Where is "home"? Home is where the heart is. Home is wherever you make it. Home is wherever I'm with you. And, of course, I'll be home for Christmas. But what does the tax man think of all of this?
In 2009, Greg Blatt was Executive Vice-President, General Counsel & Secretary of InterActive Corp (IAC), which ran 150+ web sites including About.com, Vimeo, and The Daily Beast. Blatt's title sounded impressive, but IAC had reorganized him out of much of his responsibility, and he started looking for a new position. IAC didn't want to lose him, so they made him CEO of Match, a collection of dating sites including Match.com, OKCupid, Tinder, and PlentyofFish.
There was just one problem with the new gig — it was headquartered in Dallas. That held no appeal for the New York-based Blatt. So he worked out a deal to manage Match from New York. (Just another long-distance relationship, really.) He would keep his corporate position with IAC, spend most of his working time in New York, and keep his West Village loft and his boat in the Hamptons.
They say no battle plan survives initial contact with the enemy, and Blatt's was no exception. He got to Dallas and discovered, much to his surprise, that he loved it. The people were friendly! The city was cosmopolitan! (We realize that may be hard for the bi-coastal elites to accept, but there really is life in flyover country.)
Blatt loved the work, where he got to be "the decider." He loved his apartment in a swanky Uptown hi-rise, where 1-bedroom units start at $2,230 per month. He started dating, which makes sense for a guy running an online dating empire. (We're pretty sure Warren Buffett gets his insurance from GEICO, too.) He even moved his dog, who he had rescued from the SPCA, telling a friend, "Dog is the final step that I haven't been able to come to grips with until now. So Big D is my new home."
Unfortunately for Blatt, his Lone Star adventure was short-lived. He did so well at Match that he got promoted to CEO of IAC. While he tried to run the corporate parent from Dallas, he quickly realized he couldn't do it, and he moseyed on back to the Big Apple in 2011.
Everyone was happy except the romantics at the New York Division of Taxation, who didn't love the idea of losing taxes on Blatt's salary. In 2011, they audited him and hit him with $430,065 in taxes plus interest and penalties. Blatt paid the tax, then filed a petition for a refund. (Did we mention that New York's top tax rate of 8.82% is 8.82% higher than Texas's top rate of zero?)
Administrative Law Judge Diane Gardiner issued a 23-page opinion walking through Blatt's story. She noted mundane factors like changing his driver's license and voter registration. But the real clincher? "As borne out by the evidence in this case, petitioner's dog was his near and dear item which reflected his ultimate change in domicile to Dallas . . . . As demonstrated by a contemporaneous email regarding his move, petitioner stated that his change in domicile to Dallas was complete once his dog was moved there."
So, boys and girls, what have we learned today? Well, we've learned that home is where the dog is. More important, we've learned that home is where the tax savings are — in this case, $430,000 worth. So call us when you're ready to save, and let's see if we can help feather your nest!
Monday, August 28, 2017
Tuesday, August 22, 2017
TurboTax Made Me Do It
One of the highlights of living in our technologically-advanced age is the ability to buy tools to do almost anything. If your kid fractures his arm playing baseball, you can hop on over to Amazon and order an orthopedic bone saw for less than the cost of a tank of gas. Then you can (probably) head over to YouTube and watch a video explaining how to smooth off the rough edges and set it for best results. You might not want to do that all yourself. But the tools are there if you want them.
Here in the tax business, there's no shortage of similar tools you can use to help satisfy your obligations with your friends at the IRS. TurboTax, TaxCut, and similar programs give you much the same power as professional tax-prep systems. If your circumstances are simple enough, and you're familiar with the process, you might be able to do a perfectly serviceable job of preparing your own return. You might not want to write off an entire weekend wrestling with the various questions, forms, and procedures — but the tool is there if you want to.
But sometimes, doing it yourself really isn't the best idea. Barry Bulakites just learned that the hard way, to the tune of a trip to Tax Court (where he represented himself, of course). Bulakites is a San Diego-based insurance consultant who works with accountants, but who didn't see the value in hiring a professional to prepare a pretty complicated return. Here's how his DIY tax prep worked out:
He deducted $79,000 in mortgage interest in 2011 and 2012, for a loan that was due to be paid off in 2008. The court could see that Bulatikes had paid something, but he couldn't cough up the paperwork to show the amount of interest or even why he was obligated to pay. The court disallowed it all.
