Jeffrey B. Kahn, Esq. and Windus A. Fernandez Brinkkord Discusses Oil Price Impact On Saudi Arabia, Newest IRS Scam and Taxes On ESPN Radio – June 3, 2016 Show

Topics Covered:

1. Meet Our Guest Of The Day: Ed Quinlan, Market President of Corporate Alliance.
2. Oil Change: Affluent Saudi Arabia Goes to Work
3. IRS Warns of Latest Scam Variation Involving Bogus “Federal Student Tax”
4. Questions from our listeners:
   a. My spouse passed away last year, and I will be filing a joint return. How should I file, how should I sign, and are there any special notations required to indicate my spouse is deceased?
   b. How do I sign my tax return when I e-file?

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

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: Oil Change: Affluent Saudi Arabia Goes to Work.

Windus states:

Also coming up is:
Segment 3 material: IRS Warns of Latest Scam Variation Involving Bogus “Federal Student Tax”.
And of course towards the end of our show, we will be answering some of your questions.

Jeff starts chit chat with Windus.

Windus states: Let’s introduce you to today’s guest:

Ed Quinlan, Market President of Corporate Alliance. Email: eq@corporatealliance.net
Questions:

a. Describe your primary everyday responsibilities as a Market President.
b. What type of background do you look for in a prospect you’re looking to recruit?
c. Would you consider “communication disconnect” the number one deficiency that corporations face?
d. What would your plan of attack be, going in to consult for a business that is lacking highly productive individuals?
e. What are some good examples of creating continuous learning environments for associates?
f. What do you find is the most difficult aspect of customer retention?

Jeff states: Well it’s time for a break but stay tuned because we are going to tell you about how the oil change is making affluent Saudi Arabia go to work.

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.

Oil Change: Affluent Saudi Arabia Goes to Work

http://www.wsj.com/articles/oil-change-affluent-saudi-arabia-goes-to-work-1464716895;
http://www.bloomberg.com/news/articles/2016-06-01/saudis-said-to-seek-restoration-of-opec-unity-after-doha-failure-iowrk295

1. Saudi Arabia’s leadership has taken up the challenge of weaning the kingdom from its dependence on oil
a. Deputy crown prince’s urgent plan to wean kingdom from petroleum will mean deep changes in a conservative society long accustomed to handouts
2. Dismantling the world’s biggest petro-state
a. a key part of the government’s economic strategy is to replace foreign workers with Saudis displaced from down-sizing oil conglomerates
3. Prince Mohammed bin Salman
a. Deputy crown prince, second in line to the throne
b. Runs all economic and domestic policy
c. Runs the country’s military
d. Launched a historic effort to remake the conservative, change-averse kingdom
4. History of a developed kingdom
a. Crude was first discovered there in 1938
b. Developed into one of the quintessential economic constructs of the oil age
c. Billions of barrels of crude oil, pumped and sold to the world, have forged its politics and economy
5. Saudi citizens benefit from oil
a. Citizens have enjoy deeply discounted gasoline, water and electricity
b. Subsidized housing
c. Health care and education(including stints studying abroad) are paid for by the government
d. No taxes
e. Businesses have depended on cheap energy and ready access to cheap foreign labor
6. Demographics are overwhelming the petrostate
a. Social compact is breaking down
b. Declining oil prices
c. By 2030, the number of Saudis over the age of 15 will likely increase by about six million
i. At least 4.5 million new eligible workers into the labor force
ii. Even more if women begin working in larger numbers
iii. Doubling the size of the adult population
d. Stretching the kingdom’s cradle-to-grave system of handouts and subsidies to the breaking point
i. Requires the creation of almost three times as many jobs as the country generated
e. Sales, repair and low-level management jobs have long been filled by foreign workers
i. Inexpensive
ii. Willing to work long hours
7. The Response
a. Government envisions a broad diversification of the economy beyond crude exports
b. Privatize chunks of many government companies
c. Expanding more aggressively into higher-value refined products such as gasoline and petrochemicals
d. Developing a tourist industry
e. Building a manufacturing base
8. Develop tourism
a. An industry the government has struggled with
b. Holy city of Mecca draws tens of millions of visitors annually during the hajj pilgrimage
i. Saudi construction companies have made fortunes building new luxury hotels and shopping malls
ii. Muslim holy cities remain off limits to non-Muslims
c. The kingdom still doesn’t issue tourist visas, but the government says it plans to start a tourist visa program soon
d. Some tourism boosters would like to turn the country into a year-round destination
i. Capitalizing on archeological treasures
ii. Scuba diving
iii. A variety of government-supported efforts to restore historic homes
1. New projects teach restoration
2. Carpentry skills
9. Biggest challenge for the kingdom’s overhaul of the petrostate
a. The flood of oil dollars tends to drive up the price for Saudi labor
b. Exports too costly to compete in foreign markets
c. “about wealth creation” for business owners, not “economic value creation”
i. Neither encourage innovation
10. Ministry of Labor and Social Development
a. The ministry has launched a nationwide media campaign to complete “Saudization” by September
b. Decided to replace all foreigners who work in shops for sales and maintenance of mobile phones with Saudi nationals
c. New ban on foreign workers will create more than 20,000 job opportunities for locals
d. 19,084 men and women have been trained and are ready to take jobs in the sales, customer service and basic maintenance of mobile phones
e. Force most retail outlets to close by 9 p.m. instead of 11 p.m. or midnight, to make retail jobs more attractive to Saudis because it will allow them to finish work early enough to return home to spend time with their families
11. Segments of Saudi society are expressing unease
a. Skeptical that the government will be able to train enough people in time to make the plan work within the deadline
b. The sector has been controlled by foreigners for many years
c. Limits on store hours are impractical
i. Forced to close five times a day for prayer
ii. Temperatures are often blazing hot during the day
iii. Most people prefer to shop and run errands in the evening
d. Government goal = bring more Saudi women into the workforce
e. Kingdom’s arch-conservative clerical class aggravated over the government’s efforts to expand women’s participation in the public workplace
f. Young Saudis have over the years acquired a reputation of looking down on manual work
12. Innovation Center at King Fahd University for Petroleum and Minerals
a. The center has forged tie-ups with multinational companies
i. General Electric Co.
1. Invest at least $1.4 billion
2. Double its workforce in the kingdom to 4,000 by 2020
3. onglomerate plans to team up with two partners, including Aramco, to build a $400 million manufacturing facility for the energy and marine sector
ii. China’s Sinopec
b. Has developed dozens of new patents
c. 90 new products, including a water purification process
d. The university’s business incubator is developing case studies in Arabic
i. tap into the youngest members of some of the kingdom’s prominent merchant families

