Topics Covered:

1. So the Federal Reserve made its decision yesterday to hold rates steady
2. Have ETFs Reached A Breaking Point?
3. How the new Streamlined Procedures for taxpayers reporting undisclosed foreign bank accounts are being administered by the IRS.
4. Questions from our listeners:

• I am a U.S. citizen living and working outside of the United States for many years. Do I still need to file a U.S. tax return?
• I pay income tax in a foreign country. Do I still have to file a U.S. income tax return even though I do not live in the United States?
• I am a U.S. citizen married to a nonresident alien. What is my filing status and can I claim an exemption for my foreign spouse?

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Jeff states: Yes sometimes we just have to take the money and run!

Good afternoon! Welcome to Inside Advantage – Your Financial And Tax Radio Show.

This is Board Certified Tax Attorney, Jeffrey B. Kahn, the principal attorney of the Law Offices Of Jeffrey B. Kahn, P.C. and head of the KahnTaxLaw team.

Windus states: And this is Licensed Financial Planner, Windus A. Fernandez Brinkkord, Senior Vice President Of Investments at Trilogy Financial Services. You are listening to our weekly radio show where we talk everything about finances and taxes from the ESPN 1700 AM Studio in San Diego, California.

Jeff states: When it comes to knowing tax laws and paying taxes, let’s face it — everyone in the U.S. is either in tax trouble, on their way to tax trouble, or trying to avoid tax trouble!

Windus states: And whether you are on the rebound or flying high, we have the information you need to make sound financial decisions and map out your strategy for success.

Jeff states: Our show is broadcasted each Friday at 2:00PM Pacific Time and replays are available on demand by logging into the KahnTaxLaw website at www.kahntaxlaw.com.

Jeff states: For today’s show we have coming up:

Segment 2 material: Have ETFs Reached A Breaking Point?

Windus states: Also coming up is:

Segment 3 material: How the new Streamlined Procedures for taxpayers reporting undisclosed foreign bank accounts are being administered by the IRS.

And of course towards the end of our show, we will be answering some of your questions.

Jeff starts chit chat with Windus.

Jeff states: So for today’s top story:

So the Fed made its decision yesterday to hold rates steady

This was breaking news reported on September 17^th and of course all the news media picked to up. We looked at an article posted in Yahoo Finance on September 17th http://finance.yahoo.com/news/looming-fed-rate-decision-test-050656810.html

Jeff continues: So in case you have not heard this yet, the U.S. Federal Reserve in its September meeting voted to keep interest rates unchanged given their concerns about the global economy, financial market volatility and sluggish inflation at home, but left open the possibility of a modest policy tightening later this year.

Windus states: Fed Chair Janet Yellen said in a press conference that developments in a tightly linked global economy had in effect forced the U.S. central bank’s hand.

Windus states: The U.S. economy has been performing well enough to perhaps justify a rate hike “and we expect it to continue to do so,” Yellen said shortly after the Fed’s policy-setting committee released its latest statement following a two-day meeting.

Windus states: But Yellen added that “the outlook abroad appears to have become less certain,” driving down U.S. equity prices, pushing up the dollar, and tightening financial conditions in a way that may slow U.S. growth regardless of what the Fed does.

Windus states: “In light of the heightened uncertainty abroad … the committee judged it appropriate to wait,” Yellen said. “Given the significant economic and financial interconnections between the U.S. and the rest of the world, the situation abroad bears close watching.”

Jeff states: Now we have been hearing for a long time from Ms. Yellen that the decisions of the Fed are still be “data-dependent”. Windus, in making this decision to hold rates steady, is the Fed marching to a different beat?

Windus replies: I do not think so but it should be clear that international events and how they impact global markets are a variable for the Feds to consider.

Jeff asks: What about the concept that the U.S. economy is so large that even with a slow-down abroad, the U.S. economy could still be strong and weather through such a storm?

Windus replies.

Jeff asks: So getting back to the Fed’s decision, is there any future guidance we can pull from this?

Windus replies: The Fed still maintains its bias towards a rate hike sometime this year, while lowering its long-term outlook for the economy. The Fed still has two more meetings this year – one in October and one in December. Fresh economic projections showed 13 of 17 Fed policymakers foresee raising rates at least once in 2015, down from 15 at the last meeting in June. Four policymakers now say rates should not be raised until at least 2016, compared to two who felt that way in June.

Jeff asks: I always hear terms describing Fed officials as being doves or hawks. Can you explain the difference to our listeners?

Windus replies:

Jeff states: Now the Fed does make projections of GDP growth, unemployment and inflation and considers the projected movements in making rate change decisions. Windus, what are some of the projections that the Fed has communicated to the public that this article mentions?

Windus replies: Taken as a whole, the latest Fed projections of slower GDP growth, low unemployment and continuing low inflation suggest that concerns of a so-called secular stagnation may be taking root among policymakers. One policymaker even suggested a negative federal funds rate.

Windus states: The median projection of the 17 policymakers showed the Fed expects the economy to grow 2.1% this year, slightly faster than previously thought. However, its forecasts for GDP growth in 2016 and 2017 were downgraded.

Windus states: The Fed also forecasted that inflation would creep only slowly toward its 2% target even as unemployment dips lower than previously expected. It sees the unemployment rate hitting 4.8% next year and remaining at that level for as long as three years.

Windus states: Considering the foregoing, the Fed’s projected interest rate path shifted downward, with the long-run federal funds rate now seen at 3.5%, compared to 3.75% at the last policy meeting.

Jeff asks: So do you think that the Fed is being more dovish or hawkish now that growth projections revised down?

Windus replies: Despite the possibility that we could enter into some period of stagnation, I agree with the consensus that in the absence of any serious derailing of the economy, there will be some increase in rates before the year is out. Remember that we still have two Fed meetings to go before year’s end.

Jeff states: So it looks like the saga will continue into the 4^th quarter of 2015 and for now the status quo continues.

Well it’s time for a break but stay tuned because we are going to tell you about the new concerns over ETF’s.

You are listening to Board Certified Tax Attorney, Jeffrey B. Kahn, and Licensed Financial Planner, Windus A. Fernandez Brinkkord on Inside Advantage on ESPN.

BREAK

Welcome back. This is Inside Advantage – Your Financial And Tax Radio Show on ESPN and you are listening to Board Certified Tax Attorney, Jeffrey B. Kahn, and Licensed Financial Planner, Windus A. Fernandez Brinkkord.

Jeff states: Windus is calling into the studio as she is out on assignment and so in this next segment we want to talk about ETF’s.

Have ETFs Reached A Breaking Point?

Jeff states: A September 13, 2015 article in the Wall Street Journal caught your attention Windus. http://on.wsj.com/1QyPjgM

Jeff states: And in this article it reports how fund managers such as Black Rock, Inc. are trying to figure out what went wrong as the extreme stock-market gyrations in August exposed cracks in the business of exchange-traded funds.

Windus states: Which is one of the reasons why I thought we could talk a bit about the difference between a mutual fund and an ETF and when or why you’d chose to use one over the other.

Jeff asks: So first describe what is a mutual fund?

Windus replies: A mutual fund is a pooling of investors dollars towards a common objective.  Like growth, or income, etc. 
Windus states: This investment instrument can be either all stocks, all bonds, or a blend.  It can even have currencies in them and what have you.
Windus states: Mutual funds were originally created as a means to allow investors to invest with less risk because they were able to diversify with the purchase of one share, but also with a lower minimum.  With a mutual fund, you can typical start investing for as little as $50 a month.  Instead of trying to figure out how to buy one stock at a time, you have access to many with a small amount monthly.  Another great aspect of a mutual fund is the ability to always sell.  With a stock you technically have to reach out to the open market to find a buyer, with a mutual fund, you simply hit the redeem button.  Only in rare occasions will redemptions be stopped, or paused for a period of time.  Mutual funds are actively managed by a portfolio manager and typically a team of analysts.  Some have multiple portfolio managers.

Windus states: Another aspect of a mutual fund is that they settle in what we call “end of day” meaning that no matter when you sell during the day, the sale price will be reflective of the end of the market day not the time in which you imputed your sell order.  Now we are starting to talk about the differences of a mutual fund and an ETF.  Mutual funds sometimes get bad raps in markets where an index would have outperformed it.  What we need to realize is there are going to be rolling periods in the market when an index would have outpaced the mutual fund, and vice versa, and that you are ultimately buying the mutual fund instead because you believe in the manager’s ability to navigate the markets over time better than a straight index would. 

Jeff asks: so what is an EFT?

Windus replies: ETF’s are Exchange Traded Funds.  Like mutual funds, they can be a blend of both stocks bonds, or one or the other or even currencies, etc.  BUT unlike a mutual fund, and ETF is not necessarily actively managed.  ETF’s are commonly passively managed, meaning that they are periodically reset or reviewed by a manager but not daily reviewed or managed like a mutual fund.  Actively managed ETF’s have some about in current time and may gain traction but the benefit of the ETF is the lower fees, which wouldn’t be the case if they were to become managed the same way a mutual ultimately is.  Another interesting aspect of an ETF, which is the cause of some recent issues, is that you can redeem it the same way you redeem a stock.  If it is 9:02am and I enter the order to sell, the price I am given at that time is my settlement price, not the end of day price like it is with a mutual fund. 

Jeff states, before we go on Windus has a special offer for our listeners.

Windus states PLUG: Trilogy Financial Services will provide you with a retirement cash flow analysis which is a $600.00 value for free as long as you mention the Inside Advantage Radio Show when you call to make an appointment. Call my office to make an appointment to meet with me, Windus A. Fernandez Brinkkord. The number to call is 858.314.5169. That is 858.314.5169.

Windus states: You should also know that the securities and advisory services are offered through National Planning Corporation (NPC) Member FINRA, SIPC, and a Registered Investment Advisor.  Trilogy Financial Services and NPC are separate and unrelated Entities.
Jeff states: Windus now that you have done a brilliant job in explaining mutual funds and ETF’s, tell us about what the Wall Street Journal article reported that really put ETF’s to the test. 

Windus states: As the Wall Street Journal article on September 14th highlighted, at 9:42am on August 24th one specific ETF tumbled 35% to its lowest level of the day, this is right when the markets were about to open with a 1000 point drop in the DOW.  At that time the combined weighted values of the stocks the ETF held was $72.42, just down 2.7% for the day.  How can the ETF sale price be $48.00 when the real value would be $72.42?  Assets in the ETF market have grown to roughly $2 trillion up from $305 billion a decade ago.  The volume of ETF’s being trades are up 14.9% compared to a decade ago.  Real time valuing an asset that holds multiple positions is a real challenge and apparently discrepancies can be found when trading volatility picks up. 

Windus continues: This isn’t the first time we’ve seen this, another instance was reported in 2012 as well.  As more and more investors connect to the markets on a daily basis more readily, this instant “valuation” of products that have so many positions may come under further pressure.  It has also yet to be seen how a bond ETF can actually handle money rapidly flowing out of it, and that time will come one day as well.  Mutual funds experience similar pressure but because they are not as instantly traded and because you often pay to be there, people are more cautious on getting out as they are when you can click a button and get out that second. 

Jeff asks: It seems that if people and get in and out of investments quickly by going online, I would think that more of these transactions are being made without much thought people are making bad decisions. Windus what do you think?

Windus responds.

Windus PLUG: Trilogy Financial Services will provide you with a retirement cash flow analysis which is a $600.00 value for free as long as you mention the Inside Advantage Radio Show when you call to make an appointment. Call my office to make an appointment to meet with me, Windus A. Fernandez Brinkkord. The number to call is 858.314.5169. That is 858.314.5169.

Well Windus I know that you have to head off but I am glad that you were able to stay on for the first half of the show.

Windus signs off.

Jeff states: Stay tuned because after the break we are going to tell you how the new Streamlined Procedures for taxpayers reporting undisclosed foreign bank accounts are being administered by the IRS.

You are listening to Board Certified Tax Attorney, Jeffrey B. Kahn, and Licensed Financial Planner, Windus A. Fernandez Brinkkord on Inside Advantage on ESPN.

BREAK

Jeff states: Welcome back. This is Inside Advantage – Your Financial And Tax Radio Show on ESPN and you are listening to Board Certified Tax Attorney, Jeffrey B. Kahn, and Licensed Financial Planner, Windus A. Fernandez Brinkkord.

Windus is on assignment today so calling into the studio from my Walnut Creek Office is my associate attorney, Amy Spivey.

Chit chat with Amy

Streamlined Filing Compliance Procedures

PLUG: The Law Offices Of Jeffrey B. Kahn, P.C. will provide you with a Tax Resolution Plan which is a $500.00 value for free as long as you mention the Inside Advantage Radio Show when you call to make an appointment. Call my office to make an appointment to meet with me, Jeffrey Kahn, right here in downtown San Diego or at one of my other offices close to you. The number to call is 866.494.6829. That is 866.494.6829.

