Can I really skip paying income taxes?

[Bosda_Di_Chi_of_Tricor]

*Originally posted by hyjyljyj *
**

A much more sensible alternative was presented to Congress as H.R.2001 by five courageous congressmen who had the nerve to literally throw the 15,000±page tax code into Boston Harbor and suggest instead a consumption (sales) tax, paid at the cash register whenever you buy non-essential stuff. Ten or 15 percent would be more than enough if everyone, including ultra-rich guys with crafty accountants and underworld types who never pay income tax, would then have to shoulder their fair share of the tax burden. No forms to fill out, no billions of dollars and hours wasted every year on paying the IRS, and no IRS. Special-interest groups, of course, killed the legislation quickly.

**

** hyjyljyj ** --I don’t know how to tell you this, but Tennessee is trying to operate on the sales tax notion, & is going broke at lightning swift speeds.

I work in Tennessee State government, & I see it all. Shoddy supplies, unrepaired State vehicles, a total inability to recruit & retain professionals such as Civil Engineers, Architects, Physicians, & Accountants. We have exactly one Elevator Safety Inspector in the whole State. We’re supposed to have twenty. They only have to be trained elevator repairmen or Mechanical Engineers. But they can get better pay anywhere. No money.

Our State has a hidden deficet–building maintainence. There hasn’t been enough money to properly maintain & repair State buildings since the 1970s. So, bit by bit, the repair budgets have vanished. And now it’s all coming home to roost. The HQ building for the Tennessee Department of Transportation (the best funded department is State Government) is in severe danger of structural collapse due lack of reapirs. The State was warned of this 5 years ago. Nothing has been done, & there are no plans to. No money.

Our educational system is a sick joke. Our kids have no future. This year, a college dormatory here in town was evacuated, because the ceiling caved in. No repairs were made. The kids who paid for the dorm were kicked out, with no refund of fees. The fees had already been spent for day-to-day expenses. No money.

Various plans to use private contractors have all proved to be ruinous. Either the work is never done, or it is done incorrectly, or the contractor defaults on the contract, because he can’t do the work for less than in-house employees can. How could he? State employees are paid 20% to 30% less than typical private sector employees are.

All safety training for State employees has been halted. No money.

We have brand-new HazMat Rescue Trucks courtesy of the Homeland Security boys, as part of the anti-terror package. But no trained crews. The Feds buy the trucks & equipment, but Tennessee must pay the crews. No money–no crews.

We are going broke.

Internet sales are killing us, because nobody much cares if we collect our sales taxes, so on-line stores don’t bother to collect it.
We just created a State lottery, but that’s not likely to help much, as it’s sl;ated for scholarships, not day-to-day expenses.

We have sales taxes on food, clothing, & the necessities of life. There is even a call for a sales tax on medicine for Ghod’s sake!

The tax has been raised frequently in recent years, to no avail. We are in debt, & things are getting worse.

By population, Tennessee is the 16th largest state, but we have the 22 largest government by number of employees, & the 32nd highest rate of taxation. There is no more fat to cut.

The sales tax doesn’t work.

[Northern_Piper]

*Originally posted by hyjyljyj *
It is true that there is no absolute, printed law that states it is mandatory for US citizens (as that term is commonly understood) to pay any income tax.

Well, let’s start with the United States Code, Title 26, Subchapter A - Determination of Tax Liability, in particular PART I - TAX ON INDIVIDUALS, which reads:

Sec. 1. - Tax imposed

(a) Married individuals filing joint returns and surviving spouses

There is hereby imposed on the taxable income of -

– (1) every married individual (as defined in section 7703) who makes a single return jointly with his spouse under section 6013, and

– (2) every surviving spouse (as defined in section 2(a)),

a tax determined in accordance with the following table: [table omitted]

(b) Heads of households

There is hereby imposed on the taxable income of every head of a household (as defined in section 2(b)) a tax determined in accordance with the following table: [table omitted]

© Unmarried individuals (other than surviving spouses and heads of households)

There is hereby imposed on the taxable income of every individual (other than a surviving spouse as defined in section 2(a) or the head of a household as defined in section 2(b)) who is not a married individual (as defined in section 7703) a tax determined in accordance with the following table: [table omitted].