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.

Stay tuned because we do not want you to be a victim to the newest IRS scam variation involving a bogus “Federal Student Tax”.

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 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 Warns of Latest Scam Variation Involving Bogus “Federal Student Tax”

Windus states: Scam artists exploiting innocent law-abiding taxpayers has been a big problem for the IRS and despite issuing multiple consumer alerts, the bogus emails, the bogus IRS letters and the bogus telephone calls continue and unfortunately taxpayers are still falling for this.

Jeff states: Every week our office receives about a half-dozen inquiries from taxpayers asking whether the communication they just received is really from the IRS. Scam artists have been coming up with new creative ways to lure victims. I do not want you to become the next victim of any such scam so listen carefully to what we have to say.

Amy states: In the latest scheme taxpayers are receiving bogus phone calls from IRS impersonators demanding payment for a non-existent tax, the “Federal Student Tax.” The scammers look to target students and try to convince them to wire money immediately to the scammer. If the victim does not fall quickly enough for this fake “federal student tax”, the scammer threatens to report the student to the police.

Amy continues: Scam artists frequently masquerade as being from the IRS, a tax company and sometimes even a state revenue department. Many scammers use threats to intimidate and bully people into paying a tax bill. They may even threaten to arrest, deport or revoke the driver’s license of their victim if they don’t get the money.

Jeff states: Some examples of the varied tactics seen this year are:
• Demanding immediate tax payment for taxes owed on an iTunes gift card.
• Soliciting W-2 information from payroll and human resources professionals.
• “Verifying” tax return information over the phone.
• Pretending to be from the tax preparation industry.

Windus states: The communication methods used by the scammers are email, letters and telephone calls. The scammers are still going strong doing this to people who are unsuspecting and don’t know how systems work and could very easily frighten them to turn over money. So with my two top tax attorneys we are going to break down each type of fraudulent communication for you and give you the warning signs and tips that you should be aware of.

Windus asks: Amy please tell us what people should be aware about emails.

