Specialized Tax Services, Inc. and David Pathe have been the architects of numerous very successful tax appeals, some of which have been noted by the California Court of Appeals.


Treasure Chest Advertising Company, Inc. (TCA) v. County of Los Angeles (1997)

The California Court of Appeals agreed with TCA that the Los Angeles County Assessorís Office has not valued the printing equipment of TCA correctly. This resulted in refunds of hundreds of thousands of dollars to the company.

Robert E. Milhous v. Franchise Tax Board (FTB) (2005, 131 Cal App 4th 1260)

The prior shareholders of Treasure Chest Advertising Company, Inc. were assessed $2,000,000 by the FTB on income from a covenant not to compete. After paying the assessed taxes, the Milhouses brought an action for a refund. The trial court found that the covenant not to compete had no value in California and produced no income attributable to California. The amount assessed was reduced to zero.

Robert E. Milhous v. Franchise Tax Board (FTB) (2005)

The trial court awarded the taxpayers a total of $244,276.17 in litigation costs under the provisions of the California Revenue and Tax Code when the FTB takes a position that is not substantially justified. The trial court refused to award the Milhouses the balance of their fees and costs including $123,251.16 they paid a litigation support firm, Specialized Tax Services, Inc. (STS).

The California Court of Appeals ruled that the taxpayers are entitled to a reimbursement of all fees in pursuing a refund claim against an unwarranted assessment. However, the trial court record was not sufficient to support the award of fees for Specialized Tax Services, Inc. As a result of the Court of Appeals decision, and a request to supplement the trial court record, the taxpayers received 90% of their trial court and Court of Appeals attorney fees, costs, and those fees for Specialized Tax Services, Inc. (STS) for a total in excess of $600,000.

 

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