Tax Controversy and Tax Compliance Partner Yvonne R. Cort will be speaking at the Divorce Directions Summit, a live, free, virtual event Monday, August 14th – Tuesday, August 15th from 10 AM – 2 PM ET. Interested attorneys, accountants, realtors, or other professionals serving clients in the divorce/matrimonial sector are especially invited to attend Yvonne’s Monday, August 14th presentation on Innocent Spouse & Divorce, scheduled at 10:15 AM. To register for this educational summit, please click https://bit.ly/DivorceDirectionsRSVP.

Missed Our Webinar? Catch Up on Estate Planning for Your Disabled Child
Webinar Recap
Your Recap of Our Estate Planning for Your Disabled Child: The ABCs of SNTs Webinar
Stuart H. Schoenfeld recently hosted a compelling webinar on “Estate Planning for Your Disabled Child: The ABCs of SNTs.” If you were unable to attend or simply wish to revisit the topics discussed, we’ve provided a link below to watch the full webinar and keep slides on hand when you need to refer back to them.
Feel free to share this link with others who may find the information useful. Please don’t hesitate to reach out if you have further questions or need additional assistance. The Capell Barnett Matalon & Schoenfeld team is always ready to help guide you through these complex legal matters.

Long Island Herald Names Partner Stuart H. Schoenfeld A 2023 Top Lawyer

Capell Barnett Matalon & Schoenfeld LLP is pleased to announce that our Partner Stuart H. Schoenfeld has been named one of Long Island Herald’s 2023 Top Lawyers.
“The Long Island Herald Top Lawyers Award is further acknowledgement of Stuart’s commitment to each client he serves as a Partner in our Elder Law, Medicaid, Special Needs, and Trusts & Estate practices,” says Managing Partner Renato Matos.“He is a proactive advocate on each of their behalfs to help them achieve their individual goals and safeguard their legacies for future generations.”
A valued colleague, Stuart is an integral member of Capell Barnett Matalon & Schoenfeld’s team of dedicated attorneys and staff committed to delivering comprehensive and cost-effective legal services tailored to each client’s unique challenges, goals, and values.
About the Attorney
STUART H. SCHOENFELD has been a partner with the firm since 2005. His areas of concentration include elder law and estate planning, business, corporate and real estate transactions. Stuart’s extensive elder care and estate planning practice include the preservation of assets for the benefit of chronically ill, developmentally delayed and elderly individuals, planning and applying for Medicaid, guardianship proceedings and supplemental…
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Chinese America Society of CPAs Announces First Tax Symposium of 2023

Join Capell Barnett Matalon & Schoenfeld Partners Robert S. Barnett, Esq,, Masters (Taxation), CPA; Gregory L. Matalon, Esq.; and Erik Olson, Esq. for their presentations at the First Annual Tax Symposium hosted by the Chinese American Society of CPAs discussing gift tax reporting, trust and estate taxation, and partnership/S corp-related taxation. Eight CPE credits are available for the full day.
WHAT: The Chinese American Society of CPAs Tax Symposium
WHEN: Wednesday, June 21, 2023
WHERE: Hyatt Place Flushing/LGA, 133-42 39th Ave., Flushing, NY 11354
TIME: 8:15 AM – 5:45 PM l Our partners will present from 11 AM – 1 PM
COST: $100 (For Capell Barnett Matalon & Schoenfeld guests)
CREDITS AVAILABLE: 8 CPE
Register Now
Meet the Attorneys
ROBERT S. BARNETT, CPA, Esq., is a founding partner of the firm. His practice is highly concentrated in the areas of taxation, trusts, estates, corporate and partnership law and charitable planning. His experience includes Surrogate’s Court practice, tax dispute resolution in both Federal and State jurisdictions, and Tax Court representation. Mr. Barnett frequently assists clients in…
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GREGORY L. MATALON is a founding partner whose practice concentrates in the areas of estate planning, estate administration, elder law, and not-for-profit and Religious organizations law. He regularly helps individuals and families plan for the future through the preparation of last wills and testaments, trusts, living wills and health care proxies, and durable powers of attorney documents…
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ERIK OLSON is a partner who practices primarily in the areas of Estate Planning and Administration, as well as Estate Taxation. Erik earned his Juris Doctor from Loyola Law School in Los Angeles, where he received honors in the Corporate Law concentration. Erik received a B.A. in Economics from…
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Jodi Warren Named 2023 NYNP Media Nonprofit Trailblazer

Partner Jodi Warren Is Honored for Her Work on Behalf of Not-for-Profit and Religious Organizations to Further Their Missions Through Mission Driven DevelopmentTM
NEW YORK, NY – Capell Barnett Matalon & Schoenfeld LLP is pleased to announce that our Partner Jodi Warren has been awarded New York Nonprofit Media’s first-ever Nonprofit Trailblazers Award in recognition of her work on behalf of not-for-profit and religious organization clients.
