Category: News Feeds

Last
April,
the
public
learned
that
superstar
Beyoncé
underwent
an
IRS
tax
audit.
At
the
end,
the
IRS
proposed
that
she
pays
over
$2.7
million
for
taxes,
penalties,
and
interest.
But
she
is
fighting
it
and
taking
the
IRS
to
court.

The
proposed
bill
was
due
to
the
auditor
denying
various
business
and
personal
deductions.
Some
of
the
larger
ones
included
$473,738
in
legal
and
professional
service
fees,
$761,455
in
other
expenses,
charitable
contributions
of
$868,766
carried
over
from
a
previous
year,
and
over
$3.3
million
in
depreciation
expenses.

Beyoncé
filed
a
petition
to
the
United
States
Tax
Court.
The
petition
did
not
say
much
other
than
the
IRS
determinations
were
incorrect.
The
IRS
filed
its
answer
to
the
petition
last
June.

It
should
be
noted
that
as
Beyoncé
and
her
husband
Jay-Z
have
substantial
wealth
and
are
one
of
music’s
power
couples,
she
could
pay
the
proposed
tax
due.
If
she
did,
Beyoncé
can
also
sue
the
IRS
in
federal
district
court
or
the
Court
of
Federal
Claims
instead
of
going
to
the
U.S.
Tax
Court.
These
courts
only
have
refund
jurisdiction
over
federal
tax
issues.

Why
would
a
taxpayer
want
to
go
to
the
other
courts
rather
than
the
U.S.
Tax
Court?
Sometimes
case
law
from
the
Court
of
Federal
Claims
may
be
more
favorable
to
the
taxpayer.
In
district
courts,
a
jury
can
decide
the
case
assuming
the
case
is
not
decided
through
a
summary
judgment.
The
right
jury
can
be
sympathetic
to
the
taxpayer-plaintiff’s
side
of
the
story
and
may
be
inclined
to
rule
in
her
favor.
But
a
jury
composed
of
mostly
middle-class
W-2
employees
could
look
down
on
the
plaintiff
trying
to
take
an
aggressive
tax
deduction.

Unfortunately,
the
payment-in-full
requirement
puts
these
courts
out
of
reach
for
most
taxpayers
although
the
option
is
still
available
even
if
substantial
time
has
passed.

Beyoncé’s
case
will
soon
be
assigned
to
an
IRS
appeals
officer
in
the
hopes
that
they
settle
as
many
issues
as
possible.
Appeals
officers
generally
try
to
settle
the
case.
Or
at
the
very
least
narrow
the
issues
to
promote
case
efficiency.
They
have
the
authority
to
concede
questionable
issues
if
there
is
a
chance
that
the
court
will
not
rule
in
favor
of
the
IRS.

According
to

Section
1.1.7.1
of
the
Internal
Revenue
Manual,
the
mission
of
the
Independent
Office
of
Appeals
is
to
resolve
federal
tax
controversies
without
litigation
on
a
basis
which
is
fair
and
impartial
to
the
government
and
the
taxpayer,
promotes
a
consistent
application
and
interpretation
of,
and
voluntary
compliance
with,
the
federal
tax
laws,
and
enhances
public
confidence
in
the
integrity
and
efficiency
of
the
Internal
Revenue
Service.

The
outcome
of
the
case
will
depend
on
the
how
the
IRS
appeals
officer
and
attorney
assigned
to
this
case
will
approach
it.
Given
Beyoncé’s
superstar
status
and
the
publicity
it
has
generated,
they
will
give
special
attention
to
this
case
as
it
will
have
an
effect
on
public
compliance
and
respect
for
the
tax
laws.
A
hard-lined
approach
could
make
taxpayers
and
tax
professionals
think
twice
before
taking
an
aggressive
tax
deduction.
But
if
the
IRS
is
seen
as
being
cruel
or
as
unfairly
targeting
someone,
it
could
trigger
public
backlash.
This
can
lead
to
congressional
hearings
where
Democratic
and
Republican
politicians
are
likely,
for
different
reasons,
to
publicly
admonish
the
IRS.

