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DeTaxUS
Standing Up For Financial Liberty

Our Mission is to Abolish the Federal Income Tax

Newsletter and Company Introduction
Volume 2, Issue #2
February 2002


"The House Ways and Means Committee 'is probably the most appropriately-named committee in the House,' quips Committee Chairman Bill Thomas (R-CA). 'Our job is to figure out ways of separating people from their means.'"
(Wall Street Journal, December 5, 2001)

CONTENTS:

Introduction

  1. Tax News
  2. Joke of the Month
  3. Tax Tips
  4. Planning for 2002
  5. Resources
  6. Editorial

INTRODUCTION

Our Mission is to Abolish the Federal Income Tax

Together we will accomplish this mission

Another month has flown by, and we continue to make slow but steady progress toward our goal of providing the best Internet-based website for American taxpayers to have a say in how the government collects and uses our money.

Our Members' area is now password protected and you should have received your UserID and Password by now. If you have not please contact:
mailto:memberservices@DeTaxUS.com

If you don't like the ones you were issued, you can log on and change your UserID and/or pswd at:
http://www.DeTaxUS.com/members/

That's what DeTaxUS is all about after all, freedom of choice and personal responsibility. :0)

We are busily creating a FAQ page, now that we have actually received some "Frequently Asked Questions,"and should have that online within a few days.

Also, we are working on getting our own "Contact Congress" software so that you will be able to start emailing your representative and senators. Once it is functional, you will be able to enter your zipcode, pull up your representative's email address and use either our sample message or write your own. Until then we will provide links to congressional sites and instructions on how to contact them via phone or snail mail.

We want to thank you all for your support in this early stage. Your encouragement and your membership fees are both needed and appreciated.

Warmest regards,

Cory Layne & Royal Fletcher
Editors


We still find the greedy hand of government thrusting itself into every corner and crevice of industry, and grasping at the spoil of the multitude. Invention is continually exercised to furnish new pretenses for revenue and taxation. It watches prosperity as its prey and permits none to escape without a tribute."
-- Thomas Paine




1.      TAX NEWS

FEBRUARY 27th HEARING CANCELLED

An historic event was to have taken place on February 27th with a 2-day hearing scheduled on Capitol Hill. It took a Gandhi-like hunger strike by Bob Schulz, chairman of We The People Foundation For Constitutional Education and lots of petitions from his supporters to get a public forum on his issue. He contends, among other things, that the 16th Amendment was never properly ratified, so the income tax is unconstitutional.

The hearing was originally scheduled for 9/25/01, but with the 9/11 crisis, it was postponed until 2/27. Now it looks like it's been called off. It's sponsor, Congressman Roscoe Bartlett, R-Md, has backed out, as have the IRS and Dept of Justice officials.

Bartlett was quoted last fall as saying, "Our country has labored under a federal income tax system that is inconsistent with the liberty of a free people. Quite simply, the government of a free people should not tax the labor of its citizens, and it is imperative that the federal tax system not be repugnant to the Constitution and its laws."

U.S. Assistant Attorney General Dan Bryant agreed to the hearing with, "The American people are entitled to answers. It is in our nation's interest that we participate and answer these questions."

IRS Director of the Office of Congressional Affairs, Floyd Williams, called Schulz, offering to send attorneys to meet with members of his group, but only in private and without video or audio recording.

Schulz rejected the offer.

Bryant agreed to Rep. Bartlett's requirement that the meeting be public and be recorded and broadcast.

"I assure you. The IRS will be there at those meetings," Bryant promised.

Since then, Schulz's organization has posted notices on its website and circulated emails encouraging people to "Wait to File Until the Trial," stating that if the hearings went in his favor, there'd be no need to file and everyone who had had taxes withheld in 2001 would have their money refunded.

Now Bartlett and Bryant have backed out, telling Schultz, "The information that you are currently disseminating concerning the February ... forum is misleading."

