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Settle Your IRS debt

IRS debtIn the past several months three of my clients were able to settle their IRS debt through the Offer in Compromise program.  If you owe back taxes this is a good time to explore this option.

What is an Offer in Compromise?

An Offer in Compromise can allow a taxpayer with IRS debt to offer to pay what you can afford. Corporations, LLCs, and other entities can also take advantage of Offers in Compromise. If the IRS believes the Offer amount is equal to or more than what the Service could otherwise collect from the Taxpayer it will accept the offered amount to compromise the remaining tax liability. Last year we got an Offer through for a client who did not have any equity in his assets and did not have any income over and above his monthly necessary living expenses.  The IRS accepted a onetime payment of $300.00 to compromise over $80,000 in tax liabilities.  Tax liabilities that can be compromised include income taxes (1040), payroll taxes (941), trust fund recovery penalties, and more.

$281,000 IRS debt settle for $19,000.

Another example, one recent case involved a client who owned a business and had equity in his home.  He was able to demonstrate and the IRS agreed that his monthly necessary living expenses equaled or exceeded his monthly income.  In that case, the amount that the IRS determined was collectible was just over $19,000. The IRS accepted the client’s offer of $19,040.00 to compromise over $281,000 in taxes.

I have been doing Offers in Compromises for more than 24 years, essentially since the program first began. Without a doubt, this is one of the most favorable times to get an offer accepted that I have experienced. If you want to explore this option, give me a call.

by Norm Short, J.D., LL.M. Taxation

Is joint ownership a good substitute for a will?

The short answer is probably not.joint ownership

 

Joint ownership is sometimes called the poor person’s will or the lazy will, although it is the most common form of estate planning. Its chief advantage is that it avoids probate. Yet, it brings with it a host of problems. Keep in mind that there are different kinds of joint ownership and all have their problems.

Here are the main ones:

1. The joint owners can be responsible for each other’s debt.

Creditors for your co-owners may attach your jointly owned property to satisfy their debts. Bankruptcy, a legal judgment against a co-owner, or a tax lien are most likely to cause problems. For example, suppose you add your daughter as a joint-owner of your home. If she defaults on a personal debt, your home could be sold to satisfy the debt. You will likely receive half the proceeds of the sale of the house, but you are out of a home with only half the funds you need to replace it. In some states tenancy by the entirety will protect each person from the debts of the other.

2. Your survivor is not bound by your wishes in passing on the joint property after your death.

Your survivor can do anything he wants to with the jointly-owned property he inherits. If you want to control how property is distributed to your children or charities, you need a will.

3. You may need approval from joint owners to sell or refinance the jointly-owned property, such as your home.

When you share ownership through a tenancy by the entirety, every joint owner you have must agree to major decisions. You may have been the sole decisionmaker of your business that you built from nothing. Yet, if you have made your children joint owners, major financial decisions will require their approval. Lines of credit increases and other routine matters can require a lot of discussion. These transactions can be further complicated if one of your co-owners becomes incapacitated or untrustworthy.

4. You co-owner may be able to make key decisions without your approval.

On the other hand, if you use a tenancy with right of survivorship, your co-owners can use or sell any part of the jointly owned property.

5. It can increase taxes.

Uh oh. You were hoping to save taxes through joint-ownership. To the contrary, you could incur additional taxes and even paperwork.

The gift tax

You can incur gift taxes and extra paperwork if you purchase a home with your money and put it in joint tenancy with a domestic partner. IRS rules consider that to be a gift whose value exceeds the gift limit.

Capital gains tax

IRS calculates capital gains on the sale of a home based on the increase in value from the date of purchase. If you sell a home which is jointly owned, all owners must pay taxes based on the total increase in value, regardless of when they became owners. On the other hand, capital gains accrue for heirs only based on the difference between the value when they inherited the home and the value at sale.

If joint ownership isn’t the answer, what is?

There are a number of options to ensure that your property reaches the people or causes you want with the least waste of time, effort and costs. Wills, trusts, and family-owned entities will serve you much better. Check with one of our estate planning attorneys today. A 30-minute consultation is free.

