This week journalists and bloggers were lamenting the fact that a full two-thirds of United States corporations pay no income tax to our federal government. Boo-hoo.... They're apparently getting away with something horrible in the eyes of these writers.

I see it completely differently. First of all, corporations don't really pay any income taxes at all. People do. Every time a company decides to sell something to you, the price depends on a lot of things, including how much it costs to make the item, how much profit the company wants to make, and how high the company's tax bill is. You, the consumer, end up paying the corporate income tax with higher prices. And you want more of that?

My second big problem with people demanding more corporate income taxes is the result that would have on U.S. businesses. Our country really doesn't need anything else to make us less competitive in manufacturing. The same people moaning about big businesses making too much money and not paying enough taxes are the same ones belly-aching about jobs going overseas.

If the federal government told you that they were going to take $5,000 of your money because you'd never miss it, how would you feel? I don't care what your income level is, I think $5,000 makes a difference. I think you and your family would "miss it." It's your hard earned money, and you should be able to decide how it's spent.

But U.S. Representative Mike Ross sees it differently. He's supporting a proposal to make taxpayers with incomes of $1 million or more pay an extra one-half percent income tax. This is in addition to the high tax rates they already pay on much of their income by virtue of our tax system that has higher rates for higher income brackets.

Ross said, "So someone who earns $2 million a year would pay $5,000... They're not going to miss it." Really? I don't think it's fair to keep piling taxes on the rich just because it sounds good to those in lower tax brackets. No one minds a tax, so long as they're not the ones who have to pay it.

What's this new proposed tax for? More education benefits for veterans of the war in Iraq. I'm not necessarily for or against the education benefits, as I'm not up to speed on exactly how the money would be spent. But I am definitely against more taxes. We are already overburdened with federal, state, and local taxes. There is no need for one more tax, even if it would only be paid by those naughty rich people who some politicians think should be flogged over and over again.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.

If you itemize deductions on your income tax return, you can deduct either state and local income taxes paid, or sales taxes paid. You can deduct whichever is larger. For most taxpayers, it will make more sense to deduct the state/local income taxes paid. For those living in states with no income tax or for those who made a very large purchase subject to sales tax, the deduction for sales taxes paid will be more advantageous.

Included in your deduction for state income taxes paid will be whatever amounts were withheld on your paychecks and reported on your W-2, any state taxes paid during 2007 for a prior year amount owed, any state tax estimates paid during 2007, any state tax refund from a prior year that you elected to have applied to 2007 taxes. You should not deduct any penalties or interest paid related to your state income taxes. Those are not deductible.

In order to deduct sales tax paid, you should keep receipts to substantiate the amount you are claiming. In the event that you do not have receipts to substantiate the actual amount of sales tax paid, you can use the amounts allowed by the IRS on their sales tax tables.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.

This post was written as part of a series on tax excuses that don't work.

One common argument against paying income taxes is that money received for providing labor or personal services isn't really income. They say that there really is no gain that can be taxed when physical labor is exchanged for money.

Tax protestors further say the tax laws only apply to profits, and there's really no profit in receiving money for services because the money was exactly equal to the effort put forth by the person. If the effort and the money are equal, there can't be profit. Or so they say.

A cute term used to avoid the use of the word "wages" is a "time reimbursement transaction." But no matter what you call it or how you dress it up, your wages are taxable income.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.

This post was written as part of a series on tax excuses that don't work.

Tax protestors suggest filing a tax return that shows zero income, so that your resulting income tax will be zero. That's all fine and well, unless of course you have income. Then that nifty "zero return" is a lie, and you're opening yourself up to lots of problems.

It gets really fun when a taxpayer has had income tax withheld on their wages, and they file the "zero return" to try to get that money back. The taxpayer attaches a W-2 to the tax return, and the IRS quickly sees that they didn't have zero income. They had the income on the W-2 and the income tax return is immediately flagged as incorrect.

