LOOKING FOR LEGAL WAYS
TO REDUCE TAX?
New tax reduction strategies carefully explained and exhaustively researched every two weeks. Receive breaking news updates on tax law changes. Members only monthly AMA with TOTTB.tax.
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FEATURED CONTENT
The Ultimate Year End Tip Guide and the Search for the Great Shelter
Coming up on the end of the year, year end planning is kind of a ritual for me. I take my first pass in early November and will do it again no later than December. It is pretty boring. I thought it would be worthwhile to do a survey of a variety of year end tips articles. What is going on here is something like Ahab’s hunt for the great white whale. I am looking for something to help out HENRY. HENRY stands for High Earnings Not Rich Yet. I wrote about the quest in 2019. I found nothing much for HENRY then, and this year’s batch of advice articles really does not offer much. The articles do not all say exactly the same thing, but there is a lot of commonality. Due to the sophisticated nature of the readership of TOTTB, I will just allude to the tips, not explain them in detail, because I am going someplace else with this. There is nothing dramatic for HENRY coming from conventional advisers, which accounts for HENRY’s vulnerability to sketchy tax shelters. I will share a bit about what I have seen in that department and reflect a bit.
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CURRENT EDITION
Help Your Clients Implement a Fortune 500 CFO Strategy
For decades, some of America’s largest corporations have used a financial strategy that gives their CFOs greater control over insurance costs, helps them finance risks the commercial market handles poorly and creates an opportunity to retain underwriting profit when losses come in below expectations. Approximately 90% of Fortune 500 companies have captive insurance subsidiaries.¹ Historically, the economics favored organizations with substantial capital, large insurance programs and the resources to support their own insurance operations. Small and midsize businesses rarely had the scale to justify the cost and complexity. That equation has changed. A mature network of specialized insurance professionals and structures now allows qualifying privately held businesses to pursue many of the same risk-financing advantages. Federal tax law can further improve the economics for certain smaller insurance companies. For CPAs and tax professionals, this creates an advisory opportunity. The challenge is recognizing which clients could benefit and what conditions must exist before recommending it.
Structured Installment Sales Making Comeback – How Good A Tool Is It?
Structured Installment Sales (SIS) have been making a comeback. Historically low interest rates starting in 2011 made them go out of favor. Starting in 2018, insurers started coming back into offering them. MetLife expanded its SIS solution to 49 states, Puerto Rico and D.C. in 2022. You need to know about SIS and it deserves a place in your toolbox. You might not be using it as often as the toolmakers imply. I took a look at SIS in 2023 and was a little more enthusiastic about it than I am now. Let’s dig in.
Assessment Statutes and Document Retention Best Practices
When it comes to document retention, my guiding policy is “If I don’t keep it, it can’t be stolen or subpoenaed.” That sounds cynical, but there’s truth in it. The smaller your data “surface area,” the less you have to manage in the event of a data breach (or, if you hold paper documents, in the event of a fire or break in). And, if a client or former client gets really sideways in divorce or criminal court, being able to say “I have a policy in place and I don’t keep records longer than three years” can provide you with a measure of peace. But what should your policy be? It depends, but relevant assessment statutes are a good place to start. This article reviews the IRS rules for assessing tax and provides some best practices for developing document retention policies for return preparation documents in your practice.
SIMPLIFIED TAX STRATEGIES &
PRACTICAL IMPLEMENTATION
Think Outside the Tax Box provides tax reduction strategies along with practical
implementation advice in order to reduce your clients’ federal tax bill with ease.
