American taxpayers, we have the right to contest our tax liability
in court. What we don't have, however, is the right to willingly
violate or disobey federal tax law. There are those who have
advocated willful disregard for the tax laws, and they have used a
variety of false or misleading arguments for not filing or paying
taxes. As an illustration, the IRS has released a few of the worst
The Premise: Filing a Form 1040
supposedly violates the Fifth Amendment right against
self-incrimination, or the Fourth Amendment right to privacy.
Proponents also claim filing violates the Thirteenth Amendment
right against involuntary servitude and First Amendment rights
based on moral or religious beliefs.
The Bottom Line: Courts have
consistently held that the type of routine financial information
required on a tax return does not incriminate an individual or
violate one's right to privacy. The courts have also consistently
ruled that the First and Thirteenth amendments do not give citizens
the right to refuse compliance with tax laws.
The Premise: Promoters of this
scheme claim filing and paying of tax is voluntary, or the code
doesn't apply to them because they are neither a government
employee nor a resident of a sovereign state.
The Bottom Line: The term "voluntary
compliance" means each of us is responsible for filing a tax return
when required and paying the correct amount of tax. The IRS says
the tax law is found in Title 26 of the United States Code. Section
6012 of that Code makes it clear that only individuals whose income
falls below a specific level do not have to file returns. While the
U.S. tax system is based on self-assessment and reporting,
compliance with the tax laws is mandatory. The IRS adds that state
citizenship does not mean the Code doesn't apply to individuals
living and working in the United States.
The Premise: This scheme alleges
African-Americans and Native Americans can claim a special tax
credit as reparation for slavery and other oppressive
The Bottom Line: There is no such
provision in the tax code that allows taxpayers to claim reparation
credits. If it's not specifically provided for in the Code, there's
The Premise: This makes the
assumption that there's no taxable gain when a person "exchanges"
labor for money, therefore wages, tips and other compensation for
personal services are not income.
The Bottom Line: This one has been
consistently dismissed by the courts. Section 61 of the Code, Gross
Income Defined, identifies sources of taxable income, but it's not
all-inclusive. Congress, in fact, has determined that all income is
taxable, unless specifically excluded by some part of the Code.
The Premise: Proponents claim that
taxpayers are not required to file a federal income tax return
because the instructions and regulations associated with the Form
1040 don't show an OMB (Office of Management and Budget) control
number as required by the Paperwork Reduction Act.
The Bottom Line: While the grounds
have varied, courts have consistently rejected this premise. Some
courts have simply said that the Paperwork Reduction Act applies to
the forms themselves, not to the instruction booklets. Because the
Form 1040 does have a control number, there is no PRA
The Premise: Promoters claim that
taxpayers can form a business trust to hold their income and assets
to avoid taxes. They also say a family estate trust will allow
taxpayers to reduce or eliminate their tax liability.
The Bottom Line: Truth is,
establishing a trust, whether foreign or domestic, for the purpose
of hiding your income and assets from taxation is illegal. The IRS
stresses that such trusts will not absolve you of your tax
The IRS also issues this reminder to those who would use
these and other arguments to avoid paying taxes: "Section 6702 of
the Internal Revenue Code authorizes the Internal Revenue Service
to impose a $5,000 penalty against persons who submit frivolous tax
returns or other documents."