Saturday, April 13, 2013

I'm only finding out about this now?

It's decided, I'm joining the 150 million member club next year!



Just hoping I don't have any IRS employees reading this blog!

And while we're at it:


Thursday, April 11, 2013

How to fill your tax return like an expert (with no guarantees of avoiding jail time)





This year, I did my taxes.

Since most of you barely raised an eyebrow at this statement (to be honest I was expecting more of an awe and admiration facial expression change, and even secretly hoping for some to erect statues of me in their gardens), let me rephrase that first statement.

This year, I did my taxes by myself.

Aha, more the response I was aiming for. Now there is a very simple explanation as to why I took upon myself to rise to the occasion and confront this gargantuan task that millions before me have attempted landing most in mental asylums across the country: I am an utter and complete imbecile.

A point must be made that I have not always had an IQ rivaling that of a sea cucumber. Last year I had my taxes done by a bunch of sea cucumbers – scratch that, tax experts – from a company I will not name but it starts with “H&R” and ends with “Block”. As I sat and watched them swiftly fill out my returns, populating line after line of form after form, I had the deep sense that I was being swindled. Not only was I being charged insane amounts for perplexing reasons (“Ah, I see you here have a W-2 from a company whose name does not start with a vowel, there’s a $156.51 extra for that”), but they failed to find any exemptions I was entitled (I was very close though, if only I had taken my children to school in an industrialized farm machinery with high torque I could have saved a few cents). As I left their office holding the receipt for their tax preparation (not tax-deductible), I vowed two things to myself: that I would do my own taxes the following year and that I would purchase a tractor on my way home.

Flash-forward a year later. My first task was simple and consisted in laying out all the documents I had come home with the previous year.  Once this was done, the hard part began: finding the TV remote that was buried somewhere under all the paperwork. No, the hard part was to understand the process the H&R Block “experts” had gone through the previous year to populated each and every line of the tax forms based on the various documents (W-2, bank statements, tractor receipts) I had provided them with. If I could understand the process, then all I had to do was repeat the process this year, and voilĂ !
Except it was not that easy, and it was only in the wee hours of the morning, when I finally decided to take matters – and a beer – into my own hands that the revelation came forth and the whole room grew bright. Of course the latter part was just my wife turning the lights on and asking me what the hell I was doing passed out in a fetal position over crumpled paper. But the important thing remains that I had cracked the code, I was now in possession of the carefully guarded secret of all tax experts and IRS agents worldwide. The trick is to look at the name of the tax line you are about to fill, look at the document which has the most similar spelled word at the top, and simply enter the first random number that comes to mind. I will get back on the topic of random number generation later.
I happily spent the entire day following this elaborate process to prepare my tax returns. I realize that many of you, and by many I mean all, have no idea what actually is in these tax forms, so I have decided to share some of the hidden treasures I came across as I navigated the IRS form intricacies.

1.     The craziest job on the planet has to be for the guy at the IRS (Internal Rectum Search) who finds a name for each and every line in each and every of the non deductible 15 gazillion forms that exist out there. “Enter the greater of your adjusted non-gross debit free income and line 37b from schedule (109)8772134 no-this-is-not-a-phone-number here. This is your adjusted-hewey-hot-potato-chip income”. I can just imagine the meetings this guy must have with his boss:
Employee: And so I decided to call that line the wobeley-dobeley-schlong-fest.
Boss: Are you completely out of your mind? What’s wrong with you?
Employee:…
Boss: Don’t you realize we’ve already used the wobeley-dobeley-schlong-fest terminology for the difference between the non-fattening-0-calorie-income-wage-pat-a-cake and the ….

2.     A little known fact about the fields you need to fill out is that not all of them are synapse-burning grey-cell-meltingly hard, and - I know this sounds crazy – some are understandable without a PhD in linguistics. And there are even some nuggets where it is obvious a disgruntled IRS intern decided to mess with all of us:


I don’t know for you, but I almost had fun filling some of those lines out. Of course you will not squeal with the delight of a 5-year old girl who has just seen an unicorn emerge from her connect-the-dots activity, but squealing will nonetheless occur when you brutally exit IRS-lala land with line 167 requesting you to: “Enter your adjusted amortized farm alimony semi-deducted income if filing status is head and groin of household or filing jointly with at least one spouse filling single. Otherwise memorize all pages of 1040 instructions booklet.”

