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Restaurants have until 2016 to list calories on menus.

Posted on July 16th, 2015

WASHINGTON (AP) — Diners will have to wait until the end of 2016 to find calorie labels on all chain restaurant menus.

The Food and Drug Administration says that restaurants and other establishments will now have until December 1, 2016, to comply with federal menu labeling rules — one year beyond the original deadline.

FDA said it is extending the deadline after restaurants and other retailers said they needed more time to put the rules in place. The agency said those businesses are in the process of training workers, installing menus and menu boards and developing software and technology for more efficient and specific calorie label displays.

The rules will require restaurants and other establishments that sell prepared foods and have 20 or more locations to post the calorie content of food “clearly and conspicuously” on their menus, menu boards and displays. That includes prepared foods at grocery and convenience stores and in movie theaters, bakeries, coffee shops, pizza delivery stores and amusement parks.

The menus and displays will tell diners that a 2,000-calorie diet is used as the basis for daily nutrition, noting that individual calorie needs may vary. Additional nutritional information beyond calories, including sodium, fat and sugar must be available upon request.

The Obama administration has said menu labeling is just one way to combat obesity, since Americans eat and drink about one-third of their calories away from home.

Some of the rules are complicated. In grocery stores, for example, the labeling rules exclude prepared foods that are typically intended for more than one person. That could mean cut fruit or other foods would be labeled in a salad bar, but not in a larger container for sale.

Michael Taylor, FDA’s deputy commissioner for foods, said the agency will issue more detailed guidance later this summer to address some of the restaurants’ and retailers’ questions on the rules.

As they await that guidance, the restaurant industry said the delay would be helpful.

“Some of our members are ready to implement menu labeling while others still need more time,” said Dawn Sweeney, president and CEO if the National Restaurant Association.

The rules had already been delayed when the FDA issued them last November. They were first required by Congress in the 2010 health overhaul, but FDA took several years to write them as supermarkets, convenience stores and pizza delivery companies aggressively lobbied against them. Those businesses said the rules would be more burdensome for them than they would be for restaurants, which typically have more limited offerings.

Rep. Rosa DeLauro, a longtime menu labeling advocate, criticized the FDA’s further delay. She said restaurants and retailers have had enough time.

“Industry is doing everything they can to stonewall implementation of this important public health tool,” she said. “It takes time to change signage, packaging, and data systems. I understand that. But ultimately we need to make sure consumers have nutrition information available to them when making purchasing decisions.”


CEO by age 30?

Posted on July 9th, 2015

A tech executive explains how he achieved that lofty goal himself, albeit a few years beyond 30.

This post is in partnership with Entrepreneur. The article below was originally published at entrepreneur.com.

By John Schwarz, Entrepreneur

When, at age 24, I told my boss (somewhat tongue in cheek) that I wanted to become a CEO, he nearly fell off his chair. It was 1974; I was a software developer working for IBM IBM 0.55% . At that time, lowly engineers were not expected to aspire to roles reserved for successful salespeople.

But my boss’ guidance helped me take a hard look at myself and make becoming the CEO a real objective. I eventually achieved my goal 30 years later at Business Objects, but it took a lot of careful planning, as well as focus and determination.

Today, the path to becoming a CEO can look very different, particularly within tech and internet startups. But the skills required to be an effective leader are the same as ever. These skills typically take a life of experience to acquire, but there are ways to overcome that time challenge. Here are three things you should do to qualify as CEO material, even if you are short on life experience — but still big on energy and bold ideas:

1. Build a team to compensate for your shortcomings.

Even a seasoned executive needs a sounding board of people who can offer guidance, particularly for areas that fall outside his or her core expertise. For young leaders, this is essential, to avoid serious mistakes. Lack of experience can lead to very painful consequences: hiring the wrong people, spending too much money, getting stuck with bad contract terms, or falling afoul of the law — to name just a few.

Consider the example of Mark Zuckerberg and Sheryl Sandberg at Facebook FB 0.43% : He drives the products, while she is the more business-oriented person. They complement each other with their skills, and work together to achieve a common goal of building a successful company. Google GOOG 1.01% co-founders Larry Page and Sergey Brin (both 25 years old when they founded the company) brought in a more experienced Eric Schmidt so that they could gain management depth before taking over in their own right.

When building your leadership team, then, don’t look for people who are exactly like you. Find those who can round you out and challenge you to grow.

2. Use the power of positive — and negative — thinking.

If you are launching a business when you are still in your 20s — without scars from past challenges — you will have some advantages and many disadvantages.

The biggest disadvantage is the lack of a track record, which a potential investor might want to use to evaluate your probability of success. This can be overcome only by spending many hours selling your idea to as many people as will listen to it. In the venture capital universe, Bay Area investors have traditionally been the most willing to take a gamble on an untried team. Another potentially helpful strategy is to hire a more seasoned person to front the fund-raising, but take care not to lose control of the business in the process.

