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taxmanrog
taxmanrog, Certified Public Accountant (CPA)
Category: Social Security
Satisfied Customers: 743
Experience:  Licensed CPA, MA, MST with 31 years' experience. Teach Accounting and Tax courses at Masters level.
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Oh I really have a few questions since you are here, what's

Customer Question

oh hi I really have a few questions since you are here
JA: The Retirement Accountant will know how to help. Please tell me more, so we can help you best.
Customer: what's this about the SS contract and does someone on disability qualify?
JA: These retirement benefits are supposed to help us but they can be so complicated! The Retirement Expert will help you get the most benefits propertly. Is there anything else the Retirement Accountant should be aware of?
Customer: yeah I was wondering if I could receve anything on the class action lawsuits against tabacco..I have severe vascular disease and much more problems.
Submitted: 1 month ago.
Category: Social Security
Customer: replied 1 month ago.
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Customer: replied 1 month ago.
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Expert:  taxmanrog replied 1 month ago.

Welcome to Just Answer! Thank you for giving me the opportunity to assist you! I will do my best to help!

Expert:  taxmanrog replied 1 month ago.

There is no Social Security contract. This is a scam to get you to subscribe to a newsletter.

I just answered a similar question. I also attended a Social Security webinar where this topic was discussed. If you go to the Social Security website, it even mentions it:

https://blog.ssa.gov/does-it-sound-too-good-to-be-true/

"A current email scam invites people to take advantage of “a little known Social Security contract” which enables you to receive “little known benefits.” Think that sounds too good to be true? It should — there is no “little known Social Security contract.”

What are some clues that scams might not be legitimate? They insist that the situation is urgent and issue warnings. They try to convince you to act now to avoid a dire consequence. They promise a deal or secret that the public doesn’t know about. They come from organizations unknown to you. They offer things the government doesn’t want you to know, but they don’t come from a .gov website."

Another website, the Stock Gumshoe, https://www.stockgumshoe.com/reviews/lifetime-income-report/can-you-really-earn-6880-from-a-little-known-social-security-contract/, says:

"This is the part of Zachary Scheidt’s recent ad that really caught my eye… and, no doubt, the eyes of many Gumshoe readers:

“THANKS TO A LITTLE-KNOWN SOCIAL SECURITY CONTRACT…
“YOU COULD GET FOUR DEPOSITS OF $1,720 OR MORE IN 2017…
“FOR A TOTAL OF $6,880”

That’s a pretty perfectly headlined ad — it plays on the worst fears of near-retirees, who are already busily trying to wade through the Byzantine rules and regulations regarding Social Security and keep whispering under their breath, “oh my, that’s not going to be enough money… what can I do?”

So… what the heck is Zachary Scheidt talking about? Well, he’ll tell you… for $79/year if you sign up for his Lifetime Income Report newsletter"

What they are really talking about is the good ol’ Government Properties Income Trust (GOV). It’s a Real Estate Investment Trust — which means that it has to distribute 90% of its income to shareholders in the form of dividends (that becomes taxable income for those shareholders, these dividends don’t get the special treatment of lower dividend taxes). In practice, as you may well know, REITs usually distribute far, far more than they are obligated to send to shareholders (the obligation is for distributing income, but most REITs distribute a huge percentage of their Funds From Operations, which doesn’t deduct depreciation like income does).

This particular REIT rents much office space to many of the Social Security Administration offices around the US - thus the "contract" or rental contract, with Social Security. VERY MISLEADING!! This REIT pays quarterly dividends, thus the quarterly payment that is referred to.

Another trusted finance website, the Motley Fool, also addresses this: "Senior citizens have some characteristics that make them extra appealing to scam artists. They can be very trusting, for one thing, and they're also often worried about and protective of their money. Most of them are also very dependent on Social Security for much of their retirement income, which makes Social Security-related scams particularly awful.

This particular scam is trying to get you to buy a newsletter to find out how to buy this REIT (which is available through almost any broker, including e*trade or TDAmeritrade) and then get you to invest in it. In order to get the returns that are alluded to in the ad, you would need to invest over $200k, hardly a small sum, and making ANY investment is not mentioned in the ads!

Please don't fall for this scam.

I hope that this answers your question. I would be happy to talk on the phone if you would like to.(###) ###-#### Please rate my question first and I will be happy to discuss this.

In my 32 years of practice, I have seen seniors fall for many scams. These promoters need to be JAILED!! This is horrible to trick seniors like this. Even if you only buy the newsletter, $79 is probably a couple weeks' worth of groceries that you wasted.

Thanks! Have a great weekend! And please don't forget to rate me.

Roger

Expert:  taxmanrog replied 1 month ago.

As to your second question, regarding the tobacco settlement, you are probably getting emails about collecting large sums from "Big tobacco" each quarter. This is another scam.

Back in the late 1990's, the tobacco companies reached an agreement with all 50 states, where they would pay a percentage of their tobacco revenue each year to the states as a "penalty" for causing illness and forcing the states' Medicare programs to pay for diseases caused by smoking.

The States are in need of revenue, so they sell bonds in anticipation of the revenue for future years. These bonds pay interest every quarter. The interest is based on the states collecting the money from the tobacco companies each year. So if you buy a bond, you are getting money from the tobacco companies, even though it is indirectly. And these bonds only pay 4% to 6% on average, so in order to get the thousands that they talk about in the ad, you would have to invest over $200,000. For example, they say you can get $3,500 per quarter, that is $14,000 per year. In order to get $14k at say 5%, you would have to have $280k invested!

Expert:  taxmanrog replied 1 month ago.

I have not heard back from you. Do you have any further questions?

If not, please don't forget to rate me. It is how the questions are closed.

Thanks!

Roger