I don't know about you but over the past few months I have been receiving more scam calls and e-mails than ever before. Blame it on the economy? Maybe! 

With that in mind, I am sharing last December's lead article.

The holiday season is a time for celebration with family and friends. Unfortunately, it is also a time that tends to bring out the con artists, flimflammers, hustlers, and scammers who make it their holiday mission to prey upon some of the most vulnerable and trusting members of society. These criminals are always working diligently to come up with new ways to bamboozle everyone. In the movies they often only target bad guys that made their money through illegitimate means. Think The Sting, a 1973 American caper film set in September 1936, involving a complicated plot by two professional grifters to con a mob boss. In real life their favorite targets are usually seniors who spent a lifetime of hard work supporting their families and creating a nest egg for retirement. They abuse that which we hold sacred at Garden State Trust Company, a person's trust.

Here are some recent scams you should make your older loved ones aware of.

The False Authority Figure scam.
This scam is often perpetrated in person by two people posing as employees from a local electric or gas company that need to check on a "problem." While the primary resident is distracted by one "employee," the other steals from the property. Another version of this scam involves someone calling and pretending to be from the IRS or from the police and demanding that tax issues or a bail for a loved one needs to be paid immediately.

On a Website.
A scammer steals your bank's logo and creates a login website using that branding that looks identical to the actual website. They send an email or text asking you to verify information or telling you that a credit card number was stolen, and you need to login to request a new one. If you login using your current credentials on the website they built, their website captures your credentials, and they are able to enter your accounts illegitimately to make transfers.

Another new twist.
A scammer knows the exact robocall script that goes along with a stolen credit card. A person gets their credit card stolen for real, gets called by their credit card company that leaves a legitimate robo-message to call them back, verify which charges are real and which to remove and get their new card. A fairly routine procedure. The recipient is suspicious and double-checks that the number left in the message is in fact the customer service help number from their credit card provider. They call, go through the process of verification, get the new card and everything seems resolved.

However, the scammer that stole their credit card also has their phone number. They leave the same robocall message, word for word, except that the phone number has been changed. The person being scammed hears the same message that was legitimate a couple of weeks ago and is more likely to call back immediately thinking their credit card provider discovered more about the same problem or that the issue has come up again. On the second round that person is in danger of losing more than a stolen credit card number during the verification process, because the real goal of the scammer was identity theft.

Those claiming to be from the IRS.
The IRS will not call and demand immediate payment or request payment via a credit or debit card or gift card or threaten to bring in police or other agencies to arrest you for not paying. If you don't owe taxes, or have any reason to believe you do, do not give out any information when called and contact the U.S. Treasury Inspector General for Tax Administration (TIGTA) to report the call either through their website at www.tigta.gov or by calling 800-366-4484 to report it.

Those claiming to be from a financial institution.
Should you receive any digital messages telling you to login, never click through a link on the message itself. Instead, enter your bank's website address directly, or search for your bank on a search engine such as Google in order to get there. Vigilance is key against scammers. They are clever and relentless and will use the information of how they have already tried to scam you against you. Every single time your bank or a financial institution tries to initiate contact with you, utilize the same steps of verifying that it is really them by initiating contact back through their website or app directly.
Trust is hard to build, and easy to break. At Garden State Trust Company, we take these issues seriously. Please visit https://gstrustco.com/assets/Garden-State-WYW.pdf to view our booklet Keeping Our Seniors Safe-Watch Your Wallet. If you would like a copy, please call 732-255-5000.
FAMOUS WILL FOR THE MONTH RICHARD M. NIXON
CLICK THE NAME TO READ
CLICK THE NAME TO READ
Richard Milhous Nixon served as President of the United States from 1969 to 1974. His Last Will and Testament is extremely detailed and precise as to the disposition of his property, including his papers and other "work product" of his presidency. ©LIVING TRUST NETWORK
In the Informational Article, "Lightning In a Bottle"? read about how three Senators are pushing back on the idea of making Bitcoin an allowable investment for 401(k) plans. The IRS Is Catching Up article reports that the severe backlog that has plagued the IRS all year is starting to diminish.

During this holiday season no matter what you celebrate Make Some Memories with your children, grandchildren or nieces and nephews. In the Of Interest Articles read 18 Fun and Festive Treats To Make With Kids.
The IRS Is Catching Up
The effect of the Covid-19 pandemic upon the supply chains and prices has been much commented upon. Less well known is that the pandemic caused the development of a major backlog at the IRS. As of the end of August this year, some 8.2 million individual tax returns remained unprocessed.

But according to a November update, major progress has been made. The number of unprocessed returns has been cut to 4.2 million. "These include tax year 2021 returns and late filed prior year returns. Of these, 1.9 million returns require error correction or other special handling, and 2.3 million are paper returns waiting to be reviewed and processed."

