You have a point, but in my own experience accountants make more mistakes than the IRS.
As always, YMMV.
However, your accountant won't contact all your employers, friends, charities to ask about your tax status (hint, hint - he's a tax cheat), place liens on everything you own, nor levy every account they can get their hands on because of their mistake.
Great. Then we're back to where I started - apparently you don't take the deductions allowed and pay taxes on adjusted gross income. Fabulous. Now that your fantastical strawman is out of the way, we can talk about realities...
1) "By signing here, you indicate that you have fully read these forms and that all information is correct, blah blah blah"
Rather you believe the information is correct; that's the actual wording. Not that the distinction is important to the IRS - if there is an error it's considered willful and done with intent to defraud the Government. Regardless of the actual source of the error (which can include the directions of IRS employees).
2) It's generally self-employed people claiming rather questionable deductions who have trouble with audits, not regular 'workers'.
I've been audited 5 times in the last 8 years, and I do not claim any questionable deductions. No deduction for my at-home office, no mileage (even though I do drive to client offices), etc. Things many of my self-employed friends regularly claim and never get audited for.
What I do have is the unfortunate history of having been wrongfully attacked by the IRS in the past, and having successfully defended myself. And I quite sure the reason for my current high-flag-status is because of that previous encounter. Not that it can be proven beyond any doubt, of course...
In fact, if you ask the IRS for advice on how to handle a tax issue, and they give it to you (which is unusual), they *still* disclaim responsibility for their possibly being wrong, and people have undergone financial and (I think) criminal sanctions *for believing what the IRS told them*.
I know, it's happened to me. In fact, the IRS - for 7 years in a row - assigned my LLC a new EIN every year because of a typo in their systems, and promptly sent the new EIN information to an address I had not lived at for 6 years (even though they had the right address for the proper EIN). It took the better part of 2 years and around $250,000 in costs and lost levies (illegally attached, but after 21 days it doesn't matter - they get to keep the cash regardless of their error in the levy) to get it straightened out and PROVE their error and that no, I did not fail to report income on 7 other businesses.
And of course, when I went to counter-sue for the damages it was immediately dismissed because I could not provide evidence the IRS acted with malice or intent to damage. Basically the courts will indemnify errors by the IRS as "honest mistakes" but Mr. Taxpayer is treated as the scum of the earth and forced into near-bankruptcy (or forced to admit that which didn't happen - capitulate) to PROVE their innocence.
Innocent until proven guilty doesn't exist for tax laws; it's guilty as charged unless you can prove beyond any doubt that you were innocent, and even then you have to bear all costs associated with your own defense.
The IRS is in BUSINESS to collect, process, and audit (the incorrect) returns.
Oh, they audit correct returns, too! And they'll come up with completely bogus numbers as well forcing you into the position of being guilty and having to prove your innocence. If they think you made too little based upon where you live - even if you can prove it was enough - you'll still get audited and forced to prove your innocence.
After all, if the Government makes all the claims about you, and fills out your form, how can they hold you liable for their mistakes? Makes getting people charged with tax fraud and perjury and threatening them with jail time if they do not pay up the dollars demanded pretty hard...
So your claim is that ExxonMobil who paid $36.53 billion in income taxes on their AGI of $81.75 billion - 44.69% - is equivalent to the average person in the US paying 13.3%? Really?
Of course, this is/. so hating the corporations is expected, let's not let facts and rational thought enter into the discussion...
People pay it on their gross. Exxon made $477 billion, and paid taxes at a lower rate than a person who made those numbers.
Yes, because no one gets a mortgage deduction, or health cost deductions, or deductions on long-term savings, or deductions for college expenses, or deductions for dependents, or...
I take it you simply pay full tax on your gross take home pay, you don't avail yourself of even the standard $7500 deduction? You like to pay on gross, no adjusted gross like the IRS allows?
In 2008, ExxonMobil (one of the favorite targets of the Left) made $45 billion in net profit; they paid $34.5 billion in sales taxes, $41.7 billion in other taxes and duties, and $36.5 billion in income taxes (source: page 38 of the 2008 Annual Report of XOM). Meaning on revenues of $477 billion, ExxonMobil returned 9.4% to the owners of the company, and paid the Government 24% of revenue (the Government gets $2.55 for every $1 retained as profit). I don't know how many individuals pay and effective 71% tax rate on their person income.
