Eventually going to get me in trouble to? Seriously…you are both overestimating his persuasiveness and underestimating my intelligence. The one thing you did hit the nail on the head with was that his plans do get boring. Like I said, he’s one in a circle of friends, and we just all nod and smile and let him go about his business…trying to argue him out of his moronic schemes when the mood suits us.
I would agree he is persistent enough to read the literature that supports his theories, but I would hardly call this intelligent.
He did admit today that he has never read the tax code, but that he plans to. Also keeps saying things about how all the court cases in the FAQ links I’m sending him are U.S. Tax Court cases…for some reason this seems irrelevant to him. He’s looking for higher court rulings, for some reason.
As to his parents and their tax return, he gave his form to his parents so that their “tax guy” could go over it and submit. He thinks that the accountant would have taken care of any errors. For someone who grossed $6000 last year, I really don’t know what he’s complaining about.
Ironically…he’s on his third interview to be a financial consultant… :wally
Exactly…well, the entertainment factor largely comes into play when the more politically/legally informed in our group try to have a rational argument/debate with the kid. Like I said above…made the road trip go faster.
Still…I do want to have some ammo against him, and the links everyone has provided have helped, somewhat.
By Lockseer:* “As to his parents and their tax return, he gave his form to his parents so that their “tax guy” could go over it and submit. He thinks that the accountant would have taken care of any errors. For someone who grossed $6000 last year, I really don’t know what he’s complaining about.”*
If that’s the case, then it’s almost a certainty that he is not being claimed on both his personal return and his parent’s return. No ethical “tax guy” would let this happen.
I’d call his hand on this statement, make him prove to you that he was claimed on both returns. IMHO he’s blowing smoke.
If he’s telling the truth, it’s not a “minor victory”. Doing this can get you serious fines, and jail time in a worst case situation.
I don’t see this as a contridiction. I believe he put “exempt” on his tax return, knowing his parent’s were claiming him…but that the accountant would have fixed any errors he made. I’ll ask him the next time I see him, but I think it is his assumption that the “tax guy” corrected his “error.”
I guess I don’t understand what he’s telling you. I thought he told you that he claimed himself as an exemption on his personal return, and his parents also claimed him on their return. That would be illegal.
Simply writing “exempt” on a tax return is meaningless. If their accountant “fixed” his return and submitted his and his parent’s returns properly, he hasn’t gotten away with anything, so what’s to brag about?
I’d guess he’s operating on the incorrect assumption that the “U.S. Tax Court” is part of the IRS, and conducts some sort of low-level administrative hearings. Explain to him, as gently as you can, that the U.S. Tax Court is a real, live, honest-to-god, “judges in black robes” court. Organizationally, it’s on about the same level as the Federal District Courts. The next step up from there is usually the U.S. Court of Appeals, though Tax Court decisions can be appealed directly to the U.S. Supreme Court under certain circumstances. You can point him to http://www.ustaxcourt.gov/.
Does anyone know of any similar arguments for Canadians to avoid Canadian taxes? I would believe that they worked about as much as I believe that the American arguments work for American taxes; I just figure that since we have lots of goofy people north of the border too, somebody must have thought up a Charter challenge by now!
I queried him on this…turns out, he was talking about the W4s (?) that you fill out when you first start a job and determine how many exemptions you claim. He didn’t expect any tax liabilities in the upcoming year, so he claimed one exemption. I believe his parents also counted him as a dependent when claiming their exemptions. I misunderstood him…my bad.
I asked him more specifically why he wasn’t concerned about the rulings of the U.S. Tax Courts in all the FAQs I’ve been feeding him, and he said it was because “their rulings aren’t law.”
I then gave him your response above, and he told me he’d have to “look at the issue” and would get back to me on it. I tried asking whether or not the statement above conflicted with his view of how the U.S. Tax Courts worked, but he was already away from his computer…should hear back later.
What he did was perfectly legitimate. Assuming he isn’t making much, so his parents can claim him, his tax liability would be pretty low, and claiming an exemption would reduce his refund, which is fine. There are certain rules about how much you can owe on April 15 without penalties, but I doubt he’d have any problems with these, even if he is doing it right. It almost sounds like his parents are the ones who are wrong for taking him as an exemption, even if he is living at home.
I was a little surprised to hear this as well, considering he isn’t living at home, is in his 20s, and is off working at college. Of course, as I mentioned above, his income hovered around the $6000 range, so maybe he is a dependent…
Heard back from my friend. I asked him if he wanted to reply to the info above, and all he said is, “My reply is this:” and he gave the following link:
I then asked if there was anything in particular he wanted highlighted, or if he wanted to actually type out a response as to why it is relevant, and he added:
“I have the US tax regulations to look to…some judge’s decision has no bearing on what the law says and how I read it. Especially since it is statutory law, the judge does not have room to “interpret” what it says…what the judge “thinks” the law says is wrong if it conflicts with what the law actually says. This is why the Treasury Dept ignores lower court decisions, and that’s why I would ignore them too…and go read what the regulations say for myself…”
Oh, wow. I scarcely know where to begin! The legislature makes the laws, the executive enforces the laws, and the judiciary interprets the laws. Your friend needs to go back to civics class.
Unless his decision gets overturned, the law means precisely what a judge says it means. If his interpretation actually does fly in the face of the explicit language of the statute, the judge will be overturned on appeal. But until that appeal, the judge’s interpretation is the only one that counts for anything. Your personal interpretation means absolutely nothing.
If an official of the Treasury Department ignores a court ruling, he’s opening himself up to a world of hurt, starting with “contempt of court,” and ending with “summarily dismissed from Federal service.”
Again, tell your pal that we expect him to walk his talk. Tell him to put his theories to the test and violate the existing tax laws while announcing to the IRS that he’s done it.
Otherwise tell him he’s short on balls and long on breath.
If you could, please also ask your friend to provide a cite for this. I’d like to see evidence that this has happened in a case where the court didn’t stay its own ruling pending appeal.
Redirect your friends attention to the decsions in this site yet again. Some of the cases are tax disputes in Article I tax courts (not, despite your friends protestations, that there’s anything wrong with tax court decisions), but the vast majority of them are Artcle III federal courts, i.e. U.S. District Courts, U.S. Circuit Courts of Appeal, and the United States Supreme Court. As in the entire judicial branch. Their decisions most certainly do carry the force of law.
Article I tax courts resolve tax disputes, but they don’t decide criminal cases. Criminal charges are brought in an Article III U.S. District Court by a division of the U.S. Attorney’s office who does nothing other than prosecute income tax evasion and fraud. Explain to your friend that these Article III courts are going to be the courts that reject all of the arguments he is making when he is brought up on criminal charges of income tax evasion, for which he will be sent to federal prison.
The Treasury Regulations aren’t actual tax law, merely interpretations of the Internal Revenue Code (which is actual tax law), and it’s possible for the courts to overrule the regulations if they feel they’re at odds with the underlying laws; and
What the judges rule is what the tax law really says, not what Larken Rose’s selective reading of certain subsections might convince him that it says?
