# Has anyone successfully NOT paid taxes to the IRS? **URL:** \ **Category:** Factual Questions\ **Created:** [June 19, 2002, 5:00pm UTC](https://boards.straightdope.com/t/has-anyone-successfully-not-paid-taxes-to-the-irs/114911 "2002-06-19T17:00:29Z")\ **Posts on this page:** 20\ **Page:** 1
**Author:** ![GrizzRich](https://avatars.discourse-cdn.com/v4/letter/g/7ba0ec/32.png) [@GrizzRich](https://boards.straightdope.com/u/GrizzRich)\ **Post date:** [June 19, 2002, 5:00pm UTC](https://boards.straightdope.com/t/has-anyone-successfully-not-paid-taxes-to-the-irs/114911/1 "2002-06-19T17:00:29Z")
A friend of mine claims to know someone who has successfully removed himself from the roles of the IRS and federal government and is not paying taxes on his earned income. Is this possible? Every year, beginning around the same time that we get our tax forms and W-2’s, there are bunches of experts on radio hawking books and reports that claim income taxes are a VOLUNTARY thing and that, if you follow the correct procedure outlined in their book, you can avoid paying. Has anyone here done this? Can it really be done? I’m not looking for FOAF’s or UL’s (I can’t find anything on Snopes under “IRS” or “income tax”). ---
**Author:** ![zev\_steinhardt](https://avatars.discourse-cdn.com/v4/letter/z/97f17d/32.png) [@zev\_steinhardt](https://boards.straightdope.com/u/zev_steinhardt)\ **Post date:** [June 19, 2002, 5:07pm UTC](https://boards.straightdope.com/t/has-anyone-successfully-not-paid-taxes-to-the-irs/114911/2 "2002-06-19T17:07:48Z")
I’m sure there are those who have successfully avoided paying taxes and have avoided jail. You don’t hear about them because they are wisely keeping quiet about the whole deal. Once it becomes public knowledge, then the IRS gets on their backs. Zev Steinhardt ---
**Author:** ![Crafter\_Man](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/crafter_man/32/458_2.png) [@Crafter\_Man](https://boards.straightdope.com/u/Crafter_Man)\ **Post date:** [June 19, 2002, 8:01pm UTC](https://boards.straightdope.com/t/has-anyone-successfully-not-paid-taxes-to-the-irs/114911/3 "2002-06-19T20:01:28Z")
There are a number of books that purport to teach you how to avoid paying federal income tax. I read one last year. _Is it possible?_ Yes. I have an acquaintance who does not pay federal income tax, yet has an income. _Is it legal/ethical?_ IMO yes. Again, just my opinion. _Is it easy?_ Absolutely not. It takes Big Balls[sup]TM[/sup], and the paperwork is pretty intimidating. And if you work for someone, you must convince them not to withhold. ---
**Author:** ![Captain\_Amazing](https://avatars.discourse-cdn.com/v4/letter/c/6de8d8/32.png) [@Captain\_Amazing](https://boards.straightdope.com/u/Captain_Amazing)\ **Post date:** [June 19, 2002, 8:46pm UTC](https://boards.straightdope.com/t/has-anyone-successfully-not-paid-taxes-to-the-irs/114911/4 "2002-06-19T20:46:16Z")
> [@](#): > > \*Originally posted by Crafter\_Man \* > \*\* > _Is it legal/ethical?_ IMO yes. Again, just my opinion. > \*\* So, how does your friend legally avoid paying federal income tax? ---
**Author:** ![kniz](https://avatars.discourse-cdn.com/v4/letter/k/c37758/32.png) [@kniz](https://boards.straightdope.com/u/kniz)\ **Post date:** [June 19, 2002, 9:03pm UTC](https://boards.straightdope.com/t/has-anyone-successfully-not-paid-taxes-to-the-irs/114911/5 "2002-06-19T21:03:54Z")
Just like **Crafter\_man** I know someone that has not paid federal or state taxes in many years. He actually runs a very small company. He is a very good friend and I cringe to think what will happen if he gets caught, since he can’t plead ignorance. I know someone else that constantly underpays and fights and argues with the government. He is several years behind, but he likes playing the system. He is a salesman and works on commission, not salary so that he controls what money goes to the government. In this case, I would love to see him get what is coming to him. I neither case do I think it is legal or ethical. ---
**Author:** ![Crafter\_Man](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/crafter_man/32/458_2.png) [@Crafter\_Man](https://boards.straightdope.com/u/Crafter_Man)\ **Post date:** [June 19, 2002, 9:42pm UTC](https://boards.straightdope.com/t/has-anyone-successfully-not-paid-taxes-to-the-irs/114911/6 "2002-06-19T21:42:19Z")
> [@](#): > > \*Originally posted by kniz \* > **Just like Crafter\_man I know someone that has not paid federal or state taxes in many years.** No; **I** have always paid the fed. It’s my acquaintance who hasn’t. ---
