Jeffrey B. Kahn, Esq. and Gary Sussman Discusses Next Year’s Federal Budget, Love, Taxes and the IRS On ESPN Radio – February 12, 2016 Show
Topics Covered:
- Love And Taxes – How A Wife Was Convicted Of Murdering Husband To Avoid Him Learning Of Their Outstanding IRS Debt.
- The Budget the Next President Will Inherit.
- The Tax Benefits Of Claiming Your Sweetheart on Your Tax Return Or Writing Off The Costs Of Marrying Your Sweetheart.
- Questions from our listeners:
- My dad told me that term life insurance is the best and I should buy term and invest the rest, but my agent recommended universal life. What should I do?
- When are individuals of the same sex lawfully married for federal tax purposes?
- I recently got married. Am I responsible for my spouse’s past taxes?
***************************
Jeff states: Yes sometimes we just have to take the money and run!
Good afternoon! Welcome to this special Valentine’s edition of 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 Federal Budget The Next President Will Inherit.
Gary states:
Also coming up is:
Segment 3 material: The Tax Benefits Of Claiming Your Sweetheart on Your Tax Return Or Writing Off The Costs Of Marrying Your Sweetheart.
And of course towards the end of our show, we will be answering some of your questions.
Jeff starts chit chat with Gary. [Introduce Jeff’s daughter Madison].
Jeff states: So for today’s top story:
Love And Taxes – How A Wife Was Convicted Of Murdering Husband To Avoid Him Learning Of Their Outstanding IRS Debt
www.abcnews.go.com/Primetime/story?id=3546142&page=1
Gary states: That boss was Robert Bosley, owner of Bosley Roofing and Chimney Sweep in Alexandria, Kentucky who was shot to death as he slept in his small cabin in Campbell County. Robert who lived to age 42 was murdered by his wife Amy Bosley.
Jeff states: And you may be thinking what was the reason for this murder? Well Amy did not want Robert to know the huge business debts and IRS debts she had racked up.
Gary states: But let’s take it back to the beginning. Robert and his wife, Amy, were making a name for themselves in their small Kentucky community.
Gary continues: Together they were like local royalty with their million-dollar roofing business and being active volunteers in their community. They had sports cars, horses, their own plane and a 50-ft motor-yacht. They also planned to build a castle-like mansion on their 35-acre estate. It was on this land, mainly remote woods, that the Bosley’s had built their weekend retreat, a luxury cabin.
Jeff states: But that dream became a nightmare at dawn on a May morning in 2005 when 38-year-old Amy rang police in floods of tears to report that an intruder had broken into their remote luxury cabin deep in the woodlands of Campbell County.
Gary states: Moments later a patrolman arrived at the Bosley’s cabin. Amy Bosley told him, “An intruder shot my husband, he shot my husband! She then said that the intruder fled out the back door. The patrolman pushed past her and there, lying on the bed was Robert Bosley riddled with bullets. His lips were blue. He was dead. The room and the rest of the cabin, had been ransacked – possessions and clothes strewn around the doors and windows broken.
Jeff states: The Bosleys’ two sons, Trevor, nine, and Morgan, six, asleep in a first-floor loft bedroom had not been harmed.
Jeff continues: Police searched the house and grounds, but no intruder was found. Amy Bosley in a state of shock was taken to the house of friends. She described the intruder as a white guy in his thirties, very tall and with a pointed very mean face.
Gary states: Police launched a manhunt for the intruder using sniffer dogs and helicopters but no one was found. The lead investigator immediately suspected something was wrong with Amy’s story. You see Robert had been shot seven times while sleeping, and his gun was missing. Also missing were the shell casings, which should have littered the crime scene.
Jeff states: Soon afterwards police investigations began to reveal that the Bosley marriage had not been as idyllic as Amy claimed it to be. Robert spent most weekends on his boat on nearby Lake Cumberland holding parties at which most of the guests were women.
