A secretary fell at work when the chair in which she was sitting tipped forward. The chair was a standard secretarial chair with four legs (sometimes referred to by manufacturers as "outriggers") emanating from a central spindle. The outriggers on the chair did not extend as far as the perimeter of the seat. When the secretary bent over to pick up a dropped pen, the chair tipped and the secretary fell and was injured.
She tried to sue the manufacturer, claiming that the chair was defectively designed and dangerous. If the outriggers extended beyond the seat, she argued, the chair would have been much more stable. The manufacturer tried to block the suit by claiming that the secretary was misusing the chair because she had her feet wrapped around the outriggers.
A federal court found that the secretary was entitled to sue the chair manufacturer and to introduce evidence that the manufacturer knew how to make safer chairs. Such evidence was relevant because it would show that the design of longer outriggers was a feasible design and that alternative designs actually existed for secretarial chairs.
Manufacturers can be liable to consumers who are injured while using ordinary products. Where a product is defective and the defect makes it unreasonably dangerous, an injured individual may be entitled to recover monetary damages from the manufacturer. These claims, known as product liability claims, can serve as an incentive to manufacturers to produce safer products.
In determining whether a product is dangerously defective, the courts
consider how useful the product is, how available a substitute product could
be, and how easily the manufacturer could make the product safer without
compromising its usefulness or function and without making it too expensive to
manufacture. Courts also look carefully at whether the manufacturer provided
suitable warnings or safety instructions with the product.
Federal tax regulations determine which parent can claim the dependency exemption for children of separated parents. However, the Pennsylvania Superior Court recently decided that state courts can play a role in deciding which parent gets the federal tax exemption for the children. Finding that state courts have general authority to see to it that economic justice is accomplished when families break up, the Pennsylvania court ruled that under appropriate circumstances a noncustodial parent should receive a share of the federal tax exemption. The court noted that, where a noncustodial parent is in a significantly higher tax bracket than the custodial parent, awarding the exemption to the noncustodial parent may result in larger tax savings to the noncustodial parent than that available to the lower-income custodial parent. The court approved "routing the tax savings into greater support for the children, because increased tax savings will mean increased financial resources that can be utilized for the children's benefit."
A noncustodial parent who is current on all payments of child support should consider requesting a modification of the existing child support order to address the sharing of tax exemptions. But any transfer of the exemptions may result in the calculation of a higher support payment since the shift will likely create a tax savings (and an increase in net income) for the noncustodial parent, with a tax increase (and decrease in net income) for the custodial parent.
Before requesting a modification, both parents should consult with their
attorneys. Parents should also consider the advantages possibly open to each
parent by a sharing of the exemptions.
Pennsylvania law provides a limited protection of confidentiality between a client and a certified public accountant. The confidentiality applies only to licensed certified public accountants (CPAs) and anyone working under the supervision of the CPA. Information that a CPA receives from a client through the provision of professional services is confidential.
Unless properly authorized by the client, a CPA and his or her staff cannot be made to disclose confidential information, nor may they voluntarily disclose confidential information. This protection does not apply when a CPA is "reporting on the examination of financial statements." This broad exception is not particularly clear and could require disclosure by a CPA in many different kinds of circumstances.
Federal law provides limited protection of confidentiality between CPAs and their clients. As to any disclosures made after 1998, clients enjoy a privilege of confidentiality with their CPAs, enrolled actuaries, and enrolled agents with the IRS. The privilege of confidentiality protects both oral and written communications that the client makes in confidence to the CPA. However, this privilege is not applicable in any criminal tax proceeding. In criminal investigations, the IRS can require CPAs and enrolled agents to disclose all oral and written communications with their client. An additional restriction can require disclosure of advice given to corporations regarding certain tax shelters.
There are steps you can take that may protect you in your relationship with your accountant. As to any issues potentially relating to litigation, you should consider hiring your accountant through your attorney. The attorney-client privilege is much broader and will protect the documents given to your accountant as well as the work your accountant prepares if all documents are released through, and produced for, your attorney.
When an accountant is hired by a taxpayer's attorney to work under the attorney's direction and control to prepare for legal tax concerns, and if the accountant's work is necessary or highly useful to the attorney, the communications between the client and the accountant, as well as the accountant's work papers, may be protected by the attorney-client privilege. A client's records in existence or prepared by an accountant before an attorney's involvement cannot be protected from disclosure by the attorney-client privilege. Courts are unlikely to extend the attorney-client privilege to advice given by an accountant who has worked for the taxpayer before the attorney hires the accountant. To protect an accountant's work by the umbrella of the attorney-client privilege, the accountant should be hired and paid by the attorney, and a written agreement should establish that the work product belongs to the attorney and is confidential.
To avoid having to assert a privilege, you may want to consider retaining all of your records when your accountant's work is complete. If your accountant has little or nothing to produce in response to a summons, the confidentiality issue is unimportant. When you are asked to produce records yourself, you may be entitled to assert a privilege against self-incrimination.