He deducted $100,000 in alimony he paid over the same period. His separation agreement specified $2,000 per month, but he and his ex- orally agreed to bump it to $5,000. Unfortunately, the law specifies oral agreements aren't enough to qualify, so the court disallowed the excess.
He deducted $185,673 for "other expenses" in 2011, which he claimed was a net operating loss carryforward from a previous year that he put on the wrong line of his return. Too bad he failed to file the required "concise statement setting forth the amount of the net operating loss deduction claimed and all material and pertinent facts relative thereto, including a detailed schedule showing the computation of the net operating loss deduction." The court allowed just $142.
Bulakites admitted that he deducted things he shouldn't have and overstated things that he could. But then he threw TurboTax under the bus for "luring him into" claiming them! We can just imagine what that would have looked like. Did it dare him to stretch that alimony deduction by an extra $3,000 per month? Did it challenge him: "are you man enough to deduct this net operating loss?" In the end, the court concluded that "[t]ax preparation software is only as good as the information one inputs into it."
Here's the real irony, at least as far as we're concerned. Preparing your taxes, on your own or with a professional, is important. But all that really does is record history. The real value comes from planning your taxes to pay less in the first place. So call us when you're ready for planning, and don't let cheap office-supply store software bully you into paying more than you have to!
Here in the tax business, there's no shortage of similar tools you can use to help satisfy your obligations with your friends at the IRS. TurboTax, TaxCut, and similar programs give you much the same power as professional tax-prep systems. If your circumstances are simple enough, and you're familiar with the process, you might be able to do a perfectly serviceable job of preparing your own return. You might not want to write off an entire weekend wrestling with the various questions, forms, and procedures — but the tool is there if you want to.
But sometimes, doing it yourself really isn't the best idea. Barry Bulakites just learned that the hard way, to the tune of a trip to Tax Court (where he represented himself, of course). Bulakites is a San Diego-based insurance consultant who works with accountants, but who didn't see the value in hiring a professional to prepare a pretty complicated return. Here's how his DIY tax prep worked out:
He deducted $79,000 in mortgage interest in 2011 and 2012, for a loan that was due to be paid off in 2008. The court could see that Bulatikes had paid something, but he couldn't cough up the paperwork to show the amount of interest or even why he was obligated to pay. The court disallowed it all.
He deducted $100,000 in alimony he paid over the same period. His separation agreement specified $2,000 per month, but he and his ex- orally agreed to bump it to $5,000. Unfortunately, the law specifies oral agreements aren't enough to qualify, so the court disallowed the excess.
He deducted $185,673 for "other expenses" in 2011, which he claimed was a net operating loss carryforward from a previous year that he put on the wrong line of his return. Too bad he failed to file the required "concise statement setting forth the amount of the net operating loss deduction claimed and all material and pertinent facts relative thereto, including a detailed schedule showing the computation of the net operating loss deduction." The court allowed just $142.
Bulakites admitted that he deducted things he shouldn't have and overstated things that he could. But then he threw TurboTax under the bus for "luring him into" claiming them! We can just imagine what that would have looked like. Did it dare him to stretch that alimony deduction by an extra $3,000 per month? Did it challenge him: "are you man enough to deduct this net operating loss?" In the end, the court concluded that "[t]ax preparation software is only as good as the information one inputs into it."
Here's the real irony, at least as far as we're concerned. Preparing your taxes, on your own or with a professional, is important. But all that really does is record history. The real value comes from planning your taxes to pay less in the first place. So call us when you're ready for planning, and don't let cheap office-supply store software bully you into paying more than you have to!
Wednesday, August 16, 2017
Oops!
Mark Twain once said, "Never put off till tomorrow what may be done the day after tomorrow
just as well." But Twain's advice doesn't always pay when it comes to
taxes. The calendar watchers at the IRS charge a 5% per month failure to
file penalty, up to 25% of the amount due, along with a ½% per
month failure to pay penalty, also up to 25% of the total amount due.
And the IRS isn't the only tax man to pay attention to deadlines, even
if they don't loom as large in our minds as April 15.
