NEW IRS FILING REQUIREMENT FOR SMALL TAX-EXEMPT ORGANIZATIONS

On July 12, 2007, the Internal Revenue Service announced that it began mailing educational letters to more than 650,000 small tax-exempt organizations that will be required to submit a new annual notice.  This annual notice has been mandated by the Pension Protection Act of 2006 (PPA).  Pursuant to this act, the small tax-exempt organizations will be required to submit the new Form 990-N "Electronic Notice for Tax-Exempt Organizations Not Required to File Form 990 or 990-EZ."  Pursuant to the PPA, the majority of small tax-exempt organizations are now required to submit this new filing.  Prior to the enactment of this act, tax-exempt organizations with gross receipts of $25,000 or less were not required to submit information returns.  Beginning in calendar year 2008, these organizations will be required to file this new electronic notice. 

U.S. SUPREME COURT LIMITS SCOPE FOR PAY DISCRIMINATION CLAIMS

On May 29, 2007, the United States Supreme Court held that an employee seeking to recover for pay discrimination under Title VII of the Civil Rights Act of 1964 must be able to prove a discriminatory act within the 180-day limitations period.  Ledbetter v. Goodyear Tire & Rubber Co., Inc., 127 S. Ct. 2162.  The decision in Ledbetter rejects prior holdings that had allowed recovery for allegedly discriminatory pay decisions that occurred outside the statute of limitations.  In these prior holdings, the discriminatory pay decisions were allowed based on the premise that the past pay decisions affected pay during the limitations period.

IRS MANDATES USE OF NEW AGENT APPOINTMENT FORM

On June 20, 2007, the Internal Revenue Service declared that employers, payors and their agents must utilize a new and improved version of Form 2678, "Employer/Payor Appointment of Agent."  This form authorizes an agent to file tax returns and deposit and pay employment or other withholding taxes on an employer's behalf.  The IRS receives about 15,000 of these forms annually, encompassing approximately 3,000 agents and 20,000 employers.  The IRS has mandated the use of a new Form 2678 which makes it clearer and more user friendly for the employer.  However, the employer must remember it retains responsibility for filing Form 940, "Employer's Annual Federal Unemployment [FUTA] Tax Return," and depositing and paying FUTA tax.

POTENTIAL CHANGES IN THE AMERICANS WITH DISABILITIES ACT

Senator Tom Harkin (D – Iowa) is expected to introduce to the Senate the "Americans With Disabilities Act Restoration Act."  This act would effectively shift the focus of Americans With Disabilities Act litigation from whether the individual is disabled, to whether the individual was subject to discrimination "on the basis of a disability."  Under current Supreme Court case law, the determination as to whether an individual is disabled under the ADA is a complex inquiry that a court must undergo prior to reaching the question of whether there was any discrimination.  The contemplated legislation seeks to reverse several Supreme Court decisions that have restricted the circumstances under which employees can establish ADA claims.  This act seeks to include language that presumes the individual bringing suit is a member of the protected class of persons with disabilities.  Should this act pass, ADA litigation would focus more on the alleged discriminatory treatment and less on determining whether an individual is "disabled".

Prepared by Michael M. Chelus