August, 2010

The following is intended as general information and does not represent legal or tax advice. Individual circumstances vary - please consult your legal and tax advisors about your specific situation. As a monthly news source, some information may remain on this page for several weeks. To return to the general planned giving pages, please close this browser window. This News and Information section has been compiled by Future Focus.

News Stories and Articles

A Brother's Death Brings Money Lessons to Life
Two years ago, my sister-in-law Eileen went kicking and screaming to meet with lawyers and do some estate planning. She didn't want to think about the possibilities. But my big brother Rob was insistent. And so, despite Eileen's objections, they met the lawyers.

And then my brother got ill. On July 16, just 47 days after being diagnosed, my brother died. He was 57. I will miss him more than I can conjure words to describe. I wrote about him, at his insistence. "If you had only [47] days to live, what would you not want to do and not want to worry about?" he asked. You would not want to be in a position where you still have to put your affairs in order, where you have to think about every little detail, and wonder about every dollar; where you have to rush into decisions that are filled with the emotion that comes from your own terminal condition and looming deadline.

"People need to understand," he told me, "how big a blessing it is to know -- when their time comes -- that they have everything in order, that they don't need to stress or worry about how things they worked their whole life for are going to turn out. He was comforted knowing that Eileen didn't have the financial and estate concerns added to her burdens at his time of need. That he was able to make that journey without mundane financial worries was a blessing. He hoped that you, too, would have that peace when your time comes.
To read the entire story, click here. From MarketWatch

5 Tax Scams to Avoid This Summer
The Internal Revenue Service issues a list of the top 12 tax scams each year - known as the Dirty Dozen. The scams are illegal and can lead to problems for taxpayers including significant penalties, interest and possible criminal prosecution. These scams don't just happen during the tax filing season, they can happen anytime during the year. Here are five scams from the 2010 Dirty Dozen list every taxpayer should be aware of this summer.

1. Phishing This is a tactic used by scam artists to trick unsuspecting victims into revealing personal or financial information in an electronic communication. Scams can take the form of e-mails, tweets or phony websites and they try to mislead consumers by telling them they are entitled to a tax refund from the IRS and they must reveal personal information to claim it. Regardless of how official this e-mail may look and sound, the IRS never initiates unsolicited e-mail contact with taxpayers about their tax issues. Phishers use the personal information obtained to steal the victim's identity, access bank accounts, run up credit card charges or apply for loans in the victim's name. If you receive an e-mail that you suspect is a phishing attempt or directs you to an imitation IRS website, please forward it to the IRS at phishing@irs.gov. You can also visit IRS.gov and enter the keyword phishing for additional information.

2. Return Preparer Fraud Dishonest tax return preparers can cause trouble for taxpayers who fall victim to their ploys. Such preparers are skimming a portion of their clients' refunds, charging inflated fees for tax preparation or are attracting new clients by promising refunds that are too good to be true. To increase confidence in the tax system, the IRS is requiring all paid return preparers to register with the IRS, pass competency tests and attend continuing education.

3. Hiding Income Offshore Taxpayers have tried to avoid or evade U.S. income tax by hiding income in offshore banks and brokerage accounts. IRS agents continue to develop their investigations of these offshore tax avoidance transactions using information gained from more than 14,700 voluntary disclosures received last year. Taxpayers also evade taxes by using offshore debit cards, credit cards, wire transfers, foreign trusts, employee-leasing schemes, private annuities or life insurance plans.

4. Abuse of Charitable Organizations and Deductions The IRS continues to observe the misuse of tax-exempt organizations. This includes arrangements to improperly shield income or assets from taxation and attempts by donors to maintain control over donated assets. The IRS also continues to investigate various schemes where donations are highly overvalued or the organization receiving the donation promises that the donor can purchase the items back at a later date at a price the donor sets.

5. Frivolous Arguments Promoters of frivolous schemes encourage people to make unreasonable and outlandish claims to avoid paying the taxes they owe. If a scheme seems too good to be true, it probably is. The IRS has a list of frivolous legal positions that taxpayers should avoid on IRS.gov. These arguments are false and have been thrown out of court.
For the full list of 2010 Dirty Dozen tax scams or to find out how to report suspected tax fraud, visit IRS.gov.
IRS Summertime Tax Tip 2010-08

12 Obscure Websites That Can Save You Money
Searching for legitimate money-saving websites can be daunting. That's why editors of Wise Bread compiled a list of over 190 best online resources for saving money. These websites have been hand-picked for their innovation and effectiveness. Here are 12 of the most unique and relatively unknown websites from the list. Take a look - chances are you'll be able to put several of them to good use right away!

IRA Charitable Rollover Extension Remains on Hold
UPDATE (8/1) - Everything but unemployment compensation was stripped from the bill that was to contain the IRA rollover. While not a dead issue, the IRA rollover and other similar extensions are running out of time, which may be the current strategy in Congress.

On June 24, Senate Democratic leaders pulled the American Workers, State and Business Relief Act of 2010 (H.R. 4213) a bill that includes a one-year retroactive extension of the IRA charitable rollover, from floor consideration after a second attempt to move to a final vote on the bill failed. The Senate is now unlikely to act on an IRA charitable rollover extension until the fall. Prior to its expiration on Dec. 31, 2009, the IRA charitable rollover allowed taxpayers age 70 1/2 or older to direct up to $100,000 annually from their individual retirement accounts to eligible charities, including colleges, universities and independent schools, without having to count the distribution as income for tax purposes. If enacted, H.R. 4213 would retroactively extend the IRA charitable rollover for one year-from Jan. 1 to Dec. 31, 2010. Despite efforts to scale back the cost of H.R. 4213, Senate Democrats fell three votes short of the required 60 votes to proceed to a final vote on the bill. Senate Majority Leader Harry Reid (D-Nev.) indicated that he does not expect the Senate to return to the bill in the short term. With a packed agenda in July and a recess period in August, it is unlikely the Senate will take up H.R. 4213 until September at the earliest.
Council for Advancement and Support of Education 6/24/2010

Using Life Insurance To Make Charitable Donations
Donors who wish to leverage their cash donations to charity can use life insurance as an excellent means of accomplishing their goal. By either gifting a policy outright or naming a charity as beneficiary, they can provide the charity of their choice with a large sum of money that can provide a lasting legacy for a cause that they believe in. For the full article, click here.
Forbes.com 6/28/2010

The Average Investor Is His Own Worst Enemy
Terrance Odean, a finance professor at the University of California, Berkeley's Haas School of Business, has spent his career studying a very specific type of investor: the one who is overconfident, shortsighted and far more likely to snap up a stock at the worst possible moment than to make the kind of contrarian bet that pays off in the long run. Odean's specialty, in other words, is the average investor. Click here for the full article.
Forbes.com Investment Guide 6/28/2010

3 Retirement Worst Case Scenarios To Avoid
Retirement won't be enjoyable if you are constantly worried about outliving your money. Your first retirement planning goal should be eliminating this money stress. You can do this by financially preparing for worst case scenario retirement events that are reasonably foreseeable. These are three worst case scenarios that this baby boomer is planning for.
Yahoo Finance 6/1/2010