Tax Planning

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Can't Buy Me Love

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Heiress Huguette Clark, who was born in 1906 and died last May at 104, was America's last living link to the 1890s "Gilded Age." Her father, William A. Clark, was Montana's "Copper King" and, according to her New York Times obituary, "once bought himself a United States Senate seat as casually as another man might buy a pair of shoes." Huguette grew up in a 121-room mansion, at the corner of New York's Fifth Avenue and 77th Street, that cost three times as much as Yankee Stadium. But her life soon took an odd turn. She married, for just a year at age 22, then got a quickie Reno divorce. (Her husband claimed they never even consummated the marriage.) Then she and her mother withdrew almost completely from view. The last known photograph of her was taken in 1930, and she rarely appeared in public after her mother's death in 1963.

Clark may have been shy, but she was no miser. She spent most of her life in a 42-room coop at Fifth Avenue and 72nd Street, said to be the largest park-view apartment in the city, and worth

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IRS Goes Where The Money Is

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The outlaw Willie Sutton stole an estimated $2 million over a 40-year career robbing banks — and scored the ultimate "success" in his business, living long enough to die of natural causes. Sutton always carried a pistol or Tommy gun with him on jobs, declaring "you can't rob a bank on charm and personality." But the gun was never loaded, because, as he said, someone might have gotten hurt! And he became legendary, ironically, for something he never actually said. According to the story, Sutton was asked why he robbed banks — and replied "because that's where the money is." But in his 1976 autobiography, Where the Money Was: The Memoirs of a Bank Robber, he confessed that credit for the line belongs to "some enterprising reporter who apparently felt a need to fill out his copy."

What does a depression-era bank robber have to do with taxes? Well, the IRS estimates that outlaw taxpayers cost the Treasury $385 billion per year in uncollected taxes — roughly 15% of the amount

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IRS Strikes Out

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Next week marks Major League Baseball's 2011 "Midsummer Classic" — the All-Star Game between fan favorites from the rival National and American leagues. Baseball is making the usual headlines on the field this year, with tight races in most divisions. And it's making headlines off the field, too — especially in Los Angeles, where Dodgers owners Frank McCourt and his wife Jamie are contesting an especially bitter divorce.

Frank McCourt is decidedly behind the count in this at-bat. He's accused of borrowing more than he could afford to buy the team in the first place, then using the team as a personal ATM to finance an extravagant lifestyle. That lifestyle included seven homes costing just over $99 million — two houses on Cape Cod, two houses next door to each other on Malibu's famed "Millionaire's Beach," two more houses next door to each other in LA's affluent Holmby Hills neighborhood (right down the street from the Playboy Mansion), and a $6 million condo in Vail.

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Health Care and Education Reconciliation Act of 2010

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On March 23, President Obama signed the "Patient Protection and Affordable Care Act." With the next installment on March 30 he signed the companion "Health Care and Education Reconciliation Act of 2010." Together, these two acts represent the biggest change in how the US finances healthcare since Medicare was created back in 1965. Politics aside, It's truly monumental legislation. Just as President Harry Truman gave us the "Fair Deal," now Joe Biden -- as he commented when he thought he was off mic -- has given us the "Big *^@*#*@ Deal."

Healthcare reform has been an intensely political process. Not one single Republican voted for the law in either the House or the Senate. And polls show that Americans are overwhelmingly confused and concerned. They don’t know just what the new law does, and they don’t know how much it’s going to cost. That’s no surprise considering the actual texts of the bills runs over 2,500 pages. I wonder if there is actually any single person who understands it all, not likely.

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Hiring Incentives to Restore Employment (HIRE) Act

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As was expected, today President Obama signed the most recent jobs bill passed by Congress, the Hiring Incentives to Restore Employment (HIRE) Act.  While many businesses are hesitant about hiring new employees within the current economic climate, "this jobs bill should help make their decision that much easier," President Obama said during the bill signing.

While I am happy to see some effort being made to help small businesses let us be sure to keep this HIRE Act in perspective. First, unless you were already considering hiring another employee the Act is not going to offer you enough hard dollar incentive to make a hire. For example, if you were to hire a qualified previously unemployed worker and pay her $30,000 this year your tax savings would amount to $1,860. Plus, if you kept her on the payroll for a full 52 weeks you would also get a tax credit of $1,000. Your total potential savings is $2,860.  You can see that while nice to have, it is not likely these tax breaks by themselves will create much hiring. But, for all you business owners out there currently debating whether you need to add staff, this just might help you pull the trigger and make the hire.

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Worry no more, the government comes to our rescue... the HIRE Act

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President Obama is widely expected tomorrow, Thursday March 18, to sign into law the $17 billion Hiring Incentives to Restore Employment, or HIRE Act that passed the Senate on Wednesday on a bipartisan vote of 68-29.

What, you have doubts? The Senate has approved legislation that provides businesses with a payroll tax exemption for hiring new employees.  Certainly this legislation is a positive step but let’s face it, employers are not going to run out and start hiring the unemployed for the sake of hiring, at least not unless there is a 100% refundable tax credit. After all, would you spend $100 to save a little over $6? Of course not. But, for those businesses that may be on the brink of hiring the tax benefits in the HIRE Act could make a real difference.