Just for Fun

Retirement Minded

Huselton, Morgan & Maultsby colleagues, don’t become giddy.  My retirement is still a few years away.

However, I am approaching a traditionally epochal birthday, so my thoughts turn to the next chapter of my life.  It is time to start thinking seriously about what retirement will look like and where it will be spent.  So, to the internet I went.  I wanted to see where my current residences (and likely permanent co-choices) rank.  Are Texas and Michigan good choices?

After looking at a number of websites, I have decided to share some opinions about where are the best states to retire.

Wallethub.com published in 2017 a ranking of best states to retire based on four factors. Florida #1, Wyoming #2 (powered by its affordability ranking) and South Dakota #3 (primarily ascendant because of its health care ranking).  Michigan #15 and Texas #18.

Based on eight factors, Bankrate.com published also in 2017 a ranking of the best retirement states.  New Hampshire #1 (#2 in “well-being”), Colorado #2 (somewhere between #1 and #8 in legalized marijuana use), and Maine #3 (#2 in “senior” – I don’t know what this means, but it must be important in retirement rankings).  Michigan #22 and TX #24.

The magazine Kiplinger last published a full ranking of states to retire in 2015, it appears.  The rankings were based on seven factors.  Delaware #1, Florida #2 and West Virginia #3.  Michigan #21 and Texas #42.  Interestingly, the Kiplinger “best states to retire” ranking in 2016 had South Dakota #1, Utah #2 and Georgia #3.  Quite a change.  Retirees must be fickle.

While my choices don’t rank with Florida and South Dakota (huh?), I conclude that my choices are pretty good.  They actually are lot better than good, if you know anything about Traverse City, MI.

My research revealed a sobering tidbit.  Kiplinger in 2016 said that a retiring couple, both 65 years of age, should expect to spend in retirement on healthcare $387,731 on average.

Then, when I finished my research, I asked Mrs. Maultsby where she thinks the best place is to retire.  Her analysis was succinct:  Where the grandchildren are.  Well, that settles the matter.


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Just for Fun

Whoopee! Tax Busy Season is Longer This Year!

By my rough calculation, the 2016 spring tax busy season for 2015 returns is about 5 percent longer than most years.

Here’s how I got my number.

First, the late, great Bill Morgan used to say that tax season started the day after the Super Bowl.  The “day after” this year was February 8, 2016.

Second, I assume that we tax accountants work a leisurely six days per week during tax season.  On Sundays we go to church, renew acquaintances with our significant others, wash clothes, pay bills, and do all the other things most people measure out over the week.  (Some practitioners (and a certain Mrs. Maultsby) would take issue with my assumption.)

This year is leap year, so we add an extra day.

Because the District of Columbia celebrates Emancipation Day on Friday, April 15 this year, the date for filing or extending many types of returns, including Form 1040, is Monday, April 18.

So, we have a total of three extra workdays.

Is a longer tax busy season a good thing or a bad thing?  Ask me Monday evening, April 18.


Just for Fun

Multitasking? Not so Fast.

Dictionary.com says that to multitask is “to perform two or more tasks simultaneously.” It might also be described as performing tasks sequentially, switching among tasks before the task at hand is finished.

Anyway, I’ve always have had a hard time accepting the validity of the asserted benefits of fast-paced multitasking in the information workplace. So, I have been doing a little studying on the subject and have found out some interesting information, most of it from Dr. Gloria Mark, Professor in the Department of Informatics at the University of California – Irvine. (Informatics – A broad academic field encompassing computing technologies and development in their diverse relations to the human and social worlds, including applications in science, social problems, and the arts. Wikipedia.) Here are just a few of Dr. Mark’s and her colleagues’ findings.

•      Observations of information workers reveal that they switch tasks (or interrupt tasks) on average every three minutes.
•       Most interrupted work is resumed on the same day, on average in 23 minutes and 15 seconds.
•      Information workers interrupt themselves 44% of the time; the rest of the interruptions were from external sources.
•      Studies show that information workers spend about 23% of their time on email, with one estimate revealing that people check email about 36 times an hour!
•      One study found that students reported checking Facebook on average seven times a day, averaging 26 minutes per day.
•      Stress is positively associated with the amount of multitasking.
•      Without email, people multitasked less and had a longer task focus.

