Today is April Fools’ Day and many of us will participate in a prank to get some laughs. But with the tax return filing deadline coming in two weeks, some who are unhappy with how the country is doing may be tempted to write “April Fools” on their tax returns and either not pay their taxes or try to get an illegally large tax refund.
But filing an incorrect tax return or not paying taxes, even if done to conscientiously protest policies they disagree with, is not a good idea. The IRS or any other tax agency will not see this as a prank but instead illegal and will act accordingly.
Half of the country disagrees with President Donald Trump’s policies, most notably the large-scale raids by Immigration and Customs Enforcement (ICE) officers and the recent conflict with Iran which has significantly raised gas prices. A number of these people want to protest with their wallet by not paying taxes. Their rationale is that they shouldn’t have to pay taxes to fund policies they disagree with.
A few people have taken their case to social media telling their followers that they won’t pay federal income taxes as a form of protest. There are also organizations that provide information and resources for people who want to avoid paying taxes. After reading numerous news articles featuring these people and organizations, I have decided not to name them as I believe their primary motivation is getting social media clout and attention. Also, they are spreading incorrect information that could get people in trouble, both civilly and criminally.
The IRS has heard the moral objection argument before and now considers these arguments to be frivolous. The IRS notes that these individuals or groups claim that taxpayers may refuse to pay federal income taxes based on their religious or moral beliefs or on an objection to using taxes to fund certain government programs. In support of this frivolous position, these persons mistakenly invoke the First Amendment.
The IRS cites numerous court decisions which held that the First Amendment does not provide a right to refuse to pay income taxes on religious or moral grounds or because taxes are used to fund government programs opposed by the taxpayer. The First Amendment does not protect commercial speech or speech that aids or incites taxpayers to unlawfully refuse to pay federal income taxes, including speech that promotes abusive tax avoidance schemes.
The people who choose to take their chances will be liable for not only taxes but also penalties and interest. There are penalties for failing to file tax returns and not paying the tax owed which can add up quickly and raise the amount due significantly. The IRS will not waive these penalties because they do not consider protesting government policy to be reasonable cause.
Also, if the IRS considers you to be a frivolous tax protestor, they can also issue a special $5,000 penalty for filing a return containing frivolous statements and protest language. In extreme cases, this can result in prosecution for criminal tax evasion.
For these tax protestors, there are a few things to consider. First, your tax boycott must be applied consistently. Let’s suppose you are allowed to avoid paying taxes to protest ICE or the Iran conflict. Does this mean someone else can similarly protest because ICE is being too lenient on undocumented aliens or because the U.S. does nothing while Iran builds a nuclear weapon and funds terrorist groups? Many people disagree with the government’s spending on welfare or warfare for many reasons. If they are allowed to protest by not paying taxes, the government will go broke.
Second, are you really willing to accept the consequences of not paying taxes? Boycotting taxes is not the same as boycotting a TV show or a business. The IRS can seize bank accounts and garnish wages, and they don’t do this when it is most convenient for the delinquent taxpayer. This can destabilize a person or family’s finances. Once the IRS freezes your bank account holding the money for your rent or car payment, you will seriously consider whether there is a better way to protest President Trump.
Taxes are the lifeblood of government that pays for infrastructure, national defense, and public services to name a few things. It also pays for agendas you agree with and disagree with. But the system is not set up where you can veto spending you don’t like, otherwise the public treasury will be in chaos. Avoid taking advice from grifters who will tell you what you want to hear but will get you in serious trouble. So don’t think you can play an April Fools’ stunt this tax season because the tax laws are enforced on the basis of the law, not feelings.
Steven Chung is a tax attorney in Los Angeles, California. He helps people with basic tax planning and resolve tax disputes. He is also sympathetic to people with large student loans. He can be reached via email at stevenchungatl@gmail.com. Or you can connect with him on Twitter (@stevenchung) and connect with him on LinkedIn.
The post Don’t Write ‘April Fools’ On Your Tax Return Or Try A Trump-Protest Stunt Because The IRS Won’t Be Laughing appeared first on Above the Law.