EXECUTIVE COUNCIL NOTES By Annabelle Clinton
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Secretary-Treasurer
Minutes Of The Executive Council Meeting The Executive Council met on December 11, 1982, and addressed the following issues: YOUNG LAWYERS SECTION PROJECTS: The Executive Council will recommend to the House of Delegates a project sponsored by the Young Lawyers Section which will provide for the pro bono representation of the low-income elderly in Arkansas. The Disaster Relief Committee has made the necessary arrangements for responding to requests for legal service teams in disaster areas so designated by the President as a result of the recent tornados and flooding. The Young Lawyers Division of the American Bar Association will have an affiliate outreach regional program at Hot Springs, Arkansas, in March, 1983. The Council approved the allocation of $1,000.00 to the Young Lawyers Section for payment of expenses incurred by that Section's Executive Council in attending the ABA outreach program at Hot Springs. FTC AND LSC: The Council adopted a memorial on lawyers and the Federal Trade Commission urging U.S. Senators Dale Bumpers and David Pryor to support and vote for HR 6995 or Senate 2499 with the McClure Amendment attached, which bills re-
strict the jurisdiction of the Federal Trade Commission with regard to lawyers and other professionals regulated by state regulatory authorities. With regard to the national Legal Services Corporation, President Shaver reiterated that the Association supports LSC but would not become involved in the controversy over restricting its activities and funding. BANKRUPTCY REFORM: The Council requested the Creditors' Rights Committee to submit a resolution, in alternative forms, for consideration by the House of Delegates at its mid-year meeting. Alternative A favors enactment of Federal legislation providing for the appointment of additional judges who are qualified to exercise the Federal judicial power under Article III of the Constitution of the United States. Alternative B favors deferral of enactment of permanent Federal legislation to correct constitutional infirmities of the Bankruptcy Reform Act of 1978 until the organized bar of Arkansas and the United States have had an opportunity to develop and adopt recommendations concerning such legislation. LEGISLATION: The Association's legislative package has been prepared and will be filed at the proper time. Re-
gional briefings regarding the Association's legislative package have been completed. However, LAWPAC contributions for the support of lobbying efforts by the Association total only $2,600.00 as of December 1, 1982. The Council requested the Jurisprudence and Law Reform Committee to refer to the House of Delegates at its mid-year meeting a proposed constitutional amendment to remove jurisdiction for juvenile matters from the county court. The Council voted to support the Arkansas Judicial Council's proposed amendments to the judicial retirement law. OTHER MAnERS: The Association has submitted a list of lawyers to the Arkansas Supreme Court for nomination to the nine-member Board of Legal Specialization. A petition for interest on lawyers' trust accounts has been filed with the Arkansas Supreme Court. The Council approved a proposal by Mr. Robert P. Wilkins of South Carolina to offer his new book on wills and trusts with an Arkansas supplement and an annual service to Arkansas lawyers under the auspices of the Arkansas Bar Association at a cost of $50.00 for a period of 60-90 days.
A Tax Trap
If the clients had paid these expenses independently as they were incurred, no tax implications would have arisen whatsoever, but if Smith & Jones deduct the entire $4,800 annual amount as expenses but do not include this same amount as income when repaid, they have in reality claimed $4,800 in expenses to which they were not entitled. 4. The Answer. The answer is not to discontinue the use of a good TAB system, the answer is to acquire software which will perform all of the bookkeeping functions for the office,
including preparation of fully-aajusted GL accounts, as well as handling all TAB functions properly. Thus, in a fully-integrated data processing system, when telephone, photocopy or other 'expenses' are charged to clients, they are automatically deducted from the appropriate expense accounts. Then, if these 'charges'now booked properly as client 'advances'-are later reduced during bill preparation or 'written off' as uncollectible, they are properly deducted at that time as bad debt or miscellaneous expense.
Continued from page 84 fee income for tax purposes. Then, when tax returns are prepared, oniy the accumulated 12-month totals of fee income are included but the entire totals of the telephone and photocopy expense accounts are deducted. In sum, advances repaid are not included for tax purposes but the same amounts are deducted as expenses. 3. Examples. Smith & Jones, a 4-man firm, advance $400 a month on the average for telephone and photocopy expenses allocable to clients.
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