Image provided by: University of Oregon Libraries; Eugene, OR
About Portland observer. (Portland, Or.) 1970-current | View Entire Issue (Feb. 6, 1985)
Page 10, Portland Observer, February 6, 1986 Taxpayers becoming aware of tax shelters Sheltering taxes has become big business in America. Robert A . Stran gler & C o m p an y, a w ell-kno w n tax shelter research firm , reports that over $8 billion was spent in 1983 on lax shelters and that the trend is growing. Tax shelters are the oroduct o f special tax preferences and tax breaks sanctioned by Congress to stimulate the nation's ecom my and to achieve certain socially desirable goals. For example, a Congressional Budget O ffic e study showed that a substantial amount of the funds for low-incom e housing during the past two decades came from investors in real estate tax shelters. These (ax shelters have flourished because o f a number o f special tax preferences for builders of low-income housing. Thus, with the exception o f a few “ abusive (ax sh elters,” tax shelters are p er fectly legal an d , in many cases, so cially desirable. The controversy that lias long sur rounded tax shelters is that in the past their use has generally been con fined to high income individuals and large corporations. H ow ever, more and more modest and middle income taxpayers are becom ing aw are o f tax shelters and are using them to reap tremendous tax savings. At the forefront o f the movement to educate middle and modest income taxpayers o f the advantages o f tax shelters is Donald Stevenson, a Black attorney practicing in Cleveland, Ohio. According to M r. Stevenson, a former Internal revenue Service tax lawyer, “ Modest and middle income taxpay ers can reduce th eir taxes through the same tax sheltering principles used by high incom e taxpayers and the large corporations. A tax shelter, in its broadest sense, is nothing more than a co m b in a tio n o f tax breaks, deductions, and credits. By putting together a co m b in a tio n o f these, you can build yourself a nice little shelter. A tax shelter doesn't have to be complicated or elaborate to save you money.” Despite increasing numbers o f modest and middle income taxpayers who are benefiting from tax shelters, millions o f taxpayers are still paying more taxes than they are legally re quired to pay, according to the N a tional Tax Research Institute, a tax payer advocacy organization based in Cleveland, Ohio. There are tw o reasons why the average taxpayer pays more taxes than legally requ ired. The first is the complexity o f the tax laws. The Tax Code contains over 50,000 d if ferent provisions. Since the first in- Welcome Back Cynthia During January and February Hair Cut Blow Dry $10.00 reg $18 OO Single Process Perm $ 3 0 .0 0 reg $45 OO (Hair Cut Included) Relaxer $ 2 5 .0 0 reg $35.00 Double Process Curls $ 4 0 .0 0 Reg S6O OO Prices good only with this ad PRO LINE BEAUTY PRODUCTS 917 SW Alder 224*8401 Announcing wide area paging coverage without the wide area price. The paging people who have always brought you selection and service now bring you one of the widest coverage areas In Portland. Plus one big advantage: Our conifietltors charge you for "extended coverage." RAM Includes It as standard bill of fare. Premium coverage without a premium price Because at RAM. we believe your pager Is only as good as the area It reaches. gg®» 226-1507 RAM Broadcasting ot Oregon, Inc . 713 S W 12th Avenue In parts of France it was once considered good for the crops for the farmer's wife to be tossed in a blanket. • Some people once believed they could cause it to rain by drumming on a kettle in imitation of thunder, and sprinkling water with a bunch of twigs. • During a lifetime, the average human heart beats 2.5 billion times W« do .iot do business w ith South Africa American State H a n k AN INDEPENDENT BANK Head Office 2737 N. E. Union Portend. Oregon 97212 come tax law in 1913 the Tax Code has evolved into a conglomeration o f convoluted mumble jum ble. The tax laws have become so confusing that even the Congressmen w ho passed them d o n 't understand them fu lly . Yet, hidden in this maze ate hundreds o f special tax benefits and lax breaks fo r the modest and m iddle incom e taxpayer. The inck is knowing how and where to find them. There is no section in the Code entitled. “ Tax Breaks Espe cially For the Average Taxpayer — Look Here!” Going to the IRS won’t help. It is not in the business o f saving taxpayers m oney. T h e average ac countant or lax preparer who does tax work for only four months out o f the year is not likely to know about most o f these special tax breaks. O nly tax lawyers or accountants who specialize in taxes know about these lax breaks. U n fo rtu n a te ly, they are too expen sive for the average taxpayer. The key to benefiting from these tax breaks is becoming fam iliar with the fine points o f the tax laws. This is not as onerous as it may sound. There are a number o f good tax seminars that the taxpayer can attend. M any local community colleges offer excel lent income tax courses. In addition, there are a num ber o f outstanding tax guides on the m arket to day. These range from very basic for the tax novice to very com plex fo r the more astute taxpayer. These guides range from $2 to $40 The lim e and effo rt invested in understanding the tax laws is m iniscule com pared to the resulting tax savings. A nother reason why the average taxpayer pays m ore taxes than le gally required is misconceptions about how the tax system works. One com mon misconception is that the IRS is always right. The IR S has been given authority to collect the taxes. T o do this, it must interpret the law. It can not make law. Thus, a taxpayer has the righi to disagree with the IRS and to go to court to