Ask Stacy: Do I Have to File Income Taxes?

Believe it or not, there are people who don't have to file income taxes and there are others who think they don't. Here's why you don't want to be in either group.

When I phoned in my interview request, the IRS spokesperson practically bit my head off. To paraphrase, she said this was a stupid topic, they had discussed it a million times and would no longer even dignify it with a response. She added that the government had every right to collect taxes, those who didn’t pay their taxes would lose in court and risk jail time, and anyone suggesting otherwise was either a con artist, a moron or both.

While her tone and words may not have been entirely this scathing, they were close.

Fast forward to today, and the tax protest movement lives on. There’s a website called PayNoIncomeTax.com, ironically authored by someone in prison for tax evasion. There’s a Wikipedia page explaining the tax protester movement. There are articles in respected publications like Forbes asking “Are Tax Protesters Actually Winning?” (Spoiler alert: No, they’re not winning. And they are paying huge penalties.)

This taxes-are-illegal legend that refuses to die has apparently been around since the 1950s. It’s so pervasive, the IRS has published and periodically updates a useful guide, “The Truth About Frivolous (Tax) Arguments.” It offers specific court cases disproving these and other common tax protester arguments:

1. Contention: The filing of a tax return is voluntary. Some taxpayers assert that they are not required to file federal tax returns because the filing of a tax return is voluntary.

2. Contention: Payment of federal income tax is voluntary. In a similar vein, some argue that they are not required to pay federal taxes because the payment of federal taxes is voluntary. Proponents of this position argue that our system of taxation is based upon voluntary assessment and payment.

3. Contention: Taxpayers can reduce their federal income tax liability by filing a “zero return.” Some taxpayers attempt to reduce their federal income tax liability by filing a tax return that reports no income and no tax liability (a “zero return”) even though they have taxable income.

4. Contention: The IRS must prepare federal tax returns for a person who fails to file. Proponents of this argument contend that section 6020(b) obligates the IRS to prepare and sign under penalties of perjury a federal tax return for a person who does not file a return. Thus, those who subscribe to this contention claim that they are not required to file a return for themselves.

5. Contention: Compliance with an administrative summons issued by the IRS is voluntary. Some summoned parties may assert that they are not required to respond to or comply with an administrative summons issued by the IRS.

Each of these contentions is proven false, not by logic, but by court cases, each of which landed the protester in hot water or worse.

Bottom line? Seemingly logical arguments against paying income taxes are exactly the type of thing internet nut cases love to sink their teeth into. Don’t bite. Their arguments are old and specious, and, most important, they won’t hold up in court.

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About me

I founded Money Talks News in 1991. I’m a CPA, and have also earned licenses in stocks, commodities, options principal, mutual funds, life insurance, securities supervisor and real estate. If you’ve got some time to kill, you can learn more about me here.

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