***PICB*** PRINTING INDUSTRY CREDIT BUREAU ***PICB***
WHERE'S THE MONEY?
PICB'S PERIODICAL DEDICATED TO MAINTAINING PROFITABILITY IN THE GRAPHIC ART INDUSTRY THROUGH GOOD CREDIT POLICIES
PRINTING INDUSTRY CREDIT BUREAU 
(847) 265-0400
ISSUE # 2
DECEMBER 2011
ETET CREDIT TIP LOGO

Did you know: That granting credit without considering the consequences can be like kissing enchanted frogs? While you hope for a prince, when you kiss a frog there is always the risk you will find an ogre instead.

 

Ogres will always exist in the business world as a curse to hard work and perseverance. An Ogre's pledge is to profit at another's expense. They are masters of deception, always evolving to avoid detection. Business people would do well to remember looks can be deceiving.

 

PICB'S TOP TIPS FOR DECEPTION PREVENTION:

  • Use  PICB's 'Riskee Business' to search our extensive database to determine if there have been any prior collection problems.
  • Verify addresses. Legitimate businesses have proper addresses and do not operate from mail drops, post office boxes, or transient office space.
  • Verify phone numbers. Fake businesses use cell phones that cannot be traced and do not have published phone numbers.
  • Verify business registrations. Businesses that fail to maintain proper registration and licensing tend to be poorly run.  
  • Look into available civil records to identify potential legal problems. One lawsuit may be an anomaly but multiple suits may indicate money troubles.
  • Review UCC filings. Businesses that are heavily leveraged are poor credit risks because too many liens reduce cash flow.  
  • Look for potential tax liens. Business that have current or recent tax liens are potentially operating on borrowed time. Taxing authorities ALWAYS trump creditors.
  • Use PICB's web-portal 'RESOURCES' to make research easier. Just click on any state and follow the hyper-links to government sponsored websites that provide free public records that may be useful in identifying potential risks.
  • When in doubt GET CASH!

       Remember, if you don't look for Ogres they'll find you!

 
DEWEY CHI'TING
LARSON  NY
 DECEMBER CARTOON
 
ASK AN ATTORNEY
 
Q: AFTER ALL COLLECTIONS FAILED, AND WE ARE FORCED TO WRITE A CUSTOMER OFF AS BAD DEBT, IS THERE A WAY TO PROPERLY NOTIFY THE IRS THAT THE DEBT HAS BEEN WRITTEN OFF AS NON-PAYMENT AND SHOULD NOT BE REPORTED AS AN EXPENSE?  

 

A: If the business is on an accrual basis for their accounting, then the obligation not paid by the debtor was taken as income previously. In that case it should be listed under expenses as a bad debt. Client will have to have sufficient information to show that they made substantial efforts to collect the account and that it was written off as uncollected after those efforts were taken. Obviously, the ultimate situation would be if there was a bankruptcy, but this is not necessary as long as there is a file to show substantial efforts. 

 

If the client is on a cash basis, then the obligation due by the debtor was never picked up as income and, therefore, no adjustment is necessary on client's tax form and no deduction is available for that "bad debt." 

 

On a related note, client can send out a 1099 form to the IRS if they are writing the bad debt off, listing the debtors name, address, and ID number. Ultimately the IRS may then make sure the debtor lists the bad debt as income on their taxes. This does not do anything to collect the debt, but may give the client some satisfaction that the debtor is not completely getting away with non-payment. 

 

William Rinehart

Rinehart, Scaffidi, & Mathews

Milwaukee, WI 

  

 

 

A:  The short answer to your question is easy. A 1099C can be issued to a debtor for cancellation of indebtedness income. In other words, when you write off the debt as a loss it is considered income to your debtor. Getting there is a bit more complex. The IRS says a debt becomes worthless when the surrounding facts and circumstances indicate there is no reasonable expectation of payment. To show that a debt is worthless, you must establish that you have taken reasonable steps to collect the debt. It is not necessary to go to court if you can show that a judgment from the court cannot be collected. You may take the deduction only in the year the debt becomes worthless. You do not have to wait until a debt is due to determine whether it is worthless.

 

What do you need to issue the 1099 C? First, you need the debtor tax ID or social security number. The first place to look is the credit application you had your buyer complete. If this is not part of your credit approval process you are likely without recourse. Without it you will be unsuccessful achieving your objective. Futhermore, a bankrupt debtor will not be effected by it.