Norman Short, partner, 24 years experience in estate planning business and tax law

Robert Garrison, 38 years experience, including estate planning, consumer issues, and family law

Sylvia Seybold is often the choice of younger families. She combines estate planning experience with family law

Representing immigrants focus of Kitsap Legal Services benefit

Benefit features hero of  Travel Ban plus GSJones speaker and MC in evening focused on immigration

Noah Purcell kept

Kitsap Legal Services benefit speaker

Featured speaker Noah Purcell, Washington State Solicitor General tells of stopping the Travel Ban

the audience rapt with his stories focused on his role in opposing the Travel Ban. Washington State led the nation in opposing the ban that caused such pain and chaos among travelers from seven countries.  All seven countries have majority Muslim populations. He is the Solicitor General of the State of Washington. When the Attorney General decides that the state will take a particular position in a legal matter, it is often Mr. Purcell who represents the state. He told of an almost round-the-clock effort of most of the office to meet short deadlines in the case that resulted in a stay on many of the elements of the ban. He indicated that the state has not yet decided what position to take on what he referred to as Travel Ban 3.0.

The setting was the annual benefit dinner for Kitsap Legal Services attended by lawyers, judges and community members.KLS provides free legal services in areas of civil law to those unable to afford them.  Many Kitsap area attorneys provide pro bono services through KLS. The benefit was emceed by KLS board president and partner here at GSJones Law Group, John Groseclose. Several GSJones attorneys also volunteer. KLS is always seeking more volunteer attorneys and donations. Contact KLS at 360-479-6125.

Speakers explore immigration issues of DACA and representation of child immigrants

 

immigration attorneys

Speakers at the KLS benefit on immigration, Michele Taylor (l) Meghan Casey (c) and MC John Groseclose (r)

 

In addition to Noah Purcell, GSJones immigration attorney Michele Taylor and Meghan Casey of the Northwest Immigrant Rights Project spoke. Michele addressed the current situation of DACA recipients with the discontinuation of the program.  She emphasized the ways that their plight will affect us all. She said that when recipients’ two-year extensions expire most of the 800,000 employers will fire them. Many have, on the strength of government promises, made financial commitments, such as purchasing cars and homes. Without work permits, they cannot work or pay debts. Many, she noted, work in the public sector as teachers, first responders, and police officers. Others are in the armed services.

Meghan Casey focuses on representing children before immigration judges at the Tacoma office of NWIRP. They have no right to representation and often even young children must argue their case against government lawyers by themselves. She shared information about the Special Immigration Juvenile status, as well as the need for private attorneys to represent children. Attorneys do not need to practice immigration law to participate, she said. NWIRP provides training and support. The status is for immigrant children who have been abandoned, abused or neglected by at least one parent.

Newlywed Tax Tips

newlywed taxNewly married this summer?

by Norman Short, business and tax lawyer, GSJones Law Group, P.S.

You’re probably worn out from dealing with the myriad of details your wedding demanded.  The last thing you want is some more tasks. If, however, you take a little time now, you will save a lot of time in a few months when you file your first taxes together (or not).

Newlywed Tax Tip #1: Make official name and address changes

Yes, you’ve spent hours changing your relationship status and perhaps your name on social media. You’ve also spent hours making sure even great aunt Penelope that you haven’t seen since you were 11 knows about your marriage. Now it’s time to let your employer, the IRS, and Social Security know about changes in your name or address.

IRS: File their change of address form if one or both of you have moved.

Your employers: Tell your employers about any changes in name or address. Even if you are not changing the name you use at work, if you have a new legal name, the personnel department needs to know.

Social Security Administration: If one or both of your are changing your name, you will need a new Social Security card.

Newlywed Tax Tip #2: Decide on how to handle your finances

Whether or not to combine bank accounts and other finances is a very personal choice. If, however, you plan to file your taxes separately, it is much better to keep your finances separate. In most cases, it is better to file jointly and how you handle your finances will not make a difference. Other than only having to file one return (a major plus), when you file jointly you qualify for a higher standard deduction and more tax credits.

