The Journal News from White Plains, New York • Page 39

www.tfiejournalnews.com YOUR MONEY The Journal News Sunday, July 23, 2000 3D CALENDAR Telephone company's version of full disclosure is yours for the asking -f I Stephen SchmittTlie Journal News Mary Ann liebert talks with her son, Lewis, about one of the publications in their Larchmont offices. Publisher a respected voice in health care field ness counseling. New York State De-. partment of Labor offices, 120 Bloomingdale Road, White Plains. Information: 948-3907.

10 a.m. SERVICE CORPS OF RETIRED EXECUTIVES. Free business counseling. Chamber of Commerce, 30 State Ossining. Information: 941-0009 11 a m.

SERVICE CORPS OF RETIRED EXECUTIVES. Free business start-up counseling session. Yonkers Chamber of Commerce, 20 S. Broadway, Room 1207. Information: 963-0332.

6:30 p.m. INTERNATIONAL COACH FEDERATION, WESTCHESTERROCKLAND CHAPTER. Personal and business coaching. Mary-mount College, Tarrytown. Information: Frieda Kreiner at 352-0001.

7:15 p.m. SLEEPY HOLLOW. TOASTMASTERS. Bethel vale Inn, 62 Springvale Road, Croton; on-Hudson. Information: Gail Curran at 736-7015.

I' THURSDAY 7:30 a.m. NORTHERN WESTCH-' ESTER BUSINESS GROUP. Net-' working and referrals. Mardino's Restaurant, 473 Lexington Mount Kisco. Information: Paul Konigsberg at 763-9508.

9 a.m. NEW YORK STATE SMALL BUSINESS DEVELOPMENT CENTER. Free counseling for small businesses. Mercy College, Dobbs Ferry and White Plains campuses; Information: Christina Cashin at 674 7485. 9:30 a.m.

SERVICE CORPS OF RETIRED EXECUTIVES. Free counseling for start-up businesses. Mount Vernon Chamber of Commerce, 53 Valentine St Information: 9:30 a.m. SERVICE CORPS OF RETIRED EXECUTIVES. By appoint, ment.

Free counseling for start-up businesses. New Rochelle Chamber of Commerce, 557 Main second floor. Information: 632-5700. 10 a.m. SERVICE CORPS OF RETIRED EXECUTIVES.

By appoint: ment. Free business counseling: PeekskillCortlandt Chamber of Commerce, 1 S. Division Peek-skill. Information: 737-3600. Noon.

SERVICE CORPS OF RETIRED EXECUTIVES. By appointment. Free counseling for start-up and expanding businesses. Room 200 BOCES Resource Center, 131 Midland Ave. Nyack.

Information: 353-2936. FRIDAY 8:30 am. MAMARONECK CONTINUING EDUCATION. Saving money. Julian Block.

Mamaroneck High School. Information: 698-3255. 9 a.m. NEW YORK STATE SMALL BUSINESS DEVELOPMENT CENTER. Free counseling for small businesses.

Mercy College, Dobbs Ferry and White Plains campuses. Information: Christina Cashin at 674-7485. TOMORROW 9 a.m. NEW YORK STATE SMALL BUSINESS DEVELOPMENT CENTER. Free counseling for small businesses.

Mercy College, Dobbs Ferry and White Plains campuses. Information: Christina Cashin at 674-7485. 9:30 a.m. SERVICE CORPS OF RETIRED EXECUTIVES. Free business counseling.

New York State Department of Labor offices, 120 Bloomingdale Road, White Plains. Information: 948-3907. 7 p.m. BEDFORD TOASTMAS-TERS. Bedford Hills Community House, Main Street.

Information: Greg Riley at 666-9452. 7:30 p.m. COMMUNITY SUPPORT FOR EMPLOYMENT TRANSITION (COMSET). Larchmont Avenue Church. Information: Daniel Reilly at 636-6542.

TUESDAY 9 a.m. NEW YORK STATE SMALL BUSINESS DEVELOPMENT CENTER. Free counseling for small businesses. Mercy College, Dobbs Ferry and White Plains campuses. Information: Christina Cashin at 674-7485.

9:30 a m. SERVICE CORPS OF RETIRED EXECUTIVES. Free business counseling. New York State Department of Labor offices, 120 Bloomingdale Road, White Plains. Information: 948-3907.

