There are myths and arguments made by tax protesters that claim that income taxes are unconstitutional or should not be paid to the government when due. However, the IRS has laid out a detailed justification of why these refusing to pay tax arguments are fictitious and why taxes should be paid.
Taxes should be paid because they go to other resources that help the country keep going and without it there are many things that would need to get shut down because of no funding (e.g. schools, police force, government funded programs, etc.).
Anyone who files a return or makes a submission to the IRS based on the fictional legal theories refusing to pay income tax would be subject to an IRS penalty of $5,000 and may also be liable for a 75% civil fraud penalty.
Can I Refuse to Pay Income Tax?
The power of the government to tax was set forth in Article I of the Constitution: "Congress shall have power to lay and collect taxes." Then, the 16th Amendment in 1913 gave the government the specific power to collect income tax.
Many people feel that their tax bill is an unfair burden placed on them by the government. However, not paying your taxes is a crime called tax evasion and you must pay your taxes. However, as an income tax lawyer will tell you, there are some ways that you can make sure you are taking the proper deductions and planning ahead so that you do not unintentionally increase your tax bill.
You are legally required to pay income tax and the legal theories around refusing to pay income tax never hold up in court.
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What are the Legal Theories Refuse to Pay Income Tax?
Here are some theories on which people refuse to pay income tax:
- The 861 Position: Some people argue that Section 861 of the Internal Revenue Code does not list "wages" as taxable. The IRS responds that "compensation for services," which is listed, is the definition of "wages."
- Payment is Voluntary: Another theory is that the payment of taxes is "voluntary," as the word was used in the Supreme Court case Flora v. U.S. The IRS explains, however, that the word "voluntary" means that the taxpayer has the right to pay her own taxes (and thus take an aggressive interpretation of tax law), instead of the government imposing their own tax calculations on citizens.
- Not Taxable Income: There is an argument that wages, tips, and other compensation received for personal services is not "income," because there is no taxable gain when a person exchanges labor for money. The IRS responds that the Internal Revenue Code Section 61 and famous cases such as Glenshaw Glass emphasize the broad range of "gross income."
- Violation of the 5th Amendment: Then there’s the argument that filling out a tax return violates the 5th Amendment self-incrimination clause. However, while the self-incrimination privilege protects the taxpayer from revealing an illegal source of income, it does not protect her from disclosing the amount of that income.
- Involuntary Servitude: Taxation is a form of involuntary servitude, which is prohibited by the 13th Amendment. However, the Congress defines "involuntary servitude" as being forced to work against one’s will. No one in the United States is forced to work.
What are the Legal Penalties for Refusing to Pay Income Tax?
None of these theories has allowed someone to avoid paying their taxes and when tax season comes around. Anyone person who uses one of these legal theories and files a return to the IRS based on one or more of these legal theories is subject to an IRS penalty of $5,000.
In addition, the IRS will require you to pay the income tax owed, but can also enact a 20% penalty and another 75% civil fraud penalty on top of that. You can also be held criminally held liable for tax evasion and tax avoidance.
Do I Have Any Rights as a Taxpayer?
Yes. The Taxpayer Bill of Rights states your rights as a taxpayer and the code of conduct the IRS has to follow when dealing with taxpayers. However, taxpayers do not have any rights to refuse to pay income tax that is owed to the federal government.
Everyone has a legal obligation to pay income tax if they made any type of income for that taxable year. Some of the most essential rights of a taxpayer are:
- You are entitled to representation by an attorney, accountant, or other tax advisor when dealing with the IRS. If you have sought representation, the IRS cannot interact with you without the presence of that representation.
- You can record a conference with the IRS as long as you have given at least 10 days notice. Be advised, the IRS can also record the conference as long as they give you 10 days notice.
- You can suspend an audit in process to consult with your professional advisor.
Do I Need to Contact a Tax Attorney?
There is a large amount of misinformation floating around about U.S. tax law and your rights to refuse to pay any income tax. If you are being audited or brought into court by the IRS for tax evasion, then it is in your best interest to hire a local tax attorney. However, you should keep in mind that there is no successful argument to fully refuse to pay taxes and instead you should be prepared to pay any back taxes you might owe.