tax law - virginia state bari think you’ll agree - probably not the best approach. employee...
TRANSCRIPT
Feature articles onTax Lawand
Petitioning for Further Review
Discovery and Technology
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Employee benefits specialists dedicated to the needs of Virginia law firms.
October 2015Volume 64/ Number 3
The Official Publication of the Virginia State Bar
Virginia Lawyer
Features
NoteworthyVSB NEWS
46 NOTICE: Check Your MCLE HoursOnline Now
46 Upcoming Solo & Small-FirmPractitioner Forums
47 Bar Leaders Institute
PEOPLE
45 Mr. Smith Goes to Chicago
47 Local and Specialty Bar Elections
48 In Memoriam
48 YLC Honored
Departments6 Letters
18 Law Stories
39 2016 High School Essay ContestExplores a School’s Right to AccessStudents’ Secrets
44 Access to Legal Services
53 CLE Calendar
61 Professional Notices
62 Classified Ads
Columns8 President’s Message
10 Executive Director’s Message
49 Law Libraries
50 Technology and the Practice of Law
51 Risk Management
GENERAL INTEREST13 Petitioning for Further Review after
Losing a Federal Appealby Tillman J. Breckenridge
16 VACA Launches Innovative Best PracticesProgram with Law Schoolby Deirdre Norman
17 Gateway Plaza: A Clean, Well-Lighted Place
VIRGINIA LAWYER REGISTER
57 Disciplinary Proceedings
58 Disciplinary Summaries
59 Notices to Members
59 MCLE Compliance
59 Pro Bono Conference andCelebration
59 Carrico Professionalism Award
59 Immigration CLE
59 Comments Sought on ProposedAmendments to JCEC Policy
59 Criminal Law Seminar
59 Law In Society Contest
60 Nominations Sought forDistrict Committee Vacancies
Cover and illustrations by Madonna Dersch
TAX LAW21 Tax Law
by David S. Lionberger
22 Affordable Care Act and the IRS: Implementationand Now Enforcementby Nancy Porcari Rossner and Timothy L. Jacobs
26 Be Aware of Differing Worker Classification TestsApplied by DOL and IRSby Joshua D. Kelly and David S. Lionberger
30 Everything Old Is New Again: The VirginiaDepartment of Taxation’s Attempt to Ignore the Limits of Collectionby Guy C. Crowgey, Robert H. Johnson, andBrockenbrough A. Lamb
34 Recent Supreme Court of Virginia DecisionsDemonstrate the Urgent Need for New TaxRegulations by Craig D. Bell and J. Christian Tennant
40 Here Be Dragons—and Opportunities: The Uncharted Tax Waters of Your Company’s or Your Client’s First Foreign Acquisition by Anna Derewenda
Virginia State Bar Staff DirectoryFrequently requested bar contact
information is available online at
www.vsb.org/site/about/bar-staff.
http://www.vsb.org
Editor:Gordon Hickey ([email protected])
Advertising: Dee Norman
Graphic Design:Caryn B.Persinger ([email protected])
Illustration:Madonna G. Dersch([email protected])
VIRGINIA LAWYER (USPS 660-120, ISSN 0899-9473)
is published six times a year by the Virginia State Bar,
1111 East Main Street, Suite 700, Richmond, Virginia
23219-0026; Telephone: (804) 775-0500. Subscription
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and the authors do not render any legal, accounting,
or other professional service. It is intended for use by
attorneys licensed to practice law in Virginia. Because of
the rapidly changing nature of the law, information
contained in this publication may become outdated. As
a result, an attorney using this material must always
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authors, the reviewers, or the publisher be liable for
any direct, indirect, or consequential damages resulting
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Virginia LawyerThe Official Publication of the Virginia State Bar
2015-16 OFFICERSEdward L. Weiner, PresidentMichael W. Robinson, President-electKevin E. Martingayle, Immediate Past President Karen A. Gould, Executive Director and Chief Operating Officer
EXECUTIVE COMMITTEEEdward L. Weiner, Fairfax, PresidentMichael W. Robinson, Tysons Corner, President-electKevin E. Martingayle, Virginia Beach, Immediate Past PresidentBrian L. Buniva, RichmondMarni E. Byrum, AlexandriaNancy C. Dickenson, AbingdonLeonard C. Heath, Jr., Newport NewsMichael HuYoung, RichmondDaniel L. Rosenthal, RichmondJack “JB” W. Burtch, Jr., Richmond, CLBA ChairProvidence E. Napoleon, Richmond, Diversity Conference ChairRobert T. Vaughan, Jr., Danville, SLC ChairNathan J. Olson, Fairfax, YLC President
COUNCIL
1st CircuitNancy G. Parr, Chesapeake
2nd CircuitSteven G. Owen, Virginia BeachJudith L. Rosenblatt, Virginia BeachDaniel M. Schieble, Virginia Beach
3rd CircuitNicholas D. Renninger, Portsmouth
4th CircuitAnn B. Brogan, NorfolkGary A. Bryant, NorfolkNeil S. Lowenstein, Norfolk
5th CircuitCarl Phillips “Phil” Ferguson, Suffolk
6th CircuitPeter D. Eliades, Hopewell
7th CircuitLeonard C. Heath, Jr., Newport News
8th CircuitMarqueta N. Tyson, Hampton
9th CircuitW. Hunter Old, Williamsburg
10th CircuitCharles H. Crowder, III, South Hill
11th CircuitDale W. Pittman, Petersburg
12th CircuitGraham C. Daniels, Chester
13th CircuitPaula S. Beran, RichmondBrian L. Buniva, RichmondDabney J. Carr, IV, RichmondLeah A. Darron, RichmondChristy E. Kiely, RichmondGeorge W. Marget, III, RichmondEric M. Page, Richmond
14th CircuitJon A. Nichols, Jr., Glen AllenDaniel L. Rosenthal, RichmondRhysa G. South, Henrico
15th CircuitJennifer L. Parrish, Fredericksburg
16th CircuitJames M. Hingeley, Jr., CharlottesvilleR. Lee Livingston, Charlottesville
17th CircuitTimothy B. Beason, ArlingtonRaymond B. Benzinger, ArlingtonJohn H. Crouch, ArlingtonHarry A. Dennis, III, ArlingtonRachelle E. Hill, Arlington
18th CircuitBarbara S. Anderson, AlexandriaFoster S. B. Friedman, AlexandriaCarolyn M. Grimes, Alexandria
19th CircuitJames F. Davis, FairfaxJoyce M. Henry-Schargorodski, FairfaxChidi I. James, FairfaxSean P. Kelly, FairfaxDavid L. Marks, FairfaxGary H. Moliken, FairfaxJay B. Myerson, RestonLuis A. Perez, Falls ChurchWilliam Boyle Porter, FairfaxDennis J. Quinn, TysonsWilliam L. Schmidt, FairfaxMelinda L. VanLowe, FairfaxJames A. Watson, II, FairfaxMichael M. York, Reston
20th CircuitChristine H. Mougin-Boal, LeesburgT. Huntley Thorpe, III, Warrenton
21st CircuitJoan Ziglar, Martinsville
22nd CircuitLee H. Turpin, Chatham
23rd CircuitMark K. Cathey, RoanokeEugene M. Elliott, Jr., Roanoke
24th CircuitDavid B. Neumeyer, Lynchburg
25th CircuitRoscoe B. Stephenson, III, Covington
26th CircuitW. Andrew Harding, Harrisonburg
27th CircuitRichard L. Chidester, Pearisburg
28th CircuitWilliam M. Moffet, Abingdon
29th CircuitJoseph M. Bowen, Tazewell
30th CircuitWilliam E. Bradshaw, Big Stone Gap
31st CircuitGifford R. Hampshire, Manassas
MEMBERS AT LARGEMarni E. Byrum, AlexandriaNancy C. Dickenson, AbingdonAfshin Farashahi, Virginia BeachWilliam E. Glover, FredericksburgMichael HuYoung, RichmondBeverly P. Leatherbury, EastvilleTodd A. Pilot, AlexandriaLorrie A. Sinclair, LeesburgA Benjamin Spencer, Charlottesville
Conference of Local Bar Associations ChairJack “JB” W. Burtch, Jr., Richmond
Diversity Conference ChairProvidence E. Napoleon, Richmond
Senior Lawyers Conference ChairRobert T. Vaughan, Jr., Danville
Young Lawyers Conference PresidentNathan J. Olson, Fairfax
Virginia State Bar
VIRGINIA LAWYER | June 2015 | Vol. 644 www.vsb.org
VIRGINIA LAWYER | October 2015 | Vol. 646
Timely Article
Thank you for publishing the articlewritten by William E. Evans titled“Practitioners Beware: Pitfalls Created byVirginia’s New Business Records Statute”(August 2015). The piece initially caughtmy attention because I had tried a juryin Newport News the day wherein I’dstruggled (dare I say quarreled) with thejudge over the business records excep-tion to the rule against hearsay. However,as I continued reading, I realized a fileon my desk was quite literally a case inpoint regarding affidavits in general dis-trict court. After consulting the Rulesand Code, I tapped out an objectionwithin the five day period and said aprayer of gratitude for Mr. Evans. Itnever ceases to amaze me the traps thatcan be hidden within the most innocu-ous-seeming statutory language. A care-ful reading of Virginia Code Section8.01-390.3 is time well spent—as is, ofcourse, that of the Virginia Lawyer.
Eone BeckGlen Allen
Questions raised byObergefell
I was most disappointed in the article inthe August 2015 issue, “Obergefell v.Hodges: Seismic Shift or Business asUsual?” I expected to read about thepractical legal consequences of theUnited States Supreme Court’s deci-sion declaring a right for same-sex cou-ples to marry (and in fact, authorCharles E. Powers acknowledges, in foot-note 23, that this was the topic originallysuggested for him). These questions areplentiful.
For example:• Is the decision retroactive as to samesex couples for purposes of child cus-tody and support, tax law, estate divi-sion/inheritance, nepotism restrictions,etc.?
• What becomes of the rebuttable pre-sumption of legitimacy, Gibson v.Gibson, 207 Va. 821, 825, 153 S.E.2d189, 192 (1967), for intra-marital birthswhen the legal spouse of the biologicalmother/father categorically,biologically cannot be the mother orfather of the child? • What will constitute consummation ofthe marriage, see Hurt v. Hurt, 16 Va.App. 792, 798, 433 S.E.2d 493, 497(1993), for a couple that cannot engagein marital intercourse? If sodomy nowcounts for them, will it also count forheterosexual couples? What particularacts will suffice? • Given the rationale of Obergefell (heavyon talk of dignity, desire, commit-ment, and aspirations, light on consti-tutional law), what limits on eligibilityfor marriage remain defensible? Is con-sensual bigamy/polygamy now likely tobe recognized as a constitutional right?Does it matter if the family is alreadymarried under the law of a foreignnation that recognizes such unions?What age or consanguinity limits arelikely to survive challenge? Doesit make sense to limit same-sex step-siblings from marrying, when they can-not biologically procreate (removingthe concern about hereditary geneticproblems) and may have never livedtogether (removing the concern aboutincest in the home)? If not, will equalprotection arguments open the doorfor opposite-sex step-siblings to marryas well?Obergefell does not purport to
answer these questions, but Virginiapractitioners will need to confront themsooner or later. It will only be “businessas usual” for those attorneys who do notencounter scenarios like these.
Walter WeberAlexandria
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VIRGINIA LAWYER | October 2015 | Vol. 648 www.vsb.org
President’s Messageby Edward L. Weiner
Blindspot: Hidden Biases of Good People
THIS PAST SPRING I borrowed mydaughter’s car while mine was in theshop. “It drives really well, Dad,” mydaughter said proudly, “and it doesn’thave that blind spot that yours does.”
“Blind spot?” I thought. “Sure,most cars have blind spots, but Inever really noticed any in mine.”Sure enough, the next day when I gotmy car back I saw that she was right.The back corners have blind spots,particularly for someone her height.Perhaps I had become so accustomedto them that I didn’t even notice themanymore.
While I have considered myself agood driver, something changed. Itwas subtle; maybe I started to checkthe side mirror for just an instantlonger. No big deal, but knowing thatthe blind spots were there has made adifference in the way that I drive. Animprovement, I think ... I know.
Shortly thereafter, I would learnabout an even more important blindspot—my own.
At the Virginia State Bar AnnualMeeting in Virginia Beach in June, the Diversity Conference sponsoredBlindspot: Hidden Biases of GoodPeople. The session was led by psychol-ogist Dr. Mahzarin Banaji, one of theprincipal authors of the book and anacknowledged pioneer in the study ofimplicit bias, and Professor James E.Moliterno, a professor of law atWashington and Lee University whofocuses on legal ethics, professionalism,and legal education reform.
In introducing the three-hour ses-sion to a standing room only audience,
Virginia Supreme Court Justice CleoPowell, a member of the DiversityConference Board, said, “Today we willexplore a fascinating subject matter—looking into our hidden biases andhow they affect our interactions withothers, how they affect our ethics andprofessionalism as legal professionals,and most importantly, once we recog-nize them, how we overcome them.”
In Blindspot, the authors explorehidden biases that we all “carry from alifetime of experiences with socialgroups—age, gender, race, ethnicity,religion, social class, sexuality, disabilitystatus, or nationality.” Banaji arguesthat a fundamental property of humanbeings is a “preparedness to favor thefamiliar.” “Blindspot” is a metaphor to cap-
ture that portion of the mind thathouses hidden biases. The authors useit to examine the extent to whichsocial groups—without our awarenessor conscious control— shape our likesand dislikes as well as our judgmentsabout people’s character, abilities, andpotential.
The title’s “Good People” are themany who strive to align their behaviorwith their good intentions. The aim ofBlindspot, and the associated ImplicitAssociation Test, is to explain the sci-ence in plain enough language to allowwell-intentioned people to betterachieve that alignment. As the authorssay in the introduction, “Venturing intothis book is an invitation to under-stand our own minds.”
Dr. Elizabeth Loftus, past presidentof the Association for Psychological
Science and noted author of EyewitnessTestimony, describes the importantmessage of the book: “Mental processesthat we are not aware of can, in fact,affect what we think and what we do.Blindspot is one of the most illuminat-ing books ever written on this topic.”
During the session, Justice Powellsaid, “This book is a must read forevery judge, prosecutor, law enforce-ment officer, lawyer and all other ‘goodpeople’ who want to know... ‘Do I havea Blind Spot?’”
Reading this book, taking theImplicit Association Test, and attend-ing this remarkable session at theAnnual Meeting have been at the sametime scary and incredibly enlighteningfor me.
The book review in the WashingtonPost said, “While we may not havemuch power to eradicate our ownprejudices, we can counteract them.The first step is to turn a hidden biasinto a visible one.”
Hmmm ... Sort of like me and my car.
Further information and copiesof Blindspot: Hidden Biases of GoodPeople are available at www.spottheblindspot.com.
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VIRGINIA LAWYER | October 2015 | Vol. 6410
Executive Director’s Messageby Karen A. Gould
www.vsb.org
VSB PRESIDENT EDWEINER didan excellent job in his August 2015 col-umn of sounding the alarm on perilsfacing the legal profession, largelybecause of technological change.1
Other articles in that edition ofVirginia Lawyer dealt with social mediaand the practice of law by KellamParks,2 “An Interview with Jack W. “JB”Burtch — A Look at Forty Years of Lawand Technology”3 by Neil Talegonkar,and the benefits and risks of legalresearch technologies by RogerSkalbeck,4 among other technologyarticles. My point is that lawyers shouldunderstand and appreciate the signifi-cance to which the legal community isimpacted by technology and incorpo-rate technology into their practices. Aclear sign of this necessity is the pro-posed legal ethics rule change on tech-nological competence pending beforethe Supreme Court of Virginia.5
The VSB Future of Law PracticeStudy Committee met on September 3to determine the direction of its focusfor FY2016. Alternative business struc-tures for law firms had been the com-mittee’s focus the first year, but it hasdecided to widen its focus to look atother ways legal services are beingdelivered.
Former VSB president SharonNelson and her partner and husbandJohn Simek gave the committee aspeedy historical perspective on issuesfacing the profession since the eco-nomic collapse of 2008: law firm lay-offs, suspension of partner draws,mergers, drops in revenue, and the dra-matic decline in the number of lawyerspracticing law. In April 2014, a blogreported that there were 44,000 lawschool graduates but only 21,000 legal
jobs. The new reality, Sharon Nelsonmaintains, is that the “new normal” islawyers are losing work to non-lawyers,legal services have become a commod-ity, and virtual lawyers are encroachingon the traditional business areas of thesolo and small firm lawyers. Clients arerefusing to pay for first- and second-year associates on the basis that theydon’t want to pay to educate them onhow to practice law. Meanwhile,income for the solo lawyer has droppedsubstantially.
No one can argue that technologi-cal changes in the practice of law havebeen advancing like Genghis Khan andthe Mongols, a tide that cannot beturned. Legalzoom©, Avvo© andRocketLawyer© offer legal servicesthrough different platforms direct toconsumers. To learn more about theseservices, please refer to their websites:legalzoom.com, avvo.com, and rocketlawyer.com.
This three-paragraph descriptionof what was discussed during theFuture of Law Practice Study
Committee meeting only grazes thesurface of some of the topics. Suffice itto say that the committee has a lot onits agenda. Whether any specific rec-ommendations will ensue from itsstudies is uncertain. Instead, it may bea year of revelations and intense intro-spection. As a state regulatory author-ity, it is certain the Virginia State Barmust stay mindful that its job is to pro-tect the public.
Endnotes:1 http://www.vsb.org/docs
/valawyermagazine/vl0815-president.pdf.
2 http://www.vsb.org/docs/valawyermagazine/vl0815-antisocial.pdf.
3 http://www.vsb.org/docs/valawyermagazine/vl0815-burtch.pdf.
4 http://www.vsb.org/docs/valawyermagazine/vl0815-libraries.pdf.
5 http://www.vsb.org/pro-guidelines/index.php/rule_changes/item/amendments-rules-1_1-1_6-112514.
Future of Law Practice Study
VSB TECHSHOW April 25, 2016
Greater Richmond Convention Center
Faculty members will include nationally-knownveteran ABA TECHSHOW speakers who willoffer a full day of legal technology CLE.
Registration Fee: $100 per person (includes fullday of CLE, Wi-Fi, lunch, and coffee breaks)
Registration will open on December 1, 2015.The registration form and agenda will beposted at www.vsb.org/site/events/item/vsb_techshow_0416.
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C A L L F O R N O M I N AT I O N S
The Harry L. Carrico Professionalism Award was established in1991 by the Section on Criminal Law of the Virginia State Bar torecognize an individual (judge, defense attorney, prosecutor, clerk,or other citizen) who has made a singular and unique contribu-tion to the improvement of the criminal justice system in theCommonwealth of Virginia.
The award is made in memory of the Honorable Harry L.Carrico, former Chief Justice of the Supreme Court of Virginia,who exemplified the highest ideals and aspirations of profession-alism in the administration of justice in Virginia. Chief JusticeCarrico was the first recipient of the award, which was institutedat the 22nd Annual Criminal Law Seminar in February 1992.
Although the award will only be made from time to time at thediscretion of the Board of Governors of the Criminal Law Section,the Board will invite nominations annually. Nominations will bereviewed by a selection committee consisting of former chairs of thesection and Chief Justice Carrico.
Prior Recipients
CriteriaThe award will recognize an individual who meets the following
criteria:
� Demonstrates a deep commitment and dedication to the highestideals of professionalism in the practice of law and the administra-tion of justice in the Commonwealth of Virginia;
� Has made a singular and unique contribution to the improvementof the criminal justice system in Virginia, emphasizing professional-ism as the basic tenet in the administration of justice;
� Represents dedication to excellence in the profession and “per-forms with competence and ability and conducts himself/herselfwith unquestionable integrity, with consummate fairness and cour-tesy, and with an abiding sense of responsibility.” (Remarks of ChiefJustice Carrico, December 1990, Course on Professionalism.)
Submission of NominationPlease submit your nomination on the form below, describing specif-
ically the manner in which your nominee meets the criteria establishedfor the award. If you prefer, nominations may be made by letter.
Nominations should be addressed to Andrea L. Moseley, Esq.,Chair, Criminal Law Section, and mailed to the Virginia State BarOffice: 1111 East Main Street, Suite 700, Richmond, VA 23219-0026. Nominations must be received no later than December 7,2015. Please be sure to include your name and the full name,address, and phone number of the nominee.
If you have questions about the nomination process, please callElizabeth L. Keller, Assistant Executive Director for Bar Services,Virginia State Bar, at (804) 775-0516.
HARRY L. CARRICO PROFESSIONALISM AWARDNOMINAT ION FORM
Please complete this form and return it to the Virginia State Bar, 1111 East Main Street, Suite 700, Richmond, VA 23219-0026. Nominations must be received no later than December 7, 2015.
Name of Nominee: __________________________________________________________________________________
Profession: _________________________________________________________________________________________
Employer/Firm/Affiliation: ____________________________________________________________________________
Address of Nominee: _________________________________________________________________________________
__________________________________________________________________________________________________
__________________________________________________________________________________________________
City _____________________________________ State _____________ Zip ____________________________
Name of person making nomination ______________________________________________ Telephone ____________________(Please print)
E-mail _______________________________________ Signature _____________________________________________________
(Please attach an additional sheet explaining how the nominee meets the criteria for the Harry L. Carrico Professionalism Award.)
HARRY L. CARRICO PROFESSIONALISM AWARDVSB Section on Criminal Law
The Honorable Harry L. Carrico 1992
James C. Roberts, Esquire 1993
Oliver W. Hill, Esquire 1995
Hon. Robert F. Horan 1996
Reno S. Harp III, Esquire 1997
Hon. Richard H. Poff 1998
Hon. Dennis W. Dohnal 1999
Hon. Paul F. Sheridan 2000
Hon. Donald H. Kent 2001
Craig S. Cooley, Esquire 2002
Prof. Robert E. Shepherd 2003
Richard Brydges, Esquire 2004
Overton P. Pollard, Esquire 2005
Hon. Paul B. Ebert 2006
Rodney G. Leffler 2007
Prof. Ronald J. Bacigal 2008
Hon. Jere M.H.Willis Jr. 2010
Melinda Douglas 2012
Claire G. Cardwell 2013
Gerald T. Zerkin 2014
Hon. Jerrauld C. Jones 2015
GENERAL INTEREST FEATURES | Vol. 64 | October 2015 | VIRGINIA LAWYER 13
The last thing anyone wants to thinkabout in the midst of litigation is losingan appeal. But it is important to be pre-pared, because when an opinion comesdown, a short clock starts ticking, andyou will need to decide quickly whetherto move up or move on. As an appellatelitigator with a healthy chunk of my prac-tice devoted to Supreme Court work,clients often approach me after they havealready lost in a court of appeals. Theyoften want to know whether it is worth itto go forward with a petition for rehear-ing en banc or a petition for certiorari inthe Supreme Court. This article will dis-cuss when to file either petition and howto evaluate whether it is worth the cost.