9:30 a.m. SERVICE CORPS OF RETIRED EXECUTIVES. Free business counseling, by appointment. Boys and Girls Club of Northern Westchester, 351 Main Mount Kisco. Information: 666-8069.

10 a.m. SERVICE CORPS OF RETIRED EXECUTIVES. Free business counseling. Chamber of Commerce, 30 State Ossining. Information: 941-0009 11 a.m.

SERVICE CORPS OF RETIRED EXECUTIVES. Free business start-up counseling. Yonkers Chamber of Commerce, 20 S. Broadway, Room 1207. Information: 963-0332.

7 p.m. ROCKMUG MACINTOSH USER GROUP. New City Public Library. Information: Dick Price at 354-6222 WEDNESDAY 7:30 a.m. ROCKLAND BUSINESS EXCHANGE.

Nanuet Inn, Route 59. Information: Jill Pryor at 638-0118. 7:30 a.m. LEADERSHIP NETWORKING. A professional organization for business people.

Pearl River Hilton. Information: Steve Alexander at 354-7821, ext. 20. 9 a.m. NEW YORK STATE SMALL BUSINESS DEVELOPMENT CENTER.

Counseling for small businesses. Mercy College, Dobbs Ferry and White Plains campuses. Information: Christina Cashin at 674-7485. 9:30 a.m. SERVICE CORPS OF RETIRED EXECUTIVES.

Free busi In Moneyland, companies find a million ways of nipping a little extra cash out of your pocket Today's example: a telephone company, selling an extended-payment plan. The company's sales reps have made the plan sound cheaper than it really is. My story starts with Bridgett Baron, a Chicago accountant who wanted a second phone line in her home. She called SBC Ameritech and learned that the total cost would come to more than $150. Ameritech's phone rep offered to let her stretch her payments over two to 12 months, at "only a 1.5 percent finance charge." That sounded cheap, so she agreed.

But then Baron started to rethink. A 1.5 percent charge came to around $1.23 (as calculated on her Quicken program). How come Ameritech was offering financing at so low a rate? So she called back, got another phone rep named Dave, and asked for clarification. Says Bridgett: "Is that 1.5 percent for the whole year, nr 1 5 nerrent ner month' Savs T)hvp- "Yes, for the whole year per month." Huh? Whaddidhesay? Ameritech's game plan seems to be: Keep 'em confused. Luckily, Baron isn't someone who just fell off a turnip truck.

She asked Dave point-blank: "Does that mean 18 percent per year?" Well, yes, Dave finally conceded the cost of extending payments comes to an annualized 18 percent. Well, gosh. I thought that, by law, creditors had to disclose the true, annual interest rate when customers paid in installments. How can Ameritech get away with claiming that its financing costs just L5 percent? That seemed like a simple consumer question. But finding the answer led me deep into the Big Muddy.

After a long slog, I learned something that may surprise you: Ameritech (and other utilities) can disclose whatever they want Under the federal Truth in Lending Act, lenders have to tell you the annual percentage rate (APR) on any loan. That lets you compare one lender's rate with another's. Thanks to this law, consumers can evaluate whether the credit they're being offered is expensive or cheap. But public utilities, such as phone companies, are generally exempt from Truth in Lending, says attorney Kyung Cho-Miller Of the Federal Reserve, which administers the law. A utility has to disclose the annual finance charge only if it's selling a "durable good or home improvement." Public services are exempt After checking with the state of Illinois, Cho-Miller concluded that installing a second phone line is a public service.

So Truth in Lending rules don't apply. My next port of call was the Illinois How to handle Most persons pale at the prospect of an audit. But there are ways to lessen the trauma and exnense of an JANE BRYANT QUINN On the Money Commerce Commission. The commission administers what's left of local phone-company regulation. Illinois maintains price caps on the cost of installing both basic dial-tone service and a second line, says attorney Matt Harvey in the commission's office of general counsel.

But there's no requirement to disclose the annualized rate charged for installment payments. The Commerce Commission was surprised to hear that SBC Ameritech was financing the cost of second lines. "We're not of the opinion that they can finance services," spokesperson Beth Bosch told my associate, Dori Perrucci. "They aren't authorized to do that." Hmmm, could there be a problem here? No, no don't even think it. Bosch talked to Ameritech and cleared everything up.

