Posts Tagged ‘United States’
Posted by William Byrnes on January 21, 2011
Why Accredited Program Exams & Education matter. Brief History of Professional Designations in the USA and Why Certification Matters
These days it is becoming more and more important to have an accredited degree along with certifications, graduate credentials, specializations, or other professional designations. Many of todays industry professionals have the term “Board Certified” or certified on their resume which shows that they have completed the requirements for certification under the standards of an Independent Regulatory Body .
Certification bodies, honor societies, and Self Regulatory Organizations have been in existence for several hundred years in the United States. Honors, awards, designations, certifications, and other non-government regulated credentials has been well recognized since “academic honor societies” became popular over 200 years ago in the USA i.e. PBK Honor Society in year 1776.
Further, professional designations in the last 30 years have become almost a requirement to be hired into many job areas of: banking, insurance, project management, risk management, business, law, finance, and various other fields.
AAFM ® American Academy of Financial Management®, a global certification standards body, was the first to require program exams and courses from a government recognized and double accredited business schools by creating legal articulation agreements directly with Governmental Bodies and Accreditation Bodies.
Under US government laws, individuals generally must be registered with some federal or state governmental licensing authority before working in a regulated field such as law or accounting. However, corporations, state bar associations and accounting societies allow their members to use other professional certifications after your name. e.g. John Doe, MBA, CWM ®
Overall, if you research the ACBSP – The Accreditation Council for Business Schools and Programs www.ACBSP.org, The American Bar Association ABA, or other accredited business schools in North or South America, we find that double accredited programs maintain the highest admissions requirements, educational standards, and testing & assessment criteria in the world. These top business schools are also recognized by the Government sanctioned CHEA Council of Higher Education through the US Government’s DOE Department of Education.
Thus, there is a continued new movement toward applying to and beginning or entering specific degree or accredited business programs with the intent to earn specialized-graduate certifications while actually working toward a diploma or degree. Some certifications, such as AAFM®, may even count toward credit for a Graduate Degree.
As for trends, research shows that more and more of the TOP ranked accredited institutions will continue to move toward integrating independent “graduate certifications”, diplomas, charters, and even joint certification programs with external certification bodies.
Below are typical benefits for holding certifications taken from the AAFM® American Academy Website.
Sample Benefits of Professional Certification from AAFM ® International Board of Standards
- Gain Recognition from an Independent “Professional Certifying Body”
- Use Post-Nominal Credentials after your name on your business cards.
- Addition of Certification Marks after your on your Resume, CV, & Promotional Materials. Ex. John Doe, MFP Master Financial Planner
- Achieve an accredited degree-based designation that rewards you for your professional exams, education, hard work and experience.
- Protect your job security by achieving graduate recognition from: an independent, vendor-neutral, globally recognized authority and standards body.
- Promote Advanced Specialization Skills in your resume and portfolio of credentials
- Enhance your digital resume with key memberships, awards, and industry recognized qualifications.
- Certifications and knowledge expansion have been proven to increase your professional image and salary potential.
- Advanced Standing to Publish research in the journal or websites as a Certified Member.
- Assist in work helping charity, governments, the United Nations, or NGOs through our volunteer and outreach programs.
- Use our private career network of: job alerts, advice, communications and job tools.
- CPE continuing professional education from any affiliated business school.
- Networking with members in more than 150 Countries via online or conferences.
- The AAFM ® Certification body has international alliances with Leading Associations in Arabia, Asia, Africa, India, China, Asia, Singapore and more.
- The AAFM ® Official Approved Annual Conference is a TOP Global Conferences in Business, Management, Finance, Economics, Leadership and more.
- Become a Fellow or Advisor of the Academy and Institute.
- Professional Online Networks with LinkedIn
- Can show others that the Holder of certification has achieved Double Accredited Education from a government recognized business school such as ACBSP.
- Certifications are verified online globally to improve your ability to be hired & screened through our Certification Verification System
- Certifications help your resume to be found in the digital world of “Search”.
- Qualified Board Certifications are allowed by State Bar Associations and The AICPA State Accounting Bodies.
Prof. Mentz, who is CEO of the AAFM ® American Academy and a licensed US attorney stated, “Board Certification that is backed by “double accredited business program’s exams and education” is the confirmation which validates your hard work and expertise, and tells the world that your graduate certification has met the highest global accreditation standards for business education under the US Department of Education and CHEA governmental standards.”
References
- AAFM ® Investopedia http://www.investopedia.com/terms/a/american-academy-of-financial-management.asp
- AAFM ® US Dept of Labor http://www.bls.gov/oco/ocos301.htm
- AAPM ® Project Management Certification www.certifiedprojectmanager.us
- Government licensed: Attorneys/Lawyers, CPAs, and Engineers who offer Advice and services incidental to their work are generally excluded from this regulatory registration http://www.sec.gov/divisions/investment/iaregulation/memoia.htm
- AAFM ® FINRA Referenced Designations: http://apps.finra.org/DataDirectory/1/prodesignations.aspx
- CHEA, DOE, ACBSP, etc. www.ACBSP.org
- TJSL Law School http://llmprogram.tjsl.edu
Posted in Courses | Tagged: Academic degree, American Academy of Financial Management, E-learning, education, LinkedIn, Professional certification, PRWEB, United States | Leave a Comment »
Posted by William Byrnes on January 20, 2011
Beginning last week life insurance brokers in the Big Apple started disclosing commissions to consumers. New York is one of the first states that are mandating life insurance commission details to be disclosed to clients.
Under New York Insurance law, [1] an insurance producer selling or renewing an insurance contract must disclose the following information to the purchaser orally or in writing not later than application for the insurance contract or the renewal:
(1) whether the insurance producer represents the purchaser or the insurer for purposes of the sale;
(2) that the insurance producer will receive compensation from the selling insurer based on the insurance contract the producer sells;
(3) that the compensation insurers pay to insurance producers may vary depending on a number of factors, including the insurance contract and the insurer that the purchaser selects, the volume of business the producer provides to the insurer or the profitability of the insurance contracts that the producer provides to the insurer; and
(4) that the purchaser may obtain information about the compensation expected to be received by the producer for the sale and for any alternative quotes obtained by the producer by requesting such information from the producer.
To read this article excerpted above, please access http://www.advisorfyi.com/2010/12/new-york-life-insurance-commission-disclosures/
Posted in Insurance | Tagged: Agents and Marketers, Big Apple, Business, Financial services, healthinsurance, insurance, Insurance policy, United States | Leave a Comment »
Posted by William Byrnes on January 19, 2011
Life insurance policies are granted preferred tax treatment, with death benefits distributable tax-free to beneficiaries, but some distributions from a life insurance policy are subject to income tax. For instance, although inside buildup of policy value occurs tax-free, when that value is tapped through policy withdrawals, the policy owner may be taxed on the distribution. Current income taxation can also result when a policy is cancelled or otherwise terminated when a policy loan is outstanding, as illustrated by a recent Tax Court case.
For previous coverage of life insurance developments in Advisor’s Journal, see Life Insurance: Iron-Clad Asset Protection or Chink in the Armor? (CC 10-114) and IRS Blesses Life Insurance Policy Held by Profit-Sharing Plan (CC 10-96). Read this complete article at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber).
For in-depth analysis of policy loans and withdrawals, see Advisor’s Main Library: Section 19.1 G—Tax Treatment Of Policy Loan Interest and Section 19.1 C—Taxation of Amounts Payable During Life.
