Archive | July, 2013

Finding Free Answers to Small Business Tax Questions

The income tax law is a product of all three branches of our federal government:

o The legislative branch, Congress, writes the Internal Revenue Code (IRC), or tax code, for short. Each part, called a Section, has its own number, like IRC § 179.
o The executive branch, specifically the Treasury Department, of which the Internal Revenue Service is a part, publishes interpretations of many tax code provisions. These writings show how the IRS applies the tax code in different situations.
o The judicial branch, the federal courts, interprets the tax code in light of the Constitution and what it divines as Congress’s intent. When the IRS applies the tax code contrary to the Constitution or differently than Congress intended, it may be overruled by the federal courts. These court decisions are published (“reported”) and serve to guide taxpayers on how to interpret the tax code.

This discusses where to find the pronouncements of the government, IRS publications, private tax guides, textbooks, websites, court decisions, and periodicals. Some are free, and most others are reasonably priced. Tax publications for professionals are expensive, but are often available at public or law libraries.

IRS Small Business Website

There is an IRS small business community website to assist the nation’s 45 million business and self-employed taxpayers. This free site provides:

o answers to basic tax questions and a calendar of tax deadlines
o online access to most IRS forms
o industry-specific tax info for specific industries like construction and food service
o tips to avoid common tax problems
o links to court opinions and to rulings and regulations on specific industries
o links to non-IRS sites for general tax information, and
o links to helpful small business resources.

Go to the IRS home page. Click on “Business” and then “Small Business and Self-Employed.” Don’t expect the IRS to tell you how to reduce your tax bill at this site.

IRS Online Publications

The IRS publishes over 350 free booklets explaining the tax code. But where there is a gray area in the law, you can bet you’ll get only the IRS’s interpretation-even if federal courts have made contrary rulings.

These IRS Publications (“Pubs,” for short), range from several pages to several ¬hundred pages in length. Get them at IRS offices, download them online, call 800-829-FORM (3676), or send in an order form. There is no charge, not even for postage.

Every small business person should order a package of IRS forms and publications called Your Business Tax Kit. The kit includes Forms SS-4, Application for Employer Identification Number, and 1040-ES, Estimated Tax for Individuals.

o Pub 334, Tax Guide for Small Business (at 325 pages, the largest booklet)
o Pub 583, Taxpayers Starting a Business
o Pub 910, Guide to Free Tax Services
o Pub 1057, Small Business Tax Education Program Brochure
o Pub 1544, Reporting Cash Payments of Over $10,000, and
o Pub 1779, Employee or Independent Contractor.

You can get all IRS publications, plus 600 forms, IRS Regulations, and back-year tax forms (to 1991) on CD-ROM Publication 1796. Call this toll-free number to order: 877-233-6767, or order online (search for Publication 1796). There is a charge.

All you may need, however, is a free online download called the Small Business Resource Guide, Publication 3207, which contains:

o information on small business topics from various regulatory agencies
o business tax forms, instructions, and publications
o valuable insight on a wide range of topics, from preparing a business plan to keeping records of financing and retirement plans
o informative tutorials, updates, and a multi-agency electronic newsletter.

Go to the IRS website (go to irs dot gov, “Business” and then “Small Business and Self-Employed”) .

TIP

The IRS’s free publications run the gamut from good to bad to plain ugly. While some are clearly written and useful, others are misleading, and a few are in an unknown language. I am always amused to see IRS publications with disclaimers warning you against relying on them. The IRS is not legally bound to follow its own writings that explain the tax law. Amazing, isn’t it?

Free IRS and Social Security Telephone/Information

You may talk to a live IRS taxpayer service representative at 800-829-4933 (business tax line). It can be hard to get through from January to May. Avoid calling on Mondays or during lunchtime.

The Social Security Administration (SSA) also has an 800 number: 800-772-1213. It is staffed 7 a.m. to 7/p.m., and has prerecorded business-related topics available 24 hours a day. Among other info available from the SSA, you or an employee of your business can get a statement of earnings, Form W-2, and Form 1099 income information for past years, an estimate of benefits, and new or replacement Social Security cards.

CAUTION

Be alert for bad IRS telephone advice. The IRS is notorious for giving misleading or outright wrong -answers on the phone. IRS folks just aren’t trained to answer more than very simple tax questions. In the IRS’s defense, often taxpayers don’t know how to ask the right questions, or really understand the answers given. Our overly complex tax code is as much to blame as the IRS. Unfortunately, the IRS does not stand behind incorrect oral advice. If you rely on what someone at the IRS tells you and it is wrong, you’ll be liable for any resulting tax plus interest and penalties. If it’s important, double check what the IRS tells you with a tax pro.

