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Posted by on Feb 5, 2010 in THE INEVITABLE TAXING OF YOUR MONEY | 0 comments

IRS offers surprising bargains at its auctions

On the Money From the  February 5, 2010 print edition This time of year, it’s hard not to think about the government. It’s tax season, and many of us are contemplating our tax situation and probably bemoaning what we have to pay. Who wouldn’t rather spend money on a new house or car than pay taxes? Those two activities may be more closely related than you think. The same agency that accepts our tax dollars also provides potential bargains on everything from real estate to airplanes. The online auction site eBay is well-known. But far fewer have heard about the Treasury Executive Office of Assets Forfeiture. This is the government office that manages auctions and administers the Treasury Forfeiture Fund (TFF). The TFF was established in 1992 as the successor to the Customs Forfeiture Fund. This fund accepts the proceeds from the sale of assets seized by the IRS, Immigration and Customs Enforcement, Department of Homeland Security, Customs and Border Protection, the Secret Service and the Coast Guard. Internal Revenue Code...

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Posted by on Apr 4, 2009 in THE INEVITABLE TAXING OF YOUR MONEY | 0 comments

Some trusts — illegally — try to avoid paying taxes

On the Money From the April 4, 2008 print edition Tax avoidance is the legal utilization of the tax law to one’s own advantage. A person is entitled to reduce their amount of tax by legal means. In Gregory v. Helvering (1935), the U.S. Supreme Court stated that, “The legal right of a taxpayer to decrease the amount of what otherwise would be his taxes, or altogether avoid them, by means which the law permits, cannot be doubted.” Tax evasion is when illegal means are used to not pay taxes. Evasion usually involves deliberate misrepresentation, concealing the true state of fiscal condition, and in particular, dishonest tax reporting. To prove that if a scheme is creative or complex enough it must be legal, some have developed elaborate structures called “tax shelters.” When a tax shelter legitimately limits taxation, it’s called avoidance. If the shelter dishonestly pays no tax, it’s called evasion. More specifically, the structure becomes an “abusive tax shelter” or “abusive tax scheme.” These schemes are characterized by the...

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Posted by on Feb 6, 2009 in THE INEVITABLE TAXING OF YOUR MONEY | 0 comments

Be sure not to overlook any of the 24 changes to tax law

On the Money From the  February 6, 2009 print edition Form 1040, one of the most foreboding phrases in the English language, had its origin a scant 96 years ago with the passage of the 16th Amendment to the Constitution. In 1913, electricity itself was still rare, let alone electronic appliances. Today, most of what we do is electronic – even replacing paper books and newspapers with eBooks. Much of the financial system runs on electronics including banking, bill paying, trading stocks and now an expanded ability to contribute to the fiscal well-being of the country by filing Form 1040 from the comfort of your own computer. On Jan. 16, the IRS announced its expanded e-File program. According to the IRS, the new e-file program includes improvements to the Free File program that will allow virtually all taxpayers to e-file — free. Filing electronically with direct deposit can produce a refund to the taxpayer in as few as 10 days. To receive a refund in 10 days, the taxpayer should use...

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Posted by on May 2, 2007 in THE INEVITABLE TAXING OF YOUR MONEY | 0 comments

IRS issues new ‘dirty dozen’ list of attempted tax scams

On the Money From the March 2, 2007 print edition “Taxes are what we pay for civilized society,” said U.S. Supreme Court Justice Oliver Wendell Holmes Jr. But President Calvin Coolidge said, “Collecting more taxes than is absolutely necessary is legalized robbery.” Somewhere between civilization and theft lies our obligation to Washington, D.C. While it’s good business to minimize expenses (including taxes), wandering into illegal areas is never a wise choice. Remember, “Ignorantia juris non excusat.” That’s a fun phrase meaning, “Ignorance of the law is no excuse.” Each February, the Internal Revenue Service publishes its “Dirty Dozen” list. The list contains the most blatant tax-related scams affecting American taxpayers. This year’s collection reveals five new swindles. At the top of the list are fraudulent refunds being claimed in connection with the special Telephone Excise Tax Refund. Other new abuses include cheats relating to Roth IRAs, the American Indian Employment Credit, domestic shell corporations and structured entities. Taxpayers should remember they are ultimately responsible for what is on their tax...

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Posted by on Mar 3, 2006 in THE INEVITABLE TAXING OF YOUR MONEY | 0 comments

How to avoid IRS trouble, as the tax deadline nears

On the Money From the  March 3, 2006 print edition It’s March Madness, the time of NCAA basketball tournaments. College basketball fans across the country hope their favorite team will emerge victorious from the Final Four. It’s also the final full month of tax-preparation season. Millions of taxpayers also hope their final tax returns aren’t one of the estimated 1.5 million returns chosen for audit. Here are things to scrutinize so that your 1040 filing is more like a relaxed free throw than an exasperated flail from half-court. First, a little bit of back-to-basics regarding income reporting. Report all your income on the proper forms and on the correct lines. For example, W-2 income belongs on Form 1040, line 7; income from residential or office rent goes on Schedule E; and 1099-MISC non-employee compensation should appear on a Schedule C, etc.The IRS utilizes automated matching techniques. If you receive a W-2 or 1099, (especially a 1099-B), the sender also has filed a copy with the IRS. It’s important to show...

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Posted by on Feb 3, 2006 in THE INEVITABLE TAXING OF YOUR MONEY | 0 comments

A dozen ways to save taxes — all of them illegal

On the Money From the February 3, 2006 print edition It’s tax preparation time. As the clock ticks inexorably toward April 17 (two extra days this year because the 15th is a Saturday), thoughts of big refunds are inescapable. Predictably, there are also other people who would like to skim some of your refund by providing tax “advice.” Some of that advice may be phony. Here are a dozen popular ploys that could cost you money — or land you in jail. Imaginary children. The earned-income credit offers lower-income workers a way to save on taxes — particularly if you’re supporting two or more children. Unscrupulous tax preparers sometimes “borrow” one client’s “extra” offspring and transfer them to another filer’s return to illegally manufacture this tax break. Pretend you’re a church. In this swindle, con artists convince individuals to apply for incorporation (called a “Corporation Sole”) under false religious pretexts so they are entitled to exemption from federal income taxes as a nonprofit, religious organization. Con artists have been charging...

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