Domain Blocks Now Available for “.sucks” Domain Extensions

By Tom Langan. Earlier this year, over 550 new domain name extensions were created.  Examples include .basketball, .college, .miami, and .fishing.  Among the more controversial additions is “.sucks” which allows nearly anyone to obtain the domain www.[InsertYourName].sucks.  A “domain block” feature is now available that would allow individuals and/or business owners to reserve .sucks domain extensions and prevent others from using it. A domain block costs $199 and is valid for one (1) year.

© 2015 Houghton Vandenack Williams
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The Supreme Court PPACA Ruling and Your Taxes

On June 25, 2015, the United States Supreme Court made headlines by ruling on King v. Burwell, No. 14-114, pertaining to the Patient Protection and Affordable Care Act (the “Act”). At issue, whether the Internal Revenue Service (IRS) may promulgate regulations that extend subsidies to individuals purchasing health insurance from a federal healthcare exchange instead of a state-based exchange. The question arose because the language of the Act itself suggested the insurance must be purchased through a state exchange in order for the individual to receive a subsidy. The Supreme Court found in favor of the IRS, allowing tax subsidies in the dozens of states that did not establish a state exchange and instead rely solely on the federal exchange.

What does this mean for the individual consumer, from a tax perspective? This means that regardless of the state in which you live, or whether the insurance was purchased on a state or federal exchange, subsidies for health insurance are available. Generally, an individual may receive assistance in obtaining health insurance by qualifying for a premium tax credit, cost sharing reduction subsidy, or Medicaid and CHIP. The premium tax credit,  the focal point of the King v. Burwell case, provides a subsidy based upon the applicant’s income.

Internal Revenue Code § 36B provides a potential premium tax credit for health insurance purchasers, dependent upon the modified adjusted gross income (MAGI) of the taxpayer and individuals in the taxpayer’s household required to file a tax return. If the income is between 100% and 400% of the federal poverty line, currently $11,770 for a one person household, a tax credit may be available. Depending upon the MAGI, the IRS limits the amount a taxpayer is required to pay for a health insurance premium, with a maximum payment range of 2% to 9.5% of the total MAGI. Any premium in excess of the applicable maximum percentage of income will be covered by the premium tax credit. The tax credit is payable in advance, to the insurer, to reduce the premium directly paid by the taxpayer. However, should the advance payments be made, the individual taxpayer must submit IRS Form 8962 with the individual’s annual tax return in order to reconcile the advance tax credit payments provided with the amount of the eligible tax credit based on the income shown on the return. In the event the reconciliation results in the taxpayer receiving a higher or lower tax credit than the amount for which the individual is eligible, an additional credit may be available, or a portion of the advanced credit the taxpayer received may need to be repaid.

King v. Burwell, No. 14-114, allows those purchasing health insurance on the federal healthcare exchange who are receiving subsidies to continue to do so. Although the tax credits are still available, an individual receiving the premium tax credit should be careful to recognize the potential tax implications on their next annual income tax return.

© 2015 Houghton Vandenack Williams

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IRS System Compromised for 104,000 Individuals

The Internal Revenue Service (IRS) recently announced that one of their systems has been hacked by organized criminals believed to be linked to one or more foreign countries. The system, “Get Transcript,” is traditionally used by taxpayers to retrieve tax returns from prior years. The hackers were able to access the information from this system for approximately 104,000 individuals, although attempts were made on over 200,000.

In order for the hackers to access the system through the multi-step authentication process, the hackers had substantial information regarding these individuals prior to this event. Information that the hackers had on each person prior to this incident likely included social security numbers, dates of birth, tax filing statuses, and street addresses.

The result from the data breach includes approximately 15,000 fraudulently filed tax returns, however, the IRS notes that the volume and type of data retrieved may be used to perpetrate other frauds.  These frauds include opening new lines of credit or credit cards in the victim’s name, filing future fraudulent tax returns, or otherwise taking advantage from the sensitive information.

For those 200,000 individuals directly impacted, the IRS will notify them regarding the data breach and monitor their tax returns closely next year. For the 104,000 accounts actually hacked, the IRS will provide free credit monitoring services and a secure PIN, to add another security layer for future tax filings.

