The Tax Preparation Blog

Archive for February, 2010

Question: Taxes have been accepted, I need to amend them, haven’t recieved my refund yet?

I just got 3 1098′s that I forgot about, I’ve already e-filed, and it was accepted, it should direct deposit to my account in a week or so– if I file an amend now, will that stop or slow down my original refund? I want to file asap, but am afraid if I file before the original return is dispersed, that it will stop my original return and take forever! Is there a time limit on when you can ammend? I would be okay with waiting for the original return to deposit and clear, and then ammend after the money is in my pocket, but wasn’t sure if there was a time limit an ammend needed to be filed by, etc. THANKS!

Answer: Tax filing is not due until April 15th, so wait until your original filing and refund have been processed and cleared. Then file an amended return.

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Question: Do you think Wesley Snipes should have been jailed for ‘tax evasion’?

Bearing in mind that the 16th amendment was never ratified…

In 1894 Congress passed an income tax act very similar to the current Income Tax Law. That law was challenged on the basis that a tax on income is a direct tax, the United States Constitution requires direct taxes to be apportioned, and the act passed by Congress was not apportioned. The United States Supreme Court agreed and held the income tax act was unconstitutional in Pollock v. Farmer’s Loan & Trust Co., 157 U.S. 429, aff. reh., 158 U.S. 601 (1895).

Answer: First, Wesley Snipes was not convicted of tax evasion. He was convicted of three counts of “Willful failure to file return, supply information, or pay tax” which is a crime. Each count carries a statutory maximum sentence of one year.

Second, the argument that the 16th amendment was never ratified has been completely refuted. The same type of “errors” that the tax denier kooks claim would also apply to the 13th amendment, the 14th amendment, the 19th amendment and the entire bill of rights to name a few. Bill Benson, the author of “The Law That Never Was” and one of the people who started this silly argument claims he spent an entire year researching his book. It took me all of five minutes to find he misinterpreted at least one state constitution. Additionally, the courts have consistently upheld the validity of the 16th amendment for the past 95 years.

Third, the Pollock case does not say what you think it does. In the 1894 law, the income tax was levied on income from all sources. That included income obtained from personal property (i.e. rental income). The court decided that income obtained from personal property was the same as a tax on the property itself and was therefore a direct tax. They also said that a tax on wages was not a direct tax and therefore constitutional, but they struck down the law because they believed it was not the lawmakers intent to have the entire tax burden to be carried by only wage-earning individuals. The 16th amendment makes the Pollock decision moot because constitutional amendments are higher than Supreme Court decisions. In either case, the 16th amendment only clarifies that income taxes are INDIRECT taxes and Congress has ALWAYS had the power to impose an indirect tax.

In STANTON v. BALTIC MINING CO, 240 U.S. 103 (1916), the Supreme Court states, “…by the previous ruling it was settled that the provisions of the 16th Amendment conferred no new power of taxation, but simply prohibited the PREVIOUS COMPLETE AND PLENARY POWER OF INCOME TAXATION POSSESSED BY CONGRESS FROM THE BEGINNING from being taken out of the category of indirect taxation to which it inherently belonged…”

http://caselaw.lp.findlaw.com/scripts/getcase.pl?court=us&vol=240&invol=103

EDIT: I see a later answer doesn’t read other people’s answers.
To the person without a clue:
Re: The 16th amendment gave the government no new taxing power.
READ WHAT I ORIGINALLY POSTED. That “no new power” is an out-of-context quote from the Supreme Court case. The 16th amendment didn’t grant any new powers because Congress ALWAYS HAD THE POWER TO TAX INCOMES.

Re: Title 26 lists the tax as voluntary.
WRONG. The statute does not say the payment of taxes is voluntary. In Helvering v. Mitchell, 303 U.S. 391, 399 (1938), the Supreme Court states, “In assessing income taxes, the Government relies primarily upon the disclosure by the taxpayer of the relevant facts. This disclosure it requires him to make in his annual return. To ensure full and honest disclosure, to discourage fraudulent attempts to evade the tax, Congress imposes sanctions. Such sanctions may confessedly be either criminal or civil.”

Re: The Supreme Court ruled that income is gains from corporate activity or sales of assets.
More B.S. The Supreme Court never said any such thing. In Myrick v. United States of America, 217 F Supp 2d 979, 2002-2 US TaxCas 650,487, KTC 2002-457, aff’d Docket: 02-16428, KTC 2003-327 (9th Cir. 2003), the court states, “One of the bases for Plaintiff’s position is that he had no taxable income since “income” can only be a derivative of corporate activity. This position, however, is simply untenable and is directly contrary to the law.”

