Women Really CAN Have it All – Ridding the Legal Field of “The Mommy” / “Tiger Lady” Oxymoron

The National Law Review recently published a book review of, Women Really CAN Have it All – Ridding the Legal Field of “The Mommy” / “Tiger Lady” Oxymoron, by Heidi R. Wendland of The National Law Review / The National Law Forum LLC:

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Long gone is the notion that a woman’s place is at home. Anne Murphy Brown has had her own success in balancing motherhood with a legal career as a litigator, corporate attorney and currently as an Assistant Professor and Director of Legal Studies at Ursuline College. Anne Murphy Brown finds more than 20 other women who have enjoyed the same successes and profiles them in Legally Mom: Real Women’s Stories of Balancing Motherhood and Law Practice. She does an excellent job in making this book relevant to every woman by carefully selecting a diverse array of women to profile. She finds women practicing at law firms and at governmental agencies. She also profiles women who have started their own law firms, who pursue a legal career from home, and who work as in house counsel at corporations. Each chapter contains a different woman’s personal experience and perspectives in balancing motherhood and her legal career. While all of these women face unique challenges depending on which course of work they pursue in the legal field, a common theme prevails throughout the entire book. The recipe for success of “having it all” is the same: these women have been successful because they have had support, drive, and a realistic grasp on their own personal limitations.

Many of the women within Legally Mom are able to pursue a career and be a mother because they have strong support from their husbands. Their husbands help split the parenting duties allowing the mother to keep up with the demands of her career. Other women profiled are not as lucky, and have to find support outside of the home. Some find support from family members in the form of child care. Others find support from within their workplace through understanding bosses, flexible hours, and policies enacted for mothers within the firm such as paid time off, nursing rooms, and child care offered on the premises. Anne Murphy Brown also provides the reader with a great resource: www.mamalaw.com . This website was created by a group of career moms to serve as a forum for other career moms to lend support to each other.

All the women profiled share a desire to succeed as both a mother and a lawyer. The book demonstrates how women have to fight for their right to pursue a career while being a mother and every woman profiled gives excellent advice as to how to do so. They have to be comfortable in confronting their bosses in order to achieve what they want. In fact, one woman profiled mentions an excellent point that it is to a firm’s detriment to not be flexible for women attorneys. Law firms and companies lose many educated women to motherhood because they do not enact policies that provide for flexibility to pursue both. This interesting perspective gives the reader a great negotiating tool when confronting her employer.

Women who want both a career and to be a mother must still acknowledge that there are limits since there are only 24 hours in a day. The women in the book all prioritize their lives in different ways and give advice as to how to live with the choices they make. In the end, the women do what works best for their own unique situation.

For some women profiled, being a mother and pursuing a legal career was something they always knew they wanted to balance. For other women profiled, being a mother was an afterthought and it was not until they had established themselves within their career did they consider starting their families. Every woman who is considering whether it is possible to be a mother and pursue a legal career should read this book. Every woman who thinks it is impossible to have both should certainly read this book. While woman have a huge task in front of them when deciding to be a mother and a career lady, this book proves it is not impossible. With effective time management, a woman can pursue a successful career and be a good mother. Legally Mom serves to enhance the feeling of female camaraderie in a traditionally male dominated career of law, and will no doubt inspire every reader and continue the movement for change and women empowerment.

Copyright ©2012 National Law Forum, LLC

9th Annual Clean Tech Investor Summit – February 6-7, 2013

The National Law Review is pleased to bring you information about the upcoming 9th Annual Clean Tech Investor Summit:

The Clean-Tech Investor Summit chaired by Technology Partners’ Ira Ehrenpreis and produced by International Business Forum, is the premier clean-tech investment and innovation summit of the year. Held each winter in Palm Springs, CA, at the Renaissance Esmeralda Resort & Spa, the event brings together leading investors, Fortune 500 executives, entrepreneurs, and service providers for two days of high-level presentations, conversations, and networking. Hosting a national audience at this destination location has fostered the optimal networking experience.  General registration is $1,995, but National Law Review readers can use discount code CTNLR and pay only $1,495!

