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HR 3962: IRS can disallow a perfectly legal tax deduction if they deem your motive is wrong
Select Democratic members of the 111th Congress ^ | 10/29/2009 | Committee of Secret Congress People

Posted on 10/29/2009 7:02:32 PM PDT by RushingWater

As


TOPICS: Government; Politics/Elections
KEYWORDS: 111th; agenda; democrats; donttreadonme; hr3962; irs; motivematters; thoughtpolice
Source for the bill:


1 posted on 10/29/2009 7:02:32 PM PDT by RushingWater
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To: RushingWater
As Heritage Foundation blog translates:

Codification of the “Economic Substance Doctrine” (Page 349): Empowers the IRS to disallow a perfectly legal tax deduction or other tax relief merely because the IRS deems that the motive of the taxpayer was not primarily business-related.
2 posted on 10/29/2009 7:03:59 PM PDT by RushingWater
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To: RushingWater
Source for the bill:

HR 3962
3 posted on 10/29/2009 7:04:34 PM PDT by RushingWater
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To: RushingWater

I would think all these tax increases are DOA in the senate.


4 posted on 10/29/2009 7:07:42 PM PDT by your local physicist (If the Canadians and Brazilians can drill for oil off their Atlantic coast, why can't we?)
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To: RushingWater; Taxman; Principled; EternalVigilance; phil_will1; kevkrom; Bigun; PeteB570; FBD; ...
The people can disallow HR3962 and the IRS by passing The Fair Tax Act(HR25/S296) that will replace all federal income taxes with a national sales and abolish the IRS! Fair Tax ping!


5 posted on 10/29/2009 7:09:55 PM PDT by Man50D (Fair Tax, you earn it, you keep it! www.FairTaxNation.com)
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To: RushingWater
IRS deems that the motive of the taxpayer

Oh great. That means Oboma gets to pick a mind reading Czar. Will the madness never end?

6 posted on 10/29/2009 7:13:37 PM PDT by concerned about politics ("Get thee behind me, Liberal")
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To: RushingWater; Jet Jaguar; NorwegianViking; ExTexasRedhead; HollyB; FromLori; ...

The list, ping


7 posted on 10/29/2009 7:14:34 PM PDT by Nachum (The complete Obama list at www.nachumlist.com)
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To: your local physicist
I would think all these tax increases are DOA in the senate.

Why would you think that? The rats are in charge of the senate too.

8 posted on 10/29/2009 7:16:30 PM PDT by Graybeard58 ( Selah.)
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To: Graybeard58
I think the massive taxes and public option just won't sit well with Senate moderates. The bill can pass the House but unless it gets a major rewrite, it won't pass the Senate. Dingy Harry doesn't have enough votes for cloture.

"Show me just what Mohammed brought that was new, and there you will find only things evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelogus

9 posted on 10/29/2009 7:19:50 PM PDT by goldstategop (In Memory Of A Dearly Beloved Friend Who Lives In My Heart Forever)
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To: RushingWater

Well illegal tax write offs become perfectly legal if a democrat uses them. See Charles Rangel.


10 posted on 10/29/2009 7:24:13 PM PDT by Waryone (II Chronicles 7:14)
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To: RushingWater
"Do you really think we want those laws observed?" Said Dr. Ferris. We want them broken. You better get it straight that it's not a bunch of boy scouts you're up against - then you'll know this is not the age for beautiful gestures. We're after power and we mean it. You fellows were pikers, but we know the real trick and you'd better get wise to it. There’s no way to rule innocent men. The only power any government has is the power to crack down on criminals. Well, when there aren’t enough criminals, one makes them. One declares so many things to be a crime that it becomes impossible for men to live without breaking laws. Who wants a nation of law-abiding citizens? What’s there in that for anyone? But just pass the kind of laws that can neither be observed nor enforced nor objectively interpreted and you create a nation of law-breakers - and then you cash in on guilt. Now, that's the system Mr. Reardon, that's the game, and once you understand it, you'll be much easier to deal with."

Ayn Rand, Atlas Shrugged, Part 2, Chapter 3, Page 404

11 posted on 10/29/2009 7:25:43 PM PDT by NonValueAdded ("The Democrats scare me, the GOP infuriates me.")
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To: RushingWater

>Codification of the “Economic Substance Doctrine” (Page 349): Empowers the IRS to disallow a perfectly legal tax deduction or other tax relief merely because the IRS deems that the motive of the taxpayer was not primarily business-related.

Sounds almost like a bill of attainder to me... but at the very least it is immoral and, honestly, should cause tax-collectors (IRS agents) to be shot and/or tar-and-feathered.


