Women in Business: Attorneys Christina Hausner, Holly Filius and Julie Miller

Russell, Krafft and Gruber, LLP is excited to be featured in the Women in Business section of the November/December 2011 issue of Susquehanna Style. The feature highlights just some of the great qualities and community work of Christina Hausner, Holly Filius and Julie Miller. If you are interested in viewing the feature, you can purchase a copy at newsstands or view the publication online (page 91-92). Susquehanna Style is a bi-monthly regional lifestyle magazine for the residents of south central Pennsylvania.

In conjunction with the Women in Business feature, Chris, Holly and Julie will be attending the Celebrate Women event held on November 30, 2011, at the Accomac Inn. If you are interested in attending, you can purchase tickets and find out more information on Susquehanna Style's website. The $10 admission donation will benefit the Power Packs Project which is a school hunger initiative.

National Legislation Introduced to Further Protect Children - The Speak Up Act

As we have witnessed the Penn State Scandal spark movement toward change in state legislation, it is no surprise that its impact has now reached Washington, D.C. Yesterday, Pennsylvania Senator Robert Casey and California Senator Barbara Boxer introduced the Speak Up to Protect Every Abused Kid (Speak Up) Act of 2011. The purpose of the Act is to ensure that all adults, no matter what profession, will be legally obligated to report cases of suspected child abuse and/or neglect. The Speak Up Act would require all states to enforce this law and would also make clear to whom suspected abuse should be reported, either directly to law enforcement or to state Child Protective Services.

For more information on this legislation please visit:

http://www.casey.senate.gov/newsroom/press/release/?id=4870f6e4-6537-44d8-ad1b-3c41da07751e

or

http://www.clasp.org/news_room/news_releases?id=0057

Is Downtown Lancaster the Right Location for Your Business?

Downtown Lancaster is currently experiencing a growth spurt in terms of businesses starting or moving to the area. This growth is in part fueled by the arts, which has helped downtown Lancaster retailers see a boom in business. Retailers see a tremendous amount of traffic due to the popularity of Lancaster's First Friday events. Downtown Lancaster has established itself as a trendy place to shop for unique and stylish products, such as eco-friendly bicycles, organic food, gourmet chocolates and vinyl records. For some business owners or entrepreneurs starting a new business, the image that Downtown Lancaster has created presents a great opportunity for growth in a slumping economy.

If you are considering a downtown location for your business you should consider a variety of factors before making a decision.

  • First, create a business plan with Downtown Lancaster as your location. What type of customers do you serve or plan on serving? Are they the type of customers who will frequent Downtown Lancaster? Will transportation be an issue for these type of customers? Visit the shops in Downtown Lancaster and see if your product or service fits in with other retailers and offers similarly unique and stylish qualities as other shops.
  • Second, how will rent compare to where you are currently operating or other areas where you would consider operating? Base rent should not be the only types of comparison. If you're communicating with a broker, ask for a draft of the lease. Is the lease gross or net? A basic gross lease only includes base rent, while a standard net lease includes operating expenses and real estate taxes. In addition, some landlords (such as those in shopping centers) will charge a percentage of net income as additional rent. You may find that provisions of a lease for a downtown location are more ideal for a start-up business.
  • Finally, if you're considering moving downtown you should attend First Fridays, if you haven't been attending already. First Fridays are immensely popular and it's important to understand what you're getting into. These events are a great opportunity for businesses to funnel traffic into their spaces and familiarize potential customers with their products and services.
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Pennsylvania Legislature to Strengthen Reporting Requirements of Sex Abuse

On Friday I posted an article regarding Pennsylvania's Mandatory Reporting Statute which requires certain people to report suspected child abuse to the proper authorities.  I highlighted some of the changes that have occurred in the law and the continuing confusion with the current law.  I suggested that our legislature may be prompted to take a look at the current law.   If you were watching the interview with Governor Tom Corbett on Meet the Press on Sunday morning, he confirmed that the move to strengthen the law has already begun.  Pennlive.com posted an Associated Press article with more details on the interview. The article says in part:

State lawmakers from both parties have proposed changes to toughen the law that governs the reporting of sex assaults, Corbett added. He said he would not be surprised to see it strengthened this year. 

“We have to make sure the change in the law is one that is effective,” he said.

 

The Penn State Child Sex Abuse Scandal and the Legal Obligation to Report

Unless you have avoided picking up a newspaper, turning on the television or conversing with friends, family or co-workers recently, you probably have heard about the scandal surrounding Penn State University and the sexual abuse allegations against former defensive coordinator, Jerry Sandusky. The scandal, however, extends beyond the football program and has resulted in criminal charges being filed against former athletic director, Tim Curley, and finance and business administrator, Gary Schultz. The charges against these two individuals are perjury and failure to report child abuse. The allegations surrounding the Penn State football program and the charges against its administration, aside from becoming major national news, have brought significant attention to the Pennsylvania Child Protective Services Law and have raised a number of questions about who is required to report child abuse and when.

The current Child Protective Services Law in Pennsylvania requires that someone who, in the course of their employment, comes into contact with children must make a report to the appropriate Children & Youth Service or police when they have reasonable cause to suspect that a child has been a victim of abuse. The Law further goes on to specifically list a number of categories of persons who are required to report suspected abuse including, but not limited to:

  • Any licensed physician, osteopath
  • Medical Examiner, Coroner
  • Funeral Director
  • Dentist
  • Optometrist
  • Chiropractor
  • Podiatrist
  • Intern
  • Registered Nurse
  • Licensed Practical Nurse
  • Hospital personnel engaged in the admission, examination, care or treatment of persons
  • Christian Science practitioner
  • Member of the Clergy
  • School administrator, teacher, school nurse
  • Social services worker
  • Day-care center worker or any other child-care or foster-care worker
  • Mental health professional
  • Peace officer or law enforcement official

This list is not meant to be exclusive of others, but provides specific examples of those required to report. The Law also provides that any person may, even if not included in the above list, report suspected child abuse, although the Law does not impose a specific duty to do so.

