Press Release: Law Office of Thomas A. Vick Wins Appeal!

In a unanimous opinion by the Indiana Court of Appeals, Judge Mathias wrote the following:

"Vick stated in part during the hearing on the motion to set aside default judgment: 'Now, the idea of somebody looking at a complaint, seeing the summons, seeing that their company, of which they are president, is named in the complaint, responding to the complaint by a letter to opposing counsel and then not doing anything to follow up on that, I don't think that's excusable neglect.' Tr. p. 23.

We agree."

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Press Release: Law Office of Thomas A. Vick Wins $6.8 Million Judgment

The Law Office of Thomas A. Vick won a $6.8 million judgment in a personal injury case on May 30, 2017.

Mr. Vick represents the plaintiff in Genia Wamsley v. Tree City Village, New Generation Management, Inc. and Matthew Joseph. The case is before the Honorable Judge Matthew D. Bailey of the Decatur County Superior Court. The Cause Number is 16D01-1609-CT-410.

Genia Wamsley was shot by her neighbor Matthew Joseph on March 7, 2016 while sitting on her couch in her apartment in Greensburg, Indiana. The shooting garnered attention from local and state media outlets.

Starting a Nonprofit Organization: Apply for State Sales Tax Exemption

Once the all important IRS Determination Letter (the letter stating your organization is now recognized as a tax exempt entity) has been received, it is now time to apply for the Indiana state sales tax exemption.

The application for the sales tax exemption is NP-20A. It is a very simple application, consisting of a single page. The form asks for basic information regarding the organization, such as contact information, the predominant purpose of the organization, and whether the organization will sell personal property for more than 30 days in a year. There are only four check-the-box questions in the main section of the form.

The NP-20A serves a dual purpose. Not only is it used for applying for tax-exempt status, but it also is a request for an Indiana Taxpayer Identification Number. Once the hard work of getting federal tax-exempt status is done, Indiana makes it very easy to finish the job.

Nonprofit Organizations: Applying for Tax Exempt Status

After the previous steps, as described in prior blog posts, it is now time to apply for tax exempt status. This process can be done in one of two ways. An organization may apply for tax exempt status using the 1023 form or the 1023EZ form. If your organization meets the requirements for 1023EZ, this step is a no brainer. You do the 1023EZ because of its simplicity.

An organization may use the 1023EZ, if it meets certain criteria. These criteria include but are not limited to (1) the organization is not expected to gross more than $50,000 in the next three years; (2) it is not a foreign entity; (3) it is not a successor to a for-profit entity; (4) it is not a school, church, or hospital; (5) it is not a 509(a)(3) supporting organization; (6) it is not classified as a private operating foundation. Organizations that are ineligible to apply with 1023EZ are relegated to 1023.

Form 1023 is a time consuming document for even attorneys to complete. The IRS estimates it will take at least 15 hours to learn complete 1023. That does not include the nearly 90 hours of necessary record keeping time. Plus, the IRS requires that particular schedules be completed depending on the nature of the nonprofit organization. Each schedule can take between 30 minutes to 2.5 hours. Sometimes multiple schedules need to be filled out. Thus, the process can end up being a weeks long affair for someone unfamiliar with the forms.

On the other hand, the 1023EZ is much more efficient in getting the request for tax exempt status before the IRS. The IRS estimates that the 1023 will require approximately 9 hours of time to complete. Obviously, this still requires a significant amount of time, but is much more manageable.

Each application for tax exempt status, whether the 1023 or the 1023EZ, requires a user fee to accompany it. The user fee for the 1023 is $850. The user fee for the 1023EZ is $400. From a simple cost perspective, the 1023EZ is the preferable way to go.

Starting a Nonprofit Organization: The Organizational Meeting

The articles of incorporation have been submitted. The bylaws of the organization have been drafted. What happens next for a nonprofit organization?

The next step is to hold an organizational meeting. An organizational meeting can cover a multitude of topics, but there are at least two topics of critical importance: (1) selecting officers for the organization; and (2) adopting the bylaws.

The organizational meeting involves the board of directors who now have the power to name officers and adopt the bylaws. Minutes of the meeting need to be kept. There may be discussion as to who would be best qualified to serve as President or Treasurer. The board of directors also might discuss what other offices might be useful in addition to the statutory requirements of President, Secretary and Treasurer.

