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It’s no secret that Washington uses the tax code to do more than just raise revenue. Lawmakers also use it to influence some of our biggest financial decisions, with tax deductions for mortgage interest to encourage homeownership, tax credits for fuel-efficient cars to encourage conservation, and “bonus depreciation” to stimulate business spending. Washington seems to believe those incentives really work. And cynics argue that the real reason we’ll never see a true flat tax is because lawmakers are loath to give up the power to regulate that comes with their power to tax.

Government also uses the tax code to sway some of our smaller decisions, too. This is especially true with so-called “sin taxes” — essentially, fees we pay to consume unhealthy products or engage in unhealthy behaviors. As Adam Smith wrote in The Wealth of Nations, “sugar, rum and tobacco are commodities which are nowhere necessaries of life, which are become objects of universal consumption, and which are therefore extremely proper subjects of taxation.”

230 years later, sugar, rum, and tobacco are still taxed. (In New York City, a pack of smokes comes with a hefty $6.86 in federal, state, and local taxes — the tobacco is extra!) The 2010 health care reform slapped a 10% tax on tanning beds. Public health advocates have proposed taxes on fatty foods and sugary sodas to fight obesity. And many Americans, discouraged by what they see as a decades-long failure in the War on Drugs, call for legalizing drugs, taxing them to shift profits from private cartels, and using the revenue to fund anti-addiction efforts.

So, how effective are sin taxes at balancing their dual goals of raising revenue and discouraging unhealthy behavior? Well, federal and state tobacco taxes alone raise nearly $30 billion per year. They seem to do that job just fine. But some economists find that sin taxes send the wrong message by legitimizing the behavior they try to discourage. Here’s what Harvard Professor Michael J. Sandel says in his new book, What Money Can’t Buy: The Moral Limits of Markets:

“A study of some child-care centers in Israel shows how this can happen. The centers faced a familiar problem: parents came late to pick up their children. A teacher had to stay with the children until the tardy parents arrived. To solve this problem, the centers imposed a fine for late pickups. What do you suppose happened? Late pickups actually increased.”

Clearly, telling parents “don’t be late or we’ll fine you” sends a very different message than telling them simply “don’t be late.” And so it goes with sin taxes, too. Telling smokers and drinkers “don’t indulge or we’ll tax you” offers them implicit forgiveness — that it’s actually OK to light up and enjoy two-for-one Happy Hour so long as they pay the fee. (If you’re reading these words with a cigarette in one hand and a Red Bull in the other, you can breathe a sigh of relief!) It may sound hypocritical for Uncle Sam to wag his finger at you with one hand while he reaches into your pocket with the other. But sin taxes have been around a lot longer than income taxes, and they aren’t going away.

There’s really no “planning” we can help you do to avoid sin taxes. (We would just give you the same advice as your mother.) But it may be worth it, next time you pay any tax, to ask yourself “what’s the government trying to accomplish with this tax? What’s the government trying to get me to do?” Understanding why you pay a tax can make you a better-informed consumer. And that, in turn, helps all your dollars go farther.

We are money managers.  We work with and continue to look for professionals who are the best in their field; CPAs, mortgage brokers, insurance agents and attorneys.  Please contact us if you would like to join our referral program as a trusted professional or if you’re are looking for specific services.

This information was provided in part by TaxCoach Software, LLC

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For 20 years now, Apple has blazed a reputation for stylish design and innovative products, creating a near-cult following among fans. Apple’s computers appeal to the artists and designers who set so many of today’s trends. Their iPod has helped change how the world listens to music. Their iPad has made online content available nearly anywhere. And their iPhone is helping change the way we communicate with friends, family, and colleagues. (Just a few years ago, your mother-in-law didn’t have a cell phone. Now she sends text messages and “checks in” on Facebook.)

Apple may be the most successful company on earth. At one point last year, they had more cash on hand ($76.2 billion) than the United States government ($73.8 billion). And Apple is currently the most valuable company on the planet, with a “market cap” (total value of tradeable shares) that topped $590 billion dollars on April 10. (That’s right . . . those iTunes you casually download for a buck each have created a company worth over half a <em >trillion dollars.) In fact, Apple’s current market cap is more than the gross domestic products of Iraq, North Korea, Vietnam, Puerto Rico, and New Zealand — combined.

