Category Archives: Litigation

EB-5 区域中心 地平线上有暴风雨吗?

Coleman Jackson,律师,注册会计师
2017 年 4月 11日

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2017年3月20日,美国公民及移民服务局公布《EB-5区域中心合规审计计划》的启动。将实施E-B-5合规审计计划核实区域中心是根据《EB-5移民投资者区域中心计划》遵守适用法律和归类管理他们的区域中心资格的当局。

美国公民及移民服务局的声明说 EB-5 审计小组的任务将包括以下内容:

  • 审查申请、认证和相关记录;
  • 审查区域中心的公共记录和信息;
  • 核实信息,包括连同申请书和在年度认证里提交的支持文件;
  • 进行现场视察;
  • 审查和分析文件;
  • 面试人员以确认与申请及年度认证一起提供的信息。

2017年3月20日的公告也就EB-5区域中心合规审计他们的区域中心的准备程序向EB-5区域中心提供具体的指导。

EB-5区域中心合规审计结果将在审计报告中定稿,该报告会成为EB-5投资者区域中心记录的一部分。审计将用于衡量或确定EB-5区域中心是否遵守指导《EB-5移民投资者区域中心计划》的法律、法规和政策。欺诈迹象可能导致EB-5区域中心的额外调查和审查。

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区域中心的创始人、建议确定他们和与登记和归档区域中心申请相关的其他人的专业人士受许多法律的约束,包括但不限于联邦和州安全法、移民法、税法等等。请看美国诉奥康纳,158 F.附录2d 697 (E.D. 弗吉尼亚州 2001);在这起刑事案件中,一位EB-5移民投资者区域中心的创始人被判犯有移民欺诈、骗税和其他严重犯罪的同谋罪。州 法律也适用于EB-5投资者不受欢迎的投资,取决于投资、由区域中心向公众提供的产品、商品和服务的性质。一些法律实践纪律将可能牵涉到EB-5区域中心 -移民法只是区域中心创 始人和那些代表其向美国移民局提出申请的人可能出现法律危险的一个方面。即使区域中心能够完好无损地幸免于最近公布的E5-5区域中心合规审计,这种调查可能会发现其他由联邦和州当局提出的适用联邦和州法律出生要求的违反以及甚至由移民投资者基于违约、欺诈等等而提出的诉讼。这种州法律要求已经在德克萨斯州发生。

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《德克萨斯商业和商务法案》§27.01 实行投资者在进入房地产或股票交易时所依赖的事实的虚假陈述的民事责任。美国Quest公司诉基蒙斯,228 F 3rd 399, 406 (5th Cir. 2000)。近年来,普通法欺诈、违约、过失虚假陈述、引诱性的欺诈及其他有关索偿时而已经在德克萨斯联邦和州法院就EB-5投资成功地进行辩论。例如,Zhang诉Monroe,民事诉讼编号6:13-CV-811 于2017年1月11日在美国德克萨斯泰勒区东区区法院对Lihua Zhang(EB-5投资者)做出有利的决定。Zhang是本案的原告;她在联邦法院的本多样性诉讼中提出了许多州法院主张 – 而且她赢了- 涉及不受欢迎的“EB-5移民投资者计划”冒险行动。Lake诉 Cravens 488 S.W. 3rd 867(德克萨斯附录,- 沃斯堡2016,本人)中;原告没有恰当地提出联邦问题或宣称多样性,然后被扔出了法庭。在诉讼中陈述实质事实和适当辩护需要技巧。在与案情无关的程序上,诉讼可能和是迷失的。该诉讼Lake诉 Cravens关注了EB-5移民投资者区域中心投资。

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尽职调查可能拯救EB-5移民投资者的法院之旅;或当他们去法院时帮助他们。考虑投资EB-5区域中心的移民投资者必须在把他们的钱交给区域中心之前进行适当的尽职调查。重要的是要清楚地了解谁拥有和经营区域中心;他们的经济记录是怎样(不仅限于特定的推广中的区域中心,还有在大体上管理团队在业务上的整体商业头脑、声誉和成功率);和区域中心投资回报是什么,如果有的话。

本法律博客是由教育目的的专业公司Coleman Jackson 的税收|诉讼|移民法律公司撰写;它不在法律公司与读者之间创建律师客户关系。你应该在你的地理地点就任何影响你、你家人或企业的法律问题咨询法律顾问。

专业公司Coleman Jackson |税收、诉讼、移民法律公司| 英文 (214) 599-0431 |西班牙语(214) 599-0432 | http://www.cjacksonlaw.com.

