LLC Law Blog

Remembering Our Fallen Heroes on Memorial Day

Memorial Day originated in the nineteenth century as a day to remember the U.S. soldiers who gave their lives in the American Civil War by decorating their graves with flowers. It is the day Americans remember the military men and women who died while serving our country. It is a day when people decorate the graves of our fallen military heroes.  Memorial Day this year is May 27, 2024.

From World War I to today, more than 40 million Americans have served in the U.S. military.  Over 1,136,000 people were wounded in combat and 660,000 gave their lives for our country.

Hymn to the Fallen

John Williams’ beautiful song “Hymn to the Fallen” plays as the video visits cemeteries around the world where Americans who made the ultimate sacrifice fighting for freedom are buried.  The video also tells how many Americans are buried at each cemetery.

Duty, Honor Country

by Five Star General Douglas MacArthur

The motto of the United States Military Academy at West Point is “Duty, Honor, Country.” On May 12, 1962, retired 82-year-old U.S. Army General Douglas MacArthur, holder of the Medal of Honor and the leader of the Army in the Pacific theater during World War II, gave his now famous 34-minute “Duty, Honor, Country” speech without notes to the entire corps of 2,100+ West Point cadets. This speech is my favorite speech of all time on any topic. I re-read it several times a year because: (i) what the General says about military service and sacrifice and Duty, Honor, Country moves and inspires me, and (ii) what he said then is as true now as it has always been throughout the history of the U.S. military. I recommend you read the entire text of the speech and listen to an audio of the General’s speech. (more…)

2024-05-26T07:31:17-07:00May 30th, 2020|Miscellaneous|0 Comments

Arizona Increases Its Minimum Wage to $14.70/Hour in 2025

The U.S. Bureau of Labor Statistics published its Consumer Price Index report on September 11, 2024, that says Arizona’s mimimum wage effective January 1, 2025 will be $14.70 an hour. The 2024 minimum wage is $14.35 an hour.  The 35-cent minimum wage increase is directly tied to the latest CPI report, which showed a 2.5% increase in inflation from August 2023 to August 2024.

2024-09-15T08:50:44-07:00September 15th, 2024|Miscellaneous, Operating LLCs|0 Comments

What Is an LLC Distribution?

A distribution from a limited liability company (LLC) is a payment of cash or property made by an LLC to the LLC’s owners, also known as members. Although state law sets forth certain default rules, LLC members can specify in the LLC’s operating agreement when and how profits are allocated, distributed, and taxed.

Distribution Method and Timing

Under the default rules provided by most state LLC statutes, an LLC is not required to make any distributions to members before they withdraw from the LLC or it is dissolved. It is prudent for LLC members to create an operating agreement that specifies the method and schedule of distributions. Distributions can be made on a regular basis, such as monthly, quarterly, or at the end of the fiscal year; or based on specific events, such as the sale of assets or the liquidation of a member’s interests.

When determining the timing and size of distributions, the compensation needs of members must be considered alongside the needs of the business to grow earnings, cover expenses, and retain sufficient cash reserves. Often, distributions are made to enable members to pay taxes they owe on the LLC’s profits: because LLCs are generally pass-through entities, their members must pay taxes on LLC profits regardless of whether they receive a distribution of those profits.

Proportionate versus Disproportionate Distributions

Distributions can be made in direct proportion to how much of the LLC each member owns—an amount that is typically based on an owner’s capital contribution to the business. This is not required, however. Although state LLC laws may provide a default rule that members must share income distributions equally regardless of how much each member invested, the owners can override this in the operating agreement.

Profit Allocations versus Profit Distributions

Profit allocation and profit distribution are not the same thing in an LLC.

  • Profit allocation is how the profits and losses are divided among LLC members, regardless of how much the LLC pays the members.
  • Profit distribution is the payment to each LLC member in cash or property by the LLC out of its profits.
    As mentioned, LLC members may need to receive regular LLC profit distributions to cover the tax liabilities on their profit allocations.

