2012-Revised.

See Case No. 14Misc00417 in the U.S. District Court, Southern District of New York.

http://www.irs.gov/Individuals/International-Taxpayers/Delinquent-FBARSubmission-Procedures.

• Free Consultation •

David B. Pastor

Law Offices of

CCCBA MeMBer SinCe 1977

DAviD B. PAStor

www.davidbpastor.com 1280 Boulevard Way, Suite 212 • Walnut Creek, CA 94595 925-932-3346 • david@davidbpastor.com

The offshore penalty was reduced to 12.5 percent and 5 percent in limited circumstances. See FAQ 52 and FAQ 53 of note 1 relating to 2012 OVDP.

See FAQ 7.2 of note 2.

Id.

AND

MEDIATION CENTER

http://www.irs.gov/Individuals/International-Taxpayers/Streamlined-FilingCompliance-Procedures.

http://www.irs.gov/Individuals/International-Taxpayers/U-S-TaxpayersResiding-in-the-United-States; http:// www.irs.gov/Individuals/InternationalTaxpayers/U-S-Taxpayers-Residing-Outside-the-United-States.

Taxpayers whose cases remain open in one of the prior VDPs may request to have the offshore penalty of the Streamline Procedure apply instead, i.e., 5 percent for taxpayers resident in the U.S. and zero percent for taxpayers resident outside of the U.S. However, other requirements and penalties of the VDPs continue to apply.

See note 9.

Id.

“A unique and effective style a great mediator” Candice Stoddard Ron Mullin

Willows Office Park p 1355 Willow Way, Suite 110 Concord, California 94520 Telephone (925) 798-3413 p Facsimile (925) 798-3118 Email ronald@mullinlaw.com

CONTRA COSTA COUNTY BAR ASSOCIATION CONTRA COSTA LAWYER

Same-Sex Marriage ... Same Taxes? by Chastity A. Schults

arriage equality has been a long-running legal topic for decades. It was only 48 years ago in the landmark case of Loving v. Virginia (1967), 388 U.S. 1, that the U.S. Supreme Court unanimously invalidated the ban on interracial marriages as violating the Equal Protection and Due Process Clauses of our 14th Amendment.

Twenty-six years later, the Hawaii Supreme Court ruled that laws denying same-sex couples the right to marry violated the state constitutional equal protection rights, unless the state could show a “compelling reason” for such discrimination.1 This was the first time a state Supreme Court ruled that same-sex couples might have the right to marry. Following the Hawaiian Supreme Court ruling, some states began recognizing samesex marriages when Congress enacted the Defense of Marriage Act (DOMA)2 in 1996. DOMA had two operative parts, one being that states are allowed to refuse to recognize same-sex marriages performed under the laws of other states; and the second was that it provided federal definitions for the words “marriage” and “spouse,” which was applicable for all federal purposes, including federal benefits (i.e., certain Social Security and pension benefits, income taxes, estate tax exemption, gift tax, military service benefits for spouses, etc.). It was the second part, Section 3 of DOMA, regarding the defined terms that came under fire in 2013 in another landmark civil rights case, United States v. Windsor, 570 U.S. 12 (2013), 133 S.Ct. 2675. The Windsor case dealt with two women who were legally married and living in the state of New York, which recognized same-sex marriages of New York residents.

MARCH 2015

When Edith Windsor’s wife died, she was left her wife’s entire estate and wanted to use the federal estate tax exemption for surviving spouses. Windsor was barred from doing so based on Section 3 of DOMA, since she was not a “spouse.” Section 3 of DOMA defined “marriage” as “only a legal union between one man and one woman as husband and wife;” and similarly defined “spouse” as being “a person of the opposite sex who is a husband or a wife.”3 On June 26, 2013, the U.S. Supreme Court (in a 5-4 decision), held that Section 3 of DOMA was unconstitutional as it violated the right to equal protection of same-sex couples who are legally married under state law.4 For those who support samesex marriage, Windsor is another step in the right direction for marriage equality; and for those supporters, a glitter of hope that we, as a nation, will overcome another discrimination hurdle as we did not too long ago in recognizing interracial marriages. However, same-sex marriage opponents got their first victory since Windsor this past November 2014, when the 6th U.S. Circuit Court upheld the ban against same-sex marriage, finding that it is constitutional in Kentucky, Ohio, Tennessee and Michigan; and that defining marriage should be left to the states, not judges. The U.S. Supreme Court has recently decided to hear these four cases on same-sex marriage this April, on the following two issues: (1) does the 14th Amendment require a state to issue a marriage license to same-sex couples; and (2) does the 14th Amendment require a state to recognize a same-sex marriage if lawfully entered into in a state where such marriages are legal?

It is anticipated that the ruling on these issues will be made sometime in June 2015.

will file either as “married filing separately” or “married filing jointly” on your federal income tax return.

Today there are 36 states that have legalized same-sex marriage,5 and although it is not currently widely recognized state-to-state, the ruling in Windsor initiated some guidance with respect to federal law, and how same-sex couples should be filing their federal income tax returns.6 Below is a list of frequently asked questions that touch on various aspects of preparing your tax return in the wake of Windsor:

Q: My same-sex partner and I are registered domestic partners and have lived together in California for 12 years. Can we file our tax returns using the “married” status?

Q: We are a same-sex couple that got married in California, but now live in Michigan. Do we file our tax returns as married or single? A. In light of Windsor, the Supreme Court held that any same-sex marriage that was entered into by a state that legally recognizes same-sex marriages, will be treated as married for federal purposes, even if the couple now lives in a state that does not recognize samesex marriages. Michigan has banned the recognition of same-sex marriage, so in the eyes of that state, you are not married. You will need to prepare your Michigan state income tax return using the filing status “single.” However, since you were married in California, which is a state that does recognize same-sex marriages, you

A: Although California recognizes same-sex marriages, they do not recognize common-law marriages and being a registered domestic partner is not considered being “married.” For federal purposes, Windsor did not extend to registered domestic partnerships or civil unions. Therefore, for both your California state return and your federal income tax return, you have to file as “single.”

Q: My same-sex spouse and I filed our 2013 income tax returns as married filing jointly. Can we go back and amend our 2012 federal income tax return to reflect similar filing status? A: You can generally amend a return to claim a refund within three years of having filed the return, or

Morrill Law Firm Phone 925.322.8615 • Fax 925.357.3151 2175 N. California Blvd., Suite 424 Walnut Creek, CA 94596

Will & Trust Litigation Financial Elder Abuse Conservatorships Estate Planning Trust Administration Probate Mediation

Joseph Morrill, Attorney Ruth Koller Burke, Of Counsel Vahishta Falahati, Of Counsel Heather Hoekstra, Of Counsel

3220 Blume Drive, Suite 200 Richmond, CA 94806

Nathan Pastor, Attorney Nicole Morrill, Paralegal Jill Olivier, Paralegal

CONTRA COSTA COUNTY BAR ASSOCIATION CONTRA COSTA LAWYER

Same Taxes, cont. from page 9

two years from paying the tax—whichever is greater. Assuming you filed your 2012 tax return on April 15, 2013, you have until April 15, 2016, to amend your return by filing IRS Form 1040X and claim the refund. The IRS made filing pre-2013 returns optional, so it is not mandatory. If amending the return would increase your collective tax or trigger or increase the alternative minimum tax (AMT), you may not want to do so. Additionally, as a same-sex married couple, you are jointly and severally liable for your spouse’s income taxes; so if one of you currently owes back taxes to the IRS, you may not want to amend your return because your collective assets will then become relevant for the IRS’ collection process.

Q: I entered into a same-sex marriage in 2012, at which time I added my spouse’s name on title to my house. Since a 50 percent interest in my home far exceeded the annual gift tax exclusion amount of $13,000 for that year, I had to file a gift tax return (Form 709) and pay the federal gift tax. Can I amend the federal gift tax return? A: Those who have entered into a marriage in a legally recognizable state (regardless of where they are now currently domiciled), are considered “married” for federal tax purposes. Married couples are entitled to make unlimited gifts to each other during their lifetime and defer the tax until after death of the surviving spouse. Therefore, you may amend your federal gift tax return

and get the tax that was paid refunded, which would then increase the amount of lifetime gifts you can make. You have to file a claim for refund within three years of having filed the return or two years from paying the tax—whichever is greater, and file using IRS Form 843, Claim for Refund and Request for Abatement.

Q: We are a same-sex married couple and my spouse wants to legally adopt my son. Will he be able to claim the adoption expenses as a deduction on our tax return? A: Assuming you were married in a state that recognizes same-sex marriages, you are considered “married” for federal tax purposes. There is both a tax credit for qualified adoption expenses and an exclusion for employer-provided adoption assistance. However, your spouse will not be able to either claim the credit or the exclusion because these tax benefits do not apply to a taxpayer who adopts his/her spouse’s child—although it does apply to registered domestic partners (assuming they live in a state that allows same-sex parent or coparent). These concepts can be complicated especially in determining how they apply to new and changing laws. However, when meeting with clients it is helpful to discuss their estate planning and tax needs in conjunction with their family goals to reach a result that is most beneficial to the client. s 1

Baehr v. Lewin (1993), 74 Haw. 530; 852 P. 2d 44.

104 H.R. 3396, Pub.L. 104-199, 110 Stat. 2419, 1 U.S.C. § 7 and 28 U.S.C. § 1738C.

110 Stat. 2419, 1 U.S.C. §7.

Windsor, 570 U.S. 12 (2013), 133 S.Ct. 2694-2695.

Since this article was written in January, Alabama became the 37th state to legalize same-sex marriage by refusing to grant a stay that would temporarily block same-sex marriage. It will be interesting to see if this number increases before publication.

