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Anti-Tax Law Evasion Schemes

from the IRS

The Internal Revenue Service wants the public to beware of fraudulent tax evasion schemes that entice people to believe there is not a legal basis for the collection of federal income taxes. Unscrupulous individuals and groups are encouraging others not to comply with the law.

Challenges about the applicability of tax laws using a variety of arguments have all been unsuccessful in the courts. Arguments have included assertions that the 16th Amendment was not properly ratified, the tax law was unconstitutional, the tax law did not apply to certain types of income, the tax law only applied to certain individuals, and that the tax law violated one or more constitutional rights. Despite consistent rejection in the courts, promoters continue to expound these arguments even incurring penalties for bringing frivolous cases into court or for filing frivolous tax returns. They often present their cases in a pseudo-legal format, luring unsuspecting people into participating in their schemes to evade taxes.

The IRS warns taxpayers to beware of any tax-savings pitch that sounds too good to be true. Taxpayers should seek expert advice before they subscribe to any scheme that offers promises of instant wealth or exemption from taxes. Additional information is available from IRS Publication 2105, "Why Do I Have to Pay Taxes?" available at www.treas.gov/irs/ci/tax_fraud/index.htm.

Taxpayers who have chosen not to file or who have filed incorrect tax returns, taking positions that they are not required to report wages or other income, should take prompt action to file correct returns and comply with the tax laws. The IRS is actively investigating promoters of these arrangements and examining the returns of the persons using the schemes. Both promoters and investors are subject to civil and/or criminal penalties.

For further information, visit the Criminal Investigation website at: www.ustreas.gov/irs/ci/ or the IRS website at: www.irs.gov.

If you have specific questions on a tax scheme or wish to report a possible scheme, call (866) 775-7474(866) 775-7474 or send an e-mail to: irs.tax.shelter.hotline@irs.gov.

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