District Court Holds IRS Lacks Authority to Issue and Enforce Tax Return Preparer Regulations

The National Law Review recently featured an article, District Court Holds IRS Lacks Authority to Issue and Enforce Tax Return Preparer Regulations, written by Gale E. Chan and Robin L. Greenhouse with McDermott Will & Emery:

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On January 18, 2013, the District Court for the District of Columbia (District Court) issued a surprising decision in Loving v. Internal Revenue Service, No. 12-385 (JEB), holding that the Internal Revenue Service (IRS) lacked the authority to issue and enforce the final Circular 230 tax return preparer regulations that were issued in 2011 (Regulations).  The District Court also permanently enjoined the IRS from enforcing the Regulations.

Background

As part of the IRS’s initiative to increase oversight of the tax return preparer industry by creating uniform and high ethical standards of conduct, the IRS created a new category of preparers, “registered tax return preparer,” to be subject to the rules of Circular 230.  Attorneys, certified public accountants, enrolled agents and enrolled actuaries were already subject to IRS regulation under Circular 230, and thus, were not affected by the issuance of the Regulations.

In June 2011, the IRS and the U.S. Department of the Treasury (Treasury) issued the Regulations relating to registered tax return preparers and practice before the IRS.  T.D. 9527 (June 3, 2011).  Under these rules, registered tax return preparers have a limited right to practice before the IRS.  A registered tax return preparer can prepare and sign tax returns, claims for refunds and other documents for submission to the IRS.  A registered tax return preparer who signs the return may represent taxpayers before revenue agents and IRS customer service representatives (or similar officers or employees of the IRS) during an examination, but the registered tax return preparer cannot represent the taxpayer before IRS appeals officers, revenue officers, counsel or similar officers or employees of the IRS.  In addition, a registered tax return preparer can only advise a taxpayer as necessary to prepare a tax return, claim for refund or other document intended to be submitted to the IRS.

The Regulations also impose additional examination and continuing education requirements on registered tax return preparers in addition to obtaining a preparer tax identification number (PTIN).  Under the rules, to become a “registered tax return preparer,” an individual must be 18 years old, possess a current and valid PTIN, pass a one-time competency examination, and pass a federal tax compliance check and a background check.  The Regulations require a registered tax return preparer to renew his or her PTIN annually and to pay the requisite user fee.  To renew a PTIN, a registered tax return preparer must also complete a minimum of 15 hours of continuing education credit each year that includes two hours of ethics or professional conduct, three hours of federal tax law updates and 10 hours of federal tax law topics.

Loving v. Internal Revenue Service

In Loving, three individual paid tax return preparers (Plaintiffs) filed suit against the IRS, the Commissioner of Internal Revenue and the United States (collectively, Government) seeking declaratory relief, arguing that tax return preparers whose only “appearance” before the IRS is the preparation of tax returns cannot be regulated by the IRS, and injunctive relief, requesting the court to permanently enjoin the IRS from enforcing the Regulations.  In filed declarations, two of the Plaintiffs indicated that they would likely close their tax businesses if they were forced to comply with the Regulations, and the third Plaintiff, who serves low-income clients, indicated that she would have to increase her prices if forced to comply with the Regulations, likely resulting in a loss of customers.  The Plaintiffs and the Government each filed separate motions for summary judgment.

At issue in the case was the IRS’s claim that it can regulate individuals who practice before it, including tax return preparers.  The IRS relied on an 1884 statute, 31 U.S.C. § 330, which provides the Treasury with the authority to regulate the people who practice before it.  The statute currently provides that the Treasury may “regulate the practice of representatives of persons before the Department of the Treasury.”  31 U.S.C. § 330(a)(1) (emphasis added).  The statute further requires that a representative demonstrate certain characteristics prior to being admitted as a representative to practice, including “competency to advise and assist persons in presenting their cases.”  31 U.S.C. § 330(a)(2)(D) (emphasis added).  The statute also gives the Treasury authority to suspend or disbar a representative from practice before the Treasury in certain circumstances, as well as to impose a monetary penalty.  31 U.S.C. § 330(b).

