Tax Settlement Firm Suggests Taxpayers Heed IRS Warning

Executives at Maryland-based FSI Tax Corp are urging taxpayers to observe IRS warnings against frivolous arguments circulating the internet that claim taxpayers are not required to pay taxes.

On March 16, the IRS issued a statement debunking 26 arguments against paying taxes. Debunked arguments include claims that taxpayers can attribute income to a trust to avoid federal income tax liability, that only federal employees and Washington, D.C. residents are required to pay taxes and that a “Native American treaty” provides tax-exempt status. Other arguments claim paying taxes is voluntary, unconstitutional or can be avoided on a first amendment basis.

“The IRS does not tolerate tax protesting, which is really another form of tax evasion,” said Sean McCabe, president of FSI Tax. “Following bad advice from a tax protestor will not protect you against having to pay your taxes and could get into hot water with the IRS.”

Tax protestors often use legal statements taken out of context to explain their positions, but the federal courts repeatedly ruled against the legitimacy of these arguments. For example, some protestors use the fact that the income tax was a voluntary system created under President Lincoln to assist with Civil War expenses and that it was found unconstitutional by the Supreme Court in 1895 as arguments against paying income taxes. However, the courts found that the 16th Amendment ratified in 1913 gave Congress the authority to again impose an income tax, which is the authority they still have today.

McCabe warns that taxpayers who follow tax protestor advice will ultimately pay more due to interest charges, a $500 penalty and civil penalties of up to 75 percent of the underpaid tax. He also warns that taxpayers filing fraudulent tax returns could be subject to federal criminal prosecution and imprisonment.

“If a claim against paying taxes sounds too good to be true, then it probably is,” McCabe continues. “Either way, it is always a good idea to check with the IRS website or a reputable tax professional if you have questions about your tax obligations.”

For more information about frivolous tax arguments see the IRS document entitled, The Truth about Frivolous Tax Arguments at www.irs.gov/pub/irs-utl/friv_tax.pdf and IRS Publication 2105, Why Do I Have to Pay Taxes?, at www.irs.gov/pub/irs-pdf/p2105.pdf.

About FSI Tax Corp:

FSI Tax is a tax resolution company headquartered in Columbia, MD, since January 2004. It is dedicated to helping taxpayers resolve their tax debt through various programs available from the IRS and state tax agencies. FSI Tax services include tax resolution through Offer in Compromise, Installment Agreement and other available tax relief programs. For more information, please call FSI Tax Corp at 1-877-4-FSI-NOW (1-877-437-4669) or visit www.fsitax.com.