Jeff states: For someone with undisclosed foreign bank accounts and unreported foreign income who does not come forward and the IRS instead finds them, they are be looking a huge penalties. The penalties for noncompliance are stiffer than the civil tax penalties ordinarily imposed for delinquent taxes. The criminal penalties for noncompliance which the government may impose include a fine of not more than $500,000 and imprisonment of not more than five years, for failure to file a report, supply information, and for filing a false or fraudulent report. As for the civil penalties they include a penalty equal to 50% of the principal in the undisclosed foreign bank accounts.

Jeff continues: We have been putting the word out for quite some time that if you have unreported foreign income and undisclosed foreign bank accounts, there are special programs in place with the IRS that you can avoid criminal prosecution and get a reduction in penalties that would otherwise be charged by the IRS. One of those programs are the “streamlined procedures” offered under the Offshore Voluntary Disclosure Program (OVDP).

Amy states. That’s right. The streamlined filing compliance procedures are available to taxpayers certifying that their failure to report foreign financial assets and pay all tax due in respect of those assets did not result from willful conduct on their part.

Jeff asks: So let’s discuss the eligibility criteria for the streamlined procedures. [Jeff to read off each item and Amy to explain].

Jeff states: Taxpayers must certify that their conduct was not willful.

Amy replies: Taxpayers using either the Streamlined Foreign Offshore Procedures or the Streamlined Domestic Offshore Procedures will be required to certify, in accordance with the specific instructions, that the failure to report all income, pay all tax and submit all required information returns, including FBARs (FinCEN Form 114, previously Form TD F 90-22.1) was due to non-willful conduct.  

Jeff states: We will talk more about what constitutes non-willful conduct but for now you need to recognize that you cannot just make general statements that you did not know about this. The IRS is looking for details of your circumstances and your background to show that you had no reason to know or to make further inquiry on what were your reporting obligations.

Amy states: And when you make the statements to justify that your conduct was non-willful in the streamlined procedures, you are making them under penalties of perjury. Making false statements in an attempt to get this treatment will put you in more trouble.

Jeff states: The standard of what you need to show that you are non-willful is complicated as many factors need to be considered. When conducting the analysis for our clients and compiling these statements, we consider over 50 factors to justify that a taxpayer is non-willful. These are then incorporated and addressed in our non-willful statements to provide the most persuasive argument that a taxpayer should be deemed non-willful and therefore benefit under the streamlined procedures.

Jeff states: IRS has initiated a civil examination of taxpayer’s returns for any taxable year.

Amy replies: If the IRS has initiated a civil examination of taxpayer’s returns for any taxable year, regardless of whether the examination relates to undisclosed foreign financial assets, the taxpayer will not be eligible to use the streamlined procedures. Taxpayers under examination may consult with their agent. Similarly, a taxpayer under criminal investigation by IRS Criminal Investigation is also ineligible to use the streamlined procedures.

Jeff states: So even if the IRS were to randomly select you for an audit not knowing that you have unreported foreign income, you are locked out from this program. That is why one should not delay in coming forward – you want to beat the IRS at the pass.

Jeff states: Taxpayers eligible to use streamlined procedures who have previously filed delinquent or amended returns must pay previous penalty assessments.

Amy replies: Taxpayers eligible to use the streamlined procedures who have previously filed delinquent or amended returns in an attempt to address U.S. tax and information reporting obligations with respect to foreign financial assets (so-called “quiet disclosures” made outside of the Offshore Voluntary Disclosure Program (OVDP) or its predecessor programs) may still use the streamlined procedures. However, any penalty assessments previously made with respect to those filings will not be abated. 

Jeff states: So just because you may have been hit with a penalty by the IRS for a late-filed foreign information return like an FBAR or you filed amended income tax returns disclosing the foreign income, you can still get into this program.

Jeff asks what is the general treatment by the IRS under the streamlined procedures?

Amy replies: Tax returns submitted under either the Streamlined Foreign Offshore Procedures or the Streamlined Domestic Offshore Procedures will be processed like any other return submitted to the IRS. Consequently, receipt of the returns will not be acknowledged by the IRS and the streamlined filing process will not culminate in the signing of a closing agreement with the IRS. 

Jeff states: So these submissions are treated no differently than when you file your annual income tax return. Just because you include a check for the balance due and the IRS cashes does not mean you can’t be selected for audit sometime in the next three years.

Amy replies: Returns submitted under either the Streamlined Procedures will not be subject to IRS audit automatically, but they may be selected for audit under the existing audit selection processes applicable to any U. S. tax return and may also be subject to verification procedures in that the accuracy and completeness of submissions may be checked against information received from banks, financial advisors, and other sources.

Jeff states: The penalty under the streamlined is equal to 5% of the highest annual aggregate foreign account balance over the last 6 years and if you can show that you were a foreign person in any of the last three years, this penalty is completely waived. Additionally, as long as you are in the program, the IRS states it would not be pursuing criminal charges.

PLUG: The Law Offices Of Jeffrey B. Kahn, P.C. will provide you with a Tax Resolution Plan which is a $500.00 value for free as long as you mention the Inside Advantage Radio Show when you call to make an appointment. Call my office to make an appointment to meet with me, Jeffrey Kahn, right here in downtown San Diego or at one of my other offices close to you. The number to call is 866.494.6829. That is 866.494.6829.

Stay tuned as we will be taking some of your questions. You are listening to Board Certified Tax Attorney, Jeffrey B. Kahn, and Licensed Financial Planner, Windus A. Fernandez Brinkkord on Inside Advantage on ESPN.

BREAK

Jeff states: Welcome back. This is Inside Advantage – Your Financial And Tax Radio Show on ESPN and you are listening to Board Certified Tax Attorney, Jeffrey B. Kahn, and Licensed Financial Planner, Windus A. Fernandez Brinkkord.

Windus is on assignment so I have my associate attorney, Amy Spivey, helping me out.

Jeff continues:

Windus PLUG: Trilogy Financial Services will provide you with a retirement cash flow analysis which is a $600.00 value for free as long as you mention the Inside Advantage Radio Show when you call to make an appointment. Call Windus A. Fernandez Brinkkord at her office to make an appointment. The number to call is 858.314.5169. That is 858.314.5169.

Jeff states: If you would like to post a question for us to answer, you can go to my website at www.kahntaxlaw.com and click on “Radio Show”. You can then enter your question and maybe it will be selected for our show.

OK Amy, what questions have you pulled for us to answer?

Question: I am a U.S. citizen living and working outside of the United States for many years. Do I still need to file a U.S. tax return?

Yes, if you are a U.S. citizen or a resident alien living outside the United States, your worldwide income is subject to U.S. income tax, regardless of where you live. However, you may qualify for certain foreign earned income exclusions and/or foreign income tax credits. 

Question:  I pay income tax in a foreign country. Do I still have to file a U.S. income tax return even though I do not live in the United States?

You have to file a U.S. income tax return while working and living abroad unless you abandon your green card holder status by filing Form I-407, with the U.S. Citizen & Immigration Service, or you renounce your U.S. citizenship under certain circumstances

Question:  I am a U.S. citizen married to a nonresident alien. What is my filing status and can I claim an exemption for my foreign spouse?

In general, if you are a U.S. citizen or resident alien married to a nonresident alien, you are considered “Married Filing Separately” unless you qualify for a different filing status. If you pay more than half the cost of keeping up a home for yourself and a qualifying child or other relative, you may qualify for the head of household filing status.

If you are a U.S. citizen or resident alien married to a nonresident alien, you and your spouse can choose to have your spouse treated as a U.S. resident for all U.S. federal income tax purposes. This allows you and your spouse to file a joint return, but also subjects your nonresident alien spouse’s worldwide income to U.S. income tax.

If you file a joint return, you can claim an exemption for your nonresident alien spouse. If you do not file a joint return, you can claim an exemption for your nonresident alien spouse only if your spouse has no income from sources within the United States and is not the dependent of another U.S. taxpayer.

Jeff PLUG: The Law Offices Of Jeffrey B. Kahn, P.C. will provide you with a Tax Resolution Plan which is a $500.00 value for free as long as you mention the Inside Advantage Radio Show when you call to make an appointment. Call my office to make an appointment to meet with me, Jeffrey Kahn, right here in downtown San Diego or at one of my other offices close to you. The number to call is 866.494.6829. That is 866.494.6829.

Jeff states: Amy thanks for joining us on today’s show.

Amy replies: Thanks for having me.

Jeff states: Well we are reaching the end of our show.

Remember you can send us your questions by visiting the kahntaxlaw website at www.kahntaxlaw.com.

Jeff states: Have a great day everyone and a great weekend!

Topics Covered:

1. The Federal Reserve – Should I Stay Or Should I Rise?
2. It’s Kickoff Time For The Political Season Of Presidential Candidate Tax Proposals! – Jeb Bush’s Tax Plan
3. State Of California Taxation and Collection Tools Used By The State.
4. Questions from our listeners:
   • What’s a credit score?
   • Is it really true that I could settle my tax debt with the IRS for a discounted lump-sum payment?

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Jeff states: Yes sometimes we just have to take the money and run!

Good afternoon! Welcome to Inside Advantage – Your Financial And Tax Radio Show. This is Board Certified Tax Attorney, Jeffrey B. Kahn, the principal attorney of the Law Offices Of Jeffrey B. Kahn, P.C. and head of the KahnTaxLaw team.

Windus states: And this is Licensed Financial Planner, Windus A. Fernandez Brinkkord, Senior Vice President Of Investments at Trilogy Financial Services.
You are listening to our weekly radio show where we talk everything about finances and taxes from the ESPN 1700 AM Studio in San Diego, California.

Jeff states: When it comes to knowing tax laws and paying taxes, let’s face it — everyone in the U.S. is either in tax trouble, on their way to tax trouble, or trying to avoid tax trouble!

Windus states: And whether you are on the rebound or flying high, we have the information you need to make sound financial decisions and map out your strategy for success.

Jeff states: Our show is broadcasted each Friday at 2:00PM Pacific Time and replays are available on demand by logging into the KahnTaxLaw website at www.kahntaxlaw.com.

Jeff states: Well today it’s “Full House Friday” because we have the whole Inside Advantage crew at bat – Amy Spivey will be calling into the show a little later and here in the studio with me and Windus is my paralegal, Susannah Kahn. Hi Susannah.

Sue says hi and chit chats with Windus and Jeff.

Jeff states:

For today’s show we have coming up:

Segment 2 material: It’s Kickoff Time For The Political Season Of Presidential Candidate Tax Proposals and the first one to talk about is Jeb Bush’s plan.

Windus states:

Also coming up is:

Segment 3 material: We are going to talk about how the State Of California taxes its citizens and what you need to know.

And of course towards the end of our show, we will be answering some of your questions.

Jeff states: So for today’s top story:

The Federal Reserve – Should I Stay Or Should I Rise?

Posted September 10, 2015 in Yahoo Finance. http://finance.yahoo.com/news/september-rate-hike-wont-175650188.html

Jeff continues: Next week will be a big one for U.S. markets as the Federal Reserve is due to hold its monthly policy meeting over two days on Wednesday and Thursday. The September meeting is a pivotal one, as investors are 50/50 on whether the bank is planning to raise interest rates this month or hold off in light of the recent market turmoil.

Windus states: In general, the rate that the Federal Reserve (or as everyone calls it the Fed) is talking about raising is the Discount Rate. The Discount Rate is the short term rate in which commercial banks borrow from the local federal reserve. When this rate is low, banks can turn around and lend out to people at lower rates. When this rate is high, banks have to charge higher rates when lending money out to people.

Windus continues: It is a common misunderstanding that the Discount Rate is a mortgage rate.  It isn’t, but the Discount Rate does impact mortgage rates.  Because when banks borrow from the Fed to turn around and make loans, if they now have to borrow at a higher rate from the Fed, they have to charge more interest to people on the loans they take from the bank.  Therefore, when the Fed raises the Discount Rate, so does everything else.

The Fed Divided

Jeff states: The article in Yahoo Finance states that Fed officials appear to be divided on whether to raise rates, as comments from the central bankers in past weeks show that there are several opinions on the matter.

Jeff continues: Some Fed officials believe that low rates for an extended period could eventually trigger asset bubbles. Those who support a rate hike point to the job market’s improvement, saying that the U.S. economy is ready to stand on its own. However, on the other hand, worries about inflation and China’s economic slowdown are making some central bankers nervous about a hike.

Why do banks borrow from the Fed?

Windus states: People think that banks should have their own money to lend and so why do banks borrow from the Fed.