“Award winners are selected based on their dedication to making a positive impact on New York City and State,” says Capell Barnett Matalon & Schoenfeld Managing Partner Renato Matos. “Jodi’s work in our Not-for-Profit and Religious Organizations Law Practice fully embodies that credo. This award is a credit to her drive and her determination to help clients further their missions through the implementation of our Mission Driven Development process.”
Meet Our Partner
Jodi Warren routinely represents religious and not-for-profit organizations on complex real estate transactions, including long-term leases, purchase and sale of properties, joint ventures, and development projects. She serves as counsel to numerous denominational governing bodies, individual congregations, and nonprofit organizations. Jodi represents and advises clients in all aspects of the development, construction, finance, acquisition, and divestiture of assets.

Are More SMB Tax Audits Coming?

by Max Freedman, Business News Daily Contributing Writer
Featuring Yvonne R. Cort, Partner
Could the IRS’ new $79.6 billion in funding result in more small and midsize business audits? Experts discuss whether or not this concern is founded.
- Most tax experts agree that more SMB tax audits could be coming, but opinions differ about whether this increase in audit frequency will be meaningful.
- Payroll, tax and accounting software can all help you remain tax-compliant, and so can staying organized and honest. Separating your business and personal finances is important too.
- If you’re audited, read your audit letter thoroughly first. It’s also crucial to hire a tax professional and cooperate with IRS agents.
- This article is for SMB owners concerned about the potential for more frequent tax audits.
You might assume that a bill with a name like “Inflation Reduction Act” would only bring relief to the small business community, especially in a midterm election year. However, when the bill was signed into law, one provision had many small and midsize businesses (SMBs) worrying – and not about inflation. Some are concerned that the bill’s new round of IRS funding could lead to more SMB tax audits.
Is the notion of increased SMB tax audits founded or unfounded? And if it is founded, what can small businesses do to stay compliant and meet tax obligations? How should they handle an audit if they are subject to one? Below is an in-depth exploration of all these questions, with input from tax experts.
How did the Inflation Reduction Act affect IRS funding?
The Inflation Reduction Act, which went into effect on August 16, 2022, will funnel $79.6 billion into the IRS over the next decade. This is a significant cash infusion for the IRS, as the agency has often had its budget slashed over the past decade. The IRS has also experienced high employee turnover, with 23,000 employees leaving its employ since 2010.
According to Sarah York, an accountant with Keeper Tax and an enrolled agent with the IRS, the cash infusion is much needed. The hope is that this new cash infusion reverses the trend of budget cuts and brings stability to the agency.
“It’s revamping their phone systems, improving their computer systems, and hiring new and younger staff to kind of manage the problem,” York said of the new funding’s potential effects. “Right now, what most CPAs have been dealing with, especially in the last three years, is the staffing shortage at the IRS.”
Why would new IRS funding lead to more SMB tax audits?
The notion that extra IRS funding could make SMB tax audits more common stems from the agency’s recent history. Many of the employees who have left the agency are highly experienced auditors, leaving behind a staff less able to handle complex audits. Typically, the higher an entity’s income, the more complicated their audit will be. That means a thinned-out IRS could primarily target lower-income entities, including SMBs.
“You’ll hear people say [the IRS is] just auditing poor people,” said Eric Green, a tax attorney and partner with Green & Sklarz. “There’s a little truth to that because those folks are easier to audit through correspondence and office audits. But I don’t think any [IRS] commissioner … ever sat around and said, ‘let’s go after poor people.’”
