IRS Announces 2005 'Dirty Dozen' Tax Schemes. Taxpayers Warned Not To Fall For False Promises

Denver 7 ABC News ^ | Feb. 28, 2005 | Denver ABC News

[FairOpinion]

The Internal Revenue Service unveiled its annual listing of tax scams Monday that it labeled the "Dirty Dozen."

The 2004 list includes several new tricks that either manipulate laws governing charitable groups, abuse credit counseling services, or rely on refuted arguments to claim tax exemptions, according to the IRS.

"The Dirty Dozen is a reminder that tax scams can take many forms," said Mark W. Everson, IRS commissioner. "Don't be fooled by false promises peddled by scam artists. They'll take your money and leave you with a hefty tax bill."

[ApesForEvolution]

Frivolous Arguments: According to the IRS, promoters have been known to make the following outlandish claims: that the 16th Amendment concerning congressional power to lay and collect income taxes was never ratified; that wages are not income; that filing a return and paying taxes are merely voluntary; and that being required to file Form 1040 violates the Fifth Amendment right against self-incrimination or the Fourth Amendment right to privacy.

"Don't believe these or other similar claims," said Everson. "Such arguments have been thrown out of court."


>>>

That's real simple IRS Federal Mafia. Show up the citizens' Constitutional Right for a Redress of Grievances.

But we know why they don't...

[ApesForEvolution]

GO FAIRTAX! END THE FRAUD! ABOLISH THE IRS/IRC! http://www.FairTax.org

[ctdonath2]

The feds were never supposed to tax citizens directly.

[Mears]

bump

[ancient_geezer]

Hate to burst your bubble, but a "fair tax" or "flat tax" would ruin the engine that keeps the US economy churning. And that is the tax deduction for interest and taxes on your home.

You pay for your home in after tax dollars under the current system my freind. Under the NRST you pay for your home out of untaxed dollars.

What would be that advantage of home ownership if you did not have an opportunity to deduct these items from your income???

So the American dream cannot be had without a heavily progessive/graduated income tax?

Hmm, may be your dream, certainly not mine:

Manifesto of the Communist Party, by Karl Marx and Frederick Engels, published in 1848. We should never forget nor overlook the philosophical underpinnings of the current income tax:

"The proletariat will use its political supremacy to wrest, by degree, all capital from the bourgeoisie, to centralize all instruments of production in the hands of the state ... . Of course, in the beginning, this cannot be effected except by means of despotic inroads on the rights of property ... . These measures will, of course, be different in different countries. Nevertheless, in most advanced countries, the following will be pretty generally applicable.

1. Abolition of property in land and application of all rents of land to public purposes.
2. A heavy progressive or graduated income tax.
3. Abolition of all rights of inheritance.
4. Confiscation of the property of all emigrants and rebels.
5. Centralization of credit in the banks of the state, by means of a national bank with state capital and an exclusive monopoly.
6. Centralization of the means of communication and transport in he hands of the state.
7. Extension of factories and instruments of production owned by the state; the bringing into cultivation of waste lands, and the improvement of the soil generally in accordance with a common plan.
8. Equal obligation of all to work. Establishment of industrial armies, especially for agriculture.
9. Combination of agriculture with manufacturing industries; gradual abolition of all the distinction between town and country by a more equable distribution of the populace over the country.
10. Free education for all children in public schools. Abolition of children's factory labor in its present form. Combination of education with industrial production, etc. "

 

I'll answer. None! And the American dream would be lost

I would certainly hope so!!!

For income is not taxed under an retail sales tax, invest it, save it, buy an older home no NRST.

All savings and investment earn tax free, no tax is ever collected until one purchases new products or services for personal use or consumption.

How does that destroy the real Amercan dream? Of individual liberty, pursuit of happiness, embodied in ownership and the rights of property?

[CSM]

So, $0 in deductions on 0% income tax will be bad how?

[CSM]

What states have 20% sales tax?

[lewislynn]

?

[houeto]

Hate to burst your bubble, but a "fair tax" or "flat tax" would ruin the engine that keeps the US economy churning. And that is the tax deduction for interest and taxes on your home. What would be that advantage of home ownership if you did not have an opportunity to deduct these items from your income??? I'll answer. None! And the American dream would be lost.

That's got to be the wildest post I've ever seen on the tax threads.

So, the engine that keeps the US economy churning is the tax exemption on home interest? WHEW!!!

Therefore, there also must have never been an American Dream before the creation of the income tax! DOUBLE WHAMMY WHEW!!!

[ctdonath2]

What would be that advantage of home ownership if you did not have an opportunity to deduct these items from your income???

#1 advantage: not needing to constantly pay for your residence. Monthly payments suck.

Methinks mortgage interest deductions are one of the biggest scams ever. The "supply and demand" law holds: anything that makes it easier to pay a price leads to that price increasing. The allure of tax-deductable interest payments means housing prices will increase to fill the gap.

Thanks to various mortgage factors (delayed payment, deductions, etc.), people who wouldn't pay more than $100,000 for a house get conned into paying over $300,000 for the same house.

[Zon]

That's a sheeple response -- you're being sarcastic, right?

[ctdonath2]

Some counties in NY are approaching 10% sales tax (and suffer among the highest income tax in the country).

Canada has a sales tax (obfuscated into "PST" and "GST") exceeding 15%.

Dunno about 20%, but some places are heading that way.

[ancient_geezer]

The feds were never supposed to tax citizens directly.

If you are operating under that kind of assumption, I would suggest your financial health not to mentiona your future freedom to roam about is in dire jeopardy.

I think you had better take a closer look at the history of why we have the Constitution, instead of the Articles of Confederation the original 13 states and their Continental Congress operated under.

