This is probably the most notorious of scams. Promoters have advocated numerous false claims over the years, including that the 16th Amendment concerning congressional power to lay and collect income taxes was never ratified, wages are not income, filing a return and paying taxes are merely voluntary and being required to file Form 1040 violates the Fifth Amendment right against self-incrimination or the Fourth Amendment right to privacy. The IRS and courts have consistently held that such arguments are frivolous. Taxpayers have the right to contest their tax liabilities in court, says the IRS, but no one has the right to disobey the law that allows the government to collect the taxes.
Beware or be ready to pay
It's bad enough that scam victims, believing promises of lower tax bills, end up losing cash. But even worse, they subsequently find themselves in deeper debt to the IRS. The reason: Even if you are duped, federal law requires you pay your rightful taxes plus any penalty charges and back interest that accrued because of your use of dubious tax-relief techniques. IRS offices across the country are keeping tabs on these dirty dozen tax scams, but warn that other cons prevalent in prior years are still around, too. Offshore abusive transactions continue to be an area of particular concern for the agency. And claims for nonexistent slavery reparations, deductions for improperly established home-based businesses and the illegal "sharing" of dependents to gain Earned Income Tax Credit payments still show up each filing season.