IRS | Fraser Blog

Five Stories That Matter in Michigan This Week – November 15, 2024

2025 IRS Benefit Plan Limits: Key Changes Announced

The IRS has released updated benefit plan limits for 2025, including increases to retirement plan contributions. For example, the Section 415 limit will rise from $69,000 to $70,000, while the annual 401(k), 403(b), and 457(b) deferral limit will increase to $23,500.

Why it Matters: Employers must understand and implement these and other new limits to ensure their benefit plans remain compliant and competitive for the upcoming year.

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Michigan Court of Appeals Confirms Commercial Roof Replacement Qualifies as “New Construction” for Property Tax Purposes

In a recent decision that clarifies the scope an “addition” for property tax purposes, the Court of Appeals held that installing a new roof on a commercial building constitutes “new construction” that triggers an increase in the property’s taxable value beyond the standard legislative cap.

Why it Matters: By confirming that even basic building improvements like roof replacements constitute “additions” that can trigger increased tax assessments, the ruling clarifies a power that local tax assessors have long possessed but may not have consistently exercised. Read more.

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Legislation Introduced Requiring License to Sell Tobacco and Vape Products

Legislation introduced this week would require businesses to purchase a three-year license for $1,500 to sell tobacco and vape products, with supporters of the bills citing the continued use of vape products by teens.

Why it Matters: Currently, Michigan is one of ten states that does not have a tobacco retail license. A licensing system would be created and monitored by LARA, which would regularly conduct inspections to ensure no underage sales are taking place. Violations range from misdemeanors, suspended licenses, to forfeiture of license.

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Michigan Legislature Passes Data Center Tax Break Bill

This week, the Michigan House passed a bill that would exempt large data centers from Michigan use tax on equipment.

Why it Matters: With the massive computing needs of artificial intelligence, data center development has exploded across the country. While this bill would likely make Michigan more attractive to data center developers, opponents argue that having more data centers—which consume massive amounts of energy—would undermine Michigan’s clean energy goals.

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Business Education Series: Referral Generation: Avoid Peaks & Valleys in Your Sales Funnel

Every business owner prefers a referral to a cold lead. Referrals have a basis of trust and understanding that makes the sales process simpler to execute and winning easier to achieve. Referrals can’t be generated intentionally however, right? On Tuesday, December 17, Ian Richardson, BBA, CSAP, MCSA, Principal Consultant, Fox & Crow Group LLC & Managing Partner, Richardson & Richardson Consulting, LLC, will discuss how this is incorrect.

Why it Matters: Learn how to structure an intentional referral generation pipeline from existing clients while minimizing the risk of client churn. Three takeaways include preparing conversations with clients, retention efforts for clients who are not ready to refer, and review of how to prepare a referral list for clients. Full information and to register.

Related Practice Groups and Professionals

Employee Benefits
Business & Tax | Paul McCord
Energy, Utilities & Telecommunication | Sean Gallagher

Five Stories That Matter in Michigan This Week – August 16, 2024

Student Can’t Bring an ELCRA Hostile Environment Claim Against School Due to Harassment from Another Student

In Doe v Alpena Public School District, the Michigan Supreme Court recently ruled that a school cannot be held liable on a theory of vicarious liability under the Elliott-Larsen Civil Rights Act for student-on-student misconduct.

Why it Matters: The Court’s ruling draws a distinction between the employment context, where such vicarious liability claims are permitted, and the school context for actions taken by non-employees, such as students.

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Michigan Supreme Court Rules on Adopt and Amend: What Businesses Need to Know

In Mothering Justice v Attorney General, a 105-page, 4-3 party-line decision, the Michigan Supreme Court ruled that the state Legislature lacked the authority to “adopt and amend” two employment-related ballot initiatives in 2018. In its ruling, the Court ordered that increases to the state’s minimum wage and tipped wage laws, and the expansion of the state’s earned sick time laws will go into effect February 21, 2025.

