If you're not already one of the millions of Americans with a smartphone glued to your hands, this story may make you reconsider . . . . Vermont Senator Bernie Sanders has fired up the progressive left with his long-shot White House run. Sanders describes himself as a "democratic socialist," and asks Americans, "What's wrong with being more like Scandinavia?" Naturally, his platform includes Scandinavian-style higher taxes on America's wealthy.
Texas Senator Ted Cruz may be Sanders' complete and polar opposite, an unabashed conservative who appears biologically allergic to anything related to government. Naturally, his platform slashes taxes for nearly everyone. If that's not enough, he wants to abolish the IRS entirely, and replace them with taxes we can file on a postcard.
So what do you think would happen if you locked Sanders and Cruz in a room and forced them to come up with a tax system they both could support? Well, it probably wouldn't be pretty. (Seriously, can you imagine?) But those two unlikeliest of bedfellows just might come up with something to make April 15 look like any other day.
Our current system couldn't be much uglier. In January, your mailbox fills up with W-2s, 1095s, 1098s, and 1099s. Starting in February, you'll get your K-1s and your corrected 1099s. (It's enough to make you suspect the tax code is a conspiracy put together by paper and printer manufacturers.) Then it's time to compile all that information and crunch those numbers on brain-numbingly obtuse federal forms. In 2010, a White House panel estimated Americans spend 7.6 billion hours and 140 billion dollars keeping the IRS off their backs. (Hey now, we know what you're thinking, and don't blame us.)
But what if we could avoid all that hassle? What if the IRS could do you taxes for you — then send you the forms, all ready to approve? In millions of cases, they already have all the information they would need to do that. (Computers, too, if they could just protect them from hackers.)
That's already reality in eight countries, including Sanders' favorites Norway and Finland. In nearby Estonia, most taxpayers file online in less than five minutes.
But the gold medalist in speed-filing gold may be everyone's favorite sub-arctic socialist paradise, Sweden. In Sweden, most taxpayers just wait for the government to send their return, already filled out. But some of them actually get it by text message. And if everything looks good, they text "yes" and they're done. (That's one Swedish policy that even Ted Cruz might be able to get behind!)
Unfortunately, there are too many groups with vested interests in the current system to make that a reality here. But there is a silver lining, if you look hard enough. (Harder!) And that's the fact that complexity creates opportunity. Every deduction, credit, loophole, and strategy that Washington throws into the code gives us a chance to help you pay less. And all you need is a plan. So whip out your smartphone — or even, god forbid, your landline — and call us!
Monday, April 4, 2016
Tuesday, March 29, 2016
The Great Eskimo Tax Scam
Spring is here, at least according to the calendar, and you probably aren't thinking much about Eskimos as April 15 approaches. But here's a fun story from the Wayback Machine to remind you it's never the wrong time to pay attention to taxes.
Back in 1971, President Nixon signed the Alaska Native Claims Settlement Act. The law was intended to settle a long history of land disputes dating back to before Alaskan statehood. It distributed up to 104.5 million acres of land to the native tribes, paid out $962.5 million in cash, and created 13 "Alaska native regional corporations" to manage those assets. But timing, as they say, is everything. Fishing, timber, and oil industries collapsed, and nearly all of the new corporations were left with losses.
In 1983, Alaska's senior Senator, Ted Stevens, added a provision to the 1984 tax bill letting the new corporations sell those tax losses. Let's say you're a profitable corporation riding the 1980s economic boom and you're looking at a $4 million tax bill on a $10 million profit. You find a needy native Alaskan corporation with $10 million in losses. You pay that corporation, say, $2 million in cash for the right to take the tax loss on your own bottom line (even though you didn't actually incur the loss yourself), and poof — you've just saved yourself $2 million in tax!
It didn't take long for tax planners to find Stevens's little Easter egg. In 1986, a Marriott exec named Stephen Norris learned about the new loophole. Norris hooked up with David Rubenstein, a former Carter administration official who had left his White House post to start peddling influence from a Washington law firm. Marriott paid Rubenstein's firm a seven-figure sum in fees for saving an even higher seven-figure sum of taxes. Norris smelled opportunity for himself and checked out of Marriott to set up shop brokering tax deals with Rubenstein.
