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Holcomb Signs Civil Liability Immunity Bill Regarding Covid-19

Last week, Indiana Governor Eric Holcomb signed the Civil Liability Immunity Bill into law. This statute provides tort immunity to claims arising from COVID-19. A tort is a wrongful action that doesn’t arise from a contract, like rear-ending someone else’s car. But this bill provides immunity for tort claims related to COVID-19, in all but cases of gross negligence. 

This immunity means that a person, business owner, or property owner, is not liable if someone contracts COVID-19 on their property. It also provides tort immunity for harm or damages resulting from the design, manufacturing, labeling, selling, distribution, or donation of a “COVID-19 protective product.” It also covers those unapproved products used to treat, test, diagnose, or prevent the spread of COVID-19. 

As noted earlier, this bill excludes acts or omissions of gross negligence. Gross negligence is the voluntary disregard of the use of reasonable care. This means that if a person committed gross negligence a court may find them liable for harm or damages related to COVID-19 caused on their property or via their product(s). To avoid committing gross negligence, be sure you’re following CDC guidelines, as well as local and state regulations and ordinances.

Some states have already passed liability immunity laws, while others are pending legislation. Visit this article for more details on what each of the 50 states are doing. 

If you have any questions about the bill give your lawyer at Jones Obenchain a call.

5 Q&As About the Corporate Transparency Act

Congress recently passed the Corporate Transparency Act in an effort to continue mitigating money laundering through shell companies. This law requires corporations and limited-liability companies to disclose “beneficial ownership” information to the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN). The CTA is a part of the National Defense Authorization Act

Here’s what you need to know:

  1. Who is defined as a “beneficial owner”? The CTA requires private companies, specifically corporations and LLCs, to report all those individuals who, whether directly or indirectly, possess at least 25% of ownership interest in the company, and those who exercise substantial control over it.
  2. What owner information must be reported? Required information includes the owner’s name, birthdate, address, and either driver’s license or passport number. 
  3. What businesses does the CTA apply to? While the statute explicitly applies to corporations and LLCs, Treasury regulations may extend the CTA’s reach to partnerships and trusts. The statute does not apply to publicly traded companies, heavily regulated companies (e.g., banks and credit unions), and companies with at least 20 full-time employees that reported more than $5 million in gross receipts on prior tax returns. The CTA also authorizes Treasury to create additional exemptions.
  4. When will this statute take affect? Treasury has until January 1, 2022, to adopt regulations concerning this bill. Private companies formed on or after this date will have to provide this information at the time of formation. Companies formed before this date will have a longer period after adoption to file their reports.
  5. Are there penalties if you fail to comply? Yes, there are penalties for noncompliance. These include civil penalties up to $500 per day, and criminal penalties of up to $10,000 and up to two years in prison.

If you think the Corporate Transparency Act may apply to you, be sure to talk to an attorney to clarify. And if it does apply to your business, be sure that you review and enhance your compliance processes so that you report all required information to FinCEN. 

We will keep you updated as Treasury releases more information and clarifies regulations. Please don’t hesitate to contact the attorneys at Jones Obenchain with any questions. 

Illegal Job Interview Questions: What You Can and Can’t Ask Candidates

The economy is starting to recover and that means businesses are beginning to hire again. Excellent news! But you’re probably aware that there are certain questions that are illegal for an employer to ask during a job interview. you may be wondering, as an employer or job candidate, what questions are proper to ask in a job interview? And which ones aren’t? The questions you ask during an interview matter. Of course, this can be tricky as interviewers juggle the task of ensuring they do not ask any questions that solicit information from a candidate that could be used to discriminate against them. 

Questions related to a candidate’s age, medical information, height, weight, race/ethnicity/color, gender/sex, citizenship, religion, disability, medical status, marital/family status, or pregnancy could open your business up to a discrimination lawsuit. Some lawsuits have cost businesses millions of dollars. We’ve outlined some guidance on legal vs. illegal job interview questions, including additional considerations for COVID-19.

The EEOC’s Role

The U.S. Equal Employment Opportunity Commission enforces workplace anti-discrimination laws, including:

Because of the laws laid out in these statutes and others, interviewers must take care not to ask questions or lead a conversation toward information that may be considered discriminatory. Doing so could open the door to an investigation by the EEOC, and potentially a lawsuit.

