Trust the Leaders

Issue 10 / Winter 2004

• Time for a State Tax Checkup? Companies with operations in multiple states should seriously consider having a periodic state income and franchise tax “checkup”—a review of the taxpayer’s operations, organizational structure, intercompany transactions and state income tax returns to determine if the company is operating in the most tax efficient manner. This article outlines the major steps that should be undertaken in such a state tax checkup to determine if there are opportunities to operate more tax efficiently.
• The United States Supreme Court: The Ultimate Decision Maker Although many a disappointed litigant has threatened to appeal its case “all the way to the Supreme Court,” review of any case by the United States Supreme Court is hard to come by. This difficulty in obtaining Supreme Court review in turn serves to heighten the significance of any opinion rendered by the Court.
• The IRS Eyes Executive Compensation: Will You Be Ready When The Tax Man Calls? The plethora of stories in recent years about executive compensation excesses has prompted action on a number of fronts. Investors have weighed in with a flurry of shareholder initiatives during proxy season. Financial advisors such as Institutional Shareholder Services have made negative recommendations to their clients concerning many equity-based plan proposals.
• C O P Y R I G H T: Centuries-Old Protection for Authors Imagine you are the client in advertising, mainly real estate advertising, who called me the other day. She said, “I have photographs of apartment complexes around town that I used in creating apartment rental advertising for a print publication I previously did work for. The images have a “© 2001 Print Publisher” notice on them. The print publisher is out of business, but I still have the photos. My current client is also in real estate advertising, but it does advertising on the Internet, not in a printed publication. Can I use the photographs, writing new copy of course, for the ads that I’m creating for the Internet publisher or do I have to hire a photographer to take pictures of the same apartment complexes?”
• Tax Increment Financing Can one create something from nothing? Can an underdeveloped area “pull itself up by its bootstraps”? Perhaps, with tax increment financing (TIF), an increasingly popular method for funding economic development and redevelopment, also known as tax allocation bond financing.
• Timing is Everything: Liability of Directors and Officers Under the Deepening Insolvency Theory Suppose you are a director of a struggling company that owns and operates a small business that has experienced significant losses over the past three years and is struggling to keep up with its creditors. You and the other directors, as well as management, consider filing for protection under the bankruptcy laws but believe that if the company can somehow continue to operate for another 12 months, it will break even and its prospects will be rosier.