Contra Costa Lawyer March 2014

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Contra Costa

LAWYER Volume 27, Number 2 | March 2014

The Tax Edition

Family Law Tax Update Procedural Considerations for Submitting an OIC: Anderson v. Commissioner

Tax Avoiders Beware: Disclosure of Foreign Assets Held By U.S. Taxpayers Underway 1


Perry A. Novak Senior Vice President - Investments

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MARCH 2014

Contra Costa  2014 BOARD OF DIRECTORS Stephen Steinberg President Nicholas Casper President-Elect Candice Stoddard Secretary Elva Harding Treasurer Jay Chafetz Ex Officio Philip Andersen Dean Barbieri Amanda Bevins Oliver Bray Denae Hildebrand Budde Mary Carey

Michelle Ferber Peter Hass Reneé Livingston Katherine Wenger James Wu

LAWYER Volume 27 Number 2 | March 2014

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





by Rita A. Holder


CCCBA main office 925.686.6900 |

Jennifer Comages Theresa Hurley

Membership Coordinator Associate Executive Director

Emily Day Barbara Arsedo


by Jenny C. Lin

Systems Administrator and LRIS Coordinator Fee Arbitration Coordinator

Dawnell Blaylock


Communications Coordinator


by Mark S. Ericsson


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 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.


CCCBA   EXECUTIVE   DIRECTOR Lisa Reep | 925.288.2555 |

925.258.9300 925.933.1500 Nicole Mills Mark Ericsson 925.351.3171 925.930.6000 Guichard BOARD LIAISON Matthew  925.459.8440 Candice Stoddard 925.942.5100 Elva Harding 925.215.4577 COURT LIAISON Patricia Kelly Stephen Nash 925.258.9300 925.957.5600 Craig Nevin PRINTING 925.930.6016 Steven’s Printing David Pearson 925.681.1774 925.287.0051 PHOTOGRAPHER Marlene Weinstein Moya Fotografx 925.942.5100 510.847.8523 James Wu 925.658.0300

The official publication of the







by G. Scott Haislet

by Gregory Harper

by Christina Ortega



INSIDE | by Christina Ortega


PRESIDENT’S MESSAGE | by Stephen Steinberg

20 CENTER | Officer Installation Lunch Get to Know Your Local Judges Food From the Bar Comedy Night Announcement 26

BAR SOAP | by Matt Guichard


INNS OF COURT | by Matthew Talbot




“HANG ‘EM HIGH” | by William Mero





W Christina Ortega

e have dangled off the edge of the fiscal cliff, pushed through the debt ceiling and withstood the government shutdown. We continue to survive drastic changes in the government and legal structures to which we have become accustomed. Of course now that we have survived, what does it all mean?

For many tax and legal professionals, we are used to tracking changes in the tax laws, and we plan for a variety of scenarios. Our clients are not accustomed to tracking these changes. Our clients have real-life concerns about how this affects their business, livelihood and planning for the future—they want to know what adjustments they should make. It is up to us to advise our clients of the current tax laws and assure them that we are prepared to make any necessary adjustments. Wealthy individuals will feel the biggest squeeze this year with respect to income tax changes. The Bush-era tax cuts are a thing of the past, and a 39.6 percent tax rate will apply to individuals who earn over $400,000 ($450,000 for married filing jointly). All wages are subject to Medicare tax; however, now individual taxpayers who earn over $200,000 ($250,000 married filing jointly) will be charged a surtax of 0.9 percent of wages, compensation, and self-employment income over that amount. Taxpayers may also be subject to Net Investment Income Tax (3.8 percent) if they have both net investment income and modified adjusted gross income of $200,000 for individuals, and $250,000 for married couples. The Pease Limitations1 are back after being eliminated in 2010. This limitation reduces allowable itemized deductions by 3 percent of the amount by which adjusted gross income exceeds $254,200 for individuals, and $305,050 for married couples, for a maximum reduction of 80 percent. Clients are currently required to have health insurance, but the shared responsibility payment, or penalty, depending on your perspective, will not be felt until tax returns for 2014 are filed. Taxpayers who do not have health insurance this year will be required to pay 1 percent of taxable income or a flat fee of $95 per adult and $47.50 per child, up to $285 for families. This flat fee increases to $325 in 2015 and $695 in 2016.2 4

MARCH 2014

In addition, the following key tax breaks have expired: Deduction for higher education tuition and related fees, tax-free treatment for forgiven mortgage debt, charitable donations from IRAs, $500 credit for energy-efficient home improvements, and $250 deduction for teacherincurred school expenses. The good news? We have a very diverse group of tax professionals in Contra Costa County, as evidenced by the articles in this issue, and you need look no further for guidance. Inside this issue, Leslie Dawson provides us with tax/family law updates, some of which are the result of the recent U.S. Supreme Court and 9th Circuit decisions. Rita Holder provides an informative piece on QDRO procedures, tax implications and issues to look out for. Jenny Lin has submitted a very timely article regarding implementation of the new Foreign Account Tax Compliance Act (FATCA). Mark Ericsson was brought in to do the heavy lifting with respect to some of the intricacies associated with net operating losses, a very important and complicated area of law. Scott Haislet is keeping us up to date on 1031 exchanges, a known target for FTB examinations now and in the past. Gregory Harper is attempting to push all of us tax practitioners into the 21st century with his article on technology. Finally, I hope you will enjoy my article, “Procedural Considerations for Submitting an OIC: Anderson v. Commissioner.” I was very happy to receive such an overwhelming response from the Taxation Section members wanting to get involved and provide articles for this issue. Despite the recent tax law changes, I say with confidence that this Bar Association has you covered. I wish everyone a happy and successful tax season. s 1 2

Named after former Rep. Don Pease. A credit is available for qualified low-income taxpayers.

Christina Ortega is an attorney at Youngman & Ericsson, LLP. Christina has her LL.M. in Taxation and focuses her practice on tax controversy and tax collection. Christina’s practice also includes complex civil litigation, and business and tax planning. Christina is Chair of the Taxation Section. | (925) 930-6000 | Special thanks to Asaf Kletter, UC Hastings law student, for cite checking the tax articles in this edition. He can be reached at or (650) 218-4873.

president’s message

Where Does the Money Go?


t is common at this time of year (tax season) to hear people griping about their taxes and wondering where all the money goes. I recently saw this helpful graphic that breaks downs federal spending on various programs per person: interactive/2014/01/19/us/budgetproposal.html?_r=0. In the same vein, as our 2014 membership drive comes to a close, some of you may be wondering about the Contra Costa County Bar Association budget and where your money goes. While a year-end financial report was included in the January issue of Contra Costa Lawyer magazine, I suspect that few people took the time to digest the numbers, and even if they did, it is hard to get a sense of the big picture, particularly from year to year. Thus, I thought it might be helpful to explain some of the key points of CCCBA’s budget and how we have managed it over time. CCCBA has managed its budget over the past half-dozen years of the Great Recession very effectively. While many government entities and bar associations have struggled

to balance their budgets and gone into debt or spent down reserves, CCCBA has always run a balanced budget and our reserves are at an all-time high. CCCBA has done so without raising membership dues, while providing more programs of a higher quality, and while still making capital investments to support our work in the future (e.g., our new website in 2010, the online CC Lawyer in 2011, furniture for the new Bar office in 2012). The bulk of CCCBA’s annual revenue comes from two comparable sources—membership dues and our Lawyer Referral & Information Service (LRIS)—with each accounting for about 35-40 percent of total income. Our remaining income is from advertising in our various publications: CC Lawyer, Membership Directory, weekly email broadcasts, and programs like the MCLE Spectacular and our fee arbitration program. Most of CCCBA’s income pays for staff to help run CCCBA’s many great programs and for direct expenses of such programs. For ex-

Youngman & Ericsson, LLP 1981 North Broadway • Suite 300 Walnut Creek, CA 94596

Tax Lawyers.

(925) 930-6000

Stephen Steinberg CCCBA Board President ample, last year, our LRIS program fielded 8,690 calls from members of our community looking for legal representation, scheduled appointments for over 4,500 of them, and referred many more to other legal and social services. The resulting services provided by our members generated nearly $1.2 million in legal fees for them. In 2013, CCCBA staff helped the Bar and its 20 different sections plan 124 MCLE programs and 32 social events, including: • The 19th Annual MCLE Spectacular, which was the most successful ever with nearly 350 people attending. • Our 2nd Annual Law Practice Management Series, with nearly 100 people attending one or more of the programs. • The annual Bar Fund Gala, which raised $55,000 for Contra Costa Senior Legal Services, the most we’ve ever raised. CCCBA published 12 issues of the CC Lawyer that were packed with informative articles and photos of our events, among other things, and the online version of the magazine received 48,000 visits from readers—another new record.



President’s Message, cont. from page 5 CCCBA staff also spent time last year on collaboration with the local bench, working with the Contra Costa Superior Court to develop the Small Claims/Unlawful Detainer Judge Pro Tem and Discovery Facilitator programs, and planning the “Get to Know Your Local Judges” mixers and bench-bar softball game and barbecue. In 2013, CCCBA also raised tens of thousands of dollars for the Food Bank of Contra Costa and Solano through our annual Food From the Bar Drive, held 102 free legal workshops for the public, and helped coordinate over 75 tours of our local courts. This is just a sampling of what your membership dues helped support in 2013, but I hope it gives you confidence that your money is well spent, and gives you a sense of the value of your membership with CCCBA. s

Will & Trust Litigation Securities Litigation Elder Abuse Litigation BARR & YOUNG AT TO R N EY S 318-C Diablo Road • Danville, CA 94526-3443 (925) 314-9999


MARCH 2014

Family Law Tax Update by Leslie Dawson


s we head into tax season, this is a great time to look at some of the tax changes affecting our family law cases. This article will discuss a few of the interesting tax rulings from 2013.

The BIG News: Same Sex Marriages

On June 26, 2013, the United States Supreme Court released their ruling in United States v. Windsor.1 The Windsor ruling struck down, as unconstitutional, Section 3 of the Defense of Marriage Act (DOMA),2 that required same-sex spouses to be treated as unmarried for federal purposes. That same day, the Supreme Court also dismissed Hollingsworth v. Perry3 for lack of standing. This case appealed a lower court ruling,4 that California’s Proposition 8, which limited marriage to opposite-sex couples, was unconstitutional. The dismissal of this case cleared the way for same-sex marriages in California. Both of these rulings were groundbreaking. They allow many benefits to same-sex married couples that were previously only allowed for opposite-sex spouses. However, there are many questions pertaining to the implementation and timing of these benefits. There are also questions regarding the interplay of various state same-sex marriage laws, property laws and tax filings. The above-referenced cases were followed by a number of rulings, including the following: • IRS News Release 2013-72: All same-sex couples must file as married after 9/15/13. • IRS Revenue Ruling 2013-17: 1. Redefined a spouse as one in a legal marriage under state law, and specifically included persons of the same sex. 2. Adopted a “state of celebration” rule. This means that if the marriage is valid in the state in which the marriage is performed, the federal government will recognize the marriage, regardless of where the parties reside. 3. It is anticipated further guidance on retroactive application of employee benefit plans will be issued. • Obergefell v. Kasich, No. 1:13-CV-501, 2013 WL 3814262 (S.D. Ohio July 22, 2013): Ohio must recognize a same-sex marriage if valid in the state where it was “celebrated.”

