A MVR (motor vehicle record) is an important compliance tool for qualifying moving company drivers.  A MVR will help the moving company verify license type, current standings and any restrictions of an applicant or current driver.  It can also verify name and address information (helpful in criminal background checks).

A MVR is not only helpful, it’s a requirement for all drivers files for drivers operating company vehicles of 10,001 lbs or greater (this can be useful for employers in transportation, delivery, DOT compliance, or other positions utilizing company vehicles or looking for drivers).  Besides a pre-employment MVR, an annual MVR is required (with an annual review of driving record with portions filled out by the driver and company).  This illustrates that the drivers is still qualified as there are certain offenses (or certain number of offenses) such as driving without insurance, license suspension or revocation, DUI’s, DWI’s traffic violations, accidents,  failure to appear in court or unpaid fines that can cause disqualifications.

When it comes to MVR retrieval, each state has it’s own method of how records are kept and released.  Some states will not release the MVR to the employer, it is up to the applicant or driver to obtain the copy.  Some states charge a fee for a copy of a MVR and while most states can provide the information instantly, some states will have a delay of up to 7-10 days (like Wyoming, Pennsylvania, Hawaii, and Alaska).  Currently there is no national database for motor vehicle records so a MVR has to be obtained through each individual state.

The information provided on the MVR will usually provide at least 3 years of driving history and up to 10 years depending on the state. 

MVR information is not only important from a regulation requirement from a regulation standpoint, it’s also is of great interest to any moving companies insurance company.  Violations like reckless driving, DUI’s etc can affect insurance premiums and whether or not the insurance company will even cover a driver.

So stay on top of the MVR driver regulations.  They can help a moving company make intelligent decisions regarding driver qualifications.  Remember, if doing a criminal background check, this is one of the tools that should be looked up, but not the only!

The CSA 2010 has updated the original calculation of the unsafe driving basic and it is important for movers (and other trucking companies) to understand the new system.  To arrive at a company’s Unsafe Driving Basic, the company is rated on applicable violations it has received during inspections in the past 24 months.  Anything older than 24 months is considered too old and irrelevant.

First, the number of power units (PU’s) needs to be determined.  This can be retrieved by using the company’s number of power units and vehicle miles traveled on the MCS-150 census.  Originally, the CSA 2010 was going to use PU averages during 3 time periods but this is no longer the case.

The “utilization factor” is calculated in 3 steps.

1. Determine whether your company is considered combo (70% or more of your power units are combination) or straight trucks (30 % or more of your power units are straight trucks.)

2. Vehicle miles travelled (VMT) per PU.  Using the information from the MCS-150, divide the total miles into PU’s to get the average.

3. Calculate your company’s utilization factor based on the following tables:

COMBO

VMT PER AVERAGE PU                                                                                UTILIZATION FACTOR

< 80,000                                                                                                             1

80,000-160,000                                                                                            1+0.6 (vmt per PU-80,000)

160,000-200,000                                                                                               1.6

>200,000                                                                                                           1

no recent VMT info                                                                                           1

STRAIGHT TRUCKS

VMT PER AVERAGE PU                                                                      UTILIZATION FACTOR

<20,000                                                                                                           1

20,000-60,000                                                                                             VMT PER pu/20,000

60,000-200,000                                                                                                3

>200,000                                                                                                         1

no recent VTM information                                                                            1

Severity weights have been updated and violations have been trimmed from 900 to 650 violations.

The time weight of violations is as follows: 

Violations in the past 6 months are weighted at

Violaions in the past 6-12 months are 2

Violations in the past 12-24 months are 1

To get the time weighted score, take the severity score from the table of violations in the CSA 2010 and mulitply it by the time weight (either 3,2, or 1 depending on the violations page)

The basic formula has been reused to:

Basic Measure:  Total of time and severity weighted applicable violations/Average PU’s X Utilization factor.