Presidio Terrace is a private block-long oval of a street in San Francisco's pricey Presidio Heights neighborhood, lined with 35 multimillion-dollar mansions. Residents have included Senator Dianne Feinstein, Representative Nancy Pelosi, and former San Francisco Mayor Joseph Alioto. There's a stone-gate entrance to the street, a rent-a-cop stationed at the gate to keep out snoopy mcsnoopfaces, and a manicured island inside the oval for residents to enjoy.
The street and sidewalks are owned by a homeowners association made up of surrounding residents. Because it's private, the association pays tax on the property — in this case, a whopping $14 per year. Now, $14 may not sound like it can power a lot of local government. But the city still wants their money. So, every year, the Treasurer-Tax Collector dutifully mails the bill to the association's accountant on nearby Kearny Street.
There's just one teensie-weensie, tiny little problem. That accountant hasn't worked for the HOA since the 1980s. (Oops.) That means the bill hasn't been paid since MTV still played music videos and Madonna was a doe-eyed ingenue. Suddenly, $14 per year snowballed into $994 in taxes, penalties, and interest. Most of the street's residents could have covered it with spare change from their couch cushions. But the city went ahead and put the street up for auction!
Enter Michael Cheng and his wife Tina Lam, real estate investors from nearby South Bay. Cheng spotted the listing for the auction and smelled money. He wasn't the only bidder looking to pick up this particular opportunity. But he outlasted the rest and, for $90,100 — sight unseen — the street was theirs!
So how can a couple of scrappy young real estate investors monetize their ownership of a block-long street surrounded by card-carrying 1%-ers? Start with parking. The street has 120 spots, which make it a potential gold mine in a city where a single parking space recently sold for $80,000. (And if the folks on the street don't want to pay to park in front of their own houses, maybe the Chengs could rent spots to the peasants living outside the gates?)
Needless to say, the people who actually live on Presidio Terrace aren't nearly as excited about paying to park on their own street as the investors who just bought it. The residents have hired an attorney, of course. (Funny how many of these weekly stories involve hiring an attorney.) They've petitioned the city to void the sale, and scheduled a hearing for October. And they've sued the city to stop the Chengs from flipping the street to anyone else until after they're done with that fight.
Twenty years ago, an author named Richard Carlson made a fortune selling a book called Don't Sweat the Small Stuff: and It's All Small Stuff. Unfortunately, sometimes you really do have to sweat the small stuff. Fortunately, you've got us. So let us sweat it for you, and save you a buck or two in the process!
Presidio Terrace is a private block-long oval of a street in San Francisco's pricey Presidio Heights neighborhood, lined with 35 multimillion-dollar mansions. Residents have included Senator Dianne Feinstein, Representative Nancy Pelosi, and former San Francisco Mayor Joseph Alioto. There's a stone-gate entrance to the street, a rent-a-cop stationed at the gate to keep out snoopy mcsnoopfaces, and a manicured island inside the oval for residents to enjoy.
The street and sidewalks are owned by a homeowners association made up of surrounding residents. Because it's private, the association pays tax on the property — in this case, a whopping $14 per year. Now, $14 may not sound like it can power a lot of local government. But the city still wants their money. So, every year, the Treasurer-Tax Collector dutifully mails the bill to the association's accountant on nearby Kearny Street.
There's just one teensie-weensie, tiny little problem. That accountant hasn't worked for the HOA since the 1980s. (Oops.) That means the bill hasn't been paid since MTV still played music videos and Madonna was a doe-eyed ingenue. Suddenly, $14 per year snowballed into $994 in taxes, penalties, and interest. Most of the street's residents could have covered it with spare change from their couch cushions. But the city went ahead and put the street up for auction!
Enter Michael Cheng and his wife Tina Lam, real estate investors from nearby South Bay. Cheng spotted the listing for the auction and smelled money. He wasn't the only bidder looking to pick up this particular opportunity. But he outlasted the rest and, for $90,100 — sight unseen — the street was theirs!
So how can a couple of scrappy young real estate investors monetize their ownership of a block-long street surrounded by card-carrying 1%-ers? Start with parking. The street has 120 spots, which make it a potential gold mine in a city where a single parking space recently sold for $80,000. (And if the folks on the street don't want to pay to park in front of their own houses, maybe the Chengs could rent spots to the peasants living outside the gates?)
