Monday, December 22, 2008

IRS Implements Final Return Preparer Regs

On December 22, 2008, the Internal Revenue Service published Treasury Decision 9436, which finalized "Tax Return Preparer Penalties Under Sections 6694 and 6695."

TD 9436 contains final regulations implementing amendments to the tax return preparer penalties under sections 6694 and 6695 of the Internal Revenue Code (Code) and related provisions under sections 6060, 6107, 6109, 6696, and 7701(a)(36) reflecting amendments to the Code made by section 8246 of the Small Business and Work Opportunity Tax Act of 2007 and section 506 of the Tax Extenders and Alternative Minimum Tax Relief Act of 2008.

The final regulations affect tax return preparers and provide guidance regarding the amended provisions.

These regulations are effective on December 22, 2008. * * *
These regulations are the culmination of a long process conducted by the IRS, through successive statutory enactments and periodic administrative regulations (temporary, proposed, or final).

In addition to new standards of preparation of federal tax returns, a preparer will also be required to generate more "paperwork", according to the Paperwork Reduction Act Summary, provided in T.D. 9436:
This information is necessary
  • to make the record of the name, taxpayer identification number, and principal place of work of each tax return preparer,
  • [to] make each return or claim for refund prepared available for inspection by the Commissioner of Internal Revenue, and
  • to document that the tax return preparer advised the taxpayer of the penalty standards applicable to the taxpayer in order for the tax return preparer to avoid penalties under section 6694.
The collection of information is required to comply with the provisions of section 8246 of the Small Business and Work Opportunity Tax Act of 2007 and section 506 of the Tax Extenders and Alternative Minimum Tax Relief Act of 2008. [Links & formatting added.]
Find updated information (summaries and legislative text) regarding the 2007 Tax Act and the 2008 Tax Act posted on the Legislation page of the website of the U.S. Senate Finance Committee.

The scheduled publication of T.D. 9436 in the Federal Register followed its announcement on December 16, 2008, by the IRS, together with related guidance regarding return preparer penalties:
  • T.D. 9436 (PDF, 211 pages) -- Final regulations under IRC §§ 6694 and 6695A
  • Notice 2009-5 (PDF, 10 pages) -- Interim guidance on the application of T.D. 9436
  • Rev. Proc. 2009-11 (PDF, 22 pages) -- List of forms subject to the return preparer penalties
See also: Updated Guidance Concerning Tax Return Preparer Penalties Released (T.D. 9436; Notice 2009-5; Rev. Proc. 2009-11) posted 12/16/08 by CCH; and "IRS Revises Tax Return Preparer Penalty Regulations" (12/17/08) posted by WebCPA.

According to the "Background" section of T.D. 9436, the
2007 Tax Act had changed the standards affecting tax preparers on both disclosed positions and undisclosed positions:
The 2007 Act's amendments to section 6694 also changed the standards of conduct that tax return preparers must meet in order to avoid imposition of penalties in the event that a return prepared results in an understatement of tax.

For undisclosed positions, the 2007 Act replaced the "realistic possibility'' standard with a standard requiring the tax return preparer to have a "reasonable belief that the position would more likely than not be sustained on its merits.''

For disclosed positions, the 2007 Act replaced the "not-frivolous'' standard with a standard requiring the tax return preparer to have a "reasonable basis'' for the tax treatment of the position. * * * [Formatting added.]
The 2008 Tax Act further altered the standards regarding tax returns with undisclosed positions or for tax shelters:
On October 3, 2008, section 506 of the 2008 Act modified the standards of conduct that tax return preparers must meet in order to avoid imposition of the section 6694(a) penalty.

Specifically, the 2008 Act changed the standard for undisclosed positions from "reasonable belief that the position more likely than not will be sustained on the
merits'' to "substantial authority for the position.''

The 2008 Act maintained the "reasonable basis'' standard for disclosed positions.

If a position is with respect to a tax shelter (as defined in section 6662(d)(2)(C)(ii)) or a reportable transaction to which section 6662A applies, it must be "reasonable to believe that the position more likely than not will be sustained on the merits.'' * * * [Formatting added.]
T.D. 9436 was based upon proposed regulations recently published. See: PA EE&F Law Blog posting "IRS Proposes Final Preparer Penalty Regs"(07/02/08).

There were some changes reflecting public comments, as explained under its heading "Summary of Comments and Explanation of Revisions."

T.D. 9436
also provides "interim guidance" regarding new provisions in the 2008 Tax Act. Those interim regulations will be finalized through future federal rule-making procedures.

After consideration of the public comments and the amendments made by the 2008 Act, the proposed regulations are adopted as revised by this Treasury decision.

Section 1.6694-2 of these final regulations does not provide substantive guidance reflecting amendments to the Code
made by the 2008 Act.

