When you are being illegally harassed by "the law"

[Wuzzat?]

you just have to ask if you are "legally required to answer that question."

And keep asking it.

Page 20 of the latest issue of Harper's had a story on this case, see attachment 1 of this file
http://www.aclu.org/files/assets/TSA.Bardmass_Decl.pdf

Of course, it helps if you tape the whole thing, like Bierfeldt did.

As a result of the ACLU's complaint alleging illegal search and seizure the TSA modified it's policies.

 

[Nestor_Kelebay]

I dunno about south of the border, but the cops up here are too busy to be harassing people for sport. Usually, if they're harassing you, it's cuz they believe you've done something they don't like and they want to let you know it.

Quite seriously tho, I've found one of the best ways to learn about the law is by downloading and reading court cases. In the USA, as in Canada, court cases become a matter of public record and the transcript of most court cases is freely available online.

For example, if you want to learn about good tax loopholes, you might go into your US government's tax court and use the search tool to search for "accountant" or "lawyer". That will give you all the cases where the character strings "accountant" or "lawyer" appear, and a goodly number of those will be where accountants or lawyers got caught cheating on their tax returns. Obviously, these guys are going to do that the smartest way they know how, and if the judge agrees that the way they structured their financial transactions avoids the black letter of the law, then the amount in dispute is not subject to tax under the law as written.

So, for example, I'd start at this web site: w w w.ustaxcourt.gov
United States Tax Court: Home

and then click on the "Opinions Search" link along the top of the web page which will take you here:

Today's Opinions - United States Tax Court

And then, click on the blue "Help" link in the top right corner of the Search dialogue box, and read the Help text so that you fully understand all of the operators and wildcards and how to use them together to most effectively use the Search tool.

For example, if you type **/**/09 into the search date area and "accountant" into the text search area to find all tax court cases in 2009 where the word "accountant" appears, one of the cases will be that of Reynard and Joyce Campbell:

Reynard and Joyce M. Campbell (1 Hit) View Highlighted Hits
[Page 1] Campbell is a certified public accountant (C.P.A.), and Joyce

I haven't tried it, but you might try typing **/**/** into the date search area and the character string "tax loophole" into the text search area, and see if any tax court judge ever used that word in an opinion. Certainly, that's the terminology the judge would use to describe a way of avoiding the tax law.

And, of course, Canadian legal eagles can do the same thing by going to the Tax Court of Canada web site at:

Tax Court of Canada - (Access to judgments)

I've found some excellent information on the Canadian Tax Court decisions. For example, did you know that if a COMPANY gives a benefit to an individual, the only way that the benefit can be considered a TAXABLE benefit is if either:

A.) the individual is a shareholder of the company, or

B.) the individual is a person on whom a shareholder of the company WANTED to bestow a benefit.

So, for example, if you own a corporation, and that corporation owns an apartment block, and you're getting too old to look after it yourself, and you want to sell it to your nephew, you could arrange to sell the shares of the corporation to him and include a caveat in the sales agreement saying that you are entitled to live rent free in one apartment in that apartment block for the rest of your life.

In that case, even if the tax man hates your guts, the free rent you're getting isn't taxable in your hands, and your nephew doesn't have to pay tax on the income he's giving up either.

You see, as soon as you sell the shares of the building, you're no longer a shareholder in the company that owns the apartment block, so you don't fall under part A.

And since you're receiving that benefit as a result of the sales agreement, and not because your nephew wants to give you an apartment rent free, you don't fall under part B either.

And, because a caveat attaches to the property and not the agreement, then you have the right to live rent free in that apartment even if your nephew sells the building to someone else. Obviously the selling price of the building would be affected by that caveat. No one wants to buy a freeloader. But, by the same token, if after looking after a building for 30 years, you want to sell it to someone much younger, then the combination of experience and acquired skills and tools on one hand, and the enthusiasm and endless enery on the other is just what you need to start renovating a second apartment block.

So, the free apartment is a benefit you can receive without having to pay tax on the value you're receiving. And, no where in the Canadian Income Tax Act does it require a company or individual to pay tax on income they DIDN'T receive.

 

[Wuzzat?]

I did better than most of the people who took the LSAT before me but I still didn't get into law school.

I'm over it.

Thanks for the link.

You know when justice becomes revenge?
According to Ms. Vos Savant, it's when its start being fun.

The last two minutes of this are great.
[ame=http://www.youtube.com/watch?v=1sOeY6ZVG2U]YouTube - [Great Movie Scenes] ...And Justice For All - Ending Scene[/ame]

 

[Nestor_Kelebay]

Wassat:

I'll save you some time. If you do read a lot of those court cases, what you'll find are basically three things:

1. Lawyers and chartered accountants don't often go to court because of tax problems. The reason why is that they know that the judge is going to go hard on them because they knew the law. There's no way they can claim they didn't. And so, they pay their taxes.