It’s always best to structure interview questions so that they help you determine if a candidate has the behaviors, skills, and experiences necessary for the job. Some infor­mation may be disclosed after hiring only, like proof of citizenship, marital status, number of dependents for tax purposes, and proof of birthdate.

Legal vs. Illegal

So that you don’t have to learn the hard way, below find a chart with the most common areas where interview questions can become improper and examples of illegal questions.

 LegalIllegal 
AgeUsually asking a candidate’s age is not permitted, except when age is a requirement (i.e. working in a bar). In this case, employers may ask for their age and for proof.How old are you? What year were you born? What year did you graduate high school?
Citizenship/National OriginAre you legally eligible to work in the U.S.? Can you provide proof of citizenship/visa/etc. if we hire you? Are you a U.S. citizen? Where were you born? What country is your family from?
DisabilitiesEmployers should accurately describe the job and its responsibilities and then ask if the candidate can perform all of its functions. Have you ever been injured while working? Have you ever filed a workers’-compensation claim?
Marital/Family StatusDo you have any commitments that might prevent you from completing the responsibilities or shifts of this job?Are you married? Single? Do you have children?
PregnancyHow long do you plan on staying with us? Do you have any leave planned?Are you currently pregnant? Are you currently trying to have children?
Financial StatusAsking if a candidate owns a car is only permissible if owning a car is a requirement of the position.Do you own a home? Do you rent? Do you own a car?
Genetic InformationIt is not permissible to ask any candidate about their genetic information or history.Do you or any members of your family have a history of disease?
Height/weightThese questions may only be asked if you can prove that a candidate’s height and weight are relevant to the job. If not, accurately describe the job and its responsibilities and then ask if the candidate is able to perform all of its functions.How tall are you? How much do you weigh?
Personal InformationHave you ever worked for us before under another name? What are the names of your references?Have you ever changed your name through a marriage application? What is your maiden name?
Race or colorNo question about this topic is permissible unless you can prove it is an occupational requirement. All questions about race or color.
Religion/CreedNo question about this topic is permissible.What denomination are you? Who is your pastor/spiritual leader?
Sex/Orientation/Gender IdentityNo question about this topic is permissible.What gender do you identify as?

Sometimes a job candidate will voluntarily offer up such personal information without you asking. If this is the case, do not follow up on their comment and do not make it a part of your decision-making process. 

Additional COVID-19 Considerations

The CDC has determined that an employee who is infected with COVID-19 poses a threat to a workplace and its occupants. So some conditions of employment are contingent on this fact. Here are three items to consider:

  1. If an employer needs a job applicant to start immediately and the individual has COVID-19 or symptoms of it, the employer may withdraw the job offer because the employee is not fit to enter the workplace. 
  2. An employer may not withdraw or postpone a job offer if an individual is pregnant or 65 years or older (conditions which the CDC has identified as placing individuals at a higher risk for contracting COVID) as being at higher risk does not justify such action. However, an employer may consider offering a telework option to the individual in question or discuss postponing the start date with the individual.
  3. An employer may not hold a job offer contingent upon an COVID-19 antibody test. The ADA considers an antibody test a medical examination, which is not allowed unless the medical exam is “job-related and consistent with business necessity.” Since the CDC stated that antibody tests should not be used to make decisions about employees returning to the workplace, and an employer may not administer or require an employee or job candidate to obtain an antibody test as a condition of returning to work. 

You can also check out the EEOC’s guidance on this and other related topics.

Interviewers should beware of the consequences of asking illegal interview questions and how to best structure questions to obtain only the information necessary to ascertain if an employee has the experiences, skills, and behaviors necessary to perform a job. Be especially conscious of it in a more casual interview setting, like taking a candidate out for lunch or dinner. Employers should also beware of the nuances that COVID-19 has added to the hiring process. 

If you have any questions about the legality of interview questions as an interviewer or interviewee, give us a call today!

Do You Need a Lawyer to Buy a House?

So you just signed a contract to buy a home—congratulations! One question we frequently receive from clients in this situation is whether they need to involve their lawyer to buy a house. Since a house is a large investment with many moving parts. It’s important that this process is handled correctly to avoid more issues down the line. 

Is a Lawyer Necessary?

The short answer is that in a standard home-buying situation you likely do not need to involve your lawyer if you already have a realtor. An experienced real-estate agent can answer most questions about your purchase agreement. They can also keep you on track with deadlines and other details. But your realtor is not qualified to give legal advice, nor are they obligated to explain the details of your purchasing agreement to you.

