Real Estate Dealings Lead to Most Legal Malpractice Lawsuits
Malpractice suits are prevalent for various workers in numerous industries, but recent findings indicate they are the most common for real estate professionals over the last reporting period.
According to the American Bar Association survey, "Profile of Legal Malpractice Claims: 2008-2011," insurers reported a higher percentage of real estate professional liability claims than any other area. In the last five surveys, personal-injury plaintiff matters topped the list.
The type of activity that generated the most malpractice claims in this survey was "preparation, filing, and transmittal of documents, while "advice" jumped up to the second spot. "Failure to file a document - no deadline," dropped out of the number two spot and fell to the bottom third percentage of all individual errors.
IRS Lists Dirty Dozen Tax Scams
The Internal Revenue Service lists its annual "Dirty Dozen" common tax scams that often peak during the tax filing season. Beware of claims that sound too good to be true, the IRS urges. The agency warns that taxpayers who buy into illegal tax scams can end up facing significant penalties and interest and even criminal prosecution.
Taxpayers who believe they are at risk of identity theft due to lost or stolen personal information should immediately contact the IRS so the agency can take action to secure their tax account. If you have received a notice from the IRS, call the phone number on the notice. You may also call the IRS's Identity Protection Specialized Unit at 800-908-4490. Find more information on the identity protection page on IRS.gov.
Phishing typically involves an unsolicited email or a fake website that seems legitimate but lures victims into providing personal and financial information. Once scammers obtain that information, they can commit identity theft or financial theft. The IRS does not initiate contact with taxpayers by email to request personal or financial information. This includes any type of electronic communication, such as text messages and social media channels. If you receive an unsolicited email that appears to be from the IRS, send it to email@example.com.
RETURN PREPARER FRAUD
Although most return preparers are reputable and provide good service, you should choose carefully when hiring someone to prepare your tax return. Only use a preparer who signs the return they prepare for you and enters their IRS Preparer Tax Identification Number (PTIN). For tips about choosing a preparer, visit www.irs.gov/chooseataxpro.
HIDING INCOME OFFSHORE
One form of tax evasion is hiding income in offshore accounts. This includes using debit cards, credit cards or wire transfers to access those funds. While there are legitimate reasons for maintaining financial accounts abroad, there are reporting requirements taxpayers need to fulfill. Failing to comply can lead to penalties or criminal prosecution. Visit IRS.gov for more information on the Voluntary Disclosure Program.
Beware of scammers who prey on people with low income, the elderly and church members around the country. Scammers use fliers and ads with bogus promises of refunds that don't exist. The schemes target people who have little or no income and normally don't have to file a tax return. In some cases, a victim may be due a legitimate tax credit or refund but scammers fraudulently inflate income or use other false information to file a return to obtain a larger refund. By the time people find out the IRS has rejected their claim, the promoters are long gone.
IMPERSONATION OF CHARITABLE ORGANIZATIONS
Following major disasters, it's common for scam artists to impersonate charities to get money or personal information from well-intentioned people. They may even directly contact disaster victims and claim to be working for or on behalf of the IRS to help the victims file casualty loss claims and get tax refunds. Taxpayers need to be sure they donate to recognized charities.
INFLATED INCOME AND EXPENSES
Falsely claiming income you did not earn or expenses you did not pay in order to get larger refundable tax credits is tax fraud. This includes false claims for the Earned Income Tax Credit. In many cases the taxpayer ends up repaying the refund, including penalties and interest. In some cases the taxpayer faces criminal prosecution. In one particular scam, taxpayers file excessive claims for the fuel tax credit. Fraud involving the fuel tax credit is a frivolous claim and can result in a penalty of $5,000.
FALSE FORM 1099 REFUND CLAIMS
In this scam, the perpetrator files a fake information return, such as a Form 1099-OID, to justify a false refund claim.
Promoters of frivolous schemes advise taxpayers to make unreasonable and outlandish claims to avoid paying the taxes they owe. These are false arguments that the courts have consistently thrown out. While taxpayers have the right to contest their tax liabilities in court, no one has the right to disobey the law.
CLAIMING ZERO WAGES
Filing a phony information return is an illegal way to lower the amount of taxes an individual owes. Typically, scammers use a Form 4852 (Substitute Form W-2) or a "corrected" Form 1099 to improperly reduce taxable income to zero. Filing this type of return can result in a $5,000 penalty.
