Category Archive: Blog

Recognized by IPA for Highest Percentage of Female Owners

HLB Gross Collins, P.C. has been recognized by Inside Public Accounting for defying a trend within the profession and having one of the highest percentages of female owners among the largest accounting firms in the nation. IPA is recognizing 30 firms across the country for doing things differently and changing the profession for the better.

The honor is an important one, as the profession has long struggled with increasing the number of women in its ranks of partners. In the largest firms, on average, one in six owners are women, a statistic that is not significantly different than a decade ago, according to IPA benchmarking data.

HLB Gross Collins, P.C. is pleased to have earned this recognition from Inside Public Accounting.

All of Georgia Now Eligible for Disaster Tax Relief

Hurricane Irma victims in the entire state of Georgia now have until Jan. 31, 2018, to file certain individual and business tax returns and make certain tax payments, the Internal Revenue Service announced today.

This includes an additional filing extension for taxpayers with valid extensions that run out on Oct. 16, and businesses with extensions that ran out on Sept. 15. It parallels relief previously granted to Irma victims throughout Florida and in parts of Puerto Rico and the Virgin Islands, and Harvey victims in parts of Texas.

For taxpayers in Georgia, this relief postpones various tax filing and payment deadlines that occurred starting on Sept. 7, 2017. As a result, affected individuals and businesses will have until Jan. 31, 2018, to file returns and pay any taxes that were originally due during this period.

This includes the Sept. 15, 2017 and Jan. 16, 2018 deadlines for making quarterly estimated tax payments. For individual tax filers, it also includes 2016 income tax returns that received a tax-filing extension until Oct. 16, 2017. The IRS noted, however, that because tax payments related to these 2016 returns were originally due on April 18, 2017, those payments are not eligible for this relief.

A variety of business tax deadlines are also affected including the Oct. 31 deadline for quarterly payroll and excise tax returns. Businesses with extensions also have the additional time including, among others, calendar-year partnerships whose 2016 extensions ran out on Sept. 15, 2017 and calendar-year tax-exempt organizations   whose 2016 extensions run out on Nov. 15, 2017. The disaster relief page has details on other returns, payments and tax-related actions qualifying for the additional time.

In addition, the IRS is waiving late-deposit penalties for federal payroll and excise tax deposits normally due during the first 15 days of the disaster period. Check out the disaster relief page for the time periods that apply to each jurisdiction.

The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. Thus, taxpayers need not contact the IRS to get this relief. However, if an affected taxpayer receives a late filing or late payment penalty notice from the IRS that has an original or extended filing, payment or deposit due date falling within the postponement period, the taxpayer should call the number on the notice to have the penalty abated.

Individuals and businesses who suffered uninsured or unreimbursed disaster-related losses can choose to claim them on either the return for the year the loss occurred (in this instance, the 2017 return normally filed next year), or the return for the prior year (2016).

The tax relief is part of a coordinated federal response to the damage caused by severe storms and flooding and is based on local damage assessments by FEMA. For information on disaster recovery, visit

For information on government-wide efforts related to Hurricane Irma, visit

HLB International Appoints New Member in Palestinian Ruled Territories

HLB International, one of the leading global accountancy networks with presence in 140 countries, continues its growth with the recent signing of a new member firm in Palestinian Ruled Territories – Palestia.

Palestia is based in Ramallah, a Palestinian city in the central West Bank, north of Jerusalem. Established in 2001, the firm provides services in the fields of Audit, Bookkeeping & Accounting, Compliance, Financial Management, Management Consulting Services, Payroll, Risk Management Solutions and Tax & Legal Services.

Omran Nasser, Partner of Palestia commented: “We are very excited to join the HLB network. This will take our practice to the next level and will enable us to better serve our clients and expand our business.”

Palestia will work closely with other HLB members and makes a great addition to our coverage in the region.

The Georgia Retraining Tax Credit

Is your construction company investing in employees through means such as new equipment, new software, or new technology? If so, your company may be eligible for the Georgia Retraining Tax Credit. The purpose of this credit is to encourage employers to continuously invest in their employees via the very means mentioned above – upgrading equipment, acquiring new technology, and even completing ISO 9000 training.