Data from Syracuse University backs the notion that lower-income earners are audited more often. According to this data, in tax year 2021, the IRS audited 13 out of every 1,000 taxpayers with low annual revenue. The corresponding rate for all other taxpayers was 2.6 out of 1,000, meaning low-income taxpayers experienced five times as many audits.
Key takeaway: When the IRS lacks funding and employees, it may also lack the resources to conduct anything other than low-income taxpayer audits.
Do SMBs really have to worry about more tax audits?
The tax experts we spoke with said that the annual amount of SMB audits will likely increase in future years. However, these experts gave varying answers on the potential extent of this increase. We’ve broken down their opinions below.
Opinion 1: Yes, SMBs may need to worry about more audits.
According to Yvonne Cort, a tax attorney and partner at Capell Barnett Matalon & Schoenfeld LLP, the increase in SMB tax audits is already here.
“I’m already seeing an uptick in audits,” Cort said. “It’s there, they started, the letters are going out, and people are being audited.” Cort said that the IRS is auditing SMB owners to close the “tax gap,” which comprises “people who have not been paying, either through not filing [a return, or] they didn’t put down the right amount of tax owed.”
Keith Jones, a CPA who operates under the name TheCPATaxProblemSolver, agrees. “There’s probably going to be more audits and less help to taxpayers,” Jones said. He added that the new funding would likely go toward “revenue-generating spots and not customer service spots. The revenue generated would be [through] auditors.”
Logan Allec, a CPA and owner of tax relief company Choice Tax Relief, said he firmly believes that more SMB audits will result from the new funding since much of it is directed toward the IRS’s “civil enforcement” division.
“$45.6 billion, is going towards civil enforcement,” Allec said. Civil enforcement, he added, encompasses “auditing and collecting taxes from certain groups that the IRS believes contributes to the tax gap,” including SMB owners.
Opinion 2: More audits will occur, but not to a meaningful extent.
Green told Business News Daily that concerns about a surge in SMB tax audits may be overstated, though a slight uptick should be expected.
“Do I think that the [new funding] will lead to more audits? Yes,” Green said. “Do I think that they’re gonna have 87,000 auditors breaking people’s doors down, grabbing stuff? No. That’s nonsense. The audit rate now is 1.3% … The percentage will go up, but not meaningfully.”
York agreed with Green’s assessment, adding that U.S. secretary of the treasury Janet Yellen has directed the IRS not to disproportionately target those with incomes of under $400,000. Still, York expects improved IRS operations will result in slightly more audits than years past.
“We shouldn’t see that big of a shift in the current audit rates for small business owners,” York said. “With the influx of resources, and as [the IRS] modernizes their computer systems, we could see more audits just because the technology is going to be more precise at picking up errors,” she said.
Andrew Griffith, proprietor of Andrew Griffith CPA, shared similar views. “I think much of this speculation is unfounded and unfortunate,” Griffith said. However, Griffith also said he “would not be surprised” if more audits did happen, “because that is part of … enforcing compliance with the tax code, and also [improving] the IRS’ own system issues.”
Tip: Even tax experts who think that SMB tax audit worries are exaggerated say that audits will indeed become more frequent. These experts believe the increase will be small, if not unnoticeable, but opinions vary. Other experts think the increase will be significant.
The tax experts we spoke with gave the following advice for keeping SMB taxes compliant to minimize audit risks.
1. Use the right software.
Whether you have employees or you only pay yourself from your business’s earnings, payroll software can help you remain compliant with tax regulations. The best payroll software platforms are regularly updated to reflect regulatory changes, which inherently keeps your business compliant. So too are many of the best accounting software platforms, which represent another type of technology that’s key to remaining compliant.
Did you know?: Some payroll services, such as Gusto, come with added HR services to further assist you with compliance. Read our Gusto payroll review to learn more.
You may want to consider using tax software alongside your payroll service. The best tax software, though not always superior to hiring an accountant depending on your business needs, can automate your tax filing process and streamline your compliance. TurboTax might be the first name that comes to mind when thinking about this software – and it’s our top tax software pick overall. Read our TurboTax review to find out why.
2. Keep your paperwork organized and substantiate your expenses.
Green said that organized paperwork is key to tax compliance, so pay attention to your recordkeeping practices.
“When you’re doing your tax return, all your documentation should be in one place,” Green said. “You set the groundwork [for a successful audit] when you get everything together for the return and keep it in one place.”
