When the war in Iraq started, or at any rate when it escalated into a full-blown invasion, I gave notice at work. My intention is to reduce my income below the threshold of taxation so as to stop paying income tax to the U.S. government.

I’m writing this to explain myself to my friends, who will notice a bit of a change of lifestyle in me in the coming months. Also, I write because writing calms my nerves, and I’m a bit nervous about this. I’m starting on an experiment, and I’m not sure where it will take me.

I take on faith the philosophical speculation that each of us has free will. It does seem that a lot of the evidence lately has been going in the other direction, but that doesn’t stop me. If I’m right, I have the opportunity to try my hand at the controls. If I’m wrong, I couldn’t change my mind if I wanted to, no?

I also believe that because I have free will, I’m responsible for the actions I choose — I cannot rent out my conscience to another person, army, government, corporation, majority or law-book. It’s not just unwise, given the history of the last century, but it is literally impossible. Each of my decisions is a decision I choose based on what I anticipate the consequences will be. I may take into account what the law says, or what the Bible says, or what the movie critic for the Chronicle says, but ultimately I’m the one making the choice.

If I ignore my conscience, I’m committing a particularly dangerous form of suicide — choking off the guardian of my free will and leaving behind the sort of dangerous robot who’s spent the last hundred years swerving from cradle to grave building gulags and genetically engineering more evil forms of smallpox. Not for me.

Then what of my choice whether or not to pay the federal income tax? The government demands taxes from me and doesn’t say I have the option to pay them or not. But it’s not that simple. I’m choosing to earn income, knowing that for every dollar I earn, I’m turning over certain of its cents to be spent by the U.S. government.

A government:

• which pretends to represent and protect its citizens, and yet keeps a vast number of them prisoner, and considers most of my friends to be in violation of its laws and deserving of jail time. (I’d shoot a dog if it were that dangerous to the neighborhood.)
• which is a comfort to those crooks who think that stealing someone else’s livelihood by devising a clever law is nothing to be ashamed of.
• which uses “democracy” as its cover of legitimacy, but which cannot be bothered to correct itself or even blush at its own outrageous violations of democratic principles.
• which can be pretty damned sanctimonious about how deliberately taking the lives of innocents in order to further some political goal is unquestionably evil, but can’t bring itself to consider that other ways of saying “terrorism” are “Hiroshima” or “shock and awe.”
• which is every year more cowardly in war — preferring that hundreds of innocents die from bombardment rather than that an embarrassingly star-spangled casket come home.
• which has never seen a human endeavor that shouldn’t be enhanced with taxation, regulation and bureaucracy. This government, which takes half the price of your Burning Man ticket, uses that money to harass you on the playa, and still ends up turning a profit on the hard work of the Burning Man volunteer community.
• which will condemn a brutal dictator or contract to sell him arms and implements of torture with the same sweet lyrics of liberty.
• which outspends on its military several of its largest competitors for the honor combined, stealing from all of us in the process to create the biggest hammer the world’s ever seen so that its leaders can see the people of the world as a set of nails that need driving.
• whose judicial system would rather see a hundred innocent people convicted than one incumbent defeated.
• which, in the 21^st Century, still condones torture when it wants to.
• which dangerously pretends to offer its subjects and employees shelter from the demands of their own consciences, of common sense, and of respect for human dignity.
• which confuses everyone’s inalienable rights with certain privileges granted to citizens who can afford good lawyers.
• which arrogantly insists that its word should be international law, and that it should be at the same time immune from that law and its judge, jury and executioner.
• which acts as though the word “freedom” is just the sound of its theme song (or a type of fried potato), and which considers civil liberties to be loopholes to be evaded rather than treasures to be jealously guarded.

I could go on, but it’s starting to be fun. This is serious. With all of that in mind, how can I continue to choose to fund this government when I have the alternative not to? Do I need money so badly that I’m willing to shovel coal into the monster’s belly for it?

Turns out, the answer’s “no.” For me, it isn’t worth it.

I may or may not decide to devote myself to opposing this government, but the least I must do is to stop supporting it:

It is not a man’s duty, as a matter of course, to devote himself to the eradication of any, even the most enormous wrong; he may still properly have other concerns to engage him; but it is his duty, at least, to wash his hands of it, and, if he gives it no thought longer, not to give it practically his support. If I devote myself to other pursuits and contemplations, I must first see, at least, that I do not pursue them sitting upon another man’s shoulders. I must get off him first, that he may pursue his contemplations too. See what gross inconsistency is tolerated. I have heard some of my townsmen say, “I should like to have them order me out to help put down an insurrection of the slaves, or to march to Mexico; — see if I would go”; and yet these very men have each, directly by their allegiance, and so indirectly, at least, by their money, furnished a substitute.

―H.D. Thoreau

I’ve been wrestling with this decision for several months now, with my conscience ganging up with Thoreau to keep me honest with myself. Like most Americans, I support this government and its war — I have only to look at my W-2 form to see how much (box #2, for those of you keeping score at home).

But I am absolutely unable to give any moral support to the U.S. government, and that I have been a source of financial support to that government has been a stone in my shoe. Ultimately I have had to conclude that my lack of moral support doesn’t amount to much, that if I am to follow my conscience I have to walk the path between my money and where my mouth is.

The U.S. government is imprisoning the harmless, butchering the innocent, and ruling like a criminal syndicate over a country that dreams of itself as a democracy. And it’s doing this in part because I and people like me are paying for it. I can be of better use to my country than this.

I intend to withdraw my financial support as much as I can, and I plan to do so lawfully. Not because I have great respect for the law (hating the leviathan as much as I do, it would be strange for me to revere its droppings). It’s a practical matter. For one thing, if I’m arrested for something, I hope it’s something better than tax evasion. Also, it would be counterproductive in the course of trying to keep from financially supporting the government to give it an easy excuse to seize my property.

I hope to reduce my taxable income, both by stopping the flow of my income and through whatever clever deductions I can find, to the point where I pay no federal income tax this year.

So how will I get by? Much more frugally, of course. I’m going to have to give up most of the tasty luxuries and expensive habits that my salary allowed me to enjoy. I may end up having to move out of the area. I haven’t figured it all out yet. I may try to land a volunteer job that covers some food and lodging. I may leave the country. I’ll probably start selling off a bunch of my stuff and live on what I’ve been able to save from already-taxed income for a bit (although I’m aiming to be able to hit a stable point of being able to live below the tax-line without supplemental income of any sort — ultimately, of course, I’ll have to do this or I’ll have to give up on the experiment).

There are other ways the federal government gets its hands on my cash — through taxes on such things as gasoline, beer, Burning Man, etc. I’ll be reducing or eliminating these contributions as well.

It’s an experiment. I’ve come to believe that I can live without giving Cæsar his due, even by Cæsar’s rules. If Cæsar changes his rules, or if I’m wrong, I’ll have to reconsider my plan. But if I’m right, my conscience tells me that I must not continue to feed the government.

I anticipate several objections to the train of thought that has driven me to these conclusions, and I have not answered these, nor, of course, the ones I haven’t anticipated. I sometimes like to argue politics and philosophy, so if you’re so inclined I’ll probably join you. As a shortcut, though:

• Yes, I really do think the U.S. government is that bad. Yes, I know there are plenty of good candidates for worse ones.
• No, I’m not blind to what a complete rat bastard Saddam Hussein is.
• Yes, I know that my company may just hire someone to replace me who may end up paying just as much taxes as I would have. Answer this objection without invoking the Holocaust for 50 extra credit points.
• Yes, I’m aware that at least some of the tax money the government takes is spent to perform life-saving surgery on widows and orphans and baby kittens, to repair sidewalks, and whatnot. Thoreau again:

  “It is for no particular item in the tax-bill that I refuse to pay it. I simply wish to refuse allegiance to the State, to withdraw and stand aloof from it effectually. I do not care to trace the course of my dollar, if I could, till it buys a man or a musket to shoot one with — the dollar is innocent — but I am concerned to trace the effects of my allegiance. In fact, I quietly declare war with the State, after my fashion, though I will still make what use and get what advantage of her I can, as is usual in such cases.”

• No, I don’t think I can continue to earn my salary and then just donate most of it to charity (because of the Alternative Minimum Tax). If you know otherwise, please let me know.
• Yes, I’ve considered that in some utilitarian way I might have been able to do more good by giving Cæsar his due and then using the remainder of my wages to oppose him, but I couldn’t convince myself of this. I’d be interested in your thoughts, though.
• No, I don’t think I’m some kind of goddamned saint.
• Yes, I realize that as a childless person without debt, in good health with some money in the bank, I’m particularly advantaged in my quest to assert my conscience in this way.
• Yes, I’d love some additional tax advice that doesn’t involve weird legal theories the IRS doesn’t recognize.
• No, I don’t really know anyone else who’s doing this. Although I’m starting to try to reach out to other tax resisters, most of them are using civil disobedience rather than income reduction.

I’ll stop there. I mostly wanted to explain what I’m doing to those of you who might be curious and for those of you who will notice me changing the way I go about my life in the coming weeks. I hope for your understanding and support, as well as your always good-humored mockery.

I made my first real stab at running the numbers today to see if I can reduce this year’s taxes to zero.

I’m starting with imperfect numbers, since I haven’t received my last paycheck yet and don’t know things like exactly how much income I’ve earned so far this year or how much of that was diverted pre-tax to things like health costs and retirement. Also, I’m using the 2002 tax return as a guideline, and Congress may change the tax law between now and the end of the year.

By making some fairly simple changes — putting $3,000 of this year’s income into an IRA and using another $3,000 on tuition (maybe I’ll take those intensive Spanish courses I’ve been meaning to take) — I can reduce my income tax payment to slightly over 5% of what I paid last year. This will also, of course, be a big drain on the money I’d otherwise be using to live on.

