Is it true that if you don't pay income tax for your first job, you are off the hook?

A friend of mine told me that she read a book that told her that if you didn’t pay income tax on your first job(including high school ones), there is a loop hole in the law that says you wouldn’t ever have to pay taxes.

My friend is often filled with deluded ideas and will not believe otherwise unless facts are clearly laid out before her(and then…). I sometimes wonder if she believes in evolutionism(kidding!!!).

So what’s the deal with this income tax “law”? Is this a common urban legend and if so, is there something that proves it’s false? Thanks.

Deluded is right.

I’m assuming you’re talking U.S., but I can’t believe ANY country would allow so silly a loophole.

It is POSSIBLE that on your first job, if you have never had to file a prior tax return, and if somehow you escape withholding by your employer, it it POSSIBLE that the government won’t catch you. This, however, is called “getting away with breaking the law” and you rely upon your luck at your peril.

You might use common sense to reason with this twit, but it’s probably hopeless. Common sense argument: lots of individuals have “first jobs” whose income level is so low that they needn’t file tax forms. Low-paying summer jobs, for instance. No way that the gummint would allow that many people to “never” file taxes again.

As members of the SDMB know, I hate paying ANY taxes more than anyone else. But when I hear these laim brain theories about how to avoid paying, I just gotta roll my eyes:rolleyes:.This sounds like another crock the author of the ridiculous “vultures in Eagles Clothing” is try to pass off as fact. Let your friend believe what she wants, but be a good friend and visit her when shes in federal prison for tax evasion.

There are several ways to lessen your tax burdem. several LEGAL ways. Tell you friend to get books on that, and stop reading nonsense.

Somehow your friend is under the impression that the individual taxpayer in the US pays (technically, remits) his own taxes. With the exception of the self-employed, that is not true. The employer pays the income and Social Security taxes (i.e. Income Tax Witholding). So if you have a job (particularly a menial minimum wage job) and don’t file a return, you simply forfeit any refund due. If you owe any additional tax, and the IRS discovers this later, be prepared to pay some hefty penalties.

It seems that your friend thinks that if he doesn’t file a return, the IRS has no knowledge of his existence. That is false; those W-2 and 1099 forms we all get at the end of the year are also filed with the IRS so Uncle knows your name, address, SSN, and how much $$$ you made during the year and how much tax was witheld.

Why is the burden of proof on you? Tell your friend that you refuse to believe her unless she can produce that book!

my brother in law (a fisherman in Alaska) never paid taxes until at the age of about 27…when he got caught.

There is something similar. (Similar in the sense of being totally different.) If you are not liable for any income tax one year, because your income was small or nonexistant, then you are not subject to the hefty penalties sewalk mentioned for the next year, even if your withholding was too low. Maybe that’s what your friend has bumping around in his skull.

e.g.

1999 Job: Paperboy, Income $2,000, Tax owed: $0

2000 Job: CEO Delivery.com, Income: $5 million, Tax owed: $1.9 million, Withholding: $0 -> Penalties: $0

2001 Job: CEO Delivery.com, Income: $5 million, Tax owed: $1.9 million, Withholding: $0 -> Penalties: boy howdy!

P.S. Good one Robbo! My brother (who worked at a hardware store) never paid taxes … until he got nailed. My sister (a porn star) never paid taxes … until she was exposed. We could keep these going all day.

And let us all chant the mantra yet again:

There is no statute of limitations on an unfiled return.

If you failed to file for any year, you are open to audit by the IRS for that year, at any time in the future.

Yes. Yes it is. Bet the rest of you are all kicking yourself!

:rolleyes:

Surely Snopes or one of the other debunking sites has addressed the entire subject of “obscure technicality means you don’t have to pay taxes”. I would hope that the following points are self-evident (but apparently not to some):

  1. If there was a fundamental flaw in the legality of our tax system, legions of tax and constitutional lawyers would have found it long ago.

  2. Such a loophole would not be recognized by the government unless a court ruling upheld it.

  3. If somehow such a ruling ever happened, a law correcting the oversight would be rammed through the next session of the legislature.

Yes, that’s absolutely correct. Here’s another little known legal fact; if you’re wearing green socks and cross your fingers when you kill someone, you cannot be prosecuted for homicide. I know that sounds weird, but for some unknown reason every legislature in the country accidently included this loophole in their penal code and despite the hundreds of murders that have since gone unpunished none of them has ever changed this law.

If the irony of the above escapes you, refer to Lumpy’s post.

OK, we’ve shattered this one.

It is important to note (which I did not explicitly, but seewalk and Greg did) that there are different requirements for:

  • FILING an income tax return
  • PAYING taxes;
  • Having taxes WITHHELD by your employer; and
  • Paying ESTIMATED TAXES.

There are also different timing requirements: You must FILE your tax form for year 2000 before April 15, 2001, … or file for an extension by that date. You must have taxes WITHHELD (or pay ESTIMATED taxes) for the year 2000 DURING the year 2000.

