Once a backyard hobby of Harry H.Smith in the 1930s, the FlowerwoodNursery of today employs over 600people throughout the southeast. Withproduction spread over Alabama,Georgia and Florida, the company sellsto retail giants Lowes and Home Depotas well as independent garden centersand re-wholesalers throughout theSouthern and Mid-Atlantic States.

Says Company President Greg Smith, Jr.“Our Company has always growntraditional nursery offerings such asbroadleaf evergreens, conifers, deciduousshrubs, grasses, groundcovers, trees andother perennials. And we continue tooffer these today. But in the mid-1990s,we realized there was a market for a nurserythat could not only grow traditionalproducts, but develop and manage newtypes of plant introductions. And thatsparked the formation of PlantDevelopment Services, Inc. ThroughPDSI, we have tried to develop plantswith unique performance attributes thatcould be patented, branded and then,most importantly, introduced to theconsumer market. We've been pleasedwith our progress.”

Rightfully so, as PDSI is now knownworldwide as a leader in horticulturalinnovation. The popularity of the Encoreand other PDSI brands has gotten theattention of Southern Living magazine.This premier southern lifestyle andentertainment publication has enteredinto an exclusive licensing agreementwith PDSI to develop and market acomprehensive collection of plants under

the Southern Livingbrand.

“Perhaps our bestknown brand is theEncore Azalea,” saysSmith. “The Encore isthe only azalea thatblooms three times ayear, and with 23 varieties we’ve got thesize, bloom color and growth habit that isperfect for any garden. And theKnockout Rose, of course, is anotherwell-known garden favorite. Its hardinessand beautiful blooms are hard to beat.”

Ellis Ollinger, Flowerwood’s CEO, saysthe Encore Azalea is only one of PDSI’sproducts that have been very successfulfor Flowerwood. “Flowerwood growsover 50 other patented plant varietiesthat PDSI has developed.” And he isquick to point out that their success didnot come by accident, but is the result ofa lot of hard work by a dedicated team ofemployees. Ollinger adds “Quality andintegrity are core values that have helped

us earn the respect of professionals fromall segments of the industry.”

It seems the world is now Flowerwood’sbackyard. CSB is proud to have assistedFlowerwood for many years with itsaccounting and tax needs, and we wishthem continued success. If you wouldlike more information, go towww.flowerwoodnurseries.com or call1-800-858-3521.

Ellis Ollinger, Winston Foster, Greg Smith

Client Spotlight on Flowerwood Nursery .1Americas Junior Miss . . . . . . . . . . . . . . . .2Ask the Tax Man . . . . . . . . . . . . . . . . . . . .3Team Member News & Braggin’ Rights . . .4CSB Tax Tidbits . . . . . . . . . . . . . . . . . . . . .5CSB Cares . . . . . . . . . . . . . . . . . . . . . . . . .62008 BGR . . . . . . . . . . . . . . . . . . . . . . . . .6Photos of The Gang . . . . . . . . . . . . . . . . .7

IN THIS ISSUE

VOLUME 9 • ISSUE 1 FALL 2008CROW SHIELDS & BAILEY, PC

Kenny CrowKristi DaughteryKatie O’ConnorDeborah MartinsenJohn Shields

Contributors

CLIENT SPOTLIGHT ON…FLOWERWOOD NURSERY

to the Newsletter

FALL 2008CROW SHIELDS & BAILEY, PC

2 CSB NEWSCSB NEWS

VISION STATEMENTOur firm’s objective is to maximize ourclients’ wealth. We strive to be the premieraccounting and consulting firm in our area byoffering a complete range of quality servicesto our clients. We will employ only the bestpeople and ensure outstanding training andlong-term career opportunities.