(The IRA, like the 401k, merely puts my taxes off for another time. I haven’t really thought this through. Will I be able to withdraw from retirement accounts at a slow enough trickle so that I would still be able to stay under the taxable threshold if I remain this crazy at retirement age? Do I have any confidence that the government I face in my 70s will be any more tolerable than the one I face now?)

Getting rid of the last 5% will be more tricky. Turns out it’s much, much easier just to not earn the income in the first place than it is to earn it and then try to unearn it somehow. Anyone know someone who’s good at this sort of thing who might be willing to help out an accounting novice like me?

Uh oh. I just got my W2 from my former employer in the mail today. According to it, I made about $5,000 more last year than I thought I did.

How did I screw up so badly? When I was trying to estimate how much I made at my old company, I used the accounting on my last pay stub, which included compensation for my last span at work and also for my accrued vacation time:

I assumed that the $24,499.98 included the $5,794.96. Way down at the bottom of the pay stub was this ambiguous note:

^** YTD figures as of the last payroll processing

Which, I now understand, means that the $24,499.98 was the total before adding the $5,794.96 — which changes things quite a bit. Why they chose to report things in this bizarre and misleading manner, I don’t know. But the upshot is that I was relying on the wrong figure in doing my calculations. Because I similarly underestimated my 401k and other deductions, the actual difference between my estimate and reality is closer to $5,000.

$5,000 is enough to make a really big difference in my plan to eliminate my federal income tax burden. Back-of-the-envelope calculations suggest that instead of getting 100% of my paid taxes back as a refund, it may be more like 75%–84%.

If I had known the accurate number back early enough in 2003 I could have adjusted (for instance by spending $3,000 or so of that surplus on additional university classes). This, and a hefty IRA contribution, would have been enough to keep me below the line.

As it is, I can still make the IRA contribution, but that isn’t going to be enough, and it’s too late to do anything else that will make a difference to my 2003 numbers.

I’m of course embarrassed and very disappointed by this. For months now I’ve been crowing about how I’m not going to pay any federal income tax for 2003, and now it looks like I have to eat that crow. That, and vow to keep closer tabs on my income in 2004.

I’ve taken a post-anniversary break, spending my time with family and friends in my ol’ hometown. I got back home and those last couple of forms I needed were in my inbox, so I finished up my tax returns. Here’s the damage:

As I’ve mentioned before, I failed to reach my target of zero taxes to the feds this year. I got back 83% of what was withheld and ended up contributing $932 to Washington last year in income tax.

I hadn’t been paying much attention to my state tax situation, and so I didn’t have a very good idea until today of how I’d do there. A little better as it turns out — I get about 91% back.

Like most Americans, I paid more in the payroll tax than in federal income tax. In my case, almost five times as much.

I start another contract job today. I’ve told my manager about my peculiar employment restriction — that is, that I can’t earn enough to put me over the tax line.

So I need to figure out where that line is. Because my crystal ball is in the shop, I’ll start by assuming that the tax law remains more-or-less the same this year. It would be dirty pool if Congress were to change the rules in the middle of the year when it’s too late for me to adjust, but there’s not much I can do about that.

The cornerstone of my method is the retirement savings credit. If my Adjusted Gross Income is under $15,000 and I’ve put $1,360 or more into an IRA, that eliminates my federal income tax entirely. So I can earn at least $16,360 (the money that goes into a traditional IRA doesn’t count toward my Adjusted Gross Income).

But why stop at $1,360? I can put as much as $4,000 into a traditional IRA this year, tax-free. So that makes the maximum $19,000 ($15,000 + $4,000). And IRAs aren’t the only thing that you get to omit from your Adjusted Gross Income.

If I want to, I can also take up to $4,000 off the top if I spend that money on classes at a qualified college or university. So that brings me up to $23,000, assuming there’s $4,000 in classes I want to take this year. There’s a good set of night classes and such offered in my area through U.C. Berkeley Extension, so I just might take advantage of this.

Because I’m self-employed, I can also deduct the cost of my health insurance, which (if I can’t find a better deal this year) is a whopping $3,960. So that boosts my maximum up to $26,960. Now if I’m earning somewhere in that ballpark, I’ll be paying upwards of $4,000 in FICA, and I can take half of that as a deduction as well. That makes my maximum something like $29,000. But I’ll probably pick up some income from miscellaneous small-change sources along the way, too (interest on my savings account, amazon.com referral fees, sales of The Annotated Hasheesh Eater), so I’d better lower that by $1,000 or so just-in-case.

So I’ll say that $28,000 is my max-out line. I’ll probably want to stop a bit short of that because I don’t know what Berkeley will be offering in the coming year or how much interest I’ll have in taking classes.

A few weeks ago I moaned and groaned about FICA and how I’m reluctantly paying up this year (to the tune of about $2,500). I gave myself three choices for the coming year, and if I go ahead and max out my income that cuts one of the choices out:

1. I could decide I don’t mind paying it
2. I could decide to evade it legally by not earning above-ground income
3. I could decide to evade it illegally by not paying up

I’m having a hard time choosing. Maybe I’m just looking forward to milking the dilemma for a few more Picket Line posts before I make up my mind.

A new Picket Line reader writes in:

I just came across your annual picket line update. First let me say that you have a great deal of respect from me for doing what you are doing. I happen to be a supporter of the current military operations we are involved in, but that does not stop me from being able to appreciate someone who is able to take action to support their ideals.

I realize that if everyone who was against the war(s) we are in right now followed your example we would have to pull the troops home (and our economy would drastically be reduced) but it would be a very honest and powerful form of protest. Too many people seem to join street protests not because they actually want to create change, but just to be part of the party for the day. They vent their feelings, but then go right back to their lives once the cameras are off.…

Yesterday I wrote that I hoped periodically to tally up the interest, penalties, and miscellaneous costs of my self-employment tax resistance technique as a way of trying to determine whether the benefits are worth the costs.

But it’s not a simple matter to determine what the costs are. You can’t simply add up all the penalty & interest values because a unit of money doesn’t have a constant value over time.

For example, if I refused to pay $100 in taxes in 2006 and then the IRS seized $100 from me in 2008, we wouldn’t be “even” because $100 was worth more in 2006.

The IRS adds a generous (to them) interest percentage, and penalties to boot, to any delinquent payments, so as to keep the money value decay from working to the advantage of folks like me. But, even so, I’m economically naïve enough that I’m not sure how best to make the calculation.

My best guess is to start by trying to find some more-or-less fixed percentage (average rate of inflation? typical savings account interest rate?) over the span in which I’ve been resisting, and use that as the money-value-decay coefficient, or, seen from the other perspective, the increase in dollar-denominated-value over time of non-relinquished assets. Let’s call this d, such that a 4.0% annual rate makes d=0.04.

So if I pay the IRS $100 in April, 2006, in April, 2008 that makes me behind by $100×e^2d (if d=0.04, $108.33). If, on the other hand, I don’t pay, the IRS charges a penalty of ½% monthly (on the original assessed tax only) and some interest percent i (say, 6% = 0.06). That comes to, hmmm… something in the neighborhood of $100×e^2×0.06 + 100×.005×2×12 = $124.75. So if they seize that, I end up losing not $24.75 more than I would have if I’d just coughed up the $100 from the get-go, but $24.75−$8.33 = $16.43.

(It occurs to me that those tax resisters who apply to the War Tax Resisters Penalty Fund for reimbursement of interest and penalties can actually end up ahead of the game this way!)

This calculation can get really complicated, since estimated taxes are due quarterly, penalties are assessed at various times, the interest really applies to both the compounding original amount plus the penalties as they accumulate, and neither d nor i are constant. Also, the penalties have a cut-off point at 25% of the tax after which they stop accumulating, so I have to remember to figure that in.

There’s also some percentage chance that they’ll never collect. Surprisingly frequently, the IRS just drops the ball, even if they know there’s a tax liability and they know where to find the assets. If they fail to collect, the costs of this method go from significant to less-than-zero. Unfortunately, for me anyway, this is something I’d only know in retrospect.

To the costs, I need to add some additional ones that are hard to predict: If the IRS freezes my checking account and I have checks outstanding, they’ll bounce and I’ll need to scramble to make sure my bills get paid. This may involve charges for wiring money, bounced check fees on both ends of the transaction, and that sort of thing. Possibly, the financial institution that gets the levy will try to pass the expenses of dealing with it on to me (I haven’t read the fine print, but it wouldn’t surprise me).

And this reminds me that these calculations will be different for people in different situations. For some people, the costs of bounced checks or frozen assets could be severe — maybe essential services would be cut off or this would cause conflict with a landlord or legal problems or would lead to other penalties. On the other hand, for someone who has few assets, or at least few that are in the form of accounts or paychecks with their social security number attached to them, the likelihood that the IRS will fail to seize anything increases.

There isn’t going to be a one-size-fits-all cost/benefit analysis for this sort of thing.

If I want to cover all the bases, I should add that this is also costing me some time — for instance, time I’m spending to come up with calculations like these — and that I could conceivably be doing something better with my life than reading IRS regulations and trying to remember compound interest equations.

Okay… on to the benefits. What are some of the things I gain from this form of tax resistance?

I say “this form” because I’m using multiple tax resistance techniques:

1. I’ve reduced my income and made efforts to qualify for a variety of tax deductions and credits so as to legally eliminate my federal income tax liability.
2. I’ve made some lifestyle changes (reducing my use of gas-powered vehicles, home-brewing beer) to legally lower my federal excise tax liability.
3. I’ve stopped paying self-employment tax, so as to illegally resist that tax.