 

EB-5 REGIONAL CENTERS Are there Storms on the Horizon?

By Coleman Jackson, Attorney, CPA
April 05, 2017

EB-5 REGIONAL CENTERS - Are there Storms on the Horizon?

On March 20, 2017, USCIS announced the launch of an EB-5 Regional Center Compliance Audit Program.  The E-B-5 Regional Center Compliance Audit will be conducted to verify that the regional center is in compliance with applicable laws and authorities governing their eligibility for classification as a regional center under the EB-5 Immigrant Investor Regional Center Program.

The USCIS announcement stated that the EB-5 Audit Team’s Tasks will include the following:

  • Review applications, certifications, and associated records;
  • Review public records and information on the regional center;
  • Verify the information, including supporting documents, submitted with the application(s) and in the annual certification(s);
  • Conduct site inspection;
  • Review and analyze documents;
  • Interview personnel to confirm the information provided with the application(s) and annual certification(s).

The March 20, 2017 announcement also provided specific guidance to EB-5 Regional Centers with respect to preparation procedures for an EB-5 Regional Center Compliance Audit of their regional center.

The results of the EB-5 Regional Center Compliance Audit will be finalized in an audit report that becomes part of the EB-5 Investor Regional Center’s record.  The audit will be used to gage or determine whether the EB-5 Regional Center is in compliance with the laws, regulations and policies governing the EB-5 Immigrant Investor Regional Center Program.  Indicia of fraud could lead to additional investigations and scrutiny of the EB-5 Regional Center.

EB-5 Regional Center Compliance Audit Program

Founders of Regional Centers, professionals advising in establishing them and others connected with registering and filing regional center applications are subject to a host of laws, including but not limited to, federal and state securities laws, immigration laws, tax laws and more.  See United States v. O’Connor, 158 F. Supp. 2d 697 (E.D. Va. 2001); in this criminal case, an EB-5 Immigrant Investor Regional Center’s founder was found guilty of conspiracy to commit immigration fraud, tax fraud and other serious crimes.    State laws could also apply to EB-5 investor ventures gone sour depending upon the nature of the investment, the products, goods and services provided to the public by the regional center.  A number of legal practice disciplines could be implicated with respect to EB-5 Regional Centers—immigration law is only one area where legal jeopardy could arise for regional center founders and those who file applications with USCIS on their behalf.  Even if a regional center can survive the recently announced E5-5 Regional Center Compliance Audit without-a-scratch, such investigations could uncover violations of other applicable federal and state laws birthing claims by federal and state authorities and even lawsuits by immigrant investors based on breach of contract, fraud and more.   Such state law claims are already occurring in Texas.

EB-5 Regional Center  are Subject to Civil Liability

Texas Business & Commerce Code §27.01 imposes civil liability for false representations of material facts that are relied on by an investor in entering into a real estate or stock transaction.  U.S. Quest Ltd. V. Kimmons, 228 F 3rd 399, 406 (5th Cir. 2000).  In recent years, common law fraud, breach of contract, negligent misrepresentation, fraud in the inducement and other related claims have been sometimes successfully argued in federal and state courts in Texas with respect to EB-5 investments.  For example, Zhang v. Monroe, Civil Action No. 6:13-CV-811 was decided in favor of Lihua Zhang an EB-5 Investor on January 11, 2017 in the United States District Court for the Eastern District of Texas, Tyler Division.    Zhang was the Plaintiff in this court case; she raised numerous state court claims in this diversity action in federal court -and she won- involving a soured EB-5 Immigrant Investor Program venture.  In Lake v. Cravens 488 S.W. 3rd 867 (Tex. App., – Fort Worth 2016, no pet); the Plaintiff did not properly plead a federal question or allege diversity and got thrown out of Court.  Alleging material facts and properly pleading in a lawsuit requires skill.  Lawsuits can and are lost on procedural grounds that has nothing to do with the merits of the case.  That case, Lake v. Cravens concerned a soured EB-5 Immigrant Investor Regional Center venture.

