Broker Check

November 4, 1994

NJDOL talks to IRS

          The New Jersey Department of Labor continues to send information to the Internal Revenue service concerning its examinations in which payments treated as having been made to independent contractors have been reclassified as wages paid to employees in accordance with the narrow three factor test found in the Unemployment Compensation Law. The Employment Tax Adjustment Program (ETAP) unit of the IRS, located in Detroit, receives this information from many states including New Jersey and generates proposed employment tax adjustments based upon the state information.

          Due to the relatively low wage bases and tax rates involved, taxpayers as well as practitioners have been quick to settle NJDOL examinations in which payments to independent contractors were reclassified as employee wages without much of a fight. You should approach such NJDOL examinations (as well as other states) with the assumption that any adjustments will automatically result in proposed IRS adjustments at much higher tax rates on considerably higher wage bases.

L`Oreal Complies With Arab Boycott

          L`Oreal, a cosmetics company in which Nazi collaborators have held high executive and ownership positions has agreed to comply with the economic boycott of Israel. L`Oreal which bought Helena Rubenstein cosmetics, complied with Arab demands to shut down the Helena Rubenstein unit in Israel. dismiss Jewish employees in the U.S. and elsewhere and to remove the use of the Helena Rubenstein name. The United States Department of Commerce has launched an investigation into L`Oreal`s role in the illegal Arab boycott.

          The Jewish War Veterans have asked for a boycott of L`Oreal and Cosmair products which include Plenitude skin care line, Vanderbilt fragrance, Studio Line, Ralph Lauren Group, Giorgio Armani, Armani for Men, Paloma Picasso, LouLou, Anais Anais, Minotaure, Lancome cosmetics, Upsy Daisy, Dualite makeup, Blushesse, Color Riche lipstick, Lash Out/Splash Put mascara, Excellence Creme permanent hair color, Horizon for Men fragrance and Color Riche nail color.