An interesting advantage you may have as a young leader, meanwhile, is the likelihood that you probably do not know what is not possible; yet, you will attempt to do it anyway. This might result in a breakthrough that a more experienced person might miss due to a past negative experience. And that would be wonderful. But real breakthroughs are relatively rare. Most progress is incremental, and to attain incremental success, tapping into the experience of previous successes and failures can be very helpful.

3. Practice humility.

Leaders need to be transparent, and humble when humility is appropriate (which is very often). In fact, intellectual humility — the ability to step back and embrace the better ideas of others — is, for Google (to name one leading company) a more important hiring criterion than credentials. Unfortunately, humility is often perceived as a weakness, when in fact it is one of the greatest strengths a leader can possess.

Humble people listen to and learn from others. They take the backseat when someone more able than themselves is available to solve a problem. They give credit where credit is due. They are less prone to hubris when things go really well. They constantly question their own views and motivation to ensure that they are truly aligned with the desired business outcome. All of these values are essential to build a high-performance organization. But of course business is all about winning.

Being humble is fine, but a leader also must be willing to lead to victory.

So, my advice is to practice humility — just don’t forget to win.


Mass. film tax credit survives in budget

Posted on July 9th, 2015

Mass. film tax credit survives in budget

It’s still “lights, camera, credit” in Massachusetts. Despite the urging of Gov. Charlie Baker to kill the film tax credit, the legislature kept it active as it wrapped up budget negotiations Wednesday for fiscal 2006.

The Boston Globe reported Thursday that Baker, like his predecessor Deval Patrick, criticized the credit as a multimillion-dollar giveaway that was not justified by the amount of economic activity it generated in the state.

“My view has been that the subsidy is not worth the value of the return,” Baker said Wednesday, according to the Globe report. “There are clearly people in the Legislature who disagree with me, but, as I said before, that’s politics. That’s government.”

The $38.1 billion budget is now on the governor’s desk.

Film-industry workers and related professionals organized a lobbying campaign to keep the tax credit active. House Speaker Robert DeLeo agreed with them.

“We feel that it’s good business,” DeLeo said Wednesday, according to the Globe. “I know I’ve talked to small businesses throughout the commonwealth who say when films are made in that particular district, how valuable they can be.”

Worcester has been the site of several Hollywood film crew shoots since the film credit took effect in 2006. The incentive provides for a payroll tax credit of 25 percent.


Protect Your Clients from Trust Scams

Posted on July 8th, 2015

Protect Your Clients from Trust Scams

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JULY 7, 2015
BY SEYMOUR GOLDBERG

Accountants are often selected as trustees of trusts for their clients. But before agreeing to act as trustee, the accountant should understand the time constraints and obligations of a trustee, along with other potential pitfalls, including trust scams.Accountants should determine whether the trust is worthwhile and in the best interest of the client. A client should avoid purchasing a trust that is boilerplate and does not carry out the client’s intentions.

There are many good reasons for establishing trusts. They include    protecting assets, preventing the assets from being dissipated prematurely by heirs, anticipating a will contest, avoiding ancillary probates if the real property is located in multiple jurisdictions, elder law planning, making sure the trust assets are maintained in the family, estate planning, and privacy issues.

There are many reasons for not having a trust, however, such as not having a qualified trustee or sufficient assets to warrant the establishment of a trust. The costs of administering a trust, time demands on the trustee, the death or disability of the trustee of a trust that lasts decades, and complex state trust laws can also make trusts difficult propositions.

Be that as it may, senior citizens are often invited to living trust seminars throughout the United States. These free lunch or dinner trust seminars have been the subject of scrutiny by Attorneys General in a number of states, including California, Michigan, Minnesota, Texas and Washington State. These seminars are often called living trust seminars and use techniques that encourage senior citizens to use revocable living trusts.

There are many good reasons for creating living trusts. However, there are many living trust seminars that take advantage of senior citizens by using scare tactics and that are in essence scams.
It is important that the senior only work with an attorney who is knowledgeable in estate planning. In most jurisdictions, going through probate is not a big deal. Having a revocable living trust does not save estate taxes. A living trust can be expensive initially and costly to administer in many cases after death.

An article by the AARP, “The Truth about Living Trusts,” warns about scams involving living trusts, noting, “Pre-printed, generic forms are often passed off as custom-made documents.”

Several years ago we had a client who set up a living trust to avoid probate after he attended a seminar. The pre-printed document ran well over 125 pages and was impossible to read or understand. He had paid a significant sum of money for the canned trust. I immediately had him take steps to eliminate the trust from his estate plan.

We currently have a client who came to us after the death of her parents. The documents exceeded 60 pages and were riddled with boilerplate language, preprinted in a loose-leaf binder. The trusts were not necessary based on the amount of the probate assets. Most of the assets were retirement accounts. The costs of running these trusts for the probate assets of under $2 million will exceed $50,000.

There are some benefits in living trusts, as the AARP acknowledged: “A properly created living trust can be helpful if you need help managing assets during a disability (and a power of attorney won’t work), if you have children or grandchildren with special needs, or own real estate in more than one state.”