The District Court’s Application of Chevron

The District Court applied the framework of Chevron U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837 (1984), and concluded that the text and context of 31 U.S.C. § 330 unambiguously foreclosed the IRS’s interpretation of the statute.  Chevron applies a two-step inquiry to determine whether a statute is ambiguous.  The first step asks whether the intent of Congress is clear in the statute—i.e., has Congress “directly spoken to the precise question at issue.”  Chevron, 467 U.S. at 842.  If a court determines that the intent of Congress is clear, under the Chevron framework, that is the end and the court “must give effect to the unambiguously expressed intent of Congress.”  Id. at 842–43.  However, if the court determines that the statute is silent or ambiguous, the court must proceed to step two of Chevron and ask whether the agency’s interpretation “is based on a permissible construction of the statute.”  Id. at 843.  An agency’s construction under step two is permissible “unless it is arbitrary or capricious in substance, or manifestly contrary to the statute.”  Mayo Found. for Med. Educ. & Research v. United States, 131 S. Ct. 704, 711 (2011) (citation omitted).

In Loving, the District Court concluded that 31 U.S.C. § 330 was unambiguous as to whether tax return preparers are “representatives” who “practice” before the IRS for three reasons.  First, the District Court stated that 31 U.S.C. § 330(a)(2)(D) defines the phrase “practice of representatives” in a way that does not cover tax return preparers.  As noted above, 31 U.S.C. § 330(a)(2)(D) requires a representative to demonstrate that he or she is competent to advise and assist taxpayers in presenting their “cases.”  The District Court stated that the statute thus equates “practice” with advising and assisting with the presentation of a case, which the filing of a tax return is not.  Thus, the District Court concluded that the definition in 31 U.S.C. § 330(a)(2)(D) “makes sense only in connection with those who assist taxpayers in the examination and appeals stages of the process.”

Second, the District Court stated that the IRS’s interpretation of 31 U.S.C. § 330 would undercut various statutory penalties in the Internal Revenue Code (Code) specifically applicable to tax return preparers.  The District Court noted that if 31 U.S.C. § 330(b) is interpreted as authorizing the IRS to penalize tax return preparers under the statute, the statutory penalty provisions in the Code specific to tax return preparers would be displaced, thereby allowing the IRS to penalize tax return preparers more broadly than is permissible under the Code.  Thus, the District Court stated that the specific penalty provisions applicable to tax return preparers in the Code should not be “relegated to oblivion” and trumped by the general penalty provision of 31 U.S.C. § 330(b).

The District Court also stated that 31 U.S.C. § 330(b) does not authorize penalties on tax return preparers because Section 6103(k)(5) of the Code, which provides that the IRS may disclose certain penalties to state and local agencies that license, register or regulate tax return preparers, does not identify 31 U.S.C. § 330(b) as one of the reportable statutory penalty provisions.

Finally, the District Court stated that if the IRS’s interpretation of 31 U.S.C. § 330 is accepted, Section 7407 of the Code would be duplicative.  Section 7407 of the Code provides the IRS with the right to seek an injunction against a tax return preparer to enjoin the preparer from further preparing returns if the preparer engages in specified unlawful conduct.  This right is similar to the authority under 31 U.S.C. § 330(b) to penalize if the IRS’s interpretation of 31 U.S.C. § 330 is accepted.  Under the IRS’s interpretation of 31 U.S.C. § 330, the IRS could disbar a representative from practice before the IRS if a tax return preparer engages in the conduct described in 31 U.S.C. § 330(b) (incompetence, being disreputable, violating regulations and fraud).  Thus, the District Court noted that disbarment under 31 U.S.C. § 330(b) is wholly within the IRS’s control and would be an easier path to penalize a tax return preparer than offered by Section 7407 of the Code.  The District Court stated that under the IRS’s interpretation, the IRS likely would never utilize the remedies available under Section 7407 of the Code, thereby rendering the statute pointless.

Conclusion

The District Court granted the Plaintiffs’ motion for summary judgment, holding that the IRS lacked statutory authority to issue and enforce the Regulations against “registered tax return preparers,” and permanently enjoined the IRS from enforcing the Regulations.  The Government will likely appeal the District Court’s decision.  Nevertheless, the District Court’s decision will have a great impact on the hundreds of thousands of tax return preparers ensnared by the Regulations and the clients they serve.