Posted in Insurance, Taxation | Tagged: insurance, Insurance policy, Internal Revenue Service, life insurance, Policy, tax, term life insurance, United States | Leave a Comment »
Posted by William Byrnes on January 18, 2011
Written by the foremost experts in the field, Robert Bloink, Esq., LL.M and Professor William H. Byrnes, Esq., LL.M, CWM
Understand the Act’s Implications for You and Your Clients
- Analyzes important insurance, estate, gift, and other elements of the Act
- Provides pertinent information on other important 2010 tax developments
- Convenient Q&A format speeds you to the information you need – with answers to over 100 important questions
Summary Table of Contents
- Analysis of the Tax Relief Act of 2010
- Income Tax Provisions
- Estate Tax Provisions
- Generation Skipping Transfer Tax
- Deduction for State and Local Sales Taxes
- Alternative Minimum Tax
- Tax Credits
- Payroll Tax Holiday
- Wage Credit for Employees who are Active Duty Members of the Military
- Charitable Distributions from Retirement Accounts
- Bonus Depreciation and Section 179 Expensing
- Basis Reporting Requirements for Brokers and Mutual Funds
- Regulated Investment Company Modernization Act of 2010
- Health Care Act
- Form 1099 Reporting Requirement for Businesses
- American Jobs and Closing Tax Loopholes Act of 2010
- Requirements for Tax Return Preparers
Product Information:
Softcover/64 pages total; 42 pages of questions and answers
Publication Date: January 2011
Publication Number: 1350011
Price: $12.95 + shipping & handling and applicable sales tax
To order:
With our Custom Imprint program, you can place your company’s logo on the cover of this analysis and you’ll leave a lasting impression. Call 1-800-543-0874 for additional information.
Posted in Taxation | Tagged: accounting, Alternative Minimum Tax, income tax, IRS tax forms, Section 179 depreciation deduction, tax, Taxation, United States | Leave a Comment »
Posted by William Byrnes on January 18, 2011
The recent Obama Tax Cuts reinstated the estate and generation skipping transfer taxes effective for decedents dying and transfers made after December 31, 2009. As was discussed earlier this week, the estate tax applicable exclusion amount is $5 million for decedents dying in calendar years after 2011, and the maximum estate tax rate is 35 percent. Furthermore, the generation skipping transfer tax exemption for decedents dying or gifts made after December 31, 2009, is equal to the applicable exclusion amount for estate tax purposes ($5 million for 2010).
For a general background on the Generation Skipping Transfer Tax, see our November 1st Blogticle entitled: Life Insurance and the Generation—Skipping Transfer Tax
Although technically the generation skipping transfer tax is applicable for 2010, the generation skipping transfer tax rate for transfers made during 2010 is zero percent. After this year, the generation skipping transfer tax rate equals the highest estate and gift tax rate in effect for such year (35 percent in 2011 and 2012), notwithstanding the exclusion amounts.
Moreover, under the new law, a recipient of property acquired from a decedent who dies after December 31, 2009, generally will receive fair market value basis (i.e., “step up” in basis). [1]
To read this article excerpted above, please access http://www.advisorfyi.com/2010/12/obama-tax-cuts-analysis-estate-and-generation-skipping-transfer-tax/
Posted in Estate Tax | Tagged: Death, Estate tax in the United States, Generation-skipping transfer tax, gift tax, Inheritance tax, Internal Revenue Service, tax, United States | Leave a Comment »
Posted by William Byrnes on January 14, 2011
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In 2001, the Economic Growth and Tax Relief Reconciliation Act first created a new 10-percent regular income tax bracket for a portion of taxable income that was previously taxed at 15 percent. That law also reduced the other regular income tax rates. The otherwise applicable regular income tax rates of 28 percent, 31 percent, 36 percent and 39.6 percent were reduced to 25 percent, 28 percent, 33 percent, and 35 percent, respectively.
Under Section 101 of the new Tax Relief, Unemployment Insurance Reauthorization, And Job Creation Act of 2010, the law creates an extension of the taxable income brackets created almost a decade ago.
Generally, a taxpayer determines his or her tax liability by applying the tax rate schedules (or the tax tables) to his or her taxable income. The rate schedules are broken into several ranges of income, known as income brackets, and the marginal tax rate increases as a taxpayer’s income increases. Separate rate schedules apply based on an individual’s filing status.
Below are the new tax rate tables for those filing as single taxpayers, married filing jointly, as well as head of household.
To read this article excerpted above, please access http://www.advisorfyi.com/2010/12/new-tax-brackets-under-the-obama-tax-cuts/
Posted in Taxation | Tagged: income tax, Inflation, Rate schedule (federal income tax), tax, Tax bracket, Tax rate, Taxable income, United States | Leave a Comment »
Posted by William Byrnes on January 12, 2011
Some economists are reporting that the recession is officially over.
Others are less optimistic, suggesting that the recession could last into 2012. And with unemployment numbers hovering around 10 percent, median household income falling, and foreclosures mounting, the most important part of any potential recovery, the public, is still cynical.
What if even the most cynical predictions for the world economy are underestimating the length of the path to recovery?
One economist is predicting that the current recession could last until 2018. Read this complete article at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber).
For previous coverage of the economic downturn in Advisor’s Journal, see Fed to Purchase $600 Billion in Treasuries in Move to Stimulate Economy (CC 10-94).
Posted in Uncategorized | Tagged: Barack Obama, Economic, Federal Reserve System, Gross domestic product, Late-2000s recession, Recession, United States, United States Treasury security | Leave a Comment »
Posted by William Byrnes on January 10, 2011
This 10 week live online video-conference course on Brazil will be taught in English (but all attendants may use Portuguese to ask and respond to questions) by several renown Brazilian specialists who have extensive out-of-country experience, working as international counsel for large multinational companies, big 4 firms, and government.
Please contact Associate Dean Prof. William Byrnes if you are interested in enrolling in this executive education course. wbyrnes@tjsl.edu or skype: professorbyrnes All lectures are recorded for playback during the ten weeks. Lexis access is included.
Tax System:
- Overview – Main taxes;
- Corporate Taxation: Corporate Income tax and Social Contribution;
- Simplified tax regime;
- Accounting Rules (IFRS and SPED);
- Investment incentives;
- Developing a Tax Strategy in Brazil;
- Tax avoidance versus Tax Evasion
General Overview of Brazilian Indirect Taxes
- VAT;
- Other Indirect Taxes;
Foreign Investments:
- Brazilian Central Bank (Regulations, Registrations and forms);
- Dividends, Royalties, Loans, etc;
- Capital Gains;
- Foreign Trade Rules (Import and Export transactions);
Mergers & Acquisitions;
- Corporate aspects;
- Tax implications;
Financial System:
- Organization,
- Newcomers,
- Competition,
Foreign Companies:
- Tax credit
- Withholding Tax;
- Financing issues;
- Permanent Establishment;
- Low-tax Jurisdictions (Tax Haven Countries);
- Tax treaties
Transfer Pricing
Industrial Property Rights
Posted in Courses | Tagged: Brazil, Corporate tax, Intellectual property, tax, Tax avoidance and tax evasion, Tax treaty, United States, Withholding tax | 1 Comment »
Posted by William Byrnes on January 6, 2011
Life insurance is often touted as an iron-clad asset protection vehicle since many states exempt life insurance policies from attachment by an insured’s creditors. Life insurance can even provide limited asset protection in bankruptcy.
But life insurance is not a foolproof method of protecting family assets from all creditors, as illustrated by a recent U.S. District Court case. In that case, an insured sued his insurance company and the IRS after the insurance company paid over the cash value of a life insurance policy to the IRS to satisfy a tax levy. The insured’s wife and daughter were the beneficiaries of the life insurance policy, which would have shielded the policy from creditors in many states, including his. Read this complete article at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber).
For previous coverage of asset protection in Advisor’s Journal, see Domestic Asset Protection Trusts: New Chart Ranks the States (CC 10-30).
For in-depth analysis of asset protection, see Advisor’s Main Library: G—Domestic Asset Protection Trusts.
We invite your questions and comments by posting them below or by calling the Panel of Experts.
Posted in Insurance | Tagged: Asset, Business, Financial services, insurance, Insurance policy, Life, life insurance, United States | Leave a Comment »
Posted by William Byrnes on December 23, 2010
archive recording of our 15 December information session webinar
- International Tax
- Financial Services
- Wealth Management
- Compliance & Anti-Money Laundering
Request an application or a continuing education enrollment form. If you have any curricular questions, I can discuss via Skype or telephone.
While the program will be online video-conference, if you should have the opportunity to visit our new campus it is considered one of the best for collaborative technology and research.
