Tax protester arguments

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Tax protesters Part of the U.S. Taxation series

History Arguments Constitutional Statutory Conspiracy Notable tax protesters Robert Clarkson - Vivien Kellems Richard Michael Simkanin - Irwin Schiff William J. Benson Wayne C. Bentson Related topics America: From Freedom to Fascism The Law That Never Was Cheek v. United States Titles of Nobility Amendment Tax avoidance and tax evasion Tax resistance Christian Patriot Posse Comitatus

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Tax protester arguments are a number of theories raised by individuals that deny that a person has a legal obligation to pay a tax for which the US government has determined that person is liable. (See also: Tax protester)

Tax protester arguments are typically based on an asserted belief that the US government is acting outside of its legal authority when imposing such taxes. The term tax protester should be distinguished from tax resistance, the act of refusing to pay tax on moral, rather than legal grounds. Whilst there have been advocates of tax resistance in many countries, the tax protester phenomenon is particular to the United States and has no notable equivalent in other jurisdictions.

Contents 1 Denial of tax liability 1.1 Constitutional arguments 1.2 Statutory arguments 1.3 Conspiracy arguments 1.4 Other arguments 2 The role of the judicial system 3 The position of the Internal Revenue Service 4 Belief about the law as a defense in criminal cases 5 Notes 6 External links

[edit] Denial of tax liability

Arguments made by tax protesters generally deal with the U.S. Federal income tax and not with other taxes such as the gift tax, estate tax, sales tax, and property tax (although some tax protesters have attacked the last category under allodial title claims).

[edit] Constitutional arguments

Main article: Tax protester constitutional arguments

Some tax protesters may cite what they believe is evidence that the Sixteenth Amendment to the Constitution (removing any apportionment requirement for income taxes) was never "properly ratified" or that it was properly ratified but does not permit the taxation of individual income, or particular forms of individual income. One argument is based on the contention that the legislatures of various states passed bills of ratification with different capitalization, spelling of words, or punctuation marks (e.g., semi-colons instead of commas) (see, e.g., United States v. Thomas^[1]). Another argument made by some tax protesters is that because the United States Congress did not pass an official proclamation recognizing Ohio's year 1803 admission to statehood until 1953 (see Ohio Constitution), Ohio was not a state until 1953 and therefore the Sixteenth Amendment was not properly ratified (see Ivey v. United States^[2] and Knoblauch v. Commissioner^[3] in the referenced article). These arguments have been universally rejected by the courts.

[edit] Statutory arguments

Main article: Tax protester statutory arguments

Some protestors have claimed that statutes enacted by the United States Congress pursuant to its constitutional taxing power are defective or invalid (see e.g., the Irwin Schiff quote below). In addition, they state the statutes are misapplied by the Internal Revenue Service (IRS), the courts, lawyers, certified public accountants, law professors, and legal experts generally, and that the tax "protesters" are not liable for tax under the law (see below).

Other protestors have argued because the term "income" is not actually defined in the Internal Revenue Code or in the United States Constitution, the tax law should be invalid. No court has upheld this argument.

[edit] Conspiracy arguments

Main article: Tax protester conspiracy arguments

Some tax protesters claim that since the year 1913 (the year of the inception of the modern Federal income tax), several generations of IRS employees, Department of Justice employees, the United States Congress, Federal court judges, lawyers, certified public accountants, and other experts have engaged in various continuing conspiracies to conceal the above deficiencies. For example, convicted tax offender Irwin Schiff states on his web site:

In 1986, 99.5 million Americans were tricked into filing and paying federal income taxes when, legally, they didn't have to do either. If this statement shocks you, it is only because you and the rest of the nation have been thoroughly deceived by the federal government (with federal courts playing the key role), and an army of accountants, lawyers, and other tax preparers. All of these have a vested interest in keeping you ignorant concerning the real nature of federal income taxes.... [N]o provision of the Internal Revenue Code requires anyone to file or pay income taxes. This tax, unlike other internal revenue taxes, is strictly (censored voluntary).... However, in order to deceive Americans of this, as well as provide federal courts and the IRS with deceptive passages on which to hang illegal prosecutions and illegal seizures, the Internal Revenue Code was written to make paying income taxes appear mandatory. The government succeeded in doing this by tricking the public^[4]

