Pearl River NY Tax Law Blog

With the untimely death of Whitney Houston, it might prompt you to get your own estate affairs in order. In Houston's case, she just won a legal case over her late father's estate, and she was going to be paid back money that he owed her. Now, with her untimely death, there may be more court battles waged over her estate.

Many years ago, Houston lent her father a large sum of money and they set up a way for him to pay her back. Houston's father took out a life insurance policy on his own life and named his daughter the beneficiary. He also structured the policy not to be included as income for his daughter for tax purposes. Upon his death in 2003, the policy proceeds went to his daughter and should have gone smoothly, but neither planned that his wife would file her own suit to collect on the proceeds of the life insurance policy. His wife wanted the proceeds of the policy to pay off the mortgage on the residence she shared with her husband. Houston counter-sued and recently won the multi-year battle a few weeks ago.

Some companies are reclassifying their pension plans with the IRS in order to save on insurance premiums, while causing employees to potentially lose their pensions.

Take the case of a hospital worker from New Jersey, who worked for a local hospital for 25 years. Her employer shut down the pension plan in 2004 because it couldn't afford to support it any longer. Currently, the pension plan has $5.25 million in assets which are being distributed at the rate of $2.7 million per year. The former employee, who has 12 years until retirement, will not be able to get the pension, since the money from the fund will be gone.

The tax deadline will be here before we know it, and for many of us tax laws can be complicated. People may find themselves owing significant amounts of money to the IRS, without realizing how fast the penalties add up. Darryl Strawberry is in a similar situation with his tax debt problems.

The tax troubles of this famed baseball player are no secret, but it seems like more issues continue to come up to compound his situation. The Internal Revenue Service has now targeted HarperCollins, Strawberry's book publisher, and his first World Championship team, the New York Mets, in an effort to collect on his tax debts.