Norris and Rubenstein had no trouble finding needy Eskimos. They flew the struggling CEOs into Washington, wined them and dined them, and got them just as hooked on free money as the crack cocaine that enterprising drug dealers were just then bringing to America's Lower 48. The partners took 1% of the transaction for themselves and juiced a billion dollars of losses through the system. (If you hated math in school, that's $10 million in fees.) In 1987, the pair built on that success to help found the Carlyle Group, a private-equity fund named after the pricey New York hotel that became a home away from home for senior Washington officials looking to cash in on their government connections.
Meanwhile, back in Alaska, our naive native tribes were learning the hard way why Wall Streeters caution, "Bulls make money, bears make money, pigs get slaughtered." Eskimo companies started overstating their losses, taking "liberties" and "cutting corners" marking down the value of their timber and oil assets. Suddenly everyone had losses for sale, and even the accountants were getting rich! But every party has a pooper, and pretty soon the IRS caught on. In 1988, Congress repealed the law, put the tax break on an ice floe, and pushed it out to sea.
Arrangements like the Great Eskimo Tax Scam force tax planners to scramble as they appear and disappear. Fortunately, our tax code includes dozens of perfectly legal strategies that aren't in any danger of disappearing — and don't include the word "scam" in their name. Call us when you're ready to start putting more of them to work for yourself!
Back in 1971, President Nixon signed the Alaska Native Claims Settlement Act. The law was intended to settle a long history of land disputes dating back to before Alaskan statehood. It distributed up to 104.5 million acres of land to the native tribes, paid out $962.5 million in cash, and created 13 "Alaska native regional corporations" to manage those assets. But timing, as they say, is everything. Fishing, timber, and oil industries collapsed, and nearly all of the new corporations were left with losses.
In 1983, Alaska's senior Senator, Ted Stevens, added a provision to the 1984 tax bill letting the new corporations sell those tax losses. Let's say you're a profitable corporation riding the 1980s economic boom and you're looking at a $4 million tax bill on a $10 million profit. You find a needy native Alaskan corporation with $10 million in losses. You pay that corporation, say, $2 million in cash for the right to take the tax loss on your own bottom line (even though you didn't actually incur the loss yourself), and poof — you've just saved yourself $2 million in tax!
It didn't take long for tax planners to find Stevens's little Easter egg. In 1986, a Marriott exec named Stephen Norris learned about the new loophole. Norris hooked up with David Rubenstein, a former Carter administration official who had left his White House post to start peddling influence from a Washington law firm. Marriott paid Rubenstein's firm a seven-figure sum in fees for saving an even higher seven-figure sum of taxes. Norris smelled opportunity for himself and checked out of Marriott to set up shop brokering tax deals with Rubenstein.
Norris and Rubenstein had no trouble finding needy Eskimos. They flew the struggling CEOs into Washington, wined them and dined them, and got them just as hooked on free money as the crack cocaine that enterprising drug dealers were just then bringing to America's Lower 48. The partners took 1% of the transaction for themselves and juiced a billion dollars of losses through the system. (If you hated math in school, that's $10 million in fees.) In 1987, the pair built on that success to help found the Carlyle Group, a private-equity fund named after the pricey New York hotel that became a home away from home for senior Washington officials looking to cash in on their government connections.
Meanwhile, back in Alaska, our naive native tribes were learning the hard way why Wall Streeters caution, "Bulls make money, bears make money, pigs get slaughtered." Eskimo companies started overstating their losses, taking "liberties" and "cutting corners" marking down the value of their timber and oil assets. Suddenly everyone had losses for sale, and even the accountants were getting rich! But every party has a pooper, and pretty soon the IRS caught on. In 1988, Congress repealed the law, put the tax break on an ice floe, and pushed it out to sea.
Arrangements like the Great Eskimo Tax Scam force tax planners to scramble as they appear and disappear. Fortunately, our tax code includes dozens of perfectly legal strategies that aren't in any danger of disappearing — and don't include the word "scam" in their name. Call us when you're ready to start putting more of them to work for yourself!
Monday, March 21, 2016
A Little Tax Magic
You already know that our Congress is as gridlocked as at any time in recent history. Budget and spending bills get rolled up into year-end monstrosities. Urgent priorities like immigration reform get hijacked by partisan posturing and "appeals to the base." The wizard Merlin himself would have a hard time pulling a sword from the solid block of stone that is today's U.S. Senate.
So here's a welcome breath of legislative fresh air that everyone can support. Representative Pete Sessions (R-TX) and six colleagues have introduced House Resolution 642 "recognizing magic as a rare and valuable art form and national treasure." Magic "is timeless in appeal and requires only the capacity to dream," they say. It "transcends any barrier of race, religion, language, or culture." It even helps children with disabilities improve their physical and mental dexterity and build confidence.