OUR TEAM MEMBERS

Auditing TeamJoey Bailey joeyb@csbcpa.comKatie O’Connor katieo@csbcpa.comMartin DeVaney martind@csbcpa.com

Bookkeeping TeamLisa Gonzalez lisag@csbcpa.comLa Nette Caskey lanettec@csbcpa.com

Business Development Consulting TeamKenny Crow kennyc@csbcpa.com

Tax TeamDebbie Schoppert debbies@csbcpa.comGina McKellar ginam@csbcpa.comGray McDermott graym@csbcpa.comJennifer Partain jenniferp@csbcpa.comJohn Shields johns@csbcpa.comKristi Daughtery kristid@csbcpa.comTim Adams tima@csbcpa.comJeremy Davidson jeremyd@csbcpa.comSherri Deighton sherrid@csbcpa.comCarrie Russell carrier@csbcpa.com

Support TeamBarb Frerman barbf@csbcpa.comDeborah Martinsen deborahm@csbcpa.comJeannie Biggs jeannieb@csbcpa.comBrenda Robinson brendar@csbcpa.comJennifer Brothers jenniferb@csbcpa.comDolores Breneman doloresb@csbcpa.comDiana Moore dianam@csbcpa.com

Mobile251/343-1012

800-347-8583 Fax: 251/343-1294

Gulf Shores251/968-4337 Fax: 251/968-8995

Visit our website atwww.csbcpa.com

The 51st Annual America’s JuniorMiss National Finals were held onSaturday, June 28th at the MobileCivic Center Theater. CSB has hadthe opportunity and pleasure to assistwith the AJM Finals competition formany years. Each year, fifty of thebrightest and most talented youngwomen come to Mobile for the AJMNational Finals. The mission of AJMis to emphasize education by providingscholarship opportunit ies tooutstanding high school girls and toencourage personal development.

More than 5,000 young womenparticipate at the local and state levelsof America’s Junior Miss each year.The young women are judged in thefollowing categories: Scholastics,Fitness, Talent, Self Expression andPersonal Interview. The class of 2008competed for a share of over$150,000 in cash scholarships.

The title of America’s JuniorMiss for 2008 was awardedto Utah’s Junior Miss,Lindsey Brinton. Sheimpressed the judges withher incredible scholastics,vibrant personality, andamazing piano performance.Lindsey plans to attendHarvard and pursue a careerin biomedical engineering.She was awarded $54,000 incash scholarships during theNational Finals.

The First Runner-up wasNorth Carolina’s JuniorMiss, Helen Ching. She

received $26,000 in cash scholarshipsduring the National Finals.California’s Junior Miss, JacquelineRotman, was selected as SecondRunner-up and received $20,000 incash scholarships during the NationalFinals.

CSB once again had the honor andprivilege of tabulating the judges’votes during the three-day 2008 AJMFinals competition. The class of 2008was made up of fifty very intelligent,personable and talented youngwomen. CSB was grateful that wehad the task of tabulating the scoresand not the daunting task of judgingthis admirable group of youngwomen. We had a wonderfulexperience and thoroughly enjoyedparticipating again this year. We lookforward to next year’s competition tobe held June 25th, 26 and 27 inMobile. Mark your calendars now!

2008 AMERICA’S JUNIOR MISS

Kenny Crow and Gina McKellar with 2007America’s Junior Miss Nora Ali at CSB office

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3CSB NEWSCSB NEWS

ASK THE TAX MAN...Dear Tax Man,I’m considering a change ofhair style. I know you’re notan expert on this, Tax Man.But you’ve been such aninspiration to me for so manyyears on tax matters that I mustseek your counsel on this issue aswell. You know how “big hair”has made a comeback, whatwith Amy Winehouse andother celebrities sporting the“beehive” look? Well, a littlemakeover never hurt anybody,and I figure maybe it's time forme to take the big-hair plunge.TM, I'm in need ofsome affirmationbefore I take this bigstep! Please help.

Sign me,Wannabeehive

Dear Bee,As you point out, hair fashion is not exactly myarea of concentration. So I think it best for all concerned if Igive your coifing conundrum a wide berth. But funny thing,this re-emergence of big hair brings to mind an interestingcorrelation between fashion and the tax law: each changesfrequently, and each repeats itself every few years.

You see, we thought that big Section 179 deductions andbonus depreciation had pretty much disappeared. But alas,much like big hair, these tax breaks are back for 2008! As YogiBerra would say, it's “déjà vu all over again.”

