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Wanna Pay No Taxes?

Discussion in 'Business & Tax Advice' started by Uptownbulker, Aug 13, 2008.

  1. Uptownbulker

    Uptownbulker BANNED BANNED

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    "Most firms pay no income taxes -

    Congress Study finds that the majority of domestic and foreign corporations in the United States avoid paying federal income taxes.

    By David Goldman, CNNMoney.com staff writer

    Last Updated: August 12, 2008: 4:38 PM EDT

    NEW YORK (CNNMoney.com) -- Nearly two-thirds of U.S. companies and 68% of foreign corporations do not pay federal income taxes, according to a congressional report released Tuesday.

    The Government Accountability Office (GAO) examined samples of corporate tax returns filed between 1998 and 2005. In that time period, an annual average of 1.3 million U.S. companies and 39,000 foreign companies doing business in the United States paid no income taxes - despite having a combined $2.5 trillion in revenue.

    The study showed that 28% of foreign companies and 25% of U.S. corporations with more than $250 million in assets or $50 million in sales paid no federal income taxes in 2005. Those companies totaled a combined $372 billion in sales for the largest foreign companies and $1.1 trillion in revenue for the biggest U.S. companies.

    The GAO report, which did not name any specific companies, said that some corporations reported zero income before deducting expenses while others said they had zero net income after deducting expenses. Either way, those companies reported no tax liability, the GAO said.

    But many of the companies the report found had paid no tax were likely small businesses that pay other taxes. Generally, many small firms, because they do not have shareholders, are able to shift corporate income to individual income.

    "Small businesses that are going to be liable for a lot of income tax are likely to use other tax forms so they only pay individual income taxes," said Eric Toder, a senior fellow at the Tax Policy Center.

    The study was requested by Sens. Byron Dorgan, D-N.D, and Carl Levin, D-Mich., in an attempt to determine if corporations are abusing so-called transfer prices.

    Transfer prices are charges on transactions between subsidiary companies within a larger corporate group. Companies may try to lessen their U.S. tax hit by improperly transferring income to foreign subsidiaries in countries with lower rates.

    The GAO study did not attempt to determine if companies were abusing transfer prices, but it said that potential abuse of transfers could reduce the amount of taxes companies pay in the United States.

    "The tax system that allows this wholesale tax avoidance is an embarrassment and unfair to hardworking Americans who pay their fair share of taxes," Dorgan said in a statement.

    U.S. politicians disagree about how much income tax the government should levy on corporations. Currently the rate is 35%, but most foreign governments have set their rates below the U.S. level.

    "The U.S. corporate tax rate stayed the same while foreign countries have drifted down, which increases the incentive for companies to report income in other countries," said Toder. "If the U.S. drops the rate to 30% but closes other tax loopholes, that may ultimately generate more tax revenue for the government."

    First Published: August 12, 2008: 3:46 PM EDT "

    Hit me up!
     
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  2. expatdude

    expatdude Newbie

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    ... and many foreign countries have personal income rates which are well above those in the US. Try Denmark (65%), Belgium (55%) or Italy (50%) as great examples.
     
  3. Uptownbulker

    Uptownbulker BANNED BANNED

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    Yeah, my personal corp; the one that I run all my shit through is like $30K down for the year and I will have significant loss carry forward or some such shit, so my accountant tells me!

    Nice position to be in; money in the bank, all the bills paid and a $30K loss for the year so far and three months to go!

    Like Billy Connolly says, "It's fookin' magic!":)
     
  4. Twins2222

    Twins2222 Regular Member

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    I need the number to your accountant...lol that's the way to do it!!!
    Thanks for the good read as well!
     
  5. MiLiTARYiV

    MiLiTARYiV Senior Member

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    Thats funny, then why does all the corps complain about Obama raising taxes?
     
  6. izm

    izm Regular Member

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    cause then the avg consumer has less money
     
  7. cashcorp

    cashcorp Regular Member

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    Lol, what you need is uptowns number!

    Dude is a financial ninja

    [​IMG]
     
  8. cskgsquad

    cskgsquad Registered Member

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    If you're not making a "profit" you're not going to pay income tax.

    **Thats funny, then why does all the corps complain about Obama raising taxes?

    Well, how do corps get funding for their projects? One of a few ways: Creditors, from their own pockets, or they can sell shares (stock). If they don't want to pay taxes they show a loss for the year. If they show a loss for the year, who the hell would want to own stock in a company that is consistently loosing money? Also, do you think a bank will want to loan money to a business who is loosing money? If they show no profits, how would they repay the loan? Therefore, most corporations pay that tax and are able to get more funds. Also, once a year the corporation will be audited. You do not want a qualified opinion on your report.

