Fraser Trebilcock Shareholder Volunteers to Help Seniors with their Taxes

Manderfield, PaulaFiling taxes can be a daunting and confusing process, especially for seniors. But there is help available in mid-Michigan, through a partnership between AARP and the IRS.

Fraser Trebilcock attorney and former Ingham County Circuit Court Judge, Paula Manderfield will be available to help prepare 2015 income and property tax credit forms, as a volunteer with the tax counseling program. Manderfield has been a part of the program in conjunction with AARP and the IRS for the past two tax seasons. Volunteer certified tax preparers are located on site at the Tri-County Office on Aging in Lansing and also at locations in Delta Township, the Hannah Center in East Lansing, Okemos, and downtown Lansing.

Although the program is geared to help low- to moderate-income seniors, there are no age or income restrictions. The program is available for senior citizens through April 15th. If you are interested in using this service, please contact the Tri-County Office on Aging at 517.887.1440 or visit to schedule an appointment.

Fraser Trebilcock attorney Paula J. Manderfield served 20 years on the bench, the last 12 of which she served as a 30th Circuit Court Judge in Ingham County, before retiring in 2012. Paula focuses her practice in the areas of mediation, civil litigation, family and criminal law. In order to assist in processing the tax returns, she successfully passed a series of exams to become a volunteer certified tax preparer. 

March Madness: IRS Issues New Reporting Rules for Trust and Estate Beneficiaries

It’s March and right around the time I finished completing my NCAA McCord, Paulbasketball tournament brackets, I also completed an Estate Tax Return. While discussing my bracket selections with a colleague, she had asked if I remembered to complete the new statement required to be filed with the IRS and sent to each beneficiary. I started to sweat. I did not think it was due. No worries, under recently issued temporary and proposed regulations, both you and I now have until March 31, 2016, in order to complete and file this new statement. So instead of complying now, or within the 30-days after filing of an estate tax return, the due date has now been extended to about the time that the elite-eight are selected. Of course, this doesn’t mean we don’t have to worry about preparing them as they are still required – just delayed a few weeks. Then again, nothing is more satisfying in the law than adjournment of a deadline so, with this timeout, let’s discuss some of the requirements of these new statements and recently issued regulations.

The IRS has long thought that the reporting of cost basis on inherited property and the amounts that the beneficiaries reported at the time of sale of the property were not consistent with what is reported on the decedent’s estate tax return. So, how does the IRS get people to match this correctly, and report it correctly?

Last year the President signed the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015, which added Section 1014(f) to the IRC. This provision provides that the income tax basis of property received from a decedent under Section 1014(a) cannot exceed the value of the property as determined for estate tax purposes or the value on a statement sent to the beneficiaries under Section 6035. Section 6035 requires personal representatives (or beneficiaries in certain situations) of estates for which an estate tax return is required to be filed to supply the IRS and each person acquiring any interest in property included on the decedent’s estate tax return an information statement.

The IRS is authorized to issue regulations to carry out these new reporting requirements. Originally, these new requirements applied to estate tax returns due on or after July 31, 2015. However, in order to give the IRS time to issue additional guidance and forms to assist taxpayers, the IRS issued Notice 2015-57 last August that extended the due date to February 29, 2016. The IRS again delayed the due date until Mar. 31, 2016 in Notice 2016-19. Finally, on March 4, 2016, the IRS issued temporary regulations providing necessary guidance.

Filing a statement seems simple enough and the IRS released Form 8971 and Instructions to Form 8971 on January 29, 2016 for this purpose. This form includes a Schedule A that will be sent to each beneficiary receiving property included on the estate tax return. For amounts passing to trusts, the Instructions suggest that the report should be given just to the trustee and not each potential trust beneficiary. For example, the Instructions state “In cases where a trust beneficiary or another estate beneficiary has multiple trustees or executors, providing Schedule A to one trustee or executor is sufficient to meet the requirement,” and that the Schedule A will be delivered “to the trustee(s) of a beneficiary trust.” Obviously, this information should be retained by either the beneficiary or the trust in a permanent file for ease of access.

The proposed regulations offer guidance of certain items or instances not subject to reporting. For example, where an estate tax return is filed solely to claim a portability election or a generation-skipping transfer tax election or allocation, no information statement is required because returns reporting these items are not required under Section 6018. Other exclusions include cash (other than coins or paper bills with numismatic value); income in respect of a decedent; personal property that need not be appraised such as household and personal effects having a value of less than $3,000; and property that the estate sells or disposes of in a taxable transaction and does not distribute.

The failure to file an information or correct payee statements invites a penalty of $250 per return or statement although this penalty may be waived where “reasonable cause” exists. Other penalties may apply to the individual who receives the property. Specifically, if one were to sell property and claim a basis higher than that reported on the estate tax return, that individual may face a penalty related to the inconsistent reporting of 20%.