Earlier this year Congress passed the Economic Stimulus Actof 2008, increasing the limitation on expensing depreciableassets and providing for bonus depreciation on newequipment. The Act provides an increase in the expensededuction limitation under Code Sec. 179 from $128,000 to$250,000, for assets placed in service in tax years beginningafter 12/31/2007 but before 1/01/09. The 50% bonusdepreciation is allowed on qualified assets placed in serviceafter 12/31/2007 and before 01/01/2009.

The bonus depreciation is allowed generally on all new tangiblepersonal property that is used in a trade or business exceptinventory. Bonus depreciation for personal property used inareas affected by Hurricane Katrina (the Gulf OpportunityZone or “GO” Zone) had expired by the end of 2007, but the

Economic Stimulus Act now allows taxpayers to take itthroughout the United States. Furthermore, remember thatKatrina legislation bonus depreciation for nonresidential andresidential real property located in the GO Zone is availablethrough 12/31/2008.

The new law also raises the Code Sec. 280F limitations on“luxury” automobile depreciation. Ordinarily, first-yeardepreciation for passenger automobiles is capped at $3,060(inflation adjusted). That cap has been raised by $8,000 to$11,060 for first-year depreciation. And for vehicles weighingover 6,000 pounds that escape the “passenger automobile”definition, the first year deduction can be much larger, using a$25,000 Sec. 179 expense plus 50% bonus depreciation. For

example, on a $50,000 vehicle used 100% forbusiness, up to $40,000 of depreciation may beclaimed in the first year.

If you want more details on the EconomicStimulus Act of 2008, please go to www.csbcpa.com and clickon “links” to get to the full text of the law. Of course, you maycertainly call one of the professionals at CSB with anyquestions. Remember that tax laws are complicated, and youshould consult with your advisor before taking any action.

Bee, your mention of Ms. Winehouse got me to humming afew bars from her popular tune about addiction entitled“Rehab.” I'm sure you're familiar with the lyrics in the song’splaintive refrain: “They tried to make me go to rehab, I saidno, no, no. Just try to make me go to rehab, but I won't go,go, go.”

And you know what? Sounds crazy, but it reminds me of theaddicts in the U.S. Congress. Their addiction, of course, is tocomplex tax laws. And trying to change an addict is useless, asweary taxpayers have found out after decades of pleading withlawmakers for simplification. Congress always has the sameresponse: “You asked for simple income tax laws, but we saidno, no, no. Just try to make us go and fix it, but we won’t go,go, go.”

Hey Bee, best of luck in your styling adventure. And if you doend up with a hive on top, may you never have a bad big-hairday.

Sincerely yours,

Tax Man

FALL 2008CROW SHIELDS & BAILEY, PC

4 CSB NEWSCSB NEWS

TEAM MEMBER NEWS AND BRAGGIN’ RIGHTSTim and Gretchen Adams are expecting their second childin December.

Michael Bailey, son of Joey and Connie and a student atMcGill-Toolen Catholic High School, was among 100Alabama high school students selected to attend theUniversity of Alabama’s Capstone Leadership Academy.Additionally, Michael is Vice-President of the Junior Class atMcGill-Toolen and serves as a Student Ambassador for bothMcGill-Toolen and the Ronald McDonald House (Red ShoeCrew).

Mary Catherine Bailey, daughter of Joey and Connie, is aMcGill-Toolen Student Ambassador and Ronald McDonaldHouse Ambassador (Red Shoe Crew).

Dolores Breneman joined CSB’s administrative team inAugust. Dolores comes to us with over 20 years experience inan accounting environment. She is married to Ray and theyhave one daughter, Alicia Breneman and one grandson,Christopher Harpinger.

Jennifer Brothers and husband Jonathon are expecting twingirls in February.

La Nette Caskey joined CSB in July as our new bookkeeper.La Nette has over thirty years of experience in bookkeepingand accounting. She is married to Jess Caskey and they havetwo daughters and four grandchildren.

Louise Crow, daughter of Kenny and Marty and a junior atthe University of Alabama, is a recipient of Kappa Deltasorority’s Corre Anding Stegall Leadership Award.

