• Labor Department Appeals OT Injunction


    The Labor Department, as anticipated, appealed Judge Mazzant's injunction of it's new Overtime Rules. The appeal was filed with the Fifth U.S. Circuit Court of Appeals in New Orleans yesterday, December 1st, by Labor Secretary Thomas Perez.

    The business community and many states have said the new threshold is too much of an increase and that the government had overstepped its authority by stipulating that the new threshold would automatically increase every three years.

    Nearly half of the states and a number of business groups had filed lawsuits in September to overturn the regulation. On Nov. 22 U.S. Judge Amos Mazzant in Texas issued a preliminary injunction and blocked the rule from taking effect.

    Many people believe that the regulation could face a challenge from President-Elect Donald Trump, however he has yet to make any comment about the rules. Many employers that had already made adjustments to comply with the rule early could have a hard time reversing some of their changes.

    Stay tuned!

    Overtime Rules Enjoined!

    November 26, 2016

    A federal judge in Texas issued a nationwide injunction blocking the new Department of Labor Overtime Rules, (see the article below), which were to have taken effect on December 1, 2016. 21 states, a number of business organizations, and the US Chamber of Commerce had sued in federal court claiming that the rule is unlawful and requesting the injunction.

    DOL strongly disagrees with the ruling, but as yet has not announced what steps they may take. If the decision is made to appeal, that appeal would be made to the 5th Circuit in New Orleans where the administration has received unfavorable rulings in the past.

    More information is available in this article from Reuters.

    Many businesses had already made significant changes to prepare for the imposition of the new rules and will now have to sit back, watch, and wait to see if their preparations were prescient or premature.

    December 1, 2016

     As of this writing, the Department of Labor strongly disagrees with Judge Mazzant's ruling and injunction. They maintain that the rules are legal and appropriate however no appeal has yet been filed. Unless the injunction is overturned, the new overtime rules will not go into effect.

    Please check this page for further updates as news comes available.

    Department of Labor
    Overtime Rules

    After months of speculation, on May 18, the US Department of Labor released its much-anticipated final rule that raises the white collar overtime exemption threshold under the Fair Labor Standards Act (FLSA). Among other things, the Labor Department has doubled the minimum salary needed to qualify for these exemptions, from the previous level of $455 a week (or $23,660 a year) to $913 a week (or $47,476 a year), with increases every three years thereafter.

    The new regulations take effect on Dec. 1, 2016.

    The revised overtime pay regulations, will have a huge impact on businesses as at least 4.2 million American workers, will see an increase in the salary threshold for the overtime exemption from $455 a week ($23,600 annually) to $913 a week ($47,476 annually).

    Businesses will need to start tracking hours for exempt salaried employees who are at or below the $47,476 threshold. Many employers do not currently track the number of hours their salaried employees work.

    Doubling the salary threshold seems like an unusually large adjustment, but consider the effects of inflation. Using 1975 (when the threshold hit $250) as a baseline, the Economic Policy Institute calculated that full adjustment for inflation would result in a threshold of over $1000 per week (over $52,000 per year). Nearly 60% of workers qualified for overtime in 1975; in 2016, that number is only about 7%. 

    Lower-wage businesses and service industries like hospitality and retail are understandably against the new rule. A press release from the National Retail Federation (NRF) declared the new overtime rules to be a "Career Killer." NRF contends that instead of increasing salaries to raise workers above the overtime threshold, many businesses will simply reclassify professionals as hourly workers, removing their existing perks, flexibility, and certain benefits (not to mention, we add, the potential loss of more prestigious titles). Comp time, where employees work overtime in exchange for future days off, is not allowed for those eligible for overtime under the new rules.

    What Effect Will the Rules Have?

    Businesses claim the rules will cause economic harm, but what about the other side of the argument? DOL contends that the new rule will set employers back $1.5 billion annually, with $1.2 billion in increased overtime pay and $300 million in corresponding administrative costs. That's a non-trivial amount, but a Wall Street Journal blog points out that in the context of America's nearly $8 trillion annual wages, the overall economic effect would be minimal.