The
notice
of
deficiency
stated
that
certain
expenses
were
disallowed
because
Beyoncé
or
her
representative
did
not
furnish
information
needed
to
support
the
claimed
deduction.
This
seems
strange
as
it
isn’t
an
outlandish
assumption
that
Beyoncé
has
a
full-time
assistant
or
bookkeeper
who
would
keep
adequate
records.
It
may
be
possible
that
the
documentation
was
misplaced
and
may
turn
up
later.

Also,
the
IRS
denied
most
of
the
other
business
expenses
for
2018
because
the
auditor
claimed
that
the
business
expenses
claimed
were
not
paid
and
that
the
expenses
were
not
ordinary
or
necessary
to
her
business.
I
do
not
know
what
these
other
expenses
are,
but
entertainers
have
certain
expenses
that
could
raise
eyebrows
at
an
audit.
Clothing
is
a
good
example
of
this.
For
clothing
purchases
to
be
tax
deductible,
they
cannot
be
suitable
for
everyday
wear.
Also,
the
cost
must
be
reasonable.

I
did
a
Google
search
on
Beyoncé’s
concert
outfits
and,
in
my
Gen
X
opinion,
they
are
not
appropriate
for
everyday
wear,
even
under
modern
standards,
as
they
would
attract
attention.
As
such,
wearing
these
outfits
on
the
street
would
be
problematic
for
Beyoncé’s
safety
as
it
would
draw
a
mob
of
fans
demanding
a
Destiny’s
Child
reunion.

If
settlement
talks
with
the
appeals
officer
fails,
then
the
case
will
be
prepped
for
trial
and
sent
to
an
IRS
attorney.
It
is
possible
that
the
attorneys
could
try
to
settle
the
case
as
well.

Most
tax
court
cases
settle
although
sometimes
a
high-profile
case
may
result
in
a
trial
and
a
detailed
opinion.
For
example,
a
few
years
ago,
the

Tax
Court
decided
on
the
valuation
of
Michael
Jackson’s
assets
at
the
time
of
his
death.
Beyoncé’s
case
is
likely
to
settle
as
well
so
long
as
the
missing
documents
are
produced
and
questionable
issues
are
resolved
by
all
parties.

---

Steven
Chung
is
a
tax
attorney
in
Los
Angeles,
California.
He
helps
people
with
basic
tax
planning
and
resolve
tax
disputes.
He
is
also
sympathetic
to
people
with
large
student
loans.
He
can
be
reached
via
email
at



stevenchungatl@gmail.com.
Or
you
can
connect
with
him
on
Twitter
(@stevenchung)
and
connect
with
him
on LinkedIn.

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It
felt
like
a
regular,
taco-less
Tuesday.
We
woke
up
yesterday
in
a
world
where
Taco
John’s
(and,
in
New
Jersey,
a
place
called
Gregory’s)
claimed
dominion
over
the
phrase
“Taco
Tuesday”
and
Taco
John’s
did
not
shy
away
from

hurling
legal
threats
at
anyone
who
hoped
to
embark
on
the
alliterative
culinary
adventure.
But
then
Taco
Bell
filed

a
pair
of
petitions
with
the
Trademark
Trial
and
Appeal
Board
—
and

brought
LeBron
into
it
somehow
—
seeking
to,
as
they
put
it,

liberate
the
trademark
for
the
world.

And,
yesterday,

Taco
John’s
agreed
to
abandon
the
mark
and
create
a
true
Taco
Tuesday
for
the
ages.

“We’ve
always
prided
ourselves
on
being
the
home
of
Taco
Tuesday,
but
paying
millions
of
dollars
to
lawyers
to
defend
our
mark
just
doesn’t
feel
like
the
right
thing
to
do,”
Taco
John’s
CEO
Jim
Creel
said
in
a
statement.

I
wouldn’t
buy
this
“woe
is
us”
routine
from
a
dollar
menu.
Taco
John’s
gleefully
paid
law
firms
to
fire
off
bullying
letters
to
local
businesses
around
the
country.
In
2010,
it
threatened
to
sue
Iguana
Grill
in
Oklahoma
City
for
attaching
the
phrase
to
its
$1
taco
promotion
and…

Taco
John’s
doesn’t
even
operate
in
Oklahoma.
Those
mom-and-pop
establishments
also
relented
rather
than
pay
lawyers,
so
this
isn’t
a
novel
concept
for
the
corporate
chain.