© 2013 McDermott Will & Emery

White Collar Crime Institute – March 6-8, 2013

The National Law Review is pleased to bring you information about the upcoming White Collar Crime Institute:

White Collar Crime March 6-8 2013

The program will provide an in-depth analysis of three recent high visibility trials by the lawyers involved in the cases.  The many topics covered will include: ethical pitfalls and blunders in white collar practice, conducting global investigations (including issues of competing laws), data privacy and blocking statutes, trial tactics in white collar cases, Brady obligations, international issues in white collar practice (including obtaining evidence abroad), handling of, and dealing with, issues related to electronically stored materials, sentencing guidelines and arguing for a departure, updates and trends in securities and FCPA enforcement, and more!

HIPAA Final Omnibus Rule Brings “Sweeping Change” to Health Care Industry

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On January 17, 2013, the U.S. Department of Health and Human Services (HHS)announced the release of the HIPAA final omnibus rule, which was years in the making. The final rule makes sweeping changes to the HIPAA compliance obligations of covered entities and business associates and comprises four final rules wrapped into one:

  1. Modifications to the HIPAA Privacy, Security, and Enforcement Rules mandated by the Health Information Technology for Economic and Clinical Health (HITECH) Act, and certain other modifications to improve the rules, which were issued as a proposed rule on July 14, 2010;
  2. Changes to the HIPAA Enforcement Rule to incorporate the increased and tiered civil money penalty structure provided by the HITECH Act and to adopt the additional HITECH Act enhancements to the Enforcement Rule that were not previously adopted in the October 30, 2009 interim final rule, including provisions to address enforcement where there is HIPAA non-compliance due to willful neglect;
  3. A final rule on Breach Notification for Unsecured Protected Health Information under the HITECH Act, which eliminates the breach notification rule’s “harm” threshold and supplants an interim final rule published on Aug. 24, 2009; and
  4. A final rule modifying the HIPAA Privacy Rule as required by the Genetic Information Nondiscrimination Act (GINA) to prohibit most health plans from using or disclosing genetic information for underwriting purposes, which was published as a proposed rule on Oct. 7, 2009.

HHS estimates a total cost of compliance with the final omnibus rule’s provisions to be between $114 million and $225.4 million in the first year of implementation and approximately $14.5 million each year thereafter. Among the costs HHS associates with the final rule are: (i) costs to covered entities of revising and distributing new notices of privacy practices; (ii) costs to covered entities related to compliance with new breach notification requirements; (iii) costs to business associates to bring their subcontracts into compliance with business associate agreement requirements; and (iv) costs to business associates to come into full compliance with the Security Rule. HHS attributes between $43.6 million and $155 million of its first year estimates to business associate compliance efforts. It is predicted that the true compliance costs for both covered entities and business associates will be far in excess of these HHS estimates.

Some of the key provisions of the final omnibus rule include:

