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I disagree. It is my opinion that you are referencing laws that do not apply to what I'm talking about.
Follow the links in the law you provided. If you read the law, and then follow the links to what they are referencing, in order to see what the actual law is that they are discussing, you are wrong.
And with that I will let you have the last word.
For anyone reading this in the future, know that my daughter had no problem, and neither did my friends. And if you are worried, read the links I provided and I suggest that you not be intimidated by someone putting links to laws that are not relevant to what I have suggested, but have big scary titles about fraud, etc., to try and prove themselves right, and scare you out of doing this.
Think about this: When you go through orientation at a new job, and they are handing you all the forms to fill out, including the W-4, have you ever asked them how to fill it out? They always say that they are not allowed to tell you how to do it. And, did they then make you prove your right to claim whatever you decided to claim? No.
You don't have to fill out a form that "certifies" that you have the right to claim what you are claiming.
You can put whatever you want on the W-4.
And if you read the article by payroll specialists that I provided, you will see that you can legally change your exemptions at any time.
Will you have to pay the IRS back if you don't withhold enough? Yes.
Will the IRS have to pay you the difference if you withhold too much? Yes.
This is just silly. The law is very clear even though you apparently cant understand it.
I'm not trying to intimidate anyone, simply correcting your misinformation. Anyone who wants to can take their chances with the IRS. For all you know, your daughter was referred for criminal prosecution and they decided it wasn't worth it. From what you said, she made what's basically a voluntary disclosure and made arrangements to pay the taxes albeit late. She is simply an unprosecuted/unconvicted tax cheat. Generally, as spelled out in their own manualwhich you can find online they don't prosecute in those cases, but there is no guarantee of that.
Not having to certify you are allowed a certain number of allowances on your W-4 means nothing. You don't have to certify anything on your tax return either until IRS asks, usually via an audit. However, on both you do sign under penalty of perjury that what you put on there is true.
Further, although I think everyone else understands what you are promoting is illegal, the IRS uses info they already have from W-2 filings, your past history, etc to detect insufficient withholding and they can notify your employer to "lock down your withholding to a certain amount" which may or may not be the smallest amount you should have withheld until you can prove you are entitled. You can find that info at irs.gov. How embarrassing would that be to have your employer get a notice from IRS that basically says they know you are cheating on your W-4.
Look people break the law every day without getting caught. Have at it. But at least understand that's what you are doing and advising others to do.
By the way, I am guessing that amassing your down payment through tax evasion is mortgage fraud. Would be interesting to hear from someone who's area of expertise that is.
It is not illegal to change your deductions any time you want to.
But your deductions, THAT one is stating that you suddenly have 9 DEPENDENTS you don't have, it also inconvieniences your employer who has to bother with all the paperwork and stuff switching back and forth, I'm SURE they have more important things to do.
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You don't need to explain on your adjusted W-4 why you are changing it. People do this all the time to save for Christmas, etc.
I'm over 50, if people are doing this all the time as you claim- besides your daughter- I'd like to see them, this is the very FIRST time in my entire life I ever heard of people doing a dumb stunt like that and playing games with the IRS, this doesn't save money at all- it all still has to be paid plus penalties and interest on top.
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And you don't lie on your next tax return. You fill it out, the resulting taxes owed to the IRS is there, and you work out a payment plan with the IRS.
Work out a PAYMENTS plan with the IRS??? oh boy... now this really begging for them to do an investigation into a person's tax returns with an audit or other checking into.
Now, what happens if during this "repayment" plan you get LAID OFF, wind up in the hospital or fired? now you have that IRS bill you agreed to pay every month and can't pay it, now you really are begging for compounded trouble.
I still strongly suggest anyone who even considers doing something like this had better check with a LAWYER and the IRS first, just because the one person managed to wangle out a payment plan doesn't mean the IRS will cut everyone else the same deal for willfully underpaying by stating they have 9 new exemptions knowing fully well they DONT.
Think about this: When you go through orientation at a new job, and they are handing you all the forms to fill out, including the W-4, have you ever asked them how to fill it out? They always say that they are not allowed to tell you how to do it. And, did they then make you prove your right to claim whatever you decided to claim? No.
No one should need to ask them how to fill that out it's super easy, a teenager could do it without help, on a new job the employer doesn't know anything about your family situation, for all they know at that point you have 37 children and your parents and grand parents all live with you, but after you've been there for months or years they know all about you, they know you have 2 children, 1 or none, now you come into the office and say "Can you change my W4 to have NINE exemptions?" you don't think they will demand to know what's going on, of if you are now pregnant with 9 babies?
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You don't have to fill out a form that "certifies" that you have the right to claim what you are claiming.
Filling the form DOES certify what you enter is the truth...
