Picture yourself at an “ozmiza,” or “eight-day tavern,” overlooking the Adriatic Sea on Italy’s Carso coast, near the Slovenian border. A guitarist serenades you and your companions with local folk tunes. Your server treats you to heaping platters piled high with housemade meats and cheeses. There’s plenty of local vino, of course — Malvasian wines by the jugful, along with bottles of crisp prosecco. Off in the distance you catch glimpses of a seaside castle.

Now think about everyone who made this experience possible. There’s the farmer raising the pigs for your prosciutto, and the one with the cows giving milk for your cheese. There’s the viticulturist growing grapes for your wine. Finally, there’s the tax law that lets the tavern operate in the first place!

Last month, the Wall Street Journal published a piece on ozmiza culture in the Carso region. And while they focused on the the food, the wine, the conviviality, and the sheer dolce vita that so many of us would jump to enjoy, a single throwaway sentence caught our attention. “As long as osmize sell only products made on site — sharp Istrian cheese, say, or chocolatey Teran wine — these cash-only businesses can operate tax-free.”

How exactly did such a loophole come to let locals to offer their bounty? The story goes that back in the late 1700s, the Dowager Empress Maria Theresa had hit the region’s peasants with harsh taxes (as Dowager Empresses are wont to do). The peasants naturally rioted (as peasants are also wont to do), so the Empress threw them a little bone. From that point on, they could open eight days out of the year to sell their surplus wine, meat, cheese, and produce without paying the usual tax. The only condition: display a “red branch” sign letting customers know they were taking advantage of the law.

Since then, the region’s governments have seen more than their fair share of despots, dictators, and strongmen — the kind of thugs you’d expect to crush the ozmize just because they could. But the scrappy little taverns just keep on keeping on. Even now, most open just a few weeks each year, and they still display the centuries-old red branch. (Technology has introduced one welcome update: You can visit www.ozmize.com/calendario to see who’s serving when. Google will even helpfully translate the page from Italian!)

The whole ozmiza culture fits beautifully in the “farm-to-table” movement that dominates dining out these days. Imagine impressing your Instagram friends (and maybe even your real friends) with dishes of savory stewed pork shoulder, or white Vitovska wine lovingly served from a rustic pitcher. Just don’t drink too much wine — area roads are steep and winding!

So, would serving up the usual range of income, sales, and VAT taxes spell the end of the ozmize? Of course not. The hordes of tourists who’ve already eaten and drunk their way through the Cinque Terre and Amalfi coasts are dying for new seaside cliffs and castles to explore. The local farmers would just stir in the extra costs for customers to pay. It’s fascinating, though, to see how a centuries-old tax policy still gives visitors even more reason to fall in love with Carso.

Ernest Hemingway once wrote, “If a man does not love Italy, he cannot love at all, for he has no soul.” (Actually, we just made that up, but it sounds like something Hemingway would say.) The point here is that taxes affect every financial choice you make — even where you eat on vacation. That’s why we’re here to help you pay less!

Back in December 2017, while you were finishing up your holiday shopping and spiking the eggnog, Congress spiked the tax code. The goal was simple. First, eliminate a bunch of deductions that made the whole thing more complicated. Then, take advantage of that broader base to cut overall rates. There’s nothing radical about that sort of tinkering. The hard part is deciding which sacred cows get gored to make it work.

Much to many peoples’ surprise, the state and local tax deduction wound up on the chopping block. Until 2018, you could deduct an unlimited amount of state and local income, sales, and property taxes. The new law capped that deduction at $10,000. That’s a big deal in states with high income taxes like California (13.3% top rate), Hawaii (11%), and New York (8.95%). It’s even a problem for a state like Texas with no income tax but high property taxes.

Naturally, the high-tax states weren’t jazzed about that part of Uncle Sam’s plan. They struck back with a fiendishly clever proposal that would have dazzled Harry Houdini with its sheer magic. Encourage residents to make gifts to special state funds, then give them dollar-for-dollar credits against their taxes for those contributions. Abracadabra! Now your payments aren’t nondeductible taxes anymore. Now they’re fully-deductible charitable gifts!

Last week, the IRS threw a wet blanket over the states’ prestidigitation, issuing 74 pages of final regulations that they could have condensed into a single word. And that word is: “Really?!?” They start out by defining a “gift” as something you make with no expectation of return benefit. Then they go on to explain that if you make a “gift,” and expect to receive a state or local tax credit in return, it’s not a gift. It’s a quid pro quo. And while the tax code is full of deductible quid pro quos, you can’t write them off as charity.