Ameritech is not "financing" the cost of its second lines, Bosch says. Instead, it's offering customers a "deferred payment plan." Get it? When customers pay 1.5 percent, they're not paying interest. That's merely a "late payment charge" for people who don't pay upfront. I guess we all must have fallen off a turnip truck. How unsophisticated of Bridgett Baron and me to mistake 1.5 percent per month for an interest payment.

"It does seem like a relatively harsh result for this consumer," Harvey says. "But we're not aware of significant complaints." Selim Bingol, spokesperson for SBC Communications in San Antonio, Texas, says, "We train our reps to fully disclose all monthly payments and charges." OK, Selim but what about disclosing the true annual rate? So he says again, "If it's 1.5 percent a month interest, they are to say that." (Selim is starting to sound like Dave a bunch of Stepford phone pals.) Finally, here's what I heard from an Ameritech spokesperson in Chicago: "If the customer asks, the reps will tell them it's 18 percent annually." So that's what passes for "disclosure." The full truth is reserved for those who know enough to ask. Jane Bryant Quinn welcomes letters but cannot offer individual financial advice. Write to: Washington Post Writer's Group, 1150 15th St NW, Washington, D.C. 20071.

an IRS audit thing you can do? Show up with very little in the way of supporting documents and only a sad story about how the dog ate your checks or that you lost your receipts. Best approach: Postpone your appointment long enough to get copies of checks from your bank. APPEAL RIGHTS Whether it makes sense in your particular case to appeal the examining agent's findings depends on the issues and amounts involved and on IRS policy in settling similar disputes. But the IRS's own statistics reveal that it settles many appeals for far less than the examining agent demanded. If your case is reassessed by the agent's superiors and you and the IRS fail to reach an agreement or if you skipped the agency's appeals system, you can then take the dispute to court.

Most persons who choose to battle the IRS do so in Tax Court. Going that route allows you to have your case heard without having to first pay the taxes at issue. Should you lose, you then pay the taxes plus interest. If the disputed taxes involve not more than $50,000 for any one year, you can go to the Tax Court's Small Tax Case Division, which will handle the case with as little formality, expense or delay as possible. In my next column, I'll provide more tips on how to cope with an IRS examiner.

Julian Block ofLarchmont is a tax attorney whose books include "Julian Block's Tax Avoidance Secrets." Send questions and comments to him via e-mail atjulianblockyahoo.com. JULIAN BLOCK 171 Tax Adviser f-h Long-term care insurance is a timely precaution mother constantly thinks of new ideas for journals. After running the ideas by her company's board of directors, it's usually a few. months before publication begins. He said she skips traditional market research for her journals and goes with her gut.

"I cant figure out how she comes up with all of this stuff," Lewis Liebert said. "She doesn't do studies. I don't even know if she's personally interested in the subjects, but she just sees a market." The company long ago expanded into non-medical publishing with journals on skating, Internet gambling and the spa business. One of Liebert's most popular magazines is The Westchester Wag, a free monthly that covers the social scene in Westchester County. The skating publication, Rinkmagazine, was started by her son and brings in more than $400,000 in subscription revenue, based on its subscription base of 8,000.

Allof the journals will be available on the Internet by year's end, Liebert said, though some are online already. Liebert won't reveal revenues or profits, but she said revenues have been growing by 18 percent to 20 percent a year for the past few years. "We've never had to downsize ever. I'm very proud of that," she said. "The company is extremely well-managed fiscally.

I tell my son all the time 'Cash is As profits grow, so does Liebert's influence. She has the ear of politicians and top executives at pharmaceutical companies. President Clinton wrote a letter to Liebert for her 20th anniversary -i- which was read aloud praising her work. Liebert also noted proudly at her 20th anniversary celebration that the late Princess Diana was a reader of her AIDS publications. "She really has an impact in the science community, with the media and decision-makers," said Mary Woolley, chief executive and president of Research! America, a nonprofit medical research advocacy group.

"She has a clear message and a strong voice." Liebert is on the board of directors of Research! America. She also supports various women's health groups, including the Society for the Advancement of Women's Health Research. Liebert's focus has mainly been on women's health issues. She is the lead organizer for the Congress on Women's Health, which helped changed research standards. Women are now included in medical research in larger numbers and drugs are screened to determine their effects on men and women.