• Cozen O’Connor v. Tobits, No. 11-0045, 3878688 (E.D. Pa. July 29, 2013): Same-sex spouse was entitled to ERISA survivor benefits even though the death occurred before the Windsor ruling. The effect of Windsor and subsequent rulings on same-sex spouses: • File as married for federal tax purposes. • Ability to receive spousal tax-free health benefits. • Ability to use unlimited marital deduction for gifts and estates. • Opportunity to split gifts. • Tax-free property division under IRC §1041. • Deductible alimony. • Ability to divide pensions via QDRO. • Ability to receive spousal benefits under ERISA plans. • Ability to divide IRAs tax-free. It should be noted that the IRS has issued “Answers to Frequently Asked Questions” for California Registered Domestic Partners and Civil Unions in other states. These unions are NOT recognized as married for federal tax purposes and do not receive the above benefits. There are still a number of unanswered questions, such as filing status for a federally recognized same-sex marriage in a state that does not recognize these marriages. Also, if the gift tax exclusion was used in a prior year to make a gift to a same-sex spouse, can that exclusion now be recovered? Stay tuned as more rulings will hopefully address some of these questions.

Innocent Spouse Relief In the fall, the IRS issued new rulings liberalizing the requirements for “equitable” innocent spouse relief. Equitable relief is one of three types of innocent spouse relief available—a “facts and circumstances”-based decision by the IRS, reviewable by the Tax Court. The rulings—Treas. Reg. §1.6015-5, Prop.Reg. §1.60159 and Rev.Proc. 2013-34—provide for a longer period of time to request relief. This provision is intended to provide relief to those divorced or separated spouses who



Tax Update, cont. from page 7

may not have even been aware they owe taxes because they did not receive copies of the notices. The new rulings also allow taxpayers to submit additional information during the reconsideration process—the reviewing court is not limited to the administrative record. Presumably, this provision is designed to assist those spouses who are not sophisticated with finances, taxes and tax collection procedures. Why did the IRS issue more “friendly” rulings? In recent years, there have been a number of cases involving spouses that would have received innocent spouse relief but for missing the filing deadline, or some other technical reason. These rulings were most likely in response to this perceived inequity. Said rulings are probably a response to a number of cases where the IRS’ innocent spouse determinations were overturned by the courts.

Family Support In a somewhat disturbing case, DeLong v. Commissioner (T.C.M. 2013-70), the IRS raised the obvious issue with “family support”—namely, that the unallocated support is designed to cover both spousal and child support. In this case, Husband was ordered to pay $3,000/month as family support in a California divorce judgment. The court acknowledged the family support included both child and spousal support. The IRS challenged Husband’s deduction with the following arguments: 1. The judgment did not specifically state that the support terminates on Wife’s death—as required by Internal Revenue Code §71(b)(1) (D). However, under California law, spousal support automatically terminates upon the recipient’s death. Also, the 2005 Berry case (Berry v. Comm’r, T.C.M. 2005-91)


MARCH 2014

ruled that family support automatically terminates upon the recipient’s death if custody of the children automatically reverts to the paying spouse. For these reasons, the Tax Court ruled against the IRS on this argument. 2. A certain amount of the support is “fixed” as child support and excluded under §71(c)(1). The judgment, however, did not contain any child support figures. Nor did it contain an automatic reduction in family support based on a contingency related to a child (18th birthday, graduation from high school, death, etc). For these reasons, the Tax Court ruled against the IRS on this argument as well.

So while Husband was ultimately allowed the deduction, he had to incur the expense and hassle of taking his case to Tax Court to do so. This is disturbing because the IRS has, for years, accepted that family support contains unallocated spousal and child support. Their position has been that if the payments meet the requirements of §71, it is deductible; and if it doesn’t meet the requirements, it’s not deductible—period. This appears to be a garden-variety family support order and there is no indication why the IRS decided to challenge it. It is unclear if this was an isolated case resulting from an overzealous IRS agent, or if the IRS is going to continue attacking family support orders.

Alimony There were at least two cases in 2013 which reaffirmed the necessity of having a written support agreement in place before the payment is made to have deductible al-

imony. In Faylor v. Commissioner (T.C.M. 2013-143), Husband made payments while the temporary order was being drafted. In Martin v. Commissioner (T.C. 2013-31), Husband voluntarily increased his payments without changing the order. The Tax Court noted that while these were both noble gestures, they were still nondeductible. While this seems very unfair, Internal Revenue Code §71(b)(1) (A) is very clear—a written agreement requiring a specific alimony amount must be in place prior to the payment.5 There have also been a number of cases where the IRS has rejected the family court’s retroactive characterization of payments as alimony. However, there is a way to protect a spouse that wants to do the right thing. A written agreement does not have to be a court order—the parties can enter into an agreement that they both sign. The document should state that the payments will terminate upon the recipient’s death, just to be safe. These are just a few of the recent rulings and cases involving family law tax issues. As with most areas of tax, the family law tax landscape is constantly changing. Family law attorneys and tax preparers alike should be aware of the current tax consequences of support, property division and other issues affecting their divorcing clients. s 1 United States v. Windsor, No.12-307, 570 U.S. ___ 2013 WL 3196928 (June 26, 2013). 2

Pub. L. 104-199 §3, codified at 1 U.S.C. §7.


Hollingsworth v. Perry, No. 12-144, 570 U.S. ___, 2013 WL 3196927 (June 26, 2013).


Perry v. Schwarzenegger, 704 F.Supp.2d 921 (N.D. Cal. 2010). 5

Id. §(b)(2) (defining “divorce or separation instrument”).

Leslie Dawson is the owner of Dawson CPA Firm, which specializes in family law and taxation services.

The Problem of the Missing QDRO by Rita A. Holder


lients often consult with a family law attorney requesting modification or enforcement of some aspect of their dissolution judgment. They may ask for help with changes in spousal support, for a court order for sale of the family home after the kids leave, or enforcement of child support payments. No surprise there. But what is surprising is the number of post-dissolution clients who have never had a Qualified Domestic Relations Order (QDRO) prepared on their behalf. The amount of money left on the table after a divorce can be staggering. Routinely, clients are awarded $50,000 to $100,000 (or more) in retirement plan assets in the property settlement. But regrettably, many never claim a penny. The client may not understand, for example, that a lifetime pension was theirs for the taking. Or they mistakenly assume that because the nest egg is identified in the judgment, a pension check will inevitably be sent to them when they reach age 65. So they wait, sometimes five, 10, even 20 years after the divorce, without ever having a QDRO drafted. Usually the QDRO can be issued without incident. But a fateful few may be devastated to find that their long-forgotten former spouse has (unlawfully) taken and spent all the retirement assets awarded in the ancient judgment. Unfortunately, by the time the misap-


CCCBA MeMBer SinCe 1977

A Complex Area of Law How does the problem of the pretermitted QDRO arise? To be honest, it is very complicated to draft a QDRO, have it approved by the retirement plan’s administrator and opposing counsel, get it signed by both the parties and the judge, and finally be able to get some money out of the plan. The body of law relating to retirement plans is complex and byzantine. To further confuse the unwary practitioner, the US Tax Code (Internal Revenue Code of 1986, as amended, 26 U.S.C. §1 et seq. (Code)) and the Employee Retirement Income Security Act of 1974 (ERISA) are often duplicative of each other.1 As a result of this duplication, there are two sets of virtually identical QDRO rules—one set in ERISA section 206(d)(3)(B)(i) and the other in Code section 414(p)(1)(A). In addition to the Code and ERISA, there are at least 40 other acts that also affect retirement plans. If the employer violates any of these rules, they face the draconian threat of plan disqualification. If that happens, the employer and employee may be forced to pay ordinary income tax on the money in the plan accounts.

The Department of Labor’s (DOL) Employee Benefits Security Administration (EBSA) provides guidance on ERISA, generally, and QDROs, specifically. The DOL’s guidance materials can be found at http://www. onServAtorShiPS Both the DOL and Treasury (i.e., IRS) regularoBAteS tions must be complied with for a riMinAl efenSe QDRO to hold water.


C David B. Pastor

propriation is discovered, the wrongdoing spouse may be penniless or dead.


• Free Consultation •

Law Offices of

DAviD B. PAStor 1280 Boulevard Way, Suite 212 • Walnut Creek, CA 94595 925-932-3346 •

Getting the Facts Because the family’s biggest assets may be their employee benefit plans, family law attorneys must determine what these benefits are worth. This information cannot be overlooked! Given all of the above-



Missing QDRO, cont. from page 9

mentioned complexity in the law, this can be a challenge. Attorneys may find that clients have little knowledge as to the type, or value, of the couple’s retirement plans. In some cases, the assistance of ERISA counsel may be advisable. Most employers will provide general information about plan benefits, if asked by the spouse or the spouse’s attorney. If the client is uncertain as to their spouse’s retirement plan benefit, and is unable to obtain them from the employer, the attorney should identify them through the use of interrogatories, requests for production of documents, or subpoena duces tecum issued to the plan’s administrator. In addition, remember to find out if the spouse maintains an Individual Retirement Account (IRA), so that it too may be included in the property settlement. Be sure to ask for account statements and recent pension estimates. Retirement benefits will be either traditional “defined benefit” pension plans, funded entirely by the employer, or defined contribution plans, such as 401(k) plans, often funded by a combination of employee and employer contributions. Once you find out what kind of plan the client or the spouse participates in, the next task is to find out how much that employee benefit plan is worth in actual dollars. In a surprising number of situations, the employeespouse keeps, or gives up, their entire pension without the client or the attorney knowing exactly how much it was worth. Seek expert help if there is any question in this area. In order to value the defined benefit plan assets, it is often advisable to engage the services of an actuarial firm on your client’s behalf. The actuary can be a matter for stipulation, or the court can be asked to make a decision as to the actuary to be engaged. An actuarial valuation can cost anywhere from $500 and up. However, this is money well spent, and can be split between the parties. Once the actuary values the retirement plan assets of the parties, informed negotiations can begin.