Gary states: Friends said that Robert would be on the lake for days at a time and refuse to tell Amy who he was with and when he would be back. But not all the Bosley’s secrets concerned Robert’s extramarital affairs. A close study of the finances of the roofing company, of which Amy was financial director, showed that the apparently booming enterprise was going bust.
Jeff states: Police also discovered a motive: the Bosley’s were deep in debt, and, unknown to Robert, the IRS was literally knocking at their door over a $1.5 million tax bill. Amy it seemed was destroying the business by embezzling nearly $2 million which should have been paid to the IRS. In fact during the investigation into the murder, police discovered something suspicious in Amy’s car: hundreds of unmailed checks to the IRS totaling about $1.7 million in back taxes.
Gary states: Weeks before the shooting, Amy met with an IRS Revenue Officer who informed her they were investigating Robert for nonpayment of taxes. According to police, Amy went to great lengths to keep the tax problems from her husband even going as far as to impersonate him over the phone. She also got a P.O. Box for the business which Robert did not know about and had all IRS notices go to that box so Robert would not be aware of this problem. But this tax problem was coming to a head and Robert was to hear about it firsthand from the Revenue Officer himself.
Jeff states: Throughout the investigation, police, prosecutors, townspeople and even the Bosley family had their suspicions that Amy committed the crime.
Gary states: Authorities even said the crime scene looked staged. Around the body police found just two bullet shell casings; the others were found in the most unusual of places, like the bottom of the washing machine.
Jeff states: The police came up with their own theory that the day of the murder, the IRS was coming to audit the business’s books, potentially exposing Amy’s secret. Police said Amy might have felt that the only way to make the tax problem go away was to kill her husband.
Gary states: But a week later another piece of incriminating evidence turned up in Amy’s purse — a Glock handgun. It was the same type of gun used to kill her husband. Even though police had no doubt they’d found the murder weapon, authorities couldn’t definitively match it to the lead slugs that struck Robert Bosley because the slugs were too mutilated. Nevertheless, this was enough for police to arrest Amy for murder.
Jeff states: So listen to this surprising outcome. Amy first pleaded not guilty, but her case didn’t hold up well during a dramatic four-hour pretrial hearing.
Jeff continues: While there was a mountain of circumstantial evidence against Amy, prosecutors admitted they didn’t have a slam dunk. But statements Amy’s children, Morgan, 9, and Trevor, 6, gave to police following the murder would become the strongest piece of evidence.
Their testimony was crucial, but no one wanted to force young children who had already lost their father to testify against their mother. As a result, prosecutors reluctantly offered Amy Bosley a deal — the minimum sentence of 20 years if she pleaded guilty — and to everyone’s surprise she took the deal.
Gary states: In November 2005, Amy Bosley was sentenced to 20 years for murder and five years for a tampering of evidence charge. The sentences to be served concurrently. Unfortunately, the IRS would still be looking to collect the over $1.7 million in payroll taxes from Robert’s estate.
Jeff states: Well the love does not end here because after the break but we are going to tell you what new Federal budget that the Obama administration is proposing will have to be embraced for the next President.
Jeff continues: 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 the special Valentine’s edition of 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.
The Budget the Next President Will Inherit.
Gary 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 858-755-6696 x 3115. That is 858-755-6696 x 3115. Or visit www.guideyourstory.com.
Gary begins: On Tuesday, President Obama released his proposed $4.1 trillion final budget, mapping out his focus for the remainder of his time in office. Although we aren’t likely to see any major budgeting deviations, the document does give way to aspects the next Presidential Office holder will inherit.
www.wsj.com/articles/economists-thin-fed-will-wait-until-march-to-raise-rates-again-1452783601
Jeff continues: As a matter of fact Gary, the next president will assume his or her duties with spending outpacing revenue, the Wall Street Journal reports. However, it will be within ranges characteristic of the past 50 years, with expenditures more or less where they’ve been in recent decades.
Gary replies: Looking at a graph of the past 50 years, we see that both federal revenues and expenditures have remained between 14% and 25% of Gross Domestic Product, while government revenues have been hovering around 17% and 19% of GDP, according to reports provided by the White House.
