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Estate Tax Planning with the Exuberant Accountant

The Exuberant Accountant isn’t the spamming type so when he sent out an email to, presumably, all of his blog’s email subscribers as a warning about new estate tax rules in 2010, it was clear this wasn’t a casual tax issue. Scott Heintzelman was kind enough to give me a few minutes to break down what this means for estates and why we should care.

Disclaimer: I took an estate tax class no less than two months ago and have since forgotten everything I learned so I needed a refresher anyway. As always, if you need advice on actually planning your estate, don’t listen to me and get yourself a CPA and/or tax lawyer. “We are accountants, ultimately we don’t draft agreements,” says Scott and he’s absolutely right. Get a trained mine-sniffer on that particular cluck mission.


Scott pointed to a recent post from his firm’s McKonomics blog called “No Estate Tax is a Good Thing, Right?” and it goes without saying he doesn’t believe this “no estate tax thing is good” by any means.

He gave the example of getting hit by a bus (awww, don’t run over the Exuberant Accountant!): If he walks out of his office tomorrow and dies, certain language in his will might leave a trust with $0 for poor Mrs Exuberant Accountant. What about the little Exuberant Accountant Jrs?! The humanity! Don’t worry, we’d start a charity drive.

Anyway, from McKonly & Asbury:

[M]any estate planners wrote wills with such language that the bypass trust would be funded with an amount equal to “the current lifetime exemption amount.” Since we currently have no estate tax, and no lifetime exemption amount, if a spouse dies in 2010, we could potentially have an unfunded bypass trust. This is especially alarming since we can all assume the estate tax will come back and we may have a taxable estate once the second [spouse passes] away.

Thanks for the heads up Scott, here’s to hoping you don’t get smashed by a bus this year. Look on the bright side, the estate tax goes up to 50% next year!

Earlier: Five Questions with The Exuberant Accountant

Strip Club Owner, Sans High School Diploma, Blames His Accountant for Tax Troubles

When you own a strip club there are certain things that you understand. Things like, knowing that there is large portion of the male species that will pay women to take off their clothes regardless of the fact that sex is not happening. And while this is going on, they’ll imbibe lots of booze. And eventually, they may get hungry and with the last sliver of will power they have left, pull themselves away to pay $5.99 for a prime rib buffet. AND since there’s no windows in the place these men will stay in your strip club and spend money until you throw them out or they’ve spent every last dime. Oh, and poles are imperative.

On the other hand, there are things that strip club owners are less savvy about. One of these things may be tax compliance. Accordingly, many proprietors find a local accountant, they swap services, everyone wins.


However, every once in awhile this traditional arrangement may run awry. Kevin Moury, owner of Kittens (NSFW), is suing his accountant, Michael Walsh, for negligence in preparing his returns that resulted in “criminal charges, penalties, costs, fines, loss of income, medical expenses, loss of life’s enjoyments, emotional distress and mental anguish.”

Okay, before we continue, we have to ask – “loss of life’s enjoyments” and “medical expenses” because of a CPA? Where do we draw the line people? Next thing you know, accountants will be blamed for the collapse of the entire financial system…

Anyhoo, Moury pleaded guilty in October to “federal charges of falsifying tax returns and failing to report substantial cash income.” He spent one night in jail, got nine months of house arrest and had to pay back taxes of $88k, etc. etc.

This all came up because Moury apparently thought it was a-okay to deposit money from various revenue streams like fining dancers for tardiness or bolting early, massages for customers, and Jell-O shots (you know, the usual stuff) and then not report it as income. Obviously the IRS was not cool with this, prosecutors threatened to go after his wife and daughters (all employees at Kittens, btw) and that got him to plead guilty.

As a result of his guilty plea, Moury lost a sweet $90k/year gig as a “superintendent of environmental management” (which sounds a lot like “boss of the garbage collectors” but whatevs) and this resulted in lost future earnings of $1.3 million, allegeth the lawsuit.

Regardless, this shit ain’t fair and the accountant needs to be held responsible (his attorney the allegations or “groundless”) and Moury’s attorney isn’t shying away from the stupidity defense:

The lawsuit claims Moury’s lack of formal education — he didn’t finish high school and has a high school equivalency certificate — led him to rely on Walsh to accurately report his income and prepare his tax returns.

“Mr. Moury gave his accountant anything and everything for his business, his real estate and the salary from his job with Methuen,” Cote said. “He signed the returns, but did he looked at them? No. Is he responsible? Yes.

Strip club owner blames accountant for his tax woes [Eagle-Tribune]

Tim Geithner: Cutting IRS Budget Hurts Taxpayers

FYI to any members of Congress who still think it’s a good idea:

Treasury Secretary Timothy Geithner on Wednesday said potential cuts to the Internal Revenue Service budget would damage the agency’s ability to collect revenues. “Any substantial cuts to the IRS budget will hurt revenue collection and service to taxpayers, resulting in unanswered phone calls and letters,” Geithner said in the text of remarks prepared for a House Appropriations subcommittee hearing.

Never mind the fact that taxpayers are getting a lot of bang for their buck:

“The customer service and enforcement programs at the IRS provide one of the best values in the federal government,” Geithner said.

What else do you need to know?

Geithner: Cuts To IRS Budget Would Hurt Revenue Collection [Dow Jones]