If you don’t pay your taxes, or file a return with all zeroes, things will happen. Eventually, when you owe enough money, an IRS agent will knock on your door (or send you a certified letter). If you keep ignoring them, your money will be garnished.
Or you could do what Robert Lee Cavins, Jr. of Chanute, KS did. He set up trusts: the Cavins Residential Trust and the Cavins Chiropractic Trust. The trusts didn’t pay income tax either. Mr. Cavins also took $70,000 and set up a bank account on Antigua (a tax haven). And since Mr. Cavins didn’t pay $119,595 of income tax from 1992 through 1994, eventually the IRS would catch up to him.
They did.
Mr. Cavins was found guilty yesterday of tax evasion. He faces up to five years at ClubFed plus a fine of up to $250,000. Yes, Virginia, there really is an income tax.