Wednesday, August 31, 2011

Six Wisconsin Nonprofits Will Share Office Space, and Maybe Staff As Well

 From The Wisconsin State Journal -

In Madison, Community Shares of Wisconsin will open a new collaborative effort, the Center for Change Project, where nonprofits will not only share office space but will also ultimately share other back office services as well. The Wisconsin State Journal reports that six organizations comprise the initial group: the American Civil Liberties Union of Wisconsin Foundation, BadgerStat, Community Shares of Wisconsin, the League of Women Voters of Wisconsin, the Wisconsin Women's Network and the Wisconsin Nonprofits Association.
The Center for Change Project also plans to connect with local businesses. Community Shares director Crystel Anders told the State Journal that the project “goes beyond just sharing a space. It’s about eventually sharing staff and providing professional resources for nonprofits.” Groups will share printers and other equipment but eventually the goal is for them to share staff and volunteers as well.

Tuesday, August 30, 2011

San Francisco Giants payroll manager arrested for embezzlement


A front office employee of the San Francisco Giants has been arrested on federal charges, accused of embezzling more than a million dollars from player accounts.

Court documents show that a payroll manager for the Giants made one crucial mistake that got her caught, and when the Giants found out, they took quick action by firing her and calling the feds.
Robin O'Connor worked in the Giants front office for four years. She's 41 years old, married, has two small children, and until last month was a payroll manager for the team with an annual salary of $80,000.
The affidavit from an FBI special agent says she embezzled $1,513,836.28 from the Giants' payroll between June 2010 and June 2011. The formal charges -- wire fraud and fraud in connection with a computer.

"They're felonies, so they're not the most serious felonies, but they do carry a penalty of up to five years in federal prison per count," said ABC7 legal analyst Dean Johnson.
The affidavit explains that O'Connor had a Giants' laptop with a payroll program, and she was allowed to work from her American Canyon home.
Here's how the scheme unraveled. Last month, O'Connor applied for a loan to buy a house in San Diego. The affidavit says she forged a letter from the Giants' HR manager, explaining large deposits into O'Connor's account "Because of her outstanding contributions ... that assisted us in accomplishing our goal of winning the 2010 World Series, she was given two additional payments of compensation in May 2011." $100,090.71 and $200,348.89.
When the lender, Bank of America, sent a copy of the letter to the Giants for confirmation, it was over.
"I'm reminded of what prosecutors often say to juries, which is, we don't catch the smart ones, the people who get convicted are people who leave enough evidence behind to prove the case beyond a reasonable doubt," said Johnson.
The affidavit says O'Connor admitted forging the letter and diverting more than $600,000 from player accounts; she made a wire transfer, returning that money to the team. Then, the Giants conducted a review and found $900,000 more misdirected to O'Connor's personal accounts.
There was no answer at O'Connor's home Tuesday, but her and her husband's 2011 model-year cars were there -- a BMW sedan, an SUV (with a Giants' employee parking sticker) and a tricked out Ford F-150 pickup -- all mentioned in court documents.
The I-Team reached O'Connor through her Facebook page: "I really want to speak out about this, but I am not allowed to do this as part of an agreement that I have at the moment... I am sure that you have come to realize in your profession, all is not always as it appears... Lastly I do understand why you are doing this and have no hard feelings. Thanks for letting me know this [the I-Team report] is going to happen."
Her neighbors we spoke with, who also happened to be Giants fans, expressed shock at what happened and disappointment.
"Absolutely surprised. I wouldn't think anyone would do that to our team, the players, they definitely don't deserve that," said neighbor Michael Runas.
The Giants declined an interview, saying the U.S. attorney has asked them to help protect the integrity of the investigation. They would not say which players' accounts were involved. O'Connor has been released on a $500,000 bond. She also surrendered her passport. She's scheduled for arraignment in a month.

Fake-check scam targets artists

  FROM,0,2146387.column -

Fake-check scams have been around for a while. But here's the first one I've seen that specifically preys on artists.

When not editing the magazine Tango Reporter — which, yes, covers the sultry world of tango aficionados — Carlos G. Groppa paints cheerful watercolor landscapes depicting cottages, gardens and other friendly subjects that one could easily imagine seeing on the wall of a hotel room or at the doctor's office.

Groppa, 80, of West Hollywood, sells his original art online. He uses a website called FineArtAmerica, which features the works of about 75,000 artists and facilitates sales of prints and greeting cards if a buyer isn't interested in an original.

Groppa is modest in his asking prices, typically seeking about $100 for an original watercolor. He said he sells about three paintings a month.

"That's not bad," Groppa told me. "But it's not good. Making $300 a month isn't such a big deal."

So it was a pleasant surprise for him to receive an email recently from someone who really seemed to like his work. The buyer, who identified herself as Jane Peterson, listed five paintings that she wanted to purchase.