Free IRS Programs

In larger metropolitan areas, the IRS offers small business seminars on various topics, such as payroll tax reporting. You can ask questions at these programs, given at schools and federal buildings. Call the IRS at 800-829-1040 to see if programs are offered near you and to get on the IRS small business mailing list.

IRS Written Advice

The IRS is only bound by formal advice to tax¬payers called IRS Letter Rulings. If you want one, you’ll have to pay a fee of $500 to $3,000 or more to the IRS; expect to wait many months for your answer.

For issues where the law isn’t clear, a better (and far cheaper) bet is to look up letter rulings issued to other taxpayers with a similar question-if you can find one. Letter rulings are published in the Internal Revenue Cumulative Bulletin, and in private tax service publications found in larger public and law libraries.

Be warned: It is not easy to find letter rulings on point, even for a tax pro. If you want to try, you should know how these rulings are identified and indexed. For example, “Ltr. Rul. 892012″ refers to a ruling issued in 1989, in the 20th week, and which was the 12th letter ruling issued that week. My suggestion is that you hire a tax pro to do this for you.

Internal Revenue Code

The Internal Revenue Code (IRC) is written by Congress and is nicknamed the code or the tax code. It’s a thick book with tiny print and is found in the reference section of most libraries, the IRS website, IRS offices, tax pros’ offices, and larger bookstores. The IRC is revised annually, mostly minor changes by Congress. More significant revisions to the tax code are made every three to four years.

The IRC is found in Title 26 of the United States Code (U.S.C. for short). The U.S.C. encompasses all of our federal laws. Title simply refers to the place within the massive U.S.C. where the IRC is found.

EXAMPLE: “IRC/179(b)(4)(A)” means that this particular tax law is found in Title 26 of the U.S.C., the Internal Revenue Code, Section 179, subsection b, paragraph 4, subparagraph/A.

The IRC is divided up into sections, which, in turn, are subdivided into more parts, ad infinitum. The tax code is a crazy quilt of laws that apply to everyone along with provisions just for left-handed sheep breeders in New Jersey.

The IRC is available online at the IRS website.

IRS Interpretations of the Tax Code

Congress, when enacting a broadly applicable tax law, can’t foresee all possible situations. So the Treasury Department (the IRS is a part of it) is authorized to issue interpretations of broad tax code provisions. The primary IRS interpretations are called Regulations, Revenue Rulings, Letter Rulings, Revenue Procedures, Announcements, Notices, the Internal Revenue Manual, and IRS forms and instructions.

Regulations

The most authoritative IRS interpretations are called Treasury Regulations or just Regulations or Regs. Regulations provide the mechanics of how many (but not all) tax code provisions apply. Regulations often include examples, like the ones in this book. They are usually bound in a four- to six-volume set and are found in most larger libraries and some bookstores. Regulations are on the IRS website . Regulations are easier to read than the tax code on which they are based.

Start with the IRC section number. Then check to see if there is a corresponding regulation. It will bear the same number, usually preceded by the numeral “1.” You can do this online at www.irs.gov

EXAMPLE: “Reg. 1.179″ refers to a Treasury regulation interpreting IRC Section 179.

Other IRS pronouncements

The IRS publishes various statements of its position on various tax matters. These pronouncements guide IRS personnel and taxpayers as to how specific tax laws will be applied by the IRS.

IRS Revenue Rulings (Rev. Rul.) are IRS announcements of how the tax law applies to a hypothetical set of facts.

Tax book publishers Prentice-Hall, Commerce Clearing House, and Research Institute of America reprint all IRS Revenue Rulings. Some, but not all, of the IRS Revenue Rulings are on the IRS website. They are indexed by IRC section and subject matter. A Revenue Ruling usually contains a factual example, followed by an explanation of how the tax code applies to those facts. While looking for a Revenue Ruling might pay off, it is not always easy to find one that precisely covers your situation.

EXAMPLE: “Rev. Rul. 92-41″ refers to IRS ¬Revenue Ruling number 41, issued in 1992.
IRS Letter Rulings are IRS answers to specific written questions about more complex tax situations posed by taxpayers. See “IRS Written Advice,” above.