The first rule of evaluating whether to go forwardwith a petition for rehearing en banc or a petitionfor certiorari is to start with the assumption thateither petition would be a waste of time andmoney. It is usually too late to salvage a case oncethe court of appeals has ruled. The SupremeCourt grants certiorari in about 1 percent of thecases brought before it. Take out the in formapauperis petitions—which leaves the “paid”cases—and the number only goes up to 4 percent.In most circuits, it is just as tough to get a petitionfor rehearing en banc granted. That does notmean that giving a serious look at options formoving forward is a bad idea. But you mustapproach the question with caution in order topursue your client’s interests wisely.
Elements of a Petition for Rehearing that Has anAppreciable Chance at SuccessWhen filing a petition for rehearing, you willalmost always petition for both a panel rehearingand rehearing en banc. Most circuits automati-
www.vsb.org
Petitioning for Further Review afterLosing a Federal Appealby Tillman J. Breckenridge
14
cally consider any petition for rehearing en bancas a petition for panel rehearing, and there isgenerally no harm in asking for both. Panelrehearing is particularly appropriate when theopinion turned on the panel’s mistake regardingan undisputed or indisputable fact.
The Federal Rules of Appellate Procedure(FRAP) require a petitioner for a panel rehearingto “state with particularity each point of law orfact that the petitioner believes the court hasoverlooked or misapprehended.” FRAP 40(a)(2).On its face, that is a very tough standard to meet.And it demands an ability to articulate a criticalfact or legal ruling that the panel obviouslymissed. It is exceedingly rare to see a panel reverseitself based on a legal error. For that reason, anypurported mistake of law should include arequest for rehearing en banc as well.
En banc rehearings are also very rare. Indeed,the rules include express discouragement againstfiling a petition. En banc hearings are “not favoredand ordinarily will not be granted.” FRAP 35(a).They will only be granted under one of two circumstances. Rehearing en banc is appropriatewhen (1) there is a split within the circuit on alegal issue, or (2) “the proceeding involves a ques-tion of exceptional importance.” FRAP 35(a).Viewing those two standards in the abstract, itwould seem that the latter is the more effectiveground on which to base a petition. But courts of appeals decide questions of exceptionalimportance all the time. Almost all appeals areexceptionally important to the parties. Otherwise,they would not spend the time or money.
The strongest petition for rehearing en bancexposes a conflict between holdings within thecircuit. Identifying an intra-circuit split allowsthe petitioner to appeal to the judges’ basesenses of judicial efficiency and fairness of theprocess. Thus, the first question you have to askyourself when considering filing a petition forrehearing en banc is whether there is an intra-circuit conflict.
One common mistake of counsel is tobelieve, and argue, that en banc rehearing isneeded because the panel’s decision conflicts withthe decisions of other circuits or state courts oflast resort. While this may be a persuasive fact tomention in the petition to establish that there arejudges who support your position, and it may behelpful to establish the importance of an issue (asnoted in FRAP 35), it is not by itself a ground fora petition for rehearing. Judges will generally dis-regard a petition that overemphasizes other cir-cuits’ decisions. While appellate courts shouldgenerally avoid creating circuit splits, it is not the
court of appeals’ job to correct circuit splits. Thatis the role of the Supreme Court.
If there is an intra-circuit conflict, the nextquestion you must ask yourself and counsel ishow simple the conflict is to grasp. A petition forrehearing en banc starts with a short statement,usually only a paragraph or two, stating the rea-son that rehearing is necessary. FRAP 35(b)(1).You must be able to grab a judge’s attention withjust that statement. After that, counsel has lessthan fifteen pages to fully explain the facts of thecase, the intra-circuit conflict, and the issue’simportance. Thus, you must write the petition ina way that the panel’s error, or the conflict at least,smacks the judge in the face. That often is not achallenge if there is a conflict on an intuitive issuethat appellate judges see all the time—such as theproper standard of review or a pleading standard.But when it is a complex issue, like a narrow areaof securities law that requires understanding several different financial products, you must beespecially careful to break the complex issuedown into simple terms.
Finally, you should consider the importanceof the case to the court and the public. Even incases involving an intra-circuit conflict, you mustimpress upon the court the importance of theissue that was incorrectly decided. You mustexplain to the court why the panel’s error will notonly damage your client, but thousands of othersimilarly-situated parties, lead to strained docketsand confused trial judges, or have a deleteriouseffect on the public. Circuit judges will rarely beconcerned if the purported error that creates anintra-circuit conflict really only affects your client,will not be a recurring problem, and will not haveany secondary effects on the public.
Despite its apparent equal footing in FRAP35, the “exceptional importance” basis for grant-ing a petition for rehearing en banc is somewhatillusory when it is not paired with an intra-circuitconflict. Courts rarely grant a petition for rehear-ing en banc on that ground alone. The hurdle isincredibly high to obtain rehearing based on theissue being of “exceptional importance.” Unlessthere is a dissent or special concurrence from theoriginal panel stating that existing precedentshould be overturned, filing a petition for rehear-ing en banc based solely on the “exceptionalimportance” ground is almost never an effectiveuse of your company’s funds.
Elements of a Petition for a Writ Of Certiorarithat Has an Appreciable Chance at SuccessLike a petition for rehearing, an ideal certioraripetition establishes that there are conflicting
www.vsb.orgVIRGINIA LAWYER | October 2015 | Vol. 64 | GENERAL INTEREST FEATURES
GENERAL INTEREST
GENERAL INTEREST FEATURES | Vol. 64 | October 2015 | VIRGINIA LAWYER 15
opinions on the same legal issue and that theissue is of exceptional importance. SupremeCourt Rule 10 sets out the “character of the rea-sons the Court considers” in exercising its discre-tion to grant a certiorari petition. The threecriteria it gives are (1) a circuit court has decidedan important case that conflicts with another cir-cuit or a state court of last resort, or it has donesomething so outside its powers that it requiresapplication of the Supreme Court’s supervisoryrole; (2) “a state court of last resort has decidedan important federal question in a way that con-flicts with . . . another state court of last resort or”a circuit court; and (3) a state court or a circuitcourt has decided an important federal questionthat has not been addressed by the SupremeCourt or in a way that conflicts with SupremeCourt precedent. Those are pretty ambiguousstandards, but the rule of thumb is that if you donot have a conflict among the courts, then filing acertiorari petition is usually not advisable.
There are, of course, exceptions to the needfor a circuit split. Occasionally, a circuit split isimpossible or so highly unlikely that requiring acircuit split would make the lower court’s decisioneffectively unreviewable. Also, there are somecases that simply strike the Court as being impor-tant enough to warrant immediate review.
One final consideration to determine thestrength of your potential certiorari petition iswhether it will attract amicus support. A petitionamicus emphasizes a case’s importance. If anindustry organization or a group of states file abrief saying the question presented is importantto an entire segment of the country or the econ-omy, your petition is more likely to get noticed.
Whether to File a Meritorious PetitionOnce you have determined that you have a legalissue that would support a petition with anappreciable chance at success, you have to weighthe chance of success against the cost. It makes nosense to spend thousands of dollars on a petitionfor rehearing en banc if the case is not worth themoney you will have to spend to brief and argueafter the petition is granted.
You must also evaluate the strength of thecase on the merits, the inclinations of the courtyou are addressing, and how the appeal was pros-ecuted. The first issue is likelihood of successwhen the case is reheard en banc or on the meritsof the case in the Supreme Court. You must takean objective look at the legal issue presented, thefacts of the case, and the reasonableness of yourposition. You must also consider the inclinationsof the court. If it is a court that consistently rules
against your side on similar legal issues, then itmay not be worth the risk and money to file thepetition and subsequent briefs. Additionally, youhave to consider the costs associated with furtherentrenching bad law if you lose on the merits. Ifyou represent a national organization, you haveto consider how much damage will occur if youlose an issue in the Supreme Court and suddenlya legal rule that had hurt your client in just onepart of the country now hurts everywhere else.
Because losing on the merits can cost farmore than simply the money spent on briefingand argument, it is important to consider howgood of a record and set of arguments you havedeveloped as well. You must make sure that youhave already raised the issue you want the courtto address because a waiver argument can inflictserious damage on a petition, even if the waiverargument is ultimately unsuccessful. If an argu-ment is even potentially waived, that weighsagainst moving forward.
Finally, you should consider the elementsthat may make a petition unworthy even if youwin on the merits. For instance, a public figureor company must consider the potential loss ofgoodwill associated with having its nameattached to an unpopular Supreme Court deci-sion. Additionally, a petitioner must weigh thetime it takes to work through the whole process.
There will be cases where, despite failing allof the tests mentioned above, the cost of quittingis too great. And there will be many, many casesthat pass all of the tests and still the petition is notgranted. But if you start with the presumptionthat the petition is not worth filing, and thenevaluate the petition’s chance of success andweigh that against the costs correctly, you can goforward more confidently or save your client a lotof headaches.
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GENERAL INTEREST
Tillman J. Breckenridge is a partner at Bailey &Glasser where he concentrates his practice on appellatelitigation at all levels, serving the needs of all the firm’sclients. He has represented individuals, companies,organizations, and foreign, state, and local govern-ments before the United States Supreme Court and theUS Courts of Appeals for the Second, Third, Fourth,Fifth, Sixth, Seventh, Eighth, Ninth, Eleventh, Districtof Columbia, and Federal Circuits as well as many stateappellate courts. Additionally, he is an adjunct profes-sor of law at the William & Mary School of Law, wherehe directs the Appellate and Supreme Court Clinic.
16
In what may be the first collaboration of its kind in the country,
the Virginia Association of Commonwealth’s Attorneys (VACA)
has joined with the University of Richmond School of Law to
create a learning experience for third-year law students focused
on the research and analysis of best practices issues in the com-
monwealth and across the country.
The Prosecution Project, as the partnership is called, begins
in the spring semester of 2016, and is spearheaded by VACA’s
Committee on Justice and Professionalism and Professor John
G. Douglass of the law school.
The Committee on Justice and Professionalism is co-
chaired by two commonwealth’s attorneys, Denise Lunsford,
of Albemarle County, and Theo Stamos, of Arlington/Falls
Church. For this initial program, the committee has outlined
four major areas of best practice interest: special prosecution,
drug prosecution strategies, use of police-worn cameras, and
conviction integrity units.
According to Lunsford, “Unlike some third-year programs
aimed at giving students practical courtroom experience, this
project is specifically focused on best practices for prosecutors,
and the research and analysis of what is going on across the
commonwealth and in other states. Because no one has imple-
mented this type of program for students, other states will be
looking to us to see what comes out of this endeavor.”
Lunsford believes that the public is often unaware of the
many different factors that go into developing best practices—
factors that include the differing policies of elected officials, the
varying sizes of police forces and prosecutors’ offices, and the
types of crime most prevalent in particular communities.
“There is a misconception that we as prosecutors are only
focused on conviction rates,” says Lunsford. “But we care about
the system, the individuals involved in the system, and getting it
right. Students will see first-hand the issues we face and the
responsibilities we carry.”
According to Douglass, “I’ve always applauded the efforts
of the Committee on Justice and Professionalism, and I had an
opportunity to develop a course for third-year students that
will allow them to learn best practices directly from the mem-
bers of the committee—experienced prosecutors like Denise
and Theo, and (Commonwealth’s Attorney) Mike Herring here
in Richmond.
“My hope is that the students take away not only the value
of these attorneys’ knowledge, but the integrity of the process.
The students will contribute their research and analysis and
writing skills, and both sides will be extremely beneficial to
each other.”
Douglass adds, “These four areas of best practice are
broad, but they are good starting points for our students.
Obviously, we will not resolve any of these issues in a semes-
ter, but hopefully we are beginning a program here that
builds on itself over time.”
The initial class will include only eight students, each of
whom have expressed an interest in careers as prosecutors,
and some of whom have already had externships in prosecu-
tors’ offices.
Says Lunsford, “We will focus on best practices as they
affect what we need to know as prosecutors, and analyze what
is going on in the rest of the country and what is being written
about in law review articles on issues ranging from discovery
to internal affairs investigations.”
Lunsford points out that each jurisdiction is unique—
whereas Albemarle County has an open file policy on discovery,
others do not. According to both Lunsford and Douglass, this
project will allow the students to research and learn about the
myriad factors affecting different prosecutorial jurisdictions,
including body camera footage, internal affairs files, and
wrongful conviction units, which may be far more easily
implemented in large jurisdictions than in smaller ones.
“We try to make the best decisions for our community,”
Lunsford says. “And these students, whether they ultimately
decide to practice as prosecutors or defense attorneys, will
benefit from helping us explore these best practice processes
and understanding why one jurisdiction may settle on a pol-
icy or practice that is different from that in a neighboring
jurisdiction.”
www.vsb.orgVIRGINIA LAWYER | October 2015 | Vol. 64 | GENERAL INTEREST FEATURES
GENERAL INTEREST
VACA Launches Innovative Best Practices Programwith Law Schoolby Deirdre Norman
GENERAL INTEREST FEATURES | Vol. 64 | October 2015 | VIRGINIA LAWYER 17
McGuireWoods, which boasts more than 1,000lawyers in twenty-one offices, has moved itsRichmond office across Ninth Street to the newGateway Plaza office tower at 800 E. Canal Street.The firm occupies 212,000 square feet on eightfloors of the eighteen story building, which cost$120 million.
Robert J. Couture, the firm’s executive direc-tor, said McGuireWoods decided to build to suitits needs rather than try to accommodate itself toan existing space. “We put our efforts and moneyinto the space our clients use,” he said. The firmalso decided to stay in Richmond, because of “ourcommitment to the city and our reputation.”
It would have been easier, he said, to moveinto an existing building somewhere, but insteadthe firm decided to design and build from theinside out, to fit the building to the employeesand customers.
The office space includes 25,000 square feetfor meetings on the 18th floor; a 360-degree viewof the city and the James River; parking in thebuilding, which is also available to the public;multiple high-definition screens and teleconfer-encing rooms with links worldwide; and meeting-room cameras that track speakers. It also hasmoot court rooms with multiple closed-circuitaudio video feeds that allow real-time trial prepworldwide.
High-tech accoutrements abound. Each ofthe attorney offices—they are all the same12'x15'—has its own docking station connectedto an internal, private, cloud. Couture said thefirm started working on its computer system in2007. The new space has multi-screen teleconfer-encing in many meeting rooms that allow for dif-ferent configurations that might include severalsimultaneous smaller live videos or one largeshot. Microphones in conference rooms filter outambient noise, such as rustling paper and shuf-fling seats. Video cameras automatically focus onwho is speaking at a conference, or if multiplepeople are talking at the same time, back off toshow the entire room.
The office also includes lower-tech amenities—a large lunch room, multiple coffee-break areas,small seating areas to take breaks or meet withcolleagues, and even small private meeting roomswith erasable walls that can been written on.
Gateway Plaza, for all the bells and whistles,is most apparently the definition of a clean, well-
lighted place. Its floor-to-ceilingwindows flood the open floorswith natural light and providewhat are surely some of the finestviews of the city and the nearbyriver.
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GENERAL INTEREST
Gateway Plaza: A Clean, Well-Lighted Place
VIRGINIA LAWYER | October 2015 | Vol. 6418
Law Stories
www.vsb.org
Every lawyer has a story set aside for gatherings of friends or relatives. It’s a special taleabout a legal battle won, or lost. Or about an amusing encounter with a judge. Or astory with a surprising twist. Maybe it’s a story that will bring a knowing smile, orshake of the head, from a colleague.
Pick your best Law Story, your incredible adventure, your unusual courtroom oreven boardroom escapade, and send it to us. Keep them short—about400 words or less—and send them in.
E-mail your stories to us at [email protected].
My Little Miracleby Mary E. Harkins
In early 2008, I met a lawyer named John
who practiced in Prince William County.
He is now retired. We had the kind of
relationship where we would run into
each other now and then in court, and
exchange niceties, but I really knew
nothing about him.
Later that same year, my husband
and I received the incredible news that
we were going to be adopting a baby
who was due at the end of March in
Beaver, Utah. I immediately started to
clear my schedule for late March. Life is
what happens while you’re busy plan-
ning, so, of course, our adoption lawyer
called on February 27 to advise me that
the baby was being delivered. I had a
hearing in Prince William County later
that week that I could not reschedule. I
looked in my wallet and noticed John’s
business card, so I called him to ask if he
would cover that hearing for me. Even
though I hardly knew him, John said
that he would be delighted to help me,
given my circumstances. I had one more
thing off my plate so I could get on a
plane to meet my baby.
About a week after we returned to
Virginia with our baby, I called John. He
told me something that makes me tear-
up every time I tell the story.
John told me that when I called him
on February 27, he was crying so much
that he could hardly speak; the day
would have been the birthday of his son,
Jeremy. John and his wife had adopted
Jeremy when he was an infant. When
Jeremy was 19 years old, he was killed in
a single car accident driving to the air-
port from a ski trip in Beaver, Utah.
My heart stopped.
John went on to say that when I
called him, he could feel Jeremy’s arms
around him, and he could hear Jeremy
whispering, “Daddy, help this lady. I will
be with her and her baby is going to be
fine.”
Of course, I started to cry so hard
that I could barely talk. Of all the dozens
and dozens of attorneys I could have
called, I chose John – a person I hardly
knew. Beaver, Utah, is such a remote
place that there was not even an OB/Gyn
to deliver our baby. There were only two
general practitioners in the whole
county.
I could not help but feel there was a
higher power involved, that Jeremy was
actually present, and that Jeremy is my
son’s Guardian Angel. My son was born
with the cord wrapped around his neck,
not once, but twice. His birthmother had
heavily consumed alcohol throughout
the pregnancy. All odds were against him
being a healthy baby, but he is my little
miracle who has Guardian Angel Jeremy
watching over him.
Mary E. Harkins has a general practice with theFramme Law Firm. She and her husband adoptedthree more children after this adoption. Their fam-ily of six resides in Loudoun County, where her “little miracle” will start first grade this year.
Supportby Carmen J. Gentile
Back in 1983 when I was admitted to thebar I was, obviously, very inexperiencedand was searching for ways to gain expe-rience. I placed myself on the court-appointed list to receive assignments torepresent indigent clients. I thought thiswould be an excellent opportunity togain courtroom skills. Plus, I would bepaid a fairly decent hourly fee, whichwould sustain me while developing aclientele and help pay the rent and elec-tricity bill for the office.
After an extended period learning todefend misdemeanor and other lessoffensive matters in the various towncourts, the time had arrived to take onmy first court-appointed felony matter.My first felony assignment was a veryyoung woman accused of grand theft. Ihad to learn all about indictments andthe law surrounding them since indict-ments were unique to felony and otherserious charges but not to misdemeanorand smaller offenses.
Tell Us Your Favorite Law Story
Vol. 64 | October 2015 | VIRGINIA LAWYER 19
The woman I was defending wasalways surrounded by a very supportivefamily of father, mother, and other rela-tives. This type of family support of acriminally accused was foreign to me.My experience up to then had been todeal with angry or incorrigible clientswho had to go it alone without a sup-portive family. Whenever I appeared incourt with this young woman, she wasvery quiet, polite, and respectful towardme. Her entire entourage acted similarly.I would hear comments such as, “Goodmorning, Mr. Gentile. How are youdoing today?” But most remarkably Iwould hear at every court appearance,“We have great confidence in you, Mr.Gentile. Our daughter is innocent andwe pray for you every day so that youmay be guided by the Lord to bring herjustice.” The effect on me, a young inex-perienced attorney handling his firstfelony, was to make me somewhatuncomfortable and anxious, since I nowfelt required to not only do my best butto succeed.
Inspired by the support of this fam-ily, I began to diligently research anddraft a dismissal motion on any groundsI could muster. I could not find anythingsolid to argue but I was determined. Iput together the best dismissal motion Icould but I was insecure in my beliefthat it would succeed. My worst fear wasthe possible disappointment of her fam-ily, who had placed so much confidencein me and who given me so muchencouragement.
The judge had a reputation of beingprosecutor-oriented and very hardnosedso my hope of success waned even more.The confidential law clerk of the judge,however, was always very reasonable. Hewould always review submissions beforethey went before the judge, as he didwith my motion. He made a point ofcalling me in, sat me down and said,“Carm, interestingly when reviewing thisI counted the days this matter has beenpending and I see the district attorneymay have exceeded speedy trial guide-lines.” This was an issue I missed due to
my inexperience. He also was kindenough to refrain from stating that thearguments in my motions had littlemerit. He continued, “I’m going to rec-ommend to the judge that this indict-ment be dismissed on speedy trialgrounds.” The indictment was dismissed.When I broke the good news to the fam-ily I felt that they all actually had antici-pated the favorable outcome. Her dadjust smiled and said softly, “Mr. Gentile,we all prayed every day for you andknew the Lord would allow the truth toprevail.”
Was it divine intervention? A fairand wise law clerk? Pure serendipity? I’lllet all of you decide.
Carmen J. Gentile is a 1973 graduate of CanisiusCollege, Buffalo, New York. He received his lawdegree from George Mason University School ofLaw in 1980. He is an associate member of theVirginia State Bar.
Law Stories
www.vsb.org
“Not in Good Standing” Search Available at VSB.org
The Virginia State Bar offers the ability to search active Virginia lawyers’ names
to see if they are not eligible to practice because their licenses are suspended or
revoked using the online Attorney Records Search at http://www.vsb.org
/attorney/attSearch.asp.
The “Attorneys Not in Good Standing” search function was designed in
conjunction with the VSB’s permanent bar cards.
Lawyers are put on not-in-good-standing (NGS) status for administrative
reasons—such as not paying dues or fulfilling continuing legal education
requirements—and when their licenses are suspended or revoked for violating
professional rules.
The NGS search can be used by the public with other attorney records
searches—“Disciplined Attorneys” and “Attorneys without Malpractice
Insurance”—to check on the status and disciplinary history of a lawyer.
Have You Moved?
To check or change your address of
record with the Virginia State Bar, go
to the VSB Member Login at
https://member.vsb.org/vsbportal/.
Go to “Membership Information,”
where your current address of record is
listed. To change, go to “Edit Official
Address of Record,” click the appropri-
ate box, then click “next.” You can type
your new address, phone numbers, and
email address on the form.
Contact the VSB Membership
Department ([email protected] or
(804) 775-0530) with questions.
CALL FOR NOMINATIONSWilliam R. Rakes Leadership in Education AwardThe Section on the Education of Lawyers in Virginia
Virginia State Bar
The Section on the Education of Lawyers in Virginia has established an award to honor William R. Rakes, of Gentry Locke,for his longstanding and dedicated efforts in the field of legal education, both in Virginia and nationally. The inauguralaward was presented to Mr. Rakes in conjunction with the 20th Anniversary Conclave on the Education of Lawyers in Virginia sponsored by the Virginia State Bar’s Section on the Education of Lawyers in April 2012.