Note: Members should talk with their professional advisors about the LLC tax election that is most advantageous for their business model.

Recordkeeping

It is very important for the LLC and its members to maintain accurate records of distributions, such as a copy of the payment check or a printout of the bank transfer. This information should be kept with other business accounting records such as financial reports, cash flow statements, accounts receivable, payroll, and tax documents.  Further, to keep track of each member’s interest in the LLC, LLCs should keep records called capital accounts to track their members’ initial investments in the LLC, subsequent contributions to the company, distributions they receive from the LLC, and the percentage of profit attributable to each member according to their membership interest percentage.

A capital account is not an actual, physical bank account. It is a recordkeeping account that exists only on paper, such as a spreadsheet, and effectively serves as a ledger. As with all recordkeeping, details matter. Detailed recordkeeping is important not only at tax time but also when a member leaves or the LLC is dissolved.

2024-08-07T08:56:23-07:00August 7th, 2024|Why People Need an LLC|0 Comments

Do I Put My LLC’s Name on Line 1 of an IRS Form W-9

Question:  I am completing IRS Form W-9, Request for Taxpayer Identification Number and Certification.  Line 1 says “Name of entity/individual.”  I am completing the W-9 for my single-member LLC.  What do I put in line 1?

Answer:  For a sole proprietor or disregarded entity, enter the owner’s name on line 1, and enter the business/disregarded entity’s name on line 2.

2024-07-24T10:02:38-07:00July 24th, 2024|Questions People Ask, Tax Issues|0 Comments

Arizona Corporation Commission is Making a New Website

The following is the text of an email I got from Tanya M. Gibson, Director, Corporations Division of the Arizona Corporation Commission on May 1, 2024:

Hi, All! It has been a while since I have reached out. I hope everyone is well and staying cool!

I have good news to share! We have secured a vendor for our new filing system! Yes, we are replacing eCorp. We are excited because the new system is technologically advanced and offers a great deal of features and functionality that will enhance the customer experience, streamline filings, and better protect against fraudulent filings.

In the next month, we will kick-off the project and start outlining requirements and flows. Over the years, we have collected your suggestions but once we get into the project, I will reach out and get additional input from you all. We will also have beta testing prior to the launch which allow some of you to “test drive” the system before we release it….and while we still have time to make changes.

We anticipate going live with the new system around August of 2025.

2024-05-04T09:14:26-07:00May 4th, 2024|AZ Corporation Commission|0 Comments

Your Company Must File a Report with FinCen or Be Fined $500/Day

A federal law called the Corporate Transparency Act effective January 1, 2024, requires almost all U.S. companies to file a FinCEN Beneficial Owner Information report with the Financial Crimes Enforcement Network of the U.S. Treasury (“FinCEN“) or the company can be fined $500 a day for a late report.  Companies formed before 2024 must file no later than December 31, 2024.  Companies formed in 2024 must file within 90 days of their formation date.

My son and I own a company called FinCEN Filer, LLC, that files FinCEN BOI reports.  To learn more about the Corporate Transparency Act read How to Avoid the $500/Day Fine and articles and blog posts on FinCEN Filer’s website. Watch these FinCEN Filer videos: 1. What Info Must be Reported, 2. Definition of Beneficial Owner, 3. What Beneficial Owner Information is in a FinCEN BOI Report, 4. Alert: Legal Consequences of Filing a False FinCEN Report, and 5. Our FinCEN BOI Report Services.

How to Hire FinCEN Filer to File a FinCEN BOI Report

Go to https://fincenfiler.com/services

Warning: If you are an owner of a U.S. company you need to be aware of the due date of your company’s FinCEN BOI report.  Reports are due:

  • December 31, 2024, for companies created before 2024.
  • 90 days after the company was formed if it is formed in 2024.
  • 30 days after the company was formed if it was formed after 2024.

