Weekly Client Facing Newsletter

Designed to Help You Grow Your Proactive Tax Business

Stay top of mind with your prospects and clients with a current event-driven, entertaining newsletter that promotes proactive tax planning and your business.

Samples newsletters (click to read)

As Time Goes By

In 1942, Captain Louis Renault, commander of French troops in Casablanca, was “shocked, shocked” to find that gambling was going on at Rick’s Café Americain. As the Captain collected his winnings, he shut Rick down. While that might not sound like a promising start, the pair ultimately joined forces to help the Czech freedom fighter Victor Laszlo and his wife escape to Lisbon. As the Laszlos boarded the plane to safety, Renault shot the German Major Strasser and ordered police to “round up the usual suspects.” For his part, Rick predicted the whole adventure would be “the beginning of a beautiful friendship.”

Twenty-seven years later, Treasury Secretary Joseph Barr was shocked, shocked that 155 taxpayers making the equivalent of $1.7 million in today’s dollars had taken advantage of enough loopholes to pay no income tax. His response? Create an alternative minimum tax equal to 10% of the sum of certain preferences above $30,000, plus the taxpayers’ regular tax liability. (It would have been easier to just shoot someone.) But Barr’s story doesn’t have a happy ending. Congress didn’t index the exemption to inflation until 2013. So as time went by, millions of Americans wound up paying the millionaire’s tax. If you were a high-school principal married to an RN in a high-tax state like California or New York, you might have paid it yourself. (The 2017 tax act fixed the problem by raising the exemption to $500,000 for singles and $1 million for joint filers.)

Today, the White House is shocked, shocked to see that stocks sometimes go up. That means billionaires like Jeff Bezos can finance mansions and yachts by borrowing against their shares tax-free, rather than selling and paying tax on their gains. Now, the White House understands Congress won’t hike regular rates in an election year. And they know a Bernie Sanders-style wealth tax is a non-starter. So, last week, as part of their 2023 budget, they floated a “hybrid” tax on increases in wealth. Specifically, they proposed going all Will Smith on households worth $100 million or more, slapping them with a “Billionaire minimum tax” of 20% on their full income – including unrealized appreciation on their stock.

Let’s pretend for just a moment this new tax has a chance of passing. (It doesn’t – but the Laszlos weren’t supposed to make it out of Casablanca, either.) Do you see a happy ending? Or do you see inflation and bracket creep eroding those thresholds to the point where your kids wind up paying? And do you see the genius in calling it a “Billionaire” tax when it hits people worth just 10% of that amount? If so, you may be cynical enough for a career in Washington!

Meanwhile, some board-certified billionaires are feeling like the usual suspects at roundup time. Hedge fund manager Leon Cooperman, who drives a Hyundai to pick up lamb chops at Costco, says, “It’s dead on arrival, it’s not constitutional, and it makes no sense.” Grocery-store kingpin John Catsimatides is even saltier, fuming that, “If they don’t like the United States the way it is, I’m buying them a one-way ticket to Venezuela.”

The cable news crowd can debate the new proposal until they’re blue in the face. Meanwhile, here in the real world, millions face a looming reckoning. Remember how the 2017 tax act fixed the AMT by raising the threshold? That fix is scheduled to expire on January 1, 2026, meaning the tax will roar back to hit an estimated 6.5 million families. If you don’t already have a plan to make the most of your opportunities, now’s the time to make one. We promise it will be the start (or continuation) of a beautiful friendship!

Not an April Fools Joke

Millions of us who are staying at home in this time of coronavirus are discovering to our dismay just how much the clown car of halfwits, freaks, and grotesques of “reality TV” has taken over our living rooms. The endless parade of bachelors, teen moms, real housewives, and Kardashians have slowly sapped at our dignity. So what if we told you we’d found the most insane reality of all? Something one critic described as “like watching a slow-motion car crash, but only if that car crashed into a jet plane and then both tumbled into an oil tanker”? Would that convince you to finally watch?

And . . . what if we told you it had tigers?

Tiger King is Netflix’s newest #1 hit, a true-crime trainwreck featuring Joe Exotic (real name: who cares?). Joe’s a gun-toting country singer with two husbands and a mullet you’ll swear you recognize from a Billy Ray Cyrus video. But what made him special was owning a private zoo with over 200 tigers. The show follows Joe’s descent into madness as he winds up in prison for hiring a hit man to kill Carol Baskin, an animal-rights activist working to outlaw private ownership of tigers and other big cats.

(Ironically, Baskin herself was the prime suspect in the 1997 disappearance of her husband Don. Joe even recorded a music video accusing her of feeding Don to her tigers. We told you this show was insane!)

At this point, you’re probably wondering “where’s the tax angle?” If we’re being honest, it’s a stretch. (We decided to write this week’s column about the show long before we figured out the tax hook.) But it’s worth mentioning that while Joe Exotic may not have a head for style, he does have a fair head for business. Running any business is hard. But running a private zoo is especially hard considering your competitors don’t have to worry about paying taxes!

