Famous reality television judge Judy Sheindlin famously said, “If it doesn’t make sense, it’s not true!” Many longtime fans of her show are likely echoing that sentiment after hearing the news that “Judge Judy” is coming to an end after its 25th season. While her reign on CBS may be coming to an end, it’s unlikely she will relinquish her hold on the Guinness World Record for longest career as a television judge or arbitrator any time soon. Judge Judy, the highest-rated daytime program in the U.S., has made Judy Sheindlin the highest-paid star in television and worth $440 million, according to Forbes. Her longevity and earnings make her a contender for one of the richest self-made women in the U.S. But every founder or entrepreneur must move on at some point.
While the series we know as Judge Judy will be coming to an end, Sheindlin plans on returning with a new show called Judy Justice. It’s incredible to think that Sheindlin sparked all of this from her reputation as a “tough, no-nonsense judge” in Manhattan almost four decades ago. But it is obvious that Sheindlin is a true entrepreneur with incredible ambition and dedication. And of course, it doesn’t hurt that she has been incredibly successful. While we can’t put ourselves in her shoes, Sheindlin has already established that this is not the end. It’s admirable to see that she isn’t letting the end of one thing end her career, citing that “If you’re not tired, you’re not supposed to stop.”
This news has a not-so-hidden message to keep going. Whether you have succeeded or not, entrepreneurship is about the journey and the constant drive to keep going. Judge Judy will always remind us that “I’m the boss, applesauce.” That should be enough to motivate you to work twice as hard for that thing you want to achieve.
If after a long and successful career in your field you’re thinking of going out on your own or creating another business that plays into your passions, Talley & Company has over 25 years of experience helping entrepreneurs successfully start and grow their businesses. From startup to succession, we maintain a proactive, global approach to our clients’ personal, family, and business needs.
06 Mar 2020
We’ve heard of artificial intelligence in movies like Terminator and I, Robot. But the real applications of artificial intelligence include analyzing complex data sets, driving vehicles, providing more insightful user experiences, and even setting dinner plans or weeding out spam callers. While these applications have grown incredibly in the private sectors, government agencies like the IRS have also started to employ artificial intelligence as a utility for improving communication, taxpayer assistance, and even detecting tax evasion.
Several government tax agencies have already employed the use of chatbots to answer taxpayer questions. The most recent example comes in the form of Canada’s Charlie the Chatbot. A similar system is no doubt in the works for the IRS, which will hopefully help taxpayers avoid long wait times on the phone and get clarification on confusing documentation on the IRS website. Artificial intelligence has a consumer-facing goal of making lives easier, so it’s not far off to expect time-saving applications like chatbots.
While this appeals to taxpayers and consumers, the ideal application for an agency like the IRS is in tracking tax evasion, and increasing the likelihood of collecting tax payments from delinquent tax payers or non-filers. Such an application comes into the picture as the Internal Revenue Service ramps up data collection and analysis by using artificial intelligence to create graphs and present relationships between data to identify people who may be avoiding their taxes. But the usability goes as far as analyzing the scripts between IRS agents and taxpayers in order to find out how to effectively solicit tax payments, and ultimately “get a check sent.”
In an effort to fulfill these objectives, the IRS has even engaged in relationships with data firms to investigate potential tax evasion. IRS commissioner Charler Rettig even reveals the benefits of these new partnerships with this quote: “If I get a first name and a cell phone number, you’d be shocked how much information Palantir can provide.” Palantir refers to Palantir Technologies, a private data analytics company based in California. The initiatives are still fairly new and uncertain considering the budget of the IRS.
Additional implications come from the already detached nature of the organization becoming more automated, pushing human interaction even further from the taxpayer. Often, taxpayers are already confused as to the reason for IRS notifications, and making the communication process automated could become frustrating and ultimately leave taxpayers even more uninformed.
While the involvement of artificial intelligence in tax processes remains uncertain, human interaction will always be close by. Taxpayers should be wary of the fact that the evolution of technology within agencies like the IRS makes it much harder to conduct nefarious actions like tax evasion.
Talley’s experienced team of tax professionals provides comprehensive tax compliance and consulting services so you can preserve, enhance and pass on to the next generation the assets and wealth that you’ve worked hard to build. We welcome the opportunity to discuss with you the current opportunities available to you, your family and business. For more information, contact us today.
In today’s technologically advanced society, data is a driving force behind most if not every single industry. In fact, data is big business that is predicted to reach over a quarter of a trillion dollars by 2022. That’s not to say that the industry is wrought with failure. While there is no definite solution when it comes to such a new and unpredictable industry, here are four questions we can ask to analyze and potentially improve data-driven decision making.