Green also said that when SMB owners get audited, it usually occurs long after filing their taxes. An audit can occur up to 18 months later, he said, so preemptively getting organized is always a smart move.
“Keep good records,” Cort said, adding that any paperwork for tax deductions should include justification for the expense. “I see a lot of people who don’t have adequate substantiation, especially for things like office supplies [or] stuff they’re buying [that] could just as easily be used at home as at the office.”
SMB owners should keep notes about their expenses, she added. For example, if you’re writing off a lunch meeting, it’s important to note who you’ve met with and what you discussed, so you can make it clear to the IRS why the lunch was indeed a business expense.
Griffith had similar advice. “[If] transactions are properly disclosed on the appropriate tax returns, that taxpayer has no real concerns about being audited.”
3. Separate your business and personal finances.
Here’s a piece of advice most SMB owners have probably heard before and could always stand to hear again: Open separate personal and business bank accounts.
“Don’t co-mingle your personal funds with your company funds,” Jones said. “You want two separate checking accounts. I’ve seen it so many times: [SMB owners] run everything through a personal account, so they have business and personal expenses coming from the same account. That’s a recipe for disaster.”
Allec gave similar advice. “If you give the IRS … all [your] bank statements and it’s a mix of personal bank statements that you ran your business through … it shows disorganization.”
That can make your audit more difficult, he said. Separating business and personal finances can solve this problem.
How to handle an audit
Below are some steps that can make a business tax audit more bearable.
1. Go over your audit letter with a fine-toothed comb.
If the IRS decides to audit you, it will send you a letter via USPS. You should open this letter immediately and read it closely. You should also note that the IRS will only send you an audit letter via USPS – other communications may be coming from scammers. As you read your audit letter, note everything that the IRS is asking you to provide.
“Usually, you’ll get something called an information document request,” Allec said. “That’ll tell you what the IRS is looking at.” Allec recommended reading this letter thoroughly, then sending the IRS all those records at once.
“If you make the auditor’s life easy, hopefully they’ll just move on to the next file,” he said. But it doesn’t always go that smoothly.
2. Hire a professional.
Most experts we spoke with stressed the importance of hiring a certified public accountant (CPA) to represent you during an audit. This makes sense: Tax audits are obviously anxiety-inducing, and it’s easy to make poor decisions under this mountain of stress. Tax professionals, on the other hand, deal with audits all the time, so they know how to approach audits rationally. They can – and should – be present with you and speak on your behalf in all audit affairs.
“You want to have professional representation,” Green said. “Do not try to handle this yourself.”
Jones agreed: “When you get audit letters, contact somebody and get representation.”
“When you get [an IRS] notice, that’s a good time to involve a tax professional,” York said.
However, York acknowledged that for some SMB owners, this may not be possible. In that case, she said, “Have your bank statements ready and recognize that, IRS auditors, they’re people and they want to help you. They want to make sure that you’re claiming what you’re allowed to claim. They’re gonna go in and look for things. If you work with them, they’ll work with you.”
3. Cooperate with auditors while being careful with their questions.
Remain professional when interacting with the IRS. No matter how frustrated you feel about being audited, any negativity can cause the IRS to think you’re hiding something. You’re better off being as kind and level-headed as possible, even if you’re upset on the inside. Keeping your cool might not feel great in the moment, but your kindness could bring your audit to a close sooner than later.
“People tend to be surprised at how understanding IRS auditors typically are when they go in and examine records,” York said. “They know small business owners don’t have the same accounting systems in place as big corporations. They’re willing to give grace and allowance for things if you approach it with the attitude, ‘We want to work with you.’”
That said, you should only answer auditor questions with the exact information the auditor is seeking. Anything more you say could open new doors for the IRS to pursue you through and add to your troubles. Green gave an insightful example.
“I have a taxpayer that shut down their consulting practice,” Green said. “The auditor noticed that, for the last two years, they had no income. The client said, ‘I wasn’t working at it.’ What the auditor heard is, ‘You’re not working at it, so it’s a hobby. You don’t get the deductions.’”
The auditor thus disallowed all the deductions.
“What a professional would’ve said is, ‘The taxpayer had ceased operations and was in their wind-down period, pursuant to regulations,’” Green said.
