IRS (was Re: Anonymous Internet Barter.)

From: James Rogers (jamesr@best.com)
Date: Sun Mar 19 2000 - 16:54:59 MST


On Fri, 10 Mar 2000, Eugene Leitl wrote:
> James Rogers writes:
> > I can back this up. I have several friends who haven't paid income tax in
> > years.
>
> Can you be a little more specific about the right paperwork and the
> right hoops? Not that I contemplate anything drastic, but I'm
> certainly interested on IRS' reasoning behind granting this.

First off, I do pay my taxes and have a generally non-adversarial
relationship with the IRS (other than the implicit ones), so I don't have
the depth of knowledge of someone who has actually gone through the
hassle.

One thing to note is that the government will deny you certain privileges
normally granted to all citizens if you intentionally do not pay your
taxes. For example, if you as a U.S. citizen marry someone who is not,
applications for permanent residency and citizenship for your spouse will
be denied. However, the government can be bribed in this case: you have to
pay them three years worth of (back) taxes and they will grant your spouse
residency/citizenship.

The IRS appears to distinguish between to different types of people who
don't pay taxes: passive resisters (people who simply fail to pay taxes)
and active resisters (people who actively file legal paperwork with the
government). The so-called passive tax resisters are the ones the IRS
usually goes after.

Apparently there are several lengthy legal and administrative procedures
that will allow one to effectively opt out if you are willing to give up
some government granted privileges. I would speculate there are a couple
reasons this might be allowed to happen:

1) There is no legal basis for opting out, but the IRS would rather not
waste resources fighting legal battles with those who have demonstrated
the willingess and tenacity to do so.

2) There is a marginal legal basis for opting out, but it is possible to
file blocking actions that make it very difficult for the IRS to pursue
you, so they go after easier targets.

3) There is a legal basis for opting out, but not one they want to
advertise or make widely available.

-James Rogers
 jamesr@best.com



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