Reddit reviews Perfectly Legal: The Covert Campaign to Rig Our Tax System to Benefit the Super Rich - and Cheat Everybody Else

People who receive the Earned Income Tax Credit also receive special scrutiny. Congress sets aside money - and creates a congressional mandate - to audit people who receive the EITC - even though the potential fallout from fraud here is much less than the fraud that small business and partnerships almost certainly perpetrate. Auditors have very little discretion to call off an audit - they just follow the rules.

>That's why she's living with her parents. To try to make a life in our shimmering city without relying on welfare, food stamps or other public assistance.

If she's living with her parents, she may very well not be entitled to claim the children as dependents. And that has nothing do with the IRS - it's how Congress writes the tax laws and the US Tax Court interprets them.

If you're curious, read Perfectly Legal. The tax-auditing process is somewhat rigged against the poor but it has nothing to do with IRS and everything to do with Congress.

Learning is fun

I also recommend this book

A big problem with repeal of the AMT is that it opens up a host of new loopholes allowing those who owe a lot of tax to avoid paying. This New York Times reporter follows the issue and his book on how the tax system deck is stacked is eyeopening.

Missing:

Extraordinary Popular Delusions and the Madness of Crowds:
http://www.amazon.com/Extraordinary-Popular-Delusions-Madness-Crowds/dp/051788433X

"Amazon.com
Why do otherwise intelligent individuals form seething masses of idiocy when they engage in collective action? Why do financially sensible people jump lemming-like into hare-brained speculative frenzies--only to jump broker-like out of windows when their fantasies dissolve? We may think that the Great Crash of 1929, junk bonds of the '80s, and over-valued high-tech stocks of the '90s are peculiarly 20th century aberrations, but Mackay's classic--first published in 1841--shows that the madness and confusion of crowds knows no limits, and has no temporal bounds. These are extraordinarily illuminating,and, unfortunately, entertaining tales of chicanery, greed and naivete. Essential reading for any student of human nature or the transmission of ideas.

In fact, cases such as Tulipomania in 1624--when Tulip bulbs traded at a higher price than gold--suggest the existence of what I would dub "Mackay's Law of Mass Action:" when it comes to the effect of social behavior on the intelligence of individuals, 1+1 is often less than 2, and sometimes considerably less than 0. --This text refers to an out of print or unavailable edition of this title. "

Perfectly Legal: The Covert Campaign to Rig Our Tax System to Benefit the Super Rich - and Cheat Everybody Else
http://www.amazon.com/Perfectly-Legal-Campaign-Benefit-Everybody/dp/1591840198

Amazon.com
Most Americans would agree that they are duty bound as beneficiaries of our democracy to pay taxes, and the majority of us do pay—-exorbitantly. But what about those who do not pay their fair share? David Cay Johnston, a Pulitzer Prize-winning reporter for the New York Times, here reveals how fairness and equity have eroded from the American tax system. Johnston describes in shocking detail the loopholes our government provides the "super rich"--from private individuals to profitable corporations—-to hide their wealth, to defer or evade tax payments, and to pass the bill to law-abiding middle-class Americans. The loss in revenue "imposes a severe cost on honest taxpayers" through reduced services, increased federal debt, and a weight on the middle class that threatens to impede its ability to achieve upward social mobility.

Admitting the extreme complexity of our economy and by extension our tax code, Johnston points out that the very wealthy do, of course, pay taxes. However, because of shelters that allow them to understate most of their income, they pay little more on average than most Americans on the dollar. This is regressive, and unquestionably favors the superrich. Johnston includes examples of outrageous corporate malfeasance (such as companies that establish off-shore tax addresses) and exposes the tax benefits of the particularly loathsome practice made famous by Jack Welch, in which thousands of wage earners are laid off while a handful of executives are granted hundreds of millions of dollars through deferred compensation, company stock options, and lucrative retirement packages, all at stock holders' xpense. In addition to these offenses, he describes the tax evasion methods of those who simply defy the law and are emboldened by a beleaguered IRS that is too underfunded to serve as an effective deterrent to tax cheats. Johnston calls for a complete overhaul of the system. But because those who most benefit from these laws comprise the "donor class" that supports the government power structure, our prospects for reform remain very bleak. --Silvana Tropea

>Pro tip: Point to current economists (many of whom agree with you), not people who died two hundred years ago.

Ronald Reagan's economists?

David Cay Johnston?

I cannot express enough my gratitude to you for typing out this reply. This has been eating away at me, and my search will continue.. a book was reccomended to me,

http://www.amazon.com/Perfectly-Legal-Campaign-Benefit-Everybody/dp/1591840198

Although I am currently unable to purchase it.

If you move (relocate) more than 50 miles in the year: $5,000 tax credit.

You can in fact set up trusts, also the above mentioned dependent care and health savings plan accounts. Also if you have children 529 plans (which can be used for "anything in the benefit of the child")

From my own tax reductions: Do you know you can register as being a farm operator without actually owning a farm or any animals? Legally? And get a huge tax deduction with farm related tax subsidies? My wife trains horses and we managed to avoid around $30k in taxes because of things like this.

Honestly if you want a good into into how to avoid paying taxes (most of what is available to billionaires are also available to others, we just don't know about them), check out Perfectly Legal It's based on the author's original Pulitzer Prize winning articles on the U.S. Tax Code.

Well, I read Perfectly Legal by David Cay Johnson, and he gives some pretty good examples of the 1% not paying the correct amount of taxes. That book made me angrier than anything I'd ever read.