Green said he took this case to appeals and reversed the auditor’s elimination of the client’s deductions. This is just one of many examples where a tax professional can more expertly navigate an audit than a non-expert SMB owner.
Key takeaway: Reviewing your audit letter, working with a tax professional, and cooperating with auditors can make a tax audit less stressful.
More SMB audits might be coming, but you can be prepared
An increase in SMB audits doesn’t necessarily spell doom for your company. If you do get audited, sometimes simply sending the requested documentation to the IRS with professional help can quickly solve the problem. If the audit does continue thereafter, the advice in this article should help you come out on the other side unscathed.
Max Freedman is a content writer who has written hundreds of articles about small business strategy and operations, with a focus on finance and HR topics. He’s also published articles on payroll, small business funding, and content marketing. In addition to covering these business fundamentals, Max also writes about improving company culture, optimizing business social media pages, and choosing appropriate organizational structures for small businesses.
Medicaid Income and Resource Limits Ring in the New Year with a Big Increase
By Stuart H. Schoenfeld, Partner and Monica P. Ruela, Associate
Beginning on January 1, 2023, the Medicaid income and resource limits will see a big increase. The income limit for a single individual will be $1,563 (up from $934) and for a couple it will be $2,106 (up from $1,367). The resource limit for a single individual will be $28,133 (up from $16,800) and for a couple it will be $37,902 (up from $28,133).
For those that are already Medicaid recipients and utilize a pooled income trust to protect excess income or income over the current Medicaid income limits, you may be wondering how you can have your excess income adjusted or even eliminated all together under the new income rules. You have two (2) choices:
- Wait until your next Medicaid renewal. Generally, a recipient of Medicaid must recertify his/her eligibility every year. However, since March 2020, Medicaid renewals have been suspended because of the Public Health Emergency (PHE) created by COVID-19. Once the PHE is declared over, the annual renewal of Medicaid applications will begin again. At that point, your excess income will be automatically recalculated at each annual renewal. There is some talk that the PHE will be declared over in April 2023.
- Make a request to your local Medicaid office to rebudget your income. The Department of Health is presently sending out notices to all Medicaid recipients advising that beginning January 2023, they can reach out to their local office to request that their income be rebudgeted. Further, in January 2023, the NYC Medicaid office will be sending out notices to NYC Medicaid recipients with a form in which the recipient will be able to state and attest to their current 2023 income and deductions. Upon receipt of the completed form, the NYC Medicaid office will rebudget the recipient’s excess income.
It is important that a Medicaid recipient not make any changes to the monies deposited into their pooled income trust account without written instructions from the Medicaid office. Please feel free to call us with any questions about these important changes.
Big Changes Coming to New York State’s Medicaid Program
By Monica P. Ruela, Associate
Capell Barnett Matalon & Schoenfeld LLP
It is that time of year again when the Governor’s annual budget is signed and released. This year’s budget expands Medicaid benefits for people 65 and older and for those who are disabled. The expansion to the Medicaid program, which is discussed below, is set to be effective January 1, 2023.
What are the new Medicaid Income Limits?
The first change is to the income limits. Currently, a single person applying for Community (home-based) Medicaid is permitted to earn $934, and a couple is permitted to earn $1,367of monthly income without it adversely affecting Medicaid benefits. Effective January 1, 2023, these limits will be increased to $1,563 for an individual and $2,106 for a couple. As in the past, for community Medicaid recipients whose income is higher than the new limits, the pooled income trust remains a viable option to protect the excess income.
The new budget also increases the permitted resource limit for Medicaid applicants. Currently, to be eligible for Medicaid, a single individual’s non-exempt resources may not exceed $16,800. A couple’s income may not exceed $24,600. Under the new law, a single person will be permitted to keep $28,134 and a couple $37,908. Note that this resource limit is exclusive of exempt resources such as a primary residence and retirement assets.
Has the Medicaid look-back period changed?
Perhaps the most important change was the imposition of the 30-month lookback imposed on applicants for community-based Medicaid. This change, originally signed into law by Governor Cuomo in 2020, penalizes applicants for asset transfers made within 30 months of the application submission. Although this new law is alive and well, due to the ongoing COVID public health emergency, the implementation of this look-back period was postponed. While the law is set to become effective on July 1, 2022, there are indications that it may be postponed again. This means that an applicant for community-based Medicaid can transfer assets out of their name. As long as the application is filed with the appropriate Medicaid office before July 1, 2022, the applicant will not be penalized for the transfers.