If you are not using a real-estate agent, you should consult a real-estate attorney.

The Most Important Thing to Know

What’s the most important part of the home-buying process? Making sure you understand the purchase agreement. This contract outlines all the terms of the purchase. As the buyer, you must understand all the details and expectations laid out to avoid future issues. The purchase contract should include:

  • Identification of the parties
  • Description of the property (including its condition)
  • Rights and obligations of the contract 
  • Pricing and financing
  • Amount of the earnest money deposit 
  • Additional purchase details (i.e. what appliances are included and excluded)
  • Contingencies of the sale (i.e. a loan or inspection contingency)
  • Terms of possession
  • Closing costs and responsible parties
  • Closing and possession dates
  • Parties’ signatures

Details to Look Out For

Even if you are an experienced homebuyer, not every purchasing process or contract is the same. Here are five additional items to look for in your purchasing contract:

  1. Home-Inspection Contingency. Your contract should include a home-inspection contingency clause. In essence, this clause states that the contract is only binding if the results of the home inspection fall within the provisions outlined in the clause. This means that you are protected if the home does not meet the inspection standards. You may negotiate repairs or completely cancel the sale and renegotiate term based on these results. Typically, inspection-contingency clauses require that substantial defects be found for you to cancel the sale. Substantial defects include those things that impact the home’s value, or the buyer’s health and safety (think tree roots growing through the plumbing). If such defects are found, a home inspector might recommend that you hire a specialist, like a licensed plumber, for additional advice. You may need a lawyer if a dispute arises between you and the seller about whether a repair need disclosed by the inspection falls within the contingency-clause provision. The contract will also outline the dates that this home inspection and any resulting renegotiations must take place in before the contingency expires. In some states, you must sign a contingency release for the inspection contingency period to close. It’s also worth noting that if the buyer fails to complete the inspection within the contingency period then they may forfeit their earnest money deposit. 
  2. Title commitment/insurance items. Title insurance is critical for homeowners. It protects you incase unknown issues impacting the property at the time the policy was issued affect your title to the property. Obtaining title insurance has two main steps. The first one is a preliminary commitment and happens when the closing agent opens a title order. This reveals tax information, loan payoffs, homeowner/maintenance fees, public utility easements, etc. It also orders a title search. A title search is a search of public records pertaining to the property—like deeds, mortgages, liens, wills, divorce settlements, and other documents—that could affect the title to the property. These documents are then reviewed during a title examination so that the legal owner and debts owed against the property are verified. The closing agent will release a preliminary report and a title commitment, which essentially ensures that the title company will provide the insurance policy for the property after closing. The second step includes the actual closing and receiving the title policy from the title insurer. Your bank (or other mortgage company) will likely also require insurance, called a “lender’s policy.” This protects them from similar issues as a homeowner’s title insurance policy. 
  3. Mortgage-lender-appraisal contingency. When issuing a mortgage, your bank or other lending body will request an appraisal to get an objective estimate of a property’s fair market value. This will help determine if the amount of money you requested during the mortgage loan process is appropriate. The bank may require that the appraisal be performed from an approved list of appraisers. The purchasing contract should include a contingency for you to terminate the sale if the appraisal value is lower than the purchase price outlined in the contract.
  4. Subdivision covenants. If you are buying a home in a subdivision or neighborhood with a homeowner’s association, you should be sure to request a copy of the subdivision’s covenants or equivalent documents.
  5. Closing details. Once it’s finally time to close, you should ask for the closing statement in advance so that you understand what you are agreeing to by signing, and so that you know what the final closing fees will be. You should review the itemized columns for both the buyer and seller to understand where various fees, tax prorations, etc. are coming from.

It’s also worth noting that if there is any reason at all that you feel you cannot or should not follow through on your purchasing contract, it is always best to consult your real-estate attorney first. There are penalties, like losing your earnest money, and other unforeseen risks for failure to follow through on the contract. Talk to your attorney before you take any steps in this direction to be sure you mitigate the risks.

Understanding these details is imperative to understanding your entire contract. Remember, there will be nuances to your home-buying process based on your location and unique purchasing agreement. This is not a one-size-fits-all outline for buying a home, so consult your attorney or trusted realtor for more details.

