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IR-2014-114, Dec. 10, 2014
WASHINGTON — The Internal Revenue Service today issued the 2015 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes. Beginning on Jan. 1, 2015, the standard mileage rates for the use of a car, van, pickup or panel truck will be:
Taxpayers always have the option of claiming deductions based on the actual costs of using a vehicle rather than the standard mileage rates. A taxpayer may not use the business standard mileage rate for a vehicle after claiming accelerated depreciation, including the Section 179 expense deduction, on that vehicle. Likewise, the standard rate is not available to fleet owners (more than four vehicles used simultaneously). Details on these and other special rules are in Revenue Procedure 2010-51, the instructions to Form 1040 and various online IRS publications including Publication 17, Your Federal Income Tax. Besides the standard mileage rates, Notice 2014-79, posted today on IRS.gov, also includes the basis reduction amounts for those choosing the business standard mileage rate, as well as the maximum standard automobile cost that may be used in computing an allowance under a fixed and variable rate plan.
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Published November 8, 2014, by Tom Petruska
There is a well-established rule in government procurement law that the only person who can bind and commit the government is the warranted Contracting Officer (“CO”) acting within the limits of their authority. Only the Contracting Officer can modify the terms of the contract. And the modifications must be in writing. Regardless of how long this firm rule has been in existence – and firmly and rigidly enforced by the courts – contractors continue to perform work based on verbal “changes” to the terms of their prime contract “authorized” by the Contracting Officer’s Representative (“COR”) or another official. The failure of a contractor to recognize this principle was discussed by the Armed Service Board of Contract Appeals (the “ASBCA” or the “Board”) in the Appeal of Creek Services, LLC, (“Creek”) ASBCA No. 59127, dated 1 July 2014. On 14 May 2009, Creek was awarded a Multiple Award Task Order Contract (“MATOC”) by the Army Corp of Engineers for “Greater New Orleans Hurricane and Storm Damage Risk Reduction System.” Task Order 0003 was awarded to Creek on 25 September 2009 for flood protection. On 3 January 2012 Creek submitted a Request for Equitable Adjustment (“REA”) for reseeding due to unusually severe weather. On 28 June 2013, Creek requested a final decision from the Contracting Officer. On 18 July and on 15 August 2013 Creek requested a meeting with the CO and informed the CO that they were preparing several additional claims but were willing to reach a global solution with the CO in an amount of $725,000. On 27 August 2013 the CO issued a final decision regarding the reseeding claim. On 5 September 2013 Creek asked the CO if she had reviewed its global offer and requested an answer. On 2 October 2013, Creek met with the CO but no decisions were made and on 11 December 2013 the CO issued a final decision rejecting the claim. Creek filed an appeal on 10 January 2014. The ASBCA dismissed the appeal as it was filed 135 days after the CO issued the final decision on the reseeding claim which was received by Creek on 28 August 2013 – 45 days after the law required a Notice of Appeal to be filed. Creek argued it was part of a global settlement that was submitted on 15 August 2013 and rejected on 11 December 2013. Creek could not show any evidence of discussions or “reconsideration” of its earlier final decision. The appellant seemed to believe that exchanges of communications constituted a change to the law or the regulation. But only the CO can issue or reconsider a final decision. No verbal exchanges can change or be a substitute for the written order. So it is critical that a contractor must get a final decision from the CO in writing. Under the CDA, the CO is required to issue a decision in 60 days. An appeal must be filed within 90 days of a denial, or deemed denial, of a claim. This means that each claim included in a CO’s final decision must be appealed to a Board of Contract Appeals within 90 calendar days. This 90 day period may not be waived unless the CO “reconsiders” the final decision – in writing. Meetings, conference calls, and other verbal exchanges do not change a decision or the time to file an appeal. Do not be misled by any conversation with the CO. The CDA time limits cannot be changed, and only the CO can issue written final decisions or reconsideration. Track the time carefully and file appeals timely. [1] FAR 1.602-1 [2] CDA 41 USC 7104(a) IR-2014-119, Dec. 29, 2014
WASHINGTON -- Following the passage of the extenders legislation, the Internal Revenue Service announced today it anticipates opening the 2015 filing season as scheduled in January. The IRS will begin accepting tax returns electronically on Jan. 20. Paper tax returns will begin processing at the same time. The decision follows Congress renewing a number of "extender" provisions of the tax law that expired at the end of 2013. These provisions were renewed by Congress through the end of 2014. The final legislation was signed into law Dec 19, 2014. "We have reviewed the late tax law changes and determined there was nothing preventing us from continuing our updating and testing of our systems," said IRS Commissioner John Koskinen. "Our employees will continue an aggressive schedule of testing and preparation of our systems during the next month to complete the final stages needed for the 2015 tax season." The IRS reminds taxpayers that filing electronically is the most accurate way to file a tax return and the fastest way to get a refund. There is no advantage to people filing tax returns on paper in early January instead of waiting for e-file to begin. November 17, 2014
HOW TO LOSE LEGITIMATE FEDERAL CONTRACT CLAIMS by Doug Hibshman Bottom Line Up Front: A recent decision by the Armed Services Board of Contract Appeals (“ASBCA”) clearly demonstrates that federal contractors will lose (or at the very least put at risk) their legitimate claims for payment or extra costs when they commit fraud on a federal contract, even when the claims for payment or extra costs are not related to the actual fraud. In the recent case of Laguna Construction Company (“Laguna”) v. United States, the contractor received 16 different cost-reimbursable task orders to perform work in Iraq as part of ongoing military operations. At some point during the performance of these task orders, several Laguna employees arranged for, and began to accept, kickbacks from subcontractors who were seeking future subcontracts (or faster subcontract payments from Laguna). The Laguna employees, including a project manager and a vice president, were ultimately investigated and prosecuted for their fraudulent actions under the contract. While the criminal investigation was ongoing, the Department of Defense rejected Laguna’s submission of 14 invoices for payment of legitimately completed work under numerous task orders. These invoices totaled about $3 million. The ASBCA upheld the Government’s refusal to pay these non-tainted invoices based on the fraudulent actions of Laguna's employees. The ASBCA found Laguna’s kickbacks violated the “well settled principle of antecedent breach” and that this material breach of the underlying contract excused the Government from paying Laguna for any remaining invoices – even where those invoices were not tainted by fraud or wrongdoing. Such a result leads to incredible liability for contractors where non-tainted claims for payment under different task orders are subject to forfeiture for unrelated fraud. A sole kickback or false claim under one task order could be found, like that in Laguna, to breach the entire contract for failure to perform in good faith and fair dealing and excuse the Government from paying a contractor. It is unlikely that a contractor will be able to limit its liability by claiming that the false claim or kickback was made by a “rogue” employee. In Laguna, the ASBCA found the actions of the employees were imputed to the contractor (i.e. were transferred from the employees to the contractor) since the contractor had selected the individuals to carry on its business in obtaining and performing the task orders. In sum, contractors are liable for the acts of their employees, to include fraud, even when the contractor has no knowledge of the actual fraud. Lessons Learned: The Laguna holding is just the latest iteration of fraud-based liability for contractors doing business with the federal government. The best defense to such employeecaused fraud is to implement and apply a robust ethical compliance program to ensure that employees are well educated on what they can and cannot do, and to ensure that checks and balances are put in place to identify and mitigate any fraud that may occur. Doug Hibshman is a partner in Fox Rothschild LLP’s Federal Government Contracts and Procurement, Construction, and Infrastructure Practice Groups in Washington, DC, and routinely represents federal contractors on False Claims Act prevention, compliance, mitigation, and defense matters. |
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