In a recent case, the taxpayers filed suit against the IRS in the United States Tax Court arguing that the tax returns they filed were valid and that the assessments the IRS subsequently made against them were untimely.
Unfortunately, the tax returns filed by the taxpayers made “tax protester” type arguments and did not properly report the income that should have been listed on the tax returns when filed.
A “tax protester” type argument takes the position that the income tax laws are either illegal or unconstitutional and do not apply. Although these arguments have existed for many years, the United States Supreme Court takes the position that these laws are valid and constitutional.
Until the United States Supreme Court says differently, the tax laws are the law of our land. In this case, the Tax Court held a dim view of the “tax protestor” arguments raised by the taxpayers and ruled in favor of the IRS.
Further, the Tax Court upheld a “frivolous argument” penalty against the taxpayers. Because the taxpayers were represented by an attorney, the Tax Court also demanded that the attorney “show cause” why he should not be sanctioned for making frivolous arguments before the Tax Court.
Have you made “tax protestor” type arguments before the IRS? If you are no longer willing to make these arguments before the IRS, call us, we can help.