Groppa informed her that the total price for the works would be $485, plus $25 for shipping.

Then things got a little weird. Peterson replied with a lengthy email explaining that she was in Cancun for her twin sister's wedding. She said she was expecting a baby and was also preparing to move from New Jersey to London, where her husband had been named head of his company's information-technology division.

OK, Groppa thought. A little more information than he required. But a sale's a sale. "I was still very happy," he said.

About a week later he received a check in the mail, but not for the $510 he'd been expecting. Instead, it was for $3,900.22.

"Is this a mistake or a joke?" Groppa wrote Peterson. "Please send me a check for $510."

In response, he got an email from someone named Shawn Wilson, who said he'd be handling shipment of Groppa's paintings to Britain. He instructed Groppa to wire $2,000 from the check he'd received to a London address to cover "insurance, tax, packaging, labeling and shipping."

Suspicious, Groppa said he contacted his bank and asked them to see if everything was hunky-dory. It wasn't.

"The check was fake," Groppa said.

It's a classic scam. The fraudster sends a bogus check for too much money, then asks the victim to deposit it in his account and send money back. In most cases, the victim doesn't know the check is bad until it's too late and ends up sending his own money.

Groppa said he emailed Peterson and Wilson, and told them what he'd learned. "I told them to go to hell," he said, "but I didn't say it that politely."

He received no other emails from the scammers. Peterson, or whoever was using the name, didn't respond to my own email seeking contact.

Sean Broihier, chief exec of FineArtAmerica, told me this wasn't the first time one of his artists had been targeted with the fake-check scam. He said he'd heard about half a dozen or so other such incidents, and assumed many other artists simply haven't reported being approached for the con job.

"But that's not the biggest scam we see," Broihier said. "The main one is a kind of money-laundering scam."

In these cases, he said, the fraudster poses as an artist and posts images online of his work (the images could be of anything). The person, usually based overseas, then uses a fake or stolen credit card number to purchase prints of his own art.

FineArtAmerica sends the prints to a bogus address and wires the "artist" his share of the proceeds. By the time the company finds out that the credit card number was no good, it's too late.

"Someone tries to pull this off at least once a month," Broihier said. "We try to stay on top of it, but it's hard."

He admitted he never expected his online art gallery to become a magnet for thieves. But he's not surprised that scammers have found ways to exploit both his business and his artists, many of whom jump at the prospect of a sale.

"I try to tell people that if they receive a check for $1,000 more than the asking price, don't do it," Broihier said. "But you can't send out that warning every month."

If you ever find yourself in such a situation, whether you're selling art online or wheeling and dealing on EBay or Craigslist, don't take the bait if a big fat check comes your way. Report it to the Federal Trade Commission and then tell the sender what you think.

And, like Groppa, there's no need to be polite.

Friday, August 26, 2011

The IRS can help in disastrous times


In most instances, you can count unforeseen casualty losses as itemized deductions. Of course, you have to fill out extra paperwork and keep good records.
And when a disaster is so severe that it's declared a major disaster area by the president, you get additional choices on when to file the tax claim. This could get you much-needed money for repairs sooner.
Whether your claim is a more routine loss or the result of a presidentially declared disaster, you won't recover dollar for dollar the financial loss you suffered. But every little bit helps. For major disasters, it's usually worth the effort to claim the tax write-off.

What counts as a casualty?

First, your loss must meet IRS deductibility guidelines. The agency classifies a casualty as the damage, destruction or loss of property resulting from a sudden, unexpected or unusual event. The losses can result from natural or man-made disasters.
Natural wear and tear isn't a casualty loss. The IRS won't accept claims for lost property, termite damage to your home or the death of your prize elm tree due to disease.

Figuring the deduction amount

After you've established that your loss is allowable, it's time to figure out exactly how much you can deduct. The IRS sets two limits: First, you must reduce your loss amount by $100, and the remainder then must be more than 10 percent of your adjusted gross income. You also have to subtract any insurance money you got for the loss.
For example, after collecting from your homeowners insurance, you were out of pocket $6,000 in damages from a flood. You subtract $100 from that $6,000 loss, giving you $5,900. Then you subtract 10 percent of your AGI, which for our example, let's say, is $50,000, giving you an amount of $5,000. That leaves you a casualty loss claim on your tax return of $900 ($6,000 - $100 - $5,000 = $900).
You need Form 4684 to figure and report your casualty loss and Schedule A to itemize your loss deduction. Attach both of these to your individual income tax return Form 1040. You don't have to include supporting documents with your return, but you need those records to help you complete Form 4684 and to verify your expenses and losses, if the IRS ever questions the deduction.

