Norris, McLaughlin & Marcus

Increased Federal Scrutiny Warrants Another Look at I-9 Compliance

Last month, we talked about 1-9 requirements here.

This month, I was interviewed by The Metropolitan Corporate Counsel regarding I-9 Compliance.

Below is a more detailed description of I-9 requirements and steps a company can take to avoid inadvertent errors:

The I-9 form is required for every employee of the company, including its officers, executives or partners. It is important to remember that the review and certification of an employee’s documents must be done in person with the original documents. The I-9 must be filled out prior to the start of employment, and the employee must be given the option to choose the documents required to prove employment eligibility. The company cannot dictate which documents should be used. In addition, where employees have authorization for only a limited period of time, the company should be certain they have a calendaring system that allows them to be reminded to re-verify in a timely manner. It is also important to remember that in the case of former employees, companies are required to retain I-9 forms for a period of at least three years from the date of hire or for one year after the employee is no longer employed, whichever is longer. Once outside that period, it is a good idea to dispose of those I-9s as you are not required to keep them on file. I-9s kept on file after the mandatory retention period can still be found violative if they are not compliant. I always recommend that a company undergo internal audits on a periodic basis to make sure that their paperwork is in order. It is important that the company have only a limited group of people who are trained specifically in preparing the I-9 and maintaining the files. This helps to prevent errors. If the internal staff is not well trained in I-9 compliance, then it is further recommended that the company hire an attorney to supervise an audit. When I prepare an audit for a company, in addition to looking for errors to correct, I also keep an eye out for particular trends or tendencies that may lead to repeat errors. Tendencies I often see include paperwork that is not properly signed, missing documentation, reliance on the wrong type of documentation – e.g. a passport or visa instead of an approval notice that lists the document’s expiration – and not tracking expirations, or tracking expirations but not re-verifying the initial document. Once my review is complete, I not only correct the errors, but also prepare a report that companies can use to show good faith compliance efforts should they receive an audit. Finally, I will meet with the HR staff to train and educate them on what they are doing incorrectly so that they can be more efficient and accurate in the future.

Check out the full interview here.

Happy Holidays from BWOB!

Happy Holidays and Best Wishes for a Happy, Healthy, Prosperous and Peaceful New Year!


REWIND: International Business News #98

In this week’s REWIND of international business news,

  • Uber Technologies continues to face legal scrutiny around the world. Last week, authorities in Taiwan declared the car-hailing service provided by Uber to be illegal. Click here to read more. Meanwhile in China, an Uber training session was raided by police last Wednesday.  Click here to read more.
  • In Italy, TripAdvisor, the American travel website that allows reviewers to rank and comment on hotels and restaurants, has been fined 500,000 Euros ($610,000) by the Italian competition authorities for failing to prevent false reviews on its web site.
  • With the rouble in distress, the Russian government has ordered a handful of government-held exporters to sell their foreign currency reserves. Officials say that private companies will not be required to take similar actions. Click here to read more.
  • Alibaba has spent over $161 million since 2013 protecting customers and combating counterfeit goods, in efforts to turnaround its prior mention on the U.S. Trade Representative’s list of “notorious markets” for intellectual property infringement. Click here to read more.

(VIDEO) Details Behind The Offshore Voluntary Disclosure Program

As an extension and follow-up to the 2012 Offshore Voluntary Disclosure Program, the IRS offers taxpayers reduced penalties with income from offshore accounts. The program offers significant benefits for taxpayers to disclose foreign accounts and avoid the risk of an audit and possible criminal prosecution.

In Part 2 of her video series, Melinda Fellner Bramwit explains the current program options for an Asset-Based Penalty or an Income-Based Penalty. Enrolling into the program admits an intentional violation of a legal duty and the first step is to submit an application for preliminary acceptance by sending a fax to the IRS. Most taxpayers will hear back within 60 days and be accepted into the program unless they are under an audit or criminal investigation. The next step is to send a letter to the Criminal Investigation Department with an attached list of assets being reported. Typical turnaround time is 60-90 days for preliminary acceptance and the beginning of the document production phase.

Melinda details the process more closely in the video below.

Government Charges “Tipping Liability” To Company Insiders At Dell & Nvidia

The basis for imposition of tipping liability for insider trading has been clarified by the Second Circuit.

In United States of America v. Todd Newman, Anthony Chiasson (Nos. 13-1837-cr (L), 13-1917 cr), the Second Circuit has vacated convictions for insider trading for two hedge fund portfolio managers convicted of trading on information obtained from analysts who had received nonpublic and material information about public companies in the technology sector.  The Second Circuit held that in order to hold the trader liable for insider trading, the Government had to prove “beyond a reasonable doubt that the tippee knew that an insider disclosed confidential information and that he did so in exchange for a personal benefit.”  p.4.  This is a significant reversal for the United States Attorney’s Office for the Southern District of New York, which has been very aggressive of late in pursuing insider trading violations.

