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June 30, 2016 / 24 Sivan, 5776

Posts Tagged ‘tax’

ZOA Loses Tax Exemption Status, Will Apply for Reinstatement

Wednesday, September 12th, 2012

The Zionist Organization of America has lost its 501(c)3 tax exemption status, due to failure to file tax returns for the last three years.

In an interview with JTA, ZOA president Morton Klein confirmed the loss, and stated that his organization has hired a tax attorney to help them bring their files up to date and apply for reinstatement of their status.

According to Klein, the error in filing was due to the failure of a ZOA-funded school in Ashkelon to provide correct information in time, as well as a misunderstanding on the part of the ZOA as to the amount of time it had left to file for an extension.

Malkah Fleisher

Transferring Wealth with Stocks, Bonds, and Bicycles

Friday, September 7th, 2012

Wealth transfer is a hot topic in financial planning. Thinking about how to pass funds from one generation to the next can be emotionally difficult. Perhaps the older generation doesn’t approve of the way the younger spends the money, or the younger generation isn’t involved in the family business. Furthermore, tax and legal issues can complicate matters.

While estate and inheritance planning can be complex, other wealth can be transferred more easily: the wealth of knowledge. My grandmother successfully passed a financial education to my mother, who transferred it to me, as I am a proud third-generation licensed broker. My maternal grandmother Miriam Rosofsky struggled against social norms to enter the work world. But eventually she had the distinction of being one of the first women to hold a U.S. Securities license. She started as a secretary in a brokerage firm, but then began picking up her own book of clients. My mother Rhoda Goldstein was an associate vice-president in Dean Witter. Dinner-time conversation around my childhood table alternated between medical issues (my father was a surgeon) and economic discussions. I saw how both my parents helped people gain and maintain their physical and financial health. It was therefore only natural for me to begin my financial career partnering with my mother on Wall Street.

After I made aliya, I founded Profile Investment Services, Ltd. with the aim of helping people living in Israel create financial plans and maintain U.S. brokerage accounts. I try to follow in my mother and grandmother’s footsteps in transferring the wealth of financial knowledge to my own children. Even though none have announced their desire to be financial planners (but my wife recently became a licensed U.S. broker), they do check stock prices regularly.

We frequently discuss fiscal responsibility, budgeting, and other economic topics at our dinner table.  Some of the kids are reading books on behavioral finance, and others are reading books about loyalty, fidelity, and trust. My mother, keen to pick up on children’s natural curiosity about money and the way the “grown up” world works, recently came out with a book geared for young adults about how the stock and bond markets work, and how an entrepreneur can raise the funds necessary to fulfill his dream. If you’re interested in sharing this information with your children and transferring the wealth of financial knowledge to them, visit my website to get her new book Stocks, Bonds, and Bicycles. Let me know if you recognize any of the characters in the story.

Doug Goldstein, CFP®

Flying Back to the US? Better Ask your Accountant First, You Could Get Arrested

Friday, August 31st, 2012

Hey American Olim — Remember the phrase, “No one expects the Spanish Inquisition”?

Well, no one expects to be questioned at the US border when flying to the US for a simcha or visit…by the IRS, about back taxes.

This month’s, “Journal of Accountancy” has a rather scary article about this very issue. First and last paragraphs are the key:

Taxpayers traveling to the United States with unpaid U.S. tax assessments can be detained at the border, questioned, and flagged for follow-up enforcement. If a taxpayer has an unpaid tax liability and is subject to a resulting Notice of Federal Tax Lien, the IRS may submit identifying taxpayer information to the Treasury Enforcement Communications System (TECS), a database maintained by the Department of Homeland Security (DHS).

The database allows the DHS to identify taxpayers with unpaid tax assessments who are traveling to the United States (Internal Revenue Manual (IRM), §5.1.12.26).

A taxpayer who resides outside the United States may not be aware of outstanding federal tax liabilities if the address on record for the taxpayer is outdated or otherwise incorrect. Consequently, tax advisers with clients who reside outside the United States should ensure that the correct address for the taxpayer is used on the client’s returns and, if the client no longer is required to file U.S. returns, that the IRS still is able to contact the taxpayer about previously filed returns. Taxpayers should be advised that a failure to keep the IRS apprised of a change in mailing address may result in an unwelcome—and potentially embarrassing—surprise when the taxpayer seeks to enter the United States.

This could apply even if you DON’T owe money, but the IRS thinks you owe money, audited you (without your knowledge if they couldn’t contact you), and then…while trying to visit…

So, make sure you file regularly, and make sure they have an address listed for you, which will actually reach you.