Trusts can often be worthwhile, but they can be costly to administer after the death of a client. Most clients, in my opinion, would not understand the terms of a 60-page trust document even if they read it several times.

The bottom line: don’t do a trust unless you fully understand it and the fact that there are often substantial post-death administrative costs of running the trust.


U.S. Sided with Tax-Avoiding Companies over Contracting Ban

Posted on July 8th, 2015

U.S. Sided with Tax-Avoiding Companies over Contracting Ban

WASHINGTON, D.C. (JULY 6, 2015)
BY ZACHARY R. MIDER

(Bloomberg) The Obama administration quietly handed a victory to U.S. companies that avoid taxes by claiming a foreign address, suggesting that virtually all of them are still eligible for government contracts.

The Department of Homeland Security last year endorsed a legal memorandum that argued in part that a 2002 law banning such companies from federal contracts was invalid, according to a copy of the memo obtained by Bloomberg News. Although President Barack Obama later began publicly criticizing the tax maneuvers known as inversions, there’s no sign that he has reversed the department’s decision.

The March 2013 memo was submitted to Homeland Security by one of the country’s largest inverted companies, the manufacturer Ingersoll-Rand Plc. The company argued in part that U.S. trade agreements with foreign governments invalidated the law that would prohibit it from winning federal contracts.

 In a written response last year, a Homeland Security lawyer cleared Ingersoll-Rand for government work without explaining his reasoning, saying only that “we do not have reason to disagree” with the company’s argument. While it was known that Ingersoll-Rand received a green light, it hadn’t been reported that the government accepted a line of reasoning that called the whole law into question.

The correspondence came during a record wave of corporate address changes, including moves by Burger King and medical device-maker Medtronic Plc. Almost 50 companies have now inverted, most of them in the past five years, and a Congressional panel estimated last year that future inversions would cost the Treasury $19.5 billion in forgone revenue over the following decade.

A Homeland Security spokeswoman said the department follows the law and declined to comment further. The White House also declined to comment.

‘Corporate Deserters’
Rosa DeLauro, part of a group of liberal Congressional Democrats who want to tighten the law, called it “abhorrent” that Homeland Security would allow such companies to get contracts. “The federal government should be making it harder for corporate deserters to get contracts, not easier,” she said in a statement.

The administration’s support for Ingersoll-Rand’s reasoning suggests that bills submitted by DeLauro’s group to expand the contracting prohibition to a broader range of companies would have little or no effect. That’s good news for corporate expatriates like Medtronic, Eaton Corp. and Tyco International Plc, which aren’t covered by the current prohibition but are targets of the Democrats’ bill.

Ingersoll-Rand’s decision to switch its tax address from New Jersey to Bermuda in 2001, after more than a century as an American industrial icon, helped cut hundreds of millions of dollars from its tax bills and spur Congress to pass the 2002 contracting ban.

The company later changed addresses again, to tax-friendly Ireland in 2009, after increased U.S. scrutiny of tax havens. The top executives never left the U.S., and Chief Executive Michael Lamach now runs the company from a suburb of Charlotte, North Carolina. The company makes Club Car golf carts, Trane air conditioners, and Thermo King refrigerated trucks.

Legal Arguments
Ingersoll-Rand provided the memo to Bloomberg News this week on the condition that it not publish the document and that the news organization drop an effort to obtain it through a public-records request filed with Homeland Security last September. Homeland Security had previously disclosed the letter from Principal Deputy General Counsel Joseph Maher endorsing the memo, but fought the release of the memo itself, saying that it contained confidential information that could damage Ingersoll- Rand.

The memo demonstrates the “care and transparency with which Ingersoll Rand interacts with its federal customers,” spokeswoman Misty Zelent said in a statement.

It’s unclear whether Homeland Security endorses all three of Ingersoll-Rand’s arguments or just one or two of them. In addition to arguing the entire law is invalid, the memo puts forth two other arguments that would cripple the contracting prohibition.

Ingersoll-Rand argued that companies like itself that inverted to one foreign country and then switched to a third shouldn’t be considered inverted anymore. Under the law, it said, companies have to start out as U.S. firms to be inverted, and during its 2009 address change Ingersoll-Rand wasn’t American anymore.

That logic would also apply to many other inverted companies that fled Bermuda and the Cayman Islands to Switzerland or Ireland, such as oil-services providers Weatherford International Plc and Transocean Ltd. It would also mean that inverted companies could qualify for contracts simply by switching their legal address a second time.

Ingersoll-Rand also argued that firms that have business operations in their new corporate homes—even modest ones—should be allowed to bid on contracts under an exception in the law for companies with “substantial business” in their new domicile.

Trade Agreement
The company said that it had more than 700 employees and a Thermo King factory in Ireland when it adopted the address there in 2009. It didn’t mention that these represented less than 2 percent of both its global employees and of its major factories at the time. Ingersoll-Rand also argued that the Internal Revenue Service’s much stricter interpretation of “substantial business,” which now stands at 25 percent of employees, assets, and sales, should not apply.

