Jeffrey B. Kahn, Esq. and Gary Sussman Discusses the Lifetime Estate Gift Annuity, the Building Blocks to Financial Security and the “Victory Tax” On ESPN Radio

Topics Covered:

1. Special Guest: Jim Sagona with Pacific Sotheby’s talking about the Sharp Health Care Lifetime Estate Gift Annuity

2. The Building Blocks to Financial Security

3. Victory Tax: Just how much are Olympians expected to pay for their medals?

4. Questions:

a. I have IRAs, a 401(k) through work and a savings account, where everything is in a budgeted model. How close am I to achieving financial security?
b. What is the foundation to achieving financial security? What should I be focusing on that I may have left out of my financial plan of investment accounts and savings?

Gary states: Good afternoon! Yes sometimes we just have to take the money and run! Welcome to Inside Advantage – Your Financial And Tax Radio Show.

This is Licensed Financial Planner, Gary Sussman, Senior Vice President Of Investments at Trilogy Financial Services.
Gary states:
Now 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 was not able to be on today’s show but we will have his associate attorney, Amy Spivey, join us later.
Gary states:

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.

Gary 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!

Gary 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.
Gary 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.
Gary states:

For today’s show we have coming up:

Segment 2 material: The Building Blocks to Financial Security

Gary states:

Also coming up is:

Segment 3 material: Victory Tax: Just how much are Olympians expected to pay for their medals?

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

Gary states: At this time, I’d like to introduce you to Jim Sagona. Jim is a realtor with Pacific SOTHEBY’S International Realty.

1) What is a Lifetime Estate Gift Annuity?
2) How long has Sharp been offering this program?
3) Why are donors passionate about having Sharp has the beneficiary to this gift?
4) Why would someone consider a LEGA?
5) How does this differ to a Reverse Mortgage?
6) Do you coordinate at all with peoples Estate attorneys?
7) How can people learn more about the program?

Gary states: Well it’s time for a break but stay tuned because we are going to let you know what The Building Blocks to Financial Security are.

You are listening to Board Certified Tax Attorney, Jeffrey B. Kahn, and Licensed Financial Planner, Gary Sussman on Inside Advantage on ESPN.

BREAK

Gary 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, Gary Sussman.

And be aware of the special offer that I have for you: Gary 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, Gary Sussman. The number to call is 949.536.2030. That is 949.536.2030. Or visit www.yourfinancialstory.com. NPC DOES NOT PROVIDE TAX NOR LEGAL ADVICE.

So, What Are The Building Blocks To Financial Security?

1) Have to start with laying the foundation…Cash accounts to meet our short term needs. For most people not the best place to be saving for long term goals. Fixed Accounts to provide stability and always perform on some level when our stocks/bonds may be underperforming.

2) Allocate dollars to primary int/long term goals. Home downpayments, Education, Retirement. Based on time frames.. seek higher ROR through mutual funds etc. Also diversify your account registrations. Don’t stick everything into Retirement even if this is your priority. Tax adv plans.

3) Only speculate when you can afford to live without it.

4) Don’t forget about asset protection. Boring and expensive stuff for most people. Health…Disability…Life…LTC…Tax…Estate

5) Cash flow. Where your money goes tell a lot about your priorities. Understanding Cash flow is often times the most important of all. Maximizing your abilities can often times hinge on cash flow.

Gary 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, Gary Sussman. The number to call is 949.536.2030. That is 949.536.2030. Or visit www.yourfinancialstory.com. NPC DOES NOT PROVIDE TAX NOR LEGAL ADVICE.

Gary states: Stay tuned because after the break we are going to explain the Victory Tax Uncle Sam is charging out Olympic Victors.

You are listening to Board Certified Tax Attorney, Jeffrey B. Kahn, and Licensed Financial Planner, Gary Sussman on Inside Advantage on ESPN.

BREAK

Gary 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, Gary Sussman.

Gary states: And Calling into the studio from Jeff’s Walnut Creek Office is his associate attorney, Amy Spivey.

Chit chat with Amy

Gary asks: Amy would you tell the listeners of your offer?

Amy replies: 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 our office to make an appointment to meet with Jeffrey Kahn, right here in San Diego or at one of our other offices close to you. The number to call is 866.494.6829. That is 866.494.6829.

Go For The Gold And Pay Your Tax – Olympic Medals Taxable

Gary states: While millions of Americans were glued to their televisions to watch American athletes compete in this year’s Summer Olympics, the Internal Revenue Service was quietly getting ready to make sure that all our Olympic winners pay taxes on their victories.

Amy replies: It’s true. The Internal Revenue Code mandates that if you win a prize in a lucky number drawing, television or radio quiz program, beauty contest, or other event, you must include it in your income. For example, if you win a $100 prize in a marathon, you must report this income on your Form 1040. If you refuse to accept a prize, do not include its value in your income. Prizes and awards in goods or services must be included in your income at their fair market value.

Gary asks: So what is the impact to a U.S. athlete who wins in the Olympics?

Amy replies: America’s Olympic medalists must pay state and federal taxes on the prize money they get for winning. The U.S. Olympic Committee awards $25,000 for gold medals, $15,000 for silver and $10,000 for bronze.

Gary states: So I get it that any prize money one receives, he or she must pick up that amount as income.

Amy replies: But that’s not all. Olympians also have to pay tax on the value of the medals themselves.

Gary states: You mean the prize money is not enough for the government to tax but also the metal?

Amy replies: That’s right. Gold and silver medals are made mostly of silver, while bronze medals are composed of mostly copper. Rio’s medals are among the largest and heaviest ever and contain about 500 grams of either silver or copper.

Gary asks: So what are the deemed values of these metals?

Amy replies: The value of a gold medal is about $564; silver is worth about $305. Bronze is worth a negligible amount so it’s not taxed.

Gary asks: But what if an athlete does not accept his metal and prize or is later disqualified and has to return the metal and prize?

