Your Mechanics Lien Resource Treasure Trove

Mechanics Liens used to be a cornerstone topic on this blog; meaning I would write an article about filings, foreclosing and/or litigating a mechanics lien quite frequently. In fact, over the years I sort of consider myself a “lien guy.”  Insofar as construction law goes, mechanic lien and state or federal bond claims has sort of become my thing.

So, where has all of the mechanic lien posts gone?!

If you’re a reader of this blog but not my other blog – The Construction Lien Blog – you may be wondering.  But as you can gather from the blog’s title, a few years ago I created a separate blog focused on lien issues across the country, and post very regularly there on the topic.

As I exhaust the subject on that blog, and don’t to duplicate postings from there over here, most of my mechanic lien and bond claim talk is done on the Construction Lien Blog.  So, if you’re interest in lien laws (and if you are a construction participant or construction law person, lien laws are super important), I recommend you take a look at this other blog.

To give you a more direct path to relevant information, here are the articles posted on the construction lien laws in the states where Wolfe Law Group practices.

Also, be sure to check out these other resources providing through the lien and notice preparation and management company I founded in 2007, Zlien:

Is Your Lawyer About To Raise His Rates?

The ABA Journal published an article last week about an Altman Weil Survey finding that 95% of law firms plan to increase fees by an average of 4%.  Yikes!

Specifically, the article, quoting a report from Reuters, states:

Almost all of the law firms responding to a survey by consultant Altman Weil Inc. are planning to raise their fees this year, if they haven’t already…The median increase in fees, compared to 2010, is 4 percent.

Wolfe Law Group is proud that it has never – I repeat, never – raised its rate on a client.  In fact, we made a point of this at the turn of the year this past January, when we posted on our blog that 2011 Marks Sixth Year Wolfe Law Group Refuses To Raise Rates.

We’ve said it a thousand times: Wolfe Law Group is different. When we make an agreement with our clients, we stick to it.

The US Supreme Court’s AZ Immigration Decision Could Spell Trouble For The Construction Industry

By now you’re heard the news that the United States Supreme Court has upheld the controversial Arizona immigration law allowing states to shut down businesses that hire illegal workers.

A pointed summary of law’s effects is found in the above-linked WSJ article:

The Legal Arizona Workers Act requires employers to use a federal system called E-Verify to check employees’ legal status. It says the state can revoke charters or licenses from employers that repeatedly hire noncitizens lacking work permits. Signing the legislation in 2007, then-Gov. Janet Napolitano called it the “business death penalty.”

The Supreme Court’s decision adds fuel to the E-Verify debate, which we have discussed on this blog in exhausting detail.  The E-Verify system is currently very confusing to contractors. Regulations previously promised to make it mandatory, and those were abandoned two or three times, with the system now being mostly voluntary.  There are, however, exceptions, as it is required on certain federally funded projects, and on all projects in Mississippi, South Carolina, and Arizona.  It is required on state projects in Utah, Colorado, Nebraska, Minnesota, Missouri, Georgia and North Carolina.

The consequences of not following the E-Verify requirements can be severe (see the AZ “death penalty” law), and unfortunately, most contractors are just flat-out confused about how to use the system, when to use it, and what to do when if something turns up about an employee when using it.

The USSC’s sanction of the AZ law demonstrates just how severe penalties for non-compliance can be, and it confirms that the federal government and states can fight illegal workers by penalizing the businesses for using illegal labor. State legislation and federal legislation targeting businesses is likely to follow this big decision. Ensure you don’t get penalized by getting informed and active with the E-Verify program immediately.

New Legislation Could Change How Contractors File and Pay Taxes

Last week, The American Job Builders Tax Reform Act of 2011 was introduced in the house as a bi-partisan bill (sponsored by Reps. Wally Herger (R-Calif.), David McKinley (R-W.Va.) and Shelley Berkley (D-Nev.)) to update how contractors are taxed. The introduction was immediately applauded by the Associated Builders and Contractors, who claim the bill will modify the tax code to help small construction contractors that are facing increased costs in energy, labor and materials.

You can track the bill on GovTrack here.

This isn’t the first time at the rodeo for the American Job Builders Tax Reform Act.  It was introduced last session, but died without any action. ABC and small contractors around the country are hoping for a different fate this session.

The proposed effects of this bill are best explained by the ABC in their press release last week as follows:

“The problem facing construction contractors is that they have been forced to pay income taxes on projects based on estimates rather than having the option of paying taxes when the contract is completed,” said Robin Word, chairman of ABC’s Tax Advisory Group and president of Word CPA Group in Jackson, Miss. “However under this bill, the definition of ‘small contractor’ will enable more contractors to report contra ct income at the conclusion of their jobs.”

Under current law, construction contractors cannot use the completed contract method (CCM) of accounting if average annual gross receipts exceed $10 million – a figure that has not been adjusted for inflation since the threshold’s inception in 1986. Instead, contractors are required to use the percentage-of-completion method (PCM) which does not accurately reflect profits because of the required use of estimates. The American Job Builders Tax Reform Act increases the threshold to $40 million and also indexes the threshold for inflation.

To put it simply, if a contractor has gross revenue over $10m, it must “estimate” its profits on any active construction projects when filing taxes. The actual profits it receives may be more or less than this estimate, whereupon the contractor has to alert the IRS of the difference and either get a credit or pay the difference.  Those contractors with less than $10m in revenue can simply wait forthe project to be completed before being obligated to pay taxes on the profits.  The new bill proposes raising the exemption figure from $10m to $40m, encompassing a larger number of contractors in the US.

We’ll monitor this bill and report any updates.  A tip of the hat to New Orleans City Business’ blog for calling my attention to the bill.