Needless to say, the people who actually live on Presidio Terrace aren't nearly as excited about paying to park on their own street as the investors who just bought it. The residents have hired an attorney, of course. (Funny how many of these weekly stories involve hiring an attorney.) They've petitioned the city to void the sale, and scheduled a hearing for October. And they've sued the city to stop the Chengs from flipping the street to anyone else until after they're done with that fight.
Twenty years ago, an author named Richard Carlson made a fortune selling a book called Don't Sweat the Small Stuff: and It's All Small Stuff. Unfortunately, sometimes you really do have to sweat the small stuff. Fortunately, you've got us. So let us sweat it for you, and save you a buck or two in the process!
Tuesday, August 1, 2017
Making More By Paying Less
When affluent clients want to pay less tax, they turn to accountants,
attorneys, and financial advisors, among other advisors. And we can
make a nice living helping clients accomplish that goal. (At the risk of
sounding self-serving, it's because we're worth it.) But you won't find
any tax professionals populating the Forbes 400, or your hometown paper's list of richest local residents.
Having said that, there are a few people who have made legitimate fortunes helping people pay less tax. They just aren't working where you think they are.
Most of us don't give much thought to tariffs, simply because we don't directly pay them. When we do pay them any mind, we typically think of international trade policy and raw materials like steel. But governments impose import taxes on consumer goods, too, including luxury favorites like perfume and cologne, watches and jewelry, high-end spirits, and the like. And while those duties don't add up like income taxes, buyers don't want to pay any more of them than they have to.
Robert Miller grew up in Massachusetts and attended Cornell University's prestigious School of Hotel Administration. But he took a different direction than most of his classmates, and five years after graduating, he launched the first Duty-Free Shop in Hong Kong. In 1962, Miller secured the rights to operate the first duty-free shop in America, in the Honolulu airport. This opened his doors to servicemen returning from Asia and wealthy Japanese travelers.
Miller and his partners eventually expanded the chain to over 420 locations in airports and high-end retail locations across the globe. In 1997, his partners sold their interests to the Paris-based luxury-goods conglomerate LVMH. But Miller kept 38% of the company, and today his net worth stands at about $2.8 billion.
And how does a guy who made billions helping his customers sidestep taxes live? Pretty much exactly how you'd expect. Miller, now 84, is a champion yachtsman — he sailed his 42-meter monohull Mari-Cha IV to a world record Atlantic crossing in six days, 17 hours, and 52 minutes. He owns a 36,000-acre sporting estate in Yorkshire, along with houses in New York, Paris, and Gstaad. (It's pronounced g-schtad, for those of you don't regularly ski the Swiss alps.)
Miller's three daughters have earned their own fame as socialites, and for marrying spectacularly well. Pia, the oldest, married a grandson of oil baron J. Paul Getty. Marie-Chantal, the middle, married Crown Prince Alexander of Greece. (We know the Greeks may not be the most prestigious royals these days, but their blood is more blue than ours!) And Alexandra, the baby, married the son of Prince Egon von Furstenberg.
Miller's success in helping customers avoid import duties may not hold any direct lessons for us. But he's obviously done some sophisticated income tax planning, too. And that's where we come in. So call us when you're ready to save, and let's see if we can help you afford more luxury goods on your next international flight!
Having said that, there are a few people who have made legitimate fortunes helping people pay less tax. They just aren't working where you think they are.
Most of us don't give much thought to tariffs, simply because we don't directly pay them. When we do pay them any mind, we typically think of international trade policy and raw materials like steel. But governments impose import taxes on consumer goods, too, including luxury favorites like perfume and cologne, watches and jewelry, high-end spirits, and the like. And while those duties don't add up like income taxes, buyers don't want to pay any more of them than they have to.
Robert Miller grew up in Massachusetts and attended Cornell University's prestigious School of Hotel Administration. But he took a different direction than most of his classmates, and five years after graduating, he launched the first Duty-Free Shop in Hong Kong. In 1962, Miller secured the rights to operate the first duty-free shop in America, in the Honolulu airport. This opened his doors to servicemen returning from Asia and wealthy Japanese travelers.
