T is for Taxes

1. True or False: Some parts of the world tax cow flatulence.

Nobody likes to pay taxes. Everybody hates tax collectors. In ancient Sumeria (as I noted in letter “C”), they had to press the taxes inside clay balls because they were “tampered” with, presumably by the tax collectors. Nowadays, the tax collectors–the IRS–has safeguards on top of security measures surrounding robust defenses against tampering. That’s a good thing for us. You might want to be more sympathetic towards the IRS. They’re safeguarding our money.

It’s True, cows are taxed extra in EU countries like Denmark and Ireland because their “expulsion” of methane gases are a significant contributor (some 18%) of greenhouses gases. Strange tax practices in history are a fascinating topic I covered before, in Tax the Peasants with this One Weird Trick!

Today, I’ll share a few fun facts about taxes in my annual post reminding you that the Volunteer Income Tax Assistance program might be able to do your taxes for you, for free.

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Free Tax Advice (Well, Not Really)

Photo from McClatchy

Sophia Loren and Spiro Agnew have it in common. Al Capone, Leona Helmsley, and Wesley Snipes are also all linked, but in a different way. And Martha Stewart and Lindsey Vonn make the list, even though their situations were completely different. What’s the common thread? Tax problems, a fitting subject for a blog five days before April 15th.

It seemed like a great time to pontificate about tax rules and hand out some free tax advice, for today is the last day I will be helping out with the Volunteer Income Tax Assistance (VITA) program. As a reminder, this program partners with the IRS and United Way to allow volunteers to file taxes for free for those whose income falls below a threshold. If your income is low, and you didn’t take advantage this year, mark your calendars next February to find out where the nearest VITA site is near you! As I tell clients, your taxes are done for free, which means you get what you pay for. Same with today’s blog. But here are a few tidbits of tax advice, both frivolous and useful.

The 861 Tax Protest Argument

Wesley Snipes tried to use what is called the “861 argument” to avoid paying taxes, which points to section 861 of the IRS code that defines income sources. Snipes and others argued that the IRS code doesn’t explicitly list all possible ways you can earn income, and therefore any income-generating activity not on the list is not taxable. Multiple tax protesters using this logic have been taken to court in the last thirty years, and none have won.

No tax protester has successfully argued that you can legally avoid paying taxes.

Snipes followed the advice of two fraudsters, Tom Clayton and Larkin Rose, who called themselves the American Rights Litigators, and then later renamed their group the Guiding Light of God Ministries. Much later, they were renamed federal prison inmates # 357-551 and #AX7-832. Not only did Snipes refuse to pay millions owed for money made as a film star, but he attempted to amend previous year filings and request millions in refunds. At one point after he was indicted for tax evasion, he tried to enter South Africa on a false passport. (He also wanted his trial venue to be moved out of Florida because Ocala is racist. The judge disagreed.)

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