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405-843-6100 | 918-615-2700 | ParmanLaw.com February 2024
IRS AMPS UP TAX ENFORCEMENT And Thoughts on Elon Musk’s Biographies
Clients and Friends,
Happy New Year! We hope the holiday season was special for you and your family, but we know it was not for some families. We received notice of the death of too many clients during this winter. For those who lost loved ones, we offer our prayers and condolences. In this column, I’m here to share a few thoughts on your economic well-being and Elon Musk. Most people are not prudent investors. In the past 12 months, the TV and media headlines reminded us of war, terror, and economic malaise. Fear overrides discipline, and we seek “safety” in CDs and U.S. Treasury securities paying 5%. Then, we pay taxes and net around 4%. If inflation increases by 4%, we will lose purchasing power on the amount of the CD multiplied by the net return. Do this over a few years, and later retirement years look less appealing. In the meantime, while we were letting fear control our investment decisions, the benchmark S&P 500 index ended 2023 with a 24.2% gain. The Dow Jones Industrial Average rose more than 13%, and the Nasdaq soared 43%. How much can you withdraw from your IRA each year and hope to never run out of money? In other words, what is the appropriate withdrawal rate? According to Morningstar in a new report, the safe starting withdrawal rate is currently the highest it has been in years. The rate is now back to traditional thinking — 4% — up from 3.3% in 2021. Higher fixed-income yields and lower inflation contribute to the increase. The report states that there are variables contributing to a smart decision. First is the market environment during the drawdown period. Second is the length of the drawdown period. Third is the portfolio’s asset allocation. There are other factors to consider, such as portfolio performance and spending. As a starting point, 4% seems back in vogue. In the COVID-19 spending blowout, the administration gave the IRS an $80 billion (yes, you read that correctly) funding windfall. The result is at least 20,000 new staff, nearly 4,000 new agents, and technological upgrades to ensure all income is reported and deductible expenses are legit. A new division will be examining LLCs and other pass-through entities. Dot your i’s and cross the t’s when doing your tax work and buckle up. What is Larry reading? I just finished two biographies about Elon Musk, the most recent by Walter Isaacson. Musk is a very unusual guy. So is his mother, Maye Musk, a heralded international model
who recently graced the Sports Illustrated swimsuit issue at 75! Here are my takeaways. Musk is quirky, for sure. He’s also fearless when investing his money, whether it’s Tesla, SpaceX, Starlink, The Boring Company, or X (formerly Twitter). He has turned the automobile and space exploration industry upside down. Isaacson describes Musk’s ruthless focus, appalling personal habits, casual cruelty, occasional recklessness, and grudge holding. But he is a visionary, thinker, and engineer extraordinaire. His passions and commitments extend far beyond normal business goals. Here is one example. I am from a small town in northwest Missouri. My time as Secretary of Commerce in Oklahoma convinced me that providing high-speed internet service to rural America is important. Cable companies are fawning all over the government to secure handouts and favored contracts to install fiber optic lines all over America. Musk’s SpaceX has launched thousands of low-altitude satellites that can provide rural America instant access to high-speed connectivity with the flip of a switch. You may have read how Musk helped Ukraine when the Russians destroyed its internet service. At great expense to SpaceX, Elon flipped the switch, and Ukraine was connected. Sadly, I just noticed the FCC, another bureaucratic and politicized rule-making agency, denied SpaceX’s application to provide this service to rural America.
The big cable companies have the FCC in their pocket. Anyway, idiosyncrasies aside, I find Musk to be a compelling figure and recommend reading the Isaacson biography.
