BEWARE OF SCAMMERS ATTEMPTING TO "CASH IN" ON YOUR IRS FEARS

I am sitting in my office one day last week when suddenly a client rushes into the office, cell phone pressed against his ear, wildly waving his other hand, wearing a look of abject terror on his face. Once he finishes the call, he tells me that he has just received a phone call from a person purporting to be with the IRS seeking to collect on a supposed tax deficiency. 

Compounding his fears, the caller claimed that unless a payment of $4500 was made within the next several hours, all sorts of dire consequences would cascade on his head, including the threat of arrest.

After calming the client down, I  questioned him about his tax payment status. The client advised that he was not aware of any supposedly unpaid tax liability and, in fact, was in the process of preparing and finalizing his 2013 return.   It did not seem likely that, in this particular case, the threat of arrest was a valid threat.

Immediately, I suspected that this might simply be a scam;  as much as we all are aware of the "iron fist" of the IRS, the reality is a typical phone call from your friendly IRS representative is usually an effort to obtain payment of an amount supposedly due, like any other collection agency.   In this case, the threat of arrest set this apart from what otherwise might have been a typical IRS collection effort.

The client contacted the IRS directly to ascertain that there was not any outstanding lien (there was not) and, after relating the story to the IRS agent, the client was referred to the Treasury Inspector General for Tax Administration hotline to report this clearly fraudulent attempt by a scammer to capitalize on everyone's innate fear of the IRS.  

My advice to you is that if you receive such a phone call, do not panic. Initially, ask the caller for any identification (usually  legitimate callers from the IRS will have an identification number), request that you are provided a number to call them back, and then immediately seek the assistance of counsel, or  make an inquiry to your local IRS office to attempt to confirm the allegations.  

Remember,  time is on YOUR side; don't make any hasty decisions to give personal information simply to get them off the phone and avoid the alleged dire consequences.  These scam artists attempt to capitalize on your fears, and will make all sorts of threats about immediate punishments if you do not provide that information to them over the phone in an effort to compel you to pay immediately.  

In addition, if you  have received such a phone call, or are faced with such a call in the future,  do not hesitate to call the Inspector General's  fraud hotline:  1–800–366–4484, or get additional information from the Inspector General's website: http://www.treasury.gov/tigta/contact_report.shtml. 

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This blog post is not considered to be legal advice, and is intended for educational purposes only. For more information regarding any of the issues discussed above, please contact Robert F. Schillberg, Jr. (rschillberg@schillberglaw.com).

PROTECT YOUR PERSONAL ASSETS AGAINST BUSINESS LIABILITY CLAIMS

So, you have taken that giant leap in your life and gone into business for yourself.  You have entered into a lease agreement for office space, leased a copier/scanner/printer, purchased a computer, hired staff, purchased liability insurance, hung out your shingle advertising your business, generated many new customers for your product or service, and you're ready to go, right?  Well, maybe not.

The fact is, in our highly litigious society, each of the simple acts mentioned above not only builds your business, but each has some legal ramifications that might someday negatively impact upon your business.  If proper care is not taken at some point during the life of the business, such claims might also impact your personal assets if you have not taken the proper steps to protect those assets.  One of the simplest, yet most effective, ways to protect your personal assets from a misstep in your business life is to either incorporate the business entity (as a “C” or “S” Corporation), or establish a Limited Liability Company ("LLC”).

The creation of either of these business entities generally shields you and your personal assets from exposure for liability incurred as a result of your business activities.  By adhering to certain rules designed to keep your business and personal activities separate (e.g.: not using business assets for personal items, or not co-mingling business and personal banking matters), one can ensure that one's personal assets will not be placed at risk due to exposure from liability for the acts of the Corporation or LLC.

While these business entities provide the advantage of limiting one's exposure to personal liability, careful consideration of the business’ goals and objectives must be given when determining whether to incorporate or create an LLC.  For example, while a “C” Corporation generally exposes income generated by the business to double taxation (once when the income is generated and when the income is distributed to shareholders), the LLC will generally be taxed once.  In addition to tax ramifications, one must also consider the goals and objectives of the business.  The LLC allows more flexibility in structuring the internal arrangements of the business, such as allocation of income, gains, losses, deductions, etc, as well as more flexibility in providing employee benefits.  Both “C” and “S” Corporations present more difficulty in structuring the allocation of profits in a manner other than in proportion to ownership of shares in the Corporation.  Hence, the LLC might be the preferred choice of business entity if these are the major concerns of the business owner.

In conclusion, the business owner – along with the legal advisor and accountant - must consider the business’ goals and objectives, such as limiting tax exposure, flexibility in allocation of profits, or the provision of employee benefits, when determining the most effective form of the business entity. However, proper selection of the business entity will provide the business owner with protection of personal assets from liability claims, as well as maximizing business profits.

This blog post is not considered to be legal advice, and is intended for educational purposes only.  

For more information regarding any of the foregoing issues discussed above, please contact Robert F. Schillberg, Jr. (rschillberg@schillberglaw.com).

IT IS ESSENTIAL TO REVIEW YOUR WILL WITH AN ATTORNEY BEFORE MAKING ANY DESIRED CHANGES

Throughout your life, few documents will be as important or valuable to you as your will. Most people spend their adult lives considering what will become of their possessions after they pass away. “What will I leave to my children? My husband? My best friend?” The process of crafting an estate plan and determining how to parcel out one’s assets is a difficult and sometimes lengthy procedure. After making these hard decisions and finalizing a plan, it is common for people to have a change of heart. We meet new people, our relationships can become strained, or a certain loved one might need to be provided for more than someone else. These are reasonable changes that can occur to anyone after they’ve crafted their will.

Under these circumstances, the instinct many people will have is to simply retrieve their will and write in the changes as they see fit. After all, the process of writing the first draft may have taken time and effort that you don’t want to go through again. Handwriting a simple change can avoid revisiting the process and save money.

Making any physical change to an estate plan is a serious mistake that people make and it has significant unintended consequences. Any alteration to a signed and witnessed will can invalidate the entire document. Writing changes onto a will immediately indicates that the intent of the testator has changed from when the signing was witnessed. Additionally, courts cannot be sure of the intent of the deceased once handwritten changes are made. This opens the door to fraud and leaves the will susceptible to a host of challenges by dissatisfied beneficiaries.

This issue does not pertain solely to the use of handwritten alterations to the language of a will. The physical integrity of a will is equally important to maintain the validity of the document. Any destruction of the will can provide the court with the implication that the maker of the will no longer intended it to be a representation of their final wishes. Large tears, burns, or even the removal of staples can create the presumption that the testator had a change of heart and no longer wished for this copy of the will to be used. Once this presumption arises, it becomes necessary to provide the probate court with an effective copy of a will. Failure to do so results in the deceased’s estate being probated intestate: not allowing for specific bequests and giving the entirety of the estate to the testator’s next of kin.

This is why it is essential for people who seek to change their will to hire an attorney to make their desired changes. A new will can appropriately reflect the changes you wish to see in your estate plan and ensure that your family and friends receive exactly what you intend. If you need help writing your first will or editing an existing will, Schillberg Law can assist you whenever you’re ready to get to work!

The author, Steven Oran, Esq., is an Associate at Schillberg Law, LLC.  This blog post is not considered to be legal advice, and is intended for educational purposes only.  For more information regarding any of the foregoing issues discussed above, please contact the author or Robert F. Schillberg, Jr. (rschillberg@schillberglaw.com).