Ingersoll-Rand’s most sweeping argument is that the government’s obligations under trade agreements trump the contracting law. Ireland and the U.S. are both bound by the World Trade Organization’s Government Procurement Agreement, which requires members not to discriminate against each other’s companies in government contracting.

An endorsement of that argument would represent a reversal for the Obama administration. In 2011, a government rulemaking committee said the law doesn’t conflict with the GPA.

The victory at Homeland Security is already bearing fruit for Ingersoll-Rand, which won a contract in May from the Army Corps of Engineers to install energy-saving equipment on U.S. military bases. The award allows Ingersoll-Rand to compete with 13 other companies over the next two decades for $1.5 billion of government work.


New Tax Penalty Starts Today on Small Business Health Insurance

Posted on July 6th, 2015

New Tax Penalty Starts Today on Small Business Health Insurance

Small business groups are sounding a warning about an obscure Internal Revenue Service rule that takes effect Wednesday imposing heavy fines on small businesses for helping defray the cost of their workers’ insurance or medical expenses.

The National Federation of Independent Business said small businesses that get caught helping their workers buy insurance or pay medical bills can be fined 18 times more than larger employers that don’t provide coverage at all.

“It’s the biggest penalty that no one is talking about,” said NFIB policy director Kevin Kuhlman in a statement. “The penalty for compensating employees for healthcare-related expenses is enough to destroy most small businesses.”

    • Under the rule, which the NFIB noted appears nowhere in the Affordable Care Act, employers who do not offer a group health plan, but give their workers additional pay to compensate for the purchase of health insurance or direct medical expenses, can be fined $100 per day, per employee. Over the course of a year that can add up to $36,500 per employee, up to $500,000 in total. In contrast, the penalty on businesses for failing to comply with the employer mandate is only $2,000 per year.

The National Association for the Self-Employed,  an advocacy group for the self-employed and micro-business community, is calling on the Treasury Department to immediately delay the policy until the end of the year in order for bipartisan legislation to passed through Congress to remedy the situation.

“Currently in Congress bipartisan legislation has been introduced that would fix this unintended consequence of the Affordable Care Act,” said NASE vice president for government relations and public affairs Katie Vlietstra. “The Treasury Department should immediately announce a delay in this rule until the end of the year in order for the legislative process to work and for small businesses to be spared the devastating effects this IRS rule could have across America’s Main Street.”

In February, the U.S. Department of the Treasury’s announced a delay in the enforcement of the technical guidance issued in September 2013 for health reimbursement arrangements. The February delay expires July 1 and fines could begin to be imposed on businesses not meeting the requirement for group coverage plans that provide health care assistance for their employees through the use of traditional HRA accounts.

“It’s hard to believe Congress or the President intended to punish employers much more severely for actually helping their workers,” said Kuhlman. “Nevertheless, that’s the consequence and most small businesses don’t know it.”

According to the NFIB’s research, 14 percent of small businesses that do not offer group insurance reimburse their workers instead, unaware of the potential pitfalls of the regulation.

“Reimbursing employees for the cost of insurance or medical services is a way for small businesses to help their workers without the administrative headache of setting up a costly group plan,” said Kuhlman. “Most small employers don’t have HR departments or benefits specialists, so this is a simpler, easier way to help their employees.”

The NFIB noted that Congress would be able to remedy the situation by repealing the IRS rule, and there is legislation in both houses awaiting action.

The bipartisan Small Business Healthcare Relief Act, introduced last week in Congress by Rep. Charles Boustany, R-La., and Mike Thompson, D-Calif., in the House and Sen. Charles Grassley, R-Iowa, and Heidi Heitkamp, D-N.D., in the Senate, would provide a remedy to this situation by enabling small businesses to continue to use health reimbursement arrangements, which allow employers to provide pre-tax dollars to employees to pay for medical care and services.

“Health reimbursement accounts have historically been a very powerful and effective tool for the small business community,” said Vliestra. “HRAs allow small business owners to do the right thing by helping provide financial assistance to their employees for qualified health care expenses.  Which should be applauding them for wanting to help their employees access affordable health care coverage, not punish them with arbitrary IRS policies that could cripple their business.”

When the technical guidance was originally issued back in 2014, the NASE provided comment on the guidancestating that, “the technical guidance misinterprets the intent of the ACA as it relates to these types of tools (HRAs) used to provide financial support to employers with less than 50 employees.”

“If there’s an opportunity for a bipartisan improvement toward affordable health care, this has to be it,” said Kuhlman. “There’s no real justification for penalizing small businesses that do what the law’s strongest supporters claim to want, which is to help employees obtain coverage or pay medical bills. This is a rigid and thoughtless bureaucratic rule that undermines the purpose of the law, and it ought to be repealed immediately.”


Will Churches Lose Tax-Exempt Status in the Wake of the Supreme Court’s Gay Marriage Ruling?

