logo
MENU

Tax Loophole for Private Schools

The MacMain Law Group report on the Tax Loophole for Private Schools that Pennsylvania businesses can donate to and participate in tax credit programs.The new federal tax code contains a loophole that could affect private schools. An analysis by the non-profit Institute on Taxation and Economic Policy (ITEP) found that with the new tax laws, donations to private schools may help businesses make money by paying less in state income tax.

In Pennsylvania, businesses that donate to educational non-profits or a private school scholarship organization can receive up to 90 percent of the donation back when they donate through a tax credit program like the Opportunity Scholarships Tax Credit (OSTC) or Educational Improvement Tax Credit (EITC). Nine other states have similar education tax credits.

Under the education tax credit program, a $10,000 scholarship donation can save a business $9,000 in state taxes. The donation is tax deductible at the federal level at the full amount.

Previously there was no real incentive to exploit this loophole because there was no cap on state tax deductions. The federal government allowed for unlimited deductions based on how much individuals or businesses paid in state taxes. For participants of OSTC and EITC, lower state taxes meant higher federal taxes.

That is no longer the case under the new federal law, which caps state tax deductions at $10,000. Without any incentive to pay state taxes past a certain point, more businesses may want to take advantage of the loophole and participate in tax credit programs.

Carl Davis, research director at ITEP, expects that some states will see a flood of new private school donations. However, in Pennsylvania tax credits are limited with demand already exceeding the amount of money available. The OSTC program has $50 million while the EITC is funded with $135 million.

The limited funds likely mean competition for tax credits will be stiff. Recipients of Pennsylvania tax credits are determined by a lottery system. Some preference is given to participants who have received credits in the last two years. Not all of the donations go to private schools. The EITC program also includes educational improvement organizations whose missions vary widely. There are entities that distribute the money to traditional public schools and charters. Some run after-school programs, and others provide extracurricular science education. There are many choices besides private schools for businesses who want to earn tax credits.

It stands to reason that demand for tax credits will continue to increase leading state law makers to expand the programs. Governor Wolf has already increased the caps on the OSTC and EITC programs at the behest of Republican leaders.

Act 22 and Police Recordings

Malvern civil rights defense lawyers advocate for your civil rights involving police body camera recordings.Governor Wolf has said he believes that body cameras help prevent confrontations, preserve evidence, and strengthen police accountability. Last summer, the Governor signed into law a new Act that provided for a federal grant to fund a Pennsylvania State Police pilot program of body-worn cameras. Act 22 governs police body camera recordings with regards to the Pennsylvania Right to Know Law (RTKL). Part of Act 22 deals also with other types of recordings, such as those made in correctional facilities, but of particular significance is a section that broadens the scope of recordings now considered exempt from disclosure in RTKL requests.

Requests for Police Audio and Visual Recordings

The new legislation stipulates that requests for law enforcement audio or visual recordings must be made in writing within 60 days from the date the recording was made. The date, time, and location of the recorded incident must be specified along with the relationship of the requester to the incident that is the subject of the recording. Within reason, the request must also name everyone who was present at the time of the recording if the incident occurred inside a residence unless they are not known to the requester.

Redacted Recordings

Under Act 22, if an audio or visual recording contains either potential evidence in a criminal matter, or information that pertains to an investigation or matter where criminal charges have been filed, it is now exempt from RTKL requests. However, agencies are still required to review recordings to assess whether protected information can be redacted. In cases where this is possible, then the agency must provide a redacted version of the recording to the party who requested it. A denial of a request for recordings must be written and state “that reasonable redaction of the audio recording will not safeguard potential evidence, information pertaining to an investigation, confidential information or victim information.”

Act 22 also provides for a new procedure to appeal the denial of a request. Appeals of denials must be submitted to the court of common pleas that has jurisdiction. The recording in question must be preserved by the agency that issues the denial until the expiration of the time period of judicial review. Law enforcement agencies have the right to establish reasonable fees to cover the cost of providing audio and visual recordings. The party that requests the recording must pay the fee when the recording is disclosed.

Pennsylvania municipalities and their law enforcement agencies should be sure they are aware of the new protocols outlined in Act 22 so that they are in compliance with any RTKL recording requests.

For more information, contact a civil rights defense lawyer at The MacMain Law Group LLC by calling 484-318-7106 or submit an online inquiry.

Suing for Defamation After a Sexual Harassment Charge

Malvern employment lawyers discuss suing for defamation after a sexual harassment charge Sexual harassment claims carry serious repercussions for those accused. This is true even if an investigation reveals the claims were unsubstantiated and the accused individual is later exonerated. For this reason, many professionals consider filing a defamation lawsuit against the accuser. Attorney Brian Leinhauser of The MacMain Law Group LLC advises clients on the most important things to know when considering suing for defamation.

Determine the Facts

A working definition of defamation is a false public statement about another that causes damage to that person’s reputation. To bring a claim for defamation, each of the elements must be satisfied. Beyond satisfaction of the elements of the claim, there are several critical issues to consider when thinking about suing an accuser for defamation in a sexual harassment matter.

First and foremost, you must separate the facts from the opinions of the accusation. When considering a defamation suit, you must consider whether the factual statements used as the basis for the defamation claim are true. In many cases, the If the factual statements are true and can reasonably be interpreted as sexual harassment, then there is no basis for a defamation claim. The interpretation of the facts by the accuser, or the opinion of the accuser about whether the underlying facts constitutes harassment are generally not be actionable as defamation. Likewise, in a she-said/he-said scenario, being able to prove the truth of a fact is important.

Weigh the Risks and Benefits

The benefit or harm caused by additional exposure to the situation should be analyzed as well. If an accusation of sexual harassment is decidedly public, then the incentive to clear one’s name might motivate the accused to pursue the defamation litigation regardless of the cost or benefit at the end. On the other hand, in the case of a quiet accusation of sexual harassment, even where false, a defamation lawsuit might make public that which has, until then, gone unnoticed publicly.

Cost of litigation should also be considered. While some attorneys may take a claim like this on contingency, there are others that would want to be paid on an hourly basis for the litigation. A defamation suit can be lengthy and expensive if no settlement is achieved. Moreover, if the defendant in the defamation suit has no significant assets, then the judgment achieved, while providing the benefit of exoneration, might provide little else by way of compensation for the damages caused by the false statement.

Consider the Burden of Proof

Whether the individual accused is a public or private figure also makes a difference. Where the accused is a public figure, there is an additional burden to prove that the factual averments are made knowing that they are false or with reckless disregard for the truth of the statement. For a private figure, the burden of proof is lower, and they only need to demonstrate that the false statements were negligently made.

Finally, the accused must consider whether the time, energy, and effort of litigation that could take months or even years is worth the outcome desired. Even where the accusation is known to be false or the proof is easy, it may be difficult to achieve the desired result without litigating the matter.

The business litigation attorneys at The MacMain Law Group LLC advise and counsel clients on all matters of business and employment law. For more information about the services we offer, submit an online inquiry or call 484-318-7106.