The Fifth Amendment protects an individual from being forced to incriminate himself or herself, often referred to as "pleading the fifth." In the past, some have unsuccessfully attempted to assert the Fifth Amendment as a reason to avoid filing tax returns, or to file tax returns that don't report any income. These arguments, usually asserted by tax protesters, are generally considered frivolous by the IRS and federal courts.
Recently, the Tax Court ruled in favor of a taxpayer who reported his income but refused to disclose the source by asserting his Fifth Amendment privilege. Youssef Youssefzadeh timely filed his 2011 tax return and reported all of his income. On his Schedule B, however, he refused to identify the source of some of the interest income that he earned, which turned out to be from foreign bank accounts. The IRS threatened to assess a "frivolous-return penalty" against Youssefzadeh if he did not provide the missing information. When he still refused, the IRS assessed the penalty against him, which he challenged at the Tax Court.