Tax scams on the front burner at the IRS

 

In case you're thinking that maybe Wesley Snipes has a good point when it comes to lowering income taxes, the Internal Revenue Service wants to remind taxpayers (or non-payers, as the case may be) that it does not plan on ignoring many of the more common arguments made by individuals and groups that oppose compliance with federal tax laws.
 
The IRS states that anyone who contemplates arguing on legal grounds against paying his or her fair share of taxes should first read the 84-page document, The Truth About Frivolous Tax Arguments.
 
The document explains many of the common arguments, described by the IRS as frivolous, that have been made in recent years, and it describes the legal responses that refute these claims. It is hoped that this booklet will help taxpayers avoid wasting their time and money with frivolous arguments and incurring penalties.
 
Congress, in 2006, increased the amount of the penalty for frivolous tax returns from $500 to $5,000. 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 2011 version of the IRS document includes numerous recently decided cases that continue to demonstrate that frivolous positions have no legitimacy.
 
Frivolous arguments include 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 (the Snipes argument).
 
In addition, the document highlights cases involving injunctions against preparers and promoters of Form 1099-Original Issue Discount schemes, and the imposition of criminal and civil penalties on taxpayers who claimed they were not citizens of the United States for federal income tax purposes.
 
Related items:

You may like these other stories...

Some of your clients may get away to business conventions from time to time. It gives them a chance to rub shoulders with colleagues, catch up on the latest developments, and fine-tune their skills. And, when the meetings or...
PwC must face $1 billion lawsuit over MF Global adviceA federal judge on Wednesday ordered PricewaterhouseCoopers (PwC) to face a $1 billion lawsuit claiming that its bad accounting advice was a substantial cause of the...
Being an accountant doesn't mean you're giving investment advice to clients. However, at tax time, accountants often have to deal with the results of any investment advice clients obtained during the year—the...

Already a member? log in here.

Upcoming CPE Webinars

Sep 9
In this session we'll discuss the types of technologies and their uses in a small accounting firm office.
Sep 10
Transfer your knowledge and experience to prepare your team for the challenges and opportunities of an accounting career.
Sep 11
This webcast will include discussions of commonly-applicable Clarified Auditing Standards for audits of non-public, non-governmental entities.
Sep 24
In this jam-packed presentation Excel expert David Ringstrom, CPA will give you a crash-course in creating spreadsheet-based dashboards. A dashboard condenses large amounts of data into a compact space, yet enables the end user to easily drill down into details when warranted.