The Alabama Supreme Court has ruled in favor of Phenix City in its long-running battle with Russell County regarding the distribution of gas tax proceeds.
In addition to the fact that Russell County has to restart distributing gas tax revenues to Phenix City, it is estimated that, to date, the amount owed by Russell County to Phenix City for previously collected taxes is around $2.5 million.
To review the Supreme Court's Opinion, click here.
Proposed Alabama legislation in the upcoming 2025 General Session would exempt sales of optical aids, including eyeglasses and contact lenses from sales and use tax.
To see the proposed bill, click here.
The Alabama Department of Revenue has now certified a new regulation detailing the collection and reporting requirements for accommodation intermediaries and providers for lodgings tax purposes.
The regulation provides details on the required annual informational report to be filed electronically by April 20th each year, with the first report due no later that April 20, 2026.
The requirements are for accommodations transactions occurring on or after January 1, 2025.
To view the new regulation, click here.
The Alabama Tax Tribunal, in its Opinion and Final Order in Voncille Pompey v. State of Alabama Department of Revenue, Docket No. P. 23-1048-JP (November 19, 2024), upheld the Revenue Department’s assessment of “paid tax return preparer” penalties against Ms. Pompey for 2019, 2020, and 2021 in the amounts of $5,100, $10,200, and $10,250, respectively.
The Department’s
investigation began when the Department received a return with a suspiciously
large loss reported on Schedule C. On further investigation of the internet
protocol (IP) address used to file the return, the Department found
approximately 100 returns filed from the same address. Many of those returns
featured large business losses on Schedule C without any documentation to
substantiate the claimed losses.
Inquires of the
taxpayers involved in those returns led the Department to Ms. Pompey, who was identified
by several of them as someone who they paid to prepare their returns.
At the hearing
before the Tax Tribunal, Ms. Pompey denied being a paid tax return preparer,
instead claiming she “would simply answer tax questions when someone called her
and offer them [advice] concerning how and where to find the answers to their
questions.” When confronted with evidence that she was paid by some of the
taxpayers, she stated that the payments she received were only “donations”
in an amount that varied depending on the extent to which she had to help them.
Not surprisingly, the Tax Tribunal concluded the “donations” were indeed payments for tax preparation and that Ms. Pompey was subject to the requirements imposed on paid tax return preparers. Therefore, the Tribunal upheld the assessment of the penalties imposed.
To read the details of the case, click here.
In a recent Final Order issued by the Alabama Tax Tribunal in the case of Raja J. Vrettos v. State of Alabama Department of Revenue, Docket No. INC. 22-132-LP (November 26, 2024), the Tribunal voided a final assessment for income tax against the taxpayer with a made for TV movie storyline.
The taxpayer presented substantial evidence
that included a sham marriage to a doctor that was already married, domestic violence,
harassment, health care fraud, bank fraud, aggravated identity theft, and
making false statements – all by her alleged husband.
The Tribunal, after considering all of the evidence, concluded that the taxpayer was credible and that she did not receive the compensation indicated on the Form 1099-MISC. As a result, the final assessment for 2012 income tax was voided. To read this fascinating Final Order, click here.