    Not only are corps mad at Obama for that, but also the shareholders. Double taxation takes place when a company make a profit and pays the dividends to its shareholders. So, not only the company suffers, but also the middle-class shareholder.

    **Info may not be 100% accurate, it is from a few years ago when I took a basic financial accounting class in high school. So, maybe I am wrong, but that would be my reasoning for companies mad about raising taxes.
     
  9. cnwelf

    cnwelf Regular Member

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    Uptownbulker

    HE is my friend

    you can work he. just trust him
     
  10. xhanuman

    xhanuman Junior Member

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    It will be interesting to see just how hard the tree shakes when the new US PREZ starts going after the top corp earners... of course, it looks like it won't be right off the bat given the overall hard economic times that much of the world finds itself in at the moment. A corp is still the way to go!
     
  11. aftershock2020

    aftershock2020 Senior Member

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    That's very interesting. I found out back when I was in law enforcement for the local sheriff's office, I found out that the 1099 manual has an ammendement that states that all non-civil, state or federal employees aren't suppose to pay income tazes at all, as it is a " WAR FUNDING " process in the U.S.

    It will take your personal IRS file and mark it permanently pending, which you will no longer have to pay taxes again.

    I don't remember what article it is but they don't teach it in accounting or law school but it is in there. I don't have to remember though because I write everything off long form every quarter. The government always ends up owing me a big check...heh.

    Great post. Interesting stuff.

     
  12. whizkids

    whizkids Newbie

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    I know this one from memory:

    IRC 3402(p): Voluntary Withholding Agreements

    Any employer making the payment of wages to an employee shall deduct and withhold upon such wages a tax determined in accordances with the tables prescribed by the Secretary. And this agreement SHALL BE VALID as long as the employer and employee mutually agree upon and SHALL BE TERMINANTED by either party at any time by providing signed written notice to the other.

    ---Income Tax is the biggest fraud in history. Check out Aaron Ruso's Freedom to Facism. Great movie on google video.
     
  13. Uptownbulker

    Uptownbulker BANNED BANNED

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    Yep; keyword being "wages".

    Think about it.
     
  14. whizkids

    whizkids Newbie

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    "Income" was defined by the Supreme Court as "corporate net profits" sorry don't know the case name by heart. It means it has to be the same definition for a corporation as it does for an individual. Meaning, as a person you can take your profits and losses just like a corporation does.

    When you put in x amount of hours a day at your job, and you're given x amount of dollars for each hour you work, that's called remuneration.

    There are several different types of remuneration.

    But, remuneration specifically excluded from gross income is automatically exempt from being "gross income" so it's not taxable.

    I created a form one time that got my employer to stop withholding taxes out of my paycheck. I could maybe upload it here if I can find it. Anyone interested?
     
  15. Uptownbulker

    Uptownbulker BANNED BANNED

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    No, it's not and you cannot stop your employer from witholding.

    You have been looking at too many weirdo whackjob websites.
     
  16. Uncle Kracker

    Uncle Kracker Registered Member

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    You can accomplish that just by having your employer hire you as an independent contractor and providing you with a 1099 at the end of the year instead of a W-2 form. Most employers would love to do this, however, they know that this arrangement will not pass IRS scrutiny so they wouldn't waste their time with it.

    Code:
    http://en.wikipedia.org/wiki/IRS_Form_990#1099
    http://en.wikipedia.org/wiki/IRS_Form_990#W-2

    Ever hear of the Universal Life Church? They have a form that will work also. You can setup your own church structure with a bank account and legally have your employer stop taking taxes out of your check. Give them the right form and they will do it. The point is the bank and employer's ass is covered with the IRS - your's is not.

    Code:
    http://www.ulc.net/
    There's a lot of forms that can do a lot of things but I'd have to agree with Uptownbulker, you've been reading to many weirdo whackjob websites. Tax protester types always get screwed in the end, it's the American Way.
     
  17. whizkids

    whizkids Newbie

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    Don't you remember filling out your 1040 where it asks if you're exempt? I found out how to get exempt and I have an old paystub somewhere on my pc where it shows I stopped the withholding.

    The IRS never bothered me. I also own a copy of the IRC code book. It's basically an encylopedia. Anyways, think what you want. 33 million Americans are legally exempt.

    EDIT: I found the pic

    http://imageshack.us
    http://g.imageshack.us/img360/mycheckstub33xm7.jpg/1/
     
    Last edited: Nov 26, 2008
  18. whizkids

    whizkids Newbie

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    Here's a copy of the form I sent to my payroll department.