But Apple’s most recent annual report reveals the company’s genius for creating successful marketing strategies also extends to successful tax strategies. How else would you describe a strategy that lets Apple earn billions and pays less than 10% of their taxable income in tax?

How do they do it? Largely by keeping the money they earn outside the United States, outside the United States. Apple owns subsidiaries in tax havens like Ireland, the Netherlands, Luxembourg, and the British Virgin islands. They helped pioneer the “Double Irish with a Dutch Sandwich” strategy that hundreds of other multinational companies have imitated. Apple even maintains a subsidiary in tax-free Nevada — the blandly-named “Braeburn Capital” — to manage that enormous cash haul without paying tax in its home state of California. For 2011, the company paid a worldwide tax of $3.3 billion on $34.2 billion of profit. But one study concludes that Apple would have paid $2.4 billion more without these rules.

Now Apple has become part of the political debate. At the risk of grossly oversimplifying a pretty complicated discussion, Democrats in Washington scoff that taking an extra $2.4 billion in tax last year would have squelched Apple’s creativity. Republicans reply that using the cash to grow the business or distribute more dividends to shareholders will grow the economy faster than if it goes to the IRS. Both President Obama and presumed Republican nominee Mitt Romney have called for eliminating corporate tax loopholes in order to pay for lower rates (28% in President Obama’s plan, 25% in Governor Romney’s). Either way, Apple is likely to become one of the stories — like Warren Buffett paying a higher tax rate than his secretary — that come to define this year’s campaign.

Taxes always play a part in Presidential races. But this time, with the economy still struggling and the Bush tax cuts scheduled to expire in a few short months, taxes will be even more important than usual. Our job, as November approaches, includes helping you understand just what the candidates’ proposals mean for your bottom line. So keep up with these emails — and if you’re curious how any of the proposals you hear about would affect your plan, call us!

We are money managers.  We work with and continue to look for professionals who are the best in their field; CPAs, mortgage brokers, insurance agents and attorneys.  Please contact us if you would like to join our referral program as a trusted professional or if you’re are looking for specific services.

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Disneynature’s newest movie, Chimpanzee, is a documentary masterpiece for all ages. It’s a truly original film that stands out in a multiplex of lookalikes, copies, remakes, and sequels. And Chimpanzee’s cinematography is amazing — the simple beauty of the jungles and the animals stands in contrast to so many of today’s movies all tricked out with 3D gimmicks and computer-generated special effects.

Filmmakers spent four years “embedded” in the lush rainforest of Ivory Coast’s Tai National Park to make the movie, which follows the life of “Oscar,” a predictably adorable young chimp. Oscar learns how to use rocks to open nuts (apparently harder than it looks) and use sticks to go “fishing” for army ants (apparently a real delicacy to chimpanzee foodies). There’s a turf war with a rival community for control over a valuable nut grove. And, this being a Disney movie, Oscar loses his mother to a leopard around the beginning of the third reel. (It’s handled sensitively — there’s nothing to terrify children or grandchildren in the audience.) Losing his mother poses a real threat to Oscar’s life, until, remarkably, he’s “adopted” by Freddy, the community’s alpha male. The film is narrated by Tim Allen, whom even the youngest viewers will recognize as the voic e of “Buzz Lightyear” from Disney/Pixar’s mega-successful <em >Toy Story series.

Primatologists have suspected that chimpanzees like Freddy might altruistically adopt orphaned young in their group. But this is the first example of such behavior actually caught on film. (There’s no word on whether Freddy “taxed” the rest of the community for the expenses of caring for Oscar, or whether “tax avoidance” is part of their natural behavior!)

Disney has announced that they are donating a portion of <em >Chimpanzee’s opening-weekend ticket sales to the Jane Goodall Institute for the “See Chimpanzee, Save Chimpanzee” program to protect habitats. Disney will donate 20 cents for every ticket sold, with a minimum donation of $100,000. (The movie grossed $10.2 million over its opening weekend, the highest opening gross in history for any nature documentary.) <em >So — and here at last we come to the <em >tax question of the day — does that mean that if you were one of the first to see it, you can deduct part of your ticket?

Unfortunately, no, that’s not how it works. You got <em >your “money’s worth” from the movie itself, although Disneynature can certainly deduct the contribution on <em >its return. It’s like buying a ticket to a college football game. The college itself may be a not-for-profit organization — but buying a ticket isn’t a “donation” because you get something of value in exchange. (Some colleges let you make donations in exchange for the right to buy season tickets — in those cases, the IRS treats that “right” as being worth 20% of the donation amount and lets you deduct the remaining 80%.)

