CATA News

Former CATA Chairman Michael Ettleson has been nominated for 2024 TIME Dealer of the Year award. Ettleson is one of a select group of 49 dealer nominees from across the country who will be honored at the 107th annual National Automobile Dealers Association (NADA) Show in Las Vegas, Nevada, on February 3, 2024.

The TIME Dealer of the Year award is one of the automobile industry’s most prestigious and highly coveted honors. The award recognizes the nation’s most successful auto dealers who also demonstrate a long-standing commitment to community service. Ettleson was chosen to represent the Illinois Automobile Dealers Association in the national competition – one of only 49 auto dealers nominated for the 55th annual award from more than 16,000 nationwide.

“I have been fortunate to have good people support me in business, a loving wife of 42 years, and a wonderful family,” nominee Ettleson said. “An Ettleson dealership has been in the Chicago area since 1968, and I am proud to continue our family’s legacy of employee longevity, honesty in pricing, and outstanding service to our customers.”

An active member in his state and local dealer associations, Ettleson has served on the board of the Illinois Automobile Dealers Association since 2015 and was chair of the group in 2020. He has also provided his leadership to the Chicago Automobile Trade Association (CATA) as a member of the board, chair of the board, and chair of the Chicago Auto Show.

In 2023, he partnered with the CATA to raise money for local service people and their families through the Chicago Automobile Trade Association’s USO BBQ for the Troops. The dealership joined more than 80 Chicago stores to offer hot dogs and burgers to visitors and raise funds for the USO Illinois.

Of all Ettleson’s good works, he is most proud of his time working with Helping Hand, where he served on the board of directors from 1995 to 2010 and policy board from 2010 to 2018. The organization provides services to children and adults with developmental disabilities and offers employment opportunities, community living options, and day programs.

Dealers are nominated by the executives of state and metro dealer associations around the country. A panel of faculty members from the Tauber Institute for Global Operations at the University of Michigan will select one finalist from each of the four NADA regions and one national Dealer of the Year. Three finalists will receive $5,000 for their favorite charities and the winner will receive $10,000 to give to charity, donated by Ally.

Ettleson was jointly nominated for the TIME Dealer of the Year award by the Chicago Automobile Trade Association and the Illinois Automobile Dealers Association. He and his wife, Jeri, have four children.

The Federal Trade Commission (FTC) has announced a final rule amending the FTC Safeguards Rule that will require non-banking institutions, such as dealers, to report certain data breaches and other security events to the FTC.

The final rule requires financial institutions (including dealers) to report “notification events,” defined as the unauthorized acquisition of unencrypted customer information involving at least 500 customers, to the FTC. The FTC has stated that the rule and its notice requirement are specifically intended to facilitate enforcement of the FTC’s Safeguards Rule against entities that file reports.

The notice to the commission must be provided electronically through a form located on the FTC’s website and must include:

• The name and contact information of the reporting financial institution
• A description of the types of information that were involved in the notification event
• The date or date range of the notification event (if possible to determine)
• The number of consumers affected
• A general description of the notification event

Notices will be available in a public database. The final rule does not impose a consumer notice requirement.

This rule will become effective 180 days after it is published in the federal register, which is expected shortly. Dealers and their qualified individuals should review the final rule to understand its requirements and scope and should consult with their technology providers and counsel regarding the implications of the new rule.

Appraisals are one of the most important areas in the dealership and are now more complex than ever before. Dealers appraise trades at the dealership, online, at homes and offices, out of state and in the service center. These intricacies, along with volatile vehicle prices, have made appraisals more difficult. Missing damage or flaws can massively affect the cost to market and ruin opportunity for profit.

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The Internal Revenue Service recommends that the best way to file the next quarterly payroll tax return by the Oct. 31, 2023, due date is electronically. While paper filing is available, the IRS strongly encourages e-filing. E-filing is the most secure, accurate method to file returns, and saves time.

E-filing is easy with auto-populating forms and schedules and a step-by-step process that performs calculations for the user.

The IRS acknowledges receipt of e-filed returns within 24 hours, giving employers reassurance that their return was not misplaced or lost in the mail. E-file users also receive missing information alerts.

Two options to electronically file payroll tax returns
The first option for employers is to self-file by purchasing IRS-approved software that meets their specific needs. There may be a fee to electronically file returns through the software, and the software will require a signature to e-file the returns.

Depending on the software they choose, employers will do one or both of the following:

The second option for employers is to hire a tax professional to prepare and file their employment tax returns. Employers can use the Authorized IRS e-file Provider Locator Service to find a tax professional who can file on behalf of the business.

For more information on electronic filing of payroll tax returns, see the E-file Employment Tax Forms page.

Facing increasing pressure from automakers using future investments as a bargaining chip, the governor's office is considering a move to repeal the Illinois Warranty Reimbursement Act during the Fall Veto Session which is being held this week and next. The CATA is urging its dealer members to contact their elected officials immediately. We are also requesting that dealers ask their technicians to make calls.   

