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Cypen & Cypen
NEWSLETTER
for
FEBRUARY 23, 2006

Stephen H. Cypen, Esq., Editor

Never Forget - September 11, 2001

1. IRS HAS $2 BILLION FOR PEOPLE WHO HAVE NOT FILED A 2002 TAX RETURN:

According to IR-2006-031 (February 21, 2006), unclaimed refunds totaling more than $2 Billion are awaiting about 1.7 million people who failed to file a federal income tax return for 2002. However, in order to collect the money, a return for 2002 must be filed with IRS no later than April 17, 2006. IRS estimates that half of those who could claim refunds would receive more than $570. In some cases, individuals had taxes withheld from their wages, or made payments against their taxes out of self-employed earnings, but had too little income to require filing a tax return. Some taxpayers may also be eligible for the refundable Earned Income Tax Credit. Specifically in Florida, there are 115,900 people eligible, with a median refund of $593 and total refunds due of $162,926.

2. IRS UPDATES TAX GAP ESTIMATES:

And speaking of Internal Revenue Service, officials announced on February 14, 2006 (IR-2006-028) that they have updated their estimates of the Tax Year 2001 tax gap based on the National Research Program. The updated estimate of overall gross tax gap for Tax Year 2001 -- the difference between what taxpayers should have paid and what they actually paid on a timely basis -- comes to $345 Billion! This figure falls at the high end of the range of $312 Billion to $353 Billion per year, an estimate released last March. IRS enforcement activities, coupled with other late payments, recover about $55 Billion for the tax gap, leaving a net tax gap of $290 Billion for Tax Year 2001. IRS says that, while no tax system can ever achieve 100% compliance, it is committed to taking all reasonable steps to improve compliance through increased and better targeted enforcement and through increased taxpayer service and outreach efforts. Good luck.

3. VALUE VS. GROWTH -- IT ALL DEPENDS ON WHEN YOU LOOK:

Value or Growth? Growth or Value? When? How long? Well, the battle between the styles still rages on, so the following comparisons may be of interest:

Period Growth Value

12/78 - 12/80 31.5 22.5

12/80 - 06/88 10.8 17.0

06/88 - 12/91 21.2 12.0

12/91 - 09/93 02.3 18.6

09/93 - 03/00 26.7 17.0

03/00 - 12/05 -8.4 05.7

12/78 - 12/05 12.0 14.3


Clearly, depending upon the period selected, one style outperforms the other -- often by a very wide margin. However, the above data also show that over the relative long-term (27 years), the difference is 2.3% a year. We would bet that over a longer term that the two styles are pretty much even.

4. DOES WORKING LONGER MAKE PEOPLE HEALTHIER AND HAPPIER?:

A new Issue in Brief from the Center for Retirement Research at Boston College asks that provocative question. The analysis provides several interesting insights into the relationship between work at older ages and well-being. It suggests that longer working lives will help most people maintain their overall well-being. While working longer seems beneficial for most people, it will likely have negative consequences for some. The type of job seems to be a critical factor. Undesirable jobs can wash out the potential favorable effects of work. Another critical factor is the opportunity to continue working. Older workers may be willing to prolong paid work, but, in order to find a job, they need to be able to work and have a real demand for their labor. Policymakers need to consider these factors when evaluating proposals to keep people in the labor force. The findings suggest interesting areas for future research. For example, an increase in the early retirement age reduces the ability for people voluntarily to decide their labor force participation. Less control in the work/retirement decision could have an adverse impact on the well-being of older individuals. Also, variations in the benefits of work as people move through their sixties could be examined. Even though work at older ages seems beneficial for many, the benefits may decrease, or stop increasing, after a certain age or amount of time worked per year.

5. GOVERNMENT IMMUNE FROM LIABILITY FOR FIREFIGHTER ACTIONS:

A property owner sued the Florida Department of Agriculture and Consumer Services for damages to his property caused by firefighters while attempting to extinguish a large fire burning out of control. The trial court granted summary judgment against the property owner, which the district court of appeal affirmed. As explained by the Florida Supreme Court, to hold a governmental entity for the negligent decisions of its firefighters would require a judge or jury to second-guess firefighters in making these decisions and would place the judicial branch in a supervisory role over basic executive branch, public protection functions in violation of the separation of powers doctrine. Thus, the trial court correctly held that the government is immune from tort liability to individual property owners for damage resulting from discretionary actions of firefighters in combating fires. Further, the trial court correctly held that the state is not liable under the Takings Clause of the United States and Florida Constitutions for the trees, fencing and a dike that firefighters damaged or destroyed to create a fire line on his property. It has long been established that a government’s destruction of private property to prevent the spreading of a fire is not a “taking” in the constitutional sense. Strickland v. Department of Agriculture and Consumer Services, 31 Fla. L. Weekly D541 (Fla. 5th DCA, February 17, 2006).

6. STATE’S UNSOLD HOMES RISE:

Real estate professionals reported rising numbers of single-family homes on the market across Florida last month, in another sign of a slowing real estate market. Statewide, almost 51,000 existing single-family homes sold during the fourth quarter, a 7% drop from the near-55,000 homes sold in the same quarter of 2004. The median home price in the West Palm Beach-Boca Raton area was up 23% to $415,800 from $339,100 compared with the same period in 2004. Median price in the Fort Lauderdale area rose 26% to $377,300 from $299,900. In the Miami area, the median went to $375,900, a 29% increase from $291,800 in 2004.


Copyright, 1996-2006, all rights reserved.

Items in this Newsletter may be excerpts or summaries of original or secondary source material, and may have been reorganized for clarity and brevity. This Newsletter is general in nature and is not intended to provide specific legal or other advice.


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