"I don't believe in wasting a sunset," I called to the startled couple wading in the surf. I'd been watching them pass their camera back and forth snapping the proverbial touristy sunset photos. "I know my way around a camera a bit, and I'd love to take some photos of you together, if you'd like."
"Oh, yes, thank you very much," the gentleman beamed. They stepped back and turned to me with their blank stares and "cheese" smiles. "No, no," I said, "Don't mind me; just do your thing." He nodded and laughed, took his lady by the hand, and led her out towards the setting sun. He caught on quick and started playfully splashing her with seafoam and laughter. After the impromptu photo session, the three of us reviewed the images together with chuckles and commentary. They were beyond thrilled, complimenting with robust "ohs" and "ahs." They thanked me over and over and waved with broad smiles as they walked away.
I watched them stroll into the golden light, a smile firmly on my face and in my heart and it prompted thoughts about "giving back." I realize that this moment of my life doesn't appear to have anything to do with my profession as a court reporter, but I would suggest that it does. Why? Because it serves as a reminder to each of us to share our talents with others. Over the last 25 years I have developed and honed my valuable court reporting skills. I have offered pro bono court reporting services in the past and the feeling is even more rewarding for me than snapping photos for tourists at the beach. Court reporters are an integral and essential aspect to the legal arena and work alongside paralegals, process servers, and support staff. Many of us want to make a difference in the world. Our jobs can provide that opportunity, but often not with the same level of fulfillment as charitable and pro bono work can. So I urge each of you, give back to your profession and your community when you can - if for no other reason than KINDNESS.
(You can see the happy couple in this phone photo I snapped as they moved down the beach!)
Reposted with permission from James James DeCrescenzo, RDR, CRR, CLVS, Philadelphia, Pa.
Everyone loves something for nothing. Marketers invest a lot of time and effort trying to appeal to that trait. A recent trend in the legal arena has seen an explosion of so-called “Rebates” programs and expensive gifts and rewards to attorneys or their staff for scheduling depositions. It is important to be aware that accepting these so-called “rebates” offered by court reporting firms may attract the attention of the Internal Revenue Service. Some secretaries and paralegals are participating in the rebate programs without the knowledge of the firm or attorney. The rebates, in the form of cash, gift cards, travel, and shopping are made to influence the selection of court reporting firms when scheduling depositions.
Court reporting companies had historically been local mom-and-pop operations. Over the past several years, consolidation has taken hold, as well as an influx of non-court reporting principals, including lawyers, buying and running court reporting firms. To maximize the return on investment, many of these firms have expanded beyond their city of origin.
Along with the trend to consolidate and expand has come the push to gain new business. In the early ‘90s salespeople began delivering trays of cookies and providing other low-cost items to lawyers and their staff. What began as an inexpensive treat has grown to the point of some court reporting firms proudly posting on their Web sites programs to earn “points” for every deposition scheduled. The points may be redeemed for all-expenses-paid vacation, limousine travel, rounds of golf, and the like. One recent flier boasted, “You Book the Depo, We’ll Bring the Dom. Take your next deposition with us, and we’ll hand deliver a complimentary bottle of the world’s finest champagne, Dom Perignon.” In the fine print the firm, whose president and vice-president are lawyers, offers the option of a donation to charity or a $125 State Liquor Store gift card.
Free iPods, mall gift certificates, theatre tickets, cash, rounds of golf – there are anecdotal reports in court reporting circles of payments in excess of $25,000 going to a secretary to switch court reporting firms.
For convenience, I’ll lump all gift, incentive, and reward point programs into the title “Rebate.”
The first question is who is entitled to the rebate? The answer to this question is not as simple as it might seem. If the rebate benefits an attorney’s staff member, becoming, in effect, a “perk” of the job, that is one thing. If the rebate benefits the attorney, then another set of issues is put into play. For example, shouldn’t any benefit received go directly to the lawyer’s client who is paying for that product or service? While not on the level of the entertainment industry’s $100,000 gift bags, an active litigator or his staff can accumulate rebates valued in the thousands of dollars a year. As suggested, this raises both ethical and tax questions.
Gift bags had been a common practice in the entertainment industry since the 1970s. The Internal Revenue Service decided in 2006 to begin cracking down on gift bags. The IRS is always looking for ways to collect more tax dollars from high-income taxpayers. The companies who “donate” these items aren't really intending to make gifts. Since the donors will usually take the cost of the gifts as a business deduction, the IRS is looking to the recipients for payment of the tax. Is it any surprise the value of the entertainment industry gift bags has dropped dramatically since 2006?
This level of tax-responsibility awareness hasn’t yet reached the court reporting firms and law firms involved in today’s expensive rebate programs. In fact, according to tax practitioners I have consulted, the Internal Revenue Service would look at the situation like this: Whether the rebate is paid to the law firm or to an employee of the firm, and whether it’s accomplished though an immediate transfer of the rebate property or service or by way of a “points accumulation system,” there is no reason for excluding it from the recipient’s taxable income. It is plainly not a gift, because the court reporter is anything but disinterested when it comes to wanting to influence the recipient’s decision-making as to future court reporting services.
If the recipient is the law firm, ethically speaking, it should be a wash to the law firm. The law firm is under an obligation to give its client the benefit of the reduced cost reflected in the value of the rebate. Only if the law firm is charging the client the full value of the service would the firm have income equal to the value of the rebate. To use a simple example, let’s say that the reporter charges $100. The law firm passes the $100 expenses through to the client. The result is a wash. Then, if the rebate is $10, the law firm pays the reporter a net $90 cost through to the client. Again this is a wash.
