Attorney-Client Privilege Extended to Tax Practitioners Does Not Apply to Communications With Corporate Representative Concerning Tax Shelter. " With respect to tax advice, the same common law protections of confidentiality which apply to a communication between a taxpayer and an attorney shall also apply to a communication between a taxpayer and any federally authorized tax practitioner to the extent the communication would be considered a privileged communication if it were between a taxpayer and an attorney." However, the privilege "shall not apply to any written communication between a federally authorized tax practitioner and a director, shareholder, officer, or employee, agent, or representative of a corporation in connection with the promotion of the direct or indirect participation of such corporation in any tax shelter (as defined in section 6662(d)(2)(C)(iii)). Sec. 3411, Internal Revenue Service Restructuring & Reform Act of 1998, ; eff. July 22, 1998.
No Exception from Lien in Citation Statute for Payments Made in the Ordinary Course of Business. Although payments made from corporate accounts by corporate representative were made in the ordinary course of business, such payments, made after service of a Citation to Discover Assets, were prohibited and in direct violation of lien and prohibition against transfer contained in Citation. In addition, corporate representative's personal guarantee of corporate loans was evidence that such payments from corporate accounts were of personal benefit to him. City of Chicago vs. Air Auto Leasing Co., et al, 1-96-3129 (1st Dist., June 29, 1998)
Retaliatory Discharge of "Malingering" Employee After Her Filing of Worker's Comp Claim Prohibited. Injured employee fired after filing Worker's Compensation Claim, was wrongfully discharged even though employer believed that employee was fraudulently claiming worker's compensation benefits. At most, dispute concerning her disability was dispute as to nature and extent of injury, which is present in every Worker's Compensation case. Clark vs. Owens-Brockway Glass Container, Inc., No. 5-96-0676 (5th Dist. July 16, 1998; original opinion of March 13, 1998 withdrawn.)
Lessor's Breach of Lessee's Right of First Refusal Deserves Some Remedy. Although Purchaser disputed lease was in effect at time of purchase, where Lessor's Estate sold property to Purchaser without honoring Lessee's Right of First Refusal, rule that when small tract on which Lessee has right of first refusal is part of a larger tract which is sold, sale may proceed, even if correct, does not mean that Lessee has no remedy. This is a case of first impression in Illinois, The Retreat, a NFP Corporation vs. William F. Bell, 695 N.E.2d 892, 231 Ill.Dec. 119 (4th Dist., 1998).
Member of Bank's Board of Directors Is Not an "Employee" Under Illinois Human Rights Act. Attorney Director on Bank's Board of Directors was not employee even though he received compensation for his services as Board Member. Director's role was that of independent contractor rather than employee, so that Human Rights Commission lacked jurisdiction to hear his age discrimination complaint against Bank. Wanless vs. Illinois Human Rights Commission, 695 N.E.2d 501, 230 Ill.Dec. 1011 (3rd Dist., 1998); 1998 WL 208849(Ill.App.3 Dist.).
American Legion Could Not Prevent Seller's Registration of "The Legionnaire" for Hat. Even though the American Legion asserted the use of the name "Legionnaire" as a trade name, it could not prevent hat seller form registering the name as a trademark for a particular type of hat. American Legion failed to prove consumer confusion about the source or sponsorship and approval of the hat. American Legion vs. Matthew, 1998 WL 244344 (C.A.7-Wis.).
Claim for Retaliatory Discharge Is Not "Personal Injury" under CGL Policy. Insurer's definition of "personal injury" as claim for other than bodily injury arising out of enumerated offenses, such as false arrest, malicious prosecution, slander and libel and violations of the right to privacy did not include claim for retaliatory discharge. Even the principle of liberal construction of an insurance policy in favor of the insured cannot overcome reasonable rules of construction. Emtech Machining and Grinding, Inc. vs. Transcontinental Insurance Co., 695 N.E.2d 545, 231 Ill.Dec. 28 (2nd Dist, 1998).
Former Division Could Not Sue Former Parent for Environmental Cleanup Costs. Even though environmental emissions preceded Division's incorporation and sale by Parent, Division could not seek environmental cleanup costs from Parent. At its incorporation, Division agreed to indemnify Parent, and neither CERCLA or RCRA nor Wisconsin common law could avoid duty to indemnify. Truck Components, Inc. vs. Beatrice Co., 1998 WL 224937 (C.A.7-Ill.).
Partners Not Personally Liable for Partnership Debt. Although all partners are jointly and severally liable for debts arising from the injury of a third party due to the wrongful act of a partner acting in the ordinary course of the business of the partnership, individual partners against whom no judgment was entered are not personally liable for judgment entered against partnership. Johnson vs. St. Therese Medical Center, 649 N.E.2d 1088, 230 Ill.Dec. 810 (2nd Dist., May, 1998.
Reminder: Incorporated Law Firms No Longer Exempt From 1099 Reporting. Businesses who pay at least $600 per year to a non-employee must report the payment on a 1099 form that's filed with both the Internal Revenue Service and the service provider. Previously, payments to incorporated law firms were exempt, but as of January 1, 1998, that exemption no longer exists. In preparation for their 1099 reporting, businesses may request a law firm's tax identification number; failure to provide that number is subject to a $50 penalty.