Thursday, March 21, 2019


I know I wrote about scams and the IRS’s annual Dirty Dozen list of them last week, but the agency has continued to write about them, so I will as well. This is because there’s one more I wanted to mention this week – using frivolous tax arguments.
This one feels different than most of the scams one hears about because it’s not predatory. Those scams feel dangerous, while frivolous tax arguments feel more, well, frivolous if not downright silly.
I mean, just look at the three arguments that the IRS listed in its look at the scam:
· The First Amendment allows taxpayers to refuse to pay taxes on religious or moral grounds.
· The only “employees” subject to federal income tax are those who work for the federal government.
· Only foreign-source income is taxable.
If you’re reading this at all, you probably are knowledgeable enough to recognize these as the false claims they are. They apparently do exist, though.  I would, however, say that the more dangerous frivolous claims are the ones that do not look as obviously egregious.
Instead, have you ever heard a friend talk about deducting something on your taxes that you never knew one could? Have you heard someone claim a windfall because they’re getting some money they don’t pay taxes on?
Frivolous arguments are not only the ones that tell you that you have to pay no taxes, they can be the ones that tell you that you can pay less taxes. These can be dangerous because those using them are largely not trying to defraud anyone. They think they have legitimate information, but they did not look into it, and now are attempting something they do not know is illegal. This can be avoided with some diligence, though.
Even if we have worked with you and done your tax return for years, don’t be afraid to speak up if you think your tax return is not being maximized to your benefit. It could be that there is information you didn’t know was relevant, thus was never shared, so we didn’t know we could use it. It could be that it would benefit some taxpayers, but it is not something you qualify for. Or it could be that it’s simply bad information.
No matter the answer, though, addressing it with a professional means that you will then have comfort and knowledge and avoid any misdeeds.
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Another reason to speak up is because you can get you some money from past years’ tax returns, as well. You only generally get three years to do this, though, so the window for the 2015 tax year is closing.
It’s wild to think about as a whole number, but the IRS estimates that there is $1.4 billion in potential refunds from that year waiting to be claimed. A lot of this comes from people who never filed a tax return. The IRS isn’t exactly tracking them down, though, for if those returns remain unfiled the money becomes property of the government.
So if you or someone you know could be owed some of that money, feel free to reach out.


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