Entries by admin_fidj

FDA Sued for Rescission of Menaflex’s 510(k) Clearance

A medical device manufacturer brought suit against the U.S. Food and Drug Administration (FDA) last week for rescinding the device’s 510(k) clearance and reclassifying the device from a Class II device to a Class III device. The FDA’s decision forced the manufacturer to undergo additional and more burdensome application processes, and significantly impacted the manufacturer’s ability to market the device in the United States. Class II devices are subject to 510(k) premarket notification review, whereby the FDA must determine whether a device is at least as safe and effective, that is, “substantially equivalent,” to a legally marketed device that is not subject to premarket approval, see 21 CFR 807. Class III devices, on the other hand, are subject to premarket approval (PMA), which is based on the determination that the PMA contains sufficient valid scientific evidence to assure that the device is safe and effective for its intended use(s), see 21 CFR 814. PMA approval is the most stringent type of device marketing application required by the FDA and must be obtained before a Class III device can be marketed in the United States.

FinCEN Expected to Announce Final Rule On Pre-Paid Access Cards In July 2011

Prepaid access cards, also known as stored value cards, such as pre-paid gift and credit cards, are currently not subject to any of the rigorous cross-border reporting requirements of the Bank Secrecy Act and FinCEN regulations that other monetary instruments such as cash and checks are subject to. The practical result of such a loophole is that while individuals crossing the border into the United States from a foreign country must declare if they are transporting over $10,000 in cash, no such requirement exists for pre-paid access cards. Additionally, prepaid access cards are relatively easy to obtain and provide for anonymous use. As a result, of the numerous schemes drug traffickers use to funnel illegal proceeds out of the United States, one of the more popular is the use of stored value cards to launder and transport money across international borders.

IRS Devising Additional Guidance on UTP Reporting, Focusing on Reserves and NOLs

In our continuing coverage of the new IRS regulations for Schedule UTP for Uncertain Tax Positions, we just learned that the IRS is working on additional guidance to aid taxpayers in properly reporting their positions. After the IRS finalized its initial UTP regulations on December 15, 2010 (https://fidj.wpengine.com/wp/index.php/04/irs-finalizes-regulations-requiring-corporations-to-file-uncertain-tax-position-statements/), companies grappled with reporting amid uncertain definitions and a lack of guidance (https://fidj.wpengine.com/wp/index.php/26/companies-still-grappling-with-utp-reporting-issues/). The IRS responded by releasing “Frequently Asked Questions on Schedule UTP” on its website. Now, BNA reports that the IRS is working to clarify what it means to record a reserve and how to treat net operating losses (“NOLs”). This much-needed update comes as the nation’s largest taxpayers are preparing their first round of Schedules UTP for tax year 2010.

Foreign Bank Account Report (“FBAR”) Extended Filing Date Announced for Signatory Authority Only Filers

The U.S. Department of the Treasury, Financial Crime Enforcement Network (James H. Freis, Jr., Director) announced via FinCEN Notice 2011-1, that individuals in the following categories now have until June 30, 2012 to file FBARs (for calendar year 2010 reporting obligations):

(1) An employee or officer of an entity under § 1010.350(f)(2)(i)-(v) who has signature or other authority over and no financial interest in a foreign financial account of a controlled person of the entity, OR

(2) an employee or officer of a controlled person of an entity under § 1010.350(f)(2)(i)-(v) who has signature or other authority over and no financial interest in a foreign financial account of the entity or another controlled person of the entity.

U.S. Tax Court Rules in Favor of Good Faith Taxpayers

On March 1, 2011, the Tax Court held that a husband and wife were not liable for accuracy-related penalties related to their 2005 income tax return where they acted in good faith and made reasonable efforts to accurately report their income. The entire Bengtson v. Commissioner opinion is available here.

Improving the FDA Seafood Oversight Program

On April 14, 2011, the U.S. Government Accountability Office (GAO) reported that the U.S. Food and Drug Administration’s (FDA) seafood oversight program, which ensures the safety of all imported seafood, is “limited” and needs improvement. In response to the GAO report, Congresswoman Rosa DeLauro (D-CT) announced her support for increased funding and better oversight for seafood to protect the public. DeLauro demanded that we “ensure that the FDA has the additional resources needed to be successful at their mission in ensuring the safety of these products and the protection of the American public.”

FDA and Medical Devices Subject of Congressional Hearing

The House Oversight & Government Reform Subcommittee on Health Care is scheduled to hold its “Pathways to FDA Medical Device Approval: Is there a Better Way?” hearing tomorrow, June 2, 2011. The panel is set to call FDA’s Dr. Jeffrey Shuren, Director of Centers for Devices and Radiological Health; in order to “study the FDA’s inconsistent application of reasonable standards for safety and effectiveness in approving medical devices, and the impact it has on American job creators.”

FDA Still Has Not Defined Gluten-Free After 3 Years

Currently, a label with the term “gluten-free” must be truthful and not misleading; however, there is no set definition provided by the FDA. The FDA has proposed that a food which bears the label “gluten-free” must not have more than 20 parts per million or more of gluten, which is the amount that can be reliably detected. The use of the label would be voluntary, meaning foods that are naturally gluten-free, such as milk or water, would not have to bear the label. Foods that would be prohibited from bearing the label are those which include barely, common wheat, rye, spelt, kamut, triticale, farina, vital gluten, semolina, and malt vinegar.