Dead Bodies = Tax Break?

In the worst thing I’ve seen on social media this week - a woman posted a video that’s since received over 500k likes, claiming that all you have to do to avoid paying property tax, deduct your home, keep the bank from ever repossessing your house, and build generational wealth, is by burying dead bodies in your backyard. To be a little more specific - she claims you can do all this if you rezone your backyard to a cemetery. Ever heard of the game two truths and a lie? This is more like two lies and a truth.

Although getting a tax break by declaring a portion of your land a cemetery is possible - it of course comes with rules. You can’t just yell “I DECLARE CEMETERY!” and be exempt from paying taxes or having your property seized for the rest of eternity. As with most tax law - in order to benefit from tax breaks you must be related to the industry in which you are attempting to get the tax breaks from. In this instance, to qualify for all the tax breaks a cemetery gets, you must run the property like, you guessed it, an actual cemetery. So the claim that turning your primary residence into a “cemetery” and entitles you to tax breaks just because you buried Mimi and Papa back there, is simply not true.

Now it is possible to have portions of your land zoned for a cemetery (think family cemeteries), but even then, after going through the legal wrangling to get it declared a cemetery, you still can only exempt the land from property tax that the bodies are actually buried on. Whether it’s worse the hassle to get that tax break (as well as potentially messing up your property values if you have a bunch of dead bodies in your backyard and want to sell later), the claim that burying bodies in your backyard is some type of “tax hack”, simply isn’t true.

IRS Scam Alert

A colleague on Twitter posted the following scam IRS “notice” one of their clients received:

I imagine if you click the “Claim My Refund” - it either asks for sensitive information they could use to conduct identity theft or access your bank account. So how do we know this is a scam?

• First - the IRS won’t email you asking for sensitive information - so that’s the first red flag.

• The second red flag is that the third round of stimulus checks in March of 2021 - over two years ago.

• The third are grammatical and spelling mistakes, such as “Tax Payer” (it’s taxpayer), a capitalized “We” after a comma, and an extra space before the period after “now”.

• Fourth - it says “We hope this message finds you well”. The IRS will never hope it finds you well.

1099-K Reporting Looming

The IRS wants you to remember that the 1099-K reporting for payments made via card kicks in at $600 in volume for 2023 taxes. Previously, the threshold was $20k in transactions and 200 transactions in volume.

Obviously, the main concern here is that 1099-K’s will be incorrectly issued for personal payments since they include payment processors like Venmo, Paypal or CashApp.

In the event that you were sloppy and didn’t do this and receive an incorrect 1099-K, you can always report the corrected amount on Schedule 1 when you file your return.