The IRS has recently released this handy tool on their website www.irs.gov to help you in preparing your 2011 tax return.

Due to the fact that this credit originally started out as an interest free 15 year loan and then was later changed to an actual tax credit, filing your return for the next several years has become a challenging task.

If your purchase falls under the 15 year interest free loan, not reporting the correct information on your return will cause a significant delay in the IRS processing your tax return.

In order to determine your reporting requirements you will need the following information to use this look up tool.

1. Your Social Security number.
2. Date of birth
3. Home address.

This is certainly a good news, bad news message. That the cost of living for all of us, from food to commodities like gasoline, has gone through the roof over the past several years is no surprise and painful. That is clearly the bad news.

The good news is that the tax law provides for adjustments which mitigate some of the damage of ongoing rises in cost of living.

To review recent changes see a recent message from UHY, LLP at the following hyperlink.

IRS Announces 2012 COLA Adjustments

The USPTO will allow inventors to patent and trademark their intellectual property. The new office will benefit Detroit by adding over 100 high-paying, high-skilled jobs in the first year alone. Additionally, the office is expected to lift Michigan’s innovation economy.

The new office is named after Elijah J. McCoy, an African American inventor from Ypsilanti, Michigan. McCoy was the son of two escaped slaves from Kentucky, who escaped using the Underground Railroad to Canada, where McCoy was born. After graduating from high school in Ypsilanti, McCoy moved to Scotland where he studied engineering. McCoy held 57 patents. His most well known invention was the oil drip cup, which continuously fed oil to steam engines. Allegedly, this invention was the inspiration for the phrase “the real McCoy.”

Michigan law has different statutes of limitations for different causes of actions. For example, lawsuits for breach of contract have six-year limits, while lawsuits for personal injury cases must be brought within three years. Additionally, contracts for the sale of goods contain a four-year statute of limitations.

In a recent case, Fisher Sand and Gravel Co. v. Neal A. Sweebe, Inc., the Michigan Court of Appeals had to determine whether the six-year statute of limitations or the four-year statute of limitations applied to an open account for the sale goods. An open account is an account that is left open for ongoing debit and credit entries and that ahs a fluctuating balance until one party settles and closes the account, at which time there is only one liability. Generally, an open account is a contract separate from the underlying contract for goods or services.

In Fisher Sand and Gravel, the plaintiff filed its claim after four years of the breach of contract. The underlying contract was for the sale of goods. As a result, the Court of Appeals had to determine whether the four-year statute of limitations under the UCC or the six-year statute of limitations for contract actions applied. The plaintiff argued that the six-year statute of limitations applied because an open account is a separate and distinct contract than the underlying contract for the sale of goods.

The Court of Appeals rejected the plaintiff’s argument and held that the four-year statute of limitations applied, despite the open agreement being a separate contract. The court reasoned that the open account existed “solely to facilitate [the] sale of goods.” In other words, the open agreement was so closely related to the sale of goods, that the UCC applies. Additionally, the statutes setting the limitations periods must be read together. When there is a conflict between them, the more specific statute governs.  In this case, the UCC was the more specific statute and therefore it governed the transaction.

The Court of Appeals also noted that its ruling was consistent with court cases from other states and that the UCC’s purpose of promoting uniformity among states with respect to transactions in goods was met.

By this point virtually every business owner in Michigan has received a State mailing putting them on notice that they are looking for any unclaimed property businesses may hold. This can include uncashed vendor checks, uncashed payroll checks, customer overpayments, and inactive bank accounts, to name a few.

While this law has been on the books forever it’s only recently that the State has pushed to claim what, according to the law, is rightfully theirs. The reason is simple; they need the money.

For an excellent summary of the State of Michigan’s voluntary disclosure program see the following hyperlink.

Michigan Unclaimed Property

Under 28 USC § 1332(a), federal courts have jurisdiction where the parties are diverse and “the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs.” If the amount in controversy is not met, then the case will be remanded to the state court.

