Law Offices of Givner & Kaye Newsletter | April Issue 

Greetings!
         

          

May is the starting point for receiving notices from the IRS regarding audits of  returns that were filed by April 15, 2013.  Please keep in mind the following:  

 

1. Notify your CPA as soon as the audit notice arrives.  

 

2. Keep a copy (preferably electronic) of every item that you receive from the IRS and that you and your CPA send to the IRS.

 

3. If you or your CPA have a phone conversation with the IRS, send a confirming letter or, if you get the auditor's e-mail address, a confirming e-mail.

 

4. Once (If) the auditor articulates a position that is negative to you, one that is going to result in a non-frivolous deficiency amount, stop.  Don't argue.  Simply respond to direct questions.  Don't try to come up with new theories and new facts.  Do NOT agree to extend the statute of limitations  Do NOT agree to go to Appeals.  The only correct result for you is to have the auditor write up a Notice of Deficiency (so-called 90 Day Letter).

 

5. Once you receive the statutory Notice of Deficiency, get a copy to us.  If you fail to file a petition in Tax Court in a timely fashion, you must pay the tax and file a claim for refund.  If your refund is denied, you must sue in Federal District Court for a refund, which is a more expensive route than going through Tax Court.

 

          For a fuller explanation of this, please give us a call at 310-207-8008.

 

                    Best regards,

 

                    Bruce Givner

                    Owen Kaye

                    Kathleen Givner

                    Neda Barkhordar

Featured Article: Should Your Family Trust, And Other Documents, Use A Fictitious Name?

          Some advisors are passionate about privacy.  Instead of the living trust being named Bruce Givner and Kathleen Givner, Trustees, of the Bruce and Kathleen Givner Family Trust, dated June 6, 1989, they think it should be named Bruce Givner and Kathleen Givner, Trustees, of the East African Wildlife Preservation Fund, dated June 6, 1989.  Why?  Because if assets are held in the name of the East African Wildlife Preservation Fund it is not obvious that it is our family trust.  Therefore, if someone is looking to sue us, perhaps a contingency lawyer might be less motivated to take on the matter.  Some advisors would go even further and have us set up a fictitious name trust with someone else as the trustee, e.g., my CPA, as trustee of the East African Wildlife Preservation Fund, dated June 6, 1989. 

 

          As you can imagine, that desire to have fictitious names applies even more strongly to family limited partnerships, family limited liability companies, irrevocable trusts for the benefit of children, and other vehicles.

 

          Some people love the idea of keeping a low profile.  Some people find the confusion of fictitious names to be difficult to deal with on a day-to-day basis.  For example, if the CPA is the trustee of your fictitious name living trust, it can be difficult to open a bank account in the name of the trust on which you can sign.

 

          In any event, it is a discussion worth having every time you establish a new trust, corporation, partnership or LLC. Give us a call or send us an email to discuss whether or not a fictitious name trust is right for you.

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Fictitious Named Trust
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Tax Tip of the Month

If you have a highly appreciated asset that you are considering selling, always consider giving it to a charitable remainder unitrust.  The ability to earn an income for the rest of your life on what would have otherwise been paid in capital gains taxes, plus the income tax deduction you get today for the present value of the charity's right to receive the asset on your death, is among the most powerful - and conservative - income tax planning vehicles available.  Some people are concerned that, upon their death, the balance is going to charity instead of to their children.  However, the increased amount going to the parent during the parent's lifetime more than makes up for the theoretically lost remainder.  After all, had the parent not engaged in the CRUT, the children would have received what was left after (i) capital gains tax; (ii) potentially estate tax; and (iii) spending by the parent.  

 

Bruce Givner & Owen Kaye
In This Issue
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Upcoming Thursday Insights Series Seminar: The Most Common Flaws in Estate Planning
 
May 15th
 

- Failure to transfer assets to the family trust.

 

- Failure to provide a copy of the health care directive to the physician.

 

- Having one child as trustee over other children.

 

- Failing to recognize that "immediate" distribution to the children might take 3.5 years.

 

- Failing to consider income tax consequences (opportunity to swap a note for assets owned by the children's trust so that the asset is back in the parent's estate and gets a step-up in basis).

 

Owen will discuss these and many other points.

 
Call (310) 207-8008 or sign up online to join the seminar in-person or via webinar!
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Attorney Spotlight: Bruce & Owen's Upcoming Engagements

Owen Kaye is speaking on May 12 to the Pasadena Discussion Group of the L.A. Chapter of the California CPA Society on "LLCs: Beyond The Basics."

 

Owen is also conducting the May 15 Thursday Insight from 2:30 to 4pm (PST) on "The Most Common Flaws In Estate Planning." Sign up here

 

Bruce Givner is speaking on June 10 to the Los Angeles County Bar Association Tax Practitioners Conference on "Hot Topics In Trust and Estate Planning."

 

Bruce is also speaking on June 11 to the Estate Planning Committee of the L.A. Chapter of the California CPA Society on "Prudent Investor Rule, Fiduciary Investing And Who Pays The Taxes."

 

Bruce is also speaking on a panel on June 17 at the Smart Real Estate Investor's Seminar on "Is Your IRA and Pension Gathering Dust? How To Control and Maximize The Return Of Your Investment."

 

Email us for more information on these events.

For over three decades, our experienced Los Angeles estate planning, asset protection and expert tax attorneys have met each client's unique planning needs by collaborating with our longtime partners - attorneys, accountants, business managers, financial planners, stockbrokers and insurance professionals. Contact Givner & Kaye today!

Givner & Kaye, A Professional Corporation | bruce@givnerkaye.com 
www.GivnerKaye.com
12100 Wilshire Blvd.
Suite 445
Los Angeles, CA 90025

May, 2014


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