Employers Must Use Revised Form I-9, Employment Eligibility Verification

-USCIS will no longer accept previous versions of Form I-9

WASHINGTON—U.S. Citizenship and Immigration Services (USCIS) reminds employers that beginning today they must use the revised Form I-9, Employment Eligibility Verification (Revision 03/08/13)N for all new hires and reverifications. All employers are required to complete and retain a Form I-9 for each employee hired to work in the United States.

The revision date of the new Form I-9 is printed on the lower left corner of the form. Employers should not complete a new Form I-9 for existing employees, however, if a properly completed Form I-9 is already on file.

A Spanish version of Form I-9 (revision 03/08/13)N is available on the USCIS website for use in Puerto Rico only. Spanish-speaking employers and employees in the 50 states, Washington, D.C., and other U.S. territories may use the Spanish version for reference, but must complete and retain the English version of the form.

The revised forms are available online at www.uscis.gov/I-9. For more information, please call 888-464-4218. Representatives are available Monday through Friday, from 8 a.m. to 5 p.m. USCIS maintains a website, I-9 Central, to support Form I-9 users. USCIS has also scheduled free webinars to help employers learn about the new form.

To order forms, call USCIS toll-free at 1-800-870-3676. For free downloadable forms and information on USCIS programs, immigration laws, regulations, and procedures, please visitwww.uscis.gov. Follow us on Facebook, Twitter (@uscis), YouTube (/uscis) and the USCIS blogThe Beacon.

Pawnshop Unit Joins World’s Richest Man With Sale: Mexico Credit

By Brendan Case and Boris Korby

April 2 (Bloomberg) — Payroll lender Prestaciones Finmart SAPI is joining Carlos Slim, the world’s richest man, in selling bonds internationally that allow investors to profit from the world’s best-performing major currency.

Prestaciones Finmart, majority-owned by Austin, Texas-based pawnshop operator EZCORP Inc., plans to sell 750 million peso-linked ($60.7 million) three-year bonds, according to a person familiar with the sale. In the past two years, only Slim’s America Movil SAB and state-owned Petroleos Mexicanos, rated as many as eight levels higher than Finmart’s B+ grade from Fitch Ratings, have sold similar securities. Yields on America Movil’s notes due in 2022 have fallen 0.73 percentage point since they
were issued in December to 5.72 percent.

The peso has gained 4 percent against the dollar this year, the most among the world’s 16 major currencies, on speculation President Enrique Pena Nieto will overhaul tax and energy policies to propel growth in Latin America’s second-biggest economy. Demand for peso bonds issued overseas is likely to grow as declining yields on dollar-denominated debt prompt foreign investors to take on more risk, according to Silva Capital Management LLC. Average yields on emerging-market corporate bonds have tumbled 0.7 percentage point in the past year to 4.93 percent.

“There could be investors who are interested because it gives them currency exposure and lets them participate in the Mexico growth story,” Alejandro Urbina, who helps oversee about $800 million in emerging-market assets at Silva Capital, said in a telephone interview from Chicago. “What it does for the corporates is it expands the universe of potential investors for them and therefore increases the availability of capital.”

Payroll Loans

Javier Creel Moreno, chairman and executive president of Mexico City-based Prestaciones Finmart, and EZCORP spokesman Rick Bluntzer declined to comment on their financing plans.

Espirito Santo Investment Bank is arranging the transaction, said the person, who asked not to be identified because terms aren’t set.

Prestaciones Finmart provides payroll loans primarily to employees of Mexican government agencies, payable in installments that are deducted from customers’ wages. Loan
amounts range from 2,000 pesos to 100,000 pesos and average 16,000 pesos. Former U.S. Ambassador to Mexico Antonio Garza and Luis Tellez, chief executive officer of the Mexican stock exchange, sit on the lender’s board.

State Employees

Prestaciones Finmart’s Crediamigo operation has agreements covering 170 employers and 3.5 million employees, according to EZCORP. The Mexican Social Security Institute for State Workers, known as the ISSSTE, handles withholding on about 25 percent of its business while the Public Education Ministry accounts for 20 percent, according to an offering circular for the Finmart bond sale obtained by Bloomberg.

