Thanks to Susan Mileski of Poetic Portraiture

Thanks to Poetic Portraiture for my fabulous new photo. Susan Mileski owner and Photographer, always does a great job -- just take a look at her site: http://www.poeticportraiture.com/.

Susan took our family pictures earlier this year and it was surprisingly easy. I was prepared for the standard event where I would be irritated with the children for refusing to wear the matching clothes, and then refusing to smile, but Susan managed to create a positive experience for all of us. Thanks!

Congratulations to Nicky Nicole, winner of the 2009 Hudson Chamber of Commerce Outstanding Business of the Year Award! http://ping.fm/kw6uz

Congratulations to Drs. Robert and Rebecca Ault, winners of the 2009 Hudson Chamber of Commerce Customer Service Award! http://ping.fm/vPdh2

Creditor Only Entitled to Simple Interest on Defaulted Note

In its December 3, 2009 opinion in Mayer v. Medancic, Slip Opinion No. 2009-Ohio-6190, the Ohio Supreme Court ruled 7-0 that when a debtor defaults on a written instrument which specified an interest rate payable on the unpaid balance, and there was no agreement or another statutory provision expressly authorizing the compounding of interest, the creditor is entitled to simple interest on the unpaid amount until payment is made.

The Court also held that after a debtor defaults on a written instrument, simple interest accrues on the entire amount owed, which includes both the unpaid principal and the interest that was due and payable to the creditor at the time of the default. Justice Maureen O'Connor wrote the Court's opinion.

See the Court's summary and see the streaming video of the oral argument:

http://www.sconet.state.oh.us/PIO/summaries/2009/1203/082363_090170.asp

CGI adds new Issue affecting Ohio DME

CGI, the Recovery Audit Contractor (RAC) for Ohio, has announced Wheelchair Bundling as the newest "Issue" under review.

CGI will now begin its automated review of billing for certain wheelchair bases, options, and accessories in order to make sure that Medicare overpayments have not been made on certain components which are not separately payable. Durable Medical Equipment claims are affected by this issue. For more information, the the CGI website: http://racb.cgi.com/ or one of the related links clarifying the billing issues:

Policy Related Links
National Government Services (NGS) Policy Article for Wheelchair Options/Accessories (A47229)
National Government Services LCD for Wheelchair Options/Accessories (L27223)
Noridian LCD Policy A19846
CMS Pub 100-03, Ch 1, § 280.1 & 280.3

Of course, please call with any questions.

Bryan Dardis is now one of the few attorney LEED Green Associates in the State of Ohio! http://ping.fm/x1ND0

Dardis earns LEED Green Associate Designation

Bryan Dardis is now one of the few attorney LEED Green Associates in the State of Ohio!

Bryan Dardis is a LEED Green Associate. LEED is an internationally recognized green building certification system, which provides third-party verification that a building or community was designed and built using strategies aimed at improving performance in energy savings, water efficiency, CO2 emissions reduction, improved indoor environmental quality, and stewardship of resources. Developed by the U.S. Green Building Council (USGBC), LEED provides building owners and operators a concise framework for identifying and implementing practical and measurable green building design, construction, operations and maintenance solutions.

The LEED Professional Credentials indicate professional excellence, a strong depth of knowledge and practical understanding of the LEED Rating Systems. Bryan is able to use his knowledge in this area to assist companies with established sustainability programs, product manufacturers, marketers, support staff, analysts, and designers, who may be involved in a green building project. Call Bryan at 216-831-0042 or visit the website at http://www.meyersroman.com/

CGI posts RAC Sample Demand Letter

CGI, the RAC contractor for Ohio, has posted a sample demand letter on its website. All providers should review the letter and become familiar with the time frames. Importantly, providers have 15 days in which to rebut claims, and interest on overpayment begins to accrue on day 31. Providers need to make sure that staff, especially those responsible for the mail, understand what the demand letter means, and that it is immediately delivered to the appropriate department. In addition, providers should continuously monitor CGI's website to review current posted Issues. Once an Issue is posted, CGI can begin auditing records related to that Issue.

CGI’s website is located at: http://racb.cgi.com/ . You can also email CGI with questions at racb@cgi.com or use the call center at 877-316-RACB (7222).

FTC delays Red Flags Rule yet again! http://ping.fm/HuGHz

Red Flags Rule Delayed Again!

The Red Flags Rule has been delayed again.

At the request of Members of Congress, the FTC has delayed enforcement of the “Red Flags” Rule until June 1, 2010 for financial institutions and creditors.

The Red Flags Rule requires “creditors” and “financial institutions” with "covered accounts" to address the risks of identity theft by developing and implementing written prevention programs. Businesses must then respond to patterns, practices, or specific activities – known as “red flags” – that could indicate identity theft.

Enforcement of the Rule has already been delayed a number of times, and the latest delay demonstrates the government is having second thoughts. Despite the good intentions, the Red Flags Rule creates a significant burden for businesses. Even with all of the easy to use tutorials provided by the FTC, businesses will have to devote substantial time, and perhaps attorneys fees, to the preparation and implementation of an appropriate plan. Then, after the plan is developed, the workforce will have to be trained and re-trained over time. In this economic climate, this kind of burden may be too much to ask.

See the FTC's statement for yourself: http://www.ftc.gov/opa/2009/10/redflags.shtm

Mario Fazio, certified tax specialist, gives year-end planning tips on my blog: http://ping.fm/Gs4eE

Year End Planning Tips for Business and Individuals

Mario Fazio, MRFL's Certified Tax Specialist, gives year-end planning tips for businesses and individuals. His client alert is set forth below:

Year-End Planning Ideas for Businesses and Individuals
This Client Alert sets forth a list of year-end planning ideas for both businesses and individuals. We present for your consideration both legal and tax items that may significantly improve your "bottom line." We recommend that you review each of the items to determine its applicability to your particular situation. If you would like to discuss any of these matters in further detail, please feel free to contact one of our attorneys.

Business Items

Company Year-End Records Review – An ounce of prevention is worth a pound of cure. Both corporations and limited liability companies are required to maintain certain legal documentation. Annual meetings, elections of directors, managers and officers and approval or ratification of significant actions are required for almost all companies, big or small. Failure to maintain these records, or to annually update them, may create the risk of personal liability for the owners for the business’ debts and may also invite tax problems. Year-end "housekeeping" also gives business owners a good opportunity to review Bank documents, licenses, leases, contracts, permits, insurance and similar documents to ensure annual compliance.
Intellectual Property. A company’s proprietary information may be one of its most valuable assets if it creates a competitive advantage. Intellectual property may include customer and vendor lists, pricing information, marketing strategies and research, processes and similar trade secrets. Determine if all intellectual property is protected or, if any trademarks, trade names, copyrights, etc. are required to be filed or renewed. Where protection of trade secrets is critical to the continued success of a business, the company should consider adopting a formal Trade Secrets Protection Plan as well as a Records Retention Policy.
Employees. If you have employees, you should consider using employment agreements to protect the company’s trade secrets. Generally these protections can be accomplished through proper confidentiality, non-competition and non-solicitation restrictions.

Employment Handbook. The risk of employment-related law suits can be greatly diminished by having a properly drafted Employment Handbook, which outlines company policies and procedures relating to employment without giving rise to an enforceable "contract."
Employment Law Compliance. Any business with employees is subject to numerous legal requirements, which may include OSHA, EEO, HIPAA, tax and other laws. An annual review of these compliance issues may avoid costly governmental audits in the future.

Incentive Compensation and Succession Planning. Developing and retaining key employees may be critical to the ongoing success of a business, including the period after an owner’s departure. To attract and retain key employees, incentive compensation is frequently used to align the interests of the owners and the key employees. Year-end bonuses, profits interest, stock options, "phantom equity," stock appreciation rights, or stock grants are examples of incentive compensation plans. Any incentive compensation plan should be customized to the particular business and the people involved, so that it properly motivates, but does not over-compensate, the key employees.

Buy-Sell Agreements. A business owner should plan for an untimely death or disability, or his or her retirement from the business. Having in place a comprehensive buy-sell agreement with one or more co-owners, or third parties, will make it more likely that ownership transitions will be successful. Existing buy-sell agreements should be reviewed annually for compliance issues, such as whether a valuation of the business is required or life insurance coverage requirements are being met, or if the terms of the existing agreement still meet the owners’ goals and expectations.