Rather, the Treasury Department and the IRS are reserving Sec. 1.6694-2(c) in these final regulations and are simultaneously issuing a notice in the Internal Revenue Bulletin providing interim guidance on the amendments to the Code made by the
2008 Act.* * * [Formatting added.]
Few accountants, attorneys, or tax preparation officers remain unfamiliar with these substantial duties and significant penalties involving returns they sign as "preparer" for filing with the IRS.

In 2009, many taxpayers will learn from their tax preparers that the rules of the game for tax returns have changed.

 Estimated total annual [paperwork] reporting burden:
10,679,320 hours.
Estimated average annual burden per respondent:
15.6 hours.
-- Internal Revenue Service, T.D. 9436 (12/22/08)

Monday, December 15, 2008

Journeys and Journals by Dying Folks

In the movie The Bucket List (2007) "two terminally ill men escape from a cancer ward and head off on a road trip with a wish list of to-dos before they die."

But what if they wanted to do was blog about dying, that is, write a public daily journal about their progress and reactions, good or bad -- what would they say?

One man's statements are found in a Dying Man's Daily Journal, which began on September 26, 2006, with a statement about the author's situation and his intentions:

I am dying, so why am I on the internet telling the world about my problems? After all a lot of people are dying and in a lot worse shape than I am, being in pain or severe discomfort.

I have a bad heart after 4 heart attacks and in congestive heart failure. According to the doctors I could go basically any time. * * *

[It] is my hope that by journaling my experiences, I can maybe help others when they are faced with the same issues. I have prepared myself and right now have no fear. * * *
After more than two years, he was still writing:
I am a 54 year old male and my doctors have told me I am dying. It is my hope that by sharing my experiences, I can encourage others faced with the same situation. I hope to also help the families of those individuals to have an understanding of the process and deal with the fear or dread of being around the dying.

I am not a doctor, not a man of the clergy, I am not a therapist. I am just me, Bill Howdle, I am merely sharing my thoughts and ideas. I write of death and dying, understand this is my personal prospective, based on what I am encountering.
Since Bill began his online journal, his site counter recorded over 170,000 hits, while he soldiers on, surprised.

But neither wild antics nor writing can shield us from suffering and death.

Another man, Leroy Sievers, a blogger, podcaster, & commentator for National Public Radio, made public his fight with cancer, beginning a few months earlier than Bill.
In May 2006, Leroy Sievers began a Morning Edition commentary on his fight with cancer by saying, "My doctors are trying to kill me."

For more than two years since, Sievers contributed a monthly commentary to Morning Edition, wrote the daily "My Cancer" blog on and voiced a weekly podcast. * * *
Then one day after his wife, Laurie, noted on Leroy's Blog, "Leroy is planning to be back next week," NPR sadly announced on August 16, 2008: "Leroy Sievers passed away on August 15, 2008, at the age of 53."

I'm so sorry to bring you this news. Leroy passed away last night. It happened very quickly.

You will hear from Laurie later. In the meantime, please let me tell you something all of you already know, how much this blog and all your comments have meant to Leroy. He felt all the affection and good wishes and strength you sent him every day.

He told us that of the many things he had accomplished, he was proudest of My Cancer. The connection he felt with all of you made such a difference in his life. * * *

I had followed his broadcast commentaries. I remember exactly where I was when I heard the announcement of Leroy's death over the radio. I, among millions of others, had lost a long-distance friend, a fellow journeyman.

What is most extraordinary is the continued posting, by Laurie, of almost daily entries on his blog, which now has become his and her "My Cancer" blog.

Instead of contemplating his deteriorating physical illness, she ponders her permeating grief after his death.

Both degeneration and loss rob a person of peace. Yet, in journaling, we can explore pain, distill lessons, form faith, and create healing, if not in the exact way we might have hoped at the outset.

The writing need not be public, but it must be personal to be helpful. And if a journaling writer is strong enough to post thoughts publicly, then others can share and learn too.

It is that desire to teach lessons personally experienced that motivated Professor Randy Pausch, of Carnegie Mellon University, in Pittsburgh, PA, to record a "last lecture," as described by Wikipedia:

He gave his "The Last Lecture" speech on September 18, 2007 at Carnegie Mellon. Pausch conceived the lecture after he learned that his previously known pancreatic cancer was terminal.

The talk was modeled after an ongoing series of lectures where top academics are asked to think deeply about what matters to them, and then give a hypothetical "final talk", with a topic such as "
what wisdom would you try to impart to the world if you knew it was your last chance?"

The talk was later released as a book called
The Last Lecture, which became a New York Times best-seller. * * *
What would your "Bucket List" include, your blog entries describe, your "Last Lecture" say?

* * *

"It's not about how to achieve your dreams. It's about how to lead your life.
If you lead your life the right way, the karma will take care of itself. The dreams will come to you."

