Sure, but you'd still want to file to rebut erroneous presumptions from other entities, no? Sadly, it's difficult to find a payer that doesn't blindly follow the status quo. Not sure how you folks are able to get out in front of that.Originally Posted by lorne
Last edited by Sabo; 03-21-19 at 03:31 AM.
You speak of the reporting by employers (including clients)?
Yes, that's another reason to file. Up to you. Let's say you made $100k last year, off the books as they say, with no reporting except for a single 1099-MISC alleging $7k in Box 7 "Nonemployee compensation." The rules say you're required to file as the $12,000 (Single) filing threshold does not apply to self employment income. You would not owe any income tax, because your income is below $12,000. But you'd be on the hook for social security and medicare ("FICA") tax due on your "self-employment" earnings. The self employed pay FICA as "Self Employment Tax" (SET). SET is calculated on schedule (form) SE and is filed as part of an income return.
But what if you're redeeming lawful money and don't agree that $7k was "self-employment" or "Nonemployee compensation"? Filing a return is your chance to rebut that allegation.
Disclaimer: not tax advice
Yes. The vast majority of non-privileged entities blindly outsource payments through companies that make those presumptions - whether based on Agency fear, and/or because they directly benefit from the confusion.
Funnily enough, this is very close to my situation. But I have had trouble in the past with Correcting 1099s (via LH/CtC, which has its merits, but certainly its flaws). Would you be kind enough to go into more detail of the structure of your rebuttal? Are you also sending a Corrected 1099, referring to LM, or are you adding it to your 1040 and calculating an LM Deduction?
Last edited by Sabo; 03-25-19 at 04:20 AM.
As I recall, Pete HENDRICKSON of LH/CtC advocated submission of a "Corrected" 1099 along with the tax return to rebut the presumption of federal income. While I never saw any rule against it, I never tried it. The 1099s and W2s are clearly intended to be prepared by the PAYER, not the recipient. Of course Pete never agreed that use of FRNs creates a federal nexus; a liability for the income tax based on use of a privileged currency. While it might work short-term, correcting an info report while still endorsing private credit of the FED does not the relieve the recipient from liability for income tax.
This brings to mind the topic of SELF-ASSESSMENT. David Merrill has mentioned this. Why is the taxpayer allowed to assess his/her own income? The feds, the IRS, the banks already know my annual income. At least what's been deposited. Why not just send me the tax bill - you made X dollars last year and here's what you owe us. It's because we are not required to use private credit. We have the option to demand Lawful Money instead - to operate outside the Federal Reserve district or system. Lawful money is a non-privileged currency; public money not subject to excise.
Last edited by lorne; 03-31-19 at 09:28 PM.
Right, but without trying to go in circles, nothing stops other entities from reporting information about what they paid to you, as they are not party to your redemption. If one were to submit a return without acknowledging and/or correcting this information, you're likely to get AUR'd.
In your last reply, you stated:
That was the question I was asking, in hopes of getting some guidance (not legal advice, but simply guidance) on how folks here are handling that currently. Since I am redeeming Lawful Money, it does not seem congruent to add this and calculate a LM reduction via a 1040, as that would still acknowledge it as being part of their limited system.
I hope you will be willing to share your experiences, at least at a high level. Not to blindly copy, but just as a concrete example in case there's something I must not be considering. Thank you.
What were you considering to do on the 1040 as a rebuttal?
Let me not put words in XPARTE's mouth......but the signed under penalty perjury information return with the properly filled out "Line 21" [yeah, I know it's a bit different this year, just using the term as a point of reference] acts as a affidavit to the truth.....we are tasked with ACCURATE SELF REPORTING, aren't we?
Presumably nothing? The allegation is on a 1099, it seems that's the document that needs to be rebutted. Given the redemption, it's not "income" in their limited scope, so it doesn't belong on the 1040 as far as I can tell.
But just to ask outright - Given your question, are you saying that if/when you receive 1099s, you personally add the presumpted amount to your 1040?
Posting Permissions
Reply With Quote