NONFILER LEGAL COMPLIANCE CAN BE EASY - BUT THERE ARE RISKS

Complying with legal requirements under the Internal Revenue Code can be far easier and far less costly than one would think, but there are certain risks connected to following the law in this way.

According to a long line of decisions by the US Supreme Court that goes back to the founding days of our republic, when there is any doubt as to what a particular provision of the law means, revenue statutes – just like criminal statutes – must be strictly construed in favor of the citizen and “most strongly” against the government.

When interpreted in this way, there are strong indications in the tax code that not everyone the IRS cavalierly calls a “taxpayer” actually falls into that category. Especially when it comes to long-time non-filers of income tax returns, and even more particularly when it comes to those of the higher-income echelon, it is now more important than ever to get expert legal advice when it comes to their efforts to come back into compliance with the law. In most cases, doing so may not entail at all what they expect.

Federal courts have long favored the needs of the service over the needs of citizens which is not that surprising because both the courts and the IRS work for the same employer, and the IRS is that part of the employer that makes sure the employer has enough money to pay its employees, including federal judges.

And that is where the risk lies

Although thew above-mentioned Supreme Court cases exist to admonish judges to construe the law strictly against the government and in favor of the citizens of this country, the reality in federal courtrooms is and has been quite the opposite.

All this can quickly change, however, when this current administration succeeds in extracting more revenue from international trade than from American citizens. As the need for federal judges to guarantee their access to taxpayer money decreases over time, their instinctive desire to rule in favor of the IRS will wane since the activities of the service will no longer be the exclusive source of their financial wellbeing.

It is widely known that, when President Trump succeeds in establishing his external tariff regime, he plans to absolve American income earners of up to $150,000 per year from all income-tax responsibilities. That cutoff point might even go as high as $200,000, by some estimations. When that happens, courts will be much more inclined to lend their ear to advocates who advocate more restrictive interpretations of the code since, by then, their old paycheck concerns will be largely alleviated.

That will be the time for tax attorneys and their clients alike to delve much deeper into the definitional sections of the income tax code in order to elicit the true import of that law as it is written.

After all, even the IRS has to obey the law. Shouldn’t citizens, their legal counsel, and the judges they face, be more willing to uphold it?