Wills, Trusts & Estates Prof Blog

Editor: Gerry W. Beyer
Texas Tech Univ. School of Law

Thursday, April 14, 2016

What To Know About Amending A Tax Return

Fix tax returnThe April 18 deadline for filing federal tax returns is almost here and hundreds of millions of Americans have already filed.  With so many tax returns being filed it is only natural that people are going to make mistakes.  “Knowing the common mistakes and the necessary tax forms that are needed when amending a tax return are critical in making the process of correcting a mistake on a return as painless as possible.”  This article discusses what people should do when they are amending a tax return to fix a mistake.  When people find out that a mistake was made they should take action to remedy the situation as soon as possible.  There are also some mistakes that do not require an amended tax return which this article discusses. 

See Matt Kubler, Make a Tax Amendment: How to Fix Mistakes on Your Tax Return, My San Antonio, April 14, 2016.

April 14, 2016 in Estate Planning - Generally, Estate Tax, Gift Tax, Income Tax, Web/Tech | Permalink | Comments (0)

Wednesday, April 13, 2016

Why E-Filing Is A Good Idea

File earlyConverting to E-filing makes paying taxes easier.  In 2015 more than 129 million Americans electronically filed their tax returns.  E-filing tax returns increases the odds of the filings being accurate.  The information in the electronic filing is encrypted and the IRS has been taking more steps recently to crack down on identity theft.  The process of e-filing is convenient and there are programs available for people who meet certain requirements.  Faster tax refunds are another advantage of electronically filing your tax returns.  People who e-file can also receive assistance with the tax provisions of the Affordable Care Act.  There are also payment options available to people who have to pay the federal government money.  There is an April 18 deadline that is fast approaching and taxpayers will need to act quick if they want to avoid the consequences of missing the deadline.

See Frank Ellis, Six reasons to e-file your taxes in 2016, Examiner, April 13, 2016.

Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.

April 13, 2016 in Estate Planning - Generally, Estate Tax, Generation-Skipping Transfer Tax, Gift Tax, Income Tax, Technology, Web/Tech | Permalink | Comments (0)

Tuesday, April 12, 2016

Millions Of Tax Returns Are Being Filed With The IRS Each Day

Irs2The filing deadline for taxpayers is less than a week away and the IRS is receiving millions of tax returns each day.  Currently the IRS expects to get about 150 million tax returns this season, and there are over 100 million of them that have already been filed.  The IRS has also payed-out over $229 billion in individual tax refunds.  “Over 90 percent of individuals have filed electronically so far, but the percentage of electronic returns is expected to fall slightly.”  The number of total tax collections have been rising in recent years after taking a hit during the past recession.  Identify theft is another major concern that the IRS has been taking steps to address. 

See Naomi Jagoda, IRS getting millions of tax returns a day, The Hill, April 12, 2016.

April 12, 2016 in Current Affairs, Estate Planning - Generally, Estate Tax, Income Tax | Permalink | Comments (0)

Asset Protection Planning Threatened By Uniform Voidable Transactions Act

Golden eggsThis column discusses an article by Chuck Rubin about the Uniform Voidable Transactions Act (UVTA).  According to the article this act might be a threat to the sort of debtor protections that exist outside of UVTA.  This is an act that has been enacted in several states and is a reworking of fraudulent conveyance law.  This “allows a creditor to avoid transfers made that attempt to put property beyond the reach of a creditor.”  There are some attorneys who might be realizing that this statute could threaten certain debtor protections.  “Other concerns are being raised about how the UVTA may interfere with other business and tax planning, such as its potential application to swap powers in grantor trusts (which may be used to obtain a step up in basis at death) and transfer of property to business entities by debtors.”

See Pooja Shivaprasad, Uniform Voidable Transactions Act (UVTA) Threatens Asset Protection Planning, Wealth Strategies Journal, April 7, 2016.

Special thanks to Jim Hillhouse for bringing this article to my attention.

April 12, 2016 in Estate Planning - Generally, Estate Tax, Income Tax, Trusts, Wills | Permalink | Comments (0)

Monday, April 11, 2016

Late Filing Excuses That Might Work With The IRS

Late filingThe deadline for filing tax returns is fast approaching, and there are many people who will probably miss the deadline.  This article discusses some of the more reasonable excuses for not filing on time which the IRS might accept.  Whether the IRS will accept the excuse will often depend on the person’s individual circumstances.  The IRS might be understanding if the taxpayer is grieving the loss of a family member or recently suffered a health crises or loss of employment.  They would probably be less understanding if the person just blew off filing a tax return for no good reason.  There is also a first-time penalty abatement waiver, and as a result everyone basically gets one free pass if they forget to file on time.  The best thing to do is avoid these issues by filing on time before the deadline.

See Lisa Kiplinger, What late-filing excuses work with the IRS, The Arizona Republic, April 11, 2016.

Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.

