“Maintaining our presence in downtown Columbia City was an important factor in our search for a new location,” said managing partner Greg Hockemeyer, “I am proud of our firm’s commitment to supporting the redevelopment of this important property.”

Built in 1911, the former Post & Mail building was most recently occupied by locally based teakwood furniture company Three Birds Casual, which has since relocated to a facility in Gateway Park. The firm anticipates $400,000 in building acquisition and improvement costs.

“I can’t think of a better way to celebrate the centennial of this local landmark,” said Hockemeyer, “This project has involved collaboration among a number of local organizations that we hope will become a source of pride for all of Whitley County.”

The Columbia City Redevelopment Commission, which oversees a Tax Increment Finance (TIF) area in downtown Columbia City, is supporting the project through Revolving Loan Fund (RLF) and façade grant awards.  The City of Columbia City is also planning public improvements along Jackson Street to support the project.

“We are pleased to support local businesses that are willing to invest in the historic charm of downtown Columbia City and contribute to the overall economic growth of Whitley County” said Columbia City Redevelopment Commission chairman Carl Siler, “The RLF program was designed to provide much needed assistance to support the reuse of vacant and underused facilities in our community.”

The Commission oversees a Tax Increment Finance (TIF) area in downtown Columbia City.  The RLF program promotes efforts to strengthen the economic viability of properties located in the TIF area and stimulate private sector investment in downtown Columbia City through the physical revitalization of local properties. RLF programs have become a widely used financial incentive, establishing a pool of funding that can be replenished once loans are repaid to provide additional loan awards.

“This project is a prime example of a local business willing to invest and make a difference in the historic preservation and appearance of downtown Columbia City,” said Mayor Jim Fleck, “This investment will serve as a benchmark for additional downtown business owners interested in preserving the history of Whitley County.”

2009 is history, and the required minimum distributions are back, even if most retirees’ account balances have not fully recovered to prerecession levels. Retirees with affected retirement plans need to make sure that the necessary distributions resume in 2010, lest they incur a hefty penalty from the IRS for failing to do so.

Some advisors have counseled retirees to try to wait until the end of 2010 to take the minimum distributions—for two reasons. First, the longer that the money stays in the account before withdrawal, the more it can grow. Second, Congress conceivably could act to extend the moratorium on mandatory distributions for another year.

The no‑zone is dangerous for two reasons. First, if the truck driver cannot see you, he might try to pull into your lane, causing a crash. Second, if you drive in the no‑zone, the truck and its trailer cut off your view to the side and reduce your view to the front, making it harder to avoid accidents.

If you are behind a truck, stay out of the no‑zone so that the driver can see you. If you are passing a truck, do not linger in the no‑zone—get through it as quickly as you can while still driving safely. Remember: No matter who has the right of way, when an 18‑wheeler and a car collide, the car always loses.

Debit Cards Carry Greater Liability

A debit card is like an electronic check—the consumer is spending money that he or she already has. As compared with credit cards, debit cards carry the potential for greater liability if the card is lost or stolen. Under federal law, liability is limited to $50 for the fast‑acting consumer who notifies the bank within two days after discovering an unauthorized transaction. After that, the cardholder could lose up to $500, or even more in some cases. On its own, a bank may choose to waive liability for unauthorized transactions if the consumer has taken reasonable precautions, but, of course, this varies depending on bank policies.

For transaction errors, banks, as a general rule, have up to 10 days to investigate after receiving notice from the cardholder, or up to 45 days in special circumstances. Pending the outcome of the review, banks generally must credit the account for the amount of the alleged error.

As with credit cards, debit cards offer convenience and an alternative to carrying cash. But, unlike credit cards, the consumer is not taking on debt when using a debit card. Nor is the consumer paying interest or an assortment of fees, assuming that the account is not overdrawn. It may be possible to avoid even the overdraft fees by linking a checking account to a savings account or a line of credit. A debit card can also be used to obtain cash without incurring charges that usually come with cash advances by means of a credit card.