How the CTA Affects Your Entity

Here is a brief summary of the CTA:

  • Almost ALL existing companies and companies formed in the future are or will be reporting companies that must report the required information to FinCEN.  See the definition of required information.
  • A beneficial owner is an individual who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise (i) exercises substantial control over the entity, or (ii) owns or controls not less than 25 percent of the ownership interests of the entity.  See the definition of beneficial owner.
  • The following is the required information about each beneficial owner and applicant that the reporting company must report to FinCEN: (i) full legal name, (ii) date of birth, (iii) current, as of the date on which the report is delivered to FinCEN, residential address, and (iv) the unique identifying number from the beneficial owner’s or applicant’s acceptable identification document or the beneficial owner’s or applicant’s FinCEN identifier number.  See the definition of required information.
  • A reporting company that violates the CTA shall be liable to the United States for a civil penalty of up to $500 for each day that the violation continues or has not been remedied; and may be fined not more than $10,000, imprisoned for not more than 2 years, or both.

Subscribe to Our Free CTA Newsletter

To stay up to date on the CTA, its regulations, and how to file a CTA FinCEN report get a free subscription to our CTA newsletter.

Don’t Pay LegalZoom More than an Arizona LLC Attorney to Form an Arizona LLC

Question: People frequently ask me why they should hire me, Richard Keyt, an Arizona LLC attorney who has formed 9,300+ AZ LLCs, to form their Arizona limited liability company instead of LegalZoom?

Answer: People should hire me to form their AZ LLC instead of LegalZoom for the following reasons:

  • We file the new company’s FinCEN Beneficial Owner Information report required by the Corporate Transparency Act for our Silver and Gold LLC formation packages.  If your new company does not file this report within 90 days of its formation date the U.S. Treasury can fine the company $500 a day for each day the report is late.  See FinCEN Filer, LLC to learn more about this law.  Companies formed before 2024 must file their report on or before December 31, 2024.  LegalZoom charges an additional $99 to file this report.
  • I’m $372 Cheaper than LegalZoom for Similar Services: As of 2/24/24 LegalZoom’s premium LLC formation package is $582, but it includes an attorney fee of $49/month for a year, which is an additional $588/year.  FinCEN BOI report filing fee is $99.  The total LLC premium formation fee for the first year is $1,269, which is $372 more than my $897 Silver LLC package which includes filing the FinCEN BOI report.
  • Our annual statutory agent (aka Registered Agent) fee is $99.  LegalZoom’s annual statutory agent Service is $199/year.
  • I’ve Got 373 Five Star Reviews: Read our 373 happy client five-star reviews on Google, Facebook & Birdeye.  When I Google LegalZoom it doesn’t display any reviews.
  • I’m an Arizona LLC Attorney who has been forming LLCs since 1992: I formed the first LLC in Arizona the day Arizona’s LLC law became effective in October of 1992. I have formed 9,300+ Arizona LLCs since I started counting in 2002.

(more…)

2024-05-26T07:33:16-07:00April 1st, 2024|FAQs, Forming LLCs|0 Comments

Federal District Court Rules Corporate Transparency Act Unconstitutional

The following is a March 4, 2024, news item on FinCEN’s website:

On March 1, 2024, in the case of National Small Business United v. Yellen, No. 5:22-cv-01448 (N.D. Ala.), a federal district court in the Northern District of Alabama, Northeastern Division, entered a final declaratory judgment, concluding that the Corporate Transparency Act exceeds the Constitution’s limits on Congress’s power and enjoining the Department of the Treasury and FinCEN from enforcing the Corporate Transparency Act against the plaintiffs. FinCEN will comply with the court’s order for as long as it remains in effect. As a result, the government is not currently enforcing the Corporate Transparency Act against the plaintiffs in that action: Isaac Winkles, reporting companies for which Isaac Winkles is the beneficial owner or applicant, the National Small Business Association, and members of the National Small Business Association (as of March 1, 2024). Those individuals and entities are not required to report beneficial ownership information to FinCEN at this time.