She is fighting to make drugs more affordable and urging insurers to cover emerging therapies for illnesses. She also advocates increased federal funding for research into new diseases, including West Nile virus, a sometimes fatal disease that is spread by mosquitoes. Liebert is starting a journal next year to look at insect and animal-transmitted diseases. With a coming journal on men's health, her attention might turn to prostate, testicular and other forms of cancer, she said. Liebert also said diabetes needs more funding to find new treatments and, possibly, a cure.

Isadore Rosenfeld, a cardiologist and professor of medicine at Cornell University, likened Liebert to the late Mary Lasker, the activist who fought to develop a universal health care system and is credited with boosting funding to find cures for fatal illnesses. "She's disseminating a lot of information through her maga-zines," he said. "Lasker was the driving force behind all the medical research in the '60s. Mary is following that lead." Liebert, who knew Lasker and credits her with teaching her the need for civic activism, sees it as her responsibility to affect change. She has the voice and she is going to use it "I'm going to be on such a soapbox this fall, fighting for all these issues," she said.

UEBERT, from ID But colleagues say Liebert's true passion is in helping others and making changes in public policy. Broadening her company's reach with new journals may be a smart business move, they say, but it will also serve as a way for her voice to be heard on a wide variety of issues affecting human health. "She has a great deal of energy, enthusiasm and drive," said Myr-na Blythe, editor-in-chief of Ladies Home Journal. "She's very committed to and has been a leader in the issue of women's health." "It's through journals that the medical community learns about new advances," said Rye resident Ruth Merkatz, director of women's health at Pfizer Inc. and a friend of Liebert's.

"So she has ability to bring a lot of attention to a particular area. She's created her influence." Liebert said her drive to advance medicine is rooted in her father's struggle with Parkinson's disease. The neurological disorder that causes Parkinson's which is receiving renewed attention after striking actor Michael J. Fox can rob victims of the ability to walk, talk or perform other simple tasks. Liebert while attending Northwestern University in Chicago, took an internship at the American Medical Association.

Every day she scoured volumes of e-search on Parkinson's looking for a cure or some therapy that could extend her father's life. She never found either and he died. "It ignited my interest in medicine," Liebert said. After graduating with a degree in journalism, Liebert worked various publishing jobs. She moved to New York and became vice president of marketing for publisher Marcel Dekker Inc.

Liebert got the idea to publish medical journals, but her company wasn't interested. In 1980 she struck out on her own. Liebert worked out of the corner of her living room, using an IBM Selectric typewriter which now sits in the waiting room at her office to type copy. She did not have a scientific background, but she had a keen interest in science and medicine and read many books on the subjects. She had an idea for the Journal of Interferon Research, which focuses on how cells develop resistance to viruses and fight off infections.

She found an editor and, after nine months of work and tens of thousands of dollars in personal savings, the magazine was published in 1981. The initial response was enthusiastic, she said. Liebert continued publishing the journal and a couple of months later started Genetic Engineering News, which, covers the goings-on in the world of biotechnology. Liebert was a one-woman crew. She designed the publications, edited and proofread the articles, sold advertising and kept the books.

She marketed the journal and GEN directly to academics, libraries and universities. "She nurtured it very carefully," said Philip Marcus, a professor of molecular and cellular biology at the University of Connecticut and editor of the Journal of Interferon Research. "This was an area that was not being covered thoroughly. She filled an important need." Liebert's son, Lewis, who heads up the company's Internet operations, said she has a gift for identifying niches overlooked by larger publishers. She publishes journals focusing on women's health issues, medicinal food, high altitude medicine and biology and cloning, among other topics.

Cloning, started last year, is edited by Ian Wilmut, the researcher who cloned Dolly the sheep. Liebert's journals are all peer-reviewed, meaning every article is examined anonymously by two other scientists before publication. Most medical journals are published this way to increase the credibility and accuracy of research findings. Lewis Liebert, 27, said his I paid by tax-qualified plans are generally not taxable. There's reason to hope that the policy designed and negotiated by the OPM will serve as a model for future policies that will be offered to the employer group market and eventually to individuals.

If LTC, policies were more available, it would go a long way toward preventing people from being forced into Medicaid because they've used up their savings trying to pay for a nurs ing home. I saw that happen to my? mother a few years ago, and it was an unpleasant experience. On Capitol Hill, there is a widespread belief that new tax deductions would encourage more people to buy long-term insurance. These tax-deduction proposals are contained in several bills, including a bipartisan measure sponsored by Sens. Charles E.

