The IRS has issued a detailed, 80-page document discussing and rebutting many of the more common frivolous arguments made by individuals and groups that oppose compliance with federal tax laws. An accompanying news release reminds taxpayers that the penalty for frivolous tax returns is $5,000, and applies when a person submits a tax return or other specified submission, and any portion of the submission is based on a position that IRS identifies as frivolous. The tax attorneys at McLaughlin & Quinn, LLC frequently see taxpayers try to raise these arguments. Partners Moore McLaughlin, Esq., CPA and Thomas P. Quinn, Esq. generally convince them to be realistic and deal with the IRS in a forthright manner.
The IRS’s “The Truth About Frivolous Tax Arguments” responds to some of the more common frivolous “legal” arguments about the federal tax system. Each contention is briefly explained, followed by a discussion of the legal authority that rejects the contention.
The document covers these broad categories of frivolous arguments:
- Various contentions that: the federal income tax system is voluntary; terms in the Code such as taxable income, gross income and “the taxpayer” are improperly defined; and payment of taxes is unconstitutional. Other arguments in the category have fictional legal bases, for example, that IRS is not an agency of the U.S., or that taxpayers are entitled to the refund of social security taxes paid over their lifetime.
- Frivolous arguments in collection due process cases, including various contentions that assessments are invalid, or that the statutory notice of deficiency, notice of federal tax lien or statutory notice and demand is invalid.
- Contentions that the Tax Court is not authorized to decide legal issues, or that IRS personnel do not have the authority to seize property in satisfaction of unpaid taxes, or that IRS employees lack credentials.
A final section of the IRS’s frivolous tax arguments document explains in detail the penalties that courts may impose on those who pursue tax cases on frivolous grounds, and cites scores of cases rejecting various frivolous arguments and imposing penalties.
For a copy of this complete report, contact Moore McLaughlin, Esq., CPA by e-mail at mmclaughlin@mclaughlinquinn.com.
If you or someone you know owes taxes and needs help dealing with the IRS or state taxing authority, please contact Thomas P. Quinn, Esq. by e-mail at tquinn@mclaughlinquinn.com or Moore McLaughlin, Esq., CPA by e-mail at mmclaughlin@mclaughlinquinn.com or either of them by phone at 401-421-5115.