Company–Owned Life Insurance. Life insurance may provide an important cash cushion during the time the business is recovering from the death of an owner or key employee. It can also be used to fund the purchase of an owner’s interest in the business. In 2006, Congress added a notice, consent and reporting requirement for company-owned policies acquired after August 17, 2006. Failure to comply with these requirements will cause the life insurance proceeds in excess of the company’s premium cost to be taxable as ordinary income to the company. The company must report annually its compliance with these requirements on its federal tax return. Life insurance policies owned by individual shareholders to fund "cross-purchase" buyout arrangements are not subject to these requirements.

Favorable Expensing Rule for 2009 Capital Purchases. There is a favorable tax deduction for purchases of new equipment, machinery and other tangible personal property, which are used in a business prior to January 1, 2010. Up to $250,000 of the cost of such property may be deducted in 2009, subject to a phase-out limit if the total of such purchases exceeds $800,000 for 2009. At this time it is unclear whether Congress will extend this provision for 2010 purchases.

Favorable Depreciation Rule for 2009 Capital Purchases. In addition to the first-year expense as outlined above, 50% of the remaining cost of such purchases (new machinery, equipment and other tangible property) may be deducted if the purchase is made, and the business begins to use the property, prior to January 1, 2010. The result of these two tax favorable rules is that all or a substantial portion of the cost of such purchases may be written-off in 2009. At this time it is unclear whether Congress will extend this provision for 2010 purchases.

Leasehold Improvements. 50% of the cost of qualified leasehold improvements, whether made by the tenant or the landlord, is tax deductible in 2009. The remaining cost may be depreciated over 15 years using the straight-line method (instead of the usual 39.5 year rule). At this time it is unclear whether Congress will extend this provision for 2010 leasehold improvements.

DISC for Exporters of US-Made Goods. A DISC is a separate corporation that meets certain requirements and makes a DISC election with the IRS. Owners of businesses that export US-manufactured goods may find it beneficial to establish a DISC to shelter up to 50% (or more) of the net income otherwise earned by the business from the export sales. The sheltered income must be paid to the DISC and is exempt from federal income tax. However, the DISC income is taxable as a dividend to the owner when it is distributed to the owner. For 2009 and 2010,
qualified dividends are taxed at the favorable 15% rate (which is far lower than the top 35% rate that otherwise applies to such income in the absence of the DISC).

Qualified Retirement Plan Contributions. To defer income, business-owners and employees should maximize their qualified retirement plan contributions. A standard 401(k) plan typically allows employees to make annual contributions of up to $16,500 for 2009. For profit-sharing plans, the contribution amount limit is $49,000 for 2009. Certain qualified pension plans may permit substantially higher contributions for the benefit of the owner depending on a variety of factors, including the owner’s age. New or amended plans may be adopted for 2009 on or before December 31, 2009. Deductible contributions for 2009 are due on or before the due date of the business’s tax return (including extensions) for 2009.

2009 Net Operating Losses May Be Carried Back Five (5) Years. Most businesses may elect to carry-back a 2009 net operating loss ("NOL"), either three (3), four (4) or five (5) years, instead of the normal two (2) year carry-back period. This additional carry-back period may allow businesses to convert a 2009 NOL into tax refunds for taxes paid in profitable years back to 2004.

Five to Ten Year Deferral of Tax on Cancelled Debt. Businesses may defer taxable income that arises from the cancellation, satisfaction or retirement of debt at a discount during 2009 or 2010 even though they are solvent and continue to operate. The tax break allows a business to elect to defer the taxable income until the fifth (5th) year following the year in which the cancellation occurs, and then report the income ratably over five (5) years (20% each year). Insolvent businesses whose debt is cancelled may continue to use the so-called "insolvency exception" to completely exclude the cancelled of debt from taxable income.

Individual Items

Roth IRA 2010 Conversion. Starting in 2010, the adjusted gross income (AGI) limitation on individuals electing to roll-over qualified plan assets to Roth IRAs will be eliminated. Thus, in 2010 everyone can consider making Roth conversions of existing traditional IRAs or rolling-over distributions from qualified plans to a Roth IRA. Generally, in making a conversion to a Roth IRA, the roll-over amount will be subject to income tax. For Roth conversions made in 2010, a special rule allows the income to be spread between 2011 and 2012 (half of such income in each year). The important benefit of a Roth IRA is the tax-free growth of the assets and the future tax-free distributions to the owner of both principal and income.

Energy Efficient Improvements to Residence. A maximum $1,500 tax credit is available for individuals who make improvements to their principal residence in 2009 and 2010 that meet certain energy efficiency standards. The credit is equal to 30% of the sum of amounts paid or incurred during the tax year for (1) energy efficiency improvements to the building envelope (for example, windows, exterior doors, roof) and (2) expenditures for qualified energy property.
Suspended Losses for Members of LLCs. Depending on the level of involvement of a member in the business of an LLC, recent judicial decisions may permit that member’s losses that were reported as suspended under the passive activity rules (Section 469 of the Internal Revenue Code) to be recharacterized as non-passive under certain limited circumstances. If you have suspended passive losses from a business in which you had some involvement (other than solely as an investor), you may be eligible to use those losses by treating them as non-passive depending on your circumstances.

Estate Planning. At least every three years or so, every individual should review his or her estate planning documents, including the Revocable Trust, Will and health care documents (living will, appointment of health care agent and HIPAA release). Due to changing family circumstances and changing laws, proper updating to existing documents may be required. For those individuals who own, or who are considering purchasing, life insurance, the use of an irrevocable life insurance trust may be advisable to avoid estate (death) tax on the proceeds.
Annual Gift Planning. Whether making intra-family or charitable gifts, completing the gifts prior to year-end is critical for tax planning. For 2009, an individual may gift up to $13,000 in cash or property to each family member or other persons. For a married couple, this amount may be increased to $26,000 per person. Using a family limited partnership or family limited liability company to facilitate the gifts may increase the size of these gifts by up to 50%, through applicable valuation discounts. Over a two or three decade period, an annual gift program, if properly structured, may pass to the next generation millions of dollars of family wealth without the payment of estate or gift tax.

Life Insurance. We recommend having your life insurance policies reviewed to determine if the death benefit is secure and the life insurance company has maintained its credit rating. In some cases, in addition to relieving your concern, these reviews can result in shopping the policy for a lower premium payment for the same or greater death benefits. If you wish to review your current life insurance, you should contact your life insurance broker, or let us recommend some brokers with whom we have worked. Many brokers will perform the review for little or no charge.

Use of Estate Planning Trusts to Provide Asset Protection. Use of a lifetime irrevocable trust created by a person (grantor) for the benefit of the grantor’s spouse and/or other family members may be designed to provide asset protection for the trust assets against creditors of both the grantor and the family members. A wholly discretionary trust generally provides the maximum amount of asset protection. A wholly discretionary trust is one that is irrevocable, grants the trustee broad discretion to determine the timing and amount of distributions to beneficiaries, and meets other requirements.

Home Buyer Credit Extended and Liberalized. The so-called $8,000 "first time home buyer’s tax credit" has been extended to include purchases of principal residences on or before May 1, 2010. The tax credit also applies to the purchase of a principal residence before July 1, 2010 by any taxpayer who enters into a written binding contract before May 1, 2010 to close on the purchase on or before July 1, 2010. The tax credit is also now available to higher income taxpayers whose modified AGI does not exceed $225,000, with a complete phase-out at modified AGI of $245,000 for joint filers. In addition to first-time buyers, the tax credit is now available to "long-time residents," who are defined as maintaining the same principal residence for any five-year period during the eight-year period ending on the date of the purchase of the new residence. The new law also imposes an $800,000 purchase price limit.