Remember the IRS motto: “We’re not happy, till you’re not happy…”

Jameel@Muqata

The Tischler Brothers Tout Their Commitments To Public Service

Thursday, August 30th, 2012

Avraham and Moshe Tischler, 20-somethings brothers and ambitious political neophytes, recently met with The Jewish Press editorial board to discuss their current political plans and future prospects.

Avraham, 21, focused on his campaign against Simcha Felder, a former New York City councilman, in the so-called Super Jewish State Senate (district 17) race in southern Brooklyn in the September 13 Democratic primary. Among his chief policy goals, Avraham stressed his commitment to tuition tax credits, creating more jobs in the district, and improving government efficiency – especially the spending of citizens’ tax dollars. If successful, Avraham said he plans to use his office as an educational tool to raise various important issues to his constituents and rally them for their implementations.

Moshe Tischler campaigning on 16th Avenue with Laizer Lichtenstein, a local business owner.

For his part Moshe Tischler, 20, discussed his race against longtime incumbent Dov Hikind for the 48th State Assembly seat. Moshe claimed that he would be more effective than Hikind in the area of tuition tax relief for Yeshiva parents, emphasizing that this would be his top legislative priority in Albany.

Born and raised in Boro Park, the Tischlers said they know firsthand the needs and issues within the community, and have gained the education and insight necessary to understand and serve the community’s needs. With a B.A. degree in psychology and a minor in political science, Avraham has established his acumen on educational issues. And his growing interest in politics has led him to pursue a career in law.

Through his studies, Avraham has become well versed on the issue of the costs of private education. Avraham, declaring that “no child should be deprived of that [school choice] right,” spoke at length about his desire to enact private school tax credit legislation in order to provide parents with financial relief, thus enabling them to exercise the choice of sending their children to private (parochial or non-denominational) or public schools. He explained that city and state government spend close to a combined $20,000 of taxpayer’s dollars per public school student. Parents who send their children to private schools are burdened with those schools’ extra expenses, and Avraham believes that if government provides tax credits to them, parents would gain immediate tax relief. When asked to explain the difference between Felder and his views on this issue, he said, “[Felder] had his opportunity for ten years on the City Council and failed to deliver relief for parents.”

Avraham brings a strong reputation and history of volunteer work in the community. In grade school, he began volunteering in Maimonides Medical Center. He has helped Ohel Bais Ezra recruit young adults to help children with special needs. And he contributes his time to the nonprofit soup kitchen network, Masbia.

These experiences and his unswerving commitment to the community’s needs have made Avraham aware of average people’s struggles in finding jobs, as well as the predicament faced by many businesses that are attempting to maintain their current workforces. Avraham spoke of his plans to help small businesses create more jobs. He said he believes that “small businesses are the key engine to prosperity” and that the fines, regulations and penalties imposed by government are effectively killing those businesses. Avraham detailed the chain reaction of what occurs when a small business is ticketed with an expensive fine, and how that penalty forces them to cut back by possibly laying off some employees – and, in the worst-case scenario, shut down the business altogether.

According to Avraham, Felder did little when serving on the City Council to solve this problem, sponsoring the bill that Mayor Bloomberg proposed to overturn term limits, thereby allowing him to remain in office and continuing to fine and regulate businesses. In Avraham’s view, Felder was essentially a rubber stamp pertaining to the policies of Council Speaker Christine Quinn and Bloomberg.

On the controversial issue of pay raises for lawmakers, Felder voted to increase his own salary by 25 percent. Avraham vowed that if elected, he would vote against a pay raise and challenged Felder to join him in this pledge. As Avraham put it: “When people are struggling and hurting because of the stagnant economy, legislators should not be increasing their pay.”

Yafit Fishbach

Florida debate: ‘Should Jews Vote for Obama or Romney’

Wednesday, August 22nd, 2012

If you are already bored with the US presidential campaign rhetoric, do we have a debate for you!

Tonight’s debate in the swing state of Florida will not be the standard snooze, and you can watch it on your very own computer screen.  Among the players are one vegetarian, animal rights, nuke-the-terrorists rabbi; a Christian Zionist whose opposition to Islamic terrorism has placed his group on the Southern Poverty Law Center’s list of hate groups; a dyed in the wool Democratic Party leader; and a former high school teacher who debates as if his life depends on it.  He thinks it does.

