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Written by Theodore M. David, Chair, Tax Law Committee

Current Items:

1) CLE Sting?
2) Tax by the Numbers

1) Scott Joplin was born November 24, 1860, in Linden, Texas, and died on April 1, 1917, at age 48, in New York City. He was the son of a slave. He is remembered as an American composer and pianist. He was called the “King of Ragtime” and composed more than 40 ragtime pieces, one ballet and two operas. One of his first and most famous written in 1899 was called the Maple Leaf Rag. Joplin considered Ragtime to be a form of classical music meant to be played in concert halls, but it found its way to honky tonks and smoky bars as well.

Some say his death in 1917 marked the end of the ragtime era. If I could hum a few bars of the Maple Leaf Rag to you right now you would immediately recognize it unless you’ve been living under a rock for the last 50 or 60 years. Many people rediscovered Joplin’s music in the early 1970s when Robert Redford and Paul Newman starred in a classic “revenge” movie called “The Sting”. Now, I am sure lawyers who are reading this get daily notices of CLE seminars on every imaginable topic. I saw one the other day on dog law.

But I suggest that you put this bulletin down right at this moment, stop reading, and watch The Sting. This is especially true if you happen to be involved in criminal defense work. More so if you are advising a certain person about a sentencing to occur on July 11, 2024. The movie is set in 1936. Redford and Newman are professional grifters. They are looking to revenge a mob killing of a friend. The movie was inspired by the true life brothers Fred and Charlie Gondorff and the 1940s book called “The Big Con.” In the movie, an elaborate plot is contrived to fool Robert Shaw as Doyle Lonnegan, the mobster; yes, Shaw is the same guy from “Jaws” who didn’t do well there either. Very cautiously, Newman, as the older and wiser Henry Gondorff, councils Robert Redford, the young Johnny Hooker, that they must take their time in erecting an elaborate horse racing betting parlor.

Throughout the movie, Scott Joplin’s masterpieces are played in the background, including the Entertainer, which became a worldwide sensation. That’s another one you will know instantly from the first two notes. As the plot unwinds Redford gets more impatient all the time. Near busting, he turns to Newman and utters these words: “Why are we waiting? Those guys are not that smart,” referring to Shaw and his henchmen. Newman responds with the blockbuster: “Neither are we”.

This year, July 4 and July 11 are days that will be remembered. One will celebrate the birth of the United States, and the other the sentencing of a felon who used to be president of the United States. I’m not taking sides here, but from my work in criminal tax cases, after a conviction, the defendant has to take responsibility for his actions and show some remorse. Promising revenge, unless you happen to be Robert Redford or Paul Newman, will not work. Defense lawyers must get control of their clients. People do tend to make up stories that they may eventually actually believe. Others care little for the truth and deserve all that comes their way. Newman taught Redford to never insult the opposition, their intelligence or preparation, and to never refer to them as “thugs”.

The Sting was nominated for 10 and won 7 Oscars, including Best Picture, Best Director, and Best Screenplay. In 2005, the movie was preserved in the United States National Film Registry, being culturally historic and significant. In 1976, Scott Joplin was awarded a Pulitzer Prize posthumously for his ragtime compositions. The Sting should be allowed as CLE credit for lawyers as well.

2) To legitimize this bulletin as tax-related, I note the Social Security annual wage base for 2024 is $168,600. That’s an $8400 increase. The Social Security tax rate on employers and employees remains at 6.2%, and both pay the 1.45% Medicare tax on all compensation with no upper limit. The standard deduction for married couples is $29,200 and single taxpayers $14,600. The tax rates remain unchanged, but the brackets themselves are wider for 2024 due to inflation during the 2023 fiscal year. There, done. Now go watch the Sting.

Questions or Comments should be sent to: Theodore M. David, Chairman at [email protected]

Written by: Theodore M. David,
Chair Tax Law Committee

Current Items:

1) Inheritance Time Bombs
2) IRS Interest Rates
3) Everybody Gets One?