IRS Revenue Procedures (Rev. Procs.) are another way the IRS tells taxpayers exactly how to comply with certain tax code provisions. Rev. Procs. are primarily relied on by tax return preparers. They often explain when and how to report tax items, such as claiming a net operating loss on a tax return. They are contained in the weekly Internal Revenue Cumulative Bulletin, found in larger public and law libraries, and also are reprinted by the tax book publishers mentioned above and on the IRS website

EXAMPLE: “Rev. Proc. 91-15″ refers to a published Revenue Procedure number 15, issued in 1991.IRS announcements and notices. Periodically, the IRS gives general guidance and statements of policy in official announcements and notices similar to press releases. They appear in the weekly Internal Revenue Cumulative Bulletin, which is published at the IRS website. Seldom does it pay to search IRS announcements or notices, as they weren’t intended to answer specific questions.

The Internal Revenue Manual (IRM) is a series of handbooks for IRS employees on tax law. This is one of my favorite free resources. The IRM tells its auditors and collectors how specific tax code provisions should be enforced. The manual is for IRS internal use, but most of it is public and ¬reprinted by private tax book publishers. It is available to the public in larger IRS offices and in law libraries and some tax pros’ offices. Portions of the IRM are also on the IRS website.

The IRM is revealing of IRS positions-for example, the criteria the IRS uses to determine whether reasonable cause exists for cancelling a tax penalty.

IRS forms and instructions are well known to us all, starting with Form 1040, the annual personal income tax return. More than 650 other forms are listed in Publication 676, Catalog of Federal Tax Forms. They are free at IRS offices or by calling 800-829-FORM or 800-829-1040 or at the IRS website . Many IRS forms come with instructions and explanations of the tax law. Always read the instructions before attempting to fill in an IRS form.

Court Cases

Federal courts have interpreted the tax law in thousands of court cases. Tax court decisions are found in the Tax Court Reports. Also, U.S. District Courts, U.S. Courts of Appeal, Court of Federal Claims, U.S. Bankruptcy Courts, and the Supreme Court all rule on tax issues. These court decisions explain tax code sections. Chances are that at least one of these courts has adjudged the point you are interested in; the trick is finding it.

TIP
Advice on research. The key to tax research, whether on the Internet or in a law library, is to start with the number of an IRC section, or a court case name, or a general topic, such as depreciation.
The Small Business Administration (SBA) puts out some good publications.

Personal counseling from the SBA is offered by the Service Corps of Retired Executives (SCORE) program. These folks are not necessarily tax experts, but if they were in business, they know the tax game. Call the SBA at 800-827-5722 or visit the SBA office nearest you. The SBA also has a very helpful website. Or write to the SBA at 1441 L Street, NW, Washington, DC 20461.

Small Business Development Centers (SBDCs) are cosponsored by the SBA and state governments. They are usually affiliated with state universities and provide free or low-cost seminars and counseling to small business owners. To locate an SBDC near you, call the SBA at 800-827-5722.

Other federal agencies offer publications-either free or at reasonable prices-to assist small businesses. PA 15250-7954.

Trade Association Publications

Every business or trade has specialized publications and newsletters that track tax issues in your industry that your tax pro might not know of-perhaps a new case or IRS ruling. Also, speakers on tax topics are often found at conventions and trade shows.

Tax Info Online

There has been an explosion of tax information on the Internet. Surprisingly, the IRS itself has a good website, but it is definitely not the “last word” in tax research.

Start your Internet search with the IRS home page. You can download over 600 IRS forms and publications and peruse summaries of 150 tax topics. Email simple tax questions to the IRS (but remember what I have said about taking tax advice from the IRS with a block of salt).

Internet service providers give you access to search engines like Yahoo! and Google to find tax information from sources, including the National Association of Enrolled Agents and TurboTax. Some sites allow you to post tax questions to experts and receive answers, either for free or a relatively small charge.

Keep in mind the person giving the answer doesn’t really know you and your tax needs. The right tax answer is usually the one tailored to your individual situation-and for that you need the personal touch of meeting with a tax pro.

To go still deeper into cyberspace, use one of the popular search engines such as Google or Yahoo! Be prepared for thousands of listings to pop up. There is a lot of tax nonsense on the chaotic World Wide Web. People can express their views or promote harebrained “untax yourself” schemes. So, watch out. In the tax universe, as elsewhere, if it sounds too good to be true … you know the rest.

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The United States Post Office – Survival – Then and Now

The Birth of the United States Post Office

In early colonial times most correspondence took place between the colonists and England. The King’s authorities would read and scour all of the information and mail that was being sent. Correspondence between the colonies depended on trusted friends, merchants, or friendly Native Americans.