Only technique #3 puts me at risk of the costs I’ve been trying to estimate above. For the other two techniques, I’m confident that the benefits exceed the costs, though I haven’t done anything formal to try to quantify this.

What are the benefits I get from exercising technique #3? Off the top of my head:

• Making the tax collector seize the money from me, rather than handing it over voluntarily, more authentically represents the sort of relationship I feel we have.
• I reduce that horrible feeling of complicity I used to feel when I would write a check to the U.S. Treasury.
• By resisting taxes in this way, I’m joining in solidarity with other tax resisters who are taking such risks.
• I’m learning first-hand about the IRS tax enforcement techniques, which is something I can share here at The Picket Line for the benefit of other resisters and potential resisters.
• The government may end up with less money in the end, and therefore less to spend on its nefarious activities, than it would if I just handed over the money voluntarily. That is to say, even if they seize extra money from me in penalties and interest, this may not cover the costs of enforcement.

This last point is going to need its own break-down. It’s hard to estimate how much it costs the IRS to track down and seize delinquent taxes, but we do have some data points:

• The Taxpayer Advocacy Panel issued a report last year that said it costs the IRS between 45¢ and $4.79 every time they send out one of their “Balance Due” notices, and that “the cost of administering a tax module through a cycle of several notices is significantly higher.”
• When the IRS started outsourcing their collection process to private collection agencies, these agencies demanded 22–24% of the take to cover their expenses and profits. And note that the IRS only outsources the easy cases, in which there aren’t disputes over the tax due, in which nobody is trying to negotiate an Offer in Compromise, and in which persuasion and not levies & liens are the tools of the trade.

My resistance might also encourage others to take up tax resistance, or might discourage people who ordinarily pay taxes only because they perceive it as the social norm. It’s also true that if there weren’t people like me who decline to pay, the IRS would not have to spend any money on its complex collections apparatus, so I help contribute in a small way to that larger drain on their budget. But at this point things become so speculative that I don’t care to try to attach a dollar value.

I should look at whether some of the benefits I listed above could be achieved at a lower cost. For instance, by resisting taxes illegally I stand in solidarity with other tax resisters who are defying the law. But I would be resisting just as illegally by refusing to pay $100 as by refusing to pay $1000, at less risk.

At the end of this process, I should have an expected cost on one hand, and a set of benefits on the other, and I should be able to judge “is it worth it?” That is: worth it compared to what else I could have gained at that cost. Could I have done just as well for me, my conscience, and the world at large by donating that much money to charity? Could I have gotten a better “return on investment” by doing symbolic, partial tax resistance, and using my time, money, and energy in other ways than in a frontal assault on the IRS?

For the reasons I’ve given above, I think it’s not going to be that easy. The costs are very hard to determine precisely ahead of time, and even in retrospect. The benefits are even harder to quantify. It’s going to come down to gut feel, informed by, but not determined by figures and equations.

A Picket Line reader, “D.W.,” wrote in response to Monday’s entry:

I am quite surprised to hear that you have made no plans to protect your assets. With all due respect, I don’t really understand the point of what you are trying by being headstrong and not paying the taxes you owe, yet not having an equally strong plan to protect yourself. They will get to the money that you leave out there sooner or later… and I am guessing sooner since they have now gone into levying mode.

I have heard stories where people withdraw all of their money from their accounts including IRAs (which I believe can be done at anytime), savings, HSA, etc. leaving nothing left to take. They will still assess penalties for withdrawing from tax advantaged accounts… they just add it to the bill… the bill you aren’t paying. These people will often lease a car too and make cash payments… or buy a car that is too cheap for them to bother with. I have also heard of people selling their homes in favor of apartments for which they pay the landlord cash or with a money order available at any convenience store. There are links all over the internet about how people do stuff like this.

As an employee with an annual W-2, I have no choice but to pay whatever they say, so I’m no expert in this sort of thing. But not having some kind of plan set up just means they take your money without you having to write a check… which I would bet they will do within the next month or two, making your whole exercise somewhat futile and more painful than need be.

I wrote back to D.W., noting that as I don’t own real estate or a car and don’t have a significant amount of tangible property of any great value, I’m not in much danger of property seizure. It’s mostly bank accounts, some stocks & mutual funds, and retirement accounts that are in danger.

I could sell the stocks/mutual funds and withdraw all the bank account money, but I think the retirement accounts are a tougher nut to crack. I was under the impression that if I were to withdraw those, I’d be hit with a penalty that would be assessed immediately, and that this (along with some tax percentage) would be withheld by the brokerage from whatever I withdrew, and handed over to the IRS.

Since then, I’ve checked the fine print at the brokerage that holds my retirement accounts and this is what they say:

IRS regulations require [us] to withhold federal income tax at the rate of 10% from your total withdrawal unless your withdrawal is from a Roth IRA, or unless you elect otherwise. You can change your tax withholding percentage by entering any whole number between 10 and 99 or by electing not to have federal tax withheld (provided that you have supplied [us] with a U.S. address). [emphasis mine — ♇]

My brokerage would, however, file a 1099R with the IRS indicating that the withdrawal had taken place. Theoretically, though, I could quickly withdraw everything and bury it in a treasure chest on a desert island. The IRS would still consider the total amount I withdrew to be taxable income (which would wreck my staying-under-the-tax-line plan) and would not only tax it as such but would add a 10% early-withdrawal penalty on top of that. However, I could continue to refuse to pay, and they would then have a hard time finding any assets belonging to me unless they got ahold of my treasure map.

They might respond by trying to seize any payments being made to me by third-parties, which would mean that I’d probably need to do some careful dancing from client to client to keep ahead of their liens (or work solely in the underground economy, but that brings up a whole other line of hypotheticals). They might also respond by asking a court to force me to reveal or surrender my assets or face criminal penalties. I don’t know for a fact that they can do this, but I’d be surprised if they couldn’t.

That wouldn’t be the end of the game, of course. As long as I’m doing theoretical civil disobedience, I might as well contemplate going all the way and choosing jail time rather than complying with discovery. At any rate, that strikes me as one possible conclusion of this path.

D.W. since has followed-up on his earlier email (he’s given his blessing to my reprinting them here, by the way), highlighting the incompatibility of my two approaches to tax resistance (legally eliminating my federal income tax by qualifying for credits in a way that exposes my assets; illegally refusing my self-employment tax in a way that makes my exposed assets vulnerable to seizure), and proposing another method of tax avoidance — making a living from returns on capital rather than from earned income:

Your response about trying to resist taxes legally does not fit together well with your decision to withhold payment. Withholding payment is in itself illegal. To me, you cannot be both a tax avoider (perfectly legal) and a tax evader (illegal). By choosing not to pay self employment taxes you have made yourself an evader. The actions of an evader are far different than the actions of an avoider. Evaders hide assets, avoiders shelter money in tax deferred accounts. With all due respect, I think you need to make a choice about how you go about minimizing your tax bill.

On the other hand, yesterday’s post does have merit on the grounds of costing the IRS money to levy. It is certainly cheaper for them if everyone just includes a check. Also, by not paying and forcing a levy you are generally slowing down the IRS in their efforts to catch others. So, there is some benefit to society at large though it is difficult to quantify. Of course, you also have to ask yourself if you want to help society at large. To me, society is mostly full of idiots who can tell you what happened on American Idol or Desperate Housewives but couldn’t find North American on a map, let alone understand how destructive a vote for Hillary could be. Are these the people you want to protect by gumming up the works at the IRS? Because it definitely costs you something to do this… though as your post said, it is hard to determine how much.

Just a few others thoughts I had…

You are not alone in not wanting to pay taxes… though I think you are well in the minority by being an evader. There is a whole group of people out there who also don’t want to pay taxes, and they don’t, but they do it legally… people with capital. If you can accumulate enough capital, you could potentially live the rest of your life with little or no work and paying little or no tax. Capitalists are often responsible for electing public officials and these public officials pay them back by giving them a “free ride” on their investments. There are so few people with capital (savings) that it doesn’t impact the Treasury much to offer benefits to this group.

For instance, if you have a portfolio of $500k you can invest it in tax managed mutual funds (VEA, for instance). These funds make an effort to offset any realized gains with realized losses. So your portfolio may grow to $550k in one year, but you owe nothing.

Now, you may like to take the $50k out at some point. Well if you do, you are already ahead of the game… there is no self employment tax on the $50k, no medicare, etc. All you will owe is the 15% on whatever is over an above your basis. Since your basis is approximately $.90 of each dollar in this instance, you have a $5k profit so you owe $750, yet you are spending $50k. If you have other investments in a loss position, you can sell those and fully offset the $5k bill. This benefit lessens as time goes on as your basis lowers, but it is one of many things that can be done.

Also, you can “bunch up” your deductions. For the year that you take out the $50k, prepay your property taxes for the following year… then take the standard deduction the year after that (since you won’t have a property tax deduction). Donate to a donor advised fund that year too (more on that later). I know you said you don’t have a house. I recommend you buy one. A paid for house is one of the best tax shelters you can get… and it is not for the interest deduction.

Here’s why… you pay rent now. In order to pay that rent you need to generate income, which counts toward your taxable income line, which you are trying to keep at a certain level. Wouldn’t it be nice to not have to pay that rent and the taxes associated with it? Or, in your case, wouldn’t it be better to make that money and spend it on something other than rent? With a paid for house, you are essentially paying yourself with tax free dollars. Hillary Clinton has talked about taxing this “imputed rental income”… that is how big this benefit is. Even if you have to pay tax on income in your quest for capital, the long term benefits of this “tax free imputed income” far outweigh the taxes paid in accumulating the capital to buy the house.