For Example:

One violation with a severity of 10 within the last six months for a carrier with 2 trucks and a utilization of 1 would be:

ViolationWeight x  TimeWeight/Power Units X Utilization Factor=Total Score

10×3/2×1=15 score

The safety Event Group Category method has replace the original “Peer Group” method of categorization carriers are grouped combo or straight and then depending on the number of unsafe inspections (related to the Unsafe Driving Basic), the categories break out as follows:

CATEGORY          COMBO # OF INSPECTIONS WITH UNSAFE DRIVING VIOLATIONS

 1                                                                             3-8

  2                                                                            9-21

  3                                                                            22-57

  4                                                                            58-149

  5                                                                            150 +

CATEGORY                   STRAIGHT # OF INSPECTIONS WITH UNSAFE DRIVING VIOLATIONS

1                                                                            3-4

2                                                                            5-8

3                                                                            9-18

4                                                                           19-49

5                                                                            50+               

Within the category the carrier is ranked in a percentile 0-100 depending on the severity of the violations.  Any carrier with less then 3 violations is removed from the carrier list, carriers whose vilations are older than 12 months are also removed.

Hope this helps explain the Unsafe Driving Basic and it’s scoring.                                                                   

 

The Internal Revenue Service has issued its list of tax scams for 2010.

According to the IRS Commissioner: “Taxpayers should be wary of anyone peddling scams that seem too good to be true.”  Tax schemes that are illegal can lead to imprisonment and fines for both scam artists and taxpayers.  Taxpayers pulled into these schemes must repay unpaid taxes plus interest and penalties.

Here is a list of common schemes that taxpayers are urged to avoid (not in any particular order):

1. Phishing – Phishing is a tactic used by scam artists to trick unsuspecting victims into revealing personal or financial information online.  IRS impersonation schemes flourish during the tax return filing season and can take the form of e-mails, tweets or phony Web sites.  Scammers may also use phones and faxes to reach their victims.

Scam artists will try to mislead taxpayers by telling them they are entitled to a tax refund from the IRS and that they must reveal personal information to claim it.  Criminals use the information they get to steal the victim’s identity, access bank accounts, and run-up credit card charges or apply for loans in the victim’s name.  Taxpayers who receive suspicious e-mails claiming to come from the IRS should not open any attachments or click on any of the links in the e-mail.  Suspicious e-mails claiming to be from the IRS or Web addresses that do not begin with http://www.irs.gov should be forwarded to the IRS mailbox: phishing@irs.gov.

1. Abuse of Charitable Organizations and Deductions – The IRS continues to observe the misuse of tax-exempt organizations.  Abuse includes arrangements to improperly shield income or assets from taxation and attempts by donors to maintain control over donated assets or income from donated property.   Statistics show that charity-based frauds are at their peak in November, December and January.

1. Frivolous Arguments – Promoters of frivolous schemes encourage people to make unreasonable and outlandish claims to avoid paying the taxes they owe.  Some of these schemes are:

1. 1. The filing of a tax return or payment of tax is voluntary
   2. Wages for personal services are not income
   3. Taxpayer is not a citizen of the United States, thus not subject to Income Tax laws
   4. Taxpayers can refuse to pay income taxes on religious grounds by invoking the first amendment

 These arguments are false and have been thrown out of court.

1. Filing False or Misleading Forms – The IRS is seeing various instances where scam artists file false or misleading returns to claim refunds that they are not entitled to.  Under the scheme, taxpayers fabricate an information return (such as Form 1099-OID) and falsely claim the corresponding amount as withholding as a way to seek a tax refund.

1. Zero Wages – Filing a phony wage-or-income-related information return to replace legitimate information has been used as an illegal method to lower the amount of taxes owed.  Typically, a substitute Form W-2 or a corrected Form 1099 is used as a way to improperly reduce taxable income to zero.

1. Nontaxable Social Security Benefits with Exaggerated Withholding Credit  - The IRS has identified returns where taxpayers report nontaxable Social Security Benefits with excessive withholding.  This tactic results in no income reported to the IRS on the tax return.  Often both the withholding amount and the reported income are incorrect.  Taxpayers should avoid making these mistakes.  Filings of this type of return may result in a $5,000 penalty.

