That’s nice. Where in the tax laws does say that the IRS has to respond to claims of not being liable for taxes in a certain amount of time, or that you are not liable for taxes if they don’t make the time limit? The fact that some ‘tax avoidance’ company says that it’s de facto agreement means about as much as me declaring that my apartment is the Republic of Ribonia. And making a public record of something just means that there’s a record that you’ve claimed something, it doesn’t mean that the claim is true. When you end up in court for tax evasion, the judge isn’t going to say ‘Oh my, a tax avoidance (not evasion, that’s illegal) company said that failure by the IRS to respond to a bogus claim from them within an amount of time set by the tax ev…avoidance company is a de facto agreement that you’re exempt from taxes! Case Dismissed!’, so you better be able to come up with an actual law backing their claims if you’re going to try to get out of paying taxes.
Great, I could file in a public record that I’m the Master of the Universe, but that doesn’t mean that people will be doing my will from then on. Where are the examples of people using this for multiple years (good 'ol Tony only filed his record last fall, so the IRS probably hasn’t even had time to catch up with him since they’re still processing extensions from that year) without getting in trouble?
So where do they make their money? After all, they claim that you’re not actually liable for any taxes, so 1 year’s tax liability would be $0.00.
The people who follow it, who will end up paying a bunch of money in penalties and/or vacationing in Club Fed.
IF you had just read my previous message on this old thread, you could have applied the standards from it and seen that this scam is a scam. But I don’t really advise taking major legal advice from message boards - why not spend a few bucks and get a lawyer to examine this plan? Maybe he’ll SO tell you you don’t have to pay taxes.
I was thinking of the same thing. Can you get them to give an example of anyone doing this for a longer space of time? And who is this Tony guy? Is he a client or the guy you talked to?
I don’t need your standards for what defines a scam. I have my own, and this certainly seems to qualify.
That said, it’s still an interesting topic. I love a good conspiracy theory, and the thought that the IRS could perpetrate this one on the American public is an excellent one. Both sides of this have what seem to be convincing arguments, but neither side has cited direct evidence to invalidate the other’s position. (as far as I can tell)
IANAL, but I would be interesed in viewing cited cases in which this technique was attempted and disallowed (or allowed for that matter) (Of course the fact that none exists will be proof that the IRS controls everything!!)
Finally, thanks for your unsolicited advice of talking to a lawyer. I wouldn’t have thought of that without you…
I don’t know who Tony is. I was hoping to see THOUSANDS of similar filings, and these are the only ones they sent in reply to my request. For all I know, the company could have filed these bogus notices simply to help convince potential customers to part with their money…
If there is a bona fide loophole that lets you avoid paying taxes, nobody’s gonna sell it to you for $49.95. Because once word gets out, Congress will close it.
But you can’t totally rule out the possibility that there really does exist a bona fide loophole out there somewhere and a lucky few are taking advantage of it.
Well ShouldBeWorking, it’s on you to get some references that we can check. You get me out of paying taxes for the rest of my life and I’ll pay YOU a years worth of taxes.
Disclamer - A year of my taxes would be fit to buy a starving kid some Ramen noodles.
ShouldBeWorking. Is the link you provided http://www.taxescape.com/ the homepage of the people you were talking to? It seems to be a legit tax service, but I didn’t read it all. Are you saying that an employee of that homepage told you that you could avoid taxes by the method you outlined?
This may have been mentioned in a link above. There is a process called “offer in compromise” which gets rid of some tax liability. It’s on the agency site and in Google.
Jdeforrest: I was hoping to find some here. I’ll keep looking. If you never hear from me again, I found them.
lucwarm: The $49.95 is a book explaining how to file a $0 tax return. The company I’m talking to says they do a process of claims and filings to actually remove you from the IRS tax roles via the court system. And actually, their fee is equal to the amount they save you in the current year. (Which, if this was to work, I’d pay… if I never had to pay taxes again…)
I still have MAJOR reservations.
minty green and Northern Piper: Have you guys ever heard of this approach? Does anything in the link above contradict anything in your previous posts?
This sounds like someone watching a three card monty game.
Come on, it’s a scam. There is no possible way for this to be legit. If you actually have any hope of this working out you need to re-read the motto of the Straight Dope.
By the way, when I took tax and corporate tax in law school, I was struck by the sheer volume of statutes and regulations.
A friend explained to me that American tax law is unique is that there are armies of private lawyers trying to find clever (but legitimate) ways to reduce their clients’ taxes; and armies of IRS people trying to close those loopholes. So the result is lots and lots of statutes and regulations.
For example, we learned about the “preferred stock bailout,” whereby a shareholder in a close corporation is given preferred stock, which is later redeemed by the corporation for a substantial amount of money. In theory, this allows the taxpayer to take money out of his or her corporation and pay lower capital gains rates instead of higher ordinary income tax rates. Well, there are now a few pages of statutes and regulations describing the consequences and treatment of redemtion of preferred stock.
Multiply this by a few thousand, and you can see the picture.
So it seems unlikely to me that there are any bona fide loopholes that let you avoid tax entirely.
About the only guy I ever heard of who beat the IRS was the late Wall Street lawyer and crook-Roy Cohn. Despite his (rumored 6-figure income) , Cohn paid little or nothing in taxes. How did he do it? First, he owned nothing-everything he had (his condo, cars, and boat) were leased from trusts set up by Cohn. He took no salary from his law firm, but drew a massive expense account. Whenevr he went to dinner at some flashy NYC restaurant, he wrote off the meal as a business expense. Whenever he represented a client, he directed the client to pay most of the fee to an offshore bank account controlled by him.
According to what I read, the IRS sued Cohn in tax court several times, and gave up trying to collect!
Besides representing some of the most flamboyant criminals in NY (like the guys who owned studio 54), Cohn was heavily involved in criminal enterprise of his own-he brought about the collapse of the National Dye and Chemical Corp., by siphoning money out of the firm.
Not the kind of person you want to emulate!
Let me also chime in to say these theories are all bunk. Interested parties can check out Dan Evan’s definitive Tax Protestor FAQ or the Quatloos Tax Scam Page.
ShouldBeWorking, since you want a cite of evidence that the tax ev… avoidance company’s claim is valid, I cite the entire US tax code and all court cases for tax evasion and related crimes. The exception you’re talking about isn’t in there, and if you want to prove me wrong, show me where the time limit restriction mentioned in your post exists in the statutes. If the cite seems overly broad, it’s because of the difficulty in proving a negative - in order to show that this loophole exists, one merely needs to point to a specific law or court case upholding it, but to show that it doesn’t exist pretty much requires saying ‘OK, here’s the whole thing, it’s not in there’.
The whole ‘conspiracy theory’ bit about the IRS pulling one over on the American people who don’t really have to pay any tax fails the smell test. There’s a constitutional amendment empowering the IRS to collect income tax, and a congress that has no problem with taxing individuals. If, as you seem to believe, there really is a provision for an individual to be exempt from all taxes (other than the obvious ones like not having any US income etc.), why wouldn’t they just get a law passed to close it instead of trying to keep it secret? They routinely get all kinds of laws and regulations put in to close much more minor loopholes, it wouldn’t exactly be hard to close a gigantic gaping one like the one you describe.
