DIVORCE

PRENUP BY RUSSIAN

According to Art. 40 of the Family Code of the Russian Federation a marriage contract is an agreement between persons planning to marry or an agreement between spouses regulating property rights and obligations of the spouses within marriage as well as in case of divorce. A marriage contract may be concluded prior to state registration of marriage (Art. 41 of the Family Code of the Russian Federation) in which case the contract comes into force on the date of state registration of the marriage. A marriage contract is subject to obligatory notarial certification.

A marriage contract may establish a matrimonial property regime different from the one established by the laws; it may establish joint, common or separate property regime in respect of all property of the spouses, certain types of property or private property of each of the spouses.

The spouses are entitled to determine their rights and obligations related to maintenance, participation in each other’s profits and bearing ...

TAX ADVISORY AND NEWS

MORE ON OFFSHORE ACCOUNTS

Question number 43 of the Frequently Asked Questions was posted on the IRS website on June 24 only 6 days before the filing deadline for the Foreign Bank Account Report (FBAR). The answer states that a person who only recently learned of his or her obligation to file a FBAR and had insufficient time to file on time should file the report late but before September 23. These late reports should be filed and a copy sent to the Philadelphia Offshore ID Unit with an explanation of why the report is late. IRS will not impose penalties if the above conditions are satisfied. The above rule is for those having only signature authority over an account but no beneficial interest or those with an interest who properly reported the income earned on the account for 2008.

The above rule would seem inapplicable to taxpayers who have filed FBARs in prior years but have mistakenly waited to file the 2008 report at the same time as their extended Form 1040. These returns...

RECENT TAX DEVELOPMENTS

TAX DEBTS

I often hear those with federal tax debts state: “I am worry-free because all I own is my home which is an exempt homestead.” I tell them to start worrying. Other creditors lack the powers given by Congress to IRS. IRS can reach your homestead to satisfy an individual tax debt even if the home is titled as tenants by the entireties and your spouse did not sign the tax return. IRS can reach your retirement assets protected in many states against most other creditors. IRS can also wipe out your bank account simply by sending a letter (Notice of Levy) to the bank and garnish your wages without a court order. In a flash the account or wages disappear. Recently, IRS Chief Counsel advised that IRS can levy on an interest in non qualified or incentive stock options even when the non-qualified stock option plan restricts transferability and the ISO plan is non-assignable under ERISSA. Although taxpayers have certain limited collection due process rights, it is often wiser to b...

A LESSON LEARNED ABOUT RISK

January 11, 2009

A New Year resolution that should be on everyone’s list is to gain a better understanding of and appreciation for risk.

RISK IS A NORMAL ASPECT OF LIFE

Robert Frost: “We took risks. We knew we took them. Things have come out against us. We have no cause for complaint.”

Harold Macmillan: “To be alive at all involves some risk?”

We consciously and unconsciously take risks every day. We drive to work not thinking all the time of the likely risk of an accident and remote risk of death. We put the risk aside because driving is a must if we are to get about. We board planes for business trips and vacations assuming the risk flight because we view the hazard as remote and always happening to someone else. Some of these daily risks are born from absolute necessity and some are voluntarily assumed.

Risk is also an element of every investment alternative. Investment risk is directly related to reward. Before the sub-prime crisis many chased performance seekin...

CONGRESSIONAL STIMULITUS

February 1, 2009

One might think of the economy as a horse drawn wagon loaded with goods and services. Three of the four horses pulling the wagon are consumers. The other horse is government spending. The wheels allowing the wagon to move are the four spokes of the financial system providing credit, namely: (1) consumer and mortgage borrowing (2) business borrowing (3) state and local borrowing and (4) U.S. Treasury borrowing. The axel grease allowing the wheels to turn is confidence for every financial transaction is a series of promises we trust will be kept. When a criminal like Bernard Madoff breaks a promise, we discount his behavior as abnormal. But, when sincerely made promises are broken by the system at large our confidence is badly shaken.

Today the three consumer horses have stopped galloping out of depression, fear and uncertainty. Three of the four credit wheels have broken off from their axels; and, even if we could get them back on, there is no axel grease to sta...