Forum for Enterprise

Deductions provide a windfall for taxpayers if they are taken!

2013-02-09T20:19:00.002-08:00

One thing we know for sure is that the opportunity to make mistakes is almost unlimited, and missed deductions can be the most costly. About 45 million of us itemize on our 1040s -- claiming more than $1 trillion worth of deductions. That's right: $1,000,000,000,000, a number rarely spoken out loud until Congress started tying itself up in knots trying to deal with the budget deficit and national debt.

Another 92 million taxpayers claim about $700 billion worth using standard deductions -- and some of you who take the easy way out probably shortchange yourselves. (If you turned 65 in 2012, remember that you now deserve a bigger standard deduction than when you were younger.)

Yes, friends, tax time is a dangerous time. It's all too easy to miss a trick and pay too much. Years ago, the fellow who ran the IRS at the time told the public that he figured millions of taxpayers overpay their taxes every year by overlooking just one of the money-savers listed below.

State sales taxes
This is an especially dangerous issue for 2012 returns because, throughout 2012, this tax deduction simply didn't exist. The right for taxpayers to deduct state sales taxes paid expired at the end of 2011. Everyone expected Congress to revive the tax break sometime during 2012, but the issue got tangled up in fiscal cliff negotiations. Finally, in the bill approved January 1, 2013, the deduction was restored ... retroactively for 2012 and for 2013 returns that will be filed next year.

This is particularly important to you if you live in a state that does not impose a state income tax. You see, Congress offers you the choice between deducting state income taxes paid or state sales taxes paid. You choose whichever gives you the largest deduction, of course, and if your state doesn't have an income tax, the sales tax write-off is clearly the way to go.

In some cases, even filers who pay state income taxes can come out ahead with the sales tax choice.

The IRS has tables that show how much residents of various states can deduct, based on their income and state and local sales tax rates. But the tables aren't the last word. If you purchased a vehicle, boat or airplane, you may add the sales tax you paid on that big-ticket item to the amount shown in the IRS table for your state.

The same goes for any homebuilding materials you purchased. These add-on items are easy to overlook, but could make the sales-tax deduction a better deal even if you live in a state with an income tax. The IRS has a calculator on its Web site to help you figure the deduction. (As this is written, the IRS is working to update the calculator for 2012 returns.)

Reinvested dividends
This isn't really a tax deduction, but it is an important subtraction that can save you a bundle. And this is the break that former IRS commissioner told the public that a lot of taxpayers miss.

If, like most investors, your mutual fund dividends are automatically used to buy extra shares, remember that each reinvestment increases your tax basis in the fund. That, in turn, reduces the taxable capital gain (or increases the tax-saving loss) when you redeem shares. Forgetting to include the reinvested dividends in your basis results in double taxation of the dividends -- once when they were paid out and immediately reinvested in more shares and later when they're included in the proceeds of the sale. Don't make that costly mistake.

If you're not sure what your basis is, ask the fund for help. (Starting with sales in 2012, mutual funds must report to investors -- and the IRS -- the tax basis of shares redeemed during the year. But note this: The new rule applies only to shares purchased in 2012 and later years. If you redeemed shares you purchased prior to 2012, it's still up to you to figure your basis. Don't forget those reinvested dividends!)

Out-of-pocket charitable contributions
It's hard to overlook the big charitable gifts you made during the year, by check or payroll deduction (check your December pay stub).

But the little things add up, too, and you can write off out-of-pocket costs incurred while doing work for a charity. For example, ingredients for casseroles you prepare for a nonprofit organization's soup kitchen and stamps you buy for your school's fundraising mailing count as a charitable contribution. Keep your receipts and if your contribution totals more than $250, you'll need an acknowledgement from the charity documenting the support you provided. If you drove your car for charity in 2012, remember to deduct 14 cents per mile plus parking and tolls paid in your philanthropic journeys.

Student-loan interest paid by Mom and Dad
Generally, you can only deduct mortgage or student-loan interest if you are legally required to repay the debt. But if parents pay back a child's student loans, the IRS treats the money as if it was given to the child, who then paid the debt. So, a child who's not claimed as a dependent can qualify to deduct up to $2,500 of student-loan interest paid by Mom and Dad. And he or she doesn't have to itemize to use this money-saver. Mom and Dad can't claim the interest deduction even though they actually foot the bill since they are not liable for the debt.

Job-hunting costs
If you're among the millions of unemployed Americans who were looking for a job in 2012, we hope you kept track of your job-search expenses ... or can reconstruct them. If you're looking for a position in the same line of work, you can deduct job-hunting costs as miscellaneous expenses if you itemize. Qualifying expenses can be written off even if you didn't land a new job. In any case, such expenses can be deducted only to the extent that your total miscellaneous expenses exceed 2% of your adjusted gross income. Job-hunting expenses incurred while looking for your first job don't qualify. Deductible job-search costs include, but aren't limited to:

Transportation expenses incurred as part of the job search, including 55.5 cents a mile for driving your own car plus parking and tolls
Food and lodging expenses if your search takes you away from home overnight
Cab fares
Employment agency fees
Costs of printing resumes, business cards, postage, and advertising

The cost of moving for your first job
Although job-hunting expenses are not deductible when looking for your first job, moving expenses to get to that job are. And you get this write-off even if you don't itemize.

To qualify for the deduction, your first job must be at least 50 miles away from your old home. If you qualify, you can deduct the cost of getting yourself and your household goods to the new area. If you drove your own car on a 2012 move, deduct 23 cents a mile, plus what you paid for parking and tolls.

Military reservists' travel expenses
Members of the National Guard or military reserve may tap a deduction for travel expenses to drills or meetings. To qualify, you must travel more than 100 miles from home and be away from home overnight. If you qualify, you can deduct the cost of lodging and half the cost of your meals, plus an allowance for driving your own car to get to and from drills. For 2012 travel, the rate is 55.5 cents a mile, plus what you paid for parking fees and tolls.

Deduction of Medicare premiums for the self-employed
Folks who continue to run their own businesses after qualifying for Medicare can deduct the premiums they pay for Medicare Part B and Medicare Part D and the cost of supplemental Medicare (medigap) policies. This deduction is available whether or not you itemize and is not subject the 7.5% of AGI test that applies to itemized medical expenses. One caveat: You can't claim this deduction if you are eligible to be covered under an employer-subsidized health plan offered by your employer (if you have a job as well as your business) or your spouse's employer if he or she has a job that offers family medical coverage.

Child-care credit
A credit is so much better than a deduction; it reduces your tax bill dollar for dollar. So missing one is even more painful than missing a deduction that simply reduces the amount of income that's subject to tax. In the 25% bracket, each dollar of deductions is worth a quarter; each dollar of credits is worth a greenback.

You can qualify for a tax credit worth between 20% and 35% of what you pay for child care while you work. But if your boss offers a child care reimbursement account -- which allows you to pay for the child care with pre-tax dollars -- that might be an even better deal. If you qualify for a 20% credit but are in the 25% tax bracket, for example, the reimbursement plan is the way to go. (In any case, only amounts paid for the care of children under age 13 count.)

You can't double dip. Expenses paid through a plan can't also be used to generate the tax credit. But get this: Although only $5,000 in expenses can be paid through a tax-favored reimbursement account, up to $6,000 for the care of two or more children can qualify for the credit. So, if you run the maximum through a plan at work but spend even more for work-related child care, you can claim the credit on as much as $1,000 of additional expenses. That would cut your tax bill by at least $200.

Estate tax on income in respect of a decedent
This sounds complicated, but it can save you a lot of money if you inherited an IRA from someone whose estate was big enough to be subject to the federal estate tax.

Basically, you get an income-tax deduction for the amount of estate tax paid on the IRA assets you received. Let's say you inherited a $100,000 IRA, and the fact that the money was included in your benefactor's estate added $35,000 to the estate-tax bill. You get to deduct that $35,000 on your tax returns as you withdraw the money from the IRA. If you withdraw $50,000 in one year, for example, you get to claim a $17,500 itemized deduction on Schedule A. That would save you $4,900 in the 28% bracket.

State tax paid last spring
Did you owe tax when you filed your 2011 state income tax return in the spring of 2012? Then, for goodness' sake, remember to include that amount in your state-tax deduction on your 2012 federal return, along with state income taxes withheld from your paychecks or paid via quarterly estimated payments.

Refinancing points
When you buy a house, you get to deduct in one fell swoop the points paid to get your mortgage. When you refinance, though, you have to deduct the points on the new loan over the life of that loan. That means you can deduct 1/30th of the points a year if it's a 30-year mortgage. That's $33 a year for each $1,000 of points you paid -- not much, maybe, but don't throw it away.

Even more important, in the year you pay off the loan -- because you sell the house or refinance again -- you get to deduct all as-yet-undeducted points. There's one exception to this sweet rule: If you refinance a refinanced loan with the same lender, you add the points paid on the latest deal to the leftovers from the previous refinancing -- and deduct that amount gradually over the life of the new loan. A pain? Yes, but at least you'll be compensated for the hassle.

Jury pay turned over to your employer
Many employers continue to pay employees' full salary while they serve on jury duty, and some impose a quid pro quo: the employees have to turn over their jury pay to the company coffers. The only problem is that the IRS demands that you report those jury fees as taxable income. To even things out, you get to deduct the amount you give to your employer.

But how do you do it? There's no line on the Form 1040 labeled jury fees. Instead the write-off goes on line 36, which purports to be for simply totaling up deductions that get their own lines. Add your jury fees to the total of your other write-offs and write "jury pay" on the dotted line.