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You can put whatever you want on the W-4.
Oh my gawd... that's why putting 10 on there raises a RED FLAG you said earlier, so you skirt around that by putting 9 instead, much like the drug dealer who transacts $9,999 in cash to skirt under the automatic reporting of cash transactions to the IRS of over $10,000- just don't get caught!
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For anyone reading this in the future, know that my daughter had no problem, and neither did my friends. And if you are worried, read the links I provided and I suggest that you not be intimidated by someone putting links to laws that are not relevant to what I have suggested, but have big scary titles about fraud, etc., to try and prove themselves right, and scare you out of doing this.
Just because your one daughter and a couple of friends who tried it and say they didn't have any problems- YET- (IRS works slow, they can be audited at any time still over this) doesn't mean this would work for anyone else, the LAST thing anyone needs is an audit from the IRS because someone followed something someone posted on a message board- do the legwork and consult a tax lawyer or the IRS directly and ASK if doing this will cause you any legal problems.
No two taxpayers are the same, no two returns are the same either, just because "Joe" got some odd deduction approved doesn't mean Jane will too, that is why people need to consult a tax attorney or the IRS directly and get the facts directly stated to them in writing, not interpreting what you think some complex forms or whatever means.
I guess the really telling thing is- your daughter got away with it, fine, but will she or you with confidence GUARANTEE anyone else doing the same will not run into legal problems? will she or you reimburse them for penalties and interest if they follow the suggestion to enter all these exemptions and the IRS audits them as a result?
My daughter and friends were not afraid of being audited. They were completely honest with the IRS about why they did what they did, had never lied on previous tax returns, and were ready to work out a payment plan, and the IRS was fine with that.
Who cares if you're audited if you have nothing to hide?
So, I guess we agree on something here. Yes, if you're afraid of being audited because you have been fraudulent on your previous tax returns, you might not want to be honest with the IRS about changing your deductions so you can save up a downpayment to buy a house.
To use the numbers you just posted for the fee rate, if you were to do them all at $5,000, you'd pay $465. Doing more charges at $90 just increases the percentage you're dealing with, so I'm going to pretend you managed to do this even more efficiently than you plan on doing it. You're still talking about turning your current mortgage into a 4% mortgage. You're paying more. That's all there is to it..
As I said, I am fine with paying a bit extra if the payments can be spread out for 12+ months.
Question: Assuming I am at $29,000 by January 5 (almost certain): What will be my interest payment over next 8 months (till August) while I continue to make $2250 total payments/month? Of that, $1618 will be bank deducted and $632 will be extra payments. We have been putting down $2250/month throughout 2014.
Thanks.
Filling the form DOES certify what you enter is the truth...
Oh my gawd... that's why putting 10 on there raises a RED FLAG you said earlier, so you skirt around that by putting 9 instead, much like the drug dealer who transacts $9,999 in cash to skirt under the automatic reporting of cash transactions to the IRS of over $10,000- just don't get caught!
Your characterization of this is spot on. However, this idea that 10 raises a red flag promoted by NoMoreSnow is also incorrect and outdated. Employers are no longer required to send W-4's claiming 10 or more allowances to IRS.
It used to be true, but the IRS found it unworkable because many people with high mortgage interest and in high state income tax and real estate tax states legitimately can claim more than 10 allowances.
So, if you are willing to file a fraudulent W-4 and game the system, you might as well put as many as you want down and take your chances.
Just be aware that this is an area the IRS investigates because W-4 fraud is the biggest ploy used by tax protestors seeking to avoid paying any tax at all. The reason the "10" rule initially came into being.
As I said earlier, according to the IRS they are now using other means and info available to them to determine if withholding is correct and lockdown the withholding of people not claiming enough to an amount they specify which may be more than you are truly required to withhold. This is explained on their own website, IRS.gov. Who knows how effective it is. You wont know until you are caught up in it. You can be sure though that they are refining their method as we speak.
This is clearly ridiculous financial advice. If it were legit every tax professional in the country would be recommending it. The link provided recommending it came from an IT professional, not a tax professional.
My daughter and friends were not afraid of being audited. They were completely honest with the IRS about why they did what they did, had never lied on previous tax returns, and were ready to work out a payment plan, and the IRS was fine with that.
Who cares if you're audited if you have nothing to hide?
So, I guess we agree on something here. Yes, if you're afraid of being audited because you have been fraudulent on your previous tax returns, you might not want to be honest with the IRS about changing your deductions so you can save up a downpayment to buy a house.
Were they also honest with the mortgage companies they used about how they came up with the downpayment? Every mortgage I've ever applied for they wanted to see where the money came from.
Additionally, you mentioned this is workable because the debt to IRS doesn't show up on your credit report. How is that relevant? Every mortgage I've applied for required listing ALL your debts. So did they just fail to list that debt? And, if so, how is that not mortgage fraud?