settle the dispute. More and more taxpayers are saving taxes by going to court, particularly the Tax Court, to settle disputes with the IR S . The l a x C o u rt has very inform al procedures similar to those in a typical Small Claim s C ourt for small tax cases. T h e taxpayer may represent himself or herself in these procedures. In addition, the taxpayer need not pay the disputed tax upfront before going to court. Many persistent taxpayers representing themselves have been successful in Tax C ourt. I f the taxpayer thinks he or she stand a better chance w ith a sym pathetic ju ry , the taxpayer can go to a U .S . District C o u rt. H o w eve r, the ta x payer has to pay the disputed tax and sue the government for a refund. The U.S. Court o f Appeals for the Tenth Circuit made it clear in the case of Jones v. Grinnell that “ it is a well settled principle that a taxpayer can Zimbabwe Continued fro m Puge I, Cohimn 6) towns and some o f the streets and roads, have reverted to their African names. For example, H arare is now Harare again after being misnamed "Salisbury" for almost eight decades Holidays commemorating the stealing of Zimbabwe by white settlers in 1890 have been scrapped and instead Z im babweans now celebrate the Heros of the African Resistance and the War of Liberation. Statues o f "Rhodesia's" arch-racists have been lorn down and replaced by those of the country’s Z im b a b w e's , that is) real national heroes. The impartiality and responsiveness of the new justice system and judicial order were clearly demonstrated late last year by one unfortunate incident. Somebxly had dreamed up the noble idea o f ridding Zim babwe of prosti tutes. T h e police were ordered to round up all unaccompanied women and detain them until they could ac count fo r their being out alone at night. Policed blitzed all the major centers o f Zim babwe and rounded up thou sands o f w om en w ho were herded into deten tion centers. O bviously, this was not only discriminatory but also unconstitutional so the women cried “ Foul!” There was an emergen cy C abin et meeting; the detainees were ordered promptly released and the government issued a public apol ogy W ith such a stellar perform ance during his first term in office, coupled w ith the abysm al failu re o f all his w ou ld-b e challengers to mount a credible challenge, is it any wonder that Comrade Robert Gahnel Mugabe finds himself a shoo-in for a second five-year term? PERFORMANCE CONTROL AUTO SERVICE CENTER legally reduce his or her taxes, accord ing to M r. Stevnson. T o illustrate, last year he and his w ife earned over SI 10,000. Using o nly a h an d fu l o f simple legal tax b reaks, they paid less than $2,000 in (axes. In his new book, "T a x Shelters Are For E veryo n e,” M r . Stevenson ex plains hundreds o f tax avoidance techniques especially for modest and m iddle income taxpayers. Here are just a few o f these techniques. — Convert nondeductible personal expenses such as entertainm ent, va cation, and education, into deductible business expenses; — Deduct portions o f the cost o f the family car, house, and home com puter by establishing a part-time busi ness using these assets; — Hire family members; — Shelter income through IR A or other retirement plans; — Take charitable contribution de duction for used clothing and fu rn i ture, and volunteer services contributed to a charitable organization; and — Shelter income through bonds and other tax-free income. M r. Stevenson warns overzcalous taxpayers to v a tc h out fo r illegal tax shelter schemes. "S o m e tim es there is a thin line between tax avoid ance and tax fra u d ." Unfortunately, too many middle and modest income taxpayers are getting involved in fraud ulent tax schemes. " W e are finding that the tax shelter p ro m o ters are moving in to these m id dle incom e gro up s,” says IR S C om m issioner Roscoe Egger. PROMOTIONAL SPECIAL 2863 NE Union/284-3932 Brake Pada • Four Wheal • Rotor« b Drum« Turned IXBO O /O ne Day S sv w . Complete Breka Sannce • Fluid. Syatam Rabudi • U M 00 • U n c o n d itio n a lly Q u arantaod 30% OFF M A J O R ENGINE REPAIR Cart) Ratoukl/Bactnc Service/Stereo A U REPAIRS G U A R A N TEED 0 0 » CHUCK ROAST BLADE CUT FIRST 2 ROASTS POUND “ Tax Shelters Are For Everyone" (75 0 pages) is av ailab le fro m SES Publishing, P .O . Box 14997 Public Square, C leveland, O h io 44114 for $9.95 plus $1.95 postage and handling How to get your tax forms l K r. SHOP ¡■ lENOW'S I I f you haven't received your fed eral income tax forms in the mail by now , you p ro bably w o n ’ t receive them this year, the Internal Revenue Service says. If you do not have your tax forms, they are available at most libraries, banks, and post offices, or by calling the IR S form s order telephone in Portland, 221-3933 or toll free state wide, I -800-452-1996. FOR. B R A N D S ya w It s a w V A R IE T IE S yaw lik a SIXES yaw w arst a » a i I | | • A llw a w h .a a I •*» • $»»h A le a * U r a . i d a • > > ,4 • 1 1 1 * 4 A N I O l> a « s a • M Larw fca'M S« O a s a ls y a • A e l e i f N M ill« » I « . « . • l $ | a « M l | O l» le * * w • B is « • Osfc A l l *a » n « a « A M I M a~a<k i l l ( M v le la s A W e e * AwryaalNe H l» < { ik y 4L3IHA VOUCH OPPORCUniCV X F O O L inC. 3710 North M iitituppi • Portland. Oregon 97227 • Telaptiona (503) 288 5813 cA vc t ueu U0U witlinp- to provide ite r ¿ticCterJor o u d veuths ? \Ne need caring two-parent minority families 'Jor m ate m in o r ity u o u th s between the OLaea of ¡ 2 -/8 . cfc oubsidu' is a v a ila b ic . dvr more information, Phase catt Prance Sf/ruiid Z 88S8I3 A Y O S adm it! itu d an tt o f any race, color, and national or ethnic origin 4<äi ">d '°<4'N 3710 North Miitiisippi • Portland, Orayon 97227 X F O O L ¡nc. (5031 288 5813
