Author: mskllp

Since 1908, Mitchell Silberberg & Knupp LLP (MSK) has proven its ability to understand the complex, demystify the mysterious, and define the unknown. With more than 130 lawyers and offices in Los Angeles, New York, and Washington D.C., MSK is often distinguished as a “go-to” firm by industry and legal insiders, and has extensive experience in a variety of practice areas, including Entertainment & IP Litigation, Labor & Employment, Entertainment Transactions, Immigration, Corporate Securities, Regulatory, Tax, Trusts & Estates, Real Estate and International Trade. Relentlessly innovative, our lawyers have developed groundbreaking legislation, established influential precedents, and shaped the legal landscape. For more information, visit www.msk.com.
International Business, International Trade, MSK Blog

Border Searches of Electronic Devices

Men dress up lifestyle hold smartphone screen shows the key in the Security online world. the display and technology advances in communications. The concept of advancement in living in the future.
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By Susan Kohn Ross

Earlier this month, MSK attorneys David Rugendorf and Frida Glucoft published an Alert summarizing the latest directive issued by Customs and Border Protection (CBP) regarding the search of electronic devices. A copy of their original article can be found here – Hold That Call International Travelers. Given the increasing likelihood of any traveler’s electronic devices being subjected to a search, whether arriving or departing the U.S. by air, ocean or land, these recent changes warrant a deeper dive.

First, for those who want to read the actual document, it is CBP Directive 3340-049A. As the earlier Alert noted, CBP has the broad rights to search any individuals, luggage, and cargo entering and leaving the U.S. Searches of cargo are governed by other laws and regulations. This directive deals only with arriving and departing travelers and their devices. Continue reading “Border Searches of Electronic Devices”

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Tax

Has Your Partnership or LLC Agreement Been Updated to Comply with the New Tax Rules?

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By Robin Gilden and Daniel Cousineau 

The new partnership audit rules substantially change the audit procedures for partnerships (including multi-member LLCs) and may require that you update certain provisions within your partnership or LLC agreement to maintain compliance.

In partnership audits, the IRS has historically adjusted the returns of partners, rather than the partnership, because partnerships do not actually pay an entity level tax but pass through their income and losses to the partners. The Bipartisan Budget Act of 2015 (the “Act”) substantially changed these rules for partnerships with tax years beginning after December 31, 2017.

Under the Act, the IRS will examine partnerships and make any adjustments at the partnership level in the year that the audit is completed rather than the year under review. The partnership will pay the tax, interest and penalties on any underpayments at the highest statutory rate for each partner’s distributive share of the underpayment (i.e., the highest corporate rate for corporate partners and the highest individual rate for individuals). This change in the rule shifts the cost of the adjustment to the partners holding a partnership interest at the time of the audit rather than those partners who held a partnership interest in the year of underpayment. Continue reading “Has Your Partnership or LLC Agreement Been Updated to Comply with the New Tax Rules?”

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Immigration, International Business, MSK Blog

Your Driver’s License Is Still Valid For Domestic Air Travel, At Least For Now

business travel
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By Benjamin Lau and David S. Rugendorf

As the Department of Homeland Security continues to phase in the requirements of the REAL ID Act, some domestic airline travelers may be prohibited from using their state-issued driver’s license or ID card in order to board their flight.

After January 22, 2018, state-issued driver’s licenses and IDs may be used for domestic airline travel only if they were issued by a state which is in compliance with the REAL ID Act or has been granted an extension by the Secretary of Homeland Security. Currently, all 50 US states, Puerto Rico, Guam, and the US Virgin Islands are either in compliance with the REAL ID Act or have been granted an extension by the Secretary of Homeland Security.  The only US nationals impacted by the January 22, 2018 date are individuals who possess driver’s licenses or IDs issued by American Samoa or the Northern Mariana Islands. Continue reading “Your Driver’s License Is Still Valid For Domestic Air Travel, At Least For Now”

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Immigration, International Business, MSK Blog

Hold That Call International Travelers: CBP Doubles Down on Airport Searches of Electronic Devices

Man Checking Mobile Is Charged At Airport Security Check
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By David S. Rugendorf and Frida P. Glucoft

Many international travelers express surprise when, after arriving at LAX, JFK or other US airports or land borders, the US Customs and Border Protection (CBP) officer directs them to hand over their smartphone, laptop or related electronics device for a search. As disconcerting and invasive as it may be to have a uniformed total stranger work his or her way through one’s e-mails, photos and hard drive, one should be aware that it is generally within the authority of immigration and customs officials to conduct such searches. Just as one’s person and luggage is subject to search upon arrival to the US, so are one’s electronic devices. International travelers should be forewarned that these types of searches may become more commonplace than they already are. CBP reports that in 2017, it conducted more than 30,000 electronics device searches at airports and land borders, almost double the amount of searches it conducted in 2016. Now with a fresh policy in place, it is safe to expect this upward trend to continue. Continue reading “Hold That Call International Travelers: CBP Doubles Down on Airport Searches of Electronic Devices”

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Intellectual Property, MSK Blog

The Federal Circuit Strikes Ban on Registering “Immoral” or “Scandalous” Trademarks

Trademark sign
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By Alesha Dominique

The U.S. Court of Appeals for the Federal Circuit (“Federal Circuit”) has struck down the Lanham Act’s ban on the registration of “immoral” or “scandalous” trademarks as an unconstitutional restriction of free speech under the First Amendment.  See In re: Erik Brunetti, No. 2015-1109 (Fed. Cir. Dec. 15, 2017).  The ruling comes less than six months after the U.S. Supreme Court’s decision in Matal v. Tam, 137 S. Ct. 1744 (2017), in which it similarly struck down the Lanham Act’s ban on “disparaging” marks as unconstitutional under the First Amendment.