Amy replies: Any athlete who accepts his or her Olympic medal and does not have to forfeit it will have to report its value as income and pay taxes on it. That’s true even though the competition took place in Brazil and not the United States.

Gary asks: How do other countries tax this?

Amy replies: Winning Olympic athletes from most other countries don’t have to worry about their medals being taxed. This unfairness has resulted in considerable debate during each session of Congress when a Summer or Winter Olympics is held but any legislation to change the tax law has never made it out of Congress. In fact there is proposed federal legislation as we speak that would make “the value of any medal or prize money” awarded during the Olympics or Paralympics exempt from income taxes. The bill was passed by the Senate in July 2016 and is being considered by the House. It would apply to earnings from January 1, 2016 to January 1, 2021. California is reviewing a similar proposal.

Gary states: You would think most Americans would be in favor of the legislation but there appears to be some backlash.

Amy replies: That’s true. For example, should an Olympian who comes home with 4 medals conceivably make $100,000 tax free while millions of hard working Americans struggle to support their families on far less income yet have to pay taxes?

Gary states: Then of course one should recognize that the U.S. is the only major country that doesn’t provide government funding to its Olympians. Now a handful of lucky athletes land lucrative endorsement deals. But most of them rely on small stipends from the USOC, support from local businesses or supplemental income from a day job.

Amy states: It’s clearly a decisive issue with arguments on both sides. But what you need to remember that even income earned outside the U.S. may be taxable. Every year, thousands of taxpayers learn that lesson the hard way. If you live, compete or work outside the United States, you must still file tax returns here. In addition, if you win a prize or award, you must claim the value of that prize or award on your tax return as income.

Gary states: You know I am not convinced that an income exclusion for Olympians and Paralympians would change anything.

Amy states: I agree. Cutting taxes isn’t going to fix the fact that these athletes don’t get paid enough. And then how do you distinguish this from other individuals who win prestigious awards. Such is the case with Nobel prize winners who receive more prize money — around $1 million. Shouldn’t an award for such an accomplishment also be tax free?

Gary states: Amy you mentioned who U.S. taxpayers have to report income from all worldwide sources. What about someone who earns interest in a foreign bank account?

Amy replies: The tax law requires U.S. citizens and resident aliens to report worldwide income, including income from foreign trusts and foreign bank and securities accounts. In most cases, affected taxpayers need to complete and attach Schedule B to their tax return. Part III of Schedule B asks about the existence of foreign accounts, such as bank and securities accounts, and usually requires U.S. citizens to report the country in which each account is located.

Gary asks: In speaking of foreign bank accounts, what are the Filing Requirements If You Have Undisclosed Bank Accounts?

Amy replies: By law, many U.S. taxpayers with foreign accounts exceeding certain thresholds must file Form 114, Report of Foreign Bank and Financial Accounts, known as the “FBAR.” It is filed electronically with the Treasury Department’s Financial Crimes Enforcement Network (FinCEN). Taxpayers with an interest in, or signature or other authority over, foreign financial accounts whose aggregate value exceeded $10,000 at any time during 2015 must file FBARs. It is due by June 30 and must be filed electronically through the BSA E-Filing System website.

Amy continues: Additionally, U.S. citizens, resident aliens and certain non-resident aliens must report specified foreign financial assets on Form 8938 if the aggregate value of those assets exceeds certain thresholds. Reporting thresholds vary based on whether a taxpayer files a joint income tax return or lives abroad. The lowest reporting threshold for Form 8938 is $50,000 but varies by taxpayer.

Gary asks: So How Does This Breakthrough Impact U.S. Taxpayers?

Amy replies: Consider this – about 60,000 U.S. taxpayers have come forward to disclose their previously undisclosed offshore accounts but just last year alone, 300,000 U.S. taxpayers filed Form 8938 disclosing foreign accounts. That would mean that about 240,000 did not previously report their foreign accounts and that under this recent filing of Form 8938 to IRS, they have put the IRS on direct notice of their non-compliance.

Amy continues: Our office saw an increase in interest and activity by U.S. taxpayers hiring our firm after the 2004 UBS scandal and subsequent implementation by IRS of its first dedicated Offshore Voluntary Disclosure Program.

Amy states: So we encourage taxpayers who are concerned about their undisclosed offshore accounts to come in voluntarily before learning that the U.S. is investigating the bank or banks where they hold accounts. By then, it will be too late to avoid the new higher penalties under the OVDP of 50% percent – nearly double the regular maximum rate of 27.5% and 10 times more than the 5% rate offered in the expanded streamlined procedures.

Amy states: And keep in mind that once the IRS contacts you, you cannot get into this program. You will now be subject to the maximum penalties (civil and criminal) under the tax law. Which is why …

Amy states: 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 our office to make an appointment to meet with Jeffrey Kahn, right here in San Diego or at one of our other offices close to you. The number to call is 866.494.6829. That is 866.494.6829.

Gary states: Thanks Amy for calling into the show. Amy says Thanks for having me.

Gary states: 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, Gary Sussman on Inside Advantage on ESPN.

BREAK

Gary 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, Gary Sussman.

Gary states: And Jeff and I always pleased to make our offers to our listeners where… 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 Jeff’s office to make an appointment to meet with him in San Diego or at one of his other offices close to you. The number to call is 866.494.6829. That is 866.494.6829.

Gary 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, Gary Sussman. The number to call is 949.536.2030. That is 949.536.2030. Or visit www.yourfinancialstory.com. NPC DOES NOT PROVIDE TAX NOR LEGAL ADVICE.

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.

Gary states: And in the studio with me is Jim Sagona with Pacific Sotheby’s. Jim as our guest today you get the honors of pulling today’s questions. OK Jim, what questions have you pulled for us to answer?

Steven from Newport Beach asks: I have IRAs, a 401(k) through work and a savings account, where everything is in a budgeted model. How close am I to achieving financial security?

Gary Answers.

Jackie from San Diego asks: What is the foundation to achieving financial security? What should I be focusing on that I may have left out of my financial plan of investment accounts and savings?