Only eligible programs qualify for the Georgia Retraining Tax Credit. Eligible programs must be designed to enhance quality and productivity or to teach certain software technologies. The retraining tax credit covers expenses incurred as part of the retraining, although the cost of the new equipment, software, or technology itself is not covered. Covered expenses must be approved by the Technical College System of Georgia and include:

  • Cost of instructors
  • Cost of teaching materials
  • Employee wages during retraining
  • Reasonable travel expenses

The retraining credit is a Georgia-only credit that can be used to offset up to 50% of a company’s Georgia income tax liability. The actual credit amount amounts to 50% of the covered retraining expenses up to $500 per full-time employee per program. The maximum annual credit per employee is $1,250. Should the credit not be fully used in one year, the excess can be carried forward for 10 years.

HLB Gross Collins, P.C. has been serving some of the Southeast’s most prominent construction companies for nearly 50 years. Our Construction Practice works closely with clients to ensure they are taking advantage of all available credits and savings opportunities.

A Health Checklist for your Benefit Plan

As we are approaching the end of summer and the beginning of fall planning, have you considered the health of your employee benefit plan in your list of to-do’s? A study published by Fidelity Investments entitled 2017 Plan Sponsor Attitudes, showed that approximately 40% of companies in North America are not confident in their understanding of plan fiduciary responsibilities. However, a continued rise in seeking professional third party assistance to consult on benefit plans design and performance, showed approximately 90% of plan sponsors are considering hiring new retirement plan advisors and implementing plan design changes to meet the ever changing requirements of the Department of Labor (“DOL”) and the 1974 Employee Retirement Income Security Act (ERISA).

So, where does this leave you with your company’s plan and fiduciary responsibilities, as the plan sponsor? Let’s review some of the top areas where you should do a health assessment, to ensure your plan is dotting its I’s and crossing its T’s to a clean bill of health.

Understanding Your Fiduciary Duty

As the plan sponsor, it is your fiduciary duty to be educated on your roles and responsibilities with monitoring the administration of your company’s employee benefit plan.

  • All plan documents are up to date: your adoption agreement, plan document and summary plan description should be reviewed by your ERISA legal counsel to ensure these documents are complying with the latest requirements of the Internal Revenue Service (“IRS”) and the DOL ERISA regulations.
  • Ensure you understand all options established in your plan adoption agreement and plan document, including knowing:
    • When/how employees can enter the plan
    • Types of allowable contributions (Roth, rollovers, etc.)
    • Vesting schedule for participants
    • Employer matching calculation,
    • Safe harbor provisions in your plan, if any
    • Loans provisions: if they are allowed in the plan, the limits on them (number of loans allowed and total balances to be loaned)
    • How/when benefits can be paid from the plan, including when terminated participants can have deemed distributions from the plan through payment of balances remaining <=$5,000 or automatic rollovers of balances <=$5,00
  • Verifying your 3rd party service providers are fulfilling their contractual obligations
    • Are the Form 5500 filings being completed and filed timely (due by July 31st with extension to October 15th)
    • Are all appropriate annual disclosures being provided to all participants in the plan
      • Summary Plan Description
      • Summary of Material Modification
      • Employee plan statements
      • Summary annual reports of the plan
      • Black out notices
      • Auto enrollment forms, as applicable
  • Ensuring timely and consistent contributions are done to the plan
    • DOL rules require that an employer deposit deferrals to the plan as soon as the employer can; however, in no event can the deposit be later than the 15th business day of the following month. Rules about the 15th business day are not a safe harbor for depositing deferrals; rather, these rules set the maximum deadline for remitting contributions. As an exception, the DOL provides a 7-business-day safe harbor rule for employee contributions to plans with fewer than 100 participants
  • Ensure you know your plan Trustee and what rights they have over the plan’s assets. Under ERISA Section 403(a)there are two types of plan trustees
    • Directed Trustee: holds plan assets but does not control them; they act with direction from a named fiduciary (i.e.-plan sponsor or an investment manager). A directed trustee also has fiduciary responsibility and liability for monitoring the timing of deposits, transactions activity, as well as accuracy and compliance with regulations under the DOL and IRS.
    • Discretionary Trustee: has exclusive authority and discretion to manage and control plan assets. A discretionary trustee has fiduciary responsibility and liability for the selection, monitoring, and replacement of plan assets
  • Understand who your parties-in-interest are to the plan and ensure no inappropriate agreements and/or dealings are undertaken to result in a prohibited transaction
  • Verify the plan’s fidelity bond is up to date on coverage
    • The rule under Section 1112 of ERISA is: a Plan’s fidelity bond should cover at least 10% of the total assets balance, as of the beginning of the plan year, with the bond coverage being no less than $1,000 nor more than $500,000, with certain exceptions for amounts greater than $500,000
  • The plan’s fiduciary insurance coverage meets current needs, for those in a named fiduciary role for the plan, as defined under Section 402(a) of ERISA
  • Verifying all recordkeeping is up to date and maintained
  • Ensuring the plan is not committing prohibited transactions and if such are incurred, they are timely addressed through the DOL Voluntary Correction Program. Your plan’s 3rd service provider (TPA) can assist with these calculations and filings

