Tuesday, June 23, 2009
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.
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
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
Thursday, June 18, 2009
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 …….
Wednesday, June 17, 2009
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
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
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