Miller and his partners eventually expanded the chain to over 420 locations in airports and high-end retail locations across the globe. In 1997, his partners sold their interests to the Paris-based luxury-goods conglomerate LVMH. But Miller kept 38% of the company, and today his net worth stands at about $2.8 billion.
And how does a guy who made billions helping his customers sidestep taxes live? Pretty much exactly how you'd expect. Miller, now 84, is a champion yachtsman — he sailed his 42-meter monohull Mari-Cha IV to a world record Atlantic crossing in six days, 17 hours, and 52 minutes. He owns a 36,000-acre sporting estate in Yorkshire, along with houses in New York, Paris, and Gstaad. (It's pronounced g-schtad, for those of you don't regularly ski the Swiss alps.)
Miller's three daughters have earned their own fame as socialites, and for marrying spectacularly well. Pia, the oldest, married a grandson of oil baron J. Paul Getty. Marie-Chantal, the middle, married Crown Prince Alexander of Greece. (We know the Greeks may not be the most prestigious royals these days, but their blood is more blue than ours!) And Alexandra, the baby, married the son of Prince Egon von Furstenberg.
Miller's success in helping customers avoid import duties may not hold any direct lessons for us. But he's obviously done some sophisticated income tax planning, too. And that's where we come in. So call us when you're ready to save, and let's see if we can help you afford more luxury goods on your next international flight!
Tuesday, July 25, 2017
Celebrities Behaving Badly
One day back in March, 2002, Us Weekly editor Bonnie Fuller
spotted a photo of actress Drew Barrymore bending over to pick a coin
off the ground. A light bulb flipped on over her head, and on April 1,
her magazine debuted a brand-new photo feature that changed the
paparazzi game forever. We're talking, of course, about "Stars — They're
Just Like Us." (Of course, they're still not quite just like us . . .
how many photographers are fighting to catch pictures of us picking up our dry cleaning, filling up our gas tanks, or trying to pick the ripest avocado at Whole Foods?)
Here's something else the stars share with us. They don't want to waste money on taxes they don't have to pay. And since they tend to make more money than we do, they tend to owe more taxes. So that pain over unnecessary tax is greater for them than it is for us! (Who says money solves all your problems?)
But sometimes they go a little too far to pay less. And that's when they discover our friends at the IRS lying in wait. Here's the problem: the IRS doesn't have nearly enough money to make sure everyone is paying their legal share. Audit rates are down to historic lows. So when they get a chance to make examples of bold-faced names, they're sure to jump on the case — even if Us Weekly won't be combing Tax Court filings and Justice Department press releases the way we do.
Our first story this week involves boxer Floyd Mayweather, who's made as much money with his fists as any man alive. Back in 2015, he earned a reported $220-230 million for defeating Manny Pacquiao in the Fight of the Century. (Granted we're less than one-fifth into the century, but the payday itself lived up to the hype even if the fight didn't.) Unfortunately, Mayweather doesn't have anyone to withhold taxes from that paycheck.
Mayweather isn't disputing how much he owes. He says he just doesn't have the cash to cover it. ($15 million worth of cars in his garage, sure. Cash in the bank, not so much.) So he's asking the Tax Court to grant him a short-term installment agreement and waive his failure-to-pay penalties. He's argued that he has "a significant liquidity event" coming up in approximately 60 days, by which he means his next fight of the century, a potential $400 million payday against MMF superstar Conor McGregor.
This isn't Mayweather's first bout against the IRS. In 2008, they filed a $6.7 million lien against him for 2007 taxes. Mayweather won that fight on points, settling for $5 million. Last year, the Tax Court ordered him to pay $1,627,563 for 2006. Also last year, he sent a Las Vegas strip club a 1099 for $20,323 he spent on strippers on May 25, 2014. Apparently he understands that "making it rain" is a taxable event, but thinks it's the club's responsibility to cover the taxes for the dancers who actually took home the cash.
Rapper DMX (real name Earl Simmons) is also feeling some summer heat from the IRS. On July 13, he was arrested on 14 counts of tax fraud. Feds say he turned the tables by using bank accounts in other peoples' names while fronting his expenses in cash. The haters at the IRS say he didn't pay $1.7 million in taxes he owed from 2002-2005, and failed to file returns entirely from 2010-2015.