Amy states: When identity theft takes place over the Internet, it is called phishing. Phishing (as in “fishing for information” and “hooking” victims) is a scam where Internet fraudsters send e-mail messages to trick unsuspecting victims into revealing personal and financial information that can be used to steal the victims’ identity. Current scams include phony e-mails which claim to come from the IRS and which lure the victims into the scam by telling them that they are due a tax refund.

Jeff states: Remember, too, the IRS does not use unsolicited email, text messages or any social media to discuss your personal tax issue so if this is the form of communication used – avoid it like you would avoid the plague.

Windus asks: Amy please tell us what people should be aware about letters.

Amy states: If you receive a notice regarding your taxes which does not bear the official seal of the Internal Revenue Service and an official verifiable address of an IRS office or Service Center, that is a sign that it really isn’t the IRS sending you a notice.

Jeff states: Another scam that the public has told our office involves a sophisticated fraudulent tax collection notice scam targeting taxpayers for which the IRS has filed a Federal Tax Lien.

Jeff continues: Here is how it works: The scammers will search public records for the filing of a Federal Tax Lien by IRS and with the information gathered from that filing will generate a form letter and mail it to the targeted taxpayer. The letter is designed to mimic an IRS notice but it is really coming from a third party having nothing to do with the IRS. If the recipient of the notice contacts the number listed, the person answering your call will purport to be working for the IRS. The intended victim is told he or she owes money to the IRS and it must be paid promptly through a pre-loaded debit card or wire transfer. If the victim refuses to cooperate, he or she is then threatened with arrest, deportation or suspension of a business or driver’s license. In many cases, the person who answered your call becomes hostile and insulting.

Windus asks: Amy please tell us what people should be aware about the telephone.

Amy states: These callers may demand money or may say you have a refund due and try to trick you into sharing private information. These con artists can sound convincing when they call. Scammers use fake names and IRS badge numbers. They generally use common names and surnames to identify themselves. They may know a lot about you and may be able to recite the last four digits of a victim’s Social Security Number and your place of business. They usually alter the caller ID to make it look like the IRS is calling – many times they will use a Washington, D.C. area code. The area codes for the Washington D.C. area are 202, 301 and 703. They will also background noise of other calls being conducted to mimic a call site. If you don’t answer, they often leave an “urgent” callback request and if they have your email address, will send bogus IRS emails to some victims to support their bogus calls. After threatening victims with jail time or driver’s license revocation, scammers hang up and others soon call back pretending to be from the local police or DMV, and the caller ID supports their claim.

Windus asks: How do you recognize that this call is fake?

Amy states: Here are five things the scammers often do but the IRS will not do. Any one of these five things is a tell-tale sign of a scam. The IRS will never:
1. Call you about taxes you owe without first mailing you an official notice.
2. Demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe.
3. Require you to use a specific payment method for your taxes, such as a prepaid debit card.
4. Ask for credit or debit card numbers over the phone.
5. Threaten to bring in local police or other law-enforcement groups to have you arrested for not paying.

Jeff states So what should you do?

Amy states: If you get a phone call from someone claiming to be from the IRS and asking for money, here’s what you should do:
If you know you don’t owe taxes or have no reason to believe that you do, report the incident to the Treasury Inspector General for Tax Administration at 1.800.366.4484.

Jeff states: And if you do owe taxes and you have not already resolved this with the IRS, then that is where we come in.

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, 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 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.

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.

OK Ed since you are today’s guest, we will let you pull this week’s questions for us to answer?

Sharon from Del Mar asks: My spouse passed away last year, and I will be filing a joint return. How should I file, how should I sign, and are there any special notations required to indicate my spouse is deceased?

Answer:
• Across the top of the return – above the area where you enter your address, write “Deceased,” your spouse’s name, and the date of death.
• When you are a surviving spouse filing a joint return and a personal representative has not been appointed, you should sign the return and write “filing as surviving spouse” in the signature area below your signature.
• A tax return for a decedent can also be filed electronically. Follow the specific directions provided by your preparation software for proper signature and notation requirements.
Note: You cannot file a final joint return with your deceased spouse if you as the surviving spouse remarried before the end of the year of death. The filing status of the decedent in this instance is married filing separately.

Cindy from San Diego asks: How do I sign my tax return when I e-file?

