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This Week in the iNews:

▲ EARLY CONTRIBUTIONS LAW REALLY MULTIPLY IN ROTH IRA

▲ KIDDIE TAX EXPANDS ITS REACH

▲ FOCUS ON FRAUD / TECH TIP WEEKLY

▲ Early Contributions Law Really Multiply in a ROTH IRA - From the Desk of John Mack, CPA. MBA

Let’s say your son/daughter makes ROTH IRA contributions of $5,000 each for 10 years starting at age 16. Assuming an 8% rate of return and that he/she let the account build up until he/she is 68, he/she will have over $2 million, which can be distributed tax free. Think how much more this could be if he/she made contributions each year until he/she retired.

▲ “Kiddie Tax” Expands Its Reach - From the Desk of John Mack, CPA, MBA

Beginning in 2008 the “Kiddie Tax” applies to children age 18 and younger, as well as to full-time students under age 24 (unless the students provide over half of their own support from their earned income). In 2007, the Kiddie Tax applied only to those under 18.

These age changes dramatically affect a popular tax-saving strategy; shifting income to children. Under this strategy, parents give their children income-producing assets so the family can benefit from the child’s lower marginal tax rate. But for those subject to the Kiddie Tax, unearned income beyond $1,850 (for 2009) is taxed at their parents’ marginal rate. Now a lot more children will be subject to the Kiddie Tax. So consider how this may alter your current income tax and estate planning strategies.

Shifting income to an adult child who isn’t subject to the Kiddie Tax but is in a lower tax bracket can still save your family tax dollars, especially if the child qualifies for the 0% long-term capital gains tax rate that goes into effect this year.

▲ FOCUS ON FRAUD / TECH TIP WEEKLY - Marty Grausam, CPA, CFE, CISA

Brand Abuse Online, Part 2

( go to www.pmcpa.com for Part 1 )

Playing defense

Trademark holders have responded to the problem by buying up "defensive" domain names so that cybersquatters can't use them, hiring monitoring services, pursuing violators through the UDRP process, and, increasingly, taking cybersquatters to court.

Dealing with the problem is not cheap. IHG has registered 4,200 domain names to protect its seven brands, which include such well-known names as Holiday Inn and Crowne Plaza.

Verizon has registered more than 10,000 domain names, mostly to protect its three most visible brands: Verizon, VZ and FiOS. This is extremely costly.

As costly as maintaining thousands of defensive registrations might be, paying $6 per year to maintain a domain name is far cheaper than the $1,500 fee to file a UDRP case with WIPO, (World Intellectual Property Organization) especially when a business has hundreds, or thousands, of complaints to address.

UDRP at a glance

· Cost to file a Uniform Domain Name Dispute Resolution Policy complaint: $1,500

· Complainant success rate in UDRP process: 85%

· Average time to decision: 60-70 days

· Cybersquatting complaints filed with WIPO in 2008: 2,329

· Increase over previous year: 8%

Most UDRP filings by industry

1. Biotech and pharmaceuticals

2. Banking and finance

3. Internet and IT

4. Retail

5. Food, beverage and restaurants

Sources: WIPO, ICANN (Internet Corporation of Assigned Names and Numbers)

Companies cannot possibly buy every conceivable combination. Companies have to prioritize which cybersquatters to go after based on factors such as the offending site's name, content and amount of traffic diverted from their properties.

Monitoring services offered by companies like MarkMonitor or Arlington, Va.-based Cyveillance Inc. can alert the business to the existence of cybersquatters. But the services cost thousands of dollars per year, and the business still needs to review each case.

"Small to medium-size businesses are most vulnerable since they can't afford such services, and lawyers to take the offensive. Consumers and small businesses get harmed the most."