As a reminder, the warranty reimbursement legislation allows dealers to be fairly compensated for warranty repairs, has resulted in better pay for service technicians and made the automotive technical career choice more attractive in a highly competitive labor market.

Unfortunately, some vehicle manufacturers have communicated to the Pritzker administration that as long as the warranty law is in place in Illinois, they will not consider locating vehicle, parts or battery plants in Illinois.

The CATA asks its dealer members including technicians to contact their state representative and senator immediately to help them understand the impact a repeal of the warranty reimbursement act will have on dealerships and employees. Ask your representatives to vote "no" on any legislation to repeal the warranty reimbursement legislation. You may also want to pass this message along and encourage your employees to contact their legislators.

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Illinois dealers have historically charged “shop fees,” also often referred to as “environmental fees,” “rag fees,” “consumables fees,” or simply “oe” (other expense.) As a result of legal activity in 2004 in Oklahoma involving Jiffy Lube, and a corresponding investigation by the New York Attorney General’s Office during that time, which found certain charges to be misleading, NADA undertook to collect state laws and guidance governing these fees and related service/repair advertising. It concluded that given the wide variety of approaches used in various states, NADA Regulatory Affairs would not develop a set of model rules or guidelines.

The CATA now has word of possible litigation in Texas, so we again alert our dealers as to the potential risk of liability. We are aware of no challenges to these fees in Illinois. However, as with any fee charged, any revenue received from the fee should approximate the expense it covers. Said another way, these fees should not be a source of additional income for dealers.

The CATA suggests that dealers periodically monitor the amount of revenue these fees produce and compare/contrast it to the expense for consumables shown on the dealer statement. If these two items reasonably offset, the dealer should be able to defend against any allegation, class action or otherwise, that the “expense” is a ruse and is merely “additional income.”

Many dealers charge such a fee as a percentage of an RO. Assuming that the percentage is “reasonable” under the above analysis, we suggest further that the charge be capped at a reasonable amount, so as to not make for unreasonable charges on expensive repair orders.

Abuse of these fees could also subject a dealer to investigation by the Illinois Attorney General, so again we advise continued caution.

[Souce: Automotive News] The FTC and the Wisconsin Department of Justice have reached a combined settlement of $1.1 million against Rhinelander Auto Center and affiliated parties for allegedly charging illegal junk fees and discriminating against American Indian customers. The FTC and Wisconsin DOJ had accused Rhinelander of charging its customers upward of thousands of dollars for add-ons without their consent, according to a combined statement released Wednesday. Rhinelander also was accused of unfairly marking up the transactions of American Indian customers. Though it agreed to the settlement, Rhinelander denied wrongdoing.

The current owners of Rhinelander, as well as general manager Daniel Towne, have agreed to cease the unfair practices and pay $1 million to refund customers. In a separate settlement, the former owners, Rhinelander Auto Center Inc. and Rhinelander Motor Co., agreed to permanently wind down business and pay $100,000 to refund affected consumers.

The complaint made by the FTC and Wisconsin cited a survey of Rhinelander customers that found half of customers were charged for add-ons "without authorization or through deception," the combined statement said. Additionally, the FTC and state of Wisconsin accused Rhinelander of marking up the interest rates of American Indian customers, which caused them to pay $401 more on average, the combined statement said. The agencies also accused the store of charging American Indian customers for unwanted add-ons at an above-average rate. The alleged practices cost American Indian customers $1,374 more on average for add-ons in credit transactions since 2019, the combined statement added.

It is almost daily that dealers’ consultants and attorneys receive a client call concerning an internal complaint of harassment or, even worse, an EEOC charge of harassment wherein the employer must respond in defending the charge. Statistically, complaints and formal charges of harassment continue to increase. As with our society and culture today, workplace cultures are wrought with poor language, nasty jokes, affairs, inappropriate behaviors, etc. It is, frankly, impossible to segregate today's societal culture from workplace culture. Additionally, employees tend to know their "rights" and aggressively pursue those, many times to protect their job, look for a windfall of money or in defense of their own inappropriate actions.

As such, it is critical that employers continue to remain on the offensive to include developing and implementing effective policy, training management as well as employees, aggressively looking into all complaints, directing frontline managers to be aware of and preventing or stopping inappropriate language. These and other measures are critical in any defense of an EEOC charge.

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As part of a larger effort to protect small businesses and organizations from scams, the Internal Revenue Service today announced the details of a special withdrawal process to help those who filed an Employee Retention Credit (ERC) claim and are concerned about its accuracy.

This new withdrawal option allows certain employers that filed an ERC claim but have not yet received a refund to withdraw their submission and avoid future repayment, interest and penalties. Employers that submitted an ERC claim that’s still being processed can withdraw their claim and avoid the possibility of getting a refund for which they’re ineligible.