1. Fuel Tax Credit Scams – The IRS receives claims for the fuel tax credit that are excessive.  Some taxpayers, such as farmers who use fuel for off-highway business purposes, may be eligible for the fuel tax credit.  But other individuals are claiming the tax credit for nontaxable uses of fuel when their occupation or income level makes the claim unreasonable.  Fraud involving the fuel tax credit is considered a frivolous tax claim and potentially subjects those who improperly claim the credit to a $5,000 penalty.

1. Misuse of Trusts – Unscrupulous promoters have urged taxpayers to transfer assets into trusts.  While there are many legitimate, valid uses of trusts in tax and estate planning, some promoted transactions promise reduction of income subject to tax, deductions for personal expenses and reduced estate or gift taxes.  Such trusts rarely deliver the tax benefits promised and are used primarily as a means to avoid income tax liability and to hide assets from creditors including the IRS.  Taxpayers should seek the advice of a trusted professional before entering into a trust arrangement.

1. Abusive Retirement Plans – The IRS continues to find abuses in retirement plan arrangements, including Roth IRAs.  There are transactions that taxpayers use to avoid the limits on contributions to IRAs, as well as transactions that are not properly reported as early distributions.  Taxpayers should be wary of advisors who encourage them to shift appreciated assets at less than fair market value into IRAs or companies owned by their IRAs to circumvent annual contribution limits.  Other variations have included the use of limited liability companies to engage in activity that is considered prohibited.

1. Disguised Corporate Ownership – Corporation and other entities are formed and operated in certain states for the purpose of disguising the ownership of the business or financial activity by means such as improperly using a third party to request an employer identification number.  Such entities can be used to facilitate under-reporting of income, fictitious deductions, non-filing of tax returns, participating in listed transactions, money laundering, financial crimes and even terrorist financing.  The IRS is working with state authorities to identify these entities and to bring the owners of these entities into compliance with the law.

1. Hiding Income Offshore – The IRS aggressively pursues taxpayers involved in abusive offshore transactions as well as the promoters, professionals and others who facilitate or enable these scams. Taxpayers have tried to avoid or evade U.S. income tax by hiding income in offshore banks or brokerage accounts through the use of nominee entities.  Taxpayers also evade taxes by using offshore debit cards, credit cards, wire transfers, foreign trusts, employee-leasing schemes, private annuities or insurance plans.

1. Return Preparer Fraud – Dishonest tax return preparers can cause trouble for taxpayers who fall victim to their ploys.  Such preparers derive financial gain by skimming a portion of their client’s refunds, charging inflated fees for tax return preparation services and attracting new clients by promising refunds that are too good to be true.  Taxpayers should choose carefully when hiring a tax preparer.  Federal courts have issued injunctions ordering hundreds of individuals to cease preparing tax returns and promoting fraud, and the Department of Justice has filed complaints against dozens of others, which are pending in court.

IRS AUDIT INFORMATION

There are approximately 130,000,000 individual income tax returns filed each year.  As you may know, it has been publicized that individual income tax returns are pulled for an Internal Revenue Service (IRS) audit at about a 1% rate (the IRS audit lottery).  This excludes over 200,000 taxpayers pulled for audit each year that did not file a tax return with the IRS when they should have filed (guaranteed IRS audit).

However, upon closer inspection of the “1%” IRS audit lottery statistics, keep in mind that approximately 63% of the individual income tax returns filed did not even itemize deductions.  That means their chance for being audited by the IRS is lower than 1% since they might only have a W-2 Form for wages earned or a 1099 Form for Retirement Income received.  The IRS receives a copy of the W-2 Forms and the 1099 Forms from the payer of those amounts and automatically matches those Forms to the applicable individual income tax return.  Thus audits of those issues are normally not required.