Answer:
You can sign your tax return electronically by using a Self-Select PIN, an Electronic Filing PIN, or a Practitioner PIN.
Self-Select PIN – Using the Self-Select PIN method, allows you to electronically sign your individual income tax return by selecting a five-digit personal identification number (PIN). The PIN can be any five numbers (except all zeros) that you choose to enter as your electronic signature PIN.
If you are filing a joint return, each spouse uses his or her own PIN. As part of the authentication process, each taxpayer also enters his or her date of birth and either his or her:
• Original prior year adjusted gross income (AGI)
• Prior year PIN, or
• Temporary PIN obtained using the Get Your Electronic Filing PIN Web tool
If you need to know the eligibility requirements or you cannot locate your prior year AGI or prior year PIN, see Self-Select PIN Method for Forms 1040 and 4868 Modernized e-File (MeF).
Electronic Filing PIN – The Electronic Filing PIN (EFP) is a temporary number issued by the IRS Web application. If you need an EFP, access the Get Your Electronic Filing PIN application or call 866-704-7388. You will have to follow the provided instructions in order to receive your PIN. As a reminder, this number changes every year.
Practitioner PIN – The Practitioner PIN is a method that does not require a prior AGI amount or prior year PIN. When using this method, you must always appropriately sign a completed signature authorization form such as the Form 8879, IRS e-file Signature Authorization. Under this method, you may either enter your own PIN into the return or authorize your Electronic Return Originator to select and enter your PIN. If you use the Practitioner PIN method and enter your own PIN in the electronic return record after reviewing the completed return, you must still appropriately sign the signature authorization form.

Jeff states: Well we are reaching the end of our show. Ed thank you for joining us.

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 Windus A. Fernandez Brinkkord Discusses Investing and Taxes and the IRS On ESPN Radio – May 13, 2016 Show

Topics Covered:

1. IRS Hiring Hundreds Of New Agents Can Spell “Tax Audit” For More U.S. Taxpayers.
2. Is the Tech Bubble Popping?
3. What To expect If The IRS Criminal Investigation Division Is Taking A Look At You.
4. Questions from our listeners:

• Are mutual fund expense ratios tax deductible?
• Should I pay attention to all notices I may receive from the IRS?

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

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: Is the Tech Bubble Popping?

Windus states:

Also coming up is:
Segment 3 material: What to expect if the IRS Criminal Investigation Division is taking a look at you.
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:

IRS Hiring Hundreds Of New Agents Can Spell “Tax Audit” For More U.S. Taxpayers.

http://www.foxnews.com/politics/2016/05/05/lawmakers-demand-irs-explain-how-it-found-for-hundreds-new-agents.html

http://thehill.com/policy/finance/overnights/278600-overnight-finance-irs-hiring-hundreds-of-new-tax-enforcers

http://www.msn.com/en-us/money/markets/irs-loses-hundreds-of-criminal-agents-as-tax-cheats-take-heart/ar-AAfYwKX

Jeff states: The supposedly cash-strapped IRS is facing tough questions from Congress after claiming it just found the money to hire hundreds more enforcement employees.

Windus states: IRS Commissioner John Koskinen — who previously has cited budget woes to explain the agency’s shaky customer service and other issues — recently announced the IRS found the “resources” to hire between 600 to 700 new tax enforcement employees.

Windus continues: The IRS says those extra “resources” resulted from high attrition rates and worker efficiency, but skeptical lawmakers are demanding answers.

Jeff states: House Oversight Committee Chairman Jason Chaffetz (a Utah Republican) said “It was only weeks ago that they were saying they did not have the money to hire more employees and today they do have the money?”

Jeff continues: In an interview with FoxNews.com, the Utah Republican said he will be sending a letter to IRS Commissioner Koskinen seeking a full accounting of how it was determined the agency now has this extra money for hiring.

Windus states: Congressman Chaffetz you should know is a vocal critic of IRS Commissioner Koskinen who has led the effort to impeach him. The Congressman stated “The IRS is the worst-managed entity in all of government and this is the latest in a long list of examples of poor management. You cannot testify you can’t do something and then just go around hiring people.”

Windus continues: Now Congress did include a $290 million budget boost in the $1.1 trillion omnibus spending bill passed in December 2015 but those funds were earmarked to address problems with IRS customer service. I do not think anyone would think hiring more agents to audit or investigate U.S. taxpayers qualifies as an improvement in customer service.

Jeff states: The Wall Street Journal reported that IRS Commissioner Koskinen said that money indeed was used to hire 1,000 employees for their phone lines, calling “taxpayer service” the first priority. But he said they would also be making their “first significant enforcement hiring” in over five years with additional funds.