In general, filing separately only makes sense when there is a significant difference in income level between you. If you are in doubt, a quick consultation with your accountant or a tax attorney will resolve the matter.

Newlywed Tax Tip #3: Estimate your new taxes

If you plan to file jointly, it’s important to avoid an ugly surprise at tax time. Use a simple tax calculator, such as the one at 1040.com. There are a variety of steps you can take before January 1 to lessen the tax time ouch. Others, such as contributions to IRAs, can be started at the time you file your taxes. Make plans now, however.

Newlywed Tax Tip #4: Adjust your W-4

Whether you have found that you will owe IRS more or your tax calculation reveals yet another benefit of marriage, adjust your W-4. Increasing your withholding will take some of the bite out of tax filing. If on the other hand, you project a refund, take it now. IRS will not pay you interest on the extra money it is taking now. Invest your refund now by decreasing your withholding now. You may want to invest in mutual funds for the future. Or you may want to invest in your new home or memorable experiences with your new spouse. It’s up to you.

Business owners

Of course, if one of you is self-employed or a partner in a business you will need to consult your accountant or an attorney about what changes need to be made.

 

books on divorce

Books on divorce

A good divorce lawyer is essential; good books on divorce are vital

Divorce is tough. Our five divorce attorneys know that well. Nothing is more important than family and friends that can listen and offer practical support. On the other hand, there are many aspects of divorce where specific expertise can help. At GSJones Law Group we have five divorce lawyers who guide you steadily and empathetically through the legal process. We are not, however, child development experts. Or couples counselors, although we often can do a lot to help you and your spouse separate with less rancor.

Here are a few books on divorce that others who have gone through divorce found helpful.

Your emotions

You can choose from a vast number of books to help you deal with your emotions, both old and new. Here are a few to get you started.

Making the decision to divorce

Let’s start with a book to help you decide whether or not to divorce, Too Good to Leave to Bad to Stay, A Step-by-Step Guide to Helping You Decide Whether to Stay in or Get Out of Your Relationship, Mira Kirshenbaum. Use the 36 diagnostic questions to help you make the fateful decision. The author is the clinical director of Chestnut Hill Institute, a psychotherapy clinic that uses the latest research.

Another research-based book, What Makes Love Last?: How to Build Trust and Avoid Betrayal, John Gottman and Nan Silver, lays out the elements of lasting love and shows you how to identify signs, behaviors, and attitudes that indicate a fraying relationship. It also provides strategies for repairing what may seem lost or broken.

Books on divorce

In print for 35 years, you may want to start with this classic in its 35th-anniversary edition: Rebuilding: When Your Relationship Ends, Bruce Fisher, Robert Alberti, and Virginia Satir. It provides a 19-step process for rebuilding your life after divorce. From amazon.com: “…this book offers just the right balance of shoulder-to-cry-on and kick-in-the-pants self-help!”

The aptly named Crazy Time: Surviving Divorce and Building a New Life, Abigail Trafford,  helps you understand your experiences as you weather the turmoil. The latest edition contains the most up-to-date research on the personal and economic effects of divorce. The new edition also adds a section on becoming single again in the age of the Internet.

Spiritual Divorce: Divorce as a catalyst for an extraordinary life, Debbie Ford, offers Seven Spiritual Laws: acceptance, surrender, divine guidance, responsibility, choice, forgiveness and creation. Based in Jungian psychology, you may find this book most helpful if you use a 12-step program or are familiar with A Course in Miracles.

How to Survive the Loss of a Love, Peter McWilliams, Harold H. Bloomfield, & Melba Colgrove, has stood the test of time. It provides comfort and recommendations in an easy-to-read format.

Books on domestic violence and other high conflict divorces

Lundy Bancroft, who counsels abusive men, offers insight into the thinking and emotions of abusers in Why Does He Do That?: Inside the Minds of Angry and Controlling MenHe also gives advice on how to safely escape from abusive relationships.

Personal accounts of divorce

Hollywood screenwriter Chris Easterly’s account of his divorce in Falling Forward: A Man’s Memoir of Divorce explores his emotional journey from discovering his wife’s affair to eventual healing. It helps affirm the fact that you will survive.