Re: The Federal income tax goes to the Federal Reserve as interest.
Someone doesn’t know the first thing about how paper money works. If the Federal Reserve collected interest on the printed bills in circulation, those outstanding bills would be ASSETS on the books of the Federal Reserve. However, they are LIABILITIES. The Federal Reserve does not collect interest on the circulating currency. The Federal Reserve does collect interest on the U.S. Government debt that it holds. However, it only holds about $900 billion of that debt and IN ACCORDANCE TO LAW, the Federal Reserve returns excess income to the U.S. Treasury. Over the years, the Federal Reserve has returned on average about 90% of the interest it has collected to the U.S. Treasury. This can clearly be seen on the independently audited financial statements of the Federal Reserve.

http://www.federalreserve.gov/boarddocs/rptcongress/annual06/default.htm

http://www.federalreserve.gov/boarddocs/rptcongress/annual06/sec6/c3.htm

Re: Income tax is a sham, money goes into the pockets of a few rich men.
Conspiracy theory nonsense. See the financial statements of the Federal Reserve.

Re: It is not a federal offense to not file your taxes, it is a misdemeanor.
You have that half right. The charges that Wesley Snipes was convicted of are misdemeanors carrying a maximum one year sentence per count. However, IT IS A FEDERAL LAW that was broken which makes it a FEDERAL OFFENSE. Just because a crime is a misdemeanor, does not mean it can’t be a federal crime.

XVI, the Constitution’s income tax amendment was not ratified …

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IRS myths: They sound too good to be true

The U.S. tax code is massive and complicated — the perfect fodder for myth-making. Perhaps the most well-worn fallacy — shot down by many courts despite the best efforts of tightfisted taxpayers — is that federal taxes are actually illegal.

Aaron Russo Interviews Former IRS Commissioner

Question: Bankruptcy, Multiple Addresses, and Filing Federal And State Taxes?

I need help, Please.

I lived in PA my whole life, own a home there. I lost my job 1.5 years ago, and I had to file bankruptcy in april of 2007. For the past 8 months I have been staying with a friend and working in Missouri. But my home is in PA, but been using my friends address for local employment.

My question is:

Do I file my federal and state taxes for Pennsylvania like I always have? If I do that, and on my PA forms, put down taxes that were paid to MO, or do I have to file MO only, and if I do that, PA will be looking for me for taxes? Or if I do the PA income tax, will MO be after me for a tax return?

Also, does my bankruptcy and chapter 13 payment plan affect my tax return at all?

I am in need of help. I always do my taxes myself cause I cannot afford to pay an accountant right now.

Please help.

Answer: If you use a program like TurboTax it will take you thru the process and asks you the relevant questions. $40 is a good investment in knowing you did your best with this gruesome task. I highly recommend it because tax code is complex and none of us is expert. Their publications are written by bureaucratic lawyers and not in real English.

you pay income on taxes depending on where it was earned, in this case MO. the only taxes you would pay in PA (not to the IRS) are property taxes on your home.

can’t address bankruptcy but I think the TurboTax program does

TurboTax Home & Business Federal + State + Federal efile 2009 $42.89 TURBOTAX HOME & BUSINESS WITH…

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Engineers say town needs to act on sewer plant upgrades

MARK HIBBS NEWPORT — The process to upgrade and expand the town’s sewage treatment plant needs to start now to avoid state fines and a possible moratorium as well as help secure federal and state funds for the multi-million-dollar project.

6 of 9: It is Legal NOT To Pay Federal Income Tax (for most)

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February 21 is College Goal Sunday in Louisiana

BATON ROUGE, La. – Louisiana’s third annual College Goal Sunday will be held on February 21, 2010, from 2-4 p.m. at seventeen locations around the state. The purpose of College Goal Sunday is to provide students and their families with free professional assistance in completing the primary student financial aid form, the Free Application for Federal Student Aid (FAFSA). Completing the FAFSA is …

Practical Accounting and Taxation in India: Introduction

Question: tax pro’s who settle your debts?

I paid a tax debt firm $5000 to settle my tax debt, its going on a year and nothing was done and i have had about $6800 in levies and am now having wages attached. they were to try a hard-ship relief of debt, offer in compramise, and then another resolution. But nothing has been done, in fact they failed to file and save these levies as promissed. what can i do, can i recover the $5000

2 years prior to this last year i paid the tax professionals $2000 to help me, and they did nothing, i believe they filed BK – are out of business, can I claim the loss, recover it, and lastly can anything be done?

Answer: so you have paid these “pros” $7000 to settle a $6,800 tax debt that includes penalties and interest?

hmmm

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Unemployment, canceled debt trigger tax bills

You’ve lost your job, you’re underwater on your mortgage, and you keep receiving annoying postcards from your globe-trotting neighbors, who are currently touring the Galapagos Islands. What else could go wrong?

7 Signs You May Need a Tax Attorney