Due diligence could possibly save an EB-5 immigrant investor

Due diligence could possibly save an EB-5 immigrant investor a trip to the courthouse; or help them when they go to court.  Immigrant investors considering investing in an EB-5 Regional Center must engage in proper due diligence before turning their money over to a regional center.  It is important to have a clear understanding as to who owns and operates the regional center; what their economic track record is (not only with respect to the specific regional center being marketed, but, the management teams’ overall business acumen, reputation and success rate in business in general); and what are the return on the regional center investment, if any.

This law blog is written by the Taxation | Litigation | Immigration Law Firm of Coleman Jackson, P.C. for educational purposes; it does not create an attorney-client relationship between this law firm and its reader.  You should consult with legal counsel in your geographical area with respect to any legal issues impacting you, your family or business.

Coleman Jackson, P.C. | Taxation, Litigation, Immigration Law Firm | English (214) 599-0431 | Spanish (214) 599-0432

Foreigners and Persons Purchasing and Selling United States Real Property Interests to and from Foreigners Must Consider U.S. Tax Consequences

By:  Coleman Jackson, Attorney, CPA
October 05, 2016

Foreigners are subject to United States tax laws under certain circumstances.  Resident and nonresident aliens (foreigners) are taxed differently under U.S. tax laws.

Here are realities effecting buying and selling United States Real Property Interests to or from Foreigners:  Foreigners are subject to United States tax laws under certain circumstances.  Resident and nonresident aliens (foreigners) are taxed differently under U.S. tax laws.

Resident aliens (Green Card Holders and foreigners meeting the substantial presence test) are taxed in the United States, generally speaking, the same way United States citizens are taxed under 26 United States Code.  Resident’s are taxed on their worldwide income, from whatever source, the same as United States citizens regardless where they reside and regardless where the income is earned.  Resident foreigners use the same tax tables as U.S. citizens.

Nonresident foreigners (foreigners who do not meet the substantial presence test or Green Card) are taxed based on the source of their income and whether or not their income is effectively connected with a United States trade or business.  Nonresident foreigner’s income from sources within the U.S. is subject to U.S. income tax and must be separated into two pools as follows:

a) Income that is effectively connected with a trade or business in the United States, and
b) Income that is not effectively connected with a trade or business in the United States

Income in pool (a) is taxed at the same graduated tax rates as applied to U.S. citizens. Income in pool (b) is taxed at a flat thirty percent (30%) tax rate or lower tax treaty tax rate.

Special tax rules apply to nonresident foreigners purchasing or selling United States Real Property interest.  Gains and losses from the sale or exchange of United States real property interests are taxed as if the foreigner is engaged in a trade or business in the United States.

Moreover, special tax withholding rules under 26 U.S.C. (Internal Revenue Code) requires under certain circumstances for buyers buying United States Real property from a foreigner to withhold taxes unless certain exemptions are applicable.  United States real property interest is defined as real estate located inside the United States, and includes amongst other things, residential single family homes, multi-unit dwellings, commercial buildings and so forth.  It is extremely important to consult legal counsel concerning tax law implications; and other not so obvious legal hazards, when buying United States real property interest from a foreigner.  Your typical real estate agent or broker is not a lawyer and cannot lawfully advise parties in a real property transaction regarding tax implications and other legal jeopardy concerns associated with real property interest dispositions involving foreigners.

What exactly is the withholding requirement associated with buying United States real property interests from a foreigner?  Internal Revenue Code Sec. 1445 (a) imposes a duty on buyers to withhold income tax on dispositions of U.S. real property interests involving nonresident foreigners.   The law imposes legal liability on the buyer for the tax due on the transaction if the buyer fails to comply with IRC Sec. 1445 (a).

Any buyer or transferee purchasing or exchanging a United States real property interest with a nonresident foreigner before February 17, 2016 must withhold a tax equal to 10% of the amount realized on the disposition.  For U.S. real property interests purchased or exchanged with a nonresident foreigner after February 16, 2016, the rate of withholding is generally 15% unless the property is going to be used by the buyer as a residence and the amount realized does not exceed $1,000,000.  In that case, the withholding tax remains at 10%.  These withholding obligations are the responsibility of the buyer of U.S. real property interests from nonresident foreigners; which means, buyers are exposed to potential tax liability or jeopardy if they fail to withhold the required tax in the correct amount at the time of closing the real property transaction.  The withholding requirement is based on the gross amount realized; which means, real estate commissions are not subtracted in applying the correct withholding tax percentage.

