In CIC Services, LLC v. IRS, the U.S. District Court for the Eastern District of Tennessee invalidated Notice 2016-66 and ordered the IRS to return disclosure documents obtained from taxpayers and material advisors who participated in micro-captive insurance arrangements.
On May 17, 2022, the European Commission (Commission) announced it had conducted so-called “dawn raids” (i.e., unannounced inspections) at multiple undisclosed companies in the fashion industry in several European Union Member States.
Francis J. Serbaroli discusses additional liabilities that lawyers should be aware of when settling Medicare or Medicaid fraud cases for their clients.
Like the federal government, many states have adopted False Claims Act (FCA) provisions that exclude tax matters from coverage. The federal model makes clear that matters under the Internal Revenue Service are not covered by the law, and in the vast majority of cases, states also explicitly exclude tax from coverage. However, there is a growing number of states seeking to extend FCA liability to tax cases in which “knowing” causes of action apply to any person that knowingly conceals, avoids or decreases an obligation to pay the state. In such states, FCA liability, including punitive penalties and damages, will be argued to create liability for certified public accountants (CPAs) and other tax professionals who advise clients to take a favorable tax position on a tax return or simply file a return with an “error.” Under a “knowing” standard, an “error” is asserted to exist when the taxpayer’s position differs from someone else’s view of the law—the reasonableness of the position simply does not matter.
On January 15, 2022, the New York City Council enacted Local Law 32 of 2022 (Wage Transparency Law or Law) to amend the New York City Human Rights Law (NYCHRL) to require that most employers include compensation data in their job advertisements. The Law was supposed to take effect on May 15, 2022, however, it faced criticism over a number of ambiguities, including undefined penalties. In response, on April 28, 2022, the New York City Council passed an amendment to the Wage Transparency Law. Among the biggest changes is that employers now have until November 1, 2022—more than six months—to ensure compliance with the Law’s requirements. If Mayor Eric Adams signs the Law, which he is expected to do, New York City will become the second jurisdiction in the country (the first being Colorado) to require employers to include minimum and maximum potential salary amounts for open positions in job postings.
In our report published on April 26, 2022, we discussed the New York Department of Financial Services’ (NYDFS) Circular Letter No. 5 in which it reminded the industry that acquiring less than 10% of an insurer’s voting securities does not necessarily mean that the acquirer (1) is not a “controller” and (2) does not have to submit a Form A application to the insurer’s home state or domestic regulator seeking approval for the change of control. This topic is one of several related matters that various committees, task forces and working groups of the National Association of Insurance Commissioners (NAIC) are studying and will continue to study over a multiyear period (the Project).
On March 28, 2022, the Securities Exchange Commission (SEC) issued a press release regarding two proposed rules, Rules 3a5-4 and 3a44-2 under the Securities Exchange Act of 1934 (the Act). These proposed rules intend to further define the phrase “as part of a regular business” to identify certain activities that would cause a firm to be considered a “dealer” or a “government securities dealer.” Any firm considered as such, absent exemption, is subject to the registration requirements of Sections 15 and 15C of the Act, and would be required to register with the SEC as well as to become a member of a self-regulatory organization (SRO) such as the Financial Industry Regulatory Authority (FINRA). The firm would then be required to comply with all federal securities laws, as well as applicable SEC, SRO, and Treasury rules and requirements.
On March 30, 2022, the U.S. Securities and Exchange Commission (SEC) approved, by a 3-to-1 vote, a 372-page proposal of numerous rules regarding disclosures and procedural requirements for special purpose acquisition companies (SPACs). SEC Chair Gary Gensler stated that their purpose was to impose many of the regulations applicable to traditional initial public offerings (IPOs) on SPACs, stating that SPAC investors “deserve the protections they receive from traditional IPOs, with respect to information asymmetries, fraud, and conflicts, and when it comes to disclosure, marketing practices, gatekeepers, and issuers.”
On January 15, 2022, New York City enacted legislation requiring all covered employers to include a minimum and maximum salary for the position advertised.
On April 19, 2022, the New York Department of Financial Services (NYDFS) issued Circular Letter No. 5, reminding owners and potential purchasers of shares of insurance companies that acquiring less than 10% of the company’s voting securities is not necessarily a safe harbor from requiring regulatory prior approval.
On Jan. 27, 2023, the California Attorney General announced his office is investigating and sending letters to businesses in the retail, travel, and food industries with popular mobile apps that allegedly are not in compliance with the California Consumer Privacy Act (CCPA) by failing to offer a consumer opt-out mechanism for sales, or honor rights requests submitted via authorized agents.
In 2022, New York State and New York City enacted many new workplace laws, creating additional obligations for employers.
While ransomware attacks have been on the rise since 2020, a recent trend has emerged where threat actors are bypassing ransomware malware and encryption tactics and going straight to data theft.
On January 13, 2023, the Internal Revenue Service (IRS) released a Chief Counsel Advice Memorandum (CCA 202302011) concluding that taxpayers cannot claim a deduction for cryptocurrency losses that have, absent a sale or other taxable disposition, substantially declined in value if such cryptocurrency continues to trade on at least one cryptocurrency exchange and has a value that is greater than zero.
Six of the seven Medicare Administrative Contractors (MACs) are scheduled to jointly host a multijurisdictional contractor advisory committee (CAC) meeting on February 28, 2023.
The District of Columbia Council has postponed the first effective date of voter Initiative 82, the “Tip Credit Elimination Act,” from January 1, 2023, to May 1, 2023.
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