Don’t bother using these excuses to avoid your taxes

“The dog ate my 1040 form” will not get you very far at tax time. But each year, the IRS receives so many goofy excuses for avoiding taxes that it publishes a list of frivolous tax arguments along with the legal refutation for each. And just in case you thought you were creative, get a load of some of these reasons given for stiffing the tax man.

› Filing a tax return is voluntary. Every year, some individuals notice that the tax collection system in the United States is “voluntary,” meaning the preparation and submission of tax returns and payment of taxes are the responsibility of the individual rather than being computed and assessed directly by the government. Sorry, but participation in the system is not voluntary.

› Federal Reserve Notes (our currency) are not valid and therefore not taxable.

One might expect this claim is a manifesto from a conspiracy nut in Montana, but a surprising number run this one by the IRS each year. The claim asserts that notes must be redeemable in specie to be legal tender. Of course the validity of fiat money

(not backed by gold or silver) is long settled, but the argument lives on. FYI, the IRS gladly accepts Federal Reserve Notes in payment of taxes.

› I have renounced my U.S. citizenship and am therefore immune from taxation. Sorry, but if you live and work in the United States and earn income here, you have a tax liability. A variation of this theme is the claim that the taxpayer was born a “free citizen” of their native state and is therefore not a U.S. citizen. Nice try.

› Taxpayer is not a “person” as defined in the IRS code. This one is hilariously based on the notion that the IRS uses all capital letters when addressing taxpayers in correspondence. They base their argument on a specious claim that only corporations are addressed in such a manner, and therefore the addressee cannot be a person. Needless to say, many legal rulings have HELD OTHERWISE.

› The First Amendment prohibits discrimination based upon religious belief. Creative tax-avoiders have long insisted that paying taxes violates their religious principles. Numerous court decisions have forcefully refuted this fanciful argument. Besides, Jesus instructed his followers to render unto Caesar that which is Caesar’s.

› Filing a tax return violates the Fifth Amendment protection against self-incrimination. Did you file a fraudulent return? Then you will not be required to testify against yourself when the IRS realizes that you are cheating. It does not let you off the hook for filing in the first place.

› The 16th amendment authorizing income taxation was not properly ratified because Ohio was not legally a state. This one gets extra credit for creativity but unfortunately falls flat legally. More than enough states ratified the 16th amendment without counting Ohio. And incidentally, subsequent legal rulings have affirmed Ohio’s status as a full-fledged state. Relax, Columbus, you are legitimate citizens of the United States.

› The Internal Revenue Service is not an agency of the U.S. government. Let that one sink in for a minute. The argument goes that the IRS has no authority since it was not created by an act of Congress. Well, it was created by the Treasury Department which was created by Congress. Try that argument and you will receive a rib-tickling letter reminding you of your appearance date.

Many have tried and failed to escape tax liability on the basis of frivolous arguments. But hope springs eternal, and each year creative new excuses are trotted out and summarily swatted down. Who says you can’t have fun paying your taxes?

Christopher A. Hopkins, CFA, is a vice president and portfolio manager at Barnett & Co. in Chattanooga.