A former Internal Revenue Service Revenue Agent was sentenced today in U.S. District Court in Seattle to 30 months in prison and three years of supervised release for accepting a $20,000 bribe. The former Internal Revenue Service Revenue Agent of Seattle, was convicted in 2016 following a three day trial. At sentencing U.S. District Judge John C. Coughenour said that in 35 years on the bench, this was his first bribery case. He called former Internal Revenue Service Revenue Agent's crime, “a tremendous breach of public trust.”
“The American public entrusts public officials to carry out their duties in an honorable way. Revenue agents, such as this defendant, conduct taxpayer audits, demand records, conduct interviews, and have the power to assess additional federal taxes,” said U.S. Attorney Annette L. Hayes. “When that power is used to line the pockets of those public officials it is a breach of trust of the highest order.”
Things to Consider
If you are thinking of converting your traditional IRA into a Roth IRA, it is imperative that you to consider the possible changes to the tax code that could be coming after the inauguration. To convert your regular IRA into a Roth, you will have to pay income tax on the amount of the account that reflects any deductible contributions you made to the IRA as well as any untaxed earnings in the account. If you are in a high tax bracket now, it may make sense to wait until retirement age to withdraw your funds from a traditional IRA when your tax rate is likely to be lower. On the other hand, with the Republicans taking over the House and the Senate, we may see the Bush tax cuts return, where tax rates for Upper-income taxpayers were at an all-time low.
The benefits to converting to a Roth IRA is that you will not have to pay tax on withdrawals later when you begin receiving distributions. Also, the earnings on your Roth IRA will never be taxed if you hold a Roth IRA for 5 years and you delay receiving distributions until you are age 59 ½. Roth IRA are more liquid than traditional IRAs, because you can withdraw rollover IRA contribution within 5 years after moving them into a Roth without a penalty. This translate to better access to savings without penalty while you still retain some of the benefits of a tax-qualified retirement plan.
Even though Donald Trump has won the Presidency and the Republicans will take over Congress, it will take time for any longer-term tax reform plan with lower individual tax rates to be put in place. With that being said it may be advantageous to wait to convert. The rules are complex though, and it is important to get the strategy right, depending on your individual financial goals. I will be glad to help you decided whether making a Roth rollover before the end of the year would be right for you.
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Spencer Accounting Group, LLC does not provide investment, tax, legal, or retirement advice or recommendations in these blogs. The information presented here is not specific to any individual's personal circumstances.
Keana Spencer is an Accountant, Entrepreneur, and Educator to her clients, with a strong passion. Keana has over 10 years of experience and through her practice, she is a source of knowledge and strategies to her clients.