But if the rebate is $10, and the law firm charges the client the $100, then the firm has $10 income. That is, the $100 charged to the client, less the $90 net paid to the court reporter. This raises what the lawyers like to call “some nice questions” about not only whether the client should get the benefit of the rebate, but also if the rebate is accreted over time and paid out at some future date, then which client or clients should get the benefit, which is a problem called partitioning.
It must also be said that if the recipient of the rebates is either a subordinate employee of the firm or an attorney employee or a partner, then the value of the rebate is clearly income to the individual. The question is complicated, however, for the employee or partner if the value of the rebate is not transferred for the benefit of the firm.
Accepting rebates would clearly violate most law firms’ gift policies, unless the value was truly trivial under those policies, for example, a box of candy. Vendor rebate programs involving non-trivial amounts are precisely why law firms and some insurance carriers have such policies forbidding acceptance of “gifts.”
Seen from the court reporters’ standpoint, the situation is, if anything, even more complicated. The reporter generally would be required to provide an IRS information return to the recipient if the annual value of the rebate exceeds $600. The rebate would be deductible by the reporter unless it’s a bribe, kickback, or other illegal payment under U.S. law or under generally enforced state laws that provide for criminal penalties or loss of license. Section 162(c)(2) of the Internal Revenue Code says that a kickback includes “payment in consideration of the referral of a client, patient, or customer.” So where does that leave the too-generous court reporter? Not in a very enviable position.
Obviously, a more in-depth discussion of the legal and ethical implications of this situation may be forced upon those who participate in giving and/or receiving these excessive gifts from court reporting firms.
The message is clear though, as underscored by knowledgeable tax attorneys: No court reporting service should venture into the world of rebates without a solid understanding of the potential problems they are creating for themselves and for their customers – both the attorneys and their clients.
By Lisa M. Rollins, RPR
As I begin this article, I am reflecting on a late night not so long ago when I was studiously working on my "homework." That particular evening it was necessary for me to preview a videotape entitled "Enchanted Cities of Europe" and enter any new words into my steno dictionary. The next day at Port Charlotte Middle School the uncaptioned videotape was to be shown to a class of sixth-grade students. In that classroom sat a hard-of-hearing child named Brian. I had been providing realtime reporting, or CART in the classroom (computer assistive realtime translation) for Brian since the end of April 1998, and it was a wonderful experience.
In January 1998, a late-deafened adult that I have realtimed for in the past read about Brian's desperate search for a certified Signed Exact English interpreter in our local newspaper; unfortunately, Port Charlotte, FL is a relatively small town, and there is none available in the immediate area. She contacted Brian's family and inquired if they were familiar with realtime and its processes and benefits. After a short time, I was contacted by Brian's mother requesting an in-home demonstration and a discussion of the possibility of my attending his classes for the remainder of the school year to provide CART in the classroom.
During my visit, I explained that realtime reporting is used in many classrooms across the United States for other students like Brian. Brian speaks English, so I knew that once we were working together for a while, there would be no problem with communication between the two of us. Subsequently, his family contacted the school board and requested my services.
The first few weeks of school brought new situations. At one point the school administration was concerned that the customary printout of classroom lectures would create some legal issues by violating a confidentiality requirement. I assured them that while printing a transcript of class discussion is a service my company provides, Brian's mother had specifically requested that I not print class discussion in order to ensure proper note taking by her child.
One of my initial concerns was the question of moving my equipment from class to class. I am proud to say that I am now an expert at transporting a steno machine and a handful of cables under one arm and a laptop computer under the other, while briskly opening doors and traversing nearly a thousand sixth and seventh graders in under four minutes. This is a feat not accomplished by the faint of heart!
Inasmuch as I attended all of Brian's academic classes, it was necessary to explain my role in the classroom to each of his teachers. All of them fully understood that I was in the classroom for one reason - to help Brian take part as much as his classmates. We discussed the fact that I would not be available to grade papers, monitor the students' behavior if a teacher left the room and/or act in any manner other than as Brian's realtime interpreter. I also explained to all of his teachers that when tests were given in class, my laptop's screen would be closed in order to avoid any impropriety.
Brian understood that if he had questions about assignments or homework or the application of a particular theory, he had to consult his teachers. I also explained to Brian that he should feel free to adjust any of the controls that determine brightness and visibility of the screen; however, he should never touch any of the buttons or keys on the computer.
Every day was a new learning experience, and I truly enjoyed it all. Some days were really challenging. For example, in Brian's World Culture class, the students were rewarded for good behavior by playing their version of the TV game show Jeopardy, which was quite challenging at times with 23 students shouting, "Pick me! Pick me!" The most rewarding feeling I had was to see Brian's boyish face light up with enthusiasm, "click" with understanding or see him enjoy a hearty laugh because of something he read on my laptop's screen. That gave me the greatest joy of all!
Oh, I forgot to mention that Brian has an IQ of 138 and attends classes for the academically gifted. His vocabulary is quite advanced for his age level, and words like "sagacious" and "dilapidated" ring throughout his classroom. During my short tenure at his school, Brian and his classmates studied Julius Caesar and the Middle Ages and presented poetry by Shakespeare. Luckily for me, there was also frequent use of the words "awesome" and "cool." Interestingly, I have witnessed my dictionary accept words like "Godzilla" and "Mothra" while my spell check is screaming an adamant, "No! That is not a word."
I will miss Brian and his classmates and can only hope that many years from now when he is a grown man, he will remember the person who signed his sixth-grade yearbook as, "Your friend and realtime reporting interpreter.