Diversions February 18, 2010
IRS Debunks Frivolous Tax Arguments
The IRS has released the 2010 version of its “discussion”—and
rebuttal—of many of the more common frivolous arguments made by
individuals and groups that oppose compliance with federal tax laws.
Reported by Nevin E. Adams
According to the IRS, “anyone who contemplates arguing on legal grounds against paying their fair share of taxes should first read the 80-page document, The Truth about Frivolous Tax Arguments.”
The document explains many of the common frivolous arguments made in recent years and it describes the legal responses that refute these claims. It will help taxpayers avoid wasting their time and money with frivolous arguments and incurring penalties.
Constitution Arguments
Those arguments include: that filing of a tax return (and payment of tax) is voluntary; that taxpayers can refuse to pay taxes on religious or moral grounds by invoking the First Amendment; that federal taxes constitute a “taking” of property without due process of law in violation of the Fifth Amendment; and that the Sixteenth Amendment was not properly ratified— thus rendering the federal income tax laws unconstitutional.
The IRS reminds us that in 2006 Congress increased the amount of the penalty for frivolous tax returns from $500 to $5,000, and that the increased penalty amount applies when a person submits a tax return or other specified submission, and any portion of the submission is based on a position the IRS identifies as frivolous.
IRS highlighted in the document about 40 new cases adjudicated in 2009. Highlights include cases involving injunctions against preparers and promoters of Form 1099-Original Issue Discount schemes and injunctions against preparers and promoters of false fuel tax credit schemes.
The document explains many of the common frivolous arguments made in recent years and it describes the legal responses that refute these claims. It will help taxpayers avoid wasting their time and money with frivolous arguments and incurring penalties.
Constitution Arguments
Those arguments include: that filing of a tax return (and payment of tax) is voluntary; that taxpayers can refuse to pay taxes on religious or moral grounds by invoking the First Amendment; that federal taxes constitute a “taking” of property without due process of law in violation of the Fifth Amendment; and that the Sixteenth Amendment was not properly ratified— thus rendering the federal income tax laws unconstitutional.
The IRS reminds us that in 2006 Congress increased the amount of the penalty for frivolous tax returns from $500 to $5,000, and that the increased penalty amount applies when a person submits a tax return or other specified submission, and any portion of the submission is based on a position the IRS identifies as frivolous.
IRS highlighted in the document about 40 new cases adjudicated in 2009. Highlights include cases involving injunctions against preparers and promoters of Form 1099-Original Issue Discount schemes and injunctions against preparers and promoters of false fuel tax credit schemes.
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