This withholding provision potentially creates a genuine conflict of interest between a buyer and their realtor or broker.  Likewise a conflict of interest could likely exist between a nonresident foreigner selling  U.S. real property interests and their real estate agent or broker,  especially involving the exemptions availability and selection of buyers .  It is probably prudent for buyer and seller of real property interest involving nonresident foreigners to have their independent legal counsel separate and distinct from their respective real estate agents or brokers because tax laws are implicated with potential for substantial financial consequences could have impact on real estate selling decisions by buyers and sellers of U.S. real property interest involving nonresident foreigners. Also, nondiscrimination laws in sale and purchase of real estate in the United States could impact these transactions.

But as for the exemptions to the withholding requirement; the following are very broad generalizations concerning exemptions that could apply (depending on all the facts and circumstances) to the withholding requirements of IRC Sec. 1445:

The buyer is not required to withhold any amount under Sec. 1445 (a) if one or more of the following applies to the transaction:

  1. The nonresident foreigner supplies an affidavit testifying that they are not a foreign person;
  2. Private domestic corporation supplies an affidavit testifying that their interests in the corporation is not an United States real property interests;
  3. IRS issues a qualifying statement to buyer (or seller) satisfying the requirements set forth in IRC Sec. 871(b)(1) or 882(a)(1);
  4. The amount realized on the U.S. real property interests transaction does not exceed $300,000 and the buyer intends to use the real property as its residence; or
  5. A wash sale is involved pursuant to IRC Sec. 8997(h) (5).

These exemptions have been abbreviated and only state the basic nature of the statutory exemption.  As with any statute effected parties must consult the applicable Internal Revenue Code Section(s), Internal Revenue Regulation(s), Revenue Ruling(s), Tax Court Opinion(s) and decision(s) of other Courts having interpreted and established precedence regarding how and when these tax withholding exemptions might or might not apply to withholding of tax on dispositions of United States real property interests involving nonresident foreigners.  Anyone buying or selling U.S. real property interest to a nonresident foreigner should perform their due diligence prior to entering an earnest money contract or any other kind of contract of purchase.  Likewise foreigners should perform their due diligence regarding applicable tax laws and other U.S. laws before entering into U.S. real property interest transactions involving nonresident foreigners.  Unintended tax consequences could lurk behind every U.S. real property interest transaction involving nonresident foreigners as well as exposure to unintended consequences of other state and federal laws governing disposition of real property interest.

This law blog is written by the Taxation | Litigation | Immigration Law Firm of Coleman Jackson, P.C. for educational purposes; it does not create an attorney-client relationship between this law firm and its reader.  You should consult with legal counsel in your geographical area with respect to any legal issues impacting you, your family or business.

Coleman Jackson, P.C. | Taxation, Litigation, Immigration Law Firm | English (214) 599-0431 | Spanish (214) 599-0432

Consequences to Employers Who Hire Undocumented Workers

September 16, 2016
By:  Coleman Jackson, Attorney

D:\Surat-work\cjacksonlaw.com\SEO\13.Apr.2015\Blogs\Sep 2016\Real Consequences to Employers Who Hire Undocumented Workers

Immigration law imposes certain hiring requirements on employers under the Immigration and Nationality Act (INA) section 274A.  The law requires every employer to maintain up-to-date Form I-9 demonstrating that they are in compliance with their responsibility to ensure that workers hired or recruited are authorized to lawfully work in the United States.  Hiring undocumented workers is illegal in the United States. 

Violations of these hiring requirements could lead to civil fines, criminal prosecution; debarment from government procurement contracts, and possibly violation of anti-discrimination laws which prohibit discrimination against workers based on nationality.

In addition to the legal jeopardy employers face who hire undocumented workers, from a practical perspective, publicly disclosed Form I-9 audit investigation information gives competitors a wealth of information, some of it quite proprietary and quite often this publicly disclosed I-9 investigation information is used by competitors to poach customers or otherwise secure competitive commercial advantage over companies suspected of hiring undocumented workers.    Competitive disadvantage is a very real possibility for an employer being investigated by Immigration Customs Enforcement suspected of hiring undocumented workers.

