THE TAX PROTESTER FAQ
Created by Daniel B. Evans evans-legal.com/dan/tpfaq.html
[Last updated: 2/21/99]
Table of Contents
* [2]What is the purpose of this FAQ?
* [3]A "tax protester" is only someone classified as a "tax
protester" by the Internal Revenue Service in accordance with the
IRS definition of "tax protester."
X * [4]The federal income tax is unconstitutional because it is a
"direct tax" that must be apportioned among the states in
accordance with the census.
X * [5]The income tax cannot apply to individual citizens, because
that would be a "direct tax" prohibited by the Constitution.
X * [6]The income tax cannot apply to wages, because that would be a
"direct tax" that must be apportioned in accordance with the
Constitution.
X * [7]The 16th Amendment is ineffective because it does not expressly
repeal any provision of Article I of the Constitution.
X * [8]The 16th Amendment gave Congress no new power to tax.
X * [9]The 16th Amendment was not properly ratified.
X * [10]The 16th Amendment is ineffective because the word "income" is
not defined.
X * [11]The Internal Revenue Code does not define "income."
* [12]The Internal Revenue Code cannot define "income" because it is
a term used in the Constitution and Congress cannot modify the
Constitution by statute.
* [13]Wages cannot be taxed because our labor is our property, and
so a tax on labor would be a tax on property and a "direct tax"
within the meaning of the Constitution.
* [14]Wages cannot be taxed because the exercise of a fundamental
right cannot be taxed and the right to work is a fundamental right
reserved to the citizens of the United States by the 10th
Amendment to the Constitution.
* [15]Wages are not "income" because wages represent an equal
exchange of labor (a form of "property") for money (another form
of property), so there is no gain and no income.
* [16]Wages are not income, but only a source of income, and
therefore not subject to tax.
* [17]Payment in Federal Reserve Notes is not "income" because
Federal Reserve Notes are not lawful money ("coins in gold or
silver") within the meaning of the constitution.
* [18]The income tax cannot apply to citizens outside of the
District of Columbia, the territories of the United States, and
the forts and military bases of the United States, because the
federal government has no jurisdiction outside of those "federal
areas."
X * [19]The income tax cannot apply to "sovereign state citizens"
because they are not "citizens" within the meaning of the 14th
Amendment.
* [20]The income tax does not apply to citizens outside of the
District of Columbia and territories of the United States because
the way "United States" is defined in the Internal Revenue Code
does not include the states of the United States.
* [21]The federal income tax amounts to a deprivation of property
without due process and without just compensation, which is
contrary to the 5th Amendment to the constitution.
* [22]Withholding of income tax from wages, and the assessment and
collection of income taxes without any court order, is a
deprivation of property without due process contrary to the 5th
Amendment to the constitution.
X * [23]You cannot be required to file an income tax return because a
tax return is a form of testimony and the 5th Amendment guarantees
that you cannot be compelled to testify against yourself.
X * [24]The IRS cannot require anyone to file an income tax return
because that would be a violation of our 4th Amendment rights.
* [25]Nothing in the Internal Revenue Code makes an ordinary citizen
liable for the income tax.
* [26]Nothing in the Internal Revenue Code requires an ordinary
citizen to file a return.
* [27]The income tax applies only to corporations.
* [28]The income tax applies only to government employees.
* [29]The income tax applies only to people exercising "privileges"
or engaged in "revenue taxable activities" such as the sale of
alcohol, tobacco, and firearms.
* [30]The Internal Revenue Service has never adopted any regulations
imposing any income tax. Furthermore, failing to file a tax return
is not a crime because the relevant provisions of the Internal
Revenue Code have never been implemented by regulations.
* [31]The Internal Revenue Code is not a law.
* [32]The Office of Management and Budget does not require any form
for the income tax imposed by section 1 of the Internal Revenue
Code, and identifies section 1 of the Code as applying only to
nonresident aliens.