    (INSERT YOUR COMPANY NAME)
    (INSERT COMPANY ADDRESS)
    Attention: Payroll Department



    Dear Payroll:

    Please stop immediately the practice of deducting Federal/State/City taxes from my paycheck. Please accept this document as my

    Certificate of Exemption from withholding in lieu of form W4 for tax year ending December 31st, 2002

    The Law, Internal Revenue Code Section #3402- (n) states:
    ?Notwithstanding any other provision of this section, an employer shall not be required to deduct and withhold any tax under this chapter upon a payment of wages to an employee if there is in effect with respect to such payment a withholding ?EXEMPTION? certificate (in such form and containing such other information as the Secretary may prescribe) furnished to the employer by the employee certifying that the employee?
    (1.) Incurred no liability for income tax imposed under subtitle ?A? for his preceding taxable year, and
    (2.) Anticipates that he will incur no liability for income tax imposed under subtitle (A) for his current taxable year.
    The Secretary shall by regulations provide for the coordination of the provisions of this subsection with the provisions of subsection (f).?

    While I qualify under this law and because this law requires that I provide you with a sworn statement (under the penalty of perjury) and I am doing what the law requires of me, now would you do what the law requires of you and stop deducting from my wages federal, state, and city income taxes?

    IRC #3402. Income Tax Collected At Source
    (A) Requirement of withholdings
    (1.) In general. Except as otherwise provided in this section, every Employer making payments of ?WAGES? shall deduct and withhold upon such ?WAGES? a tax determined in accordance with the tables or computational procedures prescribed by the Secretary?

    I have reproduces the law, IRC Code Section 3402 above to show that every employer paying ?WAGES? to an employee for services must deduct and withhold.

    Wages are ?Gross Income? and are taxable. Remuneration excluded from Gross Income is not taxable income pursuant to IRC Code Sections 3401 (A), (i), and Code 911.

    Tax laws that apply to persons making wages (Gross Income) do not apply to me because I make ?Remuneration? which is excluded from Gross Income.

    Employers have been led to believe that all employees earn ?Wages?. This false belief is based upon traditional myth, not upon facts as presented in the law. The truth is that most employees earn ?Remuneration? excluded from GROSS INCOME. Gross Income minus deductions is taxable income.

    The Supreme Court decision FEDERAL CROP INSURANCE CORP v A.A. MERRILL, 332 U.S. 380 held in that decision:

    ?Anyone entering into an arrangement with the government takes a risk of having accurately ascertained that he who purports to act for the government stays within the bounds of his authority, even though the agent himself may be unaware of the limitations upon his authority.? (Emphasis added)

    Employers and Employees when listening to the advice from the so-called experts (IRS agents, Lawyers and Accountants) need to start comparing this advice with the facts as presented in the law and implementing regulations. Otherwise, we will, as the Supreme Court warned us, ?We will be taking a RISK.?

    To have a tax imposed upon me I must have taxable income. In order to have taxable income I must make Gross Income from specific sources. The two sources are:
    #1. Sources from within the United States, IRC #861
    #2. Sources from without the United States, IRC #862

    The sources from within the United States (IRC #861) pertain to me.
    There is NO CODE linking my earnings with your company to Gross Income; therefore I am not subject to pay Federal, State, or City Income Tax.

    In the law (Code Section 3402 (p) ) under the heading ?Voluntary Withholding Agreements? it states:
    ?The Secretary is authorized by regulation to provide for withholding from ?Remuneration? for services performed by an employee for his employer which does not constitute wages.?

    When we look at the implementing regulation attached to this statute, Title 26 CFR Section 31.3402 states:
    ?An employee who desires to enter into an agreement under Code Section 3402 (p) shall furnish his employer with form W4 (withholding Exemption Certificate) executed in accordance with the provisions of Code Section 3402 (f) and the regulations there under. The furnishing of such form W4 shall constitute a REQUEST for withholding.?

    This Section also provides for: ?An agreement under Code Section 3402 (p) shall be effective for such a period as the employer and employee MUTUALLY AGREE upon. However, either the employer or the employee MAY TERMINATE the agreement prior to the end of such period by furnishing a SIGNED WRITTEN NOTICE TO THE OTHER.?

    This section makes it very clear that we the employee may volunteer to have taxes withheld from our remuneration which is excludable from Gross Income, by furnishing a W4 form signed under the penalty of perjury and presenting it to our employer. We are told this act constitutes a ?request for the employer to withhold.? Without this W4 form the employer has no lawful authority to withhold from the pay of the employee.

    Employers have been led to believe that it is mandatory for employees to sign and turn in a W4 form and submit to the deductions from their pay. This act also submits the employee to all the laws pertaining to the federal/state/city income tax and he is now treated like a foreigner in his own country.

