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Avoid Falling Victim to Abusive Tax Schemes #1: Anti-Tax Law Schemes

August 31st

With the recent IRS amnesty scheme, tax scams have become a topic of increasing concern among Americans. Many taxpayers feel worry that they will suffer IRS penalties for tax scams they may not have even known they were party to.

However, this does not need to be a problem. The IRS has provided a comprehensive list of existing abusive tax schemes, and advice on how taxpayers can avoid falling victim. With these tips, taxpayers can learn how to properly identify and steer clear of such scams.

What is an Anti-Tax Law Scheme?

One of the oldest and most prevalent forms of tax scam is the anti-tax law scheme. This scam encourages others not to comply with tax laws or IRS regulations.

Over the years there have been numerous attempts by individuals or groups to challenge the applicability of tax laws using a variety of arguments. In particular, assertions have been made that the Sixteenth Amendment was not properly ratified, that tax law is unconstitutional, and that tax law may only be applied to certain individuals.

Despite the courts having repeatedly rejected these arguments, there are those who continue to expound them, and even incur penalties for bringing frivolous cases into court or for filing frivolous tax returns. Such cases are often presented in a pseudo-legal format in an attempt to lure unsuspecting taxpayers into participating in their schemes.

Common Anti-Tax Law Scams

There are a few arguments that appear over and over in anti-tax law schemes. It is important to learn to recognize such arguments as false. Adherence to such advice can lead to violation of the tax code, and subsequent punishment through penalties and in some cases, even criminal prosecution.

The following arguments are the most common:

  • There is no Internal Revenue tax code that imposes taxes
  • Only “individuals” are required to pay taxes
  • Code Section 861 limits taxable income to certain sources which do not apply to most US citizens
  • The US government can assess taxes only against people who file returns

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