He may have been the nation's top legal jurist, but former Chief Justice Warren Burger evidently prepared a "woefully inadequate" one-page will that might cost his heirs $450,000 in additional taxes and expenses, according to a story by Associated Press. Evidently, the chief justice typed his own will in such a hurry, he even misspelled the term, "executors" as exeuctors. Mistakes included the failure for his "executors" to waive bond, and to have the will be self-proving, which means a court proceeding might be required so that his two witnesses can testify that they saw him sign the document.
Burger's do-it-yourself attempt at estate planning should be a warning to those who are considering similar measures: proper tax and estate planning is essential if you hope to minimize probate fees and estate taxes upon your death. For further information on estate planning, see the Tax Prophet's Estate Planning article.
Jerry Jones may have agreed to pay Deion Sanders $35 million over 5 years, but if a certain Congressional proposal becomes law, he may only be able to deduct $1 million of that salary per year. As a consequence, the life styles of professional athletes and others earning over $1 million a year could be drastically affected. This change would deny a tax deduction paid by a company as compensation to one person of more than $1 million, unless the compensation was tied to special performance incentive gauges. Major League Baseball, whose average player salaries are approximately $1,100,000, and whose owners have resisted performance based compensation arrangements, would suffer under this proposal. Such a tax law could adversely impact U.S. hockey teams, compared with their Canadian counterparts who would not have a similar limitation on salaries paid.
In 1993, Congress passed a narrower version of this proposal which prohibited public companies from paying executives more than $1 million. This new law would apply to all employees, and all companies, whether public or private. In addition to the owners of sports franchises, commodity brokers and entertainment industry officials are complaining about the proposed change.
The FBI is considering asking the accounting profession to ferret out business crimes in the companies they audit. Charles Owens, who is the chief of the FBI's financial crimes section believes that accountants who suspect their clients are engaged in fraud or embezzlement should first alert other executives in the corporation of the problem, but if that does not produce results, then they should then inform the FBI of their concerns.
Understandably, the accounting profession is cool to the idea. The thought of turning in clients would be bad for business and could violate an accountant's obligation to keep client information confidential (although as a legal matter, communications with an accountant are not privileged from disclosure). The FBI has noted an increase in business-related crime, and says the fastest growing area of business fraud is occurring in the health care field.
Republicans in Congress want the IRS to turn over its past due tax bills to commercial bill collectors, as part of a campaign to make the government more efficient. Relying on the findings of the General Accounting Office, which surmised that tax collections have decreased 8% since 1990, the Republicans believe the IRS's collection process is lengthy and inefficient.
The IRS is opposed to the idea, stating that providing access to confidential tax information to private collection companies would undermine the public's confidence of the fairness of Federal tax administration. Also, it would be unseemly to allow tax collectors to have a stake in the outcome of their tax collection efforts, whether they are paid by commission or under a contract with incentives for collection.
| Home Page | Search |
E-mail Form | Firm
**NOTE: The information contained at this site is for educational purposes only and is not intended for any particular person or circumstance. A competent tax professional should always be consulted before utilizing any of the information contained at this site.**