Wolters Kluwer’s March 5, 2024, article states:

the court’s ruling prohibits CTA enforcement only against the NSBA itself and all of its members. . . . Many believe that all reporting companies facing CTA deadlines should seriously consider filing , , . Businesses that fail to file in time to meet their CTA deadlines are betting on the NSBA prevailing in the courts. Meanwhile, if the UST prevails, these businesses will potentially face significant civil fines, interest, and penalties, as well as possible criminal penalties, including jail time. 

The law firm of Akin Gump wrote an article on the case and said:

The court’s injunction is limited to the plaintiffs in the case (i.e., the individual plaintiff and the NSBA). It is unclear at this point if the injunction will be understood to apply to all of the approximately 65,000 individual members of the NSBA or only to the association.”

The Katten law firm’s article states:

“Note that the case was decided on summary judgment at the federal district court level and that the language from the final judgment specifically relates solely to the plaintiffs in this case (i.e., the National Small Business Association (NSBA) and a specific business owner who is a member of the NSBA). . . . At this time, we believe it remains prudent practice for clients to continue to abide by the reporting requirements set forth under the CTA until additional guidance becomes available.

Baker Hostetler law firm’s March 5, 2024, article says:

“The relief from this ruling currently applies only to the named plaintiffs, which include the members of the National Small Business Association (NSBA).  The immediate impact of this ruling on all other companies is unclear. However, companies that were not party to the suit may not rely on this decision to avoid complying with the CTA, absent new guidance from the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) permitting them to do so. . . . As of now, this ruling technically applies only to the 65,000 members of the NSBA. In other words, no other company may rely on this decision to avoid complying with the CTA, absent new guidance from FinCEN permitting them to do so.”

FinCEN Filer, LLC’s advice as a result of this case is:

  • Companies formed before 2024: Hold off until November or December of 2024 to see what happens.  If the courts find reporting companies do not have to file a FinCEN BOI report then none of the pre-2024 companies needs to file.  If the courts find that the CTA is constitutional and the law applies to all reporting companies then file the FinCEN BOI report before December 31, 2024.  If there is no resolution of this issue before December 31, 2024, then file the FinCEN BOI report on or before December 31, 2024, so you eliminate the possibility of a $500 a day late filing fine.
  • Companies formed in 2024:  File the FinCEN BOI report within 90 days of formation unless there is a final ruling that the CTA is unconstitutional and companies do not have to file a FinCEN BOI report before the expiration of the 90 period.
2024-03-06T13:15:15-07:00March 6th, 2024|Corporate Transparency Act|0 Comments

Loan Can’t be Called if Land Is Transferred to an LLC

Question:  Can my lender call my loan that encumbers my land if I transfer the land to an LLC I own?

Answer:  Probably not.  The Federal National Mortgage Association, aka Fannie Mae, has something called Servicing Freddie Mac Mortgages Series 8000.  Section 8406.4(b) Additional permitted Transfers of Ownership Effective 10/20/2021 states:

“Permitted Transfers of Ownership subject to conditions.  In situations where all of the following conditions are met, Freddie Mac will permit a Transfer of Ownership of the Mortgaged Premises:

  • At least 12 months have passed since the Origination Date and
  • The transfer is to a limited liability company (LLC) or limited partnership (LP), provided that:

The managing member/general partner of the LLC/LP is the original Borrower. If there are multiple Borrowers, all of them must be members/partners of the LLC/LP, and at least one of them must be a managing member/general partner. If the transfer results in a permitted change of occupancy type to an investment property, such change must not violate the Security Instrument (e.g., the 12-month occupancy requirement for a Primary Residence), and

The Servicer notifies the original owner or natural person that the Mortgaged Premises transferred to an LLC/LP must be transferred back to the original owner or natural person prior to any subsequent refinance or modification application to meet Freddie Mac’s underwriting requirements

Fannie Mae ruling D1-4.1-02: Allowable Exemptions Due to the Type of Transfer (04/13/2022) says due on sale clauses cannot be enforced if the borrower transfers the encumbered land to a limited liability company.  The rule states:

“the servicer must process the following exempt transactions without reviewing or approving the terms of the transfer: . . . A transfer of the property (or, if the borrower is an inter vivos revocable trust, a transfer of a beneficial interest in the trust) to a limited liability company (LLC), provided that

  • the mortgage loan was purchased or securitized by Fannie Mae on or after June 1, 2016, and
  • the LLC is controlled by the original borrower or the original borrower owns a majority interest in the LLC, and if the transfer results in a permitted change of occupancy type to an investment property, such change does not violate the security instrument (for example, the 12 month occupancy requirement for a principal residence).”