Deductions for charitable contributions are a mainstay of the tax code. Charitable contributions let you do well for society while you do well for yourself — which of course is something <em >we want to help with, too! We can help you maximize deductions for gifts of used clothing and household accessories. We can help you plan for bigger gifts of cash, cars or boats, art or antiques, appreciated securities, real estate, and even life insurance. And don’t forget, we’re here for the rest of your “community,” too!

We are money managers.  We work with and continue to look for professionals who are the best in their field; CPAs, mortgage brokers, insurance agents and attorneys.  Please contact us if you would like to join our referral program as a trusted professional or if you’re are looking for specific services.

This information was provided in part by TaxCoach Software, LLC

The California Milk Advisory Board is an agency of the California Department of Food and Agriculture dedicated to promoting California dairy products. You’ve probably never heard of the Board. But we’ll bet you’ve seen their television spots, with their catchy slogan: “Great cheese comes from happy cows. Happy cows come from California.”

Now, The Atlantic magazine reports that landowners on the other side of the country are saving millions in tax by taking advantage of “America’s Dumbest Tax Loophole: The Florida Rent-a-Cow Scam.” But are those Florida cows as happy as their cousins in California?

Here’s how it works. Florida’s “greenbelt law” aims to help preserve farmland by taxing it according to its agricultural-use value, rather than its (higher) potential development value. To qualify, you just have to file a four-page application and convince your county tax appraiser that you’re using the land for “bona fide” agricultural purposes. You don’t even have to make an actual income from your “farming” in order to lower the valuation on your property. Pretty sweet so far, right?

But what if you’re not even really a farmer? What if you’re a rich developer, with land just sitting idle that you’re getting ready to build on, and you want to get in on the party? No problem! Lease your land to a nearby cattle rancher, plop a few cows in what’s left of the grass, and start saving big! Some landowners let ranchers graze their cattle for free. But the tax breaks are so rich and creamy that some landowners actually pay the ranchers to graze their cows, justifying the “rent-a-cow” nickname.

At this point, you’re probably scoffing this is . . . well, udderly ridiculous. Au contraire, my naive friend, au contraire!

The Miami Herald reported back in 2005 that over two-thirds of the greenbelt law’s biggest beneficiaries aren’t true farmers. Developer Armando Codina saved $250,273 in 2004 by grazing cattle on land he owned in northwest Miami-Dade County while he built industrial warehouses on it. Then he asked the county to declare his “ranch” to be an environmentally contaminated “brownfield,” while he still had cows on the land! (That had to make the cows happy.) Developer Richard Bell saved $140,168 that same year by grazing 16 cows on a 49-acre tract where he planned to build million-dollar McMansions. Even U.S. Senator Bill Nelson got in on the act — he keeps “about six cows” on 55 acres of property near the Indian River and saves $43,000 per year. The Herald found “skinny” and “underfed” cows eating garbage and grazing on bare, rocky land throughout the state.

Developers confess that this may not have been exactly what the Florida Legislature intended when they passed the greenbelt law back in 1959. But they argue that vacant land shouldn’t be taxed at full value if it’s just aging till ripeness. And they point out that once the land is developed, new homes and offices generate plenty of tax revenue.

We have no clue if the Florida cows are as happy as the California cows. Nor can we tell you if their cheese is any good. But we can tell you that you don’t have to go to such ridiculous lengths to save big on your income taxes. The tax code is full of legitimate deductions, credits, and opportunities that serve legitimate public goals. And it’s our job to help put all those opportunities to work for you.

We are money managers.  We work with and continue to look for professionals who are the best in their field; CPAs, mortgage brokers, insurance agents and attorneys.  Please contact us if you would like to join our referral program as a trusted professional or if you’re are looking for specific services.

The “Occupy Wall Street” movement argues that we live in a divided nation. First there’s a gilded “1%” enjoying lives of ease and privilege. Then there’s a downtrodden “99%” struggling just to stay in place. But here’s a take on “the 1%” that you won’t hear at your local tent city . . .