You know who else seems to like magic? The candidates offering tax plans as part of their effort to succeed Barack Obama as President of the United States! Take Republican Donald Trump, for example. He's drawn attention for his proposal to eliminate the "carried interest" loophole that lets private equity fund managers pay tax at preferential long-term capital gain rates on much of their income. But he also proposes to cut taxes to 15% on business income and 25% on individual income. He would also eliminate tax for singles earning less than $25,000 and joint filers earning less than $50,000, eliminate the marriage penalty and the alternative minimum tax, and make the estate tax vanish into thin air. Sounds great, right? But what does that tax plan do to the country's financial health? According to the Committee for a Responsible Federal Budget, those proposals would pull $12 to $15 trillion more debt from a hat. To balance the budget, spending would need to be cut by 40-80%, or the economy would have to grow by over 10%.
Trump isn't the only Republican with a little magic up his sleeve. Texas Senator Ted Cruz promises that on his first day in office, he'll saw the IRS in half. (Conveniently for the rest of us, he won't be putting it back together.) He also promises we'll be able to do our taxes on a postcard. (That's sort of a "card trick," right?) And former candidate Marco Rubio promised to make capital gains taxes disappear in a puff of smoke. "There's just a lot of magical thinking going on on the Republican side," says Len Burman, director of the Washington-based Tax Policy Center. Republicans aren't the only ones counting on some fiscal sleight-of-hand to make ends meet. Everyone's favorite Democratic Socialist, Bernie Sanders, promises to nationalize health care, make public colleges tuition-free, and raise taxes on the rich. But New York magazine has accused him of "thinking like a Republican," citing four former chairs of the Council of Economic Advisors who hit Sanders for "magic math" claims that his plan would lead to 5.3% economic growth and 300,000 new jobs per month. And while nobody has accused Hillary Clinton of magical thinking, she'll need a fair amount of sorcery to get her plan through Congress.
Look, we all wish we could wave a magic wand and make our tax bills vanish. But unless Penn & Teller run for the White House, that's not going to happen. What's the next best thing? A proactive plan can save you far more than a rabbit hidden in a hat. So call us today and see if we can make some taxes vanish!
So here's a welcome breath of legislative fresh air that everyone can support. Representative Pete Sessions (R-TX) and six colleagues have introduced House Resolution 642 "recognizing magic as a rare and valuable art form and national treasure." Magic "is timeless in appeal and requires only the capacity to dream," they say. It "transcends any barrier of race, religion, language, or culture." It even helps children with disabilities improve their physical and mental dexterity and build confidence.
You know who else seems to like magic? The candidates offering tax plans as part of their effort to succeed Barack Obama as President of the United States! Take Republican Donald Trump, for example. He's drawn attention for his proposal to eliminate the "carried interest" loophole that lets private equity fund managers pay tax at preferential long-term capital gain rates on much of their income. But he also proposes to cut taxes to 15% on business income and 25% on individual income. He would also eliminate tax for singles earning less than $25,000 and joint filers earning less than $50,000, eliminate the marriage penalty and the alternative minimum tax, and make the estate tax vanish into thin air. Sounds great, right? But what does that tax plan do to the country's financial health? According to the Committee for a Responsible Federal Budget, those proposals would pull $12 to $15 trillion more debt from a hat. To balance the budget, spending would need to be cut by 40-80%, or the economy would have to grow by over 10%.
Trump isn't the only Republican with a little magic up his sleeve. Texas Senator Ted Cruz promises that on his first day in office, he'll saw the IRS in half. (Conveniently for the rest of us, he won't be putting it back together.) He also promises we'll be able to do our taxes on a postcard. (That's sort of a "card trick," right?) And former candidate Marco Rubio promised to make capital gains taxes disappear in a puff of smoke. "There's just a lot of magical thinking going on on the Republican side," says Len Burman, director of the Washington-based Tax Policy Center. Republicans aren't the only ones counting on some fiscal sleight-of-hand to make ends meet. Everyone's favorite Democratic Socialist, Bernie Sanders, promises to nationalize health care, make public colleges tuition-free, and raise taxes on the rich. But New York magazine has accused him of "thinking like a Republican," citing four former chairs of the Council of Economic Advisors who hit Sanders for "magic math" claims that his plan would lead to 5.3% economic growth and 300,000 new jobs per month. And while nobody has accused Hillary Clinton of magical thinking, she'll need a fair amount of sorcery to get her plan through Congress.
