Do all money that you receive have to be reported to the IRS?

For example, if a person gets 10,000 dollars from an accident insurance policy, should it be reported to IRS, even tho they don't have jack to do with it?

I'm certainly not an expert, Honilov, but I'd say that you must report anything over $600. I know that that's the way it works at the race track and at the casio---win $599.00 and they just pay you off---but win $603 and out come the tax forms for you to fill out. Sorry!

I am willing to bet that if an insurance company pays out anything which is taxable that it must inform the IRS and also send you a statement early in the following year as to the taxable consequences. No statement, no taxes, most likely. One can call the company and ask if they intend to send such a statement.

IRS Publication 525 contains a complete list.

While punative damages awarded are taxable, Compensatory damages awarded for physical injury or physical sickness and damages for emotional distress due to a physical injury or physical sickness are not taxable.

Thanks for the replies. I understand now. The compensatory says it all.

Go AFLAC

Some compensatory damages are taxable, for example, damages for lost wages.

Whether damages are or are not taxable depends on 1) the type of damage (wages, physical injury) and 2) whether the award for the stated type of damage is compensatory or punitive or both. Since both types of awards may be court awarded, it is wise to get the amounts for each award (for usually one type of damage) separately stated in writing. What is in writing always prevails over what is verbally stated.

Good find, NCcichlid.

Accident policy
Monthly preminum
Physical injury
Compensatory
Not court awarded

honiluv: I try to answer questions a little more broadly so that they are of interest, not confusion, to others. Anyway, the link is great.

Yes, the link is great Tsaeb. Sorry if my post is confusing, but to paragragh it, would make it too personal, so I thought you would figure out what I meant.

To sum it up, the replies helped me to the fullest. Thanks to you, Kelleygirl, and NCcichlid.

honilov asked:

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Do all money that you receive have to be reported to the IRS?

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Only when you volunteer to do so!!


"OUR TAX SYSTEM IS BASED UPON VOLUNTARY ASSESSMENT AND PAYMENT AND NOT UPON DISTRAINT"- Supreme Court Ruling, Flora v. U.S., 362 U.S. 145

Voluntary: 1) given freely without compulsion, 2) having the power of free choice
- Webster's Dictionary

Gotta love when people find a quote and take it out of context.

If you keep reading:
"Our system of taxation is based upon voluntary assessment and payment, not upon distraint. A full-payment requirement will promote the smooth functioning of this system; a part-payment rule would work at cross-purposes with it.

In sum, if we were to accept petitioner's argument, we would sacrifice the harmony of our carefully structured twentieth century system of tax litigation, and all that [362 U.S. 145, 177] would be achieved would be a supposed harmony of 1346 (a) (1) with what might have been the nineteenth century law had the issue ever been raised. Reargument has but fortified our view that 1346 (a) (1), correctly construed, requires full payment of the assessment before an income tax refund suit can be maintained in a Federal District Court.


Affirmed."

The case, by the way, was whether a full payment of all assessed taxes must be made before they can be disputed in court. The ruling? Yes, they must be paid.

Yes, I agree that a full payment of all "assessed" taxes must be made before they can be disputed in court.

But, what if the individul chooses not to "volunteer" to "assess" himself.

One certainly cannot comply to a self assessment unless he chooses to volunteer.

After he volunteers, then comes compliance.

Almost as bad as taking out of context is splitting words.

Earlier in the same paragraph:
"Of course, the Government can collect the tax from a District Court suitor by exercising its power of distraint"

The justices were not saying that people are not obligated to pay taxes. Quite the opposite, they said "of course" the government has the power to collect them. They were simply saying that the way it worked (and still works, more or less) best is for people to file their taxes themselves, not for the government to come knocking on their doors telling them what they owe and collecting it by force.

Liability Is Established by Voluntary Self-Assessment.

When an individual files an income tax return, he establishes liability for the tax by his own action of filing a return and voluntarily assessing himself. The voluntary action of filing is considered to be acknowledgment that he is required to file as a “taxpayer” and that he is therefore subject to the tax. Anyone who admits to being a “taxpayer” is caught in the trap-like definition of the word in Code Section #7701(a)(14):Click

wow... interesting link... "The term 'taxpayer' means any person subject to any internal revenue tax" ... I didn't know that ... really ... I didn't....



