Legally Speaking - Legal Recruiter Blog

Advances in transportation certainly facilitate the spread of diseases like swine flu. With thousands of people traveling between cities and countries on a daily basis, whether by planes, trains or automobiles, the speed and breadth of potential transmission is far greater than in early times.

However, technological advances have led to the creation of the Internet, where people at their fingertips can gain access to up-to-the minute information about problems as soon as they occur and how they might be able to address those problems.
Literally, within a matter of moments after diagnoses of actual swine flu infections, information was posted in many places on the World Wide Web to inform people of potential swine flu hot spots, best practices to avoid infection, and what to do if infection occurs. International, national and local email alerts also have been provided to help address the crisis. Hopefully, the spread of information, instead of the spread of infection, will help keep the potential pandemic from unfolding to a great extent.

As just one example of where to find important information online, the Centers For Disease Control and Prevention maintains a valuable page devoted to swine flu at http://www.cdc.gov/swineflu .

If it ultimately becomes the case that people truly need to reduce their direct exposure to each other for a period of time, no matter how brief, the fact that we can communicate with each other through the Internet also helps life to go on. People still can conduct business and network online even if they are not meeting in person.

Of course, 24/7 communication can feed potential hysteria, can provide a means for bogus information and improper marketing, and can cause people to suffer from negative information burnout. Still, the advantages of mass communication appear to outweigh the downsides, and we must hope that complete and accurate information will carry the day.

It is further possible that certain individuals at some point might pursue legal claims, arguing that they relied to their detriment on swine flu information posted online. They might argue that they counted on information that they accessed in deciding where to go, and how to avoid and then how to treat the swine flu; if they end up catching the disease, they might blame those whose information they relied upon.

Along these lines, it is important for posters of swine flu information to be clear that they are providing tips in an effort to be helpful, that recipients of the information are responsible ultimately for making their own decisions, there are no guarantees in this area, and that the information provided does not constitute advice rendered by a physician for a specific patient.

This column will be posted on April 28. It is strongly hoped that by the time of the next column one week later that the swine flu worries will have abated, at least to some extent, and perhaps the Internet will have done its job in helping in achieving that result. But even if the swine flu continues to spread, let’s hope that the Internet still will function as a valuable information tool in dealing with the crisis.

Good luck to all of us, and wash your hands!

See Also:
Swine flu creates controversy on Twitter (CNN)
Twitter + Swine Flu = Stupid (Wonkette)
Swine flu : Walking the line between hyping and helping (Reuters)
No, You Cannot Catch the Swine Flu From Twitter (PC World)
Center for Disease Control’s Twitter Feed (Twitter)

Eric Sinrod is a partner in the San Francisco office of Duane Morris LLP (http://www.duanemorris.com) where he focuses on litigation matters of various types, including information technology and intellectual property disputes. His Web site is http://www.sinrodlaw.com

According to ”IRS: Offshore account holders told fess up to lower penalties” (03/27/09) by Kevin McCoy, published in USA Today, the Internal Revenue Service finally is claiming its tax stake in unreported offshore accounts owned or controlled by U.S. citizens, under severe penalties if voluntary compliance is not forthcoming.

Trying to lure wealthy Americans to disclose assets hidden offshore, the IRS on Thursday announced a six-month program that offers lower penalties to those who come forward and pay taxes due on the secret holdings.

The offer includes clients of UBS, the Swiss banking giant that last month gave federal investigators the names of American owners for about 300 accounts in a continuing federal court showdown.  Along with lower tax penalties, those who comply are expected to avoid criminal prosecution.

“This is a chance for people to come clean on their own,” said IRS Commissioner Douglas Shulman.  “For taxpayers who continue to hide their heads in the sand, the situation will only become more dire.” * * *   The IRS Commissioner commented on the 2009 Amnesty Program in a posted Press Release entitled “Statement from IRS Commissioner Doug Shulman on Offshore Income” (03/26/09).

