Today’s dose of schadenfreude: No less a person than Wesley Snipes has fallen for the “zero return” scam, in this case perpetrated by one Douglas Rosile, who just had a smackdown laid on him by the Federal courts.
k2dave - I understand you to be saying that the provision that minty green quoted simply defines “income” but it doesn’t say that individuals have to pay tax on income.
Fair enough - that section is simply a definition section. However, the liability to pay tax on income is imposed by another part of the United States Code, and that part imposes tax on the income of both individuals and corporations: TITLE 26, Subtitle A, CHAPTER 1, Subchapter A, Determination of Tax Liability.
The first part of that subchapter is intitled PART I - TAX ON INDIVIDUALS. Section 1 of that part specifically taxes the income of individuals:
And, for greater certainty, you will find that the Code also imposes a tax on corporations, in Part II - Tax on Corporations. Section 11 of that Part provides:
So, you take the defintiions of “income” that minty green provided, plug it into all of these provisions, and you find that both individuals and corporations pay tax on “income.”
The question is poorly phrased. This is like asking "has anyone successfully taken money from a bank? " The answer to the question taken literally is “yes”. I withdraw money from my account regularly. But I assume the implication would be “has someone gotten away with holding up a bank?” which is a slightly different question.
>> Has anyone successfully NOT paid taxes to the IRS?
Do you mean any taxes or just income tax? Many people do not pay income tax because their taxable income is below the limit which would obligate them to pay but I guess this is not what you wanted to ask. I am guessing what you mean is something like “Has anyone who was under a legal obligation to pay income tax successfully not paid it?” and the answer isple cheat all the time and risk getting caught. Statutes also require interpretation so the IRS may consider some portion of income is taxable and you may disagree and you may go to court and you may even win.
But there is no way to legally and openly avoid paying income tax. If there were do you really think people would be paying voluntarily? Come on! People spend a lot of money on proffessionals trying to minimise their tax burden.
this is close but my main point (well the idea behind the zero return as I understand it) was income was defined by the courts to apply only to corporations and (by omission) meaningless to individuals. So when the tax code says all income derived from …, the funds that a person gets is not income as defined by the courts. They say (the zero return filers) that there is no legal definition of income for the individual.
As pointed out above there is a definition of gross income but that is just the total of income which again doesn’t apply to the individual.
Northern Piper you get closer to it but again you use the term ‘taxable income’ not income. A very fine line I agree but here is my main point which had been danced around but not hit yet.
There is no legal definition of income that applies to the individual.
I don’t absolutely know that this is true but this is what the zero return people are claiming and I haven’t been able to find one.
Suppose you side with the zero return people against the government of the USA. Who’s likely to come out on top? How many divisions do the zero returns have? Do they have nukes?
So I’ll ask again, k2dave: where does that purported definition come from?
What court case defines income as applying only to corporations k2dave?
And how do the zero return people reconcile that asserted definition with the cases described in my links above?
And why have lawyers, CPAs and other tax professionals never herad of it, but for the low low cost of $78 Irwin Schiff can explain it all?
Hey, Minty Green when I worked in the Keys, we had a guy who proclaimed himself a soverign nation (?) and when the IRS came in and ordered us to withhold his wages, he quit his job. But he showed us tons of paperwork that he had filed and I had a feeling that he might have been on to something (at least headed in the right direction.) It was a few years ago and I don’t remember all the details, but I am curious if this is something you’ve seen or heard about.
Nope, haven’t heard that one before. I’m certainly not one to keep up with all the latest tax-dodging scams. I just find them entertaining from a legal p.o.v., since they’re all essentially baseless.
Ok after a re-going over of minty green’s link of court cases (ok the summary) it appears that the courts have denied the income is for corp’s only excuse. I do think that the zero return people do have a minor point and may be technically right but common sense rules at the bench.
As for what court case - I don’t know. I heard what I relayed here from a radio talk show guest speaker and have not really looked into it - but the thought is tempting.
Don’t be too tempted, dave. The IRS hates people who give in to temptation. 
