February 06, 2008

You wonder how many realtors are cheating on their taxes, and how bad the fraud is

Gotta love realtors deducting manicures, dry cleaning and trips to the beauty shop as business expenses. We already heard about the under-the-table bribes from builders, appraisers and mortgage brokers not being reported as income. And now this.

Too bad the US is no longer a nation of laws. Too bad millions feel free to cheat on their taxes while honest people pay the price. Too bad the IRS doesn't have the manpower to audit every realtor's tax return. Too bad we don't have a tax system that would make sure everyone pays (i.e. the Fair Tax).

Even though most realtors are pretty dumb, I've gotta believe they're smart enough to know that tax fraud is a crime. The only question is - will they get caught?


Anonymous said...

Why gang up on the Realtors? They were pawns. Target the powerful banks, the FED and regulators; they controlled and allowed this to happen. You know that.

Bitter Realty said...

The sad reality is less than 1% of the housing crooks will get their fingers slapped by our government. The government doesn't have the manpower, efficiency, or leadership to deal with graft on such a grand scale.

In California alone there are 521,000 licensed Realtors. How many other mortgage brokers, mortgage lenders, and other parasites of the food chain do you think there are in addition to the Realturds?

Anonymous said...

Well the IRS as well as the FED bank are ILLEGAL as per the constitution so you really can't cheat on taxes.

Wesley Snipes is a HERO!

Anonymous said...

The guys can deduct their penile implants on the premise they are professional dicks.

Anonymous said...

They won't go after real tax cheats, but they audit me two years in a row, costing me dozens of hours and effort. They didn't get a penny from me, but they sure did waste my time and piss me off.

Fcked and Dishonest America said...

So What IF they do get 'caught'?

Mozillo is Free. Serin is Free. Greenspan is Free and earning royalties. In a properly ordered society this bunch would have already been executed and held up as bad examples.

What does the corrupt and fraudulent Fed. Gov. care about broken down Realwhores with no money or assets?

We are AT WAR, Remember?

Ask war hero John McShame. He will be glad to tell you all about it..

Frank@Scottsdale-Sucks.com said...

I'd be willing to bet that well more than half of realtors, mortgage whores, and all the others who were paid by 1099 have never even filed or paid a dime in taxes over the past 5 years.

Ed Brown said...

Wesley Snipes is not a hero. He is just a man who learned the truth and took action. What he did should be the minimum action that all average men should take.

Afterthought said...

Inflation is the flattest tax; no more taxation, just print the money.

Back in OC in 2012 said...

I have to laugh at this deal. I work in public accounting, tax specifically, and I have been asked by people of the REIC "can I deduct my clothes, dry cleaning, and make-up? It is for my business."

My reply, "Uhhhhhh . . . . no." Will you get caught? Maybe or maybe not, odds are in your favor you will not. But if you do get caught, it sucks to be you and I will not deduct that crap on your return.

Frank: FYI, if you receive a 1099, you will get a friendly reminder from the IRS stating that you haven't filed your return and by the way, based on said 1099, you owe this much in taxes so pay up. It is only a matter of time before you get the notices.

Another FYI, if you receive a K-1 from a Partnership/LLC/LLP, S Corporation, and/or Trust and do not file you will get a friendly reminder from the IRS.

Another FYI for the dumbass tax protestors, taxes are legal. How Snipes got off on the severe charges, I don't know I did not follow the case. However, I did hear the he was still found guilty of some of the charges.

Also, for all of you tax haters/protesters out there, consider this . . . rather than bitching about the taxes you have to pay, bitch about government spending and how your income sources are taxed.

Consider this extreme example, you and your working spouse have $250,000 of earned income. In a nutshell you will pay a FEDERAL effective rate of approximately 21% - 27%, depending on individual circumstances. I used caps for federal to let you know that this does not consider payroll and state taxes. On average, depending upon age and savings habits, you may have a net worth of let us say . . . $400,000 (individual circumstances will vary).

Now, let us consider another couple that has $250,000 of 15% income (qualified dividends and long-term capital gains). This couple, including taking into account AMT, will have an effective federal rate of roughly 15% - 16%. Assuming this is all qualified divis at an average yield of 3.5% (S&P yield?), they can have a net worth of over $7,000,000 in income producing assets. Hmmmm, $7M in assets . . . those folk is loaded to the gill.