Law Offices of David A. Arietta

BANKRUPTCY ESTATE PLANNING TRUST ADMINISTRATION AND PROBATE 700 Ygnacio Valley Rd, Ste 150 Walnut Creek, CA 94596 (925) 472-8000 david@ariettalaw.com

MARCH 2015

Certified Specialist Bankruptcy Law State Bar of California Board of Legal Specialization Rated AV Preeminent Martindale-Hubbell

www.AriettaLaw.com

The IRS issued guidance on August 29, 2013 as Rev. Rul. 2013-17.

Chastity Schults is the principal at Law Offices of Chastity A. Schults in Walnut Creek, whose practice focuses primarily on two certainties in life: Death and taxes. She is a certified specialist in estate planning, trust and probate law and can be reached either by email at Chastity@SchultsLaw.com, or by phone at (925) 274-4608.

CONTRA COSTA COUNTY BAR ASSOCIATION CONTRA COSTA LAWYER

You’ve Got (IRS) Mail! What Happens When Your Tax Return is Chosen for Audit

by J. Virginia Peiser

The revenue agent may allow additional time to produce the documents for good cause. Eventually the agent reports proposed Income Tax Examination Changes,6 known as a Revenue Agent’s Report (RAR), specifying adjustments for items that were uncovered by the audit. The IRS conducts an office exam to review a greater number of issues, such as income and deductions on Schedule C for self-employed persons, or numerous itemized deductions on Schedule A.

he dreaded envelope from the IRS has come via snail mail, the U.S. Postal Service. Your recent income tax return was selected for audit. You are requested to attend a conference with an IRS revenue agent and bring documents regarding income and/or deductions on your tax return. Now what? The IRS is authorized to audit any person or entity liable for income or other federal tax.1 The time and place of the audit must be reasonable under the circumstances.2 The IRS can examine any books and records, and it can issue summons to the taxpayer or any third person with information regarding the return under examination.3 The taxpayer must provide credible evidence supporting items reported on the tax return.4

Types of Examinations The three standard types of IRS examinations are correspondence, office and field audits. A correspondence audit is usually conducted for selected issues on a tax return, such as interest deductions or charitable contributions. The IRS letter includes requests for documents, known as Information Document Requests (IDRs),5 identifying documents the IRS seeks by a specific date. 12

MARCH 2015

The initial IRS letter requests the taxpayer to attend a pre-set interview at the IRS office or to call to schedule an interview.7 It includes IDRs for documents the IRS seeks. After obtaining answers to relevant questions and reviewing records, the agent prepares a proposed RAR. The field audit is the most extensive (and intrusive) IRS examination. The revenue agent typically requests the exam take place at the taxpayer’s home or office. As with other types of audits, after reviewing records and other information, the agent prepares a proposed RAR with income tax changes. The goal of an IRS audit is to uncover unreported income or overstated deductions. Unreported income could include earned fees left in your client trust account, while improper deductions could be amounts rounded to the next higher $100.

Mail Handling Letters from the IRS should receive prompt and appropriate attention. Office employees should be instructed on who is the person to receive these letters. They should not go to staff that may bury the letter or respond on their own without understanding conse-

quences. The first contact with the IRS can impact the remainder of the audit.

can be delivered to the representative’s office, and the agent can examine them in this neutral location.

Taxpayer Interview

Document Production

Both office and field exams include requests for taxpayer interviews. You have a right to professional representation at any interview.8 You also have the right to make an audio recording of the interview upon prior notice to the IRS.9 You should do so to keep an accurate record of the interview.

All exams include IDRs. Additional document requests may be made during the audit, if the agent finds further issues to develop. You should keep a copy for your records of all documents submitted to the IRS. Summons can also be issued to third-parties, such as your bank. However, the IRS cannot compel you to prepare new documents, including a tax return or a spreadsheet summarizing records.

Taxpayers often believe they can “explain everything” to the revenue agent, so they avoid the cost of counsel at the interview. Anything you say can and will be used against you! Promptly consult your tax advisor for your response to the interview request. In almost every case, you should have professional assistance at the interview. You may not know the focus of particular questions, or how an explanation can be misconstrued for an adverse tax result. Many tax practitioners do not let their clients attend these interviews. They advise the auditor that they will forward any questions to the taxpayer and relay back the answers. The field audit generally should not take place at the taxpayer’s location. The auditor can learn more than necessary from observing furnishings, overhearing conversations or seeing unrelated documents. Any records

Documents provided to the IRS should include only the requested information. Bank statements supporting expense deductions should have entries redacted that are unrelated to the exam. The agent should not learn where you dine or shop.

Privileges For questions the IRS poses or documents it requests, you are entitled to raise privileges, such as those against unreasonable search and seizure, self-incrimination, spousal or attorney/client. A privilege log for these documents should include the date, nature, parties, length, general content and privilege claimed for them.

Statute of Limitations Although the IRS typically gives limited time for responses, the only time constraint for completing the audit is the threeyear (or six-year) limitations period to assess a deficiency.10 Months may pass from your submission of information to your receipt of the proposed RAR.

Northern California Mediator / Arbitrator

18 years as Mediator 27 years as Arbitrator 35 years in Civil Practice

Roger F. Allen 510.832-7770 Ericksen, Arbuthnot 155 Grand Avenue, Suite 1050 Oakland, CA 94612

rallen@ericksenarbuthnot.com

• Training includes Mediation Course at Pepperdine University 1995 • Serving on Kaiser Medical Malpractice Neutral Arbitrators Panel • Settlement Commissioner, Alameda and Contra Costa Counties • Experienced in all areas of Tort Litigation, including injury, property damage, fire loss, malpractice, construction defect

If the statute will expire in a few months, the auditor will request that you consent to extend the limitations period. Consult your tax advisor as to whether you should consent to an extension.

Revenue Agent Report (RAR) After reviewing the proposed RAR, your representative can discuss changes with the auditor and sometimes submit additional documentation for specific issues. Once the auditor finalizes the RAR, you have three options by the response due date. If you agree with the proposed changes, sign the examination report and return it to the IRS. The additional tax will be assessed. If you

CONTRA COSTA COUNTY BAR ASSOCIATION CONTRA COSTA LAWYER

You’ve Got (IRS) Mail, cont. from page 13

agree with the proposed changes but are unable to pay the tax, sign the report anyway and make separate arrangements for tax payments with the IRS collections department.11 If you don’t agree with the proposed changes, you can request a conference with the auditor’s supervisor or the Office of Appeals by the response due date. The Office of Appeals is quasi-independent of the IRS examination process. Its mission is to resolve tax controversies without litigation, on a basis which is fair and impartial to the government and the taxpayer.12 An Appeals Officer may settle a case based upon all elements of an examination and may consider hazards of litigation.13 Legal issues and questions of interpretation are more likely to be resolved with the Office of Appeals. If you do not respond to the RAR, the IRS will issue a Notice of Deficiency based upon it. You have 90 days to file a petition with the United States Tax Court.14 A petition filed even a single day late will be dismissed, and the IRS will assess tax based upon the Notice of Deficiency.15 The decision to request an appeals conference or file a petition in Tax Court should be made after consulting your tax advisor. But if your income and deductions are properly documented and reported, you, too, can survive an IRS audit. s 1

Internal Revenue Code (hereinafter IRC), 26 USCS §7601.

IRC §7605.

IRC §7602.

IRC §7491.

5 IRS Form 4564, Information Document Request. 6

IRS Form 4549, Income Tax Examination Changes. 7

For example, IRS letter 3572, requesting a call to schedule an appointment. 8

IRC §7521(b)(2).

IRC §7521(a).

A six-year statute of limitations applies to an income tax return that omits more than 25 percent of gross income. IRC §6501(e).

MARCH 2015

Tax payment options beside full payment may include Installment Payment Arrangements (IPA) and Offers in Compromise (OIC). 12 Internal Revenue Manual (IRM) 8.6.4.1, Fair and Impartial Settlements per Appeals Mission; see also IRM 1.2.17, Servicewide Policies and Authorities, Policy Statements for Appeals Activities. 13 IRM 8.6.4.1, Fair and Impartial Settlements per Appeals Mission; IRM 8.6.4.1.1, Mutual-Concession Settlements; see IRM 1.2.17.1.6, Consideration to be given to offers of settlement. 14

IRC §6213.

You then have an option to pay the tax and to sue the IRS for a refund in either federal district court or the Court of Claims.

J. Virginia Peiser is Of Counsel with Archer Norris, PLC, based in Walnut Creek. She represents investors and owners of closely held businesses in tax, business and estate planning matters and is practice group leader of the Archer Norris taxation and estate planning practice. Virginia is a Certified Specialist in Taxation Law, as well as Estate Planning, Trust and Probate Law, by the State Bar of California Board of Legal Specialization. She has been a member of the Board of Directors of the Contra Costa County Bar Association Taxation Section since 1988 and has served four separate terms as Chair of the Taxation Section.