And you don't only have to pay taxes owed when you file this false "zero return." Now you may have to contend with penalties for filing a frivolous return and for failure to file (failing... because you didn't provide anything close to the right information). The IRS says you didn't make a reasonable attempt to comply with the law, so now you get penalties.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.

This post was written as part of a series on tax excuses that don't work.

Wouldn't it be nice to get out of paying taxes just by not being a citizen of the United States? Well it's not quite that easy.

The scam goes like this... A tax protestor says that he is rejecting his U.S. citizenship and is instead a citizen of the state in which he lives. He says that only U.S. citizens are subject to tax laws, therefore he's exempt and doesn't have to pay any income taxes.

That all sounds lovely, but the U.S. Constitution says that doesn't work. You're a citizen of the U.S. and of the state you live in, and you can't just pretend you're not a U.S. citizen. And anyway, U.S. tax laws apply to all citizens and residents.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.

This post was written as part of a series on tax excuses that don't work.

Those opposed to paying federal income taxes often claim that the whole system is optional and they choose not to participate in it. They claim that there is no law requiring them to pay taxes and they demand that someone show them the law that requires them to pay income taxes.

Well, okay. Here's the law: Section 1 of the Internal Revenue Code. "There is hereby imposed on the taxable income of [insert status of taxpayer – single, married, etc] ..., a tax determined in accordance with the following table..."

Additional sections of the tax code elaborate on the requirement to file tax returns and pay taxes. Nowhere in the tax code is there anything about taxes being optional. And yes, the tax code is in fact the law of the land regarding taxes in the United States.

You should also note that you can't get out of paying taxes by saying that you don't understand what or how to do it. That doesn't wash with the IRS. Find a tax preparer.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.

This post was written as part of a series on tax excuses that don't work.

The Internal Revenue Code specifically says that a "taxpayer" is a person subject to the code, and that "person" includes individuals, trusts, estates, partnerships, and corporations. Tax protestors somehow interpret this to mean that they are not really a person, and therefore not a taxpayer.

I don't know about you, but in my world, people are people. A person is a person. And the tax code applies to a person, so quite simply, people must pay taxes. Was that confusing enough?

This argument against paying taxes might be the most frivolous and ridiculous of all. And while it sounds silly to most of us, there are people trying to assert this argument against paying taxes. But I don't recommend it. You open yourself up to both civil and criminal penalties for trying to avoid taxes with these kinds of lies.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.

This post was written as part of a series on tax excuses that don't work.

Tax protesters have long refused to pay income tax on the basis that it is immoral or against their religion. They further object to the use of their tax money, saying that certain programs or agencies are immoral.

How I wish that I could refuse to pay taxes because politicians aren't going to spend my money the way I want them to. But it just doesn't work that way. In exchange for living in the greatest country in the world, we have to pay income taxes and we elect representatives who spend (waste?) our money for us.

And although the First Amendment of the U.S. Constitution says that our government can't establish a religion or prohibit people from practicing their religion, this doesn't exempt anyone from taxes. Requiring the payment of income taxes does not equate to mandating the practice of a religion.

Taxpayers are allowed to have differing morals, values, and religions, but that doesn't get them out of paying taxes -- even if the use of the tax money is objectionable to them.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.

This post was written as part of a series on tax excuses that don't work.

The Fifth Amendment of the U.S. Constitution gives people the right to not incriminate themselves in criminal matters. This means they don't have to testify in criminal trials of themselves. They don't have to tell on themselves in regard to crimes that they've committed or been accused of committing.

The filing of tax returns is something completely different, however. Yes, it's possible that a tax return could later be used in a criminal tax trial against you, but that possibility is very remote. Especially if you're honest when you file and pay your taxes. So the filing of tax returns is not equivalent to self-incrimination.

It is merely the reporting of income which will be taxed by the government. You're required to report your income on tax returns, and the U.S. Constitution doesn't exempt you from that.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.

This post was written as part of a series on tax excuses that don't work.

