A recent tax case involving a woman who claimed that she didn’t owe tax because she was not an American citizen was sentenced to five years in prison. The woman represented herself and reportedly did herself no favors by being rude and vocal toward prosecutors and the judge in her case. It also didn’t help that she claimed over $8 million in tax refunds that she was not entitled to. She tried to claim that she was exempt from paying tax because she was a sovereign citizen, a status that people in Massachusetts and around the country have on occasion tried to claim.
Individuals who subscribe to the sovereign citizen movement claim that they are not beholden to federal or state laws. This includes not being obligated to pay federal taxes. However, tax courts have roundly rejected this notion, dismissing these arguments as having no legal basis.
The FBI has gone so far as to label those who subscribe to this movement as a domestic terrorist threat. At best, lawsuits filed by these groups tie up the courts and take away valuable resources that could be used to hear legitimate cases that involve complex issues that need to be determined. At worst, plaintiffs will run into judges who have little to no patience for their lack of understanding when it comes to established case law.
Tax fraud and tax evasion are charges that can have serious consequences, including fines and potential incarceration. The IRS can audit a return at any time if fraud is suspected. An attorney with experience in tax law may be able to provide assistance to a client that is under investigation by the Internal Revenue Service.
Source: Forbes, “From Spanish Royals To American Tax Protestors, Tax Evasion Can Mean Jail“, Robert W. Wood, January 10, 2014