Around 1639 Richard Fairbanks’ Tavern in Boston, Massachusetts was designated as the official repository of mail by The General Court of Massachusetts (appointed by the King). Using taverns as mail drops was common practice in England, and the colonists adopted this practice as well. Local authorities designated by town representatives and England operated post routes within the colonies, some of which are still around today.

In 1673, Governor Francis Lovelace of New York set up a monthly mailing post between New York and Boston. The post rider’s trail became known as Old Boston Post Road, which is part of today’s U.S. Route 1. Old Post Road in North Attleborough, Massachusetts was part of this rider’s trail and is considered one of the oldest roads in America.

In 1683, William Penn, founder of Pennsylvania and a leader in the Quaker community, established its’ first post office. Slaves or private messengers delivered communications from one plantation to another.

Most importantly, Thomas Neale received a twenty-one year grant in 1691 from the British Crown to begin a North American postal service. Neale had never laid foot on North American soil, so he appointed then Governor Andrew Hamilton of New Jersey as his Deputy Postmaster General. Neale’s franchise cost him only 80 cents a year. In 1699, he assigned his interests in America over to Andrew Hamilton and R. West. Neale died heavily in debt as a result of this endeavor.

By 1707, the British Government had purchased the rights to the North American postal service from the widow of Andrew Hamilton and R. West. The government then appointed Andrew Hamilton’s son, Andrew, as Deputy Postmaster General of America. He served until 1721 when he was succeeded by John Lloyd of Charleston, South Carolina.

In 1730, Alexander Spotswood, a former lieutenant governor of Virginia, became Deputy Postmaster General for America. Seven years later, Spotswood appointed Benjamin Franklin as postmaster of Philadelphia. In 1753, Bejamin Franklin and William Hunter who was postmaster of Williamsburg, Virginia, were appointed by the British Crown as Joint Postmasters for the colonies. Upon Hunter’s death in 1761, a man by the name of John Foxcroft of New York succeeded him, serving until the outbreak of the Revolutionary War.

During his time as a Joint Postmaster General for the Crown, Benjamin Franklin influenced many important and lasting improvements in the colonial posts. He immediately began to reorganize the service; he inspected post offices in the North and as far south as Virginia. New surveys were made, milestones were placed on principal roads, and new and shorter routes were laid out. For the first time, post riders carried mail at night between Philadelphia and New York, and the travel time had been shortened in half.

William Goddard, a publisher, set up a post for colonial only mail service. This was separate from the British crown and was funded by purchasing subscriptions. Net revenues were to be used to improve his postal service. In 1774 Goddard suggested to Congress that the colonies come together to form a United Postal Service. He believed that this would be a way to separate the colonies’ mail from the British postal inspectors. This way they could communicate colonial news only to the colonies. Goddard proposed his idea of a postal service to Congress two years before the Declaration of Independence was signed

By 1774 colonists did not trust the British crown and viewed the royal post office with suspicion. Benjamin Franklin had been dismissed of his post duties by the Crown for his actions. The crown believed that Franklin was displaying sympathy to the cause of the colonies. In September 1774, shortly after the Boston riots, known today as the Boston Massacre, the colonies began to separate from England. A Continental Congress was organized at Philadelphia in May 1775 to establish an independent government. One of the first questions before the delegates was how to convey and deliver the mail.

With the Revolutionary War imminent, the Continental Congress assembled and enacted the “Constitutional Post.” This act ensured that communications between the public and patriots, or those fighting for America’s independence, continued. On July 26, 1775, the Second Continental Congress chose Benjamin Franklin as the nation’s first Postmaster General. The establishment of the organization that became the United States Postal Service nearly two centuries later traces back to this date and Ben Franklin. In 1760, Franklin reported a surplus to the British Postmaster General.

Franklin dedicated himself in this position, as well as many others, to fulfill George Washington’s dream of an information highway between the citizens and government. Like Goddard, whose idea was to become united, Washington believed, that as a nation, we could forever be bound together by a communication system of roads. When Franklin left office in November of 1776, post roads operated from Florida to Canada and mail between the colonies and England was operating on a regular schedule.

America’s present day postal service descends from an unbroken line of the system Franklin created, planned, and placed in operation. History rightfully affords him major credit for establishing the basis of the postal service that has performed magnificently for the American people.

The Post Office and the Articles of Confederation

The Articles of Confederation (our countries first written form of government) gave Congress the right and power to establish and regulate post offices from one state to another, and to exact postage on papers passing through the same as may be required to so to defray expenses of the post office.