Look, we all wish we could wave a magic wand and make our tax bills vanish. But unless Penn & Teller run for the White House, that's not going to happen. What's the next best thing? A proactive plan can save you far more than a rabbit hidden in a hat. So call us today and see if we can make some taxes vanish!
Monday, March 14, 2016
The Humor Endures
The passing of former First Lady Nancy Reagan last week at age 94 marks a bit of an end to the 1980s. Nancy earned both praise and criticism for restoring what she saw as some much-needed Kennedy-esque pomp and circumstance to the White House. Later, she earned praise for her work against drug use and, in later years, for championing embryonic stem-cell research. The passage of time proved kind to Mrs. Reagan — her funeral drew an A-list of politicians, Hollywood celebrities, and even former A-Team start "Mr. T," whom Nancy befriended as part of her "Just Say No" campaign. Ironically, given Nancy's own penchant for glamour, her husband Ronald made much of his reputation through his folksy, homespun wit. And taxes were a prime target of his humor. So in honor of both Reagans, here are some of Ronald's most famous quotes about taxes to enjoy as April 15 approaches. And just to make it interesting, we've thrown in a ringer. Can you spot the words that actually came from Russian president Vladimir Putin?
"The taxpayer — that's someone who works for the federal government but doesn't have to take a civil service exam." "We don't have a trillion-dollar debt because we haven't taxed enough; we have a trillion-dollar debt because we spend too much." "Republicans believe every day is the Fourth of July, but Democrats believe every day is April 15." "The government's view of the economy can be summed up in a few short phrases. If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it." "There were always those who told us that taxes couldn't be cut until spending was reduced. Well, you know, we can lecture our children about extravagance until we run out of voice and breath. Or we can cure their extravagance by simply reducing their allowance." "History shows that when the taxes of a nation approach about 20% of the people's income, there begins to be a lack of respect for government . . . . When it reaches 25%, there comes an increase in lawlessness." "The tax agencies have no right to terrorize business . . . "If there's anything Ronald Reagan hated more than taxes, it was the "evil empire" of the former Soviet Union. That's why it's especially ironic that the last quote about tax collectors terrorizing business came from Russian strongman and former KGB apparatchik Vladimir Putin! Presidents and their spouses will always come and go. (Someday, Americans will mourn the passing of the first "First Gentleman.") But some things won't ever change, and we're confident it won't ever be easy to pay taxes. Want to make things easier? Come to us for a plan to pay as little as possible! Every day you wait is a day you might be able to pay less.
Tuesday, March 8, 2016
We Don't Really Like You
The actress Sally Field has appeared in dozens of television and movie roles since first appearing as "Gidget." But she's perhaps best known for a 45-second acceptance speech at the 57th Academy Awards, when she accepted the Oscar for Best Actress and told the audience "you like me . . . you really like me!"
Late last month, that same group of the world's most narcissistic people gathered to congratulate themselves once again. They heard comedian Chris Rock skewer the Hollywood establishment for their "sorority racism." They saw the winners take the stage to spread the word on pet political causes. And a select group of presenters and nominees walked out with something extra: a big IRS bill.
Back in the 1970s, the Academy decided to thank actors for participating in the ceremony with a "swag bag" of modest gifts. But over time, that bag has grown as lavish and extravagant as a Beverly Hills mansion. This year's participants could choose from gifts totaling up to an almost-obscene $230,000. Here's just part of the haul:
As for the tax bill, back in the old days, when the value of the gifts didn't exceed the annual income of 99% of the country, they were tax-free! But by 2006, the IRS had had enough. Time to collect some taxes, they decided. But how can they collect taxes on gifts? Well, take a look at how they answer that question in their IRS Gift Bag Q&A press release:
Here's the lesson for the week. It's not always obvious what's income and what's not, what's deductible and what's not. If you really want to keep as much as the law allows, you need a plan to wade through the confusion. So call us for a red-carpet plan of your own!
Late last month, that same group of the world's most narcissistic people gathered to congratulate themselves once again. They heard comedian Chris Rock skewer the Hollywood establishment for their "sorority racism." They saw the winners take the stage to spread the word on pet political causes. And a select group of presenters and nominees walked out with something extra: a big IRS bill.
