Federal Income Tax Legality, Part 6: Basis for Authority Continued

This is the sixth and final article in a series about the various approaches that some groups and individuals use for justifying not paying federal income tax to the Internal Revenue Service (IRS).  The first five articles in this series addressed objections to the paying of federal income tax based on the following areas:

Keep reading to learn more about the fifth basis for objections to paying federal income tax.  After reading each of these articles, if you have questions about any of the objections outlined in these articles, any other area of federal income tax law, use of a tax credit, or your own federal income tax return, you should speak to a tax attorney.

IRS building on Constitution Avenue in Washing...

Fifth Argument Against Paying Federal Income Tax:  Basis for Authority

As noted above, this write-up is the second of a two-part subseries about how some believe the Internet Revenue Service (IRS) has no authority to collect or enforce the collection of federal income taxes under the Internal Revenue Code.

People can complete “untaxing” packages so they are no longer obligated to pay federal income tax to the Internal Revenue Service (IRS)

This approach claims that you can buy and complete a package of materials that “untax” you, meaning you will be removed from the Internal Revenue Services’ (IRS’) systems and will no longer have to pay federal income tax.

But such packages are really just a way for some to make a quick buck off of others at their expense.  These packages claim many of the various approaches outlined in this series of articles, all of which are illegal and will not get you out of paying federal income tax but rather will leave you paying additional taxes and interest.

A special type of entity known as a “corporation sole” or “ministerial trust” can be created that has legal ownership of your income and is not taxable

In the case of this argument, a “corporation sole” or “ministerial trust” are actual entities that are designed for religious leaders to hold property and conduct religious activities.  But people use these entities in an attempt to avoid paying taxes by claiming to be religious leaders or other persons, whose income is that of the corporation sole and therefore not taxable as a 501(c)(3) organization.

But a corporation sole is for use by a legitimate religious organization, not an individual, and such attempts by people to use a corporation sole to avoid federal income tax have not proven successful.

The fuels tax credit is available to reduce the tax burden of anyone who did not purchase and use fuel for an off-highway businiess

This approach supports that a section 6421 fuels tax credit is available to many people who do not qualify based on their occupation, level of income, type of vehicle, use of vehicle, and amount of use.

While the section 6421 fuels tax credit is a legitimate tax credit, it is available only to off-highway business using certain power and construction equipment.

Form 1099-OID can be used to pay debts or otherwise obtain money from the Treasury

Those who support this approach believe that Form 1099-OID, Original Issue Discount, can be used to satisfy debts they owe by tapping into a secret fund created by the Treasury Department.

But the purpose of Form 1099-OID is to report the original issue discount of holders of certain OID obligations such as certificates of deposit, bond, time deposits, and like vehicles with a term of more than one year.  Form 1099-OID is not a legitimate method of paying debt or withdrawing money from the Treasury, as the Treasury does not maintain such accounts on behalf of individuals.

Legal Assistance

If you need help with your federal income tax returns, get the help you need by speaking with a tax attorney.  As you can understanding after reading this series of articles, there is a lot of inaccurate information out there about federal income taxes and what you can and cannot do legally.

by Mark Johnston

Mark has been a contributor to legal web sites related to bankruptcy, tax, and criminal law since 2011. He has an Accounting degree from Texas A&M University.