It is even possible to acquire capital without paying tax along the way… you can take your IRA money and invest it in a business. Or you can start a small business with a loan and sell it later for a capital gain and only be subject to the 15% tax. To get money out of the IRA, the IRS has what is called a 72(t) exception. If you follow a certain withdrawal formula, you avoid the 10% penalty. If those withdrawals are less than your taxable income goal, you will owe no tax at all. The younger you are, the lower the required withdrawal amount will be. So you have money that is invested and growing, which you paid no tax on to begin with, coming out of the account without penalty and with no tax. It doesn’t get much sweeter.

Also, you may want to keep in the back of your head the idea of a donor advised fund, such as those available at www.schwabcharitable.com. If you find yourself owing some tax, you can donate money to this fund and get an immediate deduction. They will then hold the money in an account for you until you are ready to send it to a charitable organization. The money will grow tax free in one of several “investment pools” you can choose. People sometimes use these funds to travel with groups like www.livada.org which build houses for orphans in various parts of Europe. They will use your donor advised fund money to buy your tickets. People will often “extend their trips”… spending a week building a home for an orphan then spend time traveling around Europe. Lots of organizations like this exist.

Even better, the DAF accepts appreciated stock. You will get a deduction for the full amount of the stock you donate and you will owe no tax on any unrealized gains ever (as long as the stock was held for at least a year). Of course, these options are only available to avoiders. The IRS will take your house, your IRA, probably even your DAF if you evade. They can’t touch you if you avoid. The road for legal avoidance has already been paved by the capitalists who have put the government freaks we have in to power. You too can benefit from their work.

Again, I am not an expert in this stuff, though I know more about avoiding than evading. You may be able to work some of this stuff into your plan and maximize the amount of money you can spend while minimizing or eliminating money sent to the IRS and keeping yourself out of trouble.

This is certainly interesting stuff. I’m going to have to look more closely at these options, particularly the 72(t) gambit. I hadn’t heard about the possibility of investing retirement account money in one’s own business — in fact, I’d heard this was prohibited — but it looks like it’s possible with some restrictions.

The idea of using a DAF to take a hemi-charitable vacation is also appealing, though it seems like exactly the sort of thing the IRS tends to prohibit. Perhaps if I learned enough about it, I could finesse the loopholes. Currently, itemized deductions like the charitable giving deduction aren’t particularly useful to me, but if I were pursuing a different tax avoidance method, they might be.

I agree that there’s a difficult-to-resolve tension in tactics between my legal tax avoidance techniques and my illegal tax resistance ones. They aren’t particularly compatible. Income tax avoidance has been working so well for me that I’m hesitant to break it off in favor of a fully-outlaw strategy, but then the self-employment tax becomes a hard nut to crack.

The key, as D.W. suggests, may be to get to a point where I don’t have any “earned” income at all, but live off capital instead. That may be a goal worth shooting for, and it’s certainly a nice job if you can get it.

Yesterday, prompted by some emails from a Picket Line reader, I imagined some alternate paths in which my tax resistance experiment could go.

Today, I’ll list a few more, and I’ll take a poll: if you were me, which path would you choose?

1. I stay on the path I’m on now: keeping my income low, squirreling away money in various tax-advantaged accounts, and qualifying for tax credits so as to legally eliminate my federal income tax liability, while refusing to pay self-employment tax and putting up with the added costs and inconveniences the IRS imposes for this and the knowledge that the IRS will probably be able to seize all they want from me in the end.
2. I do whatever I can to withdraw everything from my retirement accounts and my Health Savings Account, knowing that this makes me liable to additional taxes and penalties, and I also clean out any other bank accounts or brokerage accounts I have, and I squirrel away the cash in some sneaky way so the IRS can’t find it. I give up on trying to live under the tax line and just refuse to pay from the get-go. If the IRS puts a lien on checks from a client or other income source, I cut that source of income off as soon as I’m able. If they drag me to court and try to compel me to disclose my booty, I defy them and laugh all the way to the pokey.
3. I consult with a tax specialist, convert my sole-proprietorship into a more formal and distinct business, sell off a majority of this business to investors who agree that the business should attempt to pay no federal taxes (assuming I can find any such), pay myself next-to-nothing so as to eliminate my earned income (and therefore my self-employment tax), perhaps invest my IRA in this business, consider buying a home rather than renting, and in general, begin to structure my life in such a way that capital, loans, and investments are doing the heavy lifting rather than earned income. Give up on resisting the self-employment tax in favor of trying to no longer have any self-employment income to report.
4. Give up on earning income in the above-ground economy and insist on only underground economy work. This will probably require a lot of energetic networking and searching, and may mean earning less attractive wages, but would mean that I could earn as much as I’d like without the income being visible to the IRS.
5. Give up on the self-employment tax resistance and be satisfied with having eliminated my federal income tax liability. Go ahead and cut my quarterly checks to the U.S. Treasury, and devote the time and energy I was devoting to the self-employment tax to more-fruitful pursuits.
6. Wait, I have an even better idea, which I’ll disclose in the comments to this page…

Thursday night I spoke at a meeting of The Abundance League, a group that was founded in San Francisco a few years ago and now has a few branches elsewhere.

It sounds a bit like a support group for superheroes who are trying to lose weight, but in reality it reminds me a lot more of a modern, California-style version of Benjamin Franklin’s Junto.

There were about twenty people in attendance, and after some informal meet-and-greet over pot luck snacks, we sat in a circle and introduced ourselves — sharing three things: our passions, our gifts, and our needs. The idea being that some people’s gifts and passions might be a perfect fit for other people’s needs.

The gifts and passions ranged from esoteric things like permaculture and neurolinguistic programming to more down-to-earth subjects like accounting and web design. Needs also ran the gamut from a good-paying job to a community that could usher in a paradigm shift.

After this set of introductions, it was my opportunity as the evening’s designated speaker “to share a passion, project or skill that creates abundance” in a fifteen-minute talk, followed by some discussion. Here’s what I said, more-or-less:

Thank you for inviting me to speak tonight about how I discovered an abundant life — how I started living more by working less, earning less, and spending less.

My story starts about five and a half years ago when I went in to the human resources department where I worked and asked if it would be possible for me to get a significant pay cut. “How significant?” they asked. I said I didn’t know, but probably something along the lines of 75%. As you can imagine, this was not the sort of request they were used to, but they gave it their best shot.

I should back up a bit and explain how I came to make such a strange request. Five and a half years ago was early 2003, and at that time as you probably remember, the war on Iraq had become more-or-less inevitable. Along with many other people, I was horrified by the thought of the magnitude of the suffering the United States was about to inflict with its “shock and awe” campaign and at the increasingly blind, ignorant, and bloodthirsty belligerence that dominated our country.

But I was also painfully aware that as a taxpayer I was one small but vital part of the machine we were unleashing — that no matter how much I complained or voiced my moral opposition, as long as I continued to pay taxes, I was — in a practical, bottom-line sense — a war supporter.

Because of this, I had a hard time getting to sleep at night, and a hard time looking myself in the mirror in the morning. I knew I would have to stop supporting the war, if only for my own peace of mind.

The question was: how could I go about it? My major financial contribution to the military and the war came from paying the personal federal income tax. This tax was automatically withheld from each paycheck before I even saw it.

If I tried to stop this withholding, for instance by filing a new W-4 form with more allowances, this seemed like it would just be delaying the inevitable. Come April, the IRS would realize they’d been underfed and would come after me or my employer to seize the difference.

So I decided to see if I could get “under the tax line” — if I didn’t owe any tax to begin with, I wouldn’t have to pay and that would be the end of that. And so that’s why I went in to my H.R. department. As it turns out, they said they couldn’t help me — that such a move would look suspicious, as though they were trying to get away with something — and could cause problems of some sort for the company.

But as it turns out, I’m glad. I don’t think I would have wanted to continue to commute to a full-time, year-round job for an under-the-tax-line income if I could accomplish the same thing by just working fewer hours.

So I quit my job, where I’d been earning about $100,000 per year, and determined to get under the tax line. Now I’m self-employed, doing contract work and writing books.

At the time I started this experiment, I didn’t know where this “tax line” was. I assumed it was somewhere in the vicinity of the “poverty line,” which wasn’t a very encouraging thought.

When I did some initial research, I found some stories about war tax resisters who used this method — there are many methods of war tax resistance, this is just one of them — and these seemed to suggest that the “tax line” was somewhere around $3,000 to $8,000 of income per year.

So I started thinking “hmmm… I could buy bulk rice and pick dandelions for vitamins” … “you can do a lot with top ramen!” … “maybe I could work as a fire-spotter to avoid paying rent” … that sort of thing. I’d started to resign myself to the idea that the path I was on was going to be one of deprivation, sacrifice and renunciation in the service of my ideals. — There are things to be said for a path of sacrifice and renunciation in the service of ideals, but if that’s how things turned out, I’d probably be somewhere else, addressing the League of Renunciates tonight.

But instead I decided that first, I’d research tax law a little more closely, so as to find out more precisely where that “tax line” was and just how much of a budget I had to work with. What I found was a great relief.

Today in the United States, about one-third of households that file tax returns are already under the federal income tax line — that is to say, one-third of American households pay no federal income tax. If you take into account that those households tend to be larger on average (with more dependents, thus more deductions & credits), and if you take into account that some Americans earn so little income that they don’t file returns at all, that makes about 40% of Americans who are under the tax line. So I didn’t have to live in a cave and eat grubs and berries after all — all I had to do was become one of those two-in-five.

As it turns out, there really is no one “tax line.” It’s different for everyone, based on things like your family structure, your age, how you make your income, and what you do with your money.

