Don’t Fall For These Crazy Tax Protester Myths


Here at Tax Resolution Professionals, we are dedicated to using legal, above-the-board means to help citizens deal with their government on an even footing. It is true that there are little-known tax laws and policies which can help reduce your tax debt, and these are done using fully vetted legal processes.

However, the current times and culture being what they are, there are a number of false myths and conspiracy theories about the IRS and taxes in general out there. Following advice from bad faith parties can get you into legal jams with the IRS. Here, we’re going to address some of the more common tax myths, to help you stay correctly informed.

Where Do Tax Myths Come From?

Myths and misconceptions about taxes and the IRS can come from just common urban legends, based on a misunderstanding of tax laws. But more often, they come from individuals with an agenda, or cults or political activism groups with an agenda. Most of these have been used at one point or another as unsuccessful defenses by citizens attempting to defraud the government. Spoiler: Government wins all the time.

    • The Freemen-on-the-Land movement – AKA “Freemen,” they deny federal government jurisdiction of any kind. Basically anarchists. More common to Canada and Australia.
    • The Sovereign Citizen movement – This is a fascinating political cult which applies cargo-cult logic to dealing with the government. This includes a fascination with “exact” names, signing documents with different colors of ink, filing false liens and lawsuits just to gum up the courts, and other shenanigans.
    • The Tea Party – A movement within the US Republican party, most active in the early 21st century.
    • Christian Patriots – A religious cult which argues that they are a nation unto themselves regardless of US citizenship.
    • Anarcho-capitalists – Extreme fringe of many technology entrepreneurs and Silicon Valley in general, especially those who are heavy advocates of crypto-currency.

By no means do we count all members of any group as tax-dodging cultists. But whenever you hear tax advice from somebody affiliated with an obscure political movement, you may want to double-check the facts. Just to point out, you are perfectly within your First Amendment rights to protest tax laws and policies, sign petitions, and otherwise campaign for tax law change. But when you start applying off-beat theories to not paying your own taxes, and you get caught, that’s when you’re in deep water.

Myth #1: Something In the US Constitution Lets You Off Taxes

Truth: If it were there, we would have proven it by now.

Various arguments against the IRS or taxes, in general, have been put forth based on the US Constitution’s amendments.

    • First amendment – Taxation does not violate freedom of speech or religion
    • Fifth amendment – Filing an income tax return is not self-incrimination
    • Thirteenth amendment – Taxation is not “involuntary servitude”
    • Fourteenth amendment – You are still a US citizen even if you’re a state citizen too
    • Sixteenth amendment – Yes, it gives the government authority to tax you

Arguments that try to find loopholes in interpreting the US Constitution in such a way as to nullify taxes have all been tried before. It’s one of the most consistently tested areas of government policy. So far, thousands of court cases have been lost by arguing a Constitutional case against taxes.

Myth #2: Something in the Interpretation of Law Lets You Off Taxes

Truth: As with the Constitution, if there were such a legal paradox, it would have been found by now.

Practically every word of every law pertaining to taxation has been challenged in court. Long story short, none of them hold water. Some of the most common arguments are…

    • The word “voluntary” – It is true that the Supreme Court has indicated that “our system of taxation is based upon voluntary assessment and payment.” However, the word “voluntary” means that you are expected to comply with tax laws without being forced, not that the government can’t force you. They most certainly can. Tax filing is only “voluntary” in the sense that you “voluntarily” comply with any other US law.
    • The notion that taxes must be formally assessed – The IRS does have the clearance to file a tax return for you if you refuse to comply; however, you owe taxes regardless of whether the IRS has demanded it of you.
    • Value of non-currency assets – Units of value such as gold or silver, or cryptocurrency, are sometimes argued as not being taxable assets. All assets held by a taxpayer are taxable according to their fair market value, which is easily determined even in the case of volatile cryptocurrency.
    • “Fictitious Entity” – When court documents refer to your name in all upper-case letters, that is still your true name, as no legal condition provides that the use of upper-case letters constitutes misidentification. Sovereign Citizens argue this one a lot.

Myth #3: There is a Vast Conspiracy Within Government To Falsely Perpetuate Taxation

Truth: The US follows clearly defined legal procedures that have already been established for generations in other countries. Governments have every right to tax citizens, no conspiracies required. While it would take a book to cover all of these, briefly they include:

    • Zionism and Freemasonry – Simply put, even if a government entity could be proven to be infiltrated by a secret society, you still owe taxes.
    • Fiat currency – Goldbugs and anarcho-capitalists make arguments about taxes owed based on the supposed fictitious nature of US currency since it was cut free from the gold standard. No matter what your money is based on, it’s dollars and cents and you accepted it as payment when you earned income.
    • Alleged immunity – When it comes to ethnic or native groups, if you have any documentation identifying yourself as a US citizen, you are subject to US law.
    • Redemption movement – There is no secret fund created for US individuals upon birth, nor is there any magic way to unlock these funds to absolve you of debts.

Myth #4: There are Laws Absolving You of the Responsibility to File

Many of these are based on common, innocent misconceptions. There are varying shades of falsehood and truth to some of them.

    • You don’t have to file if you don’t owe – As long as you earned more in a year than the minimum deductible, you still do have to file, even if only to show why you don’t owe.
    • You don’t have to file if you are a student – While full-time dependent students are likewise exempt from a larger minimum deductible, those earning an income should still file.
    • Money earned through online means is not taxable – No matter how you make money, if you make over a certain amount, it is taxable income. Freelance agents file Schedule C, cryptocurrency sales count as “capital gains” and are filed on form 8949, tips and wages earned on OnlyFans are taxable on a 1040, and even Patreon donations are still taxable.

Even in the case where you are sure that you owe no taxes, filing is still a good idea anyway. You might be due a refund, or you might be advised to reduce your federal withholding. In the recent case of government stimulus checks, not filing can cause the IRS to miss out on paying money to you! You don’t want that, do you?

Bottom Line: Don’t Trust Tax Advice From Third Parties

Take your tax advice only from professionals, legally entitled individuals, or the government itself.

The IRS publishes a full pamphlet on “The Truth About Frivolous Tax Arguments,” available at that link in PDF form. It is quite a long list, at some 73 pages in the most current revision (2018).

When in doubt, apply some common sense: If there were anything within government law that could cut off their only income, wouldn’t they just eliminate it in the first place? If there were some legal loophole using twisted logic to get out of taxes, wouldn’t they have found it by now? If it were that easy to get out of paying taxes, why wouldn’t everyone be doing it?

As we say, there’s nothing wrong with protesting tax laws, or seeking to change and improve our system of government. By all means, you should run for office as a politician, if you have any ideas about how to improve things. Goodness knows, politicians get elected on the “lower taxes” platform all the time. But trying to protest the system by cheating your way out of taxes is the wrong way to go about it.

If you think you could benefit from the help of a tax attorney, schedule a consultation with one of our expert tax attorneys here or call us at (888) 515-4829.

 


About Pete

Crusader for consumer and taxpayer rights! Relentless researcher digging through the IRS red tape to inform the public.

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