3.    My greatest fear when filling out my taxes is the fact that each of my answers has a tremendous overall impact. I sometimes actually have a doubt whether or not to fill in a line. But it’s not like you can start by filling it out and easily modify it later, as every decision you make at every line propels you to a whole new world of forms never downloaded before from the IRS website. People often say that paying your taxes might cost you an arm and a leg, but carefully selecting which fields you fill out will determine if it’s your left or right arms and legs that are concerned. It’s kind of like those “Choose your own adventure” books we had as kids, where each decision made you go to a new page and if you died there too bad since you had forgotten which page you came from. The only difference is that if you die filling out your taxes you need to complete Schedule T of the Notarized Death Notification.

Come to think of it, an IRS-themed “Choose your own adventure” could actually be quite fun:

You are the President of the Unites States of America. The head of NASA warns you that a giant asteroid is heading straight for earth. What do you do?

Let some crazy nuclear-equipped country conduct a nuclear test on it
-> Go to page 127

Send an expert team of lunatics led by Bruce Willis land on the asteroid, drill a giant hole in it and Armageddon its ass (the asteroid’s not Bruce Willis’)
-> Go to page 425

Drop a couple of 1040 instruction booklets on the asteroid’s surface and watch it implode due to the sudden gravitational shift
-> Fill out form 7QTIP and Schedule 901 of your choice

Of course I have merely pointed out some of the most obvious issues with the current tax system, but I can see you shaking your head a little: “Of course the tax system is flawed! But that is like stating that cricket could be a lot more exciting if the ball were bigger, orange, bouncy and players could dunk it through nets. And also if the game didn’t last a couple of decades. But there are no alternatives so what is the use in complaining?”
“Aha!” I say. “But alternatives do exist!” Having lived a few years in France, I have had the experience of paying taxes there. Now, before reading on I strongly urge you to pour yourself a stiff one (“un raide” as the French would say) and take seat in your favorite armchair (“braschaise”). Ready? In France, once a year, you receive by mail your tax return form. So far so good, this is where it starts hurting. It is four pages long. That’s it. No additional forms, schedules, worksheets, parchments, animal skin,… But wait. The best is yet to come (now is a good time to down that drink). IT IS ALREADY ALL FILLED OUT. That’s right, everything is nicely filled out already, all you need to do is sign at the end and pay the required amount. Wow, how in the world where form 6251 exists is this remotely possible?

The answer is mind-blowing: the Internet. I find it quite surprising that we live in times where you can go to your local Best Buy and purchase a scale capable of sending your weight via Wi-Fi to your smartphone that will then send gravitational shifts to your fridge and lock it down until you have reached a more acceptable weight of -178lbs (-32 kilometers) as programmed by your six-year-old who is the only household member to have figured how to configure the damn system, but your employer and bank have NO WAY of providing any useful information to the IRS pre-fill your return except for sexual preferences. They all have your name, phone, social security everything, but that would just be too much of a sci-fi leap, as revealed from this leaked script extract from the upcoming Terminator 7:

Terminator: (Played by 89-year old Arnold Schwarzennegger but with biceps and pectorals still the size of a small South American country) I come from da year 2047 and must kill all women called Sarah. Actually, all women just to be safe so we avoid a Terminator 8 because Sarah survived this movie due to a name change.
Sarah: I’m Danielle by the way. 2047 huh? Are tax returns pre-filled by then?
Terminator: No, but machines have built machines who have built machines with sophisticated AI to understand instructions for form 626TZZZ on deducting cybernetic transplants and speech lessons for correcting Austrian accents.

