Making Sure Your Donations Are Deductible

By: Clark, Campbell, Lancaster & Munson, P.A.

Q: During the Christmas season I donate money and toys to various organizations. Are these donations tax deductible?

A: Yes, in certain situations charitable donations are tax deductible; however, the situations in which an individual taxpayer may claim a deduction for such donations are relatively limited. As an initial matter, a charitable donation is the donation of money or property to an organization without the actual or anticipated receipt of a benefit. If a donation entitles an individual to merchandise, goods, or services, including admission to a charity ball, theatrical performance, or sporting event, the charitable donation is only that portion of the donation that exceeds the fair market value of the benefit received.

Charitable donations are tax deductible only if the individual taxpayer itemizes his or her deductions and only if the charitable donations were made to an organization that qualifies under Section 170(c) of the Internal Revenue Code. The IRS maintains a searchable database of qualifying organizations that may be accessed at http://apps.irs.gov/app/eos/. Furthermore, the amount of the tax deduction an individual taxpayer may claim for charitable donations in a given year is capped at fifty percent (50%) of the individual’s adjusted gross income. This cap is lowered to thirty percent (30%) of an individual’s adjusted gross income for charitable donations to certain private foundations, veterans’ organizations, fraternal societies, and cemetery organizations.

Finally, most charitable donations must be substantiated. Donations of household items, such as toys, clothes, furniture, and appliances, worth $250.00 or more must be substantiated by a written acknowledgement from the charity receiving the donation. Such acknowledgement must include the name of the charity receiving the donation, the date of the donation, and a reasonably-detailed description of the items donated. Donations of money, regardless of the method of payment or amount, must be substantiated by a bank record or a written acknowledgement from the charity receiving the donation. Cancelled checks and bank, credit union, or credit card statements are generally sufficient to substantiate a donation of money. Due to these substantiation requirements, you should ensure that you obtain a written acknowledgement when you donate cash or significant amounts of property.

The January 1st edition of “The Law” will discuss gift certificates, credit memos and refunds. Questions may be submitted online to thelaw@clarkcampbell-law.com.

Civil Remedies For Worthless Checks

By: Clark, Campbell, Lancaster & Munson, P.A.

Q: My customer’s check bounced, and he won’t return my calls. What can I do to recover?

A Every day in Florida individuals and businesses receive payments for goods or services in the form of “payment instruments”, which include checks, debit card orders and electronic funds transfers. Unfortunately, many of these payments are “worthless”, because they have been dishonored by the drawee banks or credit unions for lack of funds, lack of credit, lack of account, or the maker has stopped payment. When a worthless payment is issued, and the maker refuses to issue a good check or make payment in another form, Florida law provides the payee with civil remedies that allow the payee to recover from the maker the amount of payment, bank fees and service charges. This article focuses on worthless checks, although the civil remedies discussed also apply to other “payment instruments”.

The payee of a worthless or “bounced” check is entitled to demand and receive from the maker the full amount (i.e., the face amount) of the worthless check, along with any bank fees incurred and a service charge. The payee must first send a written demand by certified mail that notifies the maker that the check was dishonored, lists the full amount owed, and that states the maker must pay the full amount owed in cash within 30 days from the date of receipt of the letter. If, after 30 days, the maker has not paid the payee the entire amount owed, the payee then may file a civil suit against the maker and seek three times the amount of the worthless check, plus bank fees and service charges, court costs, and reasonable attorney fees.

Because of the expense, and uncertain outcome of civil actions, including the possibility of an uncollectable judgment, payees should take the following precautions when issued a check, not only to ensure the check is valid, but also to ensure recovery from the maker if the check is dishonored. First, the payee should always confirm the full legal name and home address of the maker of the check through a government issued form of identification. Second, a payee should never accept a check that is post-dated or has no date on it since that may prevent criminal prosecution if the check is dishonored. Finally, a payee should never accept checks from third parties if the identity of the maker or whether the check was stolen or forged cannot be immediately confirmed.

The December 18th edition of “The Law” will discuss end-of-year tax issues. Questions may be submitted online to thelaw@clarkcampbell-law.com.

Keeping Information Private

By Joseph A. “Jay” Geary, Attorney
Clark, Campbell, Lancaster & Munson, P.A.

Q: How does the new Florida Information Privacy Act affect my business?

