Avoiding The Partnership Technical Termination Trap

October 10, 2011

Some families have been pleased about using partnership interests for wealth transfer during the recent market lows. Unfortunately, a few have been met with unwelcome surprises — five-figure bills penalizing the partnerships for filing late tax returns. When a partnership is terminated, its final income tax return is due three and a half months from the date of termination. Unless the partnership happened to cease doing business on Dec. 31, …

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Tips On Surviving A Tax Audit

March 29, 2011

I had just left our Scarsdale, N.Y., headquarters on a business trip a couple of years ago when an Internal Revenue Service collections officer named Celeste Green stormed in, waving a “Notice of Intent to Levy” and demanding that we pay the IRS $25,000 by the end of that month. Since I was not present, Green directed her brusque comments to our perplexed receptionist, who knew nothing about our business …

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Here Is What Happens If You Are Audited

March 29, 2011

Being well informed is the best way to ease the anxiety that comes with a letter from the Internal Revenue Service notifying you of a tax audit. First, know your rights, spelled out in the IRS publication “Your Rights as a Taxpayer.” Those include the right to privacy and confidentiality, to professional and courteous service, to be represented by your accountant or other tax professional, to get help with unresolved …

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2011 Tax Changes: Facts, Opportunities And Lessons

March 9, 2011

Amid widespread concern about 2011 tax increases, Congress surprised taxpayers in late December by actually reducing taxes for the next two years. What should a prudent person do now, and what can we learn from the evolving tax legislation? While income tax changes for 2011 do not ultimately have much impact on high-net-worth taxpayers, new transfer tax rules have the potential to dramatically reduce their tax burdens. Gift And Estate …

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Don’t Let A ‘Crummey’ Mistake Ruin Your Trust

June 4, 2010

Imagine paying your attorney a small fortune to draft your trust documents, only to have the Internal Revenue Service attack your gifting plan to the trust years later. Some taxpayers find themselves in this unfortunate situation when it comes to the common, yet often mishandled, area of Crummey withdrawal powers. What Are Crummey Powers? Many estate plans call for annual gifts to heirs, often through trusts. To be eligible for …

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Onerous New State Tax Rules

February 1, 2010

Oregon shed its fierce anti-tax reputation last month by doing something rarely seen — it voted for higher taxes. Facing a budget deficit of more than $700 million, Oregonians passed two proposals that tied them with Hawaii for the highest personal income tax rate in the nation and gave them the highest capital gains tax and corporate minimum tax. Oregon’s plight was not unique, although most states have not left …

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Should You Do A Roth IRA Conversion?

February 1, 2010

The federal government may have given you the opportunity to save tens or even hundreds of thousands of tax dollars — if you’re willing to deal with some complexity. Will you take advantage of it? Beginning this year, all taxpayers will be allowed to convert their traditional IRAs to Roth IRAs, regardless of their income levels. With tax rates already scheduled to increase in 2011 and the possibility of additional …

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Dragging Secret Accounts Into The Open

November 9, 2009

As I learned back in elementary school, “Secrets, secrets are no fun.” This is especially true when the secrets involve billions of dollars in hidden offshore accounts and hundreds of millions in unpaid taxes. Earlier this year, the Internal Revenue Service filed a lawsuit against the Union Bank of Switzerland (UBS), seeking the identities and account information for as many as 52,000 accounts. After months of negotiations, including high level …

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A Matter Of Trust At Treasury

April 2, 2009

Barely settled into office, Treasury Secretary Timothy F. Geithner may be developing a credibility problem that could set back global economic recovery and endanger his place in the Obama Cabinet. Last autumn, the financial community saw Geithner — then president of the Federal Reserve Bank of New York — as a savior. The global banking system faced imminent collapse when Geithner, collaborating with Federal Reserve Chairman Ben Bernanke and then-Treasury …

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Making Your Move Manageable

April 1, 2009

The act of moving ranks is about as high on the list of things you want to do as getting a tooth pulled without Novocain. Good planning, tax deductions and a lot of patience can make the experience tolerable. About two months before you move, start getting estimates from moving companies. If possible, have the estimator survey your home and prepare a written estimate. Alternatively, you can get a bid …

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