End of Life or Another Day at the Office? One of the most concerning communications for experts to receive from a hiring attorney is the opposing attorney has filed a Daubert motion to exclude their opinion. Going through a Daubert challenge is stressful for even experienced experts. This article will discuss the Daubert decision and its impact on experts. It will also address questions considered by courts regarding an expert and their work. Finally, the author will discuss his experience with Daubert challenges, the process, and working with the hiring attorney in defending the expert’s opinions. One of the most…
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in Detecting Fraud in Business Interruption Claims (Part II of II) Business interruption claims are generally closely scrutinized by insurance carriers and can range from thousands of dollars, to claims exceeding $100 million. Insurance carriers often seek the assistance of either internal or external forensic accountants to analyze such claims. During their analysis, forensic accountants often detect the possibility of fraud in a claim, prompting further investigation by the carrier. This second part presents a business interruption case example that illustrates how to analyze business interruption fraud claims and explains the considerations by insurance carriers when hiring external accountants. Read…
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Getting to the Finish Line is Exhausting In this article, the author analogizes the sale of a business to how one prepares and runs a half marathon. Many business owners may treat an exit as a half marathon, but that is a mistake. Business owners need professional consultants to assist them with their exit plan and negotiations. The author shares his views on the negotiation process and stresses that business owners must prepare and expect changes to successfully conclude a sale. 2021 was a record year for business sale/exit transactions in the lower-middle market (businesses with valuations between $10 million…
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in Detecting Fraud in Business Interruption Claims (Part I of II) Business interruption claims are generally closely scrutinized by insurance carriers and can range from thousands of dollars to claims exceeding $100 million. Insurance carriers often seek the assistance of either internal or external forensic accountants to analyze such claims. During their analysis, forensic accountants often detect the possibility of fraud in a claim, prompting further investigation by the carrier. This two-part article details the role forensic accountants play in identifying and analyzing fraud in business interruption claims and explains the considerations by insurance carriers when hiring external accountants. Introduction…
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A Guide for Forensic Analysts As cryptocurrencies become more mainstream, it is vital for forensic analysts to understand and analyze digital currency data. Forensic analysts are increasingly being brought in to trace and help recover crypto assets in criminal matters, such as money laundering and other fraud prosecutions. There is also a noticeable increase in the use of forensic analysts in civil litigations, which can range from contested divorces to probate and bankruptcy cases. This article focuses on how to trace and recover crypto assets using one of the major exchanges as the example. Coinbase is an online cryptocurrency exchange…
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May 2022 For more than 400 years, the limited liability protection of corporate entities has been perhaps one of the greatest accelerators of economic growth and capital formation in the industrialized world. Despite the benefits, corporations have also been used as vehicles to cheat creditors with bad guys hiding behind the “corporate veil.” Over time, courts have developed a strategy for creditors to “pierce the corporate veil” to satisfy their claims from the personal assets of malicious shareholders, but until recently, creditors have been unable to pursue recovery against other affiliated entities. For more than 400 years, the limited liability…
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Signs of Ethical Deterioration The 21st century has brought not only the worst pandemic in over 100 years, but also an alarming deterioration in ethical culture. We see examples of this in the types of fraud being perpetrated, as well as in the behavior of elected officials, athletes, business owners, and wealthy parents of students. Where is this trend headed, and can it be reversed? In this article, the authors discuss how perpetrators rationalize, how financial fraud is concealed, and ways to combat fraudulent behavior. The 21st century has brought not only the worst pandemic in over 100 years, but…
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There are two ways to set ourselves apart from the competition—be different or be better. Being different is more effective, but it takes some effort to demonstrate how we are different. Being better is less effective, but it takes almost no effort to draft the usual platitudes. The author shares his views on the respective choices and rewards. There are two ways to set ourselves apart from the competition: be different or be better. Being different is more effective, but it takes some effort to demonstrate how we are different. Being better is less effective, but it takes almost no…
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A Claim That is Not Just for Corporations Many taxpayers are familiar with the Internal Revenue Code Section 165 worthless stock deduction. Taxpayers often call on valuation analysts to analyze and document the worthlessness of the stock of a corporate subsidiary or of some other common stock equity interest. The Section 165 loss deduction also applies to the worthlessness of a partnership interest, limited liability membership interest, or similar equity interest. Many taxpayers may not be aware that the taxpayer does not need to abandon the worthless security interest to claim the loss deduction. This article summarizes the requirements applied…
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Internal Revenue Code § 4958 imposes excise taxes on the excessive portion of compensation paid by a non-profit organization. Excise taxes must be paid by “disqualified persons” who receive unreasonable compensation as well as by the individuals who approve it. Despite the “excise tax” label, these taxes are generally considered to be a severe form of penalty. In considering whether compensation is unreasonable, it is important to determine whether any part of the compensation qualifies as a “fixed payment.” This article discusses the excise tax, when the “reasonableness” test relates back and what is considered a “fixed payment.” Internal Revenue…