American Opportunity Credit
Unlike the Hope Credit that this one has temporarily replaced, the American Opportunity Credit is good for all four years of college, not just the first two. Don't shortchange yourself by missing this critical difference. This tax credit is based on 100% of the first $2,000 spent on qualifying college expenses and 25% of the next $2,000 . . . for a maximum annual credit per student of $2,500. The full credit is available to individuals whose modified adjusted gross income is $80,000 or less ($160,000 or less for married couples filing a joint return). The credit is phased out for taxpayers with incomes above those levels. If the credit exceeds your tax liability, it can trigger a refund. (Most credits can reduce your tax to $0, but not get you a check from the IRS.)

Deduct those blasted baggage fees
In recent years airlines have been driving passengers batty with extra fees for baggage and for making changes in travel plans. All together, such fees add up to billions of dollars each year. If you get burned, maybe Uncle Sam will help ease the pain. If you're self-employed and travelling on business, be sure to add those cost to your deductible travel expenses.

Credits for energy-saving home improvements
It's widely believed that tax credit for energy saving home improvement have expired. And that's true for the credits that encouraged homeowners to replace windows and doors, add insulation and upgrade air conditioning and furnace systems to more energy-efficient units. But the most valuable credits still exist ... and will through 2016. These credits effectively refund 30% of the cost (including labor) of installing l qualified residential alternative energy equipment, such as solar hot water heaters, geothermal heat pumps and wind turbines. If you installed such a system in 2012, be sure to let Uncle Sam lend you a hand with the cost.

Additional bonus depreciation
A break that allowed business owners -- including those who run businesses out of their homes -- to write off 100% of the cost of qualified assets placed in service expired at the end of 2011. Although Congress did not extend this break retroactively as part of the fiscal cliff deal, bonus deprecation didn't disappear completely – it's available at the 50% level for qualified assets purchased in 2012.

Perhaps more valuable is a break Congress did make retroactive for 2012 purchases. The lawmakers restored a supercharged “expensing” provision -- which basically lets you write off the full cost of new assets in the year you put them into service. While the dollar limit for expensing had fallen to $139,000 worth of assets for 2012, the fiscal cliff deal boosted the cap to $500,000. Note that the right to use expensing phases out if you put more than $2 million worth of assets into service in 2012

Break on the sale of demutualized stock
The year 2012 brought another court victory for taxpayers battling the IRS over the issue of demutualized stock. That's stock that a life insurance policyholder receives when the insurer switches from being a mutual company owned by policyholders to a stock company owned by stockholders. The IRS's longstanding position is that such stock had no tax basis, so that when the shares were sold, the taxpayer owed tax on 100% of the proceeds of the sale. But after a long legal struggle, a federal court ruled in 2009 that the IRS was wrong. And this year, a federal district court sided with taxpayers, too. The courts haven't said what the basis of the stock should be, but many experts think it's whatever the shares were worth when they were distributed to policyholders. If you sold stock in 2012 that you received in a demutualization, be sure to claim a basis to hold down your tax bill.

Tax-free transit subsidy
The fiscal cliff deal signed by President Obama's autopen on January 2 brought a retroactive break for commuters who use public transit to get to work in 2012. Last year, folks who drove to work could receive up to $240 tax-free from their employers to cover the cost of parking. But, due to a glitch in the law, workers who used mass transit were limited to $125 a month tax-free to pay for their bus, subway and train rides to the job. The new law brings parity to the tax break, hiking the tax-free limit for transit expenses to $240 ... retroactive to January 1, 2012.

At this writing, it's unclear exactly how transit riders will be able to claim this money-saver. But if your employer offers a transit-subsidy program and you spent more than $125 a month in 2012, you could be due a refund of both income and Social Security taxes. Check with your human resources office.
Contact Chet at 888-753-2521 ofc or email questions to taxmax@rocketmail.com .

IRS Due Diligence and Compliance

2013-01-28T23:33:00.001-08:00

Current requirements for taxpayers this year is going to be easier for the employed and self employed non ethnic filers. The self employed that have been immersed in a culture rich with deception and the illusion of wrong doing will find it more difficult. Many have missed filing for years and they actually qualify for the earned income credit. Not only do they qualify for the earned income credit, but they should also be participants in the first time home buyer program.

No one need till many of the taxpayers that they have done nothing wrong. The belief of righteousness as a relationship to employment is so conditioned into the fiber of many low income taxpayers that they believe that they are actually income deficient. In actuality, they are not. Many can document their income quite well, but in many cases they are persuaded to allow someone else to climb their children fraudulently. This will come to a screeching halt this year as a result of the due diligence requirements and documentation needed to support and claim a dependent for the child credit.

The economic turnaround will occur once again without engaging the economy of low income African Americans that are actually ripe for participants in the first time home buyer program. Unless low income self employed filers are taken seriously as taxpayers. The difficulty herein is the IRS's aggression toward the fabric of the African American culture and what they have done to survive into the transition of the millennium and the recent depression could undermine this much needed movement. Participate in this recovery by telling your friends and family claim their own kids and follow someone who has guidelines for documenting income and their dependent's residency.

Many of us know some African Americans that have never filed taxes because they don't have a job, but have allowed themselves to be exploited by their friends and family because they are not aware of how to document their income. The IRS requirements for allowing a refund in case of an audit of these individuals perpetuates this exploitation by requiring many self employed low income taxpayers to have license, website, journals and operational books of receipts and expenses for income documentation. Many of these taxpayers earn income and should step forward and file.

This harrasment by the IRS should stop and actually be a gimme to low income taxpayers that meet earned income credit requirements because many of them have cars, homes, clothes, electronics and I am finding that it wasn't obtained illegally. See from observations I have noticed peddlers selling watches as if they are stolen, but they where actually purchased from the Merchandise Mart and marketed in parking lots as if they are hot to make the purchase seem as if it's a discount. The delusion is a setback to African Americans cultural social economy.

There are ways to document legitimate income made from babysitting, baking cakes, selling scrap metals, selling goods on eBay or craigslist, referring clients in your circle of influence for a fee and tons of things that people do on a day to day basis. Transferring this information to forms that conform to due diligence requirements has not guaranteed refunds for many clients that qualify for the earned income credit. Cultural difference may be taken into account at some point in the future and presentation is everything. Documentation is key and that will be taken into account. Meanwhile, as we wait, write your congressman and share the information that you have learned.

Contact my group at 888-753-2521 ofc or 888-675-0583 fax or request documents by emailing me at chet.thecontroller@gmail.com .

Health Related Tax Credit

2013-01-13T19:48:00.000-08:00

Eligibility for the Refundable Health Related Tax Credit Tightened
Code ˜36B currently provides a premium assistance credit for eligible individuals and families who buy health insurance through an exchange. The credit, which applies to tax years ending after December 31, 2013, is refundable and subsidizes the purchase of certain health insurance plans through an exchange.
The credit is available to individuals who file single or married filing joint with household incomes between 100% and 400% of the federal poverty level and who do not receive health insurance through an employer or a spouse employer.
For purposes of the credit, household income is defined as the sum of: (1) the taxpayer's modified adjusted gross income (MAGI), plus (2) the aggregate MAGI of all other individuals taken into account in determining that taxpayer's family size (but only if those individuals must file a tax return for the tax year). Under existing law, MAGI is defined as adjusted gross income increased by: (1) any amount excluded by Code 911 (exclusion from gross income for citizens or residents living abroad), plus (2) any tax exempt interest received or accrued during the tax year.
The 3% Withholding Repeal and Job Creation Act signed into law by President Obama on November 21, 2011 revises the definition of MAGI to include the amount of the taxpayers Social Security benefits that are otherwise excluded from gross income. As a result, MAGI is now defined as adjusted gross income plus: (1) any amount excluded by Code Sec. 911 (exclusion from gross income for citizens or residents living abroad); (2) any tax exempt interest received or accrued during the tax year; and (3) the
amount of Social Security benefits of the taxpayer that is excluded from gross income under Code 86. Call 888-753-2521or email chet.thecontroller@gmail.com for more information.

Tax Deductible Life Insurance, but how?

2012-10-29T15:54:00.002-07:00

Universal Life Insurance

Universal Life Insurance is a form of Permanent Life Insurance, with considerable differences between the two. This form of insurance was created to provide customers with a better understanding of their policy and relieve them of some of the stricter policy provisions that come with standard whole life insurance.

Universal Life Insurance: How it Works

With universal life, the policyholder can arrange the benefits to meet his or her needs. The policyholder controls how much of the premium is paid toward the insurance and toward the savings, and can change the value of the policy as well. There may be a specific limit to how much the policy can be changed at one time, especially if the policyholder does not provide another health exam. Increases in the death benefit usually require updated proof of insurability. Universal life policies also allow for changing the amount and timing of premiums from time to time, as long as the premium covers the cost of monthly maintenance of the policy and maintains a basic benefit amount. If you fail to cover these minimum premiums, the death benefit of your policy can be greatly reduced.

Get a Quote for Life Insurance Today >>

Choosing a Universal Life Policy

Universal life policies usually have a minimum interest rate, but the rates can fluctuate similarly to a money market account. Therefore there are no guarantees as far as savings or cash value earnings. However, the growth of these accounts is at a substantially higher rate than average whole life insurance. These policies can sometimes allow any dividends paid by the insurer to be placed in the cash value account, as well.

