Tax Arguments With the IRS You’re Not Going to Win


This post is in: Business, International
2 Comments

3-8-11

Ever so often I get an email or comment on a blog at USTaxAid or USTaxAid Services from someone who wants to debate whether we are responsible for filing US tax returns at all.

Yeah, I’ve heard all the arguments before and my standard response in one designed to get myself out of the discussion as soon as possible. I don’t want to waste my time arguing about this issue with a zealot.

My standard response is that even if you’re right and the IRS is wrong, the US government is a whole lot bigger than you and they have a long history of collecting taxes eventually. I’m not interesting in picking a fight that I know I have no chance of winning.

But the fact is that these ‘no tax’ or ‘untax’ guys are just plain wrong. Some of the stupid arguments that you’re just not going to win include:

Stupid Argument: The federal income tax system is voluntary.

Like a lot of arguments, there is a kernel of truth that’s been misapplied. The system isn’t voluntary, the system allows taxpayers to voluntarily determine their own taxes due first, in compliance with the law. If questioned, though, you do need to provide proof that your return is correct.

Stupid Argument: The only income that’s taxable is foreign-source income.

I guess this is the exception that proves the rule. I can’t find the kernel of truth at all in this argument. Instead it’s very clear that if you’re a US citizen you pay tax on world-wide income.

Stupid Argument: There was no proper constitutional amendment for income tax or you can refuse based on the 1st or 5th Amendment.

Bottomline – no, income tax are legal and constitutional.

There are more of these type of arguments, but the bottomline is you have to file a tax return. If you don’t, the IRS is going to find you eventually and then you’ll have tax, penalties, interest and maybe even jail looking you in the face.
And a final word on all of this: The guys who say they win every argument and never have to file are just plain wrong. And they’re lying to you. That’s because they either ARE filing or they’ve been caught. I’ve run into these guys before in my early days in Nevada and I can tell you that many of them DO file returns. They still got busted though because they were helping others break the law by giving out false information.

Some of the guys who have lost and cost a lot of people a lot of heartache include:

Irwin Schiff
Cynthia Neun
Lawrence Cohen
Beverly & Darrell Hill
Charle Conces
Phillip Ballard (Asset & IRS Shield, Inc)
Michael Allamby
Richard Fuselier
Richard Ortt
Joseph Saladino
Frank Perkinson
Richard Blackstock
Donald Gray
Jonathan Luman
James Tolbert
Deowrap & Sunita Buddhu
Michael Muhammad
Wayne Bentson
Robert Schulz (We the People Foundation)
William Bensen (“The Law That Never Was”)
Harold Hearn
Judy Harkins
Elizabeth & Frederic Gardner
Nicole Baine
Kodjovi Raphael Totou
Eric D Parrish
Grace Machoko
Farai Chihota

Even scarier is that in many of the above cases, the people turned over their client lists to the IRS. That means if you ever signed up for a newsletter, attended a seminar or bought a book, the IRS would have you on their target for an audit.

These arguments are stupid because they don’t work, you don’t need them if you use LEGAL tax strategies and even finding out more information about them could mean you get targeted for an audit. (You can, however, go to the www.IRS.gov website to read up on what claims they’ve made and the get links to the court information)

Find out more about what doesn’t work when it comes to the IRS by signing up for our FREE teleseminar 25 Stupid Things That Can Cost You an IRS Audit. It’s on Saturday at 9 am PST, Noon EST.


2 Comments

  1. Norm says:

    I always figured these arguments were but the fringe of the population. Do you know how often this occurs? I’m curious as to the lost tax revenue and cost to the rest of us to chase them down.

  2. Clint says:

    Great article!

    I did a presentation at the Fastlane Gathering a couple weeks ago which touched on this subject. First off, there was an IRS Bulletin posted a few days ago about “Frivolous Tax Arguments”, my favorite is the infamous Wesley Snipes case. In it he tried to get a full refund of everything he paid in based on some tax protest clause and now he’s wearing orange.

    For anyone who thinks that taxes are unconstitutional they only need to look at Article I, Section 8 of the Constitution itself. If they still try to claim that “income” taxes are unconstitutional, then they can look at the 16th Amendment, again, in the Constitution.

    That said, it’s sad that the list you provided is only the tip of the ice-berg and makes it more difficult for tax professionals like us to utilize real tax loopholes because of “creative” accountants who try to circumvent the entire tax code.

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