Windus continues: Banks are required to maintain a certain level of reserves.  The required reserves are determined by the outside assets and liabilities of each depository institution, as well as the Fed itself, but the percentage typically used is 10%.  In 2007 and 2008, this number was 3%.  Partially due to the default of loans to financial institutions to prevent them from breaching this required deposit amount.  In 2007 and 2008, banks stopped lending for two reasons, loans were higher risk and they were having to keep more money on their balance sheets, but also because they have to meet this monetary deposit requirement and didn’t want to come under pressure.  Therefore, the Fed lowered the Discount Rate to make it easy for banks to borrow from them to cover this requirement and ultimately free up money for the bank to lend again. 

Jeff states: But we all know the flood gates of easy loans did not open. Instead the banks kept the funds for investment because the risk was too great for them to start lending again.

Investors Brace For Market Shock

Windus states: The article in Yahoo Finance goes on to state that as the Fed has waded out into uncharted territory by keeping interest rates low for such a long period and so many are unsure of how a rate hike will affect markets. Many investors worry that a rate increase will wreak havoc on share markets and have begun to prepare their portfolios.

Windus continues: The article suggests that for investors expecting a rate hike next week, financial sector stocks are an attractive bet, as most banks will be able to pass the cost of regulatory changes on to consumers, thus protecting their bottom lines. And in other sectors like healthcare and technology, the article suggests that investors are choosing stocks with low debt levels as borrowing is expected to become more costly with a rate increase.

Slow And Steady

Jeff states: Whether the Fed chooses to raise the Discount Rate this month or holds off until October or December, most analysts agree that a rate increase is coming sooner or later. However, some say the market’s panic is overdone as the Fed has promised to move slowly with consecutive rate increases after the first hike.

Windus states: What people do not understand is that the Discount Rate has never been this low in the history of the Discount Rate.  This rate is what we refer to as one of the Fed’s tools to stabilize the economy. Right now, unemployment is 5.1%, the lowest we’ve seen 2008.  This rate fell much quicker than the Fed anticipated.  If the economy continues to improve at this employment rate, the Fed needs to raise the Discount Rate.

Why does the Fed need to raise the Discount Rate?

Jeff asks Windus: Why do they need to raise the rate? 

Windus replies: If the Fed doesn’t raise the rates, then in the next recession, there will be less monetary policy options for the Fed to implement to get the economy moving.  Another concern about leaving the Fed rates low is that this could cause a bubble.  For example, a housing bubble by driving the purchase of more homes due to lower rates, we’ve seen that impact on the markets in the last 10 years.  Not something that we’d like to have a repeat of.

Windus continues: Now not raising them in September isn’t the end of this, in fact they meet again in October and December and will likely raise before the end of the year regardless of what they do in September.  In fact, it is possible that they will raise this rate more than once this year if they do raise it in September.

Jeff states: The Fed has stated that before making any subsequent rate adjustments, it would first evaluate the outcome of its first rate hike and could even lower rates again if there is a negative economic reaction following the increase.

Windus states: Ultimately, we are looking at a quarter of a percent rate hike in the month of September, maybe.  That would be a rate hike from 0% to .25%.  AND the long term current goal is to have this rate back up to 3.5% or 3.75% before the need to lower it occurs again.  The longer we take to raise it, the less likely it will be that the Fed can get it there before the next recession! The current Fed funds rate is .25%, the current Discount Rate is .75%

Well it’s time for a break but stay tuned because it’s Kickoff Time For The Political Season Of Presidential Candidate Tax Proposals and the first one to talk about is Jeb Bush’s plan.

You are listening to Board Certified Tax Attorney, Jeffrey B. Kahn, and Licensed Financial Planner, Windus A. Fernandez Brinkkord on Inside Advantage on ESPN.

BREAK

Welcome back. This is Inside Advantage – Your Financial And Tax Radio Show on ESPN and you are listening to Board Certified Tax Attorney, Jeffrey B. Kahn, and Licensed Financial Planner, Windus A. Fernandez Brinkkord and in the studio with us is my paralegal, Susannah Kahn.

It’s Kickoff Time For The Political Season Of Presidential Candidate Tax Proposals!

Jeff states: And for our first candidate we will be talking about Republican presidential candidate, Jeb Bush who Wants Fewer Tax Breaks for Wealthy Than Most in the GOP.

His tax proposal was published in the Wall Street Journal on September 9, 2015 http://on.wsj.com/1hZcdlJ. It states that Mr. Bush would change income-tax rules and curb deductions that he says often unfairly benefit high-income households

Windus states: Mr. Bush’s proposal is the first of many tax plans to come out of this election season.  The election season is becoming like the holidays…starts too early and goes on too long. Can’t beat it so we may as well join it!

Windus continues: The general idea that I am picking up on is that this candidate will want to reduce taxes for the middle class but target increases on the wealthy.

Jeff asks Windus: What defines wealthy in the United States? 

Windus replies: Income is commonly used to determine “wealthy” and that is certainly what is being used to determine it for the Presidential candidates. Before you assume you’ll want the wealthy to be taxed at a higher rate, you may want to see how this would impact you and that is where some good financial planning comes into play because…

Windus PLUG: Trilogy Financial Services will provide you with a retirement cash flow analysis which is a $600.00 value for free as long as you mention the Inside Advantage Radio Show when you call to make an appointment. Call my office to make an appointment to meet with me, Windus A. Fernandez Brinkkord. The number to call is 858.314.5169. That is 858.314.5169.

Jeff states: Now the upper middle class is most commonly defined as the top 1% with household incomes above $525,000 annually, as of 2013 and as many presidential hopefuls learned in the past, the promise to raise taxes is not a winning campaign platform yet you cannot promise tax cuts without finding offsetting new revenues.

Windus states: Mr. Bush believes his tax cuts will spur economic growth and the more growth, the more new tax revenues. Specific to his plan, taxpayers who earn more than $200,000 annually “will bear a greater share of our income-tax burden than they do today”. “So the top 5% will bear a greater share,” he said, “And the top 10% as well.”

Windus continues: The way in which he plans on doing this is two-fold: 

1.  Allowing a tax deduction of interest on debt, which makes borrowing more attractive; and 

2.  Permitting what is called “carried interest” which allows investment-fund managers to pay lower taxes on much of their compensation.

Jeff states: So Mr. Bush is proposing that we treat more than just mortgage interest as a tax deduction but interest on other debts as well and when this increased level of borrowing, there will be greater economic activity.

Windus states: Another interesting aspect of his plan is to have few tax brackets…this would actually help wealthier taxpayers, but not so much for us California taxpayers who pay high state taxes because the deductions for state and local taxes would be eliminated and all other deductions would then be capped at 2%. 

Jeff states: Now, just like everyone, Mr. Bush believes his tax cuts will spur economic growth.  And it is entirely possible, if passed they could.  Of course this is not something that is easy to judge until the action is taken and we can see its impact.

Windus states: Change is difficult.  I understand we need change.  Some of this just sounds like it may be very costly for those essentially earning more than $150,000 and living in California.  And that may not be different for any of the tax reformation proposals we will be reading about in the next year which is why you should consider making a sound financial plan.

Windus PLUG: Trilogy Financial Services will provide you with a retirement cash flow analysis which is a $600.00 value for free as long as you mention the Inside Advantage Radio Show when you call to make an appointment. Call my office to make an appointment to meet with me, Windus A. Fernandez Brinkkord. The number to call is 858.314.5169. That is 858.314.5169.

Well it’s time for a break but stay tuned because we are going to tell you we are going to talk about how the State Of California taxes its citizens.

You are listening to Board Certified Tax Attorney, Jeffrey B. Kahn, and Licensed Financial Planner, Windus A. Fernandez Brinkkord on Inside Advantage on ESPN.

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Jeff states: Welcome back. This is Inside Advantage – Your Financial And Tax Radio Show on ESPN and you are listening to Board Certified Tax Attorney, Jeffrey B. Kahn, and Licensed Financial Planner, Windus A. Fernandez Brinkkord and in the studio with us is my paralegal, Susannah Kahn.

And calling into the studio from my Walnut Creek Office to make this a “Full-house Friday” is my associate attorney, Amy Spivey.

Chit chat with Amy

Jeff states: We always talk about the IRS and its enforcement of the Federal Tax Laws so I thought that for this segment we would focus on State Taxation in this great State Of California.

State Of California Taxation.

Amy states: Unlike the Federal level which has one tax agency handling the administration, enforcement and collection of all Federal Taxes (income, employment, excise), the State Of California tax system is organized into three separate tax agencies:

1. Franchise Tax Board (FTB) which deals with State Income Tax
2. Employment Development Department (EDD) which deals with State Payroll Tax
3. Board Of Equalization (BOE) which deals with Sales & Use Tax, and Other Taxes & Fees

Windus: Amy, you would think that with our nation being so large that it would be the other way around where the Federal tax agency level would be divided up into different agencies and the State Of California operating with one tax agency?

Amy replies: True and most States do operate with a single tax agency like the Federal government. But as I said California is different and so to effectively deal with the State, you need to know how it agency operates.

Jeff states: OK Amy so let’s talk about FTB.

Franchise Tax Board (FTB)

Amy replies: FTB is responsible for administering two of California’s major tax programs: Personal Income Tax and Corporation Tax. Some other tax enforcement programs administered by the FTB:

1, City Business Tax Program – The FTB will exchange data with participating cities. City data helps the FTB identify self-employed individuals who are not filing required individual and business entity income tax returns, and state tax data helps cities identify businesses that may have a local business tax filing requirement.

2. Criminal Investigations – The FTB’s investigative efforts help bring individuals and business entities into compliance with tax laws and reduce the tax gap. The FTB will also publicize their investigation results as a means to deter other taxpayers from non-compliance with the tax laws.

3. Voluntary Disclosure Program -. The Voluntary Disclosure Program allows qualified entities, qualified shareholders, or beneficiaries that may have incurred an unpaid California tax liability or an unfulfilled filing requirement to disclose their liability voluntarily and avoid criminal prosecution.

Windus asks: Does the IRS have each of these same programs in place as the FTB?

Amy replies: It does have a Criminal Investigation Division which also administers the Voluntary Disclosure Program. By the way we have a lot of clients who have undisclosed foreign bank accounts who have engaged our services to enter into the Voluntary Disclosure Program and avoid criminal prosecution. As to information sharing, the IRS does get information from the State but not directly from local governments so it really is up to the State as to what information from local governments they include with what is being shared with IRS.

Jeff states: OK Amy so let’s talk about EDD.

Employment Development Department (EDD)

Amy replies: The EDD is responsible for the state programs involving unemployment insurance, disability insurance, payroll tax collection, and job training/workforce services. To better administer its programs in California’s two trillion dollar economy with nearly 16 million employed Californians, the EDD is divided into nine different branches.

The main one we deal with is the Tax Branch (TB) which administers the collection, accounting, and auditing functions of California’s payroll tax program. The program consists of Unemployment Insurance and Employment Training Tax, which are employer contributions, and State Disability Insurance and Personal Income Tax, which are withheld from employees’ wages. Each year, the EDD collects approximately $50 billion dollars in payroll taxes and processes more than 30 million employer tax documents and remittances.

Jeff states: And what about BOE?

Board Of Equalization (BOE)

Amy replies: The BOE was established in 1879 by a constitutional amendment. The BOE was initially charged with responsibility for ensuring that county property tax assessment practices were equal and uniform throughout the state. Currently the tax programs administered by the BOE are concentrated in four general areas: sales and use taxes, property taxes, special taxes and the tax appellate program. Each year, the BOE collects approximately $56 billion dollars in taxes and fees amounting to about 30% of all state revenue.

Jeff states: So Amy its seems that in terms of the percentage of revenues collected that each of the three State tax agencies collects about 1/3^rd of the State Of California’s revenues.

Amy replies: Yes Jeff that would be right.

Windus states: So Amy if one owns and operates a business here in California that business could be subject to tax enforcement and collection of taxes by the IRS and these three state tax agencies at the same time?

Amy replies: Yes that does happen and it is common that a business that becomes delinquent in its tax obligations usually is delinquent with more than one type of tax.

Jeff states: And so whether you are subject to the wrath of one tax agency or perhaps four tax agencies, you need to contact…

PLUG: The Law Offices Of Jeffrey B. Kahn will provide you with a Tax Resolution Plan which is a $500.00 value for free as long as you mention the Inside Advantage Radio Show when you call to make an appointment. Call my office to make an appointment to meet with me, Jeffrey Kahn, right here in downtown San Diego or at one of my other offices close to you. The number to call is 866.494.6829. That is 866.494.6829.