Preparing the QDRO Document When the parties reach agreement on the community property division, the Marital Settlement Agreement (MSA) or Stipulated Judgment can be drafted, incorporating precise language that describes the manner in which the retirement plans are to be divided. Attorneys are often understandably confused, believing that once the retirement plan assets are identified, discussed and divided in the judgment or the MSA, that should be the end of it. Unfortunately, this is not true. There is another essential step in the division of retire10

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ment benefits after the judgment or final decree is entered. The next step is drafting the QDRO. First, contact the plan administrator to get a copy of the plan’s model QDRO, if available, and written QDRO procedures. If a model QDRO is not available, the attorney will need to draft the language of the QDRO on their own. The administrator of the plan is the arbiter of all things QDRO. In a defined benefit plan, the question of survivor benefits must be considered—for both the employee and the non-employee. If the non-employee is awarded a portion of the employee’s account balance in a defined contribution plan, the non-employee’s spouse’s attorney will need to protect the spouse’s interest in case he or she dies before benefits are distributed. Any attorney who decides to prepare a QDRO without consulting the plan administrator does so at his or her own peril. Next, even if the attorney is using the model QDRO format from the administrator, it is the best practice to prepare a draft for the administrator’s review and that of opposing counsel. Any problems identified by the plan administrator or counsel can be ironed out before the order is presented to the judge. The plan administrator can still reject the QDRO as not meeting employer requirements, even though the judge has already signed it!

Taxation of the Distribution If the QDRO passes the muster of the plan administrator and is signed by the court, it is then sent back to the plan administrator. In due course, a distribution from the qualified retirement plan will be made to the nonemployee spouse (the “alternate payee”) either in cash or a defined benefit stream of payments. Invariably, the alternate payee will be disappointed to find that the distribution is subject to a 20 percent mandatory income tax withholding. To avoid this mandatory withholding, the alternate payee has 60 days to roll over the QDRO distribution as per Code sections 402(c), 402(e)(1)(B) and 3405. The 10 percent early distribution penalty does not apply to distributions made pursuant to a QDRO.2 The IRS’ “Special Tax Notice Regarding Plan Payments,” which will be sent to the alternate payee, is quite informative. It can be downloaded from the IRS’ website at, or by calling 1-800-TAX-FORMS. Practitioners should note that even if the client receives bad tax or legal advice regarding a QDRO rollover, the transaction cannot be undone and will not qualify for deferred tax treatment.3 California has mandatory state income tax withholding of 10 percent of the federal income tax withheld— unless the taxpayer elects to opt out of withholding (CA Form DE4P). Like the Feds, there is no California state income tax withheld if the QDRO distribution is rolled

directly into an IRA or another qualified plan. The 2½ percent state premature distribution penalty does not apply to distributions pursuant to divorce. Many post-dissolution clients have never had a QDRO prepared on their behalf. This may be due to the fact that the body of law relating to retirement plan QDRO is full of twists and turns. Unlike case law, tax law does not hold much wiggle room. Practitioners should pay close attention to the Code and ERISA requirements when drafting a QDRO. s 1

ERISA is found at 29 U.S.C. Ch. 18 et seq.


Code § 72(t)(2)(C).


Mills v. Commissioner, T.C. 2003-41.

Rita A. Holder maintains a law practice in Walnut Creek, specializing in family law and ERISA. For over 30 years, she has advised many companies, large and small, about ERISA issues and QDRO procedures. Rita holds an LL.M. in Tax/ERISA.

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

• 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



Tax Avoiders Beware: Disclosure of Foreign Assets Held By U.S. Taxpayers Underway by Jenny C. Lin

Affected Withholding Agents and Foreign Financial Institutions Should Ensure Proper Procedures Are in Place


hile the Internal Revenue Service (IRS) and U.S. Department of Justice were diligently investigating and pursuing taxpayers and foreign banks for their roles in the use of offshore financial accounts to avoid or evade U.S. income tax and reporting requirements, Congress passed the Foreign Account Tax Compliance Act (FATCA), formally titled the Hiring Incentives to Restore Employment Act of 2010, 124 Stat. 71, relevant provisions codified at I.R.C. §§ 1471-74, to require more transparency relating to accounts with foreign financial institutions (FFIs) and assets with non-financial foreign entities (NFFEs). There are two aspects to FATCA. One aspect requires additional reporting to the IRS by U.S. taxpayers as to specified foreign financial assets. The additional reporting requirement by U.S. taxpayers is effective commencing the 2011 tax year. Another aspect requires due diligence and reporting by participating FFIs and NFFEs, and the withholding of certain U.S.-sourced payments by withholding agents and participating FFIs. The due diligence, information reporting and withholding requirements are being implemented in phases beginning January 1, 2014, with full implementation by 2017.1 This article is intended to provide general information only as to FATCA provisions affecting withholding agents and participating FFIs.2

General Requirements Under FATCA In general, FATCA requires withholding agents to withhold 30 percent on “withholdable payments” to a payee that is an FFI or a NFFE, if the FFI or NFFE does not meet certain requirements under U.S. tax law.3 There are two broad classes of withholdable payments as follows:4 1. Payment from a U.S. source of interest, dividends, rents, salaries, wages, premiums, annuities, compensations, remunerations, emoluments and other fixed or determinable annual or periodical gains, profits (FDAP income). 12

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2. Any gross proceeds from a U.S. source after December 31, 2016, from the sale or other disposition of any property that can produce interest or dividends that are FDAP income.

FFIs Exempt From Withholding Regime In order to avoid withholding on payments to an FFI, the FFI must have an agreement in place with the IRS or be resident in a jurisdiction that has an intergovernmental agreement in effect with the U.S.5 With respect to agreements between an FFI and IRS directly, the FFI must agree in general to:6 • Obtain information from account holders with respect to accounts maintained by the FFI to determine if such account is held by one or more U.S. persons or U.S.-owned foreign entities (U.S. accounts). • Comply with verification and due diligence procedures with respect to the identification of U.S. accounts. • File an annual report with the IRS with respect to each U.S. account, including the name, address and taxpayer identification number of each account holder who is a U.S. person or the substantial U.S. owners of a foreign entity, account number, account balance or value, and gross receipts and gross withdrawals or payments from the account. • Deduct and withhold a 30 percent tax on any passthru payment made by the FFI to an accountholder who refuses to provide information and/or documentation to determine whether the account is a U.S. account or provide a waiver to allow the FFI to provide information on the account to the IRS.

• Provide additional information as may be requested as to a U.S. account. • Attempt to obtain a waiver from the accountholder if a waiver would allow the FFI to disclose account information to the IRS or close the account if the accountholder refuses to provide a valid waiver. The requirement to disclose information to the IRS poses a risk for civil and/ or criminal sanctions for some FFIs in jurisdictions that have bank secrecy laws. Recognizing the dilemma of FFIs in these jurisdictions, the IRS has been negotiating with over 50 jurisdictions on an intergovernmental level to implement FATCA in those jurisdictions.





Certified Specialist, Bankruptcy Law State Bar of California Board of Legal Specialization

David A. Arietta 20 years of experience 700 Ygnacio Valley Road Suite150 Walnut Creek, CA 94596

As of January 28, 2014, 19 IGAs have been concluded. The jurisdictions which have concluded Model 1 IGAs include jurisdictions commonly thought of as tax havens, such as the Cayman Islands, Guernsey, Isle of Man and Jersey. Only three jurisdictions have concluded Model 2 IGAs, including Bermuda and Switzerland.

NFFEs Exempt From Withholding Regime

Certain deadlines have been postponed by six months. See IRS Notice 2013-43. 2 For a general discussion of additional reporting requirements by U.S. taxpayers under FATCA, please see Jenny C. Lin, “Another Offshore Reporting Requirement,” Contra Costa Lawyer (May 1, 2012), available at: 3 Internal Revenue Code (IRC) §1471(a), §1472(a), - (d); Treas. Reg. §1.1471-2(a)(1), Treas. Reg. §1.1472-1(a). 4 IRC §1473(1)(A) (defining withholdable payment); Treas. Reg. §1.1473-1(a).

Withholding Agents Subject to FATCA The term “withholding agent” is defined broadly to include any U.S. or foreign person “that has the control, receipt, custody, disposal, or payment of a withholdable payment or foreign passthru payment.”8 Given this broad definition, anyone can potentially be a withholding agent with respect to the U.S.-source income described above for payment to a FFI or NFFE. Persons who may be withholding agents include:

• Corporations and their officers and directors.

While the 30 percent withholding is a familiar concept with respect to payments to foreign persons, the new withholding regime under FATCA adds several new complexities. The determination of the status of the payee alone requires knowledge of various definitions in the IRC, treasury regulations and various IGAs. Some IGAs also allow the financial institution to elect between the definition of terms under U.S. tax law or the IGA itself. Therefore, persons who may be withholding agents should review their procedures and make sure they will be in compliance with the new withholding regime. Foreign institutions and entities must also determine if they are affected by FATCA and how to proceed with compliance if they are affected. s 1

Payments to NFFEs are generally subject to a 30 percent withholding on withholdable payments if the beneficial owner of the payment is the entity or another NFFE. However, the withholding does not apply if a certification is provided that the NFFE does not have any substantial U.S. owners or specified information is provided with respect to each substantial U.S. owner.7

• Property/Asset managers.

(925) 472-8000 David @

• Partnerships and their partners.

There are two types of intergovernmental agreements (IGAs). Model 1 IGAs allow the FFIs to provide the required information to their respective tax authorities followed by an automatic exchange of information by the foreign government to the IRS. In addition, the U.S. agrees to reciprocate in providing information relating to accountholders that are residents of that foreign jurisdiction. Model 2 IGAs allow the FFIs to provide information to the IRS directly.

• Trusts and trustees.

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IRC §1471(b)(1); Treas. Reg. §1.1471-5(d).


IRC §1471(b)(1), -(c); Treas. Reg. §1.1471-5(a)(2).


IRC §1472(a), -(b).


Treas. Reg. §1.1473-1(d)(1).

Jenny C. Lin practices in Walnut Creek, specializing in tax law with an emphasis in international tax issues, IRS appeals and tax litigation. She is a certified specialist in tax law by the State Bar of California Board of Legal Specialization. She may be reached at (925) 202-2922.