The Postal Act of 1792 further defined the role of the Postal Service. Under the act, newspapers were allowed in the mails at low rates to promote the spread of information across the states. To ensure the sanctity and privacy of the mails, postal officials were forbidden to open any letters in their charge unless they were undeliverable. These provisions enlarged and strengthened the duties of the Post Office and unified the organization by providing rules and regulations for its development. One of which was the transportation of mail. Other than by railroad or steamboat, the delivery of mail would only be given to bidders who offered stagecoach services.

Postal headquarters were located in Philadelphia until 1800, and then later moved to Washington, D.C… Officials carried all postal records, furniture, and supplies from Philadelphia to D.C. in in two horse drawn wagons.

The Post Office and the President’s Cabinet

In 1829, then President Andrew Jackson appointed William T. Barry of Kentucky to become the first Postmaster General within a President’s Cabinet. However, the Department of the Post Office was not formally established as an executive department by Congress until June of 1872.

In 1830, an investigative and inspection branch of the Post Office was established and was led by P.S. Loughborough. Loughborough is known as first Chief Postal Inspector.

Up to 1845, mail was delivered by coach, railroad, or steamboat. This was abolished by Congress on March 3, 1845. This act provided that the Postmaster General will lease all contracts to the lowest bidder who gave sufficient guarantee of providing a faithful performance, without conditions, except to provide for the “celerity, certainty and security” of the transportation of mail. These bids became known as “celerity, certainty, and security bids” and were represented by three stars known as star routes.

Scandals

The Star Routescandals involved United States Post Office officials receiving bribes in exchange for awarding postal delivery contracts in the southern and western areas of the states. In 1872 and 1876, during President Grant’s administration, an investigation into what is called the Star Route Frauds had been made. However, evidence in the investigation had been tainted by bribery and the investigation was temporarily shut down in 1876. A resurgence of the Star Route Frauds took place in 1878 under the Hayes Administration and continued into the Garfield Administration. Many of the major players involved were large contractors, US Representatives, and past Postmaster Generals.

Then in 1881, then President James A. Garfield led an investigation into the corruption of the Star Route Frauds. After Garfield’s death by assassination, then Vice-President, turned President Chester A. Arthur continued the investigation. A trial then prosecution took place in 1882 finally shutting down the Star Route Frauds and its postal ring.

Although the Star Route Frauds were widespread, there were few that were convicted. As a result of public distrust over the frauds and death of President Garfield, the passage of the Pendleton Civil Service Reform Act of 1883 was implemented. This act is a federal law that stipulates that federal government jobs will be awarded on merit. The act provides for the selection of government employees by means of competitive exams. It also made it made it illegal to fire or demote government employees for political reasons.

Under President Theodore Roosevelt, allegations of widespread corruption in the U.S. Postal Service were made. An internal investigation in 1902 revealed many cases of bribery, blackmail, overcharging, and extortion. The press publicized the findings in 1903. This forced the President to appoint two special prosecutors who subsequently indicted 30 Post Office officials and private contractors.

In 1994 Congressional Post Office scandal referred to the discovery of corruption among various Post Office employees and members of the United States House of Representatives. Investigations took place from 1991 through 1995, and ended in the conviction of House Ways and Means Committee chairman, democrat Dan Rostenkowski.

Initially, embezzlement charges against a post office employee were investigated, but evidence led to several other employees before democrats in the House of Representatives moved to close the inquiry. A new investigation was started by the postal service resulting in embezzlement and money laundering charges. The Committee on House Administration began its own investigation, breaking through party lines. Democrats issued a report stating that the matter was closed, while republicans issued their report including a number of unanswered questions and problems with the investigation.

In July of 1993, Postmaster Robert Rota pleaded guilty and implicated democratic Representative Dan Rostenkowski of Illinois and democrat Joe Kolter from Pennsylvania. Both were accused of conspiracy to launder post office money through stamps and postal vouchers. Finally, in 1995, Rostenkowski was convicted and sentenced to eighteen months in prison until President Bill Clinton pardoned him in 2000.

The True Role of the United States Post Office

The role of the United States Postal Service is to operate as a basic and fundamental service provided by the Government of the United States, authorized by the Constitution, created by Act of Congress, and supported by the people. The Postal Service basic function is to provide postal services to link the Nation together through the personal, educational, literary, and business correspondence of the people. It shall provide prompt, reliable, and efficient services to the citizens and shall render postal services to all communities. The costs of establishing and maintaining the Postal Service shall not be apportioned to impair the overall value of such service to the people.

Until the Postal Reorganization Act of 1970, the U.S. Postal Service functioned as a regular, tax-supported, agency of the federal government. In 1982, U.S. postage stamps became sold as products rather than a form of taxation. Since then, the bulk of operating cost has been paid by customers through the sale of products and services rather than taxes.

