February 26, 2014

Now We Know Why She's Dancing

by Kenneth Hoffman in Retirement, Tax Counsel, Tax Planning

The Swedish pop band ABBA rocketed to global superstardom in the 1970s, with hits like Waterloo, Fernando, and, of course, Dancing Queen. Named for members Agnetha Fältskog, Björn Ulvaeus, Benny Anderson, and Anni-frid Lyngstad, ABBA is the one of the best-selling music groups of all time. They haven't performed together since 1982. But that didn't stop Ulvaeus and Anderson from turning their songs into a hit musical, Mamma Mia!, in 1999. Just one year later, they turned down an offer to reunite for 100 concerts and a billion dollars.

Lots of us are still embarrassed by the fashion choices we made in the 1970s. ABBA, whose members gained attention for glittering hotpants, sequined jumpsuits, and platform heels, is no exception. According to ABBA: The Official Photo Book, coming next month to celebrate 40 years since they won the 1974 Eurovision Song Contest, singer and guitarist Björn Ulvaeus confesses "in my honest opinion we looked like nuts in those years. Nobody could have been as badly dressed on stage as we were."

But now, we've learned there was more than just bad taste at work. It turns out the band was working to avoid the Swedish National Tax Board! As The Guardian reported last week, "the band's style was influenced in part by laws that allowed the cost of outfits to be deducted against tax — so long as the costumes were so outrageous they could not possibly be worn on the street."

Sweden's tax man has always taken a bigger bite of his citizens' earnings than Uncle Sam. The Swedes' top tax rate rose to 85% in 1980, at a time when Ronald Reagan was campaigning to take ours from 70% down to 50%. For 2014, their top marginal tax rate reaches 57% on income over about $88,180, versus a 39.6% top rate here. The Swedes also take 31.42% for payroll tax, versus 15.3% here. Apparently, taxes grow well in the cold Swedish climate.

So it might surprise you to learn that our tax code offers a version of the same deduction. Specifically, IRS Publication 17 says you can deduct the cost and upkeep of work clothes so long as you have to wear them as a condition of your employment and they're "not suitable for ordinary street wear." It's not enough that you wear distinctive clothing — it has to be required by your employer (or essential for your business if you're self-employed). And it's not enough that you simply don't wear your work clothes away from work — it "must not be suitable for taking the place of your regular clothing." (We think Lady Gaga's famous meat dress will qualify just fine.)

Ulvaeus himself is no stranger to tax controversy. In 2007, the Tax Board accused him of laundering royalty income through foreign accounts to avoid 90 million kroner ($12.8 million) in taxes from 1997-2005. Ulvaeus paid the tax as a precautionary measure, then appealed to his county administrative court, which eventually ruled in his favor.

We understand you want to pay less tax yourself. But we doubt you're willing to rock a spandex sequined jumpsuit to do it — at least, not in public. (What you wear at home is your own business!) Fortunately, there are hundreds of easier ways to pay less. You just need to start with a plan. That's where we take the stage. Just hit "reply" to this email and let us know you're ready to get started!

Let's Talk! For a deeper conversation on our services, or to become a client, call Kenneth Hoffman at (954) 591-8290 Monday - Friday for a no cost consultation, or drop me a note.

Kenneth Hoffman of K.R. Hoffman & Co., LLC is a highly sought after tax and business counselor. As a trusted senior advisor and counselor working closely with Entrepreneurs, Professionals and Select Individuals, Mr. Hoffman provides counsel to his clients who are navigating through the complexity of today's business, tax, and accounting challenges.

Click here to schedule an appointment with Kenneth Hoffman.

If you found this article helpful, I invite you to leave a comment and please share it on twitter, facebook or your favorite social media site and with your friends, family and colleagues. Thank you.

I truly value your business and I appreciate your referrals. Refer your family, friends, acquaintances, and business colleagues to KR Hoffman & Co., LLC.

Follow us on Twitter at @TaxReturnCoach, and let us know how we're doing.