 

Jay C. Scheinfield

Attorney at Law

Upper Darby, PA

 

 

CHEERS, JEERS, & NIGHTMARES
 

CHEERS: A member sought PICB's help to collect against a non-paying, long time customer who was now ignoring all their calls. The customer, when confronted by PICB, was treated ethically and with respect, but was provided no alternative but to cooperate. The customer explained how the recession impacted his previously profitable business. He truthfully shared his financial information and upon inspection it was clear his company was near closing. He admitted he simply didn't know how to deal with his 'fall from grace' and asked for help. With mutual respect PICB was able to negotiate a 'win-win' deal. The printer was paid in full over 12 months and maintained a good CASH paying customer. 

 

PS: The troubled company survived and thrived with PICB's & the printers help.

 

JEERS: A recent case, involving non-payment after services were rendered, has been won and collected in full after two years of battling between our client and the debtor! The printer's work was done well but the customer sunk to trickery and deception to avoid payment. Suit was filed using one of our affiliated attorneys. This printer has been a client of PICB for a long time, and had been warned previously that their lack of details left them exposed to loss.  As it happens sometimes, the owner is the proverbial "nice guy" who prefers handshakes to paperwork. Having failed to heed the warning he almost suffered a substantial loss. With PICB's assistance the lawyer assigned this case was able to construct a sufficient argument that won a judgment for the entire bill.

 

PS: We knew the customer's bank account Information and his bank was garnished resulting in 100% satisfaction for the  client.


NIGHTMARES: A Member sought help after his customer disappeared. The customer boasted he was a  founding partner in a well known company and that he had made millions upon its' sale. He looked the part wearing expensive suits, and driving nice cars. The customer claimed his new company was well funded. He explained to our client that he did not want a credit line, but a good price, and would pay cash if his price was met! The printer fell for the con and lost more than $500k by shipping the job without getting payment or checking the facts. By the time PICB was consulted it was too late. The address provided was a UPS store, the car was gone, the house was sold in foreclosure, and the client was only the LATEST victim. 

 

PS: the member never recovered from the loss and the recession and is now out of business.    

  

 

In This Issue
CREDIT TIPS
DEWEY CHI'TING
ASK AN ATTORNEY
CHEERS, JEERS, AND NIGHTMARES
KREDIT KARMA

Quick Links  
PRINTING INDUSTRY CREDIT BUREAU CONTACT INFO: 

ANDREA SCHLACK
PRESIDENT
andreas@picb-us.com

 

DENNIS ADAMS
VICE-PRESIDENT
COLLECTIONS MANAGER
dennisa@picb-us.com

 

RICK CRUZ
CHIEF RESEARCH 
OFFICER
rickc@picb-us.com

JANET DIENES
GENERAL MANAGER
janetd@picb-us.com

 

ROBBIE BURCH

DIRECTOR OF SALES AND SERVICE

robbieb@picb-us.com

 

 

KREDITKARMA

DON'T GET BITTEN TWICE

 ******************

UNCOLLECTED

JUDGMENTS DECEMBER 2012

FOR A COMPLETE LIST

GO TO 

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FRANK FINOCCHIARO INDIVIDUALLY & T/A LBT SYSTEMS & LBT SYSTEMS INC.

NJ

 

SEARCH 1 AMERICA F/K/A LUX PREMIER, LUX PUBLICATIONS LLC D/B/A LUX PREMIER

IN

 

SHE SKIN LLC

IL

 

HOME VIDEO STUDIO INC

IN

 

ALEX FINO D/B/ASF TRANSPORT SERVICES

PA

 

PRINT PARTNERS LTD

IL

 

DALE JASLOVE IND  d/b/a HEALTHCARE CONSTRUCTION

MI

 

HI INDIA, INC.,

IL

 

SANDESH PUBLICATIONS, INC. & HEMANT BRAHMBHATT AS GUARANTOR

IL

 

DESI TALK, INC. & HEMANT BRAHMBHATT INDIVIUALLY

IL

 

SANDESH 

PUBLICATIONS, INC.

IL

 

SY LENG A/K/A LENG SY D/B/A ECO SYSTEMS AQUARIUM

CA

 

VILLAGE FARM STAND, INC, D/B/A VILLAGE MARKET OF CALUMENT CITY

IL

 

ZOOM GRAPHICS, INC.

IL

 

THREE ANGELS PRINTING SERVICES, INC

IL

 

MY MOTHERS INVENTION

TX

 

CMY&K ADVERTISING

NY

 

CMY&K PUBLISHING

NY

 

VOYAGER ENTERPRISE, INC.

IL

 

HOMETOWN HEATING & COOLING INC AND RICHARD E FOX INDIVIDUALLY

NY

      

 

 

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THIS MONTHS QUESTION CAME FROM JIM MATHIAS AND ROGER WANEK OF WISCONSIN WEB-OFFSET AT
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