There are numerous books and tapes on the market which proclaim that you do not have to pay Federal income tax because it is "voluntary". In Las Vegas, there is also a radio show personality that is offering a half a million dollars, if you can prove (to him) that the filing a tax return is required by law. This premise is based often on the interpretation of "shall" to mean "may" in the Internal Revenue Code filing provisions. We have been contacted by theses groups of tax "protesters" to join them and validate their position. They tell us we will make more money promoting "protesting" than preparing tax returns and defending taxpayers in audits. In all cases we have refused as we consider the "protest" movement and the books and tapes that go with it to be the bait in just another "con" job being perpetrated to separate you from your money. And we are not alone. The Federal courts fail to see the logic used in these arguments that the tax is voluntary and have been ruling in the favor of the IRS when a taxpayer uses this defense and takes the IRS to court in hopes of not having to pay tax. Theses misguided souls end paying not only the tax they owe, but additionally, they often pay plenty in penalties and interest.

The most recent such case involved a taxpayer with non employee compensation and gambling winnings who claimed that he was not required to file a federal tax return because filing is a voluntary practice The Tax Court ruled that the taxpayer was liable for the deficiencies and penalties determined by the IRS. The following are direct quotes from the courts opinion in this case:

"We shall not painstakingly address petitioner's assertions with somber reasoning and copious citation of precedent; to do so might suggest that these arguments have some colorable merit. No useful purpose would be served by any further explanation. Suffice to say, petitioner is subject to Federal income tax during the relevant years, and we sustain respondent's deficiency determinations."

"A taxpayer may avoid the addition to tax by establishing that the failure to file a timely return was due to reasonable cause and not willful neglect. In this case, the taxpayer asserted that he relied on the advice rendered to him in the letters [tax protester propaganda] he submitted to the Court. As evident from the documents he submitted to the Court, petitioner had to search nationwide to procure materials in support of his merit less positions. While reliance on advice as to whether a return must be filed may constitute reasonable cause, the person giving that advice must be competent to render that advice and the reliance on that advice must be reasonable. By the very nature of the advice given, petitioner's reliance on that advice was not reasonable. (While petitioner may have honestly believed that she did not have to file tax returns, that belief was not reasonable.)''

The court cited numerous other cases which all involved the premise that tax returns are not required to be filed because it is a voluntary practice. One in particular from 1988 which involved the US Court of Appeals, 9th Circuit, which upheld a similar ruling by the Tax Court in a case in which the taxpayer had claimed among other things that "Payment of tax is voluntary for American citizens and wages are not income" This second claim is another play on words that the protesters promote. In addition, the Court of Appeals, imposed a $1,500 fine on this taxpayer for filing a frivolous appeals. The Courts, in upholding the IRS when taken to court by a tax "protester" merely cite the US Tax Code, as enacted by Congress, which clearly states that if you make over a certain amount of money, depending upon your filing status, you are required to file a return and pay your taxes. Its the law. Our tax system is often referred to as a voluntary system, which it is. This does not mean filing is voluntary, it means that you are not forced to go to the IRS each year and have them review your tax information.

Just some words of caution should you still be tempted to not file or file a zero return based upon this frivolous argument. The Tax Court is authorized under section 6673(a)(1) of the Internal Revenue Code to require a taxpayer to pay to the United States a penalty not in excess of $25,000 when it appears to the Court that the taxpayer's position in the proceeding is frivolous or groundless. In this recent case, the court showed mercy by not imposing this penalty. It stated in its opinion:

"Petitioner's position, based on stale and mirthless contentions, is manifestly frivolous and groundless, and his action has resulted in the waste of limited judicial and administrative resources. Previously, on its own motion, this Court has awarded damages to the United States under section 6673 where the taxpayer advanced frivolous and groundless contentions similar to those advanced by petitioner. Although we do not now impose a penalty under section 6673(a)(1) , we caution petitioner that if he continues to advance such arguments to this Court, he will invite such penalties in the future."

You might not be so lucky.