Articles Posted in Uncategorized

Calculator with PencilNew Jersey has a tax amnesty gift for its delinquent tax payers.  In a nutshell, if by January 15, 2019, a taxpayer brings all back taxes current and pays 50% of the outstanding interest due, the NJ Department of Treasury will waive most penalties, collection costs and 1/2 of the interest that is due as of November 1, 2018.  To file for tax amnesty, the taxpayer must also file all past due returns.  Click here for detailed program information straight from the NJ Department of Treasury.

Filing Deadline, Eligible Periods and Forms for Amnesty Compliance

There are several deadlines NJ taxpayers must be aware of to be eligible for tax amnesty.


Binary Code

The General Data Protection Regulation (GDPR) was approved by EU Parliament back in May 2017.  The GDPR, in a nutshell, was designed to replace an inconsistent set of data privacy laws with a comprehensive law that protected all European Union residents.  Please click here for my original post on the GDPR.  While the GDPR has been in effect for over a year, the law gave companies until May 25, 2018 to comply.  Well, that deadline has come and gone.  If you fail to comply, regulators can impose a fine of up to 4% of worldwide revenue.  This is NOT a typo!  4% of worldwide revenue up to 20 million euros.

Currently, there are no grace periods if your company still has not complied with the GDPR.  Additionally, as the ability to enforce compliance is less than 1 week old, there is no precedent out there that we can use as guidance.  Regulators for EU member states have indicated different going forward approaches to enforcement.  While one state regulator has inferred that even if full compliance has not yet been achieved, the efforts made to attain compliance will be taken into account as a mitigating factor.  Alternatively, other state regulators have simply stated that if we have reason to impose a fine we will impose a fine.  In this regard, the newly created European Data Protection Board was recently created.

The each page of the newest version of the I-9 form is laid out for display.
All US employers are required to use an I-9 form to verify the identity and eligibility of individuals (both citizens and non-citizens) for employment in the United States.  Please take notice that effective today, January 22, 2017, there is a new I-9 form that replaces the one currently in place.  You can download a copy of the new I-9 form by clicking here. For easy access, bookmark this blog entry for when you will need the form in the future.

Whats New?

This new form looks very similar to other recent incarnations with a few specific changes. The digital version linked above is now much easier to fill out online. It also includes the ability to general a QR code upon filling out the form, which can be helpful for providing copies to the appropriate parties. It also includes much more space to indicate preparers, translators, and other information that has often found it’s way to being written in the margins.

New Overtime Law Blocked- Where, Why, and for How Long?

New Overtime Law is Blocked

The new overtime law that would have increased pay for millions of employees starting on December 1 has been blocked by a preliminary injunction issued by a Texas federal court.  The law would have raised the minimum salary hourly threshold exemption for white collar employees under the Fair Labor Standards Act from $23,660 to $47,476.  Since this occurred in a federal court, the  injunction applies to the entire country.  A preliminary injunction however, is not a final determination by the Court. All this means is that the Court wants to look into this matter further and that for now, the status quo will remain in effect.  From an employer’s perspective, this means that no changes need to take place on December 1 and employers can follow the existing overtime rules.  Please click here for our May 2016 blog post that discussed the impact the new overtime law would have had on your business.

Employer Overtime Considerations

Driving to work this morning I was thinking about my aging receivables and was becoming increasingly frustrated.  Although I am a lawyer and work in a Philadelphia law firm, I am also, at my core, the owner of a small business.  I provide services and expect or hope to get paid.  My situation isn’t very different from any business or service provider.  As I thought about what I could do better to insure that I got paid, I thought there are probably a lot of other business owners, chief financial officers and the like that would appreciate options they can consider implementing to increase their chances of being paid for services rendered, products delivered or items that were manufactured.

The starting point – your contract. Whenever a client or potential client calls me and wants to discuss how to structure a transaction to insure they are paid or at the very least minimize the risk they are not paid the starting point is always the same.  Have you worked with this entity before and do you have any written agreements or standard terms and conditions that govern the contemplated transaction?  Every contract starts with the assumption that each party will be responsible for paying its own legal fees?  This concept is known as the American Rule.  However, if your contract or standard terms and conditions state that the buyer will be responsible for all costs and expenses, including legal fees incurred in connection with your collection efforts – you have successfully shifted the American Rule on its head.  Now, not only is the breaching company responsible for paying your outstanding receivable, but it is now responsible for your legal fees as well.  Keep in mind that this does not necessarily guaranty payment but you not have another hammer in your negotiation arsenal to use against the defaulting party.

Cash is king.  In my line of work the only way I can completely guarantee payment is with the retainer.  Similarly the simplest way to guarantee payment is cash up front before services begin.  This is why, for example, doctors require the co-payment before services are rendered and not on the way out.  However, recognizing this is stating the obvious, other possibilities include timing the payments better.  For example, if you are manufacturing a specific part for a customer or providing consulting services, develop a payment schedule that is tied to verifiable deliverables.  If you meet a deliverable milestone and they don’t pay, you stop working.  Other possibilities that can be explored is cash on delivery (COD).  COD is a very basic but effective method to insure that you are paid when a physical product is involved.

President Obama signed into law last year the Bipartisan Budget Agreement of 2015 and it changed, among other things, the manner in which the IRS will audit partnerships. This change will also apply to Limited Liability Companies (LLCs) that elected to be treated as partnerships for tax purposes. While this new law goes into effect for taxable years beginning after December 31, 2017, clients need to consider now how this impacts their current partnership agreement and whether changes need to be made in advance.

Partnership Audit Rules Today

Under the rules in effect today, IRS audits of partnerships and LLCs are primarily conducted under a single administrative proceeding at the business entity level. The ultimate tax liability is decided at the entity level and any adjustments decided by the IRS flow through the entity (remember-the partnership is a pass through for tax purposes) and are allocated to the individual partners or members. In addition, the law in effect today requires that certain members of the partnership need to be notified of major findings during the audit process. Finally, the partnership level audit does not necessarily bind all partners.

