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Wealth Management Advisor

Warning!!!

IRS DOES NOT SEND E-MAILS TO TAXPAYERS!

Protect Yourself from and Report Suspicious E-Mails or Phishing Schemes.

What are suspicious e-mails or phishing?  

Phishing, as it is called, is the act of sending an e-mail to a user falsely claiming to be an established legitimate enterprise in an attempt to scam the user into surrendering private information that will be used for identity theft.

Report Phishing, e-mail scams and bogus IRS Web sites.

According to the Federal Trade Commission (FTC), the nation’s consumer protection agency, phishers send an e-mail or pop-up message that claims to be from a business or organization that you may deal with — for example, an Internet Service Provider (ISP), bank, online payment service, or even a government agency. The message may ask you to “update,” “validate,” or “confirm” your account information. Some phishing e-mails threaten a dire consequence if you don’t respond. The messages direct you to a Web site that looks just like a legitimate organization’s site. But it isn’t. It’s a bogus site whose sole purpose is to trick you into divulging your personal information so the operators can steal your identity and run up bills or commit crimes in your name.

The IRS can use the information, URLs and links in the suspicious e-mails you forward to trace the hosting Web site and alert authorities to help shut down the fraudulent sites.

Please call us if you have any questions.

 

Determining State Residency

        Determining State Residency         

Over the years, many people across the country have been able to lower their tax bill by performing a seemingly simple maneuver - moving.  Each state has a different tax code and depending upon how your wealth and income is held and generated, respectively, you can obtain significant tax savings by moving from one state to another.


For example, Florida has become a haven for wealthy retirees not only because of the year-round sunshine, but because the state has no personal income tax.  Florida generates a significant amount of revenue from tourism which, in turn, allows it to pass the savings on to its residents.

The states are well aware that citizens often try to claim residency based on tax considerations...


So, the question occasionally comes up with our clients - should they consider moving across the state line to obtain the benefits of a lower income or property tax?  The answer isn't always easy because there can be important family concerns which will far outweigh any tax saving considerations.  However, even ignoring the family and personal considerations, the answer can still be complicated.

The states are well aware that many citizens try to claim residency based on tax considerations and they will often challenge your residency claims in court.  Most states will look at a list of residency "factors" that have been long established by the courts in making their determinations, so it is in your best interest to know what those factors are before you make an unwise decision to uproot your family.  

You also need to be aware that no one factor is determining and that both tax authorities and the courts can make an independent decision to weigh certain factors more heavily than others depending upon your circumstances.

Some of the factors that the courts have established over the years have included the following:

  • The length of time spent in each state is probably the single largest factor
  • The location of your telephone listing
  • The location of your primary bank and investment accounts
  • The location of your primary physician, dentist, accountant, lawyer, broker etc.
  • The location and value of your primary residence as compared to the value of any other residences
  • The location of your residence on important legal documents (wills, tax returns, etc.)
  • Where you pay property taxes
  • Where you maintain and register your personal property such as vehicles, boats, etc.
  • Where you register and maintain professional licenses
  • Where you do volunteer work, attend church and donate money to charity and political campaigns

If you have a significant income, it would be wise to NOT underestimate the state's aggressiveness at pursuing a residency claim.  If they think they have a case against you, it may well be worth their time and expense to fight your residency claim in court and even hire a private investigator to assist them in gathering information on the above factors.  

In the case of many taxpayers who spend a lot of time in more than one state, it can come down to a fine line on where the place of residency is located. 

If you do plan to use state residency as a plan to avoid higher taxes, yet you still spend a significant amount of time in your old state, you should definitely take measures to address the factors we listed above and keep a personal diary of where you spend your time.  

Without that diary, your case will be weakened considerably if you fail the test on many other factors.  We urge you to call our office before packing your bags.  A few minutes discussing your options now can save you some agonizing hours fighting an expensive court battle four years down the road.

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