Bartlett said. "While I remain committed to making every effort so that you can exercise your constitutional right to get answers to your questions, your rhetoric has made it impossible for the forum to take place because the Internal Revenue Service and the Department of Justice will not participate."
------------------------------------------------
Quotes are from a series of articles by Jon Dougherty of WorldNetDaily.com
http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=26178




2.      JOKE OF THE MONTH

  1. Is it good if a vacuum really sucks?
  2. Why is the third hand on a watch called the second hand?
  3. If a word is misspelled in the dictionary, how would we ever know?
  4. If Webster wrote the first dictionary, where did he find the words?
  5. Why do we say something is out of whack? What is in whack?
  6. Why do "slow down" and "slow up" mean the same thing?
  7. Why do "fat chance" and "slim chance" mean the same thing?
  8. Why do 'tug' boats push barges?
  9. Why do we sing "Take me out to the ball game" when we are already there?
  10. Why are they called "stands" when they are made for sitting?
  11. Why is it called "after dark" when it really is "after light"?
  12. Doesn't "expecting the unexpected" make the unexpected expected?
  13. Why are a 'wise man' and a 'wise guy' opposites?
  14. Why do 'overlook and 'oversee' mean opposite things?
  15. Why is phonics not spelled the way it sounds?
  16. If work is so terrific, why do they have to pay you to do it?
  17. If all the world is a stage, where is the audience sitting?
  18. If love is blind, why is lingerie so popular?
  19. If you are cross-eyed and have dyslexia, can you read all right?
  20. Why is bra singular and panties plural?
  21. Why do you press harder on the buttons of a remote control when you know the batteries are dead?
  22. Why do we put suits in garment bags and garments in a suitcase?
  23. How come abbreviated is such a long word?
  24. Why do we wash bath towels? Aren't we clean when we use them?
  25. Why doesn't glue stick to the inside of the bottle?




3.      TAX TIPS

The IRS says many early filers have made an error on a new line on the federal tax form. This line is for the Rate Reduction Credit, which you use only if you did NOT receive last summer's Advance Payment in the maximum amount for your filing status.

Some people are putting their Advance Payment amount on the credit line, when they should be leaving the line blank.

If you have already received the maximum amount for your filing status, the Rate Reduction Credit line should be zero or blank.

If you received less than your filing status maximum or none at all, you can claim the difference on this line.

If you made an error and the IRS does not contact you by the time you receive your refund, you may file an amended return to correct the error.

For more information on this News Release and other 2001 filing information visit the IRS Website at
http://www.irs.gov

==============

Separate your mutual fund capital gains distributions from your regular distributions: Remember that long-term capital gains receive a special lower tax treatment. You report your mutual fund dividends on Schedule B. Capital gains dividends go on Schedule D. Don't report your capital gain dividends on Schedule B or you'll pay ordinary tax rates on capital gain income.

==============

Property tax deduction for second homes and/or investment property. Property taxes are deductible for all real property vacation homes, vacant lots, raw land, etc. Interest on rental property must be taken on Schedule E, not on Schedule A.

==============

Investment interest. Though interest on personal loans and credit cards is not deductible, interest paid to your broker on a margin account is. Also interest on other loans to purchase investment assets. You may need to use Form 4952.

==============

Refinance points. If you refinanced a primary or other home, you might have paid loan "points." Though you can't deduct points as interest, you may amortize them over the life of the loan and take an portion each year as an interest deduction.

==============

Volunteer work. You can deduct 14 cents per mile for all qualified charitable travel. Plus, you can deduct your out-of-pocket expenses when serving a qualified organization. For example, Scout leaders can deduct the cost of field manuals, uniforms, even camping gear.

==============

Earned Income. To qualify for an IRA contribution (either Roth or regular IRA), compensation or earned income is defined as wages, salaries, professional fees, and other amounts received for professional services rendered. It includes commissions earned, compensation for services on the basis of a percentage of profits, tips, and bonuses.

Alimony (not child support) is considered earned income for IRA contribution purposes. Even if you do not work, if you have at least $2,000 in taxable alimony, you are allowed the maximum contribution to a Roth IRA.

Earned income does NOT include income from property, interest, dividends, capital gains, disability payments, social security payments, any amounts received as a pension, annuity, Foreign Earned Income that is excluded from gross income, or deferred compensation (even if it is included in your taxable income).

==============

Business Travel. You are on business travel whenever you are away from home overnight conducting business. Even if it is only a one-hour drive from home; if you stay in the hotel where a meeting is held (or nearby with a friend or relative) in order to avoid traffic problems, it is business travel.

For each day of business travel, you can deduct 100% of your lodging, tips, laundry and dry cleaning (including sending your clothes to the dry cleaner after you return home), car rentals, and 50% of your food.

Remember to record tips separately from meal expenses. Tips are 100% deductible. Over the course of a year, this could save you a significant amount in both federal and state taxes.

If you have a business day on Friday and another one on Monday, you may deduct all the expenses for the weekend as well. Generally appointments should be set in advance and the majority of days away must be business or travel days in order for the whole trip to be deductible.

