Photo: Thomas Jefferson by Rembrandt Peale (1805)
Two former Wall Streeters with sympathies for the Occupy Movement have launched a website to help people dodge taxes. They describe their mission to “Occupy The IRS” in patriotic terms, using a picture of Thomas Jefferson as their Twitter avatar.The site, called taxKilla, walks users through the simplest way to dodge taxes: filing Schedule C deductions for a business entity.
“Anybody can do it, that’s the beauty of it,” said Jen Powers, who graduated from Columbia University and began a career in social work after leaving Wall Street in the 80s. “We thought the 1 per cent have so many different loopholes and opportunities to take advantage of when it comes to taxes, but the everyday person doesn’t.”
Is it legal?
Most of taxKilla’s guidance isn’t anything new–even tax accountants admit plenty of people use Schedule C forms to beef up tax refunds.
But the site also delivers insider tips on what might trigger an audit (typos, too many travel and entertainment deductions, etc.) and specific strategies to turn audits in your favour (schedule appointments on Fridays right before lunch breaks, “forget” certain paper work).
“We just condensed (this information) and put it together in a way that would be appealing to the Occupiers and basically people who would need help and obviously can’t pay for it,” Powers said.
Josh King, general counsel at legal advice site Avvo.com is sceptical: “(taxKilla) is effectively saying, ‘You might as well be aggressive with this and basically enter fraudulent information on your tax return,” he said. “What they leave out is that in order for this to actually work, you have to make money (at your business). You can’t just say, ‘I love to travel and my significant other loves to travel’ and write that off when you make $15 in Google ad (revenue) every month.”
That’s where Power disagrees. It’s true that in order to qualify for deductions business entities have to turn a profit, but only in three out of the last five years.
That means if you’re in your first year as a photographer and post a negative or $0 balance at tax time, you’re still able to file deductions for things like home offices, camera equipment and your vehicle. Not to mention the fact that TaxKilla’s target audience probably doesn’t belong in the $1 million salary club, whose members are 11 times more likely to get audited.
How it works
Once you’ve signed up on taxkilla.com, you’ll find a pretty rudimentary outline on what constitutes a business entity (Note: that doesn’t mean it has to end in LLC or Corp. A blog, photography website and a lawncare service are a few examples) and which forms to fill out for deductions: the 1040, Schedule C and Form 4562.
From there, you can use the site like a cheat sheet along with any basic tax preparation service (see where you can file for free) to file deductions on everything from your home office to the gas used to travel to and from appointments. Line by line, it explains what specific lines are for and how to tie up all the loose ends at the end.
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