MARCH 2014

Passive Loss Limitations Revisited: Getting on the Right Side of Material Participation by Mark S. Ericsson


rior to the passage of Section 469 in 1986, wealthy taxpayers could purchase tax shelters that would reduce their income to zero. The most obvious tax shelter was improved real property, which tax law had assigned a depreciation deduction to offset the impact of wear and tear on the improvements. This correctly led to the perception that the wealthy could buy that deduction as an investment and pay no taxes. A taxpayer owning real property had always been allowed a deduction for depreciation allowing that deduction against ordinary income. This had become the opportunity to reduce one’s income to zero for those that could own enough real estate. Congress focused on establishing the size of the depreciation deduction to provide a consistency in these deductions. These statutory limits in effect made the investment deductable. Of course, the economics of the time played into the setting of these deductions. Higher deductions led to lower taxes for those buying the real property, which led to a rising real estate market, and happy and stable voters. Congress believed that the way to cure this problem was to disconnect the tax shelters from being an investment with a deduction attached. Congress created the concept that a taxpayer must participate in the activity which generates the loss. Expenses (real or statutorily created) associated with the activ-

ity could be written off against income from the activity. The concept turned on material participation. If the taxpayer has skin in the game in the form of time involvement and management energy, the activity takes on a legitimate goal of producing an end product (real estate holdings, a business conducted through a pass-through entity). Thus, Treasury went about trying to define what it took to materially participate in an activity. Unfortunately, the policy did not translate well. It was not widely disseminated that the material participation rules were intended to create activities resembling business endeavors and needed to be supported by business records. The government has an almost insurmountable advantage in almost any argument over material participation because most of the determinative factors are based upon hours spent on the activity. The burden is on the taxpayer to prove that the number of hours has been satisfied. In most cases, where passive loss rules come into play, the taxpayer has some passive loss activities that generate income and some passive activities that generate losses. The taxpayer is trying to match the two. Since pass-through entities where there is a lack of material participation are subject to the passive loss limitations, these must be evaluated to see which side of the line they fall. The levels of participation differ between fee simple real prop-

erly ownership and entity-owned properties. Quickly, the tax professionals began to look for ways to take advantage of the rules. The most obvious were to recharacterize rents as nonpassive income so the losses could be written off against ordinary income. Real estate professionals quickly convinced Congress that those truly in the business of real estate should be treated as in business and their losses should be treated as ordinary losses. Tax professionals began to characterize two buckets of income as passive and active. Passive would be subject to the passive losses rules. Active would integrate into the tax preparation process under the ordinary income rules. However, writing the rules to allocate these two classes of income has proved a mightier task than first imagined. The rules involving exemption as a professional real estate operator seemed pretty straight forward. A person had to spend more than 750 hours and more than one-half of the time he spent in the real estate profession on his properties. If the taxpayer was a developer, he had to spend more than onehalf of his time managing his personal properties, to be treated in the business of real estate with respect to the ownership of his properties. Issues arise as to what constitutes participation in real estate professions (mortgage brokerage?). Once



Material Participation,

in that LLC that meets the standards of 1, 5 or 6 above. This may dramatically change the entity structure preferred by the taxpayer. Many taxpayers never discover this dichotomy until audit or appeals.

cont. from page 15

the taxpayer qualifies as a real estate professional, he must prove that he materially participated in each activity that he wants to be able to deduct net losses from ordinary income. To prove material participation, the taxpayer must meet one of seven mathematical tests at Treas. Reg. §1.469-5T. The tests consider the number of hours spent on the activity, the proportion to which the taxpayer participated in the activity compared to other individuals, the amount of activity spent on the activity over a number of years, and/or facts and circumstances that tend to show that the amount of participation in the activity by the taxpayer was substantial. Disallowed passive losses are carried forward, and upon disposition of the activity, are released and allowed to be deducted against ordinary income. As a real estate operator, a taxpayer can elect to treat all activities as one activity for meeting any of the tests above. For some reason, it is widely believed that this grouping does not allow the taxpayer to realize disallowed loss carry forwards to be released and deducted against ordinary income. Treasury Regulation §1.469-2T(d)(5)(i) and (ii) provides that a loss from a disposition of an activity is treated the same as a deduction from such activity and is subject to the passive loss rules. A total distribution would trigger a loss and would be allowed where the taxpayers are estate professionals and can recognize rental real estate losses, contrary to most practitioners’ understanding of the law and reporting practices. The rules have an unexpected impact on general liability practices. The taxpayer has to keep an eye on the nature of title holding. If the real property is sitting in a limited liability company or other income pass-through entity, the taxpayer must prove a higher level of participation, namely compliance with hours of participation

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Often, the taxpayer has a large passive loss available to write off against passive income. The regulations leave a huge hole for structuring in this area. Let’s say the taxpayers own a mortgage broker/bank passing through its income as an S Corporation which has contributed to the real estate holdings. Taxpayers work full time in the bank and would seem to be well over the threshold, making this an active activity against which the passive real estate losses cannot be written off. However, Treasury Regulation §1.469-5T(b)(2)(ii) provides that an individual’s services performed in the management of an activity shall be taken into account in determining whether the individual is treated as materially participating in such activity for the taxable year ... unless, for such taxable year: (a) No person (other than the individual) who performs services in connection with the management of the activity receives [earned income] in consideration for such services, and (b) No individual performs service in connection with the management of the activity that exceed (by hours) the amount of such services performed by such individual. This was to prevent taxpayers to convert active activities to passive activities by allowing the taxpayer to claim minimal participation by hiring others to manage the activity. Now, to move the income generator over to the passive category, one needs merely to hire managers. This resulted in a tax decrease of $2.7 million in a recent audit. s Mark Ericsson is a partner in the tax and business firm of Youngman & Ericsson. Mark has written over 30 articles on tax and business issues. | (925) 930-6000

Youngman & Ericsson, LLP

1981 North Broadway • Suite 300 Walnut Creek, CA 94596

Tax Lawyers

Chastity A. Schults, Partner Tax Preparation, Tax Analysis, Tax & Estate Planning, Estate Litigation

(925) 930-6000

Drop Then Swap: 1031 Exchanges by G. Scott Haislet


nternal Revenue Code (IRC) §1031 exchanges permit a seller of investment or business property to reinvest into “like kind” replacement property to avoid (defer) taxable gain. Scenario 1: Individuals A and B own XYZ LLC (treated like a partnership for federal tax purposes). XYZ owns investment realty and wants to sell it. A and B want to reinvest in replacement investment realty, but not together. A and B want to do separate §1031 exchanges. The real estate agent says they can do it, that it’s done all the time. Can they? No. A and B each own a share of a partnership (the LLC), which is not eligible for IRC §1031 treatment.1 Scenario 2: Individuals A and B own investment realty as tenants in common (a TIC). A and B seek to sell the realty. A and B want to reinvest in real estate, but not together. A and B want to do separate 1031 exchanges. Can they? Yes (well, maybe). IRC §1031(a)(2) provides: “… an interest in a partnership which has in effect a valid election under IRC §761(a) to be excluded from the application of all of subchapter K (of the IRC) shall be treated as an interest in each of the assets of such partnership and not as an interest in a partnership.” Thus, A and B treat their respective TIC interests as direct fractional ownership of the realty, such interests are eligible for IRC §1031 treatment.2 So, how does the LLC in Scenario

1 above “convert” to TIC status found in Scenario 2?

§761(a) Election IRC §761(a) provides an election for certain partnerships to avoid partnership tax rules. To gain §761(a) status, a partnership must make and qualify for the election.

Making the §761 Election A partnership may make the election by filing a simple form with the IRS no later than the due date for the partnership’s tax return for the year the election is to begin. A partnership in its first year of operation may obtain a “deemed” election if: (1) the partners agree (presumably in writing) to elect §761(a) status, or (2) the partners report their separate respective shares of income, deductions, etc., on their respective tax returns from the first year.

Qualifying for the §761 Election Just making the election is insufficient. A partnership seeking IRC §761(a) status must qualify for it. Not all partnerships qualify. Not eligible are those partnerships: • With special allocations of income or gain (e.g., a developer’s carried interest) or disproportionate allocations of debt and equity. • With different classes of members. • Organized as an LLC. • Imposing restraints on alienation of a partnership interest (though a right of first offer is not considered a restraint generally).

• With active business in contravention of IRC §761(a)(1).3 For more information about qualifying for IRC §761(a) election, see Reg. §1.761-2 and IRS Revenue Procedure 2002-22 (not substantive law).

Drop Then Swap Under Scenario 1, A and B (as members of XYZ LLC) seek a valid IRC §761(a) election. As a practical matter, the realty must be distributed from the LLC to A and B as TIC owners (sometimes this is accomplished with dissolution of LLC, but that is not necessary, particularly if the LLC has other properties). That’s called the “drop.” After such distribution, A and B take their proceeds separately and implement separate 1031 exchanges. That’s called the “swap.”

Does This Qualify for §1031 Treatment? The Bolker case4 does not address drop then swap expressly. Rather, Bolker eliminates any holding period that IRS says is required to form intent with respect to exchanging property under §1031. Thus, taxpayer argues that a TIC interest under a §761(a) election is §1031-eligible, even though such interest was created very recently. To the contrary, the government may view the distribution as having no purpose other than to avoid 1031-ineligibility under IRC §1031(a)(2)(D), and deny §1031 treatment.



Drop Then Swap,

Consider an alternative: Swap then drop. That is, the LLC implements the §1031 exchange, buys replacement properties for each of the members, then makes special allocations of each property to one or more members.

cont. from page 17

The government may argue that each distributee did not sufficiently “hold” their investment as required by IRC §1031(a)(1) (property must be “held for” business or investment to qualify for §1031 treatment). The government says insufficient time between the drop and the swap will deny §1031 treatment, notwithstanding Bolker.5 In addition, IRS Form 1065 (partnership income tax return) asks whether the LLC distributed property in current or prior year—certainly a flag. LLCs should consider this question early. A drop on Tuesday followed by a swap on Thursday looks weak contrasted with a drop that occurred two years before the swap (though Bolker discarded the time element in granting §1031 treatment). Also, LLCs that dissolve and adopt TICs should consider other reasons for making the change (to create a “business purpose”). Notwithstanding how late a drop then swap occurs, an independent reason for doing it might override government objections. Consider side effects, e.g., will a drop trigger a loan default?

Drop and swap can work, but all factors must be considered. s 1

IRC §1031(a)(2)(D).


This does NOT say a partnership is not eligible; LLCs and partnerships as entities may use 1031 without concern of IRC §1031(a)(2)(D).

3 For example, a hotel is an active business; even if a TIC owned the hotel, it still does not qualify for IRC §761(a) election; see IRS Revenue Ruling 75-374 for an example of a qualifying apartment investment. 4

Bolker v. Comm’r, 760 F.2d 1039 (9th Cir. 1985).


See IRS Revenue Ruling 77-337 for the two-year “holding period” rule.

G. Scott Haislet is a Lafayette CPA and attorney (certified specialist in tax) with a particular emphasis on 1031 exchanges and real estate. Contact him at (925) 283-1031 or Copyright 2014, G. Scott Haislet (no copyright claimed on government works). This work may be republished or distributed without permission only in its entirety. All other use prohibited absent permission. This is not legal, tax, or accounting advice or counsel. Please consult a qualified adviser for specific representation or counsel.