Incorporeal Punishment:

Corporate Suspension and Forfeiture for Tax Noncompliance by Jason Galek

or corporate counsel, the failure to confirm the tax filing and payment compliance status of the corporate client can have disastrous results. California has long provided that the corporate powers, rights and privileges of a domestic or foreign corporation within California may be suspended (for domestic corporations) or forfeited (for foreign) for failure to file tax returns, file the annual return or statement, or pay taxes, penalties and interest beyond a prescribed period of time.1

These provisions equally apply to domestic or foreign limited liability companies in California.2 While sus-

—

WANTED — Conservatorships think

Matt Toth

as in Pedder, Hesseltine, Walker & Toth, LLP

oldest partnership in Contra Costa County (since 1955)

p 925.283-6816 • f 925.283-3683 3445 Golden Gate Way Lafayette, CA 94549 AV Martindale-Hubbell

pended or forfeited, the corporation is barred from exercising any right, power or privilege.3 Crucially, the barring of exercising any right, power or privilege includes the ability to prosecute a lawsuit.4 Defending a lawsuit is also barred, as is the filing of any appeal, during suspension or forfeiture.5 Suspension or forfeiture may also bar a corporation’s ability to sue or defend in federal courts, including the filing of petitions in the U.S. Tax Court.6 While a corporation has suspended or forfeited status, every contract made in California is voidable at the instance of any party to the contract other than the taxpayer.7 The other party can only void such a contract in a lawsuit brought against the taxpayer, and the taxpayer must receive full restitution of the benefits provided by the taxpayer under the contract.8 These suspension and forfeiture provisions provide a powerful offensive and defensive tool. Offensively, a plaintiff who is aware of a corporate defendant’s failure to pay taxes may be able to assert these provisions to bar the adverse party from defending the lawsuit while

the corporation has suspended or forfeited status. On the other hand, a defendant may bar a plaintiff from prosecuting a claim by asserting at the earliest possible opportunity an affirmative defense alleging the plaintiff’s incapacity. A defendant’s failure to assert the defense in the initial answer or demurrer is generally a waiver of the defense.9 An amended answer will avoid waiver only if the defendant demonstrates a justification for relief from waiver, such as discovery of the incapacity after the original answer was filed.10 Before suspension or forfeiture can occur, the Franchise Tax Board must provide at least a 60-day notice to the corporation and only when the corporation fails to comply may the FTB transmit the delinquent corporation’s name to the Secretary of State.11 Once suspended or forfeited, the corporation can cure incapacity and reinstate its corporate powers by applying for a certificate of revivor from the Franchise Tax Board.12 Full compliance is required by the taxpayer for the certificate of re-

CONTRA COSTA COUNTY BAR ASSOCIATION CONTRA COSTA LAWYER

Incorporeal Punishment, cont. from page 15

vivor, including filing all required tax returns, annual returns or statements and paying all taxes, penalties and interest.13 Revivor may still be obtained without full payment of taxes, penalties and interest if the Franchise Tax Board determines that the revivor will improve the prospects for collection of the full amount due, but the FTB is free to limit the revivor as to time or to the functions of the revived corporation.14 The California Supreme Court has interpreted sections 23301 and 23302 to bar a corporation from prosecuting, defending or appealing an action during the period that it is suspended for failure to pay taxes and has held that a suspended or forfeited corporation will not be barred if the suspended or forfeited corporation obtains a certificate of revivor during the pending action, thereby validating an otherwise invalid prior action.15 The Supreme Court’s rationale is to induce the payment of delinquent taxes, with little purpose in imposing additional penalties once the taxes have been paid.16 Based on this rationale, revivor during a pending appeal made after the filing of the notice of appeal will cause a

suspended or forfeited corporation’s earlier, invalid but timely filing of a notice of appeal to be valid and still timely.17 The filing of a notice of appeal is jurisdictional and does not require the corporation to be active.18 In contrast, revivor will not cure non-jurisdictional defects that offer the other party a substantive defense, such as the statute of limitations.19 Attorneys representing corporate clients in California courts have an affirmative duty to advise the court of the corporation’s incapacity, notwithstanding attorneyclient confidentiality.20 The failure to advise the court is evidence of bad faith that may support an award of sanctions.21 Counsel representing corporations or LLCs should accordingly confirm the client’s corporate status and inquire about tax compliance if the circumstances suggest that the corporation is not currently compliant. The failure to comply with tax reporting and payment may result in the loss of a corporation’s ability to act in California. While a certificate of revivor will cure invalid actions, substantive defenses will not be reinstated through revivor. Applying for a certificate of revivor during litigation will greatly add to the cost of litigation and complexity of an action. It would be best to avoid such distractions that could be used against the corporation to delay and possibly bar the pursuit of a claim. s

Tax & Estate Planning Attorneys Individual & Business Tax Issues Tax Preparation • Tax Planning • Tax Controversy Sophisticated Estate Planning • Estate Administration Trust & Estate Litigation • Probate

YOUNGMAN & ERICSSON 1981 N. Broadway, Suite 300 | Walnut Creek, CA 94596 (925) 930-6000 | Youngman.com

Walter C. Youngman, Jr., Attorney-CPA Jean Claude B. Mallein, Jr., MBA, LL.M-Taxation State Bar Certified Specialist-Estate Planning, Trust & Probate

Tara H. Shine, Attorney

MARCH 2015

Dani Altes, Paralegal Lisa Salvetti, Legal Secretary Maudie Sullivan, Certified Tax Preparer

R&TC §§ 23301, 23301.5, 23775.

R&TC § 23305.5.

19 ABA Recovery Services, Inc. v. Konold, 198 Cal.App.3d 720, 725 fn. 2 (1988).

R&TC § 23301; Cal-Western Business Services, Inc. v. Corning Capital Group, 221 Cal.App.4th 304, 310 (2013).

Crummey Co. v. Superior Court, 188 Cal. 393, 394-397 (1922).

Boyle v. Lakeview Creamery Co., 9 Cal.2d 16, 20 (1937).

Id.

Palm Valley Homeowners Ass’n, Inc. v. Design MTC, 85 Cal. App.4th 553, 562 (2000). 21

Id.

David Dung Le, M.D. Inc. v. Comm’r, 114 TC 268 (2000); Fed. Rules Civ. Proc. R. 17(b).

R&TC § 23304.1.

R&TC § 23304.5.

9 Cal-Western Business Services, Inc. v. Corning Capital Group, 221 Cal.App.4th 304, 312.

Jason Galek, LL.M. Taxation, is a tax attorney certified as a specialist in taxation law by the State Bar of California Board of Legal Specialization. Jason represents individuals and private, public and tax-exempt business entities in federal and California tax controversy and planning matters.

V & P Trading Co. Inc. v. United Charter, LLC, 212 Cal.App.4th 126, 134 fn. 2 (2012).

R&TC §§ 21020, 23302.

R&TC § 23303, 23776.

R&TC §§ 23305.

R&TC § 23305b.

30 years experience Probate-Trust Paralegal

See, Peacock Hill Assoc. v. Peacock Lagoon Constr. Co., 8 Cal. 3d 369, 371 (1972).

Id.

Bourhis v. Lord, 56 Cal.4th 320, 329 (2013).

3445 Golden Gate Way Lafayette, CA 94549 (925) 283-6998 l.neiger@mac.com

CONTRA COSTA COUNTY BAR ASSOCIATION CONTRA COSTA LAWYER

Immigration Reform Inside the World of Taxes by Angelica Lopez

hether or not you agree with President Obama’s new executive order to implement an immigration reform that will allow current undocumented immigrants to stay here without the fear of deportation for the next three years, the underlying question remains: Will this reform help our economic crisis, and will more undocumented people come out of the shadows, and report their yearly taxes?

What are DAPA and DACA? DAPA is Deferred Action for Parental Accountability, President Obama’s new executive order that protects parents of lawful U.S. citizens who have been here for five or more years, from deportation, and will grant them a work authorization permit, and a Social Security number, eventually.1 DACA is Deferred Action for Childhood Arrivals, an existing order that protects children from deportation if they arrived here prior to January 1, 2010.2 Under both DAPA and DACA, many economists expect our economy to improve as a result of less “under the table” earned money, and yearly income tax claims made.

Tax and Immigration Lawyers Unite The biggest question that undocumented immigrants currently have is: What will happen after the threeyear protection lapses? According to the Obama Administration, once the three years lapse, people under DAPA or DACA will be able to apply for their permanent residence if they can prove a good moral character.3 18

MARCH 2015

This “good moral character” will not only have to do with a criminal background check, but a record of filed income taxes. Currently, everyone that works in this country, whether lawfully, or unlawfully, is required to file applicable income taxes.

because many of these workers get paid in cash, and as a result, lie on their filings. Therefore, with a work authorization permit, fewer undocumented immigrants will work in cash-based jobs, and be able to apply for work at honest companies that will duly report their wages.

Failure to do so will surely be detrimental for those wanting to stay in this country lawfully. Not only will immigration law be at issue here, but also tax law, because honest tax filings could very well lead to permanent residence.

Willful Failure to File Tax Returns

ITINs Currently, the millions of immigrants working unlawfully are able to file for an ITIN, a tax ID number issued by the IRS that enables them to file taxes without a Social Security number.4 This is why many experts believe that although the immigration reform will enable these people to work lawfully, it will not have that big of an impact on our economic debt through tax filings. However, even with an ITIN, millions of dollars go unreported

Although people protected under DAPA are expected to file tax returns, there will be those who choose not to. As a result, failure to file or pay income taxes is a crime categorized as a misdemeanor with monetary fines, or if over $10,000 revenue loss for the government, it is considered a felony subjecting the individual to prison time, deportation or permanent ineligibility to become a U.S. citizen.5 This is why it is crucial for people protected under DACA or DAPA to consult not only an immigration attorney, but also a tax attorney if they fail to claim or pay their taxes, or deliberately lie to the IRS.

DACA to Aid Economy Economists believe that while DAPA will mainly help our economy through tax filings, and reported income, DACA will help our economy by enabling young immigrants to lawfully stay here, and receive a higher education.6 As a result, this will raise a new generation of professionals that will enrich our economy through the creation of new jobs, innovations and of course, tax filings. Children protected under this reform account for one third of immigrants benefitted from the reform, and as a result, make up the minority of the spectrum, but nevertheless count in the projected revenue for our economy.

DACA and DAPA Filing Fees Aside from revenue collected from income taxes, the 2 million undocumented immigrants expected to benefit from this reform will

have to pay an estimated $1,200 in work permit filing fees, attorney fees, etc. Our economy will certainly benefit from these filing fees. It goes to show once again how immigration law and tax law will be the two areas of law that will surface the most in this reform. It is important for people protected under DAPA or DACA to not only file for a work permit, but to also keep a record of their tax filings, and not misleadingly report false income. Three years of income tax filings may very well be the deciding factor when time comes for application of permanent residency. Then, as a result, tax filings and income tax debt paid will equate to a rise in our economy through the lens of the IRS. s 1

“Executive Actions on Immigration.” Department of Homeland Security, U.S. Citizenship and Immigration Services. Jan. 30, 2015, uscis.gov/immigrationaction.