**Author:** ![minty\_green](https://avatars.discourse-cdn.com/v4/letter/m/f6c823/32.png) [@minty\_green](https://boards.straightdope.com/u/minty_green)\ **Post date:** [June 19, 2002, 9:48pm UTC](https://boards.straightdope.com/t/has-anyone-successfully-not-paid-taxes-to-the-irs/114911/7 "2002-06-19T21:48:07Z")
Would you care to address **Captain Amazing** ’s question, **Crafter**? I’d be happy to take a shot at describing why your friend is breaking the law and/or loony. (I am quite confident the former is true, and the latter is also true in a remarkable number of such cases.) ---
**Author:** ![Max\_Torque](https://avatars.discourse-cdn.com/v4/letter/m/e9bcb4/32.png) [@Max\_Torque](https://boards.straightdope.com/u/Max_Torque)\ **Post date:** [June 19, 2002, 9:51pm UTC](https://boards.straightdope.com/t/has-anyone-successfully-not-paid-taxes-to-the-irs/114911/8 "2002-06-19T21:51:52Z")
Hell, I haven’t paid income tax in two years. Of course, I haven’t had any _income_ for two years, either. Been living on student loans. Since it’s an obligation I have to repay, it doesn’t count as “income”. ---
**Author:** ![Neptune](https://avatars.discourse-cdn.com/v4/letter/n/b5a626/32.png) [@Neptune](https://boards.straightdope.com/u/Neptune)\ **Post date:** [June 19, 2002, 10:10pm UTC](https://boards.straightdope.com/t/has-anyone-successfully-not-paid-taxes-to-the-irs/114911/9 "2002-06-19T22:10:21Z")
[http://www.quatloos.com/taxscams/taxprot.htm](http://www.quatloos.com/taxscams/taxprot.htm) This is the place you want to check out for all the straight dope. By the way, I’ve never paid taxes to the IRS, but then I don’t live in the States. ---
**Author:** ![kanicbird](https://avatars.discourse-cdn.com/v4/letter/k/5f8ce5/32.png) [@kanicbird](https://boards.straightdope.com/u/kanicbird)\ **Post date:** [June 19, 2002, 10:25pm UTC](https://boards.straightdope.com/t/has-anyone-successfully-not-paid-taxes-to-the-irs/114911/10 "2002-06-19T22:25:22Z")
> [@](#): > > you must convince them not to withhold. not true. This is how it works: 1st lets clear something up - you work and taxes are withheld (or pay estimated). Taxes have to be paid on income - due to a court decision people don’t make income corporations make it. A company’s income is it’s profit which is revinue - expense and that is the only legal definition of income. Using that loophole the person files what is known as a ‘zero return’ which basically states that he has 0 income and has paid $X dollars and is now due a refund of that $X. I never did it but it does sound interestering esp to a person who has to write out a check to unc. sam every quarter. ---
**Author:** ![minty\_green](https://avatars.discourse-cdn.com/v4/letter/m/f6c823/32.png) [@minty\_green](https://boards.straightdope.com/u/minty_green)\ **Post date:** [June 19, 2002, 10:44pm UTC](https://boards.straightdope.com/t/has-anyone-successfully-not-paid-taxes-to-the-irs/114911/11 "2002-06-19T22:44:43Z")
> [@](#): > > \*Originally posted by k2dave \* > Taxes have to be paid on income - due to a court decision people don’t make income corporations make it. A company’s income is it’s profit which is revinue - expense and that is the only legal definition of income. > > Using that loophole the person files what is known as a ‘zero return’ which basically states that he has 0 income and has paid $X dollars and is now due a refund of that $X. [Wrong](http://caselaw.lp.findlaw.com/scripts/ts_search.pl?title=26&sec=61), and very badly wrong at that. “Gross income” is defined in section 61 of the Internal Revenue Code: > [@](#): > > (a) General definition > Except as otherwise provided in this subtitle, gross income means all income from whatever source derived, including (but not limited to) the following items: > (1) Compensation for services, including fees, commissions, fringe benefits, and similar items; > (2) Gross income derived from business; > (3) Gains derived from dealings in property; > (4) Interest; > (5) Rents; > (6) Royalties; > (7) Dividends; > (8) Alimony and separate maintenance payments; > (9) Annuities; > (10) Income from life insurance and endowment contracts; > (11) Pensions; > (12) Income from discharge of indebtedness; > (13) Distributive share of partnership gross income; > (14) Income in respect of a decedent; and > (15) Income from an interest in an estate or trust. Next? ---
