FATCA Presents New Problems for Certain Taxpayers

The Foreign Account Tax Compliance Act (FATCA) was passed as part of the Hiring Incentives to Restore Employment Act (HIRE) in March 2010. The law presents new problems for taxpayers who happen to have overseas assets, with its complex overlapping reporting requirements. Additionally, the law brings with it serious penalties for those who slip in making their reports. If a submitted report is incomplete or inaccurate in any way, the taxpayer must fork over up to 50 thousand dollars and probably face other serious penalties. The law is similar to the Foreign Bank and Financial Account Report (FBAR), the Treasury Department’s long-established requirement, but has demands of its own. FATCA presents new forms to fill out, with new deadlines and disclosure requirements that might be different from those for FBAR. For example, FATCA reports, as required by the IRS, must be submitted on April 17, as part of the overall tax filing deadline. In contrast, FBAR filings are not due until June 30.

Taxpayers can seek professional assistance on this matter. James Robbins, JD, LLM, a principal in the tax practice of an accounting firm in New York, Marks Paneth & Shron LLP (MP&S), who specializes in international tax, gives such assistance. Robbins says, “The requirements of FATCA are challenging to interpret and it’s easy to misstep. In many cases, FATCA and FBAR will duplicate each other, but not always. Taxpayers need to understand the different requirements and make sure they are reporting correctly for each regulation. But it will be difficult for them to do that without professional advice.”

For those who are interested, Robbins may be interviewed and can write a bylined article that gives detailed information on the new FATCA requirements, what sets FATCA apart from FBAR, and presumably, what they have in common as well.

Monica Risam Nicklin

Florida’s New Drug Test Law

For the first time, Florida state agencies will be able to test their employees at random for drug use, even without any reason for suspicion. The law also facilitates the termination of a worker who tests positive. Governor Rick Scott is expected to sign into law HB 1205, which is SB 1359 in the senate. He had in the past tried to enforce such tests through an executive order, but its legality is being questioned in federal court. Although state employees can now be tested at random every three months, the requirement is that the batch being tested cannot be greater than 10 percent of the agency’s workforce.

According to bill sponsor Jimmie Smith, a Republican, state workers should become the laboratory for the citizens of Florida. He says, “We can make a difference for the entire country. The word is on the street. Drugs are bad.”

Democrats are debating this law, contending that when implemented without suspicion that a specific worker is using drugs, such testing is unconstitutional because it amounts to a “wrongful search” under the Fourth Amendment. Republicans argued that there have been “mixed results” in different courts, at best.

Joseph Little, a professor emeritus of constitutional law at the University of Florida’s Levin College of Law, said that for the plan to be constitutional, the state’s interest in giving drug tests to employees must outweigh the employees’ right to privacy. “There has to be something special about the employment, though, like law enforcement officers or those with a security clearance. But if there’s no special need, you probably can’t do it,” Little says. Another constitutional law professor, Rod Sullivan of the Florida Coastal School of Law in Jacksonville, also feels the same about such tests being administered to employees who do not hold “safety sensitive” positions.

Sullivan also disagrees with the Republican assertion that such tests are no different from those carried out by private companies. The Constitution guarantees protection against government intrusion. Sullivan says, “Private sector employers have the right to require things of employees that the government cannot. A private employer can make drug testing a job requirement, the state can’t.”

Monica Risam Nicklin – Lawyer

Law Enforcement Agency Battles Lack of Funds and Support

It started out with big, bright plans. The Law Enforcement Operations Center (LEOC), envisioned to be a regional law enforcement center in Monterey County, California, was to be a countywide effort led by California’s Bureau of Narcotic Enforcement (BNE), which has long played an important role in the investigation of drug cases. The plan was for the center to be chaired by then Salinas Police Chief Louis Fetherolf with funding from the FBI. The LEOC would find out what the greatest threats from gang violence in Monterey County are, Undersheriff Max Houser said.

But Governor Jerry Brown’s budget plan cut the California Department of Justice’s budget by 71 million dollars, which forced the abolishment of the BNE. This dealt a bad blow to the grand plans, but this was not the only setback. Prior to this, various police departments in the Monterey Peninsula had backed out from the joint effort. The promised funding from the FBI did not arrive for over a year. Then, due to medical reasons, Chief Fetherolf retired three months ago.

What remains of the center is an operation much smaller than that originally envisioned, and is just starting to get off the ground. The city of Salinas came to the rescue, paying unanticipated costs of more than 150,000 dollars even before operations had begun.

The LEOC operates out of a 10,500 square-foot building located near the Salinas Municipal Airport. The city council’s reports reveal that the center’s actual costs per month total about 17,000 dollars. Salinas maintained their financial support until November, when the FBI sent a check for 167,000 dollars, which comes out to about 3,000 dollars less per month than what the city paid. But the FBI’s check covers only the base rent for a year, and does not cover repairs, utilities, taxes, insurance, and other costs.