Regards – William Byrnes, Assoc. Dean – Graduate Programs & Distance Learning
Thomas Jefferson School of Law, 1155 Island Avenue, San Diego California 92101
Tel: +1 (619) 374-6955 skype: professorbyrnes
New 178,000 sq ft academic building: http://www.tjsl.edu/about-tjsl/our-new-campus
New 46,000 sq ft lifestyle spa & gym http://www.fitathletic.com/sandiego/home.php
New 178 unit student-residence http://www.entrada453.com/
New central library directly behind our new campus http://granicus.sandiego.gov/ASX.php?publish_id=897&sn=granicus.sandiego.gov (view the architectural rendering videos of the library of the future)
Posted in Courses, Uncategorized | Tagged: Distance education, education, Graduate school, Law school, San Diego, Skype, Thomas Jefferson School of Law, United States | Leave a Comment »
Posted by William Byrnes on December 21, 2010
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This 10 week live video conference course on Brazil will be taught in English (but all attendants may use Portuguese to ask and respond to questions) by several renown Brazilian specialists who have extensive out-of-country experience, working as international counsel for large multinational companies, big 4 firms, and government, by concentrate on the Brazilian corporate structures, tax & financial systems, regulations and compliance, focusing on the practical aspects of doing business in Brazil. We will also discuss the impact of the recent changes in tax/corporate laws and regulations.
Please contact Associate Dean Prof. William Byrnes if you are interested in enrolling in this executive education course. wbyrnes@tjsl.edu (or my gmail williambyrnes@gmail.com) or skype: professorbyrnes or telephone + 1 619 374 6955
Tax System:
- Overview – Main taxes;
- Corporate Taxation: Corporate Income tax and Social Contribution;
- Simplified tax regime;
- Accounting Rules (IFRS and SPED);
- Investment incentives;
- Developing a Tax Strategy in Brazil;
- Tax avoidance versus Tax Evasion
General Overview of Brazilian Indirect Taxes
- VAT;
- Other Indirect Taxes;
Foreign Investments:
- Brazilian Central Bank (Regulations, Registrations and forms);
- Dividends, Royalties, Loans, etc;
- Capital Gains;
- Foreign Trade Rules (Import and Export transactions);
Mergers & Acquisitions;
- Corporate aspects;
- Tax implications;
Financial System:
- Organization,
- Newcomers,
- Competition,
Foreign Companies:
- Tax credit
- Withholding Tax;
- Financing issues;
- Permanent Establishment;
- Low-tax Jurisdictions (Tax Haven Countries);
- Tax treaties
Transfer Pricing
Industrial Property Rights
Posted in Courses | Tagged: Brazil, Corporate tax, income tax, tax, Tax rate, Taxation, United States | 2 Comments »
Posted by William Byrnes on December 20, 2010
Live lectured video-conference webinars (recorded for pod-cast) for lawyers, accountants, bankers, compliance officers, trust and company service providers
courses include online access to LexisNexis, Westlaw, CCH, Checkpoint, IBFD, BNA, Tax Analysts and many more library databases
– Chartered Asset Manager
– International Compliance
– Information Security and Cybercrime Law
– Law of Banking and Financial Institutions
– Loan Workouts, Debt Collection & Foreclosure
– International Tax & Financial Centers
– International Estate Planning
– United States Corporation Tax
– Business Bankruptcy
– E-Business Contract Law
To enroll please contact Prof. William Byrnes (email williambyrnes@gmail.com) Skype professorbyrnes or call +1 (619) 374-6955
Posted in Courses | Tagged: American Academy of Financial Management, Information security, law, Lawyers and Law Firms, LexisNexis, Professor, Reed Elsevier, Services, Skype, Tax Analysts, United States, Videoconferencing, Westlaw | Leave a Comment »
Posted by William Byrnes on December 15, 2010
In a contentious move, the National Conference of Insurance Legislators (NCOIL) executive committee voted unanimously to adopt the Life Insurance Consumer Disclosure Model Act, (Model Act), which requires life insurance carriers to notify policy owners of settlement options when the policy owner is considering surrendering the policy or when the policy is set to lapse.
The life settlement industry is giddy over the Model Act—which should boost their business. But the insurance industry outlook on the Act is not so rosy—settlement essentially ensures that policies will not lapse before death benefits are paid and that many policy owners will choose settlement over carrier options like accelerated death benefits and policy surrender. Not all policy owners have a right to disclosure about settlements under the Model Act. The disclosure requirement applies only where the insured is sixty years old or older or “is known by the insurer to be terminally ill or chronically ill” and … read this complete article at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber).
For previous coverage of life insurance settlement options in Advisor’s Journal, see Don’t Overlook Beneficiary Designations and Settlement Options (CC 09-28)
We invite your questions and comments by posting them or by calling the Panel of Experts.
Posted in Insurance | Tagged: Business, Financial services, insurance, Insurance policy, life insurance, Life settlement, Terminal illness, United States | Leave a Comment »
Posted by William Byrnes on December 14, 2010
Insurance companies have been getting a lot of press the last few years. But this time, it’s not a story about a health insurance carrier denying a father-of-five cancer patient’s potentially life-saving treatment. It’s a Los Angeles Times story pillorying life insurance company American General and several other carriers for rescinding life insurance policies after the insured’s death.
According to the Los Angeles Times article, $372 million in life insurance benefits were denied beneficiaries in 2009, doubling over the past decade even as life insurance policy sales have decreased.
The article breaks down the denied death benefits by insurance company, finding that some carriers deny death benefits more than others. The prime target …… read this complete article at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber).
For in-depth analysis of a life insurance company’s right to rescind a policy after issuance, see Advisor’s Main Library: Section 20 C—Payment Of Proceeds.
We invite your questions and comments by posting them below or by calling the Panel of Experts.
Posted in Insurance | Tagged: Business, Financial services, insurance, Insurance policy, life insurance, Los Angeles Times, term life insurance, United States | Leave a Comment »
Posted by William Byrnes on December 10, 2010
For as long as life insurance has existed, con artists and murderers have sought payouts from policies on the lives of their victims. Tomisue Hilbert, wife of insurance giant Conseco, Inc.’s founder Stephen Hilbert, suspects that her mother, Suzy Tomlinson, was a victim of one such schemer.
She looks to hold AIG responsible for her mother’s untimely death, believing that a high-value policy issued by American General (an AIG subsidiary) on her mother’s life was the impetus behind a scheme that ended with her mother’s death. The life insurance policy at issue in the case is a $15 million policy on Tomlinson’s life naming Indiana businessman J.B. Carlson as its beneficiary. Policy premiums were paid with premium financing.
On September 29, 2008, Suzy Tomlinson drowned in her bathtub, fully clothed, after a night of drinking. Tomlinson’s death occurred right before a $1.27 million payment was due on the premium finance loan. Tomisue Hilbert’s lawsuit notes the fortuitous timing—for Carlson—of her mother’s death, Carlson’s debts of $5.9 million and the fact that Carlson may have been the last person to see her mother alive.
Read this complete article at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber).
Posted in Insurance | Tagged: American International Group, Conseco, Indiana, insurance, Insurance policy, life insurance, Premium Financing, United States | Leave a Comment »
Posted by William Byrnes on December 8, 2010
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Buzz about the Financial Industry Regulatory Authority, Inc. (FINRA) taking responsibility for regulation of investment advisers has been circulating for a couple of years now—but the talk is suddenly sounding less like gossip and a lot more like a plan. Last week, FINRA’s chief executive, Richard Ketchum, sent a letter to the SEC touting the benefits of appointing a self-regulatory organization (SRO) to oversee advisors. Although Ketchum’s letter does not directly ask the SEC to cede some of its regulatory authority over advisers to FINRA, hints abound.
The Dodd-Frank Wall Street Reform and Consumer Protection Act, passed earlier this year, mandates an SEC study of its investment advisor examinations and whether delegation of advisor regulation to an SRO would improve examinations. Read this complete article at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber).
For previous coverage of FINRA in Advisor’s Journal, see FINRA Proposes Eliminating Industry Insiders from Arbitration Panels (CC 10-80).