12 posted on 10/29/2009 7:28:01 PM PDT by OneWingedShark (Q: Why am I here? A: To do Justly, to love mercy, and to walk humbly with my God.)
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To: concerned about politics

Here is another gem in the bill:

Application of “More Likely Than Not” Rule (Page 357): Publicly-traded partnerships and corporations with annual gross receipts in excess of $100 million have raised standards on penalties. If there is a tax underpayment by these taxpayers, they must be able to prove that the estimated tax paid would have more likely than not been sufficient to cover final tax liability.

These firms will have to justify that some unlikely event caused estimated taxes to not be sufficient to cover tax liabilities. This provision is just an excuse for forcing companies to provide interest free loans to the government.

These provisions are bad news for capital formation. Capital flight and much lower private investment will be accelerating. Why should anyone invest here? The rats want to confiscate your profits and wealth.


13 posted on 10/29/2009 7:29:17 PM PDT by businessprofessor
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To: RushingWater
Always been the case, believe it or not. The IRS is not obligated to honor its own guidelines or interpretations, nor does it even honor anything like precedent the way real courts do. If today the IRS finds Dick is not in violation of tax law, they may turn around tomorrow and find Jane guilty under exactly the same circumstances, even if the same IRS employees are involved in both cases. Your sole remedy if you don't like that is to go all the way through the process and hope you can get to Federal Court. Most choose to "pay the $2."
14 posted on 10/29/2009 7:31:05 PM PDT by FredZarguna (It looks just like a Telefunken U-47. In leather.)
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To: RushingWater
My ancestors shot revenuers over much less.

There's much to be said for keeping tradition alive...


Frowning takes 68 muscles.
Smiling takes 6.
Pulling this trigger takes 2.
I'm lazy.

15 posted on 10/29/2009 7:43:22 PM PDT by The Comedian (Evil can only succeed if good men don't point at it and laugh.)
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To: concerned about politics

Frightening , but funny!


16 posted on 10/29/2009 7:56:39 PM PDT by top 2 toe red (Not supporting a corrupt, Marxist, Socialist President makes me a racist?!? Then a racist I am!!!)
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To: The Comedian

“My ancestors shot revenuers over much less...”

Mine helped overthrow a King for far less....


17 posted on 10/29/2009 8:05:45 PM PDT by mo
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To: concerned about politics
IRS deems that the motive of the taxpayer Oh great. That means Oboma gets to pick a mind reading Czar. Will the madness never end? What about Karnak the Magnificent ??? I hear that Johnny Carson isn't doing very much these days ...
18 posted on 10/29/2009 8:06:18 PM PDT by Lmo56
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To: RushingWater

Is there any other motive other than to pay less taxes?


19 posted on 10/29/2009 8:07:25 PM PDT by ThomasThomas (I don't have time to Procrastinate)
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To: RushingWater
Right out of Charlie Rangel’s committee.
20 posted on 10/29/2009 8:08:27 PM PDT by USMA '71 ((Re-elect no one!))
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To: Abathar; Abcdefg; Abram; Abundy; akatel; albertp; AlexandriaDuke; Alexander Rubin; Allerious; ...
So now the IRS claims to be able to read minds and determine intent?!? Charities will suffer.



Libertarian ping! Click here to get added or here to be removed or post a message here!
View past Libertarian pings here | DONATE to FreeRepublic NOW!
21 posted on 10/29/2009 8:15:19 PM PDT by bamahead (Avoid self-righteousness like the devil- nothing is so self-blinding. -- B.H. Liddell Hart)
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To: Man50D

There’s nothing fair about your fair tax, it’s a renaming of sales tax!!!


22 posted on 10/29/2009 8:15:44 PM PDT by dalereed
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To: mo

Mine came here 100 years ago in search of a better life... Looks like I may need to permanently go back overseas in search of that life, yet again!


23 posted on 10/29/2009 8:16:58 PM PDT by PugetSoundSoldier (Indignation over the sting of truth is the defense of the indefensible.)
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To: PugetSoundSoldier

Th question of a “reverse American diaspora” is interesting. america is extremely heterogenous..and traditionally has been held together by the promise of opportunity...based on ready and equal access to cheap energy and food. Our Congress and burocracy appears to be deliberately trying to bind us by eliminating both.


24 posted on 10/29/2009 8:34:22 PM PDT by mo
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To: dalereed
There’s nothing fair about your fair tax, it’s a renaming of sales tax!!!

The concept it's a national sales tax has not exactly been hidden. Note my original post referring to it as a national sales tax.
25 posted on 10/29/2009 8:43:42 PM PDT by Man50D (Fair Tax, you earn it, you keep it! www.FairTaxNation.com)
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To: Man50D

I think the idea of a sales tax stinks!

I’ll take the income tax with it’s thousands of ways to avoid taxes any day.

Anhyone doesn’t want to read the tax code and use its multitude of tax avoidance ways deseves to be burned!