If you have any questions about the home-buying process, give the real-estate lawyers at Jones Obenchain a call

Putting Your Home in a Trust: Pros & Cons

Estate planning can be tricky, especially with the uncertainty of a rocky global economy. But that’s precisely why estate planning is so critical to ensuring a secure financial future for you and your family. One way to create this security is to put your home, and other high-value assets, into a trust. We’re covering exactly what a trust is, how it can be used, and the pros and cons of putting your assets in one. 

What is a Trust?

A trust is a fiduciary relationship in which one party, the trustor or grantor, gives the second party, the trustee, the right to hold assets/property for a third party, called the beneficiary. When the trustor dies, the trustee ensures that the assets are distributed according to the trustor’s wishes as spelled out in the trust’s rules. Those rules can also establish how the assets and money are used while the trustor is alive. Not only does a trust outline the trustor’s wishes, but it can also provide legal protection for the trustor’s assets; trust assets can avoid taxes and probate and protect assets from creditors.

Different kinds of trusts serve different purposes:

  • Revocable vsIrrevocable – A revocable trust can be changed or terminated by the trustor during their lifetime and can serve to benefit the trustor while they are alive. An irrevocable trust cannot be changed once established because ownership of the assets lies with the trust and not with the trustor. This is what allows an irrevocable trust to avoid estate taxes. A revocable trust typically becomes irrevocable upon the trustor’s death.
  • Living vs. Testamentary – A living trust determines how an individual’s assets can be used to the individual’s benefit during their lifetime. You can be the trustee of your own living trust and can name a co-trustee (for example, a spouse) to continue managing the assets in your trust. A testamentary trust outlines how an individual’s assets are designated after their death and can only be irrevocable.
  • Funded vs. Unfunded – A trust is funded when the individual titles assets in the name of the trust, whereas a trust is unfunded when assets are not titled in it. 

Pros & Cons

Now that you know what a trust is and what it can be used for, you need to weigh the benefits and disadvantages.

The Pros

There are many positives of putting your home and other assets in a trust, some of which are noted above. First and foremost, titling assets to a trust makes certain that your beneficiaries won’t get tied up in probate. This saves everyone time and money. Probate is the legal process ensuring you have no outstanding debt and that your assets are distributed according to the law. Assets in a will, for example, are subject to probate. 

Unfortunately, the probate process can be lengthy. The whole affair could take as few as five months, but standard cases generally take nine months to a year, and even longer for contested cases. And the family/beneficiaries of the item in probate must pay any legal fees, taxes, and extraneous fees associated with it before receiving the assets. Assets in a trust could be distributed in as little as a few weeks, all while avoiding expensive fees and taxes. 

If an individual owns assets in multiple states but does not put them in a trust, those assets are subject to the unique probate law of each state. So, the beneficiaries would have to navigate multiple probate courts to receive the assets. Titling your assets in a trust avoids the extensive probate process and accompanying fees in multiple states.

The probate process is public, meaning that anyone can see your estate and assets. Since trusts are not subject to probate, your estate remains a private matter. The contents of your trust are known only to your beneficiaries after your death.

Putting your assets in an irrevocable trust means that they are protected from creditors and steer clear of estate taxes. Assets in an irrevocable trust may not be seized by creditors and are not subject to estate taxes, which is beneficial as assets appreciate. 

A living revocable trust protects your assets from conservatorship if you become incapacitated. A conservatorship happens when the court appoints a guardian to manage the incapacitated individual’s finances. But a successor trustee (like the spouse of the trustor) chosen by the trustor can manage the finances and assets in a revocable living trust —unlike a guardian appointed by a judge—who steps up as the trustee if the trustor is incapacitated.

The Cons

While there are many benefits to putting your home in a trust, there are also a few disadvantages. For one, establishing a trust is time-consuming and can be expensive. The person establishing the trust must file additional legal paperwork and pay corresponding legal fees.

While accurate record-keeping can be a challenge, trusts are more complex so keeping up-to-date records is paramount, particularly for tax purposes. Taxes are relatively straightforward for a living trust if you are both grantor and trustee. On the other hand, moving assets in or out of the trust requires additional records. It can be easy to forget about recordkeeping if it’s been some time since you established the trust. After establishing a trust, you should regularly revisit your trust to ensure it is accurate and best serves your needs. Trustees are also obligated to account to the beneficiaries on a regular basis for the managed assets.

