Why Do I Have To Pay Taxes?

HAPPY NEW YEAR!

Thoughts of a new year also bring thoughts of taxes.  So much for the festive holidays when we begin to think about taxes. 

So, why do we have to pay taxes?  Some may claim taxes are illegal.  False and misleading statements and advice may be heard.  However, if you look at the United States Constitution, it clearly states in Article 1, Section 8 that “The Congress shall have the Power to lay and collect Taxes, Duties, Imposts and Excises to pay the Debts and provide for the common Defense and general Welfare of the United States.”.  And the Sixteenth Amendment to the Constitution states that “The Congress shall have the power to lay and collect taxes on income, from whatever source derived without apportionment among the several States, and without regard to any census or enumeration.”.  As a result Congress delegated the responsibility of administering the tax laws to the IRS.  

Here are some myths that have formulated over the years:

  • Filing an income tax return violates our rights against self-incrimination, privacy, involuntary servitude and moral or religious beliefs. 
  • The filing and paying tax is voluntary because I am not a government employee or a resident of a sovereign state.
  • Certain ethnicities are entitled to a special tax as reparations for slavery and other oppressive treatment.
  • Establishing a business trust to shelter your income and assets will avoid taxes.
  • Establishing a trust will allow you to reduce or eliminate your tax liability.

If you believe in any of the above myths, please think again.  It has been consistently upheld in courts that filing a tax return does not incriminate an individual or invade their privacy.  We are each responsible for filing a tax return when required and paying the correct amount of tax.  Only when income is below a certain level is one not required to file a return.  Our tax system is based on self-assessment and reporting and compliance with tax laws is mandatory.  The establishment of a foreign or domestic trust for the sole purpose of hiding income and assets and avoiding taxation is illegal and does not absolve you from tax liability. 

Anyone who fails to comply with the filing of income tax returns when necessary face civil and criminal sanctions, including prosecution and prison sentences.  In my opinion, why would you want to take any chances.  Best wishes for a healthy and happy 2020!

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Kay Sowa

About the Author

Kay Sowa is a paralegal in the Trusts and Estates Group at Capehart & Scatchard, P.A. She is an IRS Enrolled Agent, an Accredited Estate Planner®, and a Certified Trust and Financial Advisor. She oversees the trust and estate administration practice for the firm. She is an accomplished author and lecturer who has frequently spoken on behalf of a number of organizations including the National Business Institute and the Institute of Paralegal Education.

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