Scammers improperly use third parties or form corporations that hide the true ownership of the business. They help dishonest individuals underreport income, claim fake deductions and avoid filing tax returns. They also facilitate money laundering and other financial crimes.
MISUSE OF TRUSTS
There are legitimate uses of trusts in tax and estate planning. But some questionable transactions promise to reduce the amount of income that is subject to tax, offer deductions for personal expenses, or reduce estate or gift taxes. Such trusts rarely deliver the promised tax benefits. They primarily help avoid taxes and hide assets from creditors, including the IRS.
Supreme Court Hears Argument Involving JohnstonTobey Client
The US Supreme Court recently heard arguments in a legal malpractice case arising out of a patent infringement lawsuit filed on behalf of a JohnstonTobey client.
The high court heard arguments in Gunn v. Minton over whether federal or state courts have jurisdiction in legal malpractice cases arising out of patent infringement cases. Federal courts hear most cases in the patent area.
JohnstonTobey filed the legal malpractice case on behalf of Vernon Minton, a software developer who claimed that his lawyers mishandled a patent infringement case he filed against NASDAQ. The defense in this case wanted the decision made in state court, while the Minton side was defending a Texas Supreme Court decision.
JohnstonTobey partner Randy Johnston says it’s odd defending a Texas decision at the US Supreme Court. ”I’m struck with the irony that it’s my job to protect the integrity of the decision of the Texas Supreme Court,” says the legal malpractice attorney, “because they are generally not known as a plaintiff’s friendly court. But we’re going to do it.”
Johnston says having a case heard by the US Supreme Court is an honor that comes with a price tag when you’re on a contingent fee, which he is in this case, but it’s an honor that shows the importance of malpractice cases his firm handles.
Court of Appeals Rules in Favor of Johnston In Dispute with Dallas Judge
Randy Johnston has long demanded a certain standard of conduct from members of the justice system. This is at the heart of his dispute with District Judge Carlos Cortez that came to a head this fall.
The Sixth Court of Appeals in Texarkana ruled that Cortez’s deposition and two witness statements that he wanted to keep from public view are court records and, therefore, should be made public.
According to the Sixth Court’s opinion in Cortez v. Johnston, et al, this dispute “had its roots in the filing by Johnston of a complaint against Cortez with the State Judicial Conduct Commission, wherein Johnston alleged that Cortez had (among other things) publicly demeaned other judges and was rumored to have consorted with prostitutes and used illicit drugs.”
The dispute has gone on for nearly two years, with various legal moves by both sides. Finally, it came down to whether the judge’s deposition and the witness statements would be made public. Intervening in the appeal were The Dallas Morning News, Texas Lawyer and Judge Marty Lowy, one of Cortez’s fellow judges that he verbally harassed to begin this entire process.
The dispute culminated in the opinion of the Sixth Court of Appeals. All that remains of the case is to release the documents.
Legal Malpractice Lawyer Describes Popular Scams to Financial Group
DALLAS, TX -- (BUSINESSWIRE) -- Attorney Randy Johnston told company treasurers and chief financial officers how to avoid being cheated by scam artists in a recent speech at the Intercontinental Hotel in Addison.
Addressing the annual TEXPO conference for financial professionals, Johnston used excerpts from his regional bestselling book, Robbed at Pen Point, to describe being cheated by other lawyers, stockbrokers, financial and wealth planners, and “anyone else who will steal your money with a contract or professional degree instead of a gun.”
For almost three decades, Johnston’s practice has emphasized plaintiff’s legal malpractice, stockbroker fraud, accounting malpractice and business disputes.
The Dallas trial lawyer is board certified in civil trial law and has been honored by D Magazine as one of Dallas’ top legal malpractice litigators. He has been featured in Texas Monthly as one of the 100 Top Attorneys in Texas. Texas Lawyer touted him as one of the state’s “Go-to” lawyers in the field of legal malpractice.
Johnston speaks to a wide range of business, professional and parent groups on avoiding scams and schemes. To arrange for him to address your group, contact LawTalkTexas at 214 289-9775 or LawTalkTexas@gmail.com.