-- Randy Pausch

Friday, December 12, 2008

"Taxgirl" Blog Featured by ABA Blawgs

The American Bar Association Journal's Blawg Directory today features the Taxgirl blog written by a Pennsylvania attorney -- Kelly Erb, Esq., of Philadelphia.

Her commentaries, updates, and generic advice about tax matters draw such national attention.
In fact, she is on the
ABA Journal's second annual list of the 100 Best Legal Blawgs (you can vote for her blog's position on that list here).

Separately, Kelly often posts responses to tax-related inquiries posed on the
Probate & Trust Law Listserv, operated by members of the Real Property, Probate & Trust Law Section of the Pennsylvania Bar Association; and so her name is familiar to me as a knowledgeable tax attorney.

In delivering "tax news, tax info and tax policy" -- which normally is bland and boring -- to readers of her Blog, she brings an upbeat, wry writing style that dulls the pain and gooses the juices. Her personal views often shine through, both in her selection of materials and in her commentaries about tax topics.

Kelly also represents the
newly-wired practitioner, who is connected & available not only through fax and email (as are most attorneys), but also through her personal profiles on Twitter, LinkedIn, Facebook, and even Skype.

Her blog represents a new manner of presentation for a specialized, practicing lawyer, who reveals much about her personality, preferences, and lifestyle as a real person, not as an icon or a "suit."

Characteristically open, she invites readers of
her TaxGirl blog to submit inquiries for response: "Have a tax question? Don’t know where to turn? Ask the taxgirl!"

My question would be: "
Kelly, how do you find the time to do all this while practicing law and mothering three kids?"

By whatever means or magic she does it all, I, as one of her peers, am proud that she practices in Pennsylvania.

Wednesday, December 10, 2008

POA Abuse Report and a PA POA Trial

On December 4, 2008, the AARP Public Policy Institute and the American Bar Association's Commission on Law & Aging, issued a research report entitled "Power of Attorney Abuse: What States Can Do About It" (Nov., 2008), which "explores the problem of power of attorney abuse and how state legislatures can protect vulnerable adults against it."

More specifically, the Report "explains how the new [model]
Uniform Power of Attorney Act helps prevent, detect and redress abuse, and provides resources to promote enactment of this model law."

The Full Report (PDF, 88 pages) was co-authored by Lori A. Stiegel, JD, & Ellen M. Klem, of the ABA's Commission on Law & Aging. A summary is available online either in HTML format or PDF format.

This [AARP Public Policy Institute] research report explores the problem of power of attorney abuse and how state legislatures can protect vulnerable adults.

Powers of attorney are legal documents used by individuals to empower someone else to act on their behalf. As the population ages, the power of attorney will be used increasingly to appoint trusted family members or others to handle financial decision-making.

But it also can be a ‘license to steal,’ because it grants broad powers with little oversight.

The report shows that a large majority of states lack protections against abuse. The Uniform Power of Attorney Act, a model law, lays the groundwork for keeping seniors safe from abuse, while allowing them to plan for the future. (88 pages)

As noted in an article entitled "Elder Abuse Resource", published in the October, 2008 issue (Vol. 30. No. 1) of Bifocal (the ABA Commission's newsletter), two "fact sheets" were provided for use in the Report regarding Durable Power of Attorney Abuse, both now posted online:
The ABA Commission also posted a chart of Power of Attorney Laws: Citations, by State (PDF, 2 pages), which was expanded as to specific provisions in the Report.

The Report was noted in an article posted by AARP entitled "License to Steal: When Power of Attorney Is Used to Abuse" (12/05/08) by Carole Fleck posted online by AARP Bulletin Today.

The article highlighted perceived increasing financial elder abuse through use of a durable power of attorney, which is intended by laws to assist and protect the maker, not turn the maker into a victim of misappropriation or theft.

The power of attorney can be “a license to steal because it grants broad powers with little oversight,” says Naomi Karp, a strategic policy adviser at AARP. * * *

“We have definitely seen an increase in the number of referred cases of exploitation, particularly those that deal with power of attorney documents,” says Art Mason, director of the elder abuse prevention program at Lifespan, a nonprofit in Rochester, N.Y., and president of the National Adult Protective Services Association. “The vast majority of cases involve someone in the family.”

The saga typically begins when an older adult, usually a woman whose husband handled the finances, becomes widowed and starts to fall behind on her bills. Often, an individual’s diminished mental capacity plays a role in the need for help from family or friends.

This creates the opportunity for someone in the family or a trusted friend to take advantage of a vulnerable person, “with no criminal consequences,” Mason says.

“For 10 years now, it’s been a battle to get legislation passed that would give law enforcement more opportunities to go after people criminally who abuse their power of attorney.”