Another professional writer offers a women’s account in Split: A Memoir of Divorce by Suzanne Finnamore. Goodreads: “Prescriptive yet full of pragmatic advice, insight and black humor, Split is a finely wrought tourniquet for a broken union and its attendant trauma.”

Your children and divorce

Parents

The Co-Parents’ Handbook: Raising Well-Adjusted, Resilient, and Resourceful Kids in a Two-Home Family from Little Ones to Young AdultsKaren Bonnell, takes a how-to approach to guiding you and your ex-spouse through the challenges of co-parenting.

If co-parenting isn’t working, check out Joint Custody with a Jerk: Raising a Child with an Uncooperative Ex- A Hands-on, Practical Guide to Communicating with a Difficult Ex-Spouse, Julie Ross, M.A., & Julie Corcoran. It offers easy-to-use communication techniques for dealing with difficult exes in parenting.

When Dad Hurts Mom: Helping Your Children Heal the Wounds of Witnessing Abuse, Lundy Bancroft, provides advice for abused parents on protecting their children, as well as helping them heal and feel good about themselves. In addition, it provides tips about custody. 

Young children

It’s Not Your Fault, Koko Bear: A Read-Together Book for Parents and Young Children During Divorce, Vicki Lansky, is designed for children who have both parents active in their lives. In addition to a read aloud story, it also offers advice to parents on being a successful co-parent.

Two Homes, Claire Masurel is for very young children. Here’s a sample: “At Mommy’s house, Alex has a soft chair. At Daddy’s house, Alex has a rocking chair. In each home, Alex also has a special bedroom and lots of friends to play with.”

On the same topic as Two Homes for a slightly older child, Standing on My Own Two Feet: A Child’s Affirmation of Love in the Midst of Divorce, Tamara Schmitz

By the estimable Fred Rogers Let’s Talk About It: Divorce (Mr. Rogers) helps children through the third grade identify and talk about their feelings.

Tweens

It’s Not the End of the World by Judy Blume – a classic yet still relevant novel that follows 11-year-old Karen as her parents’ divorce.

Your spirits

Sixteenth on amazon.com’s list of most popular books on divorce is Revelations of Divine Love by the 14th-century Christian mystic Julian of NorwichWhat could an old hermit know about going through a divorce? Why would she speak to the hearts of people going through one of the saddest, toughest periods of their lives? Well, it takes spiritual grounding to be strong and resilient. And nothing demands strength and resiliency like divorce.

Maybe 600-year-old Christian mysticism isn’t your cup of tea. How about modern Buddhist lovingkindness meditation? One of the foremost American Buddhist teachers, Sharon Salzberg, recently released a book, called Real Love. Real Love is a creative toolkit of mindfulness exercises and meditation techniques that help you to truly engage with your present experience and create deeper love relationships with yourself, friends and family, and with life itself.

Even older than Julian of Norwich is the Sufi poet Jalāl ad-Dīn Muhammad Rūmī. His 800th birth anniversary was celebrated all over the world. While not a book on divorce, love is a frequent topic of his religious poetry. The Essential Rumi, translated by Coleman Barks, is a great way to start. It is full of both the ecstasy and the agony of human and spiritual love. Or perhaps, you want to steer away from love and concentrate on your own inner life. Rumi’s Little Book of Life might be just what you need.

Most Christian denominations have daily devotion guides. If you have not been using one, now might be a good time to start. Your pastor will be happy to help you find the right one.

If you’re looking for a good divorce lawyer in Port Orchard and Kitsap County, check out our Divorce and Family Law Attorney page.

wills and estate planning

Wills: Five reasons you need a will

 

Do you think that wills are only for the wealthy? Or do you believe that your trust, jointly owned property, or insurance with named beneficiaries takes care of everything? Think again. Wills are necessary for everyone. Here are five reasons why.

1. You decide who gets your prized bottle cap collection…

…and every other item that may have value and meaning for others. You also decide who gets your baseball card collection and the brooch that has been handed down in your family for generations. None of your possessions may have a high financial value. On the other hand, they may hold a huge emotional value. It allows you to send your love from beyond the grave by carefully considering the meaning that each has for you and for your intended recipient.