Why it Matters: Employers will need to educate their staff on these changes, adjust payroll systems, and ensure their company’s policies are updated to reflect the new laws before the February 21, 2025, deadline to remain compliant. Learn more.

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Michigan Cannabis Exceeds $287 Million in July ‘24

Cannabis sales surpassed $278 million in July, via the monthly report from the Michigan Cannabis Regulatory Agency. Michigan adult-use sales came in at $286,388,987.71, while medical sales came in at $1,354,084.70, totaling $287,743,072.45.

Why it Matters: While the prices of cannabis and cannabis-related products continue to decrease and make consumers happy, growers on the other hand are seeing profits decrease resulting in them seeking ways to halt new licenses to be granted in an effort to steady prices.

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Comment Period Ends for Federal Cannabis Rescheduling

On May 20, the U.S. Department of Justice and the Drug Enforcement Administration issued a Notice of Proposed Rulemaking to initiate the proposed rescheduling of cannabis from Schedule I to Schedule II under the Controlled Substance Act. A 60-day public comment period then began, which ended in late July.

Why it Matters: Following the end of the public comment period, the DEA will review the public comments, may incorporate comments as appropriate, and then finalize the rescheduling rule. Typically, a final rule becomes effective 30 days after being published in the Federal Register.

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IRS Resumes Processing Some Employee Retention Credit Claims: What Business Owners Need to Know

The Internal Revenue Service (IRS) recently announced the resumption of processing some Employee Retention Credit (ERC) claims, with a focus on those considered “low risk.” This move comes after a 10-month moratorium implemented to investigate fraudulent activity surrounding these claims. In the same announcement, the IRS communicated its plans to deny tens of thousands of improper high-risk ERC claims.

Why it Matters: According to the IRS, between 10% and 20% of the claims it analyzed fall into what the agency considers the highest-risk group. An estimated 60% to 70% of claims show what the IRS terms an “unacceptable level of risk.” The remaining claims, approximately 10% to 20%, are considered low-risk, and according to the IRS, “some of the first payments in this group will go out later this summer.” Read more.

Related Practice Groups and Professionals

Labor, Employment & Civil Rights | David Houston
Cannabis Law | Sean Gallagher
Business & Tax | Robert Burgee
Business & Tax | Paul McCord

Five Stories That Matter in Michigan This Week – August 9, 2024

Michigan Supreme Court Rules on Adopt and Amend: What Businesses Need to Know

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IRS Resumes Processing Some Employee Retention Credit Claims: What Business Owners Need to Know

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Comment Period Ends for Federal Cannabis Rescheduling

Why it Matters: Following the end of the public comment period, the DEA will review the public comments, may incorporate comments as appropriate, and then finalize the rescheduling rule. Typically, a final rule becomes effective 30 days after being published in the Federal Register.

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Michigan Cannabis Regulatory Agency Set to Ban MCT Oil

In a recent technical bulletin from the CRA, effective October 1, 2024, “MCT (medium-chain triglyceride) oil will be added as a target analyte for marijuana vape cartridges as part of the Sampling and Testing Technical Guidance for Marijuana Products.

Why it Matters: MCT oil is commonly used in inhalable cannabis products, such as vapes, and may pose dangers to respiratory health when inhaled. Businesses will need to adhere to the new testing parameters and begin to eliminate MCT oil from their products before October 1, 2024, if not sooner in a proactive manner.

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DOL Issues Bulletin to Wage and Hour Field Staff Regarding AI Use in Workplace

The United States Department of Labor recently issued a Field Assistance Bulletin to its Wage and Hour Division field staff regarding the application of the Fair Labor Standards Act (FLSA) and other federal labor standards as employers increasingly use artificial intelligence (AI) and other automated systems in the workplace. For example, the bulletin advises that, “Reliance on automated timekeeping and monitoring systems without proper human oversight, however, can create potential compliance challenges with respect to determining hours worked for purposes of federal wage and hour laws.”