Gary Answers.

Gary states: Well we are reaching the end of our show. Have a great weekend!

Jeffrey B. Kahn, Esq. and Gary Sussman Discusses Financial Planning, Undisclosed Foreign Accounts and the IRS On ESPN Radio – July 29, 2016 Show

https://soundcloud.com/kahntaxlaw/undisclosed-foreign-accounts-and-the-irs

Topics Covered:

1. Special Guest Mark Schwartz, Owner at Mark Schwartz Realty
2. Financial Planning missteps that could ruin everything
3. FATCA Momentum Grows; If You Have Undisclosed Foreign Accounts You Have No Where To Hide
4. Questions from our listeners:
a. I am considering offering a 401k to my employees, is this a good idea?
b. What if a taxpayer has already filed amended returns reporting income from foreign assets without entering into the Offshore Voluntary Disclosure Program?

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

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.
Gary states:
And this is Licensed Financial Planner, Gary Sussman, 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!

Gary 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: Financial Planning missteps that could ruin everything

Gary states:

Also coming up is:
Segment 3 material: FATCA Momentum Grows; If You Have Undisclosed Foreign Accounts You Have No Where To Hide
And of course towards the end of our show, we will be answering some of your questions.

Jeff starts chit chat with Gary.

Jeff states: So let’s introduce you to today’s guest:

Please welcome Mark Schwartz, Owner and Agent at Mark Schwartz Realty 858-414-4602.

Questions:
1. So Mark, tell us how you got into Real Estate?
2. Why Real Estate?
3. How do you get your business?
4. How is the market right now and where are there good opportunities?
5. There is a lot of competition out there, what separates you from the rest?
6. Tell us about your coaching and mentoring program?

Well it’s time for a break but stay tuned because we are going to tell you about Financial Planning missteps that could ruin everything.

You are listening to Board Certified Tax Attorney, Jeffrey B. Kahn, and Licensed Financial Planner, Gary Sussman 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, Gary Sussman.

And be aware of the special offer that Gary has for you: Gary 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, Gary Sussman. The number to call is 949.536.2030. That is 949.536.2030. Or visit www.yourfinancialstory.com.
Financial Planning missteps that could ruin everything

1. Investing is a complex and challenging issue. There are lots of experts who claim to know the best guaranteed investment strategy and the best way to structure investments for secure and optimal growth. However even the most sound investment strategy is not a guarantee of success especially when the one certainty that we know will hold true is that life is always going to get in the way of our “ideal future”
2. The first mistake is that people build their house before laying a foundation.
a. Can your current plans still complete if you are sued, you are unable to work due to sickness or injury, and could your family fulfil your current plans for them if you died?”

3. The second mistake is not having a clear vision for the future and knowing what our preferred future will look like.
a. How will we ever achieve our financial goals if we don’t even know what the finish line looks like.
b. Adjust to things when taken off course

4. The third mistake is that people are sold on a story versus a concrete strategy
5. The fourth mistake is not having a budget.
a. Budget is not a dirty word.
b. Knows what we can and afford
6. Fifth mistake is not planning for Longevity or costs associated with advanced medical care.

Gary 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, Gary Sussman. The number to call is 949.536.2030. That is 949.536.2030. Or visit www.yourfinancialstory.com.

Stay tuned because after the break we are going to tell you about how the FATCA Momentum is Growing – If You Have Undisclosed Foreign Accounts You Have No Where To Hid.
You are listening to Board Certified Tax Attorney, Jeffrey B. Kahn, and Licensed Financial Planner, Gary Sussman 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, Gary Sussman.

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

Chit chat with Amy

And be aware of the special Offer that I have for you: 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 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.