Then you have to figure out the "real money" value of your deduction. Deductions don't directly translate into tax dollars saved, so a casualty deduction of $5,000 won't get you a five-grand refund. Rather, deductions reduce your taxable income. The less taxable income you have, the smaller your tax bill. After you determine your casualty loss deduction, you must refigure your taxes using the new taxable income amount to see just how much of a refund you'll get.

Making your claim

Victims in presidentially declared disaster areas -- regions hit especially hard by hurricanes, tornadoes, floods, earthquakes or other calamities -- get special consideration. Tax laws make it easier for affected folks to get some help from the IRS more quickly.
In these cases, taxpayers typically can claim their losses in the tax year the disaster struck, or they can claim it as if it happened the year before. Many taxpayers find that by filing an amended return and claiming the loss for the previous tax year, for example, claiming 2010 wildfire losses on an amended 2009 return, they get a bigger refund. This often is the case for individuals who didn't itemize deductions the prior year.
The deadline for choosing the option of which tax year to claim disaster losses usually is the due date of your current-year return. This means you can file the amended return for the previous year by the filing deadline for the year in which the disaster actually occurred.
For example, if in 2010 you suffered a casualty loss due to a presidentially declared disaster, you can amend your 2009 return up until the current April filing due date (the 18th this year) to claim the losses in that prior tax year.
FEMA maintains a list of current- and previous-year presidential disasters to help you confirm that you're eligible for special tax treatment.
Yes, the paperwork is a hassle. But the IRS provides additional details in Publication 547, Casualties, Disasters and Thefts. The agency also has a workbook to help you track your losses, as well as Publication 2194, Disaster Losses Kit for Individuals, which consolidates the tax-related disaster information you'll need.

Wednesday, August 24, 2011

Generous Depreciation Rules May Be Quickly Coming to an End


If you have been recently contemplating making capital expenditures, it is important to remember that the generous depreciation rules that we have become comfortable with over the last four years may be quickly coming to an end. You will want to keep some important dates in mind to ensure that you don't miss out on maximizing your tax savings.

Bonus Depreciation
For the rest of 2011, taxpayers are able to deduct 100% of the cost of new (rather than used) equipment. This tax incentive was extended into 2012, but the rate is reduced to 50%.

In order to qualify for the 50% and 100% bonus depreciation, the assets purchased must have been originally used by the taxpayer ("new" rather than "used"), and they must have a recovery period of 20 years or less. Most tangible personal property will qualify, such as autos, trucks, machinery, and office equipment. It is important to keep in mind that autos, vans, and trucks may be subject to limitations.

Section 179 Deduction
In 2011, taxpayers can deduct $500,000 in capital expenditures under Section 179 as long as they don't purchase more than the $2 million phase-out threshold. For every dollar of assets purchased above the $2 million phase-out threshold, the deduction will decrease by an equal amount. Starting in 2012, this benefit decreases to $125,000, with a $500,000 phase-out threshold. SUVs are limited to $25,000 in Section 179 deduction, but they can receive the 100% bonus depreciation for any amounts over the $25,000.

For 2011 only, the Section 179 deduction is available for qualified real property improvements. Qualified real property improvements include improvements to the interior of leased or retail nonresidential buildings and restaurant buildings. Interior improvements for leased property must have been completed more than three years after the date the building was first placed into service.

What Now?
It is unlikely that bonus depreciation will be extended past 2012. In addition, the Section 179 deduction will probably remain at the inflation-adjusted $125,000 amount going forward. Therefore, it is very important that you properly time your capital expenditures. Please contact me immediately at 414-277-7789 to discuss the possible tax benefits that can be obtained from your capital expenditures.

Thursday, August 11, 2011

Top ten tax tips when selling your home

The Internal Revenue Service has some important information to share with individuals who have sold or are about to sell their home. If you have a gain from the sale of your main home, you may qualify to exclude all or part of that gain from your income. Here are ten tips from the IRS to keep in mind when selling your home.

1. In general, you are eligible to exclude the gain from income if you have owned and used your home as your main home for two years out of the five years prior to the date of its sale.

2. If you have a gain from the sale of your main home, you may be able to exclude up to $250,000 of the gain from your income ($500,000 on a joint return in most cases).

3. You are not eligible for the exclusion if you excluded the gain from the sale of another home during the two-year period prior to the sale of your home.

4. If you can exclude all of the gain, you do not need to report the sale on your tax return.

5. If you have a gain that cannot be excluded, it is taxable. You must report it on Form 1040, Schedule D, Capital Gains and Losses.

6. You cannot deduct a loss from the sale of your main home.

7. Worksheets are included in Publication 523, Selling Your Home, to help you figure the adjusted basis of the home you sold, the gain (or loss) on the sale, and the gain that you can exclude.

