2026 Pub. 7 Issue 3

The past few weeks have provided an eye-opening reminder of how fast floodwater moves. In August, severe storms swept across the Midwest and Ohio Valley, bringing flash flooding to communities across the region, barely a month after catastrophic flooding tore through Texas Hill Country along the Guadalupe River and destroyed homes and businesses. For dealerships in the path of severe storms, the risk does not end when the rain stops; it often peaks during cleanup.

Dealership accounting offices carry more fraud risk than a typical small business. Vehicle sales, F&I products, floor plan draws, manufacturer incentives and high-dollar cash receipts all flow through a back office that is often just two or three people. That combination — large dollar volume and limited staff — is exactly where segregation of duties (SOD) breaks down, and where most dealership fraud actually occurs. It’s rarely a stranger; it’s almost always a trusted employee with too much unchecked control over a process.

A very big thank you to CMA’s Toyota and Chevrolet of Martinsburg for hosting a food drive for the Berkeley County BackPack Program! We appreciate their help in feeding our community!

Workplace safety is a fundamental responsibility for every organization, but at a new-car automobile dealership, it can be easy to overlook the risks that exist beyond the sales floor. Dealerships bring together employees, customers, vehicles, equipment and active service operations every day. From the service bay and parts department to the vehicle lot and customer areas, safety risks are part of the business — and ignoring them can come with significant financial and operational consequences.

Hiring has always come with a certain level of risk. Resumes can contain inaccurate information, applicants can exaggerate their experience, and references may not always tell the whole story. Artificial intelligence is adding a new layer to that challenge.

Consumer and employment lawsuits are unpredictable liabilities in dealerships. Dealers can go years without any significant lawsuits and then be surprised by multiple suits in a short time frame. For years, mandatory arbitration agreements have been thought to be a panacea for controlling that exposure. But plaintiffs’ attorneys have gotten more aggressive about fighting to stay out of arbitration, and jury verdicts against dealerships have grown sharply larger. The question dealership owners should be asking in 2026 isn’t, “Should we use arbitration agreements?” The question should be, “Is our arbitration provision actually working, and are they worth the trade-offs?”