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Quote of the Day - You don't pay taxes - they take taxes. - Unknown

Paying Taxes: Sport Or Folly?

Forgive me here if I take a position against taxes, but as you may know, it's a bit of a favorite American pastime.  It's OK for everyone else to pay taxes, just don't raise mine, and just don't ask me to pay any more than my fair share.  By the way, if I can figure out a way to avoid paying some of those taxes, don't begrudge my deduction.

It's admittedly a tough position to take knowing that lower tax dollars may mean that our men and women in green may not have enough armor, that the shuttle is built by the lowest bidder, our school teachers aren't paid sufficiently, and on and on, all the way down to the pothole across the street that is now big enough to swallow my left front end if I don't swerve in time to avoid it.

But I better stop before I talk myself out of complaining about taxes.  Who hasn't heard of the $400 hammer, after all?

This article about the IRS prosecuting lawyers who come up with tax shelters did more than strike me.  It's just plain wrong.  Think about it.  Congress passes laws that require us to pay taxes.  Once you establish the rules and write them down, it's up to the lawyers to figure out the loopholes and the way around them.  The tax code fills up 24 megabytes of space on my hard drive, which on my iPod leaves only enough room for Stairway to Heaven and The Long and Winding Road.  There really isn't much difference between the songs and the code anyway, but I digress.

So, when enterprising lawyers go out there and successfully figure out how to shelter money from taxes, the IRS takes aim and prosecutes the lawyers for being smart enough to figure out what they did wrong when they wrote the code.  I'm not sure if the lawyers are being prosecuted because they showed the ________ (fill in your own word) of the IRS and Congress to the rest of us or because the result of their work actually means less dollars in the government's hands and more money in our hands.

Sure, there's another way to look at it:  the lawyers actually did something illegal that was precluded by the code, and they should be punished.  As you can see just from these paragraphs, however, there's no such thing as black and white in the Internal Revenue Service code.  To prove that, all you have to do is look up section 61 that defines income and see what a mess the whole thing starts with.

If the IRS wants to collect money from us, how about making it simple?  You know, just like it was when we were kids and dividing up the spoils from the lemonade stand:  "One for you and two for me, one for you and two for me..."

Remember, April 15 is just around the corner.

Posted by J. Craig Williams on 1/25/2006 at 00:31 Comments (3)



Comments by David Polinsky from United States on Monday, January 30, 2006 at 11:12

Your post illustrates the principle that if you tell a big enough lie, often enough, it will become a truth. In the '80s, in order to make a big splash and justify intrusive legislation, legislators perpetrated the lie of the "$400 hammer" and the "$600 toilet seat." Neither one was an abuse, but they are still held up as examples of "evil" contractors cheating the government.
The price of the hammer resulted from compliance with government regulations on allocation of overhead cost, and the "toilet seat" wasn't a toilet seat, as congress was clearly told. But, the lies were more interessting and got better press. And now you carry them forward.


Comments by Mark Banks-Golub from United States on Sunday, January 29, 2006 at 15:19

The government isn't out there prosecuting clever lawyers who figure legitimate ways around the tax code. The government is looking at proswecuting lawyers who purposefully make assumptions that they know are untrue in writing their opinions.
There is a difference between agressive tax planning and deliberate obfuscation or disregard of fact and contrary case law in giving opinions to unscrupulous marketers and hucksters.
To defend these people does nothing but give legitimate tax lawyers a bad name.


Comments by Darryll K. Jones from United States on Friday, January 27, 2006 at 11:22

Bovine Defecation! You gotta read more than just a news article to know that the Service isn't prosecuting clever attorneys who merely turn a phrase for their client's benefit. The KPMG indictment(for example)is available all over the internet, after all. The government is properly prosecuting people accused of lying, laughing, and stealing. The "smartest guys in the room!" Moreoever, the people who are just turning a phrase to avoid taxes shouldn't complain when their turn of a phrase leads to longer and more complex anti-abuse provisions in the code that take up space on their iPod's.


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