The regulations outline a few exceptions to that general rule, including programs that give you dollar-for-dollar deductions (as opposed to credits), and programs that credit your tax bill for less than 15% of your gift. (They wouldn’t be Treasury regulations without fine print, right?) But it really just comes down to substance over form. The IRS essentially said, “Look, it walks like a duck, it quacks like a duck, and if we put our tongue on it, we bet it tastes like a duck, too. So it’s a tax, not a charitable contribution. Better luck next time!”

The truly amazing thing about the regulations isn’t that they run 74 pages. (74 pages!) It’s that they take the states’ argument seriously in the first place. Of course the IRS was going to shoot them down! Are you kidding? If you surprise your six-year-old in the kitchen with crumbs all over his face, you don’t listen to his excuses for why the cookies are gone. You give him an immediate time-out, not “due process”!

In the end, the change was more bark than bite. Many of affected taxpayers had already lost their state and local tax deductions to the alternative minimum tax. Even the ones who wound up paying tax on more income benefited from the lower overall rates.

Want some good news? You don’t need to perform sleight-of-hand with the tax code to pay less. The law is full of legitimate deductions, credits, loopholes, and strategies you can use to pay the legal minimum. And you don’t need to risk the IRS laughing at your arguments to succeed. So call us for a plan, see how much you can save, and let us worry about the 74-page regulations!

On March 12, the “Varsity Blues” scandal hit the headlines, and gossips across America leaped at the fresh meat. That’s the day we learned about a group of 1%ers who paid anywhere from $15,000 to $6.5 million to cheat their kids’ way into some of the most prestigious colleges in America. The Department of Justice indicted 50 people, including actresses Felicity Huffman and Lori Loughlin. Those who pled guilty right away are starting to receive sentences. Those who claimed innocence got rewarded with additional money laundering charges.

The parents worked with a private college counselor named Rick Singer. In some cases, they paid him $15,000 or more for crooked proctors to doctor their kids’ SAT tests. In others, they paid up to $6.5 million for him to bribe complicit coaches to tag the children as athletic recruits. Of course, nobody put “bribe” on the memo line of the check. Instead, they made “donations” to Singer’s “charity,” the Key Worldwide Foundation. That way, they got to deduct the bribes as charitable gifts! But now the chickens are coming home to roost . . . and the IRS is there to collect, too.

Prosecutors have piled up 3 million pages of evidence, including over a million pages of emails, 4,500 wiretapped phone conversations, extensive bank records, and cooperation agreements from Singer and half a dozen of his henchman. (When you conspire with a guy named “Singer,” don’t be shocked when he sings like a canary when the you-know-what hits the fan.) Deciding whether or not to plead sounds like some sort of one-question IQ test. Still, just 22 of the original 50 defendants have taken that easier way out.

Actresses Huffman and Loughlin have attracted the biggest headlines. Huffman represents the man-up end of the spectrum — she copped a tearful plea almost immediately to mail fraud charges for paying $15,000 to doctor her daughter’s SAT scores. Since the dollar amount in her case was at the low end of the scale prosecutors have recommended a relatively light sentence: four months in a place that looks nothing like Wisteria Lane, 12 months of supervised release, a $20,000 fine, and additional restitution.

Loughlin and her husband, fashion designer Mossimo Gianulli, represent the opposite end of the spectrum. The couple dropped $500,000 to get their bratty daughters into a school they clearly don’t even want to attend. Loughlin swiped left on a deal that would have included two years in a fuller house, and now faces up to 40 with the extra money laundering charge. Us magazine — everyone’s go-to source for breaking legal news — reports that the IRS is eyeing the couple’s tax returns like a hungry bear eyeing a particularly fat fish.

It looks like parents can count on paying back the taxes they avoided by deducting whatever they paid Singer. Real estate mogul Bruce Isackson pled guilty to paying (and deducting) $600,000 in bribes to pass his daughters off as athletes. The charges included one count of conspiracy to defraud the IRS. Prosecutors are recommending he spend 37-45 months occupying a 6’x8′ parcel of federal property and pay $139,509 in restitution. That figure just happens to equal the exact amount of tax he saved by writing off the bogus “gifts.” Singer reports that he collected a total of $25 million to help 761 families open “side doors” to schools for their kids. That means we can probably expect more names to be named. Hopefully yours won’t make the list! The good news is, while we can’t help you get your kids into the Ivy League, we can help you make the most of tax breaks for paying the bill. So call us for a plan before you pack up the car to move them in, and see how much we can help you save!

