Category Archives: All Notices

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

Current Items:

1. A Plea for Monica McGinley
2. See the Drones in Your Hood                                                                      

1. Chances are you have never heard of Monica McGinley. The poor woman is an unfortunate soon-to-be tax felon. She was recently indicted for tax fraud and theft of government funds by a Grand Jury sitting in Greenbelt, Maryland. According to the indictment McGinley assisted with the preparation and filing of false tax returns so that she could receive large refunds from the IRS to which she was not entitled from 2014 to 2024.

McGinley allegedly claimed nonexistent payments or withholdings and requested nearly $12 million in refunds. The IRS issued refunds to McGinley totaling over $1.5 million. In one example, she received a U.S. Treasury check for over $1 million. McGinley, the poor girl, faces a maximum penalty of 10 years in prison for the theft of government funds and a maximum penalty of three years in prison for each of the six counts of aiding and assisting in the preparation of false tax returns. Now is that any way to treat a misguided, otherwise honest, and incredibly cunning taxpayer during the holiday season? The other day, Pres. Biden commuted the sentences for 37 out of 40 federal inmates on death row, converting them to life in prison without parole before he hands over power to President-elect Trump on January 20. These folks will be getting a break in true Christmas spirit. The fact that they are all convicted murderers, rapists and kidnappers is beside the point. Biden has for years sought the elimination of the federal death penalty. He wanted to move to commute these folks so that incoming Pres. Trump who has vowed to restore a speedy return to federal executions could not have his way. Biden said that “In good conscience I cannot stand back and let a new administration resume executions that I halted.” Earlier this month, Biden commuted the sentences of nearly 1500 people and pardoned 39 more convicted of nonviolent crimes, and of course, his son Hunter walked away from a guilty plea to tax violations and firearms-related charges. But where does that leave poor Monica? Did the IRS really send her a million-dollar check? Monica obviously knows the ins and outs of dealing with the IRS. Perhaps Trump can both pardon her and name her new Commissioner of the Internal Revenue Service.

2. Here in New Jersey and in a bunch of states across the country, people have been straining their eyes looking for drones. Of course the federal government has said all of the sightings except for a hundred or so have been determined to be not credible. Years ago, I bought a pair of Sears binoculars for $20 at a local garage sale. The other night I declared a “Drone-athon” in my neighborhood. Ten people showed up. Within minutes, around 9 PM, it was clear to me and the group that at least two of these drones were flying high and nearby. They were flashing red and green. If you download an app called flightradar24 it can tell you where all the planes and helicopters are in your area. These were not planes or helicopters.

So I state unequivocally that you are not losing your marbles if you think you have been seeing drones. But what are they up to? The list of theories is getting longer by the day. Some are confident they are searching for lost nuclear bombs. Others that it is an attempt by Amazon to demonstrate its ability to deliver really big car sized packages. Some believe it is part of the Trump deportation promise using a claw like device he once saw at Seaside Heights to remove millions of illegal aliens. My favorite is that it is part of the inauguration spectacle planned for January 20 which will spell out MAGA in huge letters country wide. Not sure about that one as a slight glitch could turn it into an embarrassing MAGGOT. And of course it could be the Russians just having some fun. But here and now is my own theory. The IRS recently announced that it will be sending $1400 to taxpayers who were eligible for the Recovery Rebate Credit even though they never claimed it on their tax returns. These payments will be made either by direct deposit or sent by paper check. Eligible taxpayers will receive a separate letter notifying them of the payment. The Commissioner of Internal Revenue said “these payments are an example of our commitment to go the extra mile (That’s the hint) for taxpayers.” At least 1 million taxpayers overlooked claiming this complex credit when they were actually eligible. Now the drones make sense. I forecast in the next few weeks correspondence from the Internal Revenue Service with attached paper checks $1400 each will be drifting down from drones in your neighborhood. Keep a watchful eye. Credit should go to Shadow President Elon Musk for coming up with this novel high tech idea. It’s hard to state but if the checks don’t come this way, then the drones are in fact from an alien source like in “War of the Worlds” the 1953 film. A great holiday classic to watch with the entire family. Oh yes, the Red and Green lights are an alien attempt to communicate their message: We are here to “Stop (Red) you from Going (Green)” just like in “Close Encounters of the Third Kind” the film from 1972. Please forgive me for “droning” on. I just couldn’t resist.

Questions or Comments? Please email: Tdavidlawyer@gmail.com.

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

Current Items:                                                              

1. Tis the Season to be …Fraudulent

1) Well, it all started with that: “It was the night before Christmas and all through the house…” You know the business about the place being real quiet and the stockings were hung by the chimney with care in hopes that you know who would soon be there. Kids of all ages set out cookies and milk and perhaps treats for reindeer as well. My son-in-law who happens to be Jewish, one year dressed up as Santa Claus and snuck outside around his house at night so that he would be recorded on his ring system.

The next day the kids were incredibly wide-eyed to see Santa Claus actually stomping around their neighborhood. At my age, I don’t remember having much belief in Santa Claus, but then again, I did become a lawyer. Frankly, I think the kids hate to put their parents on the spot so they go along with their parent’s silly conduct. After all what’s the damage? Just a tiny bit of kid fraud. Then there is the gift business. That didn’t even start with ole St Nick but maybe thousands of years before. You know just as well as I do that every consumer product is decked out with holly and is offered for sale with special discounts during the Christmas season. Things that nobody really wants or needs. So the whole ball of wax is based upon us fooling each other. Acting well, fraudulently. Is it any wonder that cybercriminals would jump on this season to capitalize on the foolhardy snow sled, ice-skating, snowmen-making dreamers we turn into at this time of year? While visions of sugar plums dance in their heads, crooks say, is the best time to relieve them of their excess dollars and assets.