Id.

Agostino, Frank, Lopez, Inez “Common Tax Issues for Undocumented Immigrant Workers.” Agostino & Associates Newsletter, December, 2014. Agostinolaw.com. https://www.dropbox.com/s/ k9v620n3zz3c75g/A%26A%20Newsletter%20-%202014%20December.pdf?dl=0.

General ITIN Information.” IRS, 19 Nov. 2014. http://www.irs.gov/Individuals/ General-ITIN-Information

“The Obama Administration’s DAPA and Expanded DACA Programs.” National Immigration Law Center., 23 Jan. 2015. http:// www.nilc.org/dapa&daca.html.

Angelica Lopez is a second-year law student at JFK University and a 2014 Women’s Section scholarship recipient.

Commercial and Banking Mediation A reasonably priced alternative to big ADR groups, Dean Christopherson brings a thirty year track record of resolving contractual, business and banking disputes to your mediation table. Special rates may be

available for parties with difficulty funding a traditional mediation. Call or email to make arrangements for your mediation at our Walnut Creek office.

Dean Christopherson Dawe & Christopherson LLp Telephone - (925) 256-6677 Email - mediate@calaw.com

CONTRA COSTA COUNTY BAR ASSOCIATION CONTRA COSTA LAWYER

CONTRA COSTA COUNTY BAR ASSOCIATION

ANNUAL OFFICER INSTALLATION Friday, January 23, 2015

Nick Casper

Hon. Ignazio J. Ruvolo

Nick Casper and Steve Steinberg

Stan Casper

MARCH 2015

For more photos, visit our Facebook page at facebook.com/CCCBA!

Hon. Steve Austin administering the oath

SA JOKUITOR P I S RE

THE JOKE SPEAKS FOR ITSELF

KICKOFF FOR FOOD FROM THE BAR 2015 Benefitting the Food Bank of Contra Costa and Solano

When: Thursday, May 7, 2015 Doors open at 6 pm Show starts at 8 pm Where: Back Forty BBQ 100 Coggins Drive Pleasant Hill Tickets: $60 BBQ Buffet: 6:30 - 7:30 pm Vegetarian option available upon request, contact Renee by April 30 at (925) 771-1310.

Bring a can of protein (tuna, beef stew, chicken, etc.) to enter a drawing for valuable prizes!

Opening and Featured Acts to be announced! presented by

benefitting

BENEFACTOR Wells Fargo PATRONS Archer Norris McNamara, Ney, Beatty, Slattery, Borges & Ambacher Newmeyer & Dillion, LLP The Recorder Steele George Schofield & Ramos, LLP U.S. Legal Support CONTRIBUTORS

GET YOUR TICKETS TODAY! For tickets, scan the QR code or contact Theresa Hurley at (925) 370-2548 or thurley@cccba.org.

Thanks to our Generous Sponsors!*

*For sponsorship opportunities, contact Theresa Hurley at (925) 370-2548 or thurley@cccba.org.

Brown, Church & Gee, LLP Esquire Gagen, McCoy, McMahon, Koss, Markowitz & Raines Miller Starr Regalia Quivx

Bring your checkbook for a chance to win one of our valuable raffle items! CONTRA COSTA COUNTY BAR ASSOCIATION CONTRA COSTA LAWYER

Marijuana Taxation Without Legalization by Christina Weed

f you turn on the news, television or radio, it is difficult to avoid discussions of marijuana and its legalization.

Recently, Bethenny Frankel, known for appearing on the “Real Housewives of New York,” and for creating the “Skinnygirl cocktails,” has announced her intention to brand and market “Skinnygirl Marijuana,” which she boasts will not give you the munchies.1 In the world of professional football, consumption of marijuana is still strictly forbidden pursuant to NFL policy. However, the NFL has recently been forced to consider whether the medicinal properties of marijuana warrant a change.2 This year, the U.S. almost had its first “Weed Bowl” between Washington and Colorado teams, where marijuana has been fully legalized, but the Broncos had an unexpected early exit from the NFL Playoffs. In Seattle, a local grower of marijuana has “honored” Seattle Seahawks player, Marshawn Lynch, by naming a strain of marijuana after the Seattle running back—aptly titled “Beast Mode.”3

Outside of the NFL and pop culture, the public perception of marijuana consumption is changing. Recently, Congress passed a spending bill4 that would essentially defund federal efforts to combat the use of medical marijuana in states where it has been legalized. The bill is still pending, but it is one example of the overall changing attitude towards marijuana.

MARCH 2015

Federal Law The federal government has not yet legalized the use of marijuana for recreational or medical purposes. Just like any other business, however, businesses that sell marijuana must report gross receipts on a federal income tax return. Said businesses are permitted a deduction for Cost of Goods Sold (COGS), but they are not permitted a deduction for ordinary and necessary business expenses, such utilities or advertising expenses, pursuant to Internal Revenue Code (IRC) §162. This is due to the provisions of IRC §280E, which provides: “No deduction or credit shall be allowed for any amount paid or incurred during the taxable year in carrying on any trade or business if such trade or business (or the activities which comprise such trade or business) consists of trafficking in controlled substances (within the meaning of schedule I and II of the Controlled Substances Act) which is prohibited by Federal law or the law of any State in which such trade or business is conducted.“ Marijuana is still listed as a Schedule I5 substance, which is the most dangerous classification of a drug. For this reason, business expenses, including those for electricity, repairs and rent, may not be deducted on a taxpayer’s return.6 Requiring income to be reported and taxed, while prohibiting a de-

duction for expenses against this income, can be catastrophic for many small businesses that sell marijuana. There is some relief for businesses who engage in additional, separate activities from those related to marijuana. For example, if a business that sells or dispenses marijuana also provides caregiving services, a deduction for ordinary and necessary business expenses related to those caregiving services may be

allowed.7 Of course, it is up to the taxpayer to demonstrate that any expenses claimed relate to that separate caregiving, or other, activity.

Tax Preparer Concerns The IRS takes the position that only Congress can change IRC §280E.8 Accordingly, tax preparers may have concerns about preparing tax returns for those in the business of selling or dispensing marijuana. In response to these concerns, Karen Hawkins, an official from the IRS Office of Professional Responsibility, has indicated that there is guidance, and court cases, regarding which expenses may be deducted. To the extent that tax preparers comply with the parameters set

forth in those cases, and IRC §280E, there should not be any concern for tax preparers.9 More specifically, Ms. Hawkins stated: “Within those parameters what we would essentially be saying to the preparers in those states is that you’ve got some hard conversations to have with your clients about what goes on to the tax return, but as long as you are adhering to what the tax law says about treatment, you’re going to be within the confines of what Circular 230 expects of your due diligence.”10 Tax preparers can expect to receive further guidance sometime this year according to the Office of Professional Responsibility.11

Variation in Taxation Among the States Despite the fact marijuana has not been legalized by the federal government, many states have legalized medical use of marijuana. Colorado, Washington, Alaska, Oregon and Washington, D.C., have legalized marijuana for all purposes. 12 Of the 21 states that have legally authorized use of marijuana for medical or palliative purposes, 13 of those states impose some form of tax; four of those states specifically do not have a tax (Montana, Oregon, Alaska and Vermont); and the taxation in the other three states remains unclear.

In California

is-

Medical use of marijuana has been legal in California since 1996, although many taxpayers may not have realized it. The California State Board of Equalization (SBOE) did not sue sellers permits

to medical marijuana dispensaries pursuant to a policy against issuing licenses or permits to businesses engaged in illegal activities. Of course, the SBOE still considered sales at the marijuana dispensaries to be subject to tax. This caused uncertainty for taxpayers. Clarification came in 2007, when the SBOE issued two notices.13 These notices provided that sellers of marijuana should obtain seller’s permits and remit sales tax on sales. Accordingly, sales of marijuana are subject to both state sales tax and income tax. Within California, many counties are eager to tax the sale of marijuana, but they are not always eager to allow cannabis dispensaries to be established within their city or county.

Does Tax Revenue Really Grow on Trees … er, Plants? In Colorado, sales from recreational dispensaries are expected to be $295 million for 2014, with $51 million in tax revenue,14 despite the fact marijuana sales for recreational use are subject to a 27.9 percent tax (2.9 percent sales tax, 10 percent marijuana sales tax, and 15 percent excise tax).15 In California, SBOE spokesperson Brian Miller indicated annual sales of marijuana in California are between $700 million and $1.3 billion, with resulting tax revenue between $59 million and $109 million.16 There is a potentially huge gap with respect to how much tax revenue California is actually receiving versus what it might be entitled to receive. Perhaps, this is because marijuana can still be purchased on the black market relatively easily, and tax-free. The Marijuana Tax Equity Act17 that was introduced in 2013, but was not passed, would have amended the Internal Revenue Code to impose a 50 percent excise tax on sales of marijuana. If such a provision

CONTRA COSTA COUNTY BAR ASSOCIATION CONTRA COSTA LAWYER

Marijuana Taxation,

cont. from page 23

21 U.S.C. §812(b)(1); 21 CFR 1308.11.

See Olive v. Commissioner, 139 T.C. 19 (2012).

were passed, it is difficult to imagine that consumers would be willing to pay a 50 percent excise tax.