February 19, 2014

And the Gold Goes To ......!

by Kenneth Hoffman in Tax Planning

If you're like most of us, you've spent at least some time over the past couple of weeks watching the games of the 22nd Winter Olympiad. Who cares if the host city Sochi, a Black Sea beach resort, is warmer than Miami, Florida? 2,800 athletes from 88 countries have traveled to compete in 98 events, and the world is a better place for the fellowship.

Olympic games are famous for sports we don't usually see anywhere else. In the summer games, we get rhythmic gymnastics (dancing with a ribbon), dressage (dancing with a horse), and trampoline (dancing on a trampoline). In the winter games, it's ice dancing (to give you your dancing fix), biathlon mixed relay (dancing on cross-country skis with guns), and curling. (You don't have to appreciate dancing to enjoy curling, but it does help to be Canadian.)

So, in that same vein, what if nations competed for taxes we don't usually see? These would be our picks for medalists in the coveted "weird tax rule" event:

Bronze: Tethered Hot Air Balloons in Kansas. Kansas levies a sales tax on "any place providing amusement, entertainment, or recreation services." That sounds straightforward enough. But the federal Anti-Head Tax Act prohibits state and local governments from taxing airlines or airport users. How does Kansas apply that law to hot-air balloon rides? Well, if the balloon stays tethered to the ground and doesn't actually go anywhere, it's a taxable amusement. But if it actually flies somewhere, you're off the hook for the tax!
Silver: Cereal Toys in Canada. Cereal companies know that kids really just want the cheap throwaway toy at the bottom of the box. (Cracker Jack knew that a century ago!) But in Canada, cereal makers have even more reason to add toys to their sugary goodness. That's because they can avoid the usual tax on cereal by throwing a toy in the box — so long as the toy doesn't qualify as "beer, liquor, or wine." (Now that might be a way to sell cereal to grownups!)
Gold: Cow Flatulence in Europe. When you think of global pollution, you probably blame coal-fired electric plants or smoggy freeways. But the United Nations Food and Agriculture organization estimates that methane from slow-digesting cows accounts for up to 18% of Europe's production of greenhouse gases. (We understand not everyone is a fan of the United Nations, but just trust them on this one — and don't ask for details.) Several European Union nations have enacted taxes on their cows to help keep those gases in check. They range from $18 per cow in Ireland all the way up to $110 per cow in Denmark!

The world is full of unique and sometimes silly taxes. But there's nothing silly about paying more tax than you have to. And that is one competition where you do not want to settle for the bronze! Fortunately, you don't have to train for years to bring home a medal. You just need a plan. So call us now for some world-class savings. And remember, we're here for your fellow teammates, too!

February 12, 2014

There's an App for That

by Kenneth Hoffman in Tax Tips, Tax Planning

Managing the Internal Revenue Service is no easy job. It takes a lot of automation to process over two hundred million tax returns per year. And, while the Service still stores master tax records on computers commissioned during the Johnson administration (Lyndon, at least, not Andrew!), the IRS still spends hundreds of millions per year to take advantage of the latest information technology.

The geeks who manage the IRS's computers do a great job with the limited resources Congress gives them. But they want to be like the cool kids in Silicon Valley, too. So they've created an app, called IRS2GO, that you can download to your iPhone or Android device. You can use the IRS app to track your refund, find free tax return preparers, access your tax records, and even connect with the IRS on Twitter, YouTube, Tumblr, and Facebook.

Those are all great functions, of course. But we got to thinking . . . what sort of things would you really want an IRS app to do for you? We thought maybe these would be even more popular:

The Refund Redirector: Knowing when your refund will show up is great. But the real fun is knowing where you're going to spend it. The Refund Redirector would aggregate prices from hundreds of online shopping sites to give you the best possible deal, then send your refund directly to the store. Planning to upgrade your family room to the latest 50-inch television? Let the Refund Redirector tell you where to buy it!
Flappy Tax: Flappy Bird is the latest handheld gaming sensation, with 50 million downloads. The only problem is, it's too hard to get that stupid bird through that stupid opening between those stupid pipes! Our version would let you thread a helpless taxpayer through a maze of tiny loopholes. But if you think that flappy bird has it tough, wait 'till you see our red tape!
Red Light/Green Light: This updated version of the classic children's party game would use an easy-to-understand traffic light to tell you if your deductions will fly with the IRS. Want to write off the mileage to and from the orthodontist for tightening your kid's braces? Green light! Thinking about writing off a bottle of Dom Perignon to celebrate your latest business deal? Yellow light for the "lavish and extraordinary" expense. Hoping the IRS "won't notice" that Swiss bank account you opened last year? Stop!
YelpTax: Apps like TripAdvisor, Urbanspoon, and Yelp let you post restaurant reviews before you even get the bill. Our version would let you review auditors and other IRS staff. How much more pleasant do you think an audit would be if the examiner knew you could rate him from one to five stars on punctuality, friendliness, service, and atmosphere? (If only they could say "we know you have a choice in auditors today . . . .")

We love how technology automates so many tasks to make our days easier and more productive. We love how the Internet puts a wealth of knowledge at our fingertips. But there's still no substitute for good, old-fashioned expertise and experience. And you can't get that from an app. That's where we come in. We can give you the plan you need to pay less tax. We can help you implement that plan without having to tap it all out on a tiny screen. So call us when you're ready for the most up-to-date tax-saving strategies and concepts. And remember, winning the tax game is more fun than anything you can do on your phone!

February 5, 2014

Adding Insult to Super Bowl Injury

by Kenneth Hoffman in Tax Counsel, Tax Preparation, Tax Planning

On Sunday, quarterback Peyton Manning led his uncharacteristically hapless Denver Broncos to the second-most-lopsided Super Bowl loss ever. Manning & Company just couldn't catch a break, from the safety they gave up on the game's first play, to Manning's two interceptions, to Percy Harvin's second-half kickoff return, to . . . you get the picture. So, Manning didn't walk away with that hoped-for second Super Bowl ring. But at least he walks away with the $46,000 bonus the NFL awards to losing players.

Or does he? Well, here's the deal. It turns on two things:

New Jersey, like most states, tackles visiting athletes with a "jock tax." The state calculates Manning's taxable income by dividing the number of days he practices and plays in the state by the number of "duty days" he works for the whole year. Then they apply the regular tax rates, which range up to 8.97% on income over $500,000.
Next month, Manning heads to the doctor to follow up on a series of surgeries to his neck and spine. If everything still looks good, he plans to return for the 2014 season. If not, he'll ride off into the sunset, go to work as a broadcaster, and wait for his induction into the Hall of Fame.

Now, here's where the play gets complicated. If Manning's neck forces him to retire, he'll finish 2014 with $111,000 in playoff bonuses. He'll owe New Jersey tax for the seven days he worked in the state, out of 33 days he played for the year. He'll hand off $982 in tax, and probably hope he can forget the day ever happened.

BUT — if Manning's neck checks out okay, and he goes on to play next season, he'll earn another $15 million in 2014 salary. Then he'll owe New Jersey tax for a smaller fraction of the season — seven days out of 200, rather than seven days out of 33. But he'll apply that fraction to a whopping $15,111,000 of income. That means he'll turn over $46,844 in tax — $844 more than he actually made for playing Sunday's game!

And this is all before we get to Uncle Sam, who picks off 39.6% for income tax and 3.8% for Medicare. Manning's total tax bill on his $46,000 Super Bowl bonus could hit $66,808, meaning it actually cost him 20 G's to play! Where's the fun in that?

At least Manning still leads the NFL in endorsements. He makes $12 million per year from sponsors including Reebok, Buick, Wheaties, DirecTV, and Papa John's pizza. He should be thankful New Jersey doesn't tax him on a share of that endorsement income. Some U.S. golfers, among other athletes, have had to weigh whether or not to play tournaments in European countries that tax visiting athletes on a share of their endorsement income as well as contest winnings.