The IRS is struggling just like the rest of us to carry out its mission with limited resources. Back in 2003, they audited just one out of every 203 returns. By 2010, that number was up to one out of 90. To stretch that audit budget even further, they’re auditing more and more taxpayers by mail. But one study shows that 10% of IRS mail never gets where it’s supposed to go, and 27% of those who do get their mail don’t even realize they’re actually being audited! Naturally, that leads to more and more of the paperwork screwups that every taxpayer fears.

Enter Nina Olson. She’s the IRS’s first and only Taxpayer Advocate, a position created by the 1998 “Taxpayer Bill of Rights” act. She supervises the Taxpayer Advocate Service, a nationwide group of 2,000 caseworkers who specialize in cutting through red tape and greasing the wheels of the great gummy IRS machine. If the IRS sends your mail to the wrong address, slaps you with a lien after you’ve already paid your bill, or just makes a mistake they can’t seem to fix, Olson’s office is the one we’ll call.

Last month, Olson delivered a presentation to the Federal Bar Association on how “the 99%” experience the tax system. And the picture she painted makes a tent in lower Manhattan Park look like a room at the Ritz. One in three taxpayers who call the Service don’t get an answer. Only half of those who write hear back within six weeks. The IRS is relying on computers instead of people to audit all but the highest-income taxpayers. And perhaps most curious of all, she says, “we’re getting to a situation where the only people who get face-to-face audits are the 1%”!

Now, correct us if we’re wrong, but do you really consider face time with an IRS auditor a “privilege”? We all know that at least some level of government is necessary. But there are just some parts you don’t want to see up close and in person. Like the “Level 4″ Biolab at the Atlanta Centers for Disease Control, for example, where we store the Ebola virus, Crimean-Congo hemorrhagic fever, and other superbugs we can’t risk having out on the loose. Or the “Supermax” penitentiary in Florence, Colorado, where we “store” the most dangerous felons we can’t risk having out on the loose. Or the inside of any IRS Service Center!

Does Olson’s “1%” comment conjure up images of plush IRS offices, with thick oriental carpets and rich leather upholstery, staffed by discreet, white-gloved concierges sitting at granite-topped desks? We can assure you that when it comes to getting audited, even the 1% have to settle for the same government-issue linoleum floors, metal chairs, and battleship gray desks as everyone else. (And really, in the unlikely event you are audited, we probably won’t let you go with us anyway! Trust us — it’s for your own protection.)

We talk in these emails about how proactive planning cuts your tax bill. But paying less tax isn’t the only perk of a good tax plan. Did you know that smart tax planning can also cut your audit risk? In fact, some strategies — like choosing certain business entities — can cut that risk by as much as 90%. So call us if you think face time with an auditor is a “privilege” you can do without!

We are money managers.  We work with and continue to look for professionals who are the best in their field; CPAs, mortgage brokers, insurance agents and attorneys.  Please contact us if you would like to join our referral program as a trusted professional or if you’re are looking for specific services.

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This weekend’s Masters golf tournament featured the usual perfect weather, gorgeous scenery, and competitive play that fans have loved for so long. Tiger Woods came into the tournament as the betting favorite based on his win at last month’s Arnold Palmer Invitational — his first tour victory in nearly three years. But Tiger’s performance disappointed his fans yet again — in fact, he even hit a spectator on Saturday. And in the end, Bubba Watson became only the third leftie in history to don the coveted green jacket.

It turns out Tiger isn’t the only one having trouble on the course. Our good friends at the IRS have also “sliced into the rough” over the question of deducting conservation easements for golf courses. A “conservation easement” is a gift of a partial interest in real estate you make to a publicly-supported charity or government. If you own a historic townhouse, for example, you might donate the right to make changes to the facade, to ensure it keeps its historic character. If you own a farm at the edge of the city, you might donate development rights, to ensure it remains green space. You’ll need an appraisal to support the value of your gift, as the IRS is cracking down on inflated conservation easement deductions. If your gift exceeds 50% of that year’s adjusted gross income, you can carry forward the excess for up to 15 years (rather than the usual five year limit for all other charitable gifts).