We invite your questions and comments by posting them below, or by calling the Panel of Experts.
Posted in Compliance, Wealth Management | Tagged: Business, Chairman, Financial adviser, Financial Industry Regulatory Authority, Investor, Regulation, U.S. Securities and Exchange Commission, United States | Leave a Comment »
Posted by William Byrnes on December 2, 2010
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According to a recent report by Javelin Strategy and Research (California); “[a]lthough the recent ‘Great Recession’ has caused millions of Americans to tighten their belts financially, nearly one out of five consumers are financial sleepwalkers”—those who do not manage their personal finances. [1] That’s right; at least 20% of Americans are not currently using wealth managers to manage their personal finances. The report states that the rate is more than double that of 2009. [2] This presents a vast opportunity for wealth managers to expand their market share.
The United States Department of Labor project that personal financial advisors are estimated to grow by 30 percent over the 2008–18 period. “Growing numbers of advisors will be needed to assist the millions of workers expected to retire in the next 10 years.” [3] Further, “[a]s more members of the large baby boom generation reach their peak years of retirement savings, personal investments are expected to increase and more people will seek the help of experts.” [4]
Moreover, there is a trend in corporate America to replace “traditional pension plans with retirement savings programs, so more individuals are managing their own retirements than in the past,” creating additional opportunity for wealth managers. [5] In addition, as medical technology continues to advance and people on average, live longer, the need for additional financial planning arises.
The average compensation for wealth managers is around $89,920 to $110,130 for those marketing insurance products and services as well as other financial investments. [6] New York has the most wealth managers in terms of total numbers. [7] In addition, New York wealth managers made on average $146,460, the most from any state. [8] Read the entire article at AdvisorFYI.
For previous blogticles covering the wealth management industry, see the series beginning The Future of Wealth Management
Posted in Wealth Management | Tagged: California, Finance, Financial services, New York, Pension, United States, United States Department of Labor, Wealth, wealth management financial planning | Leave a Comment »
Posted by William Byrnes on November 29, 2010
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Why is this Topic Important to Wealth Managers? Provides an update for wealth managers into the status of employer owned life insurance. Discusses two notable exceptions to the general rule including income from the death benefits of an insurance policy when paid to a trade or business.
In 2006, Congress added Section 101(j) to the Internal Revenue Code which addresses the taxation of employer owned life insurance (EOLI) under Section 863 of the Pension Protection Act. The law departed from the traditional status of life insurance proceeds payable by death of the insured as excluded from gross income. [1]
Section 101(j) essentially taxes life insurance proceeds payable at death, in the amount over contributions or basis, when the policy is owned by a trade or business, where the employer is the beneficiary, and the employee is the insured. [2] There are a certain number of exceptions where the benefit payable to the beneficiary will remain excludable. [3] In all of the exceptional situations notice and consent requirements must be met. [4] For a discussion on the notice requirements specifically, or Section 101(j) generally, please see AdvisorFX: Death Benefits Under Employer Owned Life Insurance Contracts. [5]
Since the enactment of law, the Service has issued guidance in regards to what transactions may be allowed under section 101(j). That guidance came in part, last year when the Service published Notice 2009-48.
How do some of the exceptions work in consideration of the guidance published in Notice 2009-48? Read our entire analysis and citations at AdvisorFYI.
Posted in Insurance, Taxation | Tagged: Business, employer owned life insurance, Financial services, insurance, Insurance policy, Internal Revenue Code, life insurance, term life insurance, United States | Leave a Comment »
Posted by William Byrnes on November 26, 2010
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This week’s blogticles discussed compliance reporting generally regarding foreign transactions and activities. Today, we will continue to explore some of the common reporting requirements that are filed based on domestic and international activity.
Congress has enacted legislation to the affect that the Secretary of the Treasury requires financial institutions to report any suspicious transaction relevant to “a possible violation of law or regulation.” [1] The Financial Crimes Enforcement Network (FinCEN) maintains theses “reports in a central database and makes the information available electronically to state and federal law enforcement and regulatory agencies to assist in combating financial crime.” [2]
Currency Transaction Reports
Under Federal Statute the Department of the Treasury requires “banks, securities broker-dealers, money services businesses, casinos, and other financial institutions”, to file a “report for each transaction involving the payment, receipt, or transfer of U.S. coins or currency (or other monetary instruments as Treasury may prescribe)” in excess of $10,000. [3]
Report of International Transportation of Currency or Monetary Instruments
Read the entire article at AdvisorFYI.
Posted in Compliance, Reporting | Tagged: Financial Crimes Enforcement Network, Financial institution, Financial services, Money Laundering, Suspicious activity report, United States, United States Department of the Treasury, United States Secretary of the Treasury | Leave a Comment »
Posted by William Byrnes on November 24, 2010
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The Federal Government has estimated that the “United States loses an estimated $345 billion in tax revenues each year as a result of offshore tax abuses primarily from the use of concealed and undeclared accounts held by U.S. taxpayers or their controlled foreign entities.” [1]
In consideration of the goal of eliminating this gap, “it is not surprising that the government recently ratcheted up its pressure on taxpayers who structured their activities, in many cases, with the active help and assistance of promoters and facilitators to avoid reporting their taxable income on their tax returns or hide these offshore accounts from the government.” [2] This increased “pressure” came in the form of the HIRE Act passed in the first quarter of 2010. [3] As was discussed earlier this week,[4] the new law provides for reporting requirements by foreign financial institutions with U.S. accountholders about the status, specifically identity and balance, of their account. [5] Read the entire article at AdvisorFYI.
Posted in Compliance, Reporting | Tagged: Employment, Federal government of the United States, Hiring Incentives to Restore Employment Act, Internal Revenue Service, Offshore bank, Social Security, tax, United States | Leave a Comment »
Posted by William Byrnes on November 23, 2010
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During the first quarter of 2010, President Obama signed into law H.R. 2847, the Hiring Incentives to Restore Employment Act. “The act provides incentives for job creation, but in order to pay for the incentives, the act also contains significant changes that will affect foreign financial institutions that choose to do business with U.S. persons.” [1] Half of the “U.S. Congressional Record that contains the act” is “dedicated to foreign account tax compliance.” [2]
Therefore, “although the act is commonly referred to as the HIRE Act for its focus on job creation, one of its main purposes is to target tax dodgers’ use of foreign accounts.” [3] The act is basically a model of the 2009 Foreign Account Tax Compliance Act (FATCA) which was introduced by the Senate. “The act incorporates substantially all of FATCA, with one important exception: FATCA would have imposed reporting requirements on material advisors, including attorneys, accountants, and other professionals, who advise on acquisitions or formations of foreign entities.” [4]
Read the entire article at AdvisorFYI.
Posted in Uncategorized | Tagged: Barack Obama, Congressional Record, Employment, Financial institution, Hiring Incentives to Restore Employment Act, Incentive, tax, United States | Leave a Comment »
Posted by William Byrnes on November 22, 2010
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There is no specific Federal law that prohibits an individual from owning any interest in a financial account in foreign jurisdictions. “However, because offshore financial accounts can be used to hide criminal proceeds or evade taxes, federal law does require disclosure of such accounts.” [1]
“Congress has directed the Secretary of the Treasury to require residents and citizens of the U.S., or persons in and doing business in the U.S., to maintain records and file reports of transactions and relations with foreign financial agencies.” [2]
Specifically, every “U.S. citizen, resident and businessperson who has a financial interest in, or signatory authority over, one or more bank accounts, securities accounts or other financial accounts in a foreign country”, must “report that relationship to the U.S. Department of the Treasury if the aggregate value of the accounts exceeds $10,000 at any time during the calendar year”, annually through Form TD F 90-22.1. [3]
Read the entire article at AdvisorFYI.