IRS CIRCULAR 230 DISCLAIMER: To the extent that this Client Alert may address certain tax issues, this written communication is not intended or written to be used, and cannot be used, by any persons to avoid any potential tax penalties that may be asserted by the Internal Revenue Service. In addition, this communication may not be used by anyone in promoting, marketing or recommending the transactions or matters addressed herein.
This Client Alert is a summary only, prepared for general informational purposes, and is not an exhaustive description of the complex legal issues addressed herein. Nothing in this Client Alert is intended or is to constitute a legal opinion or legal advice from Meyers Roman Friedberg & Lewis or any of its attorneys. This Client Alert is not intended or written to be used, and cannot be used, by you or any other person to avoid any potential tax penalties that may be asserted by the Internal Revenue Service. To the extent the attached Client Alert mentions federal tax matters, it is not intended or written, and cannot be used, for the purpose of avoiding federal tax penalties. In addition, the attached Client Alert may not be used by anyone in promoting, marketing or recommending the transaction or matter addressed therein.

ODH requires Immediate Notification on Injuries.
http://ping.fm/sKmji

ODH Requires Immediate Notification on Injuries

In a November 6, 2009 letter, ODH has made a clear change in the policy regarding the current Injury of Unknown Source Investigation Guide. ODH has now made it clear:

"All alleged violations involving mistreatment, neglect, or abuse, including injuries of unknown source and misappropriation of the resident property be reported immediately to the administrator and to the State survey and certification agency.

Further, CMS states 'CFR 483.13(c)(2) and S&C 05-09 memo does not allow providers 24 hours to investigate and then determine if an incident is reportable. '"

Based on this CMS guidance, [ODH has] removed the injury of unknown source (IUS) investigation guide from the ODH website. " (emphasis in original).

ODH has promised to change its webiste to remove the current flow chart. Facilities should make sure that their policies are updated.

Of course, please post or call with any questions.

Attended the HEDC meeting this morning and heard State Rep. Mike Moran speak. Very informative. Great comments and questions.

How will the RAC Audits work? Read my blog post to find out!
http://ping.fm/oHq0Z

How will the RAC Audit Work?

How with the RAC Audit Work?

RAC audits will NOT be performed by targeting certain practice groups (like hospitals, physicians or nursing homes), or even targeting certain specific "problem" providers. Instead, the RAC audits will review ALL of the claim records contained in the Medicare database. This means that all providers are equally at risk of audit. But, the RAC audits will not extend to all potential billing errors. Instead, the RACs are constrained to review only approved "Issues."

Currently, there are only six approved Issues, all of which appear to relate only to hospitals and physicians. But now that the mandated outreach has been conducted, new issues may be posted at any time. Certainly, speakers at the Ohio Health Care Association's conference alluded to the fact that a number of issues are making their way through the approval process.

These Issues will be listed on CMS' and the RAC contractor's website for each region. The Country was divided into four geographic regions - A, B, C & D -- and each area was assigned a specific RAC contractor. Ohio falls into RAC Area B, and CGI Federal is the assigned contractor. CGI's web address is contained below.

RAC Audits

There will be two types of audits, automated and complex. All audits will be Issue driven. The automated audit will use a computer program to review all claims in the Medicare claims data base from October 1, 2007 to the present (although there was an indication that claims are only fully updated through April, 2009). The computer program will then determine if any of the the identified Issues are found on any of the claims. (e.g., two codes that cannot co-exist = error). CGI will then attempt to identify the over- and underpayments made to providers as a result of those findings.

As with the automated review, complex review will start with a computer algorithmic analysis of the claims in the Medicare Database. And again, these reviews may only be conducted on approved Issues. But the complex review will require a review of medical records by CGI staff. If the provider is identified by the computer program, CGI will request additional documentation from the provider for review. The provider will then have 45 days (plus 10 for mailing) to submit the records. The RAC will have 60 days to review the records and make a determination.

In both kinds of review, there is an "informal period of discussion" where the provider can attempt to resolve the issue. If the matter is not resolved, the RAC will send the claim information to the fiscal intermediary to issue the adjustment in payment and the Remittance Advice to the provider. The normal appeals process follows (including the interest assessment on the 31st day, and the recoupment of any offset on the 41st day).

So what can a provider do? Read my next blog post on actions you can take to prepare for the audits!



Visit the CGI Website and study the issues for yourself:

http://racb.cgi.com/Issues.aspx?st=1

RACs Audits are underway in Ohio -- read my blog post to learn more.
http://ping.fm/ddn0D

RACs rollout is underway - Are you Ready?

RAC AUDITS ARE UNDERWAY


Yesterday, November 4, 2009, I attended the Ohio Health Care Association's Seminar on Medicare's Recovery Audit Contractors ("RACs"). RACs are independent contracting agencies hired by Medicare to assist in the identification and recovery of improper payments made to Medicare Providers. (Improper payments include both overpayments and underpayments made to Providers). The RACs are compensated on a contingent basis -- they will be paid a percentage of the money they identify and which was improperly paid to Providers. In other words, the more improper payments identified, the more money the RAC will earn.

In the Tax Relief and Healthcare Act of 2006, Congress mandated that permanent RAC programs be instituted across the United States by January 1, 2010. As part of the mandate, however, the Centers for Medicare and Medicaid Services (CMS) was required to conduct "outreach" sessions across the country before any audit could be conducted. Ohio received its "outreach session" yesterday as part of the seminar. This means that RAC AUDITS are about to begin.


If you are a Medicare Provider and bill fee-for-service programs you will be affected.


See my next Blog post on how RACs work, and let me know if you have any questions.

New EPA Greenhouse Gas Monitoring and Reporting Requirements

Peter Brosse Shares Client Alert on the

NEW EPA GREENHOUSE GAS MONITORING AND REPORTING REQUIREMENTS

On September 22, 2009, the Administrator of the Environmental Protection Agency (EPA) signed the Final Mandatory Reporting of Greenhouse Gases Rule (the “Rule”), which goes into effect on December 29, 2009 and is designed to assist in the fight against climate change. The Rule requires that, beginning on January 1, 2010, many manufacturing facilities, facilities that emit greenhouse gases (GHGs), and suppliers of fossil fuels and industrial GHGs must begin monitoring their emissions of GHGs. On March 31, 2011, these companies must file their first annual report with the EPA, showing the results of the data collected during the previous year.

Who Must Comply with the Rule?

The Rule applies to many diverse industries and types of facilities, including facilities emitting GHGs, suppliers of fossil fuels, and manufacturers of new vehicles and engines. However, some facilities that produce less than the threshold (i.e., reportable) amount of GHGs may be exempt from the monitoring and reporting requirements.

Facilities Emitting GHGs

There are seventeen (17) types of industrial facilities that must monitor and report GHG emissions regardless of their level of emissions:

• Adipic Acid Production

• Aluminum Production

• Ammonia Manufacturing

• Cement Production

• Electricity-Generating Facilities

• HCFC-22 Production

• HFC-23 Destruction Processes

• Lime Manufacturing

• Manure Management Systems

• Municipal Solid Waste Landfills

• Nitric Acid Production

• Petrochemical Production

• Petroleum Refineries

• Phosphoric Acid Production

• Silicon Carbide Production

• Soda Ash Production

• Titanium Dioxide Production

Additionally, other specific facilities will be required to monitor and report their emissions if they emit GHGs in excess of 25,000 metric tons of CO2 equivalent (CO2e) annually from all stationary fuel combustion devices. These facilities include:

• Ferroalloy Production

• Glass Production

• Hydrogen Production

• Iron and Steel Production

• Lead Production

• Pulp and Paper Manufacturing

* Zinc Production

The Rule excludes from this tonnage calculation any CO2 emitted from the combustion of biogenic fuels. Biomass-related emissions must be independently identified in any report generated by a facility that is subject to the Rule.

Suppliers of Fossil Fuels and Industrial GHGs

All suppliers of fossil fuels, except those that supply solid-based coal, are required to report annual amounts of fuel sold and applicable emissions, regardless of the level of emissions. This includes producers, importers, and exporters of fossil fuels. Suppliers of industrial GHGs which supply more than 25,000 metric tons of CO2e products must report the amount of such products sold and related emissions. “Suppliers”, for these purposes, includes producers, importers, and exporters of industrial GHGs.

Manufacturers of New Vehicles and Engines

Manufacturers of heavy-duty vehicles and engines must report CO2 emissions beginning in model year 2011, and reporting on additional GHGs may be required for subsequent model years. Heavy-duty vehicles and engines includes all vehicles and engines except passenger cars and trucks. Light-duty vehicles and engines (passenger cars and trucks) are not included in the Rule. The EPA, however, has proposed a comprehensive program including monitoring and reporting that may begin in model year 2012. For more information on this pending program, visit the EPA’s Office of Transportation and Air Quality at:

http://www.epa.gov/otag/climate/regulations.htm.

