IRS REVERSES DECISION AND DELALYS PROPOSED TAX RULE THAT HELPS CONTRACTORS:The Internal Revenue Service Sept. 15 issued a new directive for how auditors should handle reviews of contractors using the completed contract method (CCM) of accounting that ignores its own proposed regulations. The CCM allows contractors to report profits at the end of a project when profits are known and payments are more likely to have been received, instead of relying on estimates. The recent IRS directivesupersedes a 2007 directive that required auditors to evaluate compliance with the CCM whenever that method is utilized by the taxpayer being audited. The September directive acknowledges the proposed regulations but explicitly tells auditors to ignore the proposed rule, which was issued at ABC’s request under the IRS Industry Resolution program in 2008. Currently, only contractors and subcontractors working on projects for which the owners meet a narrow IRS definition of “homebuilder” can use CCM.
“While ABC is typically not involved in homebuilder issues, in this case, the IRS is attacking a legal tax method used by ABC’s subcontractor members because of concerns with other taxpayers,” said Rich Shavell, president of Shavell & Company and a member of ABC’s Tax Advisory Group who submitted comments and testimony on the proposed rule. “Unfortunately, if left unchecked, the IRS could damage the availability of the completed contract method that is used by those members.” In the proposed rule, the IRS created a distinction between homebuilders and “land developers,” who would own and sell land but not participate in the construction. The new rule would remove the necessity for subcontractors to know how the owner was structured to determine if the completed contract method was available for them to use.
DON’T MISS OUT:
SPECIAL 30 HOUR OSHA CLASS TO BE HELD
DECEMBER 7, 14 & 21, 2009 at the ABC Training Center,
830 Westgate Blvd., Lincoln, NE
SCROLL DOWN FOR MORE INFORMATION!
ICE WILL AUDIT 1,000 FOR EMPLOYMENT LAW COMPLIANCE: The Department of Homeland Security’s Immigration and Customs Enforcement (ICE) Nov. 19 announced it has served Notices of Inspection to 1,000 employers associated with critical infrastructure alerting them that ICE will audit their hiring records. The purpose of the audit is to determine compliance with employment eligibility verification laws. The businesses served with notices were selected based on investigative leads, intelligence gathering and their connection to public safety and national security.
This round of audits is similar to the 652 audits ICE began in July and will involve a comprehensive review of businesses’ Form I-9s. I-9 forms require employers to review and record identity and work eligibility documents for each employee. The audits may result in civil penalties and lay the groundwork for criminal prosecution of employers who knowingly violate the law. In April, DHS issued updated worksite enforcement guidance emphasizing ICE’s major enforcement priorities. Since implementing the new ICE worksite enforcement strategy on April 30, 45 businesses and 47 individuals have been debarred and 142 Notices of Intent to Fine totaling $15,865,181 have been filed. In 2008, 32 notices totaling $2,355,330 were issued and no businesses and only one individual were debarred.
NONRESIDENTIAL CONSTRUCTION SPENDING REMAINS SLOW IN OCTOBER:Private nonresidential construction spending continues to slump, falling 2.5 percent in October and reaching levels 20.6 percent below those from one year ago, according to the Dec. 1 report by the U.S. Census Bureau. Total nonresidential construction spending, which includes both private and public construction, fell 1.5 percent for the month and 10.5 percent on a year-over-year basis to $652.2 billion.
To read the complete report, click here.
DOL RELEASES UPDATED VERSION OF THE EMPLOYMENT LAW GUIDE:The Department of Labor Nov. 30 released an updated version of the Employment Law Guide, an online resource directed at employers and workers that describes the major employment laws affecting the workplace. The updated version of the guide addresses recent changes in laws including the increase in federal minimum wage and an expansion of the Family and Medical Leave Act.
The Employment Law Guide is a supplement to the DOL’s FirstStep advisor, an online program that allows employers to determine which federal employment laws apply to them by answering a series of questions. Each chapter in the Employment Law Guide corresponds to the laws listed in the FirstStep advisor and outlines a law including, its basic requirements; employee rights under the law; recordkeeping requirements; reporting requirements; notice and poster requirements; penalties and sanctions for non-compliance; and relation to state, local and other federal laws.
To access the FirstStep advisor, visit www.dol.gov/elaws/firststep. To view the updated Employment Law Guide, click here.
