A couple of weeks back an enthusiastic man wearing a stars-and-stripes Uncle Sam top hat enthusiastically gave me a flier inviting me to a Fourth of July tax protesting event, or tea party...
No Taxes. No Problems: We all wish we didn't have to pay our taxes. We all might fantasize, but the tax protesters take this one step further by refusing to pay their taxes. They don't believe they have to pay. But are they right? And what will happen to you if you decide to side with them?
Just Letting You Know: In all my years as an IRS-Hitman, I've never seen a single court ruling supporting these groups. They have been denied in Federal courts and they will keep being denied. So why do they continue to protest and refuse to pay their taxes unlike the rest of us?
"Taxes Are Unconstitutional!" The most consistent "evidence" the Tax Protesters use is that the 16th Amendment to the constitution is unconstitutional. The 16th Amendment which was ratified in 1913 states:
"The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration."
Tax Protesters have tried (and failed) to convince courts that this amendment is not valid and was not properly ratified. They've also tried to say that federal notes do not constitute that cash is income. These positions are unfounded and are called "frivolous arguments" by the Federal Government and the IRS.
Protesting Federal income tax is not a criminal offense. However, the IRS has found a way to stop people from filing frivolous returns due to protesting (Section 6702 "in an effort to deter tax protesters from filing frivolous returns."). The penalty is $500 if you did it before March 15, 2007. But for positions taken after that, the amount has increased to $5,000. It obviously doesn't pay to protest!
Get Real: I recommend spending your holiday with friends and family rather than baking outside- both from the heat and your anger. You won't change the tax system by wasting your weekend.
Happy Independence Day, I'll be Back in Town to Answer Tax Questions on Monday