Continue reading “The Federal Circuit Strikes Ban on Registering “Immoral” or “Scandalous” Trademarks”

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Legislation, Tax, Trusts & Estates

The Tax Cuts and Jobs Act

updated logoi
The Tax Cuts and Jobs Act released by the Conference Committee, that resolved differences in the versions of the Act passed by the Senate and the House of Representatives, is almost certain to be signed into law by the President.  You can read our preliminary summary of this far-reaching tax legislation here, but these are the highlights:

Individuals

  • Tax brackets are adjusted, with the maximum rate reduced from 39.6% to 37%.
  • The mortgage interest deduction on a principal residence is limited to debt of $750,000 (down from $1 million).
  • Several itemized deductions are reduced or eliminated, including state and local taxes (“SALT”) in excess of $10,000.
  • The standard deduction is doubled to $12,000 for single individuals and $24,000 for joint filers.
    More on provisions affecting individuals

Estate and Gift Tax Continue reading “The Tax Cuts and Jobs Act”

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Immigration, Labor & Employment, MSK Blog

California Passes Immigrant Worker Protection Act

US Customs and Border Protection
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By Janice Luo

California Governor Jerry Brown has signed the Immigrant Worker Protection Act (AB 450), which restricts public and private employers in California from admitting immigration inspectors to the workplace without a judicial warrant.  It also requires employers to notify their employees before and after certain immigration inspections take place.  The new law, which adds Sections 7285.1, 7285.2, and 7285.3 to the California Government Code, and Sections 90.2 and 1019.2 to the California Labor Code, will take effect on January 1, 2018.

In conflict with the U.S. Immigration and Customs Enforcement’s (ICE) plans to increase enforcement actions under the Immigration Reform and Control Act (IRCA), which includes criminal and civil penalties for employers who knowingly employ unauthorized workers; the new California law seeks to protect foreign workers from unfair immigration-related practices, potentially causing problems for employers who must comply with federal and state laws.  Continue reading “California Passes Immigrant Worker Protection Act”

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Charitable Organizations, Trusts & Estates

Year-End Tax Planning for College Football Fans

By David Wheeler Newman

Photo credit: iStock.com/Masisyan

Fans of college athletics may have heard something about tax legislation barreling through Congress this month, and didn’t pay much attention since it sounded like boring stuff that only meant something to big tech companies stashing their billions overseas.  But buried in the 500 pages of the legislation that has now passed both chambers is a year-end tax planning opportunity for sports fans.  Or, more precisely, a tax break that has been available to sports fans for over thirty years will be eliminated starting in 2018. Continue reading “Year-End Tax Planning for College Football Fans”

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Labor & Employment

Expansion of California Parental Leave Rights

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Governor Signs Bill Expanding Parental Leave Rights for Employees of Small Businesses

By Mark Wasserman

Governor Jerry Brown has signed the New Parent Leave Act (“PLA”), extending baby-bonding leave with job protection rights and continuation of pre-existing health insurance to a broad segment of California employees. Employers with twenty (20) or more employees within 75 miles of a qualified employee’s worksite must provide “12 weeks of [unpaid] parental leave to bond with a new child within one year of the child’s birth, adoption, or foster care placement.” A qualified employee is one with twelve (12) months of service to the employer and 1,250 hours worked in the previous year. This leave is unpaid but the employee is entitled to use any accrued vacation pay, sick pay or other paid time off during the period of parental leave. Moreover, during the protected period of the leave, the employer must continue its payments for employee health coverage under a group health plan.  The law goes into effect on January 1, 2018.

This law does not change anything for businesses with 50 or more employees as they were already required to provide such baby-bonding leave under the California Family Rights Act (CFRA) and the federal Family and Medical Leave Act (FMLA). This law also does not apply to California employers that employ fewer than twenty employees. PLA is estimated to impact 16 percent of California’s labor force. Continue reading “Expansion of California Parental Leave Rights”

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Trusts & Estates

IRS Announces Key Estate and Gift Tax Exemptions for 2018

By Jeffrey K. Eisen

On October 19, IRS issued Revenue Procedure 2017-58, announcing inflation adjustments for 2018 for dozens of important figures across the Internal Revenue Code, including the following two key numbers regarding the estate tax, gift tax and generation-skipping transfer (GST) tax:

1.       Gift Tax Annual Exclusion Increases to $15,000. For gifts made in 2018, the gift tax annual exclusion will be $15,000.  This is the amount an individual can give to as many donees as desired in one year without using any of the donor’s estate and gift tax exemption.  The best way to think about this is that a person can stand on the street corner and give $15,000 to every person who passes by, and the donor will not use any of his or her estate and gift tax exemption.

This also means that a married couple can give each donee up to $30,000 in 2018 without using either spouse’s estate and gift tax exemption amount.

The annual exclusion had been stuck at $14,000 since 2013.  Even though the annual exclusion is indexed for inflation, under the Congressional version of rounding (not the one you learned in elementary school), the annual exclusion does not get rounded up to the nearest $1,000, it only gets rounded down.  Thus, the inflation adjustment must actually push the annual exclusion past the next $1,000, which explains how it can take five years for the annual exclusion to increase. Continue reading “IRS Announces Key Estate and Gift Tax Exemptions for 2018”

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