FATCA Momentum Grows; If You Have Undisclosed Foreign Accounts You Have No Where To Hide
Jeff states: Nine months have passed since the Internal Revenue Service announced on October 2, 2015 the exchange of financial account information with certain foreign tax administrations, meeting a key September 30th milestone related to FATCA, the Foreign Account Tax Compliance Act.
Amy states: This information exchange is part of the IRS’s overall efforts to implement FATCA, enacted in 2010 by Congress to target non-compliance by U.S. taxpayers using foreign accounts or foreign entities. FATCA generally requires withholding agents to withhold on certain payments made to foreign financial institutions (FFIs) unless such FFIs agree to report to the IRS information about financial accounts held by U.S. taxpayers, or by foreign entities in which U.S. taxpayers hold a substantial ownership interest.
Amy continues: To achieve this, the IRS successfully and timely developed the information system infrastructure, procedures, and data use and confidentiality safeguards to protect taxpayer data while facilitating reciprocal automatic exchange of tax information with certain foreign jurisdiction tax administrators as specified under the intergovernmental agreements (IGAs) implementing FATCA.
Gary asks: Amy, what is the reason behind the Federal government enacting FATCA into law?
Amy replies: Well for a long time the IRS felt that U.S. taxpayers were keeping money abroad to evade paying U.S. taxes. There are also many U.S. taxpayers who are still not aware that when they file their U.S. income tax returns, they must report their worldwide income. So by enacting FATCA, foreign banks would eventually be reporting the same level of financial information as domestic banks already do to the IRS which the IRS can then use to verify compliance of U.S. taxpayers in reporting their worldwide income on their U.S. income tax returns. IRS Commissioner John Koskinen has even said that “meeting the September 30th deadline is a major milestone in IRS efforts to combat offshore tax evasion through FATCA and the intergovernmental agreements and that FATCA is an important tool against offshore tax evasion.”
Jeff states: You know a lot of foreign countries are also looking to benefit from the enactment of FATCA by facilitating and participating in the exchange of financial account information so they can enforce their own tax laws on their citizens who may be evading that country’s tax laws.
Amy replies: That’s right. The U.S. government has entered into a number of bilateral IGAs that set the groundwork for cooperation between the jurisdictions in this area. Certain IGAs not only enable the IRS to receive this information from FFIs, but enable more efficient exchange by allowing a foreign jurisdiction tax administration to gather the specified information and provide it to the IRS. And some IGAs also require the IRS to reciprocally exchange certain information about accounts maintained by residents of foreign jurisdictions in U.S. financial institutions with their jurisdictions’ tax authorities. Under these reciprocal IGAs, the first exchange of information had to take place by September 30, 2015.
Jeff asks: So Amy what should one do if they have undisclosed foreign bank accounts and unreported foreign income?
Amy replies: You should see tax counsel as soon as possible. The tax law imposes penalties as high as $100,000 or 50% of the principal value of your foreign accounts per violation and you can be incarcerated for as long as 5 years if convicted by a Federal court. Since 2009, over 60,000 U.S. taxpayers have come forward voluntarily to disclose their foreign financial accounts, taking advantage of special opportunities to comply with the U.S. tax system and resolve their tax obligations. At the beginning of 2012, the IRS reopened the Offshore Voluntary Disclosure Program (OVDP), which is open until otherwise announced.
Gary asks: That is some serious punishment. Amy, what different programs are available to U.S. taxpayers?
Amy replies: The two main options are:
1. Offshore Voluntary Disclosure Program; and
2. Streamlined Filing Compliance Procedures.
Amy continues: The Offshore Voluntary Disclosure Program (OVDP) is a voluntary disclosure program specifically designed for taxpayers with exposure to potential criminal liability and/or substantial civil penalties due to a willful failure to report foreign financial assets and pay all tax due in respect of those assets. OVDP is designed to provide to taxpayers with such exposure (1) protection from criminal liability and (2) terms for resolving their civil tax and penalty obligations.
Amy continues: OVDP requires that taxpayers go back as far as eight years in amending income tax returns to report foreign source income and disclose foreign bank accounts. The taxpayers would include with their submission of these tax filings the payment of the back taxes, interest each year on the unpaid tax and a 20% accuracy-related penalty which is applied against the unpaid tax. In addition, the taxpayers would include payment of what we call the “OVDP penalty” which is 27.5% of the highest balance of the foreign bank account in the past eight years. The IRS in return will not pursue charges of criminal tax evasion which would have resulted in jail time or a felony on your record and the IRS will not pursue impose the other multitude of penalties the tax law otherwise provides.
Jeff asks: What about the other option you mentioned of Streamlined Filing Compliance Procedures?
Amy replies: 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. The key factor to be eligible for the streamlined procedures is that a taxpayer must show that he is non-willful in failing to report worldwide income and disclose foreign accounts.
Gary asks: If the streamlined procedures require a taxpayer to prove he was non-willful in failing to report the foreign account and foreign income and the regular OVDP does not, why would it still be beneficial to pursue the streamlined procedures?
Amy replies: Well for one thing that penalty is a lot lower. Recall that under regular OVDP the penalty is 27.5% penalty based upon the highest balance of the account in the past eight years. Beginning August 4, 2014, this rate increases to 50% for U.S. accountholders of certain foreign banks. Under the streamlined procedures the penalty is 5% of the highest balance of the account in the past six years and if you are a foreign person, that penalty can be waived under the streamlined procedures.
Jeff states: So it appears that for the streamlined procedures, the effort that you must place the most emphasis on to have a successful result is not so much in the preparation of the amended tax returns but showing that a taxpayer is non-willful.
Amy replies: That is correct. Many people think just by stating to the IRS that they did not know the law requires that you must report foreign income on your U.S. income tax return and disclose foreign accounts on an FBAR will satisfy this non-willful standard. There is a lot more than that to meet this standard. In fact we have identified over 50 factors that we cover with our clients which we then address in the non-willful statements that get included with the packages submitted to IRS. A comprehensive non-willful statement is the key to a successful submission.
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 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, Gary Sussman 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, Gary Sussman.

And Gary and I always pleased to make our offers to our listeners where… 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 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.

Gary 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, Gary Sussman. The number to call is 949.536.2030. That is 949.536.2030. Or visit www.yourfinancialstory.com.

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.

And again I want to introduce our quest, Mark Schwartz, Owner and Agent at Mark Schwartz Realty. So Mark as our guest, what questions have you pulled for us to answer?

Charles from San Diego asks: I am considering offering a 401k to my employees, is this a good idea?

Gary answers.

Stanley from Newport Beach asks: What if a taxpayer has already filed amended returns reporting income from foreign assets without entering into the Offshore Voluntary Disclosure Program?

Jeff replies: When a taxpayer bypasses the Offshore Voluntary Disclosure Program and instead files the delinquent FBAR’s and amends income tax returns to include foreign income, that we call is a “quiet disclosure”.

Jeff continues: The IRS is aware that some taxpayers have made “quiet disclosures” by filing amended returns, by filing delinquent FBARs, and paying any related tax and interest for previously unreported income from foreign assets without otherwise notifying the IRS. Because of this the IRS has put procedures in place whereby its computers can detect these filings and now open up examinations or investigations against these taxpayers. Our firm has already seen this happen.

Jeff continues: That is why taxpayers who have already made “quiet disclosures” are encouraged to participate in OVDP by submitting an application, along with copies of their previously filed returns (original and amended), and all other required documents and information to the IRS’s Voluntary Disclosure Unit. By doing this taxpayers are protected from criminal prosecution and obtain the favorable penalty structure offered under OVDP. Unlike a voluntary disclosure through OVDP, quiet disclosures provide no protection from criminal prosecution and may lead to civil examination and the imposition of all applicable penalties. And remember, once the IRS starts an examination or investigation, it is too late to enter into OVDP.

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.

Gary states: Have a great day everyone!

Jeffrey B. Kahn, Esq. and Windus A. Fernandez Brinkkord Discusses The Markets, Tips If You Owe Taxes and the IRS On ESPN Radio – July 15, 2016 Show

Topics Covered:

1. Special Guest: Chris Rupp, Franchise Owner; PrideStaff, PrideStaff Financial

2. Youth Optimism Powers U.S. Economy

3. Tips If You Owe Taxes

4. Call in Question:

a. I want to invest in an IRA but am not sure how to go about it. At what earnings point is it more beneficial to go the Traditional Retirement route and not the Roth Retirement route?

