of this contention assert that African Americans can claim
a socalled “Black Tax Credit” on their federal
income tax returns as reparations for slavery and other oppressive
treatment suffered by African Americans. A similar frivolous
argument has been made that Native Americans are entitled
to a credit on their federal income tax returns as a form
of reparations for past oppressive treatment.
The Law: There is no provision in the Internal Revenue Code
which allows taxpayers to claim a “Black Tax Credit”
or a credit for Native American reparations. It is a well
settled principle of law that deductions and credits are a
matter of legislative grace.
See e.g., Wilson v. Commissioner, T.C. Memo. 2001-139, 81
T.C.M. (CCH) 1745 (2001). Unless specifically provided for
in the Internal Revenue Code, no deduction or credit may be
The IRS indicated in News Release IR-2002-08, 2002 I.R.B.
LEXIS 30, that it will crack down on promoters of “slavery
reparation tax credit” and “Native American reparations“
scams. See 2002 TNT 17-15 (January 24, 2002).
Further, according to the News Release, the IRS will implement
a new policy under which these reparation claims will be treated
as a frivolous tax return which could result in a potential
$500 penalty. Id.
Furthermore, section 7408 provides a cause of action for injunctive
relief to the United States against a party suspected of violating
the tax laws. On March 6, 2002, the United States filed civil
suits to enjoin two tax return preparers (Andrew L. Wiley
and Robert L. Foster) from preparing federal income tax returns
claiming refunds based on a non-existent tax credit for slavery
reparations. United States v. Wiley, No. 3:02-cv-209WS (S.D.
Miss. 2002); United States v. Foster, No. 3:02-cv-133 (E.D.
Relevant Case Law:
United States v. Bridges, 86 A.F.T.R.2d (RIA) 5280 (4th Cir.
2000) – the court upheld Bridges’ conviction of
aiding and assisting the preparation of false tax returns,
on which he claimed a non-existent “Black Tax Credit.”
welcome your comments,
questions and suggestions.