Until next time,
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Celebrate Love With Your Pet VALENTINE’S DAY IDEAS FOR FURRY FRIENDS
Heartfelt Homemade Delights Homemade and health-focused treats are the way to go for pets on this day of love. Bake heart-shaped biscuits for your dogs with nutrient-rich ingredients like pumpkin, peanut butter, or oats. Making little tuna or salmon treats into tiny heart- shaped cakes will be irresistible for cats. These treats are not just delicious but also healthy, ensuring your pets enjoy Valentine’s Day safely. Personalized Gifts and Quality Time Adding a personalized touch to your pet’s Valentine’s Day can make it even more special. Consider a new collar with a personalized name tag or a new fluffy bed or blanket for dogs! Are their toys ratty and chewed up? A new ball or squeaky toy will make their day! If you live in a colder region, a warm sweater for smaller furry friends is a way to show your love. For cats, a new scratching
post (or an upgrade) rubbed with catnip will be a hit. Cats also love laser lights, so this gift will not disappoint, providing hours of entertainment. And after all the activity? Try a new pet brush and a gentle grooming session to help your furry friends relax and feel loved. But above all, the most cherished gift you can offer is your time. Dedicate this day to enjoy a long walk, an extended play session, or simply some quiet cuddle time. These moments of undivided attention and affection are invaluable, reinforcing the loving bond you share with your pet. This Valentine’s Day, let’s celebrate all family members, including the furry ones, in our expressions of love. Our pets, always there for us with unconditional affection, certainly deserve a place in this day of love and joy. Happy Valentine’s Day to all pet lovers and their beloved companions!
As Valentine’s Day approaches, we feel love in the air, not just for humans but also for our cherished pets. It’s the perfect opportunity to show our four- legged family members how much they mean to us. Imagine the excitement and anticipation in their eyes (and the wagging tails) as they receive a special treat made with pure love. Here are a few fun ideas to get you thinking.
In the competitive world of high school athletics, where every second counts and victories are often measured in milliseconds, an incident at the Neenah Cross Country Invitational in Wisconsin reminds us of a fundamental but often forgotten aspect of sports: good sportsmanship. On this race day, amid the blur of sprinting figures and cheering crowds, a moment of true sportsmanship unfolded. Two runners from Stevens Point Area Senior High, Cooper Erickson and Ethan Olds, encountered a fellow competitor, Seppi Camilli, in distress. Camilli had collapsed, his strength waning just shy of the finish line. Erickson and Olds chose empathy over rivalry in a split-second decision that would resonate far beyond the race track. They paused their own race to help Camilli cross the finish line. This act, simple in its execution but profound in its implication, speaks volumes about the values ingrained in these young athletes. It’s a vivid reminder that the essence of sports isn’t solely found in the glory of winning but also in the moments of shared humanity. In extending their hands to a competitor in need, Erickson and Olds demonstrated that real victory lies in lifting each other up, even amidst fierce competition. Beyond the Finish Line Compassion at the Neenah Invitational
This incident is a beacon for young athletes and a reminder for coaches, parents, and spectators alike. It underscores the importance of nurturing not only physical strength and skill in our young athletes but also the values of kindness, teamwork, and respect for others. As Erickson and Olds demonstrated, sometimes the most enduring triumphs on the sports field are those of the heart. The coaches and spectators at the Neenah Invitational witnessed more than a race that day; they witnessed a powerful lesson in character and humanity. In a world where headlines often speak of division and conflict, stories like this inspire us to look beyond the finish line and see the broader horizon of human kindness and fellowship. The spirit of sportsmanship, as shown by these young athletes, is a testament to the true essence of competitive sports — a celebration of shared humanity alongside physical prowess.
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MARGIE’S KITCHEN: DAMN GOOD STEW
by Darlene Parman
SEALAND
If someone were to ask you what the smallest country in the world was, what would you guess? Those familiar with geography would quickly answer with Vatican City, and they’d technically be correct. However, there’s another country unrecognized internationally that is 99% smaller than Vatican City: Sealand. It’s only a few miles offshore from England, so why isn’t it more well-known? The Smallest Country You’ve Never Heard Of During World War II, the British constructed Roughs Tower 7 nautical miles off the coast of Suffolk to defend shipping lanes from German attacks. Throughout the war, between 150 and 300 members of the Royal Navy occupied the tower, but by 1956, the last full-time serviceman left the facility, leaving an opportunity for Jack and Jane Moore to squat at the tower and play their pirate radio station “Wonderful Radio London.” Jack and Jane remained at Roughs Tower from 1965 to 1967; in September 1967, Major Paddy Roy Bates ousted the Moores from the fort, claiming it for himself. At this point, he declared the independence of Roughs Tower, naming it the Principality of Sealand. Later that year, the British sent workers to repair a buoy near Sealand, which caused Paddy’s son Michael to fire a warning shot in their direction. This resulted in England summoning Michael to court on firearm charges, which were eventually dropped as Sealand was considered outside of England’s territorial limits. The Bates considered this their first instance of de facto recognition. In 1978, Alexander Achenbach attacked Sealand alongside German and Dutch mercenaries. Their attack proved unsuccessful, resulting in their capture and imprisonment. Germany sent a diplomat to negotiate for Achenbach’s release, which Paddy took as another instance of de facto recognition. Over the years, Sealand officials have created a national flag, a national anthem, an entire currency, and passports. Sealand was even the location of a skateboarding event sponsored by Red Bull in 2008. Paddy Roy Bates passed away in 2012, but his son still runs the operations at Sealand. They continue to hold hope that one day, the world will recognize Sealand’s sovereignty.
