How Long Should Financial Documents Be Kept?

Fearing an IRS audit, people have been known to keep every shred of  paper, going back decades.  Professional organizer, Regina Leeds says that while there are financial documents you should keep for life, most only need to be kept for three years or less.

Safe to Shred
Unless it shows proof of a deductible expense, many documents and receipts can be shredded monthly or annually, says Leeds. For entrepreneurs, these include:

  • ATM receipts and deposit slips after they’ve been reconciled with your bank statement
  • Monthly and quarterly bank statements if year-end statements are received

Keep for Three Years
Material that supports tax returns should be saved for three years. Leeds says this might include:

  • Income-related documents, such as invoices, cash register tapes, credit card charge slips, bank deposit slips, 1099s and W2s
  • Proof of deductible purchases and expenses, such as receipts, invoices, cancelled checks, mileage logs, and credit card slips or statements
  • Receipts for charitable contributions

As businesses become more paperless, receipts and statements are often delivered online. Some information is available for a limited time, however. Make sure you check with your account holder to understand its policy, and save or print documents that might be needed in case of an audit.

While three years is standard, according to the IRS, it can perform an audit up to six years after taxes are filed if a “substantial error” is suspected. In the case of fraud, there is no limitation on an audit. Leeds says if you are worried about being audited beyond the three-year limit, you should hold your documentation longer.

Read the rest of the article by Stephanie Vozza at Entrepreneur.com.

If the IRS has contacted you regarding unpaid taxes, the Lawyer Referral Service of the New Hampshire Bar Association can help with a referral to an attorney who specifically handles IRS tax matters.  Call 603-229-0002 or request an online referral.  Assistance might also be found through the Low Income Taxpayer Project.

Jar of money labeled Taxes.

Setting Up an Online Business

Reprinted from SBA.gov.

Setting up your business on the Internet can be a lucrative way to attract customers, expand your market and increase sales. For the most part, the steps to starting an online business are the same as starting any business. However, doing business online comes with additional legal and financial considerations, particularly in the areas of privacy, security, copyright and taxation.

Rules and regulations for conducting e-commerce apply mainly to online retailers and other businesses that perform consumer transactions by collecting customer data. However, even if you do not sell anything online, laws covering digital rights and online advertising may still apply to you.

The Federal Trade Commission (FTC) is the primary federal agency regulating e-commerce activities, including use of commercial emails, online advertising and consumer privacy. FTC’s Online Advertising and Marketing provides an overview of e-commerce rules and regulations.

The following topics provide further information on how to comply with laws and regulations related to e-commerce.

Protecting Your Customers’ Privacy

Learn the necessary steps you should take to protect your customers from identity theft and other misuses of their personal information. Any business that collects personal or financial data either through online sales, credit reports or applications should understand these rules and regulations.

Collecting Sales Tax Over the Internet

If you a run business with a physical storefront, collecting sales tax is pretty straightforward: you charge your customers the sales tax required by the jurisdiction where your business is located. For example, if you operate a retail store in Nashville, Tenn., you collect both state and local sales taxes from customers buying merchandise at your store.

But suppose you start selling your products online. Does that mean you charge them the same sales taxes that you do to those coming into your store? It depends.

If your business has a physical presence in a state, such as a store, office or warehouse, you must collect applicable state and local sales tax from your customers. If you do not have a presence in a particular state, you are not required to collect sales taxes. In legal terms, this physical presence is known as a “nexus.” Each state defines nexus differently, but all agree that if you have a store or office of some sort, a nexus exists. If you are uncertain, whether or not your business qualifies as a physical presence, contact your state’s revenue agency. If you do not have a physical presence in a state, you are not required to collect sales taxes from customers in that state.

This rule is based on a 1992 Supreme Court ruling (Quill v. North Dakota, 504 U.S. 298, (1992)) in which the justices ruled that states cannot require mail-order businesses, and by extension, online retailers to collect sales tax unless they have a physical presence in the state. The Court reasoned that forcing sellers to comply with over 7,500 tax jurisdictions was too complex for sellers to manage, and would put a strain on interstate commerce.

Keep in mind that not every state and locality has a sales tax. Alaska, Delaware, Hawaii, Montana, New Hampshire and Oregon do not have a sales tax. In addition, most states have tax exemptions on certain items, such as food or clothing. If you are charging sales tax, you need be familiar with applicable rates.

Determining which sales tax to charge can be a challenge. Many online retailers use online shopping cart services to handle their sales transactions. Several of these services are programmed to calculate sales tax rates for you.