Any further questions or guidance on best practices for employee benefit plan oversight, please contact our ERISA plans segment leader at or 678-306-1222

IRS Guidance for Those Affected by Natural Disasters

For September’s National Preparedness Month, the Internal Revenue Service is offering advice to taxpayers who may be affected by storms, fires, floods or other disasters. After the devastation of Hurricane Harvey and with Hurricane Irma threatening parts of the U.S. and Caribbean, the IRS reminds taxpayers that the agency is here to help, including offering a special toll-free number to taxpayers in federally-declared disaster areas that’s staffed with IRS specialists trained to handle disaster-related issues.

Managed and sponsored by the Federal Emergency Management Agency (FEMA) and the Ready Campaign, National Preparedness Month encourages individuals, businesses and organizations to prepare for a variety of disaster and emergency situations.

Create Electronic Copies of Key Documents
Taxpayers can help themselves by keeping a duplicate set of key documents, including bank statements, tax returns, identifications and insurance policies in a safe place. Store them in a waterproof container and away from the original set.

Doing so is easier now that many financial institutions provide statements and documents electronically, and much financial information is available on the Internet. Even if the original documents are only provided on paper, these can be scanned into an electronic format. This way, taxpayers can download them to a storage device such as an external hard drive or USB flash drive, or burn them to a CD or DVD.

Document Valuables
It’s a good idea to photograph or videotape the contents of any home, especially items of higher value. Documenting these items ahead of time will make it easier to quickly claim any available insurance and tax benefits after the disaster strikes. The IRS has a disaster loss workbook, Publication 584, which can help taxpayers compile a room-by-room list of belongings.

Photographs can help an individual prove the fair market value of items for insurance and casualty loss claims. Ideally, photos should be stored with a friend or family member who lives outside the area.

Check on Fiduciary Bonds
Employers who use payroll service providers should ask the provider if it has a fiduciary bond in place. The bond could protect the employer in the event of default by the payroll service provider.

Don’t Forget to Update Emergency Plans
Because a disaster can strike any time, be sure to review emergency plans annually. Personal and business situations change over time as do preparedness needs. When employers hire new employees or when a company or organization changes functions, plans should be updated accordingly and employees should be informed of the changes. Make plans ahead of time and be sure to practice them.

IRS Ready to Help
In the case of a federally-declared disaster, an affected taxpayer can call 866-562-5227 to speak with an IRS specialist trained to handle disaster-related issues.

Back copies of previously-filed tax returns and all attachments, including Forms W-2, can be requested by filing Form 4506, Request for Copy of Tax Return. Alternatively, transcripts showing most line items on these returns can be ordered through the Get Transcript link on, by calling 800-908-9946 or by using Form 4506T-EZ, Short Form Request for Individual Tax Return Transcript, or Form 4506-T, Request for Transcript of Tax Return.

September/October Dates to Remember

September 15

Individuals. If you are not paying your 2017 income tax through withholding (or will not pay in enough tax during the year that way), pay the third installment of your 2017 estimated tax. Use Form 1040-ES.

Employers. For Social Security, Medicare, withheld income tax, and nonpayroll withholding, deposit the tax for payments in August if the monthly rule applies.

Corporations. Deposit the third installment of estimated income tax for 2017. Use the worksheet Form 1120-W to help estimate tax for the year.

Partnerships. File a 2016 calendar-year return (Form 1065). This due date applies only if you timely requested an automatic six-month extension. Provide each partner with a copy of their final or amended Schedule K­1 (Form 1065) or substitute Schedule K­1 (Form 1065).