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

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: Youth Optimism Powers U.S. Economy

Windus states:

Also coming up is:

Segment 3 material: Tips If You Owe Taxes

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: At this time, we would like to introduce you to our special guest:

Chris Rupp, Franchise Owner; PrideStaff, PrideStaff Financial

1. Can you tell us a little bit about PrideStaff?
2. What is PrideStaff Financial?
3. What was the drive behind starting up your own staffing and recruiting enterprise?
4. About how many companies around the Greater San Diego area does your company provide temporary work for?
5. Would you be able to tell us off the top of your head, what percentage of your temporary associates go on to become direct hire employees?
6. Where do you advertise for new talent to fill future positions?
7. Does PrideStaff provide benefits for the employees being sourced for temporary positions? How does that work within PrideStaff?
8. Do you have a list of associates who match up to a specific positions criteria, or do you have a first call first serve basis for available assignments?
9. Have you ever considered another path for yourself outside staffing services?
10. What would be your most valuable bit of advice for anyone interested in owning their own business?

Well it’s time for a break but stay tuned because we are going to tell you Youth Optimism Powers U.S. Economy.

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 be aware of the special offer that Windus has for you: 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. Or visit www.guideyourstory.com.

Youth Optimism Powers U.S. Economy

http://on.wsj.com/29HcJ9i

• Millennials and baby boomers seem to have different feelings about the Economy
–>This is a decades long generational issue. Often people in their 20’s & 30’s are more optimistic than those at the end or towards the end of their working careers. Chris, have you noticed this in your work place or between you & your daughters?
• Specifically, confidence among the 35 & below crowd is back at pre-recession levels where as those about 55 is far lower and even decreasing in the last year. From your experience, what would be contributing to this decrease? Do you think it is work place happiness? Or watching the investments not have a good year? Concern over the Presidential election?
• Older Americans pulled back in spending in the first quarter of 2016 while younger ones increased, according to Chase credit & debt cards. Honestly, if I didn’t have a lot of money invested, I may not have felt the pain of the first quarter in 2016 as much. Right? How connected would I be to the economy?
• Younger people feel that having to bid for a house is a sign of a strong economy. Some older people get worried it is a sign of a housing bubble.
• Now this is great but the youth cannot carry the economy:
–>Many youths are burdened with high student loans that will ultimately prevent them from buying a home. Especially without a parent co-signer on that house.
–>Millennials will not see pay raises at a rate in which can keep the economy going like baby boomers could.
• Businesses are shifting who they target:
–>they used to target retirees or people who had time and money to spend. They are now focusing on tired parents that are working OR “stressed-out young professionals”…Todd Leff, chief executive and Hand & Stone, a Pennsylvania based massage chain.
–>businesses are even moving to advertise on Facebook
• Readings on consumer confidence for these two groups has ultimately ebbed and flowed but in June it was nearing a record. In August of 2015, was when it created that record originally?
• Youth are benefiting from things like a raise in minimum wage whereas older individuals are being hurt by rising medical bills while on a fixed income. Chris, what do you think of this? Do you think this is a broad nationwide analysis or do you think this applies to your feelings?
• Some events that impacted confidence across the board:
–>Debt-ceiling fight of 2011
–>Federal government shutdown in 2013
One event that didn’t:
–>Brexit? At least here in the U.S. it didn’t impact our Millennials! Whereas retired individuals saw a huge impact, albeit a short one, on their investments. Making them feel more uneasy then they already do.

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. Or visit www.guideyourstory.com.

Jeff states: Stay tuned because after the break we are going to tell you some tips if you owe taxes.

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

And be aware of the special Offer that I have for you: 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 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.

Tips If You Owe Taxes.