Despite the formidable obstacles, Salinas mayor Dennis Donohue remains enthusiastic about the LEOC, maintaining that it was worth the lease payments the city made. He says, “People are committed to making this work. We did what we needed to do to serve as a backstop.” He adds that the center is about 80 percent functional, with several investigations ongoing. The uncertainty of the FBI’S continuing financial support remains, but Donohue says that this is due to federal budgetary constraints. “Everybody wishes things were moving faster,” he says,” but it’s coming together and we’re moving forward.”

Not Much Class behind the Glass

Patrons at upscale restaurants may be given service fit for royalty, but are blissfully unaware that in many cases, the behavior of management towards their workers does not reflect the classiness the establishment projects. This turned out to be the case at several posh restaurants in New York City, in particular Veranda in Greenwich Village on the west side of Lower Manhattan, and the chain of restaurants owned by multi-millionaire celebrity chef Mario Batali, which covers New York, Las Vegas, Los Angeles, and Singapore.

A settlement with the Attorney General ensures that 25 employees of Veranda will finally have justice in the form of 150,000 dollars as compensation for having been paid below the minimum wage. The amount also includes long overdue overtime pay. Veranda must pay an additional 50,000 dollars for the firing of two workers who had challenged the company’s illegal practices.

Large as the Veranda settlement is, the really big news is Batali. The chef and media personality of Italian and French-Canadian ancestry was ordered to pay 5.25 million dollars to 1,100 workers of seven of his restaurants. The staggering amount compensates former as well as current employees who filed a class action suit accusing Batali and partner Joseph Bastianich of paying below the federal minimum wage, withholding overtime pay and dipping their fingers into their workers’ hard-earned tips to augment their decidedly considerable income. In the lawsuit, filed in July of 2010, the restaurateurs are alleged to have pocketed as much as five percent of wine sales every night.

The plaintiffs were or are employed at Batali-owned establishments such as Babbo, Bar Jamon, and Del Posto as waiters and bartenders, and some have been with their employers since 2004.

Former judge Richard J. Holwell, who has resigned to engage in private practice, wrote in a ruling in May of last year that a former bartender of Bar Jamon said he was told that the percentage of nightly wine sales deducted from the tips was to pay for sommeliers and expenses related to the large wine selection of the restaurant. The ruling continues to say that other workers were told the amount covered breakages, and that in the first place, this practice was the policy of the Batali restaurant group.

Monica Risam Nicklin

Utah HB 147 Heads to the House Floor

A new bill in Utah, HB 147, was passed by the House Standing Education Committee and will be heading to the House floor. It proposes to rewrite a new and controversial state online education law from last year that allows high school students to take two online classes from charter schools and schools from other districts, instead of at the schools where they study.

The revised bill seeks to require students to take the two online courses only in their school districts or charters. If they take a course from an outside school, it must be one contracted by their school district. HB 147 will require school districts to contract at least one outside entity besides the Electronic High School.

As may be expected, the bill drew its fair share of supporters as well as opponents. Several school district and charter school leaders voiced their approval of it on Friday. Heidi Ross of the Tooele School District is one example. “If we’re going to sit here and say, ‘we’re not going to do anything. We’re going to let (the current online education law) roll on,’ we’re going to bankrupt schools completely,” she said.  The bill’s supporters say it will give schools a more cost-efficient way to offer online courses.

Rep. Brad Last, R-Hurricane, the bill’s sponsor, said many charter schools and school districts today worry that they’re paying outside providers more per student than they themselves receive. He claims his bill removes “one of the real disincentives” for schools to let their students take online classes. They would no longer have to pay providers $727 a class, and could negotiate how much they’ll pay with whoever they choose to contract.

But the bill’s opponents say it gives students less of a choice. The Utah Taxpayers Association’s Royce Van Tassell says students would no longer be allowed to take classes online from another district or charter in the state.

Judi Clark, executive director of Parents for Choice in Education, says “By having a wide variety of access to all the options in the state, we can ensure parents will be able to partner their students with programs that help them the most.”

She adds that lawmakers are looking at a separate bill, one intended to change the cost structure for online classes under the current law. But its opponents claim the prices it sets are still too high.

The Mother of Invention

If man’s great discoveries were driven by grand ambitions, then they certainly resulted in even higher expectations. With every discovery came new wisdom, which strengthened the belief that life could be better. So, people looked for better ways to do things. They designed then devised better means. And they kept on doing it. They kept inventing.

It’s been said necessity is the mother of invention. True. But what sired this necessity? How is it that man started to think that he “needed” to invent? In any age in history, self-sufficiency had not been a primary goal of man, but only a basic requirement. There was always a need to produce more and faster because these were equated with growth. Even when people already had what they needed to survive, they always needed more and they wanted them as quickly and easily as possible. This necessity, the mother of invention, could not be quenched.

Maybe our brains are wired to be creative and resourceful. Maybe that’s what brought about our evolutionary survival as the fittest species, in the first place. We don’t just adapt. We alter. We don’t just subsist. We search for and create new worlds.