Why it Matters: As AI use becomes more pervasive across businesses, employers must be aware that their use of AI can create legal compliance challenges, and that regulatory agencies are paying attention to these issues.

Related Practice Groups and Professionals

Labor, Employment & Civil Rights | David Houston
Business & Tax | Robert Burgee
Business & Tax | Paul McCord
Cannabis Law | Sean Gallagher

IRS Resumes Processing Some Employee Retention Credit Claims: What Business Owners Need to Know

During the processing freeze, the IRS conducted an extensive review of ERC claims. The results of this investigation have raised significant concerns and shed light on the scale of potentially fraudulent or erroneous claims. According to the IRS, between 10% and 20% of the claims it analyzed fall into what the agency considers the highest-risk group. An estimated 60% to 70% of claims show what the IRS terms an “unacceptable level of risk.” While not as clearly problematic as the high-risk group, these claims have raised red flags that the agency believes warrant further scrutiny. The remaining claims, approximately 10% to 20%, are considered low-risk, and according to the IRS, “some of the first payments in this group will go out later this summer.”

What This Means for Business Owners

If you’ve filed an ERC claim or are considering doing so, here’s what you need to know:

Claims Filed Before September 14, 2023: If you submitted your ERC claim before the moratorium started on September 14, 2023, the IRS states that no additional information or action is required from you at this time. These claims will continue to be processed on a first-in, first-out basis, and taxpayers should await further notification from the IRS.
Claims Filed On or After September 14, 2023: If you submitted your claim on or after this date, your claim is expected to remain in the processing queue at the IRS indefinitely. The IRS has not provided a timeline for when these claims might be addressed.
Preparing for Potential Audits: Given the high level of scrutiny the IRS is applying to these claims, business owners should be prepared for the possibility of audits or requests for additional information, even if their claims are eventually approved.

If you’re concerned about the status of your claim, have been contacted by the IRS about your claim, or have other questions about the claims process, please contact your Fraser Trebilcock attorney.

This alert serves as a general summary and does not constitute legal guidance. Please contact us with any specific questions.

Robert D. Burgee is an attorney at Fraser Trebilcock with over a decade of experience counseling clients with a focus on corporate structures and compliance, licensing, contracts, regulatory compliance, mergers and acquisitions, and a host of other matters related to the operation of small and medium-sized businesses and non-profits. You can reach him at 517.377.0848 or at bburgee@fraserlawfirm.com.

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 pmccord@fraserlawfirm.com.

Client Alert/Reminder: Form W-2 Reporting Due for Employer-Provided  Health Care / Disclosure Due to CMS for Medicare Part D

Upcoming Deadlines: (1) Form W-2 Reporting of Employer-Provided Health Coverage; and (2) Medicare Part D Notices to CMS

Reminder: Form W-2 Reporting on Aggregate Cost of Employer Sponsored Coverage

Unless subject to an exemption, employers must report the aggregate cost of employer-sponsored health coverage provided in 2023 on their employees’ Form W-2 (Code DD in Box 12) issued in January 2024. Please see IRS Notice 2012-09.

The following IRS link is helpful and includes a chart setting forth various types of coverage and whether reporting is required; see here.

Please note this is a summary only and Notice 2012-09 should also be consulted. The IRS has issued questions and answers regarding reporting the cost of coverage under an employer-sponsored group health plan, which can be found here.

If you have questions regarding whether you or your particular benefits are subject to reporting, please feel free to contact us.

Deadline Coming Up for Calendar Year Plans to Submit Medicare Part D Notice to CMS

As you know, group health plans offering prescription drug coverage are required to disclose to all Part D-eligible individuals who are enrolled in or were seeking to enroll in the group health plan coverage whether such coverage was “actuarially equivalent,” i.e., creditable. (Coverage is creditable if its actuarial value equals or exceeds the actuarial value of standard prescription drug coverage under Part D). This notice is required to be provided to all Part D eligible persons, including active employees, retirees, spouses, dependents and COBRA qualified beneficiaries.