The United States Post Office does get some taxpayer support. Around $96 million is budgeted annually by Congress for the “Postal Service Fund.” These funds are used to compensate the post office for postage-free mailing for legally blind persons and for mail-in election ballots sent from US citizens living overseas. A portion of the funds also pays for providing address information to state and local child support enforcement agencies.

Each class of mail is expected to cover its share of the costs. This is a requirement that causes the costs of different classes of mail to vary. Postal rates are established and proportioned on a fair and equitable basis. Under federal law, only the Postal Service can handle or charge postage for handling letters. Despite this monopoly worth some $45 billion a year, the law requires that the Postal Service remains neither makes a profit or suffers a loss.It is supposed to break even.

Today’s Postal Woes

The Postal Service, by law, is an independent establishment of the Executive Branch or government. The service doesn’t normally use tax dollars for operations, but it has exhausted a $15 billion loan from Treasury. The Postal Service defaulted twice last year on required payments to the federal government. The Postal Service’s financial woes continue as the agency waits on Congressional action to address its debt.

A key culprit in its current decline is the 2006 congressional mandate. This states that the post office has to prefund healthcare benefits for future retirees. This mandate has forced the United States Postal Service to borrow billions of dollars from taxpayers. Much of the $11.1 billion loss is due to the costs of future retiree health benefits. Included with this is an operating loss of $2.4 billion, lower than the previous year.

Postmaster General Patrick Donahoe has said that the post office reduced costs by boosting worker productivity, but that mail agency has been hampered by congressional inaction. The Postal Board of Governors, which oversees the United States Post Office, tells us that mail volume fell to 43.5 billion pieces from 43.6 billion earlier this year. The board, which asked for measures to cut costs, endorsed the post office’s recent move toward suspending mail delivery on Saturday.

The data presented by the post office did show an increase in advertising mail from the 2012 election. The agency’s packaging and shipping services continue to grow, increasing by 4% in the first quarter. This year, extra mail tied to the November elections and stronger revenue from holiday-related packages contributed to a better quarter.

Donahoe has made it clear that the Postal Service could have been profitable had Congress acted. “It’s critical that Congress do its part and pass comprehensive legislation before they adjourn this year to move the Postal Service further down the path toward financial health.”

The Senate did pass a postal bill in April that would have provided financial relief by reducing the health payments and by providing an $11 billion cash infusion. This cash infusion would have been considered a refund on overpayments the Postal Service made to a federal pension fund. The House, unfortunately, stalled over a separate bill that would allow for aggressive cuts, including an immediate end to Saturday delivery.

The post office had an operating revenue of $65.2 billion in fiscal 2012. This amount was down $500 million from the previous year. Expenses for 2012 climbed to $81 billion, up $10. billion. This was largely due to the health prepayments. The annual payment of roughly $5.6 billion was deferred for a year in 2011, resulting in a double payment totaling $11.1 billion that became due this year. The Postal Service is the only government agency required to make such payments.

The post office also has also witnessed declining mail volume. As more people and businesses continue switch to the Internet to pay bills or to communicate, less volume is being produced for the post office. The number of items mailed in the last year was 159.9 billion pieces, a 5% decrease, much of it in first-class mail.

The post office is reporting some growth. Its shipping services, which include express and priority mail, grew by 9 percent. This helped offset much of the declining revenue from first-class mail.

Without legislative intervention annual losses might exceed $21 billion by 2016. If Congress fails to intervene, there could be postal shutdowns that would have undeniable consequences for workers whose jobs depend on postal services.

The Future

Our nation’s post office developed and survived in colonial America. It is one of the original freedoms our forefathers paved for us. They gave us the right to communicate with one another in a trusted and private manner. The United States Post Office has gone through loss and scandals, but it has survived.

Our nation’s post office does have a role to play in present day. It will be important for government officials to keep in mind the changing role the post office needs to take.

The Post Office needs to continue to market their strengths, which is the handling and shipping of products. With more and more people shopping over the Internet and paying their bills as well, there is less need for stamps and mailing envelopes. The Post Office would do well to think about expanding their mailing concepts to complement their customers’ needs.

It is proven that more and more people use the Internet to buy and sell products or services. Given this the Post Office must consider changing their operating schedule to include on line customer scheduling. They should have a web site where customers must use prescheduled times and dates for packages to be delivered, picked up, or shipped. They should also consider mail delivery based on neighborhoods and computer scheduled input from customers. Further, post offices day to day operations and hours should be reevaluated to align with today’s ever changing customer.

