Dear Readers,
Beginning in 2010, there will no longer be income limitations for those wishing to open a Roth savings account. So in other words, if you wish to rollover your plan assets to a Roth IRA, you no longer have to fork over 20 percent as mandatory withholding.
Your accountant or investment advisor will need to meet with you to ensure that you are both observing IRS rules regarding rollovers to a Roth IRA. Such as there has to be a “triggering event”, that is retirement, or being laid off, or qualifying under a hardship provision. For more complete information on these qualifying events, you may go to the IRS site at irs.gov/publications/p590/ch02.html.
Hear Ye! Hear Ye! This has been a public service announcement.
Showing posts with label irs. Show all posts
Showing posts with label irs. Show all posts
Sunday, September 6, 2009
Friday, June 19, 2009
Another Scandal Looming for Big Banks, Financial Houses
by L.A.S.
Yet another scandal and heavy fines loom for the big banks and investment houses, this time due to investigations of tax cheating. The IRS has been bearing down on advisors who have helped the wealthy shelter money in offshore accounts. This is not breaking news but little attention has been paid to the financial consequences of the heavy IRS fines in such cases.
A recent case in which a former banker at UBS, the the Swiss bank, pleaded guilty last year to helping a client hide $200 million in an offshore account. The banker turned whistleblower and revealed that the bank holds billions of dollars for American customers in those secret Swiss bank accounts.
According to one source, there are roughly 52,000 suspected accounts; that is just the UBS accounts and there could be many thousands more with other banks such as Credit Suisse, HSBC, and others. It is difficult to imagine how the IRS might seek out so many cheats but their strategy is to offer amnesty to the depositors.
Depositors will still have to pay back taxes, otherwise they could eventually face five years in jail and fines of $100,000 or half of the amount in the foreign account (whichever is more).
Now, supposing the investment house failed to keep on file a form that properly advised the client (the depositor) that they have to file this account with the IRS. In that case, the investment house (or the advisor) faces being dragged into court and face similar jail time and fines for tax fraud.
How many such accounts are out there with American firms or at least American offices? How many of their American staffers stand in danger of being dragged into court and probably losing their licenses as financial advisors? And what will Wall Street make of those companies when the you-know-what finally hits the fan? It could get ugly out there.
The fact that even foreign stock exchanges are now highly correlated with the fortunes of the American stock exchanges is changing the axiom that there is safety in diversifying one's stock among domestic and foreign companies. You may have stock in some foreign banking interests without realizing it, just because you bought into global mutual funds, perhaps. The world markets and financial linkages are now so pervasive that nothing is isolated from general trends in the U.S. as it once was.
It is a difficult time to correctly evaluate the relative risks of mutual funds or any other foreign investments, so perhaps the right kind of diversification is between betting on the rising market and betting on the sinking market. People still have not quite recovered their confidence that times are getting better, in spite of a partial recovery of the Dow Jones.
Yet another scandal and heavy fines loom for the big banks and investment houses, this time due to investigations of tax cheating. The IRS has been bearing down on advisors who have helped the wealthy shelter money in offshore accounts. This is not breaking news but little attention has been paid to the financial consequences of the heavy IRS fines in such cases.
A recent case in which a former banker at UBS, the the Swiss bank, pleaded guilty last year to helping a client hide $200 million in an offshore account. The banker turned whistleblower and revealed that the bank holds billions of dollars for American customers in those secret Swiss bank accounts.
According to one source, there are roughly 52,000 suspected accounts; that is just the UBS accounts and there could be many thousands more with other banks such as Credit Suisse, HSBC, and others. It is difficult to imagine how the IRS might seek out so many cheats but their strategy is to offer amnesty to the depositors.
Depositors will still have to pay back taxes, otherwise they could eventually face five years in jail and fines of $100,000 or half of the amount in the foreign account (whichever is more).
Now, supposing the investment house failed to keep on file a form that properly advised the client (the depositor) that they have to file this account with the IRS. In that case, the investment house (or the advisor) faces being dragged into court and face similar jail time and fines for tax fraud.
How many such accounts are out there with American firms or at least American offices? How many of their American staffers stand in danger of being dragged into court and probably losing their licenses as financial advisors? And what will Wall Street make of those companies when the you-know-what finally hits the fan? It could get ugly out there.
The fact that even foreign stock exchanges are now highly correlated with the fortunes of the American stock exchanges is changing the axiom that there is safety in diversifying one's stock among domestic and foreign companies. You may have stock in some foreign banking interests without realizing it, just because you bought into global mutual funds, perhaps. The world markets and financial linkages are now so pervasive that nothing is isolated from general trends in the U.S. as it once was.
It is a difficult time to correctly evaluate the relative risks of mutual funds or any other foreign investments, so perhaps the right kind of diversification is between betting on the rising market and betting on the sinking market. People still have not quite recovered their confidence that times are getting better, in spite of a partial recovery of the Dow Jones.
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