Taxes that some wealthy forget to report (illegal, dollars, rating)

[EricS39]

Here are a few examples

1) You bought items at Saks 5th Avenue or Macys that turned out to be defective over time. You got full refund on the return and replacement. That's a gain!!!!!! Depreciation on the value originally purchased and full refund

You should have given 40% of it to Uncle Sam. It's short term capital gain. There's some from 20 years back, you owe a good $10,000 in back taxes and penalties

2) 10 years ago you gambled away $1,000 on poker and lost. Then you won $1,000 on the next round ....phew break even!!!! No you did not break even. Your gambling losses weren't deductible unless you itemize and even if you do you need gambling losses that exceed like 10% of your entire income or you can't deduct any of it ...unless you are a professional gambler

So you owe at least $400 to Uncle Sam


3) You helped pay for your kid's wedding. Between everything, your piece was $11,000. That was 20 years ago when gift tax limits were much lower. With back taxes and penalties, you now owe at least $5,000 to Uncle Sam...pay up


4) You did a lot of work for your community all out of pure good conscience. Between everything you did to help poor people the value of those services you didn't take a penny from was $75,000. There was no organized charity that was the recipient on the other end. You just did this unofficially. That's a gift then!
You owe at least $20,000 in back gift taxes

5) You got very very very very sick and you paid for medical expenses yourself....then you found out a year later the services were $5,000 less than expected...but it wasn't a return in the same tax year....so that's income!!!!!
You owe an extra $1,000

6) You took out a loan to run your new family business. The business made an operating profit and after deducting the loan pay-back, you discover you paid more than you had to, reducing the life of the loan. Because you overpaid the loan, you incur less interest....this is called "phantom income"......
You owe thousands of dollars in back taxes on this

Pay up pay up pay up

Or should we do something about this tax code and fix some of the crazy rules and focus on simple reasonable rules and then enforce those

[ringwise]

Originally Posted by EricS39

Here are a few examples

1) You bought items at Saks 5th Avenue or Macys that turned out to be defective over time. You got full refund on the return and replacement. That's a gain!!!!!! Depreciation on the value originally purchased and full refund

You should have given 40% of it to Uncle Sam. It's short term capital gain. There's some from 20 years back, you owe a good $10,000 in back taxes and penalties

2) 10 years ago you gambled away $1,000 on poker and lost. Then you won $1,000 on the next round ....phew break even!!!! No you did not break even. Your gambling losses weren't deductible unless you itemize and even if you do you need gambling losses that exceed like 10% of your entire income or you can't deduct any of it ...unless you are a professional gambler

So you owe at least $400 to Uncle Sam


3) You helped pay for your kid's wedding. Between everything, your piece was $11,000. That was 20 years ago when gift tax limits were much lower. With back taxes and penalties, you now owe at least $5,000 to Uncle Sam...pay up


4) You did a lot of work for your community all out of pure good conscience. Between everything you did to help poor people the value of those services you didn't take a penny from was $75,000. There was no organized charity that was the recipient on the other end. You just did this unofficially. That's a gift then!
You owe at least $20,000 in back gift taxes

5) You got very very very very sick and you paid for medical expenses yourself....then you found out a year later the services were $5,000 less than expected...but it wasn't a return in the same tax year....so that's income!!!!!
You owe an extra $1,000

6) You took out a loan to run your new family business. The business made an operating profit and after deducting the loan pay-back, you discover you paid more than you had to, reducing the life of the loan. Because you overpaid the loan, you incur less interest....this is called "phantom income"......
You owe thousands of dollars in back taxes on this

Pay up pay up pay up

Or should we do something about this tax code and fix some of the crazy rules and focus on simple reasonable rules and then enforce those

We should probably start with the employees at the IRS first, then move on to the "wealthy". You know, those employees that got bonuses, yet still either forgot to pay their taxes, or consciously tried to defraud the govt on their taxes.

[Driller1]

Originally Posted by EricS39

Here are a few examples

1) You bought items at Saks 5th Avenue or Macys that turned out to be defective over time. You got full refund on the return and replacement. That's a gain!!!!!! Depreciation on the value originally purchased and full refund

You should have given 40% of it to Uncle Sam. It's short term capital gain. There's some from 20 years back, you owe a good $10,000 in back taxes and penalties

2) 10 years ago you gambled away $1,000 on poker and lost. Then you won $1,000 on the next round ....phew break even!!!! No you did not break even. Your gambling losses weren't deductible unless you itemize and even if you do you need gambling losses that exceed like 10% of your entire income or you can't deduct any of it ...unless you are a professional gambler

So you owe at least $400 to Uncle Sam


3) You helped pay for your kid's wedding. Between everything, your piece was $11,000. That was 20 years ago when gift tax limits were much lower. With back taxes and penalties, you now owe at least $5,000 to Uncle Sam...pay up


4) You did a lot of work for your community all out of pure good conscience. Between everything you did to help poor people the value of those services you didn't take a penny from was $75,000. There was no organized charity that was the recipient on the other end. You just did this unofficially. That's a gift then!
You owe at least $20,000 in back gift taxes

5) You got very very very very sick and you paid for medical expenses yourself....then you found out a year later the services were $5,000 less than expected...but it wasn't a return in the same tax year....so that's income!!!!!
You owe an extra $1,000

6) You took out a loan to run your new family business. The business made an operating profit and after deducting the loan pay-back, you discover you paid more than you had to, reducing the life of the loan. Because you overpaid the loan, you incur less interest....this is called "phantom income"......
You owe thousands of dollars in back taxes on this

Pay up pay up pay up

Or should we do something about this tax code and fix some of the crazy rules and focus on simple reasonable rules and then enforce those

Any links for this???