California Tax Agencies’ Collection Tools

Jeff states: Each taxing agency in California operates differently. So it is best to understand their rules and procedures if you are being targeted by the FTB, EDD or BOE.

Some of the collection actions that each tax agency will use:

1. Filing tax liens – good for 10 years and by refiling can be extended another 10 years (whereas for IRS it is 7 and 7 years).
2. Garnishing wages (State limited to 25%) (whereas IRS exempts a small amount of each paycheck from garnishment).
3. Sending levies to your customers which obligates your customers to pay the government instead of paying you.
4. Levying bank accounts (although retirement funds still exempt from levy).
5. Publishing a taxpayer top delinquency list which anyone can access on the internet.
6. Suspension of your California driver’s license.
7. Suspension of other California issued licenses such as a contractor’s license.

Jeff states: Each taxing agency in California operates differently. Remember that State tax officials do not have your best interests at heart. They are not responsible for informing you of your rights or giving you tax advice. So to level the playing field and give you the advantage you need to contact…

PLUG: The Law Offices Of Jeffrey B. Kahn will provide you with a Tax Resolution Plan which is a $500.00 value for free as long as you mention the Inside Advantage Radio Show when you call to make an appointment. Call my office to make an appointment to meet with me, Jeffrey Kahn, right here in downtown San Diego or at one of my other offices close to you. The number to call is 866.494.6829. That is 866.494.6829.

Thanks Amy for calling into the show. Amy says Thanks for having me.

Stay tuned as we will be taking some of your questions. You are listening to Board Certified Tax Attorney, Jeffrey B. Kahn, and Licensed Financial Planner, Windus A. Fernandez Brinkkord on Inside Advantage on ESPN.

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Jeff states: Welcome back. This is Inside Advantage – Your Financial And Tax Radio Show on ESPN and you are listening to Board Certified Tax Attorney, Jeffrey B. Kahn, and Licensed Financial Planner, Windus A. Fernandez Brinkkord and in the studio with us is my paralegal, Susannah Kahn.

Windus PLUG: Trilogy Financial Services will provide you with a retirement cash flow analysis which is a $600.00 value for free as long as you mention the Inside Advantage Radio Show when you call to make an appointment. Call my office to make an appointment to meet with me, Windus A. Fernandez Brinkkord. The number to call is 858.314.5169. That is 858.314.5169.

You should also know that the securities and advisory services are offered through National Planning Corporation.(NPC) Member FINRA, SIPC, and a Registered Investment Advisor.  Trilogy Financial Services and NPC are separate and unrelated Entities.

Jeff states: If you would like to post a question for us to answer, you can go to my website at www.kahntaxlaw.com and click on “Radio Show”. You can then enter your question and maybe it will be selected for our show.

OK Susannah we are giving you the honor of pulling questions for us to answer.

Sue states: This is a question for Windus. Karen from Carlsbad asks what’s a credit score?

Windus replies: A credit score is a numeric rating determined by three credit bureaus: Equifax, Experian, and TransUnion. The most commonly used credit score is from FICO. This rating, which can vary by bureau, is defined by how much debt you have, whether you pay your bills on time, how many credit cards you have, and any unpaid bills, among other factors.

Your credit score (which can range from 300 to 850) affects most financial decisions: Buying a car, buying or renting a home, getting loans, and opening new lines of credit require credit score reviews by the people or companies who can grant you any of those things.

You can check your credit score in addition to your credit report, which you should do at least once a year to make sure it’s accurate and reflects credit cards or debts you actually have (and that no one else is using your name — and your credit — to buy stuff). Your credit score impacts basically your entire adult financial life so it’s important to know what it is and monitor it. You can do this for free without affecting your score at: www.annualcreditreport.com.

Sue states: Jeff I have a question for you from Ralph in Irvine who asks, is it really true that I could settle my tax debt with the IRS for a discounted lump-sum payment?

Jeff replies: That is possible with an Offer in Compromise. An offer in compromise allows you to settle your tax debt for less than the full amount you owe. It may be a legitimate option if you can’t pay your full tax liability, or doing so creates a financial hardship. The IRS would consider your unique set of facts and circumstances that covers the following:

• Ability to pay;
• Income;
• Expenses; and
• Asset equity.

IRS will generally approve an offer in compromise when the amount offered represents the most the IRS can expect to collect within a reasonable period of time (that time is usually the remaining period left on the Statute Of Limitations For Collections). Be aware though that how the IRS arrives at how much they could expect to collect within a reasonable period of time can be very tricky which is the reason why most Offers submitted directly by taxpayers without professional guidance fail.

Jeff PLUG: The Law Offices Of Jeffrey B. Kahn will provide you with a Tax Resolution Plan which is a $500.00 value for free as long as you mention the Inside Advantage Radio Show when you call to make an appointment. Call my office to make an appointment to meet with me, Jeffrey Kahn, right here in downtown San Diego or at one of my other offices close to you. The number to call is 866.494.6829. That is 866.494.6829.

Jeff states: Thank you Sue for coming on to the show today and making this a “Full-house Friday”. Remember you can send us your questions by visiting the kahntaxlaw website at www.kahntaxlaw.com.

Windus states: Have a great day everyone!

Topics Covered:

1. Dealing With Financial Markets Turbulence.

2. How to stop your assets from being turned over to the State as abandoned property.

3. IRS Summertime Tax Tips:

• Job Search Expenses May be Deductible
• Key Tax Tips on the Tax Effects of Divorce or Separation

4. Questions from our listeners:

• I have IRAs, 401K, mutual funds, and savings for a rainy day. I have done this myself. My friend is trying to convince me to use a financial planner. I wonder what they may do so much better than me? Also, don’t their fees offset any gains they can make beyond what I can do myself?
• My CPA who I have been going to for years has never told me that I had to report my foreign income. Now that I just learned that I have to report my foreign income and disclose my foreign bank accounts, do I accept my CPA’s offer to represent me in OVDP or do I hire you?

*********************************

Jeff states: Yes sometimes we just have to take the money and run!

Good afternoon! Welcome to Inside Advantage – Your Financial And Tax Radio Show.
This is Board Certified Tax Attorney, Jeffrey B. Kahn, the principal attorney of the Law Offices Of Jeffrey B. Kahn, P.C. and head of the KahnTaxLaw team.
Windus states:
And this is Licensed Financial Planner, Windus A. Fernandez Brinkkord, Senior Vice President Of Investments at Trilogy Financial Services.
You are listening to our weekly radio show where we talk everything about finances and taxes from the ESPN 1700 AM Studio in San Diego, California.
Jeff states:
When it comes to knowing tax laws and paying taxes, let’s face it — everyone in the U.S. is either in tax trouble, on their way to tax trouble, or trying to avoid tax trouble!
Windus states:
And whether you are on the rebound or flying high, we have the information you need to make sound financial decisions and map out your strategy for success.
Jeff states:
Our show is broadcasted each Friday at 2:00PM Pacific Time and replays are available on demand by logging into the KahnTaxLaw website at www.kahntaxlaw.com.

Jeff states:

For today’s show we have coming up:

Segment 2 material: how to stop your assets from being turned over to the State as abandoned property.

Windus states:

Also coming up is:

Segment 3 material: our continuation of the IRS’ Summertime Tax Tips and what they mean for you.

And of course towards the end of our show, we will be answering some of your questions.

Jeff starts chit chat with Windus.

Dealing With Financial Markets Turbulence.

Jeff states, so Windus it finally happened we had this huge market turbulence over the past week and people do not know what to do. Windus for those who are not aware, please tell what has happened over the last week or so.

Windus replies with the general trends of the market over the last week or so.

Jeff states: So I can understand that people start getting jittery when the markets are turbulent. I am sure you have been getting a lot of calls. What do you say?

Windus replies: My points for market turbulence are:

Markets will go up and down and you should be investing for your time horizon.
The biggest issues clients have is watching their statements go up and down and trying to reconcile the statements with their account balances.
For example, we saw a few years where the U.S. market out performed the international markets, which didn’t mean you shouldn’t have international market exposure, but many people were unhappy if they were not out performing the S&P 500.
Be careful to compare your returns to one index.  It isn’t what is best for you and not likely what is in line with your risk tolerance.

Jeff states: I think that people forget that investing is for the long term and instead look for that quick return.

Windus replies: Ultimately, if you are not retiring for 20 years, this kind of volatility should not be driving your plan but should be something you continue investing through.

If you needed the money next year, you shouldn’t have been invested in equities in the first place AND if you did, it is better to weather the storm and look for stabilization before selling versus selling in the middle of a correction.

Jeff states: But for the market to take a large downturn – say 20% is this a sign that bad times are to come?

Windus replies: Correction typically indicates that this is not a sustained downturn or the start of a recession but a healthy pull back in the market. Now no one has a crystal ball, but ultimately, the traditional markets for a recession have not turned yet.

Jeff asks Windus: What are those traditional markets that you are referring to?

Windus replies.

Jeff asks Windus: So is there a specific time that you should get into a market?

Windus replies: Avoid “timing” the markets. Many people ask me should I invest now, or does the market have more down to go? That is a pretty reasonable question but the problem is, you can’t answer this until after the fact.
What you should do is slowly deploy money through a strategy called dollar cost averaging. Dollar cost averaging allows you to trickle money in over a period of time, helping you to avoid buying all on one up day or a down day.
Now, you can obviously put more in if we’ve seen a 10% sell off in 3-4 days, but regardless, it is best to hedge your bets and spread out when you put the funds in.

Jeff asks Windus: So what do you say to our listeners who are living off of their income and can’t handle the volatility?

Windus replies: The great thing about being retired and having dividend income, is that dividends are paid per share you own. They are not paid per the balance.  So as long as you are not taking from the principal, your income should remain stable in a down turn or in a market correction. Be careful of reacting to these bumps in the market, the reaction is often very hurtful to your long term growth.

Well it’s time for a break but stay tuned because we are going to tell you how to stop your assets from being turned over to the State as abandoned property.

You are listening to Board Certified Tax Attorney, Jeffrey B. Kahn, and Licensed Financial Planner, Windus A. Fernandez Brinkkord on Inside Advantage on ESPN.

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Welcome back. This is Inside Advantage – Your Financial And Tax Radio Show on ESPN and you are listening to Board Certified Tax Attorney, Jeffrey B. Kahn, and Licensed Financial Planner, Windus A. Fernandez Brinkkord.

How to stop your assets from being turned over to the State as abandoned property.

Jeff states: Windus, an article in the August 21, 2015 Wall Street Journal http://www.wsj.com/articles/protecting-your-mutual-fund-accounts-1440191878

caught your attention of how States in an effort to raise more revenues are becoming more aggressive in claiming abandoned property as it benefits them for the period of time this property is unclaimed. What usually happens is that State law will define when something becomes abandoned, so whether you are a bank, brokerage house or other financial institution, there will be a point when that dormant account must be turned over to the State as abandoned property.
Windus replies: We are seeing this more and more, your address doesn’t get updated correctly, the bank, brokerage house or other financial institution gets returned mail, and all of the sudden, you are receiving notices that your funds are going to be reported as abandoned property to the state.

Jeff asks Windus: So what should one do?
Windus replies: First, don’t melt down, this is typically an easy fix.  Normally, you can just reach out, properly prove your identity and update your address and take back over your funds.

Jeff states: Well whether the financial institution is holding the funds or the State is holding the funds, the funds still belong to the account holder so what good is it for the State to now hold this “abandoned property”?
Windus replies: Now states argue that it benefits a consumer, especially in the case of a deceased family member, for this to happen.  If the states claim it, you can search for it on their sites.  Otherwise, you’d have to call every financial institution to track down assets for that relative. That is a lot of work as opposed to going to one centralized database maintained by the State. And if you are now expecting an inheritance from a deceased family member consider this….
Windus PLUG: Trilogy Financial Services will provide you with a retirement cash flow analysis which is a $600.00 value for free as long as you mention the Inside Advantage Radio Show when you call to make an appointment. Call my office to make an appointment to meet with me, Windus A. Fernandez Brinkkord. The number to call is 858.314.5169. That is 858.314.5169.
Jeff asks Windus: So you have some comments to the tips listed in this Wall Street Journal Article.

Jeff to read each tip and Windus replies:

1. Notify financial institutions of any address change, name change or change in ownership due to death or divorce. Also change your address with the U.S. Postal Service when you move.

Windus comment:  If you notice for some reason that mail is still getting through to the old address, please let your advisor know.  Sometimes the first update doesn’t go through.  It happens.

2. Open all mail from the financial institutions where you have accounts.

Windus comment:  It is both important to be informed on your accounts, but also keep up with what they are trying to communicate.  Always open, stay informed.

3. Cash all dividend checks and insurance benefits, no matter how small.

Windus comment:  Yes, this is one thing that can very quickly cause unclaimed property for a needless reason.