The regulations also require group health plan sponsors with Part D eligible individuals to submit a similar notice to the Centers for Medicare and Medicaid Services (“CMS”). Specifically, employers must electronically file these notices each year through the form supplied on the CMS website.

The filing deadline is 60 days following the first day of the plan year. If you operate a calendar year plan, the deadline is the end of February. If you operate a non-calendar year plan, please be sure to keep track of your deadline.

At a minimum, the Disclosure to CMS Form must be provided to CMS annually and upon the occurrence of certain other events including:

1. Within 60 days after the beginning date of the plan year for which disclosure is provided;
2. Within 30 days after termination of the prescription drug plan; and
3. Within 30 days after any change in creditable status of the prescription drug plan.

The Disclosure to CMS Form must be completed online at the CMS Creditable Coverage Disclosure to CMS Form web page found here.

1. The online process is composed of the following three step process: Enter the Disclosure Information;
2. Verify and Submit Disclosure Information; and
3. Receive Submission Confirmation.

The Disclosure to CMS Form requires employers to provide detailed information to CMS including but not limited to, the name of the entity offering coverage, whether the entity has any subsidiaries, the number of benefit options offered, the creditable coverage status of the options offered, the period covered by the Disclosure to CMS Form, the number of Part D eligible individuals, the date of the notice of creditable coverage, and any change in creditable coverage status.

For more information about this disclosure requirement (including instructions for submitting the notice), please see the CMS website for updated guidance found here.

As with the Part D Notices to Part D Medicare-eligible individuals, while nothing in the regulations prevents a third-party from submitting the notices (such as a TPA or insurer), ultimate responsibility falls on the plan sponsor.

This email serves solely as a general summary of the Form W-2 reporting requirements and CMS disclosure for Medicare Part D.

Five Stories That Matter in Michigan This Week – November 17, 2023

Withdrawing Your Employee Retention Credit Claim: Navigating the New IRS Process

Why it Matters: In order to provide a safe harbor to those entities that may have filed such false or inaccurate claims, the IRS has established a new withdrawal process. This measure is designed to aid businesses in re-evaluating the accuracy of their ERC claims and wish to avoid the penalties and other complications of incorrect filings. Learn more from your Fraser Trebilcock attorney.

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CRA Suspends Licenses of Medical and Adult-Use Marijuana Processor

On November 15, the Cannabis Regulatory Agency (CRA) suspended the medical and adult-use marijuana processor licenses of Michigan Investments 10, Inc, after it was determined that both businesses violated various administrative rules.

Why it Matters: After onsite inspections and reviews of the statewide monitoring system (Metrc) data, the CRA discovered that the businesses incorrectly entered data into the monitoring system and failed to properly track large quantities of product as well as other violations.

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CRA Publishes October 2023 Data: Average Price Hovers

Per data released by the Cannabis Regulatory Agency (CRA), the average retail price for adult-use sales of an ounce of cannabis in October was $97.62, a decrease from $100.14 in September. This is still a decrease from October 2022, where the average price was $102.65.

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Package of Clean Energy Bills Head to Governor’s Whitmer’s Desk

A package of bills, including one that would require companies to make 100% of their energy through renewables such as solar and wind by 2040, and also seeks to reduce energy waste, among other objectives, is on its way to Governor Whitmer’s desk for signature after passing both the Senate and House.

Why it Matters: Clean energy legislation is a major priority for Michigan Democrats but is opposed by Republicans and has received pushback from many business groups, who argue the legislation would increase energy costs.

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Corporate Transparency Act Takes Effect January 1, 2024

The federal Corporate Transparency Act (the “CTA”) takes effect on January 1, 2024. It will require many companies, including small businesses, to report certain beneficial ownership information to the Financial Crimes Enforcement Network, which is a division of the Treasury Department. We previously summarized key aspects of the CTA in a post on our blog, which you can find here.

