About three weeks ago, as California’s budget crisis deepened, the state announced that it was going to stop paying income tax refunds. On Monday, Kansas announced that it would do the same.
Now let’s be absolutely crystalline clear on this issue: A tax refund is not some kind of bonus. It’s not a stimulus check. Not welfare! It belongs to the taxpayer. In fact, it’s not much more than a loan that the unwitting taxpayer has made to their state, and as such the government HAS NO GOD-DAMNED RIGHT TO THE MONEY! Any state that decides to hold back income tax refunds is engaging in fraud, and that state’s officials—from the governor on down—should be arrested, tried, convicted, and thrown in jail!
Of course jail-time for our elected thieves isn’t likely. So may I humbly suggest that a state that engages in that kind of fraud doesn’t deserve our tax dollars, and we should all simply stop paying our taxes. “But Kvatch,” you might say, “…I don’t want to end up in jail myself!” Quite right! And with that in mind I present (once again) Kvatch’s handy dandy tax protest methodology:
Start by submitting a new W-4 listing 100 allowances. (That’s for federal taxes. You’ll need an additional form for your state.). The effect of this is to reduce you tax withholding to practically nothing for the remainder of the year. You should then take all that saved money and invest it in some conservative monetary instrument like a CD. Then…in January of the following year make one “quarterly” payment that covers your entire tax burden for the previous year and use your capital gains to cover any penalties.
Though claiming excessive allowances is not illegal—many taxpayers must do it to get their withholding set correctly—it’s also not exactly legal. The idea is to cause a steep, temporary drop in revenue, the kind that will throw your state’s comptroller into a tizzy. A second advantage is that, if you get really pissed off at your state’s shenanigans…well…you’ve still got a hold of all that money and can decide if you want to pay your taxes at all.