A: On June 20, 2014, Governor Scott signed into law the “Florida Information Privacy Act of 2014,” Florida Statutes, Section 501.171 (“Privacy Act”), which became effective on July 1, 2014. The Privacy Act repeals and significantly changes an earlier (2005) electronic data privacy law, Florida Statutes, Section 817.5681, and is in addition to existing federal laws intended to safeguard the confidentiality of personal health information and personal financial information. Businesses should immediately become acquainted with the requirements of the Privacy Act, particularly the reporting and notification requirements. The salient features of the Privacy Act are as follows:

Ÿ      If a business acquires, maintains, stores or uses “personal information”, provided by individuals in Florida in order to purchase or lease products or services, and the business records and preserves that data in electronic form as “customer records” on a computer system, data base or digital mass storage device, then the business is a “covered entity” – i.e., subject to the Privacy Act.

Ÿ      A “covered entity” includes a “sole proprietorship, partnership, corporation, trust, estate, cooperative, association, or other commercial enterprise” that receives “personal information” from individuals “in this state”.

Ÿ      “Personal information” is defined in the Privacy Act. Generally, it is information contained in “customer records” of a “covered entity” that affords the business access to an identified individual’s financial accounts or medical information.

Ÿ      A “covered entity” must take “reasonable measures” to protect and secure electronically-stored “personal information”. (“Reasonable measures” is undefined in the Privacy Act.)

Ÿ      If there is a “breach of security” (unauthorized access to secure data) involving 500 or more individuals in this state, a “covered entity” must report the incident, in writing – “as soon as practicable”, but no later than 30 days from the date the breach is discovered – to the Florida Department of Legal Affairs, AND must directly notify “each individual in this state” whose “personal information” was or is believed to have been accessed due to the security breach. The required informational content of the report to the Department, as well as the content and permitted manner of notice to individuals, is described in detail in the Privacy Act.

Ÿ      The Department may seek and recover civil penalties of up to $500,000.00 for violations of the reporting and notice provisions of the Privacy Act by a “covered entity”. Only the Department can bring an enforcement action; however, the law expressly provides no private cause of action.

The December 4th edition of “The Law” will discuss bouncing checks in Florida. Questions may be submitted online to thelaw@clarkcampbell-law.com.

Litigation

How We Select Our Judges

By: Clark, Campbell, Lancaster & Munson, P.A.

Q: Polk County has recently seen judges appointed by governor and elected by the people. What is the process for judicial appointments, elections, and resignations?

A: The short but problematic answer is that trial court judges are elected by the people unless a vacancy arises (by resignation, by a judge being elevated to another court, or otherwise). This answer is problematic, because courts continue to grapple with how and when judicial resignations create a gubernatorial power of appointment.

For example, in March, Jacksonville’s Judge Donald R. Moran, Jr. tendered a letter of resignation to the governor, effective one business day prior to the end of the judge’s term this coming January. Days later, the Secretary of State received the first candidate submission. Once the governor accepted the resignation, however, the Division of Elections advised the candidate that the position would be filled by appointment rather than election, because the judge was resigning.

The timing of the letter and effective date were important. If the date the resignation letter is accepted by the governor predates the election process (i.e. candidate submissions), regardless of whether the effective date is later, the position is filled by the governor; otherwise, the election process continues. According to a 1970s Florida Supreme Court decision, however, if the judge resigns effective as of the end of his term, creating no actual vacancy, Florida favors elections.

An appeals court last month held that, even though the effective date of Judge Moran’s resignation created only a single business day of vacancy, there was no clear right to an election. The court’s Judge Philip J. Padovano, in dissent, expressed concern that such a ruling creates the potential for abuse; specifically, a judge could give the governor appointment power by resigning effective just hours before the end of his term or could strip the governor of that power by refusing to formally announce resignation until after the election process begins.

Above, I refer to how trial court judges get on the bench. Florida has also has an intermediary “court of appeals” and a “supreme court”. Judges on those benches are appointed by the governor after a nominating commission provides the governor with suggested candidates. Appeals and Supreme Court judges, like other judges in Florida, typically serve six-year terms and must go through a retention election process at the end of each term.

The October 23rd edition of “The Law” will address the sometimes confusing HOA covenants and restrictions.

Questions may be submitted online to thelaw@clarkcampbell-law.com.

Greening May Not Cost You So Much Green

By Justin Callaham, LL.M., Attorney 
Clark, Campbell, Lancaster & Munson P.A.

Q: Greening has decimated my small orange grove. How can I remove the trees but still retain the grove’s agricultural designation for property tax purposes?

A: Yes, you may be able to remove the trees and retain the land’s agricultural designation.

Greening, also known as huanglongbing or HLB, is a bacterial disease spread by flying insects known as psyllids. When HLB infects a grove, many growers scale back their maintenance regimen and all but abandon the infected grove. Removal of the trees, however, is the best way to prevent an infected, unproductive grove from becoming a breeding ground for psyllids and HLB. Many growers hesitate to push the grove due to the possible loss of the land’s agricultural designation for property tax purposes.