4. Initiate account transactions, such as small deposits, annually. Even a $1 deposit will be considered account activity in some states, though automated deposits and withdrawals may not count.

Windus comment:  You should always be contributing to your assets BUT in the event that you can’t work this into your budget it doesn’t hurt to put a small amount in annually to keep the account active.

5. Contact each institution at least once every three years, by calling or logging in to an online account.

Windus comment:  every 3 years, institutions are required to do a mailing.  When your information is out of date, this can trigger the assets to go to unclaimed property.  Make sure you are aware of this.

6. Search relevant government unclaimed-property websites periodically. There is no reason to pay for a search elsewhere as the state sites are free.

Windus comment:  pretty straight forward.  Unfortunately, people pay for services that are free all the time because they don’t know they are free.  Know to look directly with the state and do not pay for someone to conduct this search for you.

7. Make sure there is a current list of financial accounts and other assets available to family members, an executor or adviser, in case of death or disability.

Windus comment:  For my clients, I have a single portal that they can link all of their accounts into and I provide them with a binder.  My goal is that all clients have a paper trail summary of their accounts so that the family can know where to go in the event something happens and so consider this…

Windus PLUG: Trilogy Financial Services will provide you with a retirement cash flow analysis which is a $600.00 value for free as long as you mention the Inside Advantage Radio Show when you call to make an appointment. Call my office to make an appointment to meet with me, Windus A. Fernandez Brinkkord. The number to call is 858.314.5169. That is 858.314.5169.

Jeff states: Stay tuned because after the break we have Amy Spivey joining in to tell you some important summertime tax tips that can help you avoid tax problems with IRS.

You are listening to Board Certified Tax Attorney, Jeffrey B. Kahn, and Licensed Financial Planner, Windus A. Fernandez Brinkkord on Inside Advantage on ESPN.

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Jeff states: Welcome back. This is Inside Advantage – Your Financial And Tax Radio Show on ESPN and you are listening to Board Certified Tax Attorney, Jeffrey B. Kahn, and Licensed Financial Planner, Windus A. Fernandez Brinkkord.

Calling into the studio from my Walnut Creek Office is my associate attorney, Amy Spivey.

Chit chat with Amy

Jeff states:

Starting July 1^st, the IRS began offering its Summertime Tax Tip series which include useful information in English and Spanish. Tax Tip subscribers receive a new Tip via email three times a week during July and August. They also get a Tax Tip each weekday during the tax filing season. The IRS also issues Special Edition Tax Tips on important tax topics throughout the year. Taxpayers can sign up for the IRS Tax Tips subscription through a free service on www.irs.gov. For this segment we have pulled some of these tips which we want to share with you and add our comments to them.

IRS Summertime Tax Tip 2015-23 issued August 24, 2015:

Key Tax Tips on the Tax Effects of Divorce or Separation

Jeff states: Income tax may be the last thing on your mind after a divorce or separation. However, these events can have a big impact on your taxes. Alimony and a name change are just a few items you may need to consider. Here are some key tax tips to keep in mind if you get divorced or separated.

Jeff asks Amy: How does the tax law treat Child Support, Alimony Paid and Alimony Received?

Amy replies:

• Child Support.  If you pay child support, you can’t deduct it on your tax return. If you receive child support, the amount you receive is not taxable.

• Alimony Paid.  If you make payments under a divorce or separate maintenance decree or written separation agreement you may be able to deduct them as alimony. This applies only if the payments qualify as alimony for federal tax purposes. If the decree or agreement does not require the payments, they do not qualify as alimony.

• Alimony Received.  If you get alimony from your spouse or former spouse, it is taxable in the year you get it.

Windus asks Amy: But since alimony is not subject to tax withholding, how would a spouse receiving alimony prepare for that end-of-year tax bill?

Amy replies: So that spouse receiving the alimony may need to increase the tax that person pays during the year to avoid a penalty. To do this, you can make estimated tax payments or increase the amount of tax withheld from your wages.

Jeff asks Amy: What if a spouse previously established a spousal IRA and now in 2015 the dissolution of the marriage is final, can that spouse make a tax deductible contribution in 2015 to that spousal IRA?

Amy replies: If you get a final decree of divorce or separate maintenance by the end of your tax year, you can’t deduct contributions you make to your former spouse’s traditional IRA. You may be able to deduct contributions you make to your own traditional IRA.

Windus asks Amy: I know that most women after their divorce change back to their maiden name. If one is looking to that what must they do with the government?

Amy replies: If you change your name after your divorce, notify the Social Security Administration of the change. File Form SS-5, Application for a Social Security Card. You can get the form on SSA.gov. The name on your tax return must match SSA records. A name mismatch can delay your refund.

Jeff states: It’s hard enough dealing with the issues of divorce especially when children are involved but you cannot be ignorant of the tax consequences so it is important to contact…

PLUG: The Law Offices Of Jeffrey B. Kahn will provide you with a Tax Resolution Plan which is a $500.00 value for free as long as you mention the Inside Advantage Radio Show when you call to make an appointment. Call my office to make an appointment to meet with me, Jeffrey Kahn, right here in downtown San Diego or at one of my other offices close to you. The number to call is 866.494.6829. That is 866.494.6829.

IRS Summertime Tax Tip 2015-24 issued August 26, 2015:

Job Search Expenses May be Deductible

Jeff states: People often change their job in the summer. If you look for a job in the same line of work, you may be able to deduct some of your job search costs.

Jeff asks Amy: What are some key tax facts you should know about if you search for a new job:

Amy replies: The main one is –

• Same Occupation.  Your expenses must be for a job search in your current line of work. You can’t deduct expenses for a job search in a new occupation.

Windus asks Amy: What are typical expenses that could be deductible?

Amy replies:

• Résumé Costs.  You can deduct the cost of preparing and mailing your résumé.

• Travel Expenses.  If you travel to look for a new job, you may be able to deduct the cost of the trip. To deduct the cost of the travel to and from the area, the trip must be mainly to look for a new job. You may still be able to deduct some costs if looking for a job is not the main purpose of the trip.

• Placement Agency. You can deduct some job placement agency fees you pay to look for a job.

Jeff asks Amy: But there are got to be a catch to this or else everyone would be looking to deduct job search expenses each year?

Amy replies: There is –

• First Job.  You can’t deduct job search expenses if you’re looking for a job for the first time.

• Substantial Job Break.  You can’t deduct job search expenses if there was a long break between the end of your last job and the time you began looking for a new one.

• Reimbursed Costs.  Reimbursed expenses are not deductible.

Windus asks Amy: Where on the Form 1040 do you claim these expenses?

Amy replies:

• Schedule A.  You usually deduct your job search expenses on Schedule A, Itemized Deductions. You’ll claim them as a miscellaneous deduction. You can deduct the total miscellaneous deductions that are more than 2% of your adjusted gross income.

Jeff states: Each and every taxpayer has a set of fundamental rights they should be aware of when dealing with the IRS and one of them is the right to representation, and that’s where we come in because…

PLUG: The Law Offices Of Jeffrey B. Kahn will provide you with a Tax Resolution Plan which is a $500.00 value for free as long as you mention the Inside Advantage Radio Show when you call to make an appointment. Call my office to make an appointment to meet with me, Jeffrey Kahn, right here in downtown San Diego or at one of my other offices close to you. The number to call is 866.494.6829. That is 866.494.6829.

Thanks Amy for calling into the show. Amy says Thanks for having me.

Stay tuned as we will be taking some of your questions. You are listening to Board Certified Tax Attorney, Jeffrey B. Kahn, and Licensed Financial Planner, Windus A. Fernandez Brinkkord on Inside Advantage on ESPN.

BREAK

Jeff states: Welcome back. This is Inside Advantage – Your Financial And Tax Radio Show on ESPN and you are listening to Board Certified Tax Attorney, Jeffrey B. Kahn, and Licensed Financial Planner, Windus A. Fernandez Brinkkord.

Windus PLUG: Trilogy Financial Services will provide you with a retirement cash flow analysis which is a $600.00 value for free as long as you mention the Inside Advantage Radio Show when you call to make an appointment. Call my office to make an appointment to meet with me, Windus A. Fernandez Brinkkord. The number to call is 858.314.5169. That is 858.314.5169.

You should also know that the securities and advisory services are offered through National Planning Corporation.(NPC) Member FINRA, SIPC, and a Registered Investment Advisor.  Trilogy Financial Services and NPC are separate and unrelated Entities.

Jeff states: If you would like to post a question for us to answer, you can go to my website at www.kahntaxlaw.com and click on “Radio Show”. You can then enter your question and maybe it will be selected for our show.

OK Windus, what questions have you pulled for us to answer?

Windus states:

Bill from La Jolla states: I have IRAs, 401K, mutual funds, and savings for a rainy day. I have done this myself. My friend is trying to convince me to use a financial planner. I wonder what they may do so much better than me? Also, don’t their fees offset any gains they can make beyond what I can do myself?

Jeff states, Well Windus you are the financial planner so I will let you respond.

Windus responds.

Windus states:

Sanjay from Sunnyvale, California asks: My CPA who I have been going to for years has never told me that I had to report my foreign income. Now that I just learned that I have to report my foreign income and disclose my foreign bank accounts, do I accept my CPA’s offer to represent me in OVDP or do I hire you?

Taxpayers looking to come forward in the Offshore Voluntary Disclosure Program (OVDP) to report unreported foreign income and undisclosed foreign bank accounts would be best served by a tax attorney who was not involved in the preparation of the originally filed false tax returns. This is because the tax attorney does not have a conflict of interest and can present your case in the most favorable manner. This is especially important if you are looking to apply in the new Streamlined Procedures announced by the IRS. The best way to explain this is by example – if a great defense is that you relied on your tax preparer to tell you whether you had to report your foreign accounts and foreign income, do you think your tax preparer will put himself under the bus to save you from the IRS – chances are not. But proving non-willfulness on the new streamlined procedures is not based on one factor. We have identified over 50 factors to consider in building a case for a successful streamlined procedure submission. A tax attorney who had no involvement in the preparation of your past returns can make these arguments thus truly serving your best interests.

Jeff PLUG: The Law Offices Of Jeffrey B. Kahn will provide you with a Tax Resolution Plan which is a $500.00 value for free as long as you mention the Inside Advantage Radio Show when you call to make an appointment. Call my office to make an appointment to meet with me, Jeffrey Kahn, right here in downtown San Diego or at one of my other offices close to you. The number to call is 866.494.6829. That is 866.494.6829.

Jeff states: Well we are reaching the end of our show.

Remember you can send us your questions by visiting the kahntaxlaw website at www.kahntaxlaw.com.

Windus states: Have a great day everyone!

Topics Covered:

1. Surface Transportation And Veterans Health Care Choice Improvement Act of 2015 – Watch Out For The Hidden Tax Pitfalls!

2. Beware Of The Robo-Adviser!

3. IRS’ Summertime Tax Tips and what they mean for you.

4. Questions from our listeners:

a. I have been hearing a lot about ETF’s and always wondered what they are?

b. I just moved from Chicago to Los Angeles. How do I notify the IRS my address has changed?

********************************************

Jeff states: Yes sometimes we just have to take the money and run!

Good afternoon! Welcome to Inside Advantage – Your Financial And Tax Radio Show.

This is Board Certified Tax Attorney, Jeffrey B. Kahn, the principal attorney of the Law Offices Of Jeffrey B. Kahn, P.C. and head of the KahnTaxLaw team.

Windus states:

And this is Licensed Financial Planner, Windus A. Fernandez Brinkkord, Vice President Of Investments at Trilogy Financial Services.

You are listening to our weekly radio show where we talk everything about finances and taxes from the ESPN 1700 AM Studio in San Diego, California.

Jeff states:

When it comes to knowing tax laws and paying taxes, let’s face it — everyone in the U.S. is either in tax trouble, on their way to tax trouble, or trying to avoid tax trouble!

Windus states:

And whether you are on the rebound or flying high, we have the information you need to make sound financial decisions and map out your strategy for success.

Jeff states:

Our show is broadcasted each Friday at 2:00PM Pacific Time and replays are available on demand by logging into the KahnTaxLaw website at www.kahntaxlaw.com.

Jeff states:

For today’s show we have coming up:

Segment 2 material: Beware Of The Robo-Adviser!

Windus states:

Also coming up is:

Segment 3 material: our continuation of the IRS’ Summertime Tax Tips and what they mean for you.

And of course towards the end of our show, we will be answering some of your questions.

Jeff starts chit chat with Windus.

Surface Transportation And Veterans Health Care Choice Improvement Act of 2015 – Watch Out For The Hidden Tax Pitfalls!