Kristi and Brian Daughtery are expecting a baby girl inOctober.

Sherri Deighton joined our tax team in September andbrings over 20 years of experience to the firm. She is marriedto Joe Deighton who is the Vice President of Student Affairsat Spring Hill College and they have two children Tim andJacob.

CSB welcomes new accountant Martin DeVaney. Martingraduated from Birmingham Southern College in May witha BS degree in Accounting and is working on our audit team.

Congratulations to Barb Frerman. Her first grandchild,Ava Marie Frerman, was born on July 22, 2008. Sheweighed 7 pounds and was 20 inches long.

Diana Moore joined CSB’s Gulf Shores administrative teamin September. Diana has several years experience in anadministrative environment. She is married to Lance andthey have two daughters, Melissa and Amanda.

Brian Russell, son of Gina McKellar, graduated fromMcGill-Toolen Catholic High School in May and isattending the University of Alabama.

Emilee Shuler, daughter of Deborah Martinsen, graduatedin the top ten percent of her class at Baker High School inMay. Emilee is attending the University of SouthernMississippi where she received both academic and vocalscholarships.

Stephen Ritter, son of CSB clients Randy and Cindy Ritter,and Henry Shields at Dauphin Island. Nice Red Snapper,boys!

Did You Know???The IRS raised the mileage rate

from 50.5 cents to 58.5 cents

per mile for all business

miles driven from

July 1, 2008 through

December 31, 2008

FALL 2008CROW SHIELDS & BAILEY, PC

5CSB NEWSCSB NEWS

While the 2008 economic stimuluspayments (also known as tax rebates, butnot to be confused with refunds) havemade most of the tax news headlines thisyear, there have been many otherimportant federal and Alabama incometax developments. In fact, there havebeen so many that it's likely you have notbeen able to keep up with all of them.We'd like to highlight some of the moreimportant developments for you. Asalways, if you have any questions aboutthese developments, or any others, pleasegive our office a call or drop us an email.

FEDERAL

Stimulus payments. If you were due astimulus payment for 2008, you haveprobably already received it by now. TheIRS based the distribution schedule forthe 2008 economic stimulus paymentson the last two digits of the recipients’Social Security number. Electronicdeposits started May 2 and paper checksstarted going in the mail on May 16.

While your income may be too high toreceive a payment, keep in mind that youmay know people who do qualify. Forexample, seniors on fixed incomes wouldlikely qualify. However, to receive aneconomic stimulus payment, they mustfile a 2007 return. If they don’t, they'llmiss out on a payment.

If you want to see if you qualify for a taxrebate, you may go to www.csbcpa.com,click on “links”, and then on “Tax RebateWebsite” under “Tax Links.” Also, if weprepared your 2007 individual incometax return, we should have indicated inyour instruction letter the amount of taxrebate you could expect to receive. TheInternal Revenue Service is anotherwebsite that you may link to from ours,and it contains a lot of information onthe 2008 rebates.

2008 Standard Mileage Rates. Thestandard mileage rate for business

mileage changed on January 1, 2008 to50.5 cents per mile (from 48.5 cents in2007), and then increased 8 cents to itscurrent 58.5 cents on July 1, 2008. Onthe same date, Medical and movingmileage rates also increased to 27.0 centsper mile each. Mileage for charitablepurposes remained at 14.0 cents.

Audits. Everyone wants to know who theIRS is auditing but the agency rarelygives any details. However, it announcedin January that one out of 11 millionairesfaced an audit in 2007. More than30,000 millionaires were audited in 2007compared to 17,000 in 2006. Moreover,audits of all individuals across all incomelevels increased in 2007.

The IRS reported that the total numberof individual returns audited in 2007 was1.38 million compared to 1.29 million in2006. The IRS also announced thataudits of S corporations and partnershipsrose in 2007 but audits of largecorporations fell.

Housing news. The housing slump ishitting many communities very hard andlast year Congress gave homeowners inforeclosure some relief. A new law, theMortgage Forgiveness Debt Relief Act of2007, allows taxpayers to exclude fromincome the debt forgiven on their principalresidence if the loan balance was less than$2 million. In February, the IRS issued arevised form to report mortgage debtforgiveness.