When there is a problem with purchased merchandise, there is no right to withhold payment if the consumer has used a debit card, as might be an option with a credit‑card transaction. Another drawback for debit cards is the practice of putting “holds” on funds. If the final amount is not yet known, a merchant may place a temporary hold on funds for more than is actually spent, which denies the consumer access to that amount until the hold is lifted later.

Credit Cards Provides Protection Against Errors

Federal law limits a consumer’s losses to a maximum of $50 if a credit card is lost or stolen, and also provides protection against credit‑card billing errors. Unlike with debit cards, federal law also may allow the user of a credit card to withhold payment under certain circumstances until a problem with purchased merchandise is rectified.

The most commonly cited drawbacks for credit cards concern fees, interest rate increases, and penalties. In addition to annual fees for some cards, there are usually fees for paying late and for exceeding the credit limit. Of course, unless a consumer is in an interest‑free grace period, interest accumulates and adds to the overall debt, especially if the cardholder pays only the minimum amounts due each month. As any holder of a credit card can attest, having a credit card also makes overspending very easy, especially with high credit limits and enticements such as rewards programs.

A state supreme court ruled that Jessica had no obligation to pay any of the estate taxes. The starting point for the analysis was the general rule that the probate estate pays such federal estate taxes as may be generated by nonprobate assets, such as life insurance proceeds, jointly held property, and POD accounts. An exception to this rule exists for transfers by the decedent during his lifetime with a retained life estate, but Jessica’s case did not come within that exception. A POD account transfers no property to the recipient during the decedent’s lifetime, since the depositor remains free to make changes in the account, or even to close it, at any time before his or her death. The result was the same for the claim based on state estate taxes.

A final argument directed at both Jessica and her parents, on a contractual theory, also failed. Jessica’s parents had signed a two‑sentence agreement with the estate to retain 50% of all sums payable on the POD accounts “for the purpose of paying required estate taxes.” This did not obligate Jessica or her parents to pay a portion of the estate taxes attributable to the accounts, since the accounts were not otherwise required by law to pay any estate taxes.

In short, there were no “required estate taxes,” as referred to in the agreement. Not only that, but Jessica, the only named recipient for the accounts, did not sign the agreement and was not a party to it, and the agreement did not suggest that Jessica’s parents were signing in any capacity other than for themselves.

The format of the new GFE is supposed to simplify the process of originating mortgages by consolidating costs into a few major cost categories. The former GFE had a long list of individual charges. The new version includes this list, but also has a summary page containing the key information for comparison shopping by the consumer.

The new GFE also has a set of tolerances on originator and third‑party costs. Originators must adhere to their own origination fees and give estimates subject to a 10% upper limit on the sum of certain third‑party fees. The idea is to encourage loan originators to seek out lower costs for third‑party services, to the benefit of borrowers.

The main changes in the HUD‑1 settlement statement involve new language and the organization of charges that should make it easier to compare the GFE and the settlement statement, in order to confirm whether the tolerances in the new GFE have been exceeded. It will also be easier for the consumer to verify that the loan terms summarized on the GFE match those in the loan documents, including the mortgage note.

Mixed Reaction to Mortgage Regulations

Reaction to the new regulations has been mixed, with some consumers complaining about their complexity and vagueness and other consumers wondering if the regulations will, in fact, serve to enhance protection for consumers. Since the forms provide for lumping lenders’ fees together rather than detailed itemization, some consumers think that lumping the fees together could make it harder to detect questionable charges.

In any event, the “bait and switch” tactic in which artificially low estimates of costs mysteriously balloon at closing has been addressed by HUD. Now a lender is largely tied to its good‑faith estimates provided for such mortgage fees as points, origination costs, and appraisals.

The referral website involved a series of web pages. Victoria entered project information on the first page, clicked to the next page, entered more information, and so on. Each page was hyperlinked to the referral company’s terms and conditions, one of which was a forum selection clause limited to Denver County, Colorado. Victoria never actually looked at the terms and conditions before she brought suit in her home state of Missouri. The dismissal of the suit for being in the wrong jurisdiction was upheld on appeal.