The
company
also
“announced
it
would
spend
money
it
would
have
given
to
its
lawyers
on
a
charitable
donation,
giving
$40,000
to
the
nonprofit

Children
of
Restaurant
Employees,
which
supports
workers
and
their
families
through
health
crises
and
natural
disasters.”
Which
is
certainly
a
welcome
donation,
but…
they
just
said
they
would’ve
spent
“millions
of
dollars”
on
lawyers,
but
when
it
comes
to
charity
they
could
only
come
up
with
roughly
the
equivalent
of
hiring
TWO
minimum
wage
workers
in
Montana
(a
state
where
they
do
operate).

More
likely,
Taco
John’s
spoke
with
lawyers
willing
to
level
with
the
company
that
the
case
looked
bleak.
Despite
all
the
cease-and-desist
efforts,
Taco
Tuesday
has
entered
the
zeitgeist
and
can’t
be
readily
identified
with
Taco
John’s
(or
Gregory’s)
anymore.

It’s
also
a
victory
for
the
strategy
of
litigation
as
marketing.
Not
a
publicity
stunt,
mind
you,
but
a
real
legal
claim
crafted
with
an
eye
toward
publicity.
Taco
Bell’s
attorneys
from Pirkey
Barber
filed
petitions
that
covered
the
substantive
bases
while
piquing
media
interest
by
lacing
in
quotable,
funny
lines.
While
this
took
it
up
a
notch,
it’s
not
the
first
time
Taco
Bell
recognized
that
legal
can
contribute
to
sales…

In
any
event,
the
Taco
Tuesday
tiff
positioned
Taco
Bell
as
the
“cool”
taco
chain
trying
to
push
back
on
a
silly
legal
quirk.
Everyone
wrote
about
it
and
a
whole
bunch
of
random
folks
became
armchair
IP
lawyers
over
it.

Even
if
they
lost,
they
would’ve
“won.”

But
they
did
not
lose,
and
have
successfully
opened
up
Taco
Tuesday
to
49
states.
The
ban
lives
on,
for
now,
in
New
Jersey.
Why
do
you
gotta
be
weird,
New
Jersey?

‘Taco
Tuesday’
belongs
to
us
all,
after
Taco
John’s
gives
up
trademark
[Washington
Post]

Earlier:

‘Taco
Tuesday’
Trademark
Challenge
A
Win-Win
Proposition
For
Taco
Bell

---

Joe
Patrice is
a
senior
editor
at
Above
the
Law
and
co-host
of

Thinking
Like
A
Lawyer.
Feel
free
to email
any
tips,
questions,
or
comments.
Follow
him
on Twitter if
you’re
interested
in
law,
politics,
and
a
healthy
dose
of
college
sports
news.
Joe
also
serves
as
a

Managing
Director
at
RPN
Executive
Search.

Unlikely
though
it
may
seem,
I
have
a
bit
of
a
special
fondness
for
Justice
Brett
Kavanaugh.
This
might
have
something
to
do
with
the
fact
that
his
personal
finances
were
the
subject
of

my
first
substantive
column
when
I
started
writing
for
ATL
five
years
ago.

Plus,
you’ve
just
got
to
be
able
to
find
something
to
like
about

a
guy
who
shouts,
“I
still
like
beer!”
at
the
U.S.
Senate.
While
he
has
certainly
made
some
bad
decisions
as
a
Supreme
Court
justice,
and
despite
the
allegations
raised
at
his
confirmation
hearings,

he
does
at
least
occasionally
buck
partisan
expectations
to
make
the
right
call
in
a
case.
That’s
admirable.

So,
when
I
heard
Kavanaugh
was
going
to
speak
at
the
Eighth
Circuit
Judicial
Conference,
I
thought
it
would
be
worth
my
time
to
fill
out
the
press
registration
paperwork.
The
event
did
not
disappoint.