The percentage chance for being audited by the IRS increases as your Adjusted Gross Income increases.  Also if you file a tax return including itemized deductions (on Form 1040 Schedule A for such things as mortgage interest, local taxes and donations), your chance of being audited by the IRS is greater than 1% since so many tax returns are filed without itemizing deductions and the IRS knows some taxpayers do not keep adequate support for their itemized deductions.  Keep in mind any special tax return forms you need to attach to your tax return such as capital gains or losses, rental property income or loss, partnership income/LLC income/self-employed income, home office deductions, etc. would increase your chance of being audited by the IRS. 

  Nothing contained in this communication was intended or written to be used by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer.  Please consult with your tax advisor before acting on any of these topics.  Your tax advisor can ensure you receive the maximum tax benefits considering your tax filing status, income tax rates, etc.  You can also visit the Internal Revenue Service web site www.irs.gov for more information on the issues discussed in this article.

 Thomas L. Broderick, C. P. A. is the Treasurer of Pickens-Kane Moving & Storage Co. in Chicago, Illinois.  He has served as Chairman of the Board of Trustees of the Illinois Movers’ and Warehousemen’s Risk Management Trust since 1996.  He has also served as president of the West Central Association Chamber of Commerce for the years 2007 thru 2009.  Many individuals, small businesses and non-profit organizations consult him for various accounting, investment, insurance and tax issues.

Revised: November 10, 2010

Which Violations are Most Severe?

In the CSA 2010, the severity weighting tables previous list of 900 violations has been trimmed to 650 and is broken up into 6 different categories including unsafe driving, drugs/alcohol, fatigued driving, driver fitness, vehicle maintenance and cargo loading/securement.  Each violation carries a weight between 1 and 10, depending on severity, with 1 being the least and 10 being the most severe.  The severity of each violation will give the company its rank within its safety event group category.  The unsafe driving basic system (to determine the safety event group category) calculation is pretty simple and can be reviewed at Unsafe Driving Basic Calculation.  This will give you the category that your moving company will fall into. However, that’s not what we’re going to cover in this article.  We’re going to focus on what some of the most severe violations in each of the violating categories are so movers can give these areas the attention they deserve.

In the unsafe driving severity weighting table (SWT) the most severe violations (receiving a score of 10) are similar to the most severe violations to a CDL driver.  Reckless driving, speeding over 15 mph over the limit, speeding in a work/construction zone, and a newer violation, operating a commercial motor vehicle while texting.  The Drugs/Alcohol SWT category has violating an out of service order pursuant to 392.5 (a) (b) and driver uses or is in possession of drugs scoring 10 points.  The fatigued driving SWT has operating a CMV while ill/fatigued and driving after being declared out of service scoring a 10 but has many 7’s related to hours of service violations.  The driver fitness SWT has failing to comply with imminent hazard out of service order as its only 10 point violation but has plenty of “8”’s related to driver qualification, licensing and driver compliance.  The vehicle maintenance SWT has a large number of listed violations but only one “10″), operating an out of service vehicle. There are some “8”’s related to tires and “7”’s related to vehicle suspension, though. The sixth and final SWT, cargo/loading/securement also has a large number of total violations with “10”’s listed as release of HM (hazmat) from package, (non mover related) intermediate bulk container (IBC), not secured to or within vehicle, using a tool likely to cause damage to the closure of any package or container, failing to secure load, failing to secure cargo, failing to secure vehicle equipment, drivers view/movement is obstructed, 4 related to buses ( so not relevant to moving companies), and 96 other 10’s related to load securement (some related to moving companies, some not).

Because the severity of the violations affects the companies ranking within their safety event group category, it’s very important to emphasize the importance of compliance in the higher numbered violations (but not ignoring the others).   Moving companies should all visit the CSA 2010 website and familiarize themselves with all the regulations and we at www.emovingstorage.com, will continue to try and provide help as much as possible.  Publications and manuals can also be purchased from companies like JJ Keller.

With compliance becoming a bigger issue (CSA 2010, etc) it’s important that moving companies are in line with driver regulations.  Here’s a general idea of classifications for moving company drivers.