* [33]The Internal Revenue Code does not require any payment of tax
by individuals, and the Internal Revenue Service has admitted this
by failing to include any reference to section 1 or section 6012
in the Privacy Act Statement included in Form 1040.
* [34]The Internal Revenue Service is not an agency of the federal
government, but a private corporation incorporated in Delaware
(or, alternatively, an agency of the government of Puerto Rico).
X * [35]The income tax is voluntary.
* [36]The tax laws only apply to "taxpayers" and you are not
required to file returns or pay taxes if you are not a "taxpayer."
X * [37]There are lots of tax protesters who have won cases against
the IRS, such as John Cheek, Lloyd Long, and Gail Sanocki.
X * [38]There are many lawyers and well-educated people who believe
that tax protester positions are valid and have been successful in
arguing tax protester cases. People like Lowell H. Becraft, Irwin
Schiff, etc.
* [39]There are lots of court decisions favorable to tax protesters,
but the judges always seal the transcripts, suppress the opinions,
or issue "gag orders" against the parties so that the opinions are
never published.
* [40]The court decisions against tax protesters are all rendered by
ignorant, corrupt judges who have a vested interest in maintaining
the status quo because their salaries are paid by the income tax
and they are not going to bite the hand that feeds them.
* [41]The court decisions against tax protesters are all rendered by
judges who are afraid of being audited by the IRS and so are
afraid to rule against the IRS.
* [42]The IRS always wins against tax protesters because the IRS
only litigates cases against ignorant, ill-prepared defendants it
knows it can beat, and it always settles cases against the smart
defendants who know how to beat the IRS.
* [43]Why do you always assume that the courts are right and the tax
protesters are wrong? Couldn't the courts be wrong about what the
Constitution means?
* [44]I have a letter from the IRS saying that I am not required to
file an income tax return.
* [45]I am not required to file a tax return because I wrote a
letter to the IRS demanding to know where in the Internal Revenue
Code it says I am required to file and the IRS has failed to
respond.
* [46]The tax laws cannot be enforced against citizens in federal
courts, because federal courts are "admiralty" or "maritime"
courts.
* [47]The federal income tax is inapplicable, invalid,
unenforceable, or unconstitutional because
_________________________.
X * [48]What penalties can be imposed on tax protesters?
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The income tax cannot apply to individual citizens, because that would
be a "direct tax" prohibited by the Constitution.
False. Although the meaning of "direct tax" is a little unclear, it
was always understood that taxes imposed by Congress could apply to
individual citizens.
In Hylton v. United States, 3 U.S. 171 (1796), the Supreme Court was
unanimous in its opinion that Congress could impose a tax on a citizen
of Virginia. Of the four justices who heard the case, three were
members of the Constitutional Convention that drafted the
Constitution, and presumably knew what it meant.
Since the Hylton decision, no judge in the United States has ever even
considered that the federal government cannot impose a tax on
individual citizens.
As recently as 1991, the Supreme Court referred to arguments that the
federal income tax was unconstitutional as "surely frivolous." Cheek
v. United States, 498 U.S. 192 (1991).
The federal courts of appeal have also had to refute this argument:
"[H]is position can fairly be reduced to one elemental proposition:
The Sixteenth Amendment does not authorize a direct non-
apportioned income tax on resident United States citizens and thus
such citizens are not subject to the federal income tax laws. ...
We hardly need comment on the patent absurdity and frivolity of
such a proposition. For over 75 years, the Supreme Court and the
lower federal courts have both implicitly and explicitly recognized
the Sixteenth Amendment's authorization of a non-apportioned direct
income tax on United States citizens residing in the United States
and thus the validity of the federal income tax laws as applied to
such citizens." In re Becraft, 885 F.2d 547 (9th Cir., 1989).
"[W]e have rejected, on numerous occasions, the tax-protester
argument that the federal income tax is an unconstitutional direct
tax that must be apportioned. See, e.g., Lively v. Commissioner,
705 F.2d 1017, 1018 (8th Cir.1983) (per curiam)." United States v.
Gerads, 999 F.2d 1255 (8th Cir. 1993).
