Newspaper Page Text
The Augusta News-Review February 9,1985
Tax attorney tells taxpayers how to benefit from
tax shelters
Sheltering taxes has become big
business in America. Robert A.
Strangler & Company, a well
known tax shelter research firm,
reports that some of $8 billion was
spent in 1983 on tax shelters and
that the trend is growing. Tax
shelters are the product of special
tax preferences and tax breaks san
ctioned by Congress to stimulte the
nation’s economy and to achieve
certain socially desirable goals. For
example, a Congressional Budget
Office study showed that a sub
stantial amount of the funds for
low-income housing during the
past two decades came from in
vestors in real estate tax shelters.
These tax shelters have flourished
because of a number of speical tax
preferences for builders of low
income housing. Thus, with the
exception of a few “abusive tax
shelters”, tax shelters are perfectly
legal and, in many cases socially
desirable.
The controversy that has long
surrounded tax shelters is that in
the past their use has generally
been confined to high income in
dividuals and large corporations.
However, more and more modest
and middle income taxpayers are
becoming aware of tax shelters and
are using them to reap tremendous
tax savings.
At the forefront of the
movement to educaste middle
modest income taxpayers of the
advantages of tax shelters is
WASHINGTON, D.C.—Racism
can no longer be used by Blacks to
sanction inaction in addressing
Black family and community
needs, according to Dr. Douglas
Glasgow, Vice President for
Washinton Operations for the
National Urban League. Glasgow
said in 1985 Blacks must move
from “notions of philanthropy”
or “dependency” to reality of
greater self reliance by the year
2000.
“We cannot deny much of what
has been said about the growing
Being Black in America: A Real Picture
Remember
your first
real history
lesson. 7
PHOTOGRAPHED BY KEITH HALE
An award-winning Black photographer, Mr Hale is currently
on staff with the Chicago Sun Times. Over the years his work
has appeared in major publications, including EBONY and
ESSENCE. The photograph below is of Mr Hale's daughter and
her great-grandmother.
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Donald Stevenson, a Black attor
ney practicing in. Cleveland, Ohio.
According to Mr. Stevenson, a
former Internal Revenue Service
tax lawyer, “Modest and middle
income taxpayers can reduce their
taxes through the same tax
sheltering principles used by high
income taxpayers and the large
corporations. A tax shelter, in its
broadest sense, is nothing more
than a combination of tax breaks,
deductions, and credits. By putting
together a combination of 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 of
modest and middle income tax
payers who are benefiting from tax
shelters, millions of taxpayers are
still paying more taxes than they
are legally required to pay, accor
ding to the National Tax Research
Institute, a taxpayer advocacy
organization based in Cleveland,
Ohio.
There are two reasons why the
average taxpayer pays more taxes
than legally required. The first is
the complexity of the tax laws. The
Tax Code contains over 50,000 dif
ferent provisions. Since the first
income tax law in 1913 the Tax
Code has evolved into a
conglomeration of convoluted
mumble jumble. The tax laws have
become so confusing that even the
Congressmen who passed them
Blacks must become more self reliant to survive
sense of dependency allowed to
ferment in some sections of the
Black community”, Glasgow told
his audience at the Martin Luther
King, Jr. Center for Social Change
in Atlanta. In a Jan. 12speechhe
recalled the advice of the late Dr.
King who said, “We must not let
the fact that we are victims of in
justice lull us into abrogating
responsibilities of our own lives. In
this period of social change Black
must come to see that there is
much they can do for themselves
about their plight.”
Citing statistics that indicate
Page 2
don’t understand them fully. Yet
hidden in this maze are hundreds
of special tax benefits and tax
breaks for the modest and middle
income taxpayer..
The trick is knowing how and
where to find them. There is no
section in the Code entitled, “Tax
Breaks Especially For the Average
Taxpayer-Look Here!” Going
to the IRS won’t help. It is not in
the business of saving taxpayers
money. The average accountant or
taxpreparer who does tax work for
only four months out of the year is
not likely to know about most of
these special tax breaks. Unfor
tunately, they are too expensive for
the average taxpayer.
The key to benefitting from
these tax breaks is becoming
familiar with the fine points of the
tax laws. This is not as onerous as
it may sound. There are a number
of good tax seminars that the tax
payer can attend. Many local
community colleges offer excellent
income tax courses. In addition,
there are a number of outstanding
tax guides on the market today.