26 posted on 10/29/2009 8:53:14 PM PDT by dalereed
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To: Man50D

Where do you find support for a “Fair Tax”? The baby boomers, with savings that has already been taxed, will get taxed again, so count them out as supporters. The younger generation, who aren’t yet in the upper tax brackets, would quickly be bumped up into the universal “fair” tax bracket and get burned. That leaves the middle third to maybe, just maybe, like the idea. I can’t see where you’ll get enough support.


27 posted on 10/29/2009 8:56:52 PM PDT by Tellurian (Creativity is having the wit to capitalize on your mistakes)
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To: mo
Th question of a “reverse American diaspora” is interesting. america is extremely heterogenous..and traditionally has been held together by the promise of opportunity...based on ready and equal access to cheap energy and food. Our Congress and burocracy appears to be deliberately trying to bind us by eliminating both.

Yep. The fact that some in this thread had their ancestors come here 400+ years ago, and others (like me) are 2nd generation Americans shows that "being American" isn't so much about race or history, but creed. And that is something that can transit to other countries as needed.

America isn't just a physical locality, for someone who's only been "inside" the US for 5 years can become an American (naturalized). It's an idea and a creed and approach to life. It will always exist, but perhaps not within the geographic bounds of the United States of America, if the current Administration and Congressional leadership have anything to do about it!

28 posted on 10/29/2009 8:59:34 PM PDT by PugetSoundSoldier (Indignation over the sting of truth is the defense of the indefensible.)
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To: dalereed

So you like the government telling you how to spend your money and what to do with your life (since they’ll fine you—i.e., charge you more taxes—if you don’t do what they prefer)?


29 posted on 10/29/2009 9:53:42 PM PDT by Gondring (Paul Revere would have been flamed as a naysayer troll and told to go back to Boston.)
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To: Tellurian; Man50D
Besides, with a "Progressive" income tax, the left can keep the little guy from having any chance at improving his lot.

A wealth-based tax is far more fair than an income-based tax.

30 posted on 10/29/2009 9:56:10 PM PDT by Gondring (Paul Revere would have been flamed as a naysayer troll and told to go back to Boston.)
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To: Graybeard58

The Rats are just going to wait out the Bush tax laws and let the rates go back where they were.


31 posted on 10/29/2009 10:02:35 PM PDT by MediaMole
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To: Gondring

The tax code before 1986 allowed me to not pay any taxes from 74-90 which were my highest income years, all above $100,000.

before the 86 “Tax Simplification Act” which wasn’t totally phased in until 1990, as far as i’m concerned the IRS tax code is 1800 pages telling you how not to pay income taxes.

The only reason that I paid taxes before 74 was I didn’t get totally pissed off until in 73 I had to write a check for $18,000 at the end of the year.

I took out the tax code and figured out how to not pay income taxes.


32 posted on 10/29/2009 10:04:22 PM PDT by dalereed
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To: dalereed

“I think the idea of a sales tax stinks!”
“I’ll take the income tax with it’s thousands of ways to avoid taxes any day.”

Interesting, very interesting indeed. Very time you spend a dollar, a portion of that dollar goes to pay all for payroll taxes, companies income taxes and other hidden taxes all the back to turning a natural resource into a product and all the service industries related to that product. That amounts to about $.50 on the dollar. If you want to avoid paying taxes, stop spending.


33 posted on 10/29/2009 10:23:52 PM PDT by steveab (When was the last time someone tried to sell you a CO2 induced climate control system for your home?)
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To: The Comedian

Be wary of strong drink, for it can cause you to shoot at tax collectors-— and MISS...

Shooting tax collectors is an honorable American tradition. Pass it on to your children and grandchildren, unto the fifteenth generation!!!

(I think the first is Heinlein and the second started out as his til I modified it, filed off the serial numbers and claimed it for mine!)


34 posted on 10/30/2009 1:46:30 AM PDT by dcwusmc (We need to make government so small that it can be drowned in a bathtub. III)
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To: dalereed
I’ll take the income tax with it’s thousands of ways to avoid taxes any day.

Karl Marx would be happy to hear you like a heavy progressive tax on income. It is one of the planks in his Communist Manifesto. He understood a gradual increase on taxing productivity will eventually discourage people from working and turn to the state for dependence.

Your overall tax burden will be less with The Fair Tax than the current income tax since all the embedded taxes in everything we buy will be eliminated not to mention more money in you paycheck.
35 posted on 10/30/2009 3:29:53 AM PDT by Man50D (Fair Tax, you earn it, you keep it! www.FairTaxNation.com)
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To: Tellurian
Where do you find support for a “Fair Tax”?

Click on either one of the Fair Tax icons in my first post to find out.

The baby boomers, with savings that has already been taxed, will get taxed again, so count them out as supporters.