Posted on July 3rd, 2015

The dust barely settled on the Supreme Court’s gay marriage ruling before some critics began ramping up suggestions that churches that are theologically opposed to gay marriage deserve to lose their tax-exempt status — a proposal that conservative attorneys and a charitable giving expert patently dismissed in separate statements issued to TheBlaze this week.

Calls for houses of worship to lose their 501(c)(3) status are nothing new, though some conservative critics have warned in recent months and years that the legalization of same-sex nuptials would possibly revitalize calls for the Internal Revenue Service to rethink the issue, putting churches in a potentially difficult position.

The authors of two articles published over the past week have done just that, breathing new life into the controversial subject.

In an op-ed published by Fusion, financial writer Felix Salmon made his stance on the matter more than crystal clear in his lede: “Now that the U.S. government formally recognizes marriage equality as a fundamental right, it really shouldn’t skew the tax code so as to give millions of dollars in tax breaks to groups which remain steadfastly bigoted on the subject.”

Salmon argued that the “U.S. government subsidizes churches” and that it costs billions of dollars each year to do so — a dynamic that he fervently opposes, noting that the U.S. Constitution doesn’t grant this as a right to houses of worship.

While he believes that churches can’t be targeted and forced to pay more than other groups, Salmon said that the government reserves the right to “stop giving them special tax-free privileges.” But he doesn’t stop there, writing that the Supreme Court’s ruling that gay marriage is a “fundamental right” means, in his view, that tax-exempt groups cannot disallow it and retain that status.

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“It’s abundantly clear that religious institutions have no right to tax exemption,” he continued, citing Bob Jones University vs. the United States, a 1983 Supreme Court case in which the court found that a college can be denied tax-exempt status if it refuses to allow interracial relationships.

And since churches are the primary social drivers against homosexuality, Salmon said that they don’t necessarily deserve the tax benefit.

“If your organization does not support the right of gay men and women to marry, then the government should be very clear that you’re in the wrong,” he said. “And it should certainly not bend over backwards to give you the privilege of tax exemption.”

While Salmon said that religious freedom means that groups can hold “whatever crazy views” they want, if those beliefs are “fanatical and hurtful” and don’t abide by the law, that they don’t deserve to be tax exempt, offering support for the abolishment of this tax benefit for all churches and not just those considered anti-gay.

Salmon, of course, isn’t alone in making these claims.

New York Times columnist Mark Oppenheimer also penned a piece for Time Magazine titled, “Now’s the Time To End Tax Exemptions for Religious Institutions.” In also citing the Bob Jones University case, Oppenheimer went on to say that now is the time to rethink the way in which religious and nonprofit organizations are treated under the law.

“Rather than try to rescue tax-exempt status for organizations that dissent from settled public policy on matters of race or sexuality, we need to take a more radical step,” he wrote. “It’s time to abolish, or greatly diminish, their tax-exempt statuses.”

Oppenheimer wrote that it lacks sense to have the Internal Revenue Service deciding which institutions are religious in nature, adding that wealthy universities like Yale are paying very little in taxes. As for anyone worrying that revoking tax-exempt statuses for organizations that, many times, feed and clothe the poor, Oppenheimer said that the government would actually be equipped to do more.

“Defenders of tax exemptions and deductions argue that if we got rid of them charitable giving would drop. It surely would, although how much, we can’t say,” he said. “But of course government revenue would go up, and that money could be used to, say, house the homeless and feed the hungry. We’d have fewer church soup kitchens — but countries that truly care about poverty don’t rely on churches to run soup kitchens.”

Again, these views are not new, but the fact that they come just days after the Supreme Court’s landmark ruling will certainly have some Christians and conservatives on edge. TheBlaze spoke with Rick Dunham, president and CEO of Dunham+Company, a fundraising consultancy firm, to discuss the debate over 501(c)(3) statuses and to learn more about why nonprofits and churches have been granted tax exemption.

Dunham said that he believes that there are misconceptions about churches that drive some of the calls for them to lose this status, noting that exemptions are only given to “charities that are providing benefit to society.”
“Certain people believe that churches are an in-grown group that do no society benefit — a glorified country club,” he said. “But, in reality, if you do look at work of churches around America — the most significant is the Salvation Army — they’re doing tremendously good work across the country.”

Dunham continued, “What you’re saying is we should take tax-exempt status away from the Salvation Army, which is arguably making one of the greatest impacts we have in society today helping the poor.”

While he said that some estimates show that the tax deduction costs the U.S. government around $50 billion per year, he noted that charitable giving in 2014 was at a record $358 billion. And since donations are tax-deductible, they also benefit donors who freely give to churches and organizations.

Dunham said that it’s certainly possible that, like in any industry, there are abuses at the hands of churches and nonprofits, but he said that he operates by the principle that “you manage to the rule, not the exception.”

“There are exceptions out there … [but] at the end of the day, the charitable sector is proving tremendous good and support for families, communities and youth,” he said.

