Oh, and discussions as to the morality or 'legality" of Tax laws should go to GD. Right, Mannie?
Hey Dan, don’t get my thread moved to GD. I’d like to get an answer to this question. If you want to argue, check IMHO. Zenster is begging for your attention.
Thanks to all for the replies. It would be a bit hypocritical of me to whine about a hijack given my penchant for digression. Plus, there are some promising leads here.
So, people have suggested that employers have been paying FICA for their tipped employees since 1989 and that such an employee can deduct the amount on their tax return if they are paying the employers contribution.
Is this information correct?
I’d like take this opportunity to welcome Pendency to the SDMB.
Please note that it was my interesting topic which caused him/her to sign up.
Hopefully we will see more of you, sir or madam.
Well you get a big gold star for that. At least someone finally posted a question that I know something about without taking a WAG :-). Little did I know I was going to run into some law-book-in-one-holster-and-a-42-in-the-other-totin’ maverick.
Included for General Reference…
Here are the OMB Numbers and Descriptions for 26 USC 3101.
OMB NO: 1545-0029 EXPIRATION DATE: 01/31/2001
RESPS:53,770,392 HOURS:315,006,691 COSTS(000):$0
Employer’s Quarterly Federal Tax Return; Employer’s Quarterly
Northern Mariana Islands, and the U.S. Virgin Islands
FORMS: FORM-941 941-PR 941-SS SCHED.B- (FORM-941) SCHED.B (FORM-941-PR)
OMB NO: 1545-0059 EXPIRATION DATE: 08/31/2003
RESPS:76,000 HOURS:101,080 COSTS(000):$0
Social Security and Medicare Tax on Unreported Tip Income
FORMS: FORM-4137
OMB NO: 1545-0065 EXPIRATION DATE: 06/30/2002
RESPS:13,680,000 HOURS:36,322,800 COSTS(000):$0
Employee’s Report of Tips to Employer – Form 4070, Employee’s
Daily Record of Tips – Form 4070A, Informe al Patrono de
Propinas Recibidas por el Empleado – Forma 4070PR
FORMS: 4070 5070A 4070PR 4070A-PR
Okay, not that this helps us in any direct way, but I don’t think it could hurt us.
First off, I’d like to admit some things:
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My idea of income, is just that, mine. I think it is pretty clear that income could darn well be whatever anyone wanted it to be. However, I feel we ought to be able to find the correct meaning with respect to FICA.
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Wolfman, you are absolutely correct, I did not address the issue of an employee/employer relationship directly.
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My main purpose here is to clear up my own ideas and lay them out to inspection by a somewhat unbiased population. I want to understand lawful taxation to the best of my ability.
Now, addressing the issue currently needed – Determination of an Employee/Employer Relationship.
I am going to start with “Employment”.
I am going to assume that I don’t need to analyze Section (A) of the definition of “Employment” contained in Section 3121 of Title 26. I assume this because section (A), IMHO, applies the use of “United States” very distinctly and does not include the several states or the District of Columbia. ** Please respond if my statement here does not appear accurate!**
Next up is Section (B) of the definition of “Employment” contained in 26 USC 3121. Because there is an ‘or’ placed into this particular section, I will rewrite the one section into two seperate sections so that they are equally represented.
Before I go ANY Further is there anyone who disagrees with me that:
- The structure of the first statute includes a non-geographical context of “United States”; Whereas, the structure of the second statute requires that a geographical context of “United States” be used in understanding the law.
** Come on, I know someone is going to object!**
Umm, I will. These two statutes are identical. I read them three times and I can’t find a single word that is different. Granted, it’s late, and I’m tired, but I don’t see an iota of difference.
Anyway, that’s not the point. It’s clear that you have some “interesting perspectives” on tax law, whatever they may be. However, the government does not look kindly on this. If you are in this country, and you make money, you pay FICA, either directly, or indirectly through the SET. There isn’t much else to say. Cecil wrote an article about people like you that tried to get out of paying federal taxes in Indiana (do a search for income tax or Indiana, I’m too tired to find the link). It didn’t work. All I’ll say is this: you have general objections to make about tax laws, post it in Great Debates. You want to try not paying FICA (or other taxes) in real life, have a damn good lawyer ready.
Over n’ out.
*Originally posted by Danielinthewolvesden *
Well, if you do work/service/labor for wages/salary/pay/ money, you owe income tax on it, if your income comes from within the US, or you are a US resident.
Hmmm, Income Tax… Subtitle A…
I dunno, My Dear Daniel… as far as I can tell, you know assuming I am literate and all, according to 421 U.S. 949(74-1225) the nature of self-employment tax is a part of the social security system. Hmmmmmm… now tell me something Daniel, do you truly believe participating in or joining Social Security is Mandatory?
Now, you might well not owe FICA, as you might be “self-employed”, but then- you owe Self-Employment tax, where you get to pay BOTH halves of Social Security (but get to deduct expenses, 1st).