Tax & Estate 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

Walter C. Youngman, Jr., Attorney-CPA Chastity A. Schults, Partner Mark S. Ericsson Christina P. Ortega, LL.M in Taxation Dani Altes, Paralegal Mayra Aviles, Paralegal


MARCH 2014

Technology: Don’t Fear It, Embrace It by Gregory Harper


often receive these questions from colleagues: “Can you look up something for me? I don’t know where to start,” or “Can you verify some information for me? I looked for hours for the book at the law library, and when I found it, the pages I needed were missing.” Lawyers who started practicing before the mid-1990s were there when the computer was just a replacement for an electric typewriter, and research was done within the firm library, courthouse library, or nearby law school. I remember my first encounter with computer-assisted research in college while I was trying to pass my basic computer language class, and my terror in law school, when I tried to use computer-assisted research and concluded I needed to be an engineer. Like many of my colleagues, my resolution was to leave the computer alone. However, if you practice any federal law, you probably have to file documents online because your cases are handled electronically. Some counties like Orange and Sacramento have gone to electronic filing. Alameda County boasts one of the best systems in the country, posting all filed documents online for free retrieval and printing. In sum, if you don’t embrace technology, you will probably be left behind. Regardless of the technology you use, when making technology decisions the following should shape your thinking: 1. What can I afford? 2. How can I get the most for my money or, maximize my return on investment [ROI]? 3. What is available? Are there new or improved products? 4. Is the technology easy to use or will it require extensive training?

5. How easy is it to obtain technical support, and how do I access the technology? The following websites and email services are helpful in making hardware and/or software decisions:

The American Bar Association The American Bar Association has a wonderful Legal Technology Resource Center. I have used this ABA site for several years. There are many software and hardware comparison charts. Many discounts are available to ABA members. Its annual technology report is available for free download to ABA members and is a warehouse for the latest trends in legal. For the technologically-inclined, you can join a test group and provide feedback for different products, often for a discount on purchase and the ability to ask for your favorite features. Website: TechnoLawyer is an email publication providing real-life issues and solutions. It is written by lawyers from solos and small firms. It has an archive of articles which rarely miss a subject. One archive area, called Small Law, is a tremendous resource for newly minted solo, small or large law firms. The Small Law archive examines practical tools for lawyers with respect to technology and practicing law in general. The archives are a tremendous help to practitioners for realizing practical solutions to common problems. With the proliferation of technologies today, lawyers do not have time to try and review everything. TechnoLawyer will likely have an article addressing your issue. A great feature is that it provides the

author’s contact information and they tend to respond within a day. TechnoLawyer also provides tips and articles regarding details a lawyer should consider when buying a computer. Hardware reviews are available, and you can publish a review in connection with your experience using specific hardware and/ or software. Website:

Law Technology News This is a free publication in print and electronic form. While geared toward Chief Information Officer types at large law firms and corporate legal departments, it has a great annual report on the latest legal trends. This publication also regularly has articles examining the financial impact of an investment in information technology. Website:

Accounting Today Accounting Technology is a free email service published by Accounting Today. It’s a great clearinghouse for accounting technology information. Accounting Technology also has an annual review of the latest software products. A great feature of this publication is its examination of the future of accounting technology, legal and financial service business models, and how technology shapes them. Website: s Gregory Harper has a solo legal practice in Point Richmond, California specializing in tax and criminal law. A graduate of the University of California Hastings College of Law, before settling into his practice he held an appellate court clerkship, worked at the Contra Costa County Public Defenders’ office, had a financial planning company and served as a pro tem judge for the California Superior Court.




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MARCH 2014


Procedural Considerations for Submitting an OIC: Anderson v. Commissioner by Christina Ortega


he concept of an Offer in Compromise (OIC) has existed for more than a century.1 In the past, Offers were rarely made because the procedures and rules surrounding Offers were ambiguous, confusing and not well-known by taxpayers or practitioners. It was not until the 1990s that the IRS undertook efforts to liberalize and bolster the Offer process. Despite these efforts, the standards a taxpayer had to meet in order to have their Offer accepted remained stringent and nearly impossible for taxpayers to meet. A method for obtaining Tax Court review of a denial of an OIC was not available until the enactment of Internal Revenue Service Restructuring and Reform Act of 1998 (RRA 1998).2 RRA 1998 provided a taxpayer the opportunity to request a Collection Due Process (CDP) Hearing with an IRS Appeals Officer in order to consider collection alternatives and/or dispute a tax liability.3 A denial of an OIC submitted in connection with the CDP could also be reviewed by the Tax Court. The Tax Court will review de-

terminations made in connection with a CDP Hearing pursuant to an abuse of discretion standard. This can be advantageous to taxpayers and help them win some CDP cases. Consider a case in which a settlement officer neglects to consider evidence offered by the taxpayer on grounds the settlement officer does not believe the evidence is relevant, and denies the taxpayer’s OIC. The taxpayer would solely need to convince the Tax Court that the evidence he/she introduced was relevant and material, and that the evidence was reasonably available and had probative value. In such an instance, the taxpayer may be able to convince the Tax Court the IRS abused its discretion in denying the OIC. In the recent case Anderson v. Commissioner (T.C.M. 2013-261), Larry Anderson was convicted of tax evasion for the 1991 tax year and for willfully making false or fraudulent statements pursuant to Internal Revenue Code (IRC) §7206(1) for the 1992, 1993 and 1994 tax years. Anderson was sentenced to prison, subject to a $50,000 fine and served probation.

Youngman & Ericsson, LLP

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Tax Lawyers

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Tax Collection and Tax Controversy

(925) 930-6000

In 2008, the Commissioner assessed a civil tax fraud penalty of $23,104 against Anderson for the 1991 tax year, and interest of $53,385.4 Anderson submitted an OIC in response. Anderson offered to pay $2,310 and submitted a Form 433-A to the IRS in an attempt to reduce his tax obligation. For a number of reasons, including Anderson’s assets, prior history of non-compliance and fraud, and a purported interest in a condominium, the IRS declined to accept the offer. The Offer Specialist rejected the offer, and recommended that a notice of federal tax lien (NFTL) be filed against Anderson’s property. Anderson filed a request for CDP Hearing pursuant to IRC §6320 in response to the rejection of his OIC and the NFTL. Anderson did not dispute the underlying tax liability, but disputed he had an ownership interest in the condominium because he claimed it was a “trust asset.” The IRS considered a number of documents that Anderson submitted, including the trust agreement, a copy of the original deed, Form 433-A and a copy of the lease or rental agreement related to the real property. During the CDP Hearing, Anderson informed the IRS that he had been diagnosed with prostate cancer and was receiving treatment. Anderson increased his offer to $12,000. The settlement officer noted Anderson was “elderly, [has] health issues, and live[s] on fixed income.” The settlement officer also noted that Anderson was diagnosed with prostate cancer, had had two heart



Submitting an OIC, cont. from page 23

stallment payment proposed by the settlement officer.

attacks and was diabetic. The settlement officer requested additional information and medical verification at the conclusion of the meeting. Anderson sent the settlement officer the additional information requested, including written statements from Anderson’s physician.

Ultimately, an agreement could not be reached between the taxpayer and the settlement officer. The settlement officer closed the CDP case and a notice of determination was issued. Anderson petitioned the Tax Court for review of the settlement officer’s determination.

The settlement officer determined Anderson had full ability to pay his outstanding tax liability. The settlement officer rejected the $12,000 offer, and she suggested a $217 monthly installment payment for one year, which would thereafter increase to a monthly installment payment of $1,108. Anderson disputed the inclusion by the settlement officer of the value of the condominium in calculating Anderson’s reasonable collection potential (RCP). Anderson stated he held solely a one-fifth interest in the trust that controlled the trust assets. The settlement officer indicated she would continue to include the value of the condominium; however, the value would be reduced to $47,840 in order to reflect Anderson’s one-fifth interest.5 The taxpayer continued to dispute the inclusion of the value of the condominium in his RCP. The taxpayer increased his offer several times, but declined to accept the in-

The taxpayer in this case was convicted for tax evasion and filing false tax returns. The taxpayer had a history of noncompliance. Nevertheless, the taxpayer was able to convince the Tax Court that the IRS failed to properly exercise its discretion by failing to consider all of the facts and circumstances raised by the taxpayer. The Tax Court refused to reconcile the settlement officer’s notes indicating the taxpayer had not shown his health was severe or terminal, with the fact that Anderson’s physician diagnosed him with prostate cancer, which had spread to his bones. The settlement officer, even if she had considered the evidence provided by the taxpayer, failed to properly develop the record. This is precisely the type of case in which the abuse of discretion standard can be very instrumental in helping a taxpayer to win his/her case. The potential for this outcome in

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connection with an OIC is solely available if the OIC is submitted in connection with a CDP Hearing request. Practitioners who are aware of the benefits of submitting an OIC in connection with a request for CDP Hearing can preserve an appeal right for their client that may not have otherwise been available. s 1 Internal Revenue Code (IRC) §7122, which governs Offers in Compromise (OIC), was originally enacted as Revised Statute 3229 of the Act of 1868. H.R. 1284, 40th Cong., ch. 186 (2d Sess. 1868), 15 Stat. 125, 166. 2

Pub. L. No. 105-206, 112 Stat. 685.


See IRC §§6320 and 6330.


The record contained no explanation for the more than 16-year delay in assessing the penalty. 5

It is interesting the settlement officer arrived at the value of a one-fifth interest in the real property by simply dividing the value of the whole by five.