There are also an estimated 900,000 unprocessed amended tax returns in November, filed on Form 1040-X. They are processed in the order received, and processing can take up to 20 weeks, the IRS reports. Taxpayers may get status reports on their amended returns by going to "Where's My Amended Return?" at the IRS website https://www.irs.gov/filing/wheres-my-amended-return.

All this progress is welcome, but a whole new tax season is about to begin. The major additional funding for the IRS enacted by Congress earlier this year may help to alleviate such problems and reduce delays in the future.

(December 2022)
© 2022 M.A. Co. All rights reserved.
"Lightning In a Bottle"?
Earlier this year, Fidelity Investments made news with the announcement that they would make investing in the digital currency Bitcoin one of the investment choices available to 401(k) plan participants. Bitcoin has been classified as property, not money, by the IRS. As such, there is no legal restriction on investing retirement funds in it.

At least that is true at the moment. Three U.S. Senators wrote to Fidelity's President last July, asking that the offering be rescinded, because such an investment was thought to be too risky. They followed up with a November letter renewing the request.

The most important recent development causing concern was the collapse of FTX, a digital currency exchange, with losses to millions of clients that may reach billions of dollars. The Senators also noted in their letter that the value of Bitcoin had fallen from $21,239 when the first letter was written to a two-year low of $16,884.

The letter concluded: "In light of these risks and continuous warning signs, we again strongly urge Fidelity Investments to do what is best for plan sponsors and plan participants--seriously reconsider its decision to allow plan sponsors to offer Bitcoin exposure to plan participants. By many measures, we are already in a retirement security crisis, and it should not be made worse by exposing retirement savings to unnecessary risk. Any investment strategy based on catching lightning in a bottle, or motivated by the fear of missing out, is doomed to fail."

Greater government regulation of the digital currency market now is expected by many, in view of recent developments. Such regulation could extend to limits on such investments in qualified retirement plans. 

(December 2022)
© 2022 M.A. Co. All rights reserved.
Update On Donor-Advised Funds
Taxpayers generally welcomed the rough doubling of the standard deduction in the 2017 tax reform legislation. One group that was worried about unintended side effects of the change was the nonprofit sector. The larger standard deduction coupled with the cap on the deduction for state and local taxes meant that most taxpayers would no longer get any tax benefit for their charitable gifts.

The worries turned out to be unfounded, as total charitable giving has not declined. Most people give to charity for philanthropic reasons, not to get tax benefits. However, there was a related side effect, and that has been a boom in donor-advised funds.

The idea behind a donor-advised fund is that money is permanently set aside for charity in the fund, but the charity may not yet be specified. A full tax deduction may be allowed in the year of the contribution to the fund, while the disbursements to charity take place over the subsequent years. Note that the advice that the donor makes to the fund about the charitable beneficiary in subsequent years is not binding, but the fund will typically follow the wishes of the donor.

The tax strategy that this suggests is to bunch charitable deductions. One year the taxpayer doubles up on charitable gifts and itemizes deductions, while the next year no such gifts are made and the standard deduction is taken instead. When the large gift is made to a donor-advised fund, the receipt of the money by the charity is deferred.

A recent report from the National Philanthropic Trust documents the success of donor-advised funds https://www.nptrust.org/reports/daf-report/. Key metrics:

  • The number of accounts in donor-advised funds rose from 1,007,745 in 2020 to 1,285,801 in 2021, an increase of 27.6%
  • Assets held in these funds grew 39.5% from 2020 to 2021, from $167 billion to $234 billion.
  • Total transfers to charities by the funds in 2021 were $45.74 billion, a 27.3% payout rate. This was a 12.7% increase over the 2020 payout rate.
  • Private foundations hold some $1.3 trillion in assets, about five times larger than the donor-advised funds. Yet the total grants by private foundations came to only $96.27 billion, about double the total grants from the donor-advised funds. (Private foundations are only required to distribute 5% of their assets annually to charity).

The report concluded with a prediction of slower growth for donor-advised funds, in part as a response to financial market volatility in 2022.
(December 2022)
© 2022 M.A. Co. All rights reserved.
Articles of Interest
Whether you're whipping up a sweet snack for your family movie night or baking a treat to leave for Santa, kids of all ages will be excited to make these holiday desserts. Read More


During this season of giving, take advantage of the annual gift tax exclusion before the year ends. Read More


Forget about being a grown-up and rediscover that feeling of opening a new box of crayons. Read More
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Because of the rapidly changing nature of tax, legal or accounting rules and our reliance on outside sources, Garden State Trust Company makes no warranty or guarantee of the accuracy or reliability of information contained herein nor do we take responsibility for any decision made or action taken by you in reliance upon information provided here or at other sites to which we link. ©2022. All rights reserved.