No One Hates Paying Taxes More Than Me

Posted By: Larry Stone ICOR Blog & News ,

I must admit it.  I hate paying taxes.  No one hates paying taxes more than I do.  Sometimes you must pay taxes, no one says you must pay retail.  One of my favorite jurists, Judge Learned Hand, stated “Anyone may arrange his affairs so that his taxes shall be as low as possible....”  You can find the entire quote at http://libertytree.ca/quotes/Learned.Hand.Quote.6BF7.  What Judge Learned Hand is saying is that you can use any legal method available to you to pay the least amount of taxes possible.

What is the best way to make sure that you pay the least amount of taxes legally?  A detailed written tax plan which is indexed to the IRS (Internal Revenue Service) Code (law) which you must follow, Revenue Procedures (Instruction from the IRS) which you should follow, and tax court cases (which sets the limits you can follow).  Remember tax guidance which is not written is meaningless.  It will give you positive direction in what you can do so you can include it in your business plans.  It is organized to provide you with general tax guidance on what should be done when planning for family, home, job, business activity, exit strategy and family transition.

But you may have an accountant or CPA (Certified Public Accountant) who you trust to take care of these issues.  Take a lesson from Stephen Baldwin who pleaded guilty to not paying New York state income taxes https://www.inquirer.com/philly/business/15_Celebrities_Convicted_for_Tax_Evasion.html

He stated he had received bad advice from lawyers and accountants.  Or you may take a lesson from Nicolas Cage or Wesley Snipes, both had managers who were responsible for filing and paying the taxes.  Wesley Snipes served 3 years in a Pennsylvania prison.  No matter who you rely on, you are always the one held accountable.

And it is not easy.  Unless you studied accounting while attending college, you have not had sufficient training in the relevant tax rules.  Even those who studied accounting and took classes in taxes have forgotten most of what they learned.

To be effective and efficient at tax reduction strategies, you must study the tax rules all the time.  In addition, you must constantly follow the changes in the tax rules – no matter where they occur. Congress, IRS, and the courts can change the rules at any time.  We usually hear when Congress writes a new law.  When was the last time you read in the Denver Post that the IRS issued a new Revenue Procedure, or the tax court issued a new ruling on the tax law?  Reading your local newspaper will not keep you informed about all the on-going tax changes.

Should you rely on someone else to keep you informed – say your accountant or tax professional.  How well do they keep informed on all the tax changes?  It is your accountability so you can ask.  I recommend that you follow the favorite saying of Ronald Reagan used by him in signing the Russian missile treaties - “Trust but verify”.

Most people assume that their tax returns are correctly prepared and that they have all the available planning choices made. We offer a Discovery Session where you can “Trust but verify” those assumptions.  For $350, we will look at your tax situation for mistakes and missed opportunities.  Call us at 970-668-0772 or email info@coloradotaxcoach.com for more information.