Companies who rely on government procurement contracts as a main stay of their revenue stream, also-  in the real world- has an awful lot to lose when hiring undocumented workers.   Government contract violators can be debarred from any future participation in government procurement which could mean bankruptcy for the offending government contractor.

So, from a real world perspective, the biggest dangers of non-compliance with immigration employment laws governing hiring undocumented workers under current U.S. Government immigration enforcement practices are (a) debarment of government contractors and (b) loss of competitive advantage due to disclosure of private company information to competitors and disparagement in the public eye.

For the last few years, criminal penalties don’t seem to be the weapon of choice in enforcement of Form I-9 regulations.  But this could change!

Over the last few years, civil money penalties have been the legal weapon used with regularity to enforce Form I-9 prohibitions against employers hiring or continuing to employ a person, or recruiting or referring for a fee a person, knowing that the person is not authorized to work in the United States are as follows:

Civil Violations First Offense   Second Offense   Third Offense  
  Minimum Maximum Minimum Maximum Minimum Maximum
Hiring or continuing to employ a person, or recruiting or referring for a fee, knowing that the person is not authorized to work in the United States. $375 for each undocumented worker $3,200 for each undocumented worker $3,200 for each undocumented worker $6,500 for each undocumented worker $4,300 for each undocumented worker $16,000 for each undocumented worker

Employers desiring to expand its work force by use of foreign labor need to make all efforts to do so legally by filing proper immigration petitions with the Department of Homeland Security and  obtaining certifications from the Department of Labor (when required).  Under current immigration laws, there are regulations and procedures by which an employer can legally hire temporary and permanent skilled and unskilled foreign workers.  Employers can pursue these processes with counsel of an immigration attorney.  Finally, employers should annually review their Form I-9 practices and policies under the watchful eye of an immigration lawyer to ensure compliance with employment immigration laws against hiring, recruiting or continuing to employ undocumented workers to limit or minimize their exposure to the civil, criminal, public shame, and competitive disadvantage risks we discuss in this blog.

 

This law blog is written by the Taxation | Litigation | Immigration Law Firm of Coleman Jackson, P.C. for educational purposes; it does not create an attorney-client relationship between this law firm and its reader.  You should consult with legal counsel in your geographical area with respect to any legal issues impacting you, your family or business.

Coleman Jackson, P.C. | Taxation, Litigation, Immigration Law Firm | English (214) 599-0431 | Spanish (214) 599-0432

Government Contracts are Different from Contracts between Ordinary Parties

By:  Coleman Jackson, Attorney, CPA
March 10, 2016

Government Contracts are Different from Contracts between Ordinary Parties

Contracting with the United States Government is different from contracting with an ordinary party.  Government Contracts differ from normal contracts in a number of ways.  The U.S. government has the exclusive right to decide who the government will do business with.  In government procurement law, the term ‘government contract’ is defined as any agreement or modification thereof between any entity, individual or person and the U.S. Government for the purpose of providing goods or services.  This definition of government contracts covers parties contracting directly with the government and those supplying goods and services indirectly to the government; such as, subcontractors and sub-sub contractors.  Government contracts do not have to be in writing to be enforceable.

Most importantly, the terms and conditions applicable to a government contract do not have to be agreed to by the parties

Most importantly, the terms and conditions applicable to a government contract do not have to be agreed to by the parties.  In fact the contracting party may not even be aware of all the regulations, executive orders and government policies and rules that are applicable to their government contracts.   For example, Executive Order No. 11246, Sec. 202(1) mandates that every nonexempt government contract contain a clause under which the employer agrees not to discriminate in employment on the basis of race, color, religion, sex or national origin.  All nonexempt government contractors must comply with this Executive Order and others that require government contractors to affirmatively put in place policies and procedures to comply with affirmative action employment policies, maintain suitable compliance records, and make them available for audit and inspection by U.S. Department of Labor investigators.  The very first Executive Order concerning equal protection of all U.S. citizens in government procurement was enacted by President Franklin D. Roosevelt.  President Roosevelt prohibited discrimination by government contractors and all Presidents since him have followed his example with respect to government procurement.