The housing downturn also has manyindividuals wondering if they can selltheir vacation properties. One alternativeto selling is a like-kind exchange. Also inFebruary, the IRS announced new rulesfor like-kind exchanges of vacationhomes. The IRS will not challenge avacation home as qualifying for purposesof Code Sec. 1031 as property held forproductive use in a trade or business orfor investment if the home is onlyoccasionally used by the taxpayer for

personal use and is predominately usedto generate rental income.

Vehicle Depreciation limits. In March,the IRS announced the depreciationlimits for business automobiles, trucksand vans first placed in service in 2008.The 2008 amounts for passengerautomobiles are $2,960 for the first taxyear ($10,960 for passenger automobilesqualifying for 50 percent first-year bonusdepreciation under the EconomicStimulus Act of 2008); $4,800 for thesecond tax year; $2,850 for the third taxyear; and $1,775 for each tax yearthereafter.

The 2008 amounts for trucks and vansare $3,160 for the first tax year ($11,160for trucks and vans qualifying for 50percent first-year bonus depreciation);$5,100 for the second tax year; $3,050for the third tax year; and $1,875 foreach tax year thereafter.

Bonus Depreciation and IncreasedSection 179 Expensing. As we havediscussed in a letter sent to clients earlierthis year, and also covered in “Ask the TaxMan” in this newsletter, 50% bonusdepreciation and large Section 179expensing are available for 2008. A copyof the letter can be found on our websiteunder “links.”

Trusts and Estates. In January, theSupreme Court decided an importantcase which placed limits on the deductionsfor investment advisory fees and othercosts paid by trusts and estates. Shortlyafter the Supreme Court's ruling, the IRSannounced interim guidance. Under theinterim guidance, trusts and estates maytemporarily disregard the unbundlingrequirement in the proposed regulations.Taxpayers will not be required to determinethe portion of a bundled fee that is subjectto the two percent floor under Code Sec.67(e) for any tax year beginning beforeJanuary 1, 2008.Continued on ........................page 8

CSB TAX TIDBITS

3

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6CSB NEWSCSB NEWS

Joey Bailey is a board member for Lifelines -Family Counseling Center of Mobile, Inc.This program was founded in 1958, andenvisions building strong families to sustain ahealthier community. By helping individualslive more productive lives through caring,counseling and education, the agency hasassisted over 36,000 community members in2007. Lifelines comprehensive programsinclude:

• The Family Counseling Center providescounseling from licensed therapists and socialworkers for individuals, families and childrendealing with depression, family problems,marital issues, stress, divorce and child behaviorproblems. Call 602-0909 for more information.

• Consumer Credit Counseling Serviceprovides preventive and rehabilitativeprograms through professional, certifiedcounselors to assist clients struggling withfinancial issues. The programs include helpwith money management and budgeting,credit card problems, debt repayment plans,credit & divorce, delinquent mortgages orrent, bankruptcy and housing counseling andforeclosure prevention. Call 602-0011 formore information.

• The Rape Crisis Center provides counseling,hospital and court advocacy and supportgroups for rape victims & their loved ones.These services are provided at no cost tovictim or family member. Whether immediatelyafter the rape or long after, staff and volunteervictim advocates are available to help 24hours / 7 days. The Rape Crisis Center alsooffers prevention education programs toschool age youth on bullying, unhealthyrelationships, date rape/date rape drugs, therole of the bystander and other violenceprevention programs.

In 2007, RCC assisted 293 victims and theirfamilies and provided 557 preventionprograms to 16,231 students andcommunity members. A juvenile angermanagement program is a group available forat-risk middle and high school youth andtheir parents dealing with the frustrationsand pain of growing up. Formore information,call 431-5100 or 473-7273.

• Helpline/United Way 211 is a confidentialinformation and referral resource whichconnects and directs individuals in need tocommunity agencies and services providing ahelping hand and crisis prevention/intervention,including suicide. In December 2006, thisprogram received the contract from UnitedWay to provide United Way 211 to thecommunity. 211 is a three digit number usedto connect the community to health andhuman service programs in the community.With over 700 programs in the database,United Way 211 covers Mobile, Washingtonand Clarke counties. For more information,call 211 or 431-5111.