[edit] Other arguments

Some tax protesters feel that an income tax is enforced by threat of imprisonment, and is akin to "government sanctioned extortion", in which a citizen is forced to give up a percentage of their income in exchange for not being put in prison.^{[citation needed]} Frank Chodorov wrote "... you come up with the fact that it gives the government a prior lien on all the property produced by its subjects." The government "unashamedly proclaims the doctrine of collectivized wealth. ... That which it does not take is a concession."^[5] Issues with civil liberties are also charged at the tax system, such as social inequality, economic inequality, financial privacy, self-incrimination, unreasonable search and seizure, burden of proof, and due process.^[6] For these reasons, some argue for the FairTax proposal of implementing a national sales tax to replace the federal income tax.^[7][8]

[edit] The role of the judicial system

Legal commentator Daniel B. Evans has stated:

I am often asked, “Why do you always assume that the courts are right and the tax protesters are wrong?” Or, “Couldn’t the courts be wrong about what the Constitution means?” Those questions demonstrate that the questioner doesn’t really understand what is meant by “law” or the “rule of law.”

Law is not some kind of abstraction that floats in the air, free from any connection to people or events. “The law” is what legislatures, courts, and governments do, and the real test of what the law “is” shows in how the law is applied in actual cases.

So when lawyers talk about what “the law” is, they are talking about how a judge will rule. Not how the judge should rule, or might rule, but will rule. As Justice Oliver Wendell Holmes once explained, “the only definition of law for a lawyer’s purposes is something which the Court will enforce.” Letter to Sir Frederick Pollock, 7/3/1874. Or, more famously: “The prophecies of what the courts will do in fact and nothing more pretentious are what I mean by the law.” The Paths of the Law (1897).

[ . . . ]when the courts, the legislatures, and the voters all agree on what the law is, then that is what the law is. The fact that some people believe that the law should be different that what courts have said it is doesn’t mean that the law is different from what the courts have said, but only that they should argue their positions within the political system and attempt to change the results.

In the case of the income tax, there is no conflict. The judicial, executive, and legislative branches of our government, and a majority of the voters, have all agreed for more than 90 years that (1) an income tax is constitutional, (2) it applies to wages, and (3) every citizen and resident of every state is required to file a tax return and pay the tax [ . . . ] ^[9]

[edit] The position of the Internal Revenue Service

The position of the Internal Revenue Service based upon the statutes and upon the related legal precedents in case law, is that these and similar tax protest arguments are frivolous and, if adopted by taxpayers as a basis for failure to timely file tax returns or pay taxes, may subject such taxpayers to penalties. On its internet web site, the IRS states:

Some [people] assert that they are not required to file federal tax returns because the filing of a tax return is voluntary. Proponents point to the fact that the IRS itself tells taxpayers in the Form 1040 instruction book that the tax system is voluntary. Additionally, the Supreme Court's opinion in Flora v. United States, 362 U.S. 145, 176 (1960), is often quoted for the proposition that "our system of taxation is based upon voluntary assessment and payment, not upon distraint."

The Law: The word "voluntary," as used in Flora and in IRS publications, refers to our system of allowing taxpayers to determine the correct amount of tax and complete the appropriate returns, rather than have the government determine tax for them. The requirement to file an income tax return is not voluntary and is clearly set forth in Internal Revenue Code §§ 6011(a) , 6012(a) , et seq., and 6072(a). See also Treas. Reg. § 1.6011-1(a).

Any taxpayer who has received more than a statutorily determined amount of gross income is obligated to file a return. Failure to file a tax return could subject the noncomplying individual to criminal penalties, including fines and imprisonment, as well as civil penalties. [2]

As stated in the Arkansas District Court case of United States v. Rempel^[10]: "It is apparent ...that the defendants have at least had access to some of the publications of tax protester organizations. The publications of these organizations have a bad habit of giving lots of advice without explaining the consequences which can flow from the assertion of totally discredited legal positions and/or meritless factual positions."

[edit] Belief about the law as a defense in criminal cases

In criminal cases, the law distinguishes between beliefs about constitutionality of the tax law from other beliefs about the tax law:

A defendant's good-faith belief that he is not required to file a tax return is a valid defense to the element of willfulness, and the belief need not be reasonable if actually held in good faith. It is not, however, within the prerogative of the taxpayer to make a personalized finding of constitutionality. Thus, a good-faith belief that the tax laws are unconstitutional does not constitute a good-faith defense....^[11]

See also Cheek v. United States.

[edit] Notes

[edit] External links

• Criminal Tax Manual, § 40.00: “Tax Protesters” — From the Tax Division of the U.S. Department of Justice

• Income Tax: Voluntary or Mandatory? A law professor describes what he cites as errors in some popular tax protestor arguments.