Articles Tagged with Tax Law Articles

On December 13, 2006, the Indiana Court of Appeals reviewed the statute of limitations applicable to claims of accountant malpractice.  In so doing, it also considered whether the accountant’s “continuing representation” after the client’s financial harm became known should postpone commencement of the limitations period for a claim against the accountant.

In this case the court upheld summary judgment in favor of the accounting firm, but it held that in some situations an accountant’s representation of the client in attempting to adjust or resolve the harm will postpone commencement of the limitations period.

The facts were that the plaintiff roofing contractor was a longtime client of the defendant accounting firm.  The representation included compilation of annual financial statements, preparation of tax returns, and assistance to and training of the client’s in-house accounting manager.  In March 2003 the client discovered its accounting manager had been embezzling company funds.  In July 2004 the client sued the firm alleging its negligence contributed to the loss.  The trial court entered summary judgment for the accounting firm on the grounds the suit was not timely filed.

Are your clients envious of new businesses moving to town and receiving tax abatement on a new plant or equipment?  They, too, often upgrade or expand their business building or install new equipment.  Why shouldn’t they receive a similar credit for their investment?  Well, now they can.

Starting in 2006 taxpayers who qualify can obtain a “capital investment deduction” on their property taxes by notifying local authorities and demonstrating their new business investment has either created or retained at least one local job.

The purpose of the new deduction is to provide an incentive for businesses to invest in new or renovated plant or manufacturing equipment before March 2009.  If any new employment is created or existing employment is retained, a taxpayer may receive a three-year phase-in of the property taxes from the increased assessment.  The first-year deduction is 75% of the increase in assessed value, the second-year is 50% of the increase, and the third-year is 25%.  The maximum available deduction for both real estate improvements and personal property is $2 million.

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