No receipts are required for travel expenses under $75 per item, except for lodging. You do need to document all these items in your day timer (or tax diary if you use Tax Toolbox). If you haven't kept good records for 2001, now would be a good time to gather what receipts you have plus your check register and credit card statements, and try to recreate a running account of your expenses.

==============

Need forms ? Go to:
http://www.irs.ustreas.gov/forms_pubs/forms.html

==============

"A fine is a tax for doing wrong. A tax is a fine for doing well." -- Anonymous




4.      PLANNING for 2002

MAXIMIZE YOUR 401(K)Even if you took a beating last year, now may be a good time to beef up your 401K, especially if your employer matches your contribution. Not only does your share reduce your taxes, it gives you a guaranteed first year's yield equal to your tax rate. In the 27% bracket, a contribution of $5,000 equals $1,350 in federal tax savings, plus whatever your state rate may be. The matching contribution of your employer is an instant return on your investment of up to 100%. It's FREE money, so take full advantage of it.

==============

Student-loan interest deduction. Previously, only the interest on the first 60 months' worth of student-loan payments was deductible. In 2002 the 60-month rule is eliminated. The 2001 Tax Act has raised income limits to $65,000 for single taxpayers and $130,000 for married. You don't have to itemize to take this deduction, so you can claim the student-loan interest deduction even if you use the standard deduction.

==============

Employer-provided education assistance. Your employer (you, if you own a business) can pay for up to $5,250 of your qualified education expenses (undergraduate OR post-graduate education). This is deductible to the business and non-taxable to the student.

If you are taking or planning to take courses this year and your employer doesn't have a plan in place, now would be a good time to start one. Even if your employer reduces your wages somewhat to offset the cost, the savings for both the employer and employee can be significant.

Employer:

  • 100% deductible, saving up to 34% in federal taxes plus state rate
  • compensates employees w/o incurring payroll taxes saving 7.65%, plus the rate for FUTA, SUI and Workers Comp
  • better educated employee

Employee:

  • 100% tax free, saving both federal and state taxes (?%)
  • no Social Security or Medicare tax withheld (7.65%)
  • improved value in labor market

If you own your own business, you can hire your children, pay them up to $4,700 in wages (tax free to them with 2002 standard deduction) and give them education assistance as well. All deductible to your business.

==============

Increase In Estate and Gift Taxes: Starting in 2002, the estate tax starts being phased out. The exemptions increase and the tax rates decrease. In 2002, the exemption is $1,000,000, up from $675,000 in 2001. This exemption increases over the next 10 years until the estate tax is totally eliminated in 2010 (assuming Congress doesn't allow the sunset clause to automatically return it to 2001 levels).

Year by year exclusions:
2001........................$ 675,000
2002 and 2003..…....$ 1,000,000
2004 and 2005...…...$ 1,500,000
2006,2007,2008.…...$ 2,000,000
2009.....................$ 3,500,000
2010......Complete Elimination of Estate Tax (but not gift tax).

==============

Deadlines:

February 15, 2002 - If you claimed exemption from tax withholding for 2001 on Form W-4, you must file a new W-4 by this date to continue your exemption.

February 28, 2002

  • Form W-3, Transmittal of Wage Information, and Form W-2, Copy A, is due to the Social Security Administration.
  • Transmittal Form 1096 for all 1099-series returns is due to the Internal Revenue Service.

March 15, 2002

  • Due date for calendar-year 2001 corporation income tax returns, Forms 1120, 1120S.
  • Last date for filing 2001 calendar-year corporation tax return extension, Form 7004.
  • Last date to file amended income tax return Form 1120X for 1998.
  • Last date to elect S-corp. status for 2002 calendar year corporation, Form 2553.




5.      RESOURCES

Tax Estimator

The Ernst & Young Tax Guide 2002

J.K. Lasser's Your Income Tax 2002

H & R Block 2002 Income Tax Guide




6.      EDITORIAL
         by Cory Layne

"There are two methods, or means, and only two, whereby man's needs and desires can be satisfied. One is the production and exchange of wealth; this is the economic means. The other is the uncompensated appropriation of wealth produced by others; this is the political means."
-- Albert Jay Nock

LIBERTY OR SLAVERY?

According the Declaration of Independence, Government is "instituted among Men" and derives its powers from the "consent of the governed." It has no authority or power but that delegated to it by the People (or wrested by force from them in the case of totalitarian regimes).

Government is supposed to be the Servant of the People. But over the past century or so, that has somehow been reversed. Through the advent of the income tax, the American People became the Servants, and government became the Master.