Turn on any television, any time of day or night, and you’re likely to see an insurance ad, or two, or a dozen. Flo is showing off her “name your price” tool, which sure looks like her company’s way of saying “you may not be able to afford all the insurance you need, but we’re happy to sell you whatever you can afford.” There’s the ubiquitous gecko, telling you his company sells insurance for your RV and motorcycle, too. And there’s Duncan, age 42, buying an incredible half-million dollars of term life insurance for just $27 per month.

Of course, life insurance, homeowners insurance, and car insurance are just the tip of the insurance iceberg. Why do you think the tallest building in most cities has an insurance company’s name up top? Businesses and professionals buy all sorts of commercial coverages for their operations. Celebrities are infamous for oddball policies covering whatever makes them money — so we have Kim Kardashian insuring her backside for $3 million and Keith Richards insuring his hands for $1.6 million. Insurance companies can even buy reinsurance, which is insurance for insurance companies.

Losing a tax audit may not sound as tragic as, say, Keith Richards losing his hands. But the whole concept of “insurance” is about guaranteeing payment in the event of a specified loss. So, if Keith Richards can insure the hands that conjured up “Jumpin’ Jack Flash” out of an ordinary six-string, shouldn’t we be able to buy insurance to cover unexpected losses to the IRS? It turns out the answer is yes . . . and there’s even more than one way to do it.

The most obvious way is to buy something cleverly marketed as “tax insurance.” And while you can’t just go online to save 15% or more on tax insurance with GEICO, it’s really not much tougher than that. High-end brokers sell coverage to reimburse bigger businesses for the cost of taxes, noncriminal penalties, and the cost of taking a case to court. (Typically, these arise out of mergers and acquisitions.) They can even buy extra coverage to “gross up” benefits to cover the new taxes companies owe when they collect on the insurance!

Business owners can use something called an enterprise risk management program to insure risks that they’re currently covering out of their own pockets. These typically include operational and strategic risks, like the cost of defending sexual harassment claims, cyber risks, and the loss of key suppliers or vendors. But you might also insure against the cost of defending an IRS audit. The cost of insuring the risk is deductible — and if you have to collect, the cost of defending yourself is deductible, too!

Finally, if you’re not sure the IRS will accept your tax treatment of a particular transaction, consider visiting a tax attorney for an opinion letter. Opinion letters aren’t “insurance,” per se. They can’t guarantee you’ll avoid actual tax. But in some circumstances, even if you wind up paying tax, the opinion letter can eliminate penalties you might have otherwise paid. In other cases, the attorney can essentially cover your extra costs out of their own malpractice insurance. Fortunately, most tax savings don’t call for any insurance at all. We help clients save taxes with a complete menu of court-tested, IRS-approved strategies. In fact, some of our most powerful strategies actually lower your risk of being audited. So leave the gecko at home, because he wouldn’t be any help at an audit anyway, and see if we can save you 15% or more on your income tax!

Memorial Day has come and gone, and while summer doesn’t officially unlock the door and open for business until June 21, who’s waiting? Craft beer fans are swapping out those dark malts that taste like tree bark, and stocking up on summer brews with hints of lemon, lime, and cherry. Sports fans are turning their eyes towards baseball’s upcoming All-Star game. (Yeah, hockey and basketball are still going on — but aren’t those supposed to be winter sports?) And readers across America are combing shelves for the summer’s hottest summer beach reads.

Beach books typically don’t ask you to do much heavy intellectual lifting. They’re usually the literary equivalent of bingeing an entire season of The Bachelorette in a single weekend. Some readers don’t even bring books at all — they drop a kindle or an iPad in their bag to hide the latest 50 Shades story from the folks on the next towel. Occasionally, though, you find something weightier catching readers’ eyes. So if that’s what you need, NYU Professor Jonathan Choi has assembled a list of the 50 most-cited law review tax articles of all time. Boring, you say? Prepare to be surprised!

