Wealth & Risk Management Blog

William Byrnes (Texas A&M) tax & compliance articles

Pound Wise and Penny Foolish: The IRS Rebuts Unsound Tax Positions

Posted by William Byrnes on April 28, 2011


In the midst of the tax filing season, the Internal Revenue Service released the 2011 version of its discussion of many of the more common “frivolous” tax arguments made by individuals and groups that oppose compliance with federal tax laws.

The Service suggested that “anyone who contemplates arguing on legal grounds against paying their fair share of taxes should first read their 84-page document, The Truth About Frivolous Tax Arguments.”  At AdvisorFYI, we are not contemplating any particular legal grounds for not paying a “fair share of taxes”, whatever that may be, but rather are interested in presenting some of the frivolous positions argued and how the Government generally responds. We’ve presented a few select ones below.

The 2011 IRS document explains many of the common “frivolous” arguments made in recent years and it presents a legal position that attempts to refute these claims.  The IRS claims, the document “will help taxpayers avoid wasting their time and money with frivolous arguments and incurring penalties.”

Congress in 2006 increased the amount of the penalty for frivolous tax returns from $500 to $5,000.  The increased penalty amount applies when a person submits a tax return or other specified submission, and any portion of the submission is based on a position the IRS identifies as frivolous.

Here are some of positions we found to be commonly marketed to the public, and how the IRS responds to the positions:  Read the analysis at AdvisorFYI

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