2. Save disagreements among your loved ones.

The aftermath of a death is a very emotional time. People who are grieving often cast their feelings on to the objects the deceased owned. Making a will is one of the most loving things you can do for those you will leave behind.

3. Ensure that your minor children feel more secure.

You want the new guardians for your children to be prepared to care for them immediately. A failure to make your decision clear and legally known can lead to confusion among the family. It will surely add to your children’s emotional burden. While naming a guardian cannot guarantee that there will be no challenges, it is a powerful tool for ensuring your children’s happiness. One step that will help, beyond naming guardians in the will, is letting your family and close friends know who you have named.

4. Name someone to handle the inherited finances for someone who needs help in that area.

Many people try to alleviate the need for a will by naming beneficiaries for insurance policies, retirement accounts, and other financial instruments. Yet, if any of your named beneficiaries need help with handling the inheritance, a will can make a huge difference. It can mean the difference between a comfortable future and a wasted inheritance.

5.  Protect your estate from theft by naming an executor.

Every year identity thieves steal the identities of more than 2.5 million deceased persons. They open credit card accounts, obtain loans and services. Without the authority of a will, thieves may steal your identity and deplete your estate before your beneficiaries can access your accounts.

Three of our attorneys are happy to help you with your will and estate plan. Feel free to contact them today.

Norman Short

Robert Garrison

Sylvia Seybold

Distracted Driving Law: Concentrate or Pay

Distracted driving law

Just drive! Or pay the fines and then the increased insurance premiums. Sunday the new distracted driving law and a major tightening of the rules concerning cell phones take effect in Washington state. Cell phones must be hands-free or not used. Videos, photos, and texts are out. In sum, don’t do anything else but drive. The use of your phone will cost you $136 for the first violation and $234 for additional violations. Other distractions carry a $99 fine.

It is legal to make a 911 call and to use a cb.

Drive hands-free or phone-free

The only legal use of phones is in hands-free mode, activated by a single touch. Otherwise, move out of the flow of traffic. It is no long legal to check your messages at the stop light. Watching video even with a hands-free device is prohibited. An officer may stop you even if you are otherwise driving legally. To be safe be sure to set up your GPS and music before you pull away from the curb.

Washington State will now report cell phone violations to your insurance company. So, before you take that call, consider that you may need to add an increase in your insurance premium to your budget.

Distracted Driving Law: Other distractions cost you $99.

Grooming activities, smoking, and eating may cost you a $99 ticket. Officers must have other reasons to pull you over, and the state does not report these tickets to your insurance company.

The Kitsap County Sheriff’s Office has already begun ticketing for violations of the updated law. On the other hand, the Washington State Patrol has established a grace period. They will issue only warnings for six months from the enforcement date of July 23, 2017. Check out this handy card. 

Two of our attorneys routinely help with traffic violations, including DUIs.

Digital estate planning

What are your electronics, blog, and online photos worth?
digital estate planning

You may have worked with an estate planning attorney to carefully plan your family’s financial future. But did you include your digital assets in that plan. The average adult believes their electronics, socially shared content and blog are worth about $50,000. For many of us the most valuable asset is irreplaceable. Our photos and memories that we share on Facebook, Twitter and Instagram.  Other intellectual property may have a market value, a blog with a good following, for instance. Have you made plans for what happens to those when you die?

You probably need to redefine the role of your executor because standard wills and trusts do not address digital accounts.  The laborious process that Facebook requires for family members to get access to the account of a deceased loved one adds significant stress to an already overwhelming experience. Because most social accounts restrict access to the account holder and exclude even an executor without explicit written authorization, it is wise to amend your clause on the executor in your will or estate plan to grant permission.

Digital estate planning for financial information

Do you access your bank and investment accounts online? In addition, your insurance and other key documents may only exist in digital form. Your executor needs easy access to this information to settle your estate and close down accounts. We can’t overemphasize the importance of quickly accessing accounts. The chances of identity theft increase upon death.