Taking home the gold, with 1220 total citations, is William D. Andrews’ 1974 thriller, A Consumption-Type or Cash Flow Personal Income Tax. The plot follows a plucky tax professor challenging the conventional wisdom that taxable income should equal the sum of personal consumption plus accumulation. But that plot is really just an excuse to propose a graduated consumption tax. The story also takes us down subplots involving cash-flow accounting for loan proceeds to curb tax shelter abuses, nontaxation of reinvested capital gains, and a proposed zero basis for inherited assets. (See? Riveting!)

Claiming the silver, with 992 citations, we have Harvard professors Louis Kaplow and Steven Shavell arguing Why the Legal System Is Less Efficient Than the Income Tax in Redistributing Income. This is a classic legal thriller in the vein of John Grisham or Scott Turow. Except, in this case, the parties are “legal rules” and “the income tax system.” Kaplow and Shavell put them both on trial and declare taxes to be the victor.

Finally, taking the bronze with 762 citations, is Boris Bittker’s 1967 classic, A Comprehensive Tax Base as a Goal of Income Tax Reform. Bittker argues that it’s simply too hard to define a neutral, scientific measure of taxable income, and each policy proposal should be judged provision by provision. (It’s easy to be disappointed with Bittker’s meek conclusion — after all, isn’t the whole point of a law review article to propose something with no chance of real-world success?)

The rest of Choi’s top 50 cover the same beach book ground you’d find at your local bookseller. There’s rich historical drama. (Edward Zelinsky’s James Madison and Public Choice at Gucci Gulch: A Procedural Defense of Tax Expenditures and Tax Institutions.) There’s gripping family conflict. (Paul Caron’s Tax Myopia, or Mamas Don’t Let Your Babies Grow up to Be Tax Lawyers.) There’s even a sex scene or two to heat up your afternoon. (Marjorie Kornhauser’s The Rhetoric of the Anti-Progressive Income Tax Movement: A Typical Male Reaction.)

So, tax articles are fun, right? Unfortunately, you can read them all summer long without learning anything about how to pay less. That’s where we come in. Just pick up the phone before you head to the beach, or the lake, or the mountains, and see how much we can save you while you’re enjoying a real beach read!

Graduation season is here, and grads of all ages are excited to move on! Kindergartners are celebrating mastery of letters, shapes, and not eating crayons. Awkward eighth-graders just want to finish getting through puberty. High-schoolers are looking forward to careers, college, and moving out of their parents’ nests. College grads are looking forward to crushing student debt and moving back in to those nests. And some panicky grad students (you know who you are), are searching desperately for one last degree to avoid joining the rest of us in the real world.

Most graduations are pretty pedestrian affairs. The same Pomp and Circumstance, the same gowns, caps, and tassels, and the same trite, inspirational speeches filled with dad jokes and lame puns. But every so often, a graduation makes real headlines. This year, it came on May 18, at Atlanta’s Morehouse College, a private, historically-black men’s college.

Robert F. Smith founded Vista Equity Partners, a private equity firm investing in software companies. Smith is one of the best in that particularly challenging business — he’s built a $5 billion fortune and made himself the richest African-American in the country. (Take that, Oprah!) This year, Morehouse granted Smith an honorary degree and invited him to deliver the commencement address. Smith, who has been a generous supporter of educational causes, pledged $1.5 million to the school. So far pretty typical, right?

But Smith saved his real news for the ceremony itself, without even announcing it to administrators ahead of time. He told the audience of 396 graduates: “We’re going to put a little fuel in your bus . . . . This is my class, 2019, and my family is making a grant to eliminate their student loans.” While the exact figure is still unknown, recent classes have graduated with roughly $10 million in debt.

The best part, as far as students are concerned, is that Smith’s extraordinary gift is tax-free. Recipients never owe tax on gifts. As for Smith, givers can give up to $15,000 per year to as many recipients as they like, or $30,000 for joint gifts with their spouse. And givers can pay any amount for medical or educational purposes so long as they stroke the check directly to the institution providing those services. Givers don’t owe actual tax until their total lifetime gifts above those “annual exclusion amounts” top $11.4 million per person.

But Smith shouldn’t even face those gift tax consequences. That’s because, as he announced at the ceremony, he’s making a “grant” to nuke the loans. Doing it through the school should qualify it as a deductible charitable contribution, meaning Uncle Sam will cover up to 37% of that cost.