Why it Matters: Willful failure to file an initial or updated report with FinCEN is subject to a $500/day fine (up to $10,000) and imprisonment for up to two years. If you have any questions about your compliance obligations, filing deadlines, or any other questions, please contact your Fraser Trebilcock attorney.

Related Practice Groups and Professionals

Business & Tax | Robert Burgee
Business & Tax | Paul McCord
Cannabis Law | Sean Gallagher
Energy, Utilities & Telecommunication | Sean Gallagher

Withdrawing Your Employee Retention Credit Claim: Navigating the New IRS Process

During the COVID-19 pandemic, the Employee Retention Credit (ERC) was seen as financial lifeline for many businesses who were faced with government-mandated shutdowns and significant revenue losses. However, clouded by the prospect of lucrative government benefits and a confusing set of requirements, many employers filed inaccurate, maybe even false claims – often as a result of aggressive marketing tactics. In order to provide a safe harbor to those entities that may have filed such false or inaccurate claims, the IRS has established a new withdrawal process. This measure is designed to aid businesses in re-evaluating the accuracy of their ERC claims and wish to avoid the penalties and other complications of incorrect filings.

Background on the ERC and Emerging Problems

The ERC is a refundable tax credit intended for businesses that kept employees on their payroll while facing economic hardships caused by the pandemic. However, not long after its introduction, issues surfaced. Some businesses, influenced by the aggressive marketing of ERC promoters, have filed claims without fully meeting the eligibility criteria, leading to a slew of inaccurate claims. Even in the months and years since the effects of the pandemic have subsided, these promoters continue with their aggressive marketing on TV, radio, spam emails and robocalls.

The IRS reports approximately 3.6 million claims have been made, and the process has been marred by concerns over compliance. Earlier this year the IRS included the ERC on it “Dirty Dozen” list – a list of the worst tax scams for businesses and individuals to be aware of. The IRS has become increasingly concerned by the growing number of illegitimate claims and messaging pushed by some promoters claiming, “anyone can qualify.” Consequently, in September 2023, the IRS imposed a moratorium on processing new ERC claims, and has initiated an intense audit process, with hundreds of criminal investigations targeting dubious filings and deceptive promoters. As a safeguard, a withdrawal process has been introduced, allowing employers to retract improperly filed claims before they lead to unwanted IRS scrutiny.

Understanding the Withdrawal Process

The withdrawal option provides a potential escape hatch for those who suspect their claim may not withstand IRS review. If you’re concerned about the accuracy of your ERC claim, here’s what you need to know about withdrawing it:

Who Can Withdraw a Claim?

The ERC claim withdrawal instructions are available here. In general, you can use the withdrawal process if you:

Filed an adjusted employment return (Forms 941-X, 943-X, 944-X, CT-1X) solely to claim the ERC.
Have not received an ERCrefund check
Have not received a refund check but have been notified that you are under audit.
Received a refund check but have not cashed or deposited it.
Wish to withdraw the entire ERC claim.

How to Withdraw a Claim

The IRS has established the steps necessary to withdraw a claim. Again, it’s important to carefully follow IRS instructions, which are summarized below:

Your Payroll Company Filed the Claim: If a payroll company filed your claim, consult them first. They might need to handle the withdrawal for you.
You Filed the Claim Yourself: If you filed the claim yourself and haven’t received a refund or been notified of an audit, you can fax your withdrawal request to the IRS using their special fax line. If faxing isn’t an option, mail your request. Be aware that mailing will result in slower processing.
Under Audit?: If you’ve been notified that your claim is under audit, you should send your withdrawal request directly to the assigned examiner, or respond to the audit notice if no examiner has been assigned.
Received a Refund Check?: If you have the refund check but haven’t cashed or deposited it, mail the voided check along with your withdrawal request using the instructions at gov/withdrawmyerc.

Avoiding Penalties and Interest

By withdrawing your claim, you can prevent future repayment demands, interest, and penalties. Essentially, the claim is treated as if it was never filed. It’s crucial to note, however, that this does not apply to fraudulent claims. If you willingly filed a false claim, withdrawal would not protect you from possible criminal prosecution.