So, here's the final score. When you try something new, like earning income from a new venture or in a new place, you can't just add up the numbers at the end of the year and hope for the best. You need a plan to penetrate the tax man's defense — one that anticipates blindside rushers like New Jersey's jock tax. So call us when you're ready foryour plan. And remember, we're here for your teammates, too!

Let's Talk! For a deeper conversation on our services, or to become a client, call Kenneth Hoffman at (954) 591-8290 Monday - Friday for a no cost consultation, or drop me a note.

Kenneth Hoffman of K.R. Hoffman & Co., LLC is a highly sought after tax and business counselor. As a trusted senior advisor and counselor working closely with Entrepreneurs, Professionals and Select Individuals, Mr. Hoffman provides counsel to his clients who are navigating through the complexity of today's business, tax, and accounting challenges.

Click here to schedule an appointment with Kenneth Hoffman.

January 30, 2014

Le Grand Tax Savings

by Kenneth Hoffman in Tax Counsel, Tax Planning

When you think of France, you probably think of food. The French are known throughout the world for their truffles, foie gras, and fine champagne. French chefs have spread the gospel of rich food and fine wine across the globe. Most of us think of "French" dining as the highest form of cuisine.

But it seems the French have a dirty little culinary secret they might not like the rest of the world to know. Would you believe they love McDonald's almost as much as we do? That's right, there are 1,258 golden arches across France, and France is actually McDonald's most profitable market outside the states. McDonald's outlets in France serve slightly more exotic fare than their American cousins — the "Premio au Parmesan" starts with the usual all-beef patty, then adds a ciabatta bun, parmigiano reggiano cheese, and creamy parmesan sauce. And French McDonald's serve beer, too. But — French gourmands can still sneak in anytime for "le Grand Big Mac."

Now, it seems, those French McDonald's are being accused of whipping up a different kind of dish — specifically, cooking "the books." Quelle horreure — can it really be true?

Here's the issue. Different countries set different tax rates for the corporations that operate within their borders. Naturally, smart accountants working for multinational corporations want to minimize their taxes by shifting whatever profits they can from high-tax jurisdictions like the United States (where they pay up to 35%) to lower-taxed jurisdictions. Tech firms like Apple and Google have made headlines for using strategies like the "Dutch Sandwich" (which shifts income to tax-free Netherlands Antilles corporations) and "Double Irish" (which shifts profits to Irish subsidiaries, where they're taxed at a low 12.5% rate). Some governments are working to close loopholes and make it harder to channel profits through lower-tax locations. But unless they change the rules, it's all perfectly legal.

Last week, the French magazine L'Express reported that McDonald's has funneled 2.2 billion euros of French earnings (roughly $3 billion) through subsidiaries outside France, avoiding several hundred million euros in corporate and value-added tax. For example, French franchisees pay their licensing fees for use of the brand and related intellectual property to a Luxembourg company called McD Europe Franchising SARL. The Luxembourg company then pays an annual fee on to the parent company here in the U.S. The franchisees then deduct those royalties from their French income, which is taxed as high as 33.33%. But for 2012, the Luxembourg entity paid just $3.2 million in tax on $172 million in profit.

For their part, McDonald's responds that "McDonald's pays all of its taxes in France on the totality of its revenue, in line with current legislation." They add that they've paid a billion euros in company taxes since 2009 and they've cooperated fully with French tax authorities. French officials have launched similar investigations against Google, Amazon, Microsoft, and other corporations without finding fault.

Here's the real lesson. McDonald's didn't just wait until the end of the year to add up their income and hope to find a few deductions to pay less tax. They sat down, looked at the law, and planned a proactive menu of strategies to pay as little as possible. That sort of planning is the key to paying less tax. And you don't have to be a multinational corporation to do it. If you have your own business — even just a simple hamburger stand — call us for the plan you need to pay less. We're sure you'll enjoy some healthy and nutritious savings!