So, here you have a provision of federal law imposing a tax on the taxable income of individuals. (And no, you can’t somehow try to argue that “individuals” means corporations. Corporate income tax is dealt with in a different part, Part II - Tax on Corporations.)

Now, you’ll notice that this provision refers to “taxable income.” How do you know what that is? Well, you start with the definition of “gross income”, which I posted earlier. It’s set out at TITLE 26, Subtitle A, CHAPTER 1, Subchapter B, PART I, Sec. 61 - Gross income defined, and is extremely comprehensive: “gross income means all income from whatever source derived”.

The term “taxable income” is defined as well, by TITLE 26, Subtitle A, CHAPTER 1, Subchapter B, PART I, Sec. 63 - Taxable income defined. The general definition is:

Sec. 63. - Taxable income defined

(a) In general

Except as provided in subsection (b), for purposes of this subtitle, the term “taxable income” means gross income minus the deductions allowed by this chapter (other than the standard deduction).

So, you take your gross income, subtract the allowable deductions, and there’s the “taxable income” on which a tax is imposed.

Next, as for the argument that you’re not required to fill out the income tax return, see TITLE 26 , Subtitle F , CHAPTER 61, Subchapter A , PART II, Subpart A, Sec. 6011, which reads:

Sec. 6011. - General requirement of return, statement, or list

(a) General rule

When required by regulations prescribed by the Secretary any person made liable for any tax imposed by this title, or with respect to the collection thereof, shall make a return or statement according to the forms and regulations prescribed by the Secretary. Every person required to make a return or statement shall include therein the information required by such forms or regulations.

The next step is the authority of the federal government to collect the tax which is imposed on income. That too is set out in the United States Code, at TITLE 26, Subtitle F, CHAPTER 64, Subchapter A, Sec. 6301, which reads:

Sec. 6301 - Collection authority

The Secretary [of the Treasury] shall collect the taxes imposed by the internal revenue laws.

The Code goes on to give him the authority to issue a demand for taxes owing, at TITLE 26, Subtitle F, CHAPTER 64, Subchapter A, Sec. 6303:

Sec. 6303. - Notice and demand for tax

(a) General rule

Where it is not otherwise provided by this title, the Secretary shall, as soon as practicable, and within 60 days, after the making of an assessment of a tax pursuant to section 6203, give notice to each person liable for the unpaid tax, stating the amount and demanding payment thereof. Such notice shall be left at the dwelling or usual place of business of such person, or shall be sent by mail to such person’s last known address.

Next, the US Code provides for enforcement mechanisms, such as tax liens and the seizure of property for collection of taxes. In addition to the authority for these enforcement mechanisms, the Code also sets out due process requirements for both liens and collections, so it’s not as if the IRS officials are a law unto themselves - they must comply with the terms of the US Code, and must be prepared to defend their position in Federal Court, if need be. See: TITLE 26, Subtitle F, CHAPTER 76, Subchapter B - Proceedings by Taxpayers and Third Parties.

And finally, the US Code makes it a crime to wilfully fail to remit taxes owing pursuant to such a demand. That provision is found at TITLE 26, Subtitle F, CHAPTER 75, Subchapter A - Crimes, and reads:

Sec. 7202. - Willful failure to collect or pay over tax

Any person required under this title to collect, account for, and pay over any tax imposed by this title who willfully fails to collect or truthfully account for and pay over such tax shall, in addition to other penalties provided by law, be guilty of a felony and, upon conviction thereof, shall be fined not more than $10,000, or imprisoned not more than 5 years, or both, together with the costs of prosecution.

So, I would respectfully disagree with your suggestion that the Internal Revenue Code does not impose a tax on individual income.

[Note: the above is not intended as legal advice, but simply to contribute to a discussion of a matter of public interest. Anyone needing legal advice on their personal tax situation should seek the advice of a lawyer trained in the laws of your jurisidiction.]

[Northern_Piper]

*Originally posted by hyjyljyj *
It is also true that if you write to the IRS and ask them to send you a copy of the law that states you must pay the tax, or the law that gives them jurisdiction to operate outside the District of Columbia, they will reply in writing that there is none.