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(VIDEO) Introduction to Options for Disclosing Offshore Assets

Melinda Fellner Bramwit discusses one’s options for disclosing offshore assets in the first video of a six-week series. Stay tuned over the next few weeks to learn more about the offshore voluntary disclosure program and the streamlined filing process for residents and non-residents.

REWIND: International Business News #97

This week, in the REWIND of international business news, we discuss Sweden raiding a popular file sharing site, Spain introducing a ‘Google Tax’, and Uber’s growth challenges.

Sweden captures pirates, but fails to sink their ship.

Authorities in Stockholm raided the servers of Pirate Bay, one of the world’s most popular file sharing sites, and successfully took the service offline this week.  Anti-piracy advocates expressed concern, however, that file sharing sites like Pirate Bay, which had facilitated the sharing of pirated software, music, movies and other electronic media for 11 years, have changed consumers’ behavior.  These sites have arguably created an entire generation of consumers that expects to have access to electronic media without cost.  Despite laws prohibiting the distribution of copyrighted material, this sense of entitlement to free media leads otherwise law abiding citizens to enjoy free media without remorse.

In search of protection for local publications, Spain introduces a ‘Google Tax’ that might reduce the traffic directed to such publications.

A new intellectual property law will be introduced in Spain that will permit Spanish publishers to charge aggregators like Google News for showing even the smallest snippet from their publications.  Publishers in Germany quickly discovered the value of Google News after a similar law led traffic to German publishers’ sites to plunge.  As we highlighted in a previous post, Google has been under scrutiny in the EU.  While Spanish publishers might later advocate against these restrictions if they experience a similar fate as their German counterparts, for now, this evidences further challenges for the search giant on the horizon.

‘Ubermentum’ hits speed bumps.

We previously chronicled potential trouble for Uber as it continues to rapidly expand to additional cities around the world.  Uber’s continued rapid growth has been met with an increasing number of legal challenges.  From Judges in Spain banning Uber from operating in the country, to heightened scrutiny of Uber’s checks on drivers following allegations of sexual assault against an Uber driver in New Delhi, it appears that some of the ‘Ubermentum’ is fading.  But a recent $1.2 billion funding round at a $40 billion valuation is evidence that investors still see growth potential.  That will certainly help the company overcome regulatory hurdles.

Start-up Visas Lure Entrepreneurs to Spain

If United States business owners start closing up shop and relocating to Spain, don’t be too surprised.  In 2013, the country passed a law that granted a visa for foreign entrepreneurs as long as they had a government-vetted business plan, health insurance, and money to support themselves.  This along with lower costs, fewer competitors, and an abundance of talent that comes at a much cheaper price than the United States, is luring business owners overseas.  The law, known as Ley de Emprendedores, is also helping create jobs at a time of high unemployment.

The process to receive a visa is fast paced and there are five visa categories: (1) investors who buy at least 500,000 euros of real estate; (2) entrepreneurs who plan to establish businesses; (3) highly skilled professionals; (4) researchers, scientists, and teachers; (5) employees and trainees.  About 3,800 foreigners, including investors, professionals and their family members, have received residency via the new law, and the number is expected to gradually increase, as it has in other countries with similar rules.  Some say Spain needs to make the law a little more revolutionary like Chile, which provides a grant $34,000 along with a one-year residency to new business founders who relocate there.  However, Spain does have an unsecured lending program, which has about 100 million euros, or $125 million, to lend to small and mid-size companies annually.

One caveat – effective January 1, 2015, legislation will go into effect creating a one-time exit tax on unrealized capital gains that will apply to certain entrepreneurs and investors who have claimed tax residency in Spain and subsequently leave and claim residency elsewhere.  Although that exit tax may raise some eyebrows, it is not as debilitating as one would think, as it will only apply to entrepreneurs if they stay in Spain for ten years and then claim tax residency in a different county.

Click here to read the full article published in The New York Times, “At Spain’s Door, a Welcome Mat for Entrepreneurs,” by Nick Leiber.

How Business Structure Affects Taxes

There are many types of business structures (Sole Proprietorship, Partnership, Limited Liability Corporation, Cooperative, C Corporation, S Corporation) and each one affects taxes differently. If you want, or are planning on opening a business, the choice is very important, especially when it comes to taxes.  Check out the comprehensive research graphic below detailing the definition of each structure, the advantages and disadvantages, required tax forms, tax requirements, and more. You may also click here to see the graphic on a new page.

Business Structure and Taxes

President’s Executive Action Will Lead to Additional Benefits For Undocumented Immigrants

On November 20, 2014, the President announced a series of executive actions that will lead to deferred action status, work authorization and other benefits for those who were not previously eligible. These initiatives include:

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