Ok, before ranting I will say I really DO understand that every taxing authority is being hard pressed to bring in revenue given the current economy and in general going after tax cheats is a good way to do it. I will also agree that my small county (total population 2000) is seeing some hard times and needs every buck they can find. I may not love taxes but I DO understand the need for them.
In my state (MO) we have what they call personal property tax. Don't confuse this with real estate property (land/home). This is where you buy something, pay the income tax on the money used to buy it, pay the sales taxes on it and then once a year pay taxes on it for the right to own it. Things like cars, tractors, trailers, boats, riding mowers, etc. come under this law. When you own it also comes into play. If you own it on December 31 you owe personal property tax on it for that year.
Ok, so what has me going nuts about it? If you read my post back at Christmas my wife and I gave a family in need a mobile home and the community got together and moved it to their property and everyone pitched in to clean, paint and set it all up for them. (Still one of the best things I've ever been involved in.)
The issue is that I removed it from my personal property statement that has to be sent to the county each year to compute my taxes. Mo. treats mobile homes strangely in that it can be owned as a motor vehicle or it can be owned as a home with a deed like any other home. Switching from one to the other is a can of worms no one wants to open and I had it as an unlicensed motor vehicle. (Like holding the title on a car that is never driven so no reason to put plates on it.)
When I took it off my property statement the county clerk asked if I had sold it. (Sales tax wanted.) I explained the entire story and that it was given away as a gift. Apparently that is one of the favored ways people get around taxes, I got a notice I was being audited and to please set up a time to meet with the county clerk. Did it and went to the meeting and again explained what we did.
That wasn't good enough and questions like "Are you certain you didn't sell it for cash under the table", and "Why would anyone give away a home to someone you aren't even related to", and "Is the person you gave it to working off the books to pay for it" as well as several other "suggestions" that we were working together to avoid taxation. The real clincher in their eyes was that I didn't try to take any sort of deduction on my regular taxes for a charitable gift. (I didn't think it was worth the headaches and my accountant said it wasn't worth it.)
I made the horrible mistake of saying they could talk to anyone that helped to accomplish it and gave them names of everyone that had helped thinking that if they talked to everyone it would prove it was a gift and nothing more. Oh silly me! The county clerk has talked to each of them and now wants all of them to estimate how many man hours were involved so the county can estimate the ?value? and adjust the taxes on the folks we gave it to. (These people are not happy I gave the cleck their names.) On top of that, I have to pay all the back taxes/fees for all the years I did not buy license plates. Why? Because we told them we moved it ourselves which means we took it on the road without a license plate. Of course there are penalties involved when you have to go back several years. The clerk said, ?Look at the bright side, I?m not asking the state patrol to issue a ticket?.
No it?s not huge amounts of money (About $300) and I suspect if I wanted I could get an elected type animal involved and argue it but it?s not worth the hassle and time so I?ll pay the fees and fines but dang it just doesn?t feel right at all. Not even a little bit. I know the clerk is just doing her job and I suppose she is right and a lot of folks use ?gifts? to get around paying taxes but at some point doesn?t common sense and fairness come into play? Apparently the answer is no when it comes to a buck. Some days it feels like a guy just can't win. Sigh?
In my state (MO) we have what they call personal property tax. Don't confuse this with real estate property (land/home). This is where you buy something, pay the income tax on the money used to buy it, pay the sales taxes on it and then once a year pay taxes on it for the right to own it. Things like cars, tractors, trailers, boats, riding mowers, etc. come under this law. When you own it also comes into play. If you own it on December 31 you owe personal property tax on it for that year.
Ok, so what has me going nuts about it? If you read my post back at Christmas my wife and I gave a family in need a mobile home and the community got together and moved it to their property and everyone pitched in to clean, paint and set it all up for them. (Still one of the best things I've ever been involved in.)
The issue is that I removed it from my personal property statement that has to be sent to the county each year to compute my taxes. Mo. treats mobile homes strangely in that it can be owned as a motor vehicle or it can be owned as a home with a deed like any other home. Switching from one to the other is a can of worms no one wants to open and I had it as an unlicensed motor vehicle. (Like holding the title on a car that is never driven so no reason to put plates on it.)
When I took it off my property statement the county clerk asked if I had sold it. (Sales tax wanted.) I explained the entire story and that it was given away as a gift. Apparently that is one of the favored ways people get around taxes, I got a notice I was being audited and to please set up a time to meet with the county clerk. Did it and went to the meeting and again explained what we did.
That wasn't good enough and questions like "Are you certain you didn't sell it for cash under the table", and "Why would anyone give away a home to someone you aren't even related to", and "Is the person you gave it to working off the books to pay for it" as well as several other "suggestions" that we were working together to avoid taxation. The real clincher in their eyes was that I didn't try to take any sort of deduction on my regular taxes for a charitable gift. (I didn't think it was worth the headaches and my accountant said it wasn't worth it.)
I made the horrible mistake of saying they could talk to anyone that helped to accomplish it and gave them names of everyone that had helped thinking that if they talked to everyone it would prove it was a gift and nothing more. Oh silly me! The county clerk has talked to each of them and now wants all of them to estimate how many man hours were involved so the county can estimate the ?value? and adjust the taxes on the folks we gave it to. (These people are not happy I gave the cleck their names.) On top of that, I have to pay all the back taxes/fees for all the years I did not buy license plates. Why? Because we told them we moved it ourselves which means we took it on the road without a license plate. Of course there are penalties involved when you have to go back several years. The clerk said, ?Look at the bright side, I?m not asking the state patrol to issue a ticket?.
No it?s not huge amounts of money (About $300) and I suspect if I wanted I could get an elected type animal involved and argue it but it?s not worth the hassle and time so I?ll pay the fees and fines but dang it just doesn?t feel right at all. Not even a little bit. I know the clerk is just doing her job and I suppose she is right and a lot of folks use ?gifts? to get around paying taxes but at some point doesn?t common sense and fairness come into play? Apparently the answer is no when it comes to a buck. Some days it feels like a guy just can't win. Sigh?