The
first
thing
that
struck
me
about
Kavanaugh
in
person
was
his
overwhelming
physical
ordinariness.
Had
he
not
been
sitting
up
on
stage
speaking
during
his
allotted
time,
I’m
not
sure
I
would
have
recognized
him.
He
could
be

Tom
Wambsgans’
older
brother.

As
soon
as
he
opened
his
mouth,
though,
the
façade
of
intense
regularity
crumbled.
Kavanaugh
is
a
very
smart,
well-spoken
guy.
He’s
charming.
And
that
voice
is
quite
distinctive.

The
format
was
a
question-and-answer
session
with
a
pair
of
interviewers
(both
federal
judges
themselves).
A
good
deal
of
the
time
was
spent
exploring
the
day-to-day
operations
of
the
Supreme
Court.

How
often
do
the
justices
all
have
lunch
together?
About
65
times
each
year
(and
the
rule
at
lunch
is
that
you
can’t
talk
about
work).
What
does
a
typical
day
look
like
for
the
justices?
Mostly
reading
alone,
and
writing,
writing
more,
and
rewriting,
although
oral
argument
weeks
are
more
of
a
flurry
of
activity.
What
should
a
justice
look
for
in
selecting
a
Supreme
Court
law
clerk?
Someone
who
both
has
the
backbone
to
tell
you
when
you’re
wrong
and
can
easily
get
along
with
three
dozen
other
law
clerks.

Kavanaugh
really
was
at
his
finest
when
discussing
work
at
the
Supreme
Court
that
he’s
most
proud
of.
“Racism
has
no
place
in
the
criminal
justice
system,”
he
said,
citing

his
concurrence
in

Ramos
v.
Louisiana
which
indeed
dissects
the
racist
origins
of
non-unanimous
jury
verdicts.
Kavanaugh
also
mentioned
his
concurrence
in

NCAA
v
Alston
where

he
sharply
criticized
NCAA
practices
as
potential
antitrust
violations.
Kavanaugh
is
well-known
as
a
sports
fanatic
and
quite
a
bit
less
well-known
for
his
interest
in
antitrust
law.

There
were
many
moments
of
levity.
The
crowd’s
favorite,
based
on
the
volume
of
laughter,
was
when
Kavanaugh
was
asked
about
the
Supreme
Court’s
take
on
the
use
of
technology
in
the
legal
profession.
“We’re
probably
not
at
the
forefront,”
he
cut
in
with
perfect
timing,
leaving
his
response
at
that.

Of
course,
there
were
undercurrents
of
some
not-at-all
funny
themes
as
well.
Kavanaugh
repeatedly
claimed
the
Supreme
Court
has
lived
up
to
deciding
cases
on
the
ephemeral
idea
of
“the
law”
rather
than
on
a
partisan
or
political
basis.
The
idea
that
“the
law”
is
a
tangible
unchanging
thing
written
down
clearly
somewhere
and
Supreme
Court
justices
are
simply
discovering
it
for
us
might
satisfy
a
certain
segment
of
the
lay
population,
but
any
decent
lawyer
can
see
how
many
Supreme
Court
rulings
not-so-coincidentally
align
with
the
political
viewpoints
justices
were
specifically
selected
to
promote.

When
asked
about

the
recent
spate
of
Supreme
Court
ethics
scandals,
Kavanaugh
deferred
to
what
Chief
Justice
John
Roberts
said
about
that
(which

hasn’t
been
much).
To
be
fair,
Kavanaugh
himself
hasn’t
been
personally
embroiled
in
these
particularly
controversies.

Subjectively,
I
started
to
feel
a
little
dizzy
when
I
thought
too
much
about
the
power
in
that
room.
The
person
up
on
stage,
even
if
he’d
really
believed
it
to
be
the
right
call
legally,
had
a
direct
hand
in

a
decision
that
will
result
in
thousands
of
unaddressed
pregnancy
complications,
thousands
of
preventable
medical
issues,
thousands
of
unwanted
children
coming
into
the
world.
The
room
was
packed
with
judges.
Years,
decades,
centuries
of
human
lifespan
had
been
confined
to
the
penitentiary
by
the
people
in
that
room.
My
queasiness
subsided
after
the
session
in
the
long
line
for
the
men’s
room,
waiting
to
unzip
my
trousers
and
relieve
myself
like
everyone
else.
The
lot
of
us
were
only
regular
human
beings
after
all.