2. Where you do find tax "loop holes" is where a large chartered accounting firm is offering a way to avoid paying taxes for their clients, and in these cases the amount of money on which tax has to be paid is in the millions of dollars, so it's worth the time and effort to arrange the financial affairs in a complicated way to avoid paying SOME of the tax. For example in one case where the two owners of a large company wanted to reduce their tax payable, their accountants made their wives shareholders of class "B" shares in the company. The company then declared a dividend, but it was payable only to class B shareholders. The result was that the company paid income tax on it's profits, and the net income after tax flowed to the owner's wives as dividends, and they paid tax on those dividends on their personal tax returns. That saved tax because they had lower income than their husbands, so there was a 10 or 20 percent tax savings. But, a big chunk of that ended up going to the accountants and lawyers to make all the necessary changes to make the plan work.

3. There really are no "loopholes". If there were, the government would see them and would make the necessary changes to your Income Tax Act to close them. Where you do find those loopholes (like the one about the rent free apartment) is where the people writing the law simply didn't anticipate the kind of company you own. They have one thing in mind when they write the law, and that creates potential opportunities for the kinds of companies they didn't have in mind. And, it's that same way with every section of your income tax law. For example, your income tax law may require that any American working in a foreign country pay a withholding tax on their income to the US government. That creates an opportunity for any American scientists working in Antarctica. It's just a matter of becoming familiar with what the law actually says (the "letter of the law") and comparing that against your actual situation. That's how you find the "loopholes", if any, that you can use.

What you do find in reading tax cases is that the WORST thing you can do when you're audited is to be unco-operative with the auditor, burn or deep six your income and expense records and/or lie to them. You see, there are laws in place that determine how far back an auditor can go. In Canada, the standard audit is 2 years for an individual and 3 years for a corporation, and the auditor needs evidence of deceipt to go back further than that. So, if you start lying, and you get caught lying, they can go back another 2 or 3 years, and then another 2 or 3 years after that too if you keep lying and they keep proving that you lied. By being honest, you limit your liability to the most recent 2 or 3 years. Anything later than that is considered "statute barred", but if there's evidence to show you lied to the auditor, then that evidence puts previous tax returns in question, and the "statute barred" regulation no longer applies.

If you've been cheating on your tax like most people do, by simply not declaring all of your income, your best bet is to simply give the auditor everything they want, and then try to negotiate a settlement of your affairs with them. Normally, the fact that you saved the government money by not going to court will earn you a deduction in the amount you owe them. After all, the government would have had to pay one of the lawyers in the Justice Department to prepare a case, prepare all the motion briefs, prepare for the hearing and take time off to attend the court hearing. That's gonna cost them $5 to $10 thousand all added up. If you save them that money, then chances are you'll get credited that amount in your negotiations.

One of the smartest ways you can legally save on your taxes is by increasing the number of expenses that are tax deductable to you. For example, if you own a house, you can rent the basement as an apartment. Then, for example, if your tenant watches your TV, then the cost of a new TV becomes a business expense, and is deductable against your rental income. Ditto for plumbing repairs to the basement toilet or repairs to the stove (which the tenant also uses) and a hot tub in the back yard. Also, the cost of a new lawnmower becomes a business expense because you can't attract decent tenants if your place looks unkept. Similarily, in order to run your rental business, you need an office, and so a fraction of your house's electricity and heating bill is attributable to that home office space, and that also becomes tax deductable to your rental income. Similarily, that same fraction of your property tax is now also a business expense. And so on. That is, you turn your house into a rental business, so that any expenses for items that could be used by your tenant become a business expense, deductable against your rental income. Obviously, your business expenses can't exceed your business income for long before the judge will call that what it is; a scam. There are laws concerning what constitutes a "separate living space" and who you can rent to without it being considered a non-arm's length transaction, and the best way to learn about those laws is by reading court cases where homeowners have done this.

Really, if you're a dummie and you cheat on your taxes by simply reducing your reported income, then if your caught, the best thing to do is come clean and try to broker a deal with the tax man. If you increase your expenses instead, you certainly can't save as much because you need to keep receipts for all of your business expenses, and you have to keep a semblence of reality about your business affairs. Still, that's probably the safer way to do it because even if you make some mistakes, you're not an accountant and can't be expected to know all the rules. An accountant would know that a brand new snowblower is a capital expense and can't be claimed as an operating expense. So, if you claim the snowblower as an operating expense, no one's going to call that cheating cuz a lay person may have made that mistake honestly.

Anyhow, spend a weekend reading some tax court cases and see if it's of any benefit. The other benefit not mentioned so far is that by reading those cases you now know the names of people and the cities they live in so that you can go to your local library (or use www.Canada411.com) to find the phone numbers in the phone books for those citites of those people. You can phone them up and find out first hand that your government doesn't "keep checking" the cheaters it catches. They check you ONCE, and they make you pay what you owe. But, they don't keep checking you after that since there's more than enough other fish in the ocean for them to catch. Each and every person who's name is in the tax court cases can be contacted to confirm that they weren't audited AGAIN after being caught cheating once on their taxes.

 

[Wuzzat?]

We have a guy who does our taxes for us. . .