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Hertz Schram PC Legal Blog

It's Okay To Be A CPA Providing Services In The Medical Marijuana Industry

On May 19, 2017, the Michigan State Board of Accountancy and Michigan Department of Licensing and Regulatory Affairs - Bureau of Professional Licensing adopted guidance beneficial to CPAs. The guidance states that CPAs that are otherwise in compliance with Michigan's Medical Marihuana Act, are not specifically prohibited from providing the services under the Occupational Code to clients engaged in the medical marijuana industry. This means that a CPA will not be called in front of the Department of Licensing or Accounting Board based solely on providing professional services in the medical marijuana industry.

Inquiring Minds Want to Know: Is an Attorney a Member of a "Public Body" Under The Whistleblowers' Protection Act?

On April 12, 2017, the Michigan Supreme Court heard oral arguments on an important issue for employees and employers under The Whistleblowers' Protection Act (WPA) in the case of McNeil-Marks v MidMichigan Medical Center-Gratiot. In McNeil-Marks, the Michigan Court of Appeals expanded what constitutes a member of a "public body" under the WPA to include Michigan licensed attorneys. The Court of Appeal's expansion may be short-lived. However, if McNeil-Marks is affirmed, employees will continue to have protection under the WPA if they threaten or actually report to their attorneys a good faith belief that employers violated the law.

DUDE - DO I REALLY HAVE TO PAY THE IRS FOR MEDICAL MARIJUANA SALES?

With the sale of medical marijuana and recreational cannabis in States that have legalized their sale, I am often asked whether a seller must pay federal tax on its sales proceeds. As a former IRS Agent, I tell them that the sale of marijuana generates taxable income. They respond by saying "how can this be? It is still illegal under federal law to sell marijuana! Do I really have to report those sales to the IRS?" The problem for these sellers is that the Internal Revenue Code (the "Code") taxes all income, even if derived from the "trafficking in controlled substances." Then I tell them the really bad news. Not only do businesses selling marijuana have to pay taxes on their sales revenues, but Section 280E of the Code prohibits tax deductions for ordinary and necessary business expenses such as rent, wages and other such expenses.

SUBSTANTIATING 401(k) HARDSHIP DISTRIBUTIONS - WHAT DO I HAVE TO PROVE?

Many 401(k) plans provide that an employee participant can receive a distribution of his or her elective deferrals from the plan on account of a financial hardship. A hardship distribution is only permitted if the employee experiences an immediate and heavy financial need and the distribution is required to satisfy that need. An immediate and heavy financial is defined by the IRS as one or more of the following with respect to the employee or the employee's immediate family:(i) medical expenses; (ii) purchase of a principal residence (employee only); (iii) tuition and related educational expenses; (iv) payment necessary to prevent an eviction or foreclosure of a principal residence; (v) burial expenses; and (vi) repair expenses for damage to the employee's principal residence.

Michigan Abolishes Dower Rights

Effective April 6, 2017, dower rights in Michigan are abolished. Dower is a centuries old legal principle that a wife has an interest in a portion of all real property owned by her husband during their marriage. The common law principal of dower was codified in MCL 558.1, et. seq. It provided a widow with the use, during her lifetime, of 1/3 of all real property owned by her husband during their marriage. It is because of dower rights that a male grantor's marital status appears on deeds in Michigan. It is also the reason a wife must sign a deed when her husband is transferring real property only he owns.

YOU BLEEPING "&#+%"

Using the words "you bleeping &#+%" (insert your favorite expletives) is never the best way to motivate your employees. And yet sometimes we still want to say it. How can we encourage our employees to do their best work without losing our cool? If you hope to instill change and growth in your employees consider these six steps when giving criticism:

1. Can the issue or behavior be changed? If it cannot be fixed in the future, do not take the next step. Be silent. Never criticize what cannot be changed!

PLEASE RELEASE ME

"Release Me" was a popular song written by Eddie Miller and Robert Yount in 1949 and made into an international hit by Englebert Humperdinck in 1967. The opening line of the song "[P]lease release me, let me go," is also a constant refrain of trustees who (understandably) want to be released from liability in exchange for distributions of trust assets to the beneficiaries. This is especially true when beneficiaries have expressed concerns or complaints about a trustee's work as trustee. And why not? Contractors are asked to provide releases of lien in exchange for payment. Others in the context of fulfilling contractual obligations frequently seek a release in exchange for full performance. Should trustees be treated any differently? Under Michigan law, they are; probably.

10 Hertz Schram Attorneys Receive Super Lawyer 2016

Hertz Schram is proud to announce that 10 of our attorneys have been named for inclusion in the 2016 edition of Michigan Super Lawyers and Rising Stars. Super Lawyers is a rating service of outstanding lawyers from more than 70 practice areas who have attained a high-degree of peer recognition and professional achievement. The selection process includes independent research, peer nominations and peer evaluations. The Rising Stars list is developed using the same patented multiphase selection process used for the Super Lawyers list except:

8 Hertz Schram Attorneys Honored as 2017 Top Lawyers by Dbusiness

Hertz Schram is pleased to announce that eight of our attorneys were selected to appear in DBusiness Top Lawyers for 2017. DBusiness, publication of Hour Media, is one of the leading business journals in the Detroit area. Over 19,000 attorneys were polled across Wayne, Oakland, Macomb, Washtenaw and Livingston counties to determine who were considered the best among their peers.

Hertz Schram Partner, Lisa D Stern Receives Best in Michigan for Client Satisfaction

Lisa D Stern, Partner, Family Law, was elected 2016 American Institution of Family Law Attorneys 10 Best in Michigan for Client Satisfaction for her exceptional work in family law. Selection criteria focused on attorneys who demonstrate the highest standards of Client Satisfaction.

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