© 2015 Houghton Vandenack Williams

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Required Reporting of Offshore Assets

US individual and business taxpayers with interests in certain foreign or offshore financial assets or accounts are required to disclose those assets on their federal income tax returns or file additional forms. A failure to file the necessary forms or a failure to disclose reportable assets can lead to both criminal and substantial monetary penalties.

The IRS has established various programs for remedying certain non-compliance issues and limiting liability for taxpayers that either fail to file or make proper disclosure. The programs typically involve voluntary disclosure of the reportable assets or the filing of amended returns. These voluntary programs must normally be undertaken prior to any IRS investigation of the matter. The correct remedy and actual eligibility for the various programs depends on the circumstances surrounding the failure to disclose the reportable assets or the failure to file the necessary forms.

In 2014, the IRS announced modifications of certain programs, but expanded others to accommodate additional taxpayers. For more information, see http://www.irs.gov/uac/Newsroom/IRS-Makes-Changes-to-Offshore-Programs;-Revisions-Ease-Burden-and-Help-More-Taxpayers-Come-into-Compliance. IRS, IRS Makes Changes to Offshore Programs; Revisions Ease Burden and Help More Taxpayers Come into Compliance; IR-2014-73, June 18, 2014.

If you have foreign or offshore assets, it is best to contact an attorney to determine whether those assets are reportable, and if you have failed to report those assets, it is important to determine what steps should be taken to limit the risks associated with the previous failure to report foreign or offshore assets.

© 2015 Houghton Vandenack Williams

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B-Corp and Benefit Corporation Status

Currently, in 28 jurisdictions including Nebraska, Benefit Corporation status exists as an option for forming a legal corporate entity. This is distinguished from B-Corp. status, which is a certification by B-labs, a 501(c)(3) organization. Although the purpose and intent of the certification and the legal status are similar, each have important differences.

A Benefit Corporation is organized under the laws of the state and requires the company to make decisions that benefit the shareholder, the employees, and society at-large. In Nebraska, for example, the state officially started recognizing this form of corporate entity in April, 2014. If elected, the corporation must have a general public benefit as measured by a third party standard and meet transparency and accountability requirements. It is expected that the volume of states recognizing Benefit Corporation status will grow.

Electing Benefit Corporation status means society and the public will benefit, generally, in accordance with the intent of the founder. More importantly, should the owner/founder leave the company or somehow no longer be in charge, the company will be required to consider the societal benefit aspects of the company in their decision making.

B-Corp status, on the other hand, requires a certification process by B-labs. The certification process varies depending upon the size of the company, but includes a company assessment and a fee. This allows the company to advertise their B-Corp status and show that they are looking beyond the shareholder profit motive, to a larger, moral and societal perspective regarding their company.

Although becoming B-Corp certified is distinct from using Benefit Corporation as a legal entity, they both encourage a broader, societal perspective in corporate decision making. Depending upon the specific organization contemplating one of the two options, a careful review of the requirements for each will ensure a proper selection.

© 2015 Houghton Vandenack Williams

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Beware of Potential Tax Return Fraud

Many doctors and health practitioners around the nation are experiencing tax return fraud issues. Tax return fraud occurs when another person or entity fraudulently files a tax return for another individual, looking to receive the victim’s refund. Across the nation, over the past two tax years, this has been a growing problem targeting doctors and similar health professionals. In Nebraska, it appears that this could also be a growing trend.

If you attempt to file a return and the Internal Revenue Service rejects it because a return has already been filed under your Social Security number, this signals tax return fraud. In this event, please contact an attorney for guidance.

© 2015 Houghton Vandenack Williams

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IRS Issues Notice Regarding PPACA Excise Tax

Part of the Patient Protection and Affordable Care Act (“PPACA”) efforts to reduce healthcare costs include an excise tax on health insurers that provide benefits to employees above a threshold limit. This tax is designed to discourage insurance programs that allow employees to receive unusually generous benefits under the insurance plan, which is believed to encourage heavy usage of healthcare. By reducing the overall usage, it will decrease costs. Moreover, it is expected that this tax will help fund the PPACA and off-set the cost of healthcare for those who are not enrolled in a qualified welfare plan. The 40% excise tax is set to take effect in 2018 for the cost of an applicable coverage plan that is above the threshold limit.

