Hiring a tax expert isn't always a help. If you give the same problem to three tax experts, you are likely to get at least six different answers."
A tax lawyer is a person who is good with numbers but does not have enough personality to be an accountant. James D. Gordon, III
Definition of a Tax Attorney: Someone who solves a problem you didn’t know you had in a way you don’t understand.
“We could give it all back to you and hope you [the American people] spend it right.” President Clinton discussing how to spend the budget surplus. (1999).
“The President has kept all of the promises he intended to keep” Clinton aide George Stephanopoulos
“This [preparing my tax return] is too difficult for a mathematician, it takes a philosopher.“ Albert Einstein
“Nuclear physics is much easier than tax law. It's rational and always works the same way.” Jerold Rochwald
“And I must say that the Republicans, I think, have been cutting taxes with borrowed money, and the Democrats have been spending with borrowed money. They agree only on the borrowed money.” Alan Greenspan on PBS, September 24, 2010
"Those with the least votes will pay the most taxes."
“The difference between death and taxes is death doesn't get worse every time Congress meets.” Will Rogers
“It is a good thing that we do not get as much government as we pay for.” Will Rogers
"The art of taxation consists in so plucking the goose as to obtain the largest amount of feathers with the least possible amount of hissing." Louse XIV’s Controller-General of Finance
“Definition of a corporate tax shelter: A deal done by very smart people that, absent tax considerations, would be very stupid.” Michael J. Graetz
A new Word: Intaxication (n.): Euphoria at getting a tax refund, which lasts until you realize it was your money to start with.
Did you ever notice that when you put the words "The" and "IRS" together, it spells "THEIRS?"
There are reports that form 1040 is actually a secret code: for every $50you earn, you get to keep $10 and the IRS gets to take $40.
Urban Tax Myths. As you might expect, there are a number of untrue but interesting urban tax myths that have grown up over time, including:
Not using the IRS provided pre-printed address label removes you from the potential IRS audit base. Nothing removes you from the long arms of the tax auditor, except perhaps death and even then you have to wait for the statute of limitations to run.
The IRS has moved its headquarters from Washington to Costa Rica.
The top income earners do not pay their "fair share" of the taxes. According to the IRS, for 2009 the top 10% of taxpayers paid 70.5% of all income taxes, while the bottom 50% paid 2.25% of all income taxes. The percentage paid by the top 10% is going up in 2013.
If you write “Unconstitutional” on the front of your income tax return and send it to the IRS, they will never tax you again. It will not work, but it is an assured way to gain attention from the IRS!
A similar argument to the above tax evasion idea is that "Filing a tax return violates my Fifth Amendment right against self-incrimination!" Let's just say that the courts have not been sympathetic to the argument and most of its vocal proponents are eating at the government's expense.
A similar argument is that the income tax is a "voluntary" tax. The theory goes that all you have to do is stop volunteering to pay it and the IRS will leave you alone. They will leave you alone - behind some 30 foot concrete walls.
African Americans are entitled to a $5,000 "slavery reparation tax credit."
Members of Congress do not pay any social security taxes. Contrary to the myth, they have been paying into the social security system since 1984.
State Tax Laws. And then there is always the interesting array of state tax laws, including these gems:
In Alabama you can deduct $1,000 for building a radioactive fallout shelter. See Alabama statute 40-18-15 (a)(15).
Although clothing is generally exempt from the Minnesota sales tax, fur clothing is specifically subject to the sales tax. See Minnesota statute 297A.67.8(c)(9)
In Utah a special 10% tax is imposed on sexually explicit businesses. See Utah statute section 59-27-103.
In Texas, there is a $5.00 tax on admission to strip clubs. See Texas statute 102.052.
In Tennessee there is a "litigation tax" imposed on the filing of "every original civil and criminal case before each court." See Tennessee statute 17-512.
Arkansas has a 6% sales tax on tattoos and body piercings.
In Connecticut adult diapers are not subject to a sales tax - but baby diapers are subject to the tax. See Connecticut statute 12-412(53). Guess it's a matter of who's voting.
Alabama has a 10% "privilege tax" on any business or person who "sells or stores or uses or otherwise consumes packages of playing cards containing not more than 54 cards." In addition, each retail dealer who sells playing cards pays an annual license tax of $2. See Alabama statute 40-12-144.
California has a 33% sales tax on cold food, hot coffee, hot chocolate and hot tea purchased from vending machines. See California statute 6359.2(d).
In over 23 states if you acquire illegal drugs you are required to report the purchase to the state revenue authorities and pay a illegal drugs tax. There appears to have been little voluntary compliance, but it has been a nice revenue sources for many states after drug busts occur.
In Vermont (and many other states) funeral charges are not subject to sales taxes. See Vermont Statute 22-9741(22).
In many states, the sale of the United States flag is not subject to a sales tax.
In Connecticut, "[t]he sale, furnishing or service of water, steam and telegraph when delivered to consumers through mains, lines, pipes or bottles" is exempt from sales tax (emphasis added). See Connecticut statute 12-412(3)(C).
Mississippi imposed the first sales tax in 1932 to add revenue during the depression. As of 2013, the only states without a general state-wide sales tax are Alaska, Delaware, Montana, New Hampshire and Oregon.
There are also lots of interesting state and local taxes that have been eliminated over the years, including:
A lard substitute tax in South Dakota to encourage the use of lard.
A South Dakota tax on "Butter Substitutes"
A special tax in Louisiana for support of Confederate Veterans
A Greenville, South Carolina tax for a "Lunatic Asylum" in the late 1860s
A Nashville, Georgia "Whisky Tax"
Special taxes were once imposed on dealers and manufacturers of oleomargarine to protect the butter industry.
A tax on Missouri bachelors between the ages of 21 and 50.
A cleaning tax in North Carolina.
A cosmetics tax in Ohio.
A frontier tax in Texas.
A moth tax in Maine and Massachusetts.
A terrapin tax in South Carolina when terrapins were considered a delicacy in New England at the beginning of the last century.
A crab, shrimp and oyster tax in Georgia.
Until Roosevelt's New Deal, most states and/or local governments imposed a "poor tax" on their residents.