As alluded to earlier, in the case of a revocable trust, the assets in it are not removed from your taxable estate at the time of your passing. This is because in a revocable trust you still maintain ownership over the items in it. So your beneficiaries may still have to pay estate taxes on the assets in your revocable trust after your death.

And for the same reason that your estate is still taxable, assets in a revocable trust may also be seized by creditors. If this happens, the trust could be dissolved to compensate the creditor. 

While there are a few cons to putting your home in a trust, the benefits may  outweigh the drawbacks. Even though it can be costly and somewhat time-consuming on the front end, a trust ensures that your assets are distributed as you see fit to best benefit your family, without the lengthy public probate process and additional fees and taxes. 

Give us a call today if you are wondering if establishing a trust is the right estate planning move for you. 

9 Ways the New Covid Relief Bill May Help Your Small Business

On Sunday, December 27, 2020, President Trump signed the second covid relief bill for $900 billion. This is the second-largest relief bill in U.S. history after the $2 trillion CARES bill passed by Congress in March 2020. This new bill allocates $284 billion to the Paycheck Protection Program for federally-backed forgivable loans to support small businesses. 

This bill outlines more strict eligibility guidelines than the previous bill. Loan receivers must use said loan within 8 to 24 weeks of granting. These new loans cap out at $2 million as opposed to the previous $10 million. While the Covid relief bill may be more strict, it also clarifies points of confusion with the previous PPP. It also offers items in aid of small businesses that were not included in the previous bill. 

What Do You Need To Know?

  1. Congress has settled the dispute over whether expenses paid with the Paycheck Protection Program funds are tax-deductible. While the previous bill was confusing, Congress determined that any PPP or Economic Injury Disaster Loan (EIDL) funds used to pay for items that are usually tax-deductible will still be deductible for 2020. 
  2. This means you will likely pay less in taxes for 2020. Because standard deductible expenses paid for with PPP or EIDL loans are still deductible and the government will not tax either form of the loan, even though small business loans normally are, your small business will most likely owe less in 2020 taxes. That’s certainly something we can all be happy about. But remember to track how you use these funds because both PPP loans and EIDL grants are auditable.
  3. Even if a small business received a loan in the first round of PPP loans, it is eligible to apply again for PPP2. A small business may apply again if it has 300 or fewer employees, have or will use the full amount of their previous PPP, and can show a decline of at least 25% in revenue from comparable quarters in 2020 and 2019. It gets better: if your small business returned its loan or received less than it was entitled to under PPP1, you can now request more funding. But you must spend at least 60% of this funding on payroll expenses. 
  4. PPP2 will allow first-time borrowers from additional groups. These include businesses with over 500 employees, sole proprietors, independent contractors, other self-employed individuals. It also covers non-profits (includes churches), and hospitality/food-service businesses with fewer than 300 employees per physical location. 
  5. Congress approved more expenses as forgivable under the PPP2. PPP1 covered costs such as payroll, rent, utilities, and some mortgage interest. These additional expenses forgivable under PPP2 include covered operational expenses like cloud software, sales and billing software, product delivery, etc. It also includes any expenses incurred from worker and facility protection measures, like personal protective equipment, in compliance with CDC guidelines. Other eligible expenses include property damage costs caused from the public disturbances in 2020 that are not covered under insurance. Finally, the PPP2 covers certain supplier costs that were essential to the business at the time the business placed the purchase and/or in fulfillment of a contract or a purchase order made to a supplier before or during the covered period for perishable goods.
  6. You may be eligible to receive the full EIDL GrantUnfortunately, the Small Business Association’s funds ran out when they changed the original Economic Injury Disaster Loan Grant from $10,000 per business to $1,000 per employee during the first stimulus bill. But this round you may qualify for the full $10,000, minus any grants already received. But this time eligible businesses must align with more strict qualifications. These include having fewer than 300 employees, being located in a low-income community, and have suffered a revenue loss of over 30%. These are in addition to the original qualifications outlined in the CARES Act. 
  7. You may be able to utilize the Employee Retention Tax Credit. While businesses largely overlooked this tax credit under the first relief package, the second one now allows businesses to use it in conjunction with the PPP2. This tax credit is refundable against up to 50% of qualified employment taxes that eligible employers paid between March 12, 2020, and January 1, 2021. Find out more here
  8. The bill simplifies the forgiveness application process for any loans under $150k. Under the new criteria, you need only supply the lender with signed certification of how many employees you were able to retain because of the loan funds, what portion of the loan the business spent on payroll costs, and verification of the accuracy of the supplied information and compliance with the required record retention period. This should simplify the process for over 85% of PPP loans. The SBA will release this new application form in the next month, but until then businesses may use the current forgiveness-form 3508S.
  9. The new bill specifically allocates funds for Community Development Financial Institutions and Minority Depository Institutions. It sets aside $15 billion in funding for CDFIs and MDIs for low-cost and long-term capital investments. It also designates some of this money to the CDFI Fund to provide grants in support of other small businesses and non-profits.