Jeff states: Variations from year to year are mainly driven by the health of the economy. For instance, in the late 1990s when the economy was thriving, government revenues were slightly higher than the lower numbers following the 2001 and 2007 to 2009 recessions.
Gary replies: Yes Jeff, more individuals earning more income equals more tax revenue. Likewise, at times when the economy is weakened, for instance in periods of job loss, government revenue plunges.
Jeff states: When government revenue falls, government spending inevitably rises in response to recessions like in 2008 and 2009. This happens as a result of the president and Congress attempting to correct the economy with policies for spending on unemployment and safety-net programs.
Gary continues: Aside from the few years prior to 2000 when the economy was booming, the federal deficit, which is the difference between spending and revenue, has been mostly negative. The next president will inherit just that without any major policy changes or shock to the economy. Coming in at just over 2% of gross domestic product, it is neither exceptionally high nor low in comparison to the average over the past decades.
Jeff states: Aside from moderate deficits, the next president will face a substantial amount of residual debt. With total government debt now above 100% of GDP, let’s take a look at where all of this money is being spent.
Gary continues: Large amounts of this debt are owed to other branches of the federal government, primarily the Social Security trust fund, but the Federal Reserve also owns a large portion of Treasury bonds, used to conduct monetary policies.
Jeff replies: After that, the public own the remaining debt that amounts to about 60% of GDP. Meaning, more than half of the government debt rests on the shoulders of investors, both foreign and domestic.
Gary states: So what makes up this $4.1 trillion budget? Most of the government’s budget reaches out to only a small number of areas, regardless of the wide array of functions it performs. If we single out the Treasury, Defense and Health & Human Services, less than a shrinking 20% of the government’s spending is allotted for the other Cabinets.
Jeff continues: While most of the Health and Human Services spending goes to Medicare and Medicaid, according to the Wall Street Journal, the twelve department budgets that make up that shrinking 20% include: Veterans Affairs, Homeland Security, State, Transportation, Labor, Justice, Interior, Housing, Commerce, Agriculture, Energy and Education.
Gary states: What’s a president to do when a majority of the budget goes to funding Social Security, always a particularly challenging program to overhaul? Plus, there’s not much the future commander-in-chief can do when the second most costly budget, the Treasury Department, goes to paying down interest on the government’s debt.
Jeff continues: The reality of the situation? The winning presidential candidate will have a lot to face in January 2017. Moderate deficits along with the loftiest amount of accumulated debt since World War II, with a budget mostly consumed by defense, interest payments, Social Security and Medicare, creates quite the conundrum for the 45th President.
Gary states: In other news, economists think the Federal Reserve will wait until March to raise rates again.
Jeff states: That’s what they’re saying, Gary. About 66% of those surveyed by The Wall Street Journal predicted the next increase at the March 15-16 policy meeting, while 25% forecasting the increase for the June 14-15 meeting.
Gary continues: Now, the Federal Reserve officials stand by their pre-determined plan to move rates higher at a gradual pace, with expectations for four quarter-percentage-point rate increases in 2016. However, they have added that they “don’t know enough now to know how many there will be”. It all depends on what they predict the economy can take. Which is why you dust off your finances and talk to us….
Gary 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 858-755-6696 x 3115. That is 858-755-6696 x 3115. Or visit www.guideyourstory.com.
Jeff states: Stay tuned because after the break we are going to tell you The Tax Benefits Of Claiming Your Sweetheart on Your Tax Return Or Writing Off The Costs Of Marrying Your Sweetheart.
Jeff states: 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 the special Valentine’s edition of 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
The Tax Benefits Of Claiming Your Sweetheart on Your Tax Return Or Writing Off The Costs Of Marrying Your Sweetheart
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 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: Valentine’s Day is all about that special someone in your life, but have you ever wondered if your date across the dinner table might actually be able to save you money on your tax return or if the two of you now decide to get married, whether you can deduct any portion of the wedding and thereafter pay less in taxes?