2015 Recipient— Hon. B. Waugh Crigler2014 Recipient— Hon. Elizabeth B. Lacy2013 Recipient— W. Taylor Reveley III2012 Inaugural Recipient— William R. Rakes
CriteriaThis award recognizes an individual from the bench, the practicing bar, or the academy who has:
(1) demonstrated exceptional leadership and vision in developing and implementing innovative concepts to improveand enhance the state of legal education, and in enhancing relationships and professionalism among members of the acad-emy, the bench, and the bar within the legal profession in Virginia.
(2) made a significant contribution (a) to improving the state of legal education in Virginia, both in law school andthroughout a lawyer’s career; and (b) to enhancing communication, cooperation, and meaningful collaboration among thethree constituencies of the legal profession.
Nomination ProcessNominations will be invited annually by the board of governors of the Section on the Education of Lawyers, although theaward may only be made from time to time at the discretion of the selection committee appointed by the section’s board ofgovernors. The selection committee will include five members: at least three members of the Section on the Education ofLawyers, with one each from the bench, the practicing bar, and the academy, including the chair of the section; and at leastone former award winner.
When a nominee is selected, the award will be presented at a special event to include a reception for the honoree andhis/her family, friends and colleagues; past award recipients; and special guests. The law firm of Gentry Locke has agreed tounderwrite the award and the special event to honor award recipients on an ongoing basis. Please submit the nominationform below, together with a letter describing specifically the manner in which your nominee meets the criteria establishedfor the award. Nominations should be addressed to Professor James E. Moliterno, chair, Section on the Education ofLawyers, and submitted with your nomination letter to the Virginia State Bar: 1111 East Main Street, Suite 700, Richmond,VA 23219-0026. Nominations must be received no later than December 7, 2015.
For questions about the nomination process, please contact Elizabeth L. Keller, assistant executive director for bar services: [email protected] (804) 775-0516.
WILLIAM R. RAKES LEADERSHIP IN EDUCATION AWARDNOMINATION FORM
Please complete this form and return it with your nomination letter to the Virginia State Bar: 1111 East Main Street, Suite700, Richmond, VA 23219-0026. Nominations must be received no later than December 7, 2015.
Name of Nominee: ______________________________________________________________________________________________
Profession: ____________________________________________________________________________________________________
Employer/Affiliation (Law Firm, Law School, Court): ___________________________________________________________________
Address of Nominee: ____________________________________________________________________________________________
City: ______________________________________________ State: _________________ Zip: ________________________________
Name of Nominator: _________________________________________ Telephone: _________________________________________
Email: ________________________________________ Signature: _______________________________________________________
TAXATION SECTION | Vol. 64 | October 2015 | VIRGINIA LAWYER 21
The Taxation Section of the Virginia State Bar is honored to
contribute to this month’s Virginia Lawyer, and I am pleased to
introduce the articles that discuss a variety of issues revolving
around tax law.
“Affordable Care Act and the IRS: Implementation and
Now Enforcement,” by Nancy Porcari Rossner and Timothy L.
Jacobs, discusses the tax implications of the Affordable Care
Act from the perspective of the Community Tax Law Project.
“Be Aware of Differing Worker Classification Tests Applied
by DOL and IRS,” by Joshua D. Kelly and me, focuses on the
increased attention paid to worker classification issues by the
Department of Labor and Internal Revenue Service and the
differences between the tests and standards the agencies apply
in classifying workers as employees or independent contractors.
“Everything Old Is New Again: The Virginia Department
of Taxation’s Scheme to Ignore the Limits of Collection,” by
Guy C. Crowgey, Robert H. Johnson, and Brockenbrough A.
Lamb, is an engaging piece advocating against the Virginia
Department of Taxation’s interpretation that Section 58.1-
1802.1 of the Code of Virginia permits the department to
maintain collection activity in perpetuity until the debt is col-
lected or discharged.
“Recent Supreme Court of Virginia Decisions Demonstrate
the Urgent Need for New Tax Regulations,” by Craig D. Bell
and J. Christian Tennant, discusses the recent Virginia Supreme
Court case of The Neilsen Company LLC v. County Board of
Arlington County and the proper methodology for determining
gross receipts that are subject to local business, license, and pro-
fessional license taxes.
“Here Be Dragons—and Opportunities: The Unchartered
Tax Waters of Your Company’s or Your Client’s First Foreign
Acquisition,” by Anna Derewenda, provides an introduction to
some of the potential tax considerations to discuss with clients
acquiring their first foreign corporation.
We trust you will find the articles informative and useful,
and hope that they will assist you in your practice and advice
to your clients. If you have an interest in joining the Taxation
Section we welcome your involvement. Please contact the
Virginia State Bar for details on joining the section.
www.vsb.org
Tax Lawby David S. Lionberger
“Taxes are what we pay for a civilized society” comes from a 1927 dissenting opinion by JusticeOliver Wendell Holmes Jr. in Compañía General de Tabacos de Filipinas v. Collector of Internal
Revenue. The quote is inscribed above the entrance to the IRS headquarters in Washington, DC.
22 www.vsb.orgVIRGINIA LAWYER | October 2015 | Vol. 64 | TAXATION SECTION
Affordable Care Act and the IRS:Implementation and Now Enforcementby Nancy Porcari Rossner and Timothy L. Jacobs
Two key features of the Patient Protection and Affordable Care Act (ACA)1
are refundable income tax credits, designed to subsidize insurance premiums of lower-
income households, and a tax penalty, persuading individuals to maintain health insur-
ance. Both features are part of the Internal Revenue Code and administered by the
Internal Revenue Service (IRS). ACA has survived its most recent dust-up in the US
Supreme Court, in King v. Burwell,2 involving the validity of IRS’s tax credit regulations.
Now the focus shifts to administration of ACA’s complex tax provisions. There are
many opportunities for unsophisticated taxpayers (and even sophisticated taxpayers
and practitioners) to run into serious problems. The tax year 2014 returns filed in 2015
are the first impacted by ACA. Approximately 97 percent of eligible taxpayers elected to
receive advanced tax credit payments against their insurance premiums—approxi-
mately $15.5 billion in payments were paid for 2014 based on estimates of taxpayers’
household income.3 Approximately 90 percent of those estimates were wrong—in
many cases, substantially wrong.4 And, bad-intentioned actors may be exploiting the
program.5 It is clear that the IRS will begin enforcement actions in earnest and may
adopt policies that impact not only the bad-intentioned actors but also bona fide
lower-income taxpayers. The Community Tax Law Project, a nonprofit organization
that provides low-income Virginians with pro bono legal representation in federal and
state tax disputes, is bracing itself for what could be an uptick in cases in this new area
of tax law.
TAXATION SECTION | Vol. 64 | October 2015 | VIRGINIA LAWYER 23
Premium Tax Credit — IRC §36BIn enacting ACA, Congress decided to subsidizethe insurance premiums of lower-income house-holds. Rather than direct grants, Congress choseto use refundable income tax credits, PremiumTax Credit (PTC)—similar to the Earned IncomeTax Credit (EITC)—administered through thetax code and by the IRS. The PTC is tied to pre-miums for the cost of health insurance plans inthe individual market but does not apply to cov-erage provided by an employer or a government-sponsored program.6
The PTC applies to taxpayers with house-hold incomes between 100 percent and 400 per-cent of the federal poverty line and the creditincreases based on family size (e.g., between$11,490 and $45,960 for a family of one andbetween $23,550 and $94,200 for a family offour in 2014).7 Household income is generallythe adjusted gross income of the taxpayer, thetaxpayer’s spouse, and dependents.8
Taxpayers may claim PTCs on their annualtax returns but generally will request advancedpayments of the credit during the tax year.Advanced Premium Tax Credit payments (APTCs)are paid directly to the insurance companies bythe federal government, on a monthly basis, toreduce monthly premiums.9 Taxpayers must esti-mate projected household income and family sizeprior to the year for which the credit is requestedand then reconcile this estimate with actualincome, family size, and any changes in eligibilityduring the year.10 This reconciliation is made onIRS Form 8962 filed with the annual tax return.11
If APTCs received are more than the creditallowable upon reconciliation, the taxpayer mustrepay the excess amount with his or her taxreturn subject to certain limitations based onhousehold income—for example, a married tax-payer with household income at 350 percent ofthe federal poverty line is capped at $2,500;household income at 250 percent is capped at$1,500; and household income at 150 percent iscapped at $600.12 There is no repayment limita-tion for taxpayers whose actual household incomeis 400 percent or more of the federal poverty line—i.e., they must repay all the APTCs.13
Shared Responsibility Payment—IRC § 5000AACA requires US citizens and legal residents tomaintain “minimum essential coverage” for eachmonth of the tax year, or qualify for an exemp-tion.14 Exemptions include hardship such ashomelessness, bankruptcy, and domestic violence,income-related exemptions, and incarceration,
among others.15 If an individual fails to maintainhealth insurance coverage, he or she must reportthe liability on their tax return, and make ashared responsibility payment (SRP) when fil-ing.16 When fully phased in, the SRP for 2014 isequal to 2.5 percent of the taxpayer’s householdincome exceeding the tax return filing thresholdfor his or her filing status, or the taxpayer’s flatdollar amount ($695 per adult).17
ACA Implementation: A Difficult BirthACA implementation has been difficult, asexplained in reports by the Treasury InspectorGeneral for Tax Administration (TIGTA)18 andNational Taxpayer Advocate.19 ACA’s tax provi-sions are unique and complex, and they havegreat potential to confuse lower-income taxpayers.
Forms, forms, and more forms. Unsophisticatedtaxpayers trying to prepare their own returnscould get lost in the paperwork. Recent testimonyto Congress by the IRS commissioner indicatedthat as many as 1.6 million taxpayers did not fileForm 8962 with their annual return to eitherclaim the PTC or reconcile the APTC.20 Form8962 includes thirty-six lines requiring multiplelevels of data on household income, family size,contribution amounts, and premium informa-tion. The instructions cover fifteen pages and aredense. Also, it is unclear at this time whether tax-payers are reporting SRP liabilities and whetherthey are reporting correctly.21
Failures by the exchanges. Under ACA, tax-payers purchase insurance through exchanges setup by the federal or state governments, which areresponsible for certain tax reporting and collect-ing information from taxpayers. However,exchanges have failed in many instances to timelyprocess taxpayers’ reported changes in circum-stances that may affect their APTC amounts andrepayment obligations. In some cases, exchangeshave incorrectly calculated APTCs. In other cases,the exchanges have issued Forms 1095-A withincorrect information—Form 1095-A reportspremium and APTC information necessary toprepare Form 8962.
Cases such as these have already beenbrought to the Community Tax Law Project forassistance. In one such case, the taxpayer receivedForm 1095-A from the exchange and used it totimely file her tax return and reconcile her APTC.Later in the filing season she received a correctedForm 1095-A, and upon amending her tax returnshe was left with an unexpected balance due. Fora taxpayer on a fixed income trying to do the
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24
right thing with limited resources, a mistake bythe exchange can have lasting consequences.
Estimated household income inaccurate. For2014, approximately 1.6 million, or 50 percent, oftaxpayers who filed Forms 8962 reported excessAPTC—requiring repayment of $1.3 billion.22
Since interest is not charged on repayment of theadvanced PTC, the understated estimates result inthe equivalent of an interest-free loan. This factcombined with the express caps on repayment oferrant APTCs may incentivize taxpayers to under-state their estimated income.
Ineligible taxpayers. TIGTA has identifiedcircumstances in which individuals continue toreceive APTCs but ultimately are determined inel-igible or are unable to address an inconsistency.23
Exchanges are responsible for verifying eligibilityfor APTCs. However, individuals may receiveAPTCs on a conditional basis for at least a ninety-day period, within which they must address anyeligibility issues or inconsistencies, and until suchtime as the exchange finds the individual to beineligible (inconsistency period). There is a lackof guidance from the IRS with respect to repay-ment in these circumstances.
IRS Enforcement: Stay TunedGiven the problems associated with implementa-tion of ACA’s tax provisions during the first taxyear, it is likely that there will be increasedenforcement by the IRS and increased interactionbetween IRS and taxpayers subject to ACA.
Failure to file. Taxpayers who received APTCsin 2014, but failed to file Form 8962, will nolonger receive APTCs and may be subject to IRSaudit.24 To receive APTCs, taxpayers will need tofile their tax returns and seek redetermination oftheir eligibility from their respective exchange.Based on similar experience with the EITC, thisredetermination may be untimely for taxpayerswho owe insurance premiums and bring IRSauditors into the process. This could force taxpay-ers out of the PTC scheme and into SRP status.The IRS almost certainly will contact taxpayerswho have failed to file Form 8962 and may initi-ate an audit asserting deficiencies, interest, andperhaps penalties. The IRS may have a more diffi-cult time identifying taxpayers who fail to reportSRPs.
Administrative procedures. The excess APTCamounts after reconciliation are assessed as addi-tional taxes by the IRS and subject to deficiencyprocedures.25 If the IRS audits either failures tofile Form 8962 or challenges the informationreported, the IRS presumably will issue a notice of
deficiency giving taxpayers the right to challengeany deficiency determination in the US Tax Courton a pre-assessment basis. It is not clear whetherthe deficiency procedures apply to APTCs that arepaid on a conditional basis during the inconsis-tency period. TIGTA suggests that those APTCsmay have to be repaid prior to the filing of theannual tax return and reconciliation.26
SRP liabilities are not subject to deficiencyprocedures and rather are assessed and collectedin the same manner as civil penalties and accrueinterest.27 Taxpayers who wish to challenge SRPassessment (e.g., disputes with respect to exemp-tions, etc.) may have to pay the assessment andpursue a refund – administratively within the IRSor by suit in a federal district court or the USCourt of Federal Claims. The IRS is limited in itsoptions for collecting SRP liabilities. By statute, afailure to timely pay the SRP is not subject to anycriminal prosecution or penalty and the IRS isnot permitted to file a notice of lien or levy thetaxpayer’s property.28 IRS has authority to offsetany SRP liability against any overpayment due thetaxpayer.29 The National Taxpayer Advocate hasreported that IRS is exploring other indirectmethods of collection, including the inclusion ofSRP liabilities in installment agreements andoffers in compromise.30
Household income. The amount of PTCsdepends on two things— family size and house-hold income. Changes to either may result insignificant APTC reconciliation payments. Forexample, a recent letter from IRS to a concernedcongressman describes a scenario in which aspouse’s income was omitted from a taxpayer’sAPTC calculation, resulting in significant APTCoverpayments. In that scenario, the taxpayer wasrequired to repay $2,500—the repayment cap fortaxpayers in the bracket for 300 percent to 400percent of the federal poverty line. If this incomehad equaled or exceeded 400 percent, full repay-ment of APTCs would have been required.Because APTC reconciliation is based on actualadjusted gross income amounts for the tax year inwhich APTCs were received, it appears also thatan IRS audit resulting in the inclusion of origi-nally unreported income may produce corollaryadjustments to and perhaps disallowance ofPTCs. Practitioners familiar with the EITC havelikely seen the same phenomenon where incomeadjustments can have more bite because of loss ofthe tax credits.
Penalties. The IRS has signaled that late-pay-ment and estimated tax penalties may applywhere taxpayers have a balance due after reconcil-
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iation of their APTCs on their annual tax returnsand must repay excess APTCs. The IRS has agreedto waive those penalties but only for the 2014 taxyear.31 The IRS notice does not cover a failure topay SRP. It is not clear at this point whether theIRS will seek to impose additional penalties forfailures to file Form 8962 or failures to reportSRP. For example, it is not uncommon for aggres-sive IRS personnel to impose civil penalties insimilar circumstances for intentional disregard offiling requirements.32 Those penalties are not sub-ject to deficiency procedures.
APTC freeze. Given the initial experiencewith APTCs, the IRS may impose tighter controlsin future years. One question is whether the IRShas authority, similar to the EITC,33 to “freeze”APTCs in circumstances where they have beenoverpaid or where the taxpayer has been delin-quent in its filing obligations. The NationalTaxpayer Advocate has flagged this possibility in her annual report.34 Although this processmay be effective for dealing with the “badapples,” it creates a significant burden for inno-cent taxpayers who ended up in this process forminor or technical issues and issues not of theirown making.
ConclusionImplementation of ACA’s tax provisions hasrevealed significant complexities and potentialfor confusion at multiple levels. The structure ofthe ACA requires taxpayers to interact with multi-ple actors, including the exchanges, the insurancecompanies, and the IRS. This many partiesinvolved with unsophisticated taxpayers is arecipe for confusion. The implementation processis in its opening stages with 2014 being the firsttax year subject to ACA tax reporting. Given thelarge number of discrepancies during this firstyear, including significant overpayments ofAPTCs, it is likely that the IRS will step up taxenforcement. This burden will undoubtedly fallon lower-income taxpayers who may be lessequipped to sort through all the additional paper-work and requirements to claim the tax creditswhich reduce their insurance premiums andenable them to afford health insurance.
Endnotes:1 Pub. L. No. 111-148, 124 Stat. 119 (2010).2 135 S. Ct. 2480 (June 25, 2015).3 July 17, 2015 Letter from IRS Commissioner John
Koskinen, http://www.irs.gov/pub/irs-utl/CommissionerLetterlwithcharts.pdf.
4 Id.
5 Joel Zinberg, One Easy Obamacare Fix, U.S. News& World Report, Aug. 19, 2015.
6 IRC §36B(b), (c)(2), §5000A(f).7 IRC §36B(c)(1); Instructions to IRS Form 8962
(2014), see http://www.irs.gov/pub/irs-pdf/i8962.pdf, at 4.
8 IRC §36B(d)(2).9 42 USC §18082(c)(2).10 IRC §36B(f).11 http://www.irs.gov/pub/irs-pdf/f8962.pdf. 12 See supra note 7, Instructions to IRS Form 8962,
Table 5, at 11.13 Id.14 IRC §5000A(a).15 IRC §5000A(d), (e); see http://www.healthcare
.gov/fees-exemptions/exemptions-from-the fee/. 16 IRC §5000A(b).17 IRC §5000A(c).18 Treasury Inspector General for Tax
Administration, Affordable Care Act: Assessment ofInternal Revenue Service Preparation for ProcessingPremium Tax Credit Claims, Ref. No. 2015-43-043(May 11, 2015).
19 National Taxpayer Advocate, 2014 Annual Reportto Congress, seewww.TaxpayerAdvocate.irs.gov/2014AnnualReport, at 67.
20 See supra note 3.21 Id.22 Id.23 See supra note 18, at 9.24 http://www.irs.gov/Affordable-Care-
Act/Individuals-and-Families/The-Premium-Tax-Credit.
25 IRC §6211(b)(4)(A), §6401(b)(1).26 See supra note 18, at 10.27 IRC §5000A(g)(1); Treas. Reg. §1.5000A-5(a).28 IRC §5000A(g)(2).29 Treas. Reg. §1.5000A-5(b)(3); see IRC §6402(a).30 See supra note 19, at 74.31 Notice 2015-9, 2015-6 I.R.B. 590.32 IRC §6721(e).33 See IRC §32(k).34 See supra note 19, at 72.
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Nancy Porcari Rossner is the staff attor-ney for the Community Tax Law Project,a low-income taxpayer clinic inRichmond. She represents low-incometaxpayers in disputes with the InternalRevenue Service and the VirginiaDepartment of Taxation at all levels ofcontroversy including exams, audits, col-lections, and US Tax Court.
Timothy L. Jacobs is a partner at the lawfirm Hunton & Williams LLP,Washington, DC, and a member of theboard of directors for the CommunityTax Law Project. He focuses on tax con-troversy and litigation and formerlyserved as an attorney-adviser at the USTax Court.
26
In a business environment that hasseen recent increases in individual
income tax rates, consistent increases in
the cost of employer-provided employee
benefits, and new requirements for
employer-provided health insurance cov-
erage under the Patient Protection and
Affordable Care Act, it is not a surprise
that more employers have sought to
utilize workers as independent
contractors rather than as employees. Not
coincidentally, the Internal Revenue
Service and particularly the Department
of Labor (DOL) have increased efforts to
curb worker misclassification. The IRS
interest in worker classification as worker
status (i.e., employee vs. independent
contractor), among other things, impacts
the income tax and employment tax
withholding and reporting obligations
imposed on the employer. The DOL is
tasked with enforcement of the Fair
Labor Standards Act of 1938 (FLSA) and
the protections it provides to employees
(minimum wage, work-hour restrictions,
etc.). A recent publication by the admin-
istrator of the DOL’s Wage and Hour
Division illustrates differences between
the worker classification tests used by the
DOL and the IRS.1
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Be Aware of Differing Worker ClassificationTests Applied by DOL and IRSby Joshua D. Kelly and David S. Lionberger
TAXATION SECTION | Vol. 64 | October 2015 | VIRGINIA LAWYER 27
IRS TestTraditionally, the IRS has relied upon a common-law facts and circumstances test that focused onemployer “control” in worker classification dis-putes. In this context, “control” means employercontrol over the worker, both in the nature of thework performed and the circumstances underwhich it is performed.2 Over the years, the com-mon-law test has been incorporated into specificsections of the Internal Revenue Code (the Code),required to be used under Treasury regulations, orrequired under case law.3 Section 3121(d)(2) ofthe Code defines “employee” as “any individualwho, under the usual common law rules applica-ble in determining the employer-employee rela-tionship, has the status of an employee.”4 Treasuryregulations promulgated under Section 3401 ofthe Code also incorporate the common-lawworker classification test in the definition of“employee.”5 Under both the cited Treasury regu-lations and case law, the control necessary to pro-vide a worker with status as an employee is foundif the employer has the right to control theworker, whether or not that control is exercised.6
In Revenue Ruling 87-41, the IRS identifiedtwenty factors that may indicate whether anemployee-employer relationship exists, with theweight given to each factor varying dependingupon the facts of the situation and the occupationof the worker. The factors identified by the IRSare:1. Instructions—employee status is indicated if
the employer has the right to require compli-ance with instructions.
2. Training—required attendance at trainingsessions indicates employee status.
3. Integration—employee status is indicated ifthe worker’s services are integrated into thebusiness operations of the employer.
4. Services rendered personally—if the servicesare required to be performed personally, thisindicates employee status.
5. Hiring, supervision, and paying assistants—if the employer hires, supervises, and pays theworker’s assistants, this indicates employeestatus. If the worker hires and supervises oth-ers as part of a contract where the worker isonly responsible for the ultimate result, thisindicates independent contractor status.
6. Continuing relationship—a continuing rela-tionship between the employer and theworker indicates employee status.
7. Set hours of work—if the worker has sethours, this indicates employee status.
8. Full time required—employee status is indi-cated if the worker must devote substantially
full time to the employer; an independentcontractor is free to work when and forwhom he or she chooses.
9. Doing work on employer’s premises—if thework is required to be completed on theemployer’s premises, this indicates employeestatus.
10. Order or sequence test—if the employeemust perform services in the order orsequence determined by the employer, ratherthan the employee’s own pattern of work,this indicates employee status.
11. Oral or written reports—employee status isindicated if the worker must submit regularreports to the employer.
12. Terms of payment—payment by hour, week,or month indicates employee status; paymentby job or commission indicates independentcontractor status.
13. Payment of business and/or travelingexpenses—if the employer pays the worker’sexpenses, this indicates employee status.