A clue from the the Federalist/anti-Federalist debate of the time as well as the earliest tax decisions of the USSC:

Federalist #21:

• The principle of regulating the contributions of the States to the common treasury by QUOTAS is another fundamental error in the Confederation. Its repugnancy to an adequate supply of the national exigencies has been already pointed out, and has sufficiently appeared from the trial which has been made of it. I speak of it now solely with a view to equality among the States. Those who have been accustomed to contemplate the circumstances which produce and constitute national wealth, must be satisfied that there is no common standard or barometer by which the degrees of it can be ascertained. Neither the value of lands, nor the numbers of the people, which have been successively proposed as the rule of State contributions, has any pretension to being a just representative.

• It is a signal advantage of taxes on articles of consumption, that they contain in their own nature a security against excess. They prescribe their own limit; which cannot be exceeded without defeating the end proposed, that is, an extension of the revenue. ... Impositions of this kind usually fall under the denomination of indirect taxes, and must for a long time constitute the chief part of the revenue raised in this country.

  Those of the direct kind, which principally relate to land and buildings, may admit of a rule of apportionment.

Federalist #34:

• ``A CONCURRENT JURISDICTION in the article of taxation was the only admissible substitute for an entire subordination, in respect to this branch of power, of State authority to that of the Union.'' Any separation of the objects of revenue that could have been fallen upon, would have amounted to a sacrifice of the great INTERESTS of the Union to the POWER of the individual States. The convention thought the concurrent jurisdiction preferable to that subordination; and it is evident that it has at least the merit of reconciling an indefinite constitutional power of taxation in the Federal government with an adequate and independent power in the States to provide for their own necessities.

Federalist #39:

• "The difference between a federal and national government, as it relates to the OPERATION OF THE GOVERNMENT, is supposed to consist in this, that in the former the powers operate on the political bodies composing the Confederacy, in their political capacities; in the latter, on the individual citizens composing the nation, in their individual capacities. On trying the Constitution by this criterion, it falls under the NATIONAL, not the FEDERAL character;"

Anti-Federalist Papers #3 NEW CONSTITUTION CREATES A NATIONAL GOVERNMENT;

There are but two modes by which men are connected in society, the one which operates on individuals, this always has been, and ought still to be called, national government; the other which binds States and governments together (not corporations, for there is no considerable nation on earth, despotic, monarchical, or republican, that does not contain many subordinate corporations with various constitutions) this last has heretofore been denominated a league or confederacy. The term federalists is therefore improperly applied to themselves, by the friends and supporters of the proposed constitution.

Federalist #45:

• "The change relating to taxation may be regarded as the most important; and yet the present [Continental] sic Congress have as complete authority to REQUIRE of the States indefinite supplies of money for the common defense and general welfare, as the future [Constitutional] Congress will have to require them of individual citizens;

---

First Supreme Court Tax Case:

Hylton v. United States(1796), 3 U.S. 171

"A general power is given to Congress, to lay and collect taxes, of every kind or nature, without any restraint, except only on exports; but two rules are prescribed for their government, namely, uniformity and apportionment: Three kinds of taxes, to wit, duties, imposts, and excises by the first rule, and capitation, or other direct taxes, by the second rule. "

"the present Constitution was particularly intended to affect individuals, and not states, except in particular cases specified: And this is the leading distinction between the articles of Confederation and the present Constitution."

"Uniformity is an instant operation on individuals, without the intervention of assessments, or any regard to states,"

"[T]he DIRECT TAXES contemplated by the Constitution, are only two, to wit, A CAPITATION OR POLL TAX, simply, without regard to property, profession, or any other circumstance; and a tax on LAND."

[groanup]

That's got to be the wildest post I've ever seen on the tax threads.

It's amazing how Americans have been conditioned to give thanks to the almighty government for the mortgage deduction forgetting that the tax that allows for it is a drag on economic wealth.

[Centurion2000]

What would be that advantage of home ownership if you did not have an opportunity to deduct these items from your income??? I'll answer. None! And the American dream would be lost.

A lot of people in the 19th Century and 20th OWNED their homes and did not get deductions. How did that kill the american dream ?

[ancient_geezer]

Thanks to various mortgage factors (delayed payment, deductions, etc.), people who wouldn't pay more than $100,000 for a house get conned into paying over $300,000 for the same house.

How very true:

Tax-a-phrenic: Paying $4 interest to a banker to avoid paying $1 tax to the IRS, so the banker can pay the IRS a $1 for you.

[Principled]

And then tracking all these mixed uses quickly becomes a nightmare, not much different than today.

Tracking these mixed uses will be tough- just like it is today.

But not as tough, nor as scary!

No individuals collect or remit tax. Only business.
No individuals get audited. Only business.
The number of filers is reduced by a LOT... there will be far, far fewer places to track.

Wanna try to cheat? Go ahead- but it would be like cheating today on claiming business expenses...but since there will be so many less filers to track, it will be easier to get caught.

So it will be easier to track this under an nrst (far fewer filers) than it is under our income tax.

[dyed_in_the_wool]

Nice.
Wonder what ole Ira is up to these days...

[lewislynn]

Under a sales tax model, the interest and principal would be paid with pre-tax dollars.

From AFFT

Consumption Is Taxed Once Under Both an Income Tax and a Sales Tax

• Under the current federal income tax system, as well as under the FairTax, consumption purchases must be made from after-tax dollars. Therefore, the primary difference between a sales tax and an income tax is not the way they impact consumption, but rather how they impact savings. The income tax double or triple taxes savings, while the sales tax does not tax savings until consumed.

Both interest and new home purchases would be subject to your sales tax. You can't make the purchase or pay the interest without paying the tax so they are paid with after tax dollars.

[rabidralph]

I would still want a big back yard.