Windus states: On July 31, 2015, President Obama signed into law the Surface Transportation And Veterans Health Care Choice Improvement Act of 2015 (H.R. 3236). While getting any legislation through Congress nowadays is momentous, this Act is no different from many others whereby Congress is faced with a funding expiration (in this case maintaining our highways) and instead of passing something that is long term, they merely pass a “stop-gap” measure which will require them to revisit this issue much sooner. In the case of this Act that will be October 29, 2015.

Jeff states: The difficulty that Congress faces each time it must pass legislation to fund something, it must find a revenue source to pay for it. No lawmaker (either Democrat or Republican) wants to fund the cost by raising taxes so instead lawmakers find more creative ways to generate the additional revenues without having to call it a tax increase. Usually, this is done by limiting tax deductions and phasing out tax benefits but in the case of this Act Congress turned to “tax compliance” measures for revenue. And over a 10 year period, these measures are projected to generate $5 billion in revenues.

Windus states: Commerce Clearing House (a publisher of tax information) recently issued a special report on the tax provisions that were included in this Act.

http://www.cchwebsites.com/content/pdf/tax_brief/us/2015_July_Highway-Bill_7-31-2015.pdf

Windus continues: We are going to point out a few of them that would have the greatest impact to most of us taxpayers.

Jeff states:

RETURN DUE DATES $314 million revenue raiser over 10 years.

Under the Act, the due date for partnerships to file Form 1065, U.S. Return of Partnership Income and Schedule K-1s, Partner’s Share of Income, will move from April 15th to March 15th. This will be the same filing deadline now in place for S corporations.

Windus states:

IMPACT. The shift to a March 15th deadline will better enable partners, like current S corporation shareholders, to receive their Schedules K-1 in time to report that information on their Form 1040 before its April 15th due date and thus hopefully avoid the need to file an extension. Thus having individual taxpayers file their tax returns sooner and pay sooner (which Congress can take credit as a revenue generator).

Jeff’s comment:

1. Taxpayers will still likely avail themselves of filing an extension even though they may have all the information needed to file their Form 1040 by April 15^th especially if they will end up owing with their tax return. That surely goes against the perception that there would be less extensions if all Schedule K-1’s have to be issued by March 15^th.

Windus states:

When is the change effective:

The changes to the filing deadlines are generally applicable to returns for tax years beginning after December 31, 2015. For calendar-year taxpayers, that means the new deadlines will first apply to the 2016 tax returns filed in 2017.

Jeff’s comment:

1. Taxpayers and their tax professionals will still utilize extensions to avoid missing deadlines and for tax professionals help even out the workflow.

Jeff states:

REPORTING OF FOREIGN BANK ACCOUNTS

The Act also aligns the FBAR (Report of Foreign Bank and Financial Accounts) due date with the due date for individual returns, moving it from June 30th to April 15th.

There has been a lot of publicity surrounding foreign bank accounts over these last few years especially since Congress passed into law the Foreign Account Tax Compliance Act (“FATCA”) in 2010.

If you have foreign accounts that in the aggregate topped $10,000.00 at any time during the year, you must electronically file a return called a FinCEN Form 114. This filing must be taken very seriously as the penalties are substantial and could involve criminal prosecution. Just by failing to timely file an FBAR, you can be hit with a $10,000.00 penalty – per violation (that is per account!).

Windus states:

IMPACT. Under prior law no extension was available for the June 30^th deadline and your Form 1040 extension did not apply to the FBAR. Although the Act makes the FBAR due earlier than under prior law, it now has a filing date that is the same as individual income tax returns and you can now get an extension of time to file this return.  The Act allows a maximum six-month extension for filing this information return to October 15^th.

Jeff’s comments:

1. Putting the filing obligations of the FBAR on the same parity as income tax returns makes good sense. Helps taxpayers maintain compliance and add the flexibility of providing more time if needed.

Windus states:

When is the change effective:

Applies for FBAR’s for taxable years beginning after December 31, 2015.   This means that Form 114 for the 2016 calendar year will be the first year impacted by this new rule.  The Form 114 due for the 2015 calendar year will still be due June 30, 2016. The Form 114 due for the 2016 calendar year will be due April 15, 2017.

Jeff’s comments:

1. Given the change in the law effective with the 2016 FBAR, I would not be surprised if the IRS were to issue regulations that would waive late-filing penalties of 2015 FBAR’s due June 30, 2016 where a taxpayer filed an extension for the 2015 Form 1040 and filed both the 2015 Form 1040 and 2015 FBAR by October 15, 2016. Of course, we will keep you informed if the IRS should implement this.

Jeff states:

MORTGAGE REPORTING $1.8 billion revenue raiser over 10 years

Under current law, mortgage servicers are generally required to report to the IRS (Form 1098, Mortgage Interest Statement) how much you pay in mortgage interest each calendar year. The Act imposes additional reporting, including the amount of the outstanding principal balance, the address of the property, and the loan origination date.

Jeff states:

IMPACT. The modifications are intended to boost compliance but also impose new burdens on mortgage servicers.

Jeff’s comments:

1. With this additional information reported to IRS, the IRS computers can run additional analytics on each tax return to uncover tax returns that are suspect in overstating mortgage interest deductions.

Jeff states:

When is the change effective:

To give mortgage servicers time to reprogram their systems for the new reporting requirements, the Act will apply to returns and statements the due date for which (determined without regard to extensions) is after December 31, 2016.

Jeff states:

SIX-YEAR LIMITATION PERIOD FOR OVERSTATEMENT OF BASIS $1.2 billion revenue raiser over 10 years

In UNITED STATES v. HOME CONCRETE & SUPPLY, LLC, 132 S. Ct. 1836, a tax case decided by the U.S, Supreme Court in 2012, the Court held that an overstatement of basis does not result in an omission of income for extended statute of limitations (SOL) purposes.

Windus states:

In plain language that means that unless you understate your income on your tax return, the IRS has only three years to select it for audit.

Jeff states:

Well now the Act provides that the six-year limitations period applies where any overstatement of basis results in substantial omission (in excess of 25%) of gross income stated in the return.

Windus states:

When is the change effective:

This legislative override of the Supreme Court’s decision in Home Concrete is effective for all returns for which the normal assessment period remained open as of the date of enactment (July 31, 2015), and for returns filed after that date.

Jeff’s comments:

1. This is a great example of what happens when the IRS looses in Court – they go to Congress and have the law changed!

2. Under Code Sec. 6501(a), the IRS ordinarily must assess a deficiency against a taxpayer within three years after the return is filed. Code Sec. 6501(e) (1)(A) extends the three-year period to six years if a taxpayer “omits from gross income an amount properly includible therein” which exceeds 25% of the amount of gross income shown on the return.

3. Until now, overstating basis so that you have less income to report was only subject to the standard three-year statute for audit – now it is 6 years.

4. But still if you overstate your deductions and accurately reported your income, the statute remains at 3 years that the IRS has to audit your return.

Windus states:

AND FOR THOSE ITEMS THAT DID NOT MAKE IT INTO THE ACT…

Now there were controversial amendments that lawmakers tried to push through to get into Act and for good reason they did not make it into the final version.

1. Allow the IRS to reinstate the use of non-government bill collectors to collect tax debts.

Jeff comments.

2. Allow the State Department to revoke or deny a U.S. passport if you have unpaid taxes.

Jeff comments.

Well it’s time for a break but stay tuned because if you are looking to start some financial planning we are going to tell you about Robo-Advisers.

You are listening to Board Certified Tax Attorney, Jeffrey B. Kahn, and Licensed Financial Planner, Windus A. Fernandez Brinkkord on Inside Advantage on ESPN.

BREAK

Welcome back. This is Inside Advantage – Your Financial And Tax Radio Show on ESPN and you are listening to Board Certified Tax Attorney, Jeffrey B. Kahn, and Licensed Financial Planner, Windus A. Fernandez Brinkkord.

Beware Of Robo Advisor!

Jeff asks Windus: Until you brought this up to me, I never heard of a Robo Advisor. What is this?

Windus replies: It is computer generated financial planning.  Essentially, you work through an online portal, typically, to set up the account and investments and utilize mostly ETF strategies.

This was something I found discussed in the August 9, 2015 edition of the Wall Street Journal. http://www.wsj.com/articles/why-investing-robots-dont-march-the-same-1439172128.

The Article goes on to state what I consider to be the best description for what/how a Robo-Advisor attempts strategic asset allocation. You know that in rolling periods of the markets, sometimes active managers win and sometimes Index strategies win.  We are coming out of a period in time where the index strategy likely would have been better.

It is my belief, this is creating energy around the Robo-Advisor concept, but that this will not ultimately best serve most clients.

Windus PLUG: Trilogy Financial Services will provide you with a retirement cash flow analysis which is a $600.00 value for free as long as you mention the Inside Advantage Radio Show when you call to make an appointment. Call my office to make an appointment to meet with me, Windus A. Fernandez Brinkkord. The number to call is 858.314.5169. That is 858.314.5169.

Jeff asks: So what are the advantages of Robo-Advisors?

Windus replies:

1. Less in costs.

2. Designed by experts in behavioral finance. 

3. They are over seen by professionals with years of experience and diversified typically using modern portfolio theory.

4. Eliminates conflicts of interest between what is being recommended to the client.

Jeff asks: So what are the disadvantages of Robo-Advisors?

Windus replies:

1. Ultimately somewhere a person is deciding the one plan fits all. 

2. How do you know that this is really what is in your best interest?

3. Mutual fund companies allow you to do this online directly with them, without the additional fee of the robo-advisers firm.  Obviously only utilizing their funds though.

4. A financial advisor bases advice on someone’s goals and risk tolerance, but also their needs.  When these are not aligned, they can talk to the client about how to over come this.

Jeff asks: So what is the big picture that people should see here?

Windus replies:

Positive over all:  it is better that someone is working with someone, Robo-adivsor or not, to build wealth and take an interest in their long term plan.

Eventually, if you feel like you need more advice, you are not stuck on the robo-adivsor platform.  You aren’t stuck with an advisor either. 

The best thing to do is think about what your needs are before you make a decision on which route to go.

1.  Do you have complex needs for full service financial planning?

2.  Do you need accountability to save and encouragement to stay the path in volatility

3.  Do you need help understanding what you are buying and if you should be taking more risk or less risk on specific goals. 

Just like traditional financial advisers, not all Robo-Advisor firms are the same.  Make sure you interview and go with a route that you are really comfortable with.

Robo Advisor doesn’t replace your financial advisor. It is simply another route or option that may be good for you to explore.

Windus PLUG: Trilogy Financial Services will provide you with a retirement cash flow analysis which is a $600.00 value for free as long as you mention the Inside Advantage Radio Show when you call to make an appointment. Call my office to make an appointment to meet with me, Windus A. Fernandez Brinkkord. The number to call is 858.314.5169. That is 858.314.5169.

Stay tuned because after the break we have Amy Spivey joining in to tell you some important summertime tax tips that can help you avoid tax problems with IRS.

You are listening to Board Certified Tax Attorney, Jeffrey B. Kahn, and Licensed Financial Planner, Windus A. Fernandez Brinkkord on Inside Advantage on ESPN.

BREAK

Jeff states: Welcome back. This is Inside Advantage – Your Financial And Tax Radio Show on ESPN and you are listening to Board Certified Tax Attorney, Jeffrey B. Kahn, and Licensed Financial Planner, Windus A. Fernandez Brinkkord.

Calling into the studio from my Walnut Creek Office is my associate attorney, Amy Spivey.

Chit chat with Amy

Jeff states:

Starting July 1^st, the IRS began offering its Summertime Tax Tip series which include useful information in English and Spanish. Tax Tip subscribers receive a new Tip via email three times a week during July and August. They also get a Tax Tip each weekday during the tax filing season. The IRS also issues Special Edition Tax Tips on important tax topics throughout the year. Taxpayers can sign up for the IRS Tax Tips subscription through a free service on www.irs.gov. For this segment we have pulled some of these tips which we want to share with you and add our comments to them.

Jeff states: And like Windus talked earlier about Robo-Adviser in the financial planning industry, it looks like IRS is trying to establish the same for taxes.

IRS Summertime Tax Tip 2015-17, August 10, 2015 – IRS Offers Easy-to-Use Online Tools

Amy states: That’s true. The main reason IRS is doing this is to alleviate the need to maintain higher levels of staff at IRS walk-in centers and call centers to answer questions and instead devote those personnel to enforce the tax laws.

Windus states: Well I would also guess that as a matter of convenience, it would be a lot easier to look something up on line whenever you have the time then drive to a distant IRS office and wait in line or be put on hold on the phone for hours.

Amy states: And in that spirit when you need tax help, the IRS has many online tools that are easy to use. You can e-file your tax return free, check your refund’s status or get your tax questions answered. 