Bottom line is Fannie Mae approves transfers of encumbered land without the lender being able to enforce a due on sale clause.

Did Your File My LLC as a Partnership?

Question:  Did you file my LLC as partnership? My tax accountant needs this information and a copy of that document.

Answer:  You need to get a new accountant who understands LLCs and federal income tax law. It is not possible in any state to file an entity (corp or LLC) as a partnership for federal income tax purposes. The IRS’ default tax method for a multi-member LLC like your two member LLC is partnership. No need to file any papers with the IRS other than the LLC’s IRS form 1065, which is its partnership tax return. If the LLC wants to be taxed as an S corp it has to file an IRS form 2553. If your LLC did not file IRS form 2553 then it is automatically taxed as a partnership.

2023-08-08T15:03:18-07:00August 8th, 2023|FAQs, Tax Issues|0 Comments

Another Wells Fargo Idiot Banker

President of an Arizona nonprofit corporation I formed recently called while at the bank trying to open a bank account for the corporation.  The corporation filed IRS form 1023EZ and was a 501(c)(3) tax-exempt charity.  The banker said her bank could not open a bank account until the corporation could prove its “tax classification.”  I asked her what she meant by “tax classification” and she said it means is the corporation a C corporation or an S corporation?  I said neither because it is a 501(c)(3) tax-exempt charity.  She insisted the corporation had to be a C or an S because she was ignorant of federal income tax law.

Bottom line:  I told my client to go to another bank and hopefully would not be helped by a person who is a business idiot.

I do not recommend that businesses use Wells Fargo, Chase or Bank of America.  They are not customer friendly.

2023-07-15T09:37:45-07:00July 15th, 2023|Bank Problems|0 Comments

Should I Get a DBA for My Arizona LLC?

Question:  If my Arizona LLC is called Widget World, LLC and I want to use Best Widgets in my LLC’s advertisements do i need to file a DBA with Arizona?

Answer:  DBAs in AZ are called trade names.  If you use text that is not the full name of the LLC you should register that text as a trade name with the Arizona Secretary of State.  Getting a trade name or dba from the Arizona Secretary of State is relatively easy to do. It’s a simple online application and the fee is $10. To learn how to get the trade name (aka dba) watch my Youtube video at:

Here’s the link to the Arizona Secretary of State’s trade name page:

https://azsos.gov/business/trade-names-trademarks

2023-10-24T10:17:50-07:00June 3rd, 2023|FAQs, Questions People Ask|0 Comments

Well Fargo Bank Demands LLC Change its Principal Address

Question:  Client received a letter from Wells Fargo bank that said the client’s new LLC’s principal address on file with the Arizona Corporation Commission cannot be 24 W. Camelback Rd, #467, Phoenix, AZ 85013.  That address is also the mailing address of the LLC’s statutory agent.  Do I have to amend my LLC’s Articles of Organization to change the LLC’s principal address?

Answer: Arizona Revised Statues Section 29-2101.B states:  “The Articles of Organization [of an LLC] must state. . . the [LLC’s] principal address, which may be the same as the mailing address of the company’s statutory agent.”  Arizona Revised Statues Section 29-3102.20 defines Principal Address as “the mailing address of a limited liability company or foreign limited liability company, whether or not located in this state.”