January 22, 2014

Excuses, Excuses

by Kenneth Hoffman in Business Counsel, Tax Counsel, Tax Planning

So-called "tax protestors" have dreamed up dozens of excuses for not paying the taxes the rest of us grumble about. They argue that the Sixteenth Amendment, which authorizes the government to levy an income tax without apportionment among the states, was never "properly ratified." They accuse the "alleged" Internal Revenue Service of being a massive premeditated conspiracy to defraud U.S. citizens. Some groups assert that the gold tassels around the American flags that stand in many federal courts are a "mutilation," rendering them "courts of admiralty" with no proper jurisdiction. Still others contend that taxpayers aren't required to file a federal tax return because the instructions associated with Form 1040 don't display an OMB control number as required by the Paperwork Reduction Act. (Can you imagine risking jail time on an argument like that?)

Well, the IRS has heard it all. They've published a web page identifying 40 Frivolous Positions for Taxpayers to Avoid. They've warned taxpayers about a $5,000 penalty for using any of these arguments in a return. They've even pointed out that courts sometimes don't even bother refuting the frivolous claims anymore. But now Charles Adams, whom the First Circuit Court of Appeals described as "an unabashed opponent of the tax laws," has come up with a new argument to avoid facing the music. Think he'll fare any better?

Adams and his various co-conspirators are affiliated with a protest group called Save-a-Patriot. They ran a payroll service that helped client companies pay their employees "under the table" so they could hide their income from the IRS. On March 19, 2004, a federal magistrate issued a warrant to search Adams's home in Wrentham, Massachusetts. Four days later, armed agents executed that warrant and seized evidence. Prosecutors eventually used that evidence to convict Adams of tax evasion. District Court Judge Dennis Saylor IV sentenced Adams to four years in the pokey, and Adams appealed to the First Circuit.

Sounds straightforward enough, right? Well, here's the problem. Internal Revenue Code Section 7608(a)(1), which gives revenue enforcement officers their power, explicitly authorizes agents enforcing laws pertaining to alcohol, tobacco, and firearms to carry guns. Section 7608(b), which deals with all other tax laws, does not. The agents who searched Adams's home were packing heat. Therefore — at least according to Adams — the search was unlawful and the evidence they found should be suppressed. (It's like that scene in every episode of Law and Order when the defense attorney asks the judge to throw out the evidence against his client. Usually the judge says no, but sometimes he makes the cops go out and re-prove their case all over again.)

Not buying it? Neither did the First Circuit. The three-judge panel said "whatever intrusion may have occurred was not of constitutional dimension." They dismissed Adams's arguments as "futile" and "unavailing," and concluded, "without serious question, that the district court did not blunder in refusing to grant the defendant's motion to suppress." Even Adams's own lawyer acknowledged that his "convoluted ideas and beliefs seem far-fetched."

It's easy to laugh at protesters like Charles Adams. Their theories are clever and entertaining. But their refusal to pay their share of the tax bill leaves the rest of us holding the bag. That's why it's so important for you to have a plan to pay the least amount of tax allowed by law. Our strategies are all court-tested and IRS-approved. So call us when you're ready for your plan. And remember, we're here for your family, friends, and colleagues too!

Let's Talk! For a deeper conversation on how this issue might affect you or your business, or to become a client, call Kenneth Hoffman at (954) 591-8290 Monday - Friday for a no cost consultation, or drop me a note.

Kenneth Hoffman of K.R. Hoffman & Co., LLC is a highly sought after tax and business counselor. Counseling Entrepreneurs, Professionals and Select Individuals who are struggling with ever changing tax laws and who are paying too much in taxes. All the while he is protecting his clients from the IRS and other taxing authorities using proactive tax planning strategies, ensuring compliance with minimal tax liability while bringing his clients Peace of Mind.

Click here to schedule an appointment with Kenneth Hoffman.

If you found this article helpful, I invite you to leave a comment and please share it on twitter, facebook or your favorite social media site and with your friends, family and colleagues. Thank you.

I truly value your business and I appreciate your referrals. Refer your family, friends, acquaintances, and business colleagues to KR Hoffman & Co., LLC.

Follow us on Twitter at @TaxReturnCoach, and let us know how we're doing.

