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I have a tough time giving politicians any slack when they fail to pay their taxes. I'm a honest tax paying citizen of the USA. I have several businesses and I declare all of my income (yes, including cash payments). I carefully account for every sale and source of revenue as well as tracking legitimate expenses. The law states that you do not have to pay more tax than you owe under the law. Law is not about just "word" but also "spirit".

The article that follows is in regards to a politician owing taxes on expenses she (or more likely, her financial advisers) claimed as "Per Diem". Anyone with any understanding of the concept of Per Diem can see that these payments do not qualify for this classification but, instead, fall under the category of income. The spirit of the law was violated. But who violated it?

Was she an innocent in this situation? Did some financial adviser steer her down a slippery slope? Could be. If your employer sends you a W-2 or other tax statement showing the income you must declare, you trust their knowledge of the matter, right? Perhaps someone on her financial advisory staff told her that her expenses while living at her home could be considered travel expenses for work. If they did, they need to be sanctioned and fired pronto!

Unfortunately, ignorance is no excuse under the law. Let this story serve as a lesson to you...You need to know as much if not more than your advisers. You need to give everything they say the "gut test". If it seems too good to be true, it probably is.

http://politicalticker.blogs.cnn.com/2009/02/18/palin-told-to-pay-back-taxes/

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