In Freeland v. Liberty Mutual Fire Insurance Co., the Sixth Circuit Court of Appeals interpreted § 1332(a) and ruled that the federal courts do not have diversity jurisdiction where the amount is exactly $75,000. In Freeland, there was a dispute over the amount of money that an insurance company was required to pay under a policy. The insurance company believed it was required to only pay $25,000, while the plaintiffs claimed that the insurance company was required to pay $100,000. The issue the court had to determine was whether the amount in controversy requirement under § 1332(a) was met.

The sixth circuit ruled that the federal courts lacked jurisdiction in the case because the amount in controversy did not exceed $75,000. Even though there was the potential for a $100,000 recovery by the plaintiffs, the amount in controversy did not exceed $75,000 because “the value of the consequences which may result from the litigation” was not more than $75,000. In other words, because it was undisputed that the plaintiffs were owed at least $25,000, but no more than $100,000, the value of the case was at most exactly $75,000.  To meet the jurisdictional threshold for federal court, the amount in controversy had to exceed $75,000 by at least a penny.  Since it did not, the court was obligated to remand the case back to the state court.

In Miller-Davis, the plaintiff, a general contractor, filed a breach of contract claim against the defendant, a subcontractor who was hired to rebuild the roof of a YMCA swimming pool. The Plaintiff alleged that the defendant’s work failed to conform to the contract’s specifications. The plaintiff did not file a tort claims against the subcontractor. The problems with the roof were so severe that the roof had to be replaced, which is how the problem was identified.

Because the lawsuit was filed over six years after the work had been performed, there was an argument as to whether the statute of limitations for breach of contract, or the statute of repose applied. The subcontractor argued that Michigan’s statute of repose protected it from actions “to recover damages for any injury to property, real or personal, or for bodily injury or wrongful death arising out of the defective and unsafe condition of an improvement to real property. …” Under the statute of repose, all claims must be filed within six years after occupancy. The plaintiff argued that the statute of repose did not apply because the claims were for breach of contract, not claims in tort.

Even though both statutes have six-year limitation periods, there is a significant difference between the two. Under the statute of repose, a claim accrues at the time of “occupancy of the completed improvement, use or acceptance of the improvement.” However, the statute of limitations for a breach of contract claim begins to run at the time the claim accrues.

The Michigan Supreme Court ruled that the statute of limitations for breach of contract applied because the claim was not a tort claim. The court noted that MCL 600.5839 “does not apply to a claim against an engineer or contractor for a defect in an improvement when the nature and origin of the claim is the breach of a contract.” The court ruled that the statute of repose applied only to tort actions.

The Supreme Court ruled that the claim did not fall under the statute of repose because:

There was no allegation that the roof deck system caused any “injury to property” or “bodily injury or wrongful death.” Nor was there any allegation of a “defective and unsafe condition.” Rather, plaintiff claimed that, because defendant failed to build the roof to the agreed-upon specifications, plaintiff was forced to expend money repairing it.

This case is significant because it narrows the scope of Michigan’s statute of repose exclusively to tort actions.

The IRS has recently announced that the deadline to file your 2011 tax return and pay any balance due has been moved to Tuesday April 17, 2012.

For more information on this and other matters impacting your 2011 tax filings please copy the following link into your web browser.

http://www.accountingtoday.com/news/IRS-Extends-Tax-Filing-Deadline-April-17-61316-1.html

The Employee Notice Rule is generally considered to be pro labor. The notice outlines the numerous rights under the National Labor Relations Act (NLRA). Among these rights are the right to organize, join, or form a union; strike or picket; as well as the right to complain directly to the employer. The notice also explains many of the restrictions placed on employers under the NLRA. For example, the notice states that it is illegal for employers to fire employees for threatening to close a workplace if a union is created, question employees about union support, or firing employees because they choose to join a union.

The NLRB agreed to postpone the implementation of the date at the request of a federal judge. The rule is currently the subject of litigation and the NLRB believes that postponing the effective date will help resolve the litigation.