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Date: June 03, 1987 09:56
From: CHARM::LOGG
To: @SYS$MAIL:JUNK
If someone offered to pay you $11,000 tomorrow if you pay them $10,000 today, would you do it? Even if the party is backed by US government? Well think twice and listen to my tale. It could happen to you!!!!! Let's say you worked for the IRS and wanted to fuck some poor bastard. Suppose you sent him the standard form letter, saying that he deducted $5,000 from some investment that the IRS does not approve of. The poor bastard thinks the IRS is out to screw him so he pays the $5000 plus $10,000 in interest from his investment three years earlier so that the IRS does not continue to add more interest to the amount he owes. The poor bastard is so confident that he is right that he pays an attorney $2500 to sue the IRS in court. Court cases usually take several years but for our argument the IRS decides the day it receives the attorneys nasty letter that it has made a mistake and returns the bastards $15000 plus $1000 in interest. (I should point out the IRS charges you 9% interest but only pays 8%.) The poor bastard thinks he has won until he has his taxes done. His accountant tells him that of the $10,000 he paid in interest, he can deduct $6,500. But the $11,000 in interest returned to him is ordinary income. So the poor bastard has to additional taxes of 33% x ($11000 - $6500) = $1500. Not only has he lost $2500 in attorneys fees but has paid $1500 more in taxes! So much for tax reform!
Jun 03, 1987