In a posting on his Tax Prof Blog, Professor Paul L. Caron noted “IRS Offers Amnesty to Those Who Evaded Tax Through Offshore Accounts” (03/26/09); and he listed articles published about the IRS foreign holdings amnesty program. I’ve added the articles’ titles and authors, and noted some substantive points:

·     “IRS increases pressure on Swiss bank clients” (03/26/09) by Devlin Barrel, published by Associated Press, who noted: “[Taxpayers] coming forward are now confronting a list of nearly 30 detailed questions, asking not just about financial documents, but any travel to conduct banking business, documents and correspondence related to the accounts, and which bank employees helped them manage the accounts.” * * *

·     “UBS Offshore Customers Offered Eased Tax Penalties“(03/26/09) by Ryan J. Donmoyer, published by Bloomberg, who noted: “It is legal for Americans to have money in offshore accounts, which many do for legitimate reasons such as when they own a home or business overseas. The accounts must be disclosed to the Treasury Department when they hold more than $10,000, and U.S. taxes must be paid on any income earned.”* * *

·     “IRS aims to reel in offshore-account holders –Penalties reduced, criminal prosecution unlikely for those who come clean” (03/26/09) by Andrea Coombes, posted on MarketWatch, who noted: “The U.S. loses an estimated $100 billion in tax revenue every year because of money stashed offshore, according to Sen. Carl Levin, D-Mich., who with other lawmakers introduced the Stop Tax Haven Abuse Act in March. * * *

·     “I.R.S. to Ease Penalties for Some Offshore Tax Evaders” by Lynnley Browning, published by The New York Times, who noted: ” In another shift, the I.R.S. will generally not prosecute taxpayers who come forward voluntarily, provided they are not drug dealers, arms merchants or others with ill-gotten gains. And it will not assess a 35 percent penalty on money secretly transferred to foreign trusts — a common method of tax evasion. The goal, Douglas Shulman, the I.R.S. commissioner, said during a briefing ‘is to get taxpayers who have been hiding assets offshore back into the system.’” * * *

  ·     “IRS launches crackdown on offshore tax evasion” (03/26/09) by Corbett Daley, published by Reuters, who noted: “IRS memos sent to agency examination staff said offshore tax cases should ‘receive priority treatment.’ ‘Offshore cases sent to the field are work of the highest priority,” said one document, which was made public by the IRS. “Examiners should utilize the full range of information gathering tools in properly developing offshore issues with special emphasis on detecting unreported income. This includes interviewing taxpayers, making third-party contacts and timely issuing summonses to taxpayers and third parties.” * * *

·     “IRS Cuts Penalties to Lure Tax Evaders” (03/27/09) by Evan Perez & Tom Herman, published by The Wall Street Journal, who noted: “A key part of the program, IRS officials said, is ‘developing intelligence’ on bankers, lawyers, accountants and others who help the rich hide assets from tax authorities. This raises the likelihood that the IRS and the Justice Department could take aim at major financial firms, as they have against UBS AG, the Swiss bank that admitted in a settlement last month that some of its bankers had helped U.S. clients evade taxes.” * * *

Clearly, past tax law and current tax return forms require that a U.S. citizen who has an interest in, or signature or other authority over, a financial account in a foreign country with assets in excess of $10,000 are required to disclose the existence of such account on Schedule B, Part III of their individual income tax return.

The IRS has made various tax amnesty offers as recently as 2005 and 2003 to enforce these rules. But the political and economic climates have chilled sufficiently to steel the IRS’ intentions towards non-reporting citizens.

For those U.S. citizens who have continued to ignore the legal requirements of reporting and paying income tax, the “amnesty” program may be viewed as harsh, but it may be their last chance before criminal prosecution.

This program and the alternative enforcement routes are now supported politically by the new federal law. And it is consistent with prior initiatives by the IRS. See: Abusive Offshore Tax Avoidance Schemes — An Abusive Scheme Toolkit for External Stakeholders, updated in April, 2009.

Offshore accounts and trusts have been utilized by some Pennsylvanians to avoid both federal and state income tax, as evidenced by a prosecution in Pennsylvania announced recently by the IRS on its website in a posting entitled “Pennsylvania Father and Sons Sentenced in Tax Fraud Scheme.”

On March 26, 2009, in Scranton, Pa., Wendall Sollenberger was sentenced to 42 months in prison and ordered to pay $1,274,615 in restitution to the Internal Revenue Service (IRS).  Last week, Avery Sollenberger, Wendall’s father, was sentenced to 44 months in prison and Gary Sollenberger, Wendall’s brother, was sentenced to 42 months in prison. In September 2008, a jury found Avery, Wendall, and Gary Sollenberger guilty of conspiracy to defraud the IRS.