Although the new budget increases the income and resource limits for potential Medicaid applicants, most New Yorkers do have income and resources that fall above those limits. The time to plan is now! We urge everyone to be proactive about their own planning. If you have questions about Medicaid planning and the application process, let’s talk.

Small Law Can Be Just The Right Size For You
In this episode of the Jabot podcast, Yvonne Cort, partner at Capell, Barnett, Matalon & Schoenfeld, talks about how her law school career goals matched up with her actual career. Yvonne discusses how she settled on her practice area. She also speaks about the benefits of small firms, and what it’s like when there aren’t a lot of women at the firm. Yvonne also shares her advice for folks just starting their legal career.
The Jabot podcast is an offshoot of the Above the Law brand focused on the challenges women, people of color, LGBTQIA, and other diverse populations face in the legal industry. Our name comes from none other than the Notorious Ruth Bader Ginsburg and the jabot (decorative collar) she wore when delivering dissents from the bench. It’s a reminder that even when we aren’t winning, we’re still a powerful force to be reckoned with.
Happy listening!
New Law Gives NY Nonprofit and Religious Corporations Permanent Permission to Hold Virtual Meetings
On November 8, 2021, New York Governor Kathy Hochul signed legislation that permanently gives New York not-for-profit corporations and religious corporations the ability to hold virtual meetings beyond the expiration of any emergency declarations related to COVID-19.
Although the new laws make the option of virtual meetings permanent, “secular” not-for-profit corporations and religious corporations are treated differently.
A not-for-profit corporation’s board of directors may choose to hold an “all virtual” meeting (where attendance is solely by means of electronic communication, with no “in person” attendance) or a hybrid meeting (where some attend by means of electronic communication, and others attend “in person”), if such meetings are not prohibited by the organization’s certificate of incorporation or bylaws.
Religious corporations, however, are not permitted to hold hybrid meetings, and may only hold all virtual meetings if the board of trustees (by whatever name, e.g., board of elders, church council, etc.) is authorized to determine the place of meetings, and they, in their sole discretion, determine that the meeting shall be held solely by means of electronic communication, otherwise, it must be held solely in person. Unlike corporations formed under the N-PCL, meetings of religious corporations cannot be held partially virtually—they must be held either entirely in person or entirely virtually.
Although virtual and hybrid meetings have become necessary alternatives to in-person meetings during this time of COVID-19, proper procedures must still be followed even in a virtual setting (notice, quorum, resolutions, minutes).
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RCL § 28. Electronic meetings
Notwithstanding any provision of law, certificate of incorporation or by-laws to the contrary, if the board of trustees of a religious corporation is authorized to determine the place of trustee meetings, corporate meetings, congregant or membership meetings, the board of trustees may, in its sole discretion, determine that the meeting shall be held solely by means of electronic communication, the electronic service and/or platform through which the meeting is held shall be the place of the meeting for purposes of this chapter.
N-PCL § 603. Meetings of members
(a) Meetings of members may be held at such place, within or without this state, as may be fixed by or under the by-laws or, if not so fixed, as determined by the board of directors. The board of directors may, unless otherwise restricted by the certificate of incorporation or the by-laws, in its sole discretion, determine that meetings of members be held partially or solely by means of electronic communication, the electronic service and/or platform by which the meeting is held shall be the place of the meeting for purposes of this article if a meeting is held solely by means of electronic communication. Meetings conducted partially or solely by means of electronic communications in reliance upon this paragraph and any member’s electronic participation in such meetings shall be subject to those guidelines and procedures as the board adopts, provided the board shall implement reasonable measures to: (1) verify that each person participating electronically is a member or a proxy of a member; (2) provide each member participating electronically with a reasonable opportunity to participate in the meeting, including an opportunity to propose, object to, and vote upon a specific action to be taken by the members, and to see, read or hear the proceedings of the meeting substantially concurrently with those proceedings; and (3) record and maintain a record of any votes or other actions taken by electronic communication at the meeting.
Published by Joseph Milano