The easement in question involves Kiva Dunes — a Jerry Pate-designed golf course nestled on Alabama’s Fort Morgan Peninsula, which is tucked neatly between Mobile Bay and the Gulf of Mexico. The course is surrounded by 163 upscale homes, including 30 right on the beach. It’s no Augusta National, of course, although Golf Digest has ranked it the best course in Alabama. Back in 2002, the partnership that owns Kiva Dunes placed a conservation easement on the course, limiting its use to a golf course, park, or farm. They appraised the easement at $30.6 million, donated it to the North American Land Trust, and happily deducted that amount on their partnership return. (Not bad, considering the owners paid just $1.05 million for the property encompassing both the course and the homesites back in 1992!)

Not surprisingly, the IRS ruled the deduction out of bounds — valuing the easement at just $10.0 million — and the case wound up in Tax Court. The Court started by noting that the partnership’s appraiser lives and works in the immediate vicinity of the course and has decades of experience evaluating local properties, while the IRS’s appraiser lives 250 miles away in Birmingham and has only visited the vicinity of the course twice. Then they estimated how much the owners could realize if they subdivided the property for the same sort of instant mansions already surrounding the course ($31.9 million). Next, they calculated the current value of the golf course (just shy of $3.0 million). Finally, they subtracted the current value from the potential value to settle on a $28.7 million value for the easement — really, just a chip shot away from the partnership’s original appraisal.

The law allowing deductions for conservation easements expired at the end of 2011. That’s not necessarily the end of the story, though — lots of popular tax breaks expire, then come back from the dead. But this one may be more dead than usual. That’s because President Obama’s 2013 budget proposes to eliminate deductions for golf course conservation easements entirely, arguing that they do more to benefit the people living in the McMansions surrounding the courses than the general public. Thus, Kiva Dunes’s owners may be the last to benefit from this hole-in-one of a deduction.

Minimizing your taxes may look hard, but it’s a lot easier than driving straight down the fairway. Proactive planning is the key to staying out of the sand and water. Remember, we’re here for you — and the rest of your foursome, too!

We are money managers.  We work with and continue to look for professionals who are the best in their field; CPAs, mortgage brokers, insurance agents and attorneys.  Please contact us if you would like to join our referral program as a trusted professional or if you’re are looking for specific services.

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Fans of AMC’s Mad Men rejoiced last week when Don Draper and his colleagues at Sterling Cooper Draper Pryce returned after a 17-month absence. The year is 1966, and change is in the air. Protestors oppose the war in Vietnam, and riots break out in Los Angeles, Cleveland, and Atlanta. The “kids” are listening to Dusty Springfield and the Rolling Stones. And the “grownups” are struggling to make sense of it all.

Mad Men creator Matthew Weiner is famed for his obsessive attention to period detail. (One episode featured junior executive Pete Campbell displaying a spectacularly ugly “chip and dip” platter he received as a wedding present — the very same chip and dip that Weiner’s own parents received for their wedding back in 1959.) So, fashion mavens predictably ooh’ed and ahh’ed over the period costumes, which have inspired today’s Banana Republic to introduce an entire Mad Men collection. Interior design aficionados ooh’ed and ahh’ed over Don and his new bride Megan’s stylish Upper East Side penthouse, with its white carpeting, sunken living room, and broad terrace. But tax professionals cheered loudest of all when partner Roger Sterling bribed media buyer Harry Crane $1,100 to give up his office for rising star Campbell. “That’s more than you make in a month,” Sterling wheedled, “after tax!”

And really, who cares about Don’s suits, Megan’s dresses, or Roger’s cocktails, when we can spy on their money and their taxes?

Prices from 1966 seem comically quaint today. A gallon of gas cost just 32 cents. A dozen eggs cost 60 cents. Postage stamps cost a nickel. But there was nothing comical or quaint about taxes. Rates in 1966 started at 14% on income over $1,000 (roughly $7,000 in today’s economy), and rose to 70% on income over $200,000. 70% is a lot compared to today’s 35% maximum — but 70% was actually a big step down from the 91% top rate that Don and his colleagues faced just three years earlier in 1963. One small consolation — Don’s Form 1040 was quite a bit simpler. However, the “Expense Account Information” section at the bottom of page two includes an intimidating box to check — and separate instructions to follow — “if you had an expense account or charged expenses to your employer.”