Back in the 1970s, the Academy decided to thank actors for participating in the ceremony with a "swag bag" of modest gifts. But over time, that bag has grown as lavish and extravagant as a Beverly Hills mansion. This year's participants could choose from gifts totaling up to an almost-obscene $230,000. Here's just part of the haul:
- A VIP all-access trip to Israel ($55,000)
- Three nights at the famed Golden Door spa in San Marco, California ($4,800)
- Three nights at the Grand Hotel Tremezzo just down from George Clooney;s summer home on Italy's Lake Como ($5,000)
- A plastic surgery package from 740 Park Associates ($5,530)
- Three sessions with celebrity fitness trainer Jay Cardiello ($1,400)
As for the tax bill, back in the old days, when the value of the gifts didn't exceed the annual income of 99% of the country, they were tax-free! But by 2006, the IRS had had enough. Time to collect some taxes, they decided. But how can they collect taxes on gifts? Well, take a look at how they answer that question in their IRS Gift Bag Q&A press release:
"Q: If these are gifts, why do they have to be treated as income?Sorry, Sally Field . . . when it comes to the swag bag, the IRS says the sponsors who "donate" the goodies don't really like you. (But the hotel in Italy sounds lovely!)
A: These gift bags are not gifts for federal income tax purposes because the organizations and merchants who participate in giving the gifts bags do not do so solely out of affection, respect, or similar impulses for the recipients of the gift bags."
Here's the lesson for the week. It's not always obvious what's income and what's not, what's deductible and what's not. If you really want to keep as much as the law allows, you need a plan to wade through the confusion. So call us for a red-carpet plan of your own!
Tuesday, March 1, 2016
Taxes Without Zaxes
March 2 marks the birthday of Theodore Geisel — better known to millions of children and former children as Doctor Seuss. That's reason enough to celebrate. But the beloved author's birthday is especially noteworthy this year. Archivists working at the Geisel Library have discovered an early draft of the author's most famous classic — and it seems there's something the book's unnamed narrator detests even more than Green Eggs and Ham. That's right — he hates paying taxes just as much as you do!
Armed with a plan, our narrator takes on the task of tackling his Form 1040. (Can you imagine how much fun Dr. Seuss had with that illustration?) And while Sam I Am can't make paying taxes as tasty as a plateful of green eggs and ham, he can make them at least palatable:
Slippery taxes on my boat.Fortunately, our friend Sam I Am is there with a solution. You might already know what it is:
Smelly taxes on my goat . . . .
Income taxes here and there.
Excise taxes everywhere!
I sure don't like to pay my tax.
No one does! That's just the facts!
You do not like them, so you say.
Perhaps a plan can save the day.
'Cause everybody hates to pay,
but careful planning saves you hay.
Armed with a plan, our narrator takes on the task of tackling his Form 1040. (Can you imagine how much fun Dr. Seuss had with that illustration?) And while Sam I Am can't make paying taxes as tasty as a plateful of green eggs and ham, he can make them at least palatable:
Say, I don't hate this tax so much!You've loved Dr. Seuss since you were knee-high to a Sneetch, right? So now that you know how much he appreciates a tax plan, why on earth are you waiting for your own?
Your careful planning saved a bunch!
So now I'm writing off my boat.
You found some credits for my goat!
And now I'm "sheltered" in the rain.
And in the dark and on a train,
and in a car and in a tree.
I'm paying so much less, I see!
I've stuffed my savings in a box.
I'm feeling clever like a fox!
I've saved enough to buy a house!
Tomorrow I'll deduct my mouse!
I know I owe them here and there,
but planning saves me everywhere!
Your planning saved me from a jam —
Thank you! Thank you, Sam I Am!
Monday, February 22, 2016
Men, Boys, Price, Toys
How much is a classic bright-red Ferrari worth? Well, if it's the 1957 335 S Spider Scaglietti that the French Bardinon family auctioned earlier this month, the answer is €32 million, or around $35.8 million. But if there isn't a convenient auction to establish how much someone will pay for something, and you need to set a price, how exactly do you go about establishing a number?
Here's where this week's story starts. Pierre Bardinon was a French leather-goods heir whose family manufactured, among other items, bomber jackets for the U.S. Air Force. At a young age, he fell in love with car racing and Ferraris, eventually assembling a collection of over 70 of them. (No word on how many were candy-apple red.) He even dedicated the family's chateau at Mas du Clos to the sport, adding a two-mile track and car museum.