Mat Staver, chairman of Liberty Counsel, a conservative legal firm, agreed with Dunham that churches and nonprofits provide benefits to society, though he added another reason why houses of worship should retain its tax-exempt status: to maintain their independence.

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“Churches also have tax-exemption in order to keep government out of the affairs of churches. This is the essence of having the government separate from the church,” he told TheBlaze. “The power to tax is the power to destroy, according to the Supreme Court. If government could tax churches then government can control them and interfere with their mission.”

He continued, “The First Amendment and religious free exercise protections protect churches for good reason in this area.”

Piggybacking off of that, Erin Mersino, senior trial counsel at Thomas More Law Center, another conservative legal firm, said that there’s no basis for the government being able to decide what is and is not acceptable when it comes to religious beliefs. Targeting churches’ tax-exempt statuses would, thus, be legally problematic, age believes.

“By stripping churches who believe and practice a doctrine that has existed for the millennia, namely, that homosexual conduct and same-sex marriage is sinful, while allowing other organizations to maintain their 501(c)(3) status because they hold different religious beliefs, is blatant discrimination,” Mersino said. “Any attempts to strip a church of its 501(c)(3) status due to a Church’s view on homosexuality should be accurately labeled — it is religious persecution.”

Her view calls Salmon’s more pointed perspective on targeting churches into question, though Oppenheimer’s argument that it is most viable to go after the statuses of all organizations is a bit broader.

Attorney John W. Whitehead of the Rutherford Institute added that calls to strip tax-exempt status as a result of stances on gay marriage are problematic in that they ask a person or group to ”forfeit a governmental benefit because of the exercise of First Amendment rights” — a dynamic that is said is “wholly contrary to the Constitution.”

“The ‘unconstitutional conditions’ doctrine forbids conditioning a governmental benefit on the surrender of a constitutional right,” Whitehead said. “This doctrine has particular application to churches, which engage in both the fundamental freedom of religious exercise and speech.”

Barry W. Lynn, executive director of Americans United for Separation of Church and State, a First Amendment watchdog that sometimes clashes with conservative legal firms over the separation of church and state, said that the Constitution doesn’t mention or guarantee tax-exemption for churches, but that it is permissible so long as the benefit is available to all nonprofits who fit similar categories.

“If it were offered only to houses of worship, it would likely be an unconstitutional benefit to religion,” he said. “But tax exemption has been extended to many other types of organizations, which, the Supreme Court has indicated, solves the constitutional issue.”

Lynn continued, “We agree with the finding in Walz v. Tax Commission of New York. Tax exemption for churches is not required by the Constitution, but if it is offered under statute, it should be given to similarly situated secular entities as well.”

Despite the recent calls from some advocating that churches lose their tax-exempt status, Lynn said that he believes much of the discussion surrounding gay marriage and the Internal Revenue Service is trumped up and that a church, under current law, can only lose tax-exempt status if it endorses or opposes a political candidate.

“The talk about churches losing tax exemption for their viewpoints is like the argument that religious leaders can be forced to marry same-sex couples – it’s hyperbolic,” he said. “The possibility of a church losing its tax exemption for advocating anti-LGBT views is effectively zero.”

But many others, like Fox News host Bill O’Reilly, worry that the Supreme Court’s gay marriage ruling will open the door to lawsuits that are aimed at forcing the hands of religious organizations.

“It’s just a matter of time before lawsuits are filed against churches and religious organizations, trying to strip them of their tax-exempt status if they don’t toe the line on gay marriage and other progressive causes,” O’Reilly said on his show on Wednesday night.

For now, such a prospect seems unlikely, but many faithful fear that it’s entirely possible down the line.


Jeb Bush used little- known tax strategy to build retirement

Posted on July 3rd, 2015

Jeb Bush used little-known tax strategy to build retirement | Tampa Bay Times

The Wall Street Journal:

In the tax returns he released Tuesday, GOP presidential candidate Jeb Bush reported large deductions for payments to “pension and profit-sharing plans.” The payments averaged $350,000 a year for the past five years, far more than most people could contribute to an individual retirement account or 401(k) plan.

Other documents Mr. Bush has filed show that he used a little-known but perfectly legal tax strategy to establish a pension plan for two people working for his consulting firm, Jeb Bush & Associates LLC. Attorneys who work with such plans say one of them was almost certainly Mr. Bush himself and the other was likely his son, Jeb Bush Jr.

The strategy has allowed Mr. Bush to defer paying hundreds of thousands of dollars in income taxes since he established the plan in 2007 and to rapidly build up a large retirement-plan balance, the attorneys say.

“I have any number of clients in this age range, early to mid-60s, who have used these kinds of tax-shelter, defined-benefit plans,” said Charles M. Lax, an employee-benefits attorney with Maddin, Hauser, Roth & Heller, P.C. in Southfield, Mich. He reviewed Mr. Bush’s plan for The Wall Street Journal.

Details of Mr. Bush’s pension arrangement are found in filings by Jeb Bush & Associates with the U.S. Labor Department. The filings, not released by the Bush campaign, show that the firm’s pension plan had assets of $2.4 million as of the end of 2013.