While I was happy to learn of the March 31st deadline – it is fast approaching. We are best served by paying close attention to these new reporting rules to avoid costly penalties. Reviewing these new rules and creating best practices should ensure that the new rules cause the least confusion for clients and beneficiaries.

This article originally appeared in Legal News.

Fraser Trebilcock attorney Paul V. McCord has more than 20 years of tax litigation experience, including serving as a clerk on the U.S. Tax Court and as a judge of the Michigan Tax Tribunal. Paul has represented clients before the IRS, Michigan Department of Treasury, other state revenue departments and local units of government. He can be contacted at 517.377.0861 or

Electronic Voting Rules and Michigan Nonprofit Corporations: Ensure Each Vote Counts Under Michigan Law

Castellani_Michigan Business NetworkMichigan nonprofits are comprised of members, shareholders, and directors that can be found in various locations at any time. To avoid meetings and travel time, many nonprofits use electronic voting instead of a meeting. But are they following the correct procedure according to Michigan law?

Attorney Edward Castellani recently cleared up questions on how to make sure every vote  counts under Michigan law.

“For members or shareholders to vote electronically they must comply with the rules for ballot voting which were adopted in Michigan in the 2015 amendment to the Michigan Nonprofit Corporation Act,” states Castellani.

The entire article on this subject can be found on the Michigan Nonprofit Association website by clicking this LINK.

To take a deeper look into Electronic Voting, the Michigan Business Network will air an interview between Castellani and Cheryl Ronk of “Association Impact” on April 7th at 9 am and 3 pm EST. The show is hosted by the Michigan Society of Association Executives as part of their weekly online radio show. If you are not able to catch the interview on Thursday, a podcast will also be available after April 11th that we will share when available.

To learn more, contact attorney Ed Castellani at or 517.377.0845. In addition to having practiced law for more than 30 years, Ed is a certified public accountant. This dual background and experience provides his clients unique insight into business transactions, such as business entity formations, mergers, acquisitions, tax audits and appeals, and general business and tax planning for both profit and nonprofit corporations.

Social Security, Durable Powers of Attorney, and Guardianships for Children with Disabilities

Trusts & Estates - Fraser TrebilcockYou likely already know how important it is to plan for yourself, but it’s especially imperative for those caring for children with disabilities to know what options are available to their children and what government benefits might be available to assist in supporting them.  Continue reading Social Security, Durable Powers of Attorney, and Guardianships for Children with Disabilities

Attorney Peter D. Houk Issues Findings of Fact on Remand in Judge Simpson Case

Houk, PeterFraser Trebilcock attorney and retired Ingham County Judge Peter D. Houk has issued his findings of fact on remand against Washtenaw County district court Judge J. Cedric Simpson.

You can read the findings of fact in its entirety below or view as a PDF by clicking the following link: Houk Findings of Fact on Remand





Hon. J. Cedric Simpson
14-A District Court
415 W. Michigan Avenue
Ypsilanti, Michigan 48202

Formal Complaint No. 96
Hon Cedric Simpson on Remand

Paul J. Fischer (P35454)
3034 W. Grand Boulevard
Suite 8-450
Detroit, Michigan 48202
(313) 875-5110

Kenneth M. Mogill (P17865)
Attorney for Respondent
27 E. Flint St.
Suite 2
Lake Orion, MI 48362
(248) 814-9470



This matter was remanded to the Judicial Tenure Commission (“JTC”) by the Supreme Court “for further proceedings … [to] consider the information that the respondent has obtained and that was in the possession of the JTC Examiner before the hearing in this matter, but was not made available to the respondent for inspection or copying …“ The JTC was instructed to issue a new decision and recommendation if it finds it appropriate. The newly discovered evidence that is pertinent to the claims advanced here are centered around approximately two dozen c-mails that were written by and between various police officials; exchanges between Chief Harshberger and Chief Judge Tabbey; and between Chief Harshbergcr and Township Attorney Lillich, the initial prosecuting authority in the arrest of Crystal Vargas.

The Judicial Tenure Commission considered the previously undisclosed material. The JTC remanded the matter to the Master “for a determination of whether the evidence would alter his findings in this matter.” The Commission further remanded the matter “for a determination of how the non-disclosure occurred and the reasons for the non-disclosure.” These three questions will be addressed seriatim.