What Doesn’t It Include?

It’s important to note that the loan package excludes certain businesses, including businesses dealing specifically with politics (i.e. a state political party). It also encompasses businesses that operate widely in China or have Chinese residents on their boards, or concert venues, theaters, and museums. These arts venues, though, may apply for a Shuttered Venue Operator Grant of up to $10 million. The application process for this grant is still in the works.

2020 was a tough year in more ways than one, but the Covid relief bill will provide some financial cushioning for small businesses who have fallen on hard times. And remember, like we mentioned before, be sure to keep detailed records of how any funds you receive are used in case of an audit down the road. 

If you have any questions about how your small business can utilize the PPP2, contact us today!

Can Employers Require Workplace COVID-19 Vaccination?

Since the beginning of the Covid-19 outbreak, pharmaceutical companies all over the world have been working tirelessly to create a vaccine. According to the CDC, the U.S. Food and Drug Administration has only authorized and recommended the Pfizer-BioNTech vaccine to prevent COVID-19. As of late November, three other vaccines, from Moderna, Janssen, and AstraZeneca, went into Phase 3 testing. 

With mass vaccine distribution on the horizon, things are starting to look up. 58% of American adults say they will get the vaccine once it becomes available. But what about those skeptical of the vaccine’s effectiveness? Employers may wonder whether they can require employees to take the vaccine as a condition of employment. As with many similar issues, the answer isn’t black-and-white.

New EEOC Guidance: Workplace COVID-19 Vaccination

On December 17th, the Equal Employment Opportunity Commission issued new guidance regarding workplace COVID-19 vaccinations. Since the beginning of the pandemic, the EEOC has noted that COVID-19 meets the Americans with Disabilities Act’s direct-threat standard. The ADA states that it poses a “significant risk of substantial harm” to those in the workplace. This means the ADA allows some more extensive controls in the workplace—like screening questionnaires and medical testing—than there would be under its typical guidelines. 

The EEOC’s guidance addresses an array of questions and concerns from employers, but here are the key takeaways:

  • The COVID-19 vaccine is not considered a “medical exam­ination” under the ADA. This means an employer may generally mandate workplace vaccination under federal law as a requirement for returning to, or remaining at, work.
  • But an employer must attempt to provide reasonable accommodation to employees who decline to receive the vaccine based on medical disabilities or sincerely held religious beliefs. 
  • Pre-screening questionnaires and other medical forms given by an employer to an employee in relation to a vaccination may conflict with the ADA’s provision on inquiries related to disability. If such a pre-screening is necessary, the employer must ensure that the ques­tions are job-related and “consistent with business necessity.” 
  • Title II of the Genetic Information Nondiscrimination Act, which makes it illegal to discriminate against an employee because of genetic information, does not apply when an employer administers the vaccine to employees or requires proof of COVID-19 vaccina­tion. But any questions asked in a pre-screening pertaining to genetic information could violate GINA. 
  • An employer requiring a COVID-19 vaccination may determine that an employee who cannot receive the vaccine due to a disability or religious belief poses a direct threat in the workplace. The employer cannot exclude that employee from the workplace unless there is no other way to provide reasonable accommodation that would either reduce or eliminate the threat. Reasonable accommodation only persists so far as the employer does not incur “undue hardship”, which is defined as significant difficulty or expense to provide an accommodation.

