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From: cramer@kontron.UUCP
Newsgroups: net.taxes,net.invest
Subject: Re: IRS has budget of $160 Million???
Message-ID: <913@kontron.UUCP>
Date: Mon, 14-Jul-86 17:38:34 EDT
Article-I.D.: kontron.913
Posted: Mon Jul 14 17:38:34 1986
Date-Received: Tue, 15-Jul-86 04:57:16 EDT
References: <2eacf085.2a75@apollo.uucp>, <886@kontron.UUCP> <1360@pyuxa.UUCP>
Organization: Kontron Electronics, Mt. View, CA
Lines: 26
Xref: utcs net.taxes:1160 net.invest:1570

> 
> While explaining the various benefits of simplifying the tax code,
> Clayton Cramer says:
> 
> > same rate) takes away reason to take questionable deductions so that 
> > you can get below a particular tax rate.  (I know: I spent an hour once
> > adding up the state utility tax on my electricity bills to get seven
> > dollars more deduction to drop below a taxable income level to save
> > more than $7 in taxes.)
> 
> While I agree that a simplified tax law will reduce the incentive for
> questionable deductions (and rightly so), I'm afraid that your
> referenced deduction is a little worse than questionable - it's probably 
> a non-allowed deduction.  I believe that the taxes on your utility
> bills (electric, phone, etc.) are considered excise taxes, and not
> sales taxes; excise taxes are not deductible.  I hope the IRA will
> overlook the $7, but it looks like your hour was spent in vain :-).
> 
> (On the other hand, I may be wrong; I wonder if I'll draw undue attention
> to myself if I file an amended return for my $7! :-)

The tax form said, "Other state & local taxes", and at least the year 
in question, the instructions didn't prohibit deducting state excise 
taxes (if in fact that's what they are).

Clayton E. Cramer