Jeff asks: So what is the first step in the IRS Collection process where you owe money to the IRS?
Amy replies: Mailed Tax Bills. If you owe taxes, you will first receive a bill in the U.S. mail from the IRS which tells you your balance owed through a certain date indicated on the bill. Don’t fall for those calls from people claiming to be the IRS threatening criminal action against you if you don’t pay the amount they are demanding. The IRS will never make an initial contact with you by telephone without first having sent you written notice that you owe the IRS or are under examination. Of course if you have the available funds, you should pay the balance no later than the date indicated in the bill to avoid any extra charges. If you can’t pay in full, keep in mind that interest and penalties continue to accrue on the balance so any payment made to IRS will result in lower accruals of interest and penalties for the future.
Windus asks: Is there a preferred method to pay your bill to IRS?
Amy replies: Use IRS Direct Pay. When paying a balance from an IRS tax bill consider using IRS Direct Pay. It’s the safe, easy and free way to pay from your checking or savings account. You can pay your tax in just five simple steps in one online session. Just click on the “Payment” tab on IRS.gov.
Windus asks: What about a taxpayer who does not have the funds now but is expecting substantial funds soon like from a settlement or inheritance or maybe even getting a loan?
Amy replies: Full Payment Agreements of up to 120 days. If you owe more tax than you can pay, you may qualify for more time -up to 120 days- to pay in full. You do not have to pay a user fee to set up a short-term full payment agreement. However, the IRS will charge interest and penalties until you pay in full.
Jeff states: But let’s say you are a taxpayer who cannot full pay now or even in the next 120 days, what do you do?
Amy replies: Apply for an installment agreement. For one thing if you’re financially unable to pay your tax debt immediately, you can make monthly payments through an installment agreement. Before applying for any payment agreement, you must file all required tax returns and if you are required to make estimated tax payments, you must be current in making those payments. The IRS calls this “being in current compliance”. By being in current compliance, the installment agreement can now cover all tax periods with outstanding balances.
Windus asks: Is there only one type of installment agreement with IRS?
Amy replies: Actually Windus many people don’t know that there are different types of installment agreements in place with IRS.
Amy states: “No Verification” Installment Agreements. For individuals who owe $50,000 or less in combined individual income tax, penalties and interest, OR businesses that owe $25,000 or less in payroll taxes, you can have an installment agreement set up with IRS without presenting any financial information.
Jeff states: Under these agreements the IRS will usually rely on oral representations made and not require any proof of income or bank statements. Nevertheless, when calling the IRS you still must be prepared so that the request can be evaluated during that session with the agent. Having an incomplete session and then calling back the IRS with the missing information will only direct you to another agent who can have a totally different take than the first agent.
Amy states: “Full Verification” Installment Agreements. For individuals and businesses that exceed the thresholds of the No Verification Installment Agreements, the IRS will require that full financial disclosure be made with your payment plan proposal. Be careful though because the IRS does limit certain expenses and depending on the type of installment agreement entered, you may not be able to get full credit for your actual living expenses.
Jeff states: So if you are in this situation, it is best to hire tax counsel to compile the proposal and financial disclosures. If you do it on your own first and fail, your representative will not be able to “undo” what was already disclosed by you to IRS and that could then limit the representative in getting the optimum result.
Windus asks: So for someone who already has an installment agreement, what do you advise?
Amy replies: Understand Your Installment Agreement & Avoid Default. Keep in mind that your future refunds will be applied to your tax debt until it is paid in full. Pay at least your minimum monthly payment when it’s due and if paying by check include your name, address, SSN, daytime phone number, tax year and return type on your payment. Make sure the check is mailed to the right address for delivery no later than the payment due date. File all required tax returns on time & pay all taxes in-full and on time as any new liability will default your installment agreement. Make all scheduled payments even if the IRS applies your refund to your account balance. If you don’t receive your statement from IRS, send your payment to the address listed in your installment agreement.
Jeff states: There may be a reinstatement fee if your agreement goes into default. Penalties and interest continue to accrue until your balance is paid in full. If you are in danger of defaulting on your payment agreement for any reason, it is a good idea to hire tax counsel who can seek reinstatement or even a modification where you can make lower monthly payments.
Jeff continues: The IRS will generally not take enforced collection actions:
1. When an installment agreement is being considered;
2. While an agreement is in effect;
3. For 30 days after a request is rejected, or
4. During the period the IRS evaluates an appeal of a rejected or terminated agreement.
Windus states: I hear all the time that taxpayers can settle their IRS debt with an Offer In Compromise. What is that all about?
Amy replies: Check out an offer in compromise. An offer in compromise or OIC may let you settle your tax debt for less than the full amount you owe. An OIC may also be helpful if full payment may cause you financial hardship. Not everyone qualifies after all, when you are looking for a discount on your IRS liability the government wants to make sure that collectability of the full liability plus interest and penalties is highly doubtful before granting a discount.
Jeff states: 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.
Amy states: The IRS will consider your unique set of facts and circumstances with a focus on your income and expenses to determine your ability to pay and your asset equity.
Amy continues: The 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.
Windus asks: How do you know if you are eligible for an OIC?
Amy replies: Before the IRS can consider your offer, you must be current with all filing and payment requirements. You are not eligible if you are in an open bankruptcy proceeding and if you file for bankruptcy while your OIC is being evaluated, the IRS will stop evaluation and return the OIC.
Windus asks: What forms must you use to submit your offer?
Amy replies: The form to use in filing an OIC is Form 656. You must include payment of an application fee of $186.00 and a deposit towards the amount offered. Additional you must include financial disclosures. The main forms to use are Form 433-A (OIC) (for individuals) or 433-B (OIC) (for businesses) and these forms list all required documentation that must be included. Like installment agreement requests, the IRS limits certain living expenses so it make sense to engage tax counsel to pursue this process.
Windus asks: Are there any payment options available?
Amy replies: Your initial payment will vary based on your offer and the payment option you choose:

Lump Sum Cash: Submit an initial payment of 20% of the total offer amount with your application. Wait for written acceptance, then pay the remaining balance of the offer in five or fewer payments.

Periodic Payment: Submit your initial payment with your application. Continue to pay the remaining balance in monthly installments while the IRS considers your offer. If accepted, continue to pay monthly until it is paid in full.

Windus asks: What happens while an offer is being evaluated?

Amy replies:
1. Your non-refundable payments and fees will be applied to the tax liability;
2. A Notice of Federal Tax Lien may be filed;
3. Other collection activities are suspended;
4. The legal assessment and collection period is extended;
5. Make all required payments associated with your offer;
6. You are not required to make payments on an existing installment agreement; and
7. Your offer is automatically accepted if the IRS does not make a determination within two years of the IRS receipt date.

Jeff states: If your offer is accepted you must meet all the Offer Terms listed in Section 8 of Form 656, including filing all required tax returns and making all payments for the next five years; Any refunds due within the calendar year in which your offer is accepted will be applied to your tax debt; and Federal tax liens are not released until your offer terms are satisfied.

Jeff continues: If your offer is rejected you may appeal a rejection within 30 days after the determination letter has been issued by IRS. If though your offer is returned, you do not have this right of appeal and must start the OIC process all over again.

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 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.

And Windus and I always pleased to make our offers to our listeners where… 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 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.

Windus states: 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. Or visit www.guideyourstory.com.

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.

Jeff states: And in the studio with Windus and me is our special guest Chris Rupp, Franchise Owner; PrideStaff, PrideStaff Financial.

OK Chris, as our special guest what questions have you pulled for us to answer?

Tracy from Carlsbad asks: I want to invest in an IRA but am not sure how to go about it. At what earnings point is it more beneficial to go the Traditional Retirement route and not the Roth Retirement route?

Windus answers.

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!