Universal life insurance is the perfect policy for someone who has yet to purchase a home or start a family but expects to do so in the future because of its easy changeability and quick profit margin. However, because it involves more participation from the policyholder, consultation is recommended.

For more info on makeing this tax deductible contact:

www.thecontroller.net or chet@thecontroller.net

ROBS Plans.

2012-10-29T12:06:00.004-07:00

ROBS plans, while not considered an abusive tax avoidance transaction, are, according to the IRS, "questionable" because they may solely benefit one individual – the individual who rolls over his or her existing retirement 401k withdrawal funds to the ROBS plan in a tax-free transaction. In most cases, since the IRS pronouncement concerning this potentially discriminatory approach, ROBS plans have been inclusive of all participants and provide broad-based participation for all employees. The ROBS plan then uses the rollover assets to purchase the stock of the new business. A C corporation must be set up in order to roll the 401K withdrawal.
Promoters, such as a Roth IRA broker of a self directed IRA LLC, or small business financing, aggressively market IRS ROBS arrangements to prospective entrepreneurs and business owners for funding for a business as small business financing. In the case of most ROBS facilitators, there is a very close relationship between the promoter/facilitator and the franchise industry, seeking to sell and promote business "opportunities" and seeking funding sources for these sales and promotions. Most ROBS "promoters" and facilitators pay substantial referral fees to the franchise brokers who refer business to the promoters. Rarely are these fees disclosed to the entrepreneur. Fees charged by most "promoters," consequently, are in excess of the fees that would be charged by attorneys and accountants for the same services who are prohibited from paying referral fees. There remains a substantial question whether such referral fees are illegal under ERISA and the U.S. Criminal Code: Offer, Acceptance, or Solicitation to Influence Operations of Employee Benefit Plan (18 U.S.C. Section 1954).
In many cases, the broker will apply to IRS for a favorable determination letter (DL) as a way to assure their clients that IRS approves the ROBS arrangement. The IRS issues a DL based on the plan’s terms meeting Internal Revenue Code requirements. DLs do not give plan sponsors protection from incorrectly applying the plan’s terms or from operating the plan in a discriminatory manner. When a plan sponsor administers a plan in a way that results in prohibited discrimination or engages in prohibited transactions, it can result in plan disqualification and adverse tax consequences to the plan’s sponsor and its participants. Accordingly, promoters who emphasize or "promote" base on a favorable determination letter are, at a minimum, engaging in deceptive trade practices.

ROBS Project Findings

New Business Failures
Preliminary results from the ROBS Project indicate that, although there were a few success stories, most ROBS businesses either failed or were on the road to failure with high rates of bankruptcy (business and personal), liens (business and personal), and corporate dissolutions by individual Secretaries of State. Some of the individuals who started ROBS plans lost not only the retirement assets they accumulated over many years, but also their dream of owning a business. As a result, much of the retirement savings invested in their unsuccessful ROBS plan was depleted or ‘lost,’ in many cases even before they had begun to offer their product or service to the public. These findings are questionable since there are many ROBS arrangements in which the businesses are quite successful and represent very prudent alternatives to more traditional investments.
Specific Problems with ROBS
Some other areas the ROBS plan could run into trouble:

After the ROBS plan sponsor purchases the new company’s employer stock with the rollover funds, the sponsor amends the plan to prevent other participants from purchasing stock. Since the 2008 announcement from the IRS such amendments are rare.
If the sponsor amends the plan to prevent other employees from participating after the DL is issued, this may violate the Code qualification requirements. These types of amendments tend to result in problems with coverage, discrimination and potentially result in violations of benefits, rights and features requirements.
Promoter fees
Valuation of assets
Failure to issue a Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc., when the assets are rolled over into the ROBS plan.

More Info:
www.thecontroller.net or contact chet@thecontroller.net

Do's and Don'ts of Tranactions for Self Directed IRA's

2012-10-29T11:51:00.002-07:00

Prohibited Asset Types
IRS regulations prohibit IRA investments in life insurance and in collectibles such as artwork, rugs, antiques, metals (there are exceptions for certain kinds of bullion), gems, stamps, coins (there are exceptions for certain coins minted by the U.S. Treasury), alcoholic beverages, and certain other tangible personal property.

Prohibited Transactions

IRS regulations prohibit transactions that are an improper use of the value in the account or annuity by the account owner, the account owner's beneficiary, or any other disqualified person. These rules are generally designed to prevent self-dealing. Disqualified persons include your fiduciary and members of your family, such as your spouse, ancestor, lineal descendant (e.g. children), and any spouse of a lineal descendant). In addition, other disqualified persons include:

Service providers of the IRA (e.g., custodian, CPA, financial planner);
An entity (such as a corporation, partnership, limited liability company, trust or estate) of which 50% or more is owned directly or indirectly or held by a fiduciary or service provider;
An entity that is a 10% or more partner or joint venturer of with an entity that is 50% or more owned directly or indirectly or held by a fiduciary or service provider;
Additionally, in the case of a SEP or SIMPLE IRA:
- The Employer;
- 50% or more owner of the Employer;
- Officers, directors, 10% or more shareholders, and highly compensated employees of the Employer;
- An entity 50% or more owned by the Employer;
- 10% or more partner or joint venturer of the Employer.

The following are prohibited transactions with an IRA:

Borrowing money from it.
Selling property to it.
Receiving unreasonable compensation for managing it.
Using it as security for a loan.
Buying property for personal use (present or future) with IRA funds.

If the account owner or beneficiary engaged in a prohibited transaction, the account is treated as distributing all its assets to you at their fair market values on the first day of the year in which the transaction occurred. The distribution would be subject to any taxes or penalties associated with an early distribution. Generally, a 10% early withdrawal penalty and treatment of the distribution as ordinary income for the purposes of income taxes.
Examples of self-dealing include:

Having your IRA purchase real estate that you own or use.
Issuing a mortgage on a relative’s new residence purchased by a family member who is a disqualified person as listed above.
Granting a child a second mortgage for the down payment on his or her first home.
Buying stock from the account owner involving IRA funds and a disqualified person.
Purchasing stock in a closely held corporation in which the account owner has a controlling equity position.
Purchasing restricted stock from a family member who is a disqualified person listed above.

Common Permitted Investments

Some of the additional investment options permitted under the regulations include real estate, stocks, mortgages, franchises, partnerships, private equity and tax liens. Real estate may include residential and commercial properties (U.S. & Internationally), farmland, raw land, new construction, property renovation, development, and passive rental income. Real estate purchased in a self-directed IRA can have a mortgage placed against the property, thus lowering the amount of total cash needed for a purchase; however, neither the IRA nor the account owner of the IRA can have personal liability on the mortgage. Business investments may include partnerships, joint ventures, and private stock. This can be a platform to fund a start-up business or other for-profit venture that is managed by someone other than the account owner of the IRA. Other alternative investments include: commodities, hedge funds, commercial paper, foreign stock, royalty rights, equipment & leases, American depository receipts, and U.S. T-bill

Limited liability company structured IRA

In an effort to reduce fees, paperwork, and processing delays, some self-directed IRA investors choose to employ a Limited Liability Company (LLC) IRA structure. In such a structure the account holder directs his IRA custodian to invest into a limited liability company that the account owner manages himself. The account owner can then execute transactions on the LLC level without the involvement of the IRA custodian, thus reducing fees and eliminating custodian transactional fees and delays. The profits of the LLC pass through to the IRA with nearly identical tax favorable treatment. Some claim that this IRA LLC strategy has been legitimized through a tax court case: Swanson v. Commissioner, 106 T.C. 76 (1996). Others disagree on the validity of the court case.^[1] Some refer to this structure as "checkbook control" because the IRA account holder often has sole signing authority for the LLC and its bank accounts.
Although Swanson v. Commissioner doesn't directly relate to a single member IRA LLC, but instead merely sets a precedence that an individual can control an entity owned by an IRA or IRAs that they are a disqualified person to, there are other cases, private letter rulings and IRS Memorandums that collaborate the validity of the IRA LLC and Checkbook Control over an IRA. To quote a few:
Ancira v. Commissioner 119 T.C. No. 6 (2002)- Ancira acted as a conduit for her self directed IRA custodian
DOL Advisory Opinions 97-23A and 2005-03A - The Department of Labor takes the position that if an asset is owned 100% by a plan, that asset becomes the plan
IRS Field Service Advice 200128011 - IRS Confirms: "The type of investment that may be held in an IRA is limited only with respect to insurance contracts, under section 408(a)(3), and with respect to certain collectibles, under section 408(m)(1").

More Info:
More Info:
www.thecontroller.net or contact chet@thecontroller.net

The Ultimate Self Directed IRA

2012-10-29T11:41:00.001-07:00

The Ultimate IRA redefines investment freedom.

