ROADCHECK 2010

During the 72-hour period in the second week of this month, June 8-10, thousands of inspectors will be examining over 70,000 vehicles.

What they find or don’t find can affect your CSA 2010 scores. And remember, even violations not resulting in an out-of-service order will be counted into your CSA 2010 Safety Measurement System. Some facts to consider regarding last years Road Check are: 1) A record of 72,782 inspection were done, 2) Of the vehicles inspected, 19.6% were placed out of service for mechanical problems which was approximately 14,130 vehicles and 3) On average, 17 trucks or buses were inspected very minute.

CARB Reminder

As you know as of January 8, 2010, the Truck and Bus Regulation has become law. Affected vehicles include most diesel fueled trucks and buses with a gross vehicle weight rating (GVWR) greater than 14,000 pounds. Most fleets need to report and begin cleanup requirements starting January 2011: fleets with 3 or fewer vehicles that report in January 2011 can delay cleanup requirements until January 2014.

Reporting was required beginning March 31, 2010 at www.arb.ca.gov/dieseltruck for fleets: 1) to qualify for agriculture vehicle provisions (need odometer reading from January 2, 2010) and 2) to meet two engines street sweeper requirements for auxiliary tier 0 engines (must report hour meter reading from January 2, 2010).

Any person selling a vehicle with an engine subject to the Truck and Bus regulation must provide specific disclosure language in writing to the buyer on the bill of sale.

The Tractor and Trailer Greenhouse Gas Regulation is also in effect. 2011 model year and newer box type trailers and tractors that pull them must be SmartWay Certified or equivalent. Existing equipment must meet similar requirements starting 2012 for tractors and 2013 for trailers. Additional flexibility is available for fleets that report by July 1, 2010 at www.arb.ca.gov/cc/hdghg/hdghg.htm.

For more information call 866-636-3735 or by email at 866-6diesel@arb.ca.gov. Sign up for email notifications and get additional information at www.arb.ca.gov/dieseltruck. This will take you to the Truck and Bus Regulation where at the bottom of the left side you will find the email list.

The Independent Contractor of the Future

If you remember back in April, I informed our readers how the government was cracking down on independent contractors by going after motor carriers claiming they were misclassifying their drivers. The motive is very simple – taxes. It‘s that simple, it’s all about getting your money. The government has found that it is easier to get tax money from you, the independent, by going after the not so smart motor carrier. They penalize the carrier by a one time fine but now the IRS knows who you are and where you are. The IRS can now tax you year after year after year for the rest of your life. Not a bad deal for the government.

Leona Hemsley, who once owned the Empire State Building, said, “Only little people pay taxes.”  Well, she was right but she said it too loudly and drew attention to herself. She wound up in jail for tax evasion.

Fact in 1935, there was a court case (Gregory v. Helvering, 293 U.S. 454) that said, “ The legal right of a taxpayer to decrease the amount of what otherwise would be his taxes, or altogether avoid them, by means which the law permits, cannot be doubted.”

Fact, in another case, Raymond Pearson Motor Co v Commission, 246 F.2d 509, it states, “Taxpayers are NOT REQUIRED to continue that form of organization which results in the maximum tax.”

Fact, in 1943, the United States Supreme Court said: Whether the purpose (of incorporating) be to gain an advantage under the law of the state of incorporation or to avoid or comply with the demand of creditors… so long as that purpose is the equivalent of a business activity or its following by the carrying on of businesses by the corporation, the corporation remains a separate taxable entity…

 Fact, the New York Times reported on April 14, 2010 that 47% of American households owe NO income tax for 2009. That leaves 53 % of American paying the IRS. Were you one?

Taking all of these facts above into consideration, coupled with the fact of the upcoming FMCSA regulations (EOBR & CSA 2010), ALL independent contractors need to ask themselves if they are going to stay in this industry as a Professional Driver, whether it be an over-the-road, local or a “port hauler” as the IRS classifies the intermodal group or not. In the eyes of the industry and the law, you are already held as a professional but most of you just think of yourself as just a driver.

So if you decide to stay driving in this industry as an Independent Contractor, then you better get smart and turn into a Professional Driver using a corporate structure, as soon as possible, not only to protect your personal assets but to reduce your tax liability exposure.

You ask why go to such extremes and extra cost? Simple – self preservation and respect. I want you to think about all the things you have acquired in your life. Do you own any rentals, property, motor home, boat, motorcycles etc?

One motor vehicle accident could wipe that all away, if you’re a sole proprietor. But if your company had a corporation, then only the assets of the corporation would be at risk and not your personal items.

It boils down to this; the Independent Contractor of the future will be a Professional Driver, have a clean driving record and be incorporated. This is the motor carriers “dream contractor”. The carriers will trample over themselves to get to your door, offer you more money, etc, so that you will drive for them.

Whether you choose a “C”, “S” or LLC to incorporate, you will be ahead of the game. You could even get a group of guys together and form a LLC to keep cost down.