Look, we know you don't want to pay more tax than you have to. And we know you're not willing to risk an appearance in the news (or court!) to pay less. But you don't have to feel stuck between a rock and a hard place. You just need a plan. So call us when you're ready to lace up your gloves, and let us take your corner!
Here's something else the stars share with us. They don't want to waste money on taxes they don't have to pay. And since they tend to make more money than we do, they tend to owe more taxes. So that pain over unnecessary tax is greater for them than it is for us! (Who says money solves all your problems?)
But sometimes they go a little too far to pay less. And that's when they discover our friends at the IRS lying in wait. Here's the problem: the IRS doesn't have nearly enough money to make sure everyone is paying their legal share. Audit rates are down to historic lows. So when they get a chance to make examples of bold-faced names, they're sure to jump on the case — even if Us Weekly won't be combing Tax Court filings and Justice Department press releases the way we do.
Our first story this week involves boxer Floyd Mayweather, who's made as much money with his fists as any man alive. Back in 2015, he earned a reported $220-230 million for defeating Manny Pacquiao in the Fight of the Century. (Granted we're less than one-fifth into the century, but the payday itself lived up to the hype even if the fight didn't.) Unfortunately, Mayweather doesn't have anyone to withhold taxes from that paycheck.
Mayweather isn't disputing how much he owes. He says he just doesn't have the cash to cover it. ($15 million worth of cars in his garage, sure. Cash in the bank, not so much.) So he's asking the Tax Court to grant him a short-term installment agreement and waive his failure-to-pay penalties. He's argued that he has "a significant liquidity event" coming up in approximately 60 days, by which he means his next fight of the century, a potential $400 million payday against MMF superstar Conor McGregor.
This isn't Mayweather's first bout against the IRS. In 2008, they filed a $6.7 million lien against him for 2007 taxes. Mayweather won that fight on points, settling for $5 million. Last year, the Tax Court ordered him to pay $1,627,563 for 2006. Also last year, he sent a Las Vegas strip club a 1099 for $20,323 he spent on strippers on May 25, 2014. Apparently he understands that "making it rain" is a taxable event, but thinks it's the club's responsibility to cover the taxes for the dancers who actually took home the cash.
Rapper DMX (real name Earl Simmons) is also feeling some summer heat from the IRS. On July 13, he was arrested on 14 counts of tax fraud. Feds say he turned the tables by using bank accounts in other peoples' names while fronting his expenses in cash. The haters at the IRS say he didn't pay $1.7 million in taxes he owed from 2002-2005, and failed to file returns entirely from 2010-2015.
Look, we know you don't want to pay more tax than you have to. And we know you're not willing to risk an appearance in the news (or court!) to pay less. But you don't have to feel stuck between a rock and a hard place. You just need a plan. So call us when you're ready to lace up your gloves, and let us take your corner!
Monday, July 17, 2017
Caliente
Summer is here, and in most of the country, it's hot! The All-Star game has come and gone, dog days are right around the corner, and if your air conditioner makes a funny noise, the hair stands up on the back of your neck. Now, we can't help you if your air conditioner breaks, but we can try and put a smile on your face with a few tax quotes to start your day. Try and spot the summer references hidden inside — they might not be quite as easy to find as you think!
- "A dog who thinks he is man's best friend is a dog who has obviously never met a tax lawyer."
Fran Lebowitz
Lawrence Summers
Will Rogers
Franklin D. Roosevelt
Gerald Barzan
Dave Barry
Ronald Reagan
Harry BlackmunNot many of us are thinking about taxes after April 15. But the reality is, there's never a bad time to stop wasting money on taxes you don't have to pay. The sooner you start planning, the sooner you'll rescue those dollars from your paycheck or quarterly estimates. So call us before the heat gets too high and see if we can bring you some cool relief!
Tuesday, July 11, 2017
Accountants Behaving Badly
Actress Alyssa Milano first gained fame playing Tony Danza's daughter on the television sitcom Who's the Boss. The show ran for eight seasons, snagged ten Emmy and five Golden Globe nominations (winning one of each), and established Milano as a bone fide teen idol. While her star has dimmed since then, she continues to work in Hollywood and seems to be one of the few child stars in recent memory to grow into adulthood without well-publicized trips to rehab or jail.
