Personal Finance

Tax

Merrill Lynch Loses $1 Million Court Case

Merrill Lynch, Pierce, Fenner & Smith, Inc. has been ordered by an arbitration panel of the National Association of Securities Dealers, Inc.
Tax

Treasury, IRS Issue Guidance on Life, Annuity Insurance and Annuity Contracts

This week, the Treasury Department and the Internal Revenue Service (IRS) finalized a regulation that would limit the use of life insurance and annuity contracts as a way to avoid current taxation of investment earnings. The regulation, together with other guidance previously issued, will prevent taxpayers from turning otherwise taxable investments in hedge funds and other entities into tax-deferred or tax-free investments by purchasing the investments through a life insurance or annuity contract.
Tax

Tax Dodger Owes $210M, Largest Criminal Tax Case in US History

A Washington telecommunications executive faces a lengthy prison term if the government is successful in its attempts to prosecute him for failing to pay nearly $210 million in taxes, Dow Jones Newswires reported.In the largest individual criminal tax case in U.S. history, Walter Anderson, 51, was charged Wednesday on a 12-count sealed indictment handed down by a federal grand jury.The District of Columbia resident allegedly used numerous corporations to hide earnings totaling nearly $450 million, evading federal and District taxes.
Tax

Tax Shelters Remain A Mystery To Many Affluent Investors

Don't assume that wealthy investors know all the tricks to avoiding taxes.More than two-thirds (70%) of affluent investors admit they have little to no knowledge of tax shelters, according to the Spectrem Perspective report "Tax Planning and the Affluent Investor," released late last week.
Tax

IRS Clarifies Early Distributions From Retirement Plans

An early distribution from an Individual Retirement Arrangement (IRA) or a qualified retirement plan need not be a “taxing” experience, according to the IRS.Any payment that you receive from your IRA or qualified retirement plan before you reach age 59½ is normally called an “early” or “premature” distribution. As such, these funds are subject to an additional 10 percent tax. But there are a number of exceptions to the age 59½ rule that you should investigate if you make such a withdrawal.
Tax

ChoicePoint Says Security Breach Widespread

A spinoff of credit reporting agency Equifax acknowleged Monday that criminals may have gained access to consumer information on residents in all 50 states, the District of Columbia and three U.S. territories.ChoicePoint Inc.
Tax

IRS Clarifies Capital Gains and Losses

Almost everything you own and use for personal purposes, pleasure or investment is a capital asset. The IRS says when you sell a capital asset, such as stocks, the difference between the amount you sell it for and your basis, which is usually what you paid for it, is a capital gain or a capital loss. While you must report all capital gains, you may deduct only your capital losses on investment property, not personal property.A “paper loss” — a drop in an investment’s value below its purchase price — does not qualify for the deduction.

Money Flowing into Tax-Free 'Dynasty Trusts'

Wealthy Americans are taking advantage of looser rules in some states that allow so-called dynasty trusts to remain tax-free in perpetuity.About $100 billion in assets has poured into trusts in states that have started allowing them to last for hundreds of years or even forever, according to new research published in the Wall Street Journal.
A&A

NASD Warns Investors Too Much Company Stock Can Jeopardize Financial Future

NASD today issued an Investor Alert warning workers against concentrating too much company stock in their 401(k) plans and stressing the importance of diversifying retirement investment accounts. The Alert, Putting Too Much Stock In Your Company -- A 401(k) Problem, identifies the problems with owning too much company stock and explains how investors can balance their 401(k) portfolios. "For some people, a 401(k) plan is their only form of retirement savings," said John Gannon, NASD Vice President for Investor Education.