14. Furnishing tools and materials—if theemployer provides the worker with signifi-cant tools and materials, this indicatesemployee status.
15. Significant investment—significant invest-ment in facilities or materials by the workerindicates independent contractor status.
16. Realization of profit or loss—if the workerhas the potential to realize a profit or loss as aresult of his or her work, this indicates inde-pendent contractor status.
17. Working for more than one firm at a time—if a worker provides more than de minimisservices for multiple employers simultane-ously, this indicates independent contractorstatus.
18. Making service available to the general public—if a worker regularly and consistentlymakes services available to the general public,this indicates independent contractor status.
19. Right to discharge—if the employer has aright to discharge the worker, this indicatesemployee status.
20. Right to terminate—if the worker has theright to terminate his or her relationshipwith the employer without incurring liability,this indicates employee status.7
More recently, the IRS has consolidated thetwenty-factor test into three critical factors to beconsidered in determining whether employercontrol exists: behavioral control, financial con-trol, and the relationship of the parties.8
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Behavior control relates to whether theemployer has a right to direct or control themanner in which a worker completes his or herwork. Factors evaluated in determining behav-ioral control include the type and degree ofinstructions provided, whether the employer eval-uates how the work is performed or only the finalwork product, and whether the employer trainsthe worker on how to perform the job.9
Financial control relates to whether theemployer has a right to control the economicaspects of the work. Factors evaluated in deter-mining financial control include whether theworker has made a significant investment inequipment, whether the employer reimburses allworker expenses, whether the worker has a possi-bility of incurring a loss as a result of the job,whether the worker is free to seek out other busi-ness opportunities, and whether the worker isguaranteed a regular wage.
The type of relationship is evidenced by themanner in which the employer and workeridentify their relationship, such as the mannerin which the relationship is described in anywritten contracts between the two parties,whether the employer provides the worker withbenefits, the expected duration of the relation-ship, and whether the worker’s services are keycomponent of the employer’s business.10
DOL TestThe DOL, on the other hand, relies upon thedefinition of “employ” in the FLSA and judicialinterpretation of that definition in worker classi-fication disputes for purposes of the FLSA. TheFLSA does not actually define “employee,” butdefines “employ” as “to suffer or permit towork.”11 In determining worker classificationquestions under the FLSA, courts have developeda multi-factor “economic realities” test.12 The eco-nomic realities test focuses on the economic sub-stance of the employer-worker relationship andeconomic dependence of the worker on theemployer, rather than the employer’s control overthe worker and/or the work product.13 The fac-tors most commonly applied in the economicrealities test include: the extent to which the workperformed is an integral part of the employer’sbusiness, the worker’s opportunity for profit orloss, the extent of the relative investments of theemployer and the worker, whether the work per-formed requires special skill, the permanency ofthe employer-worker relationship, and the degreeof control exercised or retained by the employer.14
The DOL applies each of these factors in relationto one another with no individual factor being
given more weight than any other. The DOLapplies the economic realities test broadly to pro-vide more expansive coverage for workers underthe FLSA.15 From the DOL’s perspective, the mostbasic worker classification question, and the cruxof the economic realities test, is whether theworker is an independent business person or iseconomically dependent upon the employer.16
Comparison of Differing TestsIn comparing the IRS’s control test and the DOL’seconomic realities test, the question confrontedby employers is how to properly classify workerswhen the different tests yield different results.
Consider a delivery truck driver or freightcarrier who operates on his own schedule, deter-mines his route, pays his vehicle operating costs,and has little oversight or reporting obligations tothe employer. Suppose the worker is paid on aper-delivery or per-mile basis. Suppose also thatthe time required to complete the work requestedby the employer provides the worker with theopportunity to provide similar services to a differ-ent employee, but the worker chooses not to doso. It seems likely that such a worker would beclassified as an independent contractor under theIRS common law test. However, under the eco-nomic realities test, the DOL could argue theworker was an employee as the work was an inte-gral part of the employer’s business, the worker’sopportunity for loss is low, the work provideddoes not require special skill, and, most impor-tantly, the worker appears economically depen-dent upon the employer.
Consider also a skilled tradesman who oper-ates as a subcontractor on construction projects.Assume the worker made a significant investmentin the purchase of her tools and has the ability toseek out other business but is paid on a per-jobbasis, was not offered benefits by the employer,and received no training from the employer.These facts would likely indicate independentcontractor status under the IRS’s test. However,assume that the worker works regularly andalmost exclusively with a single general contrac-tor, performs a function that is an integral part ofthe general contractor’s projects, and her workproduct requires special skills. Is this worker reallyan independent business person or is the workereconomically dependent upon the success of thegeneral contractor for whom she regularly andconsistently provides services? The DOL couldargue the latter under the DOL’s interpretation ofthe economic realities test.
As illustrated by these examples, it is gener-ally more difficult for an employer to classify a
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worker as an independent contractor under theDOL’s economic realities test for FLSA purposesthan the IRS’s control test for tax purposes. Thus,counsel for employers should be cognizant of thedifferent tests in structuring their employmentarrangement and, particularly, in worker classifi-cation enforcement actions initiated by the DOL,and bring their clients’ attention to the differingstandards applied by the respective agencies.
Information SharingIf an employer is the subject of a DOL workerclassification audit, it should be aware that theIRS will almost certainly be alerted to any result-ing worker reclassifications. Pursuant to aMemorandum (MOU) entered into between theIRS and DOL on September 19, 2011, the agen-cies agreed to collaborate and share informationto reduce instances of worker misclassification inorder to reduce the “tax gap” and improveemployer compliance with federal labor laws.17
Amongst other information to be shared pur-suant to the MOU, the DOL agreed to refer to theIRS “investigation information and other data”gathered by the DOL Wage and Hour Divisionwhich the DOL believes may present IRS employ-ment tax compliance issues.18 An employerinvolved in a DOL classification case or an IRSaudit involving worker classification issues canexpect the results of such case or audit to beshared with the other agency as well.
The MOU also requires the IRS to shareemployment tax referrals provided by the DOLwith state and municipal taxing authorities withwhich the IRS is authorized to share tax returninformation, provide the DOL with IRS compileddata relative to trends in worker misclassification,and provide the DOL with information that mayevidence Federal criminal violations enforced bythe DOL.19
ConclusionWith the increased attention paid to worker clas-sification issues by the DOL and IRS, it is impor-tant that both counsel and employers be familiarwith the respective tests and standards applied byboth agencies and prepared for worker classifica-tion audits from either agency. While the terms ofa written agreement between the employer andworker are not determinative of worker status,counsel and employers should review currentagreements to ensure that they are drafted withboth the IRS’s test and the DOL’s test in mind.Counsel and employers should also review man-agement procedures and all employment arrange-ments with respect to independent contractors to
promote compliance with each test and attemptto minimize the risk of the DOL and/or IRSrecharacterizing independent contractors asemployees.
Endnotes:1 Administrator’s Interpretation No. 2015-1.2 Joint Committee on Taxation, Present Law and
Background Relating to Worker Classification forFederal Tax Purposes (JCX-26-07), May 7, 2007.
3 Id.4 I.R.C. § 3121(d)(2).5 Treas. Reg. § 31.3401(c)-(1)(b) provides that an
employer-employee relationship generally exists ifthe worker “is subject to the will and control ofthe employer not only as to what shall be done buthow it shall be done.”
6 Id. See also, Gierek v. Commissioner, 66 T.C.M.1866 (1993).
7 Rev. Rul. 87-41, 1987-1 C.B. 2968 Department of the Treasury, Internal Revenue
Service, Publication 15-A Employer’s SupplementalTax Guide, Cat. No. 21453T
9 Id.10 Id.11 FLSA § 203(g).12 Tony & Susan Alamo Found. V. Sec. of Labor, 471
U.S. 290, 301 (1985).13 Goldberg v. Whitaker House Co-op, Inc., 366 U.S.
28, 33 (1961).14 Administrator’s Interpretation No. 2015-1 at 4.15 Id.16 Id at 5.17 Memorandum of Understanding between the
Internal Revenue Service and the United StatesDepartment of Labor (9/19/11).
18 Id.19 Id.
BE AWARE OF DIFFERING WORKER CLASSIFICATION TESTS APPLIED BY DOL AND IRS
www.vsb.org
Joshua D. Kelly is an associate inHirschler Fleischer’s business section,where his practice focuses on tax plan-ning, estate planning, trust and estateadministration, state and local taxation,and mergers and acquisitions.
David S. Lionberger is a partner inHirschler Fleischer’s business section,where his practice focuses on taxation andbusiness planning, tax credit transactions,state and local tax, trusts and estates, andmergers and acquisitions. He representsclients ranging from family and closely-held growth and middle market compa-nies to regional and multi-nationalbusinesses, focusing on privately-heldcompanies.
30
On October 17, 2014, the commis-sioner of the Virginia Department of
Taxation issued a Public Document
(P.D. 14-177) in which he answered a
taxpayer’s request for a ruling on the
period of limitations for collecting taxes.1
Turning to § 58.1-1802.1(A) of the Code
of Virginia, the commissioner argued
“that so long as the any [sic] collection
action is initiated or made before the end
of the period of limitations, collection
may continue until the assessment is
satisfied.”2 According to the commis-
sioner, a “collection effort” has occurred
when the Department of Taxation
(department) “levies an assessment” on
a taxpayer and “encompasses all means
of collecting taxes enumerated under
Virginia statutes.”3 In practice, this inter-
pretation of § 58.1-1802.1 permits the
department to collect assessed taxes by
wage garnishments, liens, and any other
means no matter how old the underly-
ing liability.
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Everything Old Is New Again: The Virginia Department of Taxation’sAttempt to Ignore the Limits of Collectionby Guy C. Crowgey, Robert H. Johnson, and Brockenbrough A. Lamb
TAXATION SECTION | Vol. 64 | October 2015 | VIRGINIA LAWYER 31
The commissioner’s ruling in P.D. 14-177raises the question as to what is actually limitedby § 58.1-1802.1. If the commissioner’s ruling iscorrect, the department has the same ability topursue a taxpayer for a liability incurred in 1990as it does for one incurred in 2014 as long as thedepartment has properly made an assessment.According to the commissioner, a collection efforthas already begun once the tax is assessed. Since aliability must be assessed in order to exist, andP.D. 14-177 states the department need only begina collection effort in order to collect beyond thestatutory period, every Virginia tax liability is fairgame for collection in perpetuity. This seems con-trary to the intent of a code section titled “Periodof limitations on collection.”4 Moreover, thisstatute does not limit the time for the departmentto assess a liability as that period is set out by Va.Code Ann. § 58.1-1812. If § 58.1-1802.1 does notlimit the period of time the department actuallyhas to collect the tax or limit the time the depart-ment has to assess a tax, then it does not limitanything at all except for the accrual of interestand penalties under certain circumstances.5
The Virginia General Assembly enacted § 58.1-1802.1 in 1990. Prior to this statute, therewas no law specifically limiting the collection oftax by the department. Originally § 58.1-1802.1set forth a limitation on collections of twentyyears from the date of a proper assessment6 of a tax.7 Since then, the code section has beenamended twice, first, in 2010 when the limit wasreduced to ten years,8 and again in 2012 whenthe limit was reduced to seven years.9 Under thecommissioner’s ruling, it is unclear what, if any-thing, would have been changed by this reduc-tion in years.
In both 2010 and 2012, the departmentissued impact statements in which it argued thereduced time periods would have little effect onthe revenue generated from tax collectionsbecause it is unusual for the department not tohave instituted a collection effort well before thespecified time period.10 These impact statementsnaturally dovetail nicely with the commissioner’slater ruling in P.D. 14-177. Since the commis-sioner ruled in P.D. 14-177 that the collectioneffort commences when the department “levies anassessment,” a reduction of the limitations periodfrom twenty years to seven years would, in fact,have no effect on the department’s ability to col-lect assessed liabilities.
It seems unlikely the General Assemblywould have created and twice amended a lawthat is largely meaningless. Evidence that the
commissioner has misunderstood the intent ofthe General Assembly is present in the legislativehistory. In 2012, the governor formally recom-mended to the General Assembly an amendmentto § 58.1-1802.1, which suggested that the statute,as written, did not, in fact, provide for unlimitedcollection. The proposed amendment, which theGeneral Assembly tellingly declined to adopt,would have inserted at the end of the statute thefollowing language: “Nothing in this section shallprohibit the continuance of a collection activitybegun within the period prescribed in subsectionA11 from continuing beyond that period.”12 Suchan amendment would have explicitly allowed forthe commissioner’s position that the departmentmay continue collection actions past the sevenyear limit,13 but again, the General Assembly didnot amend § 58.1-1802.1 to include it.
According to the Supreme Court of Virginia,in order to collect a tax, the commissioner mustbe able to point to a statute that positively andexplicitly grants the department such authority.14
A ruling by the commissioner involving the inter-pretation of a statute authorizing collection orassessment is presumed to be correct, but only onits face.15 It may be challenged on the basis that itis “contrary to law, was an abuse of discretion, orwas the product of arbitrary, capricious, or unrea-sonable behavior.”16 Though courts will giveweight to the interpretations of the commissionerwhen statutes are ambiguous, they will neverdefer to the commissioner.17 Furthermore, when astatute is unambiguous, a court will grant theinterpretation of the commissioner no more con-sideration than that of a taxpayer.18
When it comes to his interpretation of § 58.1-1802.1 in P.D. 14-177, the commissioner has giventhe department substantial power well beyond theauthority explicitly granted by the statute. In P.D.14-177, the commissioner relies on and interpretsa single sentence out of the entire statute:
Where the assessment of any tax imposed bythis subtitle has been made within the periodof limitation properly applicable thereto,such tax may be collected by levy, by a pro-ceeding in court, or by any other meansavailable to the Tax Commissioner under thelaws of the Commonwealth, but only ifsuch collection effort is made or institutedwithin seven years from the date of theassessment of such tax.19
The commissioner considers this sentence in avacuum, without the surrounding language, andthen gives the taxpayer his “clear” interpretation.
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The commissioner suggests that if a collec-tion effort is merely “initiated” within seven yearsof a proper assessment, “any collection” at anytime is good until the debt is repaid.20 However,the sentence does not say that a collection is goodso long as “any collection action is initiated ormade before the end of the period”21 but ratherthat a collection is good only if “such collectioneffort is made or instituted”22 within the period.Even if the statute were limited to this single sen-tence,23 it does not say what the commissionerneeds it to say. Instead, this sentence, on its own,explicitly limits the collection of taxes to thosespecific collection actions made or institutedbefore the expiration of the period of limitationsand, as such, is unambiguously at odds with thecommissioner’s ruling.24 The commissioner’s rul-ing becomes even more unreasonable once thesentence is read in conjunction with the rest ofthe statute, as it would require much of 58.1-1802.1 to be meaningless.
Take for instance the following languagefrom § 58.1-1802.1(A) which immediately followsthe sentence relied on by the commissioner inP.D. 14-177:25 “[p]rior to the expiration of anyperiod for collection, the period may be extendedby a written agreement between the tax commis-sioner and the taxpayer.”26 Why would it be nec-essary to extend a period for collections, especiallyby written agreement, if all the department has todo to make a collection period last forever is to“lev[y] an assessment”27 on the taxpayer? Or toask it another way, why would the GeneralAssembly provide the department with such ameager method of extending a collection periodwhen it has already (according to the commis-sioner) granted it the tremendous ability to col-lect a tax in perpetuity?
In the very next sentence of § 58.1-1802.1(A), the General Assembly lists its excep-tions to the general “period of limitationsprovided in this subsection during which a taxmay be collected.”28 This language, which directlycontradicts the commissioner’s ruling, explicitlymarks the statute as a general limitation on thetime period for collections (with certain listedexceptions). The commissioner, however, rulesthat the statute does not limit the time period forcollections but rather merely limits the timeperiod for the initiation of collections. This read-ing is likely incorrect because the language of thestatute here identifies § 58.1-1802.1 as a straight-forward limitation on collections. Moreover, a
limitation on the initiation of collections is mean-ingless when, as the commissioner contends, acollection is initiated by the assessment itself.
To arrive at his understanding of the statute,the commissioner seems to put great weight onthe fact that a “tax may be collected . . . if suchcollection effort is . . . instituted within sevenyears from the date of assessment.”29 If these spe-cific words could be considered on their own,without the surrounding language of the statute,they might well suggest that § 58.1-1802.1 is anattempt to limit the time period for the initiationof tax collections rather than the time period forthe collections themselves. However, given thesurrounding language, such an interpretation isflawed.
Considering the statute as a whole, it seemslikely that the General Assembly intended to cre-ate something like the general federal CollectionStatute Expiration Date (CSED), which applies toIRS collections. Using similar language to § 58.1-1802.1, the CSED provides that “[w]here theassessment of any tax imposed by this title hasbeen made within the period of limitation prop-erly applicable thereto, such tax may be collectedby levy or by a proceeding in court, but only if thelevy is made or the proceeding begun . . . within10 years after the assessment of the tax.” 30 As inthe Virginia statute, the federal CSED mentionsthat a tax may be collected if a collection proceed-ing is made or begins before the expiration of thecollection period;31 however, unlike § 58.1-1802.1,the CSED statute has always been interpreted tobe a general limitation on the time period for col-lecting a tax (limiting it to ten years).32 The IRSinterpretation makes sense as such language iseasily read to mean that a collection is good to theextent that it is initiated during the statutoryperiod described. Interpreting § 58.1-1802.1 in asimilar fashion, the Virginia statute allows thateven if a collection cannot be completed duringthe statutory period, it may still be instituted andpartially made during that period. While thisreading requires a small degree of interpretation,it does not upend the statute.
Until the commissioner’s ruling is challengedand overturned by the courts, it will likely remainthe stated policy of the department. Such a chal-lenge may be particularly slow in coming giventhe high cost of litigation when compared withthe relatively low-cost administrative avenues forthe resolution of outstanding tax assessments.
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Endnotes:1 Virginia Dep’t of Taxation, Pub. Doc. 14-177
(October 17, 2014), available at http://www.tax.virginia.gov/laws-rules-decisions/rulings-tax-commissioner/14-177.
2 Id.3 Id.4 VA. CODE ANN. § 58.1-1802.1 (2015).5 VA. CODE ANN. § 58.1-1802.1(C) says that the
accrual of penalties and interest cease when theDepartment has not made contact with the tax-payer for over six years.
6 See VA. CODE ANN. § 58.1-1812 (2015) (properassessment of a tax).
7 Act of Apr. 9, 1990, ch. 659, 1990 Va. Acts (codifiedat § 58.1-1802.1(A) (Cum. Supp. 1990)).
8 Act of Mar. 4, 2010, ch. 30, 2010 Va. Acts (codifiedas amended at Va. Code Ann. § 58.1-1802.1(A)(Cum. Supp. 2010)).
9 Act of May 18, 2012, ch. 840, 2012 Va. Acts (codi-fied as amended at Va. Code Ann. § 58.1-1802.1(A) (Cum. Supp. 2012)).
10 See Va. Dep’t of Taxation, Fiscal Impact Statementfor HB 35 (Feb. 27, 2012) available at http://lis.virginia.gov/cgi-bin/legp604.exe?121+oth+HB35FER161+PDF; Va. Dep’t of Taxation, FiscalImpact Statement for HB 17 (Feb. 22, 2010) avail-able at https://lis.virginia.gov/cgi-bin/legp604.exe?101+oth+HB17FER161+PDF.
11 Again, in 2012, 58.1-1802.1(A) was amended tolimit the period for collections from ten years toseven years.
12 Governor’s Recommendation for HB 35, availableat http://lis.virginia.gov/cgi-bin/legp604.exe?121+amd+HB35AG.
13 Such an amendment would have explicitly autho-rized the Department to continue collectionattempts on liabilities after the limitations periodin circumstances where a collection action hadalready been commenced. However, the issue stillremains as to whether the mere assessment of a
liability constitutes the commencement of a col-lection effort.
14 City of Richmond v. Suntrust Bank, 283 Va. 439,442, 722 S.E.2d 268, 270 (2012) (quotingWoodward v. Staunton, 161 Va. 671, 673, 171 S.E.590, 591 (1933)).
15 See Chesapeake Hosp. Auth. v. Commonwealth,262 Va. 551, 560, 554 S.E.2d 55, 59-60 (2001).
16 Id.17 Nielsen Co. (US), LLC v. County Bd. of Arlington
County, 289 Va. 79, 88, 767 S.E.2d 1, 4 (2015).18 Id.19 Pub. Doc. 14-177, supra note 1 (quoting VA. CODE
ANN. § 58.1-1802.1(A)) (emphasis added).20 Id.21 Id. (emphasis added).22 VA. CODE ANN. § 58.1-1802.1 (2015).23 And obviously it is not. The statute should be read
and interpreted as a whole. 24 Additionally, there is no explicit support for the
Commissioner’s proposition that the assessmentitself would constitute such a collection action.
25 Indeed the very next sentence.26 VA. CODE ANN. § 58.1-1802.1(A) (2015) (empha-
sis added).27 Pub. Doc. 14-177, supra note 1.28 Id. (emphasis added).29 Id. (emphasis added).30 See I.R.C. § 6502.31 Compare id. (“made or the proceeding begun”)
with VA. CODE ANN. § 58.1-1802.1(A) (2015)(“made or instituted”).
32 See IRM 8.21.5.1.2, Internal Revenue Manual(Apr. 20, 2012).
EVERYTHING OLD IS NEW AGAIN
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Guy C. Crowgey is the founder of the lawfirm of Crowgey & Associates inRichmond. His practice is concentrated infederal and state tax law, tax controversies,audit and appeals, and collection actions,and federal and state criminal tax fraudcases.
Robert H. Johnson is an associate withthe law firm of Crowgey & Associates. Hefocuses his practice around state and fed-eral tax controversy. He also assists smallbusiness owners with a variety of tax andcorporate issues.
Brockenbrough A. Lamb, an intern atCrowgey & Associates, is a third year lawstudent at the University of Richmond.
34
The January 2015 Supreme Court ofVirginia opinion in The Nielsen Company
LLC v. County Board of Arlington County
sent two important messages to state and
local governments in Virginia. First, local
governments should permit taxpayers to
use an estimation methodology when
determining a deduction for gross
receipts taxed in other states for purposes
of the business, professional, and occupa-
tional license (BPOL) tax if it is impossi-
ble to determine the exact amount of the
deduction. Second, the state government,
specifically, the Virginia Department of
Taxation (tax department) needs to
reconsider its current policy of issuing
guidelines and public documents instead
of regulations in an effort to meaning-
fully promote taxpayer compliance and
minimize tax controversy disputes.
www.vsb.orgVIRGINIA LAWYER | October 2015 | Vol. 64 | TAXATION SECTION
Recent Supreme Court of Virginia DecisionsDemonstrate the Urgent Need for New TaxRegulations by Craig D. Bell and J. Christian Tennant
TAXATION SECTION | Vol. 64 | October 2015 | VIRGINIA LAWYER 35
Multi-State Businesses Must Deduct GrossReceipts Taxed By Other StatesSince 2009, the Supreme Court of Virginia hasdelivered three very important opinions concern-ing the BPOL tax imposed by many Virginia localgovernments on the businesses operating withintheir boundaries. Each of these cases involves theproper method of calculating the BPOL tax owedby larger businesses and businesses that operate inmultiple states. The Virginia General Assemblyreformed the BPOL tax in 1996 to reign in localgovernment officials’ over-reaching interpreta-tions of the tax and to provide uniformity onhow the tax is imposed in different localities inVirginia.1 Despite the reformation of the BPOLtax, major issues regarding differing interpreta-tions on the proper method of calculating theBPOL tax still exist for businesses that operate in multiple states. In connection with the 1996reform, the tax department promulgated regula-tions concerning the BPOL tax, but has failed toupdate them since they were first promulgatedin 2008.2 Because the BPOL regulations have notbeen updated, multi-state businesses continue tobe forced to incur unnecessary costs relating toadministrative and judicial disputes on coreissues that should have been dealt with by newregulations.