One of the things that it IS possible (under some circumstances) to do with a first job (or any low-paying job) is to not have taxes withheld. You can do this primarily if you think you will not owe any taxes that year, by citing a high number of dependents. Of course, if you’ve guessed wrong, the penalties are pretty stiff.

I spoke with my friend, who by the way has evolved(or devolved) into a man in this thread, about where she got her info. This was her response through email.

“I think I got it from the book ‘More Wealth without Risk’ by Charles J.
Givens. And I talked to a friend’s father who happens to own a
pharmistical company who talked to his lawyers and accountants and they
confirm it…b/c he was looking into lawful ways not to pay taxes”

Here is the link. http://www.amazon.com/exec/obidos/ASIN/0671694030/qid=981139998/sr=1-1/ref=sc_b_1/102-

Anyway, I think Greg Charles has the right idea on this. Does anyone know anything about the book she read? Is it one of those bunk-filled pieces of trash that floats around?

I just did a search using the terms “Wealth without Risk” and “Charles J. Givens.” Try it yourself and look through the websites that come up. There are a number of reviews of the book. From what I see there, it looks like the book consists of some reasonable (although not truly non-risky) financial suggestions and some questionable philosophical and political statements. None of the reviews mention your friend’s suggestion. I find it hard to believe that if it were in the book no one would mention it (even if they only wanted to debunk it).

I think that not only does your friend fall for silly rumors, but she doesn’t even reliably remember where she heard them. I suspect that she read this book once and heard the rumor about not paying taxes if you didn’t have to in the first job in an E-mail message about the same time, but she’s gotten them mixed up in her head.

…by author Lynne Meredith purport to be able to show a person how to legally avoid paying income tax. Just to keep this interesting thread going, I would like to hijack it somewhat to ask if anyone of you have read these times and put them to use successfully?

Quasi

[i}Vultures In Eagles’ Clothing* and How To Cook A Vulture

Q

It appears that the arguments in Lynne Meredith’s books are the same ones that have already been addressed in this column by Cecil:

http://www.straightdope.com/classics/a5_127.html

There’s probably no way for me to persuade somebody who believes that nonsense that it’s wrong. Let me just say though that if you go fail to pay your taxes and go to court trying to make those arguments, be sure to send us a postcard from prison telling us what the judge had to say about them.

If you’re a student, then you can avoid having any taxes withheld by filling out two forms, one for state, and one for federal. You don’t have to list any dependents at all, just ask your employer for the correct form and write “exempt” in the correct box. If your employer doesn’t have copies of the form, you can probably get one at a local college. Then you hand the form back to your employer and don’t worry about it until next December.

Of course, you only want to do this if you make around 7,000 a year or less, and know that you won’t have to pay taxes. If you combine filling out the exempt forms with not filing income tax returns (which you don’t have to do if you won’t owe any money), then it is very much like not having to pay taxes at all.

At least there are some benefits to being a poor college student :slight_smile:

You can claim exemption from federal withholding for 2001 if you had $0 tax liability for 2,000 (i.e., you got back all of your withheld income tax) and you expect to make less than $4,000 in income, no more than $700 of which is interest, dividends, or other unearned income, in 2001.

In the circumstances described above, your taxable income will be zero. There is no reason to have tax withheld if you’re going to get it all back anyway, so the IRS allows you to claim exemption from withholding.

You don’t have to be a student. An individual gains no tax benefits whatsoever for being a student. That is a myth which refuses to die.

I’ve read the “Wealth Without Risk” books by the late Charles Givens. Generally, I found the BASIC information about saving money to be sound. He discusses the various financial instruments available (401k, IRA, savings, bonds, etc.) that’s fairly clear as can be, and he’s entertaining and a bit of a rabble-rouser. For example, he HATES whole-term life insurance, reminding us to think of it as a “hole” you throw your money into and never get back.

Now, then there’s the bad Charlie. He was popular during the go-go '80s as another one of those infomercial types, and apparently – this is as best as I can recall so please pardon the vagueness – he acted as a consultant for other people’s money. He also got into trouble for it as well, and he was involved in several major lawsuits and eventually went broke. The details are around somewhere on the net. He died, IIRR, in the mid-90s.

As for taxes, he advocated trying to take as many deductions as you think you can get away with. He was not advocating taking illegal or obviously false deductions, but his general attitude was that a) you have an obligation to protect your money; b) that the government was not going to be nice and help you save your money, their job is to take as much as they can from you; c) so you should take an active role in preserving as much of your wealth as possible and let the government try to get it from you; d) that few people were audited and he went into great detail about what “red flags” to avoid that would boost substantially your chances for an audit; e) and gave fairly sound advice about what to do if you should become audited (basic, like don’t piss off the auditor, and advanced, like don’t talk except in response to a question, make a list of the questions the IRS needs answered and say you’ll get back in touch with them with the answers. Then you do so.)

You were better off accepting the advice in his books, than his advice in person. Even so, it would be good to cross-check his more, ahem, adventuresome nuggest against some more mainstream books by writers like Sylvia Porter.