(It must be admitted that there is often some confusion in the
opinions of the Circuit Courts of Appeal about whether the income tax
is an excise tax, and therefore subject to the requirement of
uniformity, or a non-apportioned "direct tax." Ultimately, the
distinction is meaningless. Regardless of what label you apply to the
federal income tax, the 16th Amendment declares that it is
constitutional.
***********************************************************************
The income tax cannot apply to wages, because that would be a "direct
tax" that must be apportioned in accordance with the Constitution.
False. There is nothing in the Constitution that says that wages or
income from labor cannot be taxed, or that a tax on wages or income
from labor is a "direct" tax. And it has been the consistent opinion
of the Supreme Court beginning with Hylton v. United States, 3 U.S.
171 (1796), and continuing with Springer v. United States, 102 U.S.
586 (1880), Pollock v. Farmers' Loan & Trust Co., 158 U.S. 601 (1895),
and Brushaber v. Union Pacific R.R. Co., 240 U.S. 1 (1916), that the
phrase "direct tax" only applies to a tax on the value of property.
The majority opinion in the Pollock decision states that, if only the
tax on interest, rents, dividends, and other income from property were
ruled unconstitutional, "this would leave the burden of the tax to be
borne by professions, trades, employments, or vocations; and in that
way a tax on capital would remain in substance a tax on occupations
and labor." 158 U.S. at 637. The majority opinion therefore held that
the entire tax act was unconstitutional, even though Congress had the
right to impose a non-apportioned tax on the income from employment.
(The minority opinion in Pollock believed that the entire tax was
constitutional, and so did not need to distinguish between income from
property and income from employment.)
That a tax on wages and other compensation for labor would have been
constitutional even before the adoption of the 16th Amendment was
confirmed by the unanimous decision of the Supreme Court in Brushaber,
in which the court stated:
"Nothing could serve to make this clearer than to recall that in
the Pollock Case, in so far as the law taxed incomes from other
classes of property than real estate and invested personal
property, that is, income from 'professions, trades, employments,
or vocations,' (158 U.S. 637), its validity was recognized; indeed
it was expressly declared that no dispute was made upon that
subject, and attention was called to the fact that taxes on such
income had been sustained as excise taxes in the past. Id. p. 635."
Brushaber v. Union Pacific R.R. Co., 240 U.S. 1, __ (1916).
As recently as 1991, the Supreme Court referred to arguments that the
Sixteenth Amendment did not authorize a tax on wages and salaries, and
that the federal income tax was unconstitutional, as "surely
frivolous." Cheek v. United States, 498 U.S. 192 (1991).
In the history of the United States, not a single judge has ever
issued an opinion suggesting that a tax on income from employment was
a "direct tax." Not one. Never.
And even if a tax on wages might have once been considered to be a
"direct tax" that must be apportioned, the 16th Amendment plainly
states that Congress can tax incomes, and wages are a form of income.
***********************************************************************
The 16th Amendment is ineffective because it does not expressly repeal
any provision of Article I of the Constitution.
There is nothing in the Constitution that says that an amendment must
specifically repeal another provision of the Constitution. In fact,
there are 27 amendments to the Constitution, and only one of the
specifically repeals an earlier provision. (The 21st Amendment, when
ended Prohibition, specifically repeals the 18th Amendment, which
started Prohibition.)
If this argument were correct, then Robert Dole would be the
vice-president of the United States, because the 12th Amendment did
not expressly repeal Article II, Section 1, Clause 3 of the
Constitution.
The claim that the 16th Amendment should have been worded differently,
to redefine what was meant by "direct tax," was actually addressed by
the Supreme Court in Brushaber, and the court concluded that the way
the 16th Amendment was written was absolutely right.
***********************************************************************
The 16th Amendment gave Congress no new power to tax.
This statement is derived from language in the opinions of the United
States Supreme Court in the Brushaber and Stanton decisions and,
unlike most other tax protester nonsense, it is actually true. The
problem is not that the statement is false, but that it doesn't mean
what tax protesters think it means and it doesn't lead to the
conclusion that tax protesters want to reach.
