Key Takeaways from Our 2017 Corporate Law for Accountants Seminars

Here is a brief summary of the presentations from our seminars.

Avoiding Disaster: Time to Dust off Your Operating Agreements by Frank Cureton, Scott Barnes, Julie Medich and John Scott 

• Partnership and limited liability company income tax returns for years beginning after December 31, 2017, will be subject to a new audit regime for returns reviewed by the Internal Revenue Service. Partnership authority to make decisions and receive notices regarding the audits will be vested exclusively in a new “partnership representative” to the exclusion of the partners. That representative must meet certain requirements and can even be appointed by the IRS if not properly appointed by the partnership. 
• Moreover, audit adjustments resulting from an underpayment will now be payable by the partnership itself rather than the partners, and this can occur even where the partners who own the partnership at the time of the audit differ from those who were partners in the year that resulted in the underpayment. 
• There are exceptions to the partnership’s payment responsibility but the exceptions have numerous requirements that should be addressed in the operating agreement or partnership agreement.
• An Operating Agreement is a contract. When a member leaves an LLC or a new member joins the LLC the Operating Agreement (the Contract) must be amended to reflect that revised membership.

Top Ten Employment Law Issues for CPAs by Chris Gantt-Sorenson, Denny Major and Perry MacLennan

Employers are reminded of several recent updates/changes.

• The EEO-1 Filing Report (for those companies required to file) still must be completed by March 31, 2018, despite changes in what needs to be reported.
• Companies that have contracts or subcontracts of $10,000.00 or more are generally considered “federal contractors” and have additional employment law compliance obligations. For instance, federal contractors must have an affirmative action program and a drug-free workplace policy.
• Companies classifying workers as independent contractors must be careful that these workers are not misclassified as the penalties for misclassification can be steep. Whether a worker is classified as an employee or an independent contractor is dependent on the specific facts of each case, so companies are advised to seek legal counsel on the issue.
• The Department of Labor has issued a request for information to solicit input on the salary level test used to help determine if an employee meets the executive, administrative, or professional exemption for the FLSA’s overtime requirement. The DOL has indicated that it intends to use the comments to develop a new proposed regulation regarding this exemption. For now, the 2004 salary level test ($455/week) remains in effect.
• OSHA requires employers to permit transgender employees to use the restroom of the gender they identify with rather than their biological gender. If possible, have single user unisex restrooms rather than multi-user. Otherwise, insure that you have lockable stalls in each restroom. 
• Workplace harassment (unwelcome conduct because of someone’s age, race, color, national origin, gender (including gender identity, pregnancy, childbirth or medical condition related to pregnancy or childbirth), religion, physical or mental disability, medical condition, genetic information, marital status, military status, sexual preference or orientation) in violation of federal law is unreported 3 out of 4 times everyone should implement changes.

State and Local Tax Update by Aaron Scheuer

• Beginning in 2018, SC manufacturers are eligible for a new property tax exemption being phased in over the next six years.
• Certain business owners and employees can be held personally liable for sales taxes and withholding taxes of their business under DOR’s “responsible party” assessment.
• In the corporate income tax arena, keep an eye on the alternative apportionment and sourcing cases currently at in SC’s appellate courts.

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