S corporations. File a 2016 calendar-year income tax return (Form 1120S) and pay any tax due. This due date applies only if you timely requested an automatic six-month extension. Provide each shareholder with a copy of Schedule K-1 (Form 1120S) or a substitute Schedule K-1.

October 2

Estates and Trusts. If you have an automatic 5 ½ month extension to file your estate (other than a bankruptcy estate which have a 6 month extension) or trust tax return for 2016, file Form 1041 and pay any tax, interest, or penalties due. This due date only applies if you timely requested an automatic 5 ½ month extension.

October 16

Individuals. If you have an automatic six-month extension to file your income tax return for 2016, file Form 1040, 1040A, or 1040EZ and pay any tax, interest, or penalties due.

Corporations. File a 2016 calendar-year income tax return (Form 1120) and pay any tax, interest, and penalties due. This due date applies only if you timely requested an automatic six-month extension.

Employers. For Social Security, Medicare, withheld income tax, and nonpayroll withholding, deposit the tax for payments in September if the monthly rule applies.

October 31

Employers. For Social Security, Medicare, and withheld income tax, file Form 941 for the third quarter of 2017. Deposit any undeposited tax. (If your tax liability is less than $2,500, you can pay it in full with a timely filed return.) If you deposited the tax for the quarter in full and on time, you have until November 13 to file the return.

For federal unemployment tax, deposit the tax owed through September if more than $500.

The R&D Credit for Small Businesses


Just as individuals get a dollar-for-dollar tax savings from tax credits, the same is true for businesses that qualify for tax credits. The Protecting Americans from Tax Hikes (PATH) Act of 2015, passed in 2016, expanded the ability of small companies to use the research and development (R&D) tax credit. The R&D credit is based not on the total amount a business spends on R&D, but on increases in R&D spending. Not only is a tax credit better than a tax deduction, but R&D costs not covered by the credit may not be immediately deductible.

The spending that counts for the R&D credit might be for in-house wages and supplies, as well as for outside contracts that are considered qualified research expenditures. Money spent on activities such as developing new or improved products, processes, or formulas; developing prototypes or models; developing new technology; and developing or applying for patents may qualify.

To obtain the R&D credit, diligent recordkeeping is required. Defining which outlays qualify as R&D can be a challenge, so companies should be able to support their claims. Moreover, certain small businesses may run into additional obstacles, such as the alternative minimum tax (AMT) and a lack of taxable income that prevents using tax credits currently.

Addressing the AMT

Generally, a company that owes the AMT cannot use the R&D tax credit to reduce its AMT obligation. However, in some cases, the PATH Act allows the R&D credit to offset the AMT. Eligible companies are sole proprietorships, partnerships, or nonpublic corporations with average annual gross receipts under $50 million for the prior three tax years. In the case of pass-through entities, partners and S corporation shareholders may be able to use the R&D credit against their individual AMT liability.

Offsetting payroll taxes

The R&D tax credit is nonrefundable, so it generally doesn’t help companies with no income tax liability. Another PATH provision addresses this problem for young companies that do substantial R&D yet have no tax liability to reduce. Eligible firms can use the credit to reduce payroll tax, rather than income tax.

To qualify, a corporation or partnership must have less than $5 million of gross receipts in the year of claiming the credit and no gross receipts in any year before the fourth preceding year. Thus, this tax break is mainly for startups. A company that qualifies can use up to $250,000 of R&D tax credits to reduce its employer share of Social Security payroll tax outlays, so cash can be retained. If current payroll tax doesn’t equal the amount of the R&D credit a company can claim, carryforwards may be possible.

The complexity of the R&D tax credit and the required recordkeeping may discourage small companies from claiming it. If your company is devoting resources to developing new products and technology, HLB Gross Collins, P.C. can determine if seeking this credit will be worthwhile and help you provide the necessary documentation.

Tax Credits vs. Tax Deductions


Many people prize tax deductions. The promise of a deduction can affect decisions in many areas, including charitable contributions, home buying, and investing in rental property.

However, tax deductions offer only partial relief because they reduce income, not the tax bill. The higher your income and tax bracket, the more you’ll benefit from a tax deduction.