According to court documents, the Sollenbergers own and operate a house framing business in Hanover, Pennsylvania.

Evidence introduced at trial stated that beginning in 1994, Wendall, Gary and Avery began to employ a deceptive scheme consisting of bogus trusts, a foreign corporation and an off-shore bank account in Cyprus to conceal assets from the IRS. The three men have not paid any income tax on their business earnings since 1994.  During the trial, the government also introduced evidence of defendants expenditures including the purchase of a $100,000 race car, a $40,000 custom made motorcycle, a motor boat, gold, silver, rental properties, a second home in Altoona, Pennsylvania, and hunting trips to Idaho. * * *

See also: Press Release, “UBS Client Charged with Filing False Tax Return Boca Raton, Fla. — Resident Hid Income and Assets in Secret Swiss Bank Account” (04/02/09).

CCH summarized the terms of the amnesty program in its Tax News posting on March 27, 2009 entitled “Voluntary Disclosure Terms.”

[The IRS Commissioner] emphasized that the terms being offered for the disclosure of offshore accounts are an outgrowth of current policy and carry penalties at a level consistent with voluntary disclosure programs in the past. Within this framework, Shulman enumerated the amounts that would need to be paid by taxpayers with heretofore undisclosed offshore accounts who “come clean” under the program:

·     Back taxes due on newly disclosed assets for the last six years;

·     Interest due on these back taxes for the last six years;

·     A 20-percent accuracy-related under Code Sec. 6662 or a 25-percent delinquency penalty under Code Sec. 6651 for each tax year at issue;

·     Looking to the past six years, a 20-percent penalty on the total balance of all the taxpayer’s foreign bank accounts or assets during the year among the past six in which the accounts had their highest aggregate value. * * *

In the past, Pennsylvania did not elect to participate in the IRS’ Offshore Voluntary Compliance Initiative, and, may not participate in this latest program. Therefore Pennsylvania residents intending to participate in this IRS amnesty program should consider their future interactions, too, with the Pennsylvania Department of Revenue.

Neil E. Hendershot is a practicing & teaching lawyer in Harrisburg, Pennsylvania who works daily in the legal areas covered by the PA EE&F Law Blog.   

By: Paul Cherner

The U.S. General Accounting Office (”GAO”) recently issued a scathing report about the DOL’s handling of FLSA investigations. The title of the report is “Wage and Hour Division’s Complaint Intake and Investigative Processes Leave Low Wage Workers Vulnerable to Wage Theft.”

In response, the new DOL Secretary, Hilda Solis, issued a News Release stating that she takes the issues raised by the GAO report seriously and will be hiring 250 new field investigators to refocus their efforts on enforcement of wage-hour laws. This is a one-third increase in that investigative staff. Employers can anticipate more vigorous enforcement of these laws and should prepare now by conducting an audit of their compliance with the FLSA.

Paul Cherner is a labor and employment attorney in Chicago, IL. Visit his blog at http://hrcounselblog.com.

FindLaw

By Eric Sinrod

In a recent memorandum to heads of federal executive departments and agencies, Attorney General Eric Holder, Jr. has followed President Obama’s earlier lead in instructing that the Freedom of Information Act be administered with the clear presumption of openness.

According to the Attorney General, this presumption has two important implications.

The first implication is that an agency should not withhold requested government information simply because it is permitted to do so under the law. Rather, discretionary disclosures are strongly encouraged. Just because an agency technically may be able to establish that certain records are covered by a FOIA exemption is not reason enough to withhold the records.

The second implication is that even when an agency concludes that it cannot make a full disclosure with respect to requested records, it nevertheless must consider whether a partial disclosure is appropriate. Indeed, according to the Attorney General, agencies always should be cognizant that the FOIA requires that reasonable steps be taken to segregate and release non-exempt information.

The Attorney General, of course, notes that the disclosure obligation arising under the FOIA is not absolute. He understands that the statute contains meaningful exemptions designed to protect interests such as national security, personal privacy, and law enforcement.

Nevertheless, the Attorney General echoes the President in reminding government officials that they cannot shield information as confidential merely because they may be embarrassed by disclosure, because errors or failures might be made public, or because of “speculative or abstract fears.”