As to your tax planning and/or tax consultations with your attorney, you enjoy the protection of the attorney-client privilege. However, courts have found that no privilege results where an attorney is merely "translating his activities into those of an accountant." If you use an attorney to perform "essentially accounting" functions, the privilege is lost. No clear advice has yet been offered by the courts as to just what functions are "essentially accounting." Interpretation of IRS Code provisions or regulations is a legal function, while the physical preparation of tax return schedules is probably an accounting function.
Where a law firm is the first professional consulted by a client and where the law firm takes the lead role in the provision of tax advice and tax planning, the attorney-client privilege is more likely to protect the disclosure of the client's statements and documents, including issues relating to the preparation of tax returns.
When dealing with your accountant, consider specifically limiting the use of
documents by delivering the documents with a brief cover letter that advises
that you expect the documents to be treated with the highest confidentiality.
The courts often decide challenges to document requests by first examining
whether the client really expected confidentiality. If you let third parties
see or handle your confidential documents, or if you do anything that indicates
you do not expect confidentiality from your professional advisors, the courts
may be less inclined to protect your privacy.
If you have an IRA, you probably completed a beneficiary statement when you opened the account. Do you know who the named beneficiary is? How can you change your designation of the beneficiary if you choose to?
Your IRA may be structured by an agreement you signed with the investment entity that manages it: your bank, brokerage house, or investment group. There also may be a separate document, commonly referred to as a "plan." These documents probably provide that the only way you can change your beneficiary is to do so by use of the investment entity's forms.
In a recent case between a surviving sister and her brother's remaining heirs, the Pennsylvania Superior Court found that the brother made effective, although not perfect, use of the proper form. Initially, upon opening the account, the brother had designated his sister as the beneficiary of his IRA account. Later, in making changes to his will and in creating a trust for his nieces and nephews, the brother directed his attorney to use the IRA to fund the trust and to make a separate cash bequest to his sister in the new will.
The brother, who was terminally ill, promptly signed the new will and also signed insurance forms changing the beneficiary designations on a savings account and a life insurance policy. He did not sign the IRA beneficiary designation form at the same time that he executed all of the other documents because his broker was on vacation and had not sent the necessary form. He repeatedly tried to obtain the form to sign it, but he passed away before the form arrived and it was never completed.
The sister later objected to the transfer of the IRA money to the trust on the grounds that the beneficiary form was legally controlling and that it had never been changed. The Pennsylvania court found otherwise. While acknowledging that insurance policies and investment agreements normally control the designation of beneficiaries, the court ruled that the intent of an account owner or policyholder can be given effect if he or she does all that is reasonably possible to comply with the requirements for changing beneficiaries. The detailed discussions the brother had with his attorney, his clear intent to fund the education trust, his execution of a new will, and his numerous and persistent requests to his brokers to secure the form all proved to the court's satisfaction that he had intended to change the beneficiary designation on his IRA.
Generally, courts are strict in enforcing existing beneficiary designations
on investment accounts and insurance policies. Rarely will courts respect a
beneficiary designation that is not made on the required form. Wise investors
periodically review the status of their primary and secondary beneficiary
designations. The effect of any delays in securing forms can possibly be offset
by immediately and carefully memorializing in writing and communicating to your
attorney your specific intentions to change your beneficiary.
If a Pennsylvania worker suffers permanent hearing loss and can medically prove that the hearing loss was caused by long-term exposure to noise in the workplace, the worker is entitled to workers' compensation payments. Only workers who can document a loss of more than 10% of their hearing are entitled to benefits. For those with an impairment of 10% or less of their hearing, no benefits are available. The only medical testing that can be used to prove or dispute a worker's hearing loss is audiometric testing conducted in compliance with standards established by federal law.
Recently, a Pennsylvania court upheld an award of benefits to a steel worker who was employed in a mill for over 37 years. Exposed on a daily basis to loud noise from gas engines, impact wrenches, and blast furnaces, the steel worker regularly wore hearing protection. He testified, however, that he had to scream at fellow workers to be heard on a daily basis and could not wear hearing protection when actually speaking to other employees. His doctor documented a hearing loss of over 24% caused by chronic exposure to noise.
The employer's physicians interpreted the audiometric testing differently and argued that the hearing loss percentage should be reduced because of natural hearing loss due to aging. The court found that the Act does not permit experts to adjust hearing test results for age-related losses and ruled that the worker was entitled to a larger workers' compensation payment based on the actual test results.
Generally, employers whose workplaces expose workers to high levels of occupational noise maintain hearing loss prevention programs and conduct audiometric testing of exposed employees. If an employer offers regular audiometric testing in the workplace, employees who refuse to participate in the testing forfeit their rights later to receive workers' compensation benefits for their hearing loss. Employees who submit to testing are entitled to copies of their test results in writing.
Where an employee who has changed jobs can document his or her hearing loss over time through periodic audiometric testing, each employer may be held separately liable to the worker for hearing loss attributable to each period of employment. Claims for occupational hearing loss caused by long-term exposure to occupational noise must be filed within three years after the date of last exposure in the workplace of the responsible employer.