Tax protesters believe that, before the adoption of the 16th
Amendment, a tax on incomes was unconstitutional and therefore outside
the power of Congress. (This is not correct because, as explained
above, it was clear even before the 16th Amendment that Congress could
tax wages and earnings from employment, as well as income from
business operations.) If the 16th Amendment gave Congress no new power
to tax, then a tax on incomes must be unconstitutional even after the
adoption of the 16th Amendment. This is ridiculous, because it means
that the 16th Amendment changed nothing and has no meaning, while it
is plain from the words of the amendment that Congress was to have the
power to tax incomes.
To understand the statement of the Brushaber court, you have to
understand the context in which it was made. One of the claims made by
the taxpayer in the Brushaber case was that the 16th Amendment was
"repugnant to the constitution" because it created a form of tax that
was neither required to be apportioned (as required for "direct" taxes
by Article I, Section 9) nor required to be uniform (as required for
"excises" by Article I, Section 8, Clause 1). The court referred to
the conclusion "that the 16th Amendment provides for a hitherto
unknown power of taxation; that is, a power to levy an income tax
which, although direct, should not be subject to the regulation of
apportionment applicable to all other direct taxes," as an "erroneous
assumption."
"[T]hat the contention that the Amendment treats a tax on income as
a direct tax although it is relieved from apportionment and is
necessarily therefore not subject to the rule of uniformity as such
rule only applies to taxes which are not direct, thus destroying
the two great classifications which have been recognized and
enforced from the beginning, is also wholly without foundation
since the command of the Amendment that all income taxes shall not
be subject to apportionment by a consideration of the sources from
which the taxed income may be derived forbids the application to
such taxes of the rule applied in the Pollock Case by which alone
such taxes were removed from the great class of excises, duties,
and imposts subject to the rule of uniformity, and were placed
under the other or direct class." Brushaber v. Union Pacific R.R.
Co., 240 U.S. 1, __ (1916).
This statement was confirmed and explained by the Supreme Court in
Stanton v. Baltic Mining Co., 240 U.S. 103 (1916), in which the court
stated that "by the previous ruling [in Brushaber] it was settled that
the provisions of the 16th Amendment conferred no new power of
taxation, but simply prohibited the previous complete and plenary
power of income taxation possessed by Congress from the beginning from
being taken out of the category of INDIRECT taxation to which it
inherently belonged, and being placed in the category of direct
taxation...."
Therefore, the power to tax incomes without apportionment is not a new
type of power, but just a different classification of the power,
placing it in the category of indirect taxation "to which it
inherently belonged."
(As noted above, some circuit courts are still not certain whether the
income tax is a "direct tax" or an "excise," despite the Brushaber and
Stanton decisions. Regardless of the confusion in nomenclature, they
are unanimous that the tax is constitutional under the 16th
Amendment.)
***********************************************************************
The 16th Amendment was not properly ratified.
Although the Constitution describes how to ratify amendments, it
doesn't say how we know when an amendment has been ratified. After
some confusion about the status of some amendments (including the
infamous "Titles of Nobility" amendment that fell at least one state
short of ratification, but appeared in numerous copies of the
Constitution in the early and middle 1800's), Congress decided that
the Secretary of State should certify what amendments have been
ratified.
The argument that the 16th Amendment was not ratified is best
explained (and refuted) by this quotation from U.S. v. Thomas, 788
F.2d 1250 (7th Cir. 1986), cert. den. 107 S.Ct. 187 (1986):
"Thomas is a tax protester, and one of his arguments is that he did
not need to file tax returns because the sixteenth amendment is not
part of the constitution. It was not properly ratified, Thomas
insists, repeating the argument of W. Benson & M. Beckman, The Law
That Never Was (1985). Benson and Beckman review the documents
concerning the states' ratification of the sixteenth amendment and
conclude that only four states ratified the sixteenth amendment;
they insist that the official promulgation of that amendment by
Secretary of State Knox in 1913 is therefore void.
