Tax Avoidance vs. Tax Evasion.

You should be aware of the difference between: tax avoidance vs. tax evasion.
♦ Tax avoidance is the legitimate minimizing of taxes, using methods approved by the IRS. Businesses avoid taxes by taking all legitimate deductions and by sheltering income from taxes by setting up employee retirement plans and other means, all legal and under the Internal Revenue Code or state tax codes. Tax avoidance is perfectly legal. The courts have stated clearly that you have no duty to pay more taxes that what is minimally required by law. You have every right to take all legitimate deductions and also to structure your business to minimize taxes.
♦ Tax evasion, on the other hand, is the illegal practice of not paying taxes, by not reporting income, reporting expenses not legally allowed, or by not paying taxes owed. Tax evasion is most commonly thought of in relation to income taxes, but tax evasion can be practiced by businesses on state sales taxes and on employment taxes. In fact, tax evasion can be practiced on all the taxes a business owes. Tax evasion is a crime. This involves fraud, misreporting income, or taking deductions that you do not qualify for.
♦ Put another way, the difference between tax avoidance and tax evasion is a $250,000 fine and ten years in jail.
♦ The Internal Revenue Code (Title 26 US Code) is authorized by the 16th Amendment.
Section 1 of the Internal Revenue Code (26 USC §1 or simply IRC §1), titled "Tax Imposed" is the law that imposes a federal income tax on taxable income, and sets forth the amount of the tax to be paid. A similar tax on corporations is set forth in IRC §11.
♦ The Internal Revenue Code states that "gross income means all income from whatever source derived," and gives specific examples. 26 USC §61
♦ IRC §861 sets forth a frivilous position as fraud. IRC §861 is titled "Income from sources within the United States." A widespread statutory argument (Tax protester 861 argument) used by tax protesters interprets this definition to apply throughout the tax code, mistakenly concluding that only income described in §861 is taxable. The IRS and federal courts have consistently rejected this interpretation, as in US v. Wesley Snipes et al.
♦ United States persons (including citizens, residents, and US corporations) are generally subject to US federal income tax on their worldwide income. Foreign persons (i.e., persons who are not US persons) are subject to US federal income tax only on income from a US business and certain income from United States sources. Source of income is determined based on the type of income. The source of compensation income is the place where the services giving rise to the income were performed. The source of certain income, such as dividends and interest, is based on location of the residence of the payor. The source of income from property is based on the location where the property is used.
♦ Levy and distraint: Continuous levy: Property subject to: Federal Payment Levy Program.--The IRS has announced that, pursuant to the new Federal Payment Levy Program (FPLP), individuals and businesses with delinquent tax liabilities may be subject to a continuous 15% levy against funds owed them by the federal government. The FPLP will be used in conjunction with the existing levy program.
♦ The law says you're liable. The courts say "the law says you're liable". That's why you're liable. Nothing will help you. Besides, according to Ron Paul, (R) Texas, "if the IRS thinks it's the law, and they have all the guns"...ergo, you have voluntary compliance.