Well,
there’s
a
little
glimpse
into
the
Eighth
Circuit
Judicial
Conference,
and
specifically
Kavanaugh’s
remarks.
There
were
other
interesting
goings
on
—
I’ve
got
to
at
least
mention
that
the
Honorable
Billy
Roy
Wilson
is
a
delightful
man
—
but
I
suppose
those
are
stories
for
another
time.
Perhaps,
one
day,
we
can
talk
it
through
over
beers
with
Justice
Brett
Kavanaugh.

---

Jonathan
Wolf
is
a
civil
litigator
and
author
of Your
Debt-Free
JD


(affiliate
link).
He
has
taught
legal
writing,
written
for
a
wide
variety
of
publications,
and
made
it
both
his
business
and
his
pleasure
to
be
financially
and
scientifically
literate.
Any
views
he
expresses
are
probably
pure
gold,
but
are
nonetheless
solely
his
own
and
should
not
be
attributed
to
any
organization
with
which
he
is
affiliated.
He
wouldn’t
want
to
share
the
credit
anyway.
He
can
be
reached
at jon_wolf@hotmail.com.

Above
the
Law
publishes
an
in-house
compensation
report
every
year,
and
it’s
time
once
again
to
update
our
data.
If
you’re
an
in-house
attorney,
please
take
our

brief
survey.

How
are
corporate
counsel
faring
this
year
compared
to

previous
years?
How
much
does
compensation
vary
by
company
size,
industry,
market
size,
or
geographic
region?
Has
the
gender
pay
gap
narrowed?

Please
take
our

short
survey and
help
us
share
this
crucial
benchmarking
information.
The
survey
is,
as
always, completely
anonymous and
won’t
take
more
than
a
few
minutes.

The
newest
edition
of

Hillman
on
Documenting
Secured
Transactions:
Effective
Drafting
and
Litigation,
recently
published
by
PLI
Press,
updates
an
authoritative
treatise
with
best
practices
from
a
21st-century
perspective.
Designed
as
a
useful,
accessible
resource,
the
book
covers
significant
amendments
made
in
2022
to
the
Uniform
Commercial
Code
(UCC)
designed
to
accommodate
emerging
technologies.
We
spoke
with
author
Thomas
S.
Hemmendinger,
of
Brennan,
Recupero,
Cascione,
Scungio
&
McAllister,
LLP
in
Providence,
Rhode
Island.

What
makes
this
book
a
useful
resource
for
lawyers
working
today?

Since
the
book
compiles
and
organizes
relevant
case
law
from
all
jurisdictions,
lawyers
get
a
jump
start
in
developing
and
supporting
the
legal
arguments
they’ll
need
in
court
to
enforce
security
interests.
The
book
puts
more
than
60
years
of
UCC
Article
9
jurisprudence
in
context,
so
lawyers
can
tell
which
case
law
is
still
useful
in
interpreting
the
latest
version
of
Article
9.

This
book
also
provides
both
the
legal
framework
and
practical
guidance
on
how
to
document
a
secured
transaction
today
in
a
way
that
capitalizes
on
the
benefits
that
secured
lenders
will
get
when
the
2022
UCC
technology
amendments
become
law.

Your
treatise
is
one
of
the
first
on
the
market
to
address
the
extensive
2022
amendments
to
the
UCC.
What
was
your
involvement
in
drafting
these
amendments?
How
did
you
become
interested
in
the
topic?

In
2018,
the
Uniform
Law
Commission
(ULC)
and
the
American
Law
Institute
(ALI),
who
are
the
UCC’s
co-sponsors,
began
a
comprehensive
study
and
drafting
project
to
accommodate
emerging
technologies.
As
a
member
of
the
ULC,
I
was
privileged
to
serve
on
the
study
and
drafting
committees.
In
2022,
both
the
ULC
and
ALI
approved
our
proposed
amendments.

