Are You a “Tax Defier?”

On April 8th, Nathan Hochman, the Department of Justice's Tax Divisions' Assistant Attorney General, announced the creation of the National Tax Defier Initiative. This new initiative is meant to crack down on those deliberately trying to evade their federal tax obligations by rejecting the legal foundation of the tax system.


The administration's proposal: If someone willfully fails to file returns in any three years within a five-year consecutive period, that person would be subject to a new criminal penalty if the total tax liability is at least $50,000. That would be labeled as a felony.


If convicted, the person could face a fine of as much as $250,000, imprisonment for as much as five years — or both. This recent action should not come as a surprise, as congress has been urging the IRS to take more action to reduce the nation's $290 billion-a-year "tax gap," the difference between what the agency actually collects and what it thinks it should be collecting.


Those who peddle tax defier schemes should be especially wary. In his proposal, Assistant Attorney General Hochman had specifically harsh words: “we want to pull back the curtain and show the public that these promoters of these tax and bogus schemes are not some wizards that have revealed the tax-free universe to America, but instead are nothing more than garden variety hucksters and modern day snake oil salesmen, peddling their bogus tax products."


I have often stated in our blog to steer clear of those who tell you that somehow the federal government does not have the legal right to tax you, who believe – or claim to believe – that the Internal Revenue Service is an unconstitutional anomaly.


As you can see, with this latest development, the government is going to step up its efforts to squash this line of thinking. Don’t get caught up in it. It’s not worth it to be a “tax defier”. You’ll wreck your life…the IRS will make sure of it.