Christina Ortega is an attorney at Youngman & Ericsson, LLP. Christina has her LL.M. in Taxation and focuses her practice on tax controversy and tax collection. Christina’s practice also includes complex civil litigation, and business and tax planning. Christina is Chair of the Taxation Section. | (925) 930-6000 | http:// html

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Bar Soap by Matt Guichard


lways lots to talk about, so where to start? We continue to be disappointed with the meager reporting of civil jury verdicts. I often receive news of an interesting verdict, then reach out to the lawyers for details. More often than not, the lawyers are outside of the county and have no interest in reporting a local verdict. If you know of a local verdict, or an interesting settlement, please let me know. It really is of great interest to the readers. More about local verdicts later in this article. It once was that the biggest turnout of local lawyers at an event was either the annual Bar Association Party or the annual Zandonella Holiday Party. The Bar Association’s party was always at a local hotel and Zandonella’s party at the old Concord Elks Lodge. Now, I must say the Bar Association’s MCLE Spectacular takes the honors. What a wonderful event! It’s great to see all the faces and catch up with many of our local lawyers. The event is packed and the sessions are interesting, informative and the credits a must. I


MARCH 2014

particularly enjoyed the luncheon presentation by Professor Erwin Chemerinsky. He discussed leading decisions of the United States Supreme Court for an hour without notes, and never missed a beat. Another event with a very nice turnout of local attorneys and judges was the 2013 Volunteer Appreciation event at the Wakefield Taylor Courthouse in Martinez. The brochure listed about 420 volunteers, and a good number of them attended. We all got a nice volunteer button and a certificate suitable for framing. Although it was not a local event, I did attend the annual Mission Language and Vocational School Awards Dinner in San Francisco. Many of our local attorneys attended. I sat at a table sponsored by Daniel A. Flores. Daniel is a local Contra Costa attorney with an office in San Francisco. I sat next to San Francisco Public Defender Jeff Adachi and had a very interesting discussion. Not name-dropping with this information, just items of interest. And the final event to be mentioned was the hearing on the “Pension spiking” issue before Judge David Flinn. The courtroom was packed with interested parties. And speaking of Judge Flinn, he has retired. Last day in court appeared to be Friday January 17, 2014. Now the only court you will see him on is the tennis court. Congratulations and good for him, how-

ever, we are losing a very talented judge. Sad to see another obituary for one of our long-time members of the local legal community. James (Jim) Disney passed away in December 2013. I met Jim when I first started in the mid-1980s as a Deputy DA. He was defending DUI misdemeanors, and as I recall, we had a couple of jury trials in Walnut Creek. It took the obituary to learn about the real Jim Disney. Take a look at the obituary and learn about an interesting life. Our “People on the Move” section starts with John Cope, who has moved from the District Attorney’s Office to the Contra Costa Superior Court Bench. A big loss for the DA, but a nice gain for our local bench. Christina P. Ortega joined Youngman & Ericsson as an associate. As you might expect, she has an LL.M. in taxation. Dennis Cashman, former San Francisco Police Officer, former Marin County Deputy DA, former San Francisco Assistant District Attorney and husband of Dara Cashman, retired Contra Costa Deputy DA, has moved his offices to 3223 Webster Street in San Francisco. There’s a very nice article in the September 2013 “Plaintiff” magazine about our own Kelly Balamuth. My friend Shawn Tolliver was named managing director of the Lewis Brisbois office in San Francisco. Put on your vest and helmet, Shawn, I remember trying to manage that position at Ropers Majeski in Sacramento. “So you want me to

manage the office, manage a case load, ensure everyone is up on billable hours, collect accounts payable, get the PR rolling and put out the fires?” Local Attorney Beth W. Mora advised that several members of the CCCBA were listed in a recent edition of the San Francisco Magazine “Power Issue” in the Super Lawyers Top Women Attorneys section. Take a look online to see who was honored.

Craddick. Ryan Lapine of Beverly Hills represented plaintiff and Robert Smith of San Francisco represented defendant. I understand the case was a “fraud” case, but I do not have the case facts. The verdict was in excess of a million dollars.

Of late, I have been hearing of some of our local firms opening outposts in the “Big Cities” of San Francisco and Los Angeles. On a much more modest scale, Guichard Teng Portello and Portillo is opening an office in Willows, California. In case you have never heard of it, Willows is the county seat for Glen County, California.

Valley Commercial Contractors v. Windsor et al, Case No. C08-02958, was also tried before the Honorable Judy Craddick. William Kronenberg and Steven Yuen of Oakland represented plaintiff. Barry MacNaughton and Eric W. Cheung of Beverly Hills represented defendant(s). Factually, the case appeared to me to be a construction defect matter. Again, no report on the actual case facts. At any rate, the verdict in that matter was in excess of $1.5 million.

And now back to local jury verdicts. I did hear of three recent verdicts. And I do know that cases are getting out to trial. I had to do a bit of research on my own to get the facts for a minimal report on each one of the three rumored cases. As an aside, I have observed since the economic downturn, that jury verdicts statewide seem to be going down in value. Contra Costa certainly is not known for lots of large seven-figure verdicts. However, two recent Contra Costa verdicts both surpassed seven figures.

Finally, I just heard of a verdict in Judge Laurel Brady’s department and will have to get the case name, number and facts for the next issue. However, the case was a slip and fall, I am told. Pre-trial offer was $65,000. Causation and liability were disputed. During trial, the offer was increased to $200,000. Plaintiff did not take that offer. The jury returned with a defense verdict. Ouch! I have reported on a lot of verdicts over the years. That same story has been heard over and over. My advice: Take the money and run.

Doublevision v. Commercial Escrow Services, Case No. C08-02958, was tried before the Honorable Judy

Keep those cards and letters coming, and please write to me about those civil verdicts/settlements of any kind. You can reach me at s



inns of court

Marsy’s Law A t the January 9, 2014, meeting, Judge Mockler’s pupilage group (featuring David Pastor, Jill Lifter, Jodi Reynosa, Pamela Marraccini, Ross Pytlik, Gregory Abel, Rita Holder and Taeho Chung) presented a series of skits related to Marsy’s Law, a 2008 California-approved ballot measure, which helps attorneys collaborate to assist criminal victims. Marsy’s Law literally changed the definition of the word “victim,” expanding it to also include specific family members of the crime victim. The presentation highlighted how under Marsy’s Law, civil or family law attorneys can assist in protecting the victim and victim’s family. Judge Mockler’s group used a hypothetical child molestation case to illustrate ways that attorneys can work together on a complex criminal case. In the presentation, the defendant (played by Gregory Abel) was a teacher accused of molesting one of his students (Jodi Reynosa). Ross Pitlik portrayed the criminal defense attorney representing the defendant, while Dana Filkowski participated as the Deputy DA. Pam Marraccini played the defendant’s mother, who was having a relationship with the abuser. David Pastor participated as a civil attorney representing the victim and Rita Holder had a role as a family law attorney representing the victim’s father, played by Taeho Chung, who was seeking sole custody of the child.


MARCH 2014

In the first scene, the civil attorney, David Pastor, informally interviewed Gregory Abel about the case, raising several ethical issues related to direct communication with an adverse party that he knows is represented by a criminal defense attorney. Lesson to all attorneys: If the opposing party is represented by an attorney, even if that attorney is not adverse in your matter, you should remain aware of your ethical obligations. The second scene discussed subpoenaing records in a criminal setting, the implications on the privacy rights of victims and the use of Marsy’s Law to protect the victim’s privacy. Pam Marraccini, as the mother, did not support her daughter’s account, as she had her own relationship with the abuser. She directed criminal defense attorney Ross Pytlik to obtain records from the school that could be used to show the daughter’s lack of credibility. To obtain records from a third party in a civil matter, a lawyer can issue a subpoena duces tecum and receive the records directly from the third party. However, in a criminal matter, the subpoenaed documents are delivered to the court. The DA has an opportunity to object before the records are released to defense counsel. This gives attorneys representing a victim an opportunity to protect the victim’s rights by requesting that the court preclude the defense from seeing the records if there is a relevant

by Matthew Talbot privilege, such as work product or psychiatrist-patient. Even though the victim’s mother consented to the release, the court would not release the records due to the minor’s right to privacy and the fact that the mother was not acting in the best interests of the child. In the third scene, the parties argued over another victim protection: anonymity. The nature of the criminal proceedings was causing great stress for the victim. The Deputy DA worked with Rita Holder, the family law attorney, to create the most protections for the victim, including referring to her as “Jane Doe,” closing the hearing, avoiding harassing questions and allowing support people to join the victim in the courtroom. These efforts at victim anonymity sparked a discussion centered on whether the court would close the hearings to the public. The fourth scene was used to demonstrate the ability of multiple counsel (Deputy DA, civil and family law), to advocate for the minor victim’s protection in a criminal proceeding in light of Marsy’s Law. The discussion centered on the potential harm to the victim if the courtroom remained open, and

how best to tailor any closing order to make it as limited as possible. The court heard statements from the DA, the father, the father’s family law attorney and the victim’s civil attorney relating to the victim’s legal rights and emotional harm, including the possibility that she would be unable to testify due to the stress. The court then weighed the victim’s rights against the right of the defendant to confront his accuser in public. In the final scene, the defendant was found guilty and subject to criminal sentencing that included a restitution order. This vignette demonstrated that Marsy’s Law expanded the definition of victim to include other family members who are entitled to restitution. Additionally, criminal restitution orders may include damages for pain and suffering and may include an award of civil attorney’s fees. Judge Mockler’s group’s informative presentation provided insight into California’s improved victim’s rights that span many different legal fields. s

The next Inns of Court meeting will be held on March 13, 2014. If you are interested in applying for RGMAIOC membership, please contact Scott Reep at

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restaurant review

INCAS GRILL by Gary M. Lepper


eighborhood Gem is a category in Open Table’s feedback format. It presumably means economical, tasty and convenient. If so, then Incas Grill qualifies easily.

As the name implies, its fare is Peruvian—and extensively so. One can begin with one of 20 (yup, 20) appetizers, starting at $6. The empanadas ($6) are superb. Likewise the ceviche de pescado (white fish marinated in lime juice, onions and rocoto, served with sweet potato pieces, corn and toasted corn) at $13. In between are, for example, fried yuccas ($6), papa rellena (deep-fried, seasoned potato filled with meat, hardboiled egg and black olives) at $9.50, marinated and grilled beef heart pieces in a special house sauce with corn ($7) and choros a la chalaca (green mussels in the shell with a composite topping) at $9. Depending on how much asbestos is in your throat, you can spice up these as well as any of the entrees. The seven soup selections include chupe de mariscos (traditional Peruvian seafood chowder) at $18, two kinds of chopped steak in creamy blends ($13) and parihuela (a house recipe of different seafood simmered in a special broth) at $18. Entrees? A paltry 32 of them—not counting the five on the “Kid’s Menu”—spread out among beef, chicken and seafood (there’s also pasta, but isn’t that Italian?). We had lomo saltado (beef strips sautéed with onions, tomatoes and aji amarillo over rice) at $15 and pescado a lo macho (Peruvian fish with onions, shrimp, calamari and scallops over rice) also at $15. Other possibilities were aji de gallina (shredded chicken in spicy sauce over rice) at $12, cau cau de pollo (stewed chicken and potatoes over rice) at $14, Peruvian seafood paella ($15) or jalea (a mix of fried white fish, shrimp and calamari, served with fried yucca, the house salsa and tartar sauce) at $22 or $13 for a half portion. As with everything, portions are generous.