Inevitably we have accumulated a vast collection of knowledge. But the wisest of us all will be the first to admit: “The more we learn, the more we realize how little we know.” Every discovery, every invention, therefore, is a step closer not to the journey’s end, but to the beginning. In spite of everything that we have accomplished, no matter how far we’ve come, we are always looking far into the horizon of which we still know nothing.

Monica Risam is the general counsel for the European arm of insurance giant Aviva.

Rioters Recurring Law Breakers, Analysis Shows

An initial analysis of the riots that erupted in English cities revealed the mobs were led by a core of repeat offenders. The Ministry of Justice reported that of the 1,715 people who had been arrested and arraigned for riot-related charges, 25% had committed at least 10 criminal offenses and had previously served a jail sentence. About 10% of those charged were found to be serving a community order already for breaking the law or were just released from prison conditionally.

This had led the courts to act more harshly in handing down legal penalties on some of the defendants. Those charged with theft, on average, got seven-month jail terms instead of the usual three. Burglary attracted 14 months rather than 8, and violent disorder cases were given 10 months (normally 5 months).

This also confirms Justice Secretary Kenneth Clarke’s claims that radical prison reforms are needed to stop repeat offenders from going around the legal system over and over again. He said “existing criminals went on a rampage” the moment they had the opportunity.

Nine of ten of those brought before the courts were male, and a significant fraction—21%—were minors. Some were as young as ten years old. In accordance with law, most of them received custodial punishments. Some were given non-custodial punishments, however, depending on the severity of their crimes.

TUP to Resist ‘Oppressive’ Laws on Pension and Spending Cuts

The Trades Union Congress (TUC) has called on all workers in the UK to resist “oppressive” laws aimed at cutting their pensions. TUC General Secretary Brendan Barber said the union federation is prepared to endorse and organize strikes if the government will not back down on its controversial plans to reform pension schemes.

Ministers in London have been trying to hammer out austerity measures to get rid of the budget deficit in four years. Laws have been passed in Parliament to make significant cuts in coalition spending, which will hit middle and low income workers in both private and public sectors. In addition to reducing pensions, there are moves to raise the lawful retirement age to 67.

Len McCluskey, leader of Unite, warned that there will be unrest if the attacks on the rights of workers continue. McCluskey said: “Law is an essential thing for a civilized society. But oppressive laws designed to hold back ordinary people, pushed through Parliament of expense cheats by a cobbled-together coalition which no one voted for must be resisted.”

TUC represents the majority of trade unions in the UK. It has 58 affiliated unions with a total of about 6.5 million members. Around half of its membership belongs to Unite and UNISON, the two largest unions in the UK.

Covering the bases: Monica Risam, Aviva

Motorcyclist Spills and Dies from Head Injuries in Protest against Helmet Laws

A protest ride by motorcyclists against helmet laws in upstate New York led to tragedy after one of their members had an accident during the demonstration in which they rode without head protection. The victim, Philip A. Contos of Parish, New York, decided not to wear helmets along with other members of his group to make a statement in defiance of the law.

Contos reportedly hit the brakes, and for some reason, the motorcycle went out of control, turned turtle, and hurled him over the handlebars onto the road. He was pronounced dead at the hospital he was taken to.

The riding accident occurred in Onondaga, near Syracuse in central New York. Law enforcers said Contos would have likely survived if he had been wearing a helmet.

It’s a tragic incident, especially in the light of the protest being against wearing helmets. The ant-helmet demonstration instead gave a big message on the importance of wearing helmets when riding motorcycles. Unfortunately, it had to be at the expense of a life.

Monica Risam Nicklin Profile

Aviva set to launch European panel as new GC joins from GE

2 Senators Propose Privacy of Mobile Location Law

After the controversy surrounding the manner in which Google and Apple have collected data from mobile phone users, US senators have proposed a law that will give more privacy on whereabouts of cellphone users.

The proposed Mobile Location Law, technically known as the Location Privacy Protection Act, will require companies to get permission from mobile users before they obtain information about them. The principal authors of the bill are Democrat Senators Al Franken (Minnesota) and Richard Blumenthal (Connecticut). The two say the bill will seal holes in the current federal law. They say people need to have the right to know what information is being collected from them through their mobile phones and to decide if they want that data to be shared.

The mobile location bill specifies that companies that need to extract information from more than 5,000 mobile devices be responsible enough to protect the data gathered, allow disclosure on extracting and possessing user information, and to delete the data if a user wishes it. The Center for Democracy and Technology, the Consumer’s Union, and the National Network to End Domestic Violence, are all in support of the new bill.

The proposed law came about after hearings and information brought to light by researchers who say that iPhones and iPads store unencrypted data and that providers, like Google and Apple, collect location data even when tracking applications aren’t switched on in the cell phones. The concerned parties have issued statements on the matter. Google stated that tracking service for Android phones is “opt in” with all location data anonymous. Apple, on the other hand said that what it downloads to the users’ phones are information on Wi-Fi hotspots and cell towers in order to improve their service. Franken claimed that Apple gave conflicting information.

Monica Risam Nicklin

Aviva Europe Adds New GC, Pan-European Legal Panel Alerts – “Aviva PLC”