Granted French taxes are in the neighborhood of 253% of income, but that is the price to pay for pre-filled tax forms.
So taxes in France are quite awesome, but why stop there? Four pages is still too long as far as I am concerned, I want to take this to the next level! Two lines! Attention a little math will be involved here. Assume the IRS receives 15 trillion dollars from taxpayers (I feel like a contribute 13 of those 15). Assume total revenue for all taxpayers is 30 trillion dollars (I feel like I get a fair share of $23.16 out of those). If each taxpayer pays 50% of his or her revenue, then we are all set. My new tax return would look something like:

Enter your revenue here ………………………………………………..........
Compute 50% of above revenue and pay this amount to the IRS…………

Of course it might be unfair that really rich people pay the same rate of 50% as really poor people, so we could adjust the exact percentage based on the total revenue and number of tractors leased. Also, if for the same revenue someone has no dependents or 1452 (this new IRS threshold was set by the Pitt-Jolie household) we would need to factor that in. And the source of revenue should also come into play as two people receiving the same revenue one by working five jobs in parallel or choosing funky names for tax lines should be taxed differently. But all these are simple issues that can easily be addressed by adding a few lines here and there and coming up with a few additional forms and schedules…

Now I mentioned earlier that the key element to doing your taxes is the ability to generate random numbers. It sounds easy, but if you do not do this properly you will end up entering multiple times the same number and the IRS will become highly suspicious. I hope you don’t believe the IRS actually cares about the numbers you enter. They just want to make sure you are so confused trying to fill in each and every line that you will end up cursing the whole process and sending them a check for one gazillion dollars out of pure frustration. Back to our random number generation: if you don’t want to end up sharing a five-by-five cell with a three hundred-pounder called Blackwurst who will repeatedly insist to practice the Heimlich maneuver on you, you must generate them wisely. One good technique is to turn your TV on, close your eyes, and frantically peck at it like a coke-addict with Parkinsons on steroids. After a few minutes, open your eyes and enter the channel number on your form. If it includes text and special characters, make sure to add those in to increase trustworthiness.
And while we’re on the topic, the above technique is also an excellent test to determine the quality of your cable provider. If the channel landed you on a movie you have good service. If the movie has a lot of people in the nude you have great service. If two or more are performing the wobeley-dobeley-schlong-fest, please email me your cable provider’s name.

Monday, April 1, 2013

Best Tax Quotations

"The term "tax humor"is no doubt an oxymoron to many people; to the more cynical, it is an apt description of the entire tax code." John F. Iekel

"America is a land of taxation that was founded to avoid taxation." Laurence J. Peter

"The invention of the teenager was a mistake. Once you identify a period of life in which people get to stay out late but don't have to pay taxes naturally, no one wants to live any other way." Judith Martin

"One thing is clear: The Founding Fathers never intended a nation where citizens would pay nearly half of everything they earn to the government." Ron Paul

"Like mothers, taxes are often misunderstood, but seldom forgotten." Lord Bramwell

"There is no such thing as a good tax." Winston Churchill



"Why does a slight tax increase cost you two hundred dollars and a substantial tax cut save you thirty cents? " Peg Bracken

"There is no worse tyranny than to force a man to pay for what he does not want merely because you think it would be good for him." Robert A. Heinlein

"Death, taxes and childbirth! There's never any convenient time for any of them." Margaret Mitchell

"We must care for each other more, and tax each other less." Bill Archer

"The income tax has made more liars out of the American people than golf has." Will Rogers

"They can't collect legal taxes from illegal money." Al Capone


"If you get up early, work late, and pay your taxes, you will get ahead - if you strike oil." J.P. Getty

"Congress can raise taxes because it can persuade a sizable fraction of the populace that somebody else will pay." Milton Friedman

"Man is not like other animals in the ways that are really significant: animals have instincts, we have taxes." Erving Goffman

"Income tax returns are the most imaginative fiction being written today." Herman Wouk

"I owe the government $3,400 in taxes. So I sent them two hammers and a toilet seat." Michael McShane

"The government deficit is the difference between the amount of money the government spends and the amount it has the nerve to collect." Sam Ewing

"I'm spending a year dead for tax reasons." Douglas Adams

"The question is: What can we, as citizens, do to reform our tax system? As you know, under our three-branch system of government, the tax laws are created by: Satan. But he works through the Congress, so that's where we must focus our efforts." Dave Barry

"I told the Inland Revenue I didn't owe them a penny because I lived near the seaside." Ken Dodd

"Two years ago it was impossible to get through on the phone to the IRS. Now it's just hard to get through. That's progress." Charles Rossotti

"In general, the art of government consists in taking as much money as possible from one party of the citizens to give to the other." Voltaire