New Jersey Family Law

NORTH CALDWELL NEW JERSEY ESSEX COUNTY DIVORCE LAWYER MEDIATION

Beginning in 2008, the Kiddie Tax will apply to any child under age 19, or a child who is a full-time student under age 24, if the child does not have earned income exceeding half of her/his support. Thus, the Kiddie Tax could come back to bite many families who thought it had been banished. For 2007, it applies to a child who has not turned age 18 by December 31, 2007. For 2008, it applies to a child who has not turned age 19 by December 31, 2008, or a full-time student who has not turned age 24 by December 31, 2008, if the child does not have earned income totaling more than half of his support.       Small Business and Work Opportunity Tax Act, November 13, 2007

LITTLE FALLS NEW JERSEY PASSAIC COUNTY DIVORCE MEDIATION LAWYER TAX LIABILITIES

The wife was not eligible for the benefits of  "Innocent Spouse" treatment under Internal Revenue Code Section 6015.  Thus, the tax penalties, interest and  liabilities in question were not solely attributable to the husband. The wife was deemed to have had actual knowledge of the understatements of income. This was because she was college-educated, she had access to the parties' joint bank accounts, she balanced the parties' checkbook, she admitted to her status as a member of the parties' Limited Liability Partnership, and she failed to satisfy her duty to make diligent inquiry.     Golden et ux., v Commissioner, TC Memo 2007-299,  October 8, 2007

EDGEWATER NEW JERSEY BERGEN COUNTY DIVORCE MEDIATION TAXATION

The IRS recently amended its "Innocent Spouse" Form 8857. It's quite detailed and can serve as a  preliminary questionnaire for any New Jersey divorce cases involving suspected tax fraud. Unreported or underreported income? Unfiled tax returns? Use this readily available form as an initial client questionnaire.    Internal Revenue Service, September 28, 2007;   http://www.irs.gov/pub/irs-pdf/f8857.pdf

NORTH CALDWELL NEW JERSEY ESSEX COUNTY DIVORCE MEDIATION TAX FRAUD

Richard Josephberg prospered at Goldman Sachs, as a Manhattan tax shelter promoter and by running his own investment houses. He raised many millions for clients, built what he called his dream home and sent his children to top colleges. But there was another reason he had lots of cash. For 29 years, he did not pay his taxes. After a 4-week trial where one of Mr. Josephberg’s grown children testified for the prosecution, a jury convicted him on all 17 charges, including the first criminal conviction ever for willfully refusing to pay the so-called "nanny tax", the requirement that people with servants withhold federal taxes. Yesterday, in a Federal District Court in White Plains, Mr. Josephberg was sentenced to 50 months behind bars and another three years on supervised release.    U.S. v. Josephberg, New York Times, September 11, 2007

TOTOWA NEW JERSEY PASSAIC COUNTY DIVORCE LAWYER TAX FRAUD

The United States Government appeals from a judgment of sentence imposed on defendant, who pleaded guilty to a fraudulent scheme to evade personal income taxes, resulting in a tax deficiency of more than $225,000. The District Court imposed a below-guidelines sentence of 250 hours of community service, three years of probation (including one year of house arrest), a $250,000 fine, and in-house alcohol abuse treatment. But this sentence is unreasonable and is rejected. In light of the circumstances and the sentencing factors in 18 U.S.C. § 3553(a) , it was an abuse of discretion for the District Court to impose it . The judgment is vacated and remanded for resentencing.    U.S.A. v. Tomko, ___ F.3d. ___ (3d. Cir. 2007); August 13, 2007

HOBOKEN NEW JERSEY HUDSON COUNTY DIVORCE LAWYER TAX LIABILITIES

When a married couple files jointly, both spouses typically are responsible for taxes, interest or penalties. In some cases, though, one spouse may be relieved from the debt. See the IRS's new Form 8857, which the agency says will "help reduce follow-up questions." The new form "will ask more questions initially, but collecting critical information early in the process will mean faster processing." The IRS estimates the new design will eliminate an estimated 30,000 follow-up letters each year.    Internal Revenue Service, www.irs.com; July 5, 2007

FLORHAM PARK NEW JERSEY DIVORCE LAWYER

Uncle Sam is closing a common tax loophole that allowed wealthy parents to give stock to their children so they could use the kids’ lower tax rates on the investment income portion of their income. Starting next year, full-time students under 24 whose investment income is above $1,700 will pay at their parents’ rate. Until a year ago, that age was 14, leading many affluent couples to use their children as convenient tax shelters. The new law "is going to effect a lot of people," as told to The Wall Street Journal by New York CPA Ed Slott.      New Jersey Lawyer, May 23, 2007

MORRIS COUNTY DIVORCE

The parties' New Jersey divorce agreement required the ex-husband to pay $5,000 per month in unallocated alimony and child support, and it set forth the tax consequences of that support. Contrary to the ex-wife’s arguments, the terms of that agreement do not violate the Internal Revenue Code. The court also properly rejected her claim for reimbursement of income taxes she paid because her accountants had "blatantly ignored" the language that prohibited the calculation of the reimbursement that they believed she was entitled to receive. Weiss v. Weiss, New Jersey App. Div., March 6, 2007

NEW JERSEY DIVORCE TAXES

Their New Jersey judgment of divorce required them to file amended joint income tax returns, after they had already filed individually. On their individual returns, the ex-wife's liability had been $34,772 and the ex-husband's had been $9,095, which he had paid in full. The liability on the joint return was $40,812. The trial court concluded that the ex-husband was entitled to half of the savings achieved by the joint filing and was not required to make an additional payment. The record clearly indicated that any other result was unfair to the ex-husband, who earned "significantly less" than the ex-wife and thus had a lesser tax liability.  Caruso v. Francioni-Caruso, New Jersey App. Div., August 18, 2006

NEW JERSEY DIVORCE : CATHOLIC SCHOOL & TAX EXEMPTION

The New Jersey divorce judge was correct in denying the mother’s request to compel the father to pay part of Catholic school tuition for their 7-year-old son and in awarding the father the son as a tax exemption in odd-numbered years. As to Catholic school tuition, the judge found no basis under the New Jersey Child Support guidelines for the child to attend private or parochial school, other than the mother's own wishes. While she had the right to make that choice, she must bear the cost. As to the income tax exemption, the judge's decision was equitable and within the court's discretion, by offsetting money which had been paid to the mother for daycare but which she never obtained, and which the father would never otherwise recoup.   Makara v. Marino, New Jersey App. Div., March 23, 2006