Before you try it, better read the link from Mr. Miskatonic…it sounds an aweful lot like the various trusts scams:
Basically, if there was a way to do it (legally), people would be doing it…especially very rich people who can afford the very best in tax lawyers. Once the IRS saw anyone doing it, they would close the loophole immediately. There are legitimate ways to lower your tax burden, or defray your taxes…but there isn’t any legal ways to get out of paying taxes at all, except to make no money.
These tax-avoidance schemes all seem to arise from a misunderstanding of how the law operates, a misunderstanding that’s almost child-like. They rely on the notion that the law consists of spells and incantations: if you say the right words, in the right order, at the right time (and, presumably, pluck your magic twanger, Froggy), the IRS and the courts will suddenly be rendered mute and powerless, and will be forced to bow to your will.
The legal profession shares some of the blame for creating this notion, of course. Its reliance on often arcane language and seemingly impenetrable documents can make you feel as if you’ve just entered your second year at Hogwarts.
Despite appearances, however, the law is much more pragmatic than that. No judge is ever going to hand down a decision that makes it utterly impossible for the government to collect the revenue it needs to operate, no matter how sloppily the legislation was drafted.
Imagine that for some utterly stupid reason there was a “secret” law saying that everyone who has a middle name doesn’t have to pay income tax. Now if everyone with a middle name stops paying their taxes, the federal government would collapse.
How do you think Congress would handle this? Would they:
1 - Write a new law saying people with middle names do have to pay income taxes.
2 - Do nothing and hope nobody ever finds out about it.
IIRC the 16th merely clarified the situation. Congress had always had the power to collect income taxes (and had done so, during the civil war). The 16th amendment was in response to a SCOTUS ruling saying that landlord’s rental income was not subject to such taxes. Congress/The People responded with a resounding ‘oh yes it is’.
You want to win this argument? Tell him he’s just blowing smoke and doesn’t mean it. Tell him you expect him to put his plan into action. In effect, tell him to put up or shut up. Then you’ll either
A) Find out his doesn’t mean it when he meekly pays his taxes
or
B) See him convinced he’s wrong when the door locks behind him in the pokey.
And just to make sure he doesn’t slip through the cracks, let him know that you’ll be informing the IRS about what he’s doing. If he’s right, he certainly can’t object to having you alert the authorities, now can he?
Oh, he’s already started, although in minor ways. He told me he claimed himself as exempt, even though his parents also claimed him as an exemption on their tax form.
You know, I’ve always wondered in threads like this (and I’ve seen other threads where people tell about the stupid things that their friends do), why do you continue to hang out with this guy? Hanging out with him is like hanging out with someone who’s always saying, “Hey, let’s knock over a bank. I’ve got a perfect scheme so that we won’t be caught.” The best thing that can happen in your case is that your friend will eventually be persuaded that this idea of not paying taxes won’t work. Your friend will still resent your being right and will consider you a party-pooper. Worse, your friend might actually try this scheme. You’ll be visiting him in jail and he’ll resent you for not disuading him from his stupid ideas. The worst thing that might happen is that, while he doesn’t go through on this plan, in the future he persuades you that some other clever idea of his will work, and you’ll both end up going to jail. Is friendship with this guy worth the trouble?
You said you went on a road trip with him. Didn’t it strike him as a bit hypocritical to be enjoying the benefits of tax paid roads while not wanting to pay the taxes?
I’d tell him that I would turn him in, so he could really see if his little schemes worked. I hope he’s told his parents that he’s claiming himself as an exemption, since they could get in trouble also. If he is legitimately eligible to be an exemption on their form, they’re paying more than half of his support, so he’d be taking money from them while putting them at risk. Sounds like a nice guy.
Yes…friendship is worth the trouble. He’s a good friend. He would never try to rob a bank, by the way…he’s too damn lazy.
Part of being friends with someone, in my book, is putting up with their stupid moments…unless they start affecting me personally. I’m not going to let a worst-case scenario break the bond of friendship. Especially one that predicts him pulling me into some sort of pyramid scheme or bank heist or whatever…our circle of friends just kind of chuckles at his shortcuts (and that is what he is interested in…not patience, this kid), pats him on the head, and sends him on his way.
He does repeatedly say that the only things that he uses which his tax dollars support are roads. Was trying to bring up the armed forces, the FDA, the FCC, etc, but his A.D.D. kicked in by that point and he was focused on something bright and shiny…
It seems to me that there’s only two possibilities. Either he’s a blowhard, so that you’ll never have to worry about him ever doing anything stupid and illegal because he never goes through on his plans. But he’s already done one illegal thing in this double exemption business. Or else he’s willing to go through on his stupid and illegal ideas, in which case he’s eventually going to get you into trouble too, unless he manages to get caught and sent to jail before he has time to pull you into these schemes. (And even if he’s just a blowhard, I would think that his blowhard plans would get boring.)
And another problem is that it appears that he’s not really as stupid and lazy as you make him out to be. He had the intelligence and the persistence to read through these tax protestor websites. He’s really more like the type that has read a lot about UFO’s or the Kennedy assassination or some such and now insists on talking your ear off about the conspiracies he sees. Just intelligent and persistent enough to read all the literature that supports his theories, but not intelligent and persistent enough to read the stuff that disproves it. The ironic thing is that the semi-intelligent tax protestor sorts that claim to have found elaborate legal arguments for not paying taxes are likely to get caught faster than the stupider and lazier sorts who just take their wages under the table and don’t file income tax forms.
