- Tax protester arguments
Tax protester arguments are a number of theories raised by individuals who 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 (United States))
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 or selfish, 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. Fact|date=September 2008
United States citizens have a long history of protesting taxation. Taxes imposed on American colonists by the British helped to persuade Americans to seek independence, resulting in the creation of the United States of America. Anti-taxation sentiment led to the
Boston Tea Partyin 1773 and the Whiskey Rebellionin 1791. Americans so despised taxation that the first Congress of the United States created under the Articles of Confederation did not receive the power to levy any taxes. Congress was not given that power until 1789fact|date=October 2008. Many tax protesters argueweasel word that the power of taxation is still limited in its scope.
This article discusses tax protester arguments with respect to the U.S. federal income tax.
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 titleclaims).
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" [788 F.2d 1250 (7th Cir. 1986), "cert. denied", 107 S.Ct. 187 (1986).] ). Another argument made by some tax protesters is that because the
United States Congressdid not pass an official proclamation recognizing Ohio's year 1803 admission to statehood until 1953 (see Ohio Constitution), Ohiowas not a state until 1953 and therefore the Sixteenth Amendment was not properly ratified (see "Ivey v. United States" [76-2 U.S. Tax Cas. (CCH) paragr. 9682 (E.D. Wisc. 1976).] and "Knoblauch v. Commissioner" [749 F.2d 200, 85-1 U.S. Tax. Cas. (CCH) paragr. 9109 (5th Cir. 1984), "cert. denied", 474 U.S. 830 (1985).] in the referenced article). These arguments have been universally rejected by the courts.Another tax protester argument is that the manner in which the income tax is enforced violates the fifth amendment, which protects individuals from having to make self-incriminating statements. In particular, they argue that the fifth amendment protects individuals from being required to file a personal income tax return. This argument was ruled invalid by the United States Supreme Court in the case of "United States v. Sullivan". [274 U.S. 259 (1927).]
Some protestors have claimed that statutes enacted by the
United States Congresspursuant 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. These protesters claim that without clear definitions, Chapter 1 of Title 26 of the Code of Federal Regulations suggests IRS agents must rely on voluntary compliance. No court has upheld this argument.
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 Schiffstates 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 [cite web
url = http://www.paynoincometax.com/chapter1.htm
title = The Income Tax is Voluntary!
author = Irwin Schiff
work = The Federal Mafia
accessdate = 2006-08-14]
tax protestersargue that an income taxis enforced upon 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.Fact|date=July 2007 Frank Chodorovwrote "... 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."cite web|url=http://www.mises.org/story/1597| title=The Origin of the Income Tax|publisher= Ludwig von Mises Institute|last=Young|first=Adam|date=2004-09-07|accessdate=2007-11-07] 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. [cite web|url=http://cato.org/pubs/tbb/tbb-0204-2.html |title=Top Ten Civil Liberties Abuses of the Income Tax|last=Edwards|first=Chris|publisher=Cato Institute|date=2002-04|accessdate=2007-07-13] For these reasons, some argue for the FairTaxproposal of implementing a national sales tax to replace the federal income tax.cite book | first=Neal | last=Boortz | coauthors=Linder, John | year=2006 | title=The Fair Tax Book | edition=Paperback | publisher=Regan Books|id=ISBN 0-06-087549-6 ] [cite web|url=http://www.americanchronicle.com/articles/viewArticle.asp?articleID=31824|title=A Fair Tax for Progressives and Conservatives|publisher=American Chronicle|last=Sipos|first=Thomas|date=2007-07-10|accessdate=2007-07-13]
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 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. [http://www.irs.gov/businesses/small/article/0,,id=106502,00.html]
As stated in the Alaska District Court case of "United States v. Rempel": ["United States v. Rempel", 87 Amer. Fed. Tax Rep. 2d (RIA) 1810, 2001 U.S. Dist. LEXIS 8518 (D. Alaska Feb. 14, 2001).] "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."
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.... [Bruce I. Hochman, Michael Popoff, Dennis L. Perez, Charles P. Rettig & Steven R. Toscher, "Tax Crimes", page A-4 (Tax Management, Inc. 1993) (citations omitted).]
See also "
Cheek v. United States".
* A film that espouses tax protester arguments
Zeitgeist, the MovieAnother film presenting tax protester arguments
Tax protester conspiracy arguments
* [http://www.usdoj.gov/tax/readingroom/2001ctm/40ctax.htm Criminal Tax Manual, § 40.00: “Tax Protesters”] — From the Tax Division of the U.S. Department of Justice
* [http://docs.law.gwu.edu/facweb/jsiegel/Personal/taxes/IncomeTax.htm Income Tax: Voluntary or Mandatory?] A law professor describes what he cites as errors in some popular tax protestor arguments.
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