Tax protesters claim that the filing of income tax returns is optional. They say that there is not a requirement to file a tax return. So if you want to avoid paying taxes, just don't file a tax return and you're off the hook.

Not so fast. This lie is based upon an incorrect interpretation of what a "voluntary" tax system is, which is mentioned in some IRS instruction booklets. A voluntary system under the tax laws of the United States doesn't mean that paying taxes is voluntary.

It means that taxpayers "volunteer" their information to the IRS, including how much income they have and the resulting tax due. However, taxpayers are obligated to provide this information. The IRS gives us a chance to correctly report the numbers, and they may later go in and do clean-up via an audit or other inquiry.

But the use of the word "voluntary" doesn't mean you don't have to report your income to the IRS. You do.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.

This post was written as part of a series on tax excuses that don't work.

A popular lie about income taxes is that, quite simply, they aren't allowed by the U.S. Constitution. You'll hear tax protesters say, "Show me the place in the Constitution where it says I have to pay taxes!"

Well, they're sort of right. The Constitution itself doesn't give details on income taxes and who must pay them and how they must be paid. But the Constitution does give the U.S. government the right to create and enforce income tax laws in the Sixteenth Amendment.

Does your favorite tax protester take this argument even further by saying that the Sixteenth Amendment was not properly ratified so it doesn't count? Well he's wrong. It was, in fact, properly ratified and therefore must be followed. Income taxes are constitutional -- so says the U.S. Constitution.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.

This post was written as part of a series on tax excuses that don't work.

While we may all wish this one was true, it's not. Quite clearly, the Internal Revenue Service is a bona fide federal agency and has the authority to collect income taxes from us.

Tax protesters claim that in order for the Internal Revenue Service to be a real agency of the United States, it should have been created through an act of Congress. Because it was not created that way, it's just a private corporation and we don't have to cooperate with them. Or so they say.

Sorry... the Secretary of the Treasury has the authority to enforce tax laws and has the power to create an agency to help him. That agency just happens to be the IRS, and so long as the Secretary of the Treasury wants the IRS to exist, it can and will enforce income tax laws. So when IRS agents come knocking at your door, you better believe that they really are representatives of a Federal agency and they really do have the authority to collect taxes from you.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.

Whether someone can do their own taxes is an interesting question. The U.S. tax code gets more and more complicated with each passing year. Another year, another set of rules added to the previous set of rules.

If you have a very simple and straightforward tax situation, with a job, a house, and a family, it might be fairly easy for you to fill out your forms online with the help of TurboTax or one of the free filing programs offered by various companies. But once you add things like self-employment income, distributions from retirement funds, capital gains taxes, and any of a zillion of other items that must go on your tax returns, it's probably too complicated for the average person.

When in doubt, get some help. If you can't afford to hire a tax preparer, many cities have volunteer tax assistance programs offered through local colleges or non-profit organizations. See if there is one available near you.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.

The general rule of thumb for tax records is to keep everything for at least three years, but there are some things you should keep longer. Throughout the year, I recommend that you keep your pay stubs, mortgage statements, bank statements, home purchase and renovation receipts, investment account statements and receipts for anything that might be used on your tax return.

Once you receive your W-2, you can throw out the pay stubs. Once you receive your 1098 for mortgage interest paid, you can discard your monthly mortgage statements. Most of the other documents mentioned above should be kept with your tax return for the three year period. Items related to your home purchase, rental property purchase, or major renovation should be kept until you sell the property.

Anything that has been deducted on the tax return should have documentation in your files, in case the IRS ever questions it. You may have heard that you should keep your records for seven years, rather than the three years I've mentioned above. Three years is the time frame during which the IRS can audit your tax return, while seven years is generally the time period during which the IRS can bring a criminal tax fraud case against you. Since most of us aren't engaged in serious tax fraud, we probably don't need to maintain our records for seven years. Some people still like to be cautious though, and keep the records for the longer period.

You can find more information about good recordkeeping practices at the IRS website.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.