Internal Revenue Bulletin: 2006-15
April 10, 2006
Table of Contents
Frivolous tax returns; “nunc pro tunc.” This ruling emphasizes to taxpayers, promoters, and return preparers that inserting the phrase “nunc pro tunc” on a return or other document submitted to the Service has no legal effect and does not validate an invalid return, make a delinquent return timely, invalidate a signature, create a claim for refund of taxes previously paid, or reduce one’s federal tax liability.
Frivolous tax returns; only certain persons subject to federal income tax. This ruling emphasizes to taxpayers, promoters, and return preparers that all individuals are subject to federal income tax. Any argument that Forms W-2 only record and report payments made to federal employees, or that only federal employees or residents of the District of Columbia or federal territories and enclaves earn wages subject to tax, has no merit and is frivolous.
Frivolous tax returns; use of sham trusts. This ruling emphasizes that an individual cannot escape taxation by attributing income to a purported trust. The Service will take vigorous enforcement action against frivolous arguments relating to trusts.
Frivolous tax returns; “Native American Treaty.” This ruling emphasizes to taxpayers, promoters, and return preparers that there is no right to exemption from federal income tax for Native Americans under an unspecified “Native American Treaty.” Any return position based on an unspecified “Native American Treaty” has no merit and is frivolous. As a general rule, Native Americans are subject to federal income tax just like every other American.
Frivolous tax returns; reliance on Paperwork Reduction Act. This ruling emphasizes to taxpayers, promoters, and return preparers that taxpayers are required to file a federal income tax return under section 6012 of the Code, and the regulations thereunder, and that the Paperwork Reduction Act of 1980 (PRA) does not relieve taxpayers of the duty to file. Any argument that the PRA relieves the taxpayer of the duty to file an income tax return has no merit and is frivolous.
This notice sets out some of the most common frivolous arguments and schemes that taxpayers use to avoid their tax obligations. It also identifies civil and criminal penalties that the Service may impose against taxpayers who engage in abusive tax-avoidance schemes. Notice 2005-30 modified and superseded.
Public comments are requested on recommendations for items that should be included on the 2006-2007 Guidance Priority List. Taxpayers may submit recommendations for guidance at any time during the year. Recommendations submitted by May 15, 2006, will be reviewed for possible inclusion on the original 2006-2007 Guidance Priority List. Recommendations received after May 15, 2006, will be reviewed for inclusion in the next periodic update.
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