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IRS Adds to Frivolous Claims List

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Washington, D.C. (January 15, 2008)

By WebCPA staff

The Internal Revenue Service has amended its list of "frivolous" legal arguments used by people who want to avoid paying taxes, adding four new claims to the set it considers without merit.

They include misinterpretation of the 9th Amendment to the U.S. Constitution regarding objections to military spending; erroneous claims that taxes are owed only by persons with a fiduciary relationship to the United States or the IRS; a nonexistent "Mariner's Tax Deduction" related to invalid deductions for meals; and misuse or excessive use of the Section 6421 fuels credit.

The IRS said that taxpayers who file tax returns or make other submissions with these and other claims on its list are subject to a $5,000 penalty. The penalty increased from $500 to $5,000 in 2006.

Notice 2008-14 lists the other positions the IRS considers frivolous for purposes of the penalty. It applies when filing a frivolous tax return or submitting to the IRS a frivolous request for a collection due process hearing or application for an installment agreement, offer-in-compromise, or taxpayer assistance order.

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