But anyone who contemplates arguing on legal grounds against paying their fair share of taxes would be well-advised to first check out “The Truth about Frivolous Tax Arguments’, a 74-page document published by the IRS. The document, which discusses and rebuts many of the more common frivolous arguments made by individuals and groups that oppose compliance with federal tax laws, has been updated for the 2007 filing season.
Not only will it “help taxpayers avoid wasting their time with frivolous arguments and incurring penalties’ – the IRS notes that in 2006 Congress increased the amount of the penalty for frivolous tax returns from $500 to $5,000. 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.
“Too good to be true schemes are exactly that–too good to be true,” said IRS Chief Counsel Donald L. Korb. “Taxpayers should be careful in making frivolous arguments since courts have routinely rejected them.”
You’ve got another think coming if you:
- Believe that filing a tax return or payment of tax is voluntary, that you can reduce your federal income tax liability by filing a “zero return’, or that the IRS must prepare federal tax returns for a person who fails to file.
- Think that wages, tips, and other compensation received for personal services are not income, that only foreign-source income is taxable, or that Federal Reserve Notes are not income.
- Try to argue that a taxpayer is not a “citizen’ of the United States, and thus not subject to the federal income tax laws, that the “United States’ consists only of the District of Columbia, federal territories, and federal enclaves, that a taxpayer is not a “person’ as defined by the Internal Revenue Code, thus is not subject to the federal income tax laws, or that the only “employees’ subject to federal income tax are employees of the federal government.
- Contend that taxpayers can refuse to pay income taxes on religious or moral grounds by invoking the First Amendment, that federal income taxes constitute a “taking’ of property without due process of law, violating the Fifth Amendment, that you do not have to file returns or provide financial information because of the protection against self-incrimination found in the Fifth Amendment, that compelled compliance with the federal income tax laws is a form of servitude in violation of the Thirteenth Amendment, or that the Sixteenth Amendment to the United States Constitution was not properly ratified, thus the federal income tax laws are unconstitutional.
- Are under the impression that the Internal Revenue Service is not an agency of the United States, that taxpayers are not required to file a federal income tax return, because the instructions and regulations associated with the Form 1040 do not display an OMB control number as required by the Paperwork Reduction Act, that African Americans can claim a special tax credit as reparations for slavery and other oppressive treatment, that taxpayers are entitled to a refund of the Social Security taxes paid over their lifetime, or that a “corporation sole’ can be established and used for the purpose of avoiding federal income taxes.
And yes – all of the above have (unsuccessfully) been argued previously.
The Truth about Frivolous Tax Arguments is available online at http://www.irs.gov/taxpros/article/0,,id=159853,00.html