What to Expect in the Near Future If the above-referenced spending bill is approved by President Obama, marijuana businesses in states where medical or recreational use is permitted can breathe easier, knowing they will not be subject to federal raids. With recreational use being legalized in four states and Washington, D.C., and medical use being legalized in 21 states, it is clear the public perception of marijuana is changing. Many businesses and entrepreneurs have expressed interest in developing marijuana products further. Recently, state universities in Colorado have been called upon to research and develop the product to maximize exploitation and research of marijuana’s potential health and medicinal benefits.18 Legalization of marijuana is an issue that is not likely to go away any time soon. Whether or not you support the outright legalization of marijuana, it is difficult to ignore the proven, and potential, health benefits that it may offer to many. It will be an interesting topic to follow in the months and years ahead. s

Californians Helping to Alleviate Medical Problems, Inc., v. Commissioner, 128 T.C. No. 14, May 15, 2007.

Wooten, Casey. “IRS Guidance Coming for Practitioners Preparing Returns for Marijuana Retailers,” 33 TMWR 1605 (November 19, 2014). 9

“NFL Seeks Right Answer for Marijuana Use,” USA Today, 4 Aug. 2014. Web. 2 Feb 2015.

Young, Bob. “Pot Grower’s ‘Beast Mode’ Strain Packs Punch,” The Seattle Times, 26 Jan. 2014, Web. 2 Feb 2015.

H.R. 5016, 113th Cong. (2014).

MARCH 2015

16 “MEDIA RESOURCE: Medical Marijuana/Legalization of Marijuana,” n.p., n.d. Web. 2 Feb. 2015, http://www.boe.ca.gov/ news/marijuana.htm. 17

H.R. 501, 113th Cong. (2013).

18 Kelly, David. “Colorado Seeks Permission to Grow Pot at State Universities.” LA Times, 25 Jan. 2015. Web. 2 Feb. 2015.

Id.

12 “Daily Chart: Mapping Marijuana,” The Economist, 20 Jan. 2015, Web. 2 Feb. 2015. 13

These notices can be viewed on the SBOE website at http://www.boe.ca.gov/ news/marijuana.htm#Resources. 14 Whitaker, Bill. “The Marijuana Effect,” CBS, 60 Minutes, CBS, 11 Jan. 2015. Web. 2 Feb. 2015. 15 “Marijuana Taxes: File,” Colorado Department of Revenue, Taxation Division, n.d., Web. 2 Feb. 2015. Also, sales of mari-

Since 1949 Rated AV by Martindale-Hubbell

Christina Weed, JD, LL.M., is an attorney at the Law Offices of Chastity A. Schults in Walnut Creek, a tax law and estate planning firm. Christina’s practice has an emphasis in Tax Law, Business Succession Planning and litigation. Christina is the Chair of the Tax Section of the Contra Costa County Bar Association and the Co-chair of the Contra Costa County Delegation of the California Conference of Bar Associations. You can reach her at christina@schultslaw.com or (925) 274-4608.

Bray & Greenwood LLP Oliver W. Bray* Oliver A. Greenwood Over 29 years in practice

Weiss, Geoff. “Bethenny Frankel Developing ‘Skinnygirl Marijuana,’ a MunchieFree Weed Strain,” Entrepreneur, 16 Jan. 2015. Web. 2 Feb. 2015.

juana for medical use are taxed at a much lower 2.9 percent rate.

736 Ferry Street Martinez, CA 94553 925-228-2550 925-370-8558 (fax) braygreenwood.com

obray@braygreenwood.com ogreenwood@braygreenwood.com

• Probate, Trust & Estate litigation and administration • Elder Abuse litigation • Conservatorship and Guardianship establishment and litigation • Fiduciary Representation and Court Accountings • Estate Planning, Wills & Trusts Free case evaluations for referring attorneys *Certified Specialist in Estate Planning, Trust and Probate Law – State Bar of California Board of Legal Specialization *Selected to Northern California Super Lawyers each year since 2006

S P I XT

1. 2.

From the Tax Lawyer: Free Filing Services

by Christina Weed

For taxpayers who have adjusted gross income (AGI) below $60,000, there are many free filing options for completing and filing a federal income tax return. (Fees for filing a state income tax return may apply.) Taxpayers may browse and compare free filing options here: http://apps.irs.gov/app/freeFile. For taxpayers who feel more comfortable obtaining tax preparation assistance in person, there is the Volunteer Income Tax Assistance (VITA) program. This program generally offers free tax help for taxpayers who make less than $53,000, taxpayers with disabilities, elderly taxpayers and limited English-speaking taxpayers. There is also a VITA tax counseling for the elderly program (TCE) which offers help for all taxpayers, but particularly those who are 60 years or older with unique pension or retirement-related questions.

Locate your nearest VITA or TCE provider here: http://irs.treasury.gov/freetaxprep/. Many tax assistance programs are operated by the AARP Foundationâ&#x20AC;&#x2122;s Tax Aide Program. Locate your nearest AARP TCE Tax-Aide site here: http://www.aarp.org/applications/VMISLocator/ searchTaxAideLocations.action. Taxpayers who are interested in learning more about these options may wish to visit IRS.gov. s

CONTRA COSTA COUNTY BAR ASSOCIATION CONTRA COSTA LAWYER

restaurant review

Kobe Japan seats eight. This can lead to “stranger danger” since you will be sitting with people you don’t know, and that can be risky! We got lucky—we were seated with two couples who appeared to be on a date, so there was limited interaction between the groups.

by Suzanne Boucher

f you love Japanese food and teppanyaki dining, but don’t want to endure the crowds at the large chain restaurants, you should try Kobe Japan.

Kobe Japan is located in a small strip mall on Oak Park Road in Pleasant Hill (where the original Back Forty BBQ was before they moved). While it may not have the upscale location or décor, it has food that will make you want to come back again and again. Kobe Japan seems to have something for everyone— from the sushi bar offering an extensive selection of sushi, sashimi, bento boxes and saki, to the teppanyaki tables for those who like to be entertained, and the dining room for those who do not want to watch their food being cooked. They also have a sports bar that was packed with people of all ages enjoying the big screen TVs, food and drink specials and the casual atmosphere. I went on a Saturday night with a group of friends, but not enough to fill the entire teppanyaki table, which

Youngman & Ericsson

The restaurant was crowded, but we had a reservation and did not have to wait long. They have an extensive cocktail menu with an array of tropical drinks. I had a pineapple-infused vodka that was awesome. The real deal was the beer, which came in 32 oz. glasses! The teppanyaki menu offers a larger variety of surf and turf options, including Kobe beef from Snake River Farms in Idaho. I tried the Kobe steak, which came with the best miso soup I have ever had, plus a mixed green salad with a nice dressing, grilled vegetables, a choice of hibachi shrimp or a sautéed mushroom appetizer and steamed rice. I decided to upgrade to the bacon fried rice, since everything is better with bacon. Unfortunately, it was a little too rich for me; I will opt for the veggie fried rice on my next visit. I should warn you that they cook with a lot of butter, but that is probably why it tasted so good! My Kobe steak was perfectly cooked by our chef, who entertained us with his knife skills, a light and fire show and a smoking volcano! Everyone in our group raved about the high quality of the food, including the New York steaks, sashimi, shrimp and Maine lobster tails. The teppanyaki setting provided a fun and festive atmosphere, although with all the activity in the restaurant, it was very loud. They do offer semi-private dining rooms for a quieter setting.

1981 North Broadway • Suite 300 Walnut Creek, CA 94596

Tax & EstatE Planning attornEys Youngman.com

MARCH 2015

(925) 930-6000

Next time you are looking for a place for a group lunch or dinner, I recommend Kobe Japan as a great local restaurant. s Suzanne Boucher is a certified family law specialist. Her practice, located in Walnut Creek, focuses on complex property, support and custody issues in dissolution proceedings.

Coroner’s Inquests by Matt Guichard

or a number of years, I have served as the hearing officer in Coroner’s Inquests in Contra Costa County and a few other Northern California counties. I am often asked to explain the process. In doing so, more often I discuss what it is not, rather than what a Coroner’s Inquest actually entails. In most counties in California, the elected sheriff is also the elected coroner. That is the case in Contra Costa County, where a Coroner’s Inquest is held in all cases involving a death related in any way to law enforcement. That means when an inmate in county jail dies in his sleep of natural causes, we have an Inquest. When a death involves a police shooting, a fatal car chase, a suicide witnessed by law enforcement, a

fight with officers resulting in a death, a Coroner’s Inquest is held. Keep in mind the sheriff coroner can order an Inquest for any death, even if there is no law enforcement connection. But in all cases involving law enforcement, an Inquest is conducted. By law in California, all deaths are categorized by one of four modes or manners of death: Natural Causes, Suicide, Accident and At the Hands of Another Other Than By Accident. One can readily see how those four modes fit all deaths. The fellow who died of a heart attack while sleeping in his cell would fit “Natural Causes.” The fellow who purposely jumped in front of a moving big rig when officers were checking on his safety on the freeway, committed “Suicide.”

The cyclist who was hit and accidently run over by a patrol car, died of an “Accident.” And the person who was shot and killed by a police officer, typically died “At the Hands of Another, Other Than By Accident.” The latter category might be “Suicide by Cop” when the evidence supports such a finding. A Coroner’s Inquest is not a grand jury proceeding. A Coroner’s Inquest is held in open court. No witnesses are excluded from the courtroom; it is open to the public. A court reporter takes down the entire proceeding. A jury is picked from the regular pool of jurors. Attorneys representing the family of the decedent may present written questions to the hearing officer to be asked of witnesses. The jury listens to all the testimony and

CONTRA COSTA COUNTY BAR ASSOCIATION CONTRA COSTA LAWYER

Coroner’s Inquests, cont. from page 27

then deliberates. The only question it is required to answer is: Which of the four modes of death applies in the particular case? Only one can be chosen. In a Coroner’s Inquest, the hearing officer conducts the jury voir dire, presents all the witnesses, questions all the witnesses and reads the jury instructions to the jury. It is not an adversarial proceeding. It is designed to put into the open the circumstances of the death of a human being. It does not assign fault, either criminal or civil, to anyone. Not to the decedent, nor to the involved officer or officers. That is for a different venue. We often hear there is a lawsuit related to the same death as is pre-

MARCH 2015

sented in a Coroner’s Inquest. The two are completely unrelated, legally. It is however, often the first time a family hears the circumstances surrounding the death of their loved one. Contra Costa County has a very sophisticated and robust system for investigating any law enforcementrelated fatalities. That system is regularly referred to as LEIFI, or the Law Enforcement Involved Fatal Incident protocol. When an officer-involved fatal incident occurs, the District Attorney’s Office takes charge and partners with the venue agency. It may be that more than one police agency is involved. Teams are immediately assigned and a very thorough investigation is conducted.