  • Expanded definition of “business associate.” The definition of “business associate” has been expanded to include subcontractors of business associates, any person who “creates, receives, maintains, or transmits” protected health information on behalf of a covered entity, and certain identified categories of data transmission services that require routine access to protected health information, among others. A covered entity is not required to enter into a business associate agreement with a business associate that is a subcontractor; that obligation flows down to the business associate, who is required to obtain the proper written agreement from its subcontractors.
  • Direct compliance obligations and liability of business associates.Business associates are now directly liable for compliance with many of the same standards and implementation specifications, and the same penalties now apply to business associates that apply to covered entities, under the Security Rule. Additionally, the rule requires business associates to comply with many of the same requirements, and applies the same penalties to business associates that apply to covered entities, under the Privacy Rule. Business associates must also obtain satisfactory assurances in the form of a business associate agreement from subcontractors that the subcontractors will safeguard any protected health information in their possession. Finally, business associates must furnish any information the Secretary requires to investigate whether the business associate is in compliance with the regulations.
  • Modified definition of “marketing.” The definition of “marketing” has been modified to encompass treatment and health care operations communications to individuals about health-related products or services if the covered entity receives financial remuneration in exchange for making the communication from or on behalf of the third party whose product or service is being described. A covered entity must obtain an individual’s written authorization prior to sending marketing communications to the individual.
  • Prohibition on sale of PHI without authorization. An individual’s authorization is required before a covered entity may disclose protected health information in exchange for remuneration (i.e., “sell” protected health information), even if the disclosure is for an otherwise permitted disclosure under the Privacy Rule. The final rule includes several exceptions to this authorization requirement.
  • Clear and conspicuous fundraising opt-outs. Covered entities are required to give individuals the opportunity to opt-out of receiving future fundraising communications. The final rule strengthens the opt-out by requiring that it be clear and conspicuous and that an individual’s choice to opt-out should be treated as a revocation of authorization. However, the final rule leaves the scope of the opt-out to the discretion of covered entities. In addition to demographic information, health insurance status, and dates of health care provided to the individual, the final rule also allows covered entities to use and disclose: department of service information, treating physician information, and outcome information for fundraising purposes. Covered entities are prohibited from conditioning treatment or payment on an individual’s choice with respect to the receipt of fundraising communications. In addition, the NPP must inform individuals that the covered entity may contact them to raise funds and that they have a right to opt-out of receiving such communications.
  • Right to electronic copy of PHI. If an individual requests an electronic copy of protected health information that is maintained electronically in one or more designated record sets, the covered entity must provide the individual with access to the electronic information in the electronic form and format requested by the individual, if it is readily producible, or, if not, in a readable electronic form and format as agreed to by the covered entity and the individual.
  • Right to restrict disclosures to health plans. When an individual requests a restriction on disclosure of his or her protected health information, the covered entity must agree to the requested restriction (unless the disclosure is otherwise required by law), if the request for restriction is on disclosures to a health plan for the purpose of carrying out payment or health care operations and if the restriction applies to protected health information for which the health care provider has been paid out of pocket in full. Covered health care providers will need to employ some method to flag or make a notation in the record with respect to the protected health information that has been restricted to ensure that such information is not inadvertently sent to or made accessible to the health plan for payment or health care operations purposes, such as audits by the health plan.
  • GINA changes for some health plans. Health plans that are HIPAA covered entities, except issuers of long term care policies, are prohibited from using or disclosing an individual’s protected health information that is genetic information for underwriting purposes. The rule does not affect health plans that do not currently use or disclose protected health information for underwriting purposes.
  • Provision for compound authorizations for research. A covered entity may combine conditioned and unconditioned authorizations for research, provided that the authorization clearly differentiates between the conditioned and unconditioned research components, clearly allows the individual the option to opt in to the unconditioned research activities, and the research does not involve the use or disclosure of psychotherapy notes. For research that involves the use or disclosure of psychotherapy notes, an authorization for a use or disclosure of psychotherapy notes may only be combined with another authorization for a use or disclosure of psychotherapy notes.
  • Required changes to Notice of Privacy Practices (NPP). NPPs must be modified and distributed to individuals to advise them of the following: (1) for health plans that underwrite, the prohibition against health plans using or disclosing PHI that is genetic information about an individual for underwriting purposes; (2) the prohibition on the sale of protected health information without the express written authorization of the individual, as well as the other uses and disclosures for which the rule expressly requires the individual’s authorization (i.e., marketing and disclosure of psychotherapy notes, as appropriate); (3) the duty of a covered entity to notify affected individuals of a breach of unsecured protected health information; (4) for entities that have stated their intent to fundraise in their notice of privacy practices, the individual’s right to opt out of receiving fundraising communications from the covered entity; and (5) the right of the individual to restrict disclosures of protected health information to a health plan with respect to health care for which the individual has paid out of pocket in full.
  • Broader disclosure of decedents’ PHI. Covered entities are permitted to disclose a decedent’s protected health information to family members and others who were involved in the care or payment for care of the decedent prior to death, unless doing so is inconsistent with any prior expressed preference of the individual that is known to the covered entity.
  • Disclosure of proof of immunizations to schools. A covered entity is permitted to disclose proof of immunization to a school where State or other law requires the school to have such information prior to admitting the student. While written authorization will no longer be required to permit this disclosure, covered entities will still be required to obtain agreement, which may be oral, from a parent, guardian or other person acting in loco parentis for the individual, or from the individual himself or herself, if the individual is an adult or emancipated minor.
  • Tiered and enhanced enforcement provisions. The final rule conforms the regulatory language of the rule to the enhanced enforcement provisions of the HITECH Act. Penalties for non-compliance are based on the level of culpability with a maximum penalty of $1.5 million for uncorrected willful neglect.