True Diversification. With the Ultimate Self-directed IRA you can invest your retirement funds directly into real estate, tax liens, small businesses, private placements, personal loans, foreclosures, gold & silver and all other alternative (i.e. non-Wall Street) investments that are not available through a typical IRA. Of course, you can continue to invest your retirement funds in all traditional investments (e.g. stocks, bonds, mutual funds, etc.)
Checkbook Control. The Ultimate IRA comes with a checking account, which we will assist you in setting-up at your bank so your retirement funds will always be under your control. Once the account is set-up, it's easy to begin placing investments, all you have to do is simply write a check. This enables you to move quickly when time-sensitive opportunities and other on-the-spot investments present themselves.
Investment Control. The Ultimate IRA is the ultimate self-directed IRA, giving you complete control over your retirement account, enabling you to make all investment decisions alone, or with the help of a financial professional.
Tax-Deferred Investing. The Ultimate IRA enables you to take control of your retirement funds without incurring any early distribution penalties or taxes. Furthermore, the profits generated from your investments flow back into your account and continue to grow tax-deferred, or tax-free in the case of a Roth, helping you build the retirement you want.
Rollover Options. Your Ultimate IRA can be funded by transferring or rolling-over funds from any of your existing retirement accounts or plans IRA, 401K, Roth IRA, SEP IRA, Keogh, 403b, etc., or by making an initial contribution.
Limited Fees. Once your Ultimate IRA is set-up, there are no asset-based-holding fees or transaction fees, rather there is a low fixed annual fee regardless of how large your account is or how many transactions you place during the year.

How does the Ultimate Self-Directed IRA work?

Let’s look under the hood of the self-directed IRA, and see how it works.

Broad starts the process by facilitating a new self-directed IRA at a registered self-directed IRA custodian.
With the new self-directed IRA in place, funds from previous retirement accounts (IRA, 401K, etc.) can now be rolled over. Or the account can be started with an initial contribution.
Broad then sets up a Limited Liability Company (LLC) for the self-directed IRA. This is an important step as the LLC will serve as the investing platform for the plan. Each LLC is customized to adhere to the laws and regulations which govern self-directed IRA investment platforms.
Capitalization now occurs by instructing the self-directed custodian to invest the self-directed IRA in the newly formed LLC. This is a process that is similar to buying stock, i.e. the self-directed IRA buys all the “shares” of the LLC. The self-directed IRA now owns the LLC.
The custodian sends a capitalization check to the account holder. The account holder can now open a checking account at the bank of their choosing in the name of their LLC.
And now… start investing!

How easy is it to set up the Ultimate Self-Directed IRA?

The Broad process for establishing a self-directed IRA has been crafted with only one consideration: you. As a company whose defining hallmark is industry leading customer service, we’ve worked hard to make sure that your experience is smooth and hassle-free. Our team of accountants, self-directed specialists, and attorneys is dedicated to giving you a complete package. We’ll hold your hand the entire way, and we’re always available for any questions you may have.

More Info:
www.thecontroller.net or contact chet@thecontroller.net

Don't make these mistakes when buying or starting a business!

2012-09-27T05:38:00.000-07:00

I have invested, owned, developed, bought and sold many businesses. I am currently acquiring a litany of operations and real estate holdings. I found these to be mistakes that can get you into trouble quickly in business.

Mistake #1 – Paying too much
This results from the combination of all the other mistakes. Many new business owners set themselves up for failure by paying too much, which results in higher loan payments, lower operating funds, and reduced borrowing capacity.
Mistake #2 – Letting your emotions rule
If you have always dreamed of owning a business, it is very easy to get caught up in the strong emotions invoked by seeing those dreams coming true. To counteract your emotions, take your time, do your homework, and enlist the help of objective advisors.
Mistake #3 – Paying for potential
You should only pay for the business as it stands at the date of purchase, not what it could be in the future. You will have to spend time, effort, and money to develop its potential. The seller chose not to invest in these things, so he does not deserve to be paid for them.
Mistake #4 – Not evaluating yourself
Do you have what it takes to run this business? Try to match your strengths to the important duties you will be required to perform. Running a small business requires the owner to do many things. No one can be good at them all, so make provisions for those areas in which you are the weakest. Some tasks like payroll and bookkeeping can easily be contracted to outside vendors. Possibly your spouse, other family member, or a partner could do things that you cannot or do not want to do.
Mistake # 5 – Not building a team of experts
At a bare minimum, you should enlist the aid of an attorney and a CPA. The attorney can prepare and review documents, help structure the deal, and make you aware of legal and liability issues. The CPA can provide a financial analysis of the business, and advise you about tax and accounting matters. You should also consider adding a business valuation professional to your team. His valuation report can be used to determine the reasonableness of the asking price, negotiate a lower price, and provide valuable information about the business, the industry, competition, and economic conditions.
Mistake #6 – Not verifying information
You should verify all important information about the business. Your CPA can check financial information like receivables, payables, and inventory. Your attorney can review loan documents, leases, and contracts. Your business valuation professional can analyze the competition, the industry, and the economic conditions. Use independent appraisers to value real estate and equipment. Get a credit report on the business through your CPA or banker. You can do some of the investigating yourself to save money, but do not cut too many corners – it may cost you in the long run.
Mistake #7 – Changing too much, too fast
Once you own the business, you will be tempted to start making wholesale changes from day one. You risk alienating long-time employees and customers. Unless the business is in bad financial condition and needs immediate action, its better to take some time to get to know the business, your employees, and your customers before making changes. This is a perfect time to solicit suggestions from employees and customers.
Mistake #8 – Buying a business because you like to do what the business does
One reason restaurants have a high failure rate is people buy or start them because they like to cook. Very few restaurant owners spend time cooking. Their time is spent managing staff, ordering supplies, doing paperwork, and handling daily crises. A small business owner must wear many hats – including that of manager.
Conclusion
Buying a business is a complicated, emotional process. By avoiding these costly mistakes, you can prevent turning your dream into a nightmare.
Courtesy of GlobalBx, October 14, 2009

Posted in Business Brokerage, Business Buyers, Buy A Business, Buyer Financing, Investing, SBA | 1 Comment

Tax avoidance is not illegal, but just smart business

2012-08-07T08:46:00.003-07:00

The IRS is hiring over 100,000 new personnel to address tax evasion, non payment of payroll liability and for the performance of audits. The momentun is shifting away from corporations.   I service a diverse niche of individuals as well as small to medium size businesses which include; medical facilities, manufactorers, retail operations and federal contractors. What I tend to notice is that many of my clients have kids in college that are in undergraduate and post graduate programs. In most cases the parents are paying the tuition of about $25,000 which have a limit on the deductions at about $4,000. I am seeing a trend of clients coming from other accountants and tax attorneys that have paid tax liabilities at average of $35K per year.  Additionally, I am seeing retirees withdrawing cash from there IRA's only to realize that they have had a partner (IRS) and have deferred paying taxes into a period of higher taxes.

All of this is resulting from not receiving any advise from their accountants or attorneys. The right advice would have assisted these taxpayers in avoiding the liabilities that are saddling them with high tax liabilities, levies and payment plans. Tax avoidance is not illegal, but tax evasion is illegal and celebrities are target practice right now. If you don't pay the IRS any money and you are W2'd that does not mean that you avoided paying taxes. The amount that was withheld paid taxes and that means that you are still in the liability section. Guess what? In the future the rate of taxation will be higher.

There is something that you can do about it. If you are not an entrepreneur and you work 9 to 5 and you are an emptynester start a business today. If you or in a 401K and close to retirement you are going to have a partner and you will be taxed upon disbursement. So how do you get the money paid in to the IRS back in the form of a refund?   Make the right investment and get a sizable refund otherwise you could lose about 40% of your disbursement forever. Seek professional assistance to avoid paying tax liabilities that I consider avoidable.

Those of you that have businesses that are not structured to provide you with maximum tax benefits find how what changes need to be made to avoid paying taxes. Tax Avoidance vs. Tax Deferral a no-brainer right now...taxes are increases so avoidance is much safer. Documentation is key and 3rd party documentation is certainly safe when it comes to large expenses that will be used as a write off.

IRS Audits are not always avoidable, but it is all about maintaining good verifiable records.  Nothing to fear as long as you plan within the rules and document the activity. Existing businesses should always expand rather then pay tax liability. All those that have tax accountants and attorney's that are advising them to defer tax liability fire them or ask them to cut the check for the payment of the future liability. Get savvy attorney's, consultants and accountants in your business now. They are less expensive then the interest and penalties you will pay if you don't avoid taxation. For more information or if you have questions email us at chet@thecontroller.net or secureprojectz@gmail.com .

Hud Rolls Out New Public Service Advertising for the $25 Billion Settlement with Mortgage Services

2012-08-07T07:52:00.003-07:00

The first high visibility public service announcement campaign rolled out on Thursday.
Who is eligible?
* Borrowers who are current on their mortgage payments but “under water” — their homes are worth less than they owe.
* Some 750,000 homeowners who lost their homes to foreclosure between Jan. 1, 2008, and Dec. 31, 2011
* Homeowners who need loan modifications, including principal reduction.
Homeowners in Oklahoma, the only state not to join in the settlement, will not qualify for the assistance.
Loans owned by Fannie Mae or Freddie Mac are not impacted by this settlement. For more information visit http://www.nationalmortgagesettlement.com/
Don't wait for the bank to contact you regarding these funds!
Have your documents checked today for Robo-Signing and be proactive in procuring these benefits for your clients. If you need more assistance comment here or email us your questions modifymortgageloan@gmail.com or secureprojectz@gmail.com we are more then happy to assist you.