In recognition of this problem, the Florida legislature adopted § 193.461(7)(a) which allows land to retain its agricultural designation for property tax purposes if the land was taken out of agricultural production by a state or federal eradication or quarantine program. Additionally, the Citrus Health Response Program, an initiative developed by the Florida Department of Agriculture and Consumer Services, declares that much of the State of Florida is quarantined due to the presence of HLB. Taken together, §193.461(7)(a) and the Citrus Health Response Program allow growers to remove trees from an infected and unproductive grove while retaining the land’s agricultural designation.

If your grove is infected with HLB and you are interested in completely removing the trees, start by contacting your local Citrus Health Response Program office and requesting a Site Report. Next, execute a CHRP Abandoned Grove Compliance Agreement. Once you receive the Site Report, submit the Site Report and an executed CHRP Abandoned Grove Compliance Agreement to your local property appraiser before the March 1 statutory deadline. If your grove is currently designated as agricultural for property tax purposes, you will not be required to file a new application. However, if your grove is not currently designated as agricultural for property tax purposes, submit an application for such designation along with the Site Report and CHRP Abandoned Grove Compliance Agreement.

The October 9th edition of “The Law” will address the sometimes confusing process of the appointment and election of judges. Questions may be submitted online to thelaw@clarkcampbell-law.com.

Litigation

Subpoenas

By Joseph A. Geary, Attorney
Clark, Campbell, Lancaster & Munson, P.A.

Q: My business has been served with a civil subpoena demanding business records. What should I do?

A: When a Florida business, large or small, is served with a subpoena in a civil action demanding records of the business, there are certain “do’s” and “don’ts” that business owners should follow:

  1. DO read the subpoena. Every page. Carefully. What records are demanded? When, where and how are you asked to produced the records? Next week? In another county or state? Physically or electronically? How much time have you been given to respond? A subpoena may seek records that contain, for example: employee information protected by privacy laws (such as HIPAA); financial data, trade secrets or other information you don’t want publicly known; records containing confidentiality agreements you might violate if you produced them. A subpoena might also ask you to produce data that is electronically stored (e-mails, for example) and in a specific file format.
  1. DON’T assume the subpoena has been properly issued or served, or that the lawyer responsible for issuing it has “followed the rules.” All jurisdictions have laws and court rules specifically governing both the issuance and the service of subpoenas, as well as what records can be sought, and where, how, and when you are to produce them. Your business may be entitled to the protections the law affords.
  2. DON’T ignore the subpoena or put off dealing with it. Treat any subpoena seriously. It is lawful process of the court, and can be enforced by that court by finding you in contempt and/or assessing attorney’s fees and court costs, if you wilfully disobey it.
  3. DO obtain legal advice promptly, if you have questions or concerns about the subpoena. In this context, ignorance is never bliss, and knowledge is usually power. A misstep could prove costly. A subpoena could be improper or objectionable for any number of reasons that might excuse or mitigate your obligation to obey it. However, you may not know what is proper or improper or, in the latter case, what you can do about it, if anything. The usual way to address an improper or overreaching subpoena is by a “Motion to Quash”, to be heard by a judge, filed in the court that issued the subpoena.

If your business is served with a subpoena, dealing with it proactively should always be a priority, never an afterthought.

The September 11th edition of “The Law” will address issues regarding estate planning. Questions may be submitted online to thelaw@clarkcampbell-law.com.

Breastfeeding

By: Clark, Campbell, Lancaster & Munson, P.A.

Q: My employee returned from maternity leave and must express milk regularly. What are my obligations when she requests a break and private space?

A: As an initial matter, the Florida Civil Rights Act considers pregnancy discrimination as sex discrimination. You cannot treat employees adversely because of pregnancy or the fact that they have children. A state public health statute recognizes breastfeeding as an “important and basic act of nature which must be encouraged”, and therefore mothers can breastfeed wherever they are otherwise permitted to be, regardless of whether breasts are covered.

Last month, the United States Equal Employment Opportunity Commission (EEOC) issued guidelines stating, among other things, that lactation is a pregnancy-related medical condition and that breastfeeding employees must have the same freedom to address lactation needs as coworkers would have to address “limiting medical conditions”. Accommodations need to be made. But to what extent?