As a United Way agency, Lifelines services areavailable to all community members.Therapists and counselors are licensed andcertified in their respective fields. The agencyis accredited by the Council on Accreditationfor Children and Families.

CSB cares about our community and we areproud to be affiliated with a worthwhileprogram such as Lifelines. If you would likemore information, please contact DirectorChandra Brown at 251/602-0909 or visittheir website at www.lifelinesmobile.org.

In July, we started our seventh season ofBGR. We have a diverse group of attendeesincluding the following industries:construction, retail, legal, marketing andadvertising, exterminating and insurance.

This group is learning how to work “ON”their business so they won't have to work“IN” it. This process can take a long timebut the thing that separates these businessowners from others is that they know thereis a better way to run their business andthey are searching for the right answers.They want to enhance their quality of life

by learning to manage the moving partsproactively to improve decision makingand eliminate anxiety and stress. This is aprocess and requires patience andendurance but BGR is a great place tostart.

The monthly topics have led to livelydiscussions about best practices. We are alllearning from each other as we relatepersonal experiences with the rest of thegroup. The BGR experience drives us tothink outside the box and look at ways totweak what we are doing by trying new

ideas. It’s the realization that if we keepdoing the same thing that we are going toget the same result.

Some of our monthly BGR topics includepricing, customer service, cash flow,benchmarks, team building, timemanagement and, of course, improvingyour bottom line. If you think you wouldlike to join us, please call or email me(kennyc@csbcpa.com) and we’ll get yousigned up. We have quite an impressivealumni group and we can provide contactinformation should you desire.

Businesses Getting Results 2008 by Kenny Crow

CSB CARESLifelines - Family Counseling Center of Mobile, Inc.

WINTER 2006CROW SHIELDS & BAILEY, PC

7CSB NEWSCSB NEWS

CROW’S NEST TOO OUTING

Josh, Ava and Kathryn Frerman watchinga New Orleans Saints game

Ashley Gonzalez with parents Lisa and Mikeat Jacksonville State Universitygraduation in December

Emilee Shuler and momDeborah Martinsen at BakerHigh School graduation

Mary Emily and John MorganDavidson, wife and son of Jeremy

Jonah Daughtery, son of Kristi and Brian

Jennifer and Jonathon Brothers Julia, Betsy and Gray McDermott

Captain Joey Bailey and Crew MemberDavid Gonzalez, son of Lisa

Dolores and Ray Breneman

Barb Frerman and Marty CrowJohn Shields and Kenny Crow...theartists..at CSB’s Annual Team Retreat

CSB interns Jerry Nowlin and StephenMcKinnell with 2007 America’s Junior

Miss Nora Ali

THE CSB GANG

3742 Professional ParkwayMobile, Alabama 36609

121 Cove AvenueP.O. Box 2405Gulf Shores, Alabama 36547

PRST STDU.S. PostagePAID

Mobile, ALPermit No. 1343

www.csbcpa.com

ALABAMAGroup Health Insurance "Super Deduction". Alabamaemployers with fewer than 25 employees may deduct 150% of theamount of health insurance premiums paid by the employer, aswell as the portion paid by the employees, such as for familycoverage.

Federal Tax Rebates not Taxable. The federal tax rebatesauthorized by the Economic Stimulus Act of 2008 are exemptfrom Alabama income tax.

No Bonus Depreciation or Enhanced Section 179 Deduction.The accelerated depreciation and Section 179 expensingprovisions allowed for federal purposes under the EconomicStimulus Act of 2008 will not be allowed for Alabama income taxpurposes.

Withholding on Alabama Real Estate Transactions. EffectiveFriday, August 1, 2008, Alabama began imposing a withholdingtax requirement on the sale or transfer of real property and relatedtangible personal property in Alabama by a "nonresident ofAlabama". The requirement only applies to transactions over acertain dollar amount, at a 3% or 4% rate depending on the typeof seller involved.

TIDBITS, CONT.