Smith is no stranger to deductible gifts. He’s given $50 million to his own alma mater, Cornell, which named their school of chemical and biomolecular engineering for him. (Who knew you could slice and dice engineering schools like that?) He’s supported the Smithsonian’s new National Museum of African-American History and Culture. And last year, he bought two houses — where the Rev. Martin Luther King was born, and where he lived with his family — and donated them to the National Park Service. Smith is obviously smart as well as generous. And one thing he seems to know is you don’t build a $5 billion fortune without minimizing interference from the IRS. Would you love to be able to make some sort of grand, generous gesture at the next graduation you attend? Call us for a plan to pay less tax, and let’s see how generous we can help you be!

A long time ago in a galaxy far, far away (okay, on May 21, 1980), The Empire Strikes Back introduced the world to Yoda, the oldest, most-powerful, and most syntactically-challenged Jedi knight in the universe. Yoda delighted audiences as he trained Luke Skywalker, launched him into battle against Darth Vader, and died peacefully at age 900, his body becoming one with the Force. Today, his fans remember Yoda by celebrating May 21 as National Talk Like Yoda Day. And celebrating we are this year by talking about taxes!

Hard to believe it is, but taxes lie at the heart of the Star Wars universe. In Episode One: The Phantom Menace, in the very first paragraph of the opening crawl, we learned that taxation of trade routes to outlying star systems was in dispute. The Galactic Senate had imposed taxes to fight interplanetary pirates, and in response, the Trade Foundation had blockaded shipping to Naboo to pressure the Senate into repealing those taxes. The Supreme Chancellor dispatched two Jedi Knights to resolve the dispute . . . and the adventure begins!

Yes, more to the story there is than that. The Sith Lord Darth Sidious — masquerading as Senator Palpatine — used the dispute to seize dictatorial powers, declare himself Emperor, lure Anakin Skywalker to the Dark Side, commission a Death Star factory, and proceed to ravage the Galaxy. But really . . . dig down deep enough, past the epic space battles, light saber duels, and colorful aliens inhabiting Mos Eisley’s cantina (aka “the bar scene”), and you’ll find just another battle over tariffs. Like the American Revolution almost it sounds, hrmmm?

The Galactic Senate isn’t the only body levying taxes in the Star Wars universe. On the desert planet of Tatooine, so common it was that Jabba the Hut imposed a tax on murder. The bodies murderers even plotted to cheat the tax by hiding. Smart tax policy on Jabba’s part? Possibly . . . although probably not sustainable in the long run, yes? That is, unless the Tatooine Department of Tourism manages to make the desert planet appealing enough to attract future victims to emigrate!

There’s even a real-life tax-planning success behind the Star Wars story. Back in 2012, before releasing the final three installments of his saga, creator George Lucas sold his production company Lucasfilm to Disney. Closed the deal he did less than three months before the maximum tax on capital gains was scheduled to jump from 15% to 20%, and the new 3.8% net investment income tax was scheduled to begin. Lucas’s timing saved him around $176 million in earthbound taxes, yes?

Lucas with one last challenge success faces. With somewhere north of $5 billion in assets, he’s facing an estate tax bill the size of a minor outlying planet. But estate planning moves he has. Lucas has signed Bill Gates’ “Giving Pledge,” which encourages wealthy people to donate most of their wealth to charity. Signing the pledge accelerates normal charitable giving into hyperdrive and cuts estate taxes with the power of the Millennium Falcon.

When it comes to saving money on taxes, one thing you must remember there is: plan or plan not. There is no try. Jedi tax planning you need. Fortunately, you don’t have to fight your way through an army of stormtroopers to slash your bill. You just have to pick up the phone. So call us, and feel the proactive power of the Force!

On May 6, England’s Prince Harry and his wife Meghan introduced the world to a baby with the delightfully British name of Archie Harrison Mountbatten-Windsor. The new royal is now seventh in line for the throne, which means he won’t have to spend his life faking fascination with mundane royal duties like touring factories or christening ships. The poor kid doesn’t even have a title, at least not yet. You’d think he would at least be Laird of some Scottish fishing village, or Earl of ye olde shopping malle somewhere.

The U.S. Department of Agriculture estimates it costs an average of $233,610 to raise a child. (Make that $264,090 in the urban northeast, and “just” $193,020 out in the sticks.) That total includes the costs of paying for more house, skinned knees and braces, and daycare until they get old enough that you just want to send them to school already.

