Sunday, March 20, 2011

Debunking Frivolous Tax Arguments

Many have tried and the Internal Revenue Service (IRS) has issued a response to the most common frivolous arguments made by individuals and groups that oppose compliance with federal tax laws.

The IRS publishes a long list of arguments it warns have already been deemed frivolous including contentions that taxpayers can refuse to pay income taxes on religious or moral grounds by invoking the First Amendment; that the only "employees" subject to federal income tax are employees of the federal government; and that only foreign-source income is taxable.

Penalties jumped from $500 per offense to $5,000 in 2006. 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.

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