There’s no other way to describe this month’s recipe other than ... “Damn Good Stew.” I remember how delicious this stew was on a cold winter night with a big piece of Margie’s (my late great momma to whom “Margie’s Kitchen” is dedicated, who believed the way to a person’s heart and soul is through your cookin’!) cornbread. Of course, I liked to crumble my cornbread into the bowl. The great thing about this stew is that it cooks all day while you work or play. My mom did not have a “Crock Pot” when I was a little girl, but I’m sure this would be perfect for one leaving the heat on low. But I prefer to do it the old fashioned way ... Margie’s way!
Ingredients
• 1 can button
• 2 lbs lean chuck, cubed for stew
mushrooms, drained
• 1/2 to 1 cup Burgundy wine (to taste)
• 2 cans of diced
tomatoes, undrained
• 3 tbsp Minute Tapioca
• 1 large can of tomato sauce
• 1 tbsp sugar
• 1 onion, chopped
• 1/2 tbsp salt
• 1 cup chopped celery
• 1 tsp fresh ground pepper
• 6 carrots, chopped
• 3 potatoes, chopped
Directions In an large oven-safe pot, mix all these ingredients except the mushrooms. Bake in a 250 F oven for 5 1/2 to 6 hours. Add the mushrooms 20 minutes before finished cooking.
If you have a recipe you’d like us to share in Margie’s Kitchen, please mail it to us or email it to Info@parmanlaw.com. We’ll feature it in our newsletter or on our website!
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INSIDE THIS ISSUE
1
Look Out, the IRS Is Stepping Up Their Collections
Valentine’s Day Pet Pampering
2
When Compassion Trumps Competition
Damn Good Stew
3
Sealand’s Ongoing Quest for Global Recognition
Lessons From Hoffman’s Estate
4
Beyond the Stage PHILIP SEYMOUR HOFFMAN’S ESTATE OVERSIGHT
The situation raised significant questions about how Hoffman’s daughters figured into the estate since they were born after the will’s creation. Thankfully, New York law, like many other states, offers protection for children in this situation, provided there’s no explicit intent to exclude them. Hoffman’s choice not to marry O’Donnell further complicated matters, leading to a substantial estate tax burden. Unmarried, Hoffman’s estate faced a staggering tax rate of up to 40% federally and 16% in New York State, culminating in a potential $14 million tax bill from his $35 million estate. Marital status plays a crucial role in estate tax liabilities, something entrepreneurs with significant assets should note.
The unexpected demise of actor Philip Seymour Hoffman at just 46 shocked the world and brought to light the intricacies of estate planning. His passing left behind a substantial estate worth over $35 million, primarily bequeathed to his long-term partner, Marianne O’Donnell. A glaring issue with Hoffman’s will was its outdated status, failing to encompass his entire family. Drafted in 2004, it only acknowledged his son, Cooper, with daughters Tallulah and Willa, born after that, absent from the document. This oversight necessitated a complex navigation through New York’s probate system, showcasing the need for everyone to update their will regularly.
Photo: Georges Biard
Hoffman’s case exemplifies why proactive and continuous estate planning matters. Regular updates to one’s estate plan can significantly ease the burden on your loved ones during times of grief. It’s a stark reminder to meticulously manage and regularly revise your estate plans, especially for entrepreneurs overseeing considerable assets. It ensures your final wishes are honored, and your loved ones are provided for.
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