10 Jan

40 days of Frivolous Tax Arguments: Federal Reserve Notes are not income

Here the jokers are saying that our money isn’t legit, so it’s not really money, so it can’t be taxed. Really? Well I wonder what they do when they go to the grocery store? Do they use *gasp* money????

The truth is that Congress can call something money if they want to. The Constitution says that gold and silver are the only legal tender in the U.S., but that Congress could declare other legal tender if they wanted to. And they did. So we have it. It’s called money. Those pieces of paper that we exchange for other stuff.

So money is really money, and taxes must be paid on money.

 

09 Jan

40 days of Frivolous Tax Arguments: Only foreign-source income is taxable.

The argument that there is no law that allows the government to impose a tax on income from within the United States is plain wrong. The tax rules say that all people in the United States, have to pay tax on income inside and outside the United States. There are provisions to prevent double taxation, so that if your earnings are taxed in a foreign country, you don’t get taxed again in the U.S.

02 Jan

40 Days of Frivolous Tax Arguments: Wages, Tips, and Other Compensation Received For Personal Services Are Not Income.

How funny. In America, almost everything is “income.” That’s just how things work. Heck… you can’t even win a prize without that being income. About the only thing that is not income is a gift or an inheritance, but even those are easily taxed by our government.

The heart of the argument against wages being income is that there is no taxable gain when you “exchange” your labor for money. They claim that you actually have a “basis” in your labor (kind of like it has inherent value) and you can exchange it for the fair market value of wages without a profit. No profit or gain means no taxation, to those who argue against income taxes. Read More

31 Dec

40 days of Frivolous Tax Arguments: Compliance with an administrative summons issued by the IRS is voluntary.

IRS sends taxpayer an administrative summons. Taxpayer claims that responding and complying is voluntary. Not so. A summons is a command to appear, testify, and produce documents, and the IRS is authorized to issue one. The district courts will enforce the summons, if necessary. And yes, there can be criminal penalties.

30 Dec

40 days of Frivolous Tax Arguments: The IRS must prepare federal tax returns for a person who fails to file.

Supporters of this bogus theory say that it’s the IRS’s responsibility to prepare and file a tax return for them if they don’t file. But the tax law really says that if someone doesn’t file their return, the IRS can prepare their return (i.e. make up numbers for the person). It doesn’t say that the IRS must prepare the return. And the tax law doesn’t say that a person is excused from filing a tax return.

29 Dec

40 days of Frivolous Tax Arguments: Taxpayers can reduce their federal income tax liability by filing a “zero return.”

This one is at least a little creative. File a tax return showing no taxable income, and your taxes are zero. That would work if you really have no income. But since most of us have W-2s and 1099s and such, that “zero income” return is actually false… and you really do owe taxes.

Don’t you kind of wonder who is coming up with these arguments? I mean… how can they think it’s okay to just lie and say their income is zero? It makes no sense.

28 Dec

40 days of Frivolous Tax Arguments: Payment of tax is voluntary.

Like yesterday’s bunk, this false assertion relies upon the idea that taxes are voluntary. Again, the concept that our tax system is based upon voluntary assessment and payment. But that doesn’t mean that taxes are voluntary all together. It means that taxpayers give up their information and tell the IRS how much they’re supposed to pay under the tax law.

We can go straight to the Internal Revenue Code, which imposes a tax on the taxable income of individuals, estates, and trusts as determined by tax tables.

Protesters have known to get cute too, and try to avoid taxes by saying that they just don’t know if income is taxable or not. That one doesn’t fly either.

27 Dec

40 days of Frivolous Tax Arguments: The filing of a tax return is voluntary.

This one is good. The tax protesters say that they don’t have to file income taxes because it’s a voluntary system. And they volunteer to NOT file taxes. Part of what fuels this misconception that taxes are voluntary is a Supreme Court decision which said “[o]ur system of taxation is based upon voluntary assessment and payment, not upon distraint.”

Except that didn’t mean that filing tax returns is optional. It means that it is mandatory for people to volunteer the information about their income and expenses. It means that people tell the IRS how much they made and therefore how much they’re supposed to pay. This is done instead of the IRS coming in and initially telling taxpayers how much they are going to pay.

So the bottom line is that filing a tax return is, in fact, mandatory. You don’t get a choice.

Incidentally, one guy got sentenced to 13 years in prison for promoting and selling this concept that taxes are voluntary. Royal Lamarr Hardy called his scheme the “Reliance Defense,” and he also got tagged with a bill of almost $200,000 for restitution to the IRS for his nonsense.

26 Dec

40 days of Frivolous Tax Arguments

Because I just can’t get enough of the Internal Revenue Service and our messed up American tax system, I’m going to treat my readers to 40 days of “frivolous tax arguments.” Settle down…. I’ll still be posting all of my regular fraud news and topics. This is just a bonus for the next (very painful) 40 days.

Although I have many arguments with our tax system, I don’t support the loons who promote these bogus reasons why they don’t have to pay taxes. The fact is, we’re all subject to the horrendous laws, and there aren’t any cute loopholes to help you get out of paying them.

The IRS recently published a huge document about all of those “frivolous tax arguments,” and I’ll be giving a short summary of each of their 40 points.