IRS explains tax incentives

New IRS guidelines show taxpayers how to qualify for deductions for energy-efficient building improvements.

Under the Energy Policy Act of 2005 (EPACT), building owners and leaseholders can claim deduction for all or part of energy-efficient improvements made in 2006 and 2007. That means businesses only have two years to make energy-saving improvements to get the tax break.

In the new EPACT regs, the IRS states that to qualify for the tax break, the annual energy and power savings from building improvements must be at least 50 percent. There may be a partial tax savings if the building meets a 16.66 energy savings target.

The IRS also is telling owners and leasers exactly what types of buildings qualify for the energy tax breaks and what parts of the building qualify. Typically, energy-saving improvements to interior lighting, heating, cooling, ventilation, hot water systems and the building envelope will qualify.

-- Gordon Scherer, Horovitz, Rudoy & Roteman
gscherer@hrrcpa.com

'Negligent hiring' suits on rise

The number of lawsuits for "negligent hiring" has increased dramatically over the past few years.

When an employee of a company or nonprofit organization commits a criminal act that injures someone, the injured person may file a "negligent hiring" lawsuit against the employer. For example, cases have been brought against an employer when the employee committed a sexual assault and a background check by the employer would have disclosed a prior conviction.

Both large and small employers are reacting to the increase in negligent hiring lawsuits by doing more extensive background checks of new hires. The Internet has made it easier to dig into the backgrounds of prospective employees.

But employers should beware of federal and Pennsylvania laws that limit the employer's ability to obtain records. For example, a background check might be determined to be a credit check and the employer may be subject to the requirements of the fair Credit Reporting Act, including telling an unsuccessful job applicant the exact reasons a job was not offered.

-- Joseph Vater, Meyer, Unkovic & Scott LLP
jav@muslaw.com