Jeff asks: So what are some of the most popular self-help tools that taxapyers have used to get free tax help?

Amy replies: Well there are 4 tools that I find most useful in an on-line environment:

• IRS Free File.  You can use IRS Free File to prepare and e-file your federal tax return for free. Free File will do much of the work for you with brand-name tax software or Fillable Forms. If you still need to file your 2014 tax return, Free File is available through Oct. 15. The only way to use IRS Free File is through the IRS website.
• Where’s My Refund?  Checking the status of your tax refund is easy when you use Where’s My Refund? You can also use this tool with the IRS2Go mobile app.
• Direct Pay.  Use IRS Direct Pay to pay your tax bill or pay your estimated tax directly from your checking or savings account. Direct Pay is safe, easy and free. The tool walks you through five simple steps to pay your tax in one online session. You can also use Direct Pay with the IRS2Go mobile app.
• IRS Select Check.  If you want to deduct your gift to charity, the organization you give to must be qualified. Use the IRS Select Check tool to see if a group is qualified.

Jeff states: Now if you have a tax problem, there likely is not a Robo-Adviser App that will be able to provide you with a solution which is why…

PLUG: The Law Offices Of Jeffrey B. Kahn will provide you with a Tax Resolution Plan which is a $500.00 value for free as long as you mention the Inside Advantage Radio Show when you call to make an appointment. Call my office to make an appointment to meet with me, Jeffrey Kahn, right here in downtown San Diego or at one of my other offices close to you. The number to call is 866.494.6829. That is 866.494.6829.

IRS Summertime Tax Tip 2015-12, July 29, 2015 – Tips on Travel While Giving Your Services to Charity

Jeff states: Do you plan to donate your services to charity this summer? Will you travel as part of the service? If so, some travel expenses may help lower your taxes when you file your tax return next year.

Amy states: Here are several tax tips that you should know if you travel while giving your services to charity.

• Qualified Charities.  In order to deduct your costs, your volunteer work must be for a qualified charity. Most groups must apply to the IRS to become qualified. Churches and governments are qualified, and do not need to apply to the IRS. Ask the group about its IRS status before you donate.

Windus asks: Amy, how do you know if the organization is a qualified charity and continues to be one when you make your donation?

Amy replies: The IRS used to have to publish a book listing all the qualified charities. Now though you can also use the Select Check tool on IRS.gov to check the group’s status.

Jeff states: Now giving up your time no matter how valuable is not deductible but what about any associated costs?

Amy replies:

• Out-of-Pocket Expenses.  You may be able to deduct some costs you pay to give your services. This can include the cost of travel. The costs must be necessary while you are away from home giving your services for a qualified charity. All  costs must be:

o Unreimbursed,

o Directly connected with the services,

o Expenses you had only because of the services you gave, and

o Not personal, living or family expenses.

Windus asks: So if I am planning a trip to Central America and happen to visit an orphanage for a day, can I write off the cost of trip as a charitable expense?

Amy replies:

• Genuine and Substantial Duty.  Your charity work has to be real and substantial throughout the trip. You can’t deduct expenses if you only have nominal duties or do not have any duties for significant parts of the trip.

Jeff asks: But if your trip does involve a genuine and substantial duty of charitable service, what can you deduct?

Amy replies:

• Deductible travel.  The types of expenses that you may be able to deduct include:

o Air, rail and bus transportation,

o Car expenses,

o Lodging costs,

o The cost of meals, and

o Taxi or other transportation costs between the airport or station and your hotel.

• Nondeductible Travel.  Some types of travel do not qualify for a tax deduction. For example, you can’t deduct your costs if a significant part of the trip involves recreation or a vacation.

Jeff states, so important to know how far you can push envelope and where you pushed it to far, you need to get with …

PLUG: The Law Offices Of Jeffrey B. Kahn will provide you with a Tax Resolution Plan which is a $500.00 value for free as long as you mention the Inside Advantage Radio Show when you call to make an appointment. Call my office to make an appointment to meet with me, Jeffrey Kahn, right here in downtown San Diego or at one of my other offices close to you. The number to call is 866.494.6829. That is 866.494.6829.

Thanks Amy for calling into the show. Amy says Thanks for having me.

Stay tuned as we will be taking some of your questions. You are listening to Board Certified Tax Attorney, Jeffrey B. Kahn, and Licensed Financial Planner, Windus A. Fernandez Brinkkord on Inside Advantage on ESPN.

BREAK

Jeff states: Welcome back. This is Inside Advantage – Your Financial And Tax Radio Show on ESPN and you are listening to Board Certified Tax Attorney, Jeffrey B. Kahn, and Licensed Financial Planner, Windus A. Fernandez Brinkkord.

Windus PLUG: Trilogy Financial Services will provide you with a retirement cash flow analysis which is a $600.00 value for free as long as you mention the Inside Advantage Radio Show when you call to make an appointment. Call my office to make an appointment to meet with me, Windus A. Fernandez Brinkkord. The number to call is 858.314.5169. That is 858.314.5169.

You should also know that the securities and advisory services are offered through National Planning Corporation (NPC) Member FINRA, SIPC, and a Registered Investment Advisor.  Trilogy Financial Services and NPC are separate and unrelated Entities.

Jeff states: If you would like to post a question for us to answer, you can go to my website at www.kahntaxlaw.com and click on “Radio Show”. You can then enter your question and maybe it will be selected for our show.

OK Windus, what questions have you pulled for us to answer?

Nancy from Oceanside asks: I have been hearing a lot about ETF’s and always wondered what they are?

Jeff states, I think that is a great question for Windus to answer so I will let you respond. Windus responds.

Eric from Los Angeles asks: I just moved from Chicago to Los Angeles. How do I notify the IRS my address has changed?

Jeff replies: Well, Eric welcome to Southern California! There are different ways to let the IRS know you moved and its important that the IRS has your current address. First if the IRS needs to send you a refund check, you want to make sure it is going to the right address so it is not delayed. Second, if the IRS is sending out notices because you owe the IRS, you don’t want those to go unanswered especially if there is some limited right to appeal that runs from the date of the letter not from when you decide to accept the letter and read it.

So to change your address with IRS:

1. Do it through a tax return filing – Use your new address on your tax return.

2. Even better – use Form 8822, Change of Address, which can be filed at any time.

3. Alternatively to using Form 8822, send the IRS a signed written statement with your:

• full name
• old address
• new address
• Social Security number (or individual taxpayer identification number or employer identification number)

Mail your statement to the address where you filed your last return

4. Orally you can call IRS and if you get through to someone after they verify your identity, you can tell them the new address.

5. There is only one way to notify an address change via electronic notification and that is if your refund check was returned to IRS you can use the Where’s My Refund? Tool to complete your change of address online.

Remember, if you filed a joint return, you should provide the same information and signatures for both spouses. Also, if you filed a joint return and you and/or your spouse have since separated, you both should notify the IRS of your new addresses.

Jeff PLUG: The Law Offices Of Jeffrey B. Kahn will provide you with a Tax Resolution Plan which is a $500.00 value for free as long as you mention the Inside Advantage Radio Show when you call to make an appointment. Call my office to make an appointment to meet with me, Jeffrey Kahn, right here in downtown San Diego or at one of my other offices close to you. The number to call is 866.494.6829. That is 866.494.6829.

Jeff states: Well we are reaching the end of our show.

Remember you can send us your questions by visiting the kahntaxlaw website at www.kahntaxlaw.com.

Windus states: Have a great day everyone!

Topics Covered:

1. IRS Action – Civil Forfeitures: The Carole Hinders Story.
2. How To Get Your Family Budget Started And Maintain Success.
3. IRS Summertime Tax Tips:

• Tax Tips for Students with Summer Jobs
• Include a Few Tax Items in Your Summer Wedding Checklist

4.Questions from our listeners:

• Why does the IRS file tax liens?
• How Does A Tax Lien Impact You?
• How long should I keep my tax papers?

Yes we are all working for the tax man!

Good afternoon! Welcome to the KahnTaxLaw Radio Show

This is your host Board Certified Tax Attorney, Jeffrey B. Kahn, the principal attorney of the Law Offices Of Jeffrey B. Kahn, P.C. and head of the KahnTaxLaw team.

You are listening to my weekly radio show where we talk everything about taxes from the ESPN 1700 AM Studio in San Diego, California.

When it comes to knowing tax laws and paying taxes, let’s face it — everyone in the U.S. is either in tax trouble, on their way to tax trouble, or trying to avoid tax trouble!

It is my objective to make you smarter so that you legally pay the least tax as possible, avoid tax problems and be aware of the strategies and solutions if you are being targeted by the IRS or any State tax agency.

Our show is broadcasted each Friday at 2:00PM Pacific Time and replays are available on demand by logging into our website at www.kahntaxlaw.com.

I have a lot to cover today in the world of taxes and helping me out will be my associate attorney Amy Spivey who will be calling in later.

And in the studio with me I have a special guest.  I want to introduce you to Licensed Financial Planner, Windus A. Fernandez Brinkkord, Senior Vice President Of Investments at Trilogy Financial Services.

Chit chat with Windus.

Jeff states so today’s top story is:

How The IRS Turned Carole Hinders’ Life Upside Down.

A restaurant owner in northwest Iowa has landed in the national news spotlight over her fight with the federal government. Carole Hinders who at the time was 67 years old and a grandmother has operated Mrs. Lady’s Mexican Food in Arnolds Park, Iowa for 38 years.

Nowadays it is most notable for a small business to be in operation for 38 years – especially if it is a restaurant which we all know “come and go”.  Even more notable for Ms. Hinders was that she was always in full compliance with her tax obligations.  But despite her clean tax record, on May 22, 2013 while settling into a crossword puzzle with her grandchildren she was visited at her home by a pair of IRS agents who stated that they had closed her business bank account and seized all her money, which at the time was almost $33,000.

Windus asks:  Jeff if she did not owe any taxes to the IRS, how could this have happened?

Jeff continues: True she did not have any outstanding liability to the IRS.  The problem though is that Ms. Hinders’ restaurant only accepts cash so Ms. Hinders makes frequent trips to the bank to avoid having large sums of money on the business’ premises.

As part of the federal government’s dragnet surveillance of the civilian population, everyone’s banking activities are monitored for “red flag” activities. Under the Bank Secrecy Act of 1970, banks are required to report to the IRS transactions on every individual who deposits or withdraws more than $10,000 in cash to or from a personal bank account on a given day. These reports indicate the financial activities that took place and include the individual’s bank account number, name, address, and social security number.

People who know of this law and are seeking to avoid this level of reporting by the bank will often go to great lengths to make multiple deposits so that no single deposit will be greater than $10,000.  This tactic is called “structuring”.  The IRS thinking that Ms. Hinders was making small deposits to evade this reporting requirement used its civil forfeiture power to seize Ms. Hinders’ bank account and close down her business.

That’s right – federal law enforcement agencies are invested with the power of civil forfeiture whereby the agency can take cash, cars and other property without charging the property owner with a crime. The property owner need not receive any advance warning or notice before the assets are seized by the federal government.  The government need not prove that a person is guilty of a crime – only that he or she is suspected of committing a crime. This law was designed to catch terrorists, money launderers, drug lords and serious criminals – but it can also be used by the government against law-abiding businesses.

Ms. Hinders said she received no warning from either her bank or the government before her money was taken.  The reason that the federal government does not have to read you your rights, or advise you that you can have a lawyer, or do any of the things that the constitution is supposed to provide, is that they don’t charge the person with the crime, they charge your money with the crime.

Since then, she’s had to borrow money and use credit cards to pay bills and keep her restaurant in business.  But Ms. Hinder was not stopping there – she knew she didn’t do anything wrong and did not owe anything to the IRS. But yet the IRS took her money so Ms. Hinders’ decided she was going to fight the IRS.

The Battle Against IRS Begins

Remember Ms. Hinders was never accused of any crime. The Mexican restaurant she owned, Mrs. Lady’s, did not accept credit cards, and she regularly deposited earnings in a bank branch a block away.

Ms. Hinders wasn’t using the money for illegal purposes. Her business doesn’t accept credit cards and the law fails to provide provisions for small businesses with limited cash flow. Ms. Hinders frequently deposited money in order to keep it safe in the bank.

But yet the government was treating Ms. Hinders like a criminal, just for running an honest cash business.
She hired an attorney to sue the IRS and regain her property.  In civil forfeiture cases, the government must file lawsuits “against” property or cash in order to keep it. This one was called United States of America v. $32,820.56 in United States Currency (Case No. 2013-CV-4102).  This lawsuit was filed in Federal District Court for the Northern District of Iowa.  Eventually Ms. Hinders was deposed and it then became clear that Ms. Hinders was an innocent and hardworking taxpayer.  The Assistant United States Attorney on the case had then informed the IRS that they should not go forward with the case.  The IRS agreed and the case was dismissed but without prejudice – meaning that the government can file another action in the future to get Hinders’ money if the court grants its motion.