250 NEW DOL INVESTIGATORS AND IRS AUDITS WILL ADDRESS INDEPENDENT CONTRACTOR STATUS:The Department of Labor Wage and Hour Division Nov. 19 announced it added 250 new investigators to examine employment law violations, including minimum wage or overtime violations, as well as misclassification of employees as exempt or independent contractors. The additional investigators were added in response to a Government Accountability Office report that found the Wage and Hour division frequently responded inadequately to complaints.
In response to the same report, the Internal Revenue Service said it will begin conducting audits of 6,000 companies in February 2010 with the goal of reducing the number of misclassified independent contractors in addition to expanding revenue. The audits will include line-by-line reviews of employment tax returns and related documents and will initially focus on four targeted areas: payroll taxes, independent contractor status, fringe benefits; and executive compensation. Companies will be selected at random and will be audited at the rate of 2,000 each year for three years.
ABC’S ASK A LAWYER:Question: At last month’s Omaha meeting, Rob French with Construction Labor Contactors mentioned that companies were being audited for compliance with the Department of Labor’s 16 Point Plan. What is the 16 Point Plan and does my company have to comply with it?
Answer: The 16 Point Plan refers to the Department of Labors’ regulations, 41 CFR 60-4.3, sub-part 7a-p. These regulations were drafted to implement Executive Order 11246 that prohibits government contractors from discriminating against employees or applicants for employment because of race, color, religion, sex, or national origin. Basically, any company with a federal contract or subcontract exceeding $10,000 is covered by Executive Order 11246. Additionally, employers with 50 or more employees and at least one government contract valued at $50,000 or more are required to maintain a written affirmative action plan. Governed the Office of Federal Contract Compliance Programs (OFCCP) under the Department of Labor, covered federal construction contractors must take 16 affirmative action steps, including record keeping, recruiting practices, policy review and education, to comply with the program.
The OFCCP has indicated that it will be scrutinizing recipients of federal stimulus funds under the American Recovery and Reinvestment Act (ARRA) for compliance with federal affirmative action requirements. It has also stated that it expects to conduct 450 construction audits by September 2010, so now is a good time to review and update your Affirmative Action Plan.
If you have any questions about your Affirmative Action Plan, feel free to contact Craig Martin, Lamson Dugan and Murray, cmartin@ldmlaw.com or Tim Engler, Harding & Shultz, tengler@hslegalfirm.com.
Training Classes
Management & Safety Class Schedule
NOVEMBER & DECEMBER 2009
30 Hour OSHA Class
Federal Law requires each company have a designated trained safety coordinator. This will give your foremen, supervisors, safety directors or safety coordinators the expertise to comply with all OSHA and State requirements. This is an in-depth look at CFR 1926 and 1920 and NE 757 as they affect construction. Price includes study materials
$395.00 each attendee – Member Price / $595.00 each attendee –Non-Member price.
¨ December 7, 14 & 21, 2009 – 7:00 – 5:30 p.m. - LINCOLN
OSHA 10 Hour Class
OSHA requires a competent person on all job sites. This course ensures that your people have the necessary training to comply with OSHA standards CFR 1926.32(f) for a competent person. Training includes OSHA Construction Standards CFR 29 1926, Scaffolds, Ladders and Stairways, Housekeeping, Personal Tools, Electrical Hazards, Fall Protection, Materials Handling, Hazardous Communications and much more!
**CFR 192 OSHA Regulations Book for the Construction Industry with new steel erection standards will be available for $25.00** each for class participants.
$135.00 each attendee – Member Price/$240.00 each attendee – Non-Member Price
¨ December 10, 2009 – 7:00 a.m. – 5:30 p.m. – OMAHA
¨ December 11, 2009 – 7:00 a.m. – 5:30 p.m. – LINCOLN
First Aid/CPR Classes
$50.00 each attendee – Member Price/$60.00 each attendee – Non-Member
Recertification only - $40.00 each attendee – Member Price/$50.00 each attendee – Non-Member Price
¨ December 8, 2009 – 7:00 – 11:00 a.m. – LINCOLN
¨ December 9, 2009 - 7:00 – 1100 a.m. – OMAHA
Forklift Training
The OSHA standard 29CFR1926.602(d)requires employees who operate forklifts be trained in both the classroom and through a practical exercise on the type of equipment that they will be running in the field.
$125.00 each attendee – Member Price/$200.00 each attendee – Non-Member Price
¨ December 16 & 17, 2009 - 7:00 a.m. – 11:00 a.m. – OMAHA