What are Frivolous Tax Arguments?

By | March 22, 2015

The Internal Revenue Service (IRS) today completed the “Dirty Dozen” of 2015 and warned taxpayers who are lurking scam against frivolous tax arguments to avoid paying their taxes. It would be very rare to try and assets one of these frivolous tax arguments against the IRS. 


The Truth About Frivolous Tax Arguments

Also today, the IRS published “The Truth About Frivolous Tax Arguments”. The 69-page document describes and responds to some of the most common frivolous arguments taxes created by those who oppose the enforcement of federal taxes. Examples include debates frivolous arguments that taxpayers can refuse to pay income taxes on religious or moral grounds by invoking the First Amendment. The cases cited frivolous arguments demonstrate how they are treated by the IRS and the courts.

“The IRS and the courts hear many arguments to avoid filing or payment of taxes,” said IRS Commissioner John Koskinen. “Taxpayers should be lurking against scammers and promoters of schemes offering extravagant claims”.

Common IRS Scams that Taxpayers Face

The list of the “Dirty Dozen” is compiled each year by the IRS, and lists a number of common scams that taxpayers may face at any time. However, many of them reach the top during tax season when taxpayers file their returns or hire professionals for the task.

Illegal scams can result in significant fines, interest and possible criminal charges. The Criminal Investigation Division of the IRS works closely with the Department of Justice (DOJ, for its acronym in English) to stop scams and prosecute the criminals involved.


Debunking frivolous tax arguments

“The Truth About Frivolous Tax Arguments” describes and responds to some of the most common frivolous arguments taxes done by those who oppose the enforcement of federal taxes. The cases cited frivolous arguments demonstrate how they are treated by the IRS and the courts. The 2015 version includes numerous recently culminated cases demonstrating that courts still consider such arguments as illegitimate.

Examples include debates frivolous arguments that the only “employees” subject to federal taxes are federal government employees; and that only foreign income is taxable.


Do not be persuaded to use a frivolous argument

Promoters of frivolous schemes instigate taxpayers to make foolish and unfounded claims to avoid paying the taxes they owe. These arguments are false and have been thrown out of court. While taxpayers have the right to contest their tax liabilities in court, no one has the right to disobey the law or ignore the responsibility to pay taxes.


Fine for Frivolous Tax Argument

The penalty for filing a frivolous tax is $ 5,000. The penalty applies to any person who submits an alleged tax or other specified document if any part of the presentation is based on a position identified as frivolous in IRS Notice 2010-33, 2010-17 IRB 609 or reflects the attempt to delay or impede the administration of the tax laws. Those who promote or take frivolous positions are at risk of a variety of sanctions. For example, taxpayers could be responsible for the penalty related to the accuracy of the claim, the civil fraud penalty, the penalty erroneous claim for refund or a fine for failure to file a statement. The Tax Court may also impose a sanction against taxpayers who make frivolous arguments in court.


Penalties for Frivolous Tax Arguments and Frivolous  Tax Returns

Taxpayers are based on frivolous arguments and schemes may also face criminal prosecution for attempting to evade or cancel fees. Similarly, taxpayers may be convicted of a felony for knowingly make and sign under penalty of perjury any return, statement or other document that the person does not believe to be true and correct in all material matters. People who promote frivolous arguments and those who assist taxpayers to claim tax benefits based on frivolous arguments can be prosecuted for a criminal offense.