As detailed above, the changes announced by HHS expand many of the requirements to business associates and subcontractors. Fortunately, the final rule provides a slight reprieve in one respect. It allows covered entities and business associates up to one year after the 180-day compliance date to modify business associate agreements and contracts to come into compliance with the rule.

Perhaps the most highly anticipated change found in the final omnibus rule relates to what constitutes a “breach” under the Breach Notification Rule. The final rule added language to the definition of breach to clarify that an impermissible use or disclosure of PHI is presumed to be a breach unless the covered entity (or business associate) demonstrates that there is a low probability that the PHI has been compromised. Stated differently, the rule removes the subjective harm standard and modifies the risk assessment to focus instead on the risk that the PHI has been compromised. The final rule also identifies four objective factors covered entities and business associates are to consider when performing a risk assessment to determine if the protected health information has been compromised and breach notification is necessary: (1) the nature and extent of the protected health information involved, including the types of identifiers and the likelihood of re-identification; (2) the unauthorized person who used the protected health information or to whom the disclosure was made; (3) whether the protected health information was actually acquired or viewed; and (4) the extent to which the risk to the protected health information has been mitigated.

The final omnibus rule does not address the accounting for disclosures requirements, which is the subject of a separate proposed rule published on May 31, 2011, or the penalty distribution methodology requirement, which HHS has stated will both be the subject of future rulemaking.

The Office of Civil Rights has characterized the new rules as “the most sweeping changes to the HIPAA Privacy and Security Rules since they were first implemented.” Leon Rodriguez, the Director of the Office of Civil Rights, stated, “These changes not only greatly enhance a patient’s privacy rights and protections, but also strengthen the ability of my office to vigorously enforce the HIPAA privacy and security protections, regardless of whether the information is being held by a health plan, a health care provider, or one of their business associates.”

The HIPAA final omnibus rule is scheduled to be published in the Federal Register on January 25, 2013 and will go into effect on March 26, 2013. Covered entities and business associates must comply with the applicable requirements of the final rule by September 23, 2013. Entities affected by this final rule are strongly urged to begin an analysis of their existing HIPAA compliance policies and procedures and take steps to comply with the final rule.

The HHS Press Release announcing the final rule is available at:
http://www.hhs.gov/news/press/2013pres/01/20130117b.html

The full text of the rule is currently available at:
https://www.federalregister.gov/articles/2013/01/25/2013-01073/modifications-to-the-hipaa-privacy-security-enforcement-and-breach-notification-rules

© 2013 Dinsmore & Shohl LLP

IP Law Summit – March 21-23, 2013

The National Law Review is pleased to bring you information about the upcoming IP Law Summit:

The IP Law Summit is the premium forum for bringing senior IP Counsel and service providers together. As an invitation-only event taking place behind closed doors, the Summit offers an intimate environment for a focused discussion of cutting edge technology, strategy and products driving the IP market place.

The one-on-one business meetings provide access to Senior IP Counsel within the largest corporations across the United States. A thorough selection process ensures a qualified audience, which grants unparalleled business and networking opportunities in a luxurious and stimulating environment.

March 21-23, 2013

The Broadmoor, Colorado Springs, CO

Refresher on the “Step-up” Process for Service Personnel

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A common question our Education Law Practice Group deals with relates to how the “step-up” process works for service personnel.

The “step-up” process is found in W. Va. Code 18A-4-15, which in relevant part, states:

Any regular service person employed in the same building or working station and the same classification category of employment as the absent employee shall be given the first opportunity to fill the position of the absent employee on a rotating and seniority basis. In such case the regular service person’s position is filled by a substitute service person. A regular service person assigned to fill the position of an absent employee has the opportunity to hold that position throughout the absence. For the purpose of this section only, all regularly employed school bus operators are considered to be employed within the same building or working station.

Let’s discuss some common scenarios we often see.

