The Internal Revenue Service has taken the offensive against frivolous arguments that taxpayers should avoid when filing their tax returns. "Every filing season, thousands of taxpayers hear groundless theories suggesting that they don't have to pay taxes or file returns," said IRS Commissioner Mark W. Everson. "We want people to know the truth about these frivolous arguments: They don't work." Just-issued IRS Notice 2005-30 describes 23 frivolous arguments that taxpayers should avoid when filing their returns. Five revenue rulings issued in conjunction with the notice address specific frivolous claims often made to the IRS. These include arguments that the income tax is unconstitutional, that taxes may be withheld as a protest against government programs, and arguments that taxpayers may obtain a refund of all Social Security taxes paid by waiving their right to Social Security benefits. The revenue rulings emphasize the adverse consequences to taxpayers who fail to file or fail to pay taxes based on an erroneous belief in any of these frivolous arguments. In addition to tax and interest, taxpayers who file frivolous income tax returns face a $500 penalty, and may be subject to civil penalties of 20 or 75 percent of the underpaid tax. Those who pursue frivolous tax cases in the courts may face an additional penalty of up to $25,000. "The courts have consistently rejected these arguments and imposed substantial penalties on those taking these unsupportable positions," said IRS chief counsel Donald L. Korb. "Those potentially tempted by these schemes need to realize that they carry a heavy price for both the taxpayers and the promoters."
-
AuditBoard announces AuditBoard AI now generally available; Earmark launches web app; and other accounting technology news.
26m ago -
Plus, the Kansas Society of CPAs gives out scholarships; the Accounting MOVE Project announces a mini summit; and more.
1h ago -
Speedy sentencing; WWTF; no longer Confident; and other highlights of recent tax cases.
April 25 -
The Internal Revenue Service and the Treasury Department released final regulations on the transfer of clean energy manufacturing, investment and production tax credits, with specific rules for partnerships and S corporations.
April 25 -
Sens. Cassidy and Warren teamed up to introduce legislation aimed at making math error notices from the IRS easier to understand.
April 25 -
A recent experiment tested different generative AI models against each other on the CPA Exam and found they each have their own strengths and weaknesses.
April 25