The language of the Child Protective Services Law, while seemingly clear in its intent to require those in contact with children to report abuse, does leave open the question of what constitutes contact with children during one’s course of employment. Does it require constant contact? Occasional contact? It has been found that incidental contact with children during employment is not enough to trigger a reporting duty under the Law. In one case decided by a federal court interpreting this law, the Court found that a photo lab worker in a retail store was not under the purview of the Child Protective Services Law. Because the photo lab worker did not have regular contact with children during the course of her employment, she did not have a duty to report suspected abuse she perceived from photographs she processed in the lab.

Much has been made of the legal duty to report child abuse in the context of the allegations against the Penn State administrators. The question has been raised by at least one of the administrator's attorneys as to whether a crime was actually committed by the administrator’s failure to report the information provided to him by Joe Paterno and the former graduate assistant who allegedly witnessed the sexual abuse of the child. It has also been pointed out by legal journals and commentaries that in 2002, when these alleged failure-to-report crimes occurred, the law was different than it is today. The 2002 law required that the abused child come directly in contact with a person in his or her professional capacity in order for that person to be considered a mandatory reporter. The law was then amended in 2007 to broaden the reporting requirements and include those who received the information second-hand. 

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IRS Voluntary Worker Classification Settlement Program

I would like to thank Timothy Kershner, CPA for providing his accounting and tax expertise for this blog article.

Timothy Kershner, CPA is a partner at the accounting and consulting firm of Walz, Deihm, Geisenberger, Bucklen & Tennis, P.C. He has more than 20 years of experience in public accounting and operates as the partner in charge of the firm's accounting and consulting division.

One important decision most business owners must confront is whether to treat certain workers as employees or independent contractors. An employer who makes the mistake of incorrectly classifying an employee as an independent contractor can face tax consequences and incur heavy penalties. Fortunately, the Internal Revenue Service ("IRS") has launched the Voluntary Classification Settlement Program (“VCSP”), which will enable many employers to reclassify workers as employees with minimal penalties. For those who are unsure of whether they are correctly classifying their workers and are concerned about possible audits, the VCSP can work as a "reset" button that offers a fresh start.

Employees vs. Independent Contractors

Before addressing the VCSP itself, it is important to understand a few basic concepts regarding tax reporting and withholding requirements for employers. If a worker is treated as an employee, the tax law requires the employer to withhold certain portions of the worker’s pay and pay those amounts directly to the federal government. The amounts withheld are generally reported to the IRS on payroll tax returns and to the employee on IRS Form W-2. In addition, the employer must remit their portion of payroll taxes.   

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Pennsylvania's Mechanics' Lien Law a Better Option Now than it was Five Years Ago

This article has recently appeared in the Fall 2011 issue of the Lancaster Builder, a newsletter published by the Building Industry Association of Lancaster County.

For anyone who is unfamiliar with the term Mechanics’ Lien, while it may sound like it involves auto repair, it is actually a form of legal recourse available to contractors and subcontractors who perform work on real property and are not paid for their services. The lien itself is against the property on which the work was performed and is used as leverage against the owner of the property to collect any unpaid amounts owed to the contractors and subcontractors. It can be a valuable tool in certain collection matters, especially in light of changes to the Lien over the last five years that have made the lien more available to contractors and subcontractors.

The lien arises from a series of Pennsylvania statutes known as the Mechanics' Lien Law of 1963 ("Lien Law"). Over the last five years, the Lien Law has undergone a number of changes that affect the rights of contractors, subcontractors and property owners alike. The most extensive changes were made by the Pennsylvania Legislature back in 2006, but those changes did not come into effect until January 1, 2007. Since then, a few other changes have been made.

It is almost impossible to properly communicate these changes without using a good bit of “legalease”. However, I have attempted to summarize the changes by category. If your eyes still glaze over and you wonder how this might apply to you, I would call your attention to the expanded definition of "Subcontractor", the elimination of many lien waivers and the elimination of the preliminary notice requirements which have opened up lien claims to many subcontractors to which the lien was previously not available. As a result, many contractors and subcontractors who had previous abandoned attempts to utilize the lien may want to reconsider.

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Tax Exempt Organizations from Start to Finish Seminar, November 9, 2011

Matthew Grosh will be on the faculty for the National Business Institute's seminar Tax Exempt Organizations from Start to Finish, on November 9, 2011 in Harrisburg, Pennsylvania.  This seminar will cover topics such as:

  • Establishing, operating and terminating tax-exempt organizations.
  • Studying the various categories of 501(c)s under the internal revenue code, and learn how to properly apply for tax-exempt status.
  • Making sure to include all of the key provisions in articles of incorporation and bylaws.
  • Recognizing the two Sarbanes-Oxley requirements for nonprofit organizations, and learn what other SOX practices may be extremely valuable to implement.
  • Gaining a better understanding of the fiduciary duties and potential liabilities of the Board of Directors and officers.
  • How to ensure organizational transparency on Form 990, while using it as a positive marketing opportunity.
  • Avoid inadvertent paperwork mistakes that may trigger a compliance check by the IRS.
  • Understand what documentation needs to be filed to authorize dissolutions of exempt organizations.
  • Maintain an ethical practice by knowing how to handle multiple representation and confidentiality dilemmas.

If you are interested in attending you can register online.