Affirmative Action and equal employment policies in government procurement are only one example of how the government achieves social and economic national policies through the U.S. government’s procurement of goods and services.  The President and governmental agencies run the government by enacting executive orders and writing and enforcing regulations.  In 1952, the U.S. Supreme Court ruled that President Truman’s executive order seizing the steel mills were unlawful.  The basic rule established by the Court in Youngstown Sheet & Tube Co. v. Sawyer, 343 U.S. 579, 72 S. Ct. 863, 96 L. Ed. 1153 (1952) is simple, if the executive acts pursuant to congressional authority, the executive action is lawful; and if the executive acts against congressional authority, as President Truman did in seizing the steel mills, the executive action is unlawful.  In Youngtown, Congress had expressly refused to authorize seizure of the steel mills.  The actual implementation of this rule can be extremely nuanced and complicated as to determining whether an executive order or administrative regulation is -with or without- congressional authority.

Contracting with the U.S. Government is different from contracting with ordinary parties.  Compliance with applicable governmental policies, rules and regulations are extremely important.  Ignorance of government regulations and executive orders can destroy your business because executive orders and regulations apply to government contracts even if the actual contract never mentions them.  Agency regulations and Executive Orders have the full force and effect of law if they do not conflict with an express Congressional statute.  Maryland Cas. Co. v. United States, 251 U.S. 342, 349 (1920).

 Government Contractor’s ignorance of the law is no valid excuse. 

You can follow our blog post by visiting our Taxation, Litigation & Immigration Law Firm’s Website at www.cjacksonlaw.com.

This government contracting law blog is written by the Taxation | Litigation | Immigration Law Firm of Coleman Jackson, P.C. for educational purposes; it does not create an attorney-client relationship between this law firm and its reader.  You should consult with legal counsel with respect to any specific contract issues impacting you, your family or business.

Coleman Jackson, P.C. | Taxation, Litigation, Immigration Law Firm | English (214) 599-0431 | Spanish (214) 599-0432 

When Are Lost Profits Recoverable in a Texas Breach of Agreement Case?

By Coleman Jackson, Attorney & Counselor at Law
January 29, 2016

When Are Lost Profits Recoverable in a Texas Breach of Agreement Case?

Lost Profits in a Texas breach of agreement case cannot be speculative; nor does an aggrieved party in Texas have to prove lost profits by exacting calculations or precise mathematical calibrations.  In order to recover lost profits in a Texas breach of agreement case, Texas courts have repeatedly stated that an aggrieved party must bring forth sufficient competent evidence to give the trial jury the ability to determine the net amount of the lost profits with a reasonable degree of certainty.

Opinions and speculations by accountants, economists and others with respect to the amount of the lost profits are not sufficient.  Expert opinions in Texas lost profit cases require that opinions, estimations and determinations of lost profits be based on objective facts, verifiable data and mathematical principles from which the net amount of lost profits can be reasonably ascertained.

Juries weigh the testimony, documents and other evidence and give it the credibility they deem appropriate.  Therefore to the extent net profits are presented by competent, credible witnesses it improves the probability of an award of lost profits in a breach of agreement case.  Furthermore, competent, credible corroborating evidence is essential in breach of agreement cases where the aggrieved party is seeking lost profits.  Corroborating evidence is typically in the form of historical financial data which demonstrates past profitability; or futures contracts; such as, contracts that have already been executed which allows the computation of lost profits, or other credible hard evidence that the alleged lost profits are not merely speculations are absolutely necessary to prove lost profits in a Texas breach of agreement case.

Bottom line, when a Texas litigant is seeking lost profits in a breach of agreement case; they must not only plead lost profits, but also produce objective facts evidencing lost profits. 

Follow Our Taxation | Litigation | Immigration Law Blog Posts

You can follow our blog post by visiting our Taxation, Litigation & Immigration Law Firm’s Website at www.cjacksonlaw.com.

This law blog is written by the Taxation | Litigation | Immigration Law Firm of Coleman Jackson, P.C. for educational purposes; it does not create an attorney-client relationship between this law firm and its reader.  You should consult with legal counsel with respect to any specific contract issues impacting you, your family or business.

Coleman Jackson, P.C. | Taxation, Litigation, Immigration Law Firm | English (214) 599-0431 | Spanish (214) 599-0432