Today, Milano is as busy as a bumblebee. So she and her husband, agent David Bugliari, employed a business manager to handle "the details." Usually those relationships proceed without trouble. But that's not the case with Milano, who just sued her manager, CPA Kenneth Hellie, for $10 million.
Milano says the relationship first soured with "a home improvement debacle." She and her husband bought their Ventura County home in 2013 with plans to spend $1.1 million remodeling it. They wound up spending $5 million on the house which is now worth $3 million. (That odd math may not sound implausible to anyone else who's done a gut rehab!)
But Milano soon discovered that Hellie had made eight late mortgage payments in a 13-month period. That destroyed her credit, which meant she couldn't refinance the house. She also says:
He failed to pay her 2013 and 2014 income taxes,
He used scotch tape to attach her signature to wire transfers to make unauthorized withdrawals, and
He failed to pay her employees or their taxes, and
His reassurances that the finances were in shape gave her the confidence to pass up a $1.3 million paycheck for starring in a third season of ABC's "Mistresses" series.
Of course, every story has two sides (especially in Hollywood). Hellie's response basically throws her husband under the bus, arguing that he approved additional remodeling expenses and may have been "intentionally or negligently keeping Milano in the dark regarding the couple's deteriorating finances." He blames the couple for their own lavish spending, including "a second home in the mountains, private planes, a country club membership, a boat, and numerous personal staff such as multiple nannies and housekeepers."
Milano is hardly the only Hollywood celebrity to break with her manager. Actor Johnny Depp, who spent $3 million to shoot author Hunter S. Thompson's ashes out of a cannon, has sued his manager for $25 million for a similar series of offenses. And singer Alanis Morissette's so-called business manager has ironically just reported to federal prison in Oregon for embezzling millions from her and other clients. (She said he would literally cry when she asked where her money had gone!)
Here's the lesson from today's sad stories. Choose wisely! Don't ask us for advice on remodeling your home or managing your household staff. But do count on us to help stop wasting money on taxes you don't have to pay. And remember, we're here for your co-stars, too!
Today, Milano is as busy as a bumblebee. So she and her husband, agent David Bugliari, employed a business manager to handle "the details." Usually those relationships proceed without trouble. But that's not the case with Milano, who just sued her manager, CPA Kenneth Hellie, for $10 million.
Milano says the relationship first soured with "a home improvement debacle." She and her husband bought their Ventura County home in 2013 with plans to spend $1.1 million remodeling it. They wound up spending $5 million on the house which is now worth $3 million. (That odd math may not sound implausible to anyone else who's done a gut rehab!)
But Milano soon discovered that Hellie had made eight late mortgage payments in a 13-month period. That destroyed her credit, which meant she couldn't refinance the house. She also says:
He failed to pay her 2013 and 2014 income taxes,
He used scotch tape to attach her signature to wire transfers to make unauthorized withdrawals, and
He failed to pay her employees or their taxes, and
His reassurances that the finances were in shape gave her the confidence to pass up a $1.3 million paycheck for starring in a third season of ABC's "Mistresses" series.
Of course, every story has two sides (especially in Hollywood). Hellie's response basically throws her husband under the bus, arguing that he approved additional remodeling expenses and may have been "intentionally or negligently keeping Milano in the dark regarding the couple's deteriorating finances." He blames the couple for their own lavish spending, including "a second home in the mountains, private planes, a country club membership, a boat, and numerous personal staff such as multiple nannies and housekeepers."
Milano is hardly the only Hollywood celebrity to break with her manager. Actor Johnny Depp, who spent $3 million to shoot author Hunter S. Thompson's ashes out of a cannon, has sued his manager for $25 million for a similar series of offenses. And singer Alanis Morissette's so-called business manager has ironically just reported to federal prison in Oregon for embezzling millions from her and other clients. (She said he would literally cry when she asked where her money had gone!)
Here's the lesson from today's sad stories. Choose wisely! Don't ask us for advice on remodeling your home or managing your household staff. But do count on us to help stop wasting money on taxes you don't have to pay. And remember, we're here for your co-stars, too!
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