Don't Try this at Home - Frivolous Arguments

June 17, 2014 by Carol Thompson, EA
glasses and pen laying on top of tax form

One of the ways to make the government cranky is to file a bogus tax return using a “frivolous argument.” There are so many ways that taxpayers have tried to do an end run on the tax system that the IRS issues an updated consumer alert each year titled, “The Truth About Frivolous Tax Arguments.” 

DISCLAIMER: Don’t try these at home!
(The IRS already knows about them.)

This series will present some of the worst arguments brought up by your fellow Americans to avoid their annual tax bill. Most of these ended with significant penalties assessed on the taxpayers along with the correct tax. The current tax system began in 1913, and taxpayer fraud not long after. The courts often decline “to refute (frivolous) arguments with somber reasoning and copious citation of precedent” for various reasons. (See: Wnuck v. Commissioner, 136 T.C. 498 (2011) (quoting Crain v. Commissioner, 737 F.2d 1417, 1417 [5th Cir. 1984].)1

Following is a list of some of the more popular arguments given by taxpayers – and the answer by the IRS and court systems.2

  1. Filing a tax return and paying taxes are voluntary.
  2. The Meaning of IRS Terms: Taxpayers are not “citizens,” the “United States” only applies to Washington D.C.
  3. Taxpayers are not “persons” as defined by IRS Code, and therefore not subject to federal income tax laws.
  4. Only government “employees” are subject to taxes.
  5. Taxes are unconstitutional.
  6. Taxes constitute a “taking” of property without due process and violate the Fifth Amendment.
  7. Taxpayers do not have to file returns under the protection of self-incrimination in the Fifth Amendment.
  8. Taxes are a form of servitude that violates the Thirteenth Amendment.
  9. Federal tax law is unconstitutional because the Sixteenth Amendment was not properly ratified.
  10. The Internal Revenue Service is not an agency of the United States.
  11. Taxpayers are not required to file a federal tax return because the forms do not all have an OMB control number required by the Paperwork Reduction Act.
  12. African Americans can claim a special tax credit as reparations for slavery and other oppressive treatment.
  13. Taxpayers are entitled to receive a refund of all of the Social Security taxes paid over their lifetime.
  14. A “corporation sole” can be established and used to avoid federal income taxes.
  15. Taxpayers who did not purchase and use fuel for an off-highway business can claim the fuels tax credit on Form 4136.
  16. Form 1099-OID can be used to obtain money from the Treasury.
  17. A tax assessment for taxes due is invalid because the Secretary of the Treasury did not personally sign the collections form.
  18. The Tax Court does not have the authority to decide legal issues.
  19. Penalties for pursuing frivolous tax arguments and penalties assessed on representatives and attorneys.

1Court citation notations are discussed on Wikipedia.
2http://www.irs.gov/Tax-Professionals/The-Truth-About-Frivolous-Tax-Arguments-Introduction

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