“…nothing can be said to be certain, except death and taxes”

On November, 1789, Benjamin Franklin wrote a letter to a friend in France saying, “In this world, nothing can be said to be certain, except death and taxes.”  I bet he had no idea that over a hundred years later, that quote would still be very accurate!

Everyone who have “earned income”  has to pay taxes.  Many people have tried to get out of paying taxes for a number of different reason — 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 — only a few among many that have been attempted and found illegal by the U.S. Courts.

The IRS considers these arguments “Frivolous,” and “Frivolous Arguments” is listed as one of the IRS 2014 “Dirty Dozen Tax Scams” released earlier this year.  The penalty for filing a frivolous tax return is $5,000.  This penalty is applied to anyone who submits a tax return or other specified submission, if any portion of the submission is based on a position the IRS identifies as frivolous.

Those who promote or adopt frivolous positions also risk a variety of other penalties.  For example, taxpayers could be responsible for an accuracy-related penalty, a civil fraud penalty, an erroneous refund claim penalty, or a failure to file penalty.  On top of all the IRS penalties, the Tax Court may also impose an additional penalty against taxpayers who make frivolous arguments in court.  Additionally, taxpayers who rely on frivolous arguments and schemes may also face criminal prosecution for attempting to evade or defeat tax.

Similarly, taxpayers may be convicted of a felony for willfully making and signing under penalties of perjury any return, statement, or other document that the person does not believe to be true and correct as to every material matter. Persons who promote frivolous arguments and those who assist taxpayers in claiming tax benefits based on frivolous arguments may be prosecuted for a criminal felony, as well.  So if your sister-in-law does your taxes they don’t accurately reflect your income or deductions, you both could be fined and prosecuted.

The Internal Revenue Service released their 2014 version of “The Truth about Frivolous Tax Arguments” on April 11, 2014.  This document describes and responds to some of the common frivolous tax arguments made by those who oppose compliance with federal tax laws.  The cases cited demonstrate how frivolous arguments are treated by the IRS and the courts.  The 2014 version includes numerous recently-decided cases that demonstrate that the courts continue to regard such arguments as illegitimate.

And, if that’s not bad enough, I’ll leave you with another quote that has stood the test of time  from Will Rogers — “The only difference between death and taxes is that death doesn’t get worse every time Congress meets.”

Have a good day!