But seriously, that link says nothing about who is subject to tax and is therefore a 'taxpayer,' and definitely says nothing about it being voluntary.

The original Constitution didn't allow a compulsory federal income tax system of the sort we have now, but the Constitution was properly amended, and now the tax system is both legal and compulsory.

I'm not going to bother arguing this point any further because I doubt you will be convinced. I just wanted to make sure that no naive person reads your post and thinks they are not obligated to pay their taxes, because I know for a fact (among other ways, through a friend who is a criminal investigator for the IRS) that if they are caught (which they may well not be, as the justices said, the system works because people pay without people banging on their doors) they will have to pay what they originally owed and then some.

[This message was edited by methos5000 on 11-19-03 at 08:35 PM.]

The 13th Amendment makes it very clear that we cannot legally or Constitutionally be forced into involuntary servitude.

As such, we maintain that a human being has an inalienable right to own 100 % of Person and 100% of Labor, including control over how the fruits of his actions are dispensed. A human being has an inalienable right to control the compensation for his labor while in the act of any service in the marketplace – e.g., digging ditches, flipping burgers, word-processing documents for a company, programming computers, preparing court cases, performing surgery, preaching sermons, or writing novels.

A forcible direct tax on the labor of a human being is in violation of this right as stated in the 13th Amendment. If we work 40 hours a week, and another entity forcibly conscripts 25 % of our compensation, then we argue that we have been forced into involuntary servitude – slavery – for 10 of those 40 hours, and we were free for the other 30. If we could freely choose to work just the 30 hours and decline to work the 10 hours, then our wills would not be violated and the 13th Amendment would be honored.

However, Congress, the IRS and their Internal Revenue Code (IRC) lay direct claim to those ten hours (or some stated percentage) without our consent.

In other words, in a free and just society, a society in which there is no slavery of any form:

Human beings are not forced to work for free, in whole or in part.
Human beings are not slaves to anything or anyone.
Anyone who attempts to force us to work for free, without compensation, has violated our rights under the 13th Amendment.

This, of course, is not the state of affairs in the United States of America at the turn of the millennium, in which:


We labor involuntarily for at least four months out of every year for the government.
We are, therefore, slaves for that period of time.
The government, having forced us to work for free, without compensation, has violated the 13th Amendment.

Of course, what follows from all this discussion is that there is an issue about slavery. But it is not the issue politically correct historians and activists are raising. As for reparations, we suspect many of us might be willing to let bygones be bygones if we never had to pay out another dime to the IRS. We often read about how great the economy is supposedly doing. Just imagine how it would flourish if human beings owned 100% of Person and Labor, and could voluntarily invest the capital we currently pay to the government in our businesses, our homes, our schools, and our communities!

For those of you who believe that the 16th Amendment repealed, replaced, modified, appended, amended or superceded the 13th Amendment, you are mistaken. For an Amendment to be changed, in any way, there must be an Amendment that emphatically declares this action. There is absolutely nothing in the Constitution that alters the efficacy of the 13th Amendment in even the slightest way. The 16th merely allowed the government to enter the "National Social Benefits" business where it finances the system with the mandatory contributions of voluntary participants. While all Americans certainly understand the concept of mandatory contributions, they fail to understand the concept of voluntary participation, largely due to a very effective marketing campaign on the part of our central government for several generations now since the Great Depression. The 16th gave the government the power to legally enter a contractual relationship with its citizens wherein the citizen contributes a portion of his labor in exchange for social benefits. In order for both Amendments to peacefully coexist, the contractual relationships in the system created by the 16th cannot be forced upon the citizens. For to do so would be to contradict the 13th completely.

The following hyperlink may not convince you either, Methos!
Source

Careful: I was just reading that the taxes of not all states/cities follow the IRS rules exactly. So it is possible that something nontaxable by the IRS may be taxable by a particular state/city.

How I can file a tax return without waiving my Fifth Amendment protected rights.

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How I can file a tax return without waiving my Fifth Amendment protected rights?

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Should I assume that there is no satisfactory answer to that question?