Associate Examiner, Margaret Rynier, filed a freedom of information request with the Pittsfield Police Department on September 17, 2014, requesting a copy of any and all documents, including c-mails, in the possession of the Pittsfield Police Department and or Chief Matthew Harshberger, pertaining to the arrest of Crystal Marie Vargas.” Township Attorney Fink replied on October 15, 2014, via e-mail. (Ex120) The subject line of the e-mail was blank, but below it, the Attachment line noted “rynicr.pdf” The text of the e-mail says in its entirety, “Please see attached documents. I have not included documents subject to attorney client privilege or deliberative communications.” Neither Judge Simpson nor Crystal Marie Vargas is referenced in the communication. The Master finds that Ms. Rynier should have been aware of its contents because of its origin, and the e-mail chain to which it was attached. Further, Ms. Rynier accessed the e-mail a week later on October 22 to send an e-mail to Mr. Fink; giving her another opportunity to see the communication. (Ex 122)

This communication was received and in the possession of the Examiner. It was not provided to Respondent’s counsel when he requested it.

Ms. Reynier asserts that the failure to open the e-mail was a result of negligence on her part in not realizing what it was, and because she thought she had already received all of the pertinent documents, but in violation of the department’s policy to require a Freedom of Information request. (Remand Tr. 26). The Master finds this a credible explanation for the reasons discussed below regarding Findings Reviewed.


After the March 2015 hearing in this matter the Master found that:

Respondent’s appearance at the accident scene, his self-introduction as a judge, his involvement beyond assuring himself of Ms. Vargas’ safety and his subsequent offer to give her a ride prove beyond a preponderance that Respondent interfered with the police investigation.

Respondent asserts that Exhibits 133 through 136 demonstrate that the police department, including Chief Harshberger believed that arresting Officer Cole had done everything by the numbers and that hence the Respondent could not be guilty of interfering with the police investigation. Indeed, the c-mails do reflect that the officers believed that Officer Cole acted appropriately. That however, doesn’t excuse Respondent’s conduct that was detailed in the Master’s findings. Nor do the c-mails cast a favorable light on Respondent’s conduct. Exhibit 134, not previously considered by the Master, is pertinent because it shows how concerned the victim party to the crash was that he might not get a fair result because “the judge showed up.”


Respondent Argues that Judge Tabbey’s involvement actually sped up the issuance of the complaint and warrant for the arrest of Crystal Vargas and thus Respondent could not have been responsible for delaying the arrest. See Remand transcript p. 176. Again, there is a confusion of whose conduct is in question. It is not the conduct of Judge Tabbey, who was not called, or Chief Harshberger, but rather Respondent. It is like a batter saying, “Coach, not my fault I missed the ball; he threw a strike.”

Additionally the Respondent ignores the Master’s findings that he interfered as demonstrated by Attorney Lillich testifying that:

“I would be glad to just sit on this or hold this thing until the attorney gets involved and then talk to the attorney about the about the problems with the case if there are problems with the case. “Findings of Fact P.6.

Respondent further ignores the findings that concerning Respondent’s offering that the defendant was a “good kid;” and the discussion of potential defense attorneys for her and potential defenses.

Nothing in the exchange of c-mails between Chief Harshberger and Judge Tabbey affect these findings which I find to be an interference with the prosecution.


Nothing in the undisclosed e-mails relates to the misrepresentations dealt within Count III. Counsel for Respondent argues that since he, the Master, was misled on Counts I and II, that a different decision would have been reached on Count III. Counsel asserts that the Master would have evaluated Respondent’s credibility differently. This argument fails simply because nothing in the e-mail chain causes the Master to reexamine his assessment of the facts previously found.


As stated in the first section on findings, the Master finds the explanation of Ms. Reynier that she was negligent, to be credible. She overlooked an e-mail that contained information that she thought she had already obtained from another source. Arrayed against her testimony is an unsubstantiated charge that the Examiner and his office is a racist. This is predicated upon the pendency in federal court of a four year old ease where the allegation has been made that the Examiner treats black judges less favorably than white judges. Counsel also urges that the Examiner did not disclose the c-mails because they would show that Judge Tabbey was involved, and he received more favorable treatment from the Judicial Tenure Commission than the Examiner was seeking for Respondent. The argument ignores the fact that punishment is imposed on errant judges by the JTC and not the Examiner. Moreover; without any supporting evidence, counsel urges the Master to find that the Examiner’s actions are racially motivated and that there was an inherent agreement between the Examiner and his associate to withhold evidence from Respondent based on his race. The argument does not pass the test of Occam’s Razor that, the simplest of competing theories be preferred to the more complex.” Webster’s New Collegiate Dictionary 1980.