You have it 180 degrees backwards. Baby boomers, along with everyone else, are being taxed multiple times with every purchase thanks to embedded corporate income taxes passed onto the consumer by businesses at each stage of production. The Fair Tax will remove those taxes by eliminating all federal income taxes and tax only once at the point of sale. Boomers will not be taxed on any investments or savings since income will not be taxed.

The younger generation, who aren’t yet in the upper tax brackets, would quickly be bumped up into the universal “fair” tax bracket and get burned.

There will be only one tax bracket with The Fair Tax. Everyone will have the same rate imposed at the point of sale.

I can’t see where you’ll get enough support.

Then you haven't been paying attention. More than a million people have signed petitions to support The Fair Tax. The American Farm Bureau and the National Tax Payers Union have endorsed The Fair Tax. The number of cosponsors has increased with each session of Congress since The Fair Tax was first introduced in 1999 to the point in the last session of Congress there were 76 cosponsors.
36 posted on 10/30/2009 3:41:51 AM PDT by Man50D (Fair Tax, you earn it, you keep it! www.FairTaxNation.com)
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To: RushingWater
I cannot think of one reason for a deduction that could be deemed wrong.
This must be selective reasoning.
37 posted on 10/30/2009 3:45:20 AM PDT by MaxMax (Obama can't play in the Olympic reindeer games)
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To: RushingWater

One of the most difficult things to prove is intent. I can just imagine how easy it will now be for the IRS to prove intent.

There will be no end to this tyranny until DC is swept clean.


38 posted on 10/30/2009 3:45:53 AM PDT by dforest (Who is the real Jim Thompson? I am.)
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To: Gondring
Besides, with a "Progressive" income tax, the left can keep the little guy from having any chance at improving his lot.

You're ok with being controlled?

A wealth-based tax is far more fair than an income-based tax.


Wealth is a factor with The Fair Tax. People spend more as their income rises. The more they spend, the more they will pay in taxes. High income earners will be taxed the most since they tend to purchase more big ticket items than lower wage earners.
39 posted on 10/30/2009 3:47:31 AM PDT by Man50D (Fair Tax, you earn it, you keep it! www.FairTaxNation.com)
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To: NonValueAdded

Also the first quote on my FR profile page.


40 posted on 10/30/2009 3:48:19 AM PDT by FreedomPoster (No Representation without Taxation!)
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To: dalereed

In response to FDR’s ‘witchhunt’....

“Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not
bound to choose that pattern which best pays the treasury. There is not even a patriotic
duty to increase one’s taxes. Over and over again the Courts have said that there is
nothing sinister in
so arranging affairs as to keep taxes as low as possible. Everyone does it,
rich and poor alike and all do right, for nobody owes any public duty to pay
more than the law demands.”

(US Appeals Court Justice the Honourable Learned Hand)


41 posted on 10/30/2009 6:08:26 AM PDT by griswold3 (You think health care is expensive now? Just wait till it's FREE!)
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To: RushingWater; Owl_Eagle; Sam's Army; Darksheare; pissant; najida; r-q-tek86; blackie; ...

THOUGHT POLICE....PING!!!


42 posted on 10/30/2009 7:00:07 AM PDT by Jersey Republican Biker Chick (Cleverly disguised as a responsible adult.)
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To: RushingWater

Couldn’t this be challenged under the 13th Amendment?


43 posted on 10/30/2009 8:09:54 AM PDT by Slings and Arrows ("When France chides you for appeasement, you know you're scraping bottom." --Charles Krauthammer)
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To: MaxMax
I cannot think of one reason for a deduction that could be deemed wrong.

Here's one - If you don't support democRats and 0bama, then your "motivation" for taking the tax deduction is wrong.

Clear enough?

44 posted on 10/30/2009 8:13:39 AM PDT by MrB (The difference between a humanist and a Satanist is that the latter knows who he's working for.)
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To: indylindy
One of the most difficult things to prove is intent. I can just imagine how easy it will now be for the IRS to prove intent.

It's not about the IRS proving intent; it's about you proving you didn't have the intent they accuse you of!

45 posted on 10/31/2009 3:52:45 AM PDT by PugetSoundSoldier (Indignation over the sting of truth is the defense of the indefensible.)
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To: Man50D
Your topic sentence isn't supported by the others. Do you not see the difference between wealth and income?

A hard-working person who tries to get ahead will have to purchase assets to get there, so he'll get whomped. Meanwhile, someone who inherits assets and is a lazy bum, not producing/earning much, gets taxed less.

People trying to get ahead shouldn't be the ones carrying the burden for those folks who "aleady have theirs," especially when those already having wealth have the most to lose if there were no governmental protections.

46 posted on 10/31/2009 1:09:25 PM PDT by Gondring (Paul Revere would have been flamed as a naysayer troll and told to go back to Boston.)
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