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I'm rich
2-14-02 | farmall

Posted on 02/14/2002 10:25:16 AM PST by farmall

My wife and I are both public school teachers. We both teach additional day and after school classes. We both teach summer school and I have another job as a security guard. Combined total we earned @ $119,000 in 2001. IRS has already taken @ $19,000. It looks like they want another $ 3-5,000 on 4-15-02.


TOPICS: Business/Economy; News/Current Events
KEYWORDS: educationnews; taxreform
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To: VRWC_minion
That is section 1. All authority for the IRS comes from the code passed by Congress. Now when are you going to acknowledge that you have been wrong about section one conferring any liability?
361 posted on 02/18/2002 4:57:56 AM PST by Demidog
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To: farmall
Why do you think that there is something wrong with this? It is bad enough that they consider you rich, but they don't stop there, they believe in giving your taxes back so that those who haven't paid any takes should get a "refund" (Explain that one to your kids.)

It would be like three kids going to the candy store, one has two dollars, one has one dollar and the other one is broke. The kid who has two dollars earned that money from working two paper routes. The kid with the dollar earned the money from working one paper route. The kid with no money chose to stay home and play video games, he didn't like getting up so early in the morning. The store owner, assumes that the kid with two dollars has rich parents, the kid with one dollar has rich parents and the kid who has no money is poor through no fault of his own. He proceeds to take one dollar from the the rich kid and 25c from the other rich kid. We now have a lazy good for nothing kid with 1.25 and the other kids have 1.00 and 75c.

Since they know that we would never fall for the above scenario, they have the Newspaper steal the money prior to the kids getting it, that way they have a better chance of pulling off this scam.

362 posted on 02/18/2002 5:05:20 AM PST by ODDITHER
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To: Demidog
I told you we must read code section 1, before skipping around. So, far we agree that code section 1 does in fact impose a liability. You apparently believe that unless a return is filed it is not applicable. I can see where you would read it that way. However, the next logical step is to see what other legal authority there is to support your understanding. This is where I have trouble. I find no support for your reading. You have regulatory authority that directly contradicts you, you have Supreme court, appellate, tax court etc that directly contradict your interpretation and you have congressional intent which directly contradicts you.

Again, if you want to continue reading the code beyond Section 1 then please provide any authority what ever that conforms with your style of reading code section 1.

363 posted on 02/18/2002 5:24:30 AM PST by VRWC_minion
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To: Demidog
All authority for the IRS comes from the code passed by Congress.

Absolutely. And congress has given the IRS authority to write regulations which have either statutory authority or interpretive authority. In this case the IRS has published the following regulation which says in part:

Sec. 1.1-1 Income tax on individuals.

(a) General rule.

(1) Section 1 of the Code imposes an income tax on the income of every individual who is a citizen or resident of the United States and, to the extent provided by section 871(b) or 877(b), on the income of a nonresident alien individual. Now when are you going to acknowledge that you have been wrong about section one conferring any liability?

This regulation is authoritative and has been upheld by court rulings (some of which have been posted on this thread).

I will acknowledge that it is possible for one to read code section 1 as if it only applies if you file a return but that reading has never, ever worked in court. It is possible to come up with a silly way to read just about anything. Clinton proved that. Again, please provide any support that contradicts the mountain of support that says section 1 does impose an income tax.

New question, assuming section 1 does not apply to anyone that doesn't file a return, can an assessment of income tax be made when someone doesn't file ?