Wells Fargo settles over its sub-prime racism

2012-07-31T04:22:00.002-07:00

Wells Fargo agrees to pay $175M settlement in pricing discrimination suit
Settlement calls for payments of $7.5 million to city of Baltimore, $2.5 million directly to 1,000 area residents
About 1,000 Baltimore-area residents are expected to receive thousands of dollars each under a landmark $175 million settlement between the U.S. Department of Justice and Wells Fargo over accusations of discriminatory lending practices.
Under the terms of the deal announced Thursday, Wells Fargo also will provide $7.5 million to the city of Baltimore, which federal officials credited with first raising issues of discrimination related to bank's subprime mortgages.
The city alleged Wells Fargo steered minorities into subprime loans, gave them less favorable rates than white borrowers and foreclosed on hundreds of Baltimore homes, creating blight and higher public safety costs. Wells Fargo is the largest residential home mortgage originator in the United States.
"Baltimore got the ball rolling," said Assistant Attorney General Thomas E. Perez, who heads the Department of Justice's civil rights division. "The federal government heard you and the federal government followed up."
The deal is the second largest fair-lending settlement in the department's history, said Perez, a former Maryland labor secretary.
The settlement provides $125 million in payments to borrowers, including an estimated $2.5 million in the Baltimore area. Minority borrowers who were steered into subprime mortgages will receive an average payment of $15,000 each, Perez said. Blacks and Hispanics who paid higher fees and rates than white borrowers because of their race or national origin will receive smaller payments that will be determined based on what they were charged.
As part of the agreement, Wells Fargo will pay for an independent administrator to find and compensate more than 30,000 residents nationwide affected by the bank's lending practices.
To address concerns about blight, Wells Fargo also will provide $50 million in direct down-payment assistance to borrowers in Baltimore and seven other communities nationwide that were hit hard by the housing crisis and where federal officials identified large numbers of discrimination victims.
"This practice caused harm to families, neighborhoods and the city's tax base," Mayor Stephanie Rawlings-Blake said. "The agreement puts to rest our legal challenges and allows us to move forward collaboratively and work on growing the city."
Mike Heid, president of Wells Fargo Home Mortgage, said in a statement that his company was "settling this matter ... to avoid a long and costly legal fight, and to instead devote our resources to continuing to contribute to the country's housing recovery."
The bank said it stopped making subprime loans through independent mortgage brokers in 2007 and stopped all subprime home lending in 2008.
Even though the bank agreed to settle the suit, Wells Fargo spokesman Oscar Suris said it still rejects claims that it engaged in discriminatory practices. "The value in settling to us is to get this behind us," he said.
Wells Fargo brought in more than $80 billion in revenue last year and nearly $16 billion in profit.
The Justice Department's lawsuit alleged the bank discriminated against African-American and Latino borrowers between 2004 and 2009. The federal government said that black and Hispanic residents were more likely to be placed in a subprime loan than their white counterparts even if they qualified for a better loan.
"That's called discrimination with a smile," Perez said.
At a news conference at City Hall, he told a story about an "80-year-old African-American resident of the Baltimore area with a 714 credit score and a rock-solid credit file who received a subprime loan instead of a prime loan, and who was not told that she may have qualified for a prime loan with better terms."
"By the time she realized she had an adjustable-rate mortgage, and not the fixed rate she thought, it was too late," Perez said. "The damage was done."
U.S. Sen. Ben Cardin and Rep. Elijah E. Cummings released statements hailing the settlement.
Wells Fargo said it agreed to pay $4.5 million to Baltimore for down-payment assistance, and will grant the city $3 million in additional funds for foreclosure-related initiatives.
Wells Fargo also set a five-year goal of lending $425 million for mortgages in Baltimore, an amount city officials called an increase over current lending levels. This commitment includes $125 million in loans for low- and moderate-income residents.
City Solicitor George Nilson said Baltimore will receive the $3 million payment next month, but officials have not yet determined how to use it. Officials said the $4.5 million will be administered by a not-yet-selected nonprofit. They said the program will be launched in late 2012 or 2013.
"This will greatly assist those looking to buy a home," Rawlings-Blake said.
The settlement covers borrowers who obtained mortgages through brokers, rather than directly from the bank. Wells Fargo agreed to conduct an internal review of its retail lending and compensate African-American and Hispanic borrowers who were placed into subprime loans when similarly qualified white borrowers received prime loans, which offer better rates.
Payments to any retail borrowers identified in the review process will be in addition to the $125 million to compensate borrowers who were victims of discrimination, the federal government said.
Perez, a former Montgomery County councilman, said he believed some Baltimore residents would qualify for payments under this review as well.
Baltimore first filed suit against the bank in 2008 but was forced to refile three times after Wells Fargo won a series of court victories. The fourth version of the city's lawsuit was filed in 2010 and identified more than 250 properties as blighted houses that fell into disrepair because of unnecessary foreclosures that resulted from dishonest loans. At the time, Nilson said the value of damages sought by the city would approach $20 million.
Under the terms of the deal, Baltimore's suit against Wells Fargo will be dismissed.
Perez said the settlement of the federal suit, which also includes payouts to Washington, Chicago, Philadelphia, San Francisco, New York, Cleveland and Riverside, Calif. —all hit hard by the foreclosure crisis — recognizes that foreclosures hurt communities as well as individuals.
"It all started here in Baltimore City," Perez said. "The lawsuit filed by Baltimore City in 2008 was the catalytic force, plain and simple. When you filed this lawsuit to call attention to the devastating consequences of this crisis, you got the attention of the federal government and you got the attention of the nation."
Contact us at modifymortgageloan@gmail.com for more information or leave a comment.

Professional Compensation Series

2012-07-31T04:08:00.000-07:00

Ref:	911118	Buyer: Department of the Treasury, Georgia
Solicitation:	T2T23X7GL02
Title:	Professional Compensation Series
Category:	611 - Educational Services
Ends:	Aug 07, 2012
Buyer:	Department of the Treasury, Georgia, USA
Location:	Georgia, USA
Contact:	Brian J Leo, Phone 4043389224, Fax 4043389233, Email brian.j.leo@irs.gov 2888 Woodcock Boulevard, Suite 300, (Stop 80-N) Atlanta GA 30341
Phone:
Fax:
Email:

Description/Comments: The Internal Revenue Service (IRS) intends to award a sole source contract under the authority of FAR 13.106-1 (b) (1) to the Economic Research Institute Redmond, WA. This is a renewal for the Professional Assessor Series subscription which includes a Salary Assessor, Geographic Assessor, Relocation Assessor, Non-Profit Comparables Assessor, Executive Compensatioon Assessor and an Occupational Assessor. The anticipated date of award is July 31,2012 This NOTICE is not a Request for Quote (RFP) and no soliciation will be publicized. However, if you have tha capability to fulfill this requirement; you may submit such capabilities in writing to the IRS Point of Contact. Writen responses to this NOTICE must be provided to this office no later than July 26,2012 by 12:00PM .

Investor Money for 2 Year Old Businesses

2012-07-31T04:04:00.000-07:00

Money is available for existing businesses. The targeted businesses have had a difficult time capitalizing over the years in my opinion. One of the requirements is that the business must have filed taxes for 2 years and that would be 1120's, 1120S, or Schedule C's (in the case of LLC's). The businesses must be structured as a corporation, s-1 corp, or llc. The lowest loan amounts would be $50K and the limit would be $500K. This would work for beauty salons, restaurants, medical clinics, chiropractic clinics, apparel stores, convenience stores (no gas pumps), women's boutiques, other retail operations, and commercial operations (group homes, etc.).

The requirements are easy, but stiff; in example if you do not have 6 months bank statements with a monthly average of $5,000 or 15 deposits per month then you may find difficulty qualifying. The credit score requirement for the guarantor is between 580 to 720, but I am sure that exceptions will be made pending the other criteria. The use of an interim principal would be ideal to acquire the line.

The payback is daily, therefore the deposit average is a good gauge to determine ability to repay. Now if you are getting money just to have it and you really don't have transactions lined up or expansion activity with high returns then you should look elsewhere for capital. However, you can use this capital to pay off tax liens.

Many small and medium sized businesses are under capitalized and have needed a breath of fresh air relative to cash reserves for years to hire employees and lower the cost of using contractors or working your own business. This would be of superior benefit to goverment contractors that need to turn the corner and lower there cost of human resource and plan for lower taxation in the forthcoming years.

Tax credits will be small businesses saving grace if you choose to utilize this vehicle and expanding your business could offset profits that would otherwise be taxable causing you to pay precious expansion money to Uncle Sam. In the event that you need further assistance leave a comment or contact our organization at Global Enterprises Trust at www.thecontroller.net or email funding request to chet@thecontroller.net .