    Employees who find themselves caught in this trap should know there is hope. There is a Code Section, which will allow them to correct the situation. That will be the Regulation under the heading ?Returns Regarding Remuneration for Service?, Title 26 CFR 1.6041-A-1:
    ?Any service recipient (defined as the person for whom the service is preformed) engaged in the business that pays ?Remuneration? to any person for service shall make a return. Only the term ?remuneration? does not include amounts paid to any person? if the service recipient (THE EMPLOYER) knows that such amounts are EXCLUDABLE FROM GROSS INCOME of the person performing the service.?

    The above regulation is speaking to YOU the EMPLOYER and is talking about the W2 filing that you are required by law to file.

    The above statement basically tells my employer that if he knows my remuneration is excluded from the definition of Gross Income, that he is not to include that remuneration on a W2 filing. When he knows that my remuneration was EXCLUDABLE FROM GROSS INCOME and he goes ahead and reports this as GROSS INCOME on the W2, he is telling the IRS, the State of (INSERT: name of your state), and the City of (INSERT: name of city where you work), that I had taxable income. When the fact is that I had remuneration excludable from taxable Gross Income.

    This Section goes on to say that the employer is considered to know the facts if he is given a written statement by the employee signed under the penalty of perjury. This section did NOT instruct the employee (me) to take an army of Accountants and Lawyers to the employer?s office to help prove this case. The code simply instructed me to write a statement, sign it under the penalty of perjury, and present it to the employer in lieu of the W4 form.

    This is my formal notice to you, my employer. I am submitting this statement sworn by me under the penalty of perjury that my remuneration is excluded from Gross Income and is not wages subject to withholding tax.

    In view of the fact that I had no Wages, I also had no Gross Income to report on a W2 to the Federal government. This also means that I had no Gross Income to report to the State of (INSERT: name of your state) or the City of (INSERT: your city name). Therefore, you are to stop immediately the practice of deducting the (INSERT: State name) Withholdings and the City of (INSERT: name of city) Withholdings. The Ohio Laws pertaining to the Ohio Income Tax are the same laws as in the Internal Revenue Code and their Regulations. So since I have no legal liability for the Federal Income tax, I also have no legal liability to pay the Ohio or City of ((insert city)) tax either.

    I am doing what the law requires of me, now will you start doing what the law requires of you and stop the illegal practice of sending a portion of my Remuneration, (excluded from Gross Income) off to these three government agencies.

    Thank you for your cooperation in this matter, and please do not hesitate to contact me directly should you have any questions on this issue.

    (INSERT YOUR NAME) SSN: ***-**-****
    ?Under the penalty of perjury I attest that everything contained herein is accurate and legal to the best of my belief.?



    Signature:_________________________________DATE:________________

    ?Without Prejudice? to any of my unalienable rights.



    (NOTE TO TEA PARTY PEOPLE: You will want to sign this form IN FRONT OF A NOTARY PUBLIC and have it NOTARIZED. Also, if you want to see a picture of my paystub which I have scanned, I will glady email it to you to show you that my company honored this form. Glad to be part of the greatest mission in America)
     
  19. Uncle Kracker

    Uncle Kracker Registered Member

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    Alot of code and a lot more words...but a good read none the less, this is what I take from all of it: On the W-4 form you are declaring that you had no taxable income and were due 100% refunds for the previous year as well as the current year. So far you've done what you need to do and the employer's ass is covered because you've given them what they need to satisfy the IRS.


    Related Sources, for the hard core:
    Code:
    http://www.irs.gov/pub/irs-pdf/fw4.pdf
    http://www.supremelaw.org/rsrc/cert3402.htm

    That leaves you having to prove to the IRS that you indeed were not liable for any taxes on gross income and were due 100% refunds for 2 years because your compensation was classified (only by you at this point) as remuneration. You call your income remuneration and the IRS calls it wages. Not the best position to be in, but it may fly.



    At this point there's still alot of if's, now the IRS and the employer are the ones who have to ultimately decide if you've been paid remuneration or wages. If I was the employer I wouldn't want the aggravation you bring me and would find a way to get rid of you. But, there are still employers who would do it. The clearest part seems to be if you earned under $3000.00 you're free and clear - not worth being on IRS's radar. Anything more than that (or unless you meet some other unlikely qualifications) and it seems like you're still on the IRS hook if they want to pursue it.



    You are correct about the supreme court decision it tells you to do your own due diligence and ignorance (of the law) is no excuse, but it doesn't support your deciding what is remuneration and what is not. I would be interested in finding out where you got the 33 million legally exempt (from this method) statistic though. And on that happy note I feel the urge to put out a high priced eBook on the subject. :p
     
  20. kevinfoster

    kevinfoster Registered Member

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    Now you've got my attention. This is exactly what I need. I sure hope you know what your talking about. Then again, there is the law aspect to taxes and then there is the enforcement side. Those two don't always agree, but the enforcement side is the one that has the hammer.