The organizational meeting is an exciting one. Sometimes it is the first instance of the organization's coming together in pursuit of its charitable purposes. When the organizational meeting is well planned, usually clients leave the meeting confident that their charitable purposes will be achieved. 

Starting a Nonprofit Organization: Drafting Bylaws

The next step in starting a nonprofit organization is to draft bylaws. The bylaws will be the rules that the organization follows. The bylaws will cover a multitude of topics. Here is a list of some of the topics that the bylaws will cover:

  • The location of principal office
  • The tax exempt purposes of the organization
  • Whether the organization will have members
  • The rules governing the board of directors, such as how many director will serve and how long each will serve
  • The rules governing meetings of the board of directors
  • The rules about the officers of the organization, such as the responsibilities of the President or Treasurer

This is just a taste of the decisions that must be made regarding the bylaws of the organization. The IRS will look for specific provisions in the bylaws in order to provide tax exempt status. It is best to talk through all of these decisions with a nonprofit attorney. 

Starting a Nonprofit Organization: Drafting and Submitting Articles of Incorporation

The first step to starting a nonprofit organization is simple: you must incorporate! You must form a nonprofit corporation.

Starting a corporation, whether for-profit or nonprofit, may seem like a daunting task. But the actual paperwork is quite simple. What comes after the formation of the corporation is what is most daunting.

To form a nonprofit corporation, one must draft articles of incorporation and submit them to the Indiana Secretary of State. The Secretary of State will then review the document, and if it meets with approval, a nonprofit corporation will be formed.

While this process is simple and can be done online, it is important that an attorney prepare the articles of incorporation because of the challenges that may come later. If the nonprofit corporation will seek tax exempt status from the IRS, which is almost always the case, the articles of incorporation will need to have particular language regarding the purposes of the corporation and the distribution of assets upon dissolution of the corporation. If the articles of incorporation do not contain this particular language, the IRS will likely not grant tax exempt status.

How Do I Start a Non-profit Tax Exempt Organization?

Non-profit organizations do a lot of good, and more and more are forming every day. They are a great way of doing charity and making a positive impact on the community. If you have an idea to do charity in your community, a nonprofit tax-exempt organization may be the right fit for you. To form a nonprofit, the following steps are necessary:

  • Draft and Submit Articles of Incorporation
  • Apply for and Receive Federal Employer Identification Number
  • Draft Bylaws of Organization
  • Hold Organizational Meeting
  • Apply for Federal Tax Exempt Status
  • Apply for Indiana Sales Tax Exempt Status

These are some of the steps necessary to form a nonprofit and receive its tax exempt status. In later posts, we will delve into the details of each step. Stay tuned.



Temporary Total Disability Payments in Workers Compensation Cases

You were injured at work, and now your injury has resulted in time off work. What do you do?

For injuries in the workplace, the Indiana Code offers some relief. The Indiana Workers Compensation statute mandates that employers with five or more employees to carry workers compensation insurance. This insurance, if it complies with Indiana law, will provide benefits to the employee.

These benefits include temporary total disability payments. These payments amount to 2/3 of the weekly gross income of the employee. While these payments can be a nice benefit during the recovery period after the injury, they do not begin immediately. The employee must be unable to work for a period of 7 days before payments begin. Once payments begin, they will continue until the employee has improved. More specifically, the employee must reach "maximum medical improvement," which only comes after a doctor has evaluated the employee.

(This post is for information purposes only. Contact an attorney regarding your potential workers compensation case.)

Medical Treatment in Your Workers Compensation Case

You've been injured at work. Seriously injured. And you do not know how you are going to get medical treatment. You do not make much money in the first place, and now you are facing the possibility of major medical services.

What do you do?

Fortunately, the Indiana Workers Compensation Act is employee friendly in this area. Under Indiana law, your employer is required to pay for your medical treatment at no cost to you.

IC 22-3-3-4 states, "After an injury and prior to an adjudication of permanent impairment, the employer shall furnish or  cause to be furnished, free of charge to the employee, an attending physician for the treatment of the employee's injuries, and in addition thereto such services and products as the attending physician or the worker's compensation board may deem necessary."

Be sure to speak to a workers compensation attorney concerning your injury as every case is different. But you should expect for your employer to help you out with obtaining your necessary medical treatment.

Why You Need A Power of Attorney

Many people may think that a will is all they need for their estate planning. For certain purposes, those people may be correct. A will may fit their needs for the transfer of assets at death. But unfortunately, often other matters must be taken care of prior to death.