BOA Rocking as State Attorney General Offices Filing Lawsuits Nationwide

2011-09-23T07:06:00.000-07:00

Bank of America Corp. (BAC) is among a group of lenders that may face a wave of new lawsuits claiming cash-strapped counties were cheated out of millions of dollars by a system used for more than a decade to register mortgages.
Dallas County District Attorney Craig Watkins said state attorneys general and county officials across the U.S. have expressed interest in his lawsuit against Mortgage Electronic Registration Systems Inc. and Bank of America, filed in Texas state court on Sept. 21. Dallas County could be owed as much as $100 million in filing fees, he said.
“This is a big new front,” said Christopher L. Peterson, associate dean and professor at the University of Utah S.J. Quinney College of Law. “This case is scary because if Dallas wins then there are a lot of other counties around the country that are going to follow.”
MERS, a unit of Reston, Virginia-based Merscorp Inc., says on its website that its aim is to place every mortgage in the country on an electronic, rather than a paper, system that allows members to buy and sell mortgages.
MERS acts as the lender’s nominee and remains the mortgagee of record as long as the note promising repayment is owned by a MERS member. Dallas County claims this allows banks to buy and sell loans without properly recording transfers with counties and paying the fee.
‘Practices are Legal’
“The MERS business model and practices are legal and comply with the recording statutes and regulations of Texas,”Janis Smith, a spokeswoman for Merscorp, said in an e-mail. The claims in the lawsuit “are without legal or factual merit.”
Shirley Norton, a spokeswoman for Charlotte, North Carolina-based Bank of America, the biggest U.S. lender by assets, declined to comment on the suit.
Liability in the Dallas case could exceed $1 billion, based on the number of mortgages in the county, Peterson said. Local laws impose substantial penalties, as well as back payments of fees and taxes, if false documents were filed in land transactions, said Peterson, who has advised private plaintiffs making similar claims.
Faulty mortgages and foreclosures have already cost the five biggest home lenders $66 billion, according to data compiled by Bloomberg. Bank of America’s credit rating was cut on Sept. 21 by Moody’s Investors Service in part because the bill for mortgage disputes may climb past the $39 billion committed since 2007. County clerks in Kentucky have also sued MERS, while officials in Massachusetts and Michigan say they are exploring the possibility.
Half of Mortgages
MERS, operating since 1997, has registered more than half of all U.S. home mortgages. The company came under scrutiny last year after attorneys general in all 50 states began investigating claims that banks and loan servicers used faulty documentation in foreclosures.
Merscorp said on Feb. 16 that it will propose a rule change to stop members from foreclosing in its name.
Damages in the MERS claims won’t rival the tens of billions of dollars of losses banks have suffered due to faulty mortgages, said Chris Gamaitoni, a bank analyst with Washington-based Compass Point Research & Trading LLC.
The banks are more threatened by lawsuits that question the way mortgages were originated, pooled and securitized, Gamaitoni said in an interview.
“This is going to test the foresight of the people who created MERS,” said Peter Henning, a law professor at Wayne State University in Detroit.
The prospects for the lawsuits are difficult to determine because every state has its own property laws and requirements, Henning said.
‘Will Pursue’
“It will depend on what they say constitutes a transfer of a mortgage,” he said. “Counties sure could use these revenues, so if they can find an opening there they will pursue it.”
MERS is owned by financial institutions including Citigroup Inc. (C), JPMorgan Chase & Co. (JPM), Wells Fargo & Co. (WFC) and Stewart Title Guaranty Co., and industry trade groups including the Mortgage Bankers Association and the American Land Title Association. It’s also partly owned by Fannie Mae and Freddie Mac, the housing finance agencies now controlled by the U.S. government after being bailed out in the 2008 financial crisis.
Dallas County called that crisis “a direct result of the financial system’s commoditization, packaging, securitization and sale of tens of millions of mortgages throughout the U.S.,”according to the complaint. “Without the fiction of the MERS system, these activities would not have been possible.”
‘Avoiding Recordation’
The county said that through MERS, notes and mortgages are being “sold, assigned or transferred” without being recorded in county deed records. The defendants “misrepresented the true beneficial owner of notes and related mortgages filed by them in Dallas County, Texas, for the purpose of avoiding the recordation of subsequent transfer and payment of attendant filing fees.”
Watkins, 43, is seeking reimbursement for fees lost, punitive damages and a judgment of $10,000 a violation.
He asked the court to find that a violation of the Texas code occurred each time MERS was identified as a mortgagee or beneficiary under a deed of trust when it had no interest in the note secured by that deed. According to the complaint, MERS was the “grantee” in 157,319 records in Dallas as of Sept. 11.
The lawsuit also seeks a court order preventing the defendants from filing anything in deed records that identified MERS or anyone as a beneficiary who doesn’t have an interest in the secured note. The county said Bank of America “knew or should have known” the MERS system would cause improper filing.
‘More Banks’
“We expect more banks will be in this before it’s over,”Watkins said in an interview. The litigation could spread, he said. “This is not just going to be a Texas deal.” He wouldn’t specify which states or counties had contacted him or his lawyers about the suit.
Peterson, the Utah professor, who wrote an academic article on MERS that is cited in the Texas complaint, said he has advised plaintiffs in whistleblower cases against MERS in California, Nevada and Tennessee. The California case was dismissed when the court determined the purported whistleblower didn’t meet filing standards. A Nevada court said state law didn’t require recording the assignment of a mortgage.
The clerks of Kentucky’s Christian and Washington counties sued MERS, Chase Home Mortgage Corp., CitiMortgage, Wells Fargo, Bank of America and others in federal court in Louisville in April, seeking to represent all 120 counties in the state.
“According to MERS’s own website, its system saves money for its members and is specifically designed to avoid paying the fees” to county clerks, according to the April 25 filing.“MERS president, R.K. Arnold, testified in 2009 that assuming each mortgage has been resold and recorded just once, it would have saved the industry $2.4 billion in recording expenses.”
‘Immediately Cease’
The Kentucky suit seeks compensatory and punitive damages and an injunction ordering defendants “to immediately cease the practice of nonrecording of assignments of mortgages.”
Dennis Pantazis Jr., attorney for the counties, declined to comment on the suit.
Thomas Kelly, a spokesman for New York-based JPMorgan Chase, and Vickee Adams, a spokeswoman for San Francisco-based Wells Fargo, the biggest U.S. home lender, declined to comment.
The banks and MERS asked the court to dismiss the case, saying Kentucky law doesn’t require recording transfers of promissory notes or interests in loans. MERS remains the“mortgagee of record” during these transactions, so no duty to record is triggered, the companies said in a July 1 filing.
Oakland County, Michigan is “evaluating a possible suit”against MERS, said Keith Lerminiaux, corporate counsel. The county has sued Freddie Mac and Fannie Mae in federal court in Detroit alleging they failed to pay transfer taxes on foreclosure sales.
Massachusetts Probe
Martha Coakley, the Massachusetts attorney general, said this year that she’s investigating MERS. The probe includes complaints by registers of deeds in the state over unpaid filing fees, said Brad Puffer, a spokesman for Coakley.
Delaware is also investigating MERS, according to a person familiar with the matter.
John O’Brien, register of deeds for Southern Essex County, Massachusetts, said he was among the officials pushing Coakley for an investigation. He estimates that since 1998 his district has lost $44 million in fees and the state has lost $250 million to $300 million.
“I’m hopeful that she will be filing the same type of lawsuit against MERS,” he said in an interview. If Coakley doesn’t sue, O’Brien said, there’s a “very strong” chance he would do it himself.
Fees Vary
Recording fees vary and may depend on the length of a filing, Watkins, the Dallas district attorney, said. A county may charge $21 for the first page of a document and $9 for each succeeding page, he said. The recording fee for assignment of a mortgage in Christian County is about $13, according to the Kentucky lawsuit.
The Dallas county clerk has estimated that at least $58 million in fees have gone unpaid as a result of MERS-related transactions, dating back to 1997, Watkins said. “Our research shows it could be more than $100 million,” he said.
Claims against Bank of America stem mainly from loans originated by Countrywide Financial Corp., the subprime mortgage company acquired in 2008 when it was on the verge of collapse.
The mounting costs of buybacks, settlements and litigation helped push Bank of America’s stock to levels last seen in early 2009. Chief Executive Officer Brian T. Moynihan, 51, has sold at least $40 billion of assets and preferred shares to bolster the company’s finances.
Budget Woes
U.S. states have already dealt with four straight years of budget imbalances and closed gaps totaling about $511 billion, according to the National Conference of State Legislatures in Denver. Dallas county has a budget shortfall of $36 million, Watkins said.
“We’re in the position that we can’t even provide basic services,” he said. Had MERS not existed, “we could have collected those fees,” he said.
The Texas case is Dallas County v. Merscorp Inc., CC-11-06571-E, County Court at Law, Dallas County, Texas. The Kentucky case is Christian County Clerk v. Mortgage Electronic Registration Systems Inc., 5:11-cv-00072, U.S. District Court, Western District of Kentucky (Louisville).
To contact the reporters on this story: Margaret Cronin Fisk in Detroit at mcfisk@bloomberg.net; James Sterngold in New York at jsterngold2@bloomberg.net
To contact the editors responsible for this story: Michael Hytha at mhytha@bloomberg.net; Rick Green at rgreen18@bloomberg.net

How to Sue Your Bank.

2011-09-22T20:10:00.000-07:00

There are many reasons to sue a bank. Banks have a fiduciary duty to their customers, and if they break it, they are liable. Also, in today’s market, it seems that banks keep coming up with new ways to take advantage of their customers, such as levying huge fees, changing interest rates, and so on.It is also possible to sue a bank for predatory lending practices. But it’s not easy. Banks have lots of money (surprise, surprise) and plenty of legal muscle at their disposal. While they have very, very deep pockets from which to satisfy a judgment, they’re going to make it very difficult to get a judgment against them in the first place.
In terms of the formalities, filing a lawsuit against a bank is just like filing suit against any other company. In practice, though, it’s going to be different.
Before allowing you to open an account, banks always force customers to sign an agreement to their terms of service. And–surprise again–these documents have been very carefully worded to work only to the bank’s advantage. Before suing the bank, you will need to be sure you have a copy of all the “agreements” you have made with the bank. It’s very likely that there will be wording that will make your battle an uphill one.
Get copies of all relevant documents and be prepared to lay out your case in great detail. However, because the entire “system,” starting with the terms of service, is heavily slanted against the consumer, it’s tough going. Attorneys know this. They’re only being ethical by being reluctant to file lawsuits that they know are very difficult to win.
You can also, in many states, sue a bank in small claims court. This is an interesting possibility because often, small claims courts require plaintiffs and defendants to represent themselves rather than being represented by an attorney. But even if the court says that both you and the bank must represent themselves, there is no prohibition on being advised by an attorney.