Guidance for Those Who Received Payments

The IRS is also working on guidelines to assist employers who were misled into claiming the ERC and have already received the payment. The IRS anticipates that these details will be available this fall.

Conclusion

Navigating the ERC claims process can be daunting, especially amidst the backdrop of aggressive marketing and the risk of inaccurate filings. The IRS’s new withdrawal option provides a safety net for businesses that wish to avoid the pitfalls of a potentially erroneous claim. If you have any questions, or require assistance, please contact your Fraser Trebilcock attorney.

This alert serves as a general summary and does not constitute legal guidance. Please contact us with any specific questions.

Five Stories That Matter in Michigan This Week – June 9, 2023

Michigan House Approves Bills to Protect Domestic and Sexual Violence Victims

The Michigan House of Representatives, in bipartisan fashion, voted on June 7 to approve a series of bills that aims to increase support services and add privacy protections for victims and survivors of domestic and sexual assault. For example, House Bill 4421 would allow photos and videos of crime victims to be blurred if they are viewable in court proceedings that are made public.

Why it Matters: Lawmakers who introduced the bills argue that the legislation will increase access to support services for domestic and sexual violence victims, and also will protect their privacy and shielding them from additional harassment.

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Michigan Cannabis Sales Exceed $245 Million in May

Cannabis sales surpassed $245 million in May, via the monthly report from the Michigan Cannabis Regulatory Agency. Michigan adult-use sales came in at $238,867,535.00, while medical sales came in at $7,051,723.96, altogether totaling $245,919,258.96.

Why it Matters: Marijuana sales remain strong in Michigan, particularly for recreational use. However, there still are significant concerns about profitability and market over-saturation that the industry is contending with.

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Client Alert: IRS Announces 2024 Adjustments for HSAs & Excepted Benefit HRAs

The IRS has released its 2024 annual inflation adjustments for Health Savings Accounts (“HSAs”) as determined under Section 223 of the Internal Revenue Code. Specifically, IRS Revenue Procedure 2023-23 provides the adjusted limits for contributions to a HSA, as well as the high deductible health plan (“HDHP”) minimums and maximums for calendar year 2024.

Why it Matters: HSA contributions for an individual will increase in 2024 to $4,150 from $3,850 in 2023, and the minimum deductible on a HDHP for an individual will increase to $1,600 in 2024 from $1,500 in 2023. Read more from your Fraser Trebilcock attorney.

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NLRB General Counsel Issues Memo on Non-Competes

On May 30, NLRB General Counsel Jennifer Abruzzo issued a memo that non-compete provisions in employment contracts and severance agreements violate the National Labor Relations Act except in limited circumstances.

Why it Matters: The memo details that non-compete agreements hinder the ability of the employee from exercising their rights to take collective action to improve their working conditions, making these non-competes unlawful under Section 7 of the National Labor Relations Act.

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Anti-Distracted Driving Laws Enforced June 30

Beginning June 30, Michigan motorists will be prohibited from using any mobile electronic device while operating a motor vehicle, even if at a stop sign or red light. This includes sending/receiving texts, accessing social media, or recording videos.

Why it Matters: First time offenders will face a $100 fine and/or 16 hours of community service, in addition to one point being added to the individual’s driving record. Penalties will increase for repeated violations, and on the third offense, individuals may be required to take a drivers improvement course.

Related Practice Groups and Professionals

Cannabis Law | Sean Gallagher
Employee Benefits | Robert Burgee
Labor, Employment & Civil Rights | Dave Houston

Client Alert: IRS Announces 2024 Adjustments for HSAs & Excepted Benefit HRAs

Additionally, Revenue Procedure 2023-23 sets forth the maximum amount that may be made newly available for excepted-benefit health reimbursement arrangements (“HRAs”) as provided under 26 CFR 54.9831-1(c)(3)(viii).