Other Companies with GHG Emissions

In addition to those companies and industries listed above, other companies are required to report their emissions on a facility-by-facility basis. According to the Rule, “facility” means “any physical property, plant, building, structure, source, or stationary equipment located on one or more contiguous or adjacent properties in actual physical contact or separated solely by a public roadway or other public right-of-way and under common ownership or common control.” Those facilities with GHG emissions greater than the threshold amount of 25,000 CO2e, will be required to monitor and report their emissions.

Exiting the Program

Once a company or facility is subject to the Rule for any calendar year, it will continue to be subject to the monitoring and reporting requirements until it meets one of the exit criteria. The exit criteria consist of the following: (i) permanently ceasing all GHG-emitting processes and operations covered by the Rule; (ii) reducing covered emissions to less than 25,000 CO2e per year for a period of five (5) consecutive years; or (iii) reducing covered emissions to less than 15,000 CO2e per year for a period of three (3) consecutive years. If a company or facility stops reporting because it has met one of the above requirements for the appropriate amount of time, it must immediately begin reporting again if its emissions increase to 25,000 CO2e or more.

Requirements of the Rule

What Monitoring is Required by the Rule?

Under the Rule, companies and facilities that are already required to collect data using continuous emissions monitoring systems (“CEMS”) under another air emission program must now also monitor GHGs using the same systems, which could force them to upgrade their systems. Facilities that do not currently use CEMS may use emissions calculations, as specified in the Regulations for each source-category. Depending on the specific category, periodic data collection may be required (i.e., flow rates, fuel use, or heat values).

Facilities and companies should begin to plan for the purchase and installation of required monitoring equipment. In order to give companies sufficient time to acquire and install the necessary monitoring equipment installed and operating, the Rule allows for the use of the “best available” data in lieu of the required monitoring methods for the period from January 1, 2010 to March 31, 2010. Facilities can request an extension beyond March 2010, but extensions beyond December 31, 2010 will not be granted. During this extension period, the facility must use the GHG calculation methods specified for the relevant source category, but it may continue to use the best available monitoring method for any parameter for which it is not reasonable feasible to acquire, install, and operate the required piece of monitoring equipment by January 1, 2010. Requests for extension must be submitted by January 31, 2010. The EPA estimates that the expected cost to the private sector to comply with the Rule will be $115 million in the first fiscal year.

The Rule also provides for calibration requirements for GHG measurement devices. Such devices must be calibrated by April 1, 2010, to an accuracy of five percent (5%). However, devices with an unexpired existing calibration need not be recalibrated until the existing calibration expires. Fuel billing meters are exempt from the calibration requirement, provided that there is no common ownership between the fuel supplier and the fuel combustion source.

What Reporting and Recordkeeping is Required by the Rule?

Reporting will be required on an annual basis, with the first annual report being due on March 31, 2011. If a facility becomes subject to the Rule due to a change in its operations after January 1, 2010, it must begin reporting for the year in which the change occurs, beginning in the first month of the change through December 31 of that year. The Rule requires self-certification of monitoring results and includes an EPA verification process. Each report must contain a signed certification by a “Designated Representative” selected by the company or facility. Only one Designated Representative and an alternate may be specified per reporting company or facility. After a report is submitted, the EPA will conduct a two-step verification process. First, it will conduct a centralized review of the data to ensure its completeness and accuracy. The EPA will then follow up with the facilities if potential errors, discrepancies or questions are identified or arise through the review of reported data. The EPA will conduct on-site audits of the selected facilities; these verifications may be conducted by private firms or by federal, state or local personnel.

Each company or facility that is subject to the Rule must maintain for three (3) years and make available upon request by the EPA the following records:

•

A list of all units, operations, processes, and activities for which GHG emissions are calculated;

•

The data used to calculate the emissions data including, among others: GHG emissions calculations and methods used, analytical results for the development of site-specific emissions factors, any facility operating data, or process information used for the emissions calculations;

•

The annual emissions reports;

•

Missing data computations, including a record of the duration of the missing data event, actions taken to restore malfunctioning monitoring equipment, the cause of the event, and the actions taken to prevent or minimize occurrence in the future;

•

A written GHG monitoring plan containing required information;

•

The results of all required certification and quality assurance tests of monitoring equipment and instruments;

•

Maintenance records for all monitoring equipment; and

•

Any other data specified in any applicable part of the Rule.

These records may be maintained in electronic or hard-copy.

Penalties for Noncompliance

Companies or facilities that fail to monitor or report GHG emissions as required by the Rule may be subject to administrative, civil and criminal penalties. The EPA may seek injunctive relief to compel compliance, and civil or administrative fines of up to $37,500 per day per violation may be assessed.

For more information on the new EPA Monitoring and Reporting Requirements, including answers to Frequently Asked Questions, please visit:

http://www.epa.gov/climatechange/emissions/ghgrulemaking.html

If you would like to discuss how the Rule may affect you or your business, or for a fuller description of the new EPA Monitoring and Reporting Requirements, please contact:

Peter D. Brosse, Esq.

Chair, Business Practice Group and

Green Sustainable Practice Group

Meyers, Roman, Friedberg & Lewis

28601 Chagrin Blvd., Suite 500

Cleveland, Ohio 44122

(216) 831-0042 ext. 144

pbrosse@meyersroman.com

Sarah M. Duffy, Esq.

Meyers, Roman, Friedberg & Lewis

28601 Chagrin Blvd., Suite 500

Cleveland, Ohio 44122

(216) 831-0042 ext. 191

sduffy@meyersroman.com

This Client Alert is a summary only, prepared for general informational purposes, and is not an exhaustive description of the complex legal issues addressed herein. Nothing in this Client Alert is intended or is to constitute a legal opinion or legal advice from Meyers Roman Friedberg & Lewis or any of its attorneys.

Join us for the CMBA Halloween Run, Saturday at 10/31! ttp://www.clemetrobar.org/Bar_Foundation/Programs/Run/CMBF_-_Halloween_Run/

Green Real Estate Law Journal discusses perils of quantifying Green Standards. http://ping.fm/4KcRt

Tax Benefits available for Exporters of US Goods.
http://ping.fm/j3DG7

Tax Benefits for Exporters fo US Goods

CLIENT ALERT

TAX BENEFITS FOR EXPORTERS OF US-MADE GOODS

IN 2010 AND BEYOND

There is an underused, but very significant, federal income tax break for businesses exporting US-manufactured goods. For these businesses, the tax break can reduce taxes on current income and improve cash flow. The tax break essentially is an export subsidy found in Sections 991 through 996 of the Internal Revenue Code. To take advantage of this tax break, exporters will generally need to establish a new corporation, which qualifies as a “Domestic International Sales Corporation” (“DISC”). The DISC typically is owned by the same persons who own the business making the export sales (“export company”). The DISC is not required to perform business activities. Rather, it is simply a device to shelter up to 50% (or more) of the net income otherwise earned from the export sales. The sheltered income is exempt from tax under the DISC rules and, therefore, can result in substantial income tax savings.

How the DISC Works: The owner of the export company (which may be a C corporation, S corporation, LLC, partnership or sole proprietorship) forms a new corporation (the DISC). The new corporation makes an election with the Internal Revenue Service to be a DISC. The election is made on Form 4876-A and should be submitted to the IRS within 90 days of the beginning of the DISC’s first taxable year. The DISC must have an initial capitalization of at least $2,500. The DISC and the export company then may enter into a “commission agreement,” which provides that the DISC is entitled to “commissions” for export sales made by the export company. The DISC’s commissions are exempt from income tax, while tax deductible to the export company.

Amount of Tax-Exempt Commissions. There are 3 prescribed methods for determining the amount of commissions payable to the DISC. One method allows for commissions of 50% of the net income from export sales (the “50-50 method”). Another method permits commission of 4% of the gross sale price of the export sales. A third method provides for a commission based on an arm’s length price. Under the 50-50 method, 50% of the net income derived from the export sales would be payable to the DISC by the export company (as commissions) and exempt from income tax (since the DISC is a tax exempt entity). For example, if the export sales otherwise generate $500,000 of taxable income to the export company, the export company, after implementing the DISC, would have only $250,000 of taxable income and the DISC would have $250,000 of tax exempt income. Assuming a 40-percent tax rate, the tax on such income would be reduced from $200,000 to $100,000 by adopting a DISC. The extra $100,000 in tax savings would be available to the business or distributable to the owner.