The Internet is a huge connector for communication, and yet so was the Post Office. By today’s standard, the post office is obsolete, but needlessly. We still need their services to get our products to and from, and, like the Internet, to have our voice heard across the world. Remember, the post office was not meant to make a profit, nor was it meant to report a loss, the post office was developed in such a way as to break even.

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The CRTC & the Internet – Forbidden Domain

“Please indicate if your Web site contains any of the following (select all that apply): Al Waxman, Alanis Morissette, Alan Thicke, Alex Trebeck, Anne of Green Gables, Anne Murray, back bacon, bears, beavers…”

It hasn’t come to that – yet. The CRTC firing off questionnaires to professional web designers, amateur enthusiasts, or awkward teenagers reminding us yet again that the world simply doesn’t understand them. Anyone possessing the time and the inclination can create a website and have it up and running within hours. As of July 9, 2002 there were 2,073,418,204 web sites listed on Google with “no way of knowing definitely.” With that amount of sheer numeric volume, it is nearly impossible for any organization to tackle the responsibility of regulating web site content.

For the time being, the CRTC has decided not to pursue any regulatory sanctions regarding website content. Although the dearth of websites – Canadian or otherwise – has no doubt had an influence on the CRTC’s ruling, the official results of their inquiry were as follows:

oThe internet is not, by definition, broadcasting.

oThe internet compliments broadcasting. It is not a replacement.

oMaterial can be customized by its user. The web is a “push media.”

oThere is already a large Canadian presence on the internet.

oThe Criminal Code and web filtering equipment can effectively deal with offensive content present on the internet.

Currently, these findings serve as a perishable template for the CRTC to conduct more research into whether or not there is a place for regulations on the internet. Indeed, there have already been public hearings where both the provider and the consumer of websites have had the opportunity to voice their opinions on the matter. Undoubtedly there will be many more discussions and debates regarding whether or not the CRTC should regulate the internet.

So, the question is: should the CRTC regulate the internet?

Perhaps the question should be directed thusly: can the CRTC regulate the internet? To the former question, the answer is “probably not.” To the latter, the response is “absolutely not.” There are many roadblocks that prevent the CRTC from claiming any kind of regulatory influence over the internet. These barriers can be viewed as permanent reminders that any attempt at defining Canadian content on the internet will be thwarted. The four mandates that will ultimately dictate any CRTC decision are:

oLegal Precedent

oPersonal and Moral Choices

oCurrent Successes.

oAvailability of Resources.

First off, there is a legal history that produces a difficult obstacle for the CRTC to overcome if it wishes to establish a regulatory presence on the web. It deals with the reason that the internet is a popular tool: pornography. A popular adage is that pornography created the internet. At last glance, there is nothing wrong with viewing naked people on your computer and…excuse me, I was distracted for a moment. Yet, on May 3, 2002, the Supreme Court of Canada made a precedent setting ruling.

On that day, the Supreme Court of Canada ruled in a horrific (aren’t they all?) child pornography case involving John Sharpe: a British Columbia man who possessed child pornography on his computer and who enjoyed writing explicit sex stories featuring children. His loathsome defense lied in the theory that his work and possessions had “artistic value” and that should override any legal discrepancies that may arise. Shockingly, the Supreme Court of Canada agreed with him, ruling that:
“His possessing…child pornography.” And the “graphic child sex stories Sharpe had wrote had artistic merit and were therefore exempt from child pornography laws.”

This ruling contradicts the CRTC’s earlier proclamation that the Criminal Code of Canada would act as a legal buffer to deter web users from viewing illicit material. Any attempt by the CRTC to enforce restrictive content limits would no doubt be challenged by a referral to this specific case. If one element of the Criminal Code can be circumnavigated in the name of aesthetic expression, then why not another? The result of this landmark case – which is not lost on Canadians who either wish to post or view illegal material on the web is that Mr. Sharpe has no criminal record to reflect his sickening actions.

Along with juristic background, another basis that precludes the CRTC from regulating the internet are the personal and moral rights that Canadians have under the Canadian Charter of Rights and Freedoms. This document, born on April 17, 1982, is the guide to the liberties that individuals who step within Canadian borders are entitled to. Section 2 (b) of the Charter, listed under Fundamental Freedoms, is an important passage. It decrees that:
“Freedom of thought, belief, opinion and expression, including freedom of the press and other media of communication.”