364 posted on 02/18/2002 5:34:29 AM PST by VRWC_minion
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To: RooRoobird14
You are right that an employee has far less flexibility in saving taxes than does a self-employed individual. You are also right that few people understand that exemption deductions and itemized deductions are phased out for people with what the government thinks are high incomes. These phaseouts, however, will themselves be phased out under the 2001 Tax Act. Other than maxing our your 401k plans, about all you can do is be sure to shelter medical expenses with a Sec. 125 cafeteria plan if your employer has one available. You could also start a small business if you have the time and interest.
365 posted on 02/18/2002 5:42:40 AM PST by TheCPA
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To: RooRoobird14
The Internal Revenue Code now provides numerous incentives for going to college--such as the Hope credit, the lifetime learning credit, the new deduction allowed in computing adjusted gross income for certain education expenses, the deduction for student loan interest, the Coverdell education savings accounts, 529 plans, etc. However, some of these benefits are phased out for taxpayers at certain levels of income.
366 posted on 02/18/2002 5:47:00 AM PST by TheCPA
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To: Wm Bach
A flat tax IS an income tax. And it would be far more complex that the average person thinks it would be. Determining income for a business is inherently complex. Computing taxes for a wage earner is rather simple now. Yes, in my judgment, the rates are far too high. A national sales tax would be far simpler than a flat tax or a VAT. However, if numerous exemptions were allowed, even a sales tax could be somewhat complex. Yet, a sales tax should be far more simple than an income tax.
367 posted on 02/18/2002 5:50:08 AM PST by TheCPA
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To: TheCPA
Hi CPA--we don't qualify for ANYTHING in terms of IRA's, college savings accounts, etc--our income bracket makes us ineligible. The only legal deductions we have are 401k's, charitable contributions, mortage interest (zip--our house is paid for), state taxes, and our daughter (don't even get 100% of that deduction). We are the proverbial "golden goose" for the IRS.
368 posted on 02/18/2002 5:52:51 AM PST by RooRoobird14
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To: Kevin Curry
The income of drug dealers is subject to income tax. In addition, drug dealers are not allowed any deduction for ordinary and necessary business expenses such as office supplies and telephone. However, because cost of goods sold is subtracted in determining gross income under the Regulations under Sec. 61, a drug dealer is allowed a deduction for the cost of drugs sold. This is obviously strange that a drug dealer may deduct the cost of the drugs, but not the cost of office supplies. Of course, most illegal drug dealers do not report their income honestly. However, the income is still taxable.
369 posted on 02/18/2002 5:53:08 AM PST by TheCPA
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To: SamAdams76
You are right that employees incur many expenses that might qualify as legitimate expenses. However, employee business expenses are miscellaneous itemized deductions. Only the total miscellaneous itemized deductions in ecess of two percent of adjusted gross income are deductible. And at higher levels of income, there is a reduction in the total itemized deductions. This reduction is just a back door way of increasing the tax rate for high income people. In fact, in some cases, after the reduction in itemized deductions, a taxpayer would be better off taking the standard deduction.
370 posted on 02/18/2002 5:59:08 AM PST by TheCPA
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To: RooRoobird14
The deduction for business gifts is limited to $25 per donee per year, plus the costs of wrapping and delivery. Business meals and entertainment are only 50% deductible, and the taxpayer must document that a valid business discussion occurred before, during, or after the meal or entertainment. Business travel costs are deductible, but the additional cost for accompanying spouse or children are deductible only if they are employees and have a valid business purpose for being there.
371 posted on 02/18/2002 6:10:20 AM PST by TheCPA
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To: rolling_stone
Ah yes the rest of us are subsidizing your family.

Even with the Child Tax Credit going beyond wiping out his income tax liability -- a glaring error in the tax law, IMHO -- I can assure you that biblewonk and his large family are anything but a burden on society.

372 posted on 02/18/2002 6:23:25 AM PST by newgeezer
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To: farmall; RooRoobird14
Funny you don't mention taxes on taxes - are your local and state taxes bases on your gross income? If so you are being taxed on a tax. What is the true percentage you pay in taxes when you figure it from your net after other tax income?

If you're paying into Social Security and saving for retirement via a 401k or IRA, etc., then probably about 30% of your income is going to retirement where much less would be needed if the government didn't have their hand in your pants. This includes the employer contribution to your social security since your employer pays the money on your behalf. If you’re self-employed, your paying the full SS bill directly out of pocket. Just think how much money you’d have by now if you were able to save all of this 30% directly for retirement!

Welcome to indentured servitude USA.

373 posted on 02/18/2002 7:19:36 AM PST by disclaimer
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To: TheCPA
Hi CPA--I was aware of most of the things you pointed out. Do people who cheat the way I've seen eventually get caught, or are there just too many of them? I find some of the fraud simply mind-boggling.
374 posted on 02/18/2002 7:34:41 AM PST by RooRoobird14
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To: RooRoobird14
There is some fraud out there. The IRS does not get that many of them. Their investigation may focus on high profile cases so that others will see it and fear the IRS. Although the IRS investigates criminal tax fraud, the actual prosecution is handled by the Department of Justice. There is also a civil fraud penalty equal to 75 percent of the unpaid tax due to fraud. The IRS bears the burden of proving civil fraud by clear and convincing evidence, which is a lesser standard than the beyond a reasonable doubt standard required for a criminal tax fraud conviction. A taxpayer could be subject to both fraud penalties because courts have held that the civil fraud penalty is remedial rather than punitive and therefore does not violate the double jeopardy clause of the Fifth Amendment.

However, there are a lot of gray areas in the law, or the law may be clear but the facts are gray. A CPA may advocate the best position of the client when there are gray areas as long as there is a realistic possibility of the position being sustained on its merits.

375 posted on 02/18/2002 7:52:47 AM PST by TheCPA
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To: ODDITHER
nice "ill"ustration
376 posted on 02/18/2002 9:24:09 AM PST by farmall
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