Written by www.howtosue.org

Entreprenuer Started with Her Dream at Childhood

2011-08-15T04:59:00.000-07:00

As a child there were two occupations that intrigued me: Medicine and Trucking. For one thing I wanted to help people and there were many role models I learned about in school. On the other side of the coin there were people that came in my life who drove big trucks and as a little girl I used to love it when one of my sister's friends showed up with a truck. Later as a young woman I remember driving down the street in mine and honking my horn. My mom would yell at me to get that big thing from in front of her house before the cops showed up and the look of glee and admiration of my son who ran and climbed up in the passenger seat happy that Mom was home. My Mom only spoke truth because of the fact we lived off a main street that wasn't zoned for trucks.

Then there was medicine: I had been ill enough to be hospitalized but what really got me was the first surgery that I was old enough to remember having was the cesarean birth of my son. Even though the operation takes time, time flew by for me for I was the one operated on. Only thing I remember was the anesthesiologist who brought me to enough for me to see my son whilst in the Operating Theatre then putting me back under, then Intensive Care post op. And don't forget the show M*A*S*H. Even though it was a comedy, around that time, my sister Deborah had just enlisted in the Army Reserve. She had been in Dentistry for some time so that gave her rank in the service. I wanted that too, but even at my age the Army Doctor did not pass me on the physical exam because they discovered early back problems. So much for 'Hot Lips' the Surgical Nurse.

There were other issues I had along with the world having theirs so Marketing & Retail has helped me in many ways even today in my present career. Air Transportation came along and lit that fire once again for Big Trucks. I was working for a company called Pony Express which was a subsidiary of Well Fargo. The little vans had outgrown me quickly for I had an eye on the straight trucks and semis that came in. One of my co-workers helped me with learning about the gears in the straight truck he drove mind you I never drove a standard shift of any kind. I had enrolled in Trucking School and was having trouble because of that. But I was determined for I had to pay this student loan back I took out to go. In a class of at least 100 6 were women, 3 were Black women and 5 graduated out of a class of 100. There were not many women even in the late 80's when I graduated that were truckers. Back in my hometown and in the cities and towns across the U.S, women would see me in my truck and many were inspired by me..They figured if a petite 4'9 120 lb. brown girlie like me could they could too! Thus whence came the C.B. handle 'Smurfette'

Because of my travels, my network is diverse. With the Internet becoming the 'now' thing in communication, I have fit in with people all over the world nicely and now my phone list includes people from all over the world. This is my bio, the first one I have penned, there will be more, probably not as long as this one though, Karyn aka Smurfette and more alias, mostly good.

© 2011 Karyn D. Walker Professional Sub Contractor ~ Transportation

Why outsource your accounting?

2011-06-04T08:37:00.000-07:00

Accounting is a core business function. Without accounting, a business is sure to fail. With accounting, a business might survive. With accounting managed by a Profit Center Expert, a business is certain to succeed.

You’re probably already familiar with the bleak forecast for new small businesses. While failure rates have decreased considerably in the last few years, recent studies from the Small Business Administration (SBA) indicate that one third of new employer establishments fail within the first two years, and 56% fail within four years.

Poor financial management is often cited as the reason for most small business failures. Often the business owner or a member of the business team manages this crucial function because they want to maintain complete control of their business, they’re afraid that outsourcing the accounting would be too expensive, or a combination of the two. What they don’t realize is that outsourcing is a useful management tool that can save a business both time and money while preventing potential failure. And when you outsource to the right accountant, it can be the difference between base survival and profitable success.

The Benefits

There are countless benefits you enjoy when outsourcing your accounting. Here are just a few:

Save Yourself Time. You’re in business because you’re good at what you do. Your expertise involves the product and/or service you offer. And we’re guessing your expertise is not accounting. So if you, or anyone on your team, spend time managing your business’s finances, that’s time that could be better spent building your business.

In order to be competitive you must constantly be looking for ways to improve and expand your products and/or services, better market your business, and stay ahead of your competition. When you and your team focus time and attention on the accounting, that’s time not spent on these crucial tasks. When you outsource the accounting to a trusted professional, you can use that time to make your business the best it can be.

Save Yourself Money. We all know time is money. The average small business owner spends over 10 hours personally, each month, accounting for the business. If your average billing rate is $50 per hour, you may be spending more than five hundred dollars’ worth of your time! Chances are you easily can pay for a good accountant and then some with all that money.

Gain Access to Valuable Accounting Expertise, Equipment, and Technology. Reputable accountants have the expertise to not only save you money, but to make your business more profitable. In addition to that, they have access to equipment and technology that most small businesses can’t afford. They will use their resources to your advantage and save you the time and headache of doing it yourself.

Gain Access to Profit-Building Information. A truly valuable accountant is also a Profit Center Expert. They analyze financial data in order to assist you in making profitable decisions for your business. A Profit Center Expert can inform you which products and/or services to expand, which to eliminate, whether your marketing attempts are successful, where you’re loosing money, and where to cut back in order to save and redirect funds in order to become more profitable.

Call us for a free, no-obligation consultation. We can customize a package of services that is competitively priced and designed to save you time, energy, and headache. We offer the following services:

Accounts Payable

Input vendor invoices to payable system

Classify invoices to the proper G/L account

Request and maintain vendor W-9 information

Maintain vendor master files

Respond to vendor inquiries about payment status

Retrieve copies of payments as necessary

Prepare and file required 1099 forms

Process requests for stop payments when necessary

Cut checks to vendors based on due dates or client instruction

Reconcile vendor statements to accounts payable ledger

Reporting to organization on detailed aged payables and cash requirements

Process year-end 1099 forms

Accounts Receivable

Prepare and mail billings as needed (all billings provided to client for approval prior to mailing)

Record and account for revenue

Input receivable transactions into the accounting system

Prepare and deliver periodic statements

Issue client-approved credit memos and refund checks

Maintain subsidiary receivables ledger

Process client-approved adjustments

Apply cash received to customer accounts and resolve “short pays”

Perform low-level phone collections as needed by client

Cash management

Process daily sales and deposit reports

Verify daily deposits and report variances

Reconcile and verify credit card deposits

Reconcile monthly bank statements

Journal entry and general ledger

Account reconciliations

Payroll

Time cards, after approval, will be scanned and uploaded prior to payday

Complete payroll while client prints, signs and distributes paychecks

Prepare employee earnings statements complete with current pay period and year-to-date wages, taxes, and adjustments

Prepare department summaries of month-to-date payroll data in addition to customized reports specific to client

Prepares timely and accurate notifications of tax liabilities and deposits

Completes year-end W-2 forms

Respond to requests for employee verifications

Process and submit garnishment payments

Respond to employee payroll inquiries

Prepare and file new hire reporting to state

Prepare, file, and pay all federal, state, and local payroll taxes

Reconcile health insurance payments and make payroll deductions when required

Prepare necessary HR reports such as turnover

Allocate payroll expenses for multi-store employees

Prepare and process payroll accruals when necessary

Monthly Closing

Fixed assets accounting & depreciation

Monthly financial analysis and reports

Yearly Business Assessments

Don’t wait another day to partner with a Profit Center Expert (PCE) and make your business more successful. Do what you love to do more; let your PCE take care of the rest. Call now for a free, no-obligation consultation.

Being in the Black

2011-06-04T08:31:00.000-07:00

Being in the black can mean a lot of different things. For most business owners, it means being profitable. When a business owner sets out on a new venture, establishing a profitable business is one, if not the only, driver. Unfortunately, too many entrepreneurs get lost in the day-to-day tasks of running the business and forget their main purpose.

As your accounting professional and Profit and Growth Expert we apply The Universal Business Model to help maximize the profitability of your business. Each month we apply our financial expertise, combined with access to a variety of analytical tools, to assess your business’s financial position and progress.

With our help you can improve your business’s financial position using The Wisdom Pyramid. Here’s a short list of what you will accomplish:

Know how your business stacks up against the competition using the professional business assessment we provide.

Recognize your business’s strengths and weaknesses, and use that awareness to improve your profitability. Consider this a Day with your CFO.

Identify trends that expose what is both helping and hindering to your business.

Take advantage of tax benefits through regular reviews of your tax position.

By gathering the necessary information through the bookkeeping and accounting process, we will analyze the data and help you make the changes required to improve your business’s profitability. Whether you need a financial audit or review, we can help move your business forward.

The Controller.Net

2011-06-04T08:26:00.000-07:00

Global Enterprises Trust has a saying, “Longevity is Success”. The team at “The Controller.Net” has over 75 years of experience in the area of payroll processing, monthly financial reporting, personal financial reporting, systems integration and automation. Many of our operatives have prepared pro forma budgets and been involved in budget analysis. This detailed analysis of variances can be used to assist companies determine their appetite for business development and help them make better decisions in their day to day business operations.

Teaming arrangements between our organization and that of our clients can improve cash flow. Our expertise in the area of preparing business plans; strategic planning and contract management can put your company on the cutting edge or turn your business bottom line from red to black. Accounting tricks are not needed to improve our client’s position, but what is needed is tax planning and strategy that lowers tax liability and promotes growth. All this translates into an organization that can take advantage of opportunity.