If you haven’t already received a phone call, you’ll be getting it soon. Your kid has been taken by some cop in a distant place and the poor kid needs bail money immediately. They even have his voice mimicked just enough so you’re convinced. Even though sensible people know it’s not possible, you’d be surprised at the millions of dollars that are forked over. So it’s the peace on earth and goodwill to men that gets us every time. We lower our guard thinking we hear angels in our belfry when it’s really just the wind whistling through the hole in our head. Now annually the IRS reaches out to taxpayers to alert them to the common scams that are going around while the snowflakes are falling. These include all variety of emails and telephone scam calls as well as fraudulent promises by tax return preparers for exaggerated refunds that seem to fall out of the snow laden clouds. Fake deductions and credits for childcare and employee retention are the icing on the evergreen tree.

For those who may have an IRS tax debt, greasy looking phony lawyers and accountants pop up promising $.10 on the dollar reduction in the tax bill. Many of the scams are aiming for your Social Security number. Recently at a doctor’s office I was given a form to fill out and there was the line requesting by Social Security number. I looked around the office to see whether my doctor was part of a cabal stealing Social Security numbers and selling them to some faraway land for unimaginable amounts. I didn’t fill it in. No one seemed to notice. There’s another reason to remain vigilant about tax and business scams of all kinds. You could actually make a buck. Legally. IRS says that anyone experiencing scams or encountering promoters or tax preparers peddling schemes should file Form 14242, Report Suspected Abusive Tax Promoters or Preparers. Send that form with any supporting materials to the IRS Lead Development Center IRS, 1973 N. Rulon White Blvd., Ogden, UT 84404. The lead development center within the office of promoter investigations follows up on each referral. By the way, to get yourself out of the credit card hole you’ve dug buying all those gifts, consider filing Form 211 to request a possible monetary award. You see, there really may be a Santa Claus after all.

2) Not to be outdone by the fat guy in the red suit with the long white beard, IRS recently announced that the interest rate it applies to taxes owed has dropped to 7%. That’s the same rate they pay on overpayments/refunds.

Enjoy Your Holiday. Be Grateful at Thanksgiving and Generous at Christmas and Chanukah

If You Were a Turkey

Wouldn’t it be pleasant
To perhaps be a pheasant?
Or maybe a goose
Out on the loose?
But when leaves turn red,
You’d be filled with dread,
If you were a turkey.

Why, if you were a turkey,
You’d be on the phone all day,
Talking with your lawyers,
Having bills to pay
To settle up the life jams,
Waiting for the roast yams.

If you were a turkey,
You’d be gobbling with your friends
Kissing good bye to hens;
Wishing if somehow
You could be some other fowl.

So when it’s time to sup and sip,
Include this prayer upon your lip:
Be grateful for all you see
And that a turkey you will never be.

 

Questions or Comments should be sent to: Tdavidlawyer@gmail.com

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

Current Item:

1) Just How Smart is AI?

1) On the eve of the most historic presidential election in the history of the United States it does seem a little silly putting together a bar bulletin dealing with taxation. Now all the polls have been done and results tabulated and it’s clear one or the other of these candidates may actually be elected. You don’t need AI to understand that. So instead of trying to come up with something truly witty I thought I would just employ AI to do it for me. Now I will confess that my young nephew married and a new father gave me the idea. Holding his new baby with one hand he said as a matter of fact, if you can’t think of something why don’t you let AI write your bulletin? So not to kill a lot of your time as well as mine I took his advice. Now Chat GPT and things like it seem to be the future. So I downloaded the app and asked a simple question: Why do people cheat on their income tax returns? In a matter of one or two seconds this is what AI had to say:
People may cheat on their income tax returns for a range of reasons, from financial pressure to personal beliefs about the tax system. Here are some common motivations:

1. Financial Strain: For some, tax payments create a heavy financial burden, and they may feel that misreporting income or claiming unearned deductions is necessary to make ends meet.
2. Opportunity: The self-employed, freelancers, and those who receive cash payments may have more freedom to underreport income since it’s harder for tax authorities to track these earnings compared to salaried employees.
3. Belief that “Everyone Does It”: If people perceive tax evasion as common, they may feel less guilt about doing it themselves, rationalizing that it’s a widespread, socially acceptable act.
4. Distrust in Government: Some may cheat on taxes if they feel their money isn’t being used wisely by the government or that they’re paying more than their fair share. They might justify it as withholding support from wasteful or ineffective spending.
5. Perceived Low Risk of Getting Caught: If people believe the risk of being audited or penalized is low, they may be more willing to take the chance.
6. Complex Tax System: A complicated tax code can lead to mistakes, intentional or otherwise. Some people may take advantage of gray areas, interpreting laws in their favor or under-reporting simply because it’s difficult to understand exactly what’s required.
7. Sense of Entitlement: Some may feel they deserve a break from paying taxes, perhaps because of a perceived contribution to society or a belief that they’re unfairly burdened by the tax code.

Ultimately, while the motivations vary, cheating on taxes often involves a mix of personal financial considerations, beliefs about fairness, and perceptions of the system’s enforcement effectiveness.

So there you have it, unedited straight from cyberspace. I have no clue who wrote this, but it wasn’t me. Frankly, it’s a damn good response. Very scary. Can it write briefs, memorandums, an essay, a book, some poems, some jokes. So who has been writing all these bulletins for the last bunch of years? Makes you wonder.

2) BTW the tax brackets for 2025 are on the IRS website and the standard deduction limits too…or you can just go to AI and ask it.

Questions or Comments should be emailed to Tdavidlawyer@gmail.com.

 

 

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 Tdavidlawyer@gmail.com