The involved officers are sequestered, witnesses are contacted and interviewed, any video or audio recordings are gathered, an autopsy and background checks are conducted, the family is interviewed, toxicological studies are conducted and much more. The Coroner’s Inquest is designed to put into the open all the circumstances surrounding the death and all aspects of the investigation. And that is precisely what happens at a Coroner’s Inquest. s

ethics corner

Recent Developments in Ethics

e all pay our State Bar dues, so what is happening there that might affect us? First, the State Bar has finally picked a new Commission to re-draft the Rules of Professional Conduct. What a fiasco the whole process was!

The first set of Rules was rejected by the Supreme Court with no Rule by Rule explanation of their misgivings. Instead, they broadly stated that the Rules needed to be more in line with national standards and not be so lawyer protectionist. Okay … but give the Commission some idea on how to go about it all, people! The new Commission has a deadline of 2017 to finish an entire new set of Rules, as well as get them out for public comment. I really do not see it all being done by 2017, considering the first Commission took years to do the job; especially since a lot of the new members have never drafted a Rule in their lives. Good luck on that, I say, but let’s wish them the best.

by Carol M. Langford

In the meantime, the lawsuit between Joe Dunn, the previous State Bar Executive Director, and the State Bar is raging. Scott Drexel and Jim Towery left, and now it is Joe Dunn. It seems like the job of executive director is a revolving-door position, no matter how smart and effective the person is. Anyone who takes the job is now on notice of the turnover. Why this is so, I do not know. People in the know say it is just State Bar politics on steroids. But it hurts the public’s and the court’s image of a self-regulating State Bar. Even worse, it has caused an independent auditor to look both into Dunn’s expense forms and to investigate whether Discipline and Enforcement (and maybe Admissions) is doing its job. Heads will roll, because the State Bar is backlogged—especially Admissions. It now takes a new admittee with any kind of minor record at least a year to get moral character approval. It can take much longer. Also being audited—MCLE compliance. But here’s an interesting statistic: The audits are not totally random. About 8.5 percent of people in the compliance group are audited, and half of those are chosen randomly. The others are people who were noncompliant before or have a history of administrative actions, for example, paying dues late. The State Bar has been auditing since 2011, but before that, nothing. Despite everyone knowing they could be audited, especially now, 25 percent of those audited were noncompliant! Hard to believe, but true. Last, I am seeing some trends in the disciplinary context of late. A lot of older men are being brought before the State Bar. These are usually attorneys who are in their late 60s and 70s, still working—not because they want to, but because they have to—they have young children and second wives, and the wives are not working.

CONTRA COSTA COUNTY BAR ASSOCIATION CONTRA COSTA LAWYER

Recent Developments, cont. from page 29

Finding the Right Talent... It’s easy with the CCCBA Job Board! Post your job at jobs.cccba.org

30 days for only $99

with CCCBA member-only pricing. Use coupon code: CCCBA-JOBS to receive $100 off standard pricing.

Candice E. Stoddard Personal Injury Real Estate Litigation Trust and Estate Disputes Mediation

Law Offices of Candice E. Stoddard 1350 Treat Blvd., Suite 420 Walnut Creek, CA 94597

925.942.5100 • fax 925.933.3801 cstoddard@stoddardlaw.com Practicing law in the East Bay for over 25 years

Elder Law is

The average survival rate is eight years after being diagnosed with Alzheimer’s — some live as few as three years after diagnosis, while others live as long as 20. Most people with Alzheimer’s don’t die from the disease itself, but from pneumonia, a urinary tract infection or complications from a fall. Until there’s a cure, people with the disease will need caregiving and legal advice. According to the Alzheimer’s Association, approximately one in ten families has a relative with this disease. Of the four million people living in the U.S. with Alzheimer’s disease, the majority live at home — often receiving care from family members.

If the diagnosis is Alzheimer’s, call elder law attorney

Michael J. Young

Estate Planning, Disability, Medi-Cal, Long-term Care & VA Planning Protect your loved ones, home and independence.

Alzheimer’s Planning 30

MARCH 2015

925.256.0298 www.YoungElderLaw.com 1931 San Miguel Drive, Suite 220 Walnut Creek, California 94596

To be 73 years old with a child in college and another at age 15 would not be fun. But it is a sociological trend, and it is not going away. I am also seeing more women get in trouble for petty theft. Interestingly enough, these women are not poor; in fact, they are educated from top schools and have the money to pay for what they steal. I think it is stress related and is likely compulsive. Lawyers getting in fights or DUIs because they are on prescription drugs is making a comeback—I guess it never went away—with lawyers forgetting that they have to be fit to practice and it makes no difference if the drugs are prescribed by a doctor. A DUI is a DUI. Last but certainly not least is the downloading of illegal pornography. Usually it is child porn, and arises in the context of the lawyer downloading non-child porn but images of a child are embedded. The Feds know their way around the Internet, and even if you have no intent, if an image of a child comes in the batch you download and you are caught, you are interim suspended from the practice of law. Not the best way to build your business. And in law schools we are seeing more and more schools teaching marijuana law (wish that was taught when I went to law school. Kidding!), while law firms are merging up a storm and students are back in force to law schools. All good. s Carol M. Langford is a lawyer in Walnut Creek who specializes in representing lawyers and law students before the State Bar. She is also a lecturer at Boalt Hall, U.C. Berkeley School of Law.

inns of court

Ethical Violations by Matthew Talbot

n January 15, 2015, Judge John Laettner’s group (starring Mika Domingo, Kelley Way, Jonathan Babione, Wendy McGuire Coats, Scott Isherwood, Patricia Kelly, Steven Derby, Steven Enochian and Remsen Barnard) put on easily the most unique Inns presentation. This was not your standard Inns presentation, which may be a lively game show or a series of vaguely related skits or even the appearance of a cuddly police dog. No, this was an avant-garde play, which included soliloquies and even a Broadway standard. The first act was a hearing over custody of a baby purported to belong to Mr. White, played by Remsen Barnard, a man with special needs who was entitled to a large inheritance. We learn that Mr. White’s stepbrother hired a prostitute named Mona Money, played by Wendy McGuire Coats, to get pregnant in an attempt by the stepbrother to get part of this inheritance in the form of child support. Mona’s attorney, Mr. Powerful (played by Scott Isherwood), argued that Mr. White was stalking Mona

and was an unfit parent. Patricia Kelly played the Ima Green, the attorney appointed to represent the baby’s best interests. At the hearing, Mr. Powerful was quick to remind the judge of the money he had donated to the judge’s political campaign. Mr. Powerful also threatened Ms. Green’s career if her recommendation was adverse to his client. Then, out of nowhere Remsen Barnard stood up, received a spotlight, and proceeded to recite a poetic soliloquy. Current U.S. Poet Laureate Charles Wright (or so the Internet tells me) would be proud! But the fun didn’t stop there. Kelley Way busted out a Broadway classic, complete with jazz hands, sparkly outfits and a dancing cane! OK, that last section was made up, but you had no idea what was coming next. Poems, jazz standards, were we going to see a puppet show in the next act? Juggling flaming chainsaws? I was 60 percent closer to the edge of my seat in excitement! In reality, there was not a single puppet juggling a flaming chainsaw. We simply discussed some of the ethical violations from the attorneys, including Mr. Powerful’s

threats to Ms. Green and Ms. Green’s failure to do a full investigation of the best option for the baby. In the next vignettes, the story shifted from a child dispute to a criminal hearing. Here, Mr. White was defending against a charge of child endangerment. The real issue in the case was whether he was mentally competent enough to stand trial. If he stood trial, he could go to jail, but he really needed to be sent to a mental health facility. There were a few running themes throughout these vignettes. The first was that Mr. White’s public defender (played by Mika Domingo) decided to do absolutely nothing in the way of his defense. This was designed to set up an appeal based on ineffective assistance of counsel. The question here was whether this inexplicable strategy was morally OK. Is it OK to throw a case? Steve Echonian played the judge, and in one scene he discussed with Judge Laettner whether he could do something more than just apply the presented evidence to the law. He knew there was more to the case than the defense was putting

CONTRA COSTA COUNTY BAR ASSOCIATION CONTRA COSTA LAWYER

Inns of Court, cont. from page 31

on, but Judge Laettner told him that his job was to apply facts to law, not make things up based on what he thinks or feels to be correct. That was an underlying tension throughout this whole section. The judge was not the only one struggling morally with the strategy. Kelley Way played the district attorney prosecuting the case and she was not sure whether she should just take the easy victory. Mika Domingo, as the public defender, also struggled with the decision. And this section of the story would not be complete without another lengthy spotlit soliloquy from Remsen “The Bard” Barnard. His lyrical poetic diction and autobiographical approach reminded me

of a young Wordsworth! Or even a middle aged Wordsworth. Basically, Wordsworth is the only poet I know. Finally, the climactic scene arrived. The DA put on their medical expert, Dr. Death, who, despite never meeting Mr. White, testified that he was competent to stand trial. The judge stood before the packed group of Inns members and slowly provided his ruling. Yet just as he was to get to the key part of the ruling, the lights abruptly cut out and the skit ended. It was the ending of “The Sopranos 2.0,” but with fewer people upset that their cable had cut out. To this day, we have no idea whether