The company had a credit portfolio of 1.28 billion pesos as of Dec. 31, up 78 percent from two years earlier. Net income was 72.9 million pesos last year, compared with a loss of 90 million pesos in 2011.

Investors are turning to higher-yielding local-currency debt from emerging-market companies to bolster returns amid near-zero rates in the U.S., according to Eduardo Cortes, who helps manage $1.4 billion in debt at GIA Partners LLC.

“This all falls into a broader category of investors going to emerging markets, where you can pick up higher interest rates than are available in Japan, Europe, the U.S.,” Cortes said in a telephone interview from New York. “You can get exposure outside of the dollar as well, which is what a lot of investors
are looking for.”

‘Reputational Risks’

Fitch Ratings assigned a B+ ranking to Prestaciones Finmart on March 11, four levels below investment grade and eight steps less than America Movil’s A rating.

The rating reflects “its favorable business model granting loans to stable public sector employees with direct debit to their payrolls,” Alejandro Garcia, a Fitch analyst, said in the report. It takes into account “relatively high operational, political and reputational risks associated with this sector, as well as the exposure to fierce competition and the potential for rapidly changing market dynamics.”

While past-due loans almost tripled last year to 56.9 million pesos, the increase came off an “exceptionally” low level and was partly due to attempts to be more proactive in
measuring bad credit, Garcia said in a telephone interview from Monterrey, Mexico.

Teachers in the state of Puebla filed complaints last year with state prosecutors alleging that money was deducted from their pay by Crediamigo without having asked for a loan, according to La Jornada de Oriente newspaper and Diario Como newspaper. The company denied the allegations in a statement.

Prestaciones Finmart’s Creel Moreno declined to comment on the complaints.

Market ‘Froth’

On Jan. 19, 2012, EZCORP announced an agreement to buy a 60 percent stake in Prestaciones Finmart for $38.7 million in cash and possible additional amounts if the company achieves certain performance targets. Under the terms of the deal, EZCORP also agreed to inject an additional $12 million into the company alongside $8 million from minority shareholders. EZCORP also owns the Empeno Facil chain of Mexican pawnshops.

While America Movil’s notes are denominated and payable in pesos, Prestaciones Finmart’a bond payments will be determined in the local currency and converted by a foreign-exchange agent into dollars two days before payment and settled in U.S. currency.

Marco Aurelio de Sa, the head of fixed-income trading at Credit Agricole’s Miami brokerage, says Prestaciones Finmart’s offering may be a sign of “froth” in the market and that more peso gains will be limited after the Mexican central bank cut its benchmark interest rate by 0.5 percentage point to a record-low 4 percent on March 8.

Yield Spread

“The Mexican peso is still an attractive play but it’s kind of a crowded trade at this point,” he said. “Mexico recently cut rates, so it’s less attractive.”

The extra yield investors demand to own Mexican government dollar bonds instead of Treasuries climbed one basis point, or 0.01 percentage point, to 183 basis points yesterday, according to JPMorgan.

The cost to protect Mexican debt against non-payment for five years with credit-default swaps rose one basis point to 98 basis points, according to data compiled by Bloomberg.
Yields on Mexican interbank rate futures contracts due in December, known as TIIE, were unchanged at 4.38 percent yesterday.

The peso weakened 0.3 percent to 12.3642 per dollar.

Pemex Sale

Prestaciones Finmart is selling bonds 16 months after Pemex, as the state-controlled oil producer is known, sold 10 billion of notes linked to the peso to yield 7.65 percent. The
securities now yield 5.68 percent.

“As often happens, these markets are blazed by the big guys,” GIA Partners’ Cortes said. “A lot of these non-U.S. capital markets, pesos and other countries that are not traditional in the investment community, are going to expand over time. There’s plenty of demand.”

