Tax protester arguments

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Tax protesters
History Arguments Constitutional Statutory Conspiracy Notable tax protesters Robert Clarkson - Vivien Kellems Mitch Modeleski - Irwin Schiff Related topics The Law That Never Was Cheek v. United States Titles of Nobility Amendment Tax avoidance and tax evasion Christian Patriot Posse Comitatus
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Tax protester arguments are a number of heterodox theories that deny that a person has a legal obligation to pay a tax for which the government has determined that person is liable. Tax protester arguments are typically based on an asserted belief that the government is acting outside of its legal authority when imposing such taxes. (See also: Tax protester)

1 Denial of tax liability in the United States
2 The position of the Internal Revenue Service
3 Belief about the law as a defense in criminal cases
4 Notes
5 External links

[edit] Denial of tax liability in the United States

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).

These arguments generally contain logical fallacies and selective interpretation of perceived syntactic ambiguity in statutes and cases, and are often based on general misconceptions about:

fundamental U.S. legal concepts (especially the fundamentals common to all U.S. laws not separately "spelled out" in "tax law" materials, such as the repeated tax protester practice of citing court decisions as "authority" for theories about Federal income tax law in cases where the courts were not presented with, and did not rule on, Federal income tax law questions -- see, e.g., Taxing labor or income from labor; see also Precedent, Stare decisis, Ratio decidendi and Obiter dictum);
how to perform formal analysis of legal texts in general (especially, how to analyze statutes and case law -- see, for example, the Merchants' Loan corporate profits argument and The Stanton v. Baltic Mining Co. case, where the Court's rulings essentially contradict tax protesters' arguments);
the structure of the U.S. legal system (see arguments about the legal status of the Internal Revenue Service, including arguments that the IRS is not a government agency); and
the operations of the government (see, e.g., Arguments about authority of IRS employees).

[edit] Constitutional arguments

Main article: Tax protester constitutional arguments

Some tax protesters, conspiracy theory proponents, and others opposed to income taxes in general cite what they contend 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 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 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).

[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^[4]

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 [ . . . . ]

[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. [1]

As stated in the Arkansas District Court case of United States v. Rempel^[5]: "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 [ . . . . ]^[6]

[edit] Notes

^ 788 F.2d 1250 (7th Cir. 1986), cert. denied, 107 S.Ct. 187 (1986).
^ 76-2 U.S. Tax Cas. (CCH) paragr. 9682 (E.D. Wisc. 1976).
^ 749 F.2d 200, 85-1 U.S. Tax. Cas. (CCH) paragr. 9109 (5th Cir. 1984), cert. denied, 474 U.S. 830 (1985).
^ Irwin Schiff. The Income Tax is Voluntary!. The Federal Mafia. Retrieved on 2006-08-14.
^ 2001 U.S. Dist. LEXIS 8518, *; 87 A.F.T.R.2d (RIA) 1810.
^ 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).

[edit] External links

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Some of the sites linked to in this section advocate tax law positions that have been repeatedly declared frivolous by U.S. federal courts, as discussed in the article text.