I generally don’t comment on items in the DemonRats’ official propaganda publication, which has less credibility in regard to accuracy than the National Enquirer; but I couldn’t resist this item that Ohio CPA Dana Stahl passed along:

Subject: NYTimes on the new Roth IRS provisions

 

Mr Guru – more of the same BS from the NY(Commie)Times.

DS

My reply:

Dana:

While they are true to their nature in attacking another “Bush bonanza for the evil rich,” it’s based on the ridiculous assumption that the tax free status of Roths will remain intact decades from now.

As I’ve written several times, I have never trusted our imperial rulers in Congress to be able to keep their hands off of that provision long enough to advise clients to pay real taxes today on IRA conversions in anticipation of tax free benefits later down the road.  Congress royally screwed Social Security recipients by breaking this exact same kind of promise, and they will have no qualms about doing the same thing to “evil rich” owners of Roth IRA accounts. 

Since they have already defined “evil rich” to be any single person with more than $25,000 of annual income, or married couple with over $32,000 of annual income, for Social Security purposes, to feel that they won’t nail just about everybody is very naive thinking.

However, the Times couldn’t make their point about Bush only caring about rich folks if they were to mention that these same rich folks are almost certainly going to get screwed over when their tax free income promise is revoked.

Kerry

Dana wrote back:

Mr Guru – amen to that, bro’.  I’ve advised any of my clients who want to convert over to or start a Roth IRA not to trust that the withdrawals will be tax free years down the road, citing Social Security as an example, as you just did, that government promises are, like Lenin once said, “pie crusts made to be broken”.  It seems that most people would be better off to set up a regular IRA and take immediate deduction, so at least they get something out of it.

DS

 

I received the following from a Texas CPA in response to my earlier post on helping a friend (caps were his):

Subject: MONEY LAUNDERING

 

HI KERRY, [RE: BELOW]

 

I USUALLY CONCUR WITH YOUR ANSWERS AT LEAST 90-95%, BUT THIS QUESTIONS CONJURED UP VISIONS OF MONEY-LAUNDERING IN MY MIND.  ESPECIALLY IF THEY WANT TO PAY IN CASH, AND GET BACK A CHECK, OR CREDIT FOR SOME THING THEY WERE GOING TO PAY LATER ANYWAY.  BESIDES, IT JUST SOUNDS TOO GOOD TO BE TRUE. [AND WE KNOW WHAT THAT MEANS].

 

HAVE A GOOD ONE.

My Reply:

You’re correct that this was intended to be a form of money laundering. 

However, I felt what was more important for my client to understand was the real underlying substance and motivation for the transaction his friend was proposing.  That was obviously to mislead the leasing company and obtain cash under false pretenses, which would have implicated my client even though he wasn’t going to be keeping more than a small fraction of the money. 

Luckily, he took my advice and turned this deal down.  He didn’t say how well his friend accepted that decision.

Thanks for writing.

Kerry Kerstetter

 

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