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And this also means that basically 25% of the cost of the gas you pump into your car is used to pay the taxes that ExxonMobil pays to the Government. On top of the ~$0.60 per gallon in direct taxation you pay (at least here in Washington State). On that $3/gallon of gas, ExxonMobil is making about $0.28; the Government is $1.35.
I believe the total spent on the 2008 campaign was $1 billion for both parties. Fill in the current numbers. The union share is significant but doesn't come close to corporate spending.
The unions were the biggest spenders by far, and they were essentially one-sided as well.
IMHO, if the unions - representing the workers - can donate and target funds for elections, then the corporations - the management - should be able to do so as well.
Uh, the corporation GIVES YOU the dividend. If it's being returned because of their actions, then you're giving it back to them. I'm sure if you're offended by their actions, they'll gladly take your returned dividends...
I work in the loudspeaker industry - we use a LOT of neo magnets. China is really about the only place in the world where you can get neo magnets made. The last vendor in the US closed years ago (General Magnetics down in Texas) not because of lack of sales but environmental regulations. Refining of neo into magnets and other materials has effectively been shut down in the US by regulations, meaning we have no choice but to buy neo based products from overseas (mainly China).
The iPhone was the first of its kind, there were no phones with a similar interface when it came out. The first phone like the iPhone that had cut and paste was that clunky blackberry touchscreen toy that came out and no one really liked.
I give you TouchFLO (May 2007) from HTC and Mobile Shell (Jan 2007) from SPB Software, both of which pre-dated the iPhone with a full graphical interface, movable icons, etc.
And for cut-and-paste, Windows Mobile phones (with a touch screen) since, oh, about 2002 had cut and paste. Works great.
And the app store? Verizon had one in 2006 where you can log on, download what you want, and go. Based on the Qualcomm BREW platform it supported multiple phones.
Zoom in-and-out browsers? Opera Mini from January 2006. Slide the screen around, tap-to-zoom, all that fancy browsing.
Apple's innovation in the phone was to put an Apple logo on it. That and hyping it as a status-symbol.
Funny, the GM of my company - 26th generation Shanghainese - had her grandmother's old home condemned and "siezed" by the Government. She was able to go out, get 3 real estate appraisals, and submit them to the Government which paid the average. She and her family made out quite well - very well indeed. Enough that she, her aunt, and her cousin all bought apartments in Shanghai (only way any of them could afford to buy in the city - it's expensive).
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And the place condemned? It was the 3rd floor of a 4 story building. Another family on the 4th floor, another family on the 2nd floor, a communal (yes communal) kitchen on the first, shower and bathrooms down the street. Had cold running water, and a single drain. About 600 square feet, total...
Yeah, damn that government for offering a pittance in return for that property!
If Amazon moves overseas, everything they ship into the US is subject to import duties. Import duties are generally much higher than sales taxes.
Actually, that's not the case. Import duties are typically LOWER than sales taxes; you can look at the import duties here. And for many countries there are zero duties applied to all their products imported.
Here in Amazon's home State, Washington, there is a 6.5% State sales tax, and in Seattle the total sales tax is 10%. If you're buying an iPod boom box in Seattle, you pay 10%; if you import that item from China you pay 4.9%, and if you import it from India you pay 0%.
Note that the import tariff schedule is also a LOT simpler than the sales tax fiasco across the nation... It would be a LOT simpler for Amazon to work with the USITC duty schedule as compared to the literally hundreds of thousands of taxation jurisdictions across the US, and the level of tax or duty would often be lower for consumer as well.
California is getting zero tax revenue from Amazon at the moment.
And why should they? CA gets no tax revenue if I drive from Riverside to Las Vegas and buy a shirt in Nevada; why should a purchase completed in another State (the financial transaction doesn't happen in CA) be taxed inside CA? CA - and all States - have use taxes that citizens are to pay for products acquired outside the State. That the people don't report and don't pay says a lot about the feasibility of such taxation.
How can you show that Amazon shipped to a CA resident without the CA resident reporting? Should the State set up and monitor all package shipments into and out from the State, to ensure they aren't commercial products?