The process by which Victoria agreed to sue only in Colorado was not as clear‑cut as when a customer shows assent by clicking to show acceptance of terms and conditions (a “clickwrap” agreement), but it still was sufficient to bind the website user. The referral business had not unreasonably hidden the terms and conditions. Victoria assented to the forum selection clause contained in the website “browsewrap” agreement, although assent did not require a “click,” where the website placed an immediately visible notice of the existence of license terms on the site by stating “[b]y submitting you agree to the Terms of Use,” and by placing a blue hyperlink next to the button that the user clicked.

There was also a second link to those terms that was visible on the same page without scrolling, and similar links were on every other website page. In short, the referral business was sufficiently up front about the forum selection clause, and it was not its fault that Victoria had not actually navigated on the website so as to read about that term.

The court acknowledged that the legal effect of online agreements may be an “emerging area of the law.” Nonetheless, courts still apply traditional principles of contract law, which means focusing on whether the plaintiff had reasonable notice of, and manifested assent to, the agreement and all of its terms and conditions. Since notice and assent were both present in Victoria’s case, she had to sue the referral business in Colorado or not at all.

It is always good advice for anyone signing a tax return to do so only after carefully reviewing and understanding every line of it. But even such common‑sense measures cannot always prevent mistakes and/or deception from happening. To avoid unfairness in such circumstances, the Tax Code has provisions designed to protect “the innocent spouse.”

Under this general heading, there are three kinds of relief: innocent spouse relief, relief by separation of liability, and equitable relief. To request relief, a taxpayer must file the appropriate form with the IRS no later than two years after the IRS first tries to collect the tax. An attached statement must explain why the taxpayer believes he or she qualifies for relief. If the IRS rejects the claims for the first two types of relief, it will automatically determine whether equitable relief is warranted.

Conditions for tax relief

An innocent spouse must meet the following conditions to qualify for relief:

(1) a joint return understated taxes because of erroneous claims by the requesting party’s spouse, such as unreported or underreported income, or unjustified deductions or credits;

(2) when the return was signed, the innocent spouse did not know, or have reason to know, that there was an understatement of tax. If the spouse knew, or should have known, that there was an understatement but did not know by what amount, partial relief may be given; and

(3) in light of all of the surrounding circumstances, it would be unfair to hold the requesting party liable for the understatement of tax. Among the factors taken into account by the IRS are whether the taxpayer benefited from the erroneous return in the form of a higher standard of living and whether the joint filers later were divorced or separated.

A claim for innocent spouse relief was recently rejected by the Tax Court under circumstances that illustrate some of the factors that weigh against such relief. A husband underreported the income from a family business that, during the relevant tax year, was the couple’s only source of income. His wife, who had retired from another job, helped run the business in a variety of ways, including answering the telephone, sending out mail, paying hired help, and sometimes working on some of the casino game nights that the business provided for customers.

Although both spouses thought of the business as primarily being the husband’s, and only the husband had filed the joint tax return (although the wife had also signed it), the wife was too closely involved in running the business and had too much access to the records of the business to be accorded the status of an “innocent spouse.”

Relief by Separation of Liability

Separation of liability means an allocation between the spouses of unpaid liabilities resulting from the understatement of taxes owed. Either of the following requirements must be met: The parties filing the joint return are no longer married or are legally separated, or the joint filers were not members of the same household at any time during the 12‑month period before the relief is sought. This relief is not available if the spouses transfer assets between themselves to avoid taxes or as part of a fraudulent scheme. Another disqualifying factor is actual knowledge of the other spouse’s erroneous items on a return that gave rise to the deficiency.