Taxable Distributions by DISC. Although the DISC is not required to perform sales activities, the “commissions” that it earns must actually be paid by the export company to it. Continuing the above example, the DISC would be paid $250,000 of commissions. The question then is, what does the DISC do with the cash? The DISC can distribute the $250,000 to its owner, which

would be subject to a tax-favored rate of 15% for federal income tax purposes. This favorable 15% rate is less than half of the ordinary income tax rate (currently 35%). In this example, the DISC results in a tax savings of $50,000 on distributed earnings ($250,000 times 20%) (20% is the difference between the 15% rate and the 35% rate). The 15% rate on dividends applies generally to dividends paid on or before December 31, 2010. At this time, it is unclear whether Congress will extend the favorable dividend tax rate beyond 2010.

Tax Deferral Through Loans. Alternatively, the $250,000 of cash held by the DISC may be loaned back to the export company with no current tax to the owner of the DISC. The loan proceeds must be reinvested in the export company and the loan must meet certain other requirements. However, the IRS imposes an interest charge (at the U.S. Treasury Bill rate, currently 0.37% annually) to the owner on the deferred taxes. If export sales revenue exceeds $10,000,000, the owner of the DISC is taxed currently on the DISC’s share of the net income in excess of $10 million.

Conclusion. The tax incentive created by a DISC should not be overlooked by wholesalers or manufacturers of exported goods. This tax incentive can create substantial tax savings, resulting in additional cash flow for the business.

If you are interested in discussing or establishing a DISC, please contact attorney Mario J. Fazio at 216-831-0042, ext. 139, or by e-mail at mfazio@meyersroman.com.

DISCLAIMER

This Memorandum is not intended or written to be used, and cannot be used, by you or any other person to avoid any potential tax penalties that may be asserted by the Internal Revenue Service. To the extent this notice mentions federal tax matters, it is not intended or written, and cannot be used, for the purpose of avoiding federal tax penalties. In addition, this notice may not be used by anyone in promoting, marketing or recommending the transaction or matter addressed herein

Interesting article on whether dialysis provides comfort to those at end of life - http://ping.fm/IMrlM

Peter Brosse was named a Leading Lawyer by Inside Business! http://ping.fm/ykJHS

Ben Zemanski is a finalist! Vote Ben, Go Zips!
tenhttp://ping.fm/RKYXn

I love this place: Main Street Cupcakes, Hudson Ohio, c the story: http://ping.fm/PbTap

Looking forward to Brent's Shelley's Presentation at the Cleveland Music Industry Panel Saturday! www.clevelandmusicpanel.eventbrite.com

Join us at the Hudson Area Chamber of Commerce Golf Outing on September 11th!
http://ping.fm/fWAoJ

Hudson Chamber of Commerce Golf Outing!

Make sure to mark your calendar for the Annual Hudson Area Chamber of Commerce Golf Outing. The shotgun scramble will be held at Ellsworth Meadows Golf Club on Friday, September 11th. There will be a silent auction and door prizes to raise money for the Chamber Scholarship Fund. So round up your team and make your reservation soon!

The player registration form and sponsorship forms can be found on the link attached below. If you have any items that you would like donate for the event, please contact Carolyn Konefal at 330.342.8331, by email at ckonefal@hudsoncoc.org or call Veronica Petron at anythingPROMO at 330.703.8789 or by email at vp@anythingpromo.com.

http://208.206.15.32/news/anmviewer.asp?a=63&z=5

Scott Lewis speaks to the Ohio Business Broker's Association: http://ping.fm/41KlZ

Scott Lewis speaks before the Ohio Business Brokers Association

Scott M. Lewis, a partner with the Cleveland law firm of Meyers, Roman, Friedberg & Lewis and Chair of the Firm’s Business Practice Group, gave a presentation entitled “Help Me Help You: Overlap and Interplay between the Business Broker and the Mergers and Acquisitions Attorney” on July 29th at an Ohio Business Brokers Association (OBBA) meeting. Mr. Lewis has written extensively on this subject and was recently featured in two publications—The Cleveland Metropolitan Bar Journal (cover story, Jan. 2009, “Beware the One-Stop Shop Business Broker”), http://www.meyersroman.com/0109-MRFL-CMBJ-REPRINT.pdf, and the Cleveland Jewish News, http://www.clevelandjewishnews.com/articles/2009/05/21/news/business/legal_matters/doc4a0c30d188ab1651760087.txt).
His general business and mergers and acquisitions practice includes the representation of closely held, small to middle market companies from inception through recapitalization or sale.

FTC Delays enforcement of the Red Flags Rule: 30 days more to comply. http://ping.fm/IBXbT

Red Flags Rule Delayed

Please be aware that on July 29, 2009, the Federal Trade Commission (FTC) announced that it will further delay enforcement of the Red Flags Rule until November 1, 2009 . The purpose of the delay is to give the FTC time to further educate businesses about compliance and to provide additional guidance on which businesses are covered by the Rule. We will keep you updated on the Rule as the information is finalized.

For the full text of the press release and for more information on the FTC’s Education Campaign on the Red Flags Rule, please visit: http://www.ftc.gov/opa/2009/07/redflag.shtm

Red Flags Rule: How to comply by August 1, 2009 http://ping.fm/maWWQ

Client Alert: Red Flags Rule mandates compliance by August 1, 2009

Client Alert

FTC PULLS OUT THE “RED FLAGS” TO COMBAT IDENTITY THEFT – NEW LEGAL REQUIREMENTS

The Federal Trade Commission (FTC) has issued a new rule requiring all financial institutions and “creditors” to implement programs to detect, prevent and mitigate instances of identity theft. This “Red Flags Rule” goes into effect as of August 1, 2009.

Requirements of the Rule

The Rule requires that all financial institutions and creditors develop, implement and administer an Identity Theft Prevention Program (the “Program”), which must include four basic elements:

First, the Program must include reasonable policies and procedures to identify the “red flags” of identity theft that may arise in the day to day operation of your business. Red flags are suspicious patterns or practices, or specific activities, that indicate the possibility of identity theft. For example, if a customer has to provide some form of identification to open an account, an ID that appears to be fake would be a “red flag” for your business.

Second, the Program must be designed to detect the red flags that you’ve identified as arising in your business. For example, if you’ve identified fake IDs as a red flag, you must develop procedures to detect possible fake, forged or altered identification.

Third, the Program must spell out appropriate actions you’ll take when you detect red flags. For example, the protocols to follow once you have detected a fake ID (e.g., confiscating the fake ID and contacting authorities).

Fourth, because identity theft is an ever-changing threat, the Rule requires you to address how you plan to re-evaluate the Program periodically to reflect new risks that have arisen related to identity theft.

The Rule also sets out requirements on how to incorporate the Program into the daily operation of your business. Your board of directors (or a committee of the board) must approve the initial written Program. If your company does not have a board of directors, the Program must be approved by the president, chief operating officer, or another appropriate senior-level employee. The Program must state specifically who is responsible for implementing and administering it, and must provide for appropriate staff training. If you outsource or subcontract parts of your operations, the Program must address how your company will monitor the compliance of all contractors.

Who Must Comply with the Rule?

The Red Flags Rule applies to “financial institutions” and “creditors.” The Rule requires you to conduct a periodic risk assessment to determine whether or not you have any “covered accounts.”

“Financial Institutions”

The Rule defines “financial institution” as including: (i) all banks, savings associations, and credit unions, regardless of whether they hold a transaction account belonging to a consumer; and (ii) any other person or organization that directly or indirectly holds a transaction account belonging to a consumer. Accordingly, all banks, savings associations, and credit unions are covered by the Rule as “financial institutions,” whether or not they hold a transaction account belonging to a consumer.