How Employers can Prepare

With these guidelines in mind, particularly those pertaining to reasonable accommodation, there are a few things for employers to review to determine whether mandatory workplace vaccination is the right move for your company. Here’s what you need to know:

  1. Consider whether mandatory vaccination is truly necessary in light of other, less invasive practices, like remote work, social distancing, mask usage, and other preventative measures. 
  2. The CDC and other government organizations are actively advocating to implement a vaccination plan for critical workers on the state and local level. 
  3. If vaccination is necessary, employers should determine if it is needed for all employees. It may be possible to relegate it to high-risk departments or locations where the other means of limiting the virus are less viable. Note that employers may need to negotiate the implementation of a mandatory vaccine with unionized employees. 
  4. If employers deem the vaccine necessary, be sure to give employees enough time to submit requests for accommodations or modifications. This may look like additional PPE or transfers to other departments.
  5. An employer may impose a vaccine deadline based on CDC recommendations. In this case, employers should have a well-trained employee or department assigned to monitor and enforce compliance with vaccination policy. Employers should also clearly define and communicate expectations for employees if they fail to comply.
  6. Employers should consider whether it is possible to provide the vaccine at little to no cost to employees. It is also helpful to provide convenient on-site vaccination locations. 
  7. Review state workers’-compensation laws and current employer insurance policies. Any negative physiological effects derived from an employer-mandated vaccine could lead to a workers’-compensation claim. 
  8. And as always, be sure to continually monitor federal, state, and local policies, guidelines, and laws for the most recent updates in your area.

As the situation continues to rapidly evolve, employers must keep alert to decide if mandatory workplace COVID-19 vaccination is necessary. If you have any questions surrounding the legality of this topic or other concerns, give us a call!

Commercial Litigation: What You Need to Know

What exactly is litigation? It can be a confusing word, but it simply means to take legal action. While many lawsuits involve just two individuals, commercial litigation involves legal action between two businesses or companies. In fact, and contrary to popular opinion, business disputes make up the majority of civil court filings, excepting domestic relations. These lawsuits usually involve businesses suing to enforce contractual obligations.

The Nuances of Commercial Litigation

Commercial litigation follows the same process as other civil litigation, but there are a few notable differences.. The issues surrounding business disputes are often far more complex due to their specialized nature. And because the discovery process is equally as intricate it often makes commercial litigation more expensive and ties it up in court for years. 

Types of Commercial Litigation

Commercial litigation can take on many different forms, but these are a few of the most common:

  • Breach of Contract – A contract case comes forward when one or both parties claim that a contract was broken. This happens when a party fails to perform any or all aspects of the contract without a legal excuse.  
  • Partnership & Shareholder Disputes – These types of litigation arise specifically when partners, shareholders, or minority owners in a business take legal action when the other party neglects their interests or breaches the contract.
  • Employer/Employee Disputes – Issues dealing with overtime, workplace discrimination, or non-compete agreements can lead to legal battles between employers and employees. 
  • Construction Disputes – Construction law deals with anything involving the construction of a building or other structure. A dispute could concern issues ranging from employment laws established by the state or federal government to environmental regulations. 

When Should You Get a Lawyer? 

Especially in times like these, where many businesses are dealing with employment issues, potentially requiring workplace vaccination, and other health concerns, it’s important to stay ahead of the game. While it might feel more necessary to hire an attorney as a reactive measure to a commercial lawsuit, hiring a lawyer to help you before an issue has arisen is the best course of action. Business disputes can quickly erupt, so it’s best to have a trusted legal advisor on your side to help you map out a plan of action. They can help you meet both your business and legal goals. 

If you’re involved in a commercial lawsuit and need legal assistance, give us a call!

Impacts of the IRS Taxpayer Relief Initiative

Despite the $2.2 trillion stimulus bill released by the Federal Government in late March and the IRS’s People First Initiative to support businesses and individuals through the pandemic, many are still experiencing financial woes. And as president-elect Joe Biden pushes lawmakers to pass another relief package, the IRS recently announced that it will expand taxpayer options for making payments through the Taxpayer Relief Initiative to give flexibility to those still struggling financially.

Details of the Initiative

The IRS has always given taxpayers some alternate tax-payment methods, but this new plan expands the offerings. Here are the key items to note:

  • Qualified individual taxpayers who earn under $250,000 a year may be able to establish an installment agreement without providing a financial statement if their monthly payment proposal is deemed sufficient.
  • Individual taxpayers who only owe for 2019 and who also owe less than $250,000 may qualify to establish an installment agreement without the IRS filing a federal tax-lien notice. 
  • The IRS extended the deadline for short-term payment plans to resolve tax liabilities to 180 days, rather than 120 days. 
  • There is more flexibility for taxpayers who can’t meet the payment terms of an existing offer-in-compromise agreement. (An offer in compromise allows taxpayers to settle their debt for less than the full amount owed.)
  • For any organizations no longer in business, the IRS will automatically adjust certain tax balances of existing installment agreements. 
  • Qualified taxpayers with existing direct-debit installment agreements may be able to request a lower monthly payment rate. They may also be able to change their due date through the online payment-agreement system.