1. Boy, how things have changed. There was a time when I looked forward to getting the Journal of Taxation, Estate Planning and New Jersey and County Bar Journal magazines. I would read them cover to cover if for no reason other than to check to see whether or not a professional article of mine had been published. Some of them were kind enough to put your picture. Looking back at some of the esoteric topics I wonder if even tax lawyers ever got around to reading them. I made a habit of never rereading them myself. I would order reprints and send some to clients in another act of vanity. At least one of my earlier essays on the role of disclaimers in estate planning ended up being cited in New Jersey Statutes Annotated. I kept that particular volume in my office for years. My secretary kept track of all of those publications in folders that grew to overtake filing cabinets over my more than 40 years of practice. I can’t remember the last time I saw any of these magazines. I know the New Jersey Bar Journal still appears in my mailbox from time to time but the others seem to be long gone. All those professional magazines that I paid such attention to have been replaced by the AARP magazine. The latest addition has a fetching Brooke Shields on its cover with two articles of interest that I have in fact read. One is a lengthy discussion of how to live much longer. “Your Total Guide to Health Risks in your 70s.” If you are not quite there yet, it still has some pretty good advice: Eat well, exercise, have some decent relationships, lower your stress and visit a doctor from time to time. It reminded me of an article I did for the ALI – ABA Journal called “Can Lawyers Learn to be Happy.” The second got my attention immediately it was called “Inheritance Time Bombs, Six Ways to Avoid Family Feuds.” Now I didn’t write this nor am I cited so my picture is absent but it still may be the kind of thing you may want to consider sending to your clients or considering for yourself. So here they are: #1 The caregiver conundrum. Should you leave the house to the kid who moved home to be cook/chauffeur/ nurse’s aide/ therapist for the past decade? What about the other children? #2 False expectations. Your kids think you will be leaving them caviar and champagne but all they will be able to afford is barely pretzels and beer; #3 Trust issues. You want to leave money for all of your kids but are concerned about one of the youngest who has a fondness for blackjack tables and fast living; #4 The blended family problem. You want to leave your assets to your new spouse and children from a previous marriage not to your stepchildren. #5 A business problem. Only one child has been involved but you have two other kids. How can you create a plan to avoid the drama? #6 Skipping generations. Your kids seem capable and secure as adults so you decided to mostly bypass them and give to your grandkids instead. The author of the article is Laura Petrecca and she says older Americans hold nearly two thirds of the country’s wealth which is about $93 trillion in assets that could pass to younger generations. It’s time, she says, to work out your “battle plans” that can help you avert disaster. I’ll add that it may be time to hire an estate planning lawyer before the bombs start bursting in air. And to join AARP… it’s got some pretty good articles.

2. IRS has announced that interest rates will remain the same for the calendar quarter beginning July 1, 2024. For individuals the rate for overpayments and underpayments will remain at 8% per year, compounded daily.

3. My grandson loves to play soccer. I’ve watched him as a little boy run all over the field with boundless energy. Alex just turned 16 and is more serious about the game. But I remember fondly when he was perhaps five or six running in every direction at the same time. My son-in-law, God bless him, has been an organizer of teams, coach, assistant coach and a scout leader to boot. When the kids were done knocking themselves out one of the parents would bring muffins or cookies for all to share. When the season ended without any consideration to who had won how many games every player got a trophy. Russell made sure of that. Therapists these days say such affirmation is good for any kid’s ego. It helps them recognize that hard work pays off and can be rewarded. So coaches dig into their own pockets and use their imagination and Internet surfing ability to provide those prized trophies. The kids feel good, the parents are proud and the coaches enjoy every bit of it. I’ve been told over the years that once you work for IRS in any capacity you will always be treated as family. So it is with some dubious parental pride I am proud to report that the IRS has recently won a Certificate of Excellence and Accountability Award for the second year in a row. I don’t know whether they got a trophy but there was a ceremony held on May 16. The award is the highest form of recognition in the field of federal government financial management and performance reporting. I’m not sure exactly what that means but it sounds like it was trophy worthy to me.

Questions or Comments should be sent to:[email protected]