Jeff continues: IRS Commissioner Koskinen also added “In previous years, job losses across the agency have helped us absorb the funding cuts we have received, but left us with large gaps in various areas across the agency. This year, the IRS is determined that we have the resources available to hire these employees as a result of the rate of attrition in enforcement and your continuing dedication to find efficiencies to help us with the budget.”

Windus states: So this new funding has been good news for the IRS because the IRS has faced an ongoing staffing crisis as an increasing number of older employees retire. Since 2010, the IRS also has seen its budget decline by $900 million, with the total number of enforcement employees dropping by 24%.

Jeff states: Just last March during a speech at the National Press Club, IRS Commissioner Koskinen said the IRS workforce would “shrink by another 2,000 to 3,000 full-time employees this year,” which has impacted enforcement efforts. He also stated “As you might imagine, these staffing losses have translated into a steady decline in the number of individual audits over the past six years.”

Jeff continues: And just a month earlier than making that speech, in February 2016 IRS Commissioner Koskinen told congressional appropriators that the IRS “will not be able to replace” as many as 1,800 enforcement officials due to budget cuts.

Windus states: In fact the IRS has seen its staff shrink over the past several years as a result of the significant ongoing past budget cuts. Had it not had these additional funding resources available, IRS Commissioner Koskinen expected that by the end of this year, it will have lost more than 17,000 employees since 2010 with more than 5,000 of those workers have been in enforcement areas.

Windus continues: Last year, IRS Commissioner Koskinen also cited a cash crunch in explaining customer service issues. After getting additional funding, he told the House Ways and Means Committee in April that “significant improvements” were made in terms of customer service thanks to that.

Jeff states: So with all of this flip flop by the IRS Commissioner, one can understand why the public and Congress are skeptical of the Commissioner’s woes.

Jeff continues: Sen. Chuck Grassley, Iowa Republican and member of the Senate Finance Committee, questioned the IRS’ latest claims stating to FoxNews.com: “The IRS always seems to be able to find more resources when it wants to. Because of that, and because of non-taxpayer service activities, like union work on the taxpayer’s dime, the IRS deserves skepticism when it continuously seeks more money.”

Windus states: According to IRS Commissioner Koskinen, the new hires will be divided into two so-called waves with the first job announcements in the coming weeks. The second wave will provide “employees with promotional opportunities for higher-level enforcement positions,” and will focus on “high-profile enforcement areas, including international tax issues, refund fraud and identity theft.”

Jeff states: And you can expect that IRS Commissioner Koskinen will still be lobbying Congress with additional requests for budget increases in the coming months as he claims that “While adding 600 to 700 new enforcement hires will not replace those who have left, it will help fill key gaps in our enforcement workforce created by years of attrition.”

Windus states: The 2016 hiring addition that the IRS is starting will be the agency’s first significant enforcement hiring in more than five years. IRS Commissioner Koskinen said in a message to agency employees: “This is a good development for our tax system because when you look at the IRS overall, every dollar invested in the IRS returns at least $4 to the Treasury. The numbers are even higher when it involves enforcement. Each enforcement position typically returns almost $10 to the U.S. Treasury for every dollar spent — and in many instances, much more.”

Jeff states: Of all the agents who work for the IRS, IRS Criminal Investigation agents (known as Special Agents or CI agents) are the elite special forces in the never-ending war on tax evasion. They are feared among criminals for their unmatched ability to follow the money, assess net worth and find fraud in corporate books. They have been at the center of major tax and money-laundering cases involving Swiss banks, FIFA soccer officials, and the Costa Rican digital currency company, Liberty Reserve.

Windus states: Claire Rossini, a former Special Agent who spoke to Bloomberg News said that “As a Special Agent, your job is to find those facts and put criminals in jail. If you know that somebody is getting away with something because you don’t have the manpower, that’s very disheartening.”

Jeff states: CI agents help federal prosecutors build corruption, narcotics and money-laundering cases. Agent attaches are stationed in 10 foreign countries. They work undercover, use wiretaps and rely on informants. They are the only ones authorized to investigate federal tax crimes, including evasion and failing to file returns. It’s painstaking work and cases often take years of work to meet the legal threshold of proving beyond a reasonable doubt the intent to cheat on taxes.

