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Some people are procrastinators, especially when it comes to unpleasant tasks such as filing income taxes. (I happen to know one such laggard very well). So instead of celebrating Easter today or watching a ball game, you've got receipts and check stubs spread across the kitchen table, and you suddenly discover you need tax advice, which is almost impossible to come by at the last minute, and on a Sunday to boot.
As a public service, I asked a renowned tax expert if he would answer some common questions here. He gladly agreed, providing he could remain anonymous.
Q: As a savings-and-loan owner and manager, I made a comfortable income for my management skills in skimming and making unsecured insider loans to develop real estate that I and my partners owned, and I also managed to keep in my personal possession several Renoirs, a yacht and a Lear jet from the company's assets after it was seized by the regulators. Do I have to pay taxes on this stuff?
A: Probably not. Just check the box to donate $100,000 to the Keating Five Re-election Fund.
Q: I just read somewhere that the average American works
from Jan. 1 to May 12 each year just to pay taxes. Over a
40-year working life, that comes to about 15 years of
unpaid work that I do not perform voluntarily. Doesn't the
U.S. Constitution say that neither slavery nor
involuntary servitude, except as a punishment for crime
whereof the party shall have been duly convicted, shall
exist within the United States
?
A: The constitution also provides protections against self-incrimination and unreasonable searches and seizures. However, since you're dealing with the IRS, none of this matters.
Q: I've heard that a lot of people fudge on their taxes. How would I spot one of these scofflaws?
A: Go down any commercial street and look for small businesses. If it's open, it's run by somebody who fudges -- that's the only way they can stay in business.
Q: I'm paying more in social security than in income taxes this year. I don't mind paying income taxes, since they presumably go to benefit all of society, including me, but how do I benefit from all this social security tax I pay?
A: In theory, you will be able to draw on it when you retire, since it is supposedly being set aside as a trust fund for you -- which of course it isn't. What doesn't go out right now is lent to the federal government, and those loans will have to be repaid when you retire. If any private insurance company ran this way, its sales agents would be arrested on federal fraud charges every time they crossed a state line or used the mail. Just be philosophical and realize that the major benefit from social security taxes is an education in how 12 percent of society can consume 20 percent of the federal budget.
Q: I made $12,000 last year, which really wasn't enough to live on, especially since we have two kids. We try to get by on our own without asking for anything from the government. Even at that, it appears that I am paying $913.20 in Social Security and $604.21 in income taxes. This doesn't seem fair.
A: Fair or not, somebody has to pay Leona Helmsley's share.
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