Kenneth Hoffman -Tax Counsel to Entrepreneurs, Professionals and Select Individuals
KR Hoffman & Co., LLC
954-591-8290
www.krhoffman.com
info@krhoffman.com

January 15, 2014

The Endangered Species List

by Kenneth Hoffman in Tax Counsel, Tax Planning, Tax Preparation

On September 1, 1914, "Martha," the last remaining passenger pigeon (ectopistes migratorius), died at the Cincinnati Zoo. On September 7, 1936, "Benjamin," the last Tasmanian tiger (thylacinus cynocephalus), died at Australia's Hobart Zoo. And on June 24, 2012, "Lonesome George," the last living Pinta Island tortoise (chelonoidis nigra abingdoni), died in Ecuador's Galapagos National Park.

When you think of endangered species, you naturally think of plants and animals. But the IRS has its own endangered species list (called "listed transactions"), and that means sometimes even tax strategies go extinct. So, for example, in October, 2006, the last grandfathered private annuity trust was formed. On April 10, 2007, most so-called "Section 419(e)" plans were shot down. Now, could the venerable Swiss bank account (bankum secretus strongius) be next?

Switzerland's banking laws have long made it a crime to reveal an account holder's name. At the same time, Swiss authorities have historically refused to cooperate with foreign countries where failure to report taxable income is concerned. Together, these policies made Switzerland the banker of choice for Colombian druglords, Sub-Saharan kleptocrats, Russian oligarchs, and even the so-called "Wolf of Wall Street," Jordan Belfort.

But recently those protections have melted away like so much Swiss chocolate sitting in the bright alpine sun. It started back in 2008 when Bradley Birkenfeld, a mid-level banker, blew the whistle on helping American taxpayers "forget" to report millions of dollars of interest income. Birkenfeld's bombshell landed him a 40-month prison sentence and a $104 million reward from the IRS. A year later, the Department of Justice fined the biggest Swiss bank $790 million and cut a deal with the Swiss government, giving them power to force their banks to disgorge information on American depositors almost on demand. In 2012, an even stronger settlement required 300 Swiss banks to identify their American account holders or face their own penalties. Most recently, "Beanie Babies" creator Ty Warner pled guilty to evading $5 million in tax and agreed to a $53 million fine — and still faces four years in jail.

And now? Well, some observers say that Swiss banks are actually doing the IRS's job for them. Better to rat out clients than pay IRS fines! Banks are pressuring Americans to report their accounts, and even freezing accounts unless clients can prove they're playing by the new rules. U.S. attorneys are generally advising clients with secret accounts to 'fess up now before the IRS finds them and penalizes them 50% of their balances. At this point, attorneys say, discovery is a matter of "when," not "if." That message appears to be hitting home. Since 2009, over 38,000 Americans have come forth and paid over $5 billion in taxes, penalties, and interest. The once-celebrated Swiss bank account appears headed the way of the dodo, as far as U.S. tax cheats are concerned.

Look, we understand that everybody wants to pay less tax. But there's a right way to do it and there's a wrong way to do it. The right way is to take advantage of hundreds of legitimate deductions, credits, and strategies contained in the tax code and treasury regulations. And it all starts with a plan. We can give you that plan, and it doesn't involve a trip to Zurich or Geneva to visit your money. So call us now to see how much you might be overpaying. And if you really like cuckoo clocks, fine watches, and yodeling, you can take a legitimate trip with the savings!

January 8, 2014

Test Your Tax Knowledge

by Kenneth Hoffman in Business Counsel, Tax Counsel, Tax Planning

They say that knowledge is power, and that's especially true with taxes. So here's a quick quiz to test your tax knowledge in 2014. But look out — the questions (and the answers) might not be what you expect!:

We'll start with an easy one. Last year's "fiscal cliff" legislation raised the top marginal tax rate to 39.6%. What's the top effective rate?

A. 39.6%
B. 43.4% (39.6% plus 3.8% Medicare tax)
C. >43.4% (depending on "PEP" and "Pease" phaseouts)

Give up? It's a trick question — all three answers can be correct, depending on your own circumstances!