Scenario 1: Employee “A” is regular bus operator that is on an approved leave of absence (“LOA”) that was requested in writing and approved by the board of education. The LOA is expected to extend beyond thirty days. When an employee receives a LOA from the board, and the leave will extend for more than thirty days, W. Va. Code 18A-4-15 requires the board to post the assignment and fill it per W. Va. Code 18A-4-8b. The assignment is awarded to the most senior regular employee in the classification that applies, and if no regular employee is interested, bus operators on preferred recall, and if none, substitutes bus operators that might apply. Suppose that in the instant, Employee “B”, the most senior regular bus operator bids and receives the assignment. “B” finds the route more attractive than his or her route because it is closer to home, or is short (or some other reason). Keep in mind this is not a “step-up” for “B”. As for “B’s” regular assignment though, you have to permit “step-up” (not posting it), which is offering “B’s” assignment to the regular bus drivers via seniority based rotation. Let’s say regular Employee “C” wants “B’s” assignment via the “step-up” up process. If “C” “steps-up”, “C” will remain in that assignment until “B” returns. A substitute bus driver via rotation (whoever is next on the list) will substitute for “C”. You do not allow “step-up” to “C’s” regular assignment. “Step-up” happens once.

Scenario 2: Employee “A” is a regular bus operator out from work using sick leave. “A” has not requested in writing an approved LOA from the board. It appears that “A” is going to be absent for an extended period of time (lets’ say five to sixty days). The board does not post it after the twentieth day (that is a common myth). Instead, the board utilizes the “step-up” process of W. Va. Code 18A-4-15 and offer “A’s” assignment to the most senior bus operators via seniority based rotation. If a regular bus operator “steps-up” (let’s say “B”), a substitute next on the bus operator list is called for “B”. “Step-up” does not continue on-and-on-and-on. A substitute is called for “B”. Yes a substitute with little seniority might get lucky if s/he is next in line on the substitute list.

Always keep in mind that if a substitute is initially called for “A’s” assignment (which is often the case because the board might not know the absence could extend for a few days), but after that initial day it appears the regular employee will continue to be absent, the board should offer “step-up” per W. Va. Code 18A-4-15 to regular employees, who then bump the substitute out. The Grievance Board encourages this process (see Decision). And again, if a regular employee “steps-up”, a substitute is then called for the regular employee who took the opportunity to “step-up”.

The “step-up” process is not fun from a personnel standpoint, especially when there is not sufficient time to contact regular employees, in emergency situations, or in situations when it is not known that the regular employee’s absence will be beyond a day or so, etc. But we hope the above sheds some light on the proper use of the “step-up” process compared to the posting process. For additional grievances decision on the “step-up” process, see GarnerMullinsMcMillen, and Prickett.

© 2013 Dinsmore & Shohl LLP

Chief Litigation Officer Summit – March 21-23, 2013

The National Law Review is pleased to bring you information about the upcoming Chief Litigation Officer Summit:

The primary objective of the Chief Litigation Officer Summit is to explore the key aspects and issues related to litigation best practices and the protection and defense of corporations. The Summit’s program topics have been pinpointed and validated by leading litigation counsel as the top critical issues they face.

March 21-23, 2013

The Broadmoor, Colorado Springs, CO

Employers Can Obtain Refund for Excess FICA Tax Paid as Result of Increased Excludable Limit for Transit Benefits

The National Law Review recently published an article, Employers Can Obtain Refund for Excess FICA Tax Paid as Result of Increased Excludable Limit for Transit Benefits, written by Maureen O’Brien and Ruth Wimer, Esq., CPA with McDermott Will & Emery:

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On January 11, 2013, the Internal Revenue Service published Notice 2013-8 providing a special administrative procedure for employers with respect to 2012 transit pass benefits.  The American Taxpayer Relief Act retroactively increased the monthly transit benefit exclusion under Section 132(f)(2)(A) of the Internal Revenue Code for commuter highway vehicles or transit passes from $125 per participating employee to $240 per participating employee for the 2012 calendar year (the monthly transit benefit exclusion for parking remains at $240).  The notice addresses employers’ questions regarding the retroactive application of the increased exclusion, which can result in both decreased FICA and federal income tax liability.  Employers acting promptly, in many cases by January 31, may have less administrative burden in obtaining a benefit for themselves and their employees with respect to the retroactive increase for employer-provided transit benefits.

