Joy in Grace

Series: On The Way to Joy: A Study in Philippians

Introduction:  Bankrate's 10 craziest tax write-offs

(Remember: Serious consequences await those who fail to file, falsely file, knowingly underreport or otherwise play fast and loose with their federal income tax return.)

1. It went up in smoke
Hatter must have thought he was hallucinating when one of his clients, a criminal defense attorney, referred a marijuana dealer he was defending to Hatter. The dealer was facing prison time for drug dealing and didn't want to be nailed for tax fraud as well.

"Because he was involved in an illegal business, he could not take any deductions, period," Hatter says. "The tax code is written where if you are engaged in something illegal, you have to recognize all of the income and none of the deductions are recognized, even the cost of the product. It was quite an education on my part."

Hatter chuckles at his client's income statement, or lack thereof: "Let's just say he wasn't getting 1099s from his customers. He gave me a number and we paid taxes on it. I had no basis for it because he dealt in cash."

2. No receipts from "above"
Putting a few bills into the church offering plate got one client of Virginia CPA James T. Campbell in a bind when the IRS asked for canceled checks or receipts to support his charitable deductions. Explaining why he had no such receipts, the taxpayer said he simply throws in cash "as the spirit moves me."

Campbell says the IRS agent paused to consider the taxpayer's response, and then offered this advice: "I understand how the spirit can move you. So my advice to you is to always take your checkbook to church with you. When you feel the spirit coming on, just take out your checkbook and fill in any amount you think is right, whatever the spirit may dictate. It makes no difference how much you give, just as long as you have a copy of the canceled check. This way both the spirit and the IRS will be pleased."  

3. Silence is golden ... and deductible
Since we're on the subject of charitable deductions, Allyson Baumeister, CPA, of Sanford, Baumeister & Frazier in Fort Worth, Texas, recalls one prominent client who found a creative solution to a chronically noisy next door neighbor: He bought the house from the fellow, ripped it out of the ground and donated it to a local women's shelter. He then claimed the value of the house as a charitable deduction.

"The deduction was limited to a percentage of his income, but his income was such that that wasn't a problem. From what I recall, the IRS may have adjusted the value somewhat, but it did allow the deduction," says Baumeister.

Seems everything is bigger in Texas, even the charitable deductions.

4. He took Manhattan, the Bronx and Staten Island, too
When accounting software was in its infancy, a rookie CPA at Hunter Group of Fair Lawn, N.J.,  prepared a return for an individual with one small glitch: The software mistook the filer's address "New York, N.Y." for the name of a dependent. The mistake went unnoticed by the firm and the client until one day they received a phone call from the IRS. The agent apologized that the deduction was being disqualified, even though, as the agent politely agreed, it might indeed be justified.

5. The Oldest Write-Off
When does an entertainment expense exceed IRS criteria? Ed Mendlowitz, CPA with WithumSmith+Brown in Morristown, N.J., found out the funny way when a businessman client wanted to deduct the cost of a call girl he hired to entertain some clients. When Mendlowitz told the businessman he'd have to present said contractor with a Form 1099 to support this business expense, the client declined to do so and dropped the whole idea.

6. The 'Zoolander' deduction
Those who work in front of the camera for a living -- like Derek Zoolander in the 2001 film comedy -- are often inclined to work their accountant to deduct all manner of personal property and perks as business expenses, from full wardrobes to back waxing. "We have public speakers and we help them understand that they cannot deduct all of their clothing, even though they wear it onstage," says Dallas CPA Ken Sibley. "Models can deduct a lot of makeup and certain pieces of apparel, but it has to fit the rules. We don't let them deduct the pedicures, manicures and back waxing for therapeutic reasons."

The craziest "Zoolander" deduction? New Jersey CPA Alan Sobel wins the prize: "Deductions are sometimes claimed for money given to infants for "modeling" for their parents," he says. Seriously.