“Creditors”

The definition of “creditor” is broad and includes any businesses or organizations that regularly defer payment for goods or services or provide goods or services and bill customers later. Thus, utility companies, health care providers, telecommunications companies and even some professional service providers are all among the entities that may fall within this definition, depending on how and when they collect payment for their services. The Rule further defines “creditor” as one who regularly grants loans, arranges for loans or the extension of credit, or makes credit decisions. This would include finance companies, mortgage brokers, real estate agents, automobile dealers, and retailers that offer financing or help consumers get financing from others, like by processing credit applications. Finally, the definition also includes anyone who regularly participates in the decision to extend, renew, or continue credit, including setting the terms of credit. For instance, a third-party debt collector who regularly renegotiates the terms of a debt would also fall within the definition of “creditor.”

“Covered Accounts”

Once you have concluded if your business or organization is a financial institution or creditor, you must determine whether you have any “covered accounts.” The definition of this term under the Rule points to two categories of accounts, and requires you to examine both existing and new accounts in determining whether your business has any “covered accounts.” The first type of “covered account” is a consumer account you offer your customers that is primarily for personal, family or household purposes that involves or is designed to permit multiple payments or transactions. For instance, a credit card account, mortgage loan, automobile loan, margin account, cell phone account, utility account, checking account and/or savings account is a “covered account.”

The second type of “covered account” includes “any other account that a financial institution or creditor offers or maintains for which there is a reasonably foreseeable risk to customers or to the safety and soundness of the financial institution or creditor from identity theft, including financial, operational, compliance, reputation, or litigation risks.” Thus, this type of “covered account” would include small business accounts, sole proprietorship accounts, or single transaction consumer accounts that may be vulnerable to identity theft. Unlike consumer accounts designed to permit multiple payments – which are always “covered accounts” under the Rule – other types of accounts will only be considered “covered accounts” if the risk of identity theft is reasonably foreseeable.

In determining whether or not accounts are covered under the second category, consider how they are opened and accessed. For instance, if an account can be accessed remotely (such as through a telephone or computer) there could be a reasonably foreseeable risk of identity theft. The risk analysis should include consideration of any actual instances of identity theft.

If your business has no covered accounts, it is not required to have a written Program. However, it is important to conduct a periodic re-evaluation of the services and accounts provided by your company to determine whether or not you have acquired any covered accounts.

Penalties for Non-Compliance

Once enforcement begins on August 1, 2009, financial institutions and creditors may be subject to penalties of $2,500 per violation of the Rule.

This Client Alert is a summary only, prepared for general informational purposes, and is not an exhaustive description of the Red Flags Rules. Nothing in this letter is intended or is to constitute a legal opinion or legal advice of the undersigned or Meyers, Roman, Friedberg & Lewis.

If you would like to discuss how these changes affect you or your business, or for a fuller description of the new Red Flag Rules, please contact:


Sarah M. Duffy, Esq. or John R. Seeds, Esq.
Meyers, Roman, Friedberg & Lewis
28601 Chagrin Blvd., Ste. 500

Cleveland, Ohio 44122
(216) 831-0042 ext. 191 (216) 831-0042 ext. 174
sduffy@meyersroman.com , jseeds@meyersroman.com

Lawyers threaten suit over Red Flags Rule: http://ping.fm/WABW4

ABA threatens to sue over the Red Flags Rule

The ABA has promised to sueif the FTC does not exempt lawyers from the Red Flags Rule. The Red Flags rule is an effort to protect against identity theft. At the heart of the issue is the exceptionally broad definition of creditors, which makes any service provider billing at the end of the month for services performed in the previous month a "creditor," subject to extensive, and expensive regulations. With these regulations, the FTC hopes to identify potential "red flag" internal areas of vulnerability in creditors, and then create policies for detection and prevention of identity theft. The ABA argues that attorneys were never the kind of "creditors" the law sought to regulate. See the article:

http://www.abajournal.com/weekly/aba_to_sue_if_ftc_wont_exempt_lawyers_from_id_theft_rules

Read about market basket freeze: http://ping.fm/Mn1Qr

Market Basket Freeze in Skilled Nursing

Just read: CBO: market-basket freeze for skilled nursing could add up to billions in savings



http://www.mcknights.com/CBO-market-basket-freeze-for-skilled-nursing-could-add-up-to-billions-in-savings/article/139823/



Let me know what you think.

What do you think?: Women Take Time Off for Kids at Their Peril Interesting read: http://ping.fm/m7AON

Brent Shelley presents for Cleveland Music Industry Panel: tips on survival in the music industry http://ping.fm/JOOBi

Brent Shelley presents at the Cleveland Music Industry Panel

Brent A. Shelley, a business and corporate law attorney with Meyers, Roman, Friedberg & Lewis in Cleveland, OH, will be a speaker and panelist in a program (Cleveland Music Industry Panel) presented by Modern Revival Media on Saturday, August 8th from 10:00 am – 1:00 pm in the Auditorium of the Cleveland Metropolitan Zoo.

This interactive event for musicians, bands, solo artists and music industry professionals will provide information on strategies and solutions to get ahead in this competitive arena. Brent's practice focuses on internet and e-commerce law; entertainment law; and copyright, trademark and intellectual property law, areas that are essential to protect and facilitate professional survival in the music and entertainment industry.

Brent will be lending his experience to help navigate the difficult and often confusing subject of forming and establishing a solid legal foundation to build a successful enterprise in the industry. Please join us for what promises to be an exciting and informative program. For more information and tickets, go to: http://clevelandmusicpanel.eventbrite.com/

Northeast Ohio is the next Green Power Powerhouse

Northeast Ohio is the next Powerhouse in Green Power. Euope is well advanced in the development of alternative energy, and the United States is slowly but surely recognizing the serious need for the development of new Green energy. No matter the political reasoning, be it independence from foreign fuel sources, a desire to develop new industry, a need to save the planet, or all of the above, green initiatives and the businesses that develop around them are here, and Northeast Ohio is the perfect storm of opportunity.

Our natural resources have inspired the development of a rapidly growing wind turbine industry. At this time, every part of a wind turbine is manufactured and available within 100 km of Cleveland, Ohio, along with a skilled labor force for the manufacture and maintenance of those turbines. Several European wind power companies are considering Ohio, and in particular Cleveland to establish manufacturing, service, distribution and sales facilities including a wind farm in Lake Erie. Offshore projects have also started in Atlantic City New Jersey and in New York, all within a 1 hour airplane flight from Cleveland.

We are the next powerhouse in Green Power. Investors in all industries, including alternative energy, wind power, solar power, medical technology, polymers, technology and manufacturing have come to Northeast Ohio to establish their business and technologies and are receiving assistance through business incubators. The incubators provide offices and resources to help establish and develop new businesses and technologies in Ohio and the United States. For your medical and health care industry clients, the Cleveland Clinic, University Hospitals, BioEnterprise, Case Western Reserve University, the University of Akron and other academic institutions are resources your clients can use for raising capital and for research and development and commercialization of products and technology.

Let us know how we can help. We are all part of a global network now and we are ready willing and able to share contacts, information and expertise to develop Northeast Ohio into the Powerhowse of Power. If you have questions or comments about Green Inititives here Northeast Ohio, write back, or call Peter Brosse in our office.

Check out this great SlideShare presentation on eMarketing Techniques. Click on the link below http://mlhommedieu@blogspot.com

Social Online Networking Slideshare Presentation

I saw Brad Kleinman of WorkSmart eMarketing speak at the Hudson Chamber of Commerce meeting yesterday. It was a great presentation and he was kind enough to upload the slide show for us.

heck out this great SlideShare presentation on LinkedIn titled Hudson Chamber of Commerce - eMarketing Techniques. Click on the link below to view the presentation.
http://tinyurl.com/lqslmo

Online social networking is getting a lot of attention these days -- what do you think?

There are tax breaks out there for small businesses -- ask Mario Fazio. . . mlhommedieu.blogspot.com

There are Tax Breaks if you know where to find them!!

CLIENT ALERT
Recent Small Business Tax Law Breaks



On May 20, 2009, the IRS issued a press release encouraging small businesses to take advantage of tax-savings opportunities created under the 2009 economic stimulus act passed earlier this year. The American Recovery and Reinvestment Tax Act of 2009 (“2009 Act”) became law on February 17, 2009. This Client Alert describes some of those tax breaks that may be of interest to you or your clients.