And what about those three-martini lunches that play such a central role in lubricating Mad Men’s ensemble? Well, for starters, they sure cost less back then. In one scene from Season One, Don flips a waitress at a beatnik bar $5 to cover three martinis, plus tip. Today, those same martinis cost $14 each at The Roosevelt Hotel, where Don stays after separating from first wife Betty. As for tax breaks, under today’s rules, meals and entertainment are 50% deductible. That means, if you’re in the top 35% bracket, a dollar’s worth of martini saves 17.5 cents in tax. But back in 1966 — when doctors appeared in cigarette commercials and seatbelts were still optional in most cars — meals and entertainment were 100% deductible. That means that same dollar’s worth of martini saved up to 70 cents in tax. No wonder the partners spent more time getting soused than they did talking business!

If we had been practicing back in 1966, we would have looked just as good wearing the silhouettes of 1960s style. But Don Draper would have appreciated us more for the way we cut his taxes. There’s no need to get mad at the IRS if you have a proactive plan. And there’s no pesky two-drink minimum, either!

We are money managers.  We work with and continue to look for professionals who are the best in their field; CPAs, mortgage brokers, insurance agents and attorneys.  Please contact us if you would like to join our referral program as a trusted professional or if you’re are looking for specific services.

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England’s creative class is known throughout the world for the richness and variety of its work. Some is good (think Savile Row tailoring and the architecture of Sir Christopher Wren). Some is not (Princess Eugenie’s royal wedding hat). And some is just sublime (the 1961 Jaguar E-type). But there’s one art form the English are better at than anyone else, and that’s highbrow television.

It all started with Upstairs Downstairs. Next came 1981′s lavish Brideshead Revisited. And now there’s yet another snooty television “programme” invading American hearts and minds — Downton Abbey, a period drama centered on the aristocratic Crawley family and their servants, during the reign of King George V.

Yes, it’s a soap opera. But oh, what a soap opera it is. You have your standard-issue improbable plot complications and ill-advised romances, naturally. But it’s set against a backdrop of class, manners, and humanity that seem long lost a century later. And where else will you find a soap with Oscar- and Tony-winning actors, much less a pheasant hunt? Add in Edwardian sensibilities, amusing antique technology, and impossibly dry British wit, and you have an irresistibly compelling package.

Programs like Downton Abbey showcase British culture to the world and boost the nation’s economy, too. So Her Majesty’s Treasury began offering film tax credits for movies roughly 10 years ago. For 2010, they gave about £100 million in credits to support more than 200 productions — including, of course, both Harry Potter sequels. But now, as part of their 2013 budget, officials are extending the incentives to high-end television, too. To qualify, dramas must cost more than £1 million (roughly $1.58 million), and must pass a “cultural test.”

We have tax credits for movies and television here in the United States, of course. There’s nothing at the federal level, but state and local governments eagerly compete for filmmakers’ dollars with a vast variety of tax incentives. While Hollywood is the obvious center of the film universe, you might be surprised to learn that the next most attractive location for film production, based in part on generous tax incentives, is Louisiana. In fact, Louisiana was the first state to adopt tax incentives for filmmakers, and sparked a trend across the country. Producers get a 30% transferable tax credit on total in-state expenditures, plus a 5% labor-tax credit on payroll of employed residents.

Here in the US, you wouldn’t think we’d worry too much about the quality of the productions we encourage. That, after all, is part of our uniquely American charm. But at least one state official has imposed his own informal “cultural test” in an apparent attempt to class up the joint. Last year, the New Jersey legislature approved $420,000 in credits for the producers responsible for MTV’s raucous Jersey Shore — then watched in dismay as Governor Chris Christie vetoed the bill, declaring “as chief executive I am duty-bound to ensure that taxpayers are not footing a $420,000 bill for a project which does nothing more than perpetuate misconceptions about the state and its citizens.” His Lordship the Earl of Grantham would heartily approve.

If you run your own business — or even if you’re just thinking about starting a business — you may not qualify for film credits. But you will qualify for more tax breaks than you realize. So make sure you take some time to sit down with us to plan how best to take advantage of those breaks. And let your friends, family, and colleagues know we’re here to help them, too!

We are money managers.  We work with and continue to look for professionals who are the best in their field; CPAs, mortgage brokers, insurance agents and attorneys.  Please contact us if you would like to join our referral program as a trusted professional or if you’re are looking for specific services.

We went underground and had a wonderful and eerie time.

The day began at Hobo’s Restaurant in Historic downtown Portland. Hobo’s Restaurant is architecturally interesting with decor of old- time classic PDX. The food was delicious and Andy’s service was outstanding! Prior to the presentation, each guest was gifted a beautiful sport grey “Lettin & Company Racing Team 2012″  long or short sleeve t-shirt. We hope to see these on everyone!