The first two BPOL tax opinions from theSupreme Court of Virginia prevented local gov-ernments from taxing gross receipts not earnedin the locality. In City of Lynchburg v. EnglishConstruction Company3, the Court determinedthat the City of Lynchburg had no authority totax the gross receipts of a taxpayer earned inother localities where that taxpayer maintained adefinite place of business. Then, the Court in FordMotor Credit Company v. Chesterfield County4
determined a multi-state financial serviceprovider’s receipts from an office located in aVirginia locality were not 100 percent attributableto the actions performed in the office when theloans originated in the Virginia office but werefunded and serviced through offices outside ofVirginia. While both of these cases involved dif-ferent BPOL tax issues, the opinions correctlycontrolled the local government’s power to tax.
Determining the BPOL Deduction for GrossReceipts Taxed in Other StatesUnlike English Construction and Ford MotorCredit, the most recent dispute concerning theBPOL tax, The Nielsen Company LLC v. CountyBoard of Arlington County5, could have beenavoided had the tax department simply updated
its regulations. The Nielsen case involved anappeal from the Circuit Court of ArlingtonCounty that rejected Nielsen’s claim of a deduc-tion for gross receipts taxed outside of Virginiafor purposes of calculating the BPOL tax.6 TheSupreme Court of Virginia reversed the circuitcourt’s decision and allowed the deduction as cal-culated by Nielsen.7
The dispute in this case involved the inter-pretation of a statute allowing businesses a deduc-tion for gross receipts taxed in other states.Specifically, the calculation of the permissiblededuction was at issue. Through publicly issuedrulings, the Virginia Tax Commissioner (tax com-missioner) provided his interpretation of how thededuction should be computed. This methodol-ogy was not contained in the BPOL tax regula-tions. In these rulings, the tax commissionerdetermined that BPOL taxpayers who use payrollapportionment to situs their taxable receiptsshould use the same apportionment factor toascertain the proper amount of the deductionpermitted by Virginia Code § 58.1-3732.8
The dispute between Nielsen and Arlingtonover the deduction arose upon an audit byArlington that resulted in assessment for under-paid BPOL tax issued to Nielsen.9 Nielsenappealed the assessments back to Arlington andultimately to the tax commissioner pursuant toVirginia Code § 58.1-3703.1(A)(6)(a).10 The taxcommissioner issued his decision on the appeal inPublic Document 12-146.11 The tax commis-sioner determined that Arlington used an incor-rect methodology to calculate the deduction, andinstead permitted a payroll percentage methodol-ogy to be used.12 The tax commissioner statedthat the rationale behind this requirement is whilethis methodology provides an estimate, it resultsin a reasonable approximation of the deduction,is straightforward to administer, and can beapplied uniformly.13 In a ruling issued by the taxcommissioner prior to Nielsen’s ruling, he specifi-cally articulated the method to calculate thededuction as follows:1. Ascertain whether any employees at the
Virginia definite place of businessparticipated in interstate transactions by, forexample, shipping goods to customers inother states, participating with employees inother offices in transactions, etc. If there hasbeen no participation in interstatetransactions, then there is no deduction. Ifthere has been participation, then;
2. Ascertain whether any of this interstateparticipation can be tied to specific receipts.
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36
If so, then those receipts are deducted;however, if payroll apportionment had to beused to assign receipts to the definite place ofbusiness, then it is very unlikely that any ofthose apportioned receipts can be specificallylinked to interstate transactions. If not, or ifonly some of the participation can be tied tospecific receipts, then;
3. The payroll factor used for the Virginiadefinite place of business would be applied tothe gross receipts assigned to definite placesof business in states in which the taxpayerfiled an income tax return. Note that payrollapportionment would probably be needed toassign receipts to definite places of businessin other states.14
Arlington filed suit challenging the tax com-missioner’s ruling arguing that “regardless of howthe pool of taxable gross receipts was calculatedunder Code § 58.1-3703.1(A)(3), determining thededuction under Code § 58.1-3732(B)(2) requiresthe taxpayer to prove by manual accounting thatthe receipts attributable to business in a foreignjurisdiction where the taxpayer is subject to anincome-based tax liability were actually capturedin the pool of taxable gross receipts.”15 The circuit court ultimately ruled that usage of pay-roll apportionment for purposes of the deduc-tion is “arbitrary and capricious” and that “[t]hetaxpayer however, is certainly in a position todemonstrate by time sheets, travel expenses, bud-get, phone logs and other means how Virginiaemployees may have contributed to revenuesgenerated out-of-state and therefore entitled tothe deduction.”16
Entitlement to the deductionRequiring Nielsen to calculate its exact deductionignores the reality that if Nielsen were able tocalculate its deduction, it would also be able todirectly situs its gross receipts and not be requiredto use payroll apportionment for situsing pur-poses. Therefore, the circuit court’s ruling that anexact determination was required was in error.Interestingly, Arlington never argued that Nielsenimproperly used payroll apportionment to situsits receipts and stipulated that using payrollapportionment to situs receipts was proper forNielsen.17 So when the circuit court attempted torequire Nielsen to calculate its deduction withoutusing an apportionment formula, the circuitcourt effectively determined that Nielsen may notclaim a deduction to which it was entitled andhad been legislatively granted by the GeneralAssembly.18 The trial court’s decision on this issue
was contrary to the General Assembly’s intent forthe BPOL deduction statute.
The Supreme Court of Virginia overturnedthe circuit court on the basis that the tax commis-sioner’s ruling was neither contrary to law, norarbitrary and capricious.19 However, the SupremeCourt of Virginia did not state that the taxdepartment’s method for calculating the deduc-tion was the method that should be used. After itwas acknowledged that the Code of Virginia doesnot resolve the permissible methodology for cal-culating the deduction, the Court determined thatthe tax department’s requirement of manualaccounting, or payroll apportionment in theevent that manual accounting is impossible to cal-culate the deduction, falls within the scope ofaccounting methodologies permitted by VirginiaCode § 58.1-3732 which provides for the deduc-tion for out-of-state receipts.20 The Court con-cludes the tax department’s methodology is notcontrary to law.21 The Court also held that the taxdepartment’s methodology was not arbitrary orcapricious as it followed the statute’s scheme fordetermining the situs of gross receipts when it isimpossible or not practical to make such a deter-mination for purposes of the tax.22 Specifically,the Supreme Court of Virginia stated:
The use of an estimate methodology whendetermining a deduction, but only when it isimpossible to determine the exact figures tocalculate such a deduction, is neither “con-trary to ... established rules of law” nor amechanism permitting an assessment to be“founded on prejudice or preference ratherthan on reason or fact” when that very samemethodology is used to determine the initialtax to be imposed, but only when it isimpractical or impossible to determine theexact figures to calculate such a tax.23
On this basis, the case was remanded back tothe circuit court to issue an order consistent withthe opinion.24
Litigation could have been avoided withupdated tax regulationsThe Supreme Court of Virginia in Nielsenaddressed the issue of the deference or weightthat must be given to the tax commissioner’s rul-ings. The tax department has a long history ofbelieving that its rulings should be deferred toand given great weight by the judiciary in its deci-sions. Virginia courts disagree with providing anysuch deference. The Court directly addressed thiscontention when it stated, “A court never defers to
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the Tax Commissioner’s interpretation of astatute.”25 Great weight is only provided when astatute is obscure or its meaning doubtful.26
If the tax department would like its interpre-tations to receive “great weight,” the tax depart-ment should follow prior Court guidance:
For purposes of giving weight to the posi-tions of administrative agencies, it does notmatter whether an agency has been consis-tent in its rulings. This is because an agency’s“prior rulings and policies themselves are notentitled to great weight, unless expressed inregulations.” Chesapeake Hosp. Auth. v.Commonwealth, 262 Va. 551, 560, 554 S.E.2d55, 59 (2001).27
The Court also recognized that the taxdepartment’s rulings are only accorded judicialnotice and nothing more pursuant to VirginiaCode § 58.1-203.28 This subject begs the questionof why the tax department will not promulgateregulations so multistate businesses have the nec-essary regulatory guidance to comply withVirginia’s BPOL tax laws. Simply put, there wouldnot have been an issue in dispute in the Nielsencase had the tax department simply promulgateda regulation instead of publishing its desiredBPOL deduction methodology in a ruling thatVirginia courts and Virginia taxpayers are notentitled to rely upon as precedent.
The Virginia Department of Taxation will notpromulgate tax regulations The issue of promulgating tax regulations inVirginia is contentious. Regulations interpretingtax statutes typically are more desirable than regulations in other areas of law because tax regulations provide answers and more certaintywhen trying to determine how tax statutes thatfrequently are in-artfully worded or are some-what ambiguous apply to them. Both the TaxPolicy Committee of the Virginia Chamber ofCommerce and the Taxation Committee of theVirginia Bar Association have expressed theirbelief on numerous occasions to the tax commis-sioner that the tax department should put forthmore of an effort promulgating new and updat-ing existing tax regulations.
Unfortunately, there does not appear to bemuch interest from the tax department to devoteresources to this endeavor. Members of the TaxPolicy Committee of the Virginia Chamber ofCommerce and the Taxation Committee of theVirginia Bar Association first met with the taxcommissioner and his senior staff approximatelyfive years ago. During this meeting, it was
expressed to the tax commissioner that theChamber would assist the tax department in itsefforts to restart the regulation process so taxcompliance and certainty could be improved.Note that this is the odd situation where businessrepresentatives asked the government to writeregulations.
The business community’s pleas apparentlyfell on deaf ears. Subsequent meetings betweenthe various business community stakeholders andthe tax department leadership were equallyunsuccessful even though the tax departmentrecognized the importance and need for tax regu-lations in many areas of mutual interest. The taxdepartment’s inaction with tax regulations canalso be observed on the Virginia Regulatory TownHall website operated by the Virginia Departmentof Planning and the Budget.29 The Town Hallwebsite shows that the last activity for any chapterof the Virginia Administrative Code for which thetax department is responsible occurred in2009.30 Furthermore, the Town Hall websiteshows that the tax department has seventeenactions pending.31 All seventeen actions were ini-tiated by the tax department between late 2006and early 2008.32 None of the pending actionshave advanced beyond the initial notice stagereferred to as the NOIRA (Notice of IntendedRegulatory Action).33
Rulings and guidelines are not the answerThe tax department has all but abandoned issuingtax regulations. Instead, since 1980 the depart-ment has issued approximately 8,800 “public doc-uments,” an average of about 245 per year. These“public documents” consist of rulings of the taxcommissioner on assessment appeals and refundrequests, advisory opinions, and other bulletinsand announcements. “Public documents” cancover all of the taxes administered by the taxdepartment plus some local taxes. While it isnotable that Virginia releases such documentspublicly unlike many other states, such “publicdocuments” are not precedential and receive nodeference in a judicial setting.
The tax department last performed a majorupdate of the tax regulations in 1985. In manycases when a new tax policy has been enunciatedin a post-1985 public document, the tax regula-tions have not been updated. The tax regulationsalso have not been updated to reflect opinions ofthe Supreme Court of Virginia.34 Because the reg-ulations have not been updated, Virginia taxpay-ers in need of more certainty on tax positionsmust hire advisors simply to comply with the
THE URGENT NEED FOR NEW TAX REGULATIONS
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38
commonwealth’s tax laws. While that is goodnews for lawyers and CPAs who specialize inVirginia taxation, it is not necessarily financiallygood news for the taxpayers themselves. The taxdepartment’s own auditors must also negotiatethe thousands of public documents issued by thetax department in an attempt to find the right taxpolicy when conducting audits of taxpayers.The tax department has begun to issue or release“guidelines” as an alternative to tax regulations.Guidelines are provided for in Virginia Code sec-tion 58.1-204(A)(4) by requiring the tax commis-sioner to publish guidelines that he believes “maybe of interest to taxpayers and practitioners.”35 Itis unclear if anyone asked the tax department toissue such guidelines as both the business com-munity and the legal community has asked forregulations, not guidelines, which taxpayers, thetax imposing authorities, and the Virginia judi-ciary may rely upon.
The process for issuing guidelines in thismanner is easier and less cumbersome. It is theview of the authors that what makes guidelineseasier to issue is that there is nothing in theVirginia Code that establishes a procedure forhow such guidelines are developed. When writ-ing guidelines, the tax department tries to fol-low the comment periods provided for in theAdministrative Process Act (APA) that arerequired for the promulgation of regulations.However, the tax department will abandon thispractice when it deems it necessary. By writingguidelines completely within the tax depart-ment, reviews by other executive branch agenciesand the Attorney General of Virginia that arerequired by the APA for the promulgation ofregulations are avoided. The result is a simplestatement by the tax department of what itbelieves to be its policy.
Recognizing the lack of review, the GeneralAssembly chose to give guidelines no weight andsolely afforded them judicial notice.36 Knowingthat guidelines receive no formal review outsideof the tax department and receive no weight bythe judicial system, how can tax lawyers andother tax practitioners advise clients to rely onthem? Of all the different state agencies, the taxdepartment probably has the most diect contactwith Virginia citizens. Despite that, the taxdepartment has not issued regulations underthe APA and instead provides unreviewed policythrough the use of guidelines that have noprecedential value, thus leading to uncertainty,expense, and litigation that may otherwise beavoided.
Endnotes: 1 Craig D. Bell and J. Christian Tennant, Is Your
Client Overpaying BPOL Tax?, VIRGINIA LAWYER,Vol. 58/No. 3, (October 2009) at 24.
2 As a temporary measure, the tax departmentissued BPOL tax guidelines instead of regulationsprior to 2008.
3 City of Lynchburg v. English ConstructionCompany, Incorporated, et al., 277 Va. 574, 584; 675S.E.2d 197, 202 (2009).
4 Ford Motor Credit Company v. Chesterfield County,281 Va. 321; 707 S.E.2d 311 (2011).
5 The Nielsen Company LLC v. County Board ofArlington County, 289 Va. 79, 767 S.E.2d 1 (2015).
6 Nielsen, 289 Va. at 86.7 Nielsen, 289 Va. at 99.8 Nielsen, 289 Va. at 95.9 Nielsen, 289 Va. at 85.10 Id.11 Nielsen, 289 Va. at 86.12 Id.13 Ruling of the Virginia Tax Commissioner, Public
Document (P.D.) 12-146 (August 31, 2012).14 Ruling of the Virginia Tax Commissioner, P.D. 12-
88 (May 31, 2012).15 Nielsen, 289 Va. at 94.16 County Board of Arlington County, Virginia, et al. v.
The Nielsen Company (US), LLC, Case No. CL12-2872, Pg. 5 (County of Arlington Circuit Court,November 19, 2013).
17 Post-trial brief of the respondent at 8, CountyBoard of Arlington County, Virginia, et al. v. TheNielsen Company (US), LLC, Case No. CL12-2872(County of Arlington Circuit Court, November19, 2013).
18 Post-trial brief of the respondent at 12-13, CountyBoard of Arlington County, Virginia, et al. v. TheNielsen Company (US), LLC, Case No. CL12-2872(County of Arlington Circuit Court, November19, 2013).
19 Nielsen, 289 Va. at 99.20 Nielsen, 289 Va. at 96.21 Id.22 Nielsen, 289 Va. at 97.23 Id.24 Nielsen, 289 Va. at 99.25 Nielsen, 289 Va. at 89.26 Nielsen, 289 Va. at 88 (citing Superior Steel Corp. v.
Commonwealth, 147 Va. 202, 206, 136 S.E. 666, 667(1927)).
27 Nielsen, 289 Va. at 89.28 Nielsen, 289 Va. at 89 (citingVa. Code § 58.1-
205(3); Chesapeake Hosp., 262 Va. at 560, 554S.E.2d at 59).
29 http://www.townhall.state.va.us/30 https://www.townhall.virginia.gov/l/viewboard
.cfm?boardid=75&display=chapters31 https://www.townhall.virginia.gov/L
/NowInProgress.cfm
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32 Id.33 Id.34 For example, sales tax regulations have not been
updated to reflect a 2001 opinion of the VirginiaSupreme Court in Chesapeake Hosp. Auth. v.Commonwealth, 262 Va. 551, 560, 554 S.E.2d 55,59 (2001).
35 Va. Code § 58.1-204(A)(4).36 Va. Code § 58.1-205(3).
THE URGENT NEED FOR NEW TAX REGULATIONS
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Craig D. Bell is a partner in the Richmondoffice of McGuireWoods, where he is chairof the Tax and Employee BenefitsDepartment. He practices primarily in thearea of State and Local Tax and TaxLitigation. Mr. Bell is the law firm’s leadtax litigator in federal, state, and local taxdisputes at the trial and appellate levels.
J. Christian Tennant is a counsel inMcGuireWoods’ taxation and employeebenefits practice group. His practicefocuses on state and local tax. He rou-tinely handles appeals of state and localtaxes, business tax planning, and lobbyingefforts in the Virginia General Assembly.
2016 High School Essay Contest Explores a School’sRight to Access Students’ Secrets Is it OK for school administrators to go undercover or use false identities to dig out secret information from students’ socialmedia pages? What if that information includes a test stolen from the school?
Those are the questions the Virginia State Bar is asking students to address in its annual Law in Society essay competition.Essays are judged on how well they demonstrate the student’s understanding of the role and value of the legal system ineveryday life. The purpose of the contest is to awaken an interest in law and appreciation of the US Constitution.
Virginia high school students age 19 or younger and enrolled in grades 9–12 or a home-school equivalent are eligibleto submit an essay for a chance to win the competition and cash prizes. The contest is co-sponsored by the VSB LitigationSection and Communications Committee. The deadline for submissions is February 12, 2016.
The first place winner will receive $2,300 and the winning essay will be published on the VSB website. Other awardsinclude $1,850 (second place), $1,350 (third place), and honorable mentions of $250 each. All winners receive a plaque andcopy of Strunk and White’s Elements of Style. Awards will be presented in the spring at the winners’ schools.
This year’s competition examines a hypothetical situation at fictional Rocktown High School where it is apparent thatstudents in an AP history class have somehow received advance information on test questions. A student tells teachers thatthe test was stolen and circulated among students in the class through a social media site. The school principal forces a student, under threat of suspension from school, to log into the secret site in front of her in order to confirm that the testquestions were posted there. The principal then gets another student, again under the threat of suspension, to turn over hiscell phone and show her text messages that include the names of the students who had advance knowledge of the test. Allof the students involved are expelled from the school.
Contestants are asked to address whether a school administrator can demand that a student share her list of “friends” ona social media site; whether a school administrator or teacher can demand that a student surrender his or her cell phone andshare private text messages; and whether there is a better course of action the school could take.
More information, including contest rules and last year’s winning essay, is posted at www.vsb.org/site/public/law-in-society.
Join a VSB Section
There are twenty sections of the Virginia State Bar. Each is a separate group devoted to improving the practice of law in aparticular substantive area or specialty practice. The sections operate under bylaws and policies approved by the VirginiaState Bar Council. They elect their own officers and choose their own activities within the limits established by the Council.Section membership is open to all members in good standing of the Virginia State Bar. Many sections also have law studentand associate memberships. See more information at http://www.vsb.org/site/members/sections.
40
The increasing volume of mergersand acquisitions (M&A) in 2014 and2015 has been a hot topic for commenta-tors and analysts. Heightened levels ofM&A activity made headlines in 2014and reports indicate that the number ofdeals is expected to increase further in2015.1 The growing interest in acquisi-tions may reflect a strengthening USeconomy. This, coupled with the largeamounts of cash reserves held by UScompanies, creates an amenable atmos-phere for additional M&A activity for theremainder of 2015 and beyond.
This optimism extends to acquisitions by UScompanies of foreign entities (outbound acquisi-tion). Currency exchange rates are another factorin cross-border acquisitions and the strength ofthe US dollar in 2015 has provided an additionallevel of benefits. A recent analysis byPricewaterhouseCoopers indicates that US invest-ment in foreign markets has increased by 80 per-cent in the first half of 2015 (up to $139 billionfrom $89 billion in 2014).2
Expanding internationally can provide a UScompany with exciting new opportunities, includ-ing access to new customers and markets, as wellas manufacturing and workforce opportunities.However, for a US company considering its firstoutbound acquisition, the process can seem quitedaunting. Besides the new logistics and integra-tion that will be required, the acquisition will
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Here Be Dragons—and Opportunities: The Uncharted Tax Waters of Your Company’sor Your Client’s First Foreign Acquisition by Anna Derewenda
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likely require an analysis of US and foreign taxissues and rules that the US purchaser has notdealt with previously. This article provides anoverview of and introduction to some of the taxissues and considerations that can potentiallyarise in the various stages of the outboundacquisition process, specifically in the context of a stock purchase.
Due DiligenceAs is the case with all stock acquisitions, in orderto complete tax due diligence it is important tounderstand not only the financial statements andtax filings of the target but also its legal structureand business operations. When pursuing a foreigntarget, this review, as well as all aspects of thepurchase, must be completed while keeping twoperspectives in mind: the non-US view and theUS view. These considerations are relevantbecause while the purchaser must be aware ofthe potential foreign tax liabilities of the target,the operations and activities of the foreign com-pany may result in US tax consequences to theUS purchaser.
Due diligence should include a review of theforeign target’s legal entity organization chart. Anunderstanding of the target’s investments willhelp provide a background for understanding theoperations and intercompany transactions of thetarget and its affiliates, as well as information thatwill be necessary for structuring the acquisition.
Practitioners should understand each targetcompany as a separate entity and also review itsoperations on a global scale. Among other items,due diligence includes understanding the target’sintercompany agreements, financing, and locationand volume of supply chains, manufacturingoperations, distributors, sales agents, and employ-ees. Reviewing these items will provide back-ground for another important detail—intercompany payments, such as service fees,interest, dividends, and royalties.
