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THE TRUTH ABOUT FRIVOLOUS TAX ARGUMENTS January 1, 2010

I. FRIVOLOUS TAX ARGUMENTS IN GENERAL .............................................1 A. The Voluntary Nature of the Federal Income Tax System............................1

1. Contention: The filing of a tax return is voluntary............................................... 1 2. Contention: Payment of tax is voluntary. ........................................................... 3 3. Contention: Taxpayers can reduce their federal income tax liability by filing a “zero return.” ....................................................................................................... 7 4. Contention: The IRS must prepare federal tax returns for a person who fails to file. ...................................................................................................................... 9 5. Contention: Compliance with an administrative summons issued by the IRS is voluntary. .......................................................................................................... 10

B. The Meaning of Income: Taxable Income and Gross Income ...................12

1. Contention: Wages, tips, and other compensation received for personal services are not income. ................................................................................... 12 2. Contention: Only foreign-source income is taxable. ........................................ 18 3. Contention: Federal Reserve Notes are not income........................................ 20

C. The Meaning of Certain Terms Used in the Internal Revenue Code ..........21

1. Contention: Taxpayer is not a “citizen” of the United States, thus not subject to the federal income tax laws. ............................................................................. 21 2. Contention: The “United States” consists only of the District of Columbia, federal territories, and federal enclaves............................................................ 24 3. Contention: Taxpayer...