24 W. Camelback Rd, #467, Phoenix, AZ 85013 is a UPS mail box. You are dealing with an idiot banker who is ignorant of Arizona LLC law.  The banker is telling you that your LLC’s principal address stated in its Articles of Organization filed with the Arizona Corporation Commission cannot be the LLC’s statutory agent’s mailing address even though that address is expressly authorized in Arizona Revised Statues Section 29-2101.B. Only an uniformed idiot would say that. In forming 8,700+ LLCs I can only remember one other person whose banker said the same thing. It is very common for businesses to have a PO box or a UPS mail box.

The bank has no legal basis to say that the LLC’s principal address cannot be 24 W. Camelback Rd, #467, Phoenix, AZ 85013, because that is KEYTLaw, LLC’s, mailing address and KEYTLaw, LLC is the LLC’s statutory agent.

Recommendation:  Go to another bank, but never use Wells Fargo, Bank of America or Chase Bank.


Will My Lender Call My Loan If I Convey Land to My LLC?

Question:  I own a rental home that I want to put into an LLC for asset protection, but it is subject to a deed of trust that has a due on sale clause in it.  If I form an LLC and convey the home to the LLC will the lender exercise the due on sale clause and demand I pay off the loan?

Answer:  A due on sale clause is text in the deed of trust that says that the lender can demand payment of the balance owed on the loan if the borrower transfers ownership of the land.  This is a common clause in residential loan documents.

I’ve formed 4,000+ AZ LLCs into which people transferred land that was subject to a mortgage or deed of trust. I’ve never had an LLC client’s lender call the loan because of the transfer. If your lender were to call your loan Arizona law says that if you cure the default by transferring the land back to you the lender must stop the foreclosure.

The purpose of a due on sale clause is to give the lender an option to call the loan when the borrower ceases to own or have any involvement with the land. When the borrower transfers the land to the borrower’s LLC the borrower continues to be involved with the land and will make the future payments. That’s why lenders don’t call the loan when the borrower transfers the land to the borrower’s LLC.

Advice:  Don’t contact the lender and ask for permission.  The standard response is you cannot do it and you may get yourself on the lender’s radar.

Chase Bank Refused to Open LLC Account Because It Could Not Verify LLC’s Phone Number

Question:  What is a verified LLC phone number?  I tried to open a bank account for my LLC at Chase Bank.  The bank clerk said that he could not open a bank account for the LLC unless he could “verify” the LLC’s phone number.  My client who is the sole member and manager of the LLC gave the banker all of his phone numbers.  The banker was unable to verify any of the phone numbers and declined to open a bank account for the LLC.

Answer:  I don’t have a clue what a verified phone number is.  In forming 9,300+ Arizona LLCs since 1992 I’ve never had anybody call or email me and say their bank required a phone number (verified or unverified) to open a bank account.  My advice was go to another bank, preferably not Chase, Wells Fargo or Bank of America.

Idiot Banker Won’t Open a Bank Account for an LLC Owned by a Trust

Question:  You setup an LLC for me that is owned by a revocable living trust you created.  I gave the bank a copy of the Articles of Organization, the Operating Agreement, the Trust Agreement and the Certification of Trust, but the bank won’t open an account for the LLC unless you send the bank a letter that says that I am the trustee of the trust that is the member of the LLC?

Answer:  You are dealing with an idiot banker because he/she wants somebody who is not an owner of the LLC or affiliated with the LLC, i.e., me, to sign a letter that states who owns the trust.  Ask the idiot banker if another bank employee can sign the letter because that person has the same connections to the LLC and the trust as I have.

Your Certification of Trust and your Trust Agreement show that you are the trustee, aka the “owner” of the trust.  Why doesn’t the banker know that?  It’s because he or she is an idiot.

I’ve formed 8,700+ LLCs and only one other time has a bank idiot asked me to sign a letter before opening an account.  The other time the idiot banker wanted me to sign a letter as the LLC’s statutory agent stating that the LLC’s address was the address displayed on the Arizona Corporation Commission website.  Why wouldn’t the idiot ask the owner of the LLC to sign that letter?

Go to another bank or a different branch.  I don’t recommend that LLC owners open accounts with Chase, Wells Fargo or Bank of America.