BTW: This has been covered before:
http://boards.straightdope.com/sdmb/showthread.php?threadid=42859
In the above thread, I forwarded a email from an “untax” author who was responding to some of the posters. A definite “must read”…
I heard (I can search for cite if you really want me to :rolleyes: ) that wealthy owners of several linked multi-national corporations with part of their empire in tax havens pay far less tax than you would expect.
Individuals avoiding all tax in the US (or here in the UK)?
No chance, I agree completely with minty green.
These tax boys love jumping onto a ‘scheme’.
Okay, k2dave, let’s take a look at TITLE 26, Subtitle A, CHAPTER 1, Subchapter B: Computation of Taxable Income.
Section 63 of that part of the US Code is intitled Taxable Income Defined. It reads (in part):
The provision then goes on to set out specific deductions that individuals can claim from their “taxable income.”
So, the Code defines the basic term “income”, in the provisions minty green has set out.
The provision I’ve quoted here defines the term “taxable income” for individuals, based on the combination of the definition of “income” and the allowable deductions.
And the provision I quoted earlier imposes a tax on the “taxable income” of individuals.
Have we danced close enough for you?
Let’s assume, for the moment, that the loopholes exist in tax code which allow individuals to claim that they don’t make “income”.
Wouldn’t the IRS be able to fix that loophole in the next year’s tax code? :smack:
It seems to me that if we Dopers haven’t figured a way out of paying income tax as required by the IRS, then there’s probably not a legal way to do it.
I think the real question is: has anyone successfully (that is for several years with no arrests/fines) avoided paying US income taxes without falling into one of the exempt categories (out of US, not earning any money, etc.)? k2Dave’s arguments about what ‘income’ means are irrelevant to that, since it’s been made quite clear that those arguments simply don’t fly in court, the main person selling that ‘system’ has lost court cases. While I’d love to not have to pay any taxes at all, I’m not gullible enough to fall for these systems.
Think about what Grizzrich said before you start risking a vacation in club fed - if there was an easy way to escape income tax, why can’t the people selling materials about it point to people successfully using it (there are a lot of lawyers and accountants who pay income tax, after all)? And, if there was a simple loophole like ‘income is only for corporations’, why wouldn’t the IRS or congress just close it once someone put out such a system?
Hey you guys… Check this out. In actual discussions I’ve had personnally with one of these “tax avoidance” companies. (as opposed to “tax evasion” which is illegal) I asked how it works.
Basically, they file a claim that you aren’t liable for income tax. Then give the IRS a certain time to respond. When the IRS doesn’t respond, they say that’s de facto agreement with your claim. Then you make a public record of the claim and of the failure by the IRS to respond, and you’re done!
So, I asked if these are public records, I should be able to see filings of some of the “thousands” of people who are doing this across the nation.
Here’s what I got.
http://www.clerk.co.sarasota.fl.us/
Click on “OFFICIAL RECORDS”
Click on “Click here for online Official Records Inquiry”
Acknowledge the disclaimer
Enter Name: Scrimale, Tony
You can also check out the website. www.taxescape.com
They ONLY charge 1 year’s tax liability for the service. Cheap compared to a lifetime of paying taxes…
(Two other points they made. They said that the IRS is the origin of the disinformation about this technique. I mean, who has the most to lose if this information gets out…? Also, they said that the IRS makes a big show of their initial arrests and seizures of the purveyors of this ionformation, but that they then quietly apologize. Just for the publiciity.)
What say you???
(PLEASE tell me this is on the up and up. I SO want to not pay taxes.)
(Also very interesting is that they told me Wesley Snipes was their client… Not good.)
It looks like crap to me. The idea that you can write the IRS and say “I don’t owe any taxes and you have ten days to respond and if you do not respond in ten days then I definitely don’t owe you anything” is kind of silly and you do not need to be an attorney to see why it is silly. At any rate. Run the idea past an attorney and see how hard they laugh. You think if this was legit nobody would know? Come on!