The bit about the District of Columbia is another bit of misinformation, I’m afraid. The federal government’s power to impose taxes is set out right where you would expect to find it: in Article I, s. 8 of the U.S. Constitution. The opening words of that provision are:

The Congress shall have power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States; but all duties, imposts and excises shall be uniform throughout the United States.

The idea that the federal government is limited to operating in the District of Columbia is a misreading of a later provision in section 8, which reads:

To exercise exclusive legislation in all cases whatsoever, over such District (not exceeding ten miles square) as may, by cession of particular states, and the acceptance of Congress, become the seat of the government of the United States, and to exercise like authority over all places purchased by the consent of the legislature of the state in which the same shall be, for the erection of forts, magazines, arsenals, dockyards, and other needful buildings

This is simply one of several powers granted to the Congress, and does not limit the scope of the other legislative powers set out in section 8. The significance of the provision lies in that phrases “exclusive legislation.” The normal rule is that of concurrency: federal and state laws operate throughout the U.S. This provision creates an exception for the District and other federal areas ceded by individual states: the states cede their legislative powers with respect to those areas.

[Northern_Piper]

*Originally posted by hyjyljyj *
A much more sensible alternative was presented to Congress as H.R.2001 by five courageous congressmen who had the nerve to literally throw the 15,000±page tax code into Boston Harbor and suggest instead a consumption (sales) tax, paid at the cash register whenever you buy non-essential stuff. Ten or 15 percent would be more than enough if everyone, including ultra-rich guys with crafty accountants and underworld types who never pay income tax, would then have to shoulder their fair share of the tax burden. No forms to fill out, no billions of dollars and hours wasted every year on paying the IRS, and no IRS. Special-interest groups, of course, killed the legislation quickly.

Well, except for the fact that sales taxes are regressive in nature: the poorer you are, the greater a proportion of your income you pay in tax. The richer you are, the smaller the proportion of your income you pay. As between a progressive system (where the richer you are, the more you pay) and a regressive system, I would opt for the progressive system.

[Duckster]

*Originally posted by Early Out *
Your last statement implies that, if I’ve ever earned money working in the U.S., I can’t ever go to live somewhere else. When I said “emigrate,” I was referring to moving to another country, giving up U.S. citizenship, and becoming a citizen of your new, adopted homeland. If that won’t get you out of paying taxes to the U.S. IRS, I don’t know what will (short of dying, of course!).

Actually, if you do emigrate from the USA, give up US citizenship, etc., and there is any intent on your part to do so to avoid paying US taxes, the feds will void your attempt to give up US citizenship so they can still tax you.

So when you do leave, never tell anyone part of the reason your leaving to to avoid US taxes.

[ChuckForbin]

Is there a difference between paying taxes and filing taxes ?

I know a woman who hasn’t paid taxes for several years. When I asked her why she isn’t in jail, she said she has filed every year, just not paid. She says the law only says you have to file, not pay.

The weird thing, and I expect no one to beleive this, is that she is a lawyer.

I should call her up and see if she’s still with us.

[Nametag]

Refer to the above posted statute:

“Any person required under this title to collect, account for, and pay over any tax imposed by this title who willfully fails to collect or truthfully account for and pay over such tax shall, in addition to other penalties provided by law, be guilty of a felony and, upon conviction thereof, shall be fined not more than $10,000, or imprisoned not more than 5 years, or both, together with the costs of prosecution”

[Northern_Piper]

This just in: Federal District Court convicts guy peddling books arguing that you don’t have to pay income tax unless you work for a foreign corporation.

Judge orders halt to ‘861’ scam that promotes tax evasion

The widely promoted claim that Americans are not required to pay income taxes on their wages is false, a federal judge ruled Friday in ordering one of its leading proponents to stop inciting tax evasion.

The judge, Christopher C. Conner, ordered the proponent, Thurston Paul Bell of Hanover, Pa., to post the court’s order at his Web site (www.nite.org). Bell was also ordered to remove all language promoting the claim, known as the 861 position after a section of the tax code, that only those working for foreign-owned companies owe taxes on their wages.
…
The 861 position is nonsense, ruled Conner of U.S. District Court for the Middle District of Pennsylvania. At least a dozen other courts have taken the same position, but that has not stopped people from paying at least $1,000 to Bell and others who claim that they have found a way to legally stop paying taxes.

For full story, go to the Arizona Republic.