Chapel Hill Restaurant Closed - You Gotta Pay Your Taxes!

As reported on Charlotte News channel 9 - a popular Chapel Hill North Carolina restaurant - the Ratskeller - is closed. A note on the door stated it was closed for failure to pay taxes. What a shame!

Every choice has a consequence!

As we approach tax season, many of us will begin the process of closing out our business years and accumulate data for our individual returns. Many people will begin thinking about their tax saving strategies in an effort to minimize what is due. That is just good tax planning.

However, failure to comply with federal or state tax laws is just unwise! As a business ethics speaker I know full well the effect of not paying taxes - I served time in prison for my unethical choices. While I am not proud of my past behavior, I do speak to groups nationally about choices and consequences.

For the Ratskeller the cost - business closure (at least for now). In the long run, the cost will likely be greater. Minimize your taxes - just makes sense. Failure to pay taxes will yeild an outcome that - I promise - you won’t want.

If you’ve enjoyed the food and fellowship at the Ratskeller…post a comment. Perhaps, it will be reopened and legal!

Mortgage Fraud Prevention Tips From The FBI - Comments by Business Ethics Speaker Chuck Gallagher (Post 2 of 6)

This is the second in the Mortgage Fraud prevention tip series. The series has been established to help folks know how to avoid the trappings of mortgage fraud. Since mortgage fraud is rapidly becoming one of the most significant areas of interest for law enforcement - local as well as federal. The FBI issued an information to their web site related to mortgage fraud.

Mortgage Fraud Avoidance Tips (from the FBI web site):

• Get referrals for real estate and mortgage professionals. Check the licenses of the industry professionals with state, county, or city regulatory agencies.

• Be suspicious of outrageous promises of extraordinary profit in a short period of time.

• Be wary of strangers and unsolicited contacts, as well as high-pressure sales techniques.

• Look at written information to include recent comparable sales in the area and other documents such as tax assessments to verify the value of the property.

Tip One: Get referrals from industry professionals seems to be common sense. However, over time I’ve seen many folks who were mortgage brokers who (with the down turn) failed to make a living in the industry and couldn’t pass a background test for subsequent career opportunities in sales. Any person representing themselves as mortgage professionals should be willing, if not delightet to show you their license or other identifying information designating them a professional.

Tip Two: Beware of extraordinary profit or profit in a short period of time. A South Carolina man was sentenced to over 5 years in prison for a scheme that involved others promised profits. Information from the mortgage fraud blog is presented here: “Wimmer (man sentenced for mortgage fraud) recruited investors to purchase distressed houses that he promised would be fixed up and rented. He then inflated investors’ financial information to make them appear more creditworthy than they really were, in an effort to qualify them for mortgage loans from banks to purchase the investment properties.”

Tip Three: Very little needs to be said about this tip as it is common sense and straight forward. Mortgage professionals, much like CPA’s, should not have to resort to high pressure sales tactics as their past performance and industry recommendations should provide a solid foundation for new business. More times than not, high pressure sales techniques indicate a commission based compensation program that has a high turn over rate for mortgage sales personnel. One question might be how long has the person been involved in the mortgage industry - especially with the company they are representing?

Tip Four: Key issue - get the highest appraisal possible so that the mortgage loan can finance as much as possible of the purchase. Great idea, but what happens if the appraisal is way off from the realistic valuation. While the prospective mortgagee may not be a specialist in appraisals some practical characteristics can be considered: (1) there are on-line programs that do “quickie” appraisals based on other local sales; (2) look at sales of other properties in the same market place - divide the sales price by the property square footage and then multiply the average by the square footage of the property being purchased for an estimated value; or (3) consider the property tax on the property in question and assume that it should generally be around 80% of the true fair value of the property (or whatever the percentage should be in the area in question). Either of these should give a non professional appraiser a reasonable guess as to the properties prospective value.

As a business ethics speaker - a person who speaks to groups about choices and consequences - it is evident that people need to take responsibility for their involvement with there property lending choices. While the great majority of mortgage loans are fine, with free flowing money in our recent past, mortgage fraud has become a big business and has led to many issues that have caused financial ruin.

If you have been a victim of mortgage fraud - feel free to comment as those comments may be helpful to others when considering their lending and mortgage choices.