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Do dead people have to pay taxes?
That question springs up regularly
on websites such as Yahoo! Answers.
Bereaved family members usually post
it, although occasionally there’s something in
the ensuing discussion that suggests the ghost
posted it directly. “Why should I pay? I have
stopped using public amenities.”
(There must be Internet terminals in
heaven, otherwise my kids are going to flatly
refuse to go there.)
Anyway, the question always gets one of
two responses. Amateur respondents who
post answers just to earn website loyalty points
say: “Don’t be silly, if you’re dead you can’t pay
up.” Accountants give the opposite answer:
“Of course you do. Tax collectors laugh at folk
who use being dead as an excuse not to pay.”
The professionals are right, of course.
In India, dead people pay income tax regularly,
sometimes for years. Madan Kumari
Jain of Delhi has been paying about 200,000
rupees (HK$28,000) a year in tax for the
past five years. She died in 2007. A tax office
in Mumbai revealed that it had taken in 40
million rupees from corpses in the past five
years, The Times of India reported recently.
This information came out when an activist
filed a freedom of information request, but
the ensuing news reports failed to explain
why exactly dead people would pay income
tax. The possible theories, I reckon, are these:
1. She died owing tax money and her heirs
are settling her death duties in stages.
2. She died but nobody noticed, so the tax
bills come in and the company accoun-
60 December 2012
Let’s get fiscal
Get your daily dose of Nury’s humour at www.mrjam.org
No escape from death and taxes
Revenue collectors laugh at folks who think being
dead is an excuse not to pay, warns Nury Vittachi
tant sends out the cash as a habit.
3. She so loved paying tax that her corpse
rises from the grave once a year to file tax
returns.
4. The money is intended for the Heavenly
Tax Department in the afterlife but there
has been an address mix up.
5. The Indian Department of Revenue has
changed the rules so that every resident
or former resident pays taxes every year,
dead or alive, backdated to the beginning
of time and stretching forwards to eternity.
Now if you know anything about the
Indian government, you’ll know that the fifth
option is by far the most likely, and if they
hadn’t thought of doing that yet they will after
reading this article.
While I was preparing this piece, one
reader commented that a friend of hers had
received a tax bill addressed to a recently deceased
relative. She said: “He simply sent it
back with a note saying: ‘The person you want
has changed address’ and then added the address
of the local cemetery. He heard no more
from the tax office.” The envelopes are probably
piling up in front of the gravestone.
There was an interesting case in the United
States in which tax officers received letters
from 250 dead people specifying that
they had not earned much recently, and thus
were entitled to tax refunds. The total sum
requested was US$2 million. Most tax office
staff ignored the requests. But a few did pay
up. It turned out to be a scam by two live villains.
I feel sorry for any real ghosts dealing
“ Madan Kumari
Jain of Delhi has
been paying about
200,000 rupees
(HK$28,000) a year
in tax for the past
five years. She died
in 2007.”
with tax matters at that time.
Also from the U.S., a reader told me that
ghosts in Michigan probably rejoiced one
season when posters went up all over town
saying: “Posthumus Tax Cuts.” But it wasn’t
an adjustment to the tax rates in the afterlife.
It turned out to be the campaign slogan of a
candidate called Dick Posthumus. He didn’t
get many votes. People wanted their tax cuts
before death.
This seems a reasonable request. After
all, like the ghost who wrote to Yahoo! Answers
noted, dead people aren’t exactly a
drain on the public purse. They don’t even
use doors anymore.
Nury Vittachi is a bestselling author, columnist, lecturer and
TV host. He wrote the Institute’s first two storybooks, May
Moon and the Secrets of the CPAs and May Moon Rescues
the World Economy. A third, May Moon’s Book of Choices,
was published in August.