See above. Need a Citation?
Unless you are some sort of caterer, part-owner, or similar, if you do waiting, you are an employee, in general.
Are you aware that there are four seperate categories of employees? Are you aware of that some people qualify to be called statutory non-employees?
There is no legal way to get out of paying Income taxes or Social Security, except the well known deductions for certain expenses.
You are right, getting out of payment would be “evasion”; However, never having them applied to ones self can be achieved through avoidance.
pendancy, it appears, is trying some sort of “tax protestor” arguement, such as “wages are not income”, or “we are not US taxpayers”, all of which arguements will get you into very deep trouble with the IRS, and have been disproved so many times in Tax Court, District Court, and the Supreme Court- that you can be fined some $5000 just for trying this sort of arguement in Court.
Oh great forebringer of wisdom, just where is the cite for this statement! I shan’t even bother with citing for fear that you would not extend the same courtesy to me.
A few folks are exempt from Social Security. But you have no “option” to speak of. If you are in one of these occupations, then you are not covered by, and do not have to pay Social Security/Fica. Civil servants under FERS, many State & county workers, Railway workers, and Ministers of certain faiths that have a ‘vow of poverty’- in all these cases the exemption applies only to the specific income earned from the specific source. In other words, if you are an Ordained Exempt Minister, you ministerial income is exempt, but not your part time job at, say Sears. In all these exempt occupations there is a retirement system which takes the place of Social Security. Thus, for all workers, participation in the Social security system is not “optional”, either you MUST, or you can not*. You can not “opt out” of Social Security, but you could get a job which is not covered by SS. This is the simple, non-complex version.
I will not debate your tax protestor arguements here. Go to GD, or the PIT, and start a new thread, if you want to do that. Here we are trying to answer Questions, not Debate.
And, as I am 'Enrolled to Practice before the Internal Revenue Service", I am well aware of the various permutations of employees. Incidentally, it is “statutory employee”, not “non-employees”.
- some few Civil Service workers can, at some period, switch, but it is generally nonrevocable.
Pendency, I confess to being very confused. What are you trying to prove?
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That the definition of “employment” in the tax rules is fuzzy? That’s no surprise. The law offers a general guideline, which has been clarified by regulations issued by the IRS and by court decisions over the years. Merely citing the Code itself will get you nowhere. Also please note that there have been any number of rulings that something that walks, talks, and acts like a duck IS a duck… that is, you cannot get around the employment issue by simply being clever (like claiming to be self-employed independent contractor.)
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That the definition of “United States” is unclear in the tax code? Here’s where I lose you, Pendency. As near as I can tell, you are confusing the term “resident” of the U.S. with the common dictionary definition, and sometimes the tax code does use “resident” that way. However, when used in contrast to “citizen”, then a resident is someone who has a green card (“resident alien”). A green card holder is a “resident” regardless of geographic location; if someone came from Mexico, got a green card, and went back to live in Mexico, they are still “U.S. resident” for most purposes of the tax codes.
I basically just don’t see what you’re trying to prove, Pendency. You’re quoting law, at length, out of context, without tying it together (at least, I don’t see it being tied together.) However, it appears to me that you are reading the tax code and trying to interpret it. That’s folly. The tax code includes all regulations and court cases (precedents) and there are private letter rulings over disputed points, as well. Just going to the law itself is to ignore everything else…kind of like, trying to hook up and operate a palm pilot (say) for the first time, by just looking at the machine itself without reading the instructions that are also in the package.
*Originally posted by Danielinthewolvesden *
*A few folks are exempt from Social Security. But you have no “option” to speak of. If you are in one of these occupations, then you are not covered by, and do not have to pay Social Security/Fica. Civil servants under FERS, many State & county workers, Railway workers, and Ministers of certain faiths that have a ‘vow of poverty’- in all these cases the exemption applies only to the specific income earned from the specific source. In other words, if you are an Ordained Exempt Minister, you ministerial income is exempt, but not your part time job at, say Sears. In all these exempt occupations there is a retirement system which takes the place of Social Security. Thus, for all workers, participation in the Social security system is not “optional”, either you MUST, or you can not. You can not “opt out” of Social Security, but you could get a job which is not covered by SS. This is the simple, non-complex version.
- some few Civil Service workers can, at some period, switch, but it is generally nonrevocable. **
Altho this thread appears to have ended, I just want to set the record straight on a non-pertinent point. Civil servants under FERS are not exempt from Social Security taxes. Those under the old retirment system are.
Most of Pendency’s arguments, or arguments almost idenentical to Pendency’s arguments, have been throroughly addressed here:
http://evans-legal.com/dan/tpfaq.html
Particularly the arguments about how “United States” doesn’t actually include the states:
barbit: you are completely right- I meant CSRS are exempt, not FERS