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Financial District

January 2021 Newsletter

LOCAL NEWS: I found the solution to why we have two Route 79 state highways. One, as you know, is Winchester Blvd. in Temecula which winds and doglegs from the I-15 freeway to Beaumont I-10 freeway. The other is Temecula Parkway, which begins at the I-15 and gets lost in the desert near Mexico after Warner Springs. I used to wonder, what fool would create two roads with the same name and number and get away with it? Well, it’s really the same road. Once upon a time the famed Route 79 wound around Southern California from San Jacinto to Warner Springs. During the journey, it passes through Temecula from NE to SW. Then came the new Route 15 on the same Temecula path truncating old 79 at Winchester in the North and Temecula Pkwy in the South side. So, Route 15 replaced part of the old 79 and can be located with little 79 signs along the sides of the I-15 freeway in between. Now you can quit worrying.

TAX NEWS: Our tax software has some new questions this year relating to Stimulus payments, foreign income, virtual currency, and California health care. To streamline our procedures, we have attached a simple questionnaire for everybody to complete and return, either at their appointment or when they mail/email/drop off their tax documents. This will keep us from asking the same questions and hopefully prevent unnecessary delays while you gather the information.

MORE FROM THE RON PAUL FESTIVUS REPORT: $3,452,234 was spent by the National Institutes of Health (NIH) to ascertain if social media messages will get mothers to stop young daughters from using indoor tanning salons. No results were ever published but the 10% Obamacare tax resulted in closing half of the salons in the country.

Another article from the Agency for International Development (USAID) which spent $37,500,000 to deal with truant Filipino youth. Questions were raised about supporting the huge school truant dropout of children in America instead of in foreign countries.

Lastly, $896,994 was spent by the National Institutes of Health (NIH) at Brown University to test adolescent reactions to various levels of cigarette nicotine. This was accomplished by studying smoking habits of kids assigned cigarettes on a daily basis. When I was a kid, we called cigarettes addictive cancer sticks. They were just proving the point before Vaping became popular and the wheel began to turn all over again. Kids have always rebelliously smoked, and it was illegal to sell them to children before this study.

THE GOOD NEWS: We have established complementary relations with a local paralegal, China Long, to update our clients with their wills, trusts, and other paralegal matters. This will benefit everybody because she charges only half of attorney fees when she does the same work for their clients. She has 26 years of experience working independently, as well as assisting attorneys. She will come to our office to meet with you and we have attached a list of her activities and fee schedules. I have searched for years to find someone qualified to work with my clients and we will all be very pleased with her many years’ experience, and work. Ms. Long is a member of the California Association of Legal Document Assistants.

MORE GOOD NEWS: We are happy to announce we are now accepting payment for your tax preparation fees by MasterCard, Discover, or Visa. As always, we also accept cash or checks.

INTERNATIONAL NEWS: Our Chinese Military friends have exposed a new level of combat discipline. At this time, some of their frontline troops stationed in Tibet are wearing a new helmet with a self-destruct control terminal worn on the soldier’s arm. In a tight situation, instead of surrendering to the enemy, the soldier just pushes a button, and his head is blown off and away. I am not inventing this; it was published in a national newspaper. They are also equipped with a radio headset so they can talk to their commander. In a compromised situation, the commander can push the self-destruct button himself. This is so much easier than the old method of harassing soldiers until they go AWOL.

INTERNAL REVENUE SERVICE NEWS: The last time we had an audit the auditor advised us that most of the experienced auditors, like him, were retiring which would result in very few business audits. They had held up a $40,000 refund on my realtor’s tax filing. After the field audit in my office, my client received the full refund plus interest.

This winter, the IRS has been hiring many new people for business auditor training. The elimination of Schedule A Miscellaneous expense deductions has already cut audits way down. This was the section where job expenses, moving expenses, gambling losses, travel, tax, and legal fees, and other items were deductible subject to a 2% haircut. Now, there has been a dearth of audits altogether, with business Schedule C and corporations not being audited at all. Well, that will be corrected when Spring comes, and the new auditors have finished their training. They have traditionally audited a year back and will probably begin auditing 2019 Schedule C business tax returns this Summer. Those are easier than the corporate audits, which require BS degrees in accounting for auditors, so that will come later. I expect to see face to face audits again when they are reinstated. These are the best audits because it is hard to argue or compromise by mail to the local IRS office in Ogden, Utah.

ABOUT OUR PRACTICE: We still offer investment and financial planning without charge after tax season but will limit the meetings to one session. We still offer insurance annuities which pay from 4% to 7% income depending on investment options. They are ideal for pensions and lifetime income. No taxes are paid on earnings until withdrawn. No investment losses will affect the guaranteed principal in any case.

Free 2021 Calendars are available to all clients until supplies run out.

We had no IRS audits last year although there were some SC 2000 letters which needed responses. We are here all year to answer your questions or fire off tax return copies to mortgage brokers. Call now for early appointments but note that the IRS is not accepting e-filed returns before February 12th.

No new books this year after the superhuman effort on Stocks, Bonds, and Taxes with the textbook edition. My initial book, American Independent Business, sold in 1985, is in 66 libraries nationwide.

Five of my books are available when you visit for your taxes.

Take care and keep in touch.

Phil, Nenita, Les, Sarah

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