Penalty Killer

A week ago today, the last issue of the Rocky Mountain News hit newsstands across Denver. The paper’s owner, E.W. Scripps Company, closed the Pulitzer Prize-winning paper to the shock of the paper’s staff and readers. Other papers could soon face the same demise. We speak to Newspaper Guild president Bernie Lunzer and Laura Frank, until last week an investigative reporter at the Rocky Mountain News.

Generally, businesses and trusts and estates in Los Angeles County, Orange County, Santa Barbara County and Ventura County, California need a new employer identification number (“EIN”) when their ownership or structure has changed. Changing the name of your business does not require you to obtain a new EIN.

What follows are some general rules about when getting a new federal EIN may or may not be appropriate:

Trusts
You will be required to obtain a new EIN if any of the following statements are true.
• One person is the grantor/maker of many trusts.
• A trust changes to an estate.
• A living or intervivos trust changes to a testamentary trust.
• A living trust terminates by distributing its property to a residual trust.

You will not be required to obtain a new EIN if any of the following statements are true.
• The trustee changes.
• The grantor or beneficiary changes his/her name or address

Estates
You will be required to obtain a new EIN if any of the following statements are true.
• A trust is created with funds from the estate (not simply a continuation of the estate).
• You represent an estate that operates a business after the owner's death.

You will not be required to obtain a new EIN if any of the following statement is true.
• The administrator, personal representative, or executor changes his/her name or address.

Limited Liability Company (LLC)
An LLC is a new entity created by state statute. The IRS did not create a new tax classification for the LLC when it was created by the states; instead IRS uses the tax entity classifications it has always had for business taxpayers: corporation, partnership, or sole proprietor. An LLC is always classified by the IRS as one of these types of taxable entities.

Corporations
You will be required to obtain a new EIN if any of the following statements are true.
• A corporation receives a new charter from the secretary of state.
• You are a subsidiary of a corporation using the parent's EIN or you become a subsidiary of a corporation.
• You change to a partnership or a sole proprietorship.
• A new corporation is created after a statutory merger.

You will not be required to obtain a new EIN if any of the following statements are true.
• You are a division of a corporation.
• The surviving corporation uses the existing EIN after a corporate merger.
• A corporation declares bankruptcy.
• The corporate name or location changes.
• A corporation chooses to be taxed as an S corporation.
• Reorganization of a corporation changes only the identity or place.

Sole Proprietors
You will be required to obtain a new EIN if any of the following statements are true.
• You are subject to a bankruptcy proceeding.
• You incorporate.
• You take in partners and operate as a partnership.
• You purchase or inherit an existing business that you operate as a sole proprietorship.

You will not be required to obtain a new EIN if any of the following statements are true.
• You change the name of your business.
• You change your location and/or add other locations.
• You operate multiple businesses.

Partnerships
You will be required to obtain a new EIN if any of the following statements are true.
• You incorporate.
• Your partnership is taken over by one of the partners and is operated as a sole proprietorship.
• You end an old partnership and begin a new one.

You will not be required to obtain a new EIN if any of the following statements are true.
• The partnership declares bankruptcy.
• The partnership name changes.
• You change the location of the partnership or add other locations.
• A new partnership is formed as a result of the termination of a partnership under IRC section 708(b)(1)(B).
• 50 percent or more of the ownership of the partnership (measured by interests in capital and profits) changes hands within a twelve-month period (terminated partnerships under Reg. 301.6109-1).

President Obama hosted a White House summit Thursday on reforming healthcare. While President Obama said every idea must be considered, the idea of creating a single-payer national health insurance program appears to have already been rejected. We speak to Harper’s senior editor Luke Mitchell, author of the article “Sick in the Head: Why America Won’t Get the Health-Care System It Needs.”

Senator Carolyn McGinn of Kansas (pictured) recently published an op-ed calling for an end to the death penalty because it is too costly and does not benefit the people. Sen. McGinn, a Republican from Sedgwick, is the sponsor of a bill that would replace the death penalty with a sentence of life without parole.  She explained that in light of the state’s budget deficit, Kansas is looking at ways to reduce government spending.  “One policy change being considered is whether the death penalty is worth its higher cost to Kansas citizens, versus the alternative sentence of life in prison without parole we now have on the books,” she wrote.  She pointed to a Kansas legislative report that found "the estimated median cost of a case in which the death sentence was given was about 70% more than the median cost of a non-death penalty murder case.

As many as 143 soldiers took their own lives last year, the highest rate of suicides among US troops ever. We speak with Salon.com correspondent Mark Benjamin, co-author of an in-depth investigation of suicides at an army base in Colorado.

Erik Prince, the founder of Blackwater, has announced his resignation as the company’s CEO. The move comes weeks after the company changed its name to Xe in an attempt to rebrand the firm. Jeremy Scahill, author of Blackwater: The Rise of the World’s Most Powerful Mercenary Army, assesses the latest developments.

President Obama’s plan to withdraw US combat troops from Iraq has both been hailed by some as a signal of the coming end of the war while criticized by others as an extension of the occupation. We host a debate between Lawrence Korb, the former assistant secretary of defense under President Reagan, and Jeremy Scahill, award-winning author and investigative journalist.

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