Finally, various studies have shown multitasking to be consistently counterproductive, and, in certain cases (such as texting and driving), dangerous. Seattle Times.

So, the next time I walk up behind a young colleague checking Facebook or reading email on his or her personal information device and he or she tells me it is OK because he or she is multitasking, I can say “BullXXXX!” with authority and peer-reviewed academic references.

Just for Fun


In the tax business, we focus on one fact about April 15 – it’s the tax deadline and the end of our spring busy season. (Full disclosure: in our office, there are at least four additional big tax deadlines each year. We celebrate them all!)

Despite our myopic focus on April 15 as the tax filing and payment deadline, other things have happened on this date. Here are just a few examples:

  • In 2010, volcanic ash from the eruption of Eyjafjallajökull in Iceland led to the closure of airspace over most of Europe. Reports of this natural disaster were delayed for 24 hours as newscasters searched for the pronunciation of the name of the volcano.
  • In 1992, billionaire Leona Helmsley was sent to jail for tax evasion. She said that paying taxes was for the “little people.” Think the day of her incarceration was a coincidence?
  • In 1968, the Houston Astros beat NY Mets, 1-0, in 24 innings. Except for one miraculous season, the ‘Stros hitting has remained about the same as in 1968.
  • In 1959, Fidel Castro began his US goodwill tour. Huh? Did I read that wrong?
  • In 1955, Ray Kroc started McDonald’s chain of fast food restaurants. Mr. Kroc was multi-mixer salesman who was intrigued by these two McDonald brothers ordering eight multi-mixers for their burger joint. He was fascinated by the restaurant’s focus and efficiency. One thing led to another.
  • In 1931, the first walk across America backwards began. Plennie Lawrence Wingo actually walked backwards to Istanbul, Turkey. I am not sure how he got across the Atlantic Ocean.
  • In 1912, RMS Titanic sinks at 2:27 AM off Newfoundland as the band plays on.
  • In 1892, The General Electric Company was formed. Based on a quick search, I determined that a share of GE today is worth about the same it was worth on the date that Jack Welch retired as CEO of GE on September 7, 2001. Impressive – not.
  • In 1071, Bari, the last Byzantine possession in southern Italy, was surrendered to Robert Guiscard. (That’s a shout out to my good friend, Alessio Bax, favorite son of Bari and recognized as one of the finest classical pianists in the world.)

And in all seriousness, we offer prayers for the Boston Marathon bombing victims, the three that died and the 264 others that were injured, and their families – April 15, 2013.


IRS, Just for Fun, Tax Court

Michael Jackson’s Estate Tax Liability – Dangerous Dollars

The executor of Michael Jackson’s estate and the IRS have rather divergent opinions of the value of his estate at the time of his death. Recent filings with the Tax Court reveal that the executor declared a value of $7 million. The IRS tells the Tax Court that the value is about $1.125 billion. This Tax Court case promises to be a Thriller.

We learned in August of 2013 that the estate was going to Tax Court with the IRS’ calculation of the estate tax and try to Beat It; we learned the particulars only a few days ago. A couple of the biggest differences of opinion are eye-popping. The estate valued the value of Jackson’s likeness at $2,105; the IRS says it was worth $434 million. (Heck, my likeness may be worth $2,105!) The estate valued the value of a music catalog comprised of works of Michael Jackson and of the Beatles (!) at zero; the IRS valued the catalog at $469 million.

The IRS says that the valuations by the estate were really Bad, so they have assessed the penalty for gross understatement. The total of taxes and penalty that the IRS wants is $702 million.

Valuation cases are never Black or White. This one will be very interesting to follow. If you are interested in the results of this conflict, You Are Not Alone.


IRS, Just for Fun

I Like Baseball!

And I like to read what tax authorities say about baseball.  Sometimes it doesn’t make a lot of sense, though.