Posted in Compliance, Reporting | Tagged: Bank, Bank account, Citizenship in the United States, Congress, Finance, Internal Revenue Service, United States, United States Department of the Treasury | 1 Comment »
Posted by William Byrnes on November 19, 2010
Why is this Topic Important to Wealth Managers? Section 1035 exchanges are known for deferral of a taxable gain through a step-up in basis into a new contract. The tax benefits granted by Congress are certainly advantageous, however, in an uncertain economy Section1035 exchanges also offer wealth managers the opportunity for new business. Because of the potential little to no out-of-pocket expense associated with these transactions, many wealth mangers are currently implementing this advantageous exchange during sluggish times.
It is often the case that policy owners’ expectations change during the life of a contract. It makes sense to re-evaluate objectives to ensure they’re still aligned with client goals. Section 1035 exchanges are one area where this practice is commonplace.
Generally, Congress allows owners of life insurance and annuity contracts to exchange that contract for another, similar or related insurance or annuity contract without recognizing any unrealized gain which may have accrued within the policy, so long as the insured stays the same.
Read the entire article at AdvisorFYI.
Posted in Insurance | Tagged: Business, Congress, Financial services, insurance, Life annuity, life insurance, United States, United States Congress | Leave a Comment »
Posted by William Byrnes on November 18, 2010
Why is this Topic Important to Wealth Managers? Provides information on one additional planning tool that many wealth managers find useful for affluent clients who own a small business. Gives an overview of the nonqualified plans as well as proving a common use of life insurance to fund plan obligations well into the future.
Simply a nonqualified pension plan is a retirement plan that does not meet the requirements under the tax code and federal employment law to be considered qualified, and therefore the nonqualified plan is treated differently for tax purposes. [1]
What are some of the advantages of using a nonqualified plan over a qualified retirement plan? [2]
- Flexibility and selectivity—because the plan is not subject to requirements under the qualified plan rules, employers have much more control in terms of who may be included and the varying terms of each individual participant.
- Vesting and contingencies—nonqualified plans allow for the employer to exclude all amounts not met by vesting conditions or contingencies that the employee must achieve to obtain the benefit. Say for example, that the retirement funds become available to the employee after 10 years of faithful service to the company. If the employee does not work for 10 years, no benefits have thus accrued and the employee has no benefit under the plan.
- Cost savings through minimal reporting requirements—since nonqualified plans do not usually fall within major regulatory scope of qualified plans, the cost to administer these plans is generally less than some alternatives.
How are nonqualified plans treated for tax purposes? Read the entire blogticle at AdvisorFYI.
Posted in Insurance, Pensions | Tagged: Business, Employment, Financial services, Human Resources, life insurance, Pension, tax, United States | Leave a Comment »
Posted by William Byrnes on November 16, 2010
Why is this Topic Important to Wealth Managers? Discusses a basic deferred compensation plan available to many small businesses seeking to retain key personnel. Provides discussion on common transactions as well as expected tax consequences.
Key employee insurance generally means “a life insurance policy owned by and payable to a business that insures the lives…of employees whose deaths would cause a significant economic loss to the business, upon whose skills talents, experience or business or personal contacts the business is dependent, and who would be difficult to replace.” [1]
Generally, life insurance premiums payable by a business are not deductible. [2] Which means the income received (whether in a single sum or otherwise) by the business, under the life insurance contract by reason of the death of the insured, is not included in gross income. [3]
If a key employee policy is transferred for valuable consideration, just as with other life insurance policies, the income tax benefit normally afforded to life contract proceeds payable at death may be extinguished. [4]
As was discussed a few weeks back in our blogticle: AdvisorFYI- Treatment Life Insurance Contracts—Part II: Secondary Market Participants, “[i[n the case of a transfer for valuable consideration…the amount excluded from gross income shall not exceed an amount equal to the sum of the actual value of the consideration paid and the premiums and other amounts subsequently paid by the transferee.” [5] In other words, the transferee must include the death benefits as gross income over the amount of consideration and any additional premiums paid.
Read the entire blogticle at AdvisorFYI.
Posted in Insurance | Tagged: Agents and Marketers, Business, Financial services, insurance, Insurance policy, life insurance, term life insurance, United States | Leave a Comment »
Posted by William Byrnes on November 13, 2010
The estate tax is scheduled to explode in 2011. Analysts have assumed for years that Congress would act to fix the estate tax before it expired in 2010 and reverted to its pre-2001 levels in 2011, but it is looking more and more likely that the current Congress will hand the problem off to the next Congress on January 11, 2011. Although movement during the lame duck session is possible, it is not likely to generate any positive action on the estate tax.
Whether Congress acts on the estate tax or not, 2011 will likely bring drastic changes to the estate tax, requiring your clients to do significant tinkering on their estate plans. In the interim, estate planning professionals will continue to use disclaimer planning as a stop gap measure to deal with 2010′ s estate tax uncertainty. For instance, rather than split an estate’s assets between credit shelter and marital deduction trusts—which is unnecessary when there is no estate tax—all of the assets are devised to the spouse or the marital deduction trust. The surviving spouse can then disclaim up to the tax-free amount— … Read this complete article at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber).
For previous coverage of the estate tax conundrum in Advisor�s Journal, see Estate Tax Chaos (CC 10-02).
For in-depth analysis of the federal estate tax, see Advisor�s Main Library: Section 2 A—Overview Of The Federal Estate Tax And Its Calculation.
Posted in Estate Tax | Tagged: estate planning, Internal Revenue Service, Lame duck session (United States), law, Marital deduction, tax, United States, Widow | Leave a Comment »
Posted by William Byrnes on November 11, 2010
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The Health Care Act includes many provisions that are not directly related to health care but which are intended to fund the colossal government expenditure necessitated by the Act. One of the most burdensome changes imposed by the Health Care Act is the massive expansion of the payees and payment types that require a 1099. The new requirements will trigger a flood of paperwork for everyone involved, including payors, payees, and the IRS.
The new information reporting requirement will kick in on January 1, 2012. But the IRS will not be releasing guidance on the changes right away, so the time for taxpayers to implement the new requirements may run short. The comment period preceding the IRS’s release of proposed regulations passed at the end of September, so we can expect proposed regulations in the coming months. Advisor’s Journal will keep you informed as the IRS implements these new rules. Read this complete article at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber).
For previous coverage of the Health Care Act in Advisor’s Journal, see Changes Affecting Individuals in the 2010 Health Reform Law (CC 10-15), Changes Affecting Business in the 2010 Health Reform Law (CC 10-16), and Changes Affecting Large Employers in the 2010 Health Reform Law (CC 10-17).
Posted in Taxation | Tagged: Employment, Health care, Health care reform, Internal Revenue Service, Patient Protection and Affordable Care Act, Politics, tax, United States | Leave a Comment »
Posted by William Byrnes on October 29, 2010
A rush of IRS challenges to transactions that provide your clients with a significant tax benefit may be on its way. The IRS has new options for denying tax deductions and other tax benefits when it— at its discretion—believes that a transaction has been entered into solely for a tax reduction and not a valid business purpose.
This IRS`s “new” tool is the recently-codified economic substance doctrine, which was signed into law earlier this month by President Obama as part of the Health Care and Education Affordability Reconciliation Act of 2010. The IRS says that the act codifies only existing case law, but in practice, it gives the service the power to supplant a taxpayer`s business judgment with the service`s judgment of whether a transaction has profit potential, the end result being a denial of the tax benefit of transactions that the IRS judges not to have an economic purpose other than the reduction of taxes.
Read this complete article at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber).
We look forward to your comments on AdvisorFYI.
Posted in Taxation | Tagged: Barack Obama, Business, Economic substance, Internal Revenue Service, IRS, Obama, tax, United States | Leave a Comment »
Posted by William Byrnes on October 27, 2010
A disclaimer in the estate planning context is a voluntary refusal to accept a gift from a will. A properly structured disclaimer can be a great tax planning technique, allowing the person making the disclaimer to pass a gift on to the next person in line—for instance, someone in the next generation—without being subject to the gift tax. But a disclaimer should not be made lightly because a disclaimer that is not “qualified” for tax purposes can create serious gift tax consequences for the person making the disclaimer.