Mr. White was fit to stand trial. It will haunt me to my death! Then, the group discussed whether you can truly throw a case like the PD did and whether there are more ethical rules guiding the decision. As it turns out, ineffectiveness of counsel is usually not allowed if it appears to be intentional. All in all, it was a truly unique Inns meeting with many more theatrical moments than usual. The next Inns of Court event will be held on March 12, 2015. If you are interested in applying for RGMAIOC membership, please contact Patricia Kelly at patriciakelly@pacbell.net. s

Will & Trust Litigation Securities Litigation Elder Abuse Litigation BARR & YOUNG AT TOR N EYS 318-C Diablo Road • Danville, CA 94526-3443 (925) 314-9999 www.BarrYoungLaw.com

MARCH 2015

What You Missed in February’s Online Issue Women in Law edition Features: • Thirty Years and Going Strong: The CCCBA Women’s Section - Crystal L. Van Der Putten • Egg Freezing: Is it Truly an Employee Benefit? - James Y. Wu and Claudio J. Castillo • Wolf at Work - Beth W. Mora • Community Violence Solutions: The Unsung Heroes of the CCC Justice System - Terry R. Leoni • A Teacher of Equality: Marvin B. Starr - Leslie A. Johnson • Role Model for the Male Mentor: Randolph M. Paul - Jordan M. Rojas

Spotlight: • A Letter to my Younger Self - Lubna Jahangiri • Ladies, You’re Invited to Calendar it, Show up and Go! - Wendy McGuire Coats

Columns: • Inside Guest Editor: On Lamps, Lifeboats and Ladders - Wendy McGuire Coats • President’s Message: February 2015 - Nick Casper • Bar Soap: February 2015 - Matt Guichard • Ethics Column: Is There a Glass Ceiling as Lawyers Climb the Law Firm Ladder? - Carol M. Langford

News & Updates: • CCCBA Holiday Party [photos]

More: • Civil Jury Verdicts: February 2015 - Matt Guichard • Coffee Talk: What is the most shocking gender bias comment you have heard?

HESE S, T D A E TO R R ARTICLE THE AND O ONLINE TO . GO ER.CCCBA Y CCLAW ORG.

CONTRA COSTA COUNTY BAR ASSOCIATION CONTRA COSTA LAWYER

CALENDAR UPCOMING EVENTS | OVERVIEW March 10 | Barristers/Young Lawyers Section

The “End Game” of Mediation and How to Succeed at It more details on page 35 March 11 | Family Law Section

Family Law Domestic Violence Update more details on page 35 March 13 | Women’s Section

California Women Lawyers Honors Judge Clare Maier with the Rose Bird Award more details on page 35 March 19 | CCCBA

Social Security and Your Future more details on page 35 March 20 | Real Estate Section

Advanced Topics in Enforcement of California Judgment Liens on Real Property more details on page 35 March 24 | Bankruptcy Law and BLCC Sections

Winding Up for the Wind Down: Managing Risk and Creating Opportunity Through an Assignment for the Benefit of Creditors more details on page 35 April 2 | CCCBA

Welcome Celebration for Theresa Hurley more details on page 36

April 8 | Family Law Section

Is Your Order Worth the Paper It’s Printed On? The Importance of Enforcement Issues in Drafting Support Orders more details on page 36 April 17 | Appellate Section

A Discussion with Justice James A. Richman: Appellate Practice & Pitfalls more details on page 36 April 17 | Real Estate Section

Preparing for and Handling the Emotional Mediation more details on page 36 April 21 | Estate Planning & Probate Section

22nd Annual Estate Planning Symposium more details on page 36 April 23 | Women’s Section

Annual Wine Tasting and Silent Auction more details on page 36 May 4-15 | Food From the Bar

24th Annual Food From the Bar Drive more details on page 37 May 7 | Res Ipsa Jokuitor XX

Comedy Night & Kickoff for Food from the Bar 2015 more details on page 21 May 16 | CCCBA

Bench/Bar BBQ & Softball Game more details on page 37

For up-to-date information on programs, please visit www.cccba.org/attorney/calendar and/or subscribe to our weekly “Events & News” email. To subscribe, text CCCBA to 22828.

MARCH 2015

March 10 | Barristers Section

March 11 | Family Law Section

March 13 | Women’s Section

The “End Game” of Mediation and How to Succeed at It

Family Law Domestic Violence Update

California Women Lawyers Honors Judge Clare Maier with the Rose Bird Award

This is a program for advocates designed to create a highly positive mediation experience and outcome for themselves and their clients. In this program two successful mediators, Malcolm Sher and Ken Strongman, will discuss some of the best practices for negotiation and to prepare the client, advocate, mediator and opposition for the mediation journey. A light dinner of sandwiches, veggies and fruit platters will be provided. Speakers: Kenneth Strongman Malcolm Sher, Esq.

Meal choices are: Chicken Scallopini, Grilled Salmon or Vegetarian Speaker: Garrett Dailey, Esq., CFLS, AAML Time: 12 pm – 1:15 pm Location: Contra Costa Country Club, 801 Golf Club Rd., Pleasant Hill

SAVE THE DATE! More details to come! Time: 5:30 pm Location: TBD

MCLE: 1 hour family law specialization MCLE credit Cost: $50 for section members and law student members, $75 for CCCBA members, $100 for non-members

Time: 4:30 pm – 8:30 pm

Registration: Please send payment to FLS, PO Box 5818, Concord, CA 94524

Location: CCCBA Office, 5th Floor Conference Room, 2300 Clayton Rd., Concord

More Info: Contact Therese Bruce at (925) 930-6789 or fls.cccba@gmail.com

MCLE: 3 hours general MCLE credit Cost: $40 for section members and law student members, $50 for CCCBA members, $60 for non-members Registration: Online at www.cccba.org/attorney/calendar March 19 | CCCBA

March 20 | Real Estate Section

Social Security and Your Future

Advanced Topics in Enforcement of California Judgment Liens on Real Property

Co-sponsored by MassMutual San Francisco Now more than ever, it’s important for you to know how to get the most from your Social Security. Learn how to make the right calls when it comes to Social Security and your retirement. Advanced registration required. Space is limited. Lunch will be provided. Speaker: Todd Friedman Time: 12 pm – 1:15 pm Location: CCCBA Office, 5th Floor Conference Room, 2300 Clayton Rd., Concord Cost: $10 for CCCBA members, $20 for nonmembers Registration: Online at www.cccba.org/attorney/calendar More Info: Contact Liz Galliett at (925) 370-2540

Breakfast will be provided. Speaker: Kevin S. Eikenberry Time: 7:30 am – 9 am Location: Scott’s Seafood Restaurant 1333 N. California Blvd., Walnut Creek MCLE: 1 hour general MCLE credit Cost: Free for section members, $5 for law student members, $15 for CCCBA members, $35 for non-members Registration: Online at www.cccba.org/attorney/calendar More Info: Contact Liz Galliett at (925) 370-2540

March 24 | Bankruptcy Law and BLCC Sections

Winding Up for the Wind Down: Managing Risk and Creating Opportunity Through an Assignment for the Benefit of Creditors This program will include a high level discussion of various liquidation alternatives, with a particular focus on ABCs. The discussion will take the perspective of various stakeholders and will be based upon a hypothetical fact pattern to illustrate the stakeholders’ strategic considerations with respect to the sale of a struggling company’s potentially valuable assets. Speakers: Bernie Murphy, Sherwood Partners David Kanel, Trodella and Kanel, LLP Robert Trodella, Trodella and Kanel Location: Scott’s Seafood Restaurant 1333 N. California Blvd., Walnut Creek MCLE: 1 hour general MCLE credit Cost: $25 for section members, $20 for law student members, $30 for CCCBA members, $35 for non-members

CONTRA COSTA COUNTY BAR ASSOCIATION CONTRA COSTA LAWYER

April 2 | CCCBA

April 8 | Family Law Section

April 17 | Appellate Section

Welcome Celebration for Theresa Hurley

Is Your Order Worth the Paper It’s Printed On? The Importance of Enforcement Issues in Drafting Support Orders

A Discussion with Justice James A. Richman: Appellate Practice & Pitfalls

Sponsored by Brown, Church, & Gee, LLP, and CCCBA Board of Directors Please come celebrate with us and welcome the CCCBA’s new Executive Director, Theresa Hurley, as she embarks on the adventure of running our Bar Association! Time: 5:30 pm – 7:30 pm Location: Brown, Church & Gee, LLP, 200 Pringle Ave., Ste. 400, Walnut Creek Registration: Online at www.cccba.org/attorney/calendar More Info: Contact Liz Galliett at (925) 370-2540

Meal choices are: Chicken Picatta, Roast Sirloin or Apple & Romaine Salad with Prawns Speaker: Melinda Self, Supervising Attorney for CCC DCSS Time: 12 pm – 1:15 pm Location: Contra Costa Country Club, 801 Golf Club Rd., Pleasant Hill MCLE: 1 hour family law specialization MCLE credit Cost: $50 for section members and law student members, $75 for CCCBA members, $100 for non-members Registration: Please send payment to FLS, PO Box 5818, Concord, CA 94524

Speaker: Justice James A. Richman Time: 12:15 pm – 1:15 pm Location: Archer Norris, 2033 N. Main St., #800, Walnut Creek MCLE: 1 hour appellate law specialization MCLE credit Cost: $20 for section members, $15 for law student members, $25 for CCCBA members, $35 for non-members Registration: Online at www.cccba.org/attorney/calendar

More Info: Contact Therese Bruce at (925) 930-6789 or fls.cccba@gmail.com

More Info: Contact Liz Galliett at (925) 370-2540

April 17 | Real Estate Section

April 21 | Estate Planning & Probate Section

April 23 | Women’s Section

Preparing for and Handling the Emotional Mediation

22nd Annual Estate Planning Symposium

Annual Wine Tasting and Silent Auction

Breakfast will be provided.

