Archive for January, 2009
Clearly, Medicaid will pay only if you have few assets. Logically, then, make sure you don’t have assets. Therefore, transfer your assets to your children now. This will make you poor, and by being poor, you’ll qualify for Medicaid.
If you don’t’ transfer your assets to your children, you’ll just spend everything you own on long-term care costs until you have nothing left anyway. Either way, you’ll be broke. So wouldn’t you rather give your assets to your kids instead of to a nursing home?
Four problems with transferring assets
If you think this sounds reasonable, watch out for these four big problems:
Problem #1: Yeah, Right
You’ll find it very hard to give everything you own to your (spoiled rotten!) kids just as you’ve reached that time in your life when you can start enjoying yourself. In other words, this recommendation, un-usually doesn’t go over very well.
Try convincing your parents to give you all their money.
“No, really, Dad, you need to give me everything you own right now. It’s for your own good!” Yeah, right.
Problem #2: Medicaid is aware of this trick
If you made gifts during the 36 months prior to filing your claim for benefits, Medicaid will deny this claim – 60 months for gifts you make to a trust. This rule is specifically intended to prevent people from asset-shifting. And please note an important change in Medicaid rules: If you file a claim at any time during the 36-month waiting period, Medicaid will restart the clock. Therefore if you plan to use this strategy, assets must be transferred well in advance of the need for long-term care, and be sure you don’t file a claim until you’re sure the 36-month waiting period has expired. Also, be aware that transferring assets to a spouse does not shield the assets from Medicaid.
Have you brought assets into your marriage?
Many people who marry later in life bring assets into the marriage, like Ruth. Her husband died when she was 47, leaving her his 401(k), their home, plus life insurance proceeds. Five years later, Ruth remarried. She kept all her assets in her name and filed a separate tax return. When her second husband needed long-term care, he quickly spent down all his assets. But Medicaid permitted Ruth to keep only $2,000 per month; all her other income had to be spent on her husband’s care before Medicaid would pay benefits. Thus, over the next several years, Ruth was forced to spend down to the poverty level, too.
Regardless of whose money it was or where it came from – inheritances, savings, retirement plans, or insurance proceeds – Medicaid will deny claims until both spouses spend virtually all their money on long-term care. The fact that the money originally belonged to the community spouse does not matter.
Problem #3: Attempts to asset-shift are stymied by the IRS
Under gift tax rules, you may give to any one person only $11,000 per year (you may give unlimited amounts to your spouse). So, even if you try to give your money away, the IRS will restrict the speed with which you may proceed.
Problem #4: This strategy is unethical…
Please remember that Medicaid is funded by taxpayers to help the truly needy of our society – not as a middle class tax dodge to protect your assets.
Problem #5: …and Illegal, too!
Congress knows that few consumers have the imagination or knowledge to effectively execute an asset-shifting strategy. So, to discourage professional advisers from sharing this information, Congress passed a law that made it a felony for advisers to counsel or assist consumers in their efforts to shift assets. Therefore, don’t bother asking your lawyer, accountant, or financial adviser for help; the smart ones won’t provide it.
Donate for tax breaks? IRS wants proof
Year-end holiday giving and cleaning tend to get people thinking about a little year-end tax planning, say, extra tax breaks for charitable contributions. To count for the 2009 return, individuals and businesses must have made their donations to a charity by Dec. 31.
Cash Gifting and the IRS: An Urban Myth BUSTED! www.GiftingAlert.com
IRS, states crack down on independent worker abuse
The Internal Revenue Service and 37 states are cracking down on companies that illegally try to trim payroll costs by changing employees’ status to independent contractors, rather than as full employees, The Associated Press has learned.
Question: Can a collection agency file a 1099 on a debt that is past the statute of limitations?
It is a credit card debt from 1999. They are saying they will file a 1099 with the IRS if I do not pay it. They have not sent any sort of letter by mail within the past 30 days. I just received this call this morning.
This credit card debt was not mine. It was a credit card my ex-huband got while we were separated, so naturally it went on my report as well. I only found out about this debt recently.
I am a full-time student and I do not work outside the home as I have 5 kids.
If this was my responsibility, AND IT IS NOT! I still would not have to pay it because it has been 9 years!
The statute of limitations is there for a reason. Federal is 7 years. The state I live in is 6 years.
Get off your high horse. You are saying you are perfect and NEVER had any problems?
Answer: > 1st per the Fair Debt Collection Practices Act, they have to send you a letter, do you dispute debt? For convenience, you can always say yes, or no, of course it is a moral question there, up to you. Did they send this letter originally?
>This is a factored debt. Factoring is one of the fastest growing businesses in the U.S., buying and selling of debt, my guess they bought the debt for pennies on the dollar if it is that old.
>Under the above law they cannot say anything they do not intend to do, like say they are going to sue, then don’t would be a violation.
>The only time a 1099 would be sent is if you made a settlement on a debt, and since you obviously did not make a settlement, this is an illegal, and unjust attempt at making you pay, and it is particularly dangerous to you, because if you pay $1 on the debt you have re-started the statue of limitations on the debt.
>I would immeditately obtain all names involved, name of agency, gent who said that, and immediately contact the Federal Trade Commission, and the attorney general of your state.
>This industry reigned in from calling people 25 yrs ago, making believe they were the city marshall, and were on their way to pick up someones furniture…….was regulated successfully by the FDCPA, the law mentioned above. The factoring business, buying and selling of debt has opened a whole new avenue of abuse, whereas they even sometimes will sue someone. like your situation, beyond the statute of lims with the hope the consumer doesn’t show up in court, court not knowing the situation gives judgement to shady attrny for agency.
>The debt collection agency business, originally corrected by the above law, has now reverted to practices like this, and are in need of new legislation to stop the abuse, also, the debt settlement companies are getting away w/enormous predator violations. Federal officials are focused on homeland security, I had a similar fraud situation, mailed all info to local FBI, actually spoke to an agent, who told me that much of the “schemes” in this situation are now on the backburner, homeland security their main focus.
>Immediatly contact the FTC & the Attorney General of your state and file a written complaint.
A New Breed of Debt Collectors
The last decade or so has given rise to a new version of an old phenomenon: the bottom… Fair Debt Collection Practices Act – Law – Collection agency – Business – Financial Services
20. Collection Statute of Limitations
Question: what can a person do if they were a victim of identity theft?
a few years back? they wrote several letters to the IRS, called the old and new IRS hotline for Identity Theft Victims, and filed a police report.
I had someone illegally file an income tax return in my name a few years ago. That resulted in me having to owe several thousands dollars to the IRs. After going back and forth with the IRs, they told me I had straighten my name and that I didnt really owe the money and I would be able to file my future returns with no problem. Now I am back to square one. The IRS is still saying I owe all the money.
What can I do?
Answer: As I keep on saying… there are ID theft professionals hammering us on the TV all the time. Surely you have seen them on the papers, on the website ads?
The CEO of one such firm placed his NSS on the website? Interviewed by CNN??
$20 a month TOPS for the service?
And what about he ftc spending millions in ads, booklets, websites, all free for the ones that don’t have the $20?
Where to find free money
Some $32.9 billion in unclaimed assets is sitting in state treasuries and other agencies just waiting to be claimed. Here’s how to find out if any of it belongs to you.
Don’t Get Caught in a Phishing Fraud!
Tax day rapidly approaching
BULLHEAD CITY — “It’s that time of year,” said Linda Jordan, Bullhead City H&R Block franchise owner. With Tax Day fast approaching, local tax preparers have seen the traditional influx of filers walking through their doors with few notable differences.
America -7- Freedom to Fascism