One day you may find yourself unexpectedly involved in a grand jury investigation as a target, subject or witness. Before I explain the important differences between these legal distinctions I want to briefly cover the grand jury basics.

The grand jury is a group of individuals as a collective legal body whose function is to determine if criminal charges (an indictment) should be brought against a particular person or entity. Federal grand juries are comprised of between 16-23 individuals. What happens in a grand jury is kept secret. This is done for two purposes. First, it encourages witnesses to talk freely. Second, if the grand jury decides not to indict, the potential defendant’s reputation is not harmed. There is no judge in a grand jury and thus it is more relaxed than a typical court room. The prosecutor will explain the law to the grand jury and present witness testimony and exhibits for the jury to consider. The rules of evidence that pertain to the introduction of exhibits and testimony are relaxed at this stage and the grand jury has the ability to see and hear much more than what a typical jury would be allowed to consider. The prosecutor is able to compel individuals to give testimony at the grand jury by serving a subpoena-an Order of the Court that compels the individual to appear and testify. Remember, the grand jury does not decide guilt, but only if the prosecutor should bring the criminal charges in the first instance. The jury in a criminal trial is different group of individuals from the grand jury and the jury trial typically does not have the ability to consider everything the grand jury did.


Last month, Sally Yates, Deputy Attorney General for the United States Department of Justice, set forth a six point Memorandum that identified going forward how Justice would allocate its investigation resources to more effectively go after individuals responsible for corporate wrongdoing. This new directive was the result of senior attorneys from within the Justice department meeting and discussing the best ways it could leverage its resources to identify culpable individuals at all levels of corporate management -recognizing that corporations act through individuals.  This really is not a new policy but merely the culmination or rather the continuation of the direction SEC Chair Mary Jo White has taken Justice.  For example, see my earlier post on the SEC requiring admissions of wrongdoing in order to settle “egregious cases”.   Set forth below is a summary of the Memorandum.

FIRST – To be eligible for any cooperation credit, corporations must identify all relevant facts and individuals responsible for the misconduct.

If a company wants to receive any cooperation credit, it must now disclose all relevant facts and actors. A corporation can no longer pick and choose to hide those individuals responsible based upon, position, status, or seniority. To receive cooperation credit, the company must learn all relevant information and turn this over to Justice otherwise cooperation will not be considered as a mitigating factor under USAM 9-28 et seq. Stated another way, the company must now be an active participant in its own internal investigation and must learn and discover the extent of its wrongdoings. This self-reporting is only the minimum threshold. The extent of any cooperation credit is awarded by Justice, it will still be based on the same factors that have traditionally been applied in making this determination – timeliness of cooperation, thoroughness, diligence, speed of internal investigation and whether the cooperation was proactive or not.

The Department of Labor and Internal Revenue Service have joined forces in a “misclassification initiative” that will target small business employers who misclassify employees as independent contractors. How serious is this initiative? Well, President Obama’s proposed 2011 budget allocates $25 million for this initiative. This additional funding will allow the Department of Labor to hire 100 more enforcement agents, and will also support grants at the state level to fund various incentive programs. The failure to properly classify an employee will result in heavy fines and penalties against employers. Why does the government care so much about this issue? Because the misclassification is costing the government billions in uncollected taxes; FICA and FUTA obligations.

Complicating the analysis of whether your workers are independent contractors or employees in Pennsylvania is that the state and federal courts focus on different factors. Even more troublesome, in some instances the state itself may have different tests depending upon which state agency you are before. For example, worker’s compensation and unemployment compensation are both Pennsylvania state agencies, but each agency looks to different factors when making their determination. As the employer, you must be certain that your decision will satisfy all applicable criteria for the agency or department most likely to be evaluating your business. The analysis entails much more than just reviewing the old 20 part IRS control test. While many worker prefer an independent contractor classification, the risk to the business has just become too great to not conduct a thorough review and action plan.
Continue reading

In this current economic climate, Philadelphia landlords are aggressively recruiting new tenants with offers of robust rent abatement and fit out allowances. Since the commercial lease is often one of a small business’s primary expenses, it is a good idea to review any proposed lease carefully before signing or making changes to your existing deal.

A thorough lease review is important so you understand not only what the lease includes, but also what the lease does not include; and what terms are implied by law. Often, we see clients presented with lease agreements that contain terms which are unenforceable in court. Although rent, term, purchase options and security deposits are always the key business terms to any lessee, there are other legal issues which must be considered.

While not an exhaustive list, major issues that a tenant should consider prior to signing or renewing include:

1. Never enter into a commercial real estate lease in your individual capacity. If necessary, offer to personally guaranty part of the lease or pay a higher security deposit. Be wary of the landlord who states, “Don’t worry. That is why you have insurance.”
2. Pennsylvania law does not require a commercial landlord to mitigate his damages. That means the landlord can refuse to sign a replacement tenant and hold you liable for the unpaid rent. Therefore, make sure your lease requires the landlord to mitigate.
3. If a zoning change is required for you to operate your business, negotiate in advance under what circumstances the lease can be terminated if you are unable to obtain either a zoning change or variance. Also, be sure to include in your lease that your landlord has an obligation to cooperate and support you before the zoning board. This may seem like common sense, but you’d be surprised how often it becomes an issue.
4. You may be responsible under applicable law for environmental problems that occurred on the leased property prior to you getting there. Review the environmental and indemnification sections of your lease carefully and ask questions concerning prior “uses” of the property.
5. Be sure that you have meaningful rights if your landlord sells the property.
Continue reading

Contact Information