TAX SEASON ALERT: Beware Of Fraudulent Refund Claims Using Your Social Security Number

 by Bruce Sires

We were made aware of this fraud when the IRS sent a letter inquiring about a 2011 Form 1040A allegedly filed by our client, who happened to have died in January of 2011.  The taxpayer's 2011 tax return had not been prepared or filed, and it was clear that someone had obtained the taxpayer's Social Security Number ("SSN") and filed a falsified return in the taxpayer's name, claiming a fraudulent refund.  The return requested a direct deposit into an account which was not in the taxpayer's name.  The IRS was alerted to the possible fraud, because they had received notice from the Social Security Administration of the taxpayer's death.  However, in many cases there are no obvious indicators of fraud, and we've heard that the Service has made direct deposit refunds into accounts shown on fraudulent returns, which do not belong to the taxpayer!

What should be done if the IRS notifies you that someone has claimed a fraudulent refund under your SSN?  Immediately call the IRS to confirm the fraud and ask them to flag your return.  The Service will flag your account regarding potential identity theft.  Also, notify your accountant, bank, financial advisor, and credit card companies that you may be the victim of identity theft.  All of your accounts should be closely monitored for any suspicious activity, and consider closing all existing accounts (and opening new ones) to prevent unauthorized purchases, cash transfers or withdrawals. 

If you haven't received such a letter, it is still a good idea to carefully review your bank and brokerage statements as well as credit card bills to be sure there is no unfamiliar activity, and where there is a suspect transaction follow up to be sure the issue isn't anything other than authorized use by your spouse, partner or children, or a memory lapse.  Finally, in this era of identity theft and fraudulent refund claims, you may want to regularly check your account with the IRS to be sure that only returns you have actually filed are reflected on their records.

You can order tax return transcripts online (www.irs.gov and go to the "Order a Return or Account Transcript" link), with a call to the IRS at 1-800-908-9946, or by filing the appropriate form with the IRS:  Form 4506,  Request for Copy of Tax Return; Form 4506-T, Request for Transcript of Tax Return; or, Form 4506T-EZ, Short Form Request for Individual Tax Return Transcript.   The time spent carefully and regularly monitoring your finances could save you from a major disaster.

Contact Bruce Sires

Negotiating Listing Agreements

By Laurie Murphy

Now that the worst of the recession seems to be abating and you are one of the sellers who has been waiting in the wings for the past few years but ready now to take the plunge, you've selected a broker to represent you but your work does not end there.

Brokers and agents throughout the state use standard California Association of Realtors forms for every major aspect of the purchase and sales transaction.  You, as the broker's client however, are not stuck with these forms which are created by lawyers whose sole purpose is to protect the brokers and agents. 

The first significant form you as the seller will be presented with is the Residential Listing Agreement.  This is the agreement that gives the broker the right to list your home for sale.  Most agents or brokers will present this to you as just another form which you must sign "as is" to get your house sold.  Don't fall for it.  Many of them will tell you that 6% commission is standard.  It is not.  Certainly for the higher priced homes, most brokers will take a listing for 4-5%.  Also, if the transaction is an "in house" one, where the same agent represents both the seller and the buyer, most brokers will agree to even a lower commission since the entire transaction will be handled by the same people. 

This standard listing agreement contains many other traps for the unwary seller.  Unless modified, the broker is entitled to a commission if the property is not sold but leased instead and they will take their full commission out of your first rent check.  If they bring you a buyer who does not perform and you end up having to sue the buyer, the standard listing agreement requires you to pay their commission out of the proceeds of any settlement reached with the buyer or judgment obtained.  And, if you happen to retain a second broker after the first one is not successful in securing a buyer and the initial broker gives you a list of people he showed the home to, that person looks at it again and decides to purchase it, and you don't exclude that sale from the second listing agreement you signed, you could find yourself owing both brokers a commission. 

Many deals go through without a hitch but if yours does not, you do not want to be on the bad end of an agreement designed solely to protect your broker and agent.  Demand appropriate revisions to these standard agreements up front.  Once the deal goes south it will be too late.

 Contact M. Laurie Murphy

Michael Morris to Discuss Financial Strategies for Music Copyright Stakeholders at California Copyright Conference

Michael Morris is a panelist at the California Copyright Conference's panel discussion, "Show Me the Money II: Financial Strategies for Copyright Stakeholders," on March 20, 2012 at the Sportsman’s Lodge Hotel at 12825 Ventura Blvd. in Sherman Oaks, California.

“Music publishing is a profitable long-term business if managed well,” Mr. Morris states. “In these challenging economic times, it is important for writers, publishers, artists or attorneys in the music industry to know how to hedge against a downturn in copyright values, raise cash, minimize taxes and protect the heirs.”

United States copyright law can be extremely complicated.  It is important that anyone with an interest in a musical composition, including artists, heirs, music publishers, and administrators, have not only a basic understanding of the key aspects of the law in order to effectively protect and exploit their musical property, but also the complex financial aspects of how to exploit multiple opportunities afforded by the music publishing business.

If you have any questions please contact Micheal Morris

To register for the conference go to http://www.theccc.org

Valensi Rose Attorneys Receive 2012 Super Lawyers Designation

We are pleased to announce that four of our attorneys were named by Law and Politics Magazine and the Publishers of Los Angeles Magazine as Super Lawyers in Southern California for 2012. Only 5% of lawyers statewide receive this designation.
  