Issuance of the Report was also noted in a nationally published article, entitled "Senior citizens can lose life savings via power of attorney" (12/04/08), by Sandra Block, posted by USA Today. That article noted some bullet point reminders as to "[h]ow to protect yourself when assigning power of attorney":
  • Trust. Don't give anyone even a child or spouse power of attorney unless you thoroughly trust that person with your finances, says Naomi Karp, strategic policy adviser for the AARP Public Policy Institute.
  • Verify. Consider requiring the person who has power of attorney to periodically report to a third party, such as your lawyer or another family member.
  • Communicate. Make sure other family members know who has your power of attorney. That way, Karp says, they can be on the lookout for misconduct.
For an illustrative case of alleged financial abuse under a durable power of attorney, read a Press Release, issued November 29, 2007, by the PA Attorney General's Office, entitled "Attorney General Corbett announces criminal charges against a Schuylkill County couple accused of stealing more than $84,000 from an elderly man."

The trial on those announced criminal charges is now underway in Pottsville, PA in a Schuylkill County Common Pleas criminal jury trial, according to "Caregivers on Trial for Stealing Thousands" (12/09/08) by Norm Jones, posted by WNEP (TV-16) (Northeastern PA):
A trial began Monday for a Pottsville couple accused of stealing tens of thousands of dollars from an elderly man they were supposed to take care of.

The state attorney general's office is handling the case because the district attorney asked for the state's help in investigating the theft and conspiracy case.

Monday attorneys for both sides made opening statements in the trial against Robert and Catherine Whitney. They are charged with stealing $85,000 from Louis Long of Mahanoy City.

The Whitneys' attorney is trying to prove they didn't steal from Long, but had permission to use his money to pay for his care.

The attorney general's office told jurors the Whitneys milked more than $85,000 from Long's bank accounts but defense attorneys painted a much different picture, about a family who took in an elderly man and when he was stricken with Alzheimer's, cared for him 24 hours a day, seven days a week. * * *
For a further account, see "Were pair thieves or caregivers of elderly man?" (12/09/08), posted by The Morning Call (Allentown, PA):
A Schuylkill County couple befriended a man at the outset of his Alzheimer's disease, took him into their home and drained $167,000 from his accounts before his bank teller friends alerted authorities, who removed him from the home a month before his death, a state prosecutor told a jury Monday.

But the lawyer for Catherine Whitney, 58, and her husband, Robert, 57, said they did nothing more than take in and provide end-of-life care for a friend who made them promise they wouldn't let him die in a nursing home ''alone, isolated in loneliness, cared for by no one, loved by no one.'' * * *
In the setting of this criminal trial where the principal is deceased, consider this: Pennsylvania law already contains many protections intended to prevent financial elder abuse -- far more than many state laws reviewed in the Report.

Yet financial abuse of the elderly continues statewide. See: PA EE&F Law Blog postings "POA Abuse Cases Pressed by PA AG" (12/03/07) and other postings under the topic "Powers of Attorney."

Soon, though, the current Pennsylvania law (Chapter 54 of Title 20 of PA Consolidated Statutes) will be revisited by a study group of the Decedents Estates' Laws Advisory Committee, of the Joint State Government Commission, to reconsider whether those existing protections are sufficient.

Update: 12/12/08:

"Robert M. and Catherine M. Whitney, charged with stealing almost $85,000 from an elderly Mahanoy City man they were caring for, were convicted Thursday in Schuylkill County Court of stealing $10,000 to pay taxes," according to an article, "Jury: $10K stolen from elderly man" (12/12/08) by Peter E. Bortner posted by The Republican & Herald (Pottsville, PA).
As the Pottsville couple's daughters wept, a jury of seven women and five men deliberated more than seven hours before finding Catherine, 58, and Robert, 57, each guilty of three counts of theft, but not guilty of five other charges, four of theft and one of conspiracy.

President Judge William E. Baldwin, who presided over the Pottsville couple's four-day trial, ordered preparation of a presentence investigation but did not set a sentencing date. He allowed them to remain free on $75,000 unsecured bail pending sentencing.

Two of the thefts are felonies with a maximum prison term of seven years, while the third is a misdemeanor with a maximum possible sentence of five years, Senior Deputy Attorney General Anthony W. Forray said.

"Absolutely," Forray said when asked if prosecutors will seek to send the Whitneys to prison.

The Whitneys, who did not visibly react to the verdict, said nothing as they left the courtroom, but their lawyer, Frederick J. Fanelli, Pottsville, said they would consider filing an appeal, which would not occur until after sentencing.

"We're disappointed in the counts that resulted in conviction," he said. "It's a curious verdict." * * *

Monday, December 08, 2008

ABA's Estate & Trust Primers (Updated Links)

The American Bar Association, through its Real Property, Trust & Estate Law Section, posts excellent general explanations regarding estate planning principles and the planning process that eventually will materialize into surrogate decision-making or a fiduciary administration when needed.

As reliable general information, long-posted online, these lawyer-authored, publicly-posted legal resources can be referenced to clients who inquire about such topics before state-specific laws are applied to their specific situations.