    DOL projects that 4.2 million workers will be directly affected by the change, and that another 8.9 million will be indirectly affected by reducing the ambiguity of their status. In other words, they should have been classified as non-exempt originally, based on their duties. In total, those affected in some fashion make up less than 9% of the workforce. To put that in perspective, the WSJ blog notes that a national $15 minimum wage would affect close to one-third of America's workforce.

    The new overtime laws could be quite costly for employers, so don’t be surprised if many companies makes some changes to avoid signing everyone up for overtime.
  • Missed Property Valuation Protest Deadline?

    Help May Still Be Available!

    If a Texas property owner missed the protest deadlines in 2016 for protesting the 2016 valuations and subsequent property taxes imposed, there still may be some help available. This applies to both real property and business personal property.

    Under Texas Property Tax Code, Section 25.25 (d), a property owner or the chief appraiser may file a motion with the Appraisal Review Board to change the appraisal roll to correct an error that resulted in an incorrect appraised value for the owner's property. However, the error may not be corrected unless it resulted in an appraised value that exceeds by more than one-third the correct appraised value. This motion must be filed prior to the property taxes being delinquent which, as of this writing, would be January 31, 2017.

    If the appraisal roll is corrected, the property owner will pay a 10 percent late-correction penalty of the taxes on the new corrected value of the property. Still, this is a "better than nothing deal" for the property owner. For this section to apply, the property owner cannot have protested the property, or reached a settlement for a value on the property, during the year.

    Note that the motion can be filed as late as January 31, 2017, and actually be heard by the appraisal review board on a later date, to be effective. However, the property taxes for the year must be paid prior to the January 31, 2017 date. If a reduction in taxes is achieved, a refund for any excess taxes will be issued.

    So, with a large discrepancy, all is not lost when the protest deadlines are missed !

    Steve M. Spencer, CPA
    Palestine, Texas
    Questions? TACPA members, as part of TACPA's networking, feel free to contact Steve with your questions at smscpa@stevemspencer.com 

    From IRS Newswire... Nov 16, 2016

    IRS, States, Industry Launch Second Year of Public Awareness Campaign: “Taxes. Security. Together.”

    The Internal Revenue Service and its Security Summit partners today began the second year of their “Taxes. Security. Together.” campaign aimed at encouraging taxpayers to take stronger measures to protect their financial and tax data.

    The campaign features a series of security awareness tax tips, a round-up of suggestions at the Taxes. Security. Together. web page and a one-page Publication 4524, Security Awareness for Taxpayers.

    “These are common sense tips to help taxpayers ensure the security of their information,” said IRS Commissioner John Koskinen. “The Security Summit partnership between the IRS, states and industry has made great strides but we need taxpayers to ensure their information is secure as well.”

    The IRS, state tax agencies and the tax community came together in 2015 to combat tax-related identity theft as a coordinated partnership. But they immediately saw that one partner was missing: taxpayers.

    The IRS and its partners need the help of all taxpayers. The Security Summit also needs the help of tax preparers and businesses to share information and help educate clients and employees about security measures. For example:

    • Always use security software with firewall and anti-virus protections. Make sure the security software is always turned on and can automatically update. Encrypt sensitive files such as tax records you store on your computer. Use strong passwords.
    • Learn to recognize and avoid phishing emails, threatening calls and texts from thieves posing as legitimate organizations such as your bank, credit card company and even the IRS. Do not click on links or download attachments from unknown or suspicious emails.
    • Protect your personal data. Don’t routinely carry your Social Security card, and make sure your tax records are secure. Treat your personal information like you do your cash; don’t leave it lying around.

    e-Services - Online Tools for Tax Professionals

    The IRS web site has a listing of online services designed for you, the practitioner. They break out into several topic areas which you may find useful. Take a look at some of these...

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    Use our CPA Referral Service to locate a Texas CPA in your area.

    Just tell us what you are looking for and we will provide names of CPAs you can contact.



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