Windus states: CI agents are also involving in fighting fraudulent refunds and identity theft. In 2011, the IRS paid out $3.6 billion in potentially fraudulent refunds, an amount that swelled to $5.8 billion in 2013. The IRS said its own website got hit in June, with thieves stealing information on about 100,000 taxpayers to generate $39 million in refunds. Identity theft rose to 28% of all new investigations in 2013. Though such cases have since been declining nationally, they account for about half of investigators’ time in South Florida.

Jeff states: But now there are more CI agents working today on cybercrimes, and they use analytical software to mine data from the Treasury Department’s Financial Crimes Enforcement Network (known as FinCEN). This is the same network that has been receiving information from foreign governments and foreign financial institutions and matching it up to foreign account information reported directly by U.S. taxpayers or missing from U.S. income tax returns filed by taxpayers.

Jeff continues: So beware with more agents out there, you can bet that there will be more taxpayers now having tax problems with the IRS.

Jeff states: Well it’s time for a break but stay tuned because we are going to find out if the Tech Bubble is ready to pop.

Jeff states: 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: And so before we start with this next segment, Windus would like to remind you of her offer:

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.

Is the Tech Bubble Popping? Ping Pong Offers an Answer

www.wsj.com/article_email/is-the-tech-bubble-popping-ping-pong-offers-an-answer-1462286089-lMyQjAxMTE2MjAxMzYwOTMyWj

Jeff starts: That’s right folks, of all the possible indicators, we may be getting our best information regarding how the tech industry is fairing based on Ping Pong sales reports.

Windus replies: This coincident comes to light after dismal first quarter reports for Twitter troubled investors. Interestingly enough, if the company would have paid attention to a single key indicator, they could have predicted the downturn.

Jeff continues: Specifically, regular shipments of ping pong tables. You heard right, ping pong tables. As a corner stone of most start-up companies, ping pong tables are a popular way of spending break hours to help employees distress.

Windus states: Twitter had been ordering these tables regularly until late 2014 when their requisitions to Billiard Wholesale stopped. The store’s owner had figured that social media company had either run out of space or worse yet, were having company problems.

Jeff replies: Now analysts are becoming increasingly unsettled by Twitter’s slowing user growth and even more alarming weak revenue growth in the first quarter.

Windus continues: When Twitter spokesperson Jim Prosser was questioned as to why the company had stopped its orders of ping pong tables, he responded with a simple “I guess we bought really sturdy ones.”

Jeff states: An additional spokesperson, Natalie Mikaye, added that they’re “more of a Pop-A-Shot company now”, in reference to an indoor basketball game.

Windus questions: Which leads us back to the original question, is the tech bubble popping? Can ping pong table sales direct us to the general wellness of a tech company’s growth??

Jeff states: Well, Mr. Ng of Billiard Wholesale insists that sales of these tables track the tech economy. In his business “last year, the first quarter was hot.” But now, “there’s a general slowdown.”

Windus replies: His 2016 first quarter sales reflected a drop of about 50% down from the previous quarter. Dow Jones VentureSource, which tracks venture financing, reports that US startup funding in that period fell 25%.

Jeff continues: This “table tennis indicator” is a glimpse into Silicon Valley culture. Chief technology officer, Sunil Rajasekar, of Lithium Technologies explains that, “if you don’t have a ping pong table, you’re not a tech company.”

Windus states: Don’t believe him? Look at the 30-year old head of marketing at the start up that was recently bought by BlackRock Inc. As number 2 in the internal ping pong rankings, Joe Fahr believes that the table is an equalizer that “breaks down the hierarchy”. Joe keeps his $100 Butterfly-brand paddle with him at his desk in a special bag.

Jeff replies: It’s believed that the incorporation of table tennis into the workplace sends a psychological message to the founders and employees that “we’re not your father’s company.” Somewhat equivalent to “we don’t wear suits.”

Windus continues: Now this isn’t all about fun and games nor in the slightest bit, about goofing off at work. It’s more of an activity carefully selected to benefit employees who spend a good portion of their day, sitting at a desk, staring at a screen, for the sake of their corneas. And, it helps build culture.

Jeff states: But when the Nasdaq fell to its lowest in over a year this past February, Mr. Ng sold the fewest tables to companies since he started keeping track in 2014.

Windus replies: Yahoo!, who has been hit hard by weakening revenue, hasn’t purchased new items in a long time. Intel stopped buying new tables over a year ago, and recently announced 12,000 job cuts last month.