The after proofs closed in this matter, Respondent submitted a motion to reopen proofs to receive a phone log from Mr. Fink that would clear up a dispute as to whether Mr. Fink called Ms. Reynier on October 9, 2015. This is clearly a collateral issue. Moreover, it is one that should have been dealt with at the hearing. Regardless, one need look no farther than Mr. Fink’s testimony:

Q. So now you’re sure that you didn’t talk to me, or is it your recall that you did not talk to me?

A. Well, I would not — given the nature of this ease, I would not say a hundred percent sure. I think people have made mistakes in reporting things. I will tell you that I have no recollection of talking to you. I don’t believe I talked to you, and the only way that I would be led to believe I talked to you is if there was a phone record that showed that your number and my number were on the same phone call.

Q. And you don’t have that?

A. I don’t have it. I don’t think it exists.

A record that from the witness’ cell phone that shows no phone call does not preclude a call from another phone and at best is tangential to this matter for the reason that the witness expressed, “I think people have made mistakes in reporting things.”

The Motion is DENIED.

Signed by Peter D. Houk on March 7, 2016

Client Alert: CMS Issues Final Rule on Reporting and Return of Overpayments Under 60-Day Rule

Health Care Law

On February 12, 2016, the Centers for Medicare & Medicaid Services (“CMS”) published a long-awaited Final Rule regarding Section 6402(a) of the Affordable Care Act—the so-called “60-day rule”. The 60-day rule outlines the obligation of providers and suppliers to report and return Medicare overpayments within 60 days of their “identification”. A provider or supplier who retains Medicare overpayments beyond the 60-day period faces the risk of False Claims Act (FCA) liability, Civil Monetary Penalties Law (CMPL) liability, and exclusion from federal health care programs.

Section 6402(a) of the Affordable Care Act added section 1128J(d) to the Social Security Act (“the Act”). Section 1128J(d) of the Act requires a Medicare or Medicaid provider or supplier to return and report an overpayment “by the later of: (A) the date which is 60 days after the date on which the overpayment was identified; or (B) the date any  corresponding cost report is due, if applicable”.

Since Section 6402(a) of the ACA was enacted in 2010, there has been confusion about what it means to identify an overpayment for the purposes of starting the 60-day clock, how far back a provider or supplier must look back to identify an overpayment, and the obligations a provider or supplier has once it has identified an overpayment.

Under the Final Rule, the 60-day clock starts when a provider or supplier has identified an overpayment and defines “identified” as occurring when “the person has or should have, through the exercise of reasonable diligence, determined that the person has received an overpayment and quantified the amount of the overpayment. A person should have determined that the person received an overpayment if the person fails to exercise diligence and the person in fact received an overpayment”. CMS clarified in the Final Rule that the 60-day time period does not begin to run until after the reasonable diligence period is completed, and agreed with commentators that “part of identification is quantifying the amount, which requires a reasonably diligent investigation”.

The CMS also clarified that reasonable diligence means a timely, good faith investigation of credible information, which should take no longer than six months from the receipt of credible information, except under extraordinary circumstances.

The Final Rule recognizes that providers and suppliers must exercise reasonable diligence by being both proactive and reactive. Proactive reasonable diligence includes implementing compliance activities, conducted in good faith by qualified individuals, to monitor for the receipt of overpayments. Reactive reasonable diligence would include having qualified individuals undertaking investigations in a timely manner “in response to obtaining credible information of a potential overpayment”.

Providers and suppliers should understand that failure to initiate reasonable diligence efforts could start the running of the 60-day clock on the day the provider or supplier received credible information of a potential overpayment. Providers and suppliers should also recognize that failure to initiate reasonable diligence efforts with all deliberate speed after obtaining overpayment information could result in knowingly retaining an overpayment because the provider or supplier “acted in reckless disregard or deliberate ignorance of whether it received an overpayment”.

Under the Final Rule, the CMS finalized a 6-year lookback period rather than the 10-year lookback originally suggested by the Proposed Rule. Under the Final Rule, providers and suppliers must report and return overpayments identified “within 6 years of the date the overpayment was received”.

Other important provisions of the Final Rule:

Overpayments caused by errors or third parties outside of the provider’s or supplier’s control, including CMS system errors, are also subject to the 60-day time period.  Therefore, providers and suppliers will need to ensure implemented compliance activities also monitor for overpayment errors from third parties outside the provider’s or supplier’s control.

To satisfy the obligation to report and return overpayments under the final rule, a provider or supplier must use “an applicable claims adjustment, credit balance, self-reported refund, or another appropriate process” to report and return overpayments.

The final rule goes into effect March 14, 2016, and applies to Medicare Part A and Part B provider and suppliers. An earlier Final Rule, published in May 2014 applies to overpayments under Medicare Parts C and D. No final rules has been published that addresses requirements for Medicaid and some states are developing their own requirements.

To find out more about the Final Rule from CMS and its impact on health care and your business, contact Fraser Trebilcock at 517.482.5800.