How was the data sourced? Ultimately data is messy business, and data has a great potential to be entirely inaccurate. There is the element of human interaction, which is typically troubled by mistakes made when entering data like inventory, product purchases, etc. Lastly, and often the most overlooked, is the use of outdated data. Using a list or report from the wrong quarter or even wrong fiscal year can lead to disastrous consequences for businesses.
How was the data analyzed? Besides being misinterpreted by the people handling the data, accurate date can be misrepresented by computer models. Traditionally, we trust a spreadsheet/model to predict accurate results based on data input. The problem is twofold though: these models are not always entirely foolproof and even worse, some models contain enormous bias. Simply put, some models are entirely too simple and misrepresent data, while more complex models can muddle the data. In both cases, the claims of such models are often overly dramatic in either direction.
What doesn’t the data tell us? Data may be massively helpful to businesses in predicting shopper behavior or tracking performance, but it is just that, predicting. Humans cannot be entirely represented by data. This is called availability bias, and basically explains the phenomenon where decisions are made based only on available data or models and does not account for information that is not represented by what is not immediately available. Typical examples can include basing the amount of labor hours to give employees on hourly sales or extending loans to people based on established credit data. These are not always entirely representative of the entire situation, and ultimately reflect the danger of not asking this third question.
How can we use data to redesign products and business models? In other words, how do we utilize and/or apply data in business today to affect change in the way products are created, marketed, and sold as well as how businesses operate? This is multiple questions in one, but it is one of the most important to consider, because without an aim or goal for the data, it’s pointless to interact with it.
Data is such an incredibly valuable asset to business today, and utilizing it correctly and to its full potential can yield incredible results. It can be the difference between maximum efficiency and blatant inefficiency.
From technology-based accounting solutions to management information, analysis, and reporting, Talley LLP is the premier business consulting firm for entrepreneurs and their closely-held businesses. For more information on how to leverage your business’s data technology, contact Talley today.
21 Feb 2020
With tax season in full swing, it’s a great time to address tax savings strategies that apply to everyone. No matter what your age or what capacity you are employed in, if you are making money then these tips apply to you. We wanted to focus on retirement, not only because it’s relevant in the current self-help-centered social climate, but because saving for retirement is one of the most crucial investments in your future that may also serve as a tax-saving tactic.
Most Americans are not prepared for retirement. Consider the fact that almost 300,000 baby boomers are set to retire each month until 2030 with less than 10% of the suggested minimum retirement savings. The unfortunate reality is that the lack of retirement investments and savings coupled with active debt (e.g., a mortgage), many baby boomers are not in a position to enjoy a stress-free retirement. Many may even be forced out of retirement or kept from retiring altogether. That is why it is so important to take advantage of financial planning options like retirement accounts and leveraging tax-saving strategies that are available to you.
Most workplaces offer options like a 401(k) or 403(b), which are effectively savings accounts that allow you to invest your money while deferring any taxes until a later time. Although there is more to it and the details are generally pretty complex, it’s not hard to set up automatic contributions every month. As a bonus, if you are utilizing a 401(k) offered by your company, they may even offer to match what you put in up to a certain amount.
Traditional IRAs are also an option because you are taxed at the time of withdrawal. As such, these contributions may be considered tax deductions when you file your taxes. Roth IRAs are an interesting alternative because you pay taxes upfront, so the benefits come later on. Either way, the best part is that you can maintain both a 401(k) and IRA at the same time.
In conjunction with money management and financial planning, long-term tax planning can help both you and your family protect your hard-earned money. No matter your situation, consulting with your wealth advisor and tax advisor is a good start.
Talley’s experienced team of tax professionals provides comprehensive tax compliance and consulting services so you can preserve, enhance, and pass on to the next generation the assets and wealth that you’ve worked hard to build. We welcome the opportunity to discuss the current options available to you. For more information, contact us today.
California’s groundbreaking Assembly Bill 5 (AB 5) went into effect on Jan. 1st, becoming the standard for determining whether workers should be classified as employees or independent contractors. All companies using independent contractors in California will be put through a three-part test to determine whether they must reclassify their workers. If they don’t pass that test, they’ll have to turn their workers into employees.
The debate that raged around the bill for months focused mainly on its effects on Big Tech and gig economy companies such as Uber, Lyft and Postmates. But by the time the legislation became law last year, its scope broadened to encompass an array of industries, from transportation/trucking to journalism. Proponents of the bill say that it forces companies to replace gigs with jobs that entitle employees to state-mandated protections like paid time off, coverage for job injuries, and unemployment insurance. Critics of AB 5 say despite its good intentions the legislation has boomeranged on contractors, making it harder for tens of thousands of them to make a living in a tight economy.
The three-part AB 5 “ABC classification test” requires businesses to use the following test in determining whether a worker is an employee or an independent contractor:
(A) The person is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact.
(B) The person performs work that is outside the usual course of the hiring entity’s business.
(C) The person is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.”