Practitioners should also request copies ofthe foreign target’s financial statements and for-eign tax returns (including any supporting docu-mentation) in order to understand the potentialforeign tax exposures and tax balance sheet posi-tions. The request should include items that maynot yet be relevant to the US purchaser, such asvalue-added tax returns, tax rulings, and transferpricing documentation. If the sellers are US per-sons and the target and/or its subsidiaries are (orhave been) controlled foreign corporations(CFCs) or passive foreign investment corpora-tions (PFICs), copies of any US tax informationreturns filed also should be requested.3
Obtaining these documents and details willhelp the buyer analyze the following aspects: • Type of entity: As in the United States, eachcountry has multiple options for organizing abusiness. In addition to confirming the local taxaspects of the chosen business entity, it will beimportant to know the foreign target’s tax classi-fication (or entity type) for structuring pur-poses, including the availability of check-the-boxelections, as discussed further below. • Potential foreign tax exposures: Tax liabilities mayresult not only from home country tax filingsand positions, but also from other jurisdictionsas a result of “permanent establishments” cre-ated through the target’s activities in anothercountry. • Withholding taxes: Countries often impose with-holding taxes on payments made outside theirjurisdiction. These taxes are applied on a grossbasis and the rates typically depend on the typeof payment being made. For example, differentwithholding tax rates may apply to payments ofroyalties, interest, dividends, and for services.Understanding the applicable tax rates can beimportant for both due diligence and planningpurposes because the rates can be quite high insome countries. However, if the recipient is eligi-ble, the rate may be reduced under an applicableincome tax treaty between the foreign countryand the US.• Transfer pricing documentation: Most countrieshave transfer pricing rules in place requiringthat many payments made between affiliatedcompanies are completed on an arm’s lengthbasis. Documentation and reporting may berequired by the taxing authorities in the foreigncountry and in the US. In the absence of propertransfer pricing, the target and its affiliates maybe under a higher risk of having their taxableincome adjusted by the taxing authorities. • Tax rulings: Some countries allow taxpayers rela-tively easy access to advance tax rulings wherebythe taxpayer and the tax authority can agree tothe tax consequences for proposed transactions.The tax authorities also can agree to the effectivetax rate for a company’s income taxes. Oftenthese rulings are conditional on the substance inthe entity (e.g., the number of individualsemployed locally). • US anti-deferral regimes: Where the foreign tar-get will be a CFC or a PFIC in the hands of theUS purchaser, the target’s investments, opera-tions, and transactions may result in the USpurchaser being required to include the target’sforeign profits in its US taxable income.Understanding the target’s status is important
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to know what post-closing risks may arise forthe US purchaser after the acquisition. • Tax attributes: Tax attributes should be analyzedfrom both foreign and US tax perspectives. Forexample, it may be necessary to understand theearnings and profits (E&P) of the target as wellas the foreign tax paid by the foreign targets.4
These attributes are calculated pursuant to UStax rules and may be different from earningsand tax pools calculated for foreign tax andfinancial statement purposes.5 Therefore, wherethe seller is foreign, it is unlikely that suchrecords have been kept. As discussed below, anelection under Section 338 of the InternalRevenue Code (Section 338 Election) may beuseful in purging these historical attributes forUS tax purposes.
Structuring the transactionThe structure of the transaction will depend onmany factors, including the identity of the buyerand the purchaser, whether the target is publiclytraded or privately held, and whether an asset orstock purchase is contemplated. The structure canbe simple, such as the making of one of the elec-tions listed below, or more complicated involvingmultiple entities and steps or even implicating themuch discussed “inversion” rules.6
• Use of a newly formed acquisition company: Anacquisition company, either foreign or US maybe useful for an additional layer of legal protec-tion, where an asset purchase is contemplatedand in planning for financing, post-closing own-ership, operations and transactions. • Section 338 Election: A Section 338 Election willserve to treat a stock purchase as an asset acqui-sition for US federal income tax purposes.7 Afictional transaction is deemed to occurwhereby “old” target sells all of its assets to“new” target.8 This has the effect of eliminatingthe historic US tax attributes of the target andtherefore may be useful where the E&P and for-eign tax credit pool of the target is not knownor is unreliable. Furthermore, the election mayhave the benefit of stepping up the tax basis ofassets, resulting in increased depreciation andamortization deductions that may serve toreduce the future E&P of the entity. It should benoted that this election is effective only for UStax purposes and has no effect on the tax attrib-utes as calculated for foreign tax purposes.Thus, for example, a Section 338 Election mayeliminate a historic deficit in E&P for US taxpurposes, but carryforward losses may continueto exist for foreign tax purposes.
A Section 338(g) election may be made for aforeign target if all the requirements for makingsuch an election are met.9 There are various con-siderations that must be analyzed in conjunctionwith the making of this election. The electionmay have an effect on the future tax credits avail-able to the US purchaser or the character of dis-tributions made from the target.10 In addition,the identity of the seller will be relevant. Wherethe seller is a US person, additional tax may resultto them on the sale of their shares because theelection may recharacterize their gain.Indemnification of the seller for incremental taxesmay be negotiated as part of the purchase andincluded in the share purchase agreement. • Check-the- box election: The US tax rules providethat a taxpayer may elect to treat domestic andforeign business entities as corporate (opaque)or as flow-through (transparent) entities.11 Incertain circumstances, it may be useful to treatthe foreign target as a flow-through entity. Suchan election may be useful where the foreign tar-get is projected to create losses, when deferral ofUS taxation on foreign income is not possibledue to anti-deferral regimes, or where access toadditional US foreign tax credits may result. The check-the-box election is generally avail-
able for foreign entities unless they are on a list ofentities known as “per se corporations.”12 An elec-tion cannot be made to treat such entities as flow-through entities. Therefore, it is important tounderstand the foreign target’s structure to deter-mine whether a conversion to an eligible entitywill be required. Such conversions can often becompleted in a tax neutral matter, but it may takeseveral weeks or even months, resulting in “taxleakage” while the foreign target remains a corpo-ration and upon the check-the-box election itself. • Financing of the acquisition: Acquisition of theforeign target may be financed by the cash heldin the US purchaser’s reserves or through third-party financing. To the extent that bank financ-ing is necessary, the determination should bemade as to whether it should be obtained by theUS purchaser or a foreign acquisition company.Although generally driven by non-tax factors,financing of the acquisition must be carefullyanalyzed from a tax perspective. For example, banks frequently require collat-
eral for loans by US purchasers. This requirementcan extend to a pledge of the newly purchasedforeign assets or shares. Such a pledge can resultin a deemed dividend to the US purchaser in theamount of the loan.13 The same consequencescan result if the foreign subsidiary guarantees the
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US purchaser’s loan.14 Therefore, care must betaken to ensure that the financing is properlynegotiated to avoid substantial tax consequencesto the purchaser.
ConclusionAlthough the acquisition of the US company’sfirst foreign target can seem like a dauntingprocess, it can provide significant opportunitiesfor growth of the company. Coordination withreliable and knowledgeable co-counsel in the localjurisdiction(s) will be vital in the process, ensur-ing that issues are properly addressed and negoti-ations adequately memorialized in the purchaseagreement. With the assistance of experienced USand local counsel, the burdens on you and yourcompany can be greatly alleviated.
Kyle Wingfield contributed to this article.
Endnotes:1 http://www.pwc.com/us/en/press-releases
/2015/pwc-deals-mid-year-outlook-press-release.jhtml based on data provided byThomson Reuters; http://www2.deloitte.com/content/dam/Deloitte/us/Documents/mergers-acqisitions/us-ma-trends15-042115.pdf.
2 http://www.pwc.com/us/en/press-releases/2015/pwc-deals-mid-year-outlook-press-release.jhtml.
3 A CFC is a foreign corporation that is ownedmore than 50% by US shareholders. I.R.C. §957(a). For this purpose, a US shareholder isa US person that owns 10% or more of theshares of the foreign corporation. I.R.C. §951(b). Where the foreign corporation is aCFC, the US shareholder may be subject tothe “Subpart F” anti-deferral regime requir-ing inclusion of the CFC’s profits in theshareholder’s US taxable income.
The PFIC regime is also an anti-deferralregime, but has no ownership threshold. A
foreign corporation will be treated as a PFICif the level of its “passive” income and assetsmeets a certain threshold. I.R.C. § 1297. A USperson owning an interest in a PFIC may besubject to additional taxation on distribu-tions from and sales of the PFIC stock. I.R.C.§ 1291.
In both cases, additional return report-ing will likely be required for the U.S. share-holder.
4 A US shareholder’s taxable income under USanti-deferral regimes often depends on theE&P of the foreign company. However, dou-ble-taxation of the income may be alleviatedin certain circumstances through creditsavailable in the U.S. for foreign taxes paid onthat income. I.R.C. §§ 901, 902.
5 I.R.C. § 964(a). 6 See I.R.C. § 7874.7 I.R.C. § 338(a). 8 Id. 9 See generally I.R.C. § 338 and the regulations
thereunder. 10 See, e.g., I.R.C. § 901(m). 11 Treas. Reg. § 301.7701-3. 12 Treas. Reg. § 301.7701-2,-3.13 See I.R.C. § 956; Treas. Reg. § 956-2(c).14 Id.
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Anna Derewenda is a partner in the Richmondoffice of Williams Mullen where she is part of thetax group. She focuses her practice on inbound andoutbound international tax issues, as well asdomestic corporate tax issues. She provides adviceregarding the tax consequences of all manner ofcross-border transactions and international opera-tions across a variety of industries.
Got an Ethics Question?The VSB Ethics Hotline is a confidential consultation service for members of the Virginia State Bar. Non-lawyers may submit only unauthorized practice of law questions. Questions can be submitted to the hotline by calling (804) 775-0564 orby clicking on the blue “E-mail Your Ethics Question” box on the Ethics Questions and Opinions web page at www.vsb.org/site/regulation/ethics/.
VIRGINIA LAWYER | October 2015 | Vol. 6444
Access to Legal Services
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Access to Justice HeroAre you providing service to someone who can’t afford legal representation, is your law firm, or another attorney you know? We’d like to tellthe members of the Virginia State Bar about it. We’d also like to hear about work lawyers have done on special pro bono projects, or anyaccess to justice program or issue that needs assistance. The VSB is continuing its focus on access to justice by regularly raising awareness ofoutstanding service by pro bono, legal aid, and indigent defense lawyers.
So send us your story—400 words or less—about access to justice, along with a photo. We’ll pick the best and feature it in VirginiaLawyer. E-mail your stories to us at [email protected].
By the way, the Access to Justice/Pro Bono pages of the VSB website at http://www.vsb.org/site/pro_bono have begun featuring aVolunteer Lawyer Spotlight. Please send a brief “blurb” (3 to 5 sentences and a photo) about an outstanding contribution by a volunteerlawyer or law student. The Special Committee on Access to Justice will update the spotlight each month. Please send your “blurbs” [email protected].
A CLE entitled “Poverty and the Law:Understanding Poverty” recently gavesixty-five attorneys an opportunity tolearn about the day-to-day struggles oflow income citizens. The CLE was led byTiela M. Chalmers, an attorney inAlameda County, California, and expertin experiential poverty learning.
A mini-community was set-up inthe Jepson Alumni Center at theUniversity of Richmond that included ajob bank, school, daycare, public park,pawn shop, jail, fast food restaurant, andgrocery store, among other organiza-tions. Attorneys were assigned a charac-ter to play and then grouped intofamilies who then set out to try andmake it through their tasks, often with-out money, transportation, or both.Volunteers from the law school and the
Virginia State Bar playedroles ranging from apolice officer to a land-lord to the head of thelocal job bank.
In the debrief thatfollowed the session,many attorneys laughedat the lengths they wentto in order to accom-plish their tasks, includ-ing taking otherparticipants’ travel tickets off their chairswhen they weren’t looking. Asked tosum up the general theme of the experi-ence, one attorney commented, “It allcame down to basically never having theright form,” which was clearly seen in thelong lines as attorneys waited in job linesor tried to cash work checks in order to
buy transportation vouchers. Of thethirty-six evaluations submitted, thirty-two rated the CLE as excellent and onecommented, “I appreciate this simula-tion so much. It made me stop and thinkabout the background issues that myclients are bringing to the table.”
Poverty and the Law CLE atthe University of Richmond
Tiela M. Chalmers (standing), an attorney in Alameda County, California, andexpert in experiential poverty learning, spoke to volunteers at the recent “Povertyand the Law: Understanding Poverty” CLE at the University of Richmond.
Vol. 64 | October 2015 | VIRGINIA LAWYER 45
On October 2 in Chicago, Christian &Barton litigator Michael W. Smithbecame the 66th president of theAmerican College of Trial Lawyers,achieving a mark in the Virginia legalcommunity: a trifecta presidency of the Bar Association of the City ofRichmond, the Virginia State Bar, andthe American College of Trial Lawyers.
Raised in a hamlet of SouthCarolina called Beech Island that is per-haps best known for being the homeand final resting place of James Brown,the Godfather of Soul, Mike Smith wasbetter known as the quarterback of thestate champion North Augusta YellowJackets than he was as an academic or apolitician. “I never ran for office then,or now,” says Smith from his Richmondoffice. “I’ve always set my sails for prac-ticing law, not governing.”
The American College of TrialLawyers invites only those “who havedemonstrated, after an intensive investi-gation, the highest standards of trialwork, ethics, and collegiality over aminimum of 15 years.” Currently, only0.5 percent of trial lawyers are membersof the college, or about 5,700 lawyersfrom every state and Canada, includingall members of the US and CanadianSupreme Courts.
Campaigning or applying to jointhe college is not allowed and viewed as counter-productive, and leadershiproles are selected by committee.According to immediate past-presidentFrancis Wikstrom, “We believe thattruly outstanding trial lawyers not onlypossess the necessary trial skills, butalso treat all participants in the justicesystem with dignity and respect at alltimes.”
Smith was inducted into the ACTLin 1989, three years after he became
president of the BarAssociation ofRichmond. He thenserved as the presi-dent of the VirginiaState Bar in 1995–1996. During theseyears, Smith alsomanaged a thrivingcorporate and com-mercial trial practice representingclients that included railways, utilities,health-care companies, and aviationcompanies.
In his office at Christian & Barton,it is not difficult to imagine the civilitythat impressed Smith’s peers over hiscareer. After apologizing for not tidyinghis office and making a number of offersto get coffee or water, Smith settles into a warm and thoughtful conversation inwhich he expresses his admiration forthe grandmother who raised him afterhis own mother died. He also talks aboutmeeting his wife, the former Ellen BainBremner, at the University of SouthCarolina, when she was an undergradu-ate and he a law student.
After graduating from USC LawSchool, Smith served in the Army beforeaccepting a clerkship with the HonorableRobert R. Merhige Jr., of the UnitedStates District Court for the EasternDistrict of Virginia. Judge Merhige, afteran illustrious career as a pilot in WWII,became famous for his rulings thatdesegregated Virginia schools. JudgeMerhige not only mentored Smith, hebecame a lifelong father figure. The daythat Judge Merhige retired from the lawhe called Smith and said simply, “Comeand get your desk,” referring to the heavyburl wood desk that now sits in Smith’soffice. The desk had originally belongedto Ellen Bain’s grandfather, criminal
defense attorney Leith Bremner, whohad been Merhige’s law partner, mentor,and close friend, and who had givenJudge Merhige the desk when he retired.The desk was one of only two made, theother going to Woodrow Wilson.
Smith hopes to see the ACTL useits influence under his tenure to helpveterans “…breakthrough the backlogof appeals to get the coverage andmoney they deserve for their injuries.We will advocate at the highest levels to improve a system that is currentlyallowing some veterans to die beforetheir appeals are heard.”
Of another major goal, Smith says,“We are the only country that guaranteesthe right to a jury trial in a constitution.We need to be vigilant in protecting ourright to a jury trial, and the best way tobe vigilant is to exercise that right.” Tothat end, the ACTL will continue to pro-mote and protect jury trials and partnerin programs such as Justice Sandra DayO’Connor’s non-profit iCivics teachingprogram that aims to educate childrenabout their roles as citizens, includingthe right to a jury trial, the importanceof jury duty, and the three equalbranches of the US government.
Smith lives on a horse farm inManakin Sabot, outside of Richmond,and admits that though his riding skillsare “very, very poor,” he is excellent at
PEOPLE < Noteworthy
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Mr. Smith Goes to Chicagoby Dee Norman
Smith continued on page 46
VIRGINIA LAWYER | October 2015 | Vol. 6446
mucking the stalls of Ellen Bain’s horses,Winnie and Gabby. It’s not hard toimagine the modest and affable MikeSmith cleaning stalls, nor is it difficultto picture him driving the school busfor his Aiken County school district,which he did as a senior in high schoolto earn $30 a month. His humblebeginnings are perhaps the key to hislove of the American judicial system,and the jury system in particular.
“It used to be that the judges,jurors, prosecutors and executionerswere the nobles and kings in all cases,”says Smith. “Now, everyone, even MikeSmith from Beech Island, has theopportunity to be judged by one’speers. And that’s a great system.”
Noteworthy > VSB NEWS
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NOTICE: Check Your MCLE Hours
Online NowThe Mandatory Continuing Legal Education compliance deadline is
October 31, 2015. Go to https://member.vsb.org/vsbportal/ to review your
MCLE record.
An Interim Report was mailed to all active members in July. Please
apply for any non-approved courses now to avoid a new late application
fee for applications received over 90 days after course attendance.
Reminder: Of the 12.0 CLE hours required each year, 2.0 must be in
ethics and 4.0 must be from live, interactive programs. If you have any
questions, please contact the MCLE Department at (804) 775-0577 or
Upcoming Solo & Small-FirmPractitioner Forums
The Solo & Small-Firm Practitioner Forum focuses on issues that confrontattorneys who practice alone or in small firms. Law office management andethics are among several topics covered at these CLEs.
These CLEs are free, include lunch, and are available on a first-come, first-served basis. Registration will open in December and the agendas and registra-tion details will be posted on the CLBA website at http://www.vsb.org/site/conferences/clba-calendar.
Monday, April 11, 2016 Solo & Small-Firm Practitioner Forum – Eastern Shore Community College,Melfa
Monday, May 2, 2016 Solo & Small-Firm Practitioner Forum/Regional Bench-Bar Conference –Fredericksburg Hospitality House & Conference Center, Fredericksburg
Monday, May 16, 2016 Solo & Small-Firm Practitioner Forum – Virginia Tech, Blacksburg
Smith continued froom page 45
For confidential, free consultation
available to all Virginia attorneys
on questions related to legal
malpractice avoidance, claims repair,
professional liability insurance issues,
and law office management, call
Fairfax County lawyer, John J.
Brandt, who acts under the
auspices of the Virginia State Bar at
(703) 281-2600 x101
VSB Staff DirectoryFrequently requested bar contactinformation is available online atwww.vsb.org/site/about/bar-staff.
Vol. 64 | October 2015 | VIRGINIA LAWYER 47
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SAVE THE DATE
Bar LeadersInstituteMarch 28, 2016
Lewis Ginter Botanical GardenRichmond
Registration will open in December.
See http://www.vsb.org/site/conferences/clba/.
Harrisonburg-Rockingham BarAssociationTracy James Evans II, PresidentJacob Townsend Penrod, President-electQuinton Bowman Callahan, SecretaryCharles Andrew Bolt, Treasurer
Hispanic Bar Association of theCommonwealth of VirginiaJames Reyes, PresidentGilberto Sanchez, Vice PresidentFernando Villarroel, SecretaryMikhail Nekrich Lopez, Treasurer
Loudoun Chapter, VWAAAngela Gilless Campbell, President
Newport News Bar AssociationJames Arnold Segall, PresidentJoseph Franklin Verser, President-electLisa Marie Moore, SecretaryChristopher Scott Johnson, Treasurer
Petersburg Bar AssociationTiffany Buckner, PresidentShaun Ryan Huband, Vice PresidentKevin Bjorn O’Donnell, SecretaryRichard McIlwaine Cuthbert, Treasurer
South Hampton Roads Bar AssociationLenard Tyrone Myers Jr., PresidentTameeka Montgomery Williams,President-electKendra Nicole Johnson, SecretaryWilliam T. Mason Jr., Treasurer
York County-Poquoson BarAssociationJeremy Allen Markle, PresidentJustin Robert Atkins, President-electRobert Paul Stenzhorn, Treasurer
The CLBA would like to welcome theVirginia Women Attorneys Association(statewide) as its newest member. (Thelocal chapters were already members.)This year’s officers are as follows:Betsy Sue Scott, PresidentJoan McKenna, President-electClaire Frances Egan Keena, SecretaryCynthia Kaplan Revesman, Treasurer
Local and Specialty Bar Elections
Did you know ALPS funds a dedicated grant program developed specifically for local bar associations? ALPS would like to help local bars like yours bolster your
current programming, develop new initiatives and increase your reach. Apply now or learn more at http://vaportal.alpsnet.com
LOCAL BARS: Enhance Member Value and Fund Valuable Programs
BENEFITS REACH SUCCESS
Next Grant Funding Deadline: 11/30/2015
BENEFITS
CH CESSSUCREA
CESS
VIRGINIA LAWYER | October 2015 | Vol. 6448
Noteworthy > PEOPLE
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YLC Honored
Stephen Wade AdkinsMcGaheysville
August 1956 – March 2015
Robert Gerard AndaryWashington, DC
June 1947 – March 2015
Geoffrey Sean BaldSpringfield
October 1970 – July 2015
Robert C. Barclay IIIPortsmouth
April 1922 – June 2015
John J. DalyLeesburg
June 1927 – June 2015
Mary Johnson DonahueVirginia Beach
November 1949 – April 2015
Fitzhugh Elder Jr.Staunton
January 1917 – June 2015
Herbert Bradford GlassmanWashington, DC
January 1967 – July 2015
Willie L. Hudgins Jr.Reston
March 1943 – April 2015
Dionisio Cayetano Legaspi Jr.Woodbridge
April 1976 – April 2015
Robert Douglas LyndStone Ridge
September 1945 – July 2015
Edward C. MinorDuluth, Minnesota
December 1942 – May 2015
Glenn Jerold PfadenhauerWashington, DC
July 1959 – January 2015
John Patrick Shannon Jr.Alexandria
June 1946 – May 2015
Richard Duncan ShepherdTroy
December 1953 – July 2015
Myrna B. SilenDallas, Texas
July 1947 – November 2014
Charles W. SloanVienna
August 1938 – July 2015
Kenneth Warren SmithAlexandria
July 1948 – June 2015
Carla Janet UrquhartAlexandria
February 1962 – March 2015
In Memoriam
The VSB Young Lawyers Conference
recently received a number of awards
from the American Bar Association. The
conference competes in Class 1A
against the largest young lawyer groups
in the country. The awards were:
• 2nd place, Newsletter, for Docket Call
• 2nd place, Diversity, for its mentorship
program
• 2nd place, Service to the Profession, for
its Rule of Law Day at the Capitol
The conference also received special
recognition in the Service to the Bar
category for the Immigration Outreach
Committee CLE Series and another
special recognition for its overall work.
Support the Virginia State Bar Diversity Conference.
Anyone can join, it’s free, and takes only about two minutes. Demonstrateyour support for the Diversity Conference by becoming a member today.
http://www.dcvsb.org/
Have You Moved?To check or change your address of record with the Virginia State Bar, go to the VSBMember Login at https://member.vsb.org/vsbportal/. Go to “Membership Information,”where your current address of record is listed. To change, go to “Edit Official Address ofRecord,” click the appropriate box, then click “next.” You can type your new address,phone numbers, and e-mail address on the form.