Just over a year ago, I reviewed some of the ABA's online resources about estate planning topics. See: PA EE&F Law Blog posting "ABA's Estate Planning Primers Online" (11/28/07).

Recently I noticed rearrangement of the ABA's information on the RPTE Section's web page. At the risk of repetition, I again emphasize the value of those resources, both to the professional and to the consumer; and I copy the updated links.

These are the topics and articles, presented in outline form, in the ABA-RPTE's "Frequently Asked Questions -- Estate Planning" as excerpted from its website:

I) Estate Planning Overview:
  1. What is Estate Planning?
  2. Glossary of Estate Planning Terms
II) An Introduction to Wills:

Frequently Asked Questions about Wills
  1. What Happens if You Die Without A Will?
  2. What A Will Does
  3. What A Will Does Not Do
  4. How To Execute a Will
Types of Non-probate Property
  1. Jointly Owned Property
  2. Trusts
  3. Annuities and Retirement Benefits
  4. Life Insurance
III) Revocable Trusts:

What is a Revocable Living Trust?

IV) Power of Attorney:

Questions Regarding Power-of-Attorney
  1. Introduction
  2. Who Should Be Your Agent?
  3. How The Agent Should Sign?
  4. Beyond Signing Checks
State Laws Vary
  1. What if I move?
  2. Will my Power of Attorney expire?
V) Living Wills, Health Care Proxies, and Advance Health Care Directives:

Questions Regarding Living Wills
  1. Introduction
  2. Living Wills
  3. Health Care Proxy
  4. Why Have Health Directives?
  5. Obtaining and Maintaining Living Wills and Health Care Proxies
  6. Organ and Tissue Donation
  7. Communication is the Key
Other Resources on Living Wills

VI) The Probate Process:
VII) Planning With Retirement Benefits:
VIII) Guidelines for Individual Executors and Trustees:
IX) The Lawyer's Role:

What is the Lawyer's Role?

X) Who We Are:

About the Section of Real Property, Trust and Estate Law

XI) Tax Changes From 2001

Changes to Federal Estate Taxes 2004-2010
On its RPTE Resources web page, a few important external online references are linked, including one that I had not encountered before -- U.S. Tax Code Online, which presents the United States Internal Revenue Code, Title 26 of the U.S. Code (26 USC), as a structured and searchable document.
You can access the Code through its own hierarchical table of contents, a comprehensive (flat) table of contents (Note: this file is almost 300K and takes a while to retrieve), or an index by section number, handy when you're looking up a citation in another document.

Each section of the Code contains navigation buttons which provide immediate access to the next and previous section, the table of contents, the section index, the text search request form, and this document. * * *
Two other expansive, reliable Internet legal resources stand out among the other links listed on that web page:
In providing such information, the American Bar Association continues to provide a laudable public service to consumers.

* * *

"Information is not knowledge."
-- Albert Einstein

"Lack of knowledge... that is the problem."
-- W. Edwards Deming

"All my knowledge comes from research."
-- Stan Sakai

"Knowledge is power."
-- Francis Bacon

Friday, December 05, 2008

Elder Law Attorney as Family Counselor

On December 3, 2008, a Pennsylvania elder law attorney, Laurel Hartshorn, of Saxonburg, related a story on the PA Elder Law Section's listserv that highlighted the good work of elder law attorneys with aged clients and their families.

I post Laurel's account (as edited by me) with her permission.

Had a wonderful call today. A client's daughter called to thank me.

The daughter and her brother met with me two weeks ago to talk about their mother. Mom was failing quickly and they needed some advice.

One of the issues we discussed was medications.

At the Elder Law seminar in July, I attended the lecture by a blind geriatric doctor. He stressed how medications could get mixed up or have bad combinations. He also said that the changes might occur rapidly.

Since that seminar, I have paid particular attention to what caregivers and clients say about rapid changes in health or behavior. So I suggested that daughter talk to mom's pharmacist first and then the doctor.

The daughter went the next day and talked to the pharmacist. Lo and behold, there had been a substitution by the pharmacy in mom's medicines. The pharmacist told the daughter that she though it would be okay, since the drugs were in the same prescription family.

Apparently, however, mom could not tolerate the new drug, and the family did not know about the change.

Mom is back on the correct medication. She is doing much better and is regaining strength.

The family is so happy. They said they could not believe that such a great result could come from a conference with an attorney.

Funny how sometimes I give personal advice. It is just something that I do -- relate information that I had acquired. I might not realize how important non-legal suggestions may become until a client or a family benefits.

I want to thank the organizers of the July conference for bringing in the doctor to speak. At least in my practice, for those clients, his session may have had a life saving effect.
Such stories can be told by most elder law attorneys, who daily offer advice and counseling in the model of the old-style, small town "family lawyer" or "counselor-at-Law," with one objective: Help the aged client.