Background

Section 132(a)(5) of the Internal Revenue Code provides that any fringe benefit that is a qualified transportation fringe is excluded from gross income for federal income tax purposes, and the FICA rules allow for the same exclusion.  The term “qualified transportation fringe” includes (when provided by an employer to an employee) transportation in a commuter highway vehicle between home and work and any transit pass (Transit Benefits), or qualified parking.  Prior to the enactment of the American Taxpayer Relief Act (ATRA), the 2012 monthly limit for qualified parking was $240, and the monthly limit for other Transit Benefits was $125.  ATRA amended Section 132(f)(2) to increase the maximum monthly excludable amount for Transit Benefits to an amount equal to the maximum monthly excludable amount for qualified parking (i.e., $240), effective retroactively beginning on January 1, 2012.

As a result of ATRA, employers that provided Transit Benefits in excess of the pre-ATRA maximum monthly excludable amount may be able to obtain a refund of FICA amounts paid on such benefits.  Generally, corrections of overpayments of FICA tax are made when an error has been ascertained using either the adjustment process or using the refund claim process, and requires a Form 941-X to be filed for each quarter in which excess FICA taxes were reported.  (Correction of over-withheld federal income tax can not be made until after the year-end in which the over-withholding occurred.)

IRS Notice 2013-8 provides a special administrative process to obtain a refund for excess FICA tax paid as a result of the retroactive amendment on the monthly excludable limit for Transit Benefits.  To benefit from the retroactive increase in the excludable limits for Transit Benefits, the employer must have actually paid amounts for Transit Benefits in excess of the limit either from its own resources or from employee salary deferrals.

Employers that have not yet filed their fourth quarter Form 941 for 2012 must repay or reimburse their employees the over-collected FICA tax on the excess transit benefits for all four quarters of 2012 on or before filing the fourth quarter Form 941.  The employer, in reporting amounts on its fourth quarter Form 941, may then reduce the fourth quarter wages, tips and compensation reported on line 2, the taxable social security wages reported on line 5a and Medicare wages and the tips reported on line 5c by the excess transit benefits for all four quarters of 2012.  By taking advantage of this special administrative procedure, employers will avoid having to file Forms 941-X, and will also avoid having to file Forms W-2c.

Employers that have already filed the fourth quarter Form 941 must use Form 941-X to make an adjustment or claim a refund for any quarter in 2012 with regard to the overpayment of tax on the excess transit benefits after repaying or reimbursing the employees or, for refund claims, securing consents from its employees.  Similarly, employers that, on or before filing the fourth quarter Form 941, have not repaid or reimbursed some or all employees who received excess transit benefits in 2012 must use Form 941-X to make an adjustment or claim for refund with respect to the excess transit benefits provided to those employees, and must follow the normal procedures.

Employers that have not furnished 2012 Forms W-2 to their employees should take into account the increased exclusion for transit benefits in calculating the amount of wages reported in box 1, Wages, tips, other compensation; box 3, Social security wages; and box 5, Medicare wages and tips.  Employers that have repaid or reimbursed their employees for the over-collected FICA taxes prior to furnishing Form W-2 should reduce the amounts of withheld tax reported in box 4, Social security tax withheld, and box 6, Medicare tax withheld, by the amounts of the repayments or reimbursements.

In all cases, however, employers must report in box 2, Federal income tax withheld, the amount of income tax actually withheld during 2012.  The additional income tax withholding will be applied against the taxes shown on the employee’s individual income tax return (Form 1040, U.S. Individual Income Tax Return).  The same procedures are available to filers of other employment tax returns reporting FICA taxes (e.g., the related Spanish-language return or return for U.S. possessions) and to filers of employment tax returns reporting taxes under the Railroad Retirement Tax Act.

© 2013 McDermott Will & Emery

2013 National Association of Women Lawyers Mid-Year Conference

The National Law Review is pleased to bring you information about the upcoming 2013 NAWL Mid-Year Conference – Stretched & Balanced:

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Please join NAWL at Walt Disney World®, Florida for our 2013 Mid-Year meeting, February 14-16, 2013.

Attend timely andstimulating CLE programs that will assist you as a woman lawyer in your practice setting.

Network with NAWL membersfrom across the country, plan future activities with your colleagues on NAWL committees, and have a family-oriented, fun-filled time at the theme parks.

View Brochure (.pdf)