Pound for pound, then, babies like Archie are the priciest people on earth. Here on our side of the pond, our tax code offers all sorts of goodies to make raising them easier. There’s a $2,000 annual child tax credit, deductions for at least part of the mortgage interest and property tax on the new McMansion, a $2,100 dependent care credit for daycare, and various strategies for out-of-pocket medical costs. But what sort of goodies will Britain’s newest royal enjoy, aside from the obvious perk of being born with a platinum spoon in his mouth?

The British tax system works a bit like ours, but with posher accents. Her Majesty’s Revenue and Customs (which sure sounds warmer and fuzzier than “Internal Revenue Service”) phased out most child tax credits two years ago. The mortgage interest deduction disappeared all the way back in 2000. Health care is already free. And as for Archie’s nanny bills, HMRC offers a “tax-free childcare” subsidy of £2 from the government for every £8 they spend, up to £2,000 per year.

Of course, the latest royal moppet won’t really need any of those. His father benefits from the Queen’s Sovereign Grant — £76.1 million in 2018 ($103 million) — which she uses partly to maintain Kensington Palace where Archie lives. Harry also shares in his own father Prince Charles’s Duchy of Cornwall income, which has been handed down to the eldest son of the monarch since 1337. And mom Meghan is no slouch herself, with a net worth estimated at $5 million from her Hollywood days.

Climbing further up the family tree, Forbes pegs Archie’s great-grandmother the Queen’s personal fortune at $500 million. She also benefits from the $25 billion Crown Estate, which includes the really pricey stuff like Buckingham Palace (worth $4.7 billion) and the Crown Jewels. Do yourjewels have names? (Fun fact: The thoroughly modern Queen even posts on Instagram now!)

So, with all that Sovereign Grant money raining down on the Queen, the royals are a burden on the state, right? Think again. The Grant money works out to just about 69 pence per taxpayer. But the monarchy also generates $700 million per year in tourism revenue. Harry and Meghan’s royal wedding last summer added another $1.5 billion to the coffer. That means, despite anti-Royalist criticism, Archie’s family is actually a profit center.

You may be thinking none of this has anything to do with you. But children can make great, sticky, squirmy little tax-planning opportunities. So call us after the baby shower, and let us help you hire them for your company, write off their braces as business expenses, and even help pay for their college!

In the criminal justice system, tax-based offenses aren’t considered especially heinous . . . but they still cost the government a ton of money. In field offices throughout the country, the dedicated Special Agents who investigate these expensive felonies are members of an elite squad known as IRS Criminal Investigation. (They’re also the only IRS agents who get to pack heat, rock a Kevlar vest, and go undercover.) From the FY 2018 CI Annual Report, these are their stories. (Dun Dun.)

  • Shawanda Nevers — aka Shawanda Hawkins, Shawanda Bryant, and Shawanda Johnson — operated several businesses in New Orleans, including a sports bar and a tax-prep shop. She must have thought her taxes should be as spicy as her cooking. So she whipped up returns giving her clients fake business losses, deductions, and credits. In 2014, the IRS permanently barred her from preparing taxes. But she kept letting les bon temps rouler until CI agents busted her again, fined her $7 million, and sentenced her to seven years of bland prison chow.
  • Kelly Sue Reynolds worked as a bookkeeper in North Carolina. Over five years, she embezzled $439,459.97 from her employer, including the money that was supposed to pay their taxes. (That’s the mark of a top-notch bookkeeper, right? They can tell you down to the penny how much they stole.) When the IRS came looking for their money, CI agents busted Reynolds’ scheme. Now she’s counting down two years in the “camp” where Martha Stewart served. It’s been called “America’s cushiest prison” . . . but Reynolds still gets to learn if orange really is the new black.
  • Rick Rizzollo ran a “gentleman’s club” in Las Vegas, where he paid employees in cash and filed bogus employment tax returns. (He’s a real gentleman himself — he hired teenage strippers, and used a baseball bat to “persuade” customers into signing fraudulent credit card charges.) In 2006, he copped to the employment tax fraud. Then he hid his money to dodge the back taxes and sent $900,000 from selling a second club to an account in the Cook Islands. But CI agents demanded the naked truth, and helped send Rizzollo to 24 months in a place where the “bouncers” don’t wear tuxedos.
  • Lizzie Mulder (not a CPA) posed as a CPA in California, where she had clients make out checks payable to “Income Tax Payments.” Perfectly kosher, right? What clients didn’t know was that she had set up a phony account called (wait for it) “Income Tax Payments,” under her own name. She used their money for a pricey house, cosmetic surgery, vacations, and an Arabian horse. Lizzie’s husband ratted her out to clients, then CI agents joined to “stable” her in a Phoenix prison for five years.
  • Monsignor (!) Hien Minh Nguyen was a priest for the San Jose archdiocese and director of the local Vietnamese Catholic Center. Apparently he missed class the day they discussed that whole “poverty” thing in priest school. Nguyen stole cash donations from parishioners and deposited their checks in his personal account, among other sins. CI agents visited him, hoping for a confession, and used his lies and inconsistent answers to build a case that led to $1.9 million in restitution and three years in prison. (He can probably count on a few years in purgatory, too.)

