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Hertz Schram PC Legal Blog

What to Know About Tax Cuts & Jobs Act Changes for 2018

The Tax Cuts and Jobs Act of 2017 ("TCJA") was enacted into law on December 22, 2017. The TCJA is regarded as the most sweeping tax reform legislation in more than three decades. Hertz Schram has put together the following brief summary of the TCJA's changes to help you prepare for 2018. This is by no means exhaustive, and should not be relied upon as tax advice.

The impact of the following changes will vary on the your income, size and composition of you restate. It's important to note that that business provisions of the TCJA are permanent, but estate tax provisionsare not permanent and sunset after 2025. All changes are effective now.

Below is a look at the impact in three parts: Individual Tax Reform, Estate, Gift and Generation-Skipping Transfer Tax Reform, and Business Tax Reform. 

9 Hertz Schram Attorneys Honored as Leading Lawyers

Congrats to everyone at our firm who worked hard this past year to receive the honor of a Leading Lawyer awards for 2018. Leading Lawyers is a top honor to receive in our industry. An attorney must be recommended by their peers to be considered in their area of practice. Less than 5% of all lawyers in each state receive this distinguished award.

Over a Dozen Hertz Schram Attorneys Honored as Super Lawyers & Rising Stars

At Hertz Schram we believe in cultivating excellence. We're always honored when our team is recognized in the legal community. This year over a dozen of our attorneys received the honor of a Super Lawyers or Rising Stars.

Super Lawyers honors lawyers across 70 practice areas. Each lawyer is ranked by peers for professional achievement. A Rising Star honoree has been in practice for 10 years or less and is honored for their achievements. Only 2.5 percent of all attorneys receive this rising honor as an emerging leader in their field.

But I Never Received Notice!

A few years ago, I received a call from an elderly client (let's call him "Fred") in a panic. Fred told me that he went out to his lake cottage one spring for the first time since winter and found a notice of foreclosure pasted on the door indicating that the property had been foreclosed upon for non-payment of taxes. The appeal period had long expired. I asked Fred if he paid his taxes. He couldn't remember and said he thought he escrowed for taxes as part of his mortgage payment. Upon further inquiry I learned that he owned the property free and clear and that yes, he forgot to pay his property taxes. After some finagling I was able to make a deal with the County Treasurer to get Fred's property back so long as Fred paid all of the taxes, plus interest, within 48 hours. I did this by convincing the County Treasurer that Fred was elderly, had moved within the past few years and that the County had the wrong mailing address for purposes of notice. Fred was lucky. The County Treasurer accepted my story, although he didn't have to.

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.


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!

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