Windus asks: Are There Any Safeguards In Place For The IRS To Follow So Things Like This Do Not Happen?

Critics say the IRS rarely investigates such cases to see if the business owner has legitimate reasons for making small deposits.

Seizing assets without criminal charges is legal under a controversial body of law that allows law enforcement agents to seize cars, cash and other valuables they believe are tied to criminal activity. The burden of proof falls on owners seeking the return of their property.

There is nothing illegal about depositing less than $10,000 cash unless it is done specifically to evade the reporting requirement.

The IRS made 639 of these seizures in 2012, compared to 114 in 2005. And only one in five was prosecuted as a criminal case. So you are probably thinking was the money from the other 80% of cases returned to its rightful owners?

Well it’s time for a break but stay tuned because if you seem to find it difficult to make a family budget my guest Windus A. Fernandez Brinkkord has some important information and tips that can make this easier for you.

You are listening to Jeffrey Kahn the principal tax attorney of the kahntaxlaw team on the KahnTaxLaw Radio Show on ESPN.

BREAK

Welcome back.  This is KahnTaxLaw Radio Show on ESPN and you are listening to Jeffrey Kahn the principal tax attorney of the kahntaxlaw team.

And in the studio with me I have as my special guest Licensed Financial Planner, Windus A. Fernandez Brinkkord, Senior Vice President Of Investments at Trilogy Financial Services.

Chit chat with Windus.

How To Get Your Family Budget Started And Maintain Success.

Jeff asks questions, Windus responds:

1. What is the best baby step to starting your family budget?

Windus response includes: start with a spreadsheet to brainstorm.

2. What are some banks that have good tools for you to utilize if you bank with them?

Windus response includes: Wells Fargo, USAA, & AMEX

Jeff states:  By the way, Windus is a licensed financial planner who can help you plan for financial success and she is offering a special offer to our listeners.  Her firm Trilogy Financial Services will provide you with an Investment Audit which is a $500.00 value for free as long as you mention the KahnTaxLaw Radio Show when you call to make an appointment. The number to call is 858.314.5169. That is 858.314.5169 for your free investment audit by Licensed Financial Planner, Windus A. Fernandez Brinkkord, Senior Vice President Of Investments at Trilogy Financial Services.

Jeff asks questions, Windus responds:

3. What sites can you go to in order to help you budget and stay on top of it and what are the differences?

Windus response includes: YNAB.com & mint.com.

4. What are the best tools to pay down your debt?

Windus response includes:  bankrate.com or vertex42.com

5. Should you consolidate your credit card debt to a fixed pay off and fixed interest rate?

6. What is crowd funding and how good of a resource is this really?

Windus response includes: New crowd funding out there, lendingclub.com prosper.com lightstream.com

Jeff states:  Windus is offering a special offer to our listeners.  Her firm Trilogy Financial Services will provide you with an Investment Audit which is a $500.00 value for free as long as you mention the KahnTaxLaw Radio Show when you call to make an appointment. The number to call is 858.314.5169. That is 858.314.5169 for your free investment audit by Licensed Financial Planner, Windus A. Fernandez Brinkkord, Senior Vice President Of Investments at Trilogy Financial Services.

Stay tuned because after the break we are going to tell you some important summertime tax tips that can help you avoid tax problems with IRS.

You are listening to Jeffrey Kahn the principal tax attorney of the kahntaxlaw team on the KahnTaxLaw Radio Show on ESPN.

BREAK

Welcome back.  This is KahnTaxLaw Radio Show on ESPN and you are listening to Jeffrey Kahn the principal tax attorney of the kahntaxlaw team.

And in the studio with me I have as my special guest Licensed Financial Planner, Windus A. Fernandez Brinkkord, Senior Vice President Of Investments at Trilogy Financial Services.

Calling into the studio from my Walnut Creek Office is my associate attorney, Amy Spivey.

Chit chat with Amy

IRS Summertime Tax Tips

Starting July 1^st, the IRS began offering its Summertime Tax Tip series which include useful information in English and Spanish. Tax Tip subscribers receive a new Tip via email three times a week during July and August. They also get a Tax Tip each weekday during the tax filing season. The IRS also issues Special Edition Tax Tips on important tax topics throughout the year.  Taxpayers can sign up for the IRS Tax Tips subscription through a free service on www.irs.gov. For this segment we have pulled some of these tips which we want to share with you and add our comments to them.

Tax Tips for Students with Summer Jobs. IRS Special Edition Tax Tip 2015-13, June 18, 2015

Jeff states: Students often get a job in the summer. If it’s your first job it gives you a chance to learn about work and paying tax. The tax you pay supports your home town, your state and our nation.

Amy states: Here are some tips students should know about summer jobs and taxes:

1. Withholding and Estimated Tax.  If you are an employee, your employer withholds tax from your paychecks. If you are self-employed, you may have to pay estimated tax directly to the IRS on set dates during the year. This is how our pay-as-you-go tax system works.
2. New Employees.  When you get a new job, you will need to fill out a Form W-4, Employee’s Withholding Allowance Certificate. Employers use it to figure how much federal income tax to withhold from your pay.
3. Self-Employment.  Money you earn doing work for others is taxable. Some work you do may count as self-employment. These can be jobs like baby-sitting or lawn care. Keep good records of your income and expenses related to your work. You may be able to deduct (subtract) those costs from your income on your tax return. A deduction can cut taxes.
4. Tip Income.  All tip income is taxable. Keep a daily log to report them. You must report $20 or more in cash tips in any one month to your employer. And you must report all of your yearly tips on your tax return.
5. Payroll Taxes.  You may earn too little from your summer job to owe income tax. But your employer usually must withhold social security and Medicare taxes from your pay. If you’re self-employed, you may have to pay them yourself. They count for your coverage under the Social Security system.
6. Newspaper Carriers.  Special rules apply to a newspaper carrier or distributor. If you meet certain conditions, you are self-employed. If you do not meet those conditions, and are under age 18, you may be exempt from social security and Medicare taxes.
7. ROTC Pay.  If you’re in ROTC, active duty pay, such as pay you get for summer advanced camp, is taxable. A subsistence allowance you get while in advanced training is not taxable.

Jeff states: Amy’s mention that our tax structure is designed as a “pay-as-you-go” system is an important concept.  Because it is easy to fall behind and build up large liabilities, you could end up with big tax problems very quickly if you are not careful and diligent.

PLUG: The Law Offices Of Jeffrey B. Kahn will provide you with a Tax Resolution Plan which is a $500.00 value for free as long as you mention the KahnTaxLaw Radio Show when you call to make an appointment.  Call our office to make an appointment to meet with me, Jeffrey Kahn, right here in downtown San Diego or at one of my other offices close to you. The number to call is 866.494.6829. That is 866.494.6829.

Include a Few Tax Items in Your Summer Wedding Checklist. IRS Special Edition Tax Tip 2015-14, June 29, 2015

Jeff states: If you’re preparing for summer nuptials, make sure you do some tax planning as well. A few steps taken now can make tax time easier next year.

Amy states: Here are some tips to help keep tax issues that may arise from your marriage to a minimum:

1. Change of name.  All the names and Social Security numbers on your tax return must match your Social Security Administration records. If you change your name, report it to the SSA. To do that, file Form SS-5, Application for a Social Security Card. The easiest way for you to get the form is to download and print it on SSA.gov.
2. Change tax withholding.  When you get married, you should consider a change of income tax withholding. To do that, give your employer a new Form W-4, Employee’s Withholding Allowance Certificate. The withholding rate for married people is lower than for those who are single. Some married people find that they do not have enough tax withheld at the married rate. For example, this can happen if you and your spouse both work so you may want to adjust the information on the Form W-4 so more tax is withheld.
3. Changes in circumstances.  If you receive advance payments of the premium tax credit you should report changes in circumstances, such as your marriage, to your Health Insurance Marketplace. Other changes that you should report include a change in your income or family size. Advance payments of the premium tax credit provide financial assistance to help you pay for the insurance you buy through the Health Insurance Marketplace. Reporting changes in circumstances will allow the Marketplace to adjust your advance credit payments. This adjustment will help you avoid getting a smaller refund or owing money that you did not expect to owe on your federal tax return.
4. Change of address.  Let the IRS know if you move. To do that, file Form 8822, Change of Address, with the IRS. You should also notify the U.S. Postal Service. You can change your address online at USPS.com.
5. Change in filing status.  If you are married as of December 31, that is your marital status for the entire year for tax purposes. You and your spouse can choose to file your federal tax return jointly or separately each year. It is a good idea to figure the tax both ways so you can choose the status that results in the least tax.

Jeff states: Getting married is an important milestone and as I am certain that as you walk down the aisle the last thing you would be thinking about is taxes but after all the wedding festivities and honeymoon has passed, you should make sure you take care of this tax business early which should avoid future tax problems and keep your marriage happy.

PLUG: The Law Offices Of Jeffrey B. Kahn will provide you with a Tax Resolution Plan which is a $500.00 value for free as long as you mention the KahnTaxLaw Radio Show when you call to make an appointment.  Call our office to make an appointment to meet with me, Jeffrey Kahn, right here in downtown San Diego or at one of my other offices close to you. The number to call is 866.494.6829. That is 866.494.6829.

Thanks Amy for calling into the show.  Amy says Thanks for having me.

Stay tuned as we will be taking some of your questions. You are listening to Jeffrey Kahn the principal tax attorney of the kahntaxlaw team on the KahnTaxLaw Radio Show on ESPN.

BREAK

Welcome back.  This is KahnTaxLaw Radio Show on ESPN and you are listening to Jeffrey Kahn the principal tax attorney of the kahntaxlaw team.

And in the studio with me I have as my special guest Licensed Financial Planner, Windus A. Fernandez Brinkkord, Senior Vice President Of Investments at Trilogy Financial Services.

Jeff states: If you would like to post a question for me to answer, you can go to my website at www.kahntaxlaw.com and click on “Radio Show”.  You can then enter your question and maybe it will be selected for a future show.

OK Windus, so you have the honors of reading off this weeks questions for me to answer?

1. John from San Francisco asks: Why does the IRS file tax liens?

A federal tax lien is the government’s legal claim against your property when you neglect or fail to pay a tax debt. The lien protects the government’s interest in all your property, including real estate, personal property and financial assets. A federal tax lien exists after the IRS:

• Puts your balance due on the books (assesses your liability);
• Sends you a bill that explains how much you owe (Notice and Demand for Payment); and

You:

• Neglect or refuse to fully pay the debt in time.

The IRS files a public document, the Notice of Federal Tax Lien, to alert creditors that the government has a legal right to your property.

2. Windus asks: How Does A Tax Lien Impact You?

The lien will impact you in the following ways:

• Assets — A lien attaches to all of your assets (such as property, securities, vehicles) and to future assets acquired during the duration of the lien.
• Credit — Once the IRS files a Notice of Federal Tax Lien, it may limit your ability to get credit.
• Business — The lien attaches to all business property and to all rights to business property, including accounts receivable.
• Bankruptcy — If you file for bankruptcy, your tax debt, lien, and Notice of Federal Tax Lien may continue after the bankruptcy.

3. Patricia from Woodland Hills asks, How long should I keep my tax papers?

At least three years, but six years is preferable. The IRS has three years after you file a tax return to complete an audit. For example, if you file your 2014 income tax return on or before April 15, 2015, keep those records until at least April 15, 2018.

The IRS can audit you for up to six years if it suspects that you underreported your income by 25% or more. If the IRS suspects fraud, there is no time limit for an audit, although audits beyond six years are extremely rare.

Keep records of purchases of real estate, stocks, and other investments for at least three years after the tax return reporting their sale was filed.  You will want to do the same for capital loss carryfowards and net operating loss carryforwards.

PLUG: The Law Offices Of Jeffrey B. Kahn will provide you with a Tax Resolution Plan which is a $500.00 value for free as long as you mention the KahnTaxLaw Radio Show when you call to make an appointment.  Call our office to make an appointment to meet with me, Jeffrey Kahn, right here in downtown San Diego or at one of my other offices close to you. The number to call is 866.494.6829. That is 866.494.6829.

Thanks Windus for joining me today.  Windus says Thanks for having me.

Well we are reaching the end of our show.

You can reach out to me on Twitter at kahntaxlaw.  You can also send us your questions by visiting the kahntaxlaw website at www.kahntaxlaw.com.  That’s k-a-h-n tax law.com.

Have a great day everyone!