Example 1: Heidi Jones has recently finished her education and joined the work force. With a modest income, Heidi is in a 15% tax bracket. If Heidi donates $1,000 to charity (and if she itemizes deductions on her tax return), Heidi will reduce her taxable income by $1,000. In a 15% bracket, she will save $150 in tax (15% times $1,000).

Example 2: Ken Larsen, a middle-aged executive, has a high salary, placing him in the 33% tax bracket. If Ken itemizes a $1,000 charitable contribution, he’ll save $330 (33% times $1,000), more than twice the amount of tax that Heidi saves for the same charitable gift.

Dollar for dollar

A tax credit, on the other hand, is a direct reduction of the tax you owe. If Heidi and Ken both receive a $1,000 tax credit, they’ll both trim their tax obligation by $1,000. Moreover, many tax credits have income limits and phaseouts, which effectively means they’re available to low- and middle-income taxpayers but not to people with relatively high incomes.

Here are some widely used tax credits:

Earned income tax credit

This credit is designed to help workers, including those with self-employment earnings, who have modest incomes. The good news is that the earned income tax credit (EITC) is refundable.

Example 1: Jim Carter files his 2017 tax return. Without the EITC, Jim would owe $500 in tax. Jim’s EITC amount is $1,200. Therefore, his $500 obligation is wiped out, and Jim would receive a check from the IRS for the $700 balance. (Most tax credits are not refundable, meaning that they do no more than offset any tax obligation.)

Besides having earned income, there are several other hurdles to clear to get the EITC. They include age (at least age 25, but under 65), investment income (no more than $3,450 in 2017), and filing status (married, filing separately, not eligible).

In addition, there are income limits for the EITC; those limits vary by filing status and by the number of qualifying children. (The definition of qualifying children is very broad for EITC purposes.) This year, for instance, a married couple filing a joint tax return with two qualifying children must have both earned income and adjusted gross income (AGI) of less than $50,597 to get this credit.

EITC amounts vary, as well. The 2017 maximum credit is $6,318 for a recipient with three or more qualifying children.

Child tax credit

For the child tax credit, the definition of a child is a bit more limited than it is for the EITC. Although the EITC can cover students under age 24, the child tax credit does not go beyond age 16. Other requirements apply.

The maximum tax credit is $1,000 for each qualifying child. This credit phases out after the taxpayer’s income exceeds a threshold amount based on his or her income. The threshold amount depends on filing status—to get the maximum credit, for instance, a couple filing a joint return must have modified adjusted gross income (MAGI) of no more than $110,000. Above the threshold, the child tax credit drops by $50 per $1,000 of MAGI. Under a tax code provision known as the additional child tax credit, some of the credit may be refundable, depending on the amount of the taxpayer’s earned income.

Child and dependent care tax credit

As the name indicates, this credit has two broad applications. One is for taxpayers who have children under age 13 and the other is for those who have spouses, dependents, or certain other individuals who are physically or mentally incapable of self-care. Either way, the credit is a portion of amounts paid to a caregiver so that the taxpayer can go to work, actively look for work, or go to school.

To calculate this credit, start by finding the amount spent on qualifying care for a given calendar year. Here, the maximum amount that counts is $3,000 for one qualifying person and $6,000 for two or more people needing care.

However, this maximum credit amount may be limited for some individuals. The maximum amount is limited, in the case of a single individual, to the individual’s earned income for the year. In the case of a married individual, the maximum amount is limited to the lesser of the individual’s earned income or the earned income of the individual’s spouse. In addition, if the individual receives dependent care benefits that he or she excludes from income, the maximum credit amount is reduced by the amount of the dependent care benefits excluded.

This resulting amount is multiplied by a percentage that depends on your AGI. The minimum percentage, used by many who claim this credit, is 20%, which applies when AGI is $43,000 or more.

Example 2: Paul and Robin Scott, who have $100,000 in AGI, pay over $6,000 to caregivers for their two children this year. Therefore, the Scotts multiply the maximum amount ($6,000) by the minimum percentage (20%) to get $1,200, the amount of this tax credit they can claim. (Claimants may also be responsible for payroll tax reporting in some situations.)

More credits, more assistance

Many other tax credits are available, including some for higher education. For all of them, the rules go beyond these brief descriptions. HLB Gross Collins, P.C. can help you plan to make the most of these dollar-for-dollar tax savers.