**Author:** ![kanicbird](https://avatars.discourse-cdn.com/v4/letter/k/5f8ce5/32.png) [@kanicbird](https://boards.straightdope.com/u/kanicbird)\ **Post date:** [June 19, 2002, 11:02pm UTC](https://boards.straightdope.com/t/has-anyone-successfully-not-paid-taxes-to-the-irs/114911/12 "2002-06-19T23:02:56Z")
> [@](#): > > gross income means all **income** from whatever source derived, including (but not limited to) the following items: bold mine this is where they hang their hat - a person can’t make income so any funds they make from any of the above is not income and not taxed. It is not income for a person. ---
**Author:** ![Northern\_Piper](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/northern_piper/32/5304_2.png) [@Northern\_Piper](https://boards.straightdope.com/u/Northern_Piper)\ **Post date:** [June 19, 2002, 11:11pm UTC](https://boards.straightdope.com/t/has-anyone-successfully-not-paid-taxes-to-the-irs/114911/13 "2002-06-19T23:11:03Z")
[IRS Warns of ‘Dirty Dozen’ -12 Common Tax Scams](http://www.smartpros.com/x32846.xml): > [@](#): > > **2. No taxes being withheld from your wages.** – Illegal schemes are being promoted that instruct employers not to withhold federal income tax or employment taxes from wages paid to their employees. These schemes are based on an incorrect interpretation of tax law and have been refuted in court. > > **5. Untax yourself for $49.95** – This scheme has been around for a while, and now it’s alive and well on the Internet. The ads may say that paying taxes is “voluntary,” which is, of course, incorrect. The U.S. courts have continuously rejected this and other similar arguments. Numerous sellers of bogus packages – called “untax packages” – have been convicted on criminal tax charges. In this latter category, there’s lots of bogus claims made:[ul]• that only corporations earn income; • that you only have to pay taxes on money earned outside the U.S.; • that only resident aliens have to pay federal taxes; • that only federal public servants have to pay taxes; • that only people living in D.C. or on federal land have to pay taxes; • that federal taxes are voluntary.[/ul] They’ve all been shot down by the courts. ---
**Author:** ![minty\_green](https://avatars.discourse-cdn.com/v4/letter/m/f6c823/32.png) [@minty\_green](https://boards.straightdope.com/u/minty_green)\ **Post date:** [June 19, 2002, 11:18pm UTC](https://boards.straightdope.com/t/has-anyone-successfully-not-paid-taxes-to-the-irs/114911/14 "2002-06-19T23:18:22Z")
Read the statute again, **dave**. It clearly states that “gross income” _includes_ compensation for services, etc. It matters not one whit whether those enumerated items count as “income,” for they indisputably count as “gross income.” The argument is facially ludicrous. ---
**Author:** ![Philosophocles](https://avatars.discourse-cdn.com/v4/letter/p/b38774/32.png) [@Philosophocles](https://boards.straightdope.com/u/Philosophocles)\ **Post date:** [June 19, 2002, 11:32pm UTC](https://boards.straightdope.com/t/has-anyone-successfully-not-paid-taxes-to-the-irs/114911/15 "2002-06-19T23:32:04Z")
The answer is yes–but only those people who are wealthy enough to buy some members of Congress. ---
**Author:** ![kanicbird](https://avatars.discourse-cdn.com/v4/letter/k/5f8ce5/32.png) [@kanicbird](https://boards.straightdope.com/u/kanicbird)\ **Post date:** [June 19, 2002, 11:32pm UTC](https://boards.straightdope.com/t/has-anyone-successfully-not-paid-taxes-to-the-irs/114911/16 "2002-06-19T23:32:40Z")
Not exactly **minty green** it states that gross income means all income …derived (from all those things). so it includes **income** from compensation for services and a person doesn’t make income. It’s a fine line but some believe they found a loophole and use it. I’ve heard claims that not only are people filling zero returns but putting in zero returns for the past years and getting refunded all the tax they paid. At this point we are playing with words and I am just explaining how it was explained to me. You argument doesn’t disprove how it was explained to me (at least how I read it). ---
**Author:** ![minty\_green](https://avatars.discourse-cdn.com/v4/letter/m/f6c823/32.png) [@minty\_green](https://boards.straightdope.com/u/minty_green)\ **Post date:** [June 19, 2002, 11:50pm UTC](https://boards.straightdope.com/t/has-anyone-successfully-not-paid-taxes-to-the-irs/114911/17 "2002-06-19T23:50:30Z")
Okay, dave, let’s play with your scenario a little bit. Where is this purported definition of “income” on which it depends? In the meantime, you might want to read the case summaries [here](http://www.quatloos.com/taxscams/meaning_of_income.htm#wages), which are entirely inconsistent with the definition you rely on. [This case](http://www.quatloos.com/taxscams/protcase/snyder2.htm) also lays out the authorities pretty well. ---
