| Finance

Is Tax Reduction Important?
Taxes are normally the second largest expenditure in the family budget after housing.  Any legitimate tax reduction would normally allow a family to save or spend more on their personal priorities.  You would think tax reduction would be at the top of our priority list.  So for the family or the small business owner, legitimate tax reduction has an immediate and long term effect.

You Can Reduce Your Taxes Without Fear:
Tax reduction is not only legitimate; it is your right under the law.  When you understand the system, you will find that those who utilize the methods available actually make a greater contribution to the ongoing welfare of our country than those who just blindly pay and complain.  In order to have peace of mind in this matter of Tax Reduction, a person must understand the big picture.

The Big Picture about Taxation in these United States

There are Four principle players in the Tax System:
1. Congress that passes bills into laws to define what taxes should be paid on which revenues at the personal or business level.
2. The Internal Revenue Service that acts as a collection agent for Congress to be sure these laws of collection are enforced.
3. The Tax Payer, individual or business.
4. The Tax Court that determines the legitimacy of claims made by either tax payers or the IRS when disputes arise in the collection process.

Congress Utilizes the Tax Code to Effect Two Goals:
1. Generate Revenue to pay for benefits for our citizens, and the delivery system to get those benefits to those citizens.
2. Generate Participation from Individuals and Corporations to solve local, state, and national problems that need attention

The Internal Revenue Service has one goal:
Compliance with the laws and regulations as the IRC Tax Commissioner interprets them.

The Tax Court has one goal:
Administrate the process of settling disputes when a Tax payer disagrees with the IRS interpretation over which revenues are subject to taxation under the law.

Every Person or Business is in One of Three Positions in Relationship to Taxation:
Every person in the United States, every citizen that is, will always find themselves in one of three positions in relationship to the Internal Revenue Code ( hereafter IRC ).

Payer:  This person fills out the form and sends in the money.  They frequently begin thinking about their tax issues either in December or after the close of the business year as they prepare to file their returns.

Non-Payer:  This person, for a variety of reasons, may believe that they are not subject to the Tax law, or the tax regulations, and therefore they either choose not to file return, file erroneous returns, or simply do not disclose their income.  This is illegal, and this person is subject to fines and criminal charges for these acts of defiance.

Participant:  This person, often with the assistance of professionals, asks what problems the Federal or State government bodies want resolved to which they attach tax incentives.  They sort through the options, and consider the risk of making such investments to be less risky than paying taxes, and thereby reduce their tax liability.

Next Article: How does Legitimate Tax Reduction Work Practically?

Adapted from Tax Reduction Strategies Tutorial
Donald Clark, Chrysalis Consulting, Inc.