Grassley, R-Iowa, and Bob Graham, and Reps. Nancy L. Johnson, and Karen Thurman, D-Fla. This bill has the support of both the AARP andtheHIAA. Here's how the plan would work A person under 55 could deduct 60 percent of the cost of a policy in the first year, plus an additional 10 percent a year until it reaches 100 percent in the fourth year.

For those over 55, the deduction would begin at 70 percent in the first year, then go to 85 percent and, in the third year, to 100 percent The deductions would be limited, however, by age restrictions already in the tax code: As of 2000, the limits were $220 for those ages 40 or less; $410 for those ages 41 to 50; $820 for ages 51 to 60; $2,200 for ages 61 to 70; and $2,750 over age 70. The bill's sponsors estimated the cost in lost tax revenue as $741 mik lion over five years; $7.3 billion over 10 years. But according to an HIAA study by Marc A. Cohen and Maurice Weinrobe, for every $1 the federal government gives up in tax revenue, Medicaid would save $1.06. An expanded tax deduction for the cost of LTC insurance looks like an idea whose time has come.

If it doesn't happen this year, it's bound to happen in the next few years. The arrival of 77 million baby boomers will make sure of that LTCfrom ID deductions, subject to both time and age restrictions, for the cost of LTC premiums. The measure's fate is uncertain because it must be attached to a tax bill that President Clinton could be expected to sign. Hill sources say the search for such a bill is under way. Although not strictly an LTC measure, there is bipartisan interest in legislation to give financial help to the 25 million people who provide care for chronically ill relatives or friends.

The Clinton administration supports a $3,000 income tax credit. Texas Gov. George W. Bush, the Republican presidential candidate, has proposed giving an additional personal tax exemption, worth $2,750, to caregivers. The chance to sell LTC insurance to 13 million federal workers is a watershed event for the $3.8 billion LTC insurance industry.

It's a huge business opportunity, and a major public relations coup with the governmental stamp of approval. In negotiations with insurers over the design of the federal LTC coverage, the OPM is expected to seek a comprehensive policy covering a variety of services, including nursing home and home health care, assisted living facilities and adult day care. The OPM also is considering a "pool of money" approach, which permits enrollees to choose a set amount of money and a time period for their coverage, then to spend their money for different services as needed. The OPM policy can be expected to meet Internal Revenue Service rules for "tax-qualified" policies. If your policy is tax-qualified, you can deduct its cost when your medical bills reach 7.5 percent of your adjusted gross income.

IRS figures show that relatively few people make use of this medical deduction. A tax-qualified policy also must have certain consumer protections. It must be guaranteed renewable and offer both inflation protection and a nonforfeiture clause, which usually cost extra. Without a nonforfeiture clause, policyholders can pay for years and get nothing back if they drop their policies. The benefits i encounter with the Internal Revenue Service.

Here are some hints on how to even the odds when the feds insist on a chat. An audit is basically an adversarial proceeding. But unlike in a criminal trial where you are presumed to be innocent until the government proves you guilty, the burden of proof in a tax dispute is on you, not the IRS, as a general rule. In the case of deductions, for example, the burden is on you to show that you incurred and paid the expenses. If you refuse to do so, the IRS will simply disallow the expenses.

You need evidence that you had the expenses (bills can take care of that); that you paid them (canceled checks are usually sufficient); and that the items in question were business-related or deductible for other reasons. For your deductions to pass muster, you have to satisfy all three requirements. Two out of three is not a passing grade. For example, canceled checks might not be enough to substantiate deductions for contributions to churches and other organizations. The auditor might also ask for letters or receipts from the charities.

Why? Because some taxpayers have been known to cash checks at church bazaars and list them as acts of charity. Also, you might have received something valuable in return for your donation for instance, tickets for sports events. The auditor has some leeway to let you get by with incomplete verification where you have a reasonable explanation for how you came up with the figures that are being questioned. That's why it pays to be cooperative and to answer questions politely. Bring with you only those checks, receipts and whatever else is necessary to substantiate your position, and confine your answers to the questions raised.

Otherwise, you might wind up with more auditing than you bargained for. The worst I.