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iNEWS.....What You Need to Know, Right Now!

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This Week in the iNews:

▲ LUNCH & LEARN SERIES PROGRAM #4 – PART 1 - YEAR END TAX PLANNING

▲ LIFE INSURANCE POLICIES AND LIFE SETTLEMENT

▲ FOCUS ON FRAUD: 2008 REPORT TO THE NATION ON OCCUPATIONAL FRAUD AND ABUSE © ACFE - PART 13 AND CONCLUSION

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▲ Lunch & Learn Series Program # 4 – Part 1 - Year End Tax Planning

Please join us for the fourth program of our Lunch & Learn Series at noon on Tuesday, November 18, 2008 in the Prangley Marks, LLP lunch/conference room.  It is the first in a two-part series on year end tax planning for individuals, corporations and for the new Michigan Business Tax.

Please contact mripley@pmcpa.com or call (616) 774-9004 to reserve your spot.

Complimentary lunch, program and parking provided.

Seating is limited.

▲ Life Insurance Policies and Life Settlement

Life settlement, in which life insurance policies are sold in a secondary market, has become a major financial market and viable opportunity for policy owners to convert unneeded policies for more than their cash surrender value (CSV), often with favorable tax treatment. 

Life settlement, in which life insurance policies are sold in a secondary market, has become a major financial market and viable opportunity for policy owners, with the help of their CPA, to convert unneeded policies for more than their cash surrender value (CSV), often with favorable tax treatment.

As an indicator of interest in such transactions , an increasing number of states are introducing model legislation to ensure they are transparent and ethical and, particularly, to protect seniors against abuses of stranger-originated life insurance (STOLI).

Although tax law provides little definitive guidance on the treatment of a life insurance policy being sold to a third party, the Tax Court has supported capital gain treatment for the excess of sale price over the higher of CSV or basis.

A safe life settlement should be made through an institutionally owned and funded purchasing entity and a contract that features a rescission period, HIPAA-compliant forms and notification of next of kin.

If you have life insurance policies that have outlived their original purpose, please discuss with us your options.   

▲ FOCUS ON FRAUD:  2008 REPORT TO THE NATION ON OCCUPATIONAL FRAUD AND ABUSE © ACFE – Part 12

This study is based on data compiled from 959 cases of occupational fraud that were investigated between January 2006 and February 2008 and published by the Association of Certified Fraud Examiners.  All information was provided by the Certified Fraud Examiners (CFEs) who investigated those cases.

Executive Summary – Part 12 – The Perpetrators MO

The survey collected information about the individuals responsible for occupational fraud in order to better understand the characteristics of those who commit fraud.

Position

The majority of occupational frauds are committed by employees and managers (and discovered much sooner); owners and executives are involved far less often. 

Annual Income

Over 40% of all frauds in the study were perpetrated by employees who earned less than $50,000 pr year at the time of the fraud.  Further, the percentage of perpetrators in each income bracket decreased as his or her reported annual salary increased.

Gender

As in past studies, the majority of fraud cases reported were perpetrated by males.  Men are also associated with a median loss more than twice as great as that caused by women.

Education Level

As the perpetrator’s education level rose, so did the median loss caused by the fraud scheme.  This trend is consistent with prior studies.

Next time:

Executive Summary – Part 13 – The Perpetrators Red Flags and Conclusions.