What Not to Say to The IRS

A little while ago Mitchell Port of The California Tax Attorney Blog posted about Hairbrained Tax Schemes. He linked to this article (PDF), called The Truth about Frivolous Tax Arguments which is “the [IRS’s] response to anyone who contemplates arguing on legal grounds against paying their fair share of taxes.”

It discusses and rebuts many of the more common frivolous arguments made by individuals and groups that oppose compliance with federal tax laws.

This 74-page document is updated at least once a year by the IRS and is designed to help individuals and groups understand their responsibilities and not violate the law.

The document explains many of the common frivolous arguments made in recent years and it describes the legal responses that refute these claims. This document is available on IRS.gov and will help taxpayers avoid wasting their time with frivolous arguments and incurring penalties.

Why does it matter? Well, aside from losing your case, badly, the IRS is going to get you for “filing a frivolous tax return.” “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.

Just last week Greg Herman-Giddens of The North Carolina Estate Planning Blog posted here about 4 new positions the IRS considers frivolous:

  • Misinterpretation of the 9th Amendment to the U.S. Constitution regarding objections to military spending.
  • Erroneous claims that taxes are owed only by persons with a fiduciary relationship to the United States or the IRS.
  • A nonexistent “Mariner’s Tax Deduction” (or the like) related to invalid deductions for meals.
  • Certain instances of misuse or excessive use of the section 6421 fuels credit.
  • You’ve been warned.

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