Contact the VSB Membership Department ([email protected] or (804) 775-0530) with questions.
Vol. 64 | October 2015 | VIRGINIA LAWYER 49
Law Libraries
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The Patient Protection and AffordableCare Act (ACA) is primarily abouthealth care, but tax law also plays animportant part in its execution. Lawyersin Virginia, along with their colleagues inother states, are still grappling with thenew body of law that the ACA has givenbirth to. Fortunately, there are numerousresources attorneys can use to under-stand the ACA and to help them keeptrack of new developments related to it.
American Bar Association Section ofTaxationhttp://www.americanbar.org/groups/taxation.html The Section of Taxation publishes threequarterly periodicals: The Tax Lawyer,NewsQuarterly, and The Practical TaxLawyer. These publications are onlyavailable to section members, but thesection sponsors CLE webinars and in-person seminars discussing the ACA.Although registration is required, someof these CLE programs are free to anyone.
Affordable Care Act Reviewhttp://www.acareview.com/ Balch & Bingham LLP publishes thisblog, in which the firm’s attorneys dis-cuss developments in ACA law. Postsdiscuss new regulations, guidance fromfederal agencies, and court decisions,and include links to the primary sourcesthey discuss. Since Balch & Bingham alsouses the blog to showcase their ACA spe-cialists, many entries contain analysis bythose attorneys.
Annual VIRGINIA Conference onFederal Taxationhttp://virginiataxconference.org/ The Annual VIRGINIA Conference onFederal Taxation describes its mission as“provid(ing) the highest level of contin-uing tax education to experienced taxpractitioners,” but it has useful informa-tion for any lawyer who wants to keeptabs on tax law. The 2014 conference hada session on federal tax developments
that included a list of important taxdevelopments related to the ACA, andthe 2015 conference included a sessionspecifically dealing with the current sta-tus of ACA law. Many Virginia lawlibraries will have a copy of the confer-ence’s thorough course materials. Inaddition, videos for some of the sessionswill be streamed from the conference’swebsite.
Bloomberg BNA Health Law &Business Series Portfolio 2350:Affordable Care Act Implementation:Regulations, Models, and Implications(available through Bloomberg BNAOnline)Lawyers have regarded Bloomberg BNA’sPortfolios for many years as a reliableresource for thorough discussions ofspecialized areas of the law. The portfo-lio on the ACA provides a useful sum-mary of the act’s history and structure aswell as detailed analyses of its provisions.Working papers include summaries ofimportant parts of the law in easy-to-read chart format along with usefulforms. Although this portfolio focuseson the health-care law aspects of theACA, it also discusses the tax implica-tions in useful detail. If you do not haveaccess to this publication, check withyour local law library.
IRS: Affordable Care Act (ACA) TaxProvisionshttp://www.irs.gov/Affordable-Care-Act The IRS’s website has a useful sectiondevoted to the ACA. This section has alist of regulations the agency has issuedunder the act, but it also has a wealth ofother useful tools. The ACA InformationCenter for Tax Professionals has links toIRS publications, backgrounders, andFAQs on some of the major questions apractitioner might have. Other sectionshave information on the ACA rules asthey relate to individuals, families, andemployers.
Federal Register: Internal RevenueServicehttps://www.federalregister.gov/agencies/internal-revenue-service The website of the Federal Register,“The Daily Journal of the United StatesGovernment,” has pages dedicated toeach federal agency, including theInternal Revenue Service. The IRS’s pagehas a list of their notices and rulesrecently published in the register, alongwith links to the full text. It also listscomment periods that have just openedor are about to close. You can sign up fore-mail updates or subscribe to an RSSfeed for notifications of when new IRSdocuments are published in the register.
Newsletters:If your office does not have access toeither of these newsletters, try your locallaw library.Bloomberg BNA Tax ManagementWeekly Report (available throughBloomberg BNA Online)Thomson Reuters (RIA) CheckpointFederal Taxes Weekly Alert Newsletter(available through Thomson ReutersCheckpoint)Practitioners rely on these newslettersfor timely information about breakingdevelopments in the regulatory world.Both the Tax Management Weekly Reportand the Federal Taxes Weekly Alertinclude useful news about developmentsin tax-related ACA law, such as new IRSrules and guidance or new court deci-sions. Articles may also include analysisof the impact these new developmentswill have for readers, and include links torelevant documents and analysis.
Fred Dingledy is a senior reference librar-ian at the College of William & Mary LawSchool and has served as president of theVirginia Association of Law Libraries.
Keeping Up with Tax Law and the Affordable Care Actby Fred Dingledy
VIRGINIA LAWYER | October 2015 | Vol. 6450
Technology and the Practice of Law
www.vsb.org
New and developing court rules, case lawand even some state bar ethics opinions2
send a clear message: the modern litiga-tor must have a basic understanding ofthe process of discovering electronicallystored information (ESI),3 including thecapabilities and limitations of technol-ogy and how the process is viewed by ajudiciary increasingly comfortable withthe topic. The proliferation of electronicdata associated with litigants of all typesand sizes, whether corporate or individ-ual, means a litigator must understandnot only how to identify where clientsand opposing parties keep documents,4
but how to leverage the available tools toefficiently analyze those documents andopponents’ productions.
When developing a plan for request-ing documents from an opposing party,or assisting your client in preservation orcollections, you must understand whereand how electronic documents arestored. An effective discovery plan mustalso take into account the cost implica-tions of collecting from those sources.The emphasis will always be on whetherthese efforts are proportionate to thecase, particularly in federal court wherethe rules will soon require an increasedemphasis on that factor.5
Parties with large volumes of data,and a commensurate discovery budget,have a host of tools at their disposal toaid in the efficient analysis of ESI.Attorneys managing small volumes ofdata and correspondingly small budgetsare not, however, precluded from takingadvantage of what technology has tooffer. While tools such as predictive cod-ing, a form of analytics where attorneysteach the computer what types of docu-ments are relevant, may presently onlybe appropriate for very large volumes ofdata (if at all), its costs are decreasing.Additionally, there are other tools thatcan help general litigators in cases withsmaller volumes of data. Today’s tech-
nology can create conceptual clusters ofdocuments with other similar docu-ments with no attorney input required.Virtually all electronic review platformsinclude filtering on any number of fieldsand “tagging” documents for produc-tion, privilege, and topical issues, allow-ing for easy organization and analysis ofESI. By understanding how technologycan streamline the process, small firmsand solo practitioners can manage agreater volume of documents than waspractical in the past and enjoy the atten-dant potential benefits to the merits oftheir claims or defenses. Understandingthis process will permit counsel to beable to articulate with confidence theactual cost of the search and review.
One technological issue that cantake litigators by surprise is the produc-tion format. Responding parties aregenerally free to produce ESI in whateverformat they choose where the requestingparty does not specify the format forproduction, provided the format is theformat in which the ESI is ordinarilymaintained or is otherwise reasonablyusable. Sophisticated litigants have thecapability to accept tiff image files deliv-ered with an accompanying metadataload file, while such a production wouldbe effectively useless to a general litigatorwithout access to a proprietary reviewplatform. It is therefore advisable to con-sider one’s capabilities and specify thedesired production format. Documentscan be produced natively, permittingboth parties to have the ESI as it was cre-ated at a much reduced cost. A search-able PDF format is available, but thesearches will not be as effective as thoseconducted in other formats. Counselmust be familiar with each of these for-mats and their advantages and disadvan-tages. Obviously, demanding that the ESIis produced in a format that is mostusable is where counsel must start.Failing to do so may create protracted
and expensive motion practice over whatshould be a practical problem that isresolved by counsel’s agreement.
There are, of course, costs associatedwith using eDiscovery technology, buthigh costs are no longer a given.Litigators can control costs with athoughtful discovery plan and under-standing how much, or how little, addi-tional support they might need fromtechnology. Most software is fairly userfriendly and relatively intuitive. Somefirms or vendors will simply host thedata for you, allowing an attorney tosearch, filter, or otherwise analyze thedocuments, flag the ones that areresponsive or important and have themprepared for production.
Regardless of the types or volume ofdata to be managed, technology can helpfacilitate a discovery plan.Understanding the technology helps indeveloping a defensible and efficientplan for evaluating the sufficiency of theopposing party’s responses, is much sim-pler than many believe and can help liti-gators add value to their cases.
Endnotes:1 The authors would like to thank U.S.
Magistrate Judge John M. Facciola (ret.)for his insights and assistance with thisarticle.
2 See, State Bar of California StandingComm. On Prof ’l Responsibility andConduct, Formal Op. 2015-193 (2015)(“An attorney’s obligations under theethical duty of competence evolve asnew technologies develop and becomeintegrated with the practice of law.Attorney competence related to litiga-tion generally requires, among otherthings, and at a minimum, a basicunderstanding of, and facility with,issues relating to e-discovery, includingthe discovery of electronically storedinformation (“ESI”)).
Discovery, Technology, and the General Litigatorby Erin W. Hapgood and Richard N.P. Naylor1
Tech continued on page 52
Vol. 64 | October 2015 | VIRGINIA LAWYER 51
Risk Management
www.vsb.org
Some time ago I was asked to reviewseveral different sample Consent to JointRepresentation forms that a firm wasusing with its estate planning clients.What I found was troubling. To set thestage, this firm was accustomed to pro-viding coordinated estate planning ser-vices to families in situations where sucha plan was called for. In other words,they were involved in multigenerationaljoint representation. Now I have noproblem with this initially as there isnothing inherently wrong with joint rep-resentation in and of itself. My problemwas with what the firm tried to do withtheir waiver documents.
In one of the forms, the firm soughtto inform their joint clients that a poten-tial conflict existed. So far, so goodbecause disagreements on key decisionsmay arise after the representation hasbegun. Unfortunately, it went downhillfrom there. The waiver went on to statethat each client will be treated as if theywere being represented by separatecounsel and that, absent authorization,no secrets would be shared betweenclients even if the resulting plans wereincompatible or that the plan of oneclient was detrimental to one of theother clients. Now I’ve got a problemwith that.
To make matters worse, this waiverwent on to state that each client had theright to loyal and diligent representation.While an accurate statement, in the con-text of the waiver document that thestatement was placed, I don’t see how anattorney could view the keeping ofsecrets in joint representation or thedrafting of documents that may end upbeing detrimental to one or more of thejointly represented clients as meeting thedefinition of loyal and diligent represen-tation. I also don’t think any of the firm’sclients would either, particularly if and
when one eventually discovers that theywere the one harmed by their own attor-ney’s act of drafting estate planning doc-uments that ultimately proved to bedetrimental to their interests. As theattorney, you don’t get it both ways.
The way that I see it is this; onecan’t be partially loyal. The duty of loy-alty is to be equal among all clients,period. It’s an all or nothing kind ofthing. Should one of the clients insistthat a confidence be maintained and as aresult an incompatibility in the overallestate plan arises in some fashion, it’sover. You are out as the attorney and outfor all. Don’t try to pick one familymember to continue on with, drop therest, and maintain the secret. Not onlywould this be unethical but a viable mal-practice claim may very well be on thehorizon.
This is one of the risks inherentwith joint representation. Significantconflicts can and sometimes will arise.When they do, the attorney often mustcompletely withdraw. At ALPS, we haveseen viable claims where an attorney lostcontact with one of the joint clients in apersonal injury suit and yet carried onwith the representation of the remainingclient. Often attorneys will attempt tojustify such a decision by arguing thattoo much, in terms of time and money,was invested in the case and they werenot about to walk away from that kindof an investment.
The decision to remain or withdrawcannot be based upon what would bebest for you as the attorney. This willeventually be viewed as your puttingyour own financial interests above thebest interests of your clients. This deci-sion should be solely about what’s bestfor, and only for, the clients. If proceed-ing with the representation of theremaining clients could in any way be
detrimental to the one client you nolonger wish to represent, you’re out.There are very few exceptions to thisoutcome. The same is going to be true injoint representation of any type; but ofparticular concern due to claims activity,is when attorneys attempt to jointly rep-resent clients in a business transaction, areal estate transaction, or in a divorce.Tread carefully in these practice areas.
I do understand the temptation totry and anticipate conflict problems andavoid the necessity of having to with-draw by obtaining waivers in advance. Itcan be very hard to walk away. Whilewaivers are valuable and quite necessaryat times, one must also understand thatwaivers aren’t a fix it all solution. Eventhough I am certain that a number ofclients have signed consent to joint rep-resentation forms just like the one dis-cussed above, that doesn’t necessarilymake that waiver effective. Consent,informed as it may be, cannot make anonconsentable conflict consentableand, for me, that’s the bottom line.Again, you don’t get it both ways.Nonconsentable conflicts do existregardless of how much you might wishotherwise.
Mark Bassingthwaight, ALPS risk manager,has conducted more than 1,000 law firm riskmanagement assessment visits, presentednumerous continuing legal education seminarsthroughout the United States, and writtenextensively on risk management and technol-ogy. His webinar on Best Practices for ClientSelection in the ALPS CLE library is athttp://alps.inreachce.com. He can be contactedat: [email protected].
You Don’t Get It Both Ways—The Downside of Joint Representationby Mark Bassingthwaighte
VIRGINIA LAWYER | October 2015 | Vol. 6452 www.vsb.org
3 See, e.g. Rules of the Supreme Courtof Virginia, Rule 4:9(a) (“electroni-cally stored information” includes“writings, drawings, graphs, chart,photographs, and other data or datacompilations stored in any mediumfrom which information can beobtained, translated, if necessary, bythe respondent into reasonably usableform”).
4 The location of documents is explic-itly included in the topics for whichdiscovery is available under the cur-rent Federal Rule of Civil Procedure26(b)(1). The revised FRCP 26(b)(1)does not specifically list the topics fordiscovery, but maintains the same lan-guage allowing discovery for informa-tion “relevant” to a claim or defense,so long as it is “proportional” to theneeds of the case. Fed. R. Civ. P.26(b)(1) (effective December 1, 2015absent contrary Congressionalaction). Elimination of the expresslisting of topics, including documentlocation, from Rule 26 does not
change parties’ obligations.“Discovery of such matters is sodeeply entrenched in practice that is itno longer necessary to clutter the longtext of Rule 26 with these examples.”Committee Notes, 2015 Amendments,FRCP 26(b)(1). Typical locationsinclude personal and business harddrives, email accounts, file share sites,
network locations, online storage,cameras and mobile devices.
5 Fed. R. Civ. P. 26(b)(1) (effectiveDecember 1, 2015 absent contraryCongressional action).
Erin W. Hapgood is an associate in Murphy &McGonigle’s Strategic Discovery andInformation Management Group. Her practiceincludes advising clients on discovery issuesarising from complex commercial litigationand regulatory enforcement actions and devel-oping strategies for the accurate and effectiveproduction of documents. Ms. Hapgood is amember of the VSB Special Committee forTechnology and the Practice of Law.
Richard N. P. Naylor is an officer at Murphy& McGonigle, PC, where he runs the firm’sStrategic Discovery and InformationManagement Group. He advises clients onissues related to e-discovery, including thepreservation, collection, analysis, and produc-tion of electronically-stored information incomplex litigation and governmental regula-tory investigations.
Tech continued from page 50
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CLE Calendar
Vol. 64 | October 2015 | VIRGINIA LAWYER 53www.vsb.org
Introduction to Virginia’s SentencingGuidelinesSix-hour seminars approved for six CLEcredits, December 8, Roanoke (RoanokeHigher Education Center); December10, Fairfax (Fairfax County GovernmentCenter); December 15, Chesapeake(Chesapeake Sheriff ’s Office). Details athttp://www.vcsc.virginia.gov/training.html. The introduction seminar isdesigned for the attorney or criminaljustice professional who is new toVirginia’s sentencing guidelines. Theseminar will begin with general back-ground information and progress todetailed information on scoring each ofthe guidelines factors to include changes.Register by completing the form andsubmit to the commission. Space may be
limited. Purchase manual separately.$125 fee waived for judges, common-wealth’s attorneys, P&P, public defend-ers, and staff.
Virginia Lawyer publishes at no chargenotices of continuing legal education pro-grams sponsored by nonprofit bar associa-tions and government agencies. The nextissue will cover December 16 throughFebruary 20. Send information by October30 to [email protected]. For other CLEopportunities, see Virginia CLE calendarand “Current Virginia Approved Courses”at www.vsb.org/site/members/mcle-courses/ or the websites of commercialproviders.
October 1534th Annual Family Law Seminar: HotTopics in Domestic Practice TodayLive — Fairfax8:30 AM–4 PM
October 15Time Mastery for Lawyers: More Than100 Ways to Maximize YourProductivity and SatisfactionLive — Richmond8:30 AM–4:30 PM
October 15Fraud — The Most Used and LeastUnderstood Cause of Action:Allegations, Defenses, and Practice TipsVideo — Charlottesville9 AM–1:20 PM
October 1541st Annual Recent Developments inthe Law: News from the Courts andGeneral AssemblyVideo — Norfolk, Tysons Corner9 AM–4:25 PM
October 15What’s New at the Virginia SupremeCourt? An Overview of Recent CivilDecisions 2015TelephoneNOON–1:30 PM
October 16Time Mastery for Lawyers: More Than100 Ways to Maximize YourProductivity and SatisfactionLive — Roanoke8:30 AM–4 PM
October 1641st Annual Recent Developments inthe Law: News from the Courts andGeneral AssemblyVideo — Alexandria9 AM–4:25 PM
October 20Communicating to WinLive — Fairfax8:30 AM–3:45 PM
October 2034th Annual Family Law Seminar: HotTopics in Domestic Practice TodayLive — Norfolk8:30 AM–4 PM
October 2033rd Annual Real Estate PracticeSeminarVideo — Alexandria, Charlottesville,Richmond, Roanoke, Tysons Corner8:30 AM–3:40 PM (Richmond videobegins at 9 am)
October 2034th Annual Trusts and EstatesSeminarLive — Williamsburg9 AM–4:15 PM
October 20Ethics Update for Virginia Lawyers 2015Webcast/TelephoneNOON–2 PM
October 21Communicating to WinLive — Richmond8:30 AM–3:45 PM
Virginia CLE CalendarVirginia CLE will sponsor the following continuing legal education courses. For details, see http://www.vacle.org/seminars.htm.
Virginia State BarHarry L. Carrico
Professionalism Course
December 2, 2015, Richmond
January 7, 2016, Alexandria
March 16, 2016, Alexandria
April 7, 2016, Charlottesville
See the most current dates and registration information athttp://www.vsb.org/site/members/new.
CLE Calendar
VIRGINIA LAWYER | October 2015 | Vol. 6454 www.vsb.org
The VSB E-News
Have you been receiving the
Virginia State Bar E-News? The
E-News is a brief monthly sum-
mary of deadlines, programs, rule
changes, and news about your
regulatory bar. The E-News is
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your Virginia State Bar E-News is
being blocked by your spam filter,
contact your e-mail administrator
and ask to have the VSB.org
domain added to your permis-
sions list.