Bardinon sold some of those cars during his lifetime. But when he died in 2012, he still had 20 left. His family valued that remaining collection of 20 at €70 million for estate-tax purposes. But since then, prices for the exotic Italian cars have accelerated nearly as fast as the cars themselves, and today the collection could be worth more like €200 million. Now French tax authorities may take another look.
Estate taxes are a whole different animal than income taxes. The rules themselves aren't especially complicated. The tax doesn't kick in until your taxable estate tops $5.45 million ($10.9 million for married couples). And the rate itself is a flat 40%. (French rates on Bardinon's Ferraris are even higher at 45%.) The real issue is assigning values to assets. How much exactly is everything worth?
If an estate consists of publicly-traded securities, that's easy to determine. Throw in some real estate or a closely-held business, and it gets a little tougher. Bring on the appraisers! And if there are collectibles or other hard-to-value assets — like Bardinon's Ferraris — that's when things get really sticky.
For 2013, the IRS got just 33,719 estate tax returns. However, they audited a hearty 8.5% of them (versus just 0.9% for individual income tax returns). 3,359 of those returns reported assets over $10 million — and the IRS audited a whopping 27% of those. In fact, experienced estate-tax preparers go into the job assuming their returns will be audited.
Naturally, most families want to lowball the value of their assets. And it's not necessarily hard to find an appraiser to go along. But the IRS has their own resources to fight back. When it comes to art, for example, the Service keeps an in-house staff of appraisers and experts. When that's not enough firepower, they also maintain an Art Advisory Panel, made up of two dozen scholars, curators, and dealers with expertise in a variety of areas. In 2014, the panel looked at 159 items and adjusted their values up by $27.8 million. That's an extra $11 million or so in tax.
They say that "he who dies with the most toys, wins." And we realize you'll probably consider yourself fortunate if you make it to the finish line with one Ferrari in your garage. (Can't drive more than one at a time, anyway, right?) But if you do have that good fortune, remember that smart planning will be the key to helping your family keep as many of your toys as possible. So ask us how we can help!
Here's where this week's story starts. Pierre Bardinon was a French leather-goods heir whose family manufactured, among other items, bomber jackets for the U.S. Air Force. At a young age, he fell in love with car racing and Ferraris, eventually assembling a collection of over 70 of them. (No word on how many were candy-apple red.) He even dedicated the family's chateau at Mas du Clos to the sport, adding a two-mile track and car museum.
Bardinon sold some of those cars during his lifetime. But when he died in 2012, he still had 20 left. His family valued that remaining collection of 20 at €70 million for estate-tax purposes. But since then, prices for the exotic Italian cars have accelerated nearly as fast as the cars themselves, and today the collection could be worth more like €200 million. Now French tax authorities may take another look.
Estate taxes are a whole different animal than income taxes. The rules themselves aren't especially complicated. The tax doesn't kick in until your taxable estate tops $5.45 million ($10.9 million for married couples). And the rate itself is a flat 40%. (French rates on Bardinon's Ferraris are even higher at 45%.) The real issue is assigning values to assets. How much exactly is everything worth?
If an estate consists of publicly-traded securities, that's easy to determine. Throw in some real estate or a closely-held business, and it gets a little tougher. Bring on the appraisers! And if there are collectibles or other hard-to-value assets — like Bardinon's Ferraris — that's when things get really sticky.
For 2013, the IRS got just 33,719 estate tax returns. However, they audited a hearty 8.5% of them (versus just 0.9% for individual income tax returns). 3,359 of those returns reported assets over $10 million — and the IRS audited a whopping 27% of those. In fact, experienced estate-tax preparers go into the job assuming their returns will be audited.
Naturally, most families want to lowball the value of their assets. And it's not necessarily hard to find an appraiser to go along. But the IRS has their own resources to fight back. When it comes to art, for example, the Service keeps an in-house staff of appraisers and experts. When that's not enough firepower, they also maintain an Art Advisory Panel, made up of two dozen scholars, curators, and dealers with expertise in a variety of areas. In 2014, the panel looked at 159 items and adjusted their values up by $27.8 million. That's an extra $11 million or so in tax.
They say that "he who dies with the most toys, wins." And we realize you'll probably consider yourself fortunate if you make it to the finish line with one Ferrari in your garage. (Can't drive more than one at a time, anyway, right?) But if you do have that good fortune, remember that smart planning will be the key to helping your family keep as many of your toys as possible. So ask us how we can help!
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