(bolding added)I will spare you a very long and sad story and just get right to the point.
My advice to you is that you should continue to file a return in the way IRS expects it if you can answer "Yes" to ANY of the following questions.
1. Would the tax you would owe for this year be less than the current frivolous return penalty of $5,000? Would it be less than $10,000 assuming you filed a Form 1040 and at least one Form 4852?
2. Are you planning on filing a Form 843 instead of a Form 4852? If yes, prepare to fight a $5,000 penalty for each one you send....oh and a NOD [Statutory Notice of Deficiency] in about 6 to 12 months.
3. Are you planning on filing a Formal Claim for Refund or some other type of mythological tax expert non-sense to try to get all your money back? If yes, you'll be the happily slapped with another $5,000 penalty within a few weeks of filing it....oh and a NOD in about 24 months give or take.
4. Do you understand that tax laws change every year and for the past few years it has gotten much harder to win against IRS? Did you know the frivolous return penalty used to be $500 and it only applied to returns? Now it's $5,000 and IRS can apply it to anything you send them. Imagine sending a response letter they deem frivolous!
5. Do you enjoy spending your free time with your family, your children, your friends, etc?
6. Do you want to keep your job?
Before you even decide to go down this path, consider the value of your time and the value of your time with your family and children. I am not a troll, I am someone just like you that got sucked into this vortex several years ago and have finally come to my senses that the tax I would owe is far less than the easily slapped $5,000 penalties IRS puts on everything you send to them that they don't agree with, plus I have missed out on several years of my children's lives.
Yeah, I know the system is corrupted. But in the grand scheme of things I'd rather pay a couple of hundred or thousand dollars each year than to spend another weeknight or weekend writing letters and researching solutions. I have binders of letters in my home and baskets of green cards from the post office. I don't have many assets to protect, and I certainly don't want to lose my job over all this mess. What I am trying to say is that it's not worth my time to continue this fight, so I am returning to filing and find every conceivable legal deduction I can to legally reduce my liability as low as possible.
If you have the money and time to fight, go for it. Beat them and spread the word how you did it, but make sure it is something that is bulletproof and will work for everyone until the tax laws are changed.
Don't ever believe anyone who tells you that if something is written in stone it's permanent. The stone can be chipped away or simply crushed and new laws written on new ones. For what is law today is the dust of tomorrow.
Bob
http://www.losthorizons.com/phpBB/viewtopic.php?t=2458