If even one of the conditions is not met, then the worker is classified as an employee. As concerns grow over the new law, large companies and third-party organizations like Uber and Airbnb are looking for ways to avoid having to take on a rush of new “employees” under this classification.
Our assessment of AB 5 is that it will have major tax implications across a wide variety of businesses and industries. Talley welcomes the opportunity to discuss what AB 5 may mean for you and your business. For more information, feel free to contact us
This year alone, Americans are estimated to inherit over $750 billion while only paying an estimated 2.1% in taxes, according to the Brookings Institution. In comparison, the estimated taxes on work income and savings is 15.8%. While plenty of people advocate for higher taxes on the wealthier population, Lily Batchelder, who advised Barack Obama during his presidency, is proposing an inheritance tax that could raise approximately $1.4 trillion over the next ten years in taxes.
Currently, wealthy Americans and their estates are required to pay a 40% tax on bequests and gifts to their heirs. However, there are many ways to avoid the tax. For example, the first $23.2 million in inheritance is tax-exempt for married couples, and there are many other methods to transfer wealth to heirs tax-free using trusts and other strategies.
Batchelder’s plan would eliminate the current estate tax system and require heirs to pay income and payroll tax on inherited money. Also included in her plan is a proposed lifetime threshold that would make certain heirs exempt, taxing only the richest heirs. The estimate is still not representative of the actual number raised by the new “inheritance tax” due to the fact that it does not include additional funds raised through the closing of certain tax loopholes also enacted by the new plan.
Batchelder wrote that the proposal would “soften inequalities, strengthen mobility, and more equitably allocate taxes on inheritances among heirs,” while also cutting any distortions in the labor market and increasing work among heirs.
Though your options are virtually limitless when it comes to estate planning, deciding on the “who, what, when, and how” and executing this with the least amount paid in taxes, legal fees, and court costs possible can be a challenging and emotional affair to wrestle with alone. For more information, contact Talley LLP today.
While a new year means new commitments to health and happiness, individuals should also make goals for their financial wellness. With tax season opening at the end of January, making some new year’s tax resolutions can make a big impact and require little follow through. Although new tax laws from the IRS and Congress can’t always be anticipated, it is a good idea to try to avoid as many surprises as possible when it comes to your taxes.
First and foremost is to take a step back and evaluate your plans for 2020. These include personal plans, business goals (if you are a business owner), and whether any of these impact your tax withholding. Some examples of significant plans or changes include having a child, purchasing a home, and getting married. A quick check on the IRS website or a consultation with a tax advisor can help determine if you are withholding too much or too little.
Even more important may be a look at your beneficiary designations. When working on non-probate assets like retirement accounts or life insurance policies, you must be sure to have the proper beneficiary designations in place. With changes to IRC §401 and other parts of the law, the way that you contribute and benefit from non-probate assets has changed. Being proactive and taking a look at the pieces you can control, like beneficiary designations, can give you more peace of mind. In addition to this, estate planning documents are important items to review. Changes in federal estate taxes and exemptions may have an impact, and even if they don’t, there may be reason to adjust for new goals or changes in your life.
A final tip is to always stay aware and up to date on policies and changes to tax laws. Following the correct procedures and remaining compliant, especially when it comes to alternative interests like offshore accounts or virtual currency, is as important as ever. Most people might not realize it, but the penalties for willingly ignoring tax laws can be incredibly serious. While these resolutions don’t require much more than a bit of time and consideration, they can offer massive benefits later during tax time.
Talley’s experienced team of tax professionals provides comprehensive tax compliance and consulting services so you can preserve, enhance, and pass on to the next generation the assets and wealth that you’ve worked hard to build. We welcome the opportunity to discuss the current opportunities available to you. For more information, contact us today.
20 Dec 2019
This holiday, families are bound to discuss their lives and talk about their plans for the next year. Most topics will revolve around day-to-day activities, but discussing broader, more uncomfortable things like finances and estate planning can benefit all those involved. With the holidays bringing key family members together, this may even be the best time to start a discussion about the future. While some believe this to be a “wealthy person problem,” a lack of estate planning can affect everyone and results in potential problems when it comes time for an estate to be managed.
One of the most obvious issues is the improper distribution of assets after a loved one’s death. It is not easy to talk or think about, but as they get older, a plan needs to be in place. If not, there is no guarantee that their assets will be handled properly after they die. More importantly, planning ahead can help protect accounts in special circumstances. For example, for those who fall ill and need expensive care and facilities, naming a legal beneficiary in advance can make sure that they can access money to help pay for the necessary treatment. Beneficiaries can also create a barrier from scammers, as with the right documents set up, there is a second source of control over accounts to prevent them from being drained without approval.