Alright, let's shift gears a bit. The tabloids love running stories about celebrities who run into tax trouble. After all, if they make so much money, shouldn't they be able to afford their taxes? So here's our next question — which of the following sets of celebrities ran into tax trouble in 2013?

A. Boxer Manny Pacquiao, rapper MC Hammer, and racecar driver Juan Pablo Montoya
B. Actor Stephen Baldwin, singer Lauryn Hill, and "Beanie Babies" creator Ty Warner
C. Actor Al Pacino, rapper Fat Joe, and "Real Housewife of New Jersey" Teresa Giudice

Well, which did you pick? The answer is, another trick question — every single one ran into tax problems last year!

Okay, final question. We know that tax laws can be impenetrably dense and hard to understand. So maybe "context" will give you a hint. Which of these passages is taken from the 2013 fiscal cliff act, and which is taken from California's workers' comp regulations?

A. "Notwithstanding any other provision of law, any refund (or advance payment with respect to a refundable credit) made to any individual under this title shall not be taken into account as income, and shall not be taken into account as resources for a period of 12 months from receipt, for purposes of determining the eligibility of such individual (or any other individual) for benefits or assistance (or the amount or extent of benefits or assistance) under any Federal program or under any State or local program financed in whole or in part with Federal funds."
B. "In the case of covered OPD services furnished on or after April 1, 2013, in a hospital described in clause (ii), if— (I) the payment rate that would otherwise apply under this subsection for stereotactic radiosurgery, complete course of treatment of cranial lesion(s) consisting of 1 session that is multisource Cobalt 60 based (identified as of January 1, 2013, by HCPCS code 77371 (and any succeeding code) and reimbursed as of such date under APC 0127 (and any succeeding classification group)); exceeds (II) the payment rate that would otherwise apply under this subsection for linear accelerator based stereotactic radiosurgery, complete course of therapy in one session (identified as of January 1, 2013, by HCPCS code G0173 (and any succeeding code) and reimbursed as of such date under APC 0067 (and any succeeding classification group)), the payment rate for the service described in subclause (I) shall be reduced to an amount equal to the payment rate for the service described in subclause (II)."

Drumroll, please . . . the answer is, it's another trick question — both examples of sterling prose appeared in the fiscal cliff law! (Quit complaining about the trick questions — it's a tax quiz, after all!)

Don't be upset if you didn't get all three questions right. (Nobody else did, either!) Fortunately, there isn't any real money at stake. But that won't be true come April 15. So call us now for the plan you need to come up with the right answers in 2014!

Kenneth Hoffman of K.R. Hoffman & Co., LLC is a highly sought after tax and business counselor. Counseling Entrepreneurs, Professionals and Select Individuals who are struggling with ever changing tax laws and who are paying too much in taxes. All the while he is protecting his clients from the IRS and other taxing authorities using proactive tax planning strategies, ensuring compliance with minimal tax liability while bringing his clients Peace of Mind.

Discover how I can help you overcome your tax and business challenges. To start the conversation or to become a client, call Kenneth Hoffman at (954) 591-8290 Monday - Friday for a no cost consultation, or drop me a note.

Click here to schedule an appointment with Kenneth Hoffman.

If you found this article helpful, I invite you to leave a comment and please share it on twitter, facebook or your favorite social media site and with your friends, family and colleagues. Thank you.

I truly value your business and I appreciate your referrals. Refer your family, friends, acquaintances, and business colleagues to KR Hoffman & Co., LLC.

Follow us on Twitter at @TaxReturnCoach, and let us know how we're doing.