Jeff states: So here is what you need to know about who qualifies as a dependent.
Jeff continues: Dependents, which can range from a girlfriend to a child or even a friend, are often an area where tax deductions are either missed or misstated on tax returns. To help taxpayers navigate this gray area, here are the tests necessary to claim someone as your dependent—and some of the tax benefits available for claiming the one you love:
Amy says:
First and foremost, whether they are your child or your Valentine:
• You cannot claim them if you can be claimed as a dependent by another person.
• They cannot file a joint tax return (in most cases).
• They must be a U.S. citizen, resident alien, national, or a resident of Canada or Mexico.
Gary asks Amy: What else is required?
Amy replies: In order to claim a child as a dependent, these five additional tests must be met:
• Relationship: Must be your child, adopted child, foster-child, brother or sister, or a descendant of one of these (grandchild or nephew).
• Residence: Must have the same residence for more than half the year.
• Age: Must be under age 19 or under 25 and a full-time student for at least 5 months. Can be any age if they are totally and permanently disabled.
• Support: Must not have provided more than half of their own support during the year.
• Joint support: The child cannot file a joint return for the year.
Gary asks Amy – so for a relative or sweetheart what additional tests apply for that person to qualify as a dependent?
Amy replies:
• They are not the “qualifying child” of another taxpayer or your “qualifying child.”
• Dependent earns less than $4,000 taxable income in Tax Year 2015.
• You provide more than half of the total support for the year.
• The person must live with you all year as a member of your household or be one of the relatives who doesn’t have to live with you.
Amy continues: You can even claim a boyfriend, girlfriend, domestic partner, or friend as a qualifying relative if:
• They are a member of your household the entire year.
• The relationship between you and the dependent does not violate the law, meaning you can’t still be married to someone else. Also check your individual state law, since some states do not allow you to claim a boyfriend or girlfriend as a dependent even if your relationship doesn’t violate the law.
• You meet the other criteria for “qualifying relatives” (gross income and support).
Jeff states: Once you’ve determined who in your life can be claimed as a dependent, be sure to take advantage of the following tax deductions and credits:
Jeff continues:
• Dependent exemption: Have you been supporting your boyfriend or girlfriend? If he or she meets the above tests, this may entitle you to a deduction of $4,000.
• Dependent care credit: Allows you to claim up to $6,000 of your eligible dependent care costs for two or more dependents.
• Child tax credit: Depending on your income, you can claim up to $1,000 per qualifying child—helping to reduce your federal taxes.
Gary asks: Can you get a Tax Write-Off for your wedding?
Jeff states: Tax write-offs are usually the last thing a bride and groom think about when planning a wedding. To the surprise of many, however, wedding purchases and/or rentals can actually save money when it’s time to pay taxes at the end of the year. While there are rules and stipulations to each of these tax write-offs, many newlyweds take advantage of them every year.
Jeff asks Amy: what ideas do you have on this?
Amy replies: The Attire. Brides often wear their wedding dress only once. And while some opt to keep them for whatever reason, others have no idea how to discard them. For a tax write-off, consider donating the wedding gown to a nonprofit organization like Goodwill, MakingMemories.org or CinderellaProject.net. These organizations will take your dress and issue you a donation receipt for your good efforts. While you’re at it, consider donating the bridesmaids’ dresses, flower girl dress, ring bearer’s outfit and any nonperishable decorations.
Gary asks Amy – what about the venue?
Amy replies: The Venue. Believe it or not, some wedding venues are tax deductible. Choose a ceremony or reception venue located at a museum, public-owned park or even a historic house or building of some sort. These places are usually owned by nonprofit organizations who use the money they receive for upkeep purposes only. Speak with the head of the venue sight to make sure that it is a nonprofit organization and what portion of the cost you pay is in excess of the deemed value of the rental of the space (only the excess amount could be deductible as a charitable contribution).
Gary asks Amy – what about the reception costs?