The danger of an improperly made disclaimer was clearly illustrated in a recent U.S. District Court, Estate of Tatum v. U.S. There, Son disclaimed his interest in the residue of his father`s estate. But because Son`s disclaimer was not a qualified disclaimer, Son was treated as if he received the gift and then made a taxable gift to his children, resulting in a gift tax bill for Son and his wife of over $1,600,000.
Read this complete article at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber).
For in-depth analysis of qualified disclaimers, see the AUS Main Libraries Section 7 B1—What Transactions Constitute Taxable Gifts
Posted in Taxation | Tagged: estate planning, Estate tax in the United States, Gift, gift tax, Internal Revenue Service, law, tax, United States | Leave a Comment »
Posted by William Byrnes on October 19, 2010
Why is this Topic Important to Wealth Managers? Provides general taxation of life insurance contracts that are surrendered, sold or exchanged. Gives examples that are easy to follow and provides an educational foundation for real-world gain determinations.
This is a two-part series in relation to the taxation of life insurance contracts once it is surrendered, sold or exchanged to a third party. The first blogticle will examine the issue from the seller or insured’s perspective, and tomorrow’s blogticle will discuss the matter from the purchaser’s prospective.
An insurance contract that carries a built-up cash value can be loaned against, collected by the beneficiary, surrendered, or sold to a third party. This blogticle deals in particular with the sale or exchange of the contract, i.e., surrendered or sold.
What are the tax implications if the life policy is surrendered?
As a starting point, gross income includes all income from whatever source derived including (but not limited to) income from life insurance contracts (unless the income is otherwise excluded by law). [1]
In general, a life insurance contract that is not collected as an annuity is included in gross income in the amount received over the total premiums or consideration paid. [2] “The surrender of a life insurance contract does not, however, produce a capital gain.” [3] The amount collected over basis is therefore ordinary income.
To read the remainder of this article please see AdvisorFYI.
Posted in Insurance, Taxation | Tagged: Business, Cash value, Contract, Financial services, insurance, Insurance policy, tax, United States | Leave a Comment »
Posted by William Byrnes on October 18, 2010
Life insurance-based estate planning strategies for high-net-worth clients with estate liquidity issues run into the problem that premiums may be so high as to exhaust the client’s annual gift tax exclusion and lifetime exemption, resulting in unwanted gift tax exposure. One way advanced planners have dealt with the gift tax problem of high premiums is through the use of a grantor retained annuity trust (GRAT). But the U.S. House recently passed a bill—H.R.4849, the Small Business and Infrastructure Jobs Tax Act of 2010—that would severely curtail the use of GRATs, so the utility of this technique may soon be eliminated.
To illustrate this technique while it remains open, let’s assume you have an unmarried client, Max, who owns a number of restaurant franchises. His estate will be worth about $12 million, most of which is tied up in his franchises and other illiquid investments. Max’s estate will need around $6 million in liquid death benefit to cover the pending estate tax liability. Read today’s article in your Advisor’s Journal at GRAT Strategy (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber).
For in-depth analysis of the topic of the use of GRATs, see Advisor’s Main Library Section 4. Estate Planning Techniques J—Grantor Retained Annuity Trusts
We invite your questions and comments by posting them below, or by calling the Panel of Experts.
Posted in Estate Tax, Taxation, Wealth Management | Tagged: Charitable organization, estate planning, gift tax, Grantor Retained Annuity Trust, Inheritance tax, law, Small business, United States | Leave a Comment »
Posted by William Byrnes on October 14, 2010
By Associate Dean William H. Byrnes, IV and Professor Hannah Bible of the of the International Tax and Financial Services Graduate Program of Thomas Jefferson School of Law
I. CAN I GET A 1099 WITH THAT?
On January 1, 2012 Mr. Irk pulls up to his local McDonalds drive thru in his new hydro car, being the general public conscious man he is.
Id like a Big Mac, a small order of fries, and a signed 1099 Form on the side please. With speaker hiss overshadowing, a voice responds, OK thats a Big Mac, a small fry, and a fried small apple pie. No, Mr. Irk responds, a signed 1099 form. Again barely understandable over the hiss of the speaker, eh, so you want four fried small apple pies? Mr. Irk, living up to his namesake, responds no no, not four, form.
Sir, I aint got no idea what you talkin bout. Clearly the local McDonalds counsel did not advise his client on the most recent changes in tax law.
Unless the Treasury takes great prerogative and creativity in the writing of regulations applicable to the recent Amendments set out in I.R.C. 6041, throughout 2011 attorneys and consultants should be preparing clients on how to comply with the new reporting requirements.
Starting in 2012 all gross proceeds, in addition to the previously required gains, profits, and income currently required to be reported, will need to be reported to the Internal Revenue Service (IRS) on Form 1099-MISC (or an applicable 1099 form within the 1099 series) from any amount received in consideration of …. Thus, starting January 1, sales of tangible goods will now require reporting by the purchaser.
Please read this 10 page detailed analysis of how to advise your clients and practice advice at Mertens Developments & Highlights via your Westlaw subscription (<– click there) or order via Thomson-West (<– click there).
Posted in Taxation | Tagged: 1099, Big Mac, Business, Internal Revenue Service, IRS tax forms, McDonalds, Politics, tax, United States, W9 | Leave a Comment »
Posted by William Byrnes on October 13, 2010
This month, the Congressional Research Service released an overview of qualified tuitions programs, giving us an opportunity to revisit the tax-advantaged nature of these accounts for higher education.
The primary advantage of qualified tuition programs—typically referred to as 529 plans—is the tax savings they provide. Although there is no federal income tax deduction for contributions to a 529 plan, accounts appreciate federal income tax free and distributions can be taken tax free to pay qualified higher education expenses (QHEE). In addition to federal tax benefits, a partial to full state income tax deduction for plan contributions is offered by twenty-six states. But because 529 plan accounts are intended to be used to pay higher education expenses, distributions of account appreciation that are not used to pay QHEE are subject to a penalty that varies from state to state.
For an analysis of Pre-Paid Tuition Plans, College Savings Plans, pointing out your role as the trusted advisor, see our article in AdvisorFX Advisor’s Journal.
For in-depth analysis of the topic of education savings accounts, see Advisor’s Main Library Section 50.1 Planning For Education Costs
From a tax perspective see Tax Facts Q 810. What is an Education Savings Account?
Posted in Taxation, Wealth Management | Tagged: 529 plan, Congressional Research Service, Coverdell Education Savings Account, Higher education, tax, Tax advantage, Tax deduction, United States | Leave a Comment »
Posted by William Byrnes on October 12, 2010
Why is this Topic Important to Wealth Managers? Provides specific information in regards to costs relating to the formation of an insurance company. Discusses multiple domicile options and how they relate to each other.
Wealth managers may be interested to know generally what costs are involved to form and manage a captive insurance company in different jurisdictions. Take for example Vermont. It is known as the “Captive Capital” here in the States, and for good reason, Vermont has licensed over 900 captives at last count.[1]
The licensing fees in Vermont total $4,800 (in the first year and only $300 a year thereafter.) [2] However, there are a couple of downsides to the preliminarily greener pastures. First, Vermont requires initial capitalization of a “pure”, which includes a traditional single parent, captive of $250,000. [3] Secondly, Vermont requires the captive to pay minimum premium tax of $7,500 which has an underwriting level of approximately around $2 million dollars at a rate of 0.38%. [4]
As a general rule, the formation and annual expenses, including premium taxes, of captive insurance companies will be lower in most offshore jurisdictions rather than domestic domiciles.
Read on about A Dollar Saved…Captive Insurance Company Costs
Posted in Insurance | Tagged: Business, Captive insurance, Captives, Financial services, insurance, risk management, United States, Vermont | Leave a Comment »
Posted by William Byrnes on October 11, 2010
Why is this Topic Important to Wealth Managers? Provides insight into relevant taxation issues regarding the ownership of a foreign insurance company, premium payments made to a foreign insurance company, and foreign insurance company income taxation. Discusses information wealth managers may find relevant in regards to advanced family and business estate plans.
What are the U.S. tax implications, generally, for a United States Corporation that owns a foreign insurance company?
