I’m a Tucson Arizona lawyer (business, real estate and probate law) and a Licensed Fiduciary (Personal Representative, Trustee and Guardian/Conservator). I also spend part of each day volunteering and helping raise money for good causes. At night I write!

Sunday, August 25, 2013

March on Washington + 50 Years

It’s hard not to choke up listening to clips from the “I Have a Dream” speech. So much promise, so much death during the 60s, and I cannot help but focus on the fact that the many 1960s martyrs had children, my age, and never got to see their kids grow up! As a product of a pretty stable two-parent household, I cannot imagine the challenges these families faced in turbulent times!

Emotions aside, I’m fascinated by how easily anyone can argue for a nearly full or almost empty cup. On the full side? Exhibit A is President Barack Obama. Elected, and re-elected—in not really very close election—despite a poor economy and many other problems! Yes, there are people among us who cannot deal with his being not like us. Some will ‘fess up, but that is the small, uninteresting bunch. I’m interested in how firmly so many deny any racism when their views reflect a level of discomfort with the president’s background. (“Don’t call me a racist, but can you prove the man was born in Hawaii,” for example, when no one questions where another candidate was born. Can you spell T-e-d C-r-u-z?) Racism is far less acceptable than it was 50 years ago. Not everywhere and not always, for sure, but the times have changed!

People of color vote! Barriers exist, and the fact that minorities vote provides no excuse for not worrying about the barriers. But minorities show up at polling places and they vote, and in many jurisdictions the effort to prevent minority voting has spurred greater voter turnout!

Generally, people can eat where they want, sleep where they want, travel as they choose, etc. Yes, there was a story about a restaurant asking a group of African Americans to leave because they made the other guests uncomfortable (Wild Wings Cafe), but that was news!!!

Empty? How about the vast number of black and Hispanic men in New York City (and other big cities) who are stopped and frisked for the crime of being … black or Hispanic? Imprisonment statistics—Prison Race Stats—reflect a race-biased justice system. And death penalty stats are really awful (Death Penalty Stats)!

Blacks are twice as likely to be unemployed in 2013, just as they were in 1963. Average black households have a net worth equal to about 10% of white households (Net Worth by Race).

Etc.! Being a person of color in these United States presents everyday challenges. For all of our “melting pot” noise, our culture does not like “different,” and it never has. Don’t believe me? Read up on the Irish, Italian, Jewish, and Hispanic immigrant experiences.

I suspect how people see the progress over the past 50 years depends, significantly, on their vantage point. I’ve never been stopped and frisked and probably never will be. If I was black, especially in a big city where people walk and use public transportation, I would almost surely have a different experience. (And yes, that would be the case even if I was an attorney!) On the other hand, people of color have many friends who, while they have not walked in the same shoes, take pride in the successes of the past 50 years, even as they do not always appreciate how far the arc must still bend before we live in a truly just society!

So, as we celebrate a milestone in our journey as a nation and a culture, I hope we can all:  take pride in the successes; know that much work remains to be done (and get to work); benefit from  appreciating the fact that our journeys always differ from those of our brothers and sisters.

Saturday, February 16, 2013

Substantiating a Charitable Donation

If you are make charitable gifts, you must play by the rules, and what may seem like substantial compliance won't satisfy the Internal Revenue Service or the United States Tax Court. That's the lesson from In re Durden, T.C. Memo.2012-140 (May 17, 2012).

Here are the basic facts. In 2007 David and Veronda Durden gave the Nevertheless Community Church $24,854 in a series of checks, each of which was for more than $250. The church sent an acknowledgment letter that covered every check, and sent it before the the Durdens filed their 2007 federal income tax return. Unfortunately, the church forgot to mention in the letter that the Durdens received no goods or services in return for the contributions. When the IRS asked raised the concern during a routine audit in 2009, the Durdens promptly obtained a new letter from the church that seemed to meet the IRS concern. Alas, while the new letter contained the right language, it wasn't dated before the 2007 return was filed. No deduction, said the IRS, and "Durdens, you lose," said the Tax Court.

The relevant section of the Internal Revenue Code is 170(f)(8). Subparagraph (A) states:  "No deduction shall be allowed under subsection (a) for any contribution of $250 or more unless the taxpayer substantiates the contribution by a contemporaneous written acknowledgment of the contribution by the donee
organization that meets the requirements of subparagraph (B)." Subparagraph (B) must state the gift amount, whether the gift recipient gave goods or services in return for the gift and, if so, describe the goods or services and state their value."