[rbohm]

Originally Posted by EricS39

Here are a few examples

1) You bought items at Saks 5th Avenue or Macys that turned out to be defective over time. You got full refund on the return and replacement. That's a gain!!!!!! Depreciation on the value originally purchased and full refund

You should have given 40% of it to Uncle Sam. It's short term capital gain. There's some from 20 years back, you owe a good $10,000 in back taxes and penalties

no, that is a replacement or refund to make you whole again after losing the original item. not income.

2) 10 years ago you gambled away $1,000 on poker and lost. Then you won $1,000 on the next round ....phew break even!!!! No you did not break even. Your gambling losses weren't deductible unless you itemize and even if you do you need gambling losses that exceed like 10% of your entire income or you can't deduct any of it ...unless you are a professional gambler

So you owe at least $400 to Uncle Sam

again no, if you lose money in one round of poker, then make money in the second, and what you made in the second round offsets the losses in the first round, you break even for the game as a whole. you scenario would only come into play if you lost $1000 on say saturday, then on friday the next week you won $1000, you might be able to make the case that you own the money. the other thing you have to look at is what is the net income from gambling, not the gross. win $1000 one week lose $1000 the next, and your net is zero, thus no taxes are owed.

3) You helped pay for your kid's wedding. Between everything, your piece was $11,000. That was 20 years ago when gift tax limits were much lower. With back taxes and penalties, you now owe at least $5,000 to Uncle Sam...pay up

this applies to EVERYONE not just the rich.

4) You did a lot of work for your community all out of pure good conscience. Between everything you did to help poor people the value of those services you didn't take a penny from was $75,000. There was no organized charity that was the recipient on the other end. You just did this unofficially. That's a gift then!
You owe at least $20,000 in back gift taxes

you might be able to make this case, but one can also make the case that you didnt exceed the gift limits per individual, and thus no taxes are owed.

5) You got very very very very sick and you paid for medical expenses yourself....then you found out a year later the services were $5,000 less than expected...but it wasn't a return in the same tax year....so that's income!!!!!
You owe an extra $1,000

wrong. a refund is a refund, it doesnt matter when the error was found. when it is returned to you, it means that your account balance was returned to zero, thus making you whole again.

6) You took out a loan to run your new family business. The business made an operating profit and after deducting the loan pay-back, you discover you paid more than you had to, reducing the life of the loan. Because you overpaid the loan, you incur less interest....this is called "phantom income"......
You owe thousands of dollars in back taxes on this

only if you deduct the original amount of interest that you would have paid over the life of the loan. otherwise there is no phantom income to deal with.

Or should we do something about this tax code and fix some of the crazy rules and focus on simple reasonable rules and then enforce those

i agree that the tax code needs to be simplified, but i would also point out that the above, and other issues, apply not only to the rich, but to EVERYONE.

[Driller1]

No links yet.....I am disappointed.

[Frank DeForrest]

I never get mad at people for trying to keep their own money, its the ones that want to grab more of someone else's that irk me.

[Retroit]

Is it any wonder that the Founding Fathers made the income tax illegal?

[AnesthesiaMD]

Originally Posted by EricS39

3) You helped pay for your kid's wedding. Between everything, your piece was $11,000. That was 20 years ago when gift tax limits were much lower. With back taxes and penalties, you now owe at least $5,000 to Uncle Sam...pay up

The parents are often the ones throwing the celebration. I don't know about you, but when I got married, my parents invited more people than I did. They were the ones throwing the party, it just so happened to be centered around my exchanging of vows with my wife. No gift tax required. I would have been just as happy getting married on the beach with a few friends around.

[Ultor]

Originally Posted by EricS39

3) You helped pay for your kid's wedding. Between everything, your piece was $11,000. That was 20 years ago when gift tax limits were much lower. With back taxes and penalties, you now owe at least $5,000 to Uncle Sam...pay up

You are wrong - 1993/1994 gift tax exclusions were $10,000 per recipient. A single parent could have given the happy couple $20,000 (if Mom and Pop were both around it goes to $40,000) before gift taxes kicked in.

[aedubber]

Originally Posted by ringwise

We should probably start with the employees at the IRS first, then move on to the "wealthy". You know, those employees that got bonuses, yet still either forgot to pay their taxes, or consciously tried to defraud the govt on their taxes.

This