Florida is one of the key swing states in play in this year’s US presidential campaign.   President Obama made a personal visit to  Century Village in Boca Raton, Florida last month, and newly-annointed Republican vice presidential candidate Cong. Paul Ryan (R-WI ) made one of his first official campaign visits there.  Ryan appeared with his Wisconsin-based mom, who lives part of the year in Florida.

Within the swing Sunshine State,  Florida’s 639,000 Jews are attracting a lot of the campaign attention.  According to a Boston Globe article this week, President Obama is losing some support amongst Jewish Floridians.   Although Jews constitute only 3 percent of Florida voters, their high voter turnout means they may account for as much as 7 or 8 percent of the vote.

Which brings us to tonight’s debate.

Rabbi Barry Silver is the religious leader of the 200-family Reform congregation L’Dor Va-Dor in Lake Worth, Florida.  His shul has been holding the Rabbi Sam Silver Controversial Issues Series for years.  Topics they have addressed include: “Which branch of Judaism is the most authentic?” and “Is vegetarianism consistent with Jewish law?”

On May 15, 2012, the Controversial Issues Series held the first debate in this year’s election series.  The question debated then was: “Is President Obama Good or Bad for Israel?”

Tonight’s question is a slightly broader one: “Should Jews Vote for Obama or Romney?”

The same quartet from May is back for tonight’s rematch.  In the blue corner, representing the pro-Obama vote, is Mark Alan Siegel, chair of the Palm Beach County Democratic Party, and Rabbi Barry Silver.  In the red corner, speaking for the pro-Romney vote, will be Alan Bergstein, a transplanted Brooklynite, currently a South Florida pro-Israel activist and Tom Trento, president of The United West.  The United West describes itself as a counter-jihad organization.  It is adamantly supportive of Israel, which Trento describes as America’s beacon of light in the Middle East.  Siegel, however, described Trento and Bergstein as anti-Islamic extremists.

In the earlier debate, Trento seized on Siegel’s statement, that “there is more to this election than merely Israel.” To which Trento responded: “no, there isn’t, there’s one issue – it’s Israel.  It isn’t abortion, it isn’t healthcare, it’s Israel.”

This afternoon, speaking by phone to The Jewish Press, the Palm Beach County Democratic Chair said that in tonight’s debate he “will be presenting a drash, based on traditional Jewish sources, which make clear that Jews should vote for Democrats, because that party is more consistent with traditional Jewish values.”  Siegel especially focused on “the Democratic party being more representative of the Jewish belief in communal responsibilities, such as for education, than is the Republican party,” which he said “focuses on individual responsibility, in other words, everybody for himself.”

In contrast to Siegel, who is a party line supporter of President Obama, Rabbi Silver is less enthusiastic.  Silver told The Jewish Press that the president “speaks well, but what he does doesn’t match up with the rhetoric.”  The Republican challenger, however, fares even worse.  In Silver’s estimation, “Romney doesn’t even say the right things, and unlike Obama’s baby steps in the right direction, Romney is taking huge leaps in the wrong direction.”

But just when you start to chalk up the Reform Rabbi’s positions as predictable of a solid left-leaning Democrat, he shatters that stereotype.

“Israel and the US and the rest of the western world should declare war on terrorist groups, such as Hamas and Hezbollah, and also Ahmadinejad,” Silver explains.

“How does the world expect Israel to achieve peace with those terrorists?” asked Silver.   “Just as during World War II we didn’t try to find a way to live with the Nazis, we defeated them militarily, and then we found friends with whom we could make peace.”  According to Silver, “the same has to happen with the Islamic fundamentalists.”

Lori Lowenthal Marcus

‘Paul Ryan Will Not Be Mitt Romney’s Running Mate’

Sunday, August 12th, 2012

This is too delicious for words. On Friday, Bruce Bartlett of the Fiscal Times published a column under this very headline. It should obviously be filed under the “Dewey Beats Truman” category. Not the kind of thing I imagine Bartlett will be mentioning on his resume come his next job interview, but likely a topic to be touched during the same interview.

Bartlett writes knowingly: “All signs point to Romney nominating a ‘boring white guy’ who is unquestionably qualified to be president, who won’t show him up, and who will hopefully carry a key state. Personally, I would put my money on Senator Rob Portman of Ohio.”

There you go. And the Bartlett knowing tone continues unabashed:

“As far as Ryan himself is concerned, I don’t think he has the slightest desire to be vice president. While it is a good stepping stone to the presidency even for those who don’t achieve the office through death of a president, I don’t think that is Ryan’s ambition.”

