After verify with our legal department, we inform you that some individuals and groups claim that taxpayers are not required to file tax returns because of the Paperwork Reduction Act of 1980, 44 U.S.C. § 3501, et seq. ("PRA"). The PRA was enacted to limit federal agencies' information requests that burden the public. The "public protection" provision of
the PRA provides that no person s2. Contention: Taxpayers are not required to file a federal income tax return, because the instructions and regulations associated with the Form 1040 do not display an OMB control number as required by the Paperwork Reduction Act. Some individuals and groups claim that taxpayers are not required to file tax returns because of the Paperwork Reduction Act of 1980, 44 U.S.C. § 3501, et seq. ("PRA"). The PRA was enacted to limit federal agencies' information requests
that burden the public. The "public protection" provision of the PRA provides that no person shall be subject to any penalty for failing to maintain or provide information to any agency if the information collection request involved does not display a current control number assigned by the Office of Management and Budget [OMB] Director. 44 U.S.C. § 3512. Advocates of this contention claim that they cannot be penalized for failing to file Form 1040 because the instructions and regulations
associated with the Form 1040 do not display any OMB control number.
The Law: The courts have uniformly rejected this argument on multiple grounds. Some courts have simply noted that the PRA applies to the forms themselves, not to the instruction booklets, and because the Form 1040 does have a control number, there is no PRA violation. Other courts have held that Congress created the duty to file returns in section 6012(a) and "Congress did not enact the PRA’s public protection provision to allow OMB
to abrogate any duty imposed by Congress." United States v. Neff, 954 F.2d 698, 699 (11th Cir. 1992).
The IRS warned taxpayers of the consequences of making this frivolous argument. Rev. Rul. 2006-21, 2006-1 C.B. 745.
Relevant Case Law: Dodge v. Commissioner, 317 F. App’x 581 (8th Cir. 2009) – the court treated the taxpayer’s argument that the Form 1040 does not comply with the PRA as frivolous.
Wolcott v. Commissioner, 103 A.F.T.R.2d 2009-1300 (6th Cir. 2008) – the court rejected the taxpayer’s argument that Form 1040 does not comply with the PRA and imposed sanctions of $4,000 under 12 U.S.C. § 1912 for bringing a frivolous appeal.
United States v. Patridge, 507 F.3d 1092 (7th Cir. 2007) – the court addressed and rejected the taxpayer’s contention that the PRA foreclosed his conviction in upholding the taxpayer’s conviction for tax evasion,.
Salberg v. United States, 969 F.2d 379 (7th Cir. 1992) – the court affirmed a conviction for tax evasion and failing to file a return, rejecting the taxpayer’s claims under the PRA,.31
United States v. Holden, 963 F.2d 1114 (8th Cir. 1992) – the court affirmed the taxpayer’s conviction for failing to file a return and rejected his contention that he should have been acquitted because tax instruction booklets fail to comply with the PRA.
United States v. Hicks, 947 F.2d 1356, 1359 (9th Cir. 1991) – the court affirmed the taxpayer’s conviction for failing to file a return, finding that the requirement to provide information is required by law, not by the IRS. “This is a legislative command, not an administrative request. The PRA was not meant to provide criminals with an all-purpose escape hatch.”
Lonsdale v. United States, 919 F.2d 1440, 1445 (10th Cir. 1990) – the court held that the PRA does not apply to summonses and collection notices.
United States v. Wunder, 919 F.2d 34 (6th Cir. 1990) – the court rejected the taxpayer’s claim of a PRA violation and affirmed his conviction for failing to file a return.
Perry v. Wright, 2013 U.S. Dist. LEXIS 36250, 111 A.F.T.R.2d (RIA) 1209 (S.D.N.Y. Mar. 8, 2013) – the court held that the PRA does not provide a waiver of sovereign immunity in a tax collection case.
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