Moving Company Drivers That Require a Class D License:

Single vehicle with a GVWR (Gross Vehicle Weight Rating) of less than 16,000lbs. 

This is a company car or probably a vehicle like an econoline van or small box truck with a 12’, 15’, or 16’ box (remember GVWR is the weight designated by the manufacturer as the maximum loaded weight of the vehicle not the empty or “tare weight”).

*Any vehicle with a GVWR or GCWR (Gross combining weight rating)over 10,001 lbs requires the driver to carry a DOT Medical Card.  Anyone who does require a medical card should also have a driver file.

Moving Company Drivers That Require a Class C License:

Single vehicle with a GVWR between 16,001 lbs, and 26,000 lbs.

This is a much larger category that likely includes 16’box trucks up to 24’or 26’ straight trucks (the 24’ & 26’ category can require either a “C” license or possible a CDL B license depending on the GVWR, and how the truck is registered and plated). 

This is very important to know before putting a driver in the truck.

One common misconception is that a Class “C” truck with air brakes requires air brake endorsement, it does not.  The only time endorsements are required is under the CDL program.

Also a “Class C” license can be obtained at any secretary of state facility (not just the special CDL facilities).

Drivers in this class are not required to be in the random drug testing pool but are required to have a DOT medical card and driver file.

Moving Company Drivers That Require a CDL B license:

Single vehicle with a GVWR of 26, 001 lbs or such a vehicle that tows a trailer less than 10,000 lbs.

This category is generally 24’-28’ straight trucks that are registered and plated to carrier heavier loads.

This vehicle requires passing of the pretrip inspection test, the basic control skills exam, and the road test or driving exam.

A driver obtaining a CDL B must have a passing pre-employment drug screen and be part of a random drug and alcohol testing program.

Drivers in this category are required to have a driver file with specific background checks for their previous 10 years of driving employment.

Moving Company Drivers That Require a CDL A:

Combination vehicles (commonly known as tractor-trailers) with a GCWR of 26,001 if the trailer being towed is more than 10,000 lbs.

All other qualifications and compliance issues are the same for CDL B and CDL A drivers.

Many of the questions related to the moving company driver qualifications can be answered in the Class C or CDL study materials.  The FMCSA (Federal Motor Carriers Safety Administration can be contacted at www.fmcsa.dot.gov, and 1-800-832-5660 for verification of driver qual laws related to moving company drivers.  If in doubt, double check the regulations.

The North American Transportation (NTA) Association report in Breaking News From NTA that the new rating program that was originally supposed to be implemented July of 2010 with all states up to speed and functioning by December has been delayed.  The time table looks to be pushed back to initial implementation fall of 2010 with all states fully functioning by summer of 2011.

Although the program has been delayed there will, however, be a limited preview of the program beginning April 12, 2010.  The NTA will assist members by informing them how to access their data from the system when it becomes available.  The preview, it states, will include roadside inspections, crash, and violations data, but it will not reflect carriers’ scores in each of the Behavioral Analysis and Safety Improvement Categories (BASIC’S).  It sounds like the compliance issues are the same but the test isn’t going to be graded.

November 30, 2010 is the date that carriers (and the general public) will be able to view the CSA 2010 data.  Also on November 30, 2010, the FMCSA will begin issuing warning letters to non-compliant carriers but won’t use all disciplinary actions available in the program at that time.  Wayne Schooling is the contact at the NTA for questions.  He can be reached at 1-800-805-0040.

Interstate movers and movers in the states of Illinois, Indiana, and Ohio take note!  The U.S. Department of Agriculture has expanded the emerald ash borer (EAB) quarantine to include these states.  In the article (Emerald Ash Borers FAQ), the questions covered include why did the 3 states listed above get quarantined, and why did they get quarantined in their entirety instead of county by county like the gypsy moth quarantine?  What is a regulated article under the quarantine along with determinations on other types of firewood and types of regulated trees is discussed.  There are plenty of phone numbers for the EAB program in each affected state, and phone numbers for each affected state’s Department of Agriculture.  For a map covering all quarantied areas, visit http://www.emeraldashborer.info/map.cfm.