October 2124th Annual Advanced Elder LawUpdate SeminarVideo — Abingdon, Alexandria,Charlottesville, Norfolk, Richmond,Roanoke9 AM–4:15 PM
October 21What’s New at the Virginia SupremeCourt? An Overview of Recent CivilDecisions 2015Telephone5–6:30 PM
October 21Tom Spahn on Confidentiality:Exceptions to the DutyWebcast/Telephone7–9 PM
October 2234th Annual Trusts and EstatesSeminarLive — Roanoke9 AM–4:15 PM
October 22Defending Serious Traffic Cases 2015:Strategies and Tactics in RepresentingClientsVideo — Abingdon, Alexandria,Charlottesville, Danville, Hampton,Richmond8:25 AM–3:50 PM (RICHMOND VIDEOBEGINS AT 9 AM)
October 22Employment Benefits for EmploymentAttorneysWebcast/Telephone1–2:30 PM
October 23Defending Serious Traffic Cases 2015:Strategies and Tactics in RepresentingClientsVideo — Fredericksburg, Norfolk,Roanoke, Winchester8:25 AM–3:50 PM
October 23The Employment Law Docket of the2015-2016 U.S. Supreme Court Term:An Analysis of the Employment IssuesThat the Supreme Court Will DecideNext YearLive — Charlottesville/Webcast/TelephoneNOON–2 PM
October 23–2443rd Annual Advanced Business LawConference: Back to the Future—Business Lawyering for All Stages of theCompany Life CycleLive — WintergreenFRIDAY: NOON–5:20 PM; SATURDAY: 8:15 AM–1 PM
October 26Trials of the CenturyLive — Richmond8:25 AM–3:45 PM
October 2634th Annual Family Law Seminar: HotTopics in Domestic Practice TodayVideo — Abingdon, Charlottesville,Fredericksburg, Norfolk, Richmond,Roanoke, Tysons Corner8:30 AM–4 PM (RICHMOND VIDEO BEGINSAT 9 AM)
October 26Witness Preparation: Spotting,Diagnosing, and Solving WitnessProblems, Issues, and ChallengesVideo — Arlington9 AM–1:15 PM
October 27Trials of the CenturyLive — Fairfax8:25 AM–3:45 PM
October 27Defending Serious Traffic Cases 2015:Strategies and Tactics in RepresentingClientsVideo — Warrenton8:25 AM–3:50 PM
CLE Calendar
Vol. 64 | October 2015 | VIRGINIA LAWYER 55www.vsb.org
October 2734th Annual Family Law Seminar: HotTopics in Domestic Practice TodayVideo — Alexandria8:30 AM–4 PM
October 2733rd Annual Real Estate PracticeSeminarVideo — Norfolk8:30 AM–3:40 PM
October 27Witness Preparation: Spotting,Diagnosing, and Solving WitnessProblems, Issues, and ChallengesVideo — Charlottesville, Richmond9 AM–1:15 PM
October 27Best Trial Practices in Circuit Court: AnInteractive Judges’ Forum forRichmond-Area LitigatorsVideo — Chester9 AM–1:20 PM
October 2724th Annual Advanced Elder LawUpdate SeminarVideo — Tysons Corner9 AM–4:15 PM
October 2735 Questions About Employment LawEvery Practitioner Should KnowWebcast/Telephone1–4:15 PM
October 28Drafting Special Needs TrustsWebcast/TelephoneNOON–3:15 PM
October 2816th Annual Virginia InformationTechnology Legal Institute 2015Video — Alexandria, Charlottesville,Richmond, Roanoke8 AM–4:30 PM (RICHMOND VIDEO BEGINSAT 9 AM)
October 2834th Annual Trusts and EstatesSeminarLive — Fairfax9 AM–4:15 PM
October 28How to Draft a Contract: The Nuts andBolts of Contract DraftingVideo — Abingdon, Danville, Norfolk8:30 AM–3:45 PM
October 28Witness Preparation: Spotting,Diagnosing, and Solving WitnessProblems, Issues, and ChallengesVideo — Dulles9 AM–1:15 PM
October 29Gain the Edge!® Negotiation Strategiesfor LawyersLive — Fairfax8:30 AM–3:45 PM
October 2916th Annual Virginia InformationTechnology Legal Institute 2015Video — Norfolk, Tysons Corner8 AM–4:30 PM
October 29How to Draft a Contract: The Nuts andBolts of Contract DraftingVideo — Alexandria, Charlottesville,Dulles, Richmond, Roanoke8:30 AM–3:45 PM (RICHMOND VIDEOBEGINS AT 9 AM)
October 29Best Trial Practices in Circuit Court: AnInteractive Judges’ Forum forRichmond-Area LitigatorsVideo — Richmond9 AM–1:20 PM
October 29Ethics Update for Virginia Lawyers 2015Webcast/TelephoneNOON–2 PM
October 29Tom Spahn on Confidentiality:Exceptions to the DutyWebcast/Telephone3–5 PM
October 30Gain the Edge!® Negotiation Strategiesfor LawyersLive — Richmond8:30 AM–3:45 PM
October 30Understanding Financial StatementsTelephone9 AM–1:15 PM
October 30Defending Serious Traffic Cases 2015:Strategies and Tactics in RepresentingClientsVideo — Tysons Corner8:25 AM–3:50 PM
October 3034th Annual Family Law Seminar: HotTopics in Domestic Practice TodayVideo — Harrisonburg, Wytheville8:30 AM–4 PM
October 30The Ethics of SecurityTelephone2–4 PM
October 31The Ethics of Advertising and DirectMailLive — Charlottesville/TelephoneTBD
November 3What Every Virginia Lawyer Needs toKnow About the IRS and the VirginiaDepartment of TaxationLive — Charlottesville/Webcast/Telephone11 AM–1 PM
November 6–736th Annual Construction and PublicContracts Law SeminarLive — CharlottesvilleFRIDAY: 8:15 AM–5:25 PM; SATURDAY: 8 AM–12:20 PM
November 10Estate Planning BootcampLive — Charlottesville9 AM–4:05 PM
November 10The Employment Law Docket of the2015-2016 U.S. Supreme Court Term:An Analysis of the Employment IssuesThat the Supreme Court Will DecideNext YearWebcast/Telephone10 AM–NOON
CLE Calendar
VIRGINIA LAWYER | October 2015 | Vol. 6456 www.vsb.org
November 11Estate Planning BootcampLive — Springfield9 AM–4:05 PM
November 12Interpreting All That PsychobabbleAND Difficult Clients and Counsel inHigh-Conflict Cases: Being Ethical andEffectiveVideo — Richmond9 AM–3 PM
November 13Interpreting All That PsychobabbleAND Difficult Clients and Counsel inHigh-Conflict Cases: Being Ethical andEffectiveVideo — Abingdon, Charlottesville,Norfolk, Tysons Corner9 AM–3 PM
November 17Forming and Maintaining an EffectiveAttorney-Client Team: TheCornerstone for SuccessfulRepresentation of ClientsLive — Charlottesville/Webcast10 AM–1:15 PM
November 1834th Annual Trusts and EstatesSeminarVideo — Alexandria, Charlottesville,Fredericksburg, Leesburg, Norfolk,Roanoke9 AM–4:15 PM
November 18Understanding Financial StatementsVideo — Richmond9 AM–1:15 PM
November 1934th Annual Trusts and EstatesSeminarVideo — Richmond, Tysons Corner,Warrenton, Winchester9 AM–4:15 PM
November 20Understanding Financial StatementsVideo — Charlottesville, Norfolk,Roanoke, Tysons Corner9 AM–1:15 PM
December 1Trying Cases in the Western District ofVirginiaLive — Roanoke/Telephone8:55 AM–1:25 PM
December 2Trying Cases in the Western District ofVirginiaLive — Staunton/Telephone8:55 AM–1:25 PM
December 243rd Annual Advanced Business LawConference: Back to the Future—Business Lawyering for All Stages of theCompany Life CycleVideo — Abingdon, Alexandria,Charlottesville, Norfolk, Richmond,Tysons Corner9 AM–5 PM
December 2Forming and Maintaining an EffectiveAttorney-Client Team: TheCornerstone for SuccessfulRepresentation of ClientsLive — Charlottesville/Webcast10 AM–1:15 PM
December 3Unique Civil and Criminal IssuesFacing Current and Former MilitaryService Members and FamiliesLive — Charlottesville/Webcast/TelephoneNOON–3:15 PM
December 8Tom Spahn on Ethical Issues Related toCivil Rights and DiversityWebcast/TelephoneNOON–2 PM
December 8Tom Spahn on Confidentiality:Exceptions to the DutyWebcast/Telephone3–5 PM
December 9Ethics Update for Virginia Lawyers2015Webcast/TelephoneNOON–2 PM
December 9Trials of the CenturyVideo — Abingdon, Alexandria,Charlottesville, Danville, Norfolk8:25 AM–3:45 PM
December 10What Every Virginia Lawyer Needs toKnow About the IRS and the VirginiaDepartment of TaxationWebcast/Telephone11 AM–1 PM
December 10Trials of the CenturyVideo — Dulles, Harrisonburg,Richmond, Roanoke8:25 AM–3:45 PM (RICHMOND VIDEOBEGIN S AT 9 AM)
December 14Executions on JudgmentsLive — Charlottesville/Webcast/TelephoneNOON–2 PM
December 15Unique Civil and Criminal IssuesFacing Current and Former MilitaryService Members and FamiliesWebcast/Telephone10 AM–1:15 PM
December 1541st Annual Recent Developments inthe Law: News from the Courts andGeneral AssemblyVideo — Charlottesville, Tysons Corner9 AM–4:25 PM
Vol. 64 | October 2015 | VIRGINIA LAWYER 57
Virginia Lawyer Register
www.vsb.org
DISCIPLINARY PROCEEDINGS
CIRCUIT COURT
Respondent’s Name Address of Record Action Effective Date
Gary L. Close Culpeper, VA Public Reprimand July 28, 2015
Shelly Renee Collette Winchester, VA Public Reprimand August 18, 2015
DISCIPLINARY BOARD
Robert Stuart Collins Wise, VA Suspension – 2 years w/Terms January 6, 2014nunc pro tunc
Sean Patrick McMullen McLean, VA Revocation June 26, 2015
Eddy Paul Rice IV Richmond, VA Revocation September 20, 2015at 6:00 p.m.
DISTRICT COMMITTEES
Michael S. Weisberg Norfolk, VA Public Admonition July 22, 2015
Suspension – Failure to Pay Disciplinary Costs Effective Date Lifted
Elizabeth Margaret Fischer Wildwood, MO September 18, 2015
Tony Michael Hutchinson Norton, VA September 21, 2015
Mark Anthony Sgarlata McLean, VA September 1, 2015
Marjorie Lancaster Wall Farmville, VA September 10, 2015
Henry A. Whitehurst Christiansburg, VA September 3, 2015
David Redd Young Jr. Leesburg, VA September 10, 2015
Suspension – Failure to Comply with Subpoena
Jesse Eric White Woodbridge, VA September 4, 2015
VIRGINIA LAWYER | October 2015 | Vol. 6458
Virginia Lawyer Register
www.vsb.org
CIRCUIT COURT
Gary L. CloseCulpeper, Virginia12-070-091061On July 28, 2015, a three-judge panel of the Circuit Court for theCounty of Albemarle issued a public reprimand to Gary L. Closefor violating a professional rule that governs diligence. This was anagreed disposition of misconduct charges. RPC 1.3(a)www.vsb.org/docs/Close-073015.pdf
Shelly Renee ColletteWinchester, Virginia14-041-098320On August 18, 2015, a three-judge panel of the Circuit Court forthe County of Arlington affirmed a public reprimand issued by theVirginia State Bar Fourth District Committee – Section I onJanuary 27, 2015, to Shelly Renee Collette for violating professionalrules that govern competence, diligence, fairness to opposing partyand counsel, and misconduct. RPC 1.1, 1.3(a), 3.4(d), 8.4(b)www.vsb.org/docs/Collette-092415.pdf
DISCIPLINARY BOARD
Robert Stuart CollinsWise, Virginia13-000-095889Effective January 6, 2014, the Virginia State Bar Disciplinary Boardsuspended Robert Stuart Collins’s license to practice law for twoyears with terms. Mr. Collins’s license had been summarily sus-pended on January 6, 2014, based on his guilty plea in the UnitedStates District Court for the Western District of Virginia, Big StoneGap Division, to four felonies. This was an agreed disposition.Rules Part 6, § IV, ¶ 13-22www.vsb.org/docs/Collins-092415.pdf
Sean Patrick McMullenMcLean, Virginia15-041-101701On June 26, 2015, the Virginia State Bar Disciplinary Boardrevoked Sean Patrick McMullen’s license to practice law for violat-ing professional rules that govern competence, diligence, commu-nication, declining or terminating representation, and misconduct.RPC 1.1, 1.3(a-c), 1.4(a-c), 1.16(a)(1-3), 8.4(a-c)www.vsb.org/docs/McMullen-081715.pdf
Eddy Paul Rice IVRichmond, Virginia14-033-099432On September 20, 2015, the Virginia State Bar revoked Eddy PaulRice IV’s license to practice law based on his affidavit consenting tothe revocation. In consenting to the revocation, Mr. Rice acknowl-edged that the material facts upon which the allegations of miscon-duct against him are predicated are true. RPC 1.3(a), 1.4(a),1.15(a)(1)(3)(i,ii)(b)(2)(3)(4)(5)(c)(1)(2)(i,ii)(3)(4)(d)(2)(3)(i-iv)(4), 1.16, 8.4(c)www.vsb.org/docs/Rice-092215.pdf
DISTRICT COMMITTEES
Michael S. WeisbergNorfolk, Virginia14-022-099500On July 22, 2015, the Virginia State Bar Second District CommitteeSection II issued a public admonition to Michael S. Weisberg forviolating professional rules that govern safekeeping property. RPC1.15(b)(4,5)www.vsb.org/docs/Weisberg-091815.pdf
Disciplinary SummariesThe following are summaries of disciplinary actions for violations of the Virginia Rules of Professional Conduct (RPC) (Rules of theVirginia Supreme Court Part 6, ¶ II, eff. Jan. 1, 2000) or another of the Supreme Court Rules.
Copies of disciplinary orders are available at the Web link provided with each summary or by contacting the Virginia State BarClerk’s Office at (804) 775-0539 or [email protected]. VSB docket numbers are provided.
Vol. 64 | October 2015 | VIRGINIA LAWYER 59
Virginia Lawyer Register
www.vsb.org
Notices to Members
MCLE COMPLIANCEThe MCLE deadline for completing your CLE requirements isOctober 31. Failure to complete 12 CLE hours, including twohours in ethics/professionalism, and four hours from live, interac-tive programs by the deadline will result in a $100 non-compliancefee. Please visit the MCLE page to check your credits, certify yourMCLE attendance online, and see a list of approved courses. www.vsb.org/site/members/mcle-courses
PRO BONO CONFERENCE AND CELEBRATIONRegistration is open for the 2015 VSB Pro Bono Conference andCelebration, Wednesday, October 21, at the DoubleTree by HiltonWilliamsburg. www.vsb.org/site/events/item/pro_bono_conf_2015
CARRICO PROFESSIONALISM AWARDThe Criminal Law Section is accepting nominations for the HarryL. Carrico Professionalism Award. Nominations are due byDecember 7.www.vsb.org/site/sections/criminal/harry-l-carrico-professionalism-award
IMMIGRATION CLEThe Understanding the Immigration Consequences of CriminalConvictions: How to Navigate Criminal and ImmigrationProceedings in Virginia CLE on October 29 will be at GeorgeMason School of Law from noon to 4 p.m. The seminar is spon-sored by the Young Lawyers Conference and open to all.www.vsb.org/site/conferences/ylc-calendar/cle10292015
COMMENTS SOUGHT ON PROPOSED AMENDMENTSTO JCEC POLICYThe Virginia State Bar is seeking comments on proposed amend-ments to the policies and procedures of the Judicial CandidateEvaluation Committee. Comments should be submitted byDecember 12, 2015. www.vsb.org/site/news/item/prop_amend_jcec_policy_2015-10
CRIMINAL LAW SEMINARSave the date for the 46th Annual Criminal Law Seminar, spon-sored by the VSB Criminal Law Section and Virginia CLE, sched-uled for February 5 in Williamsburg and February 12 inCharlottesville.www.vsb.org/site/sections/criminal/annual-seminar
LAW IN SOCIETY CONTESTThe annual Law In Society essay contest for high school students isaccepting entries.www.vsb.org/site/public/law-in-society
2016F O R T Y - S I X T H A N N U A L
Criminal LawSeminar
Video Replays in Several Locations MCLE Credits (including ethics credit) Pending
V I R G I N I A S T A T E B A R
A N D V I R G I N I A C L E
FEBRUARY 5, 2016DoubleTree Hotel, Williamsburg
FEBRUARY 12, 2016DoubleTree Hotel, Charlottesville
VIRGINIA LAWYER | October 2015 | Vol. 6460
Virginia Lawyer Register
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NOMINATIONS SOUGHT FOR DISTRICT COMMITTEEVACANCIES
The Standing Committee on Lawyer Discipline calls for nomi-nations for district committee vacancies to be filled by Councilin June. Note that there are vacancies which may not becomeavailable because some members are eligible for reappointment.
To review qualifications for eligibility, see Rules of theSupreme Court of Virginia, Part 6, Section IV, Paragraph 13-4 –Establishment of District Committees, specifically 13-4.E(Qualifications of Members) and 13-4.F (Persons Ineligible forAppointment).
FIRST DISTRICT COMMITTEE: 3 attorney vacancies (2 cur-rent members are eligible for reappointment). Vacancies are tobe filled by members from the 1st, 3rd, 5th, 7th or 8th judicialcircuits.
SECOND DISTRICT COMMITTEE, SECTION I: 4 attorneyvacancies (2 current members are eligible for reappointment).Vacancies are to be filled by members from the 2nd or 4th judi-cial circuits.
SECOND DISTRICT COMMITTEE, SECTION II: 2 attorneyvacancies (both members are eligible for reappointment); 2non-attorney vacancies. Vacancies are to be filled by membersfrom the 2nd or 4th judicial circuits.
THIRD DISTRICT COMMITTEE, SECTION I: 3 attorneyvacancies (2 current members are eligible for reappointment).Vacancies are to be filled by members from the 6th, 11th, 12th,13th or 14th judicial circuits.
THIRD DISTRICT COMMITTEE, SECTION II: 3 attorneyvacancies (all 3 current members are eligible for reappoint-ment); 1 non-attorney vacancy (current member is eligible forreappointment). Vacancies are to be filled by members from the6th, 11th, 12th, 13th or 14th judicial circuits.
THIRD DISTRICT COMMITTEE, SECTION III: 1 attorneyvacancy (current member is eligible for reappointment).Vacancies are to be filled by members from the 6th, 11th, 12th,13th or 14th judicial circuits.
FOURTH DISTRICT COMMITTEE, SECTION I: 2 attorneyvacancies (1 current member is eligible for reappointment); 1non-attorney vacancy (current member is eligible for reap-pointment). Vacancies are to be filled by members from the17th or 18th judicial circuits.
FOURTH DISTRICT COMMITTEE, SECTION II: 3 attorneyvacancies (1 current member is eligible for reappointment); 1non-attorney vacancy. Vacancies are to be filled by membersfrom the 17th or 18th judicial circuits.
FIFTH DISTRICT COMMITTEE, SECTION I: 2 attorneyvacancies (both current members are eligible for reappoint-ment); 2 non-attorney vacancies (1 current member is eligiblefor reappointment). Vacancies are to be filled by members fromthe 19th or 31st judicial circuits.
FIFTH DISTRICT COMMITTEE, SECTION II: 2 attorneyvacancies; 1 non-attorney vacancy. Vacancies are to be filled bymembers from the 19th or 31st judicial circuits.
FIFTH DISTRICT COMMITTEE, SECTION III: 3 attorneyvacancies (2 current members are eligible for reappointment); 1non-attorney vacancy (current member is eligible for reap-pointment). Vacancies are to be filled by members from the19th or 31st judicial circuits.
SIXTH DISTRICT COMMITTEE: 2 attorney vacancies; 1 non-attorney vacancy. Vacancies are to be filled by members fromthe 9th or 15th judicial circuits.
SEVENTH DISTRICT COMMITTEE: 4 attorney vacancies (3current members are eligible for reappointment). Vacancies areto be filled by members from the 16th, 20th or 26th judicial cir-cuits.
EIGHTH DISTRICT COMMITTEE: 1 attorney vacancy (cur-rent member is eligible for reappointment); 1 non-attorneyvacancy. Vacancies are to be filled by members from the 23rd or25th judicial circuits.
NINTH DISTRICT COMMITTEE: 1 non-attorney vacancy(current member is eligible for reappointment). Vacancies areto be filled by members from the 10th, 21st, 22nd or 24th judi-cial circuits.
TENTH DISTRICT COMMITTEE, SECTION I: 2 attorneyvacancies; 1 non-attorney vacancy. Vacancies are to be filled bymembers from the 27th, 28th, 29th or 30th judicial circuits.
TENTH DISTRICT COMMITTEE, SECTION II: 1 attorneyvacancy; 1 non-attorney vacancy. Vacancies are to be filled bymembers from the 27th, 28th, 29th or 30th judicial circuits.
Nominations, along with a brief resume, should be sent byFebruary 28, 2016, toStephanie Blanton, Virginia State Bar,1111 East Main Street, Suite 700, Richmond, VA [email protected]
Vol. 64 | October 2015 | VIRGINIA LAWYER 61
Professional Notices
www.vsb.org
James Lofton Named 2015 GovernmentAttorney of the Year
Lisa Bertini and Andrea Ruege haveformed Bertini Law PC at 5712Cleveland Street, Suite 140, VirginiaBeach.
Mark A. Burgin has joinedthe Lynchburg firm of Petty,Livingston, Dawson &Richards as an associate. Hewill handle constructionand commercial litigation.
Nina J. Ginsberg was sworn in as secre-tary of the National Association ofCriminal Defense Lawyers at the associa-tion’s 58th annual meeting in Denver,CO, on July 26. Ginsberg, a foundingpartner at DiMuroGinsberg PC, inAlexandria, has represented individualsand corporations in a wide range ofmatters, with a focus on national secu-rity law, white collar investigations andprosecution, financial and securitiesfraud, computer crime, copyright fraud,and professional ethics.
Bonnie H. Hoffman, deputy publicdefender in Leesburg, was appointed
parliamentarian of the NationalAssociation of Criminal Defense Lawyersat the association’s 58th annual meetingin Denver, CO, on July 26. Hoffman hasbeen a member of NACDL since 1997.
George C. Howell III, part-ner at Hunton & Williams,has started his term as chairof the American BarAssociation’s Tax Section.Howell practices in thefirm’s Richmond and New York offices.
Naureen F. Hyder hasannounced the launch ofher immigration law prac-tice. Hyder ImmigrationLaw concentrates its practicesolely in immigration law.For the past five years, Hyder served asan immigration attorney at Richmond’sLaw Offices of Hyder & Overas, whichcontinues to bear her father’s name.
The Laurel Brigade Law Group was cre-ated this year in Loudoun County toserve the Counties of Loudoun, Fairfax,
Fauqieur, Clarke, Frederick, andWinchester in the areas of domestic rela-tions, criminal, estate planning, and per-sonal injury. The partners are: Daniel J.Travostino, Christine H. Mougin-Boal,Rhonda Wilson Paice, Senator JenniferT. Wexton, Lindsay R. Hendrix, ThomasS. Rock, and Eric J. Demetriades.
John Thorpe Richards Jr.announces the formation ofJohn Thorpe RichardsPLLC, which will provideadvocacy and advice in civilmatters from its office inAlexandria.
Kimberly A. Skiba-Rokosky had joinedSurovell Isaacs Petersen & Levy PLC inFairfax, where she will continue her legalpractice focused on family law; and estateplanning, administration, and litigation.
E-mail your news and high-resolutionprofessional portrait to [email protected] publication in Virginia Lawyer.
Burgin
James Lofton, senior counsel inEnvironment, Energy, and Resources atthe Department of Justice, has been rec-ognized by the American BarAssociation, Section of Environment,Energy and Resources as the 2015Government Attorney of the year.
Lofton joined the DOJ as a trialattorney in 1990 after six years in privatepractice. He began his government careerhandling Superfund matters referredfrom EPA. He was lead trial attorney inthe first suit under the MarineProtection, Research and Sanctuaries Actand obtained restoration and mitigationof the destroyed sea grass beds in theFlorida Keys National Marine Sanctuary. Lofton was first appointed special EPAcounsel to handle the administrative trial
of the Tennessee Valley Authority forviolations at its coal fired plants.Although he was successful at the triallevel, the decision was later overturnedon appeal. He was critical in the success-ful outcome of the first power plant caseto go to trial identifying critical keyexpert witnesses and developing trialdemonstratives essential to the prosecu-tion of the complex case against theSammis Power Plant.
He later managed all of the PowerPlan Initiative cases including the suc-cessful resolution of the case directed atAmerican Electric Power and forty-six ofits units in five states. The judicial con-sent decrees and trial judgments associ-ated with the cases Lofton has managedhave resulted in the elimination of hun-
dreds of tons ofair pollutantsand improvedthe lives ofcountless people
He also has been a legal specialistfor the ABA Rule of Law Initiative teach-ing criminal law to students in Kyiv,Ukraine; a Fulbright Scholar teachingEnvironmental Law in Ankara, Turkey;and an Atlantic Fellow in Public Policyfor the University of Cambridge,England. He regularly teaches at theNational Advocacy Center, which is theJustice Department’s training center forits attorneys across the nation. There, hehas taught courses on trial advocacy, evi-dence, discovery, and public speaking.
Howell
Hyder
Richards
VIRGINIA LAWYER | October 2015 | Vol. 6462
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LEARN THE BASICS FROM THE BEST
Experienced judges and lawyers willprovide attendees with practice tips
and real-life essentials.
Choice of Morning Break-Out Sessions:
8:45 a.m.–12:30 p.m.
or
or
or
or
or
General Session:
1:00–4:00 p.m.
FIRST DAY in PRACTICEand Beyond
Thursday, December 10, 2015Greater Richmond Convention Center8:30 a.m.–4:00 p.m.
Virginia State Bar1111 East Main StreetSuite 700Richmond, VA 23219-0026(804) 775-0500
6 MCLE HOURS PENDING (2 ethics)
FIRST DAY IN PRACTICE & BEYOND REGISTRATION FORMEnclosed is my registration fee of $85.00 to attend the seminar on December 10, 2015.
(E-mail address needed for sending out information regarding materials.)
Break-Out Sessions (Select your preference. Break-out sessions will be assigned on a �rst-come, �rst-served basis.)
SPACE LIMITED.
***A LINK TO MATERIALS WILL BE SENT OUT VIA E-MAIL PRIOR TO THE PROGRAM***ONLY FLASH DRIVES WILL BE HANDED OUT ON SITE
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