And what if I - residing in WA - buy a gift for a friend in CA. I bought it, I paid for it, I reside in WA so I must pay WA sales tax (Amazon is here). But it is shipped to CA, so does CA get to claim sales tax as well?
And also worth mentioning that their population is highly concentrated in a few areas. Like Alaska - very low density (very few people for a massive place), but 95% of the population is concentrated in Fairbanks, Anchorage, and Juneau. Much easier to roll out a technology.
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For example, Finland. Just over 5 million people in that very large country, but 25% of them live in Helsinki urban area. Or Sweden, with 9.2 million people in that massive land area, but 30% of them in Stockholm, Gothenburg and Malmo urban areas.
Looking at just strict density over the entire country isn't very applicable; you need to look at the percentage of population that lives in the large cities. You'll find that in Europe the effective density is much higher than in the US; a large percentage of the total population of most European countries live in a relatively small area and in the cases of the Scandinavian nations large areas of their country are essentially uninhabited.
Yes, because sales volume indicates what is really superior. And that, quite literally extended, indicates that Windows is vastly superior to OS X, both of which are light-years beyond Linux!
thousands of brilliant, thoughtful films wallow in obscurity
Why should I pay attention to some shlub of a movie if they haven't put the effort in to at least do a McDonald's Happy Meal tie-in? I mean, come on, show me you believe in the movie before you ask me to see it!
Just look at the features available in other smart phones for the last 6 years... Since the big update for the 3GS phone was the addition of this thing called "cut and paste", I predict the next big change will be in the hardware realm, where Apple will invent some way of sticking a thing called a MicroSD memory card into the phone! Innovation at Apple will abound evermore!
Not in the US... In the US trademarks can be common marks (such as just putting TM after your name) or registered marks. A mark must be registered to prevent others from using it (and note that your registration is typically limited to just one or two market areas). If you have used the name Bing for decades, but never registered it, Microsoft can still register the name - legally, regardless of your prior use - and exclude you from using it outside your geographical area. If I had used the name Microsoft starting in 1975, and continued to use it but never registered it, Microsoft could register the trademark and use it everywhere in the US but could not prohibit me from using it here (Seattle, WA) as I had common trademark status prior to their use.
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My take: this is pretty much a small company trying to extort a few bucks from Microsoft via publicity. They know they'll lose in court because they did not have a registered name, and in fact registered the name a few months after Microsoft, and after the Microsoft use of the name "Bing" was already in the news.
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You have a point, but in my own experience accountants make more mistakes than the IRS.
As always, YMMV.
However, your accountant won't contact all your employers, friends, charities to ask about your tax status (hint, hint - he's a tax cheat), place liens on everything you own, nor levy every account they can get their hands on because of their mistake.
Great. Then we're back to where I started - apparently you don't take the deductions allowed and pay taxes on adjusted gross income. Fabulous. Now that your fantastical strawman is out of the way, we can talk about realities...
1) "By signing here, you indicate that you have fully read these forms and that all information is correct, blah blah blah"
Rather you believe the information is correct; that's the actual wording. Not that the distinction is important to the IRS - if there is an error it's considered willful and done with intent to defraud the Government. Regardless of the actual source of the error (which can include the directions of IRS employees).
2) It's generally self-employed people claiming rather questionable deductions who have trouble with audits, not regular 'workers'.
Tell that to the stylist audited because the IRS believed she didn't make enough. It's not about possible errors, it's about picking on the weakest and those most likely to settle and pay up.
I've been audited 5 times in the last 8 years, and I do not claim any questionable deductions. No deduction for my at-home office, no mileage (even though I do drive to client offices), etc. Things many of my self-employed friends regularly claim and never get audited for.
What I do have is the unfortunate history of having been wrongfully attacked by the IRS in the past, and having successfully defended myself. And I quite sure the reason for my current high-flag-status is because of that previous encounter. Not that it can be proven beyond any doubt, of course...
In fact, if you ask the IRS for advice on how to handle a tax issue, and they give it to you (which is unusual), they *still* disclaim responsibility for their possibly being wrong, and people have undergone financial and (I think) criminal sanctions *for believing what the IRS told them*.