It’s sometimes fun to see what happens to people when their good judgment and common sense take early retirement. Of course we all want to pay less tax! But you don’t have to risk a visit from a pistol-packing Special Agent to do it. Call us for a plan, and see how much you can save without posing for mug shots.

Last weekend, Hollywood made history. Disney’s three-hour popcorn epic, Avengers: Endgame sent box-office records scrambling in panic, grossing $350 million here in the U.S. And $330 million in China. And $600 million more in another 43 countries. It’s the first movie to top a billion dollars in its opening weekend. Endgame still has a long way to go before it catches Gone With the Wind, which made $3.4 billion in inflation-adjusted dollars. But did Scarlett O’Hara gross a single dollar in action figures, video games, or happy meals?

This isn’t going to be one of those stories where we say, “Hey, let’s look at taxes in the Marvel Universe!” We have no idea how payroll works in Wakanda. We couldn’t tell you the first thing about import duties on Vibranium. And we don’t really care if Thanos of Titan is reporting all his income to the proper taxing authorities. (He’s not our client!)

Surely, though, there were plenty of tax collectors in the audience swelling this weekend’s box-office gross. And they should be as happy as anyone, because they’ll be claiming a pretty nice share of it all!

Start with the real stars of the movie. We’re talking about the CGI artists who generated over 3,000 visual effects shots. (Director James Cameron’s company even created an entirely new facial-capture application called Masquerade specifically for James Brolin to play Thanos.) VFX work is time and labor intensive, so most of that budget goes to the animators, directors, and other technicians who work behind the scenes to make the magic happen. Much of that money, in turn, finds its way into Uncle Sam’s pocket, and far faster than it takes Thor to find his way back from Asgar.

Unfortunately, producers were forced to hire pricey people for situations like “dialogue” and “character” where special effects wouldn’t cut it. Robert Downey, Jr., who earned just $500,000 for his first Iron Man movie, will take home north of $50 million. Middle-tier stars like Chris Evans, Chris Hemsworth, and Scarlett Johansson earned a reported $15 million each. All of that is taxed as ordinary income, with 37% going to Uncle Sam, 3.8% going to Social Security and Medicare, and 13% going to California.

Disney spent $356 million to make the movie, along with millions more to market and promote it. In Hollywood, the accountants are nearly as creative as the directors and writers, so the studios usually find a way to show a loss. But $1.2 billion in a single weekend may be a little harder to defeat than the usual gross, and if Endgame does show a profit, the studio will pay the usual 21% corporate tax.

At the end of the last Avengers movie, Thanos collected all six of the Infinity Stones and snapped his fingers to wipe out half the Universe’s population. (Not a spoiler . . . you’ve had time!) Google celebrates that moment today with a Thanos “Easter Egg.” Just go to Google, type “Thanos” in the search bar, and hit “enter.” Then look for the jewel-covered glove, called the Infinity Gauntlet, in the upper-right corner. Click it, and you’ll see half the search results magically disappear from the page.

But . . . and we’re just spitballing here . . . what if you could “Thanos snap” your fingers and make half your taxes go away? Well, we may not have any Infinity Stones in our pockets. But we do have an ensemble cast of concepts and strategies to put to work to help you pay less. A captive insurance company can be every bit as good as the Power Stone, for the right business, and a charitable remainder trust can be as illuminating as the Soul Stone. So call us after the movie lets out, and take a look at our special effects!