Get The Truth About Frivolous Tax Arguments. Response To Common Frivolous "Legal" Arguments

Penalty amount The frivolous return penalty is $5,000, per occurrence.

These arguments include claims that the word "income" as used in the Sixteenth Amendment cannot be interpreted as applying to wages; that wages are not income because labor is exchanged for them; that taxing wages violates individuals' right to property, and several others.

The 861 argument is a statutory argument used by tax protesters in the United States, which interprets a portion of the Internal Revenue Code as invalidating certain applications of income tax.

These arguments include claims that the word "income" as used in the Sixteenth Amendment cannot be interpreted as applying to wages; that wages are not income because labor is exchanged for them; that taxing wages violates individuals' right to property, and several others.

Contention: Federal income taxes constitute a "taking" of property without due process of law, violating the Fifth Amendment. Some individuals or groups assert that the collection of federal income taxes constitutes a "taking" of property without due process of law, in violation of the Fifth Amendment.

The penalty for filing a false tax return is less severe than outright evasion but it's still enough to make it sting. Individuals may be fined up to $100,000 for filing a false return in addition to being sentenced to prison for up to three years. This is a felony and a form of fraud.

The understatement is substantial if it is more than the larger of 10 percent of the correct tax or $5,000 for individuals. For corporations, the understatement is considered substantial if the tax shown on your return exceeds the lesser of 10 percent (or if greater, $10,000) or $10,000,000.

Frivolous tax arguments are false and unreasonable claims used to support fraudulent tax returns.