Hoping For the Best, Preparing For the Worst


After Hurricane Sandy ripped along the east coast last fall, many businesses found themselves scrambling to restore the power — and the income — they lost. Electricity was out for weeks in some areas. Normal transportation routes were inaccessible. Supply line schedules were disrupted. Some businesses survived, others shut down.

In Atlantic City, debris littered streets, from downed tree limbs to pieces of the iconic boardwalk. Tens of thousands of residents were without electricity. The barrier islands took the brunt of the storm.

For Charles Place, chief financial officer for Atlantic City Check Cashing, the key is to be flexible.

“You must know how to adapt,” he said. One of his stores is located on the barrier island. The store’s staff prepared for Sandy by setting merchandise up off of the floor but did not seal the backdoor to the store. Water damage resulted.

“We definitely learned that we must seal the door,” he says. “And make sure everything is up and away from the water. Water may kill rugs but it doesn’t have to kill our machines.”
“I’ve lived here 25 years. You learn how to prepare and you keep a generator handy.”

More People Affected

Natural disasters such as Hurricane Sandy, and more recently, the winter storm that dumped two to three feet of snow throughout the Northeast, can shut down businesses for days and even weeks. The loss of income can be crippling and some businesses may never recover.

Forecasting such events has improved significantly in recent years but it is still difficult for forecasters to project where a hurricane may make landfall or when a tornado may strike.

It is estimated more than half — 53 percent — of Americans live within 50 miles of a coast. As more people migrate to the Gulf and Atlantic coastlines, and more businesses follow, the probability of hurricanes and other natural disasters striking densely-populated areas will increase.

AIR Worldwide put the insured property of coastal property from Texas to Maine at $8.9 trillion in 2007. This is up sharply from $7.2 trillion just three years before.

Pat Ballis with Mesirow Insurance Services said planning for disasters requires looking at your business and thinking about what services you need to provide your customers. If your records aren’t on computers, you need to make sure they’re backed up and off premises, he says.

Ballis also cautions that where your backup system is located can be important. “If the vendor who provides your backup service is located in same area where the storm hits, both you and your vendor could be hurt. You should seriously consider having your backup services located elsewhere geographically,” he says.

But if a check casher isn’t on computer, there’s not much they can do for off-premise backup.” If you’re working with a ledger and you put it in a safe, you’re still at risk because a flood can destroy anything in a safe,” Ballis says.

Interruption Insurance

Planning for disasters includes having a business interruption insurance policy in place. Small businesses face the greatest risk because they many lack such insurance and are unable to survive lengthy periods without income.

Companies that own policies typically have insurance to cover losses caused by physical damage. Business interruption insurance covers claims for loss of sales.

Claims for business interruption insurance soared after Hurricane Sandy. But terms of each policy affects a claim, as Place explained. “Yes, we have business interruption insurance but we didn’t qualify because we weren’t so interrupted to make a claim.”

Still, such insurance is critical. “We do have business interruption insurance, but we’ve never had a fire,” Harry Newman, manager and owner of B & I Check Cashing in Lakewood, Wash., said. His store is located inside a mall that is still susceptible to the elements.

“Bad weather can still close us down. Not long ago, we had a really bad storm that ripped off part of the mall and the roof of a store, too. Who knows when that may happen? You need insurance.”

Ballis acknowledges flood insurance is unavailable to many businesses, though water damage from flooding is a common issue for locations near locations near rivers, lakes and oceans. “A business owner may be able to buy flood insurance through the federal government,” he suggests.

Employee Communications

Communications with employees is also a critical consideration when planning for a disaster. Kenny Luquis helps run his family’s check cashing stores in the Bronx. Before the February 8 snow fell, they were ready. “We watch the latest news updates on TVs in all five of our stores so we stay on top of the weather,” he said.

The morning after the snowstorm dropped more than two feet of snow throughout the Northeast, he felt relatively lucky. “We opened an hour late,” he said. “There were problems with frozen locks at one or two stores but otherwise, we were okay. Everyone is on email and we have fax. We fax stores to let them know.”

Luquis has also been fortunate with power outages. “One time, we lost power in our store and we couldn’t plug in anything, but I had an electrician in and we were back up and running by the middle of the day,” he says.