7. I Would Drive 60,000 Miles
New Jersey CPA Elihu Katzman couldn't believe this one: "We had a client-salesman that was asked the number of miles he used his car for business that year. He insisted that he drove 60,000 miles, all for business. We asked him if he had any time to sleep, in that he must have spent most of the day and night driving."

8. The $50,000 business meeting
Imagine Hatter's surprise when a client-attorney listed $50,000 in entertainment expenses on his tax return -- quite a chunk considering the guy's gross income was in the $300,000 range.

"I said, man, what is that? He said, 'Well, I threw a party for my clients.' And I said, 'You didn't invite me?' Anyway, we started going through it and he said, 'Walt, I've got to tell you, that was for my daughter's wedding. But I did invite all my clients.'

What was the lawyer's occupation? Envelope please. Criminal defense attorney!

9. Finally, the Social Security crisis solved
Warning: If parents ever start documenting this deduction, we'll no longer need to worry about Social Security.

Marcia Geltman, CPA with Nisivoccia & Co. in Randolph, N.J., says parents have asked her more than once if they can claim a bad-debt loss from unpaid loans to their children.

"The correct answer is, unless you have documentation verifying the existence of the loan and have taken legal action that resulted in a determination that the loan is not collectible, no deduction is allowed," she says. "Let us hope that, in the long run, we receive more blessings from our children then these momentary aggravations."

10. "Inflation"???
It's a classic feel-good-all-over tax case that has grown to mythic proportions over the years. Hadder explains: "The one they always talk about at CPA classes is where the topless dancer got breast implants and wrote them off as a business deduction under Section 179 and treated them as a capital asset, as an ordinary necessary business expense, and was able to deduct them. The IRS challenged her, it went to the tax court and she won."

In this text, Paul is looking at Assets vs. Write-Offs

1.  The List of v.4-6

This is a killer resume

7 Clauses

1-4 = Privileges of Birth

5-7 = Voluntary Choices

  • Circumcised on the 8th Day
    • Set apart from pagans and recent converts
    • Born into a Jewish family
  • Israel
    • Israel is the covenant name of God's people, just as the word "Jew" emphasizes their racial origins. Hence, Paul claims to be a member of the covenant people.
  • Tribe of Benjamin
  • Hebrew of Hebrews

3 Choices

  • Pharisee
  • o the most faithful of all Jewish sects in their adherence to the law
  • Zeal = Persecuting the Church
  • Legalistic Righteousness - Faultless

2.  Are Those Assets or Liabilities?

* Religious and Traditional Carry-Overs

Is it a good thing to:

  • Go to Church?
  • Honor traditions past down from previous generations?
  • To subscribe to religious values?

Yes! - these are good things!

We want this for people.

But ... does subscription to these things equal a heart-level change?

Trainspotting, Ewan McGregor's closing speech

  • Stealing from parents
  • Lifting stereos
  • Helping friends get hooked on drugs
  • Sex
  • Baby dies

Closing Speech:

The truth is that I'm a bad person, but that's going to change, I'm going to change. This is the last of this sort of thing. I'm cleaning up and I'm moving on, going straight and choosing life. I'm looking forward to it already. I'm going to be just like you: the job, the family, the ... big television, the washing machine, the car, the compact disc and electrical tin opener, good health, low cholesterol, dental insurance, mortgage, starter home, leisurewear, luggage, three-piece suite, DIY, game shows, junk food, children, walks in the park, nine to five, good at golf, washing the car, choice of sweaters, family Christmas, indexed pension, tax exemption, clearing the gutters, getting by, looking ahead, to the day you die.

These are good things.

  • Commendable.
  • We would want these for our kids or grandchildren.

Which list makes this guy more commendable to God?

