Many people want to avoid paying taxes, and countless arguments have been made by those claiming legal grounds not to pay.  The IRS has made a list of some of the common contentions that have been made and discredited in the past. The IRS dubs these dubious contentions as frivolous tax arguments. Anyone who files a frivolous tax return can be subject to penalties above and beyond those imposed for a failure to pay taxes.  That said, it is important to understand what frivolous tax arguments are.

It is also essential to avoid falling for scams in which businesses or individuals tell you they can help you avoid paying taxes by making one of these frivolous arguments. While there are legitimate ways to reduce current taxes and back tax debt, there are no options for evading paying federal income taxes. Boca Raton tax relief services can help clients avoid frivolous tax arguments or scams claiming to avoid taxes and can offer real solutions for trying to reduce the amount of money owed to the IRS.

What are Frivolous Tax Arguments?

According to the IRS, frivolous tax arguments involve making “unreasonable and outlandish claims to avoid paying… taxes.”  The IRS releases a document each year summarizing the arguments that are considered frivolous.  Anyone who submits a tax return or makes any other submission to the IRS that includes or is based upon any frivolous tax argument can be subject to a $5,000 penalty, according to the IRS.

In addition to the $5,000 penalty, taxpayers who submit a return with a frivolous argument could also be assessed an accuracy-related penalty, a penalty for civil fraud, a penalty for an erroneous refund claim, or a penalty for failure to file taxes.  Criminal prosecution for attempting to evade or avoid taxes is also possible, and making frivolous arguments in court related to tax avoidance can also result in additional monetary penalties.

An argument against taxes is considered a frivolous tax argument if the argument is based on a position the IRS already identified as frivolous (a summary is published in an annual notice).  Any submissions to the IRS that reflect “a desire to delay or impede administration of the tax laws” can also be considered frivolous.  Some of the many examples of frivolous tax arguments the IRS has already identified include:

  • Claiming it is voluntary to file a tax return or pay federal income tax
  • Claiming tax liability can be reduced by filing a zero return
  • Claiming the IRS has to prepare federal tax returns for anyone who doesn’t file their own
  • Asserting that wages, tips, or compensation received for providing personal services do not count as income for tax purposes
  • Claiming that only income from foreign sources is taxable
  • Claiming that the “United States’ only includes Washington D.C. and federal territories or enclaves
  • Arguing that the taxpayer isn’t a citizen or a person under the meaning of the Internal Revenue Code
  • Arguing only employees of the federal government are subject to federal taxes
  • Invoking the First Amendment and refusing to pay taxes on religious or moral grounds
  • Invoking the Fourth Amendment and arguing summonses from the IRS violate the Fourth Amendment
  • Claiming that income taxes are a violation of the Fifth Amendment because they are a taking of property without due process
  • Arguing the Fifth Amendment protection against self-incrimination means that tax returns do not have to be filed
  • Claiming taxes are a violation of the 13th Amendment because taxes are a form of servitude
  • Arguing the Sixteenth Amendment to the constitution was not ever ratified and thus federal taxes are not constitutional or claiming the 16th amendment doesn’t authorize a direct non-apportioned income tax
  • Arguing the IRS isn’t an agency of the U.S.

There are also additional arguments that are considered frivolous as well, and the IRS routinely adds to its list of contentions that have been debunked and will trigger penalties. If you have been assessed penalties for filing a frivolous tax return or other submissions call East Coast Tax Consulting to learn whether you can reduce or eliminate these penalties.