Some businesses have backup generators available in case of an outage, but Luquis said they’re not practical for his stores.

“Generators are expensive and besides, you have to have them outside because of the fumes. Having a store in the city makes it kind of tough — you don’t know when you’ll go outside and the generator’s stolen.”

His stores use backup drives to store their data. “We don’t have a central server,” he says. “With services such as direct deposit, it’s important to be on computers. We’re backed up on a hard drive, which we lock in a safe every night. This has worked for us. We have backup drives, plug in our modem and we’re ready to go.”

Store Cut Off

Place had disaster plans ready for ACCC when Hurricane Sandy hit Atlantic City, but still suffered temporary setbacks because one store is located on the barrier island. “Nobody could get to the islands,” he says. But they quickly adapted.

FiSCA Attacks Treasury Election Benefit Move


The United States Treasury decree that all recipients of federal government benefits must select a form of electronic means of payment — either direct deposit or debit card — for their benefits by March 1, 2013, or be in violation of Federal law has drawn harsh criticism from the Financial Service Centers of America.

According to FiSCA, the Treasury’s position is inconsistent with testimony offered to Congress last fall which clearly stated that beneficiaries would continue to receive their payments via paper check

if they had not signed up for an electronic form of payment.

As a result, FiSCA has launched a campaign to raise awareness that customers can still receive their federal benefits via paper checks after March 1.

Can It or Can’t It

There have been conflicting reports on whether the Treasury can force such a mandate. Walt Henderson, director of the Go Direct campaign for the U.S. Treasury, has stated in various press reports that Treasury cannot force recipients to accept electronic delivery methods.

In a New York Times article dated January 10, Henderson was quoted as saying, “We don’t have the authority to change their payment method without their permission.”

FiSCA is providing in-store, digital and online materials to help its members communicate with their customers about the options they have for receiving their federal benefits.
“The reality is that recipients who have not signed up for electronic payments will still receive a paper check,” says Joseph M. Doyle, chairman of FiSCA.

“Nevertheless, there is a great deal of confusion among our customers as to what is going to happen after March 1. A significant segment of our customers have told us they don’t want to receive their federal payments electronically. For them, paper checks work best, and they are looking to us for solutions. They need to know they do not have to select one of Treasury’s preferred options. Checks will still be mailed. In addition, financial service centers have an array of options that can better meet customers’ needs.”

“We view this awareness campaign as an essential customer service initiative,” Doyle continues. “Our customers have questions when it comes to receiving federal payments, and we have the answers.”

Treasury Testimony

On Sept. 12, 2012, the House Committee on Ways and Means, Subcommittee on Social Security, held a hearing on the rule requiring electronic payment of federal benefits by March, 2013.

Decoding the R&D Tax Credit for Lead Generators


In 1981, in the wake of a recession, Congress enacted a tax credit designed to reverse the accelerated trends of a diminishing domestic ability to compete with foreign markets. Thus began the American investment in research and development.

The Credit for Increasing Research Activities, more commonly known as The Research and Development Tax Credit, has broad bipartisan support in Congress, as illustrated through 30 years of progressive expansion, refinement, and more than a dozen renewals.

Today, the United States assigns nearly $9 billion a year in federal R&D Tax Credits, making it one of the most lucrative tax incentives available in this country.

In addition, more than 30 states offer their own version of the credit. In some states there are fewer limiting factors and a wider scope for which the credits may be applied, thus doubling and tripling the overall benefit and impact when captured in conjunction with the federal credit.

The concept of R&D usually conjures up visions of white lab coats and microscopes. As a result, many software companies are unaware that the government offers incentives for engaging in activities that are often misclassified by programmers as “just another day in the office.”

Additionally, those who are aware of the R&D credit often lack the proper expertise and guidance, and consequently fail to capture and/or support all eligible expenses.

Based on Past

The myth that the R&D credit is only propagated in laboratories where groundbreaking innovations or patentable products are the focus comes from the fact that for the large majority of its existence, that was a relatively accurate depiction. The traditional definitions and the tax definitions of R&D were nearly synonymous.