And there’s the bit of insider’s wisdom:

“I’ve known Ryan since he was an intern for Jack Kemp many years ago. He is a true policy wonk who would rather talk about economics, the budget, tax policy, monetary policy and financial markets than just about anything. Moreover, I think he is happy being chairman of the House Budget Committee and knows that he is young enough—he’s only 42—that 2012 is unlikely to be his last chance to move up from the House of Representatives.”

And this political sundae comes with a cherry on top:

“I think if Ryan has any ambitions connected to Romney it would be to be his Office of Management and Budget director. In the event that Romney wins, I think he would take that job in a heartbeat. It’s a much better fit for both Ryan and Romney.”

With all of the above in mind, here are a few additional Fiscal Times articles for your consideration (did not make any of this up)

Unthinkable: Conflict between Israel and Iran

Abbas: Palestinian Spring is Here

And another one from Bartlett: “Why the Flat Tax Will Never Fly

I don’t support the flat tax, but if anyone was looking for points in favor of the thing, they should totally use “Bartlett said it’ll never happen.”

(Thanks to my friend Peretz Berk for the link)

Yori Yanover

Surviving an IRS Audit in Israel

Thursday, August 9th, 2012

Almost every American living in Israel is aware of the legendary “additional child tax credit” (ACTC) “tax credit/refund” of $1000 per child.

Over the years I’ve written about it on the blog; The IRS Taxman comethThe Apocalypse: Feds arrive in Israel, With Liberty and Passports for all, as well as the importance of filing the FBAR (Foreign Bank Account Report) — disclosure of all Financial Holdings and Bank accounts outside the United States that belong to American citizens that are in excess of $10,000.

Therefore, almost any American who has moved to Israel and has a pension fund or keren hishtalmut— is required to file the US FBAR.H

However….because there exists an entire underground “industry” of return preparers who have filed fraudulent returns, fabricating earned income in order for their clients to claim child credits, and have retroactively filed for tax credit refunds after children have been naturalized (not American by birth, but by being brought to the USA and made citizens there) — many tax practitioners in Israel have stated that the IRS has begun scrutinizing (read: AUDITING) all returns of Americans in Israel claiming the ACTC.Thankfully I have not (yet?) been audited, but with the IRS targeting everyone  — I am putting together this list on how to proactively prepare for an audit.

Step 1: Take a deep breathe, count to ten, and don’t panic. 

Assuming you used a reputable tax-preparer, didn’t count a kollel stipend as income,  and you didn’t retroactively try to claim the refund after bringing your kids to the US for naturalization — you should be able to survive the audit unscathed.

Step 2: The key for surviving the audit is to prepare now, even if you aren’t being audited.  Proactivity is the key.

You should prepare and gather the following information:

A letter from the comptroller of your company stating –

– Duration of your employment

– For the previous 3 years, your salary, income tax, health tax, and national insurance (ביטוח לאומי) payments

– The bank name, branch number, and acct. no. into which your salary was paid.

Your original form 106’s and authorized English translations** for the previous 3 years.

A letter from your family physician listing the names and date of births of all your kids, and a statement that s/he has been treating them for the previous how many years and that they reside with you and your spouse. The letter should be on Kupat Cholim stationary, preferably with an English letterhead.

A letter from each of the schools your kids attended during at least the previous 3 years indicating their names, date of births, the grade they’re currently studying in (if relevant), and a statement that you and your spouse are their primary care providers and that they reside with you. The letter should also indicate your address, that you paid their school fees, and that you attend parent-teacher meetings faithfully.

A copy of your marriage certificate. If married in the USA – your marriage license. If married in Israel, the registration form provided by the Minister of Religious Affairs when you got married, (not your Ketuba), and an authorized English translation.**

Copies of US passports for each member of the family.

Copies of IL passports for each member of the family.

Copies of Social Security cards for each child.

Copies of IL birth certificates for each child.

Copies of US Consular Report of Birth Abroad for each child.

**Authorized English Translation means you need an authorized translator (not yourself)  and it must be approved by a notary.   This may actually be cheaper in the US than in Israel because notary services in the US cost a fraction of notarization services in Israel (which are outrageous).

Step 3: Don’t try to deal with the audit by yourself. Pay a CPA in Israel — they have far more experience, and even if you get all the documentation above by yourself (which will save you much time and hassle), its still best to pay the CPA and let them be the interface to the IRS.

Jameel@Muqata

Printed from: http://www.jewishpress.com/blogs/muqata/surviving-an-irs-audit-in-israel/2012/08/09/

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