Jeff continues: Google just bought a ton of stuff regardless of missing Wall Street estimates. Even still, they did post a healthy increase in profits and revenue in the first quarter.

Windus states: We’re not telling you to start basing all of your investing in the tech industry primarily on ping pong table sales though. Whereas sales may track the tech economy, it far from predicts it.

Jeff replies: In the grand scheme of things, you could probably also track Odwalla juices, as they maintain a similar culture. Or for that matter, substitute table tennis out for foosball tables.

Windus states: During the original dot-com boom, which ended in 2000, pool (or billiards) was the popular table. The transition from pool to ping pong, may suggest growing practicality among entrepreneurs.

Jeff replies: Unlike billiard tables though, ping pong tables have an inferior return when companies hit a downturn and require downsizing and selling assets to raise funds or reimburse their creditors or investors.

Windus continues: In more plain terms, you could purchase a brand new, high-end Butterfly-brand table for $2,300, but you couldn’t sell them back to the wholesaler since nicks in the table make them worthless. Not to mention, used ping pong tables only fetch about $5 or $10 anyway.

Jeff states: Whereas pool tables tend to maintain a higher resale value. Also good to keep in mind when you’re investing in your own recreational equipment.

Windus finishes: On the same topic of investing, if you’re not sure where you’re heading but want to make sure that your future is clearly mapped out for success with regards to market volatility, you can call or email us….

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 want to do what to expect if The IRS Criminal Investigation Division is taking a look at you.
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: But before we start with this next segment, I want to remind our listeners of my offer:

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.

Is The IRS Criminal Investigation Division Taking A Look At You?

Jeff states: If the motive of the crime is money, chances are the IRS Criminal Investigation (CI) special agents are involved in tracking the money from the crime to the criminal.

Windus states: And with the ever more sophisticated schemes to defraud the government and the American economy occurring now, there is a greater demand for the financial analytical ability of forensic investigators to wade through complex paper and computerized financial records.

Amy states: CI is comprised of nearly 3,500 employees worldwide, approximately 2,500 of whom are special agents whose investigative jurisdiction includes tax, money laundering and Bank Secrecy Act laws. While other federal agencies also have investigative jurisdiction for money laundering and some bank secrecy act violations, IRS is the only federal agency that can investigate potential criminal violations of the Internal Revenue Code.

Jeff states: Compliance with the tax laws in the United States relies heavily on self-assessments of what tax is owed. This is called voluntary compliance. You do this every time you file your income tax return. When individuals and corporations make deliberate decisions to not comply with the law, they face the possibility of a civil audit or criminal investigation which could result in prosecution and possible jail time. Publicity of these convictions provides a deterrent effect that enhances voluntary compliance.

Amy states: As financial investigators, CI special agents are trained to recover computer evidence. Along with their financial investigative skills, special agents use specialized forensic technology to recover financial data that may have been encrypted, password protected, or hidden by other electronic means.

Windus asks: So how is CI organized?

Amy replies: The Criminal Investigation Division is divided into three main programs:
1. Legal Source Tax Crimes;
2. Illegal Source Financial Crimes; and
3. Narcotics Related and Counterterrorism Financial Crimes.

Amy continues: These three programs are mutually supportive and encourage utilization of all statutes within CI’s jurisdiction, the grand jury process and enforcement techniques to combat tax, money laundering and currency crime violations.

Jeff states: And because CI’s investigations tend to be long and thorough, CI typically picks only those significant financial investigations that will generate the maximum deterrent effect, enhance voluntary compliance and promote public confidence in the tax system.

[Windus to reach off each CI program, followed by Amy explanation and Jeff comment.]

Legal Source Tax Crimes. The Legal Source Tax Crimes Program includes those cases that threaten the tax system, such as the Questionable Refund Program (QRP) cases, unscrupulous return preparers and frivolous filers/non-filers who challenge the legality of the filing requirement.

Illegal Source Financial Crimes.

Amy states: The Illegal Source Financial Crimes Program recognizes that money gained through illegal sources, such as dollars obtained through illegal gambling operations, is part of the untaxed underground economy. Remember that under the Internal Revenue Code all income is taxable, from whatever source derived regardless of whether it was legal.

Jeff states: When money is derived through illegal sources, the primary concern for the criminal is to legitimize the dollars. This process of “cleaning” the illegally obtained dollars is termed “money laundering”. Money laundering activity is considered to be “tax evasion in progress”.