While the topic may not be easy to approach, there are a few tips to make starting a conversation easier. The first and most important tip is to be honest and respectful when bringing it up. It seems self-explanatory, but this is often the hardest part of the whole process. Just keep in mind that things will be a lot better when a plan has been created rather than leaving it until it is too late. In cases with multiple beneficiaries, tensions can run especially high. A good way to mediate these tensions while also ensuring things are handled correctly, is to hire a fiduciary. Fiduciaries, unlike other financial advisors, are legally obligated to conduct all business with their clients’ best interest above everything else. The most important tip is to stay dedicated to the process of getting an estate handled and taking the proper steps to make sure it is done correctly.
Though your options are virtually limitless, proper estate planning, deciding on the “who, what, when, and how”, and executing this with the least amount paid in taxes, legal fees and court costs possible can be a challenging and emotional affair to wrestle with alone. For more information, contact Talley LLP today.
LVMH Moët Hennessy – Louis Vuitton SE is no stranger to acquisitions, but the recent purchase of Tiffany & Co. comes with the most substantial price tag to date. At $135 per share, the total purchase price comes in at a little over $16.2 billion. LVMH is very familiar with owning and operating well-known luxury brands with almost eighty under their umbrella already, including Fendi, Givenchy, Dom Pérignon, Marc Jacobs, and Christian Dior. Whether this is a testament to strength in numbers or a risky game of monopoly, Tiffany & Co. seems to be a good match for LVMH with a hundred-year history that attests to its quality and authenticity.
LVMH is a luxury conglomerate with French origins and holds its place as the largest luxury group in the world. Currently operated by Bernard Arnault, the company is working towards a stronger position in North America, and Tiffany & Co.’s seventy-five retail outlets in the U.S. alone should be able to help with that. Additionally, Arnault and LVMH hope that the acquisition will support them in establishing a stronger involvement in the jewelry industry. Tiffany & Co. has been around since the early nineteenth century and is synonymous with status and luxury. It was also popularized by the entertainment industry with such films as Breakfast at Tiffany’s and songs like “Hotel California” by the Eagles.
While LVMH obviously stands to benefit, Tiffany & Co. also has the opportunity to grow as a result of the acquisition. Since its original formation, LVMH has proven successful in acquiring, establishing, and growing luxury brands for several decades. With so much global reach, LVMH should have no problem improving on some of the struggles Tiffany & Co. has run into with changing shopper demographics and behavior. For now, the merger is still pending but is expected to be finalized by the middle of 2020. Until then, jewelry lovers will have to wait to see whether LVMH can help Tiffany & Co. sparkle once more.
Talley LLP understands the challenges facing entrepreneurs with generating and protecting income. Whether you’re looking to improve your profitability or build your brand through a business transaction or capital raise, Talley is the consulting and financial services firm dedicated to strategic business solutions that deliver meaningful results.
06 Dec 2019
It is one thing to test fate with excessive deductions or claiming unverifiable items, but it is an entirely different thing to not even file a tax return. Yet, that is precisely what Harvard law professor, Ronald S. Sullivan, Jr. did, and the consequences were all too real. Sullivan’s neglect to file his 2005-2013 tax returns resulted in a $1.2 million tax bill from IRS assessments of his records, a sum he claims is much higher than his income warrants.
The IRS can and will file returns for you, known as “substitutes for returns.” As a result of this policy and Sullivan’s irresponsibility, the IRS filed his taxes and assessed that he owed over $1.2 million for 2012 and 2013 alone. When the IRS tried to collect, Sullivan ignored procedure until they filed a Notice of Intent to Levy, which he objected to. Although he argued his income was not indicative of taxes that large, Sullivan again neglected his due diligence when it came time to respond with proof. He was prompted at least seven times for information, including three letters requesting that he file taxes for the years of 2012-2015 and a telephone hearing with an assigned IRS settlement officer.
Throughout 2017, Sullivan continued to ignore these requests, communications, and his responsibility in the matter. As a result, when the case was brought to the United States Tax Court, they upheld the IRS’ assessment of taxes owed and agreed that Sullivan was responsible for paying the total amount. It’s very much possible that Sullivan was telling the truth and that his income did not command taxes owed to that amount, but he lost the opportunity to correct the assessment when he neglected to file tax returns for eight years and failed to respond to the IRS’ inquiries.
It’s disheartening to hear that you have to pay over $1.2 million in taxes (especially if it is just for two years of income), but the reality is that the consequences can be so much worse: an actual levying of your assets and accounts, garnishing of your wages, and jail time. It is unclear how the situation was resolved, but if Sullivan had at the very least filed taxes, the situation would have been much easier to fix.
Talley’s experienced team of tax professionals provide comprehensive tax compliance and consulting services so you can preserve, enhance, and pass on to the next generation the assets and wealth that you’ve worked hard to build. We welcome the opportunity to discuss with you the current opportunities available to you. For more information, contact us today.