MARCH 2014

A sort of culinary bonus is Desayuno Peruano (Peruvian breakfast) on Sunday. For that reason, the restaurant opens at 9 a.m., instead of its usual 11 a.m. The wine varietals are diverse, though undistinguished. There are plenty of pisco sours, beer, soft drinks and even chicha morada (described as a “purple corn drink”). The eager and welcoming staff is as Peruvian as the menu—the exception is a proudly Mexican waitress who is much kidded. Owner Ulises Napuri came to San Francisco in 1989. Along with his parents, he opened a crab stand at Fisherman’s Wharf (it’s still operated by his family, though now as a souvenir shop). He migrated to Concord in May 2009, to be closer to family and friends. Reservations are taken, but aren’t often necessary. The restaurant is unusually spacious (e.g., you aren’t forced to hear the people at the next table), informal (e.g., if you insist on wearing denims to dinner, this is your place) and airy. It’s open every day for lunch and dinner at 4669 Clayton Road, Suite D, Concord (925-687-2479). That reads much easier than it plays—because finding it is tough. Eventually, you’ll realize that it’s tucked in the corner of a small shopping center anchored by a large TJ Maxx. You’ll have no problem parking. Drive there and find out for yourself. s

JAY CHAFETZ Personal Injury Trust & Estate Disputes Medical Malpractice Mediation (PI and Med Mal)

Law Offices of Jay Chafetz 2033 N. Main Street Suite750 Walnut Creek, CA 94596

Here for you when you need a trial attorney

925.933.5890 fax 925.933.5620

“Hang ‘em High” - Sudden Death In Old Contra Costa by William Mero


uring most of the 19th century, it was the responsibility of the Contra Costa sheriff to carry out court ordered executions. Without television or Monday night football, public hangings were looked upon as a great excuse for the largely rural population of Contra Costa to gather in Martinez for a pleasant social outing. Eventually tastes changed as civilization swept California and the state prisons became the legal execution sites (much to the relief of our local sheriffs). The last local hanging was held in Napa in 1897. It has always been the proud boast of the Contra Costa Sheriff’s Department that no prisoner in their custody was ever seized and subjected to mob justice. Very few California counties can make that claim. Particularly in the 1850’s, the law was weak and vigilante justice was common in California. Between 1849 and 1853 there were 200 cases of lynching. During the next four years the number decreased to 100 as courts and jails were gradually established. With the lack of jails, punishments (both legal and illegal) included hanging, whipping, ear-cropping, head shaving, branding and banishment. During the first eight months of 1855 there were 370 homicides in California. The murder rate was estimated at 185 per 100,000 compared to today’s rate of 6.8 per 100,000 (1997). In this climate of lawlessness, there were 38 hangings in 1855. Newspapers recorded 36 lynchings and only 2 legal hangings. In a time of weak law enforcement, venal courts and corrupt politicians, most murderers went unpunished.

In Contra Costa the first recorded legal execution was the hanging of Jose Antonio, a Native American, who stabbed to death Aparicio Morales on May 29, 1852. Justice was pretty swift in those days. Of course it had to be since the local jail in Martinez was notorious for its swinging door policy when it came to the retention of evil doers. Convicted in July, Antonio was hanged on August 20, 1852. The county seat, Martinez, was the site of his public hanging. By our standards nothing too formal was prepared for the entertainment of the locals on that far away afternoon. The sheriff simply selected a suitable limb of a nearby sycamore tree. A barrel on an old cart completed the informal gallows. Once the rope was adjusted, the cart was driven off and the poor Indian was left kicking his way into eternity. The last court ordered execution in Martinez occurred on January 23, 1874. This was a much more formal affair than the first legal execution over 20 years before. However official incompetence turned the affair into a major PR disaster. The prisoner had helped kill the husband of his lover. Standing on the gallows he loudly proclaimed his innocence. Once he dropped through the gallow gates, an improperly strung rope popped his head off, completely decapitating the unfortunate soul. Particularly horrifying to the crowd was the way the head rolled around on the ground following the sudden drop. In fact the whole episode seemed a trifle unfair since it was the bloodthirsty wife who actually wielded the large and very sharp ax on her

apparently disagreeable hubby. She was sent to the insane asylum in Stockton. Her ultimate fate is unknown. John Marsh and his eastern Contra Costa neighbors were so plagued by cattle rustlers and horse thieves that they formed their own rough and ready justice system. During the late 1840’s and early 1850’s the law was far away in Martinez. Here in the dangerous frontier at the edge of the unsettled San Joaquin Valley, those caught stealing by the ranchers were given a taste of sudden justice by “judge rope” or shot on the spot. Eventually the hard riding, fast shooting James Kirker and his band of fearsome renegade Delaware Indians were hired to defend the ranchos. The swarms of squatters and rustlers were only mildly deterred. As one was eliminated, others moved in to take his place. Frontier justice administered by the rope is hinted at by the names of features or places found in Contra Costa County. Identification of at least two hangman’s trees in Contra Costa are a distant echo of this violent past. The “Hangman’s Tree” was famous in the Canyon area as a site where cattle thieves were strung up. It is believed that the tree was located near the old Canyon schoolhouse. The other famous hangman’s tree is on Pleasant Hill Road in Pleasant Hill. Here is currently a large oak tree reputed to be over 200 years old. The story goes that an Indian was hung from this tree for horse stealing in the 1800’s. During the Mexican period horse stealing raids were an extremely common crime



Hang ‘em High, cont. from page 31

by Indian bands attacking coastal California from their Sierra and San Joaquin strongholds. Most of the stolen horses were sold to New Mexican horse traders for guns, powder, shot and other supplies. During the pursuit of stolen stock, several major battles were fought between Mexicans and Indian raiders on the northern flanks of Mount Diablo. No quarter was given or asked. Murderous (aka Murderer’s) Creek is also located in Pleasant Hill. Murderous Creek was named when the surveyors found a victim hanging from a tree near the stream. Today the creek has practically disappeared but can be found below the hillside near Pleasant Hill Road and Withers Avenue. Kellogg Creek is in eastern Contra Costa County near Byron. Kellogg Creek is a tributary of the Sacramento River and runs through the Point of Timbers and Byron area. Farmers straightened the stream and changed the water course after 1870. Once known as Arroyo de la Poso, the creek was renamed for a man who achieved his 15 minutes of fame by being hanged on the bank of the stream. The records are silent on his supposed crime. This kind of frontier justice in old Contra Costa was not recorded or discussed in polite company. The events were only mentioned in whispers with one eye out for informers. It was when the lynching was prevented that local newspapers recorded the event. One of the most famous case of a thwarted lynching occurred in Martinez. Tice Valley was named after Andrew J. and James M. Tice, owners of the Tice Ranch (also known as Rancho El Sobrante de San Ramon). In 1855 Contra Costa County was still plagued by robberies and rustling. James Lane and Milton Davy were being held in the Martinez jail for cattle rustling. Andrew Tice was suspected of hiding cattle stolen by Lane and Davy. Two hundred armed men gathered in Martinez to prevent the rumored rescue of Lane and Davy by their hard

riding, outlaw friends from the San Joaquin Valley. The Martinez mob now demanded that Andrew Tice also be tried and convicted by judge rope. In order to prevent bloodshed, a few leading citizens made the reasonable suggestion that instead of immediately stringing up Andrew Tice, Andrew should be held by the vigilantes while the facts were checked. After a careful search, no stolen cattle were found on the Tice ranch. Andrew Tice was released. Now sensing the opportunity for big money, Andrew sued the mob’s leaders for $100,000 claiming false imprisonment. After a long and rancorous trial in San Francisco, the unimpressed jury awarded Andrew Tice $1.00 for his discomfort and violation of his civil rights. s This article was reprinted with permission from the Contra Costa Historical Society. They are committed to protecting the County’s future by preserving the documents and relics of the County’s past. For more information, visit their website at

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* Adjunct Professor Taxation Golden Gate University Law School, LL.M. Taxation Program


MARCH 2014


212 1615 Bonanza Street, Suite 204 Walnut Creek, CA 94596 T (925) 280 7788

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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, P.O. Box 479 Lafayette, CA 94549-0479 AV Martindale-Hubbell

What You Missed in February’s Online Issue ADR edition Features: • Updates on Alternative Dispute Resolution John S. Warnlof, Esq. and Leslie A. Fales, Esq. • Mediation Confidentiality: How Far Should It Go? Peter A. Mankin • Prison of Peace: Teaching Conflict Resolution to Convicts Ken Strongman • Conflict Resolution Programs in Contra Costa County Barbara Proctor • Mediation, Communication and Corrupt Speech - Tom Cain • View of the Court: A Freelance Court Reporter’s Perspective Wendy Graves

Spotlight: • Unintended Consequences of ADR - Justice James Marchiano (Ret.) • When the State Bar Audits Your MCLE Compliance Carol M. Langford

Columns: • Inside Guest Column - Nicole Mills, Co-editor • Inns of Court - Matthew Talbot

News & Updates: • CCCBA Holiday Party [photos] • Tracking Your MCLE

More: • Coffee Talk: What’s the most creative solution you’ve come up with in mediation? • Target Your Search with CCCBA’s Job Board

To re ad artic these an le cclaw s, go onl d other in yer.c ccba e to .org.




Personal Injury Law That Non-PI Specialists Should Know more details on page 35 March 4 | Bankruptcy Law Section

The New Chapter 13 Plan more details on page 35 March 7 | Family Law Section

Special Needs Children: How to Successfully Address Mediation, Custody, Visitation, Support Conservatorships and Other Issues more details on page 35 March 11 | Alternative Dispute Resolution Section

Mediation Research: What We Know About What Works more details on page 35 March 18 | Employment & Elder Law Sections

Wage and Hour Issues for Personal Attendants, Effects of New Overtime more details on page 35 March 20 | Criminal Law Section

What Criminal Law Attorneys Should Know About Civil Rights Law more details on page 35 March 21 | Real Estate Section

Recent Developments in ADA Litigation: Striking a Balance Between Discrimination and Frivolous Lawsuits more details on page 36 March 26 | Appellate Section

A Conversation with Presiding Justice Ignazio J. Ruvolomore details on page 36

April 3 | Barristers Section

Ethics 101 for New Attorneys more details on page 36 April 3 | Women’ Section

Annual Wine Tasting & Silent Auction more details on page 36 April 9 | Family Law Section

Government Benefits as an Element of Income for Support more details on page 36 April 18 | Real Estate Section

Addressing Ground Contamination Issues in Commercial and Residential Real Estate Transactions more details on page 37 April 22 | Estate Planning & Probate Section

21st Annual Estate Planning Symposium more details on page 37 April 24 | Criminal Law Section

Immigration Law Training for the Criminal Practitioner more details on page 37 April 28 - May 9 | Food From the Bar

23rd Annual Food From the Bar Drive more details on page 37 May 1 | Res Ipsa Jokuitor XIX

Comedy Night & Kickoff for Food from the Bar 2014 more details on page 22 May 6 | CCCBA

Bench/Bar Roundtable more details on page 37

March 27 | Intellectual Property Section

Anatomy of a Software License Agreement more details on page 36 For up-to-date information on programs, please visit and/or subscribe to our weekly “Events & News” email. To subscribe, text CCCBA to 22828.