Updating your digital estate plan

Do you already have an estate plan drawn up by an experienced estate planning attorney? Then, it will just take a quick meeting with an attorney knowledgeable with digital estate planning to eliminate social media problems for your heirs. At GSJones Law Group, we have three experienced estate planning attorneys. They can quickly add digital estate planning to your existing estate plan. And, if you have not gotten around to estate planning, there is no time like the present.

Norman Short

Bob Garrison

Sylvia Seybold

 

 

Immigration Travel Ban Update

immigration travel ban

After Supreme Court ruling travel for people with relationships in U.S. allowed.

While the Supreme Court lifted the hold on some aspects of the immigration travel ban, it ordered the administration to allow entry to some that the Executive Order banned. Those who already have a valid visa and to anyone who has a “bona fide relationship” with a person or organization inside the United States must be allowed to enter, SCOTUS said.  SCOTUS did not closely define those relationships, naming only relatives and business/academic relationships. The administration subsequently defined family relationships, excluding grandparents and including fiancees.  Just hours after the Trump administration’s travel order went into effect, the state of Hawaii went to federal court to challenge it, saying the order barred too many people.The state of Hawaii has filed another

The six countries affected are:

  • Iraq
  • Iran
  • Libya
  • Somalia
  • Sudan
  • Syria
  • Yemen

Parts of the travel ban remain in effect.

The Court ruled that the administration could go ahead with banning other people from the six named countries entering the U.S. for  90 days. Further, the court allowed the administration to bar the entry of refugees from any country for a period of 120 days with significant exceptions. Again, the administration must allow entry to those with a bona fide relationship with a U.S. entity or person or with existing visas. SCOTUS did not specify whether or not a relationship includes working with a U.S. refugee settlement organization.

This is not the final ruling. Expect another appeal based on the lack of specific guidance about refugee agency clients. In addition, the court only ruled on the lower courts’ stays against the administration. SCOTUS will take up the Travel Ban as a whole in the next session which begins in October. The ruling does not control the level of scrutiny that travelers arriving from traveling in those six countries will receive.

Both the 4th and 9th U.S. Circuit Courts stayed the implementation of the Travel Ban, pending full trials. The administration filed an emergency appeal from those stays to the SCOTUS. The high court ruled on the appeal immediately, just as their session ended.

Immigration Law attorney, Michele Taylor, is happy to talk with people about visa issues, as well as other immigration matters.

IRS says: Beware phone scam

New IRS phone scam threatens immediate arrest

IRS phone scam

art by Anecdoteak

by Norman Short, Partner
A new and vicious phone scam has reached the Puget Sound area in which the caller poses as an IRS (Internal Revenue Service) agent and dramatically threatens immediate arrest. I’ve received a report of a phone call made to one of our clients. The phony agent used a dramatic, threatening voice. He said that she owed back taxes and fees. If she didn’t pay that day with a prepaid card, she would be arrested at once. The threatening voice then recited her address and gave her a number to call to pay.

Needless to say, she was terrified. Fortunately, she had the presence of mind to check it out with the IRS.

IRS agents will not contact you by phone

There are very rare exceptions to this rule. If you do get a phone call from someone claiming to be with the IRS, tell them you will call the IRS. Then, ask for identification, including badge number. No legitimate agent will object to your checking out his or her validity. Call the IRS verification number: 800-366-4484. These scams come and go and cost their victims millions financially, as well as emotional pain. The IRS just issued a warning a few days ago. So, be prepared and prepare others in your household to respond calmly to this vicious phone scam.

In fact, the IRS states:

The IRS doesn’t initiate contact with taxpayers by email, text messages or social media channels to request personal or financial information. This includes requests for PIN numbers, passwords or similar access information for credit cards, banks or other financial accounts.

You may want to check out the IRS resource page on scams for more information. If you have been a victim of one of these scams, use this U. S. Treasury report form.

Norman Short, a Partner at GSJones Law Group, focuses on financial law. He earned an advanced law degree (LL.M) in tax law in 1992 and was admitted to practice before the U.S. Tax Court in 1995. He helps people with tax issues, business formation, and estate planning law.