"Benson and Beckman did not discover anything; they rediscovered
something that Secretary Knox considered in 1913. Thirty-eight
states ratified the sixteenth amendment, and thirty-seven sent
formal instruments of ratification to the Secretary of State.
(Minnesota notified the Secretary orally, and additional states
ratified later; we consider only those Secretary Knox considered.)
Only four instruments repeat the language of the sixteenth
amendment exactly as Congress approved it. The others contain
errors of diction, capitalization, punctuation, and spelling. The
text Congress transmitted to the states was: "The Congress shall
have power to lay and collect taxes on incomes, from whatever
source derived, without apportionment among the several States, and
without regard to any census or enumeration." Many of the
instruments neglected to capitalize "States," and some capitalized
other words instead. The instrument from Illinois had
"remuneration" in place of "enumeration"; the instrument from
Missouri substituted "levy" for "lay"; the instrument from
Washington had "income" not "incomes"; others made similar
blunders.
"Thomas insists that because the states did not approve exactly the
same text, the amendment did not go into effect. Secretary Knox
considered this argument. The Solicitor of the Department of State
drew up a list of the errors in the instruments and--taking into
account both the triviality of the deviations and the treatment of
earlier amendments that had experienced more substantial
problems--advised the Secretary that he was authorized to declare
the amendment adopted. The Secretary did so.
"Although Thomas urges us to take the view of several state courts
that only agreement on the literal text may make a legal document
effective, the Supreme Court follows the "enrolled bill rule." If a
legislative document is authenticated in regular form by the
appropriate officials, the court treats that document as properly
adopted. Field v. Clark, 143 U.S. 649, 36 L.Ed. 294, 12 S.Ct. 495
(1892). The principle is equally applicable to constitutional
amendments. See Leser v. Garnett, 258 U.S. 130, 66 L.Ed. 505, 42
S.Ct. 217 (1922), which treats as conclusive the declaration of the
Secretary of State that the nineteenth amendment had been adopted.
In United States v. Foster, 789 F.2d. 457, 462-463, n.6 (7th Cir.
1986), we relied on Leser, as well as the inconsequential nature of
the objections in the face of the 73-year acceptance of the
effectiveness of the sixteenth amendment, to reject a claim similar
to Thomas's. See also Coleman v. Miller, 307 U.S. 433, 83 L. Ed.
1385, 59 S. Ct. 972 (1939) (questions about ratification of
amendments may be nonjusticiable). Secretary Knox declared that
enough states had ratified the sixteenth amendment. The Secretary's
decision is not transparently defective. We need not decide when,
if ever, such a decision may be reviewed in order to know that
Secretary Knox's decision is now beyond review."
It has also been claimed that the votes of Georgia legislature were
recorded incorrectly and that Georgia actually rejected the amendment,
contrary to Knox's report. However, no Congressman or other official
from Georgia has ever complained about the "error" and, even if there
was an error and Georgia did not ratify the amendment, there would
still have been thirty-seven ratifications, one more than the
thirty-six required. (Article V of the Constitution requires that
amendments to the Constitution be approved by the legislatures of
three fourths of the states, and there were forty-eight states in
1913.)
As noted by the 7th Circuit in Thomas, the argument that the 16th
Amendment is invalid is not only factually deficient, but it is an
argument that federal courts are unwilling to consider. This is
because the federal courts have always recognized limits upon their
powers, and one of those limits is that the courts should not get
involved in issues that the Constitution has entrusted to other
branches of the government. The Constitution says that Congress may
propose amendments, and the states may ratify them. Whether an
amendment has been properly ratified is considered to be a "political
question" to be resolved by Congress and the states, and not in court.
In this case, no state has ever claimed that the 16th Amendment was
not ratified.
For other decisions upholding the validity of the 16th Amendment, see
United States v. Foster, 789 F.2d 457 (7th Cir. 1986), cert. den. 107
S.Ct. 273; Pollard v. Commissioner, 