I Want Investors to Invest in My LLC

Question:  I am interested in more information on Arizona Revised Statutes Section 44-1844.A.  I am want to open a new business and I’m looking for investors. I want information on how to do it without affecting the Arizona Securities Division.

Answer:  If you will offer interests in your LLC to investors in exchange for them paying money or value assets you are offering and selling a security and must comply with federal and state securities laws.  If you fail to comply with federal and state securities laws and an investor loses money federal and state securities laws say the promoter(s) – you in this case – are liable for the loss.

You need to hire an experienced securities law attorney to advise you and prepare the documents needed to comply with federal and state securities laws.  The cost of the legal advice is a cost of raising the capital. We do not provide securities law advice.

How Many LLCs Should I Form?

Question:  You have formed most, if not all, of my LLCs over the years and I am grateful for the efficiency, cost and professionalism.  I do have two quick questions.

  • Is it best to have rentals each in their own LLC or is okay to have them all under one?
  • What is best practice for banking? Is it best to have a separate account for each for the sake of liability?

Answer:  The reason you want multiple LLCs to operate multiple businesses or own multiple real estate properties is because you don’t want all of your eggs in one basket.  You know what happens if you drop the basket.  You get the same result if one business or property causes a lawsuit against the LLC and there is a big judgment that exceeds the insurance – you lose all your eggs, aka businesses or properties.

A fundamental rule of LLC asset protection is that each LLC must have its own bank account into which its income is deposited and from which its expenses are paid.  Each LLC also needs its own books.  If you break this fundamental rule and a lawsuit is filed, a court is going to rule that because you are treating the LLCs as if there is only one LLC the court will do the same and allow all of the assets of the LLCs to be reached by a creditor of one of the LLCs.

My 50th Wedding Anniversary

On January 29, 1972, 50 years ago I married the love of my life.  Finding and marrying Carol was the best thing that ever happened to me.  I first saw Carol at a Phi Gamma Delta fraternity party at Penn State in the winter of 1967.  I was a pledge and she had been invited to the frat party because her sister Ellen was pinned to one of my frat brothers.  It wasn’t love at first sight, but I do remember I thought she was the prettiest girl I had ever seen.

We were both freshmen that winter.  Carol dated a number of my fraternity brothers over the next two and a half years.  At the beginning of my junior year I asked Ellen if she would fix me up with Carol and she did.  Unfortunately for some reason I stood Carol up.  I was a no show.  Ellen was understandably mad and said she would never fix me up with Carol again.

The beginning of our senior year I got the courage to call Carol and ask for a date.  Getting dates at PSU in 1966 – 1970, the years we attended PSU, was very hard for guys because there were five guys for every woman.  My freshman year I called a girl for a date and she booked me six weeks later because that was her first opening.

Lucky for me Carol agreed to go out with me.  We hit it off immediately and dated exclusively our senior year.  After graduation I went to USAF Officer Training School at Lackland AFB, Texas, and Carol returned to her home town to take a job teaching in elementary school.  We tried long distance dating, but it was hard in the days before the smart phone, facetime, email and texting.

In the fall of 1971 I was just beginning the six month program in which I learned how to fly the F-4 Phantom supersonic fighter-bomber at Luke AFB, Arizona.

F-4Es returning to Korat Royal Thai Air Base, Thailand, from missions over North Vietnam

I called Carol and asked her to marry me.  She said yes.  We didn’t have time to plan a wedding.  On Friday, January 29, 1972, Carol and I were married in the Methodist Church at Central Avenue and Missouri Avenue in central Phoenix.  Six people attended – my parents and brother, two of my parents’ friends and my best friend from college who happened to be passing through Phoenix.  Unfortunately nobody from Carol’s side of the family was able to attend the wedding.

We drove to San Diego that afternoon for our short honeymoon.  I had to be back to work on Monday so we drove back to Phoenix Sunday afternoon.  We lived at Oakwood Garden apartments on 40th Street just north of Camelback Road, in Phoenix.  I drove to Luke AFB everyday to fly the F-4, attend academic classes and fly the F-4 simulator.  The traffic was much lighter back then, but it still took 45 minutes to drive one way.