For example, an elderly man has a wife, a son, and a daughter. The wife passes away. The man owns  and the elderly man is unable to care for himself due to Alzheimer's disease. The man has a will from 20 years ago, but no power of attorney. His children take care of him, but they begin having trouble handling his affairs because nobody is authorized to do so.

What are the children to do?

When an individual is not of sound mind, he is unable to execute a power of attorney authorizing another to act upon his behalf. The answer is the children must seek a guardianship for their father.

Obtaining a guardianship on the back end is much more complicated than executing a power of attorney on the front end. The process of seeking a guardianship includes petitioning the court, putting certain individuals on notice of the guardianship petition, a court's appointing a guardian ad litem to represent the incapacitated individual, attending a hearing, and obtaining a court order. Then after the guardianship is obtained, the guardian must periodically report to the court as a protection of the incapacitated individual.

In contrast, a power of attorney may be executed in the same signing ceremony as a will. The power of attorney may grant an individual the same powers of a guardianship, but going to court will be unnecessary. In fact, the individual executing the power of attorney may decide how their designated representative will become authorized to act and what limitations such representative will have in acting on the individual's behalf.

In sum, a power of attorney is a much more convenient, and cost efficient means of taking care of one's property and person.

Don't Make Them Pay Taxes Too Quickly On Your Retirement Plan

Perhaps the best kept secret about qualified retirement plans, such as IRAs and 401(k)s, is the flexibility of their beneficiary designations.

Once an individual reaches age 70 1/2, he must begin withdrawing Required Minimum Distributions from his retirement plan. If he has not withdrawn all of the money from the retirement plan by the date of his death, the beneficiary designation form will determine not only who will receive the money. The beneficiary designation form will also determine how quickly the recipient will have to withdraw the money and thus how quickly the tax will be paid on the funds.

Depending on the circumstances, it may be possible to extend the period of time in which the beneficiary must withdraw Required Minimum Distributions by naming a much younger individual beneficiary. The effect of this decision is that the Required Minimum Distributions will be withdrawn at a much slower rate. Thus, taxes will become payable at a much slower rate. The net effect will likely be that the beneficiary receives a greater amount of money over the course of the distribution than had the beneficiary received the money in one lump sum upon the death of the owner of the retirement plan.

Every situation is unique. Excruciating attention to detail is required to arrive at the proper outcome. But with proper estate planning, an individual can help his beneficiaries take full advantage of his retirement plan.

Why IRAs are Fabulous!

Individual Retirement Arrangements (IRAs) are fabulous retirement strategies. But they are fabulous estate planning devices as well. This is the beginning of a series of blog posts regarding the benefits of having an IRA.

Perhaps the greatest benefit of having an IRA is the preferable tax treatment the IRA receives.

There are basically two types of IRAs: traditional and Roth. If it is a traditional IRA, then the money placed into the account is tax deferred. That means you don't pay taxes on such money until you take the money out. If you have a Roth IRA, you pay taxes on the money you place into the account, but the money grows "tax free"--you don't pay taxes when the money is taken out!

Because the stock market historically rises over time, when you allow your money to grow "tax deferred" or "tax free" in a traditional IRA or a Roth IRA for a substantial period of time, you are choosing a path that is quite likely to result in more money after Uncle Sam is "all said and done" with his slice of the pie.

This is primarily a retirement reason for investing with an IRA. But the estate planning strategies enter into the picture when you fill out your beneficiary designation form.

More on that in the next post.


The Ever Expanding World of Nonprofit Organizations

When you listen to the news, you will hear politicians arguing about whether the economy is growing at a sufficient pace. Perhaps the accusation is that the economy is worsening, or the economy is growing but too slowly, or the economy is fine today but will take a major downturn in the future. The truth is, if we knew exactly what the economy would do, more people would become more active in the market. But when there is a lack of confidence in the market, people are hesitant to risk major investments in business. This is the type of economic talk we have heard from the pundits for the last several years. And, like it or not, that discourse will continue for as long as we have an economy.

But while some may have hesitated to risk starting a small for-profit business in the last decade, the world of nonprofit organizations has expanded at an astounding rate. In Indiana, the number of 501(c)(3) tax exempt public charities increased by 39.8% between 2003 and 2013. Now Indiana has at least 23,963 501(c)(3) tax exempt nonprofit organizations. Nationally, during the same time period the number of 501(c)(3) tax exempt public charities increased by 35% so that there are now at least 1,056,912 such organizations. To say the least, Hoosiers, and Americans in general, are becoming more community focused through charitable organizations.