They range from very basic so hte
tax novice to very complex for the
more astute taxpayer. These guides
range from $2 to S4O. The time and
effort invested in Understanding
the tax laws is miniscule compared
to the resulting tax savings.
high Black unemployment, more
Black children are having children,
increasing numbers of single
patented, females headed and
poor families, Glasgow said the
socio-economic condition of
Blacks and the nation’s poor has
worsened in the past four years.
“Blacks stand onthe recipe of
economic annihiliation. The suf
fering of Black and disadvantaged
people demands immediate atten
tion”.
Glasgow challenged the notion
put forth by Charles Murray in
When Grandma used to sit you down and
talk about her life she wasn’t just telling
tales. She was following a long line of Black
historians who passed their precious know
ledge from generation to generation using
the most expressive instrument created. The
human voice.
This knowledge is power. Because when
you know where you come from you know
who you are. Our grandparents knew this. So
did W.E.B. Dubois, Sojourner Truth, Carter
G. Woodson and Martin Luther King.
They also knew how important it was
that this knowledge continue to be handed
down. Black History Month is a reminder for
us to learn from the past, because it positive
ly 'affects the quality of our future.
Anheuser-Busch appreciates this fact. We
have an ongoing commitment to forging part
nerships with Black organizations across the
country which are involved in preserving the
Black cultural heritage.
And we’ve brought Black history into the
community through our Great Kings and
Queens of Africa art collection.
A real picture of being Black in America
includes all of us. The future rests on people
of all races working together to make our
common reality one we can all be proud of.
Building a future in partnership
with the community.
U ANHEUSER-BUSCH COMPANIES
Anheuser-Bust h Companies is the parent company <>l Anheuser-Busch,
Inc. brewers of Budweiser • Mu helob*. Mxhelob- Light.
Budweiser. Light, Natural Light and Busch. beers
MISCONCEPTIONS OF THE
TAX SYSTEM
Another reason why the average
taxpayer pays more taxes than
legally required is misconceptions
about how the tax system works.
One common misconception is
that the IRS has been given
authority to collect taxes. To do
this, it must interpret the law. It
cannot make law. Thus, a taxpayer
has the right 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, par
ticularly the Tax Court, to set
tle disputes with the IRS. The Tax
Court has very informal
procedures similar to those in a
typical Small Claims Court for
small tax cases. The 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 Court. If the tax
payer thinks he or she stands a bet
ter chance with a sympathetic jury,
the taxpayer can go to a US.
District Court. However, the tax
payer has to pay the disputed tax
and sue the government for a
refund.
Another misconception involves
the distinction between “tax
evasion,” which is illegal and “tax
avoidance,” which is perfectly
legal. Here is how Judge Learned
“Losing Ground” that the 60’s
poverty programs are the cause of
the deteriorating Black economic
condition. “For the past four years
the American public has been led
to believe that the social programs
of the 60s hurt poor and Black
people and had no measurable im
pact on improving the conditions
of poverty. The social programs of
the 60’s achieved exactly what they
were developed to achieve”.
Glasgow said the social
programs never sought to alter
economic condition by reviving
ADVERTISEMENT FORBIDS
Sealed bids from food service vendors will be received
by Concerted Services, Inc., Elderly Services Program,
until 4:00 p.m. at the time legally prevailing in
Waycross, Georgia on February 25, 1985 for the
preparation and delivery of noon day meals for the
project year July 1, 1985 through June 30, 1986 for the
following programs:
1. Nutrition Program for the Elderly
2. Home Delivered Meals Program
3. Adult Day Rehabilitation Program
Specifications for the above named programs can be
obtained from the Elderly Services Program Director,
Concerted Services, Inc., 201 State P.O. Box 1965,
Waycross, Georgia 31502, telephone (912) 285-6083.
Public Opening of the Sealed Bids will be held at 4:00
p.m. on February 25,1985 at the above address.
The right is rseserved to reject any or all bids.
ADVERTISEMENT FOR BIDS:
Sealed bids for Nutrition Program for the Elderly,
providing five (5) day a week meal service, July 1, 1985
through June 30, 1986, will be received until 4 p.m.,
March 1, 1985 at Northeast Georgia Area Planning and
Development Commission, 305 Research Drive,
Athens, Georgia 30610. Bid openings will take place at 9
a.m., March 4, 1985 in the NEGAPDC Conference
Room.
Specifications are available from NEGAPDC’s Area
Agency on Aging.
