Taking work home won't cut it with IRSAs if it wasn't bad...

WORKPLACE & CAREERS

April 02, 1993|By Kim Clark | Kim Clark,Staff Writer

Taking work home won't cut it with IRS

As if it wasn't bad enough to have to bring work home from the office. Now, the IRS has made it fiscally dangerous to take a tax deduction for a home office, local tax advisers say.

Because of a Supreme Court ruling narrowing the eligibility for the home office deduction, many working Marylanders are forgoing the deduction this year, they say. That will mean higher tax bills this April 15.

Donna Schoenberger, tax manager for Bel Air-based Christopher Seling & Assoc., says several of her clients had to give up their home office write-off this year because of the ruling.

The Internal Revenue Service has been tightening eligibility for the home office deduction for years. And many people believe that asking for a home office deduction is a flag for an audit, she says.

But this year, for the first time, the IRS is saying that only home offices that are workers' "principal place of business" can win a deduction.

As a result, Ms. Schoenberger tells most of her clients not to bother angling for the deduction.

"In the last year or two, we've had more people asking about it. But we find the risk involved is not worth the benefit," she said.

Temporary executive liquidated Hamburgers

First there was the rent-a-car; then the rent-a-receptionist. Now there's rent-an-executive.

As companies increasingly rely on temporary workers, more are seeking temporary bosses, too.

And one of the first of this new breed just closed down the Baltimore-based Hamburgers Clothiers stores.

Philip Jacoby, a University of Maryland graduate who had worked as an accountant and financial officer for the consulting firm of Arthur Andersen & Co. and the regional stock firm of Johnston Lemon Co., last month finished a half-year stint as chief operating officer of The Joseph & Feiss Co., the Cleveland-based owner of the defunct chain.

Joseph & Feiss, owned by Hugo Boss SA of Germany, didn't want to comment on its use of a temporary executive.

But the 41-year-old Mr. Jacoby says he loved the assignment, even though it was, at times, emotionally wrenching.

Mr. Jacoby liquidated all 12 Hamburgers stores, as well as 27 other stores that Joseph & Feiss owned.

The best part of the job, he says, was "saving [the owners] a lot of money" by figuring out the best way to sell inventory and terminate leases.

The worst: dismissing longtime workers. "Hamburgers had been around for 150 years. Some of the employees were there for 35 years. It was not easy to do," especially for a newcomer.

But Mr. Jacoby says it was easier for him to lay the company to rest than it would have been for a Hamburgers veteran. And that's why his bosses hired him.

Still, he couldn't help becoming "personally involved" with the people he had to fire, he says.

In fact, the job made such a difference in the life of the former Washington resident that he's moving to Baltimore. And two former Hamburgers staffers will be attending his wedding.

Mr. Jacoby returned to the region last year after a try at becoming a California real estate developer fizzled. He signed -- up for temporary executive assignments from Morgan & Banks, a Virginia-based agency.

Morgan & Banks, an Australian firm that opened its U.S. office three years ago, says it now has about 50 temporary executives working in posts around the country.

Mr. Jacoby has gone on to find temporary assignments on his own. He has already begun an assignment to help the Building Owners and Managers Institute in Arnold install a computer system.

He likes the challenge of changing jobs every couple of months.

But, he conceded, "if you are looking to put kids through college, it is tough to rely on."

Lump sum loses favor as raise substitute

During the 1980s, many employers pushed workers to trade annual raises for lump-sum payments that didn't increase their base salary, and helped the employer keep costs down.

But that trend seems to be dying out.

The latest U.S. government analysis of union settlements shows that in only 20 of the 382 large employer contracts negotiated in 1992 did unions trade upfront cash payments for raises.

The Bureau of Labor Statistics reports that nearly three times as many contracts traded back -- giving their workers annual raises instead of cash payments.

In 1991, when lump sums were most popular, they were accepted by 43 percent of the nation's 5.5 million workers covered by collective bargaining agreements.

By early 1993, that ratio had dropped significantly. Only a third of the workers were receiving lump sums.

Teamsters on strike at Joseph & Towers

About 70 Teamsters are striking Joseph & Towers, a Baltimore-based repairer of diesel engines.

Company attorney Joseph Pokempner says the strike against the 56-year-old company, which also has an office in Beltsville, is over salary and benefit provisions of a proposed union contract. A three-year contract expired last week.

The strike started on Monday, Mr. Pokempner said.

He said a federal mediator has been appointed.

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