1. 2008 Net Operating Losses May Be Carried Back 5 Years.

Many small businesses that incurred a net loss for 2008 (annual expenses exceed income) (“2008 NOL”) can choose to carry that NOL back for up to 5 years, instead of the usual 2 years. The extended carryback period may provide an opportunity to receive a tax refund for taxes paid in any of the previous 5 years (e.g., 2003 through 2007). An important limitation on this tax break is that it is limited to businesses with average annual gross receipts of $15 million or less for the three-year period (e.g., 2005 to 2007) preceding the loss year (2008).

The 2008 loss year is defined as the taxpayer's net operating loss for any taxable year ending in 2008, or if the taxpayer so elects, its net operating loss for any taxable year beginning in 2008. Two or more companies under common control may be required to aggregate their gross receipts to determine if the $15 million gross receipts test is met for the preceding three years.

The election to carry-back the 2008 NOL to 2003, 2004, or 2005 may be made by filing Form 1045, Form 1139, or an amended return. This election must be filed within 6 months after the due date (excluding extensions) of the return for the taxable year of the NOL (e.g. 2008). This option is available for most eligible taxpayers but only for a limited time. A corporation that operates on a calendar-year basis, for example, must file a claim by September 15, 2009. For eligible individuals (including those who have flow-through NOLs from a partnership or S corporation), the deadline is October 15, 2009.

2. Bonus Depreciation and Expensing of Capital Costs Creates Significant Tax Break for Investment in New Assets.

To encourage the investment by companies in business assets (such as equipment, machinery, computers, etc.), the 2009 Act extends through 2009 the special 50% deduction for the cost of new business personal property (so-called “Bonus Depreciation”), and, for qualifying small businesses, a 100% deduction up to $250,000 for the cost of such property (the so-called “Section 179 Deduction”). The cost of real property is not eligible for these tax breaks. The portion of the cost of property in excess of the Bonus Depreciation is depreciated under the remaining life of the property in accordance with the normal tax depreciation rules.

Only new property is eligible for this tax break, which must be acquired by December 31, 2009. Property that is produced by the taxpayer for its own use may also be eligible if production of the property has begun by December 31, 2009.

These first year accelerated tax deductions for capital costs of qualifying purchases can substantially reduce so-called “phantom income” that otherwise results when depreciable assets are purchased, since a substantial portion of the tax deduction for the cost is allowed in the year of the purchase rather than spread over the life of the asset.

3. Avoiding Income Tax on Cancellation/Write-Down of Debt.

To provide relief for troubled businesses, the 2009 Act provides tax relief to businesses that reacquire or satisfy, in whole or in part, their own debt at a discount during 2009 or 2010. This new rule allows businesses to defer taxable income that otherwise arises from the cancellation, satisfaction or retirement of debt at a discount. For example, the write-down by a creditor of a claim, or the repurchase by a company of its debt, may qualify for the tax deferral. It should be noted that there are other exceptions to taxation for the cancellation of debt at a discount, including the so-called “insolvency exception” which permits an insolvent company to exclude from taxable income debt forgiveness (although certain so-called tax attributes of such businesses are required to be reduced).

The importance of the new exception under the 2009 Act is that it applies to any business that acquires its debt at a discount, whether the business is solvent or insolvent. The tax break allows solvent, operating businesses to elect to defer the taxable income completely until 2014, and then report the income ratably (20% of the income each year) over five years (e.g., 2014 through 2018).

If you, your clients or your tax advisor have questions or need assistance with any of these items or are considering whether to implement business strategies that take advantage of these favorable developments in the tax law, please contact Meyers, Roman, Friedberg & Lewis at 216-831-0042 and ask for our tax partner, Mario Fazio (ext. 139).

IRS CIRCULAR 230 DISCLAIMER: To the extent that this written communication, including attachments, may address certain tax issues, this written communication is not intended or written to be used, and cannot be used by any persons to avoid any potential tax penalties that may be asserted by the Internal Revenue Service. In addition, this communication may not be used by anyone in promoting, marketing or recommending the transaction or any matter addressed herein.

See Scott Lewis' Line Fence Law Client Alert -- Be a good neighbor! Mlhommedieu.blogspot.com

New Line Fence Law

CLIENT ALERT

DON’T GET “FENCED IN” BY
NEW OHIO LINE FENCE LAW

Ohio has enacted a new Line Fence Law that creates new rules for line fence obligations and the process for resolving line fence disputes. A rule of individual responsibility will apply to “new” line fences, while “old” and previously existing fences will be subject to a rule of equitable shares. The new law has also placed new obligations on landowners to ensure the continuation of shared responsibility for old or preexisting fences, with a deadline to file certain affidavits as early as September 30, 2009.

What is a Line Fence?

The new Line Fence Law has expanded the previous definition of a line fence to include fence that has been “considered” as the division line even if a land survey subsequently shows that the fence is not placed directly on the property line. This change addresses the situation where landowners have historically treated the fence as the property line, but a recent survey shows that the fence is not exactly on the property line.

Allocating Responsibility for Line Fences

There are now three different rules used to determine responsibilities for construction and maintenance of line fences. The type of fence determines the applicable rule. The Rule of Equitable Shares will apply to some line fences, and adjoining landowners will share “equitably” in the costs of building and maintaining a fence. Other types of fences will fall under the Rule of Individual Responsibility, with the owner who proposes the fence constructing and maintaining it. The old law’s Rule of Equal Shares remains in place only in one situation.

Rule of Equitable Shares

This new rule apportions responsibility based upon “equity” or fairness factors related to the purpose, use and location of the fence. The Rule of Equitable Shares only applies to removed line fences, previously existing line fences, and line fences that were in existence as of September 30, 2008.

Rule of Individual Responsibility

Under the new law, only the landowner who wants to build a “new” line fence will be responsible for the fence. A “new” line fence is one placed where a line fence has never existed. The landowner who desires the new line fence must individually bear the cost of building and maintaining the fence, and cannot force the neighbor to contribute to those costs when constructing the fence.

Equal Shares Rule

The old law’s approach of equal shares for line fences remains in place only for certain governmental fences.

Types of Line Fences

The new law applies different rules of responsibility to different types of line fences:

Existing Line Fence

An existing line fence is one that existed on September 30, 2008. Existing line fences are subject to the Equitable Shares Rule. If the adjoining landowners decide to build a new line fence in place of the existing fence, the new fence will also be subject to the Equitable Shares Rule.

Previously Existing Line Fence

The new line fence law allows for two ways to establish that a line fence previously existed on a property line. The Equitable Shares Rule applies for both methods.

1. Filing an Affidavit of Previously Existing Fence: If a line fence existed within the past two years but has been removed, landowners may file an Affidavit of Previously Existing Fence. This affidavit must be filed with the county recorder by September 30, 2009.

2. Establishing a previously existing line fence by evidence. The court of common pleas or township trustees will review evidence to determine whether a line fence existed at the claimed location.

Removed Line Fence

Under the new law, the Equitable Shares Rule will apply to a situation where an old line fence is removed and not immediately replaced. The owner who removed the fence must establish the removal by filing an affidavit and must notify the adjoining landowner prior to removal.

1. Notice of Removal. The landowner must provide acceptable notice to the adjoining owner at least 28 days prior to removing a line fence. An owner who fails to provide notice of removal forfeits the right to make a reimbursement claim for a replacement fence.

2. Affidavit of a Removed Partition Fence. An owner who removes a line fence without replacing it within one year must file an affidavit to ensure that the Equitable Shares Rules will apply to a replacement fence. If an affidavit is not filed, the owner who constructs a new fence on the location is individually responsible for the fence.

New Line Fence

If a line fence meets the definition of a “new” line fence, the Rule of Individual Responsibility will apply. The owner who wants the new fence must individually pay for the cost of building and maintaining the line fence.

Reimbursement Claim Line Fence

If an owner constructs a new line fence, they may seek reimbursement for the costs of building and maintaining the fence from an adjoining landowner who uses the fence to contain livestock within thirty years after the fence was constructed. If a reimbursement claim is paid, the reimbursement claim line fence will be subject to the Equitable Shares Rule.

Governmental Line Fence

The governmental line fence is the only fence that is still subject to the old law’s Equal Shares Rule.