“By virtue of being predominantly a family business, the Bushes were able to plan for their retirement through Jeb Bush & Associates,” said a campaign spokeswoman. She declined to provide the names of the two persons covered by the company pension plan and didn’t respond to other detailed questions.


NETFLIX TAX? Targeting the Cord Cutters?

Posted on July 3rd, 2015

Chicago’s Netflix Tax: Targeting the Cord Cutters? | Chicago magazine | Politics & City Life July 2015

As the city’s telecommunication-tax revenues crater, it’s implementing a new tax on cloud services and streaming media. It comes as a shock to many, but the city already taxes most of your leisure activities.

Photo: Michael Tercha/Chicago Tribune
Yesterday The Verge’s Russell Brandom drew attention to a story that had flown under the radar: Chicago’s new tax on cloud computing services. Technically, it’s two taxes, one on streaming entertainment, which immediately got a lot of attention, and one on “nonpossesory computer leases,” which covers things like research databases and cloud services.

In the story, Brandom makes an important point:

But while the law may seem onerous, it’s also a response to an increasingly difficult reality for cash-strapped cities, particularly as online services start to take a bite out of the businesses in the urban center. Twenty years ago, the same albums and movies were consumed at video rental outlets and music stores — which paid local property taxes, potentially paired with municipal sales taxes and other brick-and-mortar duties. But as online subscription services take over more and more of our music and video budgets, that money ends up disappearing from the traditional municipal tax base. By 2015, the people of Chicago are being entertained by corporations outside of the reach of the city government, leaving it scrambling to make up the difference.

We’ve seen this before, in the case of the “Amazon tax”: as consumers shift away from brick-and-mortar stores, brick-and-mortar taxes go into decline. Amazon may sell physical things, but the concept is basically the same.

While Brandom’s point is salient, I can’t help but wonder if there’s another tax spiral being plugged here. This is from the city’s most recent financial analysis:

That’s a decline of almost $60 million over a decade—and over $40 million in two years. Even the reduced figure of $119 million in 2013 made up four percent of corporate fund revenues, not a trivial sum. And wireless accounts, as you can see, haven’t plugged the seemingly terminal decline in landline accounts. As the financial analysis reads (emphasis mine):

The overall decline in revenues was due in part to the continuing reduction in the use of landlines as more customers choose to have only wireless services, and in recent years due also to a decline in the number of wireless accounts as use of online communication services such as Skype or other technologies increases. In addition, federal law exempts most wireless data services, such as mobile broadband, from taxation, and consequently, growth in the market for such wireless services has not resulted in increased telecommunications tax revenues for the City.

That’s a lot of data consumption that can’t be taxed (consider the recent evolution of your cellphone bill and usage in terms of voice versus data). Cable television-tax revenues have actually increased modestly over the past few years (page 150), from $21.4 million in 2009 to $26.2 million in 2013 followed by a recent hike, but the worry at this year’s Internet & Television Expo, held earlier this year in Chicago, was about consumers (like myself) who have cut the cable cord in favor of not just streaming services but over-the-air broadcasts as well. Cord-cutting numbers remain pretty modest, but as pressure mounts to make services like HBO available without a cable subscription, the possibility of a landline-like decline is on the table, and with it a comparative decline in tax revenues.

People seem to be uniformly upset about the cloud taxes—on behalf of both Netflix binge-watchers and companies that rely on subscription databases—but it’s worth considering what taxes are and how that feeds into our immediate reactions to new ones.

When Barack Obama made his immediately infamous statement, “you didn’t build that,” about the importance of taxes to the infrastructure that makes business possible, he embodied a certain justification, a meaning, to taxes. Chicago, for instance, already taxes most of the ways you entertain yourself, whether it’s cable television or movies tickets or music shows. And under the idea of “you didn’t build that,” it makes a certain amount of sense—a venue requires roads and rails to get customers there; plumbing and electricity to make it function; inspectors to ensure the safety of patrons; and so forth.

(From a more redistributive perspective, the city justified raising cable taxes, in part, to fund free public arts performances—stuff to do if you can’t afford cable or the movies. Or, from an urbanist perspective, programming that brings people out into the community rather than encouraging them to stay home.)

But as consumption requires less and less infrastructure, that common justification for taxes starts to fall away, and taxes on local commerce start to stick out like a sore thumb: locally-based live, mass entertainment employs residents, builds community, has spillover effects to other businesses, and attracts visitors and new residents. Netflix doesn’t, or at least doesn’t to remotely the same degree. If so many other forms of entertainment are taxed locally—including cable television—should its competition get a free ride? Chicago seems to be a civic outlier, but many states tax digital consumption, whether purchased or streaming. Washington State and Florida both tax Netflix subscriptions. Deep-red Alabama plans to, beginning October 1.