The following attorneys were designated Super Lawyers in their individual practice areas:

Philip S. Magaram for Estate Planning and Probate
Designated nine years in a row

 

Michael R. Morris for Tax
Designated seven years successively

Bruce D. Sires for Estate Planning and Probate
Designated six years 



Peggy Lennon for Estate Planning and Probate
Designated seven years




Super Lawyers employs a rigorous selection process – one that has been recognized by bar associations and courts across the country for its credibility and sophistication.  It combines peer nominations and evaluations with third-party research.  Each candidate is evaluated on 12 indicators of peer recognition and professional achievement.  Selections are made on an annual, state-by-state basis. 
   
Super Lawyers are chosen based on a variety of criteria, including transactions, experience, honors and awards, special licenses and certifications, bar and other professional activities and scholarly lectures and writings, just to name a few.

Bruce Sires Interviewed on KTLA-TV News on Child Labor Laws in Entertainment Industry

Bruce Sires was interviewed by Manny Medrano for his "Inside the Law" segment on KTLA-TV Channel 5 News about the rights of child actors here in the entertainment capital of the world.  Bruce states that child actors have a lot of rights.

http://www.youtube.com/user/ValensiRosePLCLaw

If you have any questions regarding child labor laws in the entertainment industry and sports, please contact Bruce Sires.

How Does a Studio Protect Itself When the Hot Young Star it has Hired Starts Filming and the Deal Goes Awry?

By Bruce Sires

Your studio has hired one of the most sought after young minor actors to star in  the next blockbuster movie for the summer of 2013.  Not only that, but the studio has paid top dollar for this bankable up-and-coming young star.  The actor loves the script and particularly his part in it.  Because minors can unilaterally avoid (disaffirm) a contract, you've had the contract approved by the court.  Court approval of employment contracts for minors employed in entertainment will protect the studio.  And now, filming is about to start.  Of course, over the past six months the writers have been tinkering with the script, and when the minor actor, and perhaps his parents, see the re-write, they are beside themselves with the precarious scenes they have written for him.  All of the talk about how much these scenes will advance his career fall on deaf ears and both sides enter into lengthy settlement negotiations which result in a deal.  But, the attorneys in Business and Legal Affairs tell you that the statutes which allow you to have a minor's employment contract approved by the court to avoid disaffirmance do not apply to the settlement of a contract dispute.  Can you protect the settlement from disaffirmance?

Yes, you can.  There is a statutory procedure for the approval of settlements with minors, and there are form petitions and orders which must be used to obtain that court approval. This procedure protects both the studio from the minor's right to disaffirm and the minor by preserving the money or property received until the minor reaches age 18.  However, the forms, as you'd quickly discern, are designed for personal injury and medical malpractice settlements, not for contract disputes!  Because of this, the forms require fitting a square peg into a round hole and that requires the skill of a practiced expert.  In cases where the dispute cannot be settled by agreement and the matter is litigated in a civil action, the court hearing the suit may apply the same statute.  

Two other issues need to be considered before making the request to the court.  How will the court protect the money received until the minor attains age 18; and, when you're dealing with a popular and well known individual, how can you keep the actor's name out of the courtroom and the press?

The rules of court provide for filing under seal, so that the public documents have names and other identifying information redacted, such that only the judge, hearing the matter, will know the true identity of the minor and the minor's family.  The process is simple, but requires a lot of paper.  The petition is initially filed totally redacted, along with the complete, unredacted petition left with the court in a sealed envelope for the judge's eyes only.  The petition and envelope are accompanied by an application requesting the court to order the file sealed.  If granted, the public file remains redacted throughout the process, and the actual names are never publicly revealed.  If the application is denied, then the unredacted documents are taken out of the envelope, filed with the court and become public.

The money or other property to be paid to the minor is required to be placed in a protective account or trust for the minor's benefit.  The petition will include a request that the money be set aside:  (1) in a probate guardianship of the estate; (2) in a custodial account under the Uniform Transfers to Minor's Act; (3) in a blocked account, similar to a Coogan Trust account, with withdrawals made only upon court order; (4) in a special needs trust, where the minor has a disability; or (5) in a trust established by, or approved by, court order, and revocable by the minor upon attaining age 18.   In any event, the court retains jurisdiction over the trust until the minor attains age 18.  Not all of these options are available when the amount awarded to the minor does not exceed $20,000.  

These provisions provide employers of minors, not only in entertainment, but also sports, and not just movie studios, with a relatively straightforward procedure to make a settlement agreement permanent for the benefit of all the parties.  At the same time, they allow the court to approve a method to preserve the money for the minor.  Generally, the revocable trust discussed above will provide the most flexibility.  Seeking out experienced legal counsel to guide the parties through this process is essential. 

For more information on settling disputes under a minor's contract in entertainment and sports or any other related questions, please contact Bruce D. Sires.

Michael Morris Interviewed on KTLA Television on Income Tax Pitfalls

KTLA-TV Channel 5 Legal expert Manny Medrano interviews Michael Morris warning consumers about some pitfalls you want to avoid when filing your income taxes.

 VIDEO: Tax Time Pitfalls - Manny Medrano "Inside the Law"

For more information on the subject or any other tax related questions, please  Contact Michael Morris