Amy replies: Wedding Favors and Gifts. Charity donations can make thoughtful wedding gifts and favors. They also save you money during tax season. So instead of purchasing a trinket that your guests or attendants may discard later, opt for a donation to your favorite charity on behalf of all those who are a part of your wedding.
Amy continues: Flowers and Foods. You can also get a tax write-off for items that have a short life, such as leftover food and all those floral centerpieces. After the wedding is over, ask a friend or family member to bring the items to a local nursing home, homeless shelter or somewhere similar. You will get a tax deduction for the cost of the remaining food and flowers and you’ll put a few smiles on faces.
Jeff states: But Keep In Mind That It’s Risky Business To Claim Your Sweetheart on Your Tax Return or Deduct Gifts To Your Sweetheart or Take A Tax Write-Off For Your Wedding.
Jeff continues: Writing off wedding costs reduces your tax liability for the year in question and may increase your tax refund but consider whether you are willing to endure an audit for your attempted deductions. Quirky write-offs are red flags for the IRS. So if you are writing off your honeymoon as a business trip, keep a log of activities like appointments and what business was transacted. A paper trail of receipts will back up your case and may provide you with some relief and well-deserved tax savings this Valentine’s Day.
PLUG: The Law Offices Of Jeffrey B. Kahn, P.C. will provide you with a Tax Resolution Plan which is a $500.00 value for free as long as you mention the Inside Advantage Radio Show when you call to make an appointment. Call my office to make an appointment to meet with me, Jeffrey Kahn, right here in downtown San Diego or at one of my other offices close to you. The number to call is 866.494.6829. That is 866.494.6829.
Jeff states: Thanks Amy for calling into the show. Amy says Thanks for having me.
Jeff 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
Jeff states: Welcome back. This is the special Valentine’s edition of 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 are 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: 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, Gary Sussman. The number to call is 858-755-6696 x 3115. That is 858-755-6696 x 3115. Or visit www.guideyourstory.com.
You should also know that the securities and advisory services offered through National Planning Corporation (NPC), Member FINRA/SIPC, a Registered Investment Adviser. Additional advisory services offered through Trilogy Capital, a Registered Investment Adviser. Trilogy Capital and NPC are separate and unrelated companies.
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 Gary, what questions have you pulled for us to answer?
1. Thomas from San Diego asks: My dad told me that term life insurance is the best and I should buy term and invest the rest, but my agent recommended universal life. What should I do?
[Gary answers]
2. Hugh from San Francisco asks: When are individuals of the same sex lawfully married for federal tax purposes?
For federal tax purposes, the IRS looks to state or foreign law to determine whether individuals are married. The IRS has a general rule recognizing a marriage of same-sex spouses that was validly entered into in a domestic or foreign jurisdiction whose laws authorize the marriage of two individuals of the same sex even if the married couple resides in a domestic or foreign jurisdiction that does not recognize the validity of same-sex marriages. Generally, your marital status on the last day of the year determines your status for the entire year.
You are considered married for the whole year if on the last day of your tax year you and your spouse meet any one of the following tests.
- You are married and living together as husband and wife.
- You are living together in a common law marriage that is recognized in the state where you now live or in the state where the common law marriage began.
- You are married and living apart, but not legally separated under a decree of divorce or separate maintenance.
- You are separated under an interlocutory (not final) decree of divorce. For purposes of filing a joint return, you are not considered divorced.
3. Joanne from Newport Beach asks: I recently got married. Am I responsible for my spouse’s past taxes?
Maybe. Your wages and property might be at risk of IRS seizure for your spouse’s tax bill, depending on the state where you live. In most states, property owned by one spouse before marriage remains that spouse’s separate property during marriage. Assets acquired during marriage, however, are generally considered joint property. When couples own property together, IRS problems can arise. The IRS can legally go after jointly owned assets to cover the tax debt of just one spouse. The IRS cannot, however, take the share of the non-debtor spouse.
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 Valentine’s Day!
Follow
Follow