There’s not a right answer. (This analysis from the Center on Budget and Policy Priorities, jas as an example, recommends taxing digital entertainment while being much more cautious about business-to-business digital services.) As tax revenues rise and fall, bureaucrats and voters look to existing tax structures, and their literal and figurative justifications, to build new tax structures. If taxes are justified on a service as intimately tied to the infrastructure needed to provide it, perhaps those taxes fail; if they’re justified on how those services relate to things that are already taxed, perhaps they’re reasonable. Every new tax comes as a shock, but beyond the shock of the new are older, bigger questions.


ike the rest of the world, accounting professionals are quickly adopting mobile technology. And while accountants are already accustomed to doing things like viewing or managing their bank accounts and paying bills on a mobile device in their personal life, the functionality available in their business lives is far behind. That’s because rolling out mobile accounting for businesses is far more complicated and there are many more issues that need to be considered in order for it to be successful. Bill Price, CFO at the accounts payable and payment automation company MineralTree has identified eight issues that companies looking to implement mobile accounting – and bring their teams into the digital age – must consider. 1. Define Mobile Accounting There are a lot of steps to take before implementing a mobile solution into your business process. The first is to really think about your goals and what you’re looking to achieve. Mobile accounting could mean different things to different people and businesses, so the first step in a successful rollout is defining what it means to you and your company. For example, consider who the users will be and what they will be using it for. Think about the different functions you’d want your mobile accounting and financial solution to cover. 2. Security There was a time when a company’s financial and accounting information could remain under lock and key, always within the four walls of the office. Those times are long gone, and as emerging technologies, including mobile, take hold, it’s critical for a company to have a security plan in place that covers all devices, networks and users. According to a new report from the American Institute of CPAs (AICPA) and the Chartered Professional Accountants of Canada (CPA Canada), securing the IT environment was ranked as the top technology initiative by U.S. and Canadian CPAs. The first question that always comes to mind is security. CPAs and finance professionals must tackle increasingly sophisticated threats, ranging from cyberattacks to the loss of mobile devices by developing and implementing security policies and plans that cover all the potential risks. It is critical to implement security measures such as two-factor authentication to ensure that only those you authorize have access to your mobile platform. 3. The Universe of Devices There are myriad different devices available today, so you have to think about what your team will be using. Different mobile platforms from companies like Apple, Microsoft, Google and Blackberry will impact if or how the devices work with the apps or mobile sites you decide to use. You also have to think about the types of devices that will be used – is your team more likely to use smartphones or tablets? If you want to use mobile to approve payments on the go, then smartphones would likely be the device of choice. If you need mobility, but still require a high degree of functionality that could be useful for things like client meetings on the go, tablets could be more useful. 4. BYOD or Company Issued Sixty-seven percent of adults in the U.S. already own a smartphone and 42 percent own a tablet, according to the Pew Research Center. Those statistics are even higher among younger professionals so the writing is clearly on the wall: Companies have to decide if they’ll embrace a “bring your own device” (BYOD) environment, or insist upon company issued devices. While there are benefits to BYOD, including cost savings and employee satisfaction, there are compliance, security and compatibility issues to be aware of. On the other hand, when a company issues devices, it can ensure that they are compatible with the apps and sites it chooses to use, and can better control the security of those devices. However, providing your team with devices is more costly to implement and manage. 5. Apps vs. Mobile Web Businesses need to figure out what type of accounting and financial tools their team will be using on mobile devices. Are those tools available only as a downloaded app, or can they be accessed through mobile websites? Some apps only run on iOS and Android devices, so if you go that route you’ll need to make sure your team has compatible devices. Services with mobile-friendly sites offer more flexibility because they’ll work in any mobile web browser, but may not be as feature-rich. Weigh the pros and cons against your goals for mobile accounting and the devices your team will be using to choose what’s right for your business. 6. Regular Updates Technology advancements are being introduced at an increasingly faster pace and older, outdated technology can affect employee productivity and enterprise security. It’s important to keep your accounting technology up-to-date by regularly updating apps and devices. Doing this will help maximize security and improve productivity – the whole reason for implementing mobile accounting in the first place. 7. Mobile Privileges Not everyone on your team will need access to your mobile accounting tools. There are plenty of reasons to set limitations on who has access, but the most important is security, especially since security experts will tell you that information security is mostly a people problem. In fact, many of the major enterprise breaches we’ve seen in the news were caused by careless human error. Allowing mobile access in a highly regulated and risk-averse industry like finance should not be taken lightly. Just as you should control which devices are allowed for mobile accounting, choosing which employees to grant mobile permissions is equally important. 8. Compliance Even though mobile accounting is a young but emerging trend, there are surely compliance issues in the highly regulated financial services industry to which companies must adhere. There will be different regulations depending on the business functions and the type of organization that is “going mobile.” For example, public companies that are held to higher standards for things like security and archiving will have to ensure that the mobile technology they implement adheres to all applicable regulations. And just because mobile accounting is fairly new, don’t assume that regulations already “on the books” won’t apply. Regulations that apply to thing like a lost laptop could certainly apply to a lost phone or tablet too.

Posted on June 26th, 2015