In May of 1972, four months after we were married the Air Force sent me to the Vietnam war and Korea for 13 months.  Carol stayed behind in our apartment and worked at American Express at 32nd Street and Lincoln in Phoenix.  Carol lived with me in my one room barracks bedroom at Kunsan Air Base, Korea, for three weeks in 1973.   During the 13 months I was overseas we wrote a lot of letters to each other.  When I returned to the States we decided to destroy all our letters because we didn’t want our future children to read what we thought was too much “mushy” language.  I now regret destroying those letters.

Carol and I have three children and four grandchildren.  For the last 21 years Carol and I have worked closely in my law practice.  She is the office manager and the bookkeeper.  She is one of the reasons I’ve been able to have a very successful law practice.

I love my wife very much and thank God everyday for letting her be the love of my life.

2022-05-30T07:36:19-07:00January 29th, 2022|Miscellaneous|0 Comments

New Arizona Laws Effective 1/1/22

On January 1, 2022, the following new Arizona laws became effective:

  • The minimum wage is $12.80 per hour, which is an increase from $12.15 per hour.
  • Instead of having four state income tax brackets, Arizona income tax changed to two tax brackets.  The tax rates are 2.55 percent and 2.98 percent.  Single people and married people filing separately pay the lower rate if their taxable income is $27,272 or less or the higher rate if their taxable income exceeds $27,272.  Married people filing jointly pay the lower rate if their income is less than $54,544 or the higher rate if their taxable income exceeds that amount.
  • The Arizona Homestead exemption increased from $150,000 to $250,000, but this equity amount is no longer protected from liens that arise from a civil judgment.  In general this exemption protects the first $250,000 of equity a single person or a married couple have in the Arizona home in which they reside from the home owner(s) involuntary creditor(s).  Under the new law, however, if a creditor gets a judgment against the home owner issued by a court the homestead exemption no longer prevents the creditor from getting the homestead exemption amount.
2022-01-09T15:20:50-07:00January 9th, 2022|Miscellaneous|0 Comments

Businesses with an EIN Must Notify IRS of Changes with Respect to Responsible Parties

Calling it a key security issue, the Internal Revenue Service on July 31, 2021, urged entities with Employer Identification Numbers (EINs) to update their applications if there has been a change in the responsible party or contact information.

IRS regulations require EIN holders to update responsible party information within 60 days of any change by filing Form 8822-B, Change of Address or Responsible Party – Business. It is critical that the IRS have accurate information in cases of identity theft or other fraud issues related to EINs or business accounts.

The data around the “responsible parties” for business-type entities is often outdated or incorrect, meaning that the IRS does not have accurate records of who to contact for identity theft issues. This means a time-consuming process to identify the point of contact so the IRS can inquire about a suspicious filing.

As a result, the IRS intends to step up its awareness efforts aimed at businesses, partnerships, trusts and estates, charities and other entities that are EIN holders. Starting in August, the IRS will begin sending letters to approximately 100,000 EIN holders where it appears the responsible party is outdated.

All EIN applications (mail, fax, electronic) must disclose the name and Taxpayer Identification Number (Social Security number, Individual Taxpayer Identification Number or EIN) of the true principal officer, general partner, grantor, owner or trustor.

The IRS defines the responsible party as the individual or entity who “controls, manages, or directs the applicant entity and the disposition of its funds and assets.”

Unless the applicant is a government entity, the responsible party must be an individual, not an entity. If there is more than one responsible party, the entity may list whichever party the entity wants the IRS to recognize as the responsible party.

EINs are to be used strictly for tax administration purposes. Entities with EINs that are no longer in use should close their IRS tax accounts and follow steps outlined at Canceling an EIN – Closing Your Account.

Watch Five Things to Know about the Employer Identification Number

2021-08-18T16:35:27-07:00August 18th, 2021|Tax Issues|0 Comments
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