Washington Report 022008

Date Published: 
Original Author: 
Robert M. Fells
Original Publication: 
ICCFA Magazine

ICCFA joins tax relief coalition 

by ICCFA General Counsel Robert M. Fells, Esq.
The ICCFA has joined a coalition representing over 1,000 trade associations, business organizations and corporations to oppose the expiration of certain beneficial tax rates and a proposed tax code overhaul in Congress. The consequences of these two events would raise personal income tax rates, restore the estate tax from zero to 55 percent and abolish the LIFO (Last-In-First-Out) method of accounting for inventory, among many other issues. Some of these tax increases will occur simply because of the expiration of current tax rates in 2010 unless Congress acts to extend them.
In addition, a tax code overhaul proposal currently being considered by the House Ways and Means Committee would impose a 4 percent tax surcharge on individual filers with incomes greater than $150,000 and on couples with incomes greater than $200,000. According to the coalition, the combination of the proposed tax surcharge and the expiring tax cuts could raise marginal tax rates for individuals and small businesses from the current top rate of 35 percent to 44.2 percent.
Members of the Tax Relief Coalition include the U.S. Chamber of Commerce, the American Bankers Association, the Latin American Management Association, Exxon-Mobil and the Direct Marketing Association, among hundreds of other organizations and companies. The ICCFA appears to be the only association in the cemetery and funeral profession to partner with the Coalition.
For more information on the coalition, check www.taxreliefcoalition.org.

U.S. District Court clarifies funeral home ownership decision 

In December, the U.S. District Court in Maryland ruled on a motion submitted by plaintiffs in Brown v. Hovatter that requested an amendment of the court's earlier decision in October. The ICCFA had intervened in the case as a friend of the court. As previously reported in the December Washington Report, the federal court had ruled that the section of the state Morticians Act "which prohibits corporate ownership in Maryland with indefinite exemptions for corporations holding licenses existing as of June 1, 1945, violates the dormant Commerce Clause of the United States Constitution." However, the court upheld the section of the Morticians Act "which establishes a licensing scheme for the operation of funeral homes in Maryland." Uncertain of how the court's decision should be applied as a practical matter, the plaintiffs asked the court to amend its ruling. Instead of doing so, the court offered clarification.
Specifically, plaintiffs asked if the court's ruling "extend[ed] to non-mortician entrepreneurs and companies the same general right to own corporate-licensed funeral homes that was previously available only to those lucky few able to acquire one of Maryland's 58 'grandfathered' corporate funeral homes" or only "enjoined Maryland from denying corporate ownership to Maryland- licensed morticians." The court stated, "The latter is the holding of the case."
The court explained that its "prior ruling held that anyone capable of owning a funeral home in Maryland may do so in corporate form. ... However, defendants may, but are not obligated to, require that a licensed individual own or co-own a funeral home." Interestingly, the defendants, members of the Maryland Board of Morticians, "state in their response that they will not require that a licensed individual own or co-own a corporate funeral home, despite this Court's ruling that doing so was permissible under [the Constitution]."

AARP Magazine attacks prepaid funerals 

The current issue (Jan-Feb 2008) of AARP's magazine contains a lengthy article criticizing prepaid funeral contracts and contains cartoonish photographs with actors posing as greedy preneed salespersons stealing money. The article, ""R.I.P. Off," initially focuses on the Clayton Smart investigations in Tennessee and Michigan, but ultimately urges readers not to prepay any funeral arrangements: "Both AARP and the Funeral Consumer Alliance advise against pre-need contracts in most cases."
This article is similar to a story published in AARP's magazine about eight years ago, and even reuses the same title. AARP also invites readers to share their preneed funeral experiences, good or bad, on its message board. AARP states that it has over 39 million members age 50 and older. To date, a review of its message board indicates relatively few complaints from AARP members while offering a number of positive experiences with prepaid funeral arrangements. 
The article can be viewed on the AARP Web site at www.aarpmagazine.org/money/funeral_rip_off.html.