I know, it's happened to me. In fact, the IRS - for 7 years in a row - assigned my LLC a new EIN every year because of a typo in their systems, and promptly sent the new EIN information to an address I had not lived at for 6 years (even though they had the right address for the proper EIN). It took the better part of 2 years and around $250,000 in costs and lost levies (illegally attached, but after 21 days it doesn't matter - they get to keep the cash regardless of their error in the levy) to get it straightened out and PROVE their error and that no, I did not fail to report income on 7 other businesses.
And of course, when I went to counter-sue for the damages it was immediately dismissed because I could not provide evidence the IRS acted with malice or intent to damage. Basically the courts will indemnify errors by the IRS as "honest mistakes" but Mr. Taxpayer is treated as the scum of the earth and forced into near-bankruptcy (or forced to admit that which didn't happen - capitulate) to PROVE their innocence.
Innocent until proven guilty doesn't exist for tax laws; it's guilty as charged unless you can prove beyond any doubt that you were innocent, and even then you have to bear all costs associated with your own defense.
The IRS is in BUSINESS to collect, process, and audit (the incorrect) returns.
Oh, they audit correct returns, too! And they'll come up with completely bogus numbers as well forcing you into the position of being guilty and having to prove your innocence. If they think you made too little based upon where you live - even if you can prove it was enough - you'll still get audited and forced to prove your innocence.
After all, if the Government makes all the claims about you, and fills out your form, how can they hold you liable for their mistakes? Makes getting people charged with tax fraud and perjury and threatening them with jail time if they do not pay up the dollars demanded pretty hard...
You pay 10% on the first $8,375 and 15% on the next amount up to $34,000. That means you would pay $837.50 (10% of the first $8,375) and $2,439.75 (15% of the balance of the next $16,265) for a total tax bill of $3,277.25 or 13.3%.
So your claim is that ExxonMobil who paid $36.53 billion in income taxes on their AGI of $81.75 billion - 44.69% - is equivalent to the average person in the US paying 13.3%? Really?
Of course, this is /. so hating the corporations is expected, let's not let facts and rational thought enter into the discussion...
People pay it on their gross. Exxon made $477 billion, and paid taxes at a lower rate than a person who made those numbers.
Yes, because no one gets a mortgage deduction, or health cost deductions, or deductions on long-term savings, or deductions for college expenses, or deductions for dependents, or...
I take it you simply pay full tax on your gross take home pay, you don't avail yourself of even the standard $7500 deduction? You like to pay on gross, no adjusted gross like the IRS allows?
Actually, they pay taxes on an adjusted (after expenses) gross income, much like you (you do itemize, don't you?).
And this also means that basically 25% of the cost of the gas you pump into your car is used to pay the taxes that ExxonMobil pays to the Government. On top of the ~$0.60 per gallon in direct taxation you pay (at least here in Washington State). On that $3/gallon of gas, ExxonMobil is making about $0.28; the Government is $1.35.
I believe the total spent on the 2008 campaign was $1 billion for both parties. Fill in the current numbers. The union share is significant but doesn't come close to corporate spending.
The AFL-CIO spent $50+ million on the Presidential election, and the AFL-CIO and its affiliated unions planned on spending $200 million on the 2008 elections.
The unions were the biggest spenders by far, and they were essentially one-sided as well.
IMHO, if the unions - representing the workers - can donate and target funds for elections, then the corporations - the management - should be able to do so as well.
Uh, the corporation GIVES YOU the dividend. If it's being returned because of their actions, then you're giving it back to them. I'm sure if you're offended by their actions, they'll gladly take your returned dividends...
Sorry, ol' Bill was impeached, actually... He just wasn't convicted.
I work in the loudspeaker industry - we use a LOT of neo magnets. China is really about the only place in the world where you can get neo magnets made. The last vendor in the US closed years ago (General Magnetics down in Texas) not because of lack of sales but environmental regulations. Refining of neo into magnets and other materials has effectively been shut down in the US by regulations, meaning we have no choice but to buy neo based products from overseas (mainly China).
The iPhone was the first of its kind, there were no phones with a similar interface when it came out. The first phone like the iPhone that had cut and paste was that clunky blackberry touchscreen toy that came out and no one really liked.