Congress recently recognized, however, that restrictions such as the Discovery Test had been limiting the credit’s ability to fulfill its purpose for small and medium-sized businesses.

Navigating through another recession, it was again determined that investing in R&D would expedite our recovery, so the Discovery Test was thrown out along with a documentation requirement in an effort to stimulate economic growth.

Today, for software developers, one simply needs to develop new or improved software features or functionality and go through a development process (agile, waterfall, prototyping, spiral, RAD, etc.) to qualify.

For illustrative purposes, we turn to a lead generation firm that claimed the R&D credit for a six-figure refund. LeadGenCo employs teams of programmers who develop lead generation software and perform quality assurance tests. It also employs analysts, project managers, and executives who engage in the conceptualization process and/or the supervision of the programming teams.

Its development stage using the waterfall development methodology began with a requirements definition, then moved onto specification, system and software design, implementation and unit testing, integration and systems testing, acceptance testing, and eventually settled into operations and maintenance.

Passing the Test

As with any benefit offered by the government, there are requirements that every business must meet in order to qualify.

For the R&D Tax Credit, there is a four-part test:
1. There must be an attempt to develop a new or improved business component (e.g. software).
2. It must be technological in nature.
3. There must be a degree of uncertainty.
4. There must be a process of experimentation.

New or Improved Business Components

The U.S. Tax Code describes six elements that qualify as Business Components: products, processes, techniques, inventions, formulae, and computer software.

To qualify, the goal in the development of the software must be to create new or improve existing functionality, performance, reliability, or qualities (a “permitted purpose”).

The most obvious qualifying projects are the newer ones, and with some companies, it is apparent that the tests easily will be met. If the software programming and development supports the creation of new business components, it is a simple case to support the notion that a project containing a new software module would qualify.

And while the development of new programs is worthy of focus when capturing the R&D credit, one should not overlook the development of improved software. When a new software module is ready for its intended use, by no means is the development complete. In fact, it may never be.

Companies take small steps, improving a product or process gradually. Think about how many updates a single iPhone or Android app goes through. The developers are fixing bugs, improving performance and processes, adding new features, and refining the way it communicates with the hardware and other apps.

As long as there is an improvement of the software program or a creation of something entirely new, and if the work is aimed at a permitted purpose, it will satisfy the New or Improved Business Component test.

Permitted Purpose

LeadGenCo enhanced existing software to improve its processing ability. It also expanded the types of data that the system could handle. These improvements were for a permitted purpose — to improve the functionality and performance of the software.

Not everything it did was ultimately considered qualified for R&D, such as cosmetic changes to an interface and syntax error corrections (activities which related primarily to style or taste were not eligible for the credit ), so the wages tied to those hours were not applied.

However, there were significant hours left to capture because of the type of programming in which the company was engaged.

Technological in Nature

The goal of the R&D credit is meant to incentivize technical, scientific, and engineering-based activities. Programming naturally relies on principles of computer science, making this an easy test for software companies to pass.

Examples of developmental activities eligible for R&D tax incentives:
• Developing new or improved technologies
• Developing requirements, domain, software elements, or scope analysis for a new functional software enhancement
• Evaluating and establishing functional specifications
• Designing and developing the structural software architecture
• Establishing electronic interfaces and functional relationships between various software modules
• Programming software source code
• Compiling and testing source code
• Conducting unit, integration, functional, performance, and regression testing


Defining the uncertainty faced within a project can be complex. Under current regulations, the uncertainties faced should be identified at the outset of a research project.

It will be determined that “uncertainty exists if the information available to the taxpayer does not establish the capability or method of developing or improving the business component, or the appropriate design of the business component.”

In software development, there are a wide variety of situations where uncertainty may occur. Though there may not always be significant uncertainty regarding the capability or method of developing a new or improved software program, there is typically uncertainty as to the most efficient design. The key is that all three types of uncertainty need not exist; any one area will qualify on its own.