However, tax experts say that if you want to really annoy the IRS, you could do one of three things: Fail to file a return completely; loudly maintain that the tax code doesn’t apply to you; or cheat on employment tax filings for your workers. Stack appears to have done all three. And if the tone of his letter is any indication, he not only hit all of these IRS hot buttons, he hit them with a belligerent attitude that could have further exacerbated his tax woes.
“The IRS is toughest on people who reject the whole concept and authority of the system, who are not accepting that we do have income tax laws that we are all subject to,” said Philip J. Holthouse, partner at the Santa Monica tax law and accounting firm of Holthouse, Carlin & Van Trigt. “If the anger expressed in this posting is consistent with how he interacted with the government representatives, it would not have enhanced their compassion.”
Stack’s note refers to meeting with “a group” in the early 1980s who were holding “tax readings and discussions” that zeroed in on tax exemptions that make “the vulgar, corrupt Catholic Church so incredibly wealthy.” He said in the post that he then began to do “exactly what the ‘big boys’ were doing.”
“We took a great deal of care to make it all visible, following all of the rules, exactly the way the law said it was to be done.”
Since Stack wasn’t a church, this is like waving a red flag at a bull. The IRS apparently considered this foray into tax avoidance the real corruption. Stacks letter says: “That little lesson in patriotism cost me $40,000.”
Incidentally, the notion that anyone (other than a legitimate charity) doesn’t need to pay income taxes is one that’s well familiar–and refuted–by not only the IRS but every legitimate tax preparer in the country. So-called tax protestors or “tax defiers” take bits and pieces of the law, string them together in incomprehensible ways to come up with arguments that they say exempt them from tax. They can sound convincing, so the IRS publishes a long list of “frivolous” tax arguments on its web site, explaining when and where each argument was refuted, in an effort to keep innocent taxpayers from drinking the tax protest KoolAid.
But that wasn’t all. Stack also says in his letter that he drained a retirement account and didn’t pay tax on any of that money–didn’t even file a return. The penalties for not filing a tax return are roughly ten times worse than for not paying your taxes. That’s one of the reasons that accountants tell their clients to file returns, even when they don’t have the money to pay, said Holthouse.
Finally, Stack rails about independent contractor rules.
Experts said the only way this rant could make sense is if Stack started a company that employed other people, who he maintained were independent contractors rather than employees. If an employer maintains he’s hired only independent contractors, he doesn’t need to pay Social Security and Medicare taxes on their wages. But the IRS audits these claims carefully. When an employee is improperly classified as an independent contractor so that the employer can avoid these taxes, the IRS prosecutes aggressively because it considers it tantamount to stealing from workers Social Security and Medicare accounts.
Notably, the IRS has a Taxpayer Advocate’s office that helps resolve disputes when taxpayers have a legitimate problem with the agency. People who can’t pay tax bills promptly; have a dispute over the validity of a deduction or think they’ve been improperly penalized are often given some slack.
But these are not areas where you’re going to get a lot of sympathy.
thinkahol * on 02 Jun 11Martin Luther King - A Time to Break SilenceStarting in 1965, King began to express doubts about the United States' role in the Vietnam War. In an April 4, 1967, appearance at the New York City Riverside Church - exactly one year before his death - King delivered Beyond Vietnam: A Time to Break Silence. In the speech he spoke strongly against the U.S.'s role in the war, insisting that the U.S. was in Vietnam "to occupy it as an American colony" and calling the U.S. government "the greatest purveyor of violence in the world today.""Now, it should be incandescently clear that no one who has any concern for the integrity and life of America today can ignore the present war. If America's soul becomes totally poisoned, part of the autopsy must read: Vietnam. It can never be saved so long as it destroys the deepest hopes of men the world over. So it is that those of us who are yet determined that America will be are led down the path of protest and dissent, working for the health of our land.""At this point I should make it clear that while I have tried in these last few minutes to give a voice to the voiceless in Vietnam and to understand the arguments of those who are called "enemy," I am as deeply concerned about our own troops there as anything else. For it occurs to me that what we are submitting them to in Vietnam is not simply the brutalizing process that goes on in any war where armies face each other and seek to destroy. We are adding cynicism to the process of death, for they must know after a short period there that none of the things we claim to be fighting for are really involved. Before long they must know that their government has sent them into a struggle among Vietnamese, and the more sophisticated surely realize that we are on the side of the wealthy, and the secure, while we create a hell for the poor." Martin Luther King, Jr. (January 15, 1929 -- April 4, 1968), was one of the main leaders of the American civil rights movement. A Baptist minister b