For me, the tax line is about $30,000 per year. By using deductions for tax-deferred retirement accounts, for health savings accounts, in some years for tuition, and for legitimate business expenses, I’m able to — legally and by-the-book — pay no federal income tax.

To do this, I have to put about $14,000 into these retirement and health savings accounts. That leaves me about $16,000 to live on during the year. That seems like very little to many people, especially here in San Francisco where I live, but it’s more than enough for me. For one thing, it’s a real $16,000, not a $16,000 salary that then gets whittled down by income tax.

But my yearly expenses — rent, food, transportation, and the like — come to only about $12,000. What’s left over is a rainy-day, emergency, or vacation fund. I usually use it on a south-of-the-border vacation. And note that I’m also saving about $14,000 per year for retirement and for health expenses.

Here are some of the techniques I’ve adopted to lower my budget:

• I cook my own meals from scratch rather than eating out or eating expensive packaged food.
• I brew my own beer, because I like the good stuff (and I want to avoid the federal excise tax on alcoholic beverages).
• I trade English tutoring for Spanish tutoring rather than paying for classes.
• I use the public library for research & recreational reading rather than buying books.
• I don’t own a car — which is such an expensive thing, especially here in the city — but I use City Car Share, public transit, bicycling, Greyhound, and such.
• I try to find used stuff on freecycle / craigslist rather than buying new — for instance: a pot rack, a Foreman grill, our vacuum cleaner, a back door that I could cut a cat door in without risking our security deposit, a bread machine, speakers for our DVD player, our living room couch, some lectures on video tape, our food processor and blender, and a carboy I use for brewing.

So how do I feel about my life now that I’ve gone from the $100,000 a year urban playboy lifestyle to living on $12,000? Money Magazine profiled me briefly a few months ago for an article they put out on how to avoid paying taxes. They concluded that their readers probably wouldn’t enjoy what they called the “ascetic lifestyle” that comes along with my technique.

If this is “asceticism,” asceticism is very underrated. The life I’m leading now is fuller and more enjoyable than ever, I have less anxiety and feel more integrity, and I’m genuinely living a life of abundance.

By being willing to take in less income, I am able to work fewer hours. It turns out that, to me, those free hours are much more valuable than the money I’d been trading them for.

It seems that many of the things people commonly give up, in order to pursue careers and more money, are more valuable than the money we gain in the trade. Not only are they more valuable, but many are not for sale at any price! Our health, our youth, and the time we need to pursue our dreams, learn new skills, strengthen relationships with our family and friends and communities, or just to read those books we’ve been meaning to get around to.

Money, unless you collect it as examples of the art of engraving, is at best a means to various ends. It is these ends, and not the money itself, that define abundance. And while money can be very useful as a means to some of these ends, it is hopeless for others, and inefficient for many. And not only that, but the pursuit of money can take up so much time and energy that it makes it more difficult to pursue some of those ends.

How does it make sense to spend extra hours at work to earn enough money to pay for a gym membership so you can lose the pounds you’ve put on from sitting in your desk chair all those extra hours at work?

How does it make sense to work extra hours so you can afford a meal in a nice restaurant once in a while because you don’t have time after all those extra hours at work to shop and cook and do the dishes if you want to do it yourself?

I love good food. When I was making the big bucks I used to go out to eat all the time, because there are so many great restaurants in San Francisco. But for the cost of one restaurant meal, I could eat fantastic food all week — if only I had the time to shop for the ingredients, look up the recipes, prepare the food, and clean up the kitchen afterwards. Now I have that time, and so I eat great food just about every day for a fraction of what I used to spend.

One measure of abundance is this: what percentage of your time and energy — what percentage of your life — are you able to devote to your passions, and what percentage are you forced to spend on priorities that contradict and oppose them. Now, by “your passions” I don’t just mean “your own selfish interests” but your values, the things you think are worthwhile and important.

If a percentage of your paycheck is being sucked up by Uncle Sam, you’re spending that percent of every working day using your energy and your time — spending your life — to promote the Pentagon’s priorities and political pork projects.

What worked for me won’t necessarily work for everyone. Some people, for very good reasons, have higher expenses than I do — for instance, children, though they are good tax deductions, I understand can be something of an expensive hobby. I don’t have kids. Also, not everyone has job skills that translate well to a part-time, contract, work-from-home style job. And many people have to work full-time jobs, year-round to earn what I earn.

I haven’t come here tonight with a one-size-fits-all strategy for abundance and fulfillment. But, there are some lessons I learned along the way that many of us can use to make our lives better, whatever our situation.

So I urge you to take stock of your own vision of an abundant life, and look closely at which components of it are best-served by earning money and which components are best-served in more direct ways. Look also for ways in which your career may be interfering with a more abundant life. And look especially at how the government, by means of the tax system, is forcing you to expend your time and energy on priorities that contradict your own.

And consider the possibility that the most abundant life you could be living may be one in which you are earning and spending less but living more.

I simplified some things and left some loose ends hanging. There’s a lot more I could have covered and many more gaps I could have filled in, but I was supposed to hold it down to fifteen minutes and I think this just barely fit.

The talk went well, I think, and the discussion afterwards was excited and heated and threatened to keep going long after we needed to wrap things up and close down the meeting. I gave away a few copies of NWTRCC’s “Low Income/Simple Living as War Tax Resistance” pamphlet, and had discussions with a number of people who had more detailed questions about how I do what I do, and how they might be able to incorporate some of the same sort of techniques into their lives.

This “Abundance League” seems like a good group to know — energetic, enthusiastic, idealistic people with an itch to strive and improve and give a helping hand.

I’ve joined Elvis, Thich Nhat Hanh, and Dereck Coatne to be the fourth of Orna Ross’s “Inspiring Lives.” Whaddya know?

David is one of the many Americans who opposes his country’s warmaking in Iraq. What makes him different is how he decided to register his protest. Not by taking to the streets, but by withdrawing the dollars and cents support that was his taxes.

“I think many of the people who are out on the streets with their signs and chants are fooling themselves if they think they oppose the war,” he says. “Their chants don’t take a nickel from the bottom line of their actual support.”

David has quit his job and deliberately reduced his income to where he no longer owes tax. “I’m learning how to live within my means without paying federal income tax — honestly, peacefully, and legally, working for my values instead of against them.”

This has meant a change of life — and lifestyle. He says it has made him concentrate on what really matters to him, so that he can live well and securely on a lower income. “I take a practical approach, learning about the tax laws and about how to live well by being down-to-earth and sensibly frugal.

“I think we have to earn a country that we can be proud of through hard work and practical changes, and not with complaints or wishful thinking. This has to start with each one of us putting all of our effort on the side of our values, instead of allowing so much of our effort to be stolen by the tax collector and used against us and what we believe in.”

David writes a blog, On The Picket Line, where he writes about his experiment in living his beliefs — why he chose this path and what he’s learning along the way. And a How-To Guide for those who’d like to do something similar.

Even if his way of protest is not yours (I know it’s not mine), his blog certainly sparks lots of freethinking about how we might align our money activities — earning and spending — with our deepest values.

And that’s the only true escape hatch from the financial crisis (opportunity?) now rocking our world.

Well, this is a little embarrassing. I got another letter from the IRS and they’ve made some changes to the tax forms I filed this year.

If you remember, last year they did this also, but the only change they made was to inexplicably eliminate my personal exemption — as though they thought I was being claimed as a dependent on someone else’s return or something — and so the upshot of it was that I just had to file an amended return re­in­stating the exemption. Not that it mattered much anyway, as the bottom line was the same in either case.

This time they’ve made three different changes to my return.

The first change I can’t figure out. The way they put it is this:

• We changed the amount of capital gain or loss on Line 13 of your Form 1040 because there was an error on Schedule D, Capital Gains and Losses. The error was in the:
  • Computation of the capital gain or loss from Part Ⅲ of your Schedule D and/or
  • Transfer of that amount to Line 13 of your Form 1040.
  Capital losses are limited to $3,000 ($1,500 for Married Filing Separately).

I thought I had $4,276 in capital gains last year; the IRS apparently thinks I had $4,050. I don’t know where they got their numbers, but since this cannot do anything but lower my taxable income, I’m not going to raise a fuss.

The second screw-up is most embarrassing. I’ve been so ac­cus­tomed to telling folks that it’s easy to get under the federal income tax line, but that there really is no practical way to make a living under the payroll / self-em­ploy­ment tax line, that I forgot that in fact there is such a line and, given my particularly bad business year last year, I slipped under it.

• We reduced or removed the total self-em­ploy­ment tax on Line 57 of your Form 1040. Your net earnings were less than $400; therefore, they are not subject to self-em­ploy­ment tax.

Finally, they changed the recovery rebate payment credit I applied. After doing the recovery rebate credit worksheet in the tax booklet, I was under the impression that it is a non-re­fund­able credit that couldn’t be higher than whatever income tax I owed. This would have made it a $176 credit for me (given my corrected, lower taxable income), which would reduce my income tax to zero. The IRS apparently thinks differently. They think I should have been able to get a $300 refundable credit, which means that (minus the $176) I was due a refund of $124 for last year.

They credited me accordingly, but seized the refund im­me­di­ately to apply to the taxes I didn’t pay for 2007.

I gotta say… I pay a lot of attention to my taxes, I volunteer to do tax preparation and have taken classes for this, and I’m not a particularly dumb bunny — but still, this stuff is just ridiculously hard to get right.

So the latest word on my taxes for last year is that if you com­bine all of my self-em­ploy­ment tax and federal income tax for the whole year… the government owed me $124 for the priv­i­lege of having me as its citizen.