There is also discussion how regulated articles should and shouldn’t be moved in intrastate and interstate commerce.  Enforcement agencies and penalties are covered and finally the differences in the quarantines of Michigan and Maryland vs. the other quarantined states.

The U.S. Department of Agriculture Animal and Plant Health Inspection Service (APHIS) has this and other important environmental information, so do websites like www.dontmovefirewood.org.  So if you’re an interstate mover, it’s a good idea to stay current of these and other environmental issues.  Visit these websites to help stay in compliance.

Dont Move a Serious Pest to a New Neighborhood is an article posted by the USDA (United States Department of Agriculture) about the gypsy moth (Lymantria dispar) and the areas in the U.S. and Canada that are considered “quarantined”.  Most people and some moving companies aren’t familiar with what are considered infested areas and the ramifications, both environmentally and legally, for moving gypsy moth egg masses.  The article explains how the egg masses can be moved on outdoor household items like lawn furniture, outdoor toys, garbage cans, etc., if not properly inspected.  It also tells of the damage the larval (caterpillar) stage of gypsy moth can do to trees.

The article goes on to explain how homeowner self inspection and professional inspection are options for gypsy moth inspection.  It details (with pictures) the different stages of the gypsy moths development including what an egg mass looks like.  The egg mass being the most critical to detect and eradicate since each egg mass can contain up to 1000 eggs.  The article details what to do if you find gypsy moth life stages and includes a self inspection check list along with contact information to report gypsy moths and links to various related sites. 

The information is much too important for homeowners and moving companies to ignore or misunderstand!

FMCSA has launched Phase 1 of the Pre-Employment Screening Program (PSP) today.  The PSP is a screening tool that allows motor carriers and individual drivers to purchase drivers’ inspection and crash records contained the Motor Carrier Management Information System (MCMIS).  Questions and answers about PSP can be found on the PSP Website, www.psp.fmcsa.dot.gov, and are also attached.

PSP will be administered by an FMCSA contractor, National Information Consortium Technologies, LLC (NIC).  Phase 1 will allow motor carriers the opportunity to visit the PSP Website and pre-register for the program by submitting their company contact information.  Motor carriers will not be able to order driver information at this time.  However, pre-registering for the program will expedite motor carrier access to the data once the next phase is launched. 

The motor carrier will download the PSP enrollment package from the PSP Website in order to input all required information, and sign the agreement form.  The motor carrier can then mail the PSP enrollment agreement to Pre-Employment Screening Program, P.O. Box 6810 , McLean , VA   22106 or return a scanned copy of the enrollment package to PSPenrollment@nicusa.com.  The contractor’s customer service representatives will handle e-mails at PSPenrollment@nicusa.com, and telephone requests at 1-877-684-6832.  The PSP call center is available from 8 a.m. to 6 p.m. Eastern time, Monday through Friday.  To view more information on this click here PSP FAQs021710.

The FMCSA (Federal Motor Carrier Safety Administration) has come out with changes to the New Entrant Safety Assurance Program for US and Canada based motor carriers.  It covers the time table and requirements a new entrant must fulfill along with information regarding safety audits and compliance reviews.  It also covers what components make up the audit process and their associated reg numbers. It lists the changes to the roadside inspection process and the 7 incidents that would trigger corrective action.  Then, depending on the severity of the offense, the corrective action or expedited corrective action that can take place.  It also explains the availability of an administrative review if the carrier feels that the finding of the inspection is incorrect.

A list of violations that would automatically fail the new entrant by category is listed including alcohol and drug violations, driver violations, and operations violations.  Finally, the result of a failed safety audit, information on associated HHG (household goods) and ADA (Americans with Disabilities Act) compliance and “chameleon carriers” is covered.  To read more on the topic visit www.fmcsa.dot.gov or call the FMCSA Information hotline at 1-800-832-5660.  Also to read more on this view this pamphlet :NE Brochure (revised 1-14-10)