Alternative Landowner Agreements

Landowners may enter into an agreement with one another that alters how or whether the line fence law applies to their properties. The landowner agreement is valid and binding on future property owners if the agreement is in writing, includes a description of the land where the fence is located, a description of the purpose and use of the fence, and the owners file it with the county recorder where the land is located.

Access for Line Fence Work

Under the new law, landowners must now allow access for a neighbor to build or maintain a line fence. A neighbor, or their contractor, now has the right to enter upon up to ten feet of the adjoining property to construct and maintain a line fence. The landowner doing work on the line fence is responsible for harm caused to the adjoining property.

If you would like to discuss how these changes affect you or your properties or business, or for a fuller description of the changes in the line fence law, please contact:

Scott. M. Lewis
slewis@meyersroman.com
(216) 831-0042, Ext. 124

Meyers, Roman, Friedberg & Lewis earns Green Certification from Cleveland Metro Bar Assoc.! http://ping.fm/wa6hv

Meyers, Roman, Friedberg & Lewis is Green Certified!

Thanks primarily to the efforts of Peter Brosse, MRFL has been notified by the Cleveland Metropolitan Bar Association that we are now officially CMBA “Green Certified” for the year beginning July 1, 2009 and ending June 30th, 2010. This is a terrific start to our “greening” process …….

DMEPOS - Competitive Bidding - Are you ready? Check out our client alert: http://ping.fm/1zuAQ

DME Competitive Bidding -- Are you ready?

CLIENT ALERT
ROUND ONE OF THE MEDICARE COMPETITIVE BIDDING PROCESS IS UNDERWAY – ARE YOU PREPARED?

If you are a supplier of Durable Medical Equipment, Prosthetic, Orthotics & Supplies (DMEPOS) which you bill Medicare for, significant rule changes are about to change the way you do business. On January 16, 2009, the Centers for Medicare & Medicaid Services (CMS), the federal agency within the United States Department of Health and Human Services (DHHS) that administers the Medicare program and works in partnership with state governments to administer Medicaid, the State Children's Health Insurance Program (SCHIP), and health insurance portability standards, issued an interim final rule on the competitive bidding program necessary to conduct the Round 1 rebid competition in 2009. That rule became effective on April 18, 2009. To ensure that suppliers have ample time to prepare for the competition, CMS announced on May 29, 2009 the following progression for the program:
SPRING 2009
CMS BEGINS PRE-BIDDING SUPPLIER AWARENESS CAMPAIGN
PROGRAM ADVISORY AND OVERSIGHT COMMITTEE (PAOC) MEETING (JUNE 4, 2009)
SUMMER 2009
CMS ANNOUNCES BIDDING SCHEDULE/SCHEDULE OF EDUCATION EVENTS
CMS BEGINS BIDDER EDUCATION CAMPAIGN
BIDDER REGISTRATION PERIOD TO OBTAIN USER IDS AND PASSWORDS BEGINS
FALL 2009
BIDDING BEGINS
Don’t wait! If you are a supplier interested in bidding, you must take the following action now:
UPDATE YOUR NSC FILES: ALL suppliers must notify the National Supplier Clearinghouse (NSC) of any change to the information provided on the Medicare enrollment application (CMS-855S) within 30 days of the change. This is especially important for suppliers who will be involved in the Medicare DMEPOS Competitive Bidding Program. These suppliers must ensure the information listed on their supplier files is accurate to enable participation in the program.

GET LICENSED: Suppliers submitting a bid for a product category in a competitive bidding area (CBA) must meet all DMEPOS state licensure requirements and other applicable state licensure requirements, if any, for that product category for every state in that CBA. Prior to submitting a bid for a CBA and product category, the supplier must have a copy of the applicable state licenses on file with the NSC.
GET ACCREDITED: Time is running out. With limited exceptions, if suppliers are not accredited by the September 30, 2009 deadline, Medicare Part B billing privileges may be revoked on October 1, 2009. Without accreditation, a DMEPOS supplier may not be awarded a competitive bid. Further information on the DMEPOS accreditation requirements: may be found at the CMS website:
http://www.cms.hhs.gov/DMEPOSCompetitiveBid/01_overview.asp#TopOfPage
GET BONDED: Certain suppliers must obtain and submit a surety bond by the October 2, 2009 deadline or risk having their Medicare Part B billing privileges revoked.
This letter and Client Alert is a summary only, prepared for general informational purposes, and is not an exhaustive description of the DMEPOS Competitive Bidding Program and related issues. Nothing in this letter is intended to constitute a legal opinion or legal advice of the undersigned or Meyers, Roman, Friedberg & Lewis. If you would like to be removed from our e-mail distribution list, or no longer wish to receive our Client Alerts, please e-mail us at scox@meyersroman.com.

If you would like to discuss how these changes affect you or your business, or for a full description of the DMEPOS Competitive Bidding Program, please contact:

Mary Louisa L’Hommedieu, Esq.
Meyers, Roman, Friedberg & Lewis
28601 Chagrin Blvd., Ste. 500
Cleveland, Ohio 44122
(216) 831-0042
mlhommedieu@meyersroman.com

My Women's Business Network

We will be exhibiting at the My Women's Business Network First Annual Trade Show today. There will be prizes and access to information and contacts for women owned businesses in the northeast Ohio area. Let me know if you enjoyed the event, or have any suggestions for the future!

Five-Star Quality Rating for Nursing Homes

Five Star Quality Rating System for Nursing Homes

Baltimore's Inner Harbor and the site of the 2009 Institute of Medicare and Medicaid Payment Issues.

The 2009 Institute on Medicare and Medicaid Issues was, as in years past, a well-run and highly informative event. The Institute provides the latest developments in law, and the opportunity to discuss those developments with employees of the Centers for Medicare and Medicaid Services ("CMS").

One hot topic addressed at the conference was the most recent evolution of the Nursing Home Compare Website. Similar in look to a hotel rating system, the site will now include the new five-star quality rating program in which CMS assigns each nursing facility a star rating. A one star rating is classified as "much below average," while a five star rating gets the "much above average" rating. While the Five-Star program is intended to provide consumers with an easy way to compare nursing homes, it has garnered quite a bit of controversy. After all -- your nursing facility is not a hotel.

Even CMS concedes that those facilities with one star ratings still meet the federal conditions of participation. The star ratings are based exclusively on the subjective review of federal surveyors and may cause the average consumer to avoid all but the highest rated facilities. While that might seem like a logical (and desired) progression, a one star facility might still be the perfect fit for a loved one. The only way to tell is to make the visit and interview the facility.

So what does it take to get a higher rating? Survey, Staffing & Quality Measures. The scoring system starts with a review of the most recent on site inspections by surveyors (including standard annual surveys and complaint surveys), and then adds and compares that information to annual surveys conducted in the last three years along with complaint surveys from the same time period which resulted in a deficiency. The more frequent citations with higher severity the lower the ultimate rating. Once the initial score has been determined, they can add or subtract a star based on the staffing levels CMS finds optimal. Next, a star is added or subtracted based on a quality measure rating (e.g, the frequency of pressure sores, or changes to a resident's mobility).

Published Ratings

On December 18, 2008, CMS published its rating system. 23% of nursing homes were rated as one star, 21% as a two-star, 23% as a 4-star and 12% were rated as five star. Take a look at the site http://www.medcare.gov/NHCompare/ . Let me know what you think.

MRFL participates in successful 2009 Hudson Area Chamber of Commerce Business Expo!

March 14, 2009 - Meyers, Roman, Friedberg & Lewis attended the highly successful 2009 Hudson Area Chamber of Commerce Business Expo. The Chamber event was beautifully planned and included nearly 100 exhibitors with booths throughout East Woods Elementary School in Hudson. The Chamber worked with the Hudson City Schools and local community groups to provide food, education and entertainment including a great magic show and a fabulous dance performance by local children. The event was well attended by community members and it certainly appeared that everyone enjoyed their day.


MRFL attorneys Anne Meyers, Barbara Roman, Scott Lewis, Peter Brosse, Mary Louisa L'Hommedieu, Stephen Dodd and Bryan Dardis were all on hand throughout the day to answer legal questions, pass out great eco-friendly shopping bags , and enjoy the day with the Hudson Community. Were you at the event? Let us know!