I don’t often get too personal around here. But it occurred to me that some of you might be interested in what a typical day in the life of this low-income/simple-living tax resister is like. People sometimes have strange ideas about how I live (“Gross’ ascetic lifestyle”).

On a typical morning I’ll get up around 8:30 or so, depending on when my cat goes off. First thing, I’ll grind up some beans and brew a pot of coffee, then get on-line for a spell.

When my sweetie finishes up her morning routine and heads out to the office, I shower & shave (or not, if I’m having a grubby day), brush my teeth, and hunt up some breakfast: often microwaved leftovers from last night’s dinner, but sometimes an omelet (we’ve started buying eggs from a friend who raises chickens) or just some toasted home-baked bread (a second-hand bread machine takes the drudgery out of kneading, so I make bread often).

Then it’s back to the computer. Lately I’ve been trying to finish off one technical writing contract while hunting up others, helping NWTRCC set up their upcoming new web site design, keeping this blog up-to-date, ripping some library audiobooks to my MP3 player (a hand-me-down gift), doing some freelance writing, reading various blogs and news sites and such, and engaging in plenty of that aimless eDithering that keeps us all so busy these days.

Over the course of the day, I may visit our local library branch to pick up or drop off books and DVDs, or I might go to the YMCA to exercise or do a yoga class. I’d been considering dropping my YMCA membership ($40/month) but so far that strikes me as a penny-wise, pound-foolish sort of move, and I’m sticking with it in spite of the cost. Maybe one day I’ll be disciplined enough to stick to an exercise regimen outside of the gym, but I’m not there yet.

I may also wander down to San Francisco Brewcraft to pick up some brewing supplies. I currently have five and a half gallons of hard cider fermenting in my large carboy — I started it on the already-yeast-ridden dregs from an earlier batch to save money on wine yeast. When that’s ready to bottle, maybe this weekend, I’m going to start the first of two west-coast-style (hoppy) pale ales, then, when I move the first one to the secondary fermenter (a somewhat smaller carboy), I’m going to pitch the second batch onto the yeast-ridden sediment from the first (just as I did with the cider). The apple juice for five gallons of cider costs me maybe $20–$25; a five gallon batch of beer runs maybe $35–$40, depending on the style. One of my carboys was a hand-me-down, another I got from Freecycle, the larger one I bought new.

The library, the YMCA, and San Francisco Brewcraft are all within walking distance of my front door. If I have to go further afield, for instance to my Spanish tutor, I usually take the bus. This costs $2.00, which includes a transfer that’s good for an hour and a half (though often the drivers are generous and tear you off a transfer that’s good for two hours or more). When I moved up to San Francisco a decade ago, bus fare was less than half that (you could get a pack of ten tokens for $9).

Lunch is usually leftovers again, though sometimes I’ll carve up some fruit or slice up some cheese or something. Once in a while I’ll go out and pick up a sandwich from one of the Vietnamese places in the neighborhood. These run about $3–$4.

There’s always something to do around the apartment: cleaning the kitchen, tidying up, keeping the cat happy, weeding the herb bed, bottling beer, and what have you. We keep a list of household projects that need doing, and, when we have some weekend time and feel the inspiration, we try to knock an item or two off the list. We do our laundry at the laundromat, which usually takes a hunk out of a couple of our Sundays each month.

At some point during the day I’ll start thinking about what to do for dinner. I’ve saved a lot of recipes I like the look of on a wiki that my sweetie & I use to keep track of household stuff. But lately, I’ve been using an on-line recipe planner called SuperCook with which you keep track of the ingredients you have on hand and it tells you recipes you can make with the fewest additional ingredients. This helps me use the food we have more efficiently, and also means that many days I don’t need to do any additional food shopping (we often have ingredients on-hand because of our vegetable garden and because we get food in bulk from two CSA programs: one for veggies and one for meat).

It being January, there isn’t much in our vegetable garden yet, but most of the herbs have weathered the winter well, and I can go down our back stairs to harvest lavender, marjoram, chives, mint, parsley, rosemary, sage, oregano, and thyme. We’ve also still got a lot of garlic braided up from last year’s harvest.

If I do need to shop for dinner, most of what I need is close. There are four vegetable markets and a fishmonger in walking distance, and a large but quirky grocery across the street. My sweetie has sworn off CAFO meat, so if I need something we didn’t get from our meat CSA, I have to go a little further afield, as our local butchers can’t help us here. (For fish, we just stick to the Monterey Bay Aquarium guidelines for responsible consumption.)

In the evening, unless I have a yoga class or Spanish tutoring (for the last few years, I’ve been swapping Spanish tutoring for English tutoring with someone for an hour and half once a week), I’m usually working with food. I enjoy cooking and trying out new recipes, and, thanks to being able to work from home, I’ve got the time it takes to tackle even recipes that require a lot of prep. The trick is timing things so they’ll be ready around the time my sweetie gets off work, finishes her peninsula commute, and finds parking; every night is a little different. For this reason, I tend to do a lot of mise en place stuff, just like in the cooking shows on TV. I often make big portions so there will be leftovers to eat during the next day (my sweetie will pack some in a lunch bag the night before and take it to work).

My sweetie is our green-thumb, and she’s set up a compost bin and a worm bin in the yard that turn our kitchen waste into plant nutrients. But some of our kitchen scraps I divert before they hit the compost bucket. I use onion skins, carrot peels, chicken carcasses, and the like to make stock, which I put in mason jars and freeze. I use stock all the time in recipes, or use it instead of water when cooking something like rice to make the meal more rich-tasting and nutrient-filled.

After dinner, it’s all about relaxing. From time to time we’ll go out and visit friends, but more often we stay in: reading, wasting time on-line, or watching a movie from Netflix or the library. That, a glass or two of home-brew, and a lap full of cat, make for a very comfortable end of the day.

Living Nonviolence featured a guest essay on war tax resistance by yours truly yesterday:

Living Nonviolence Through Tax Resistance

When the government of the United States and its allies launched its “shock and awe” terror campaign against the people of Iraq, I quit my job and reduced my income and expenses so that I could live below the income tax-paying threshold and stop my financial support of the U.S. war machine.

I realized that it wasn’t enough for me to say that I disapproved of the war, or that I wouldn’t put on a uniform and go carry it out. In matters like this, the government relies on our practical, financial support more than on our moral support… more even than on the support of those who directly carry out the politicians’ orders.

Thoreau wrote:

I have heard some of my townsmen say, “I should like to have them order me out to help put down an insurrection of the slaves, or to march to Mexico, — see if I would go;” and yet these very men have each, directly by their allegiance, and so indirectly, at least, by their money, furnished a substitute. The soldier is applauded who refuses to serve in an unjust war by those who do not refuse to sustain the unjust government which makes the war…

In this way, at least, the “peace movement” hasn’t changed much since 1849, when Thoreau wrote this passage in Civil Disobedience. By and large, pacifists and anti-war “activists” disapprove of war, parade and preach against it, but pay for it all the while.

That wasn’t going to be good enough for me. I was having a hard time sleeping at night, and a hard time looking myself in the mirror in the morning. I knew that as long as the government had my practical support, my refusal of moral support was just for show. To follow my conscience I would have to put my money where my mouth is.

I decided to withdraw my practical support as well, particularly my taxes. I started working for my values instead of against them. I quit my job and deliberately reduced my income to the point where I no longer owe federal income tax. I transformed my life, concentrating on what really matters, so that I could live well and securely on a lower income. (As a bonus, I came to find that my lower-income lifestyle was more fun, fulfilling, and interesting than the life I had been leading before.)

I went in to tax resistance blindly, following a moral imperative rather than a how-to guide. I’ve since learned that there are many different methods of tax resistance, and that you can find a wealth of information and accumulated experience about using these methods from the National War Tax Resistance Coordinating Committee. Over the last several years, I’ve been refining my tax resistance by listening to the advice of people who have been doing this for decades.

People in war tax resistance circles sometimes remark that there seem to be about as many methods of tax resistance as there are resisters. This can make it confusing to talk about “war tax resistance” as though it meant one particular technique, but the plus side to this is that there are many techniques to choose from, depending on things like your family, job, and financial situation, what goals you want to achieve, and what risks you are willing to confront.

Sometimes otherwise well-meaning people discourage tax resistance by pointing out good things that the government does with our money. The U.S. government may spend as much as the rest of the world combined on the military, may threaten everybody with the world’s most fearsome arsenal of weapons of mass destruction, may shamelessly practice torture, may imprison on a mass scale, may have military outposts all across the globe — but if we stop paying taxes, won’t we also stop our contributions to such worthy collective projects as social security, health care, support for education and transportation, food stamps, environmental regulation, and the like?

When I hear this argument, I try to imagine a favorite charity: maybe Amnesty International, or Habitat for Humanity, or Doctors Without Borders… something like that. What if I learned that my favorite charity were spending half of the donations I send to them on a campaign of murder, brutality, and torture? Would I continue to send them checks to support the good things they were doing with the other half of my money, or would I find another charity to support?

Nothing about tax resistance prevents you from contributing your time and money to beneficial projects. It just means that you intend to do so in a way that doesn’t also contribute to the plague of government-led violence.

If I want to be nonviolent, disapproving of violence is not enough, not lifting my hand to strike another person is not enough, even chasing violent intentions from my heart is not enough: I have to consciously trace the practical effects of my actions, including my superficially nonviolent actions, through to their effects. People who think of themselves as nonviolent may be torturing, maiming, and murdering by writing checks and licking stamps, or by remaining passive when a portion of each paycheck is withheld for war — “just following orders” like any other garden-variety war criminal.