Let us provide the infrastructure that your organization needs to help finance growth utilizing debt, equity and hybrid structures. Our organization wants to help you obtain funding using equities, tax credits and/or bonds. Engaging our team as your consultants and accountants will give you a superior administration and finance department without the cost associated with this labor intensive operation. Use us as the tool that is usually reserved for major Wall Street organizations seeking public funds that maintain GAAP and GAAS accounting infrastruture. Eligible clients seeking capitalization using securities can engage our team to guide them into becoming a CDE, as well as showing them how to use securities as a revenue generator and funding vehicle. Invest in your future and improve your customer relations and financial backbone, because now you can improve your customer retention and market share

Our government relationships, management programs and marketing strategies will put your company far ahead of the competitor. Our project management expertise can assist you in delivering the deliverables on time. Our company provides real time management, essential proposal writing, centralized purchasing opportunities, internal and external reports that combine to result in a favorable bottom line.

Increase your organizations equity by engaging our team for the purchase of real estate or to guide you through mergers and acquisitions. Real time reports mean getting meaningful information for decision making that translates into sales, revenue and accounting profits. Our team provides seminars that give away more information than our competitor’s sale. Our team adds value every step of the way. Our value added proposition is integrated in a way that qualify many of our clients for equity infusion from tax credits. Our team can assist you in establishing the correct business form i.e. LLC, LLP, Inc., Trust, or a Sole Proprietorship. We are ready to deliver; so, what are you waiting for to engage our team?

Hyatt Regency....You Better Watch Out!

2011-05-20T10:26:00.000-07:00

Water for ElephantsI recently stayed at your hotel in Jacksonville Florida and I valeted my vehicle, I left that evening to purchase food and returned my vehicle to valet that evening. I checked out that morning. My passenger and drivers doors opened for me and my luggage loaded. I drove 30 minutes and pulled over for gas. I returned from the attendant cashier and got a look at my front hood and noticed a 4 inch scratch and dent on my vehicle. I contacted the hotel and a claim form was faxed to me. I completed the claim form and contacted the management regarding the status. Mr. Liscomb said that he had completed his investigation and that he would not honor my claim because I had not realized the damage before I checked out of the hotel. I am sure that all parties will claim that they are obsolved of liability. I valetted my vehicle in care your establishment and upon it's return it was not in the same condition as it was in when I released it to your care. The reason I stayed in your establishment rather then choosing a motor lodge or a motel 6 or any other hotel is because I have an expectation of care, service and responsibility. Until this is resolved I can't really tell the difference between your organization and any other hotel establishment that is along the side of the road. This never happened at Ritz Carlton, Intercontinental, or Marriot, but it did happen on your watch. I can definitely see why this organization made the mistake of not bringing resolution to this, but I can afford the repair. I just wanted to give you and your affiliates the opportunity to do the highest and best action that you could offer. What I have gotten so far is that no one wants to own any responsibility for wrong doing. The fault then is mine for choosing irresponsibility over responsibility. I am sure that you can relate to this. No legal issue here just a moral issue.

Thanks

Chet Jones

Funding Options Using New Market Tax Credits, Bonds and Equity

2011-04-08T06:14:00.000-07:00

Obtain information on New Market Tax Credits. I will also forward more information on NMTC and other funding options to anyone that leaves their email address in the comments area or anyone that request information at secureprojectz@gmail.com

If you have any questions please contact me at 404-825-6604 and if you would like to speak with any of the team members they will be ready to answer any questions you may have.

Team Members

Chet Jones- finance and strategic consultant for business development and funding. Mr.Jones has the capacity to fund deals using bonds, private equity, and institutional investors. Mr. Jones has worked with Ted Turner in day to day operations when Ted was running Turner Broadcasting.

Al Collins managing partner- Raintree Holding Group (CDE) Community Development Entity which the New Market Tax Credit must flow through CDE to fund deals in low income communities. Also Mr.Collins has extensive relationships with HUD,private investors, and government entities that focus on urban mixed use development.

Michelle Jones

Comfort Systems USA is the team she work with. Comfortsystemsusa.com which will fund and build commercial projects

where the principals will keep control of 35% of the project and no equity position is needed after completion.

– Ms. Jones is the Founder, President and CEO of Eternal Life Changers, Inc.,

parent company of THE` Emmanuel, LLC of New Orleans, LA. She is responsible for strategic

planning, business development and capital acquisition for the company. Prior to founding Eternal

Life Changers, Ms. Jones served as a grant writer for the University of Connecticut, where she wrote

and received many grants, as well as, served as the administrator for all the grants in excess of

$90,000,000.00. The Cancer Center, General Clinical Research Centers, and Green House Effects

in the inner cities, are some of the projects over the last 17 years that Ms. Jones spearheaded for the

University of Connecticut. Ms. Jones was solely responsible for getting the location, employees,

supplies, computer systems, and administration of Governmental grants for these projects. Currently

she is the manager of Total Community Action Federal Credit Union in New Orleans, Louisiana. In

less than 5 ½ months of her tenure at the credit union, she has successfully secured in excess of

$500,000 that will be used to provide low interest loans to members of the community. Seventeen

years of financial experience and 12 years of Management experience has prepared her with

incredible skill with knowledge of Local, State, and Federal rules and regulations.

Lernie C. Jones – Mr. Jones is VP of Operations & Vice-President of Logistics, THE` Emmanuel,

LLC of New Orleans, LA. He founded J & J Rehabilitation & Construction Co. in 1987. J&J was

incorporated in Nov.1990. Mr. Jones, a 2 generation tradesman, is a graduate of Southern Illinois

University 1987 with a degree in Construction Engineering.

Mr. Jones has 20 years of experience in construction and development management. Now

as president of J&J Rehabilitation and Construction Company of Chicago Ill, a subsidiary of J & W

Development, J & J Holding. Currently J & J Rehab and Construction are in engaged in building 2

condo towers on an $181M project.

Mr. Jones is also heading up development on South King Drive for single family homes which are a

$36M project, and in Aug of 2007 one of the homes was featured on Forbes magazine as one of the

best houses under $1m with such amenities. They range from $920,000 to $940,000.

Mr. Jones’ Affiliations include the following:

• Black Contractor’s United

• African American Region Committee

• Signator, Chicago Carpenters Union

• Cosmopolitan Chicago Chamber of Commerce

• Building Association of Americaichelle Jones
--

Ahmed Wadsworth

Single Parent Tax Credit: Kick off the Tax Refunds

2010-12-28T10:24:00.000-08:00

Refunds for many taxpayers will be the bridge funds that pave the way to the new car, new home, new business or needed vacation. This year the child tax credit is $1,000 per child. The difference between this tax credit and most other tax credit is that it results in a refund check. Most tax credits are used to reduce tax liability and are these credits are applied to tax liability which could increase your refund or lower the payment to the IRS.

There are ways to increase your refundable tax credits, but that is a plan that must be implemented during the tax year and the benefits will be captured at the end of the tax year. Self Employment Tax will be higher this year. Switch to a payroll system which would generate a W-2 instead of a 1099 to capture your earned income then you will give less to Uncle Sam and your refund will be higher.

Make plans during the tax year that will give you a higher refund so that you can get the most out of your spending. The spending moves that result in higher refunds or not expensive and can be implemented by the average person. Make plans for your success and eliminate failure from your future. Find out more by emailing questions to taxmax@rocketmail.com or by following and commenting at this blog.

by Chet Jones

INSIDE JOB: New Documentary Exposes How 'Banksters' Continue To Steal Ou...

2010-12-09T19:38:00.000-08:00

Lower Tax Liability - 5 Things to do before year end.

2010-11-25T20:25:00.000-08:00

Self Employed Individuals will be hit with a higher tax liability. Many individuals are sole stock holders in their LLC, S Corp or Sole Proprietorship. Avoiding the higher tax liability can occur by simply implementing a payroll system or contracting a 3rd party to prepare your pay checks so that you treat yourself as an employee of your company. At Year End your will receive a W 2.

Assets that have been fully depreciated and still in service should be sold to LLC's, S Corp's or Sole Proprietorship's that are in need of depreciation shields. This will start the depreciation clock ticking again and shield future income with non-cash deductions.

Invest in projects or vehicles that provide tax credits. Tax credits offset tax liability. Spend extra cash on vehicles that provide you with lower expenses in the upcoming year and tax credits that offset tax liability such as energy efficient appliances, mechanical, capacitors and solar panels.

Year End Profits should be placed in deferred compensation. Year End IRAs with gold acquisitions would be an excellent direction for your money if year end profits are huge. Year End Real Estate transactions should be executed as 1031 Exchanges to avoid taxes.

More information can be provided by contacting Chet Jones at 770-895-4385.

Renewable Energy Dependent on Subsidies

2010-10-02T23:44:00.000-07:00

Development of wind and solar energy is greatly dependent on government economic support in the form of subsidies and outright grants. Dependence on foreign oil is dangerous to our survival. Natural gas is abundant, clean and cheap. Gas can provide our independence from foreign sources of oil.

Wind sources in many parts of the country are limited by restrictions on wind farm locations. Further, the costs are prohibitive without large government subsidies. The wind and solar industries lobby wants a legislative imperative on the percentage of wind and solar that we must use. This is a so-called renewable energy standard. If all energy taxation were applied to wind and solar, wind and solar could produce only enough energy for a small part of our needs. American Wind Energy Association CEO Denise Bode has said that Oklahoma has wind resources to provide more than 30 times of the state's current electricity needs. She fails to say what the subsidies and grants would cost taxpayers.

Natural gas is greatly needed now to fuel our industrial machine. Renewable energy standards restrict a free market. We need to let the free market run its course with no renewable energy standards.

Sid M. Groom Jr., Edmond