Brotman Law

The Good and Bad News for Amazon Sellers

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Hi I’m Sam Brotman here with Brotman law in San Diego and this blog post is the good and bad news for Amazon salaries so it’s been any of you got the email and our where California has issued a formal legal demand Amazon and tomorrow Amazon will be turning over its seller information to the state of California so that California can go back and potentially go after people who have not been collecting and remitting sales tax in California so since this email came out last week we’ve spoken with a number of Amazon sellers and I’ve done a number of consulates with people kind of giving them you know the advice that we would give them at a consult based on their particular situation and a lot of the things that come out of those consults are some misconceptions and some misinformation surrounding this process so I wouldn’t take the opportunity to get on with you today and to address a lot of these things because I think they’re important and.

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Common Misconceptions Among Amazon Sellers

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Good Morning of my name is Sam Brockman I am a sales and use tax attorney with Brotman law here in San Diego and I wanted to do a short video this morning to clear up a lot of common misconceptions among Amazon sellers so I’ve been talking with a lot of people who received notices from California and December and they’re the January 15th deadline to become registered has now passed and in a lot of the conversations with Amazon sellers that I’m having there are some common misconceptions in those conversations as well as some things that I’ve seen that are posted online that are not exactly true or that are misleading, so I wanted to post a quick video to get the right information out there and in helping you guys to make some informed decisions with respect to this so first of all I would just want to give you an idea of where we’re coming from as a law firm with respect to this issue so even though this is a legal issue what is of most importance to most people is the business ramifications of this decision so and really our job as a law firm is to help our clients identify manage and mitigate risk so to the extent that we can’t mitigate a risk we need to manage it in.

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The Truth About CA AB 147 and the Impact on Amazon Sellers

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Good Morning this is attorney Sam Brockman with Brotman law here at San Diego and the title of this video blog post is California a B 147 and its impact on Amazon sellers so I’ve been getting a lot of questions over the last two weeks about the proposed legislation in California which is California a B 147 and what it means for Amazon sellers and there has been a great amount of confusion with our current clients with some of the prospective clients that called us and then generally in the community about what the bill is and what it means so I finally had an opportunity to sell out last night and read through the whole bill and so I wanted to share some of my thoughts on what the bill proposes to do what it does not do and then the ultimate impact on the Amazon community as a whole so California a B 147 is a direct response by California to the Wayfarer decision and what that means is the very first thing that a B 147 does is it expands.

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How Does California Locate Taxpayers and Their Assets?

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So this is actually a very interesting subject and something that we as tax practitioners talk about quite frequently. So the first way that California tracks you is through any filings that you do with the state. So for example, everybody in California files a tax return with the Franchise Tax Board and you have an address on them. So they use the address based on your FTB returns and the addresses that are submitted to third parties like banks and credit institutions and things like that to track your current information. Number two is they pull your credit report. So the same credit report that you can pull through Experian or TransUnion the state of California has access to and they can use it to locate taxpayers and their assets. Number three is California gets data from the IRS. So the IRS has a much more expanded database of taxpayer information and particularly for taxpayers that have moved out of California or might be in other places. The federal government is often a much more reliable and more accurate source of information.

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How Does an IRS Payment Plan Work?

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So an IRS payment plan and negotiating one is both an art and a science. Let’s talk about the science side of things. So IRS payment plans start based on a formula and the formula looks at the available assets that a taxpayer has and the IRS determines whether the taxpayer could full pay or substantially pay the liability based on the value of those assets. So for example if you owe the government $50,000 and you have $50,000 sitting in your bank account, the IRS is going to want that absent some good reason. So they go through your expenses, they look at your house, in certain cases they look at the equity in your house, can you borrow against any assets, things like that. If they determine that you don’t have sufficient equity in your assets, then it becomes an income and expense analysis they look at your various sources of income they usually average it over a three-month period and then they’ll look at your ordinary and necessary living expenses. So the real kicker with this is the term ordinary and necessary. The IRS has standards and they’re based on both national standards and local living standards on how much things should cost. So like for example, with your housing the IRS has an average based on where you live of how much housing is in your area. If you go to.

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