Bids from minority owned/operated firms en
couraged.
ADVERTISEMENT FORBIDS
Sealed bids will be accepted by the Middle Flint Area
Council on Aging, Inc. in its offices located at 409 Rees
Park, Americus, GA 31709, until 2:00 p.m. E.S.T.
March 1, 1985 for the provision of prepared meals for
the Title 111 Nutrition Program for the Elderly.
Detailed food vendor specifications may be obtained
from the office of the Middle Flint Area Council on
Aging, Inc. 409 Rees Park, Americus, GA ,1709 (912)
924-1739. A public opening of the sealed bids will be
held in these offices at 2:00 p.m. E.S.T. March 1, 1985.
The Council reserves the right to reject any or all bids.
E.O.E.
Hand descirbes tax avoidance;
Over and over again courts have
said there is nothing sinister in so
arranging one’s affairs as to keep
taxes as low as possible. Everyone
does so, rich and poor, for nobody
owes any public duty to pay
any more than the tax laws
demand; taxes are enforced exac
tions not voluntary contributions.
The U.S. Court of 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 has the legal right to decr
ease the amount of what otherwise
would be his taxes, or avoid them
altogether, by means which the
law permits.”
There are numerous ways a
middle or modest income taxpayer
can legally reduce his or her taxes,
according to Mr. Stevenson. To
illustrate, last year he and his wife
earned over SIIO,OOO. Using only a
handful of simple legal tax
breaks they paid less than S2OOO in
taxes.
In this new book, “Tax Shelters
Are For Everyone,” Mr. Steven
son explains hundreds of tax
avoidance techniques especially for
modest and middle income tax
payers. Here are just a few of these
techniques.
—Convert nondeductible per
sonal expenses such as entertain
ment, vacation, and education, in
to deductible business expenses:
—Deduct portions of the cost of
and recycling the institutions put in
place early to help in the struggle
to achieve economic parity. He
praised the MLK Center as a
sterling example of the impact that
Black institutions can have in
recording the lives of the Black
community. “The survival of
Black people will remain in
question unless we rebuild Black
institutions,” He urged Black
professionals to use their expertise
to reorder the American economic
order. But he cautioned that
because Blacks lack the captial
base to begin rebuilding Black in-
the family car, house, and home
computer by establishing a part
time business using these assets:
—Hire family members;
—Shelter income through IRA or
other retirement plans;
—Take charitable contribution
deduction fdr used clothing and
furniture, and volunteer servicves
contributed to a charitable
organization; and
—Shelter income through bonds
and other tax-free income.
Mr. Stevenson warns over
zealous taxpayers to watch out for
illegal tax shelter schemes.
“Sometimes there is a thin line
between tax avoidance and tax
fraud.” Unfortunately, too many
middle and modest income tax
payers are getting involved in
fraudulent tax schemes. “We are
finding that the tax shelters
promoters are moving to these
middle income groups”, says IRS
Commissioner Roscoe Egger. “We
have the potential for some real
serious personal problems. In
dividuals get mesmerized or taken
in or whatever by the siren song of
a tax shelter promotion that soun
ds great”. In his book, “Tax
Shelters Are For Everyone,” Mr.
Stevenson describes illegal tax
shelters to avoid.
Tax Shelters Are For Everyone
(750 pages) is available from SES
Publishing, P.O. Box 14997 Public
Square, Cleveland, Ohio 44114 for
$9.95 plus $1.95 postage and han
dling.
stitutions they must reeducate
Congress to become the catalyst by
providing resources to underclass
poor into the nation’s labor force
or to create mass entry of the poor
into the market economy.
Glasgow said Blacks have the
capacity to change the Black
market dynamics or labor force
tradition to ensure the elimination
of the economic dependency by the
poor. “The social philosophy
that rationalized poverty, making
it a palatable social condition”, he
added. He said while the social
programs removed the more “ab
ject” facets of poverty and
“humanized” it, the programs
were not designed to infuse the
development of these instruments
of social change and human
developemnt.
We must help government see
that rebuilding our institutional
capacity is as important to survival
of Black America as the U.S. in
vestment in Chrysler was impor
tant to building the security of hte
nation’s economic fabric. He
said Black America is not asking
the government to maintain its
poor nor to invoke policies which
were insensitive to its plight. But
Glasgow called on Blacks and
other Americans who seek a just
place in our nation to mobilize at
the state and local levels to reorder
the opportunitysystems of this
nation’s economy.
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