The internet is the new communication tool of the 21st century. At the very least, it can be identified as “other media of communication.” Name another device that enables its user to communicate with a fellow in Malaysia, play chess with a lass in New Zealand, and view a Cuban’s opinions on thermodynamics? The internet allows for people to mass communicate their ideas, thoughts, opinions and expressions. For the CRTC to impose limits on that ability would contradict Section 2 (b) of the Canadian Charter of Rights and Freedoms.

Also, the Fundamental Freedom to speak your mind is a right valued dearly by all Canadians. Although freedom of expression is protected under the Charter, a more widespread belief is that freedom is a “right given by God, and not by law.” Canada takes its pride on the fact that it’s a mosaic of cultures. However, freedom of speech is a link unifying an Italian in Halifax to a Sikh living in Whitehorse. The internet is the conduit to spread those expressions. Not every Canadian can appear on national television or radio to state their point of view. But every Canadian can log onto a chat room, or design a web site to expose their beliefs. The CRTC simply can not interfere with that ability.

The third factor that should exempt the internet from CRTC influence is the simple fact the Canadian web sites are flourishing at an impressive rate already without any regulatory guidelines. Currently “5% of content on the internet is Canadian.” That is a significant percentile when considering the amount of web sites available (recall 2,073,418,204 total web sites as of July 9, 2002).

Canadian web sites are earning a reputation on the international stage as being highly creative in both terms of creativity and content. Many Canadian web sites, either personal or professional have garnered acclaim from those in the internet community who appreciate the importance of a good web site. Perhaps the ultimate compliment was paid to the web page of The Edge 102.1 FM, a Toronto based web site for its radio station.

Peter J. Maurin, Professor of Media Studies at Mohawk College in Hamilton, made this announcement of the Edge 102.1 FM web page:

“According to Broadcast Magazine, a publication that monitors media web sites, the Edge 102.1 FM web site is the fifth most visited web site in the world regarding radio station web sites. In the entire world, for all radio station web sites, it ranks number 5 in terms of visitation.”

The CRTC, baring the banner of good intentions, may wish to provide a regulatory guide for the internet in Canada. However, there is no reason for it. Canadian operated web sites are strong and vibrant. As stated in the CRTC’s original ruling, there is already a strong Canadian presence on the internet and any outside interference could possibly put “Canadian internet media at a disadvantage in the global market.”

In today’s hyper-connected global market, any advantage that can be gained can possibly make the difference between commercial success and failure. Today’s e-commerce is built on international interaction between individuals, not faceless communications. It would be excessively unwise for the CRTC to impose regulations as to how Canadians conduct business on the web.

Along with current Canadian success on the web, the resources available to Canadians prohibits the CRTC from setting regulations. Television stations and radio stations are not purchasable at the local Future Shop. Not everyone has the means to launch a national newspaper. However, everyone can buy a computer and acquire web design software to create their own web sites. Imagine the outrage that would ensue if Canadians had to apply to the CRTC for a license to purchase web design material? A draconian proposal indeed if there ever was one.

Modern technology gives average citizens the ability to buy the technology to express their views. As this technology improves, the ability of the CRTC to have any influence over it will wane. Personal cell phones are now equipped with internet access, with wrist watches the next to follow (if that hasn’t happened already). The internet allows users to both be a part of and have access to two distinct groups: individuals and a mass collective. There are my opinions on a topic and then there are everyone else’s. Everyone else being made up of individuals, to which I am an integral part of.

The CRTC was right to explore the potential of internet regulation. Other CRTC forms of regulation (i.e. CanCon) have proved to be highly influential in promoting and protecting Canadian culture. The difference between broadcasting and internet media is that Canadians can not choose what kind of music is made by whom. If Bryan Adams wishes to record an album, there is no public corridor to counteract that. The internet allows for individuals to challenge each other on a personal-global scale. See something that bothers you? Post an answer on a message board. Have a strong view on something? Create a web site. Wish to seek others with similar interests? Join a chat room. The options are almost limitless.

Ultimately, though, the CRTC can’t regulate the internet. Legally, any attempt at internet regulation would be challenged under the John Sharpe ruling. Personally, the right to freedom of expression is protected (and sacred) under the Canadian Charter of Rights and Freedoms. The international community has already proven that Canadian web sites are successful just the way they are, and Canadians have the technology at their disposal to set up personal web sites of their own design. The internet is the one tool available for everyone, by everyone. That unifying link should not be tarnished.

As a fellow essayist put it: the CRTC’s attempt at internet regulation is an “Orwellian proposal,”…like 1984 that will “descend on Canadian free speech like an iron curtain.” The last time I checked, the novel 1984 scared the hell out of me.

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