[pct-l] Re: Isn't Hiking Free?

[AlohaAnn at adelphia.net (Aloha! Ann)]

Aloha Ilja/Ken/All!

Please forgive my delay in responding -- 'tis the season to be busy.

Once again I had to chuckle when I read the missive below.  It was in June 
of this year that I received a lovely letter from IRS claiming that I owed 
back taxes totaling $47,424.  Gulp!  The year they were claiming?  The year 
I was hiking with no income!  It seems that if you spend your life slowly 
climbing the corporate ladder, showing gradual income increases over the 
years, that the year you decide to throw in the towel, alter your priorities 
and do something totally off record from your history... the IRS sits up and 
takes note immediately.... and doesn't believe you for a moment!  The 
situation has been rectified by sending copies of my '01 and '02 taxes and 
I'm happy to report that their latest letter states "due to your diligence, 
the IRS was able to rectify YOUR problem".  I searched and I searched and I 
searched but alas no where could I find "sorry, WE screwed up".  Yes, tax 
law and people with variable income seem to be a little more under the 
microscope than those that do what society/norm believes they should do. 
Wonder if I can get a job at IRS upon my return from the PCT?  I can read.

> You touched an interesting point. Tax law treats people with highly 
> variable income over the years (say thru-hikers) much harsher than people 
> with constant income. Let us ignore inflation etc. for a moment. If two 
> people where to make one fat million dollares over their lifetime: One of 
> them in 25k pieces over 40 years - the other person 50k a year for 20 
> years (lets assume the latter person where thru-hiking in odd years and 
> doing double jobs in even). Because of the progressive tax system the 
> second person would have made less money after taxes than the first. Lets 
> call this unfairness the "thru-hiker penalty".

As for paying income tax on interest income from foreign sources... that 
even includes any purchased through mutual funds.  Isn't that double 
penalizing?  Still trying to dump that fund.

> Of course the IRS says if you are a US citizen you must pay income tax on
> interest income from foreign sources.

Happy Happy Times to All!

Aloha!