In preparing for the implementation of the excise tax, the Internal Revenue Service (“IRS”) has issued Notice 2015-16. This notice serves to clarify “the definition of applicable coverage,” “the determination of the cost of applicable coverage,” and “the application of the annual statutory dollar limit to the cost of applicable coverage.” The notice also seeks input on these issues.

This notice is only the start of implementing the new excise tax and the IRS anticipates issuing further notices. Eventually, the IRS intends to propose regulations and will invite further comments. For details regarding Notice 2015-16, the notice may found at the following link: http://www.irs.gov/pub/irs-drop/n-15-16.pdf .

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Update to FMLA Definition of “Spouse”

The Department of Labor (“DOL”) has updated selected regulations to the Family and Medical Leave Act (“FMLA”). The updates change the definition of spouse to mean: “husband or wife refers to the other person with whom an individual entered into marriage as defined or recognized under state law for purposes of marriage in the State in which the marriage was entered into . . . .”

Essentially, the change now requires employers to recognize FMLA leave for same sex individuals if the marriage is recognized and valid in the state where they were married. This change departs from the previous rule that requires recognition of the marriage by the state where the employee resides. This update will impact several parts of FMLA regulations, including leave for pregnancy, adoption, next of kin, and the care of a parent.

Although this new rule brings FMLA closer to the definition of spouse in other federal regulations and Supreme Court precedent, it does not include domestic partners. It must be a legally recognized marriage, including common law marriage, but it does not include a domestic partnership.

For employers, this may mean updating employee manuals and handbooks, as well as being aware of the laws of the various states when an individual applies for FMLA leave. The DOL does not expect compliance with the new regulations to add substantial cost.

The update to the federal regulations can be found at the following link: https://s3.amazonaws.com/public-inspection.federalregister.gov/2015-03569.pdf

© 2015 Houghton Vandenack Williams
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Potential Employer Requirements Due to Anthem, Inc. Data Breach

On February 4, 2015, Anthem Inc., one of the largest U.S. health insurers, notified the public that their data systems were breached. This breach potentially left customer names, social security numbers, and other personal information vulnerable. Subsequently, Anthem Inc. has already seen a customer lawsuit filed in California over the breach, with many more expected.

Health plan participants that have been affected will be notified in compliance with federal law. However, as this investigation continues, this may place additional burdens on employers. Depending upon the nature of the breach, of which further details are expected soon, employers may have to issue breach notifications under the Health Insurance Portability and Accountability (HIPAA). Until it becomes clear what information was taken, specific notification requirements are unclear. For example, a key question is whether protected health information was taken.

Depending upon the type of health plan an employer offers, it will have a varying impact upon the obligations for each company. The requirements will become clearer once further information is released. Beyond the federal HIPAA requirements, 47 states have unique breach notification laws that may impose obligations.

If you have questions pertaining how this may impact your requirements under the law, please contact Houghton Vandenack Williams for further information.

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Updates Made to Nebraska Homestead Exemption Information Guide

By Joshua A. Diveley.

The Nebraska Department of Revenue (NDOR) has updated its information guide regarding the Nebraska property tax homestead exemption. The homestead exemption provides property tax relief to certain homeowners by exempting from tax all or a portion of the taxable value of the taxpayer’s residence. The homestead exemption is available to persons over the age of 65, qualified disabled individuals and qualified disabled veterans and their widow(er)s. Specifically, revisions were made in the disabled veterans category to remove the requirement, effective for periods prior to January 1, 2015, that a veteran had to serve during a recognized war of the United States to be an eligible disabled veteran. Effective January 1, 2015, military service during peace is sufficient to qualify as a disabled veteran.

The homestead exemption form must be filed with the county assessor by June 30, 2015.

The updated homestead exemption information guide may be viewed on the NDOR’s website at: http://www.revenue.nebraska.gov/info/96-299.pdf. Release, Nebraska Department of Revenue, February 9, 2015

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