Seth wrote:
- quote -

AGree. Take the expenses anyway, since those funds were expended
legitimately, receipts or no. IRS can't fault you for wanting to
faithfully reflect accurate income.

ChEAr$,
Harlan Lunsford, EA n LA

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In article <Qi_rj.81590$N67.47158[at]bignews5.bellsouth.net> ,
Paul Thomas, CPA <paulthomascpapc[at]bellsouth.net> wrote:
- quote -

Take them and hope for an audit in which they get rejected :-)

Seth

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"Condor" <Condor[at]loosecannon.net> wrote

- quote -





True, but what happens if they - can't support the deductions - are they
then required to count for tax purposes expenses for which they can not
support? I would find it odd though, if the supportable expenses are only
those necessary to max out EIC, but stranger things have happened.




--
Paul A. Thomas, CPA
Athens, Georgia

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D. Stussy wrote:
- quote -

income taxes plus mortgage interest (that exceeds standard of course)
which is enough to lower taxable income to zero, there's no need to go
to extremes and also list real estate taxes and even the second mortgage
interest, or even charitable contributions.

Itemizing deductions and choosing which ones is an individual choice.

Think of it this way. An individual who knows he gave $8000 to the
church last year can't find his receipt and doesn't even need the
deduction.

ChEAr$,
Harlan Lunsford, EA n LA

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- quote -

It's not OK with IRS to omit Schedule C expenses for the purpose of
inflating earned income tax credit. See the linked IRS counsel opinion.

http://www.irs.gov/pub/irs-wd/0022051.pdf


Condor

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"EB" <nobody[at]juno.com> wrote in message
news:dbhsq3tg8k5m49j4n339k6uoo7bef0p18l[at]4ax.com...
- quote -

NO, it is not legal to omit claiming legitimate deductions. However, the
choice between the standard deduction or itemizing is an election that any
taxpayer may make (with the one limitation on those filing as MFS that both
returns must choose the same option).

You can't claim "some" itemized deductions. You claim all or nothing
(standard deduction as available).

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EB wrote:
[snip]
- quote -

This issue pops up on this board almost every year. Other than
some part of the code that requires you not distort income, I
have never seen an argument that would prevent one from
selectively reducing itemized deductions. Besides, how can the
average taxpayer even remember exactly what they are entitled to
deduct. And.. in addition.. Was that crystal goblet I donated
worth $300 or $20? Where is that receipt for my church
contribution? What happened to my mileage log I was keeping?

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On Sat, 9 Feb 2008 13:33:51 EST, Alan <sfcnm-mtm[at]yahoo.com> wrote:

.... <much of original text snipped> ,,,

- quote -

Then am I correct in assuming that it is "legal" to omit claiming
legitimate deductions? That is, deductions are discretionary (for the
taxpayer to claim), and not mandatory? (as contrasted to income
declaration, which is mandatory).

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EB wrote:
- quote -

I.e., to get a minimum of $300 plus $300 for each CTC qualifying
child you had to have at least $3000 of earned income or a
positive tax liability without counting the CTC and EITC AND GI
had to exceed the sum of the basic std ded. plus personal
exemption. The Senate added the clause that changed $3000 of
earned income to at least $3000 of earned, SSA and/or VA income.

As such, your analysis is correct. Without any earned income,
SSA benefits or VA benefits to pass the $3000 test, a taxpayer
would have to have a positive tax liability (note that this has a
very specific definition. e.g., it excludes self-employment
taxes) and GI in excess of the std deduction plus personal
exemption.

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Just a simple question on the "Final version (Enrolled Bill) as
passed by both Houses" of this bill. It can be found on the Library
of Congress THOMAS server:
http://thomas.loc.gov/cgi-bin/query/.../~c110A4gWU6::

Question:. Arranging to qualify under (b)(2)(B)(ii):

I'll quote the relevant parts of the bill here; the assumed taxpayer
scenario follows:

(b)(1) IN GENERAL- In the case of a taxpayer described in paragraph
(2)--
(A) the amount determined under subsection (a) shall not be
less than $300 ($600 in the case of a joint return), and
(B) the amount determined under subsection (a) (after the
application of subparagraph (A)) shall be increased by the product of
$300 multiplied by the number of qualifying children (within the
meaning of section 24(c)) of the taxpayer.

(2) TAXPAYER DESCRIBED- A taxpayer is described in this paragraph
if the taxpayer--
(A) has qualifying income of at least $3,000, or
(B) has--
(i) net income tax liability which is greater than zero,
and
(ii) gross income which is greater than the sum of the
basic standard deduction plus the exemption amount (twice the
exemption amount in the case of a joint return).

Assume that (b)(2)(B)(ii) is true for my hypothetical taxpayer,
that his income is all from interest (so not "qualifying income" under
(b)(2)(A)), and that his AGI is less than $75,000. Suppose this
taxpayer's itemized deductions are just large enough to bring his
income tax liability to zero. But realizing that by not claiming some
of those itemized deductions (e.g. some of his medical expenses) he
would incur a very small tax liability of $10, say. Then under these
circumstances would he qualify for the credit of $300 ($600 for joint
return) plus $300 x (qualifying children) under the terms of (b)(1)(A)
and (B), quoted above, thus earning a rebate check?

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