You Don't Have to Pay Taxes! (Actually, you do)

One sign of spring is the annual appearance of reasons why you don’t have to pay federal income taxes. Most of these tax-protester arguments are old and all of them are illegal. Try using one of these specious reasons to avoid the income tax and you’ll land in hot water with Uncle Sam, who will make you pay penalties and interest as well as back taxes. In a worst case scenario, you could end up behind bars.

One of the oldest arguments against paying income taxes is that filing a return and paying the tax is “voluntary.” Wrong. The system is voluntary only in that the taxpayer gets to figure out the tax owed rather than the government. Anyone who has income higher than the level set by law must file a return and pay any tax due. Other losers are arguments that only income from foreign sources is taxable or that the taxpayer is a citizen of an individual state, not a citizen of the United States as defined in the tax code.

For a full rundown of bogus anti-tax arguments, go to the IRS Web page.

Filing a frivolous tax return can earn you a $5,000 fine as well as a penalty of up to 75% of the underpayment. In extreme cases, the fine could go up to $25,000 or even net you a jail term. Even so, those who espouse these arguments for avoiding taxes like to claim that many taxpayers have fought the IRS and won. Not true, according to The Tax Protester FAQ.

Although a few tax protesters may have avoided criminal penalties, no one has ever beaten the IRS in a tax collection case using these arguments.