**Author:** ![Sunspace](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/sunspace/32/1250_2.png) [@Sunspace](https://boards.straightdope.com/u/Sunspace)\ **Post date:** [June 20, 2002, 12:19am UTC](https://boards.straightdope.com/t/has-anyone-successfully-not-paid-taxes-to-the-irs/114911/18 "2002-06-20T00:19:11Z")
\ Hello! I work a fulltime job and I’ve _never_ paid taxes to the IRS! How did I do it? It’s simple! Location, location, location! 😃 [sup]Of course, my paying taxes to the authorities in _my_ country is another subject of discussion entirely…[/sup] \ ---
**Author:** ![splatterpunk](https://avatars.discourse-cdn.com/v4/letter/s/3be4f8/32.png) [@splatterpunk](https://boards.straightdope.com/u/splatterpunk)\ **Post date:** [June 20, 2002, 1:07am UTC](https://boards.straightdope.com/t/has-anyone-successfully-not-paid-taxes-to-the-irs/114911/19 "2002-06-20T01:07:46Z")
**k2dave** is referring to the “Zero Return” scam promoted by one Irwin Schiff. I’d heard about this guy before. He was interviewed on a local radio station a few years back. IIRC, the DJ and his staff pretty much regarded him as a loon. I concur. His basic premise is this: Individuals are not required to pay taxes on income. Why? Because _income_ is defined as revenues and other benefits received by _corporations_. I, like **mintygreen** , wonder just where this definition of income exists. In the tax code? The constitution? The Declaration of Independence? Anyway, if you google this guy’s name, you’ll come up with a bunch of sites that promote his “system.” I’m not sure exactly what this system entails, as it costs something like forty bucks to see it. Plus, he’ll send you a handsomely bound volume (completely annotated, of course) of the relevant tax code for another $78. Or, you can attend one of his seminars for $150, as described [here](http://proliberty.com/observer/20000412.htm). Does this work? Well, I’m an accountant, but I’m not a tax professional. I had my fair share of taxation in college, and have done plenty of tax returns for individuals. But it seemed silly to me. This guy claims he hasn’t paid taxes in twenty-plus years, and can show others how they can do the same (for a fee, of course). But I did find [this](http://www.taxprophet.com/hot/june98.html). According to this site, Schiff has been prosecuted several times for tax evasion, and has lost every single case: > [@](#): > > Many such pages populate the Web, but the leading guru of this group must be Irwin Schiff. Visit his website at [http://www.ischiff.com/](http://www.ischiff.com/) and you might be convinced that you don’t have to pay income taxes. Schiff fails to mention that he is a criminally-convicted tax evader and has lost – big time – in every court that has heard his meritless theories. > > Schiff has been unrelenting and tenacious in presenting his frivolous arguments to the public and to the courts. He has also acted on his beliefs and has suffered the consequences: jail, seizure of assets, penalties and fines, and total and absolute rejection of each and every one of his ideas by the courts. BTW, here’s an interesting quote from the first link: > [@](#): > > He is a master of card tricks and slight-of-hand and uses those skills to keep his audience awake and participating in their reeducation process. That figures… The “Zero Return” system is a scam, and will land you in big trouble if you attempt it and get caught. ---
**Author:** ![samclem](https://avatars.discourse-cdn.com/v4/letter/s/a9a28c/32.png) [@samclem](https://boards.straightdope.com/u/samclem)\ **Post date:** [June 20, 2002, 1:11am UTC](https://boards.straightdope.com/t/has-anyone-successfully-not-paid-taxes-to-the-irs/114911/20 "2002-06-20T01:11:38Z")
> [@](#): > > I’ve heard claims that not only are people filling zero returns but putting in zero returns for the past years and getting refunded all the tax they paid. **k2dave** Everybody “hears” about these things. I’d love to actually read about someone who did it. And, dave, a _person **does** earn income_. Read the cite by NOrthern Piper. [Next page](https://boards.straightdope.com/t/has-anyone-successfully-not-paid-taxes-to-the-irs/114911.md?page=2)