The 2024 HSA/HDHP limits are as follows:

Annual Contribution Limit
- Single Coverage: $4,150
- Family Coverage: $8,300
HDHP-Minimum Deductible
- Single Coverage: $1,600
- Family Coverage: $3,200
HDHP-Maximum Annual Out-of-Pocket Expenses (including deductibles, co-payments, and other amounts, but not including premiums)
- Single Coverage: $8,050
- Family Coverage: $16,100
The catch-up contribution for eligible individuals age 55 or older by year end remains at $1,000.

Plans and related documentation, including employee communications, should be updated to reflect these new limits which are effective for calendar year 2024.

As always, please keep in mind that participation in a health FSA (or any other non-HDHP) will result in HSA ineligibility, unless the health FSA is limited to: (1) limited-scope dental or vision excepted benefits; and/or (2) post-deductible expenses.

The 2024 EBHRA limit is as follows:

The maximum amount that may be made newly available for the plan year for an excepted benefit HRA (“EBHRA) is $2,100. This amount is effective for plan years beginning in 2024.

If you have any questions about these products or would like assistance with updating documentation or employee communications, feel free to contact us.

As you are aware, the law and guidance are rapidly evolving in this area. Please check with your Fraser Trebilcock attorney for the most recent updates.

This alert serves as a general summary and does not constitute legal guidance. Please contact us with any specific questions.

Five Stories that Matter in Michigan This Week – January 6, 2023

The Federal “Speak Out Act” Takes Effect

The Speak Out Act took effect on December 7, 2022, which prohibits employers from requiring employees to sign pre-dispute agreements that contain nondisclosure clauses or non-disparagement clauses that would have the effect of silencing employees concerning claims of sexual harassment or sexual assault.

Why it Matters: Requiring employees to sign such agreements is now a violation of federal law. Employers should review their current employee confidentiality agreements and revise them as necessary, keeping in mind that many state laws also limit what terms can be included in an NDA or similar agreements.

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IRS Announces 2023 Standard Mileage Rates

The IRS announced the 2023 standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical, or moving purposes. Beginning on January 1, 2023, the rate for business use is 65.5 cents per mile, an increase of 3 cents from the 2022 midyear rate.

Why it Matters: Self-employed individuals who operate an automobile for business use, as well as employers who reimburse employees who use their own vehicles to conduct business, should take note of these changes.

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FTC Proposes Rules Banning Noncompete Agreements for Workers

On January 5, 2023, the Federal Trade Commission (FTC) published a proposed rule that would effectively ban the use of non-compete clauses in most employment agreements. The FTC’s guidance in proposing the rule says that 1-in-5 American workers are bound by some form of non-compete clause or agreement.

Why it Matters: These regulations (if adopted) will have wide-ranging impacts across many sectors of the economy. Employers should keep a close eye on these rules and be prepared to amend or revise their employment agreements accordingly.

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Fed Issues Final LIBOR Replacement Rule

The United Kingdom’s Financial Conduct Authority (FCA), announced that the U.S. dollar LIBOR will cease after June 30, 2023. On December 16, 2022, the Federal Reserve Board issued its final rule governing the replacement of LIBOR as an interest rate benchmark.

Why it Matters: The final rule is complex. Businesses using LIBOR as a benchmark or index should make note of this upcoming change. Fraser Trebilcock attorneys will continue to monitor the situation and provide updates. Contact your Fraser Trebilcock attorneys if you have any questions.

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Estate and Lifetime Gift Tax Exemption Update

Per the IRS, the 2023 Estate and Lifetime Gift Tax Exemption has increased from $12.06 million to $12.92 million. Additionally, the use of electronic signatures for Estate and Gift Tax forms has been extended to October 31, 2023.

Why it Matters: Individuals should take note of the increase in 2023 and plan accordingly. If you have any questions, please contact your Fraser Trebilcock estate planning attorney.

Related Practice Groups and Professionals