Jeffrey B. Kahn, Esq. and Gary Sussman Discusses The Markets, Taxes and the IRS On ESPN Radio – June 17, 2016 Show

Topics Covered:

1. Special Guest Steven Hyde, Loan Officer at Movement Mortgage

2. The Most Pessimistic Bull Market in History

3. Streamlined Filing Compliance Procedures if you have undisclosed foreign accounts.

4. Questions from our listeners:

a. I have a 401(k), my spouse has a 401(k) and we make deductible contributions. Can I contribute to an IRA?

b. Can I still contribute to an IRA after I retire? How does that work with RMDs?

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

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

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.

Gary states:

And this is Licensed Financial Planner, Gary Sussman, 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!

Gary 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: The Most Pessimistic Bull Market in History

Gary states:

Also coming up is:

Segment 3 material: Streamlined Filing Compliance Procedures if you have undisclosed foreign accounts.

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

Jeff starts chit chat with Gary.

Jeff states: So let’s introduce you to today’s guest:

Please welcome Steven Hyde, Senior Mortgage Loan Officer at Movement (858) 775-1005

Questions:
1. You have quite the passion for photography, not only working freelance for a while as a photographer, but also in web design and marketing. What prompted your career change and peaked your interest in becoming a Loan Officer?
2. What top factors determine if someone gets a loan?
3. Can you walk us through the process you take to select a mortgage loan for a client?
4. What’s more important when looking at a mortgage: rates, fees or points?
5. What do you expect to see happen to mortgage loan rates over the next couple of years?
6. Under what circumstances would you recommend to a client a refinance?
7. What are some of the things should people be aware that will increase their chances for being approved for a loan?

Well it’s time for a break but stay tuned because we are going to tell you about the Most Pessimistic Bull Market in History.

You are listening to Board Certified Tax Attorney, Jeffrey B. Kahn, and Licensed Financial Planner, Gary Sussman 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, Gary Sussman.

And be aware of the special offer that Gary has for you: Gary 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, Gary Sussman. The number to call is 949.536.2030. That is 949.536.2030. Or visit www.guideyourstory.com.

The Most Pessimistic Bull Market in History

http://on.wsj.com/1ZKiTo3

1. Instead of chasing growth and profits, investors this year have bought into safety
a. Go-go stocks aren’t growing, investments geared toward utilities and consumer staples
b. (DISCUSS: examples of safety stocks or funds in relation to go-to stocks like Google, Amazon, Facebook, Netflix, etc.)
2. The bubble that pushed markets up in 2007 is elsewhere
a. Excess in credit created shaky profits; this time the government bond market
b. (DISCUSS: market sectors that took the hardest hit in the Great Recession)
3. Change of pace
a. Investors transitioning to stock from underperforming bonds are not risk takers; aiming for more conservative, bond-like equities
b. (DISCUSSION: Does it look like investors are still uneasy from the last recession? More cautious the next go-around while remembering what happened last time?)
4. Opting for the least exciting companies has worked brilliantly
a. (DISCUSS: super conservative market sectors that perform similarly to bond expectations yet have a greater dividend and annual return)
b. Utilities sector: Up 16%
c. Consumer Staples: Up 5.7%
d. Telecom Sector: Up 14%
e. All three sectors offer healthier dividends than the market
5. The two most obvious signs that the economy is improving
a. Small company figures
b. Chip maker yield
c. (DISCUSS: Russell 2000 Index for small capitalization stocks and the PHLX Semiconductor Index of the US sector; what should investors be looking at?)
d. Leading indicators for the economy tend to follow the direction of small-cap equity and chip makers
e. (DISCUSSION: With the market what it is, what ratio should investors be focusing on between domestic and international equities? Is there a way to safe guard yourself from another US melt-down by keeping a “toe” in global trade?)
6. Picking a side
a. Buying Bond proxies = believing insanely low global yields are right, economy is weaker than projected and bad times are ahead of us
b. Buying cheaper economically sensitive stock = believing we are going to continue the recovery of the past seven years/maintain growth in a pessimistic bull market
c. (DISCUSSION: Where do you see the market heading? How do you feel the election will affect the market come November or Inauguration Day? What if you’ve got a ways until retirement, how should you be planning you IRA investments?)

Gary 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, Gary Sussman. The number to call is 949.536.2030. That is 949.536.2030. Or visit www.guideyourstory.com.

Stay tuned because after the break we are going to tell you about the Streamlined Filing Compliance Procedures if you have undisclosed foreign accounts.

You are listening to Board Certified Tax Attorney, Jeffrey B. Kahn, and Licensed Financial Planner, Gary Sussman 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, Gary Sussman.

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

Chit chat with Amy

And be aware of the special Offer that I have for you: 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.

Streamlined Filing Compliance Procedures

Jeff states: A reader of last week’s show commented on why we did not discuss the Streamlined Procedures as the solution to U.S. taxpayers who have undisclosed foreign accounts. Well we have talked about this in the past so maybe a refresher and update is due.

Gary asks: But before we get into this, Amy, what are the Filing Requirements If You Have Undisclosed Bank Accounts?

Amy replies: By law, many U.S. taxpayers with foreign accounts exceeding certain thresholds must file Form 114, Report of Foreign Bank and Financial Accounts, known as the “FBAR.” It is filed electronically with the Treasury Department’s Financial Crimes Enforcement Network (FinCEN). Taxpayers with an interest in, or signature or other authority over, foreign financial accounts whose aggregate value exceeded $10,000 at any time during 2015 must file FBARs. It is due by June 30 and must be filed electronically through the BSA E-Filing System website.

Amy continues: Additionally, U.S. citizens, resident aliens and certain non-resident aliens must report specified foreign financial assets on Form 8938 if the aggregate value of those assets exceeds certain thresholds. Reporting thresholds vary based on whether a taxpayer files a joint income tax return or lives abroad. The lowest reporting threshold for Form 8938 is $50,000 but varies by taxpayer.

Gary asks: Is it true that the U.S. Requires Reporting Of Worldwide Income On U.S. Income Tax Returns?

Amy replies: The law requires U.S. citizens and resident aliens to report worldwide income, including income from foreign trusts and foreign bank and securities accounts. In most cases, affected taxpayers need to complete and attach Schedule B to their tax return. Part III of Schedule B asks about the existence of foreign accounts, such as bank and securities accounts, and usually requires U.S. citizens to report the country in which each account is located.