Take the Bronx Zoo, for example. It sits on 265 acres less than six miles from Yankee Stadium. It’s owned by the Wildlife Conservation Society, a 501(c)(3) nonprofit. As such, it doesn’t pay sales tax or property tax. The Society collects $300+ million per year, including $50+ million in tax-deductible contributions, and manages over $1 billion in assets.

Joe’s zoo occupied 16 acres south of Oklahoma City. Joe paid every tax in the book. And while his staff and contractors were happy to accept substandard pay for the thrill of helping the animals, most of the donations it got went straight to feeding the tigers. (Don’t ask.)

Joe’s for-profit status gave him some advantages — he could do things most zoos couldn’t (or wouldn’t). He started breeding ligers (offspring of a male lion and female tiger), tigons, liligers, and even a tililiger. (Don’t ask.) Tililigers, of course, don’t exist in nature. They’re the big-cat equivalent of Californium and Nobelium — those manmade additions to the Periodic Table of Elements that exist only for fleeting milliseconds when physicists bombard simpler elements in particle accelerators.

Look, we could go on and on. The meth! The embezzlement! The wiretaps! The presidential run! By now you’re either in or you’re out. If you’re in, park yourself in front of Netflix and buckle up. If not, there’s something worthwhile on Masterpiece Theatre. The taxes can wait ’till next week.

Death, and Taxes, and Zombie

Law reviews are scholarly journals focusing on legal issues, usually edited by students at a particular school. America’s law schools currently crank out hundreds of different reviews, which means there aren’t a lot of topics that haven’t already been covered. (Chief Justice John Roberts once said “Pick up a copy of any law review that you see, and the first article is likely to be, you know, the influence of Immanuel Kant on evidentiary approaches in 18th Century Bulgaria, or something.”) But the Iowa Law Review has just published a new article on a crucial tax topic — and it’s especially appropriate to discuss this week after Halloween. We’re referring, of course, to the upcoming zombie apocalypse:

“The United States stands on the precipice of a financial disaster, and Congress has done nothing but bicker. Of course, I refer to the coming day when the undead walk the earth, feasting upon the living. A zombie apocalypse will create an urgent need for significant government revenues to protect the living, while at the same time rendering a large portion of the taxpaying public dead or undead. The government’s failure to anticipate or plan for this eventuality could cripple its ability to respond effectively, putting us all at risk. This essay fills a glaring gap in the academic literature by examining how the estate and income tax laws apply to the undead.”

Don’t laugh. This is 25 pages of lively prose, with 124 scholarly footnotes citing authoritative sources like Harry Potter and the Sorceror’s Stone, the noted gourmand Hannibal Lecter, and even “Slimer” from Ghostbusters. Chodorow isn’t afraid to ask the scary questions that the rest of us shy away from:

  • At what point does a zombie become a “decedent” for estate tax purposes?
  • Currently, the legal definition of “death” varies from state to state, with some basing it on heart function and others on brain function. This means that zombies may not actually be “dead” in some states. Does someone who dies stay legally dead after being reanimated as a zombie?
  • Could it ever make sense to die for tax reasons, then come back when income or assets will be taxed at a lower rate? If so, would the IRS attack those deaths as sham arrangements?
  • Does someone remain married for tax purposes if they or their spouse become zombified?
  • What about vampires? They’re typically wealthy and sophisticated, which makes estate planning a must. And they live for centuries, which makes tax-deferred vehicles like IRAs and cash-value life insurance even more valuable.
  • Finally, what about ghosts? Do phantoms owe tax on phantom income?

As you can see, there’s a lot more to taxes and zombies than meets the eye. Chodorow urges Congress to create tax laws for them now, before members become zombies themselves.

Fortunately, the secret to navigating taxes in a land of walking dead is the same as navigating taxes now — it’s planning. And speaking of acting now, before it turns too late, 2013 is quickly coming to an end.

December 31 may not bring a zombie apocalypse, but it will drive a stake in the heart of some of your best planning strategies. So call us for the plan you need, before it’s really too late!

Take the Next Step With Advanced Membership

The marketing and lead generation resources of Advanced membership will increase your lead capture and client base.

Basic Features

Basic features are available to all membership levels. Sign up to purchase Basic membership

Advanced Features

Advanced features are available to Advanced and Family Office Director members. Schedule a call to learn more about Advanced membership

Family Office Director Features

Elite features are only available to Elite members. Schedule a call to learn more about becoming a Family Office Director. 

Sign Up for The Briefs

Over 20,000 CPAs, tax professionals, and financial advisors subscribe to The Briefs. Subscribe now to receive expert insight on growing your business, links to the latest Tax Beat and Tax Tactics articles. You will also receive invitations to webinars, events, and special offers. Published weekly.