We know that there are places in Nevada where people sit at computers and fire drone-based weapons half a world away. Their physical distance from the anguish they inflict does not amount to a moral shield. The same is true for those of us who send the checks to buy the drones — another essential link in the same chain.

Living nonviolence means striving to live 100% of our lives nonviolently, not just the percentage the government deigns to let us keep after taxes. War tax resistance is an essential technique for pursuing the goal of a nonviolent life and a just, peaceful world.

Some weeks back I reached the maximum income I can earn this year while still staying below the income tax line. So I gracefully ended my contract and am now on an (at least) six-month sabbatical. I recently got my last payment from my main client this year, and so, although I’d also received a 1099 from the same client last year, the IRS failed to intercept any of my payments this year and seems to be flailing a bit in its attempts to locate assets to seize for my (roughly $14,000) tax delinquency.

I’m spending part of this sabbatical doing additional research in the hopes of putting out an expanded second edition of American Quaker War Tax Resistance.

As I do this research, I sometimes come across examples of tax resistance that are either not American or not Quaker or or not war tax resistance or come after my arbitrary 1900 deadline, and so aren’t right for the book. They fit right in here at The Picket Line, though.

Here’s a good example (despite its haphazard punctuation), from Volume 74, #51 of The Friend (6 July 1901):

Faithful to Principle. — To the Editor of the [Boston] Post:—

The announcement made in the Post that one Carter had been released from the New Haven Jail where he had been confined for twenty-one months for refusing to pay a military tax of one dollar to the State of Connecticut shows what power there is in passive resistance to defeat a tyrannical measure.

Carter is a man who does not believe in war — at least wars of invasion — so when the good old town of Ansonia Conn. assessed a military tax of one dollar on him he simply said that it was against his principle to pay it and that he would go to jail before he would pay it. Result twenty-one months in New Haven jail at an expense of two dollars and fifty cents per week to the town that sent him there or say a total cost of two hundred and twenty-seven dollars and fifty cents added to the tax levy of Ansonia as the cost of trying to force a man to pay one dollar for a purpose that he did not believe in. And like Mark Twain in his controversy with the missionaries the fact that the tax was such a “little one” had no weight with Carter who evidently believes that “all just governments rest on the consent of the governed” and that numbers have nothing to do with principles. Suppose a million men in the United States had said with Carter that “we will go to jail before we will pay a military tax” is it conceivable that militarism could have secured $200,000,000 to wage an aggressive war.

Speed the day when millions of men will prefer going to jail rather than spend their time in producing wealth to be used in murdering their fellow-men on the field of battle.

Some day the people may become sane enough to remember with feelings of gratitude, the man who was willing to lie in prison for twenty-one months rather than give a single dollar to aid in the business of barbarians.

The letter is signed “T. Small” of Provincetown, Massachusetts. I haven’t found much else about this Carter fellah. The New York Times ran a short piece about him that adds these details:

The money raised by the tax is used to support the National Guard of the State… Friends offered to advance the money to Carter, but he stubbornly refused to accept the money and pay the tax.… A citizen of the town connected with one of the large manufacturing concerns which has an office here… had this to say: “No, it was not an expensive luxury for the town. Some of the slothful voters, hearing of the fate of Carter, have been prompt to pay this poll tax, though they had never before paid a tax of any sort. Our Collector says that the keeping of Carter in jail as a sort of horrible example has really been a paying investment. Collection of poll taxes was made easier than ever before. The town has received much more than the usual proportion of this tax — always a hard one to collect — and some of the neighboring towns are talking of following our example. Incidentally, too, it has been a good thing for the political committees of the town, as both have had fewer taxes of this sort to pay out of their funds, in order to keep careless and shiftless people who happen to be voters on the list of electors.”

Ten years ago, Americans got hit good and hard with the sort of death and destruction they so enjoy being on the other end of, and the United States became as noisy and menacing as a country-sized dropped beehive.

Some of the seeds of my future war tax resistance were planted then, in my disgust with the bloodthirsty, know-nothing jingoism and my intuitions about what it would lead to. A week or two after the attacks, my imaginary friend Ishmael Gradsdovic wrote a story, about what was going through my mind at the time as a guilty spectator to the coming bloodbath, in the form of an email to me:

Wrote this over on the other side — yes, I got there. Briefly. Got kicked out quick and escorted way out of my way at gunpoint. And now I’m even further off and in the allegedly civilized world. Here’s something I wrote for you while I was there. Write back at my regular address (not this one) and let me know what you think.

I developed horrible dysentery shortly after arriving in Afghanistan. Absolutely none of the well water here meets the minimum World Health Organization standards for either organic or inorganic contaminants. I didn’t stand a chance.

I held out hope that this would dislodge my tenacious and belligerent tapeworm, but no dice. It’s more in-your-face than ever. Like being stuck on a Greyhound bus next to a born-again.

I’m at this roadside nothing between nowhere and nowhere else, taking photos. I got in from Iran early yesterday and just kept walking — figure I’m at least fifteen miles in, but it’s been a lot of up-and-down so maybe less as the crow flies.

Right now I’m leaned up against a rock by a wide dirt road. Every once in a while, a small group of refugees comes by, headed for the border, which is already closed and heavily-guarded.

I don’t know the language or I’d tell them to turn back — not that it’d matter; I’m sure they’ve heard the news and are trying anyway.

On the other side of the rock from me and a little down the road is a woman sitting down with the body of a dead young boy lying across her lap.

Nobody else is with her, though I doubt she and the boy were on the road alone. The boy must have died right there, and recently, and the woman’s companions begged her to leave to body or bring the body but to continue on with them, and she refused and exasperated they continued on without her. But I’m speculating. If they get turned back at the border, maybe they’ll be back tomorrow or the next day.

She sits on the ground with her legs out in front of her, recklessly exposing one ankle, holding herself up by locking her arms around the weight of the dead boy still limp in her lap.

I think it would make a good picture. Callous, I know, but there aren’t a lot of us over here on the ground with cameras so I have to think like that. I can’t see her face, and I’m not so callous that I’m going to circle her for good angles. I haven’t taken any shots of her yet, actually, but the light will be good for a while still.

I can sure hear her voice, though. Wailing, crying out words and gasping at the same time so that even if I did know the language I probably wouldn’t know what she was saying, or what words she was saying it with anyway. Pulling in snot with lungs that break three or four times with each pull as the sobs override everything else.

And then, after a while, the anguish builds to an opiate strength and she’ll be quiet — the sorrow pervasive but smooth and diffuse. Then a few moments will pass and a sharp image — maybe a face looking up or a laughing voice or the memory of a hope for a young boy’s future — will come out of this awful, blessed, narcotic fog and it starts all over again.

If I knew her language, or if I thought I could hold her or hold her hand without being killed by a misunderstanding refugee, I’d try to comfort her. And fail. She is vividly, universally, utterly inconsolable.

So instead I make stories. Speculate, like I did about her companions. Make a murder mystery out of it. Who killed Mohammad Doe?

Maybe it was another refugee, and the boy died during a fight over food or water or some squabble born of frustration and too many sleepless nights in flight. Or maybe he died as the family ran from bandits who prey on refugees near the border.

Could have been Taliban officials trying to turn back the refugees, or to punish them. Could have been the Iranian border guards.

Could have been U.S. jets or troops — I’ve heard rumors of English-speaking paratroopers. But there have been a lot of rumors.

Could have been a landmine. Lots of those around, even down here.

Or maybe the child died of more-or-less natural causes. Malnutrition, infection, fever. Maybe even the woman went mad and killed the boy herself.

Which is to say I don’t know and I’m just trying to occupy my mind and fill out captions to the photos I haven’t taken yet because every time she starts wailing my eyes water up and I feel a pressure in my sinuses and I have to choke it down.

Another thing I think of is how much taxes I paid last year, and, now that I’ve done some research, I can translate that into a certain number of landmines, or a certain percentage of a cruise missile, or the bulk of the salary of someone on an aircraft carrier doing a very important job who’ll never see anything like what I saw today.

But a bad fall or a bad well or a bad case of scarlet fever will kill a young woman’s pride and joy just as dead as my taxes, so I don’t really know who to lodge a complaint with.

I’m getting tedious now. I don’t want to pay for this war, and I’m sorry for what I’ve paid already. I think I’m going to sell these photos to some wire service photographer under-the-table and let him pay the taxes and get the pulitzer. And then I’m coming back home and maybe growing dope again or something else that I can do with clean hands.

Of course, that’s assuming I get out of here, which is what I do a lot of assuming despite the evidence. An indulgence I allow myself because I think it keeps me sane. Despite the evidence.

So I’ll sign this off by saying I’ll see you when I get back to California. Take care of yourself.

 — Ishmael

I also tried to imagine how a saner, wiser, more courageous world might have responded:

POPE ANNOUNCES HE WILL TRAVEL TO KABUL

Astana, Kazakstan (AP) — Pope John Paul Ⅱ announced Sunday that he will be traveling from Kazakstan to Afghanistan, “on foot if necessary,” in order to work for religious tolerance and brotherhood and to protect the lives of innocent people there.

“I beg God to keep the world in peace,” he declared. “I wish to make an earnest call to everyone, Christians and the followers of other religions, that we work together to build a world without violence, a world that loves life and grows in justice and solidarity. We must not let what has happened lead to a deepening of divisions,” he said. “Religion must never be used as a reason for conflict.”

CONGRESS PASSES RESOLUTION CONDEMNING BOMBINGS OF HIROSHIMA, NAGASAKI

Washington (AP) — Congress today passed a resolution apologizing for the atomic bombings of the Japanese cities of Hiroshima and Nagasaki during World War Ⅱ.

