“Good tax advice may appear to be expensive, but it’s not as costly as blowing up your IRA” -WSJ
What’s the easiest way to lose half of your retirement assets to IRS taxes and penalties? Follow the most popular social media tax and investment advice. Investors who lose tax court cases find that cultural norms provide no legal protection. Terms like “Enhanced Qualified Retirement Program”, “Home IRA” and “Checkbook IRA” are promoted online as ways to use LLCs to invest in real estate, cyber currency and precious metals. The problem is that it only works if you don’t get caught. But with IRS catching on to the marketing scams, it is easier to locate the tax abusers. The investment syndicators promoting these schemes are not responsible for the taxes and penalties of the investors who fall for these tax traps.
A real estate investment publisher recently wrote:
“A breaking court case ruling on the home storage of retirement assets has left millions of investors in jeopardy with disqualified IRA accounts. The verdict is sending shivers through the investing community … and it appears more changes may be on the way when it comes to investing using retirement programs.”
We have no way to verify the claim that millions are affected by these schemes. In contrast, it is not difficult to see that bad tax advice dominates internet discussion groups. It is not difficult to see how people fall for misinformation, especially when the matti I’ve is guided by maligned contributors.
Fortunately iIt’s easy to avoid trouble. Just follow guidance of a real life qualified and licensed tax adviser, not the charismatic and popular social media personalities and community chatter.