In an excellent article entitled "
The Lawyer as Counselor Representing the Impaired Client" published in the American Bar Association's General Practice & Solo Magazine (10-11/2004), attorney Timothy David Edwards considered the lawyer's role as a "Counselor-at-Law" in the setting of an addiction affecting a client and creating a disability.

After his detailed analysis of situational factors, scientific developments, and attorney ethical principles, he concluded:

As lawyers, we are in a position to help people who trust us and seek us out for advice.

If we come to understand our client, the nature of addiction, and the appropriate sources of treatment, we are in a better position to provide useful guidance that the client is more likely to accept. By staying involved and providing a compassionate, critical mirror, we can truly make a difference.

This is a daunting responsibility, but it can provide lasting benefits to the impaired client.
This point was reinforced in a message once posted by Thomas J. Ryan, Esq., as President of the State Bar of Michigan, entitled "Attorney and Counselor at Law." He noted:
It is not an overstatement to say that in this way, as counselor, we use our skill in an effort to heal — not just the immediate problem presented to us, but the person as well.

In a very real sense, society benefits as well from this counselor approach. And we should not underestimate the professional fulfillment we derive from our privilege to serve in this capacity. * * *
An elder law lawyer functions
daily as a "counselor-at-law" -- a role that is personally gratifying and professionally beneficial.

Thursday, December 04, 2008

PA Inheritance Tax Returns: Banded, not Bound

On November 24, 2008, the Pennsylvania Department of Revenue, through its Inheritance Tax Division, issued a bulletin addressed to "All Individuals Who Are Filing A Pennsylvania Inheritance Tax Return Rev-1500" requiring such filings in the future without permanent or restrictive bindings.

The Department's new policy regarding the connective material for paper filings of Pennsylvania Inheritance Tax Returns, through the local Pennsylvania Register of Wills offices, is now in effect:

Effective, December 1, 2008, the Department of Revenue has converted the processing system for the Pennsylvania Inheritance Tax Return to a scanning and image process.

Therefore, the Inheritance Tax Return must be filed on a scannable return, either provided by the Register of Wills office, available on the Department of Revenue's web site, or [provided by] a software vendor who has had their software preapproved by the Department of Revenue.

The Return should be compiled in the following order:
  • The 3 page REV-1500 Return
  • Any appropriate schedules based on the estate's assets and deductions
  • A copy of the decedent's will, if appropriate
  • A copy of any inter-vivos trust, if appropriate
  • A copy of any deed concerning real estate listed on Schedules A, F or G (all legal-sized documents should be reduced to 8 1/2 x 11 paper if possible)
  • Any additional documentation to verify the value of assets or deductions
The return should be held together with either rubber bands or a binder clip.

Do not use
any staples, metal or plastic binding, 3-ring binder, paper clips, [or] metal fold over straps, etc.

All of the above must be removed by Inheritance Tax Division employees before the documents can be sent for scanning. This will slow down the processing of the return, the examination of the return and finally the response to the estate representative. [Formatting added.]
If you don't already get it, you can call for clarification, as indicated in that Announcement: "Further information can be obtained by calling the Pennsylvania Inheritance Tax Division at 717-787-8327 or faxing your question to 717-772-0412 for J. Paul Dibert, Chief, Inheritance Tax Division."

Let's all call.

"A dry martini," [James Bond] said. "One. In a deep champagne goblet."
"Oui, monsieur."
"Just a moment. Three measures of Gordon's, one of vodka, half a measure of Kina Lillet.
Shake it very well
until it's ice-cold, then add a large thin slice of lemon peel. Got it?"
"Certainly monsieur." The barman seemed pleased with the idea.
"Gosh, that's certainly a drink," said Leiter.

-- Ian Fleming's novel Casino Royale (1953),
per "Shaken, Not Stirred" on Wikipedia

Update: 01/29/09:

The PA Department of Revenue, Inheritance Tax Division, recently made it known that it will accept a request for an extension to file a PIT Return, sent by email. For further information, see: PA EE&F Law Blog posting "
Extensions, Envelopes & Electricity" (01/29/09).

Wednesday, December 03, 2008

FTC: "Who Cares" About Health Care Vendors

On November 19, 2008, the Federal Trade Commission unveiled its "Who Cares" website, and issued a parallel booklet, to provide consumer information about health care products and services.

The new website and publication were announced in a Press Release entitled "FTC Announces Health Care Booklet and Web Site for Seniors" (11/19/08).

With all the sources of health information available -- many of them online -- it can be tough to tell fact from fiction, or useful products and services from those that don’t work or aren’t safe.

To help provide reliable sources of health information to seniors and their family members, caregivers, and friends, the Federal Trade Commission has developed a new booklet and Web site.

