The Tax Preparation Blog

Archive for October, 2008

Question: Can someone show me the law that saws you have to pay federal income tax?

I heard about the Brown family in NH and how they have been convicted of tax evasion but say that they don’t have to pay because there isn’t a written law that says you have to pay income tax. I also heard of a company that is willing to pay 300,000 to anyone who can find the law.

Answer: The 16th Amendment to the Constitution clarified the power of Congress to levy an income tax.

Title 26 of the U.S. Code is the LAW that requires that individuals pay income tax. Specifically, TITLE 26, Subtitle A, CHAPTER 1, Subchapter A, PART I, § 1.

The last person who asked a question about the Browns said the above wasn’t law. He is mistaken. The U.S. Code IS law. That person said the Brown’s had $1,000,000 in real estate for the person who could show the law. So, now I’m owed $1,000,000 in real estate and $300,000. BTW, I am fully prepared to pay income taxes on the transaction as long as the rest of the transaction is legal.

See the following website for discussions on the foolishness of tax protestors. http://www.quatloos.com/taxscams/taxprot.htm

Edit: To the two tax protestor people farther down the answer list. I’m leaving out the tables that are included in this section for the purpose of brevity.
TITLE 26 > Subtitle A > CHAPTER 1 > Subchapter A > PART I > § 1

§ 1. Tax imposed

(a) Married individuals filing joint returns and surviving spouses
There is hereby imposed on the taxable income of—
(1) every married individual (as defined in section 7703) who makes a single return jointly with his spouse under section 6013, and
(2) every surviving spouse (as defined in section 2 (a)),
a tax determined in accordance with the following table:

(b) Heads of households
There is hereby imposed on the taxable income of every head of a household (as defined in section 2 (b)) a tax determined in accordance with the following table:

(c) Unmarried individuals (other than surviving spouses and heads of households)
There is hereby imposed on the taxable income of every individual (other than a surviving spouse as defined in section 2 (a) or the head of a household as defined in section 2 (b)) who is not a married individual (as defined in section 7703) a tax determined in accordance with the following table:

(d) Married individuals filing separate returns
There is hereby imposed on the taxable income of every married individual (as defined in section 7703) who does not make a single return jointly with his spouse under section 6013, a tax determined in accordance with the following table:

and so on.

The phrase “There is hereby imposed on the taxable income…” can’t be any clearer than that.

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Branson businessman pleads guilty to tax evasion

A Branson businessman has pleaded guilty in federal court to a tax evasion conspiracy involving nearly $2 million.

IRS and Fed Scam

Drew Westen: Why President Obama’s ‘Taurus Tax’ Is A Disaster

President Obama promised that there would be no middle class tax hikes on his watch. Apparently he’s changed his mind.

EEP100 – Lecture 10

Question: i am looking for a tax preparer? anyone who can help me. please. thanks.?

i don’t wanna go to hrblock. i have had a bad experience with them. anyone who can recommend to a good tax preparer. i need help with my return. please give me links to websites so i can check their services. appreciate your help people.

Answer: If you are unhappy with HR Block, it is likely that you will also be unhappy with the other large tax prep firms that hire mostly seasonal workers.

You can look in your yellow pages for tax preparers. You may want to interview the tax preparer before he does your taxes.

If you want to use Enrolled Agent, the NAEA has a list of EAs by area.

http://www.naea.org/MemberPortal/

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Email Newsletters

You (along with most Americans) have probably filed your tax return by now. So this is a good time to consider which records and files you need to keep and which ones you can shred.

Short Sale Part 3

Question: What do you think about California suspending our state tax refunds?

http://www.latimes.com/news/local/la-me-budget17-2009jan17,0,4472460.story

Answer: Without budgetary authority the State Controller is legally barred from cutting any State checks. Time to start raising hell with the State Assembly if they don’t pass a budget by Feb 1st.

Californians need to understand that they cannot continuously pass ballot measures that restrict taxes yet allow increased spending. Would you take a lower paying job if your bills were piling up? Of course not! The State can’t do that either, people! You’ve largely dug this hole yourselves. Now it’s time to start climbing out.

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Inside jobs: Metro-east business news

Diel & Forguson L.L.C., certified public accounting and consulting firm, announced the following: Polly A. Stover, CPA, MBA, has been promoted to chief operating officer. She will continue supervising the tax department as well as managing the firm’s day to day operations; Lindsay Steely has been promoted to manager of the firm’s accounting services and advanced payroll services departments.

MPP’s Rob Kampia on Fox Business News 07/13/2009

Question: Income Tax allowances – UK?

Simple question about the tax bands,

Starting rate: 10% £0-£2,230
Basic rate: 22% £2,231-£34,600
Higher rate: 40% Over £34, 600

Does a person who earns say £40,000 pay 40% on all their taxable income or just the amount over the £34,600 band?

Thanks.

Answer: Chances are he wouldn’t pay any at 40%
First you get a personal allowance which comes off your income, then the various bands apply. The rates you have quoted are for 2007/08 when the personal allowance was £5,225. So the man on £40,000 would have tax applied to £40,000 – £5225 = £34,775. He’d pay 10% tax on £2230 and 22% tax on £32,545.

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Bank of England leaves UK rates unchanged, policy steady

By David Milliken

U.S. Job Openings, Hirings Slip in October