I know what you are saying, that money has already been taxed, blah blah blah, but allow my inner-hippie to come out to complain/explain.

For the fortunate <1% of the population that have this wealth it was more than likely earned with hard work. Kudos to them they earned it. However, it is very likely that the bulk of the cash came from the selling of a business. If they were smart, they would have structured the deal to achieve . . . drum roll . . . . capital gain treatment at 15% at the time of the sale. Hey, how about that. They busted there asses, built up a marketable business and lived the American dream. Admit it, this is something we should all want to achieve.

Now consider this, you too can earn this kind of cash busting your ass for wages over your lifetime, but never own a business. If you were to earn the same amount of cash (that was earned from the sale) in the same amount of time, you would have paid more than double the tax of our business owner(s). Hmmm. double the tax huh? That sucks, why? Becasue it is treated as earned/ordinary and not capital.

Okay enough with the extreme examples just think about this . . . if some of the nation's wealthiest individuals say we have a f'ed up unfair tax system, you should listen. The info is out there, look it up.

For all of you haters, shut your pie hole and pay your f'in taxes. If you want to bitch, bitch about what your taxes fund and not how much you have to pay, especially you 15% payers. If you don't like it, pack your shit and move to another country where the tax rates are higher.

Big Cheese said...

Back in OC 2012,

That's a great post. However I live in another country and have to pay my resident countries taxes and then also file in the US and pay the higher of the two! How fair is that? I don't get shite for services as I'm out of the country but have to still pay. WTF? All for the priviledge of being a fooked americano (hats of to andrew hac)???

Now my real question is if I dangle an offer to buy a distressed house in cash to a realtwhore and she gives me a BJ in the house & swallows....

Does she have to declare InCome on that?


Anonymous said...

Everyone should pay the same for basic services. This BS preferential treatment of one group over another needs to stop.

Back in OC in 2012 said...

Big Cheese:

Its only income to her if you break her teeth whilst pistol whipping her. Just slip her a $50 and tell her to "go buy yoself somin' pretty."

Regarding the foreign deal, yeah that sucks big time regarding the US tax. You should get either a foreign income exclusion or foreign tax credit for taxes paid to your resident country. As a disclaimer, you should always check with your tax advisor. My advice was for folk to give up citizenship.

Final thought for the realtwhore, just make sure she doesn't bite.

Be cool.

pwnd said...

I got tired of being the only one I knew who paid their taxes truthfully. Plus, since I'm a renter, I am bitter that I don't get a bullshit deduction to "own" a house. Now I have a savy (read shady) tax guy; and now I'm happy.

He takes deductions I don't deserve, but knows what can and can't be proven at audit. He also knows what triggers red flags by the IRS and avoids the pitfalls.

Fuck the gov't, and their bullshit tax code. I can't believe they try to control peoples' behavior with tax incentives... is this freedom?

abb said...

If you eliminated the un-Constitutional institutions in DC, you wouldn't need a Flat Tax either.

The Flat Tax is a scam. Politicians prefer an income tax because it provides more tools for social engineering, but bankers don't care how their interest payments are made.

Income Tax 1913
Federal Reserve 1913

That is not a coincidence.

Anonymous said...

For God's sake, the income taxes are the problem. They were brought in with the Fed to enslave everybody! Don't waste energy on punishing those who get around the law. Punish the government and the Fed that caused this debacle. Vote for Ron Paul!

Big Cheese said...

Back in OC,

As Keith will tell you, a US Citizen does get a credit against taxes paid against income in another country. But like everything else in tax it's tested a few ways and you have to pay using the higher scheme. Generally you are OK if you are working in a higher tax country than the US but if not you have to pay the difference to the US Gov't. Advantage of working abroad though- no state income tax, no social security withholding (but the money you earn doesn't get credited in SS payouts, who cares) and no Medicare deduction also.

Most all countries in the world don't make you file and pay the tax difference when their citizens go abroad, so why is the US special? It makes no sense to pay tax for services you don't receive.

Regarding giving up citizenship, if you read the fine print of your US passport it says verbatim "Loss of US Citizenship: Under certain circumstances... (you can relinquish your citizenship).... You may continue to have US Tax liability even if you lose US Nationality"

I heard you are still liable for taxes in the next 5 years following relinquishing US citizenship. Why the fuck is that? The corrupt gov't has the populace by the short and curlies. It's time for a revolution, I'm gonna get my Glock.