Who Cares: Sources of Information About Health Care Products and Services, online at, urges older consumers to discuss their health-related decisions with doctors and other trusted health care providers.

It also helps them:

  • find links to agencies and organizations that care about topics like generic drugs, hormone therapy, caregiving, surgery to improve vision, alternative medicine, hearing aids, Medicare fraud, and medical ID theft;
  • learn how to spot misleading and deceptive claims; and
  • find out who you can contact to ask questions, enlist help, or speak up if you think a health product or service isn’t living up to its promise. * * *
That Press Release noted the availability of a printed Who Cares booklet, which appears to be a replica of the initial web pages:
Copies of the Who Cares booklet can be ordered from the FTC’s Consumer Response Center. Call toll-free: 1-877-FTC-HELP. For bulk orders of the booklet, go to
This is the Table of Contents of that booklet, which also provides an overview of the website's content:
Care and Services
  • Alternative and Complementary Treatments (p. 1)
  • Assisted Living and Nursing Homes (p. 2)
  • Hiring Caregivers (p. 3)
  • Hormone Therapies (p. 4)
  • Lasik and Other Vision-Correcting Surgeries (p. 5)
  • Health Care Documents (p. 6)
Pills and Products
  • Buying Prescription Drugs Online (p. 7)
  • Dietary Supplements (p. 8)
  • Generic Drugs and Switching Prescriptions (p. 9)
  • At-Home Genetic Tests (p. 10)
  • Vision Prescription Portability (p. 11)
  • Hearing Aids (p. 12)
  • Personal Emergency Response Systems (p. 13)
  • Weight Loss Promises (p. 14)
Scams and Frauds
  • Medical ID Theft (p. 15)
  • Medicare Fraud (p. 16)
  • Medicare Part D Plans (p. 17)
  • Miracle Cures (p. 18)
  • Prescription Assistance Programs (p. 19)
How to File a Complaint (p. 20)
The Who Cares booklet (PDF, 2.94 MB, 28 pages) can be downloaded from the new website.
When viewed on a computer in Adobe Acrobat or Reader, the embedded links to Internet sources are "live", just as on the web pages.

This new FTC resource, Who Cares, should be consulted early by consumers who research medical services or products. And if a health care service or product has failed to deliver, the website can be accessed to file a complaint.

Tuesday, December 02, 2008

IRS Tests ADR Programs in Appeals

On December 1, 2008, the Internal Revenue Service, in its Bulletin No. 2008-48 (PDF, 40 pages) included Announcement 2008–111 (beginning on Page 1224), entitled "Test of Procedures for Mediation and Arbitration for Offer in Compromise and Trust Fund Recovery Penalty Cases in Appeals".

The announcement by the IRS modified prior revenue procedures to enable a two-year test program involving two new forms of alternative dispute resolution for taxpayers on certain appeal matters:

This announcement modifies Revenue Procedures 2002–44, 2002–2 C.B. 10, and 2006–44, 2006–2 C.B. 800, by establishing a two-year test of the mediation and arbitration procedures for Offer in Compromise and Trust Fund Recovery Penalty cases that are under the jurisdiction of the [IRS] Office of Appeals.
The new pilot program was the subject of an informational release, IR-2008-135, entitled "IRS Announces Two New Appeals Programs" (12/01/08), announcing post-Appeals mediation or arbitration procedures for test programs in the two settings of an Offer in Compromise (OIC) and a Trust Fund Recovery Penalty (TFRP).

Beginning Dec. 1, 2008, for a two-year test period, Appeals will offer post-Appeals mediation and arbitration for OIC and TFRP cases for taxpayers whose appeals are considered at the Appeals office in Atlanta, Ga.; Chicago, Ill.; Cincinnati, Ohio; Houston, Texas; Indianapolis, Ind.; Louisville, Ky.; Phoenix, Ariz.; and San Francisco, Calif.

Under these two alternative dispute resolution programs, the taxpayer or Appeals may request nonbinding mediation. The taxpayer may decline Appeals’ request for mediation. Appeals will evaluate a taxpayer’s request for mediation based on the criteria detailed in Revenue Procedure 2002-44 and Announcement 2008-111.

A request for binding arbitration must be made jointly by the taxpayer and Appeals. The mediation and arbitration procedures do not create any additional authority for settlement by Appeals. * * * [Formatting added.]

The Announcement notes that such ADR procedures will not be available when "the taxpayer has already attempted to resolve the matter through Fast Track Mediation" or when an offer in compromise was submitted by a taxpayer to the IRS as an alternative to an IRS collection action.

In a summary article drawn from these materials, entitled "
IRS Introduces Two Appeals Programs" (12-02/08) posted by WebCPA, the distinctions between mediation and arbitration, as alternative dispute resolution devices to be tested at selected IRS offices, were highlighted:

During the test period, appeals employees will advise the taxpayer of the availability of these alternative dispute strategies and the deadline for requesting such strategies.

