First, let me mention that I didn't actually do the set of transactions I outlined above. I was just pointing out what is possible.

As to "playing with the IRS" and the possible consequences, my observation is that the only thing such a scheme involves is making an interest-free loan to the government. From the government's point of view, "if only all taxpayers were so generous!" The entire cost of the pay-taxes-by-credit-card scheme is borne by the third-party payment companies, who fully recoup these costs (plus their profits) from the taxpayer through the convenience fees.