I give you TouchFLO (May 2007) from HTC and Mobile Shell (Jan 2007) from SPB Software, both of which pre-dated the iPhone with a full graphical interface, movable icons, etc.
And for cut-and-paste, Windows Mobile phones (with a touch screen) since, oh, about 2002 had cut and paste. Works great.
And the app store? Verizon had one in 2006 where you can log on, download what you want, and go. Based on the Qualcomm BREW platform it supported multiple phones.
Zoom in-and-out browsers? Opera Mini from January 2006. Slide the screen around, tap-to-zoom, all that fancy browsing.
Apple's innovation in the phone was to put an Apple logo on it. That and hyping it as a status-symbol.
And the place condemned? It was the 3rd floor of a 4 story building. Another family on the 4th floor, another family on the 2nd floor, a communal (yes communal) kitchen on the first, shower and bathrooms down the street. Had cold running water, and a single drain. About 600 square feet, total...
Yeah, damn that government for offering a pittance in return for that property!
If Amazon moves overseas, everything they ship into the US is subject to import duties. Import duties are generally much higher than sales taxes.
Actually, that's not the case. Import duties are typically LOWER than sales taxes; you can look at the import duties here. And for many countries there are zero duties applied to all their products imported.
Here in Amazon's home State, Washington, there is a 6.5% State sales tax, and in Seattle the total sales tax is 10%. If you're buying an iPod boom box in Seattle, you pay 10%; if you import that item from China you pay 4.9%, and if you import it from India you pay 0%.
Note that the import tariff schedule is also a LOT simpler than the sales tax fiasco across the nation... It would be a LOT simpler for Amazon to work with the USITC duty schedule as compared to the literally hundreds of thousands of taxation jurisdictions across the US, and the level of tax or duty would often be lower for consumer as well.
California is getting zero tax revenue from Amazon at the moment.
And why should they? CA gets no tax revenue if I drive from Riverside to Las Vegas and buy a shirt in Nevada; why should a purchase completed in another State (the financial transaction doesn't happen in CA) be taxed inside CA? CA - and all States - have use taxes that citizens are to pay for products acquired outside the State. That the people don't report and don't pay says a lot about the feasibility of such taxation.
How can you show that Amazon shipped to a CA resident without the CA resident reporting? Should the State set up and monitor all package shipments into and out from the State, to ensure they aren't commercial products?
And what if I - residing in WA - buy a gift for a friend in CA. I bought it, I paid for it, I reside in WA so I must pay WA sales tax (Amazon is here). But it is shipped to CA, so does CA get to claim sales tax as well?
Interesting idea, but the question becomes how to pay taxes on the service?
For example, Finland. Just over 5 million people in that very large country, but 25% of them live in Helsinki urban area. Or Sweden, with 9.2 million people in that massive land area, but 30% of them in Stockholm, Gothenburg and Malmo urban areas.
Looking at just strict density over the entire country isn't very applicable; you need to look at the percentage of population that lives in the large cities. You'll find that in Europe the effective density is much higher than in the US; a large percentage of the total population of most European countries live in a relatively small area and in the cases of the Scandinavian nations large areas of their country are essentially uninhabited.
Yes, because sales volume indicates what is really superior. And that, quite literally extended, indicates that Windows is vastly superior to OS X, both of which are light-years beyond Linux!
Of course a new interface... It was leaked out months ago.
thousands of brilliant, thoughtful films wallow in obscurity
Why should I pay attention to some shlub of a movie if they haven't put the effort in to at least do a McDonald's Happy Meal tie-in? I mean, come on, show me you believe in the movie before you ask me to see it!
Just look at the features available in other smart phones for the last 6 years... Since the big update for the 3GS phone was the addition of this thing called "cut and paste", I predict the next big change will be in the hardware realm, where Apple will invent some way of sticking a thing called a MicroSD memory card into the phone! Innovation at Apple will abound evermore!
If by university you mean an extended frat for drinking and fielding really bad football teams...
My take: this is pretty much a small company trying to extort a few bucks from Microsoft via publicity. They know they'll lose in court because they did not have a registered name, and in fact registered the name a few months after Microsoft, and after the Microsoft use of the name "Bing" was already in the news.