Despite the Supreme Court ruling last June saying that the cancellation of college debt to millions of taxpayers was illegal, the new administration is cancelling $127B in college loans for over 3M borrowers. The High Court ruled that the Administration didn’t have the authority under existing law to cancel the loans .
So the administration found the following loopholes and did it anyway.
1 – $22.5B in loans from 1.3M borrowers is being forgiven using the anti-fraud and consumer protection regulations. On these, the consumers allege that they were defrauded by their school, saw their institutions suddenly close, or are covered by related court settlements.
2 – $11.7B in loans is being forgiven for 513K borrowers with a permanent and total disability.
3 – $51B in loans is being forgiven based on the tweaked rules using waivers for 715K public servants.
4 – Another $42B is being forgiven for 855K borrowers based on inaccuracies, no matter how small or infinitesimal, in the income driven repayment program.
My point is to remind you that forgiveness of debt is a taxable event. Income taxes are levied on all taxable enrichments.
If you no longer have to pay a debt you will receive a 1099 in the amount of the forgiveness. As such you will be required to pay income taxes on this event.
The only way that tax will not be due is if we can prove that under the rules of the IRS Code, you were insolvent AFTER the forgiveness. That’s after, not before.
If you find yourself a recipient of this bonanza, consider yourself blessed beyond compare and pay your taxes without complaint. Think about the rest of us who saved for the college educations of our children from the day they were born and actually paid the bill in full.
Let me leave you with this.
Whenever I feel beat up, tired, or overworked, I consider the young men and women currently guarding the Tomb of the Unknown Soldier.
They must commit 2 years of their lives to guard the tomb, live in a barracks underneath the tomb, and cannot drink any alcohol on or off duty.
They cannot swear in public and cannot disgrace the uniform (fighting) or the tomb in any way. After two years, the guard is given a wreath pin that is worn on their lapel signifying they served as a guard of the tomb. There are only 400 presently worn.
The guard must obey these rules for the rest of their lives or give up the pin.
During their first six months of duty, a guard cannot speak to anyone or watch television. All off duty time is spent studying the 175 notable people laid to rest in Arlington National Cemetery. A guard must memorize who they are and where they’re interred.
Every guard spends at least five hours daily getting their uniforms ready. There are no wrinkles, folds, or lint to be found. Guards dress for duty in front of a full-length mirror.
In 2003, as Hurricane Isabelle approached Washington, the Senate and House took 2 days off in anticipation of the storm. Given the dangers of the hurricane, the military members guarding the tomb were given permission to suspend their assignment.
They respectfully declined, saying, “No Sir. Not on my watch. We have a job to do, and nothing’s going to force us to leave our post.”
I want you to picture this. Soaked to the skin, marching in the pelting rain of a tropical storm, they walked 21 steps in one direction. They then waited 21 seconds, did an about face moving their rifle to the other shoulder, and repeated the process.
The winds were blowing so hard, they could barely remain erect.
They said that guarding the tomb was not just an assignment, but the highest honor that could ever be afforded a US serviceperson. The tomb has been patrolled continuously, 24 hours, 7 days a week, since 1948.
Entrepreneuring is hard. There isn’t anything easy about it. If you want easy, go get a job. But don’t ever forget that it’s a sacred duty, a sacred honor, and a sacred privilege. Millions have died to give you this freedom and right.
Earn it.
And the next time we get less than an inch of snow and your employees start giving you grief about coming to work, remind them of the 3rd Infantry Unit, commonly referred to as The Old Guard, standing their post in the howling wind and horizontal rain of a Category 5 Hurricane. Remind them that it’s a duty, an honor, and a privilege to be able to work in these United States of America.
Millions have died to give them this freedom and right. Hundreds of millions of others living around the world, would give up just about anything to also enjoy their freedoms and their rights.
A little snow would never stop them from going to work.
We’re all going to get through this. Let’s get through it together.
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