Tax Guru – Ker$tetter Letter

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Archive for April 6th, 2007

Posted by taxguru on April 6, 2007

From the latest issue of Debt Proof Living:

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Earmarking our tax dollars?

Posted by taxguru on April 6, 2007

From A Reader:

Subject: open letter to the irs
I thought you’d appreciate this page that my friend just posted–his ideas about income tax earmarking.



My Reply:

Thanks for sharing that. 

I’ve written about that kind of fantasy – allowing us to designate how our tax dollars are spent –  a number of times over the past decades.  Several years ago, I even ran a poll of readers asking how they would allocate their tax dollars on a percentage basis for the various governmental agencies.

Unfortunately, I have also had to explain on several occasions that such direct control over how our tax money is spent is impossible under our system  of government.  Under the US Constitution, we have set up a representative republic where the smartest and brightest people among us are elected and sent to Washington DC, where they are authorized to take as much of our money from us as they want and then spend it as they, in their superior wisdom, deem it best. 

Most elected officials will allow certain people to assist them in those spending decisions in exchange for campaign contributions (aka bribes); but as far as what the average taxpayer wants his/her money to be spent on, they couldn’t care less.

IRS has no power over how any of our tax dollars are spent.  They are our rulers’ enforcers and are strictly tasked with using brute force to ensure a steady stream of money flowing in to DC.

While I am foremost in favor of repealing the 16th Amendment and abolishing all income taxes, my second best option would be to have a new amendment that adds a schedule to our tax returns that allows each of us taxpayers to earmark exactly where each of our tax dollars is spent.

That will never happen; but we can still dream.

Thanks again for writing.

Kerry Kerstetter



Hi Kerry,

Sadly, I agree with you that congress will never give up control of spending but if you read the proposal carefully, it’s not actually advocating for removing control from the politicians.  Really, all it is recommending is a cosmetic website that will tally “allocations” towards budgetary line items.  The truth is, all budgeting would continue to be in the politicians’ hands (for better or for worse), and all taxes paid would still go into the general fund.  The only real true value of this is increasing taxpayer buy-in and engagement.

It’s the feel-good equivalent of buying a brick on the entry plaza for your favorite ballpark–the truth is, they’re going to spend how they want, and your money doesn’t actually go where you tell it to.  But, the upside is you get a nice memento and a feeling of ownership.

Thanks for your feedback!



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It’s not a dream…

Posted by taxguru on April 6, 2007

Posted in Uncategorized | Comments Off on It’s not a dream…

Section 179 for office condo?

Posted by taxguru on April 6, 2007


Subject: appreciate your advice=sec 179

Dear Sir,
Greetings to you
I heard of your good name.
Appreciate if you can kindly advice me if my purchase of a condo($25,000) for business office can be claimed as sec 179?


Real estate for offices has never ever been considered eligible for Section 179 expensing. This special deduction has always been pretty much limited to movable business equipment.  For example, a motorhome used as an office would qualify, but a permanent structure would not. 

I have a lot of info on what kids of things do and do not qualify for Section 179 on my website

Better still, you should be working with an experienced professional tax advisor.  The fact that you could even consider claiming Section 179 for an office condo makes me very worried that you are going to get yourself into some very deep doo-doo with IRS if you continue to take the reckless and irresponsible path of navigating tax issues on your own.

I hope this helps.  Good luck.

Kerry Kerstetter


Thank you for your advice.
I am planning to seek help from a CPA for my tax return


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