You keep trying to make something personal that's a matter of law.....now you are taunting people who are following the law asking if they are afraid of an audit. So, lets make it personal.
If you were selling a house, in a position to hold the mortgage and willing to do so.........how would you feel if after agreeing to and executing that transaction you found out that the buyer filed false information with the IRS to save up their downpayment and lied to you as well about owing them money thereby misrepresenting their financial position?
I would be very angry knowing if the buyer ran into financially difficulty and it became necessary to forclose that I would be in line after the IRS and any lien they placed on the house due to the debt owed them. I'm guessing your daughters mortgage lender would feel the same.
My daughter and friends were not afraid of being audited. They were completely honest with the IRS about why they did what they did, had never lied on previous tax returns, and were ready to work out a payment plan, and the IRS was fine with that.
Who cares if you're audited if you have nothing to hide?
So, I guess we agree on something here. Yes, if you're afraid of being audited because you have been fraudulent on your previous tax returns, you might not want to be honest with the IRS about changing your deductions so you can save up a downpayment to buy a house.
NO contact with the IRS is ever a good thing for anyone, it is inconvienient, ALWAYS a risk their auditor who is being paid COMMISSIONS to FIND things wrong, even tiny errors on returns that generate money- that incentive alone means everyone they audit is put under a microscope and that any outcome is not going to be in the taxpayers' best interest, it's going to be in the auditors' best interest. Most people have no idea how to deal with an audit and would be best to have a lawyer with them, that costs money.
The tax laws are THOUSANDS of pages long, far too complex for the ordinary person to even understand or know, that automatically sets up every taxpayer for the auditor to find SOMETHING wrong on a return, and remember- they get a commission, the more money they can get out of you the more the auditor gets paid- a system that's ripe for abuse and corruption and there's almost nothing you can do about it.
In addition, if they audit you and do find something, chances are good they will audit you again and again.
This is not about being "afraid" of being audited or not being honest on returns, it's about paid govt shills being given a much bigger incentive by way of commissions to find anything they can, any little innocent mistake so they can sock you with high penalties plus a large compounded interest on top, they can go back at least three years.
Any system that awards employees with commissions and bonus' to find mistake, omissions and errors on other peoples' tax returns is not going to be an ethical one, just look at how the IRS was specifically targetting just one group of non- profits for political revenge, and that caused a huge row in Congress and more over it, the IRS had beeing doing that kind of thing for who knows how long. If you think they are kind to private taxpayers you are sadly mistaken, there are far too many horror stories.
The comedy duo Abbott and Costello were audited by the IRS, I guess their business manager made many errors on their returns, deductions and all the rest, when the IRS was done with them the penalties and interest were so high they lost pretty much everything they owned which was auctioned off to pay the tax bill, they even took Costellos' wedding ring. As I remember this all went down shortly after the Costellos' toddler drowned in their swimming pool and shortly before Costello died of a heart attack.
There isn't a taxpayer in the country who sends in a perfect return or is 100% honest, did you "forget" to report that $20 from selling something on Ebay or at a garage sale? did you remit your required sales tax due to your state for every out of state mail order or internet purchase? Do you keep perfect records perfectly and save them for years?
Bet not- most people don't.
If you want to keep justifying doing this, feel free- you are not going to be on the hook if someone follows your suggestion, does it and then later runs into some legal problem, arguing over this is not going to change my mind, people are advised to consult a tax attorney and/or the IRS directly for ANY questions related to falsifying your W4 forms and then making a "payment plan" to pay the back taxes and penalties plus interest you will owe doing this.
I NEVER used ChargeSmart. I have no idea what that is. And I feel bad you are paying money to ChargeSmart to use your CC to pay off your mortgage. It may be a few hundred dollars, but I just wanted to let you know that I made payments to mortgage companies directly from the CC companies (via BT checks or direct BT)..
DrD
So what I need are a couple of credit cards, each with approx. $10,000 credit limit, 15-month no interest, and, ideally, $100 'Bonus' rewards. So far, only Chase Freedom is offering that. If one more company offers that then I'd get $200 deducted from the approx. $465 I'd be paying to Charge Smart (for $20,000).
So my net 'loss' would be about $265. But, surely, if I decide to keep paying mortgage till August 2015 (and possibly beyond), I would pay at least some interest to the mortgage company. Other than the Murphy's Laws striking me, I don't think I would be 'throwing away' much money.
@Blondy and @Sculpter: Thanks for informing us about the IRS practices and the W4 'Dependents'; not that I was ever going to claim more Dependents on my W4 anyway.
Last edited by meengla; 10-08-2014 at 08:25 AM..
Reason: August 2015
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