  • Heroin
  • Sex
  • Theft

OR

  • Christmas
  • Family
  • Contributing to society
  • Being clean and sober

"In the first place, human righteousness falls short of the standards set by God, and anything short of those standards is unrighteousness. Righteousness is one of those things like perfection that loses its meaning entirely if you divide it. Perfection is a whole. Righteousness is exactly the same. You are either completely righteous by God's definition or you are not righteous at all. Jesus Christ said in what is undoubtedly the most important single verse in the Sermon on the Mount, "Be perfect, therefore, even as your heavenly Father is perfect" (Matt. 5:48). That is the standard." (Boice)

3.  Supposed Assets Are Liabilities - Write-Offs

v.7-8 - But whatever was to my profit I now consider loss for the sake of Christ. What is more, I consider everything a loss compared to the surpassing greatness of knowing Christ Jesus my Lord, for whose sake I have lost all things. I consider them rubbish, that I may gain Christ

Loss = Disadvantage

By comparison, it's the bad thing

  • Negative
  • Antithesis
  • Commercial Loss
  • Negative Profit

Three-Fold Use of "LOSS" in this Passage

  • What was to my profit I now consider loss
  • I consider everything a loss
  • For the sake of Christ I have lost all things

Rubbish (skubula)

  • Dung
  • Scraps
  • Refuse
  • That which is thrown to the dogs
  • A corpse washed up on shore half-eaten by the fish
  • Food that has gone bad

The only time this is used in the Bible

Isaiah 64:6 -    All of us have become like one who is unclean, and all our righteous acts are like filthy rags; we all shrivel up like a leaf, and like the wind our sins sweep us away.

Filthy = Menstrual (ceremonially unclean)

4.  Paul's Conversion

We think that sin is our #1 problem.

I think Paul is arguing that sin isn't what messed him up.

Sin didn't have his spirituality tied in knots

Sin didn't dominate his relationships.

It was his RIGHTEOUSNESS that was his biggest problem!

  • The fact that he was a Hebrews of the Hebrews
  • The fact that in terms of legalistic righteousness he was faultless

Paul didn't become a Christian because he changed his attitude towards sin.

Paul became a Christian when he changed his attitude about his righteousness. (Keller)

He became a follower of Jesus when he repented of his assets and called them liabilities. 

Philippians 3:9 -          and be found in him, not having a righteousness of my own that comes from the law, but that which is through faith in Christ-the righteousness that comes from God and is by faith.

  • No longer having faith in his own accomplishments
  • Only faith in what Jesus has accomplished

Philippians 3:3 -          For it is we who are the circumcision, we who worship by the Spirit of God, who glory in Christ Jesus, and who put no confidence in the flesh

H. A. Ironside "He was not simply exchanging one religion for another; it was not one system of rites and ceremonies giving place to a superior system; or one set of doctrines, rules, and regulations making way for a better one. ... He had come in contact with a divine person, the once crucified, but now glorified Christ of God. He had been won by that Person forever, and for his sake he counted all else but loss. ... Christ, and Christ alone, meets every need of the soul. His work has satisfied God, and it satisfies the one who trusts in him."

5.  This Is the Message We Share

Mission Statement:  "The Church of the Good Shepherd exists to help spiritual wanderers become authentic followers of Jesus."

2 Corinthians 5:14-21 - For Christ's love compels us, because we are convinced that one died for all, and therefore all died. And he died for all, that those who live should no longer live for themselves but for him who died for them and was raised again. So from now on we regard no one from a worldly point of view. Though we once regarded Christ in this way, we do so no longer. Therefore, if anyone is in Christ, he is a new creation; the old has gone, the new has come! All this is from God, who reconciled us to himself through Christ and gave us the ministry of reconciliation: that God was reconciling the world to himself in Christ, not counting men's sins against them. And he has committed to us the message of reconciliation. We are therefore Christ's ambassadors, as though God were making his appeal through us. We implore you on Christ's behalf: Be reconciled to God. God made him who had no sin to be sin for us, so that in him we might become the righteousness of God.

  • V.14 -Compelled by Love
  • V.16 - Not regarding people from a worldly point of view
  • o Drugs are as bad as pride
  • V.17 - Only thing that matters - ARE YOU IN JESUS?
  • V.18 - All this is form God!