Tax Fraud Alert: Frivolous Arguments for Non-Payment of Taxes

Last updated on November 21, 2022

Not many people are happy to pay taxes, but U.S. law requires every U.S. citizen to pay taxes to the government to support its infrastructure and facilities. Non-payment of taxes is considered tax fraud and is subject to penalties and/or imprisonment.

Many times, to avoid paying penalties or harsher punishment for failure to file taxes, taxpayers use frivolous arguments that include the claim that the filing of taxes is voluntary, not compulsory. It should be remembered that a court can charge a penalty of up to $25,000 if it believes that a taxpayer used a frivolous argument in which:

• There was an unnecessary delay in the court proceedings
• A position is frivolous or groundless, and used solely to avoid paying taxes, or
• A taxpayer unreasonably failed to pursue administrative remedies

Arguments that are not backed by facts or supported by law cannot be used to avoid paying taxes. If there has been non-payment of taxes, it is advisable to resolve them by qualifying for a payment plan.

Tax Fraud & Anti-Taxation Groups

Anti-tax groups often lead taxpayers to avoid paying taxes, which lands them into trouble with the IRS. Their followers often believe that taxes can be avoided easily and without punishment.

It is important to remember that believing or not believing in taxes is one thing, and paying and not paying taxes is another. Holding an opinion or a belief is no crime, but not complying with the country’s laws is a crime. As this crime is punishable, it pays to consider the consequences of not filing taxes. The better method for those who do not believe in taxes is to voice their protest and not to break the law. Cases where frivolous arguments are used are often rejected by the courts and ultimately lead to the paying of the taxes owed.

Reporting Tax Fraud

Promoters of abusive tax schemes including anti-tax law, offshore schemes, and frivolous arguments advocates can be reported to the IRS. The referral form, along with any promotional materials, needs to be sent to the Lead Development Center at:

Internal Revenue Service Lead Development Center
Stop MS5040
24000 Avila Road
Laguna Niguel, California 92677-3405

Fax: (877) 477-9135

Tax fraud can have various guises, but taxpayers must be aware of the facts so that they can avoid complicating their tax responsibilities. Using frivolous arguments with little basis in fact or law only leads to a legal battle the where chances of winning are almost nil.