Equitable Relief

As a last resort, equitable relief may be available when there has not been any fraud and when, all things considered, it would be unfair to hold the spouse seeking relief liable for the understatement or underpayment of tax. A broad range of “fairness” factors may be considered by the IRS. There is no exhaustive list, but some examples include separation or divorce, economic hardship if relief is not granted, and the fact that the tax for which relief is sought is attributable to the other spouse.

Weighing against equitable relief would be factors such as knowledge of the items causing the understated tax, receiving a significant benefit from that understatement, or not making a good‑faith effort to comply with federal income tax laws for the tax year in question.

As for the sculptor, he had not been informed of the stamp in advance, nor had anyone sought his permission for it or paid him anything for it. He sued the government for copyright infringement. Certainly, there were principles at stake, but there was also potentially a lot of money in play. The Postal Service received more than $17 million from sales of the stamp, not to mention additional income from the use of the stamp on retail goods such as commemorative panels and framed art. The sculptor wanted a share of that money.

At a trial before the Court of Federal Claims, the court determined that the sculptor was the sole copyright owner of “The Column,” rather than a joint owner with the government, and that “The Column” did not qualify for an exclusion from copyright infringement liability as an architectural work under the Architectural Works Copyright Protection Act. However, the court also determined that the government was not liable for copyright infringement because the government’s use of “The Column” was a fair use. The fair use doctrine requires courts to avoid rigid application of the copyright statute when it would stifle the very creativity that the law is designed to foster.

On appeal, a federal appellate court reversed on the pivotal issue of fair use, and sent the case back to the court below for consideration of the sculptor’s damages. The Postal Service’s stamp containing an image of the soldier sculptures did not “transform” the character of the sculptures so as to support a finding of fair use under established copyright law. Rather, both the stamp and the sculptures shared the common purpose of honoring veterans of the Korean War.

While the stamp altered the appearance of the sculptures by adding snow and muting the color, those alterations did not impart a different character to the work. In addition, although the stamp did not harm the market for derivative works, which is another consideration in fair use analysis, the appellate court concluded that allowing the government to commercially exploit a creative and expressive work would not have advanced the purposes of copyright in this particular case.

Today, there is a general business credit equal to 20% of qualified rehabilitation expenses for a certified historic structure, or a 10% tax credit for the qualified rehabilitation of nonhistoric, nonresidential buildings first placed into service before 1936. Eligibility for the tax incentives is determined by the National Park Service.

Tax credits are often more beneficial to taxpayers than deductions are, since every dollar of a tax credit reduces the amount of income tax owed by one dollar.

The 20% credit for the rehabilitation of a certified historic structure applies to commercial, industrial, agricultural, rental, or residential properties, but not to properties used exclusively as the owner’s private residence. A certified historic structure must be a building as opposed to another type of structure. To have the required historic status, the building must be either listed individually in the National Register of Historic Places or located in a registered historic district and certified as being of historic significance to the district.

Eligibility for the 20% credit also depends on meeting some additional requirements. For example, the building must be depreciable, that is, used in a trade or business or held to produce income. The rehabilitation must be substantial, generally defined as entailing expenditures exceeding the adjusted basis of the building and its structural components. Generally, this requirement must be met within two years or within five years for a project completed in multiple phases.

Qualified rehabilitation expenses include such items as architectural and engineering fees, site survey and development fees, legal expenses, and other construction‑related costs, so long as they are added to the basis of the property, are reasonable, and are related to services performed.

The owner of the rehabilitated building must hold it for five years after completion of the rehabilitation or else pay back all or part of the 20% credit. A sale in the first year means that the entire credit is recaptured. The recapture amount is reduced by 20% per year for properties held between one and five years.

The 10% credit for nonhistoric buildings constructed before 1936 shares some of the requirements for the 20% credit, such as that the rehabilitation be substantial and the property be depreciable. However, only buildings rehabilitated for nonresidential uses qualify for the 10% credit. In addition, so that the identity of the original building is not lost in the process, ­projects undertaken for the 10% credit must meet specific tests based on retention of minimum percentages of the building’s walls and internal structural framework.