Study: Repealing Estate Tax Would Hurt More than Help

A Democratic tax expert contends that more people would be required to pay taxes at death if President Bush's plan to eliminate the estate tax becomes law.A permanent repeal of the estate tax, proposed by Bush, would result in up to 71,400 estates being subject to capital gains taxes every year starting in 2010, according to a report by John Buckley, chief tax counsel for the Democratic staff of the House Ways and Means Committee.The existing law would subject 7,500 estates to the estate

Bank of America to Settle SEC Mutual Fund Charges for $375 Million

The Securities and Exchange Commission on Wednesday announced a settled enforcement action against Banc of America Capital Management, LLC (BACAP), BACAP Distributors, LLC (BACAP Distributors) and Banc of America Securities, LLC (BAS) for entering into improper and undisclosed agreements that allowed favored large investors to engage in rapid short-term securities trading known as market timing in certain Nations Funds mutual funds and for fraudulently facilitating market timing and late trading in Nations Funds mutual funds as well as unaffiliated mutual funds.
Tax

IRS Has $2B in Unclaimed Refunds from Non-Filers in 2001

Unclaimed refunds totaling more than $2 billion are awaiting about 1.7 million people who failed to file an income tax return for 2001, the Internal Revenue Service announced this week. However, in order to collect the money, a return must be filed with the IRS no later than April 15, 2005.The IRS estimates that half of those who could claim refunds would receive more than $484. In some cases, individuals had taxes withheld from their wages or made payments against their taxes out of self-employed earnings but had too little income to require filing a tax return.

Washington State Nixes Estate Tax, Refunds of $152M in the Works

The Supreme Court of the State of Washington ruled last week that the state's estate tax must go. In a unanimous decision, the court declared that the tax, which is based on a calculation related to the federal estate tax, could no longer be collected.
Tax

IRS Tax Tip: Roth IRA Contributions

Confused about whether you can contribute to a Roth IRA? The IRS suggests checking these simple rules:IncomeTo contribute to a Roth IRA, you must have compensation (e.g., wages, salary, tips, professional fees, bonuses).
A&A

NACM Applauds Movement on Commercial Bankruptcy Reform

The National Association of Credit Management (NACM) commends U.S.

Real-Time Price Transparency in the Municipal Markets Implemented

Securities and Exchange Commission (SEC) Chairman William H. Donaldson last week commended the Municipal Securities Rulemaking Board (MSRB) for its implementation of real-time price transparency in the municipal market. Chairman Donaldson said, "Today is an historic moment for all municipal bond investors.

Opinion Study: Attitudes about Social Security Reform

President George W. Bush's intention to reform the Social Security system has put the issue in the spotlight again. To better assess the public's reaction to possible changes, the American Enterprise Institute recently released a new Public Opinion Study "Attitudes about Social Security Reform," by AEI resident fellow Karlyn Bowman.
Practice Management

The CPAs Are Coming: The Evolution of the Profession

Although the role of certified public accountants (CPAs) has been gradually evolving for two decades, a recent report by California-based Tiburon Strategic Advisors highlights how CPAs are making a major push into financial planning, as they quickly redefine themselves to meet market demand. By 2006, almost 40% of CPA firms plan to offer financial planning, up from 14% in 2002, the study says. Tax professionals cite two key reasons for incorporating financial planning into their existing business: an increase in income and personal satisfaction.
Community News

Block to Expand into Small Business Services Sector

H&R Block has announced plans to expand into the business services realm, with services such as year-round tax preparation and planning, bookkeeping and payroll processing, and advisory services for businesses with 25 or fewer employees, the Kansas City Star reported.Known for its tax services for individuals, Block is hoping to open as many as 1,000 offices over the next five to seven years, with some located in nine states in former American Express Tax and Business Service Offices, which were bought by Block.
Tax

U.S. Attorney Charges Five with $30M 'Under-the-Table' Payroll Fraud

The Law News Network -- Five individuals have been charged in federal court with participating in a massive tax and insurance fraud scheme in connection with their operation of temporary employment agencies in Southeastern Massachusetts. They are accused of paying employees over $30 million in cash "under-the-table" in order to evade millions of dollars in payroll taxes and workers compensation premiums for their businesses. United States Attorney Michael J. Sullivan; Joseph A. Galasso, Special Agent in Charge of the U.S. Internal Revenue Service, Criminal Investigation; Kenneth W.

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