IRS Warns Against Frivolous Tax Returns
Savvy taxpayers often put a lot of thought into ways to legally reduce their tax bill. But taxpayers thinking about arguing to the Internal Revenue Service about whether they are truly obligated to pay their fair share of taxes should think again.
The IRS released a public announcement advising individuals and groups to avoid wasting time and money with frivolous tax arguments that will only result in penalties for the taxpayer.
Arguments heard by the IRS that have been deemed frivolous include contentions that the taxpayer can be exempt from taxes on moral or religious grounds, that only employees of the federal government should pay federal tax, and that only foreign-source income is taxable.
In 2006, Congress raised the penalty for frivolous tax returns from $500 to $5000. 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.
The IRS document, The Truth About Frivolous Tax Arguments
, describes frivolous arguments and relevant case law. Interesting reading for anyone thinking about an excuse to get out of paying their taxes.
Internal Revenue Service