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40 POISON POSITIONS

March 16, 2007

The IRS issued a passel of guidance yesterday listing 40 common tax protester positions that will be subject to the new $5,000 frivolous return penalty. The penalty was raised from $500 starting this year. A sample of the silly positions:

Nothing in the Internal Revenue Code imposes a requirement to file a return or pay tax, or that a person is not required to file a tax return or pay a tax unless the Internal Revenue Service responds to the person's questions, correspondence, or a request to identify a provision in the Code requiring the filing of a return or the payment of tax.

There is no legal requirement to file a Federal income tax return because the instructions to Forms 1040, 1040A, or 1040EZ or the Treasury regulations associated with the filing of the forms do not display an OMB control number as required by the Paperwork Reduction Act of 1980, 44 U.S.C. § 3501 et seq., or similar arguments described as frivolous in Rev. Rul. 2006-21, 2006-15 I.R.B. 745.

A taxpayer may "untax" himself or herself at any time or revoke the consent to be taxed and thereafter not be subject to internal revenue taxes.

Only persons who have contracted with the government by applying for a governmental privilege or benefit, such as holding a Social Security number, are subject to tax, and those who have contracted with the government may choose to revoke the contract at will.

You'd think people would stop buying this stuff, considering how dismal the results have been over the years for those making these arguments. Yet an article from a local high school newspaper (written by its "editor-in-chief") shows that each generation includes a new cohort of the gullible. The article refers to Ed Brown, a convicted tax evader now holed up in a fortress-like house in New Hampshire:

There's one simple question here. If there really is a law, why is the IRS so afraid to show the law? Ed and many others who have gone through similar trials have said if the law is shown to them, they will pay the taxes. It's as simple as that. The answer is that there is no law.

Hmm. If there is no law, why was Mr. Brown convicted? And why have "many" others gone on trial? Is there maybe... a law? If all of the federal judges, the federal marshals, and the bureau of prisons are convinced that there is, that seems more persuasive than the word of fugitive militiamen and high school editorial writers.

Links:

Notice 2007-30, the list of discredited tax protester positions.

Rev. Rul. 2007-19, on the taxability of wages.
Rev. Rul. 2007-20, on the idea that the tax laws are voluntary.
Rev. Rul. 2007-21, on silly procedural arguments.
Rev. Rul. 2007-22, on citizenship an related arguments.

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