The Tax Court only considered the first, contemporaneous letter. Since it lacked any statement concerning the goods or services issue, that issue is mentioned in subparagraph (B) and subparagraph (B) is incorporated into subparagraph (A), the deductions were not adequately documents and were thus disallowed. The Durdens lost the ability to deduct their donations and were assessed at least one penalty.

Key takeaways from the Durden case:

First, if you are a giver check your letters as you do your tax return preparation. If you haven't filed yet, you may still have time to get a corrected letter from the charity.

Second, if you are the charity, the short term problem is not yours, but consider how likely it is that you will retain a donor whose deduction is disallowed because your letter failed to include the right language.

Here are links to Durden and IRS Publication 526, which tells all about taking charitable deductions.

This post is intended to provide general information. Every situation is different, and by providing this information Mark Rubin provides no specific legal advice to anyone. For more information contact Mark Rubin at Mesch, Clark & Rothschild, P.C., 520.624.8886 or mrubin@mcrazlaw.com.

Saturday, February 9, 2013

Kicking Kumbaya

Recently I met with a group from a nonprofit about funding their program. An issue arose about the focused nature of their efforts, and one of their board members--a fine fellow and a friend--quickly noted the fact that they don't "just sit around and sing Kumbaya." I took umbrage, right away, asking "what's wrong with that?"

Somewhere, somehow, Kumbaya became the whipping boy for people who are not really serious about what they're doing! In 2010 a nice little piece in the New York Time (A Long Road From Here to "Kumbaya") detailed the history of the song and how it gets denigrated now. Interesting, especially, is the fact that all sides in the world of "important" people doing "important" things use the song to distinguish themselves and their grown up, "important" work from the naive people who hold hands and sing songs.

Well ... every time I see a picture of Speaker John Boehner, surrounded by Majority Leader Eric Cantor and the boys, I think about children playing "grown-ups." Smug and self-satisfied, offering yet another set of proclamations or demands based on contempt for what their fellow travelers in the Bush II White House called "the reality-based community." (I also wonder, often, if Eric and the boys are there because they like to see themselves on television, or because one or more of them have shivs pressed against the Speaker's spine to remind him that his job depends on their mercy. Close call, and maybe the answer is "both reasons.") Adults doing important work? I think not.

Anyway, I totally appreciate the need for more than "feel good" experiences if accomplishments are the goal, and I know lots of groups can get lost in the weeds. That said, if the "weeds" are a campfire with decent people bonding with one another, or a class of people--mostly men--who think the people's business gets accomplished with pronouncements and the daily photo-opp behind the podium in the blue suit with the white shirt and the red tie and the flag pin and the slicked back hair and the shit-eating grin or the serious grimace, gimme the campfire and Kumbaya!

P.S. From all of the evidence I have seen to date, the group with which we met walks the talk! Nothing in this post is intended to put them--or my friend--down in any way.

Tuesday, January 1, 2013

The Middle Class

Lately, we've heard plenty about the middle class, protecting the middle class, building the middle class, the evaporating middle class, etc. So who belongs in the middle class?

Income and wealth get very much blurred in our discourse. But for the lucky few whose wealth comes from those who came before them, wealth is a function of income. For those with investment assets, income is also a function of wealth. Both are, thus, important.

For 2011, the middle quintile of American households--households between the 40th and 60th percentiles-- had a mean (average) income of $49,842. Those households at the top end of the quintile earned $62,434. By way of comparison, $186,000 per year puts a household at the 95th percentile. (Those in the top 5% have an average household income of $311,444, a mean that includes the very few who earns tens or hundreds of millions of dollars per year.) Here's the link to the income data for 2000-2011:  2000-2011 US Household Income by Quintile.

Wealth statistics are harder to capture so neatly. Every bit of information, however, demonstrates that households in the middle--50th percentile--have almost no wealth, and that what wealth they do have correlates highly with the equity in their homes.  Table 721, reflecting 2007 (pre-crash) Census data shows a median net worth for all families of $120,000 and a mean net worth of $556,000. Here's the link:  Table 721. For a discussion about wealth issues, Professor G. William Domhoff's article, Who Rules America?, is worth a look-see! (Professor Domhoff is not without a position on wealth and its role in and on society, but he relies on plenty of authorities in advancing his views.)

In 2013, anyone can call him/herself anything, I suppose. That said, it seems fair to wonder how anyone whose household income greatly exceeds about $50,000 per year can fairly fall within the middle class! You may not feel wealthy if you earn $150,000 or more per year, or if your net worth exceeds $500,000 because you have a home with plenty of equity, but you are far from the middle, relative to your fellow Americans.