Tax season can be a really stressful time of year, especially if you owe a lot of money to the IRS. That's why the Sovereign Citizen movement might sound appealing at first. But, don't fall for it. It's actually a bizarre scam that could cost you thousands of dollars or even your freedom.
Some who follow Sovereign Citizen ideology claim that you can ignore your tax burden because the letters the IRS sends are written in all capital letters. They believe that the government sets up corporations called straw men in people's names. Things like your birth certificate and Social Security number are used to create and keep track of the straw men. And, when the IRS sends a letter to you in all capital letters, that's to the straw man and not you, so you're not liable.
In Sovereign Citizen lore, if your name is John Smith and you receive a letter, or bill, addressed to JOHN SMITH, you should ignore it, because that’s clearly meant for your straw man.
The folks who believe in this stuff use the straw man argument to ignore tax bills, court summonses and even child support. There are even businesses out there that sell how-to guides and other Sovereign Citizen material for hundreds, even thousands, of dollars. There's only one problem: The government isn't buying it.
The government is so serious about this scam, that it has landed a number of followers in prison, either for not filing tax returns, or in a weird twist, filing too many returns. A Sovereign Citizen named Glenn Unger was sentenced in 2013 to eight years for filing over $36 million in false returns. The IRS even has a $5,000 fine for filing "frivolous returns."
Some Sovereign Citizens also claim that the government sets up bank accounts with $630,000 in it for each straw man. And, there are companies that say they can get that money back for you, for a fee of course.