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birthday special - FREE Completion Certificate today only / more on LLC filing as S Corp / more on signs for video - audio and request for data disclosure August 5, 2017

KEN KIRSCHENBAUM, ESQ
ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE
You can read all of our articles on our website     Having trouble getting our emails?   Change your spam controls and white list ken@kirschenbaumesq.comsecure.mybiz.com and mybiz.com 
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birthday special - FREE Completion Certificate today only / more on LLC filing as S Corp / more on signs for video - audio and request for data disclosure
August 5, 2017
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Free Completion Certificate if ordered today by midnight - birthday special
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You only have one birthday a year, and today's mine.  If you have our mouse pad you should have guessed.  So for today only, if your on-line order is received by midnight tonight we will include a FREE Completion Certificate.  You can order just the Completion Certificate and we will delete the charge.  When you place your order today we will automatically add the Completion Certificate for FREE.    Order here:  www.alarmcontracts.com    When filling in the order form you will see full price; we will apply the discount when processing the order provided the order is received by August 5, 2017 11:59 PM.  No exceptions and no extensions.  BTW, I'm 69, which means I am representing alarm companies for 41 years.
PS:  All contracts have the updates that we have added up until now and will be including in the 2018 forms

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LLC filing as S Corp from July 25, 2017 article
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Ken,
    Reading the July 25 post from Megan, in which she states that they are an LLC that files taxes as an S Corp, I am reminded of a confusing aspect of LLC’s.  LLC’s are entities regulated by the states in which they are formed and / or operate.  They are similar to Corporations under the law.  
    The Federal Tax Code does not recognize LLC’s as taxable entities.  LLC’s don’t have shareholders, they have members.  If an LLC has one member, the IRS generally considers it a sole proprietorship (again, this is a tax designation and the member ‘owner’ reports its income/loss on his/her personal income tax return, it has no bearing on its legal status or limited liability for the owner).  If the LLC has more than one member, it is generally taxed as a partnership, and it files a Partnership Tax return and the members report their share of the income/loss on their personal returns.  Members of an LLC can elect to be treated as a corporation for Federal Tax Purposes by filing 8832 “Entity Classification Election” with the IRS. This results in the LLC being taxed as a C Corporation, which, as I have mentioned many times, is generally not a good idea for a security company due to the possible double taxation on income from the eventual sale of the RMR.  To avoid this, the LLC can then file form 2553 and elect to be taxed as an S Corporation, if it meets the requirements to be taxed as an S Corporation (all members are U.S. Citizens, no members who are not individuals or trusts, etc…)
    Sound complicated… It is.  The question is why a small business with one, or a handful, of owners, would want to go through all of this.  It is much simpler to form a Corporation from the outset and then elect to be taxed as an S Corporation.  Very simple and straightforward.  LLC’s sound sexy and trendy.   One of the reasons that large company’s are LLC’s is that they may have owners that are corporate entities or non-U.S. Citizens.  I believe that single member LLC’s that are taxed as sole proprietorship are asking for trouble.   These entities report their income/loss on Schedule C of their personal Income Tax Returns (Form 1040).  This is problematic because it doesn’t insulate the business return from the Owner’s personal return.   This can cause a “fishing expedition” if the return is selected for audit.
Mitch Reitman
Reitman Consulting Group
Fort Worth, TX
817-698-9999
http://www.reitman.us
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Response
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When is Trump going to reduce the tax code to 3 pages as Cruz recommended?  Tax or accounting issues?  "better call" Mitch.
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more on signs for video and audio / request for data disclosure
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Ken,
    I enjoyed your response to my son’s question [audio video signs - do you need to post signs - is there implied consent July 26,  2017] and appreciated that you posted it from RHM rather than his full name.
I think that you are right on the money….no surprise there. 
    Second interesting follow-up question.  As you know, we  frequently are asked by law enforcement and insurance companies to provide details of incidents, video and audio recordings etc.   We maintain confidentiality agreements with our Dealers.  Short of discovery documents in litigation what is the appropriate response when law enforcement, insurance companies, plaintiffs or defendants counsel request information from a call center with regard to a particular incident. 
Thanks-
rrm
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Response
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    The response I was "right" about is that signs don't confer permission when it comes to audio and video.
    Regarding a central station's [or dealer for that matter] obligation to turn over data, there are many considerations in play.  For starters, the central station - dealer - subscriber agreement to treat the data as confidential is contractual, but has no statutory authority confering confidentiality.  In other words, statements in the Catholic confessional to the priest is confidential - not just because that's the policy of the church, but because the law says so.  There is no law that holds audio or video data collected legally by the central station confidential.   There is therefore no shield against disclosure.  But, there is also no obligation to disclose.
    The CS does not have to cooperate with law enforcement unless a warrant is obtained, and a warrant will be obtained if law enforcement believes the data will be helpful.  A CS, dealer or subscriber, all claiming proprietary rights to the data, would not be successful preventing turn over to law enforcement if investigating a crime, in my opinion.  
    The Standard Form Agreements provide that the data is owned by the central station.  Even if the dealer or subscriber were to claim ownership rights, the question whether anyone need turn the data over to someone else becomes more a matter of contract than law.  The CS has the data, but plenty of portals permit dealers or subscribers to access the data, so any of them could disclose the data to another.  
    The question posed is what is the appropriate response by the CS when asked for the data by law enforcement, insurance companies, lawyers in a lawsuit.  You can also add, if requested by the subscriber or dealer.  If the contract signed by the CS provides that the data will be released to the subscriber or dealer, then that would be appropriate.  It may not say that.  It probably says that the CS owns the data and will turn it over to the subscriber.  There is no obligation to turn the data over to private parties, and that includes insurance companies and lawyers, unless they get a court order or subpoena the data.  A letter is not a subpoena or court order.  One caveat, the CS should preserve the data, even beyond the period required by the CS's policies for retention or the contract retention period, once it knows the data may be requested, i.e. the data may be useful in a lawsuit.  
    So that addresses what the CS has to do, not what it may want to do or has a right to do.  Whoever owns the data has the right to disclose it.  The risk then escalates depending on who the data was disclosed to and what the data was used for.  The CS should not disclose the data unless it's to a legitimate party for a legitimate purpose.  Disclosure to the NY Times may be different than the National Enquirer.  Hopefully you understand the difference, because this article is getting longer than I intended.
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Ken Kirschenbaum,Esq
Kirschenbaum & Kirschenbaum PC
Attorneys at Law
200 Garden City Plaza
Garden City, NY 11530
516 747 6700 x 301
ken@kirschenbaumesq.com
516 747 6700
www.KirschenbaumEsq.com