Top Tax Excuses: Wages aren't really income

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.

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