When it Comes to Defense, Ginnie Mae Stands Out

Many people prefer to have some conservative holdings in their IRAs and other retirement accounts. This century has already produced two nasty bear markets (in 2000–2002 and 2007–2009). If a third downturn occurs, investors will be glad they held some defensive positions, which might minimize losses and possibly offer gains.

When it comes to playing defense, Ginnie Maes may merit consideration. The nickname comes from the formal name, Government National Mortgage Association, or GNMA. This agency promises investors the payment of principal and interest from residential mortgage loans insured or guaranteed by federal entities, such as the Federal Housing Authority and the Department of Veterans Affairs. Ginnie Mae mortgage bonds are the only mortgage securities with full federal backing.

It’s complicated

Ginnie Mae securities might be considered the “safe option” for retirement investing. Yields are not enormous in today’s environment, but they may be relatively attractive. Typically, Ginnie Maes pay one to two percentage points of yield more than Treasuries. Why should supposedly safe Ginnie Maes pay more?

One answer rests with mortgage-backed securities. Most bonds lose value when interest rates rise but gain value when rates fall because their fixed yields become more attractive.

Mortgage-backed securities, including Ginnie Maes, also suffer losses when rates rise. However, rising rates can cause a slowdown in mortgage pre-payments because borrowers are less likely to refinance their loans. This slowdown means that Ginnie Mae investors have less money to reinvest at higher yields.

The opposite phenomenon affects mortgage securities when rates fall. More refinancing occurs as homeowners seek the lower loan rates. That means more cash flow to investors holding mortgage bonds and more money to reinvest at lower rates. Thus, mortgage-backed securities may lose more than conventional bonds when rates rise and gain less when rates fall.

Taxes, too

Treasury securities and funds holding them pay interest that’s taxable at the federal level, but is generally exempt from state and local income taxes. Therefore, these holdings can be especially attractive to investors in high-tax areas.

Mortgage-backed securities, even federally backed Ginnie Maes, do not enjoy state or local tax exemption; they’re fully taxable at all levels of government. This relative disadvantage, along with the complexity and interest rate threats, may explain the higher yields (versus Treasuries) that Ginnie Maes offer to investors. Their tax treatment also might cause Ginnie Maes to be an appealing holding in retirement accounts where all the income taxes can be deferred until money is withdrawn.

Favoring funds

Investors can often purchase individual Ginnie Mae bonds for around $25,000. Some retirees are pleased with these “pass-through” securities because they deliver monthly cash flow, reflecting the regular payments made on the underlying mortgages by homeowners. If you work with a savvy financial adviser or if you are willing to research Ginnie Maes on your own, this can be an astute choice.

That said, the Ginnie Mae market is complex, likely to lead to missteps by novice investors. Many people prefer owning shares of a fund and relying on the expertise of professionals to choose suitable Ginnie Maes. Diversification and a lengthy time frame might overcome interest rate concerns and deliver the benefits of relatively high yields. Many leading fund families, including Vanguard, Fidelity, and T. Rowe Price, have established Ginnie Mae mutual funds with performance records for investors to evaluate.

In terms of performance, Ginnie Mae funds generally had positive returns in 2008 when the stock market nosedived. The past is no guarantee of future results, but an encouraging track record might indicate that Ginnie Mae may be worth a place in a retirement portfolio.

Up With Housing

  • The GNMA, or Ginnie Mae, helps make affordable housing a reality for millions of low- and moderate-income U.S. households.
  • The Ginnie Mae guarantee allows mortgage lenders to obtain a better price for their mortgage loans in the secondary mortgage market, then use the proceeds to fund new mortgage loans.
  • Ginnie Mae guarantees investors the timely payment of principal and interest on certain mortgage-backed securities.
  • Besides loans insured by the Federal Housing Authority or guaranteed by the Department of Veterans Affairs, other guarantors or issuers of loans eligible as collateral for Ginnie Maes include the Department of Agriculture’s Rural Development and the Department of Housing and Urban Development’s Office of Public and Indian Housing.
  • Ginnie Mae has never needed a bailout from the federal government. It does not buy or sell loans or issue mortgage-backed securities; its balance sheet doesn’t use derivatives to hedge or carry long-term debt.
  • Ginnie Mae securities are the only mortgage-backed security to carry the full faith and credit guarantee of the U. S. government.