My
interest
in
the
Code
began
in
1982
when
Bill
Hillman,
the
original
author
of
this
book,
hired
me
as
a
law
clerk.
After
law
school,
I
joined
Bill’s
law
firm
as
an
associate
and
later
became
a
partner.
Throughout
my
career,
most
of
my
work
has
involved
the
Code
in
some
manner,
especially
commercial
loan
transactions
and
workouts,
receiverships,
and
bankruptcies.

What
are
some
highlights
of
the
2022
amendments
practitioners
should
be
familiar
with?

The
2022
amendments
affect
nearly
every
article
of
the
Code,
but
those
with
the
biggest
effect
on
secured
transactions
include:

• A
  new
  Article
  12
  on
  controllable
  electronic
  records
  (CERs),
  including
  most
  “digital
  assets.”
  The
  Code
  already
  covers
  CERs
  as
  general
  intangibles.
  However,
  Article
  12
  creates
  a
  new
  regime
  for
  perfecting
  a
  security
  interest
  in
  a
  CER
  through
  control,
  making
  CERs
  much
  more
  readily
  transferrable
  and
  financeable,
  because
  someone
  who
  perfects
  a
  security
  interest
  in
  a
  CER
  by
  control
  has
  priority
  over
  security
  interests
  perfected
  through
  other
  means,
  such
  as
  the
  filing
  of
  a
  financing
  statement.
• A
  purchaser
  (including
  a
  secured
  party)
  who
  acquires
  a
  CER
  in
  good
  faith,
  for
  value,
  and
  without
  notice
  of
  a
  property
  claim
  to
  the
  CER
  actually
  takes
  the
  CER
  free
  of
  that
  claim.
  This
  makes
  a
  CER
  that
  evidences
  a
  right
  to
  payment
  (a
  “controllable
  payment
  intangible”
  under
  the
  amendments)
  the
  functional
  equivalent
  of
  a
  negotiable
  electronic
  promissory
  note.
• The
  CER
  concept
  can
  also
  be
  applied
  to
  accounts
  receivable.
  A
  “controllable
  account”
  is
  an
  account
  where
  the
  customer
  agrees
  to
  pay
  whoever
  is
  in
  control
  of
  the
  CER
  that
  evidences
  the
  account.
• Obligor-friendly
  rules
  on
  who
  is
  entitled
  to
  payment
  on
  one
  of
  these
  digital
  assets
  when
  control
  is
  transferred.
• CERs
  are
  designed
  to
  handle
  not
  only
  the
  latest
  technology,
  but
  also
  any
  future
  technologies.
  Before
  the
  2022
  amendments,
  the
  law
  assumed
  that
  a
  digital
  asset
  exists
  only
  as
  a
  single,
  unique
  original
  thing,
  whereas
  many
  digital
  assets
  reside
  in
  systems
  that
  use
  distributed
  ledger
  technologies,
  such
  as
  a
  blockchain,
  where
  multiple
  originals
  may
  exist.
• These
  innovative
  concepts
  have
  been
  adapted
  to
  chattel
  paper
  (payment
  obligations
  secured
  by
  specific
  goods)
  and
  documents
  of
  title
  (bills
  of
  lading
  and
  warehouse
  receipts).
• Many
  conforming
  changes
  to
  ensure
  that
  the
  CER-related
  changes
  dovetail
  into
  Article
  9’s
  existing
  rules.
• Finally,
  the
  cleansing
  of
  outdated
  Code
  requirements
  for
  paper
  documents
  where
  an
  electronic
  document
  will
  work
  in
  practice.

What
are
some
risks
practitioners
should
be
aware
of
when
documenting
secured
transactions?

Some
of
the
most
common
mistakes
include
not
understanding
what
Article
9
does
and
does
not
cover,
thereby
failing
to
comply
with
the
right
set
of
laws,
as
well
as
failing
to:
properly
describe
the
collateral
in
the
security
agreement
or
in
the
UCC-1
financing
statement;
use
the
correct
debtor
name
on
the
UCC-1
financing
statement;
or
appreciate
the
need
for,
and
how
to
draft,
intercreditor
or
subordination
agreements,
when
multiple
parties
have
an
interest
in
the
collateral.
Each
of
these
could
result
in
the
partial
or
complete
loss
of
the
client’s
collateral.

The
book
gives
sensible
guidance
on
how
to
avoid
these
mistakes.