A quick tax quiz:
Q. Payment of tax is voluntary?
Q. Taxpayers can reduce their federal income tax liability by filing a “zero return?”
Q. The IRS must prepare federal tax returns for a person who fails to file?
Q. Compliance with an administrative summons issued by the IRS is voluntary?
If you answered true to any of these, you could be in hot water with the Internal Revenue Service.
The IRS on Monday released its 2011 list of most-common frivolous tax arguments, and the legal rebuttals to them.
It’s available for viewing online at: www.irs.gov/taxpros/article/0,,id=159932,00.html.
“The document explains many of the common frivolous arguments made in recent years and it describes the legal responses that refute these claims. It will help taxpayers avoid wasting their time and money with frivolous arguments and incurring penalties,” according to an IRS statement.
The penalty for filing frivolous tax returns is $5,000.
The increased penalty amount applies when a person declines to file documents, or files incorrect information, based on a position the IRS identifies as “frivolous.”
Such arguments are typically employed by people opposed to federal income taxes.
“Frivolous arguments include contentions that taxpayers can refuse to pay income taxes on religious or moral grounds by invoking the First Amendment; that the only ‘employees’ subject to federal income tax are employees of the federal government; and that only foreign-source income is taxable,” the IRS said in a statement.