The IRS created the withdrawal option to help small business owners and others who were pressured or misled by ERC marketers or promoters into filing ineligible claims. Claims that are withdrawn will be treated as if they were never filed. The IRS will not impose penalties or interest.

Those who willfully filed a fraudulent claim, or those who assisted or conspired in such conduct, should be aware that withdrawing a fraudulent claim will not exempt them from potential criminal investigation and prosecution.

When properly claimed, the ERC – also referred to as the Employee Retention Tax Credit or ERTC – is a refundable tax credit designed for businesses that continued paying employees during the COVID-19 pandemic while their business operations were fully or partially suspended due to a government order, or they had a significant decline in gross receipts during the eligibility periods. The credit is not available to individuals.

The ERC is a complex credit with precise requirements to help businesses during the pandemic, and since mid-September, the IRS has received approximately 3.6 million claims for the credit over the course of the program.

In July, the IRS said it was shifting its focus to review ERC claims for compliance concerns, including intensifying audit work and criminal investigations on promoters and businesses filing dubious claims. The IRS has hundreds of criminal cases being worked, and thousands of ERC claims have been referred for audit.

The new withdrawal process follows the Sept. 14 announcement of an immediate moratorium on processing new ERC claims. The moratorium, which will last until at least the end of this year, follows a flood of ineligible ERC claims. Payouts for claims submitted before Sept. 14 will continue during the moratorium period but at a slower pace due to more detailed compliance reviews. With stricter compliance reviews in place, existing ERC claims will go from a standard processing goal of 90 days to 180 days – and much longer if the claim faces further review or audit. The IRS may also seek additional documentation from the taxpayer to ensure the claim is legitimate.

Enhanced compliance reviews of existing claims submitted before the moratorium is critical to protect against fraud but also to protect businesses and organizations from facing penalties or interest payments stemming from bad claims pushed by promoters.

The IRS continues to warn taxpayers to use extreme caution before applying for the ERC as aggressive maneuvers continue by marketers and scammers. The IRS is also working on guidance to help employers that were misled into claiming the ERC and have already received the payment. More details will be available this fall.

Who can ask to withdraw an ERC claim

Employers can use the ERC claim withdrawal process if all of the following apply:

Taxpayers who are not eligible to use the withdrawal process can reduce or eliminate their ERC claim by filing an amended return. For details, see the Correcting an ERC claim – Amending a return section of the frequently asked questions about the ERC.

How to withdraw an ERC claim

To take advantage of the claim withdrawal procedure, taxpayers should carefully follow the special instructions at www.IRS.gov/withdrawmyERC, summarized below.

Those who received a refund check, but haven’t cashed or deposited it, can still withdraw their claim. They should mail the voided check with their withdrawal request using the instructions at www.IRS.gov/withdrawmyERC.

Gabrielle Abinion of Fox Valley Volkswagen in St. Charles, Illinois was honored with this year's "Ally Sees Her" award for her proven leadership in the automotive industry, becoming a dealership general manager at only 25-years old – decades ahead of most in that role.

Juan Niebles, Ally's senior director of auto sales, presented Abinion, a general manager at Fox Valley Volkswagen, which has been owned by Abinion's family since 2006, with the award during the National Association of Minority Automobile Dealers (NAMAD) annual conference.

"Gabrielle is a trailblazer in automotive retail becoming a general manager at 25 years old and an inspiration to the next generation of minority dealers," said Niebles.

Abinion, a proud Filipina, embodies the spirit of the Sees Her award. This award was established by Ally and NAMAD six years ago to recognize significant achievements of women of color in the auto industry and their commitment to strengthening their communities.

"Growing up in the automotive industry, I always admired my mentors and coaches, most of whom were men," Abinion said. "However, my perspective on the industry changed when I started selling cars at a Land Rover Jaguar store and was taken under the wing of an African American saleswoman, Alicia Houston, right out of college. She taught me the importance of having women in our industry and how by challenging traditional masculine norms, we can create a culture of diversity that inspires innovation, growth, and meaningful change."

To celebrate Abinion's commitment to giving back to her community, Ally will donate $10,000 that will be split between two non-profit organizations: Cal's Angels, which supports pediatric cancer research and helps families affected by the disease, and Naomi's House, which provides housing, job-skill training, and mental health services to victims of commercial sex trafficking. Through Abinion's leadership, the dealership has donated 10 vehicles to graduates of the Naomi's House program since 2019 to give each participant a fresh start.

The St. Charles native and Loyola University-Chicago graduate began her career in the automotive industry as a sales consultant at Howard Orloff Imports in Chicago.  She credits mentoring as instrumental to her development, leading to a promotion to finance manager at the Land Rover Jaguar Volvo franchise dealership within a year. She has completed the NCM's General Management Executive Program and Ally's Financial Leadership Academy, which are specialized dealer training programs. Abinion is also a member of the General Motor's Dealer Development National Candidate Pool. In February 2023, she was selected as a finalist for the "What Drives Her Retailer of the Year" award at the Chicago Auto Show.