To begin, a well known rule is that premiums paid to a foreign insurance company are subject to a federal income premium tax. The tax is due even though the U.S. parent may own the foreign insurance company, either in part or in full. The tax is remitted by the premium payor who “must file Form 720 to pay the tax at the time of the premium payment.”[1]
For casualty insurance policies the tax is 4% of the total premium payment to a foreign insurer and for life insurance and annuity contracts the tax is 1% of the premium paid.[2] The tax only applies to premium payments to a foreign insurer.
If a foreign company carrying on an insurance business within the United States qualifies as a life or casualty insurer under the Code, “if it were [otherwise] a domestic corporation,” then the company is “taxable under such part on its income effectively connected with its conduct of any trade or business within the United States.” [3]
To determine what income then is effectively connected with a trade or business within the United States, one must know what a trade or business within the United States means. “Neither the Code nor the regulations fully define the term ‘trade or business within the United States.’ ” [4] Most “cases hold that profit oriented activities in the United States, whether carried on by the taxpayer directly or through agents, are a trade or business if they are regular, substantial, and continuous.” [5] Additionally, an insurance company “makes contracts over a period of years”, which leads one to believe the issuance of insurance contracts on persons or activities in the United States is continuous. [6]
Read on about Foreign Insurance Company Taxation
Posted in Insurance, Tax Policy, Taxation | Tagged: Agent Resources, Business, Business and Economy, Carriers, Financial services, insurance, Property and Casualty, United States | Leave a Comment »
Posted by William Byrnes on October 8, 2010
Why is this Topic Important to Wealth Managers? Provides an introduction into the Internal Revenue Code so that tomorrow’s blogticle about specific sections of the Code may be better understood, in particular the taxation of life insurance companies.
How are the laws related to tax organized or in other words, what’s the general process in finding an answer to a tax question?
All federal laws of the United States arise out of the Constitution. The Constitution has granted Congress certain enumerated powers, such as the power to regulate commerce among the several states. Congress also has the power to create laws that are necessary and proper in governing based on its listed powers. All powers not granted to the Federal government are reserved by the States through the 10th Amendment – meaning only the States may enact laws in those areas (al least this is how it is supposed to work).
Once Congress passes a necessary and proper law to carry out its enumerated powers, that law becomes a United States Statute, or a Statute already existing is either amended or deleted. The Statutes of the United States are called the United States “Code”.
The United States Code is divided into 50 different titles. Title 26 is perhaps the most infamous, being the “Internal Revenue Code”. The Internal Revenue Code, or Title 26 of the United States Code is further delineated, into Subtitles, Chapters, Subchapters, Parts, and finally Sections and Subsections.
Congress has delegated the power of enforcement of these laws, which lies with the executive branch, of Title 26 to the Secretary of Treasury to create Regulations or Administrative Interpretations of the Statutes. The regulations are not in and of themselves laws but rather, direction from the Secretary of interpretation of the laws. The regulations have legal authority, which means they may be presented in court. In almost all tax cases, there is some Statute, that is called into question, therefore the Court’s exclusive job is to rule on interpretation of the Statute as it applies to the situation before the court, not to overrule any statute, unless it found the law unconstitutional. Therefore, additional law is generated by courts’ interpreting Statutes. This is known as “case law”.
Read on about the The Internal Revenue Code: Decoded
Posted in Tax Policy | Tagged: Federal government of the United States, Internal Revenue Code, law, Statute, United States, United States Code, United States Congress, United States Constitution | Leave a Comment »
Posted by William Byrnes on October 5, 2010
Why is this Topic Important to Wealth Managers? Discusses how international planning can impact clients’ tax position domestically. Provides discussion on a number of common international tax concepts as they relate to U.S. taxpayers.
In previous blog this week, it has been briefly discussed that there may be a number of reasons a client may consider offshore planning, generally. Today we will focus on one major component of offshore considerations, the impact of world-wide income on U.S. taxpayers. It is generally accepted that U.S. taxpayers are expected to pay income taxes on income earned from sources worldwide. This concept is commonly referred to as “outbound” taxation.
It is the case that many sovereign nations will also have taxes on personal and/or corporate income that an individual or corporation could become subject to, creating in effect “double taxation.” And some foreign nations choose to have very low or no tax rate on certain types of income, or on corporations in general, thus allowing foreign income to potentially escape foreign taxation (and current U.S. taxation in the year that it is earned).
What are some rules that that Congress has attempted to avoid double taxation or subject foreign income to U.S. taxation?
Check out the full blogticle at AdvisorFYI.
Posted in Uncategorized | Tagged: Congress, Corporation, income tax, law, tax, Taxation, United States, United States Congress | Leave a Comment »
Posted by William Byrnes on October 4, 2010
Valuation discounts are increasingly challenged by the IRS. Gone are the days when assets could be dropped into a family limited partnership with some transfer restrictions and forgotten about until a valuation discount was needed to reduce a gift or estate tax bill. A recent U.S. District Court case, Fisher v. U.S., reminds us that times have changed. Often, placing assets in a business entity is no longer enough to justify a valuation discount—the entity must be run like a business to justify the discount. Read the analysis by our experts Robert Bloink and William Byrnes located at AdvisorFX Journal Valuation Discounts: Only for a Bona Fide Business
For some good news about valuation discounts, see our article in AdvisorFX Advisor’s Journal on the Jensen case.
From a tax perspective see Tax Facts Q 613. How is a closely held business interest valued for federal estate tax purposes?
After reading the analysis, we invite your questions and comments by posting them below, or by calling the Panel of Experts.
Posted in Estate Tax | Tagged: Business, Estate tax in the United States, Internal Revenue Service, law, Services, tax, United States, valuation | Leave a Comment »
Posted by William Byrnes on October 1, 2010
The tax landscape is changing for the amount U.S. multinational corporations may claim through the foreign tax credit. This change is the result of the Statutory Pay-As-You-Go Act of 2010 that requires any increased spending must be offset by a corresponding increase in revenue. The foreign tax credit modifications narrowly escaped becoming the offsetting revenue raising provisions of the Unemployment Compensation Extension Act of 2010 that extended unemployment benefits. However, the success was short-lived, as these modifications were added to Pub. L. No. 111-226, the Education, Jobs and Medicaid Assistance Act of 2010. This legislation provides $10 billion of elementary and secondary education funding to protect teacher jobs from being cut. Nearly $10 billion over ten years is expected to be raised by altering various rules that corporations leverage to calculate their foreign tax credits and foreign-source income, providing the necessary revenue offset for this law.
In the article, we will examine the concept behind foreign tax credits offered in the United States; the history of foreign tax credits in the United States; the changes to the foreign tax credits; and the public policy behind the bill and the potential effects upon multinational corporations. To download the free article, please link to LexisNexis here at Tax Law Community
You may post any questions or comments below – Prof. William Byrnes
Posted in Tax Policy | Tagged: education, law, Low Income Taxpayers, Multinational corporation, tax, Tax credit, Taxation, United States | Leave a Comment »
Posted by William Byrnes on October 1, 2010
A recent IRS Chief Counsel Advice addressed the importance of making adequate disclosures to the IRS when filing a gift tax return, demonstrating the dangers of a tight lip. There, a taxpayer failed to disclose the method and valuation discounts used to value gifted stock. As a result, the taxpayer was unable to seek the protection from gift tax changes based upon the three year statute of limitations.
The statute of limitations for the IRS to question an item on a gift tax return is essentially unlimited if a gift is not “adequately disclosed” on the return, so taxes—and fees and interest—can be imposed on the inadequately disclosed gift any time after the return is filed.
For the complete analysis of this development regarding the disclosures required on a gift tax return by our Experts Robert Bloink and William Byrnes, please read the article via your AdvisorFX subscription at Gift Tax Return Disclosures—Adequate or Else?
For in-depth analysis of this topic, see Advisor’s Main Library Section 7. Gift Taxes D—Valuation For Gift Tax Purposes and from a tax perspective see Tax Facts Q 1534 What are the requirements for filing the gift tax return and paying the tax?
