As Jim Terrell (a Waco attorney) and I were talking, the discussion turned to taxes. He posed a question: what would happen if he paid me more money for my work, and then I later returned the money to him? If he paid me twelve dollars an hour instead of four dollars, he would be able to deduct all the money as a business expense. If I then returned the money to him, he wouldn't have to pay taxes on it.

I asked him if he were in the fifty percent tax bracket. He said he had even been in the seventy five percent tax bracket. I said, "Well, they don't even have a seventy five percent tax bracket anymore."

He concluded that he must be in the fifty percent tax bracket, although he didn't really know. I thought more and said, "Well, you know if you did do that, anything you paid me, like that extra ten dollars an hour, that would just be deductible right off the top. If you paid me an extra eight or ten dollars an hour, that would be an extra four or five dollars you wouldn't have to pay taxes on, right off the top. You would just be able to put it in your pocket."

He seemed to like that idea. I had never thought about it, and I was unsure I wanted to do something like that. But finally I said, "Yea. I would be amenable to doing something like that. I normally don't like to violate the prohibitions out there, but when it comes to the Internal Revenue Service, I don't have too many qualms."

Nevertheless, I was still considering whether or not such an action would be advisable. Perhaps he wasn't even serious about it, and was simply trying to trap me into something. If he was serious, it didn't seem like a wise move on his part, because I might later blackmail him. I didn't intend to blackmail him, but it could be done.