The benefits of forming a nonprofit organization for charitable work are tremendous. From a tax standpoint, a nonprofit organization—if it is planned strategically—will be eligible for tax exempt status. Tax exempt status means that the organization will not have to pay federal or state income tax. In addition, the nonprofit organization may apply for an exemption from state sales tax. Moreover, the contributions to the nonprofit organization may be tax deductible under IRC § 170. Simply stated, the Indiana Code and the Internal Revenue Code are written so as to encourage community members to start non-profits.

And that’s merely the tax benefits.

Think about how much good a non-profit organization can do in the community. Charitable organizations might provide scholarships to those who cannot afford to attend college. Other organizations may conduct scientific research to find a cure for cancer. Still others might provide a safe place for students to escape the violence on the streets. Indeed, the possibilities are endless.

The Declaration of Independence and Business Formality

"We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness."
-Declaration of Independence, July 4, 1776

The Declaration of Independence is among the greatest pieces of writing in human history. The words of these documents have undoubtedly changed the "Course of human events," founding a nation and structuring a government that has done untold good on this earth. Because a nation began on July 4, 1776, American citizens have saved the world from the evils of Nazism and Communism, leveraged prosperity to deliver aid in times of disaster in developing countries, and welcomed immigrants seeking a place to work and raise a family. Yes, we have not always done what was right, but on this July 4th holiday, let's remind ourselves of this: we are a great nation, and one of our most treasure documents has much to do with that.

The Declaration is more than some eloquent words written with excellent penmanship. Indeed, it is a legal document whose significance parallels business organization law. More specifically, the Declaration serves as our nation's articles of incorporation.

In business law articles of incorporation are necessary for the government to recognize the formal existence of the organization, its incorporators, and the powers the business will enjoy. For example, in Indiana if a group of individuals wishes to start a plumbing business, the group must file paperwork (the articles of incorporation) stating  the name of the corporation. In addition the group of aspiring business owners may set forth in the articles of incorporation the purposes for which it is incorporating, such as to conduct any lawful business. The language contained in the articles of incorporation is somewhat flexible, but the words contained in the articles are of utmost significance.

The words are significant because they cannot be undone haphazardly. Now the organization is not just subject to federal and state law, but also to the law of the corporation itself, namely its articles of incorporation. Returning to our example of the plumbing corporation, once the name and purpose of a company are stated in articles of incorporation, they are in essence "set in stone." The only way to change them is to amend the articles of incorporation, which can be a major procedural problem in the business.

So how does the Declaration serve as our nation's articles of incorporation? The Declaration does this in several ways.

First, just as articles are filed with the state to begin its corporate life, the Declaration is a statement to the overseeing authority of governmental associations to begin its nationhood. Specifically, the overseeing authority is God, "the Supreme Judge of the World." The founders appealed not to mankind for recognition of nationhood but to "our Creator" who raises up nations and casts them down (Dan. 2:21).  In keeping with corporate formality, the Declaration lets it known to the world and to God himself that a new government is founded. The Declaration is a statement for formal recognition of the new nation's lawful existence.

Second, as business law includes an identification of the incorporator(s), so also does the Declaration. The Declaration begins by stating it is the declaration of "the thirteen united States of America." Business law grants to incorporators the authority to decide for themselves how the business will operate. Similarly, the Declaration states that the "business" of government derives its "just power from the consent of the governed." Thus, the thirteen states are the incorporators of our country.

Third, as business law allows for the articles of incorporation to describe the powers of the organization, so the Declaration formally states the powers of the thirteen independent, united states. For instance, a nonprofit organization must abide by strict rules of the Internal Revenue Service to receive tax exempt status. One rule includes how money will be spent. To receive tax exempt status, it thus becomes necessary to include language in the articles of incorporation that will empower the organization to take those actions that are in keeping with the requirements of tax exempt status. Even so, the Declaration of Independence empowers the thirteen states the "full Power to Levy War, conclude Peace, contract Alliances, establish Commerce, and to do all other Acts and Things which Independent States may of right do." Thus, the general authority of each state is contained within the Declaration.

Our Founding Fathers were legal scholars. They understood the significance of legal documents, and they made sure that they crafted a document that considered the laws of men and of "Nature's God." Their careful attention to legal formality, even to the finest details, is a reminder for us to do the same today.