You may read this column only if you promise to shred and burn it immediately afterward — and then completely destroy it. I do not want my name falling into the hands of a certain government agency with the three-letter abbreviation (I_S) that I’d rather not spell out in case they google themselves, find this column, and misunderstand what I am about to say. Feds have the sense of humor of a bobcat.
It's tax time. An annual event in the United States when seemingly sane people waste multiple evenings and at least one complete weekend in an unnatural activity. It's a time when normally quiet people swear at their spouses and devoted fans miss prime time TV for a reality program of their own making — piecing together a financial jigsaw puzzle from bits of paper carefully stored in several shoe boxes, the American filing system of choice.
A few years ago I got all excited when Congress passed the Tax Relief Act of 2003. That was before I read it. Two examples:
1) Lower marginal tax rate it turns out meant a cut in the top four tax brackets. This was relief, for 23 people.
2) Increase in the Child Tax Credit encouraged people to have more children, who will eventually end up in Medicare and Social Security. I propose population relief as an alternative. Under this plan the government will pay me 30% of what it costs them to care for a new citizen for every child I elect not to have. If this bill passes, I elect not to have 43 children. The children I did elect to have can find me retired in Palm Beach.
The IR_ is still smarting from a round of embarrassing congressional hearings a few years back. Admissions of hounding taxpayers, and rumors of miscreant taxpayers being detained in Guantanamo Bay, didn’t do much for their image. But, hey, I’m sure they’re all nice guys at heart. It is not true that one of their own left the I_S to produce Fear Factor.
What do I do? I pay my taxes in October after filing extensions explaining how I sprained my check-writing finger. April 15th is a bad date to file. Spring has just started and Daylight Savings Time seems to have a deleterious effect on my math ability.
April 15th is also 9 days after my birthday. I find it very depressing to think What shall I do with my next year of life? and be forced to list the first item as "File Taxes".
October is a more civilized time, six months further away from the tax year in question, which adds weight to my "I don't remember" argument. And, in April, because everyone is working on his/her taxes, the movies lines are minuscule.
Check with your own tax consultant about the details of delayed filing. All I know is I have filed late for the past 10 years and have never been contacted by the I_S. My accountant thinks moving from state to state every three months explains why I haven’t heard from them. I think it's because I cross my sevens, which confuses the optical scanning machines and forces some lowly clerk to enter my return manually when he really wants to be watching the World Series.
WARNING: Once you start fall filing you’re pretty much committed. This year I would rather file earlier but, having filed in October for a decade, I know getting my return in on time would turn the _RS Computer Room into a reasonable facsimile of an air raid in progress.
“What’s all the noise and fuss?”
“John Philipp filed on time!”
“You know what that means?”
“Heh, heh, heh.”
“Let’s get our best team on this one. Call in Snake & Epstein”.
You want to avoid an audit at all costs. An audit is (in the words of Jerry Seinfeld) “the financial equivalent of a full rectal exam.” Some elementary addition errors on your return doesn't hurt either. Essentially you want to project a profile such that no IR_ inspector would choose to sit in the same room with you much less conduct your audit.
Another area of savings is to deduct expenses for your pet, say a dog named Fluffy. If challenged, claim you use him to keep robbers away from your business records.
EXAMINER: A toy poodle?
ME: Yeah, but he sleeps in front of a magnifying mirror. He looks huge from outside. And I pay him.
EXAMINER (taking the bait): Then where’s the dog’s tax return.
ME: He didn’t make over $600.
EXAMINER: I see you never filed Form 124638, the “Prove You Didn’t Lie” form.
ME: I filled it out.
EXAMINER: Then where is it?
ME: Fluffy ate it.
EXAMINER: AHA! There's nothing in the regulations about dogs eating forms as an excuse for incomplete filing.
ME: He’s not a dog, he’s an employee.
At which point the Examiner begins his nervous breakdown.
Remember, it’s okay to be creative with deductions. It’s not reporting income that gives the _RS a wedgie. One motivated taxpayer deducted his son’s clarinet lessons because the dentist said it would help correct tooth defects. A true story, upheld by the tax court.
One last pointer, sign your tax return in crayon, so they know who they're dealing with. As for me, it’s April and I’m off to the movies.