The post-appeals mediation process is available for both legal and factual issues. The mediator's role is to facilitate settlement negotiations so the parties can reach an agreement, but the mediator does not have settlement authority over any issue.

The arbitration procedure is available for factual issues only. The arbitrator's role is to hear both sides of a disputed issue and then render a decision based on the specific factual issue. The decision is binding on both parties. However, the arbitrator does not have the authority to decide that the offer in compromise itself must be accepted or that a person is or is not liable. Neither party may appeal the decision of the arbitrator or contest the decision in any judicial proceeding. * * * [Formatting added.]

Testing of such ADR devices by the IRS is significant. Hopefully the test will reveal the processes to be efficient and effective in resolving IRS claims against taxpayers.

The IRS ADR test program follows a trend in many areas of law for resolution of disputes more through open exploration, direct discussion, and an acceptable agreement by parties, in a process controlled and supervised by an experienced, independent mediator or arbitrator, rather than through adverse positioning, formal litigation, and a court's adjudication.

Monday, December 01, 2008

History Channel Airs "Corpse Tech"

On Friday, November 28, 2008, from 7 to 8 pm, The History Channel aired a Modern Marvels episode entitled "Corpse Tech" (2008, 50 mins.) that featured Dauphin County (PA) Coroner Graham Hetrick and Funeral Director Nathan A. Bitner, both of Harrisburg, PA.

Celebrating ingenuity, invention and imagination brought to life on a grand scale, MODERN MARVELS® tells the fascinating stories of the doers, dreamers and sometime-schemers who created everyday items, technological breakthroughs and man-made wonders.

It may seem grisly or macabre, but a human's body remains useful long after the person who lived in it has passed away. From forensic investigations to medical experimentation to organ and tissue transplantation, every cadaver has a purpose.

In CORPSE TECH, MODERN MARVELS tours the boneyard to discover just how our remains are put to use.

Meet a County Coroner and visit the University of Tennessee's famous Body Farm to see how dead bodies contribute to criminology. And tour a morgue, a crematorium, and one of the largest tissue banks in the United States to discover the multitudinous fates awaiting our earthly vessels.

So, whether saving a life, catching a crook, or memorializing the departed, CORPSE TECH will show you how the job gets done.
The nationwide television appearance of Graham Hetrick and Nathan Bitner --both of whom I've known here in Harrisburg for awhile -- came as a surprise to me when I viewed the new episode.

However, their appearance had been noted in advance in a Press Release issued by Dauphin County, PA, dated July 23, 2008, entitled "Dauphin County Coroner to Appear on TV Show" (which only mentioned it in the title).

Graham noted the significance of death as an emotional and spiritual event that holds the deepest meaning. Nathan explained (and demonstrated) how rendering a corpse in a presentable way can allow for some closure in the grieving process.

The documentary was upbeat, detailed, and antiseptic in exploring the technological, business, and environmental aspects of its offbeat, but common, topic -- disposal of human remains by burial or cremation.

This episode is one of a few produced by The History Channel about death, which include:

  • Crypts, Coffins and Corpses -- "From the Ganges River to a college of Mortuary Science, this is a comprehensive look at how mankind has dealt with the dead throughout the ages."
  • Rites of Death -- "How does belief in an afterlife affect rituals which give meaning to the greatest and most terrifying of mysteries: death?"
  • Business of Death -- "Go inside the San Francisco College of Mortuary Science, where they believe in hands-on training."
  • Cemeteries -- "Industry insiders offer a behind-the-scenes look at the $20 billion American funerary business. It's the one journey we all make."

  • Beyond Death -- "Mainstream researchers, mediums and those who have had near-death experiences help explore the eternal mystery of what awaits us when we die."
That last episode leads to the topic presented in A&E/History Channel's Paranormal State: Cemetery, which featured Pennsylvania State University students in their club affiliated with the Paranormal Research Society:
Other students at Penn State University join clubs to play chess, speak French or go camping.

But a special few share an interest that goes far beyond this plane of existence. They are The Paranormal Research Society (PRS).

Under the leadership of club founder and director Ryan Buell, the intrepid team sets out each week to discover the truth behind terrifying real life mysteries, hauntings and ghosts. * * *
If you are interested in their investigation at cemeteries, this is what that episode covered:

Spend some quality time among the gravestones with Ryan and the rest of the PRS crew as they track a disturbing force to a mysterious, unclaimed cremation urn.

  • Forget the Ghostbusters! Call the Paranormal Research Society!
  • PRS investigates cases submitted by ordinary people suffering hauntings and other phenomena.
  • A gothic graveyard is a suitably creepy setting for PRS' latest investigation.
I know, I know . . . you'd rather watch Modern Marvels: Corpse Tech, like I did.

Well, I have some bad news, straight from The History Channel's website: "There are no upcoming airings within the next two weeks.