April 11, 2016 in Estate Planning - Generally, Estate Tax, Generation-Skipping Transfer Tax, Gift Tax, Income Tax | Permalink | Comments (0)

Tycoon's Move Leads To Tax Rate Soul Searching In New Jersey

New jerseyNew Jersey has long been notorious for the difficulty of doing business in the state combined with the high tax rates on income, estates, and property. Attempts to fix those issues has been in the works for years but little common ground between Republican Gov. Chris Christie and the Democratic legislature has been found to form the basis of a solution. However, the recent move of the wealthiest individual in the state, hedge fund manager David Tepper, to tax friendly Florida has upped the issue to crisis level in the minds of many. Some worry that his departure could cost the state tens of millions of dollars, due in part to the fact that Tepper moved his entire operation out of state, and be the harbinger of other wealthy residents fleeing the state. The estate tax rate has been particularly contested as opponents worry the low exemption and high rate will drive people from the state while supporters do not want to lose the income especially since it comes from a group that is popular to tax. Whatever the solution eventually reached, New Jersey is just one state among many faced with tough questions about internal tax policy and the loss of high net-worth residents.

See Michael Catalini, Billionaire's move puts New Jersey tax rates in spotlight, Philly.com, April 10, 2016.

Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.

April 11, 2016 in Current Affairs, Estate Tax | Permalink | Comments (0)

Friday, April 8, 2016

Article On The Who, What, And When of Estate Tax Liabilities

ArticlePictureNikki Laing (Capshaw Green, PLLC) recently published an article entitled, The 3 W's (Who, What, & When) of Estate Tax Penalties and Liability, 54 Real Est., P. & Tr. Rep. No. 2. Provided below is an abstract of the article:

Why should the typical lawyer be concerned with staying abreast of federal estate tax laws? The recent increases in the exemption amount have resulted in fewer estates being required to file an estate tax return. Only attorneys who provide services to the very wealthy need bother with staying up to date on federal estate tax laws, right? Not so! Despite the estate tax exemption being higher than ever, the number of federal estate tax return filings is actually on the rise. Even when a lawyer does not anticipate ever accepting an engagement to prepare an estate tax return, it may be reasonable to assume that he or she might, at some point, represent a surviving spouse, personal representative, or beneficiary of an estate that is subject to the federal estate tax. In that event, it is imperative for the lawyer to be aware of the federal estate laws that could affect his or her client. This article addresses some general concepts and recent cases regarding penalties and liability in the context of the federal estate tax and describes the “Who,” “What,” and “When” of some issues that might be encountered by surviving spouses, executors, administrators, beneficiaries, and heirs.

April 8, 2016 in Articles, Estate Tax | Permalink | Comments (0)

Tuesday, March 29, 2016

Deadlines For Filing Taxes

Tax dayThis year’s tax day is going to be on April 18, 2016, instead of the usual April 15 date.  The reason for this change in the tax date is because this year April 15 will fall on Emancipation Day which is a federal holiday.  Any person who wants an extension for filing their taxes “must file Form 4868 before April 18.”  The new deadline for anyone who successfully filed for an extension will be October 17, 2016.  People who are owed a tax refund will be given an extra three years to file their taxes to claim it.  It is a good idea for people to stay on top of getting their tax returns filed on time and hopefully this article will be of some assistance to those who need to remember the deadlines. 

See Brian Stoffel, This Is the Absolute Last Day You Can File Your 2015 Taxes, My San Antonio, March 28, 2016.

March 29, 2016 in Current Affairs, Estate Planning - Generally, Estate Tax, Generation-Skipping Transfer Tax, Gift Tax, Income Tax, Non-Probate Assets, Trusts | Permalink | Comments (0)

Important Things People Should Know About Estate Taxes

Estate taxThe vast majority of Americans will not have to worry about federal estate taxes, but they may be liable for estate taxes at the state level.  The estate tax can also be referred to as the “death tax,” and it is a tax which is paid out of the estate when a person passes away.  A married couple can combine their estate tax exemption amount, but they don’t get to share their exemption until one of the spouses dies.  Whatever state a person resides in will impact how much that person pays in state estate taxes.  There are also a handful of states that have a separate inheritance tax which heirs may have to face.  It is important for people to stay educated and informed about their states policies and regulations concerning the estate tax.

See Tracy Craig, 4 Things You Probably Don’t Understand About Estate Taxes, Money, March 28, 2016.

Special thanks to Jim Hillhouse for bringing this article to my attention.

March 29, 2016 in Estate Planning - Generally, Estate Tax, Wills | Permalink | Comments (0)

Monday, March 28, 2016

More Art Collectors Using Irrevocable Trusts

Art collectorsA growing number of art collectors are turning to a common estate planning tool that will let them continue possessing and enjoying their art while reaping tax savings.  When a person places property into an irrevocable trust it is no longer included as part of the estate for tax purposes.  Another tax benefit involves being able to legally appraise the items of art for tax purposes when they are gifted to the trust, and as a result being able to shelter the appreciation.  People who put their art into a trust can continue to hold onto it by having the trust rent it back to them.  One of the issues that might come up involves determining a fair-market rent for the art because the rent does matter to the IRS. 

See Daniel Grant, Art Collectors Discover Irrevocable Trust, The Wall Street Journal, March 27, 2016.

Special thanks to Jim Hillhouse for bringing this article to my attention.

March 28, 2016 in Estate Planning - Generally, Estate Tax, Gift Tax, Income Tax, Trusts, Wills | Permalink | Comments (0)