8. If you have more than one home, you can exclude a gain only from the sale of your main home. You must pay tax on the gain from selling any other home. If you have two homes and live in both of them, your main home is ordinarily the one you live in most of the time.

9. If you received the first-time homebuyer credit and within 36 months of the date of purchase, the property is no longer used as your principal residence, you are required to repay the credit. Repayment of the full credit is due with the income tax return for the year the home ceased to be your principal residence, using Form 5405, First-Time Homebuyer Credit and Repayment of the Credit. The full amount of the credit is reflected as additional tax on that year’s tax return.

10. When you move, be sure to update your address with the IRS and the U.S. Postal Service to ensure you receive refunds or correspondence from the IRS. Use Form 8822, Change of Address, to notify the IRS of your address change.

Friday, August 5, 2011

Roth IRAs – Market Sell-offs Prompt Two Vital Questions

The planning topic du jour in 2010 involved converting traditional IRAs to Roth IRAs, capitalizing on favorable tax laws effective in 2010 and depressed market values. Despite all the press and attention devoted to the issue in 2010, very little discussion touched on the importance of 2011.

Recharacterization Opportunity – Must be on or before 10/17/11!
Roth IRA conversions can be viewed as a short-term,“heads you win, tails you tie” wager. Specifically, 2010 conversions can be recharacterized back to a traditional IRA for any reason, as long as the recharacterization occurs on or before 10/17/11.  This is the extended due date for 2010 returns; however, you have until this date even if you did not extend your return or have already filed.

As an example, assume you converted a $50,000 IRA to a Roth in December 2010, and it is now worth $30,000 because of market declines. If you do not recharacterize the conversion, your 2010 return will report ordinary income of $50,000. Unique rules in 2010 allowed you to report this income all in 2010 or half ($25,000) in 2011 and half ($25,000) in 2012,deferring the tax hit. With recent market declines, you may wish to recharacterize the conversion now.

Note: If you do recharacterize some or all of a 2010 conversion, you may still re-convert that money back to a Roth in 2011. However, you must wait at least 30 days to convert the same amounts. In addition, 2011 conversions may not be spread over future years. In other words, you will have to report all of the income resulting from the conversion in 2011. Of course, you now have until October 15, 2012, to determine whether the 2011 conversion worked well or whether to recharacterize again.

2011 Conversion – Must be on or before 12/31/11!
Starting in 2010, anyone could convert to a Roth IRA, regardless of filing status or income level. That opportunity continues in 2011 (and all future years). The only unique feature about 2010 conversions involved the option to defer income into 2011 and 2012. The extension of the Bush Tax Cuts,  coupled with declining market values, make 2011 Roth conversions worthy of discussion. Also, as discussed above, 2011 conversions offer the same “heads you win, tails you tie” feature via the recharacterization rules.

What to do?
Whether you converted in 2010 or are considering a 2011 conversion, please contact us tax benefits and choices you have.

Wednesday, August 3, 2011

Ten Facts from the IRS about Amending Your Tax Return

Ten Facts from the IRS about Amending Your Tax Return
If you discover an error after you file your tax return, you can correct it by amending your return. Here are ten facts from the Internal Revenue Service about amending your federal tax return:
When to amend a return You should file an amended return if your filing status, your dependents, your total income or your deductions or credits were reported incorrectly.
When NOT to amend a return In some cases, you do not need to amend your tax return. The IRS usually corrects math errors or requests missing forms – such as W-2s or schedules – when processing an original return. In these instances, do not amend your return.
Form to use Use Form 1040X, Amended U.S. Individual Income Tax Return, to amend a previously filed Form 1040, 1040A or 1040EZ. Make sure you check the box for the year of the return you are amending on the Form 1040X. Amended tax returns cannot be filed electronically.
Multiple amended returns If you are amending more than one year’s tax return, prepare a 1040X for each return and mail them in separate envelopes to the appropriate IRS processing center.
Form 1040X The Form 1040X has three columns. Column A shows original figures from the original return (if however, the return was previously amended or adjusted by IRS, use the adjusted figures). Column C shows the corrected figures. The difference between Column A and C is shown in Column B. There is an area on the back of the form to explain the specific changes and the reason for the change.
Other forms or schedules If the changes involve other schedules or forms, attach them to the Form 1040X.
Additional refund If you are filing to claim an additional refund, wait until you have received your original refund before filing Form 1040X. You may cash that check while waiting for any additional refund.
Additional tax If you owe additional tax, you should file Form 1040X and pay the tax as soon as possible to limit interest and penalty charges.
When to file Generally, to claim a refund, you must file Form 1040X within three years from the date you filed your original return or within two years from the date you paid the tax, whichever is later.
Processing time Normal processing time for amended returns is 8 to 12 weeks.
Form 1040X and instructions are available at or by calling 800-TAX-FORM (800-829-3676).