09 Dec

Financial Aftermath of an Imprecise Premarital Agreement

A divorcing couple has a premarital agreement, so everything is simple when it comes to dividing assets and paying maintenance, right? Of course not. Premarital agreements are rarely simple, and they become even more complicated when the language in the agreement is imprecise.

This high net worth divorce case study provides some important insights into the process of completing a lifestyle analysis and calculating support. In this case, an imprecise premarital agreement led to problems in analyzing the marital lifestyle, excluding certain questionable expenses, and calculating future needs. Read More

04 Dec

Corporate Accountability Reporting and Roddy Boyd’s Hobby

I got a little chuckle this week when Roddy Boyd and his paid hobby, Southern Investigative Reporting Foundation, put out a plea for donations and referred to their “work” as corporate accountability reporting.

You see, a couple of weeks ago, I wrote about Roddy Boyd’s lack of ethics as it relates to a large donation from investor Marc Cohodes that influenced Roddy’s reporting. Read More

02 Dec

Sale on Lifestyle Analysis Book (Today Only)

Today is your chance to get a 40% discount off list price for the second edition of my book Lifestyle Analysis in Divorce Cases: Investigating Spending and Finding Hidden Income and Assets.

The American Bar Association rarely discounts its books, and the title won’t be available on Amazon for a year or more. So today only is your chance.

Use the code CYBER19 for your discount!

You can read more about the book and see excerpts from all chapters here.

26 Nov

IRS Audit Rates Keep Falling

Accounting Today had an awesome article about IRS audits and the recent trends. The good news for taxpayers is that audit rates are down overall. In 2010 the audit rate was 0.9%, or 1.735 million tax returns. Last year it was only 0.5%, or 991,000 tax returns.

There is even better news with some of the specifics:

  • Most audits are done by mail. The IRS asks for information and the taxpayer sends in the responsive documents. The number of field audits (an IRS auditor working directly with a taxpayer to address issues) keeps dropping, and last year the numbers were at an all-time low. Field audits are done for complex tax situations, and less than 250,000 were done last year.
  • S-corporation or partnership tax returns have a very low audit rate at 0.22%. That’s less than half the overall audit rate of 0.5%
  • If you make more than $1 million a year, your likelihood of audit is higher. 3% of taxpayers making more than $1 million were audited last year, but that’s down from the 12% who were audited in 2011.
  • Criminal investigation cases are down 58% in the last five years. During the same period, the number of revenue agents (field auditors) and criminal investigators has dropped by about 25%. So it’s only natural that prosecutions have gone down too.

As Accounting Today notes, the IRS has always used the fear of audits to get people to voluntarily report all of their income and pay the taxes they owe. With audits down, that fear might not be so great anymore. However, the IRS uses other non-audit tools (such as letters that notify taxpayers of discrepancies and taxes due) which still create fear in taxpayers, and may therefore encourage compliance.

21 Nov

How Does MLM Affect People?

pyramid-selling-scamThe late Jon Taylor, PhD wrote a thorough and excellent book about multi-level marketing (MLM): The Case (For and) Against Multi-Level Marketing: The Complete Guide to Understanding the Flaws – and Proving and Countering the Effects – of Endless Chain “Opportunity” Recruitment, or Product-Based Pyramid Schemes.

He put the book together in 2011 and 2012, but it is still relevant.

If you’re not familiar with MLM, you should acquaint yourself with the horrible statistics.  Basically, the odds of a distributor losing money in multi-level marketing are greater than 99%. Despite the fact that participants are almost guaranteed to lose money in MLM, these scams are marketed as business opportunities with the potential for unlimited earnings. Read More

18 Nov

MLM Income Disclosure Statements

A collection of annual income disclosure statements published by multi-level marketing companies, continuously updated. Last updates done 11/18/19.

Some MLMs release income disclosures or earnings disclosures. These numbers are not required to be disclosed in the United States, but some of the companies do it anyway to appear transparent. The disclosures theoretically provide insight into how much distributors earn in commissions or overrides, but they are generally worthless. They are worthless because of what they do not disclose.

Multilevel marketing companies purposely omit important information that would allow potential distributors or investors to have real insight into these plans. In general, earnings disclosure statements often fail to provide the following information that is critical to understanding the plans and the results: Read More

18 Nov

Lost Profits Calculations in Litigation

In the below video, Tracy Coenen talks about three common methods that are used to calculate lost profits in commercial litigation: the before and after approach, the yardstick approach, and hypothetical profits. In general, these methods are aimed at determining the profits a company would have realized if the incident giving rise to the litigation had not occurred.