“It is the understanding of this Congress,” the resolution read, “that there is no justification for the wholesale murder of civilians — not to discourage an imperialist enemy, no matter how aggressive or irrational — not to prevent the loss of life of soldiers on the battlefield — not even to win a war that might be otherwise lost.

“To slaughter thousands of innocents in order to horrify a nation into surrender can never be a victory for Good. We recognize this now as we have not recognized this before.

“As we prepare for battle against the evil of terrorism, we must as part of this preparation purify our hearts, atone for our injustices, and be able to go forward with confidence that we are in the right. As our chaplain said, ‘we ask not that God be with us, but that we be always with God.’

“We do solemnly and gravely apologize for the great evil this country committed when we murdered and maimed hundreds of thousands of people in the atomic bombings of Hiroshima and Nagasaki. We condemn the bombing of civilian areas to terrorize a populace or a nation.”

Metaphorically, the Obamacare page is still loading and its icon looks like it’ll be spinning for a while yet, but I’m ready to share a very preliminary evaluation at how it interacts with my low-income tax resistance method.

In summary: the news so far is good. It looks like I will be able to have a high-deductible health insurance plan that allows me to continue to contribute to a tax-advantaged Health Savings Account. My strategy of keeping my adjusted gross income (AGI) below a certain threshold in order to avoid income tax has the side-effect of qualifying me for the maximum subsidy: I will be paying next-to-nothing (a token dollar per month) for this insurance.

Here are some observations and questions I’ve come up with along the way. The law is complex and confusing and they’re still tweaking it, so don’t take any of this as gospel:

• As a self-employed person, I’ve been permitted to take the cost of my health insurance premium as an “above-the-line” deduction on my 1040 (that is, a deduction that has the effect of lowering my AGI). Because of this, although my premium is going from $2,500+ in 2013 to $12 in 2014, this won’t translate to any extra spending money for me as it wasn’t money I was spending out of my post-tax income anyway. However, I’ll need to bring in $2,500 less income next year to meet my over-all expenses. In other words, I’ll be able to maintain the same standard of living while having to work for $2,500 less income.
• The way the insurance premium subsidy works is a sort of Rube Goldberg machine centered on the federal income tax, and it goes a little something like this:
  • The health insurance premium subsidy is implemented as a tax credit that is based on the premium amount and on your AGI. If your AGI is low enough, some or most of your premium is paid by the government (or, if it’s even lower, you may be shuffled into Medicare).
  • Instead of making you pay for your insurance throughout the year and then giving you a big credit when you file your taxes the following year, the government parcels this credit out to you indirectly — by paying it to your insurance company in lieu of that portion of your own payment.
  • But you don’t know what your AGI is going to be for 2014 until you fill out your taxes in 2015, so you have to play a guessing game. When you do file and learn what your real AGI was, you also find out what your credit should have been for the year. If the government oversubsidized you, you’re supposed to pay it back; if you paid more than you had to, the government should issue you a refund.
  • But there are a number of restrictions on the government’s ability to collect any overpaid subsidies: the amount that the government can demand that you return has an absolute cap on it, and the IRS is prohibited by the law from using almost all of its usual measures for recovering tax debts to go after this specific sort of delinquency. Since all the tax amounts are going to be mixed up on the 1040 and come out as one number at the end, I expect that the agency is going to have a hell of a time figuring out how to take enforcement actions against people whose tax debts are mixtures of overcredited Obamacare premiums and resisted income taxes. (Hint, hint.)
  • I think I may have had this last point wrong. I have heard since that the absolute caps are only for people at low income levels: so that if you qualify for a subsidy, but the subsidy you actually received was higher than what you qualify for, you might not have to repay the complete difference between the two amounts; however, if you don’t qualify for a subsidy but you got one anyway, you can be required to pay back the full amount. Also: I think the restrictions on the IRS’s ability to use its enforcement measures against you may be restricted to its efforts to retrieve the amount of the tax penalty for not having health insurance at all, and that it may use all of its usual measures to try to recover over-paid subsidies. Again, the details of the law remain fuzzy to me, and I read a lot of contradictory things about it, so I’m piecing it together.
• So wait a minute: The government is going to keep paying to subsidize my health insurance at the same time that they’re trying to chase me down for (last I counted) $26,000+ I’ve refused to pay them? Seriously? Apparently so. I have heard of no mechanism for withholding subsidies from people with tax debts. Perhaps if I foolishly applied for the subsidies as a tax credit on my 1040 instead of applying for the government to use the subsidy to cover my monthly premium, the IRS would seize the refund and apply it to what they’re trying to extract from me, but they don’t seem to have any interest in interrupting the payments if I apply in the normal way.
  • I anticipate at some future date, despicable leeches like myself will be subject to some sort of two-minute hate and Congress will cut us off in a flurry of righteous hearings and outraged pontifications. That might make this good news turn to bad news, as I then will be on the hook for the full premium of what I wouldn’t be surprised to find would be an inferior and more expensive product than I have now (keeping my present insurance plan was not an option as it’s being canceled at the end of the month).
• For those of you who are signing up for health insurance in this period of flux, I recommend that you seriously consider a plan that allows you to contribute to a Health Savings Account. Such plans usually have higher deductibles, so you have to be comfortable with that, but Health Savings Accounts are a good way to shield a good hunk of your income from federal income tax.

I was recently putting some finishing touches on my annual year-in-review post. One element of this has been a “Five Years of Federal Taxes” chart showing how much federal tax I’ve been assessed, how much of that I paid, didn’t pay, or was seized, and how much can be attributed to interest & penalties.

I decided I wanted to see how that looked on a longer scale, so in addition to that graph with the floating five-year window, I created another graph showing the fate of my taxes since 2000:

Before 2003, I was doing pretty well for myself in the post-dot-com-boom software industry, and paying plenty to Uncle Sam. In 2003 I decided I didn’t want to pay federal income tax anymore and quit my job so I could lower my income below the tax line. I still paid some FICA that year, though (the FICA amounts in the chart include both the employee and employer portions, so they correspond to my later SECA amounts).

In 2006 I decided to stop paying SECA (including some residual amount from 2005 that was included on my 2006 tax return). The IRS managed to seize what I resisted for that year, but since then they have pretty much let me be.

During the “Great Recession” of 2008 and 2009 I had a hard time finding paying gigs, and my income suffered, but this also kept my taxes even lower.

How much tax have I managed to resist since I started? It’s hard to say for sure. You can count the dollars I’ve owed and not paid, but it’s harder to count the dollars I didn’t owe in the first place because of my decision to stay under the income tax line. To get a ballpark figure, you might just extrapolate from those first three years, and say I’ve resisted about that much each year since. So something in the neighborhood of $400,000.

I’ve been refusing to pay federal taxes for many years now, and this year I got to experience one of those rare and beautiful triumphs we tax resisters sometimes have: One of the tax debts the IRS has been pursuing me for fell off of the ten-year statute of limitations.

In 2008 I filed my federal tax return, showing that I owed $3,695 in self-employment tax. I didn’t enclose a check. The IRS came after me with its usual series of exasperated demand letters, eventually adding about $2,800 in interest & penalties to the original total. They even successfully seized $469 from a bank account once.

But then they seemingly lost interest in the chase. At any time they could have seized money from my IRA or tapped the client who sends me most of my self-employment revenue. But they just plain dropped the ball.

I had allowed myself to hope that this would happen, but I didn’t really expect it. I got away with it. I didn’t pay my taxes, weathered the IRS threats, called their bluff, and walked away without having to pay. That’s pretty fantastic.

Here’s how I’m celebrating:

Enclosed, please find a check for $3,226 made out to the Prisoners Literature Project. As a former volunteer with PLP I know how well this money will be spent.

Several years ago, I became unwilling to continue to offer financial support to the U.S. government by voluntarily paying taxes to it. In 2008, for example, I filed a tax return showing that I owed $3,695, but I refused to write the check. The IRS has periodically sent me threatening notices about this, has added significant penalties and interest to the total, and has even managed on one occasion to seize $469 from my bank account. But earlier this year, the ten year statute of limitations on that tax debt expired without the IRS managing to collect the remaining $3,226.

That is to say: I totally got away with it.

I’m grateful for the opportunity to share my good fortune with the Prisoners Literature Project and with those the Project serves.

Sincerely,
David M. Gross

P.S. My check comes to you via the People’s Life Fund, which operates as a way for conscientious tax resisters like myself to coordinate in order to redirect their taxes from harmful government spending to beneficial causes.

In 2011 when I filed my federal tax return for 2010 it showed that I owed $3,856. I didn’t pay it. Since then, the IRS has sent me pleading letters and threats, and warned me it would add penalties and interest to what I didn’t pay.

But by law, the IRS has ten years to recover unpaid taxes, after which time a statute of limitations kicks in and the tax becomes permanently uncollectible (interest & penalties too). This year, that ten year deadline expired. I successfully called the IRS’s bluff.

Today, I’m celebrating by donating that $3,856 to GiveWell’s Maximum Impact Fund. I appreciate the work that GiveWell does to identify charitable giving opportunities that can do the most good for the most people with the greatest impact per dollar.

Today I’m sending a check for $4,031 — representing what I didn’t pay in federal taxes in 2011 — to the Maximum Impact Fund run by the GiveWell organization.

GiveWell researches promising charities to determine which are currently able to make the greatest impact per donated dollar. They have a number of top recommendations, mostly involving disease prevention in poorer parts of the world. Rather than choose from those, I chose the simpler option, which is to give to GiveWell’s Maximum Impact Fund, whereupon GiveWill will give that money to whichever charity is currently at the top of their list.

You may remember that I also redirected my taxes to the Maximum Impact Fund last year.