Amy states: Historically, money launderers used legitimate businesses to “launder” their illegal proceeds. Now money launderers use various schemes and types of transactions to conceal their income and/or assets. Some of these schemes include the manipulation of numerous currency reporting requirements and the layering of transactions. The schemes are frequently international in scope.

Jeff states: The Illegal Source Financial Crimes Program encompasses all tax and tax-related violations, as well as money laundering and currency violations. In fact, money laundering and currency violations are often intertwined with tax violations. As part of the criminal charges against an individual, Criminal Investigation (CI) makes effective use of the forfeiture statutes. Forfeiture statutes deprive individuals and organizations of their illegally obtained cash and assets.

Narcotics-Related Financial Crimes and Counterterrorism Financing.

Amy states: One look at the daily newspaper is proof enough that crimes dealing with or motivated by money make up the majority of current criminal activity in the nation. Tax evasion, public corruption, health care fraud, and even drug trafficking are all examples of the types of crimes that revolve around money. In these cases, a financial investigation often becomes the key to a conviction.

Amy continues: Traditional law enforcement relies on investigative tools such as crime scene analysis, physical evidence, fingerprint identification or eyewitness accounts. The limitations of these techniques become obvious to those who are trying to prove wrongdoing in a sophisticated financial crime. With no proof, there is no conviction.

Jeff states: When the IRS astounded Public Enemy Number 1 “Al Capone” by obtaining a conviction for tax evasion and demanding millions of dollars in back taxes, Capone said, “They can’t collect legal taxes from illegal money”. But it’s really pretty simple: No matter what the source of income — all income is taxable.

Windus asks: And this creates a real problem for drug dealers. What are they going to do with their money — so that IRS won’t find it?

Jeff states: Well usually it involves some level of foreign banking. And speaking about taxpayers who have undisclosed bank accounts, about 60,000 U.S. taxpayers have come forward in special voluntary disclosure programs established by IRS to avoid criminal prosecution and benefit from lower penalties than the maximum provided by law.

Amy states: By law, many U.S. taxpayers with foreign accounts exceeding certain thresholds must file FinCEN 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).

Windus asks: So what are the Filing Requirements if someone has foreign bank accounts?

Amy replies: 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: Generally, 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.

Windus asks: But I thought that if income was earned abroad, it does not get reported on a U.S. income tax return?

Amy replies: Many people mistakenly believed that. 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.

Amy continues: Additionally by law, Americans living abroad, as well as many non-U.S. citizens, must file a U.S. income tax return. In addition, key tax benefits, such as the foreign earned income exclusion, are only available to those who file U.S. returns.

Windus asks: So what are the penalties for non-compliance?

Amy replies: Civil Fraud – If your failure to file is due to fraud, the penalty is 15% for each month or part of a month that your return is late, up to a maximum of 75%.

Amy continues: Criminal Fraud – Any person who willfully attempts in any manner to evade or defeat any tax under the Internal Revenue Code or the payment thereof is, in addition to other penalties provided by law, guilty of a felony and, upon conviction thereof, can be fined not more than $100,000 ($500,000 in the case of a corporation), or imprisoned not more than five years, or both, together with the costs of prosecution (Code Sec. 7201).

Jeff states: Now if the IRS are targeted you for investigation or even started a random audit of your tax returns, you are locked out of going into any voluntary disclosure program. 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, 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 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.

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.

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

Question from Chelsea of San Diego: Are mutual fund expense ratios tax deductible?

Windus answers.

Question from Martin of Newport Beach: Should I pay attention to all notices I may receive from the IRS?

Jeff answers: Definitely yes! Look, the IRS does not send out junk mail or mass mailers. The IRS sends notices and letters for the following reasons:

• You have a balance due.
• You are due a larger or smaller refund.
• The IRS has a question about your tax return or is changing it.
• The IRS needs to verify your identity.
• The IRS needs to notify you of delays in processing your return.

It is important to read the notice to see what it is about. For example, if the IRS changed your tax return, compare the information the IRS provided in the notice with the information in your original return.

Then check and see if a response is required. If your notice requires a response by a specific date, you will want to comply to minimize additional interest and penalty charges and to preserve your appeal rights if you do not agree.

I believe that IRS notices are designed to confuse laypersons so that they unknowingly waive their appeals rights. That’s why if you receive a notice from the IRS, take it seriously and engage a tax professional such as myself to handle this matter for you.

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!