Last week, the Office of Chief Counsel of the IRS released a highly redacted version of a field advice to a revenue agent who was auditing an owner of a minor league baseball team.

The standard minor league contract is for seven years.  Often, someone starting his career is paid a bonus when he signs his contract.  The contract can be terminated by the club for a number of reasons, the most obvious being that aspiring ballplayer can’t hit, field or pitch as well as the owner had hoped.  The player can go to the major leagues and get out of the contract.

The owner did a study of all the minor league players that the club had ever had on its roster and determined that the average useful life of the contract is [redacted].  I am going to guess that the number is about four years, based on my exhaustive research on the web and my observations this summer of the Frisco RoughRiders and the Traverse City (MI) Beach Bums.  So, (let’s assume that) the owner amortized the cost of the contracts over 4 years.

The field attorney at the Chief Counsel’s office disagreed. He said that the contracts were amortizable and not currently deductible when paid or incurred, citing a lot of authority, some directly applicable to baseball contracts.  I’ve got no problem with that.  Neither did the owner.  The field attorney cited Regulation Section 1.167(a)-1(b) that says “the estimated useful life of an asset is not necessarily the useful life inherent in the asset but is the period over which the asset may reasonably be expected to be useful to the taxpayer in his trade or business.”  Makes sense to me.

Then, he cited a case involving the buyout by a franchisor of a franchisee’s territory rights, because the franchisee was not developing the territory fast enough.  The franchisor had to amortize the cost of that buyout over the estimated time that it would take to build out the territory.   Based on that authority, the field attorney said that the contracts have to be amortized over the seven year contract term – not the estimated useful life of the contract.

Huh?  I think that field attorney is probably a young whippersnapper who never had to compute depreciation or amortization based on useful lives.  That was how it was done in the good old days prior to ACRS, MACRS and Section 197.  (ACRS was enacted in 1980.)  The estimated useful life is not seven years.  There aren’t many 26- to 30-year old men riding around the country on minor league buses.  Check for yourself.  Go to a Beach Bums game next year.

IRS, Just for Fun

That’s 595,699 Fruitcakes!

If you are buying Regular Deluxe Fruitcakes, that is.  This week, a Federal grand jury indicted on 10 counts of mail fraud Sandy Jenkins, the former longtime corporate controller for Collin Street Bakery, the Corsicana, Texas company famous for its mail order fruitcakes.   He is accused of embezzling “approximately $16,649,786.91” between 2005 and 2013.  That is almost $2,000,000 per year!   Seems like that is enough money to have been noticed by someone.   Maybe the owners thought the run-up in price of pecans was a lot worse than it really was.  (Indeed, his apparent demise occurred shortly after the 2012 crop prices tumbled!)

Jenkins is accused of taking advantage of a lapse (or maybe a complete void) in internal controls to write checks to his creditors and himself.  And, wow, he must have had some creditors.  Investigators were able to identify a lot of property that most controllers could not afford.  Among other goodies:  a house in Santa Fe; four luxury vehicles; about 60 luxury men’s watches; about 50 necklaces; a Steinway Model B piano (big money, let me tell you!); 596 bottles of wine (that’s not so much, I think); 14 furs; 93 designer handbags.  The list goes on.

Wasn’t anyone suspicious?  What do you think when your controller walks in with 60 luxury watches on his arm after parking his Mercedes, Lexus, BMW or GMC Denali in the employee parking lot?  Unless he had 14 girlfriends, seems like his lady might raise an eyebrow when he buys her a really nice necklace every two months and a couple of furs each year.  Or how about a new designer handbag every month?

Of course, an indictment does not establish guilt.  However, it seems like the Feds have the goods on Mr. Jenkins.  Unless he was meticulously keeping records and reporting “approximately $16,649,786.91” on his income tax returns, his troubles are just starting.  The Internal Revenuers should be right behind the Postal Inspectors.  Maybe someone will send Sandy a fruitcake for Christmas at his next long-term residence, which figures to be owned by the Federal government.