The Patient Protection and Affordable Care Act (ACA) included an amendment requiring employers to provide both reasonable break time and a “shielded” location to express milk during the child’s first year. The employer does not need dedicated space, but the employer must make a suitable, private space other than a bathroom available upon request. The extra break time need not be compensated, provided that the employee is completely relieved of duty.

The protections of the amendment extend only to employers covered by the federal Fair Labor Standards Act (FLSA)—and whether your business meets that requirement could be the subject of a much longer article—but employers with fewer than fifty employees may be able to avoid the break time requirement if they can demonstrate that compliance would impose an undue hardship when looking at the difficulty or expense of compliance in comparison to the size, financial resources, nature, or structure of the business.

Earlier this year, the American Civil Liberties Union brought its first case under the ACA’s breastfeeding provision: a mother was forced to choose between lactation in a bathroom or a dirty locker room alongside dead bugs. It remains to be seen how courts will respond to increasing breastfeeding discrimination litigation, but it appears enforcement will primarily be by the EEOC as individual employees have difficulty bringing lawsuits for damages under the FLSA absent lost wages.

The August 28th edition of “The Law” will address responding to document subpoenas.

Questions may be submitted to thelaw@clarkcampbell-law.com.

Defamation by Blog & the First Amendment

By: Clark, Campbell, Lancaster & Munson, P.A.

Q: As a business owner, what recourse do I have against negative online reviews and scathing blog posts?

A: It has long been the case that business owners could seek and obtain monetary judgments against those whose lies about the business caused damage to the company. But the popularity of online business review sites as a guide for selecting restaurants and other services has opened the door for very public, published defamation that requires, for a remedy, something more than monetary relief. Specifically, if a dishonest, damaging review remains published or the author can continue to publish even after the money judgment is obtained, the reviews are likely to cause more damage in the future.

Earlier this year, a Florida appeals court dealt with online defamation in the context of a commercial landlord-tenant relationship. A former retail store tenant blogged about the landlord being “the most immoral human-being in the world” and “tak[ing] bread from [a] little Jewish special needs child to support their luxury lifestyle.” The blogger further warned that doing business with the landlord would jeopardize “your business, your investment, [and] your ideas.” The landlord sued for defamation, interference with business relationships, and even stalking. When considering whether the landlord could obtain a preliminary court order to stop further defamatory blogging, the court gave heavy deference to First Amendment rights and declined to prohibit further blog entries even if clearly defamatory.

This result does not mean that takedowns of blogs and dishonest reviews are impossible. The court indicated that, if the business can show that the reviews “are having a deleterious effect” on current business, court orders to take down and prevent further publication could be appropriate. A landlord or other businessperson looking to go beyond a money judgment and, in fact, stifle a blogger’s posts must carefully navigate the First Amendment and make the appropriate showings that he is suffering actual, ongoing, but difficult to calculate losses. A customer simply indicating some concern about the review, but not specifically indicating that he is walking away from the business because of the review, is not enough.

The July 17 edition of “The Law” will address potential pitfalls in mergers and acquisitions.

Questions can be submitted to thelaw@clarkcampbell-law.com.

Will Must Be Equivocal As to Intentions

By: Clark, Campbell, Lancaster & Munson, P.A.

Q: Must I revise my will when I acquire new assets?

A: A well-crafted will need not be revised for each new asset, but, as at least one surviving brother learned, the intentions for such future-acquired property must be clear in the will.

On March 27, the Florida Supreme Court resolved the dispute over property that Ann Aldrich acquired after writing her will but before her death. Without an attorney, Aldrich used a universal legal form to draft her will. She listed out each of her known assets and indicated that all were to go to her sister or, if the sister died first, to her brother. The sister then died and left assets to Aldrich, who never revised her will but did later write and sign a note that indicated that all of her possessions (including the inheritance from her sister) would go to the brother.

Upon Aldrich’s death, her brother claimed Aldrich’s intent to give everything to the brother was clear: she had intended to list all of her assets in her will, she listed only one beneficiary (the brother), and she later signed a note to clarify that the brother would also get the assets acquired after the will was executed. But Aldrich’s nieces from her other, deceased brother claimed otherwise, noting that the will itself simply listed assets to go to the brother and did not clarify any intention of what might happen to other assets not listed.

The Court agreed with the nieces and limited itself to the four corners of the will, which was vague at best as to Aldrich’s intention. Aldrich should have included a general “residuary clause” to act as a catchall provision for the intentions as to all assets not specifically listed. Without such a clause, the law handles such assets using strict bloodline inheritance rules regardless of the will.

Planning your estate does not have to be difficult and can be effectively done in a single step without worrying about making changes with each asset. An attorney can help ensure that your intentions are clear in all of your estate planning documents.