MARCH 2014

March 4 | West County Section

March 4 | Bankruptcy Law Section

March 7 | Family Law Section

Personal Injury Law That Non-PI Specialists Should Know

The New Chapter 13 Plan

Special Needs Children: How to Successfully Address Mediation, Custody, Visitation, Support Conservatorships and Other Issues

Topics covered include: • Why Do I Need to Know Basic PI Law? • Handling A Car Crash Claim • Intersection with Other Specialties—Your Clients’ Potential PI Issues Probate law, Immigration law, Criminal law, Workers comp, Bankruptcy. Speaker: Jim Yu Time: 12 pm – 1:30 pm Location: La Strada 2215 Church Lane, San Pablo MCLE: 1 hour general MCLE credit Cost: $10 for section members, free for law student members, $15 for CCCBA members, $20 for non-members. Attendees will pay for their own lunch at the venue. Registration: Online at

March 11 | Alternative Dispute Resolution Section

Mediation Research: What We Know About What Works Gary Weiner is the Director of The Appellate Mediation Group, Former Director of the Mediation Program of the CA Court of Appeal, First District in San Francisco. Snacks and beverages will be provided. Speaker: Gary Weiner Time: 6 pm – 7:30 pm Location: CCCBA Office, 5th Floor Conference Room, 2300 Clayton Road, Concord MCLE: 1.5 hours general MCLE credit

An in-depth discussion and analysis of filling out the new Oakland Chapter 13 plan, including how to calculate the plan payment, figure out the monthly calculations and plan term. A must-attend for anyone in the Chapter 13 area. Lunch will be provided. Speaker: Andrew Christensen Time: 12 pm – 1:30 pm Location: CCCBA Office, 5th Floor Conference Room, 2300 Clayton Road, Concord

Time: 1:30 pm – 5 pm Location: Contra Costa Country Club 801 Golf Club Road, Pleasant Hill

MCLE: 1 hour general MCLE credit

MCLE: 3 hours Family Law Specialization credit

Cost: $25 for section and law student members, $35 for CCCBA members, $45 for non-members

Cost: $75 for section and law student members, $100 for CCCBA members, $150 for non-members

Registration: Online at

Registration: Go to the Family Law website at

More Info: Contact Theresa Hurley at (925) 370-2548

More Info: Contact Therese Bruce at (925) 930-6789

March 18 | Employment & Elder Law Sections

March 20 | Criminal Law Section

Wage and Hour Issues for Personal Attendants, Effects of New Overtime

What Criminal Law Attorneys Should Know about Civil Rights Law

Who is covered, what it means, how California statute intersects with the state Wage Orders and current and anticipated federal laws and regulations. Miles Locker is considered one of the foremost experts of wage and hour law in California. As the head of the legal department of the State Labor Commissioner’s office and as a senior attorney there, Miles has been involved in interpreting and enforcing California’s wage and hour laws for over 20 years.

Join us for this fascinating look at the current legal issues found at the intersection of criminal litigation and civil rights. What do you need to know in order to protect your criminally charged client’s civil rights causes of action? What is the state of the law on medical treatment for the incarcerated client? Well respected attorneys, and trial teammates, Andrew Schwartz and Karen Snell will provide us with an in-depth look at relevant statutory and case law.

Speaker: Miles Locker, Esq., Locker Folberg, LLP

Cost: $10 for section and law student members, $15 for CCCBA members, $25 for non-members

Time: 11:45 am – 1 pm

Registration: Online at

MCLE: 1 hour general MCLE credit

More Info: Contact Theresa Hurley at (925) 370-2548

Speakers: Hon. Christopher Bowen Virginia George, Esq James Paulsen, L.C.S.W.

Location: Scott’s Seafood Restaurant 1333 N. California Blvd., Walnut Creek Cost: $40 for section members, $35 for law student members, $45 for CCCBA members, $50 for non-members Registration: Online at

Speakers: Andrew Schwartz, Certified Trial Specialist Karen Snell, Esq. Time: 12 pm – 1:15 pm Location: CC Superior Court Dept. 33, 2nd Fl., (Judge Austin’s Courtroom), 725 Court St., Martinez MCLE: 1 hour general MCLE credit Registration: Online at



March 21 | Real Estate Section

March 26 | Appellate Section

March 27 | Intellectual Property Section

Recent Developments in ADA Litigation: Striking a Balance Between Discrimination and Frivolous Lawsuits

A Conversation with Presiding Justice Ignazio J. Ruvolo

Anatomy of a Software License Agreement

Join First District Court of Appeal Division 4’s Presiding Justice, Ignazio J. Ruvolo, and Appellate Practice Section Chair Gary A. Watt for a conversation on appellate practice, pitfalls and pet peeves. This is a Brown Bag lunch.

Light breakfast included.

Speakers: Hon. Ignazio J. Ruvolo, Presiding Justice, First District Court of Appeal, Division 4 Gary A. Watt, Esq., Partner, Certified Appellate Specialist, Archer Norris, CCCBA Appellate Section Chair

Time: 7:30 am – 9 am

Speaker: Jason Gong, Esq. 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 More Info: Contact Theresa Hurley at (925) 370-2548

Time: 12:15 pm – 1:15 pm Location: Archer Norris 2033 N. Main Street, Ste. 800, Walnut Creek MCLE: 1 hour Appellate Law Specialization credit Cost: $15 for section members, $25 for CCCBA members, $35 for non-members

Speakers: Terence N. Church, Partner, Brown Church & Gee, LLP Jaime Herren, Attorney, Doyle Low, LLP Location: Conference Room 100 Pringle Ave., Walnut Creek MCLE: 1 hour general MCLE credit Cost: $5 for section and law student members, $10 for CCCBA members, $20 for non-members Registration: Online at More Info: Contact Theresa Hurley at (925) 370-2548

Registration: Online at April 3 | Barristers/Young Lawyer’s Section

April 3 | Women’ Section

April 9 | Family Law Section

Ethics 101 for New Attorneys

Annual Wine Tasting & Silent Auction Benefitting the Hon. Patricia Herron and Hon. Ellen James Scholarship Fund

Government Benefits as an Element of Income for Support

SAVE THE DATE! Please join us in honoring CCC Superior Court Judge Clare Maier for her dedication to the Women’s Section and women’s issues. Proceeds from this event benefit the Hon. Patricia Herron & Hon. Ellen James Scholarship Fund. Delicious wines and tasty hors d’oeuvres! More details to come!

Time: 12 pm – 1:15 pm

Time: 5:30 pm – 7:30 pm

Registration: Go to the Family Law website at

Lunch will be provided. Speakers: Jerome Fishkin Mary Grace Guzman Time: 12 pm – 1:30 pm Location: CCCBA Office, 5th Floor Conference Room, 2300 Clayton Road, Concord MCLE: 1 hour Legal Ethics credit Cost: $10 for section members, $25 for CCCBA members, $30 for non-members Registration: Online at More Info: Contact Theresa Hurley at (925) 370-2548


MARCH 2014

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

Speaker: Comm. Anita Santos, Social Security Benefits Attorney Location: Contra Costa Country Club 801 Golf Club Rd., Pleasant Hill MCLE: 1 hour general MCLE credit Cost: $50 for section members and law student members, $75 for CCCBA members, $100 for non-members

More Info: Contact Therese Bruce at (925) 930-6789

April 18 | Real Estate Section

April 22 | Estate Planning & Probate Section

April 24 | Criminal Law Section

Addressing Ground Contamination Issues in Commercial and Residential Real Estate Transactions

21st Annual Estate Planning Symposium

Immigration Law Training for the Criminal Practitioner

Co-sponsored by Wealth Management at Mechanics Bank.

Topics to be covered: • What to do if your client has an immigration detainer. • What is an immigration detainer? • Types of individuals that are at risk for immigration detention and deportation • How does Department of Homeland Security identify individuals for investigation and deportation? and more. Lunch will be provided.

Speaker: James Arnold 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 More Info: Contact Theresa Hurley at (925) 370-2548

Speakers to be announced soon. Registration - 12:30 pm – 1 pm Program - 1 pm – 4:15 pm Reception catered by Scott’s Seafood to follow program. Time: 12:30 pm – 4:15 pm Location: Lesher Center for the Arts 1601 Civic Drive, Walnut Creek MCLE: 3 hours EP/T & Probate Specialization credit Cost: $75 for section members, $25 for law student members, $90 for CCCBA members, $95 for non-members Registration: Online at More Info: Contact Theresa Hurley at (925) 370-2548

May 6 | CCCBA

23rd Annual Food From the Bar Drive

Bench/Bar Roundtable

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

Members of the CCCBA are invited to attend a meeting with Civil Court Judges. This program is free. Lunch and 1 general MCLE credit are included. Please RSVP so we will know how much lunch to order. This is a unique opportunity. We hope to see you there!

This year marks the 23rd 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. This year’s goal is $100,000 and 10,000 pounds of food. Do your part to feed the hungry in your area. Participate in Food From the Bar! To donate or for more info, go to

Speakers: Hon. Steve Austin Hon. Laurel Brady Hon. Judith Craddick Hon. Barry Goode, Presiding Judge Time: 12 pm – 1:15 pm Location: Wakefield Taylor Courthouse Dept. 9, Room 320 (Judge Craddick’s room) 725 Court Street, Martinez MCLE: 1 hour general MCLE credit Registration: Online at More Info: Contact Theresa Hurley at (925) 370-2548

Time: 12 pm – 1:15 pm Location: CCCBA Office, 5th Floor Conference Room, 2300 Clayton Road, Concord MCLE: 1 hour general MCLE credit Cost: $20 for section members, $30 for CCCBA members, $35 for non-members Registration: Online at


April 28 - May 9 | Food From the Bar

Speaker: Spojmie Nasiri, Esq., Certified Immigration Specialist



CLASSIFIEDS CONCORD OFFICE SPACE AVAILABLE Near downtown Concord and BART. 1 or 2 offices with library, kitchen, receptionist areas, client waiting area. Free parking. Overflow cases possible. Call Joe at (925) 687-9121.


2700 sq.ft. 2nd story professional law office space for lease ($2700/mo) in Martinez. Has 3 windowed offices, open cubicle area, patio, garage, reception area and conference room. Near county courthouse & downtown shops. Video tour: Call Eugene Ross (925) 372-8400.

ATTORNEY & FIDUCIARY SUPPORT SERVICES Conservator, Probate, Estate Accounting. Expert witness, professional; timely excellence. Loren R. Acuña, MBA, CPFL #534 | (925) 906-1882 THE ACE FIDUCIARY GROUP

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Upscale office in class A building with Mt. Diablo view and ready-to-use secretarial station. Includes receptionist, conf. room (w/ access to second conf. room), copier & postage machine with billing systems, reduced phone and internet charges through group and wireless network. Adjacent to athletic club; across the street from BART. Call Candice Stoddard (925) 942-5100.

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“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


MARCH 2014

Youngman & Ericsson, LLP 5,16, 18, 23 Zandonella Reporting Service . . . . . 11


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

2121 N. California Blvd.  Suite 210 Walnut Creek, CA 94596

925.930.7388 fax



MARCH 2014