Jeff states: The first Voluntary Disclosure Program for Undisclosed Foreign Bank Accounts came out in 2009. While the law imposes a penalty rate as high as 50% of the value of your foreign accounts, this program had a maximum rate of 20%. In later years this top penalty rate was increased to 25% and then 27.5%. The IRS still received a lot of complaints that the penalty rates under this program were to high.

Amy states: So on June 18, 2014, the IRS announced major changes in the 2012 offshore account compliance programs, providing new options to help taxpayers residing in the United States and overseas. The changes are anticipated to provide thousands of people a new avenue to come back into compliance with their tax obligations.

Jeff states: 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. The streamlined procedures are designed to provide to taxpayers in such situations (1) a streamlined procedure for filing amended or delinquent returns and (2) terms for resolving their tax and penalty obligations.

Gary asks: How are the streamlined procedures different than the regular OVDP?

Amy replies: Taxpayers will be required to certify 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. Under the regular OVDP it is not necessary to show your conduct was non-willful.

Gary asks: Under what circumstances would a taxpayer not be allowed to enter into this program?

Amy replies: If the IRS has initiated a civil examination of a 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. Similarly, a taxpayer under criminal investigation by IRS Criminal Investigation is also ineligible to use the streamlined procedures.

Amy continues: However, 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 OVDP or its predecessor programs) may still use the streamlined procedures.

Jeff states: Now the Streamlined Procedures are classified between U.S. Taxpayers Residing Outside the United States and U.S. Taxpayers Residing in the United States.

Gary: As I understand a key factor in qualifying for a full waiver of the penalty is that the taxpayer cannot be a U.S. resident.

Amy replies: That’s right. Individual U.S. citizens or lawful permanent residents, or estates of U.S. citizens or lawful permanent residents, meet the applicable non-residency requirement if, in any one or more of the most recent three years for which the U.S. tax return due date (or properly applied for extended due date) has passed, the individual did not have a U.S. abode and the individual was physically outside the United States for at least 330 full days. Under IRC section 911 and its regulations, which apply for purposes of these procedures, neither temporary presence of the individual in the United States nor maintenance of a dwelling in the United States by an individual necessarily mean that the individual’s abode is in the United States.

Amy continues: Individuals who are not U.S. citizens or lawful permanent residents, or estates of individuals who were not U.S. citizens or lawful permanent residents, meet the applicable non-residency requirement if, in any one or more of the last three years for which the U.S. tax return due date (or properly applied for extended due date) has passed, the individual did not meet the substantial presence test of IRC section 7701(b)(3).

Gary asks: What if a taxpayer closed an liquidated their undisclosed foreign bank accounts, are they in the clear?

Amy replies: No. Recent closure and liquidation of foreign accounts will not remove your exposure for non-disclosure as the IRS will be securing bank information for the last eight years. Additionally, as a result of the account closure and distribution of funds being reported in normal banking channels, this will elevate your chances of being selected for investigation by the IRS. For those taxpayers who have submitted delinquent FBAR’s and amended tax returns without applying for amnesty (referred to as a “quiet disclosure”), the IRS has blocked the processing of these returns and flagged these taxpayers for further investigation. You should also expect that the IRS will use such conduct to show willfulness by the taxpayer to justify the maximum punishment.

Amy continues: Additionally, starting with the 2011 Tax Return Filing Season: U.S. taxpayers who have an interest in foreign assets with an aggregate value exceeding $50,000 must include new Form 8938 (Statement of Specified Foreign Financial Assets) with their Federal income tax return. This reporting will serve as an additional tool for the IRS to determine prior noncompliance of taxpayers who have undisclosed foreign accounts or unreported foreign income. The new Form 8938 filing requirement does not replace or otherwise affect a taxpayer’s obligation to file an FBAR (Report of Foreign Bank and Financial Accounts). Failing to file Form 8938 when required could result in a $10,000 penalty, with an additional penalty up to $50,000 for continued failure to file after IRS notification. A 40% penalty on any understatement of tax attributable to non-disclosed assets can also be imposed.

Gary asks: What if someone is current in the 2012 Offshore Voluntary Disclosure Initiative (“OVDI”) and facing a penalty of 27.5%, can they get relief under the streamlined procedures and be subject to a 5% penalty?

Amy replies: For taxpayers who essentially applied to the 2012 Offshore Voluntary Disclosure Initiative (“OVDI”) on or before June 30, 2014, they can have their case converted to be under the new procedures which could substantially reduce their penalties to 5% and in some cases even eliminate them. Our office has been successful in getting such cases converted.

Gary asks: So what should one do if they have undisclosed foreign accounts?

Amy states: So we encourage taxpayers who are concerned about their undisclosed offshore accounts to come in voluntarily before learning that the U.S. is investigating the bank or banks where they hold accounts. By then, it will be too late to avoid the new higher penalties under the OVDP of 50% percent – nearly double the regular maximum rate of 27.5% and 10 times more than the 5% rate offered in the expanded streamlined procedures.

Jeff states: And keep in mind that once the IRS contacts you, you cannot get into this program. You will now be subject to the maximum penalties (civil and criminal) under the tax law. Which is why …

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.

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, Gary Sussman 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, Gary Sussman.

And Gary and I always pleased to make our offers to our listeners where… 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.

Gary 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, Gary Sussman. The number to call is 949.536.2030. That is 949.536.2030. Or visit www.guideyourstory.com.

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 Steven since you are our guest, what questions have you pulled for us to answer?

James from Newport Beach asks: I have a 401(k), my spouse has a 401(k) and we make deductible contributions. Can I contribute to an IRA?

Gary answers.

James from Newport Beach also asks: Can I still contribute to an IRA after I retire? How does that work with RMDs?

Gary answers.

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.

Gary states: Have a great day everyone! And Happy Father’s Day!