These changes do not apply to cases that are assigned to a revenue officer in field collection.

Taxes can be confusing and challenging to meet. The IRS Taxpayer Relief Initiative should help taxpayers alleviate some of the stress and confusion surrounding their taxes.

Check out our other blog addressing the impacts a new administration could have on estate taxes.

4 Ways the Biden Administration Could Impact Estate Taxes

Despite some pending lawsuits from the Trump Campaign, Joe Biden is the presumed President-elect of the United States. As we look to a Biden Administration, you may have questions about how the tax code could change. Will you owe more or less in taxes? How will this affect you and your family? Especially for those with high accumulated wealth, changing estate taxes is a primary concern. We’re covering what you can expect under a Biden Administration and how to prepare.

1. The Biden Campaign proposed returning estate tax levels to “historical norms.” 

Currently under the TCJA, the federal estate-tax exemption is $11,580,000 ($23,160,000 per married couple). This means that you can transfer up to this amount during life or at death to a beneficiary without incurring federal estate or gift taxes. Any amount in excess of this exemption is subject to taxes. 

Although President-elect Biden has not yet clarified what “historical norms” exactly means, it could indicate a return to Obama-era tax levels. This could lead to a reduction of the estate tax exemption amount to $3,500,000 ($7,000,000 per married couple) and a reduction of the gift tax exemption amount to $1,000,000 ($2,000,000 per married couple). So any estate or gift amount in excess of the exemption amounts would be subject to estate or gift taxes.

Biden, according to the tax plan he released before the elec­tion, would raise taxes on individuals with incomes above $400,000. This would include raising individual-income, capital-gains, and payroll taxes. Biden would also raise taxes on corporations by raising the corporate income tax rate and im­po­sing a corporate-minimum book tax. Those who earn less than $400,000 per year would not see their taxes rise.

2. Biden returning estate tax levels to “historical norms” may also indicate that the top gift and estate tax rate could rise to 45%. 

Current estate-tax rates top out at 40%. But under Biden’s tax plan these levels could revert to 2009 levels at 45%. This, coupled with reducing estate and gift-tax exemptions, could mean that estates with assets exceeding the estate tax exemption level would owe more taxes. The Biden tax plan would not affect most taxpayers.

3. Biden has endorsed the removal of “Step-up in Basis.”

First, let’s figure out what “step-up in basis” means. When an asset is passed on to a beneficiary on the original owner’s death, the asset has often appreciated since the time the original owner obtained it. To avoid large capital-gains taxes, the asset receives a “stepped-up” cost basis. This cost basis is the market value of the asset at the time of the original owner’s death. Current policy taxes Capital-gain income on any amount that exceeds the cost basis. So, when an asset has a higher cost basis the capital gains taxes are much lower. 

For example, Clara purchases a home in 2000 for $300,000 but then passes it on to Ben at the time of her death in 2020; the house has now appreciated to $500,000. Since the market value of the home at the time of her death is $500,000, this is the new basis of the home. Later, when Ben sells the home for $550,000, the amount he is taxed on is $50,000—the difference, or the excess, between the selling price of the home and the cost basis ($550,000 – $500,000 = $50,000). So taxes are only due on any amount that the asset appreciated over the cost basis established at the time of the original owner’s death.

Biden has indicated that he may eliminate this benefit in his tax plan. This could mean that any unrealized appreciation of the asset could be taxed at the time of the original owner’s death. Alternately, this could mean that the cost basis for an asset is what the original owner paid. To use this application in our previous example, Ben would either owe capital gains taxes on the unrealized appreciation of the home ($200,000) or Ben would owe taxes on the asset if it were sold for any amount in excess of the original price/basis, which is $300,000.

4. If you have a high-value estate, be sure to review estate-planning strategies now.

The year is winding down and it is advisable to evaluate your current estate plans. Consider how to optimize the value of your estate before year-end should the tax code change. 

If you’re feeling confused about how potential changes in Federal Tax Code could impact your estate, we’re here to help! Contact us today to find out how estate planning could help you and beneficiaries of your estate.