Income Tax Fraud or is it

A good number of people are currently beating their heads against the wall trying to get every penny back that they can in a refund from the IRS for Federal personal income taxes they’ve had withdrawn for the entire 2006 calendar year. Even though I posted this last September on Blogger, I would imagine there are many out there who have not seen the film to which I referred, nor have they really understood the law as presented in the Bill of Rights.

Income Tax Fraud –

The film America: Freedom to Fascism is not available through Google or YouTube at the moment, that I can find. It was out in theatres, and is also available via DVD here:

America: Freedom to Fascism –

So the question: Who has to pay Federal income tax and who doesn’t? I’ve chatted with a couple of IRS people I know, several tax attorneys, and – of course – those damned radical left-wing revolutionaries who think the government is bleeding us dry (please, people, that’s sarcasm!). And I’ve taken everything said into consideration, so don’t be branding me as anything other than an interested citizen who may or may not pay taxes, in accordance with the law.

Three examples:

Person A works for a company, it’s the only job Person A has.

Person B works for the same company, but also is sole proprietor of a business operated on the side.

Person C works for the same company and also owns a small corporation.

The general consensus is this:

Definitions: There is a difference between income tax and personal income tax. Income tax is based on the income you receive from all sources, including garage sales, estates, babysitting in your home, and so forth. Personal income tax is the tax based on your personal income from a job you may have with an employer, who is already paying income tax on you via their company.

Person A does not have to pay personal income tax on monies received from his employer. It is not Federally mandated, but no one ever says that it is voluntary when they stick the form in front of your face. There’s a reason for that.

Person B does have to pay income tax on the business he conducts on the side, but not personal income tax on the income he receives from his employer.

Person C also has to pay tax through the corporation he owns, but not personal income tax on the income he receives from his employer.

More about Person A – and also the income from the employer for Persons B and C:

The Federal personal income tax for any one of these three examples who may or may not agree to pay through their employer at the beginning of the year is voluntary. However, if you sign the form, and agree to pay personal income taxes for that calendar year, then you are required to pay all that the tax code requires that you pay. There’s no skimping, no saying, “Oh I am only going to give you $50 when the code says $500.” It’s going to come against you immediately when it is due, and you will end up owing the government for that year, based on your qualified deductions and so forth. Remember, it’s voluntary. You agreed.

If you fall into categories B and C, you will likely be scrutinised to death if you pay only on your businesses and not on the personal income from your employers. Your records need to be squeaky clean – squeaky clean! Remember, your company is paying taxes on you as their employee, so the government knows where you are at all times.

Let’s confuse things further. Capital gains taxes. Do you have investments through the company for which you work? Does your company front you x amount in those investments? Then you damnwell better be paying taxes, because those do not fall under the auspices of the difference between paying personal income tax and paying any other taxes. Any other benefits you get from the company? Check and see if they are taxable under Federal law. You may not have to pay on the income you receive, but you do have to pay taxes on the benefits that are covered by the tax law, not the tax code.

And that’s why they don’t say a word to you when they stick that form in front of your face.

As an aside, too, keep this in mind: Your state taxes. If your state code states something along the lines of “just as you must pay Federal income tax, you must pay state income tax”, the same voluntary rule applies to your state taxes. If no such statement is made referring to Federal taxes, the Federal rule does not apply to your state taxes. If your state says, “You must pay personal income taxes”, then you must pay state personal income taxes. Period. End of story.

My admonition to you is this: Determine on your own whether or not the rules, or lack thereof, apply to you. Then look to your conscience to determine whether or not you think you should – or wish to – pay personal income taxes. Do not go back to previous years and cry, “I’ve been duped! No one ever told me about this! Unfair! I want my money back!” That’s bollocks. Never, ever rely on someone else to do your thinking for you. This “rumour” of income tax “fraud” is just crap. The verbage has been out there for decades. The government has never said, ever, that the law states you must pay. It has always said the code says thus and so. And they’re not wrong.

While you’re making your decisions, put some thought into the Federal budget, and what’s included in that. What, you say you don’t have any idea what the budget covers? You no longer have that excuse:

Congressional Budget Office –

I realise that my admonition that you think for yourselves may fall on a few deaf ears, but you can’t say I didn’t offer the information. Any questions? Ask. Can’t read? Just let me know, and I’ll read the information to you. Can’t think? You’re on your own.