December 27, 2013

Thoughts on Taxes for 2014

by Kenneth Hoffman in Tax Counsel, Tax Planning

2013 has been a big year for taxes. The "fiscal cliff" deal boosted the top federal income tax rate to 39.6%; "Obamacare" added new taxes on top earners; and dozens of state and local governments raised their taxes, too. Congress will finish 2013 even more divided than it began, which will probably protect us from new taxes next year. But here are some quotes to ease the sting of this year's higher bills:

"[A tax loophole is] something that benefits the other guy. If it benefits you, it is tax reform."
Sen. Russell B. Long (D-LA)
"The Eiffel Tower is the Empire State Building after taxes."
Anonymous
"Our party has been accused of fooling the public by calling tax increases 'revenue enhancement.' Not so. No one was fooled."
Dan Quayle
"When we played, World Series checks meant something. Now all they do is screw up your taxes."
Hall of Fame pitcher Don Drysdale
"When it comes to finances, remember that there are no withholding taxes on the wages of sin."
Mae West
"The question is: What can we, as citizens, do to reform our tax system? As you know, under our three-branch system of government, the tax laws are created by: Satan. But he works through the Congress, so that’s where we must focus our efforts."
Dave Barry
"Late one night, just blocks from the Capitol, a mugger jumped into the path of a well-dressed fellow and stuck a gun in his ribs. 'Give me your money,' the thief demanded. 'Are you kidding?' the man said. 'I’m a U.S. congressman.' 'In that case,' the mugger growled, cocking his weapon, 'give me my money.'"
Playboy Magazine
"A government which robs Peter to pay Paul can always depend on the support of Paul."
George Bernard Shaw

On a more serious note, we wish you all the best this holiday season, and we look forward to serving all your tax-planning needs in 2014!

December 11, 2013

"Ardente!" is Portuguese for "Hot!"

by Kenneth Hoffman in Tax Counsel, Tax Planning

Tax collectors generally don't choose their line of work for the pay. Glassdoor.com, a gossipy website covering salaries and careers, reports the average Revenue Agent earns $73,967. Careerbliss.com tells us the average criminal investigator earns $99,000 — which makes sense considering there's at least a chance they get shot at while working. That's not bad coin . . . but it's hardly enough to party with the rich and famous.

But what's true here in the United States may not be true in the rest of the world. Our neighbors to the south in Brazil have been transfixed lately by a sordid scandal of glitz and bling featuring — you guessed it — a gang of tax collectors, accused of helping construction companies evade over $200 million in taxes.

Our story starts, as so many tawdry stories do, with a woman scorned. Luis Alexandre Cardoso de Magalhaes met his former girlfriend, Vanessa Alcantara, at a sleazy nightclub. (She says they met when she tried to sell him a cellphone plan.) Magalhaes worked as a tax inspector for the city of Sao Paolo, earning $82,000 to oversee the city's "Imposto sobre Servicos," or service tax. He was also, it turns out, working with three other officials to help developers evade the tax. The builders delivered bags of cash with up to $30,000 every week to his office. Magalhaes would spirit the cash out of the building, and he and Alcantara would count it and divvy it up together in her living room.

And what did our young lovers do with their ill-gotten gains? Secure their retirement with a portfolio of carefully diversified mutual funds and prudently-laddered municipal bonds? (That wouldn't make much of a story, would it?) No — they blew the loot on $500 boxes of Cuban cigars, $2,260 bottles of wine, a Porsche Cayenne, and private plane rides to resorts on Angra dos Reis, an island off the coast. The couple dropped $50,000 to decorate Alcantara's apartment and splurged on $2,200 hotel suites. Magalhaes also showered up to $4,500 a night on a cavalcade of young women who valued their cash flow more than their virtue.

The party came to an end, as all parties must, when Magalhaes and Alcantara separated after giving birth to a son, and Alcantara became enraged at what she saw as a meager monthly child support offer. She dimed him out to city prosecutors, and the story went straight to the tabloids. The case has even produced two brand-new celebrities — Magalhaes's new girlfriend, Nagila Coelho, a personal trainer who plans to start her own line of bikinis, and Alcantara herself, who plans to run for office. Her proposed slogan? "Being a thief is easy; I'll be honest among the thieves."

We understand that you want to pay less tax, too. But we know you're not willing to risk scandal to do it. So we give you a plan to pay less, legally. Everything we do is court-tested and IRS-approved. The best part is, there's still time to act before 2013 draws to a close. So call us now for the plan you need!