In responding to President Obama’s directive that he issue new FOIA guidelines, Attorney General Holder rescinded an Attorney General FOIA memorandum from 2001 that provided that the Department of Justice would defend decisions to withhold records “unless they lack a sound legal basis or present an unwarranted risk of adverse impact on the ability of other agencies to protect other important records.”

In its place, Attorney General Holder has announced that the Department of Justice now will defend a denial of a FOIA request only if the agency reasonably foresees that disclosure would harm an interest protected by one of the FOIA exemptions or if disclosure is prohibited as a matter of law.

In response to the President’s instruction to agencies to “use modern technology to inform citizens what is known and done by their Government,” the Attorney General has directed that agencies should “readily and systematically post information online in advance of any public request.”

Attorney General Holder also has encouraged agencies to reduce FOIA backlogs and to respond to information requests in a more timely manner. Along those lines, he notes that “timely disclosure of information is an essential component of transparency,” and that “long delays should not be viewed as an inevitable and insurmountable consequence of high demand.”

Perhaps the foregoing directives by the Attorney General will cause more sun to shine on the affairs and activities of government. However, this will not happen overnight. Agencies are staffed by actual human beings. These people have been operating within a different, less-disclosure-oriented culture over the past eight years. But, over time, paradigm shifts are possible, starting from the top down.

                                                                                                                                                                                                                                                                                                                                                                By: Nancy C. Grimes

President, Managing Partner

Grimes Legal, Inc.

Nancy Grimes has over twenty years’ experience serving the legal industry.  Clients include international, national, regional, local and independent law firms and attorneys.  “Counsel to Counsel” is updated weekly.  Have a question you’d like answered?  Email it to ncgrimes@grimeslegal.com.

The Question:

After almost three years as an associate, I’m not sure I want to practice law. I’ve considered making a move to another firm, but I feel a change in venue is not the answer.  As I research the internet and speak with friends and family, I feel there are many more creative avenues I could entertain with my legal degree.  Any suggestions on what I can be doing now to gear up for my career change besides read internet sources?

Craving Creativity

The Answer:

Dear Craving Creativity:

After almost three years in practice, you seem to be unsure about your career path. I’m gathering from your question that you very intellectual and are drawn toward “something creative.” At the same time, you leave an opening for continuing to practice law.

To confirm whether you are ready to give up law practice, self-assessment exercises can be helpful. Consider your reasons for going to law school and whether you can fulfill them in any type of practice. Assess whether different practice areas or settings would interest you. Consider the skills that you like to use and whether law gives you an opportunity to use them on a regular basis.

If you determine that no other practice appeals to you, the same self-assessment exercises can help you identify the skills, work values, work settings, and interests that you would like to incorporate in a different career path. You have already singled out creativity as an important element in whatever you do. Creativity can take many forms and be found in many different careers.

Three of the books that contain self-assessment exercises are: What Can You Do with a Law Degree? A Lawyer’s Guide to Career Alternatives Inside, Outside & Around the Law, by Deborah Arron; The Lawyer’s Career Change Handbook - More Than 300 Things You Can Do with a Law Degree, by Hindi Greenberg; and Alternative Careers for Lawyers, by Hillary Mantis. Those books are also a source of information on diverse types of careers and may help you determine paths that appeal to your creative side.

After you figure out one or more potential new career paths, your next step is to learn more about them. Internet research can be a starting point. As you recognize, you must go beyond reading about careers.

To gain a deeper understanding about different careers, you can talk to individuals who are doing what you think you want to do. In an informational interview, you can find out whether your idea about a career matches the reality of the work; for example, how much of the work is creative. Be prepared to ask questions that can help you determine whether you are on the right track. Some possible areas of inquiry are the individuals’ career path, what attracted them to the career, their responsibilities, their challenges, and opportunities within the field.

As you learn about each individual and her or his career, be sure to discuss your background and experience, including how it may be transferable to their field. Ask for suggestions and resources related to how you can develop skills and knowledge that can help you make a transition. Seek referrals to others so that you can continue to gather information and become known to individuals who may open doors to a new career.

Take the time to learn about yourself and the types of opportunities that interest you. Creativity and resourcefulness can help you discover and pursue your calling.