In what other relationship would we be required to report every penny of our earnings to the government at specific intervals and be forced by law to turn over an excessively large percentage of it? In what other relationship would we allow our employers to send part of our pay to the government before we ever see it ourselves? Would a Master quake in terror upon hearing that his financial records were being audited by his Servant? Would the Master be subject to penalties and punishment by the Servant for making a mistake in his calculations or failing to file on time?

When were we sold into bondage? And by whom?

We, as complacent citizens, have allowed many laws to be passed giving the government more and more control over our lives. We the People have relinquished many of our rights to self-rule, believing that a beneficent and capable government could take on the responsibilities that Americans used to shoulder themselves.

We have allowed social reformers to plunder our labor in the name of charity. But forced charity is not charity at all. We've been sold a myth that Robin Hood was a hero because he stole from the rich to give to the poor, so it is all right for the government to do likewise. Regardless of Robin Hood's noble purpose, he was still a thief.

The 20th Century was a hundred years of tax and spend and tax some more. It was a period in which we ever so gradually quit taking care of our families and neighbors and became insensitive to the needs of others, believing that "the government will take care of them." After all, that's what we pay all those outrageous taxes for, isn't it? Isn't that what government is for?

No, my friends, that is not what government is for.

Government has one purpose and one purpose only - to protect the rights of its citizens. Your rights, my rights and the rights of all Americans. Your rights to "life, liberty and property" as John Locke first termed them in the 17th Century.

About a hundred years later, Thomas Jefferson used the more eloquent words "Life, Liberty, and the pursuit of Happiness," but our founding fathers understood that happiness is inseparable from property. In those days even a man's family was his property as wives and children were chattels of the husband or father. It was a man's duty to nurture and protect his family, to provide for them to the best of his ability, and to leave a legacy for future generations, at the very least the family farm or village work shop. Men who failed to meet their family responsibilities were despised by their peers. No man was legally required to provide financial support for another man's family, though many did so out of charity.

A lot has changed since 1776 -- much for the better. Most of the improvements have come from the ingenuity of individuals who have found better, faster and cheaper ways to produce food, goods and services, and better healthcare. We've gradually moved from an agrarian society where 90% of the population were farmers to an industrial, technological society where less than 10% of the population is engaged in farming.

At the same time, we've also moved from a federal government charged by the Constitution (in 1787) with specific limited powers to one with rapidly expanding supremacy over the States and the People.

Society itself has changed, with fewer people being self-sufficient and far too many people being partially or even totally dependent on government largess. Even huge businesses seek taxpayer supported handouts, and many foreign governments who despise us get billions in aid.

Congressmen, who used to be called "public servants" and "representatives" but now are called "lawmakers," pat themselves on the back and are assured of their reelection when they can appropriate funds for one of their pork barrel projects that sends tax money to their home district at the expense of taxpayers in other districts. They brag that they are "stimulating the economy," while we struggle to provide for our families on limited budgets.

Ayn Rand called these politicians "looters" because they consume America's wealth and produce nothing. They believe the People are too stupid to run their own lives, so they want to control everything and make the choices for us that we should be making for ourselves.

The time has come to rescue America from the hands of the political "looters." We can only do that by cutting off their money supply. When ENOUGH of us are willing to stand up and say, "No," to them, we can restore personal liberty and property rights. We can once more require the government to serve us, not supervise us.

The first step is to repeal the 16th Amendment and abolish the income tax.

The second step is to cut federal spending to the point that no replacement tax is needed. There are many ways we can do this. One is to declare peace with the world, pull our troops out of more than 100 nations, and take a position of armed neutrality, defending our country but not trying to police the world or dictate how others live.

You can help by sharing our vision with other over-taxed Americans.

Cory Layne
Editor

P.S. Your comments and suggestions are welcome. We will try to respond to all of them personally and will include a selection of them in future newsletters and on the DeTaxUS website. Send email to: Editor

P.P.S. Let us know how you feel about the income tax. Your opinion is always welcome. You can join our online forum to discuss tax issues by going to:
DeTaxUS Forum


DISCLAIMERS:

The information contained herein is general in nature and is not intended as legal, accounting or tax advice by DeTaxUS, Inc. The reader should seek professional guidance prior to taking any action based upon this information. DeTaxUS, Inc. shall have no obligation to inform the reader of any changes in tax laws or other which may affect the information provided.

Copyright© 2001 by DeTaxUS, Inc.
All Rights Reserved. Written permission is required to copy or republish any portion of this document.



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