Our 30 minute presentation during this event was on “Rebalancing”. There are 3 important points of Rebalancing.

1. Rebalancing reduces risk.

2. Rebalancing increases your return- by buying low and selling high.

3. Rebalancing maintains a standard deviation in accordance with your investment objective.

After this engaging presentation, we embarked on our Underground Tour with Mike from the non profit organization Cascade Geographic Society leading the way through a trap door situated directly in the sidewalk in front of Hobo’s. We were entertained by his intriguing stories of old and his amazing knowledge of the bizarre, morbid and oft sad facts of “Shanghiing” in Portland, Oregon.

Keeping a wary eye on the darkness following behind us, we heard stories of paranormal experiences while seeing artifacts supporting the forgotten hidden heritage. All in all, the experience was educational and eye opening, showing us some of the more dark history of prim and proper Portland.

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Working in the tax business is usually a pretty safe gig. You really just need an office, a computer with an internet connection, and a fast laser printer for all those piles of paper. There’s not much heavy lifting — and even less intrigue or danger. But sometimes the tax business is a different story. Just ask Pavel Petrovich Ivlev, who works (now) in suburban New Jersey.

Pavel was born in 1970 just outside Moscow. He earned a law degree from Moscow State University in 1993, studied more in Amsterdam and London, then joined an international law firm. At that point, he appeared set to become another one of a new breed of Russian lawyers, helping newly-privatized companies negotiate the awkward transition to “real” capitalism.

Pavel’s clients included Yukos Oil, and its charismatic chairman, Mikhail Khodorkovsky. Khodorkovsky had started out collecting dues for the Communist Youth League. But as the Soviet Union collapsed, he rejected his old Leninist ideology. Taking advantage of glasnost and his party connections, he became an entrepreneur, published his own capitalist manifesto called The Man with the Ruble, and traded his way up to controlling 20% of Russia’s lucrative oil production. For one brief shining moment, Khodorkovsky’s $16 billion fortune made him the richest man in Russia and the 16th-richest man on earth.

In 1999, Vladimir Putin succeeded to Russia’s Presidency. Putin had started his career in the KGB — working counterintelligence, no less — and he was no stranger to blunt force. (Google “Putin+thug” and you get 2,190,000 hits. ‘Nuff said.) Putin quickly moved to tighten his grip on power, clamping down on elected officials and billionaire oligarchs alike. Khodorkovsky naturally pushed back, and at one point in 2003, embarrassed Putin in a nationally televised meeting of business leaders. Unfortunately, such resistance amounted to bringing the proverbial knife to a gunfight.

Eight months later, Putin had Khodorkovsky arrested, and slapped everyone else associated with Yukos with tax and fraud charges. And that’s where our tax attorney friend Pavel comes back into the picture. Here’s how he describes his own interrogation by government investigators. Clearly, they felt no need to screw around with the usual “good cop-bad cop” shtick — or maybe the good cop was just off grabbing a ponchiki (Russian doughnut):

“On November 16, the lead detective in the case said to me ‘Now I am going to interrogate you.’
I said, ‘You can’t do that, it’s against the law.’
‘I guess we are going to have to break the law then. Tell me all.’
‘What do you want me to say?’
‘You are the lawyer — you know the penal code. Whatever you say, we’ll use.’
‘You want me to describe how we took sacks of cash out of Yukos and delivered them to Khodorkovsky personally?’
‘Yes.’
‘But nothing like that ever happened.’
That’s when he threatened to arrest me.”

Pavel’s momma didn’t raise any dummies. He caught the next plane out of Moscow and didn’t even call his wife till he landed. But he remains under indictment in his homeland for stealing $2.4 billion, laundering $810 million, and evading tax on the gain. At least he’s better off than his former client — Khodorkovsky has spent the last seven years in a series of former Soviet prisons.

Look, there’s nothing fun about the IRS. And we’ve all met someone who went through an “audit from hell.” But few people actually flee abroad to shake off the tax man! So while we gripe about how much we pay, we can at least appreciate the IRS playing on a level field. Let Pavel’s story help you feel fortunate that we won’t be chased out of this country for paying less tax!

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This information was provided in part by TaxCoach Software, LLC.