Broker Check

February 27, 2004


True Pension Portability

            A little known provision of EGTERRA, the 2001 Tax Act, expanded the rollover option so that Individual Retirement Accounts can be rolled over tax free into retirement plans since January 1, 2002.  This is a real breakthrough since qualified plans are ERISA plans and, hence, offer more protection from creditors and in bankruptcy. IRC 408 (d)(3)(A)

            If you believe you would like to take advantage of this new feature of the law, please contact Howard Lisch.

Take Steps to Thwart Identity Theft

            These are common sense tips to prevent criminals from assuming another person’s identity with the purpose of fraudulently taking over accounts and/or credit cards:

1.      Order a credit report annually from each of three credit reporting bureaus and review them for accuracy.

2.      Guard social security numbers.

3.      Create passwords and PINs that are difficult to guess for all accounts and change them periodically.

4.      Buy a shredder to adequately destroy personal financial documents that are being discarded.

5.      Never give out any confidential information over the telephone to an unsolicited caller.

6.      Review all bills and statements closely.

Mail outgoing checks, bill payments or tax documents directly at the post office or a postal mailbox instead of from a home mailbox where they can be easily stolen


Double Sales Tax Due on Auto Lease

            In a recent decision of the New York State Tax Appeals Tribunal, the lessee of an automobile that he leased as a New York resident was not entitled to a refund of the prorated portion of sales tax that he paid to New York after he moved to New Jersey.

            The lessee, a New York resident, leased a vehicle from a New Jersey auto dealer.  The New York State sales tax, at the rate of 7 ¼%, was paid on the total amount of 39 lease payments due under the lease.  After living in New York for 66 years, petitioner purchased a home in New Jersey and registered his leased automobile in his new home state of New Jersey.  On registering his vehicle in New Jersey he was required to pay New Jersey sales tax for the 30 months remaining on his lease.

            The petitioner filed a claim in New York for the refund of the remaining 30 months of sales tax prepaid to New York.  The Division of Taxation denied petitioner’s claim citing “When a lease… is entered into on or after June 1, 1990, the amount due under the agreement and for the entire period covered (including renewals and/or options) will be immediately subject to sales tax.  There is no provision in the New York State Sales and Use Tax Law to allow for refunds of sales tax paid on the lease of a vehicle where the lessee relocates to another state where they may also be required to pay tax.” Petition of Thomas Gallagher DTA 819115

            We believe the decision is wrong and potentially unconstitutional as this is taxation without representation.  However, a better approach would be for the petitioner to have tried to obtain a credit in New Jersey for taxes paid to New York. 

History of Accounting

            Accounting is, perhaps, one of the most innovative professions.  Although the CPA is a relatively young designation, the skills of a CPA are deeply routed in history.

3000 B.C.-2500 B.C.

            Ancient Sumerians invent the worlds first written language.  Cuneiform eases record-keeping requirements for Sumerian cities expanding trade.  Across the ancient world, rulers tax their people to finance public works, making records necessary to account for transactions.


            If you have any questions about the foregoing or any other financial matters, please call us.  If you want to read more, visit the AOHL Newsletter Archives at


Remember, We’re Here For You!!