After reading the analysis, we invite your questions and comments by posting them below, or by calling the Panel of Experts.
Posted in Estate Tax | Tagged: accounting, Business, gift tax, Internal Revenue Service, tax, Tax Negotiation and Representation, Taxation, United States | Leave a Comment »
Posted by William Byrnes on September 30, 2010
President Obama signed the Small Business Jobs and Credit Act of 2010, H.R. 5297, on Monday, September 27, establishing an allowance for partial annuitizations of annuity contracts from January 1, 2011. In the coming weeks, the Advisors Journal will include in-depth examinations of the provisions of the Small Business Act that are of the most interest to advisors and insurance producers, such as the partial annuitization of annuity contracts and the Roth Conversion Extension to Employer Accounts.
In this AdvisorFX exclusive analysis, we summarize the impact of the Act’s other major provisions. Please read the article via your AdvisorFX subscription at AdvisorFX (or sign up for a free 30 day trial).
Posted in Tax Policy, Taxation | Tagged: Barack Obama, Business, insurance, Life annuity, Small business, Small Business Administration, Small Business Jobs, United States | Leave a Comment »
Posted by William Byrnes on September 27, 2010
Life insurance ownership has hit a fifty-year low, according to the August-released Trends in Life Insurance Ownership, a LIMRA study administered once every six years. But do the economic clouds have a silver—or better yet, gold—lining?
Today’s analysis by our Experts Robert Bloink and William Byrnes is located at AdvisorFX Journal Life Insurance Ownership Hits Fifty-Year Low
Posted in Insurance | Tagged: Agents and Marketers, Business, Business and Economy, Financial services, insurance, Life, life insurance, United States | Leave a Comment »
Posted by William Byrnes on September 24, 2010
Why is this Topic Important to Wealth Managers? Provides a view with respect to revocable trust concepts and estate planning. Presents identifying factors of the trust, what it’s commonly used for, as well as some of the benefits and detriments of its implementation.
This week has mainly discussed the use of trusts with characteristics of complete transfers by grantors. This edition will explore the revocable nature of trusts and how they are applicable to estate planning.
The main difference between a revocable trust and one that is not, is that “the settlor reserves the right to terminate the trust and recover the trust property and any undistributed income.” “The creation of a revocable living trust involves either the transfer of property to one or more trustees or the settlor’s declaration that he holds the property in trust for himself and that upon his death the property is to be held for other beneficiaries.”
For the complete blogticle and its analysis, see AdvisorFYI.
Posted in Uncategorized | Tagged: estate planning, law, Living trust, Property, Settlor, Trust law, Trustee, United States | Leave a Comment »
Posted by William Byrnes on September 22, 2010
Why is this Topic Important to Wealth Managers? Discusses estate tax considerations in regards to life insurance policies. Also, includes a detailed dialogue of the incidents of ownership concept.
What do most wealth managers try to avoid when planning with life insurance and trusts?
That the Gross Estate for Estate Tax calculations would include the death benefit from the policy in the estate.
What are some common ways to avoid this dilemma when using a trust and life insurance in regards to estate planning?
For the answer to this question, and planning analysis, see the blogticle at AdvisorFYI
Posted in Estate Tax, Insurance, Trusts | Tagged: Business, Death, estate planning, Estate tax in the United States, Insurance policy, law, life insurance, United States | Leave a Comment »
Posted by William Byrnes on September 21, 2010
Why is this Topic Important to Wealth Managers? The terminology associated with common estate planning techniques is generally misguided. Provides a better understanding of the tax and legal implications, on behalf of the client’s estate plans, of trusts that purchase life insurance.
One commentator states “If the practitioner would examine either the Internal Revenue Code or the Treasury Regulation designed to interpret the Code, they will not find the use of the term ‘Insurance Trust’ or the term ‘ILIT.’” For a detailed analysis of the ILIT see the Main Library Section 4. Estate Planning Techniques H—Life Insurance Trusts.
For the complete blogticle and its analysis, see AdvisorFYI
Posted in Estate Tax, Insurance, Trusts | Tagged: Business, estate planning, Internal Revenue Code, life insurance, Life insurance trust, tax, Treasury Regulation, United States | Leave a Comment »
Posted by William Byrnes on September 17, 2010
Why is this Topic Important to Wealth Managers? Provides discussion on current situation of federal tax “stand-off” as it relates to clients’ planning objectives. Gives insight into market participants current choices in dealing with the Tax Cut dilemma.
Congress’ inaction is causing concern for many high net worth taxpayers. Clint Stretch, managing principal of tax policy at Deloitte Tax LLP in Washington says, “uncertainty over taxes means some individuals are ‘vulnerable to hysteria’ ”. And that some financial advisers are urging clients into “unnecessary or unwise transactions.” [1] With “[a]n estimated 315,000 U.S. taxpayers earn more than $1 million, according to the Joint Committee on Taxation”, it leaves a lot of room for opportunity and error.
Read the analysis at AdvisorFYI
Posted in Tax Policy | Tagged: Economic, Joint committee, Net worth, tax, Taxation, United States, United States Congress, Washington | Leave a Comment »
Posted by William Byrnes on September 16, 2010
Why is this Topic Important to Wealth Managers? Provides an overview of how the pending tax cut provisions will affect the national economy and your clients as a part of it. Discusses generally the relationship between tax and Congressional budget as they relate to the taxpayer burdens.
In the face of bailouts, new legislation and regulation, and a stalling economy, one area, taxes, is certainly being discussed among the public scuttlebutt. Specifically, the Bush Era Tax Cuts are the center of attention because they will sunset or expire, without further legislative action by the end of this year.
Read the full analysis at AdvisorFYI
Posted in Tax Policy, Uncategorized | Tagged: Budget, Business, Economic, Economy, Politics, tax, Taxation, United States | Leave a Comment »
Posted by William Byrnes on September 15, 2010
Although, Reagan’s administration saw higher growth in total, and annually, on average, than that of the previous and post 8 years of his term, his administration’s numbers are still below the 50 year trend, as well as the terms of some other Presidents, notwithstanding the unsupportive data on the short term effects of the tax cuts. However, there is a lack of conclusive evidence, therefore, to determine that a decrease in capital gains tax rates will have the short or long term affect of increasing total GDP. Yet, neither will an increase in the rate increase tax revenues.
We invite you to read the study and analysis at AdvisorFYI
Posted in Tax Policy | Tagged: Business, Capital gains tax, Gross domestic product, income tax, Politics, tax, Taxation, United States | Leave a Comment »
Posted by William Byrnes on September 14, 2010
Why is this Topic Important to Wealth Managers? Author Ben Terner of the Panel of Experts offers detailed information that has a direct affect on clients’ planning objectives as it relates to estate and gift tax. Provides a general discussion as well as detailed analysis of the current law and the affect of Congress’ current indecision.
Generally, “[g]ross income does not include the value of property acquired by gift, bequest, devise, or inheritance.” [1] Which means gift income or inheritance income received by the beneficiary is not taxable income to the individual who receives property by such gift, bequest, devise, or inheritance. [2] “Although the donated or inherited property itself is not taxable, income derived from such property is includable in gross income.” [3]
Read the analysis at AdvisorFYI
Posted in Tax Policy | Tagged: Congress, gift tax, law, Politics, tax, Taxation, United States, United States Congress | 2 Comments »
Posted by William Byrnes on September 13, 2010
Why is this Topic Important to Wealth Managers? Provides a basic overview of the tax cut provisions that are in effect but set to expire by the end of this year. Helps financial professional understand implications regarding client’s estate and personal plans in consideration of the Bush Tax Cuts.
As busy as Congress has been over the last year, it’s “finally turning its attention to the expiring 2001 and 2003 tax cuts”, says Robert Rubin who is co-chairman of the Council on Foreign Relations and former Secretary of the U.S. Treasury. Read the entire analysis at AdvisorFYI
Posted in Tax Policy | Tagged: Bush Tax Cuts, Congress, Jobs and Growth Tax Relief Reconciliation Act of 2003, Robert Rubin, tax, Taxation, United States, United States Congress | Leave a Comment »
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