Co-sponsored by Wealth Management at Mechanics Bank

SAVE THE DATE! More details to come!

Registration: 12:30 pm - 1 pm Program: 1 pm - 4:15 pm

Time: 5:30 pm – 7:30 pm

Speaker: Claudia Hagadus Long Time: 7:30 am – 9 am Location: Scott’s Seafood Restaurant 1333 N. California Blvd., Walnut Creek MCLE: 1 hour general MCLE credit Cost: Free for section members, $5 for law student members, $15 for CCCBA members, $35 for non-members Registration: Online at www.cccba.org/attorney/calendar More Info: Contact Liz Galliett at (925) 370-2540

Reception catered by Scott’s Seafood to follow program. Speakers: Kyle M. Fisher, Esq. Steven M. Goldberg, Esq. Timothy Maximoff, Esq. Location: Lesher Center for the Arts, 1601 Civic Drive, Walnut Creek MCLE: 3 hours estate planning & probate specialization MCLE credit Cost: $75 for section members, $90 for CCCBA members, $95 for non-members Registration: Online at www.cccba.org/attorney/calendar More Info: Contact Liz Galliett at (925) 370-2540

Join First District Court of Appeal Justice James A. Richman and Appellate Practice Section Chair Gary A. Watt for a discussion on appellate practice, pitfalls & pet peeves. This is a brown bag event.

MARCH 2015

Location: Contra Costa Country Club 801 Golf Club Road, Pleasant Hill

May 16 | CCCBA

24th Annual Food From the Bar Drive

Bench/Bar BBQ & Softball Game

Make a difference to the hungry people in Contra Costa County (and show those other law firms how generous your firm really is)!

We’ll provide the hamburgers, veggie burgers, hot dogs, condiments and soft drinks.

This year marks the 24th Annual Food From the Bar drive benefitting the Food Bank of Contra Costa and Solano. You can donate money and/or non-perishable food items. It’s easy, just add some extra items to your shopping cart, then bring them to your office and put it in the Food Bank barrel. Even easier is to donate money—for every $20 you give, the Food Bank can provide 40 nutritious meals to hungry people in Contra Costa county. All monetary donations are tax-deductible and will be acknowledged. The firm with the highest per capita figures in each category will receive an individual award for permanent display in their office. Do your part to feed the hungry in your area. Participate in Food From the Bar! To donate or for more info, go to www.foodbankccs. org/foodfromthebarcc.

Bring food according to your MCLE Compliance Group: • • • •

Group 1 (A-G): Appetizers for 8 people Group 2 (H-M): Salad Group 3 (N-Z): Dessert for 8 people BYOB (no glass containers)

Please arrive promptly if you want to play (bring your glove)! Teams will be mixed. Supporters and cheerleaders encouraged. Time: 3 pm – 6 pm Location: Heather Farms Park 301 N. San Carlos Dr., Field 5, Walnut Creek Registration: Online at www.cccba.org/attorney/calendar More Info: Contact Liz Galliett at (925) 370-2540

CALENDAR

May 4-15 | Food From the Bar

— WANTED — Will/Estate Contests Conservatorships

B A R A S S O C I A T I O N

You handle the estate, we do the contest. Cases, except conservatorships, often handled on a contingent fee basis, but can be hourly. Referral fee where appropriate. Pedder, Hesseltine, Walker & Toth, LLP

CONFERENCE ROOM FOR RENT • Conference table seats 10-12 people comfortably

oldest partnership in Contra Costa County (since 1955)

p 925.283-6816 • f 925.283-3683

• Available for rent on weekdays, 8 am - 5 pm

3445 Golden Gate Way Lafayette, CA 94549 AV Martindale-Hubbell

• Accessible by public transit

Member Rates: $125 all day | $70 half day | $20 hourly

For More Information Contact: Barbara Arsedo (925) 370-2544 | barsedo@cccba.org

ESTATE PLANNER: WANT TO RETIRE?

Leading Estate Planning Law Firm desires to purchase Estate Planning and Elder Law practices of retiring Contra Costa area attorneys. If you are interested, please contact Reed Scott at (925) 225-1025 for more information.

CONTRA COSTA COUNTY BAR ASSOCIATION CONTRA COSTA LAWYER

CLASSIFIEDS OFFICE SPACE AVAILABLE NEAR WALNUT CREEK BART

PROBATE PARALEGAL TO ATTORNEYS Joanne C. McCarthy. 2204 Concord Blvd. Concord, CA 94520. Call (925) 689-9244.

WALNUT CREEK SPACE WITH VIEW

Office space available in beautiful suite with use of conf. room, kitchen and reception area. Located in Class A building in downtown Walnut Creek, across the street from BART. Call 925-943-7456 for details.

Single Office For Sublet; Downtown Walnut Creek; 6th Floor View; Secretarial Setup; Furnished or not; Class A. Call (925) 938-5880.

BEAUTIFUL WALNUT CREEK OFFICE SPACE AVAILABLE

Beautiful offices w/ 7 solos. Networking poss. Single story converted house w/ pillars, built in’s, FP, molding, kit., conf rm, lg treed rear deck, etc. Corner w/ skylight & built-ins. Perfect for working hard and relaxing at end of long day! Very congenial. No smoking. Call Paul at (925) 938-8990.

$ 550 $ 690 $ 500 $ 415 $ 520 $ 350 $ 215 $ 165 $ 125

MARCH 2015

David Arietta . . . . . . . . . . . . . . . . . . . . . . 10 Barr & Young Attorneys . . . . . . . . . . . . 32 Bingham Osborn & Scarborough, LLC . . . . . . . . . . . . . . . . 11

Three large window offices and one smaller office available in a nine office attorney suite in downtown Walnut Creek. Offices are on the seventh floor in Class A office building. All amenities including receptionist, conference room, secretarial area, and kitchen. Call Elliott at (925) 947-1333 or Larry at (925) 977-3898.

Diablo Valley Reporting Services . . 40

Dean A. Christopherson . . . . . . . . . . . . 19 JAMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 Lenczowski Law Offices . . . . . . . . . . . . . 5 Morrill Law Firm . . . . . . . . . . . . . . . . . . . 9 Mullin Law Firm . . . . . . . . . . . . . . . . . . . .7 Perry A. Novak , UBS Financial Services, Inc. . . . . . . . . . . . . 2 David B. Pastor . . . . . . . . . . . . . . . . . . . . . . 7 Pedder, Hesseltine, Walker & Toth, LLP . . . . . . . . . . . . . . . . . . . . . . 15, 37 Law Offices of Reed K. Scott . . . . . . . . 37 Scott Valley Bank . . . . . . . . . . . . . . . . . . 14 Candice Stoddard . . . . . . . . . . . . . . . . . . 30 Lisa M. West . . . . . . . . . . . . . . . . . . . . . . . . 17

ONLINE AD RATE:

Whiting, Fallon, Ross & Abel . . . . . . . 39

$165/ month for members. Substantial discounts available for three or more insertions.

Michael J. Young . . . . . . . . . . . . . . . . . . . 30

CLASSIFIEDS ONLINE: $50/ month flat fee. In addition to text, you may add photos or graphics at no additional charge.

CLASSIFIEDS - PRINT: Member rates are $15 per line for a one-time insertion and $12.50 per line for three or more insertions.

Roger F. Allen . . . . . . . . . . . . . . . . . . . . . . 13

Bray & Greenwood . . . . . . . . . . . . . . . . . 24

in the Contra Costa Lawyer!

Full page: Full page Color: 2/3 page: 1/2 page: 1/2 page Color: 1/3 page: 1/6 page: Business card: 1/12 page:

ADR Services . . . . . . . . . . . . . . . . . . . . . . . 25

LAW OFFICES AVAILABLE IN WALNUT CREEK

Advertise

DISPLAY AD PRINT MEMBER RATES:

advertisers index

Call Dawnell Blaylock at (925) 370-2542 or email dblaylock@cccba.org.

Youngman & Ericsson . . . . . . . . . . . 16, 26 Zandonella Reporting Service . . . . . 17

Whiting, Fallon, Ross & Abel, LLP Matrimonial Attorneys

We are pleased to announce: Laura R. Ramsey has been named a partner. Ms. Ramsey is a Certified Family Law Specialist and serves on the Board of Directors of the Contra Costa County Bar Association and the Alameda Contra Costa Trial Lawyers Association.

WILLIAM F. WHITING*U

ANDREW ROSS*U

KIMBERLY V. CAMPBELL SCOTT J. LANTRY

R. ANN FALLON*U

LAURA R. RAMSEY*

VERONICA M. CAMPOS

GREGORY C. ABEL*U

DANIEL W. CANTRELL* ANNA M. BEDNARCZYK

The Firm continues to practice exclusively family law in Alameda, Contra Costa and Solano counties.

Whiting, Fallon, Ross & Abel, LLP 101 Ygnacio Valley Road, Suite 250 Walnut Creek, California 94596-5193 Telephone (925) 296-6000  Facsimile (925) 296-6001 E-mail: whiting@disso.com www.disso.com *Certified Specialist, Family Law, The State Bar of California Board of Legal Specialization UFellow, American Academy of Matrimonial Lawyers Fellow, International Academy of Matrimonial Lawyers

CONTRA COSTA COUNTY BAR ASSOCIATION CONTRA COSTA LAWYER

DIABLO VALLEY REPORTING SERVICES Certified Shorthand Reporters

Serving the entire Bay Area • Deposition Reporting • Experienced Professional Reporters • Computerized Transcription • Deposition Suites Available • Expeditious Delivery • BART Accessible

2121 N. California Blvd. Suite 290 Walnut Creek, CA 94596

925.930.7388 fax

925.935.6957

dvrs2121@yahoo.com

MARCH 2015