Digital Rights/Copyright

Personal data is not the only thing protected on the Internet. Digital works, including text, movies, music and art are copyrighted and protected via the Digital Millenium Copyright Act (DMCA). The DMCA offers a number of protections for information published to the Internet, as well as other forms of electronic information. Among its many provisions, the DMCA:

  • Limits Internet service providers from copyright infringement liability for simply transmitting information over the Internet. However, service providers, are expected to, upon notification, remove material from its web sites that appear to constitute copyright infringement.
  • Limits liability of nonprofit educational institutions for copyright infringement by faculty members or graduate students.
  • Makes it a crime to circumvent anti-piracy measures built into most commercial software. However, reverse engineering of copyright protection devices is permitted to conduct encryption research, assess product interoperability, and test computer security systems.
  • Provides exemptions from anti-circumvention provisions for nonprofit libraries, archives, and educational institutions solely for the purpose of making a good faith determination as to whether they wish to obtain authorized access to the work.
  • Outlaws the manufacture, sale or distribution of devices used to illegally copy software.
  • Requires that “webcasters” pay licensing fees to record companies.

The Lawyer Referral Service of the New Hampshire Bar Association can refer you to attorneys who specifically handle e-commerce matters.  Call 603-229-0002 or request a referral.

New Guidance on Using Criminal Background Checks

In a press release dated April 25, 2012, the EEOC Commission issued enforcement guidance on employer use of arrest and conviction records.

PRESS RELEASE
WASHINGTON — The U.S. Equal Employment Opportunity Commission (EEOC) today issued an updated Enforcement Guidance on employer use of arrest and conviction records in employment decisions under Title VII of the Civil Rights Act of 1964, as amended (Title VII). The Commission today voted 4-1 to approve the guidance document.  The Commission also issued a Question-and-Answer (Q&A) document about the guidance. The Enforcement Guidance and Q&A document will be available on the EEOC’s website at www.eeoc.gov.

“When the Commission met publicly to discuss this subject in July, 2011, I said that I hoped the meeting would help to inform the Commission’s consideration of revisions to existing EEOC guidance.  We had excellent testimony from two public meetings and hundreds of written comments submitted by a diverse group of commenters to inform our deliberations concerning the new guidance,” said EEOC Chair Jacqueline A. Berrien.  Chair Berrien added, “The new guidance clarifies and updates the EEOC’s longstanding policy concerning the use of arrest and conviction records in employment, which will assist job seekers, employees, employers, and many other agency stakeholders.”

While Title VII does not prohibit an employer from requiring applicants or employees to provide information about arrests, convictions or incarceration, it is unlawful to discriminate in employment based on race, color, national origin, religion, or sex.  The guidance builds on longstanding guidance documents that the EEOC issued over twenty years ago.  The Commission originally issued three separate policy documents in February and July 1987 under Chair Clarence Thomas and in September 1990 under Chair Evan Kemp explaining when the use of arrest and conviction records in employment decisions may violate Title VII.  The Commission also held public meetings on the subject in 2008 and 2011.  The Enforcement Guidance issued today is predicated on, and supported by, federal court precedent concerning the application of Title VII to employers’ consideration of a job applicant or employee’s criminal history and incorporates judicial decisions issued since passage of the Civil Rights Act of 1991.  The guidance also updates relevant data, consolidates previous EEOC policy statements on this issue into a single document and illustrates how Title VII applies to various scenarios that an employer might encounter when considering the arrest or conviction history of a current or prospective employee.  Among other topics, the guidance discusses:

  • How an employer’s use of an individual’s criminal history in making employment decisions could violate the prohibition against employment discrimination under Title VII;
  • Federal court decisions analyzing Title VII as applied to criminal record exclusions;
  • The differences between the treatment of arrest records and conviction records;
  • The applicability of disparate treatment and disparate impact analysis under Title VII;
  • Compliance with other federal laws and/or regulations that restrict and/or prohibit the employment of individuals with certain criminal records; and
  • Best practices for employers.

The materials for the public meetings held on the use of arrest and conviction records, including testimony and transcripts, are available at http://eeoc.gov/eeoc/meetings/index.cfm.

The EEOC enforces federal laws prohibiting employment discrimination.  Further information about the EEOC is available on its web site at www.eeoc.gov.

The Lawyer Referral Service of the NH Bar Association can refer you to qualified and experienced attorneys to assist you with your employment law issues.  Call 603-229-0002 or request a confidential online referral.

 

Does Your Business Own Its Social Media Accounts?

When an employee creates and maintains a social media account on behalf of his/her employer, what happens to the account(s) when the employee is terminated or resigns?

The world is closely watching a federal case in the Northern District of California where a mobile news and reviews resource company, Phonedog, is suing a former employee Noah Kravitz (or independent contractor, depending on what news report you read) over who owns a Twitter account that was started in association with PhoneDog, and is now being used by Kravitz as his own Twitter account. The issues drawing so much attention include who owns a social media account – the employee who posts on it, or the employer on whose behalf the employee was posting. The other issue is what value, if any, can be placed on Twitter followers (or, by analogy Facebook likes), when social media attracts people who are portable and not “owned” by the social media account.

The crux of the lawsuit is that Kravitz was paid as a product reviewer and video blogger for PhoneDog from April 2006 through October 2010, and that this position included posting tweets on a Twitter account called @PhoneDog_Noah. After Kravitz left PhoneDog, he changed the name of the account to @noahkravitz, and kept its followers instead of relinquishing the account and its followers over to PhoneDog as was requested of him.

Michelle Sherman, Esq.  at JDSupra.com gives the following advice to employers:

In general, companies should to the greatest extent possible register social media accounts in their own names or through a senior marketing person and/or social media manager if the account needs to be in the name of a person. Further, on social media accounts such as Facebook pages, where you can have more than one administrator, companies should take advantage of this option and have several administrators. Having several administrators, and asserting control over the account, is another way to demonstrate “ownership” of the account, and also avoid some of the problems experienced by PhoneDog.

Read the full article by Michelle Sherman, Esq.

If you are an employer with questions about issues regarding your employees, past and present, the Lawyer Referral Service of the NH Bar Association can refer you to competent, licensed and insured attorneys who specifically represent employers. Call 603-229-0002 or request an online referral.

Can I Be Fired While On Maternity Leave in NH?

According to the NH Commission for Human Rights, you cannot be fired or laid off while on maternity leave if it’s related to your temporary disability; however, you may be fired or laid off from a general and legitimate lay-off for performance requirements.

What else does the Commission say about the rights of pregnant employees?

1. Is a pregnant woman entitled to maternity leave?

Yes, an employer must grant a female employee leave for the period of time she is physically disabled due to pregnancy, childbirth or related medical conditions.

2. Is there a set period of time for maternity leave?

No, there is no set period of time for maternity leave. It is based on the period she is disabled as determined by a physician, usually the employee’s personal doctor.

3. Is the employee entitled to full pay while on maternity leave?

The general rule is that pregnancy must be treated in the same manner that the employer treats other temporary physical disabilities. Therefore, if the employer continues to pay other temporarily disabled employees, it must pay pregnant women. If the employer requires use of vacation and/or sick leave for temporary disabilities, then it may require the same for pregnancy.

4. Is the employee entitled to her job back after she recovers from childbirth?

When the employee is physically able to return to work, her original job or a comparable position must be made available to her by the employer unless business necessity makes this impossible or unreasonable.

5. If the position is filled by another employee while the original employee is on maternity leave and the employer prefers the temporary replacement, can the employer refuse to provide the original job for the returning employee?

No, any change in position for the returning employee must be made for reasons of business necessity. An employer’s preference for one employee over the other cannot be a factor in this decision.

6. Can an employee be laid off or fired while pregnant or on maternity leave?

No, an employee cannot be laid off or fired while pregnant or on leave for reasons related to her temporary disability. However, an employee while pregnant or on maternity leave is not immune from a general and legitimate lay off of employees for performance requirements.

To find out more about rights for pregnant employees, go to the NH Commission for Human Rights.

If you believe you have been discriminated against by your employer because of your age, sex, sexual orientation, race,  physical or mental disability,  religion or pregnancy status, contact the Lawyer Referral Service.  LRS can refer you to competent attorneys who specifically handle discrimination matters in New Hampshire.  Call 603-229-0002 or request an online referral.

Consumer & Business Alert – Fake BBB Email

    Better Business Bureau Alert – 11/23/2011

 

Important Alert!


For Immediate Release

 

The Better Business Bureau has received several calls this morning regarding a “complaint email” that businesses are receiving. The email states that this is regarding a pending complaint with the BBB from either services@bbb.org or alert@bbb.org. These email addresses are not connected with the BBB. We have confirmed that this is an email Phishing Scam. It has been sent to businesses across the country.
 

If you receive one of these emails DO NOT open any attachment found within the email. The body of the email asks recipients to respond to the complaint by directing them to a link shown as our national website at http://www.bbb.org.  This link is actually disguised to go to a third party website and may be malicious.

 Because the message is fraudulent, the BBB advises any business that receives this email to take the following steps:

  • Do not click on any links or reply to the message,
  • Completely delete the message from your inbox and/or forward it to phishing@council.bbb.org, and
  • Run a full virus scan on your computer if you did click on any links.

Read Full Alert

If you are the victim of an internet scam, the Lawyer Referral Service can refer you to competant attorneys who specifically handle internet scam issues.  Call LRS today at 603-229-0002 or request an online referral

How to Start a Business in New Hampshire

“The New Hampshire Business Resource Center and the International Trade Resource Center offer resources to enhance the economic activities of the state through business attraction outreach, in-state business expansion efforts, and facilitation of government and international sales.”

For more information and links to many resources such as Business Assistance Programs, Emergency Management Tools, and Energy Efficiency Programs, go to the NH Business Resource Center  at  www.nheconomy.com/business-services/start-a-business-in-nh/.

Whether starting a small home-based business or a corporation, your business must comply with state laws and regulations. There may be licensing and permit requirements to consider, or zoning and environmental regulations. If you plan to hire employees you also need to be aware of federal and state labor laws regarding benefits and wages, and discrimination.

The Lawyer Referral Service can refer you to an attorney who can assist you in starting your business, from sole propietorships to corporations and franchises. For more information call 603-229-0002 or fill out the Lawyer Referral Request Form at

https://www.newhampshirelawyerreferral.com/contact-us