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

Recent Articles

Cryptocurrency Coin on 1040 Tax Return
Cryptocurrency is not treated as money for U.S. federal income tax purposes, but rather as property so tax rules that apply to property apply to cryptocurrency.
Wage Garnishment
The IRS uses an annually updated wage garnishment table to determine how much the taxpayer needs to live on and then the IRS takes the rest.
Man looking at a letter
If you review the CP12 notice and do not believe it is correct, it is vital to contact the IRS within 60 days of the date on the notice to request an abatement.
Woman working in her home office
Yes, you can deduct a portion of your home rent for your home office on taxes – but as always , this benefit is only available if certain conditions are met.
This blog does not provide legal, financial, accounting, or tax advice. The content on this blog is “as is” and carries no warranties. TaxAudit does not warrant or guarantee the accuracy, reliability, and completeness of the content of this blog. Content may become out of date as tax laws change. TaxAudit may, but has no obligation to monitor or respond to comments.