The Indiana Department of Revenue (DOR) continues to partner with the Internal Revenue Service (IRS) to share the top tax filing season concerns referred to as the “IRS Dirty Dozen” tax scams for 2018.
Asserting frivolous tax arguments to avoid paying taxes is the final installment in this 12-part series. This includes making unreasonable and outlandish legal claims to avoid paying taxes. While taxpayers have the right to contest any tax liabilities, individuals must still follow the law and acknowledge their responsibility to pay taxes.
A few examples of these invalid tax arguments include:
- The First Amendment allows taxpayers to refuse to pay taxes on religious or moral grounds
- The only “employees” subject to federal income tax are those who work for the federal government
- Only foreign-source income is taxable
A comprehensive list of frivolous tax arguments can be found on the IRS website at https://www.irs.gov/privacy-disclosure/the-truth-about-frivolous-tax-arguments-introduction.
“Any claim made to avoid paying taxes needs to be legitimate,” said DOR Commissioner Adam Krupp. “Trying to use terminology or fake constitutional claims to elude paying taxes often ends up in court, with the taxpayer having to pay penalties or worse, possibly jail time.”
A civil penalty of $5,000 for filing a frivolous tax return is the most common, however, other penalties may apply.
“When you’re thinking of ways to get out of paying taxes, take a step back and think, is this worth the penalties or possibility of being incarcerated? Remember that payment options are always available to aid taxpayers with large tax debts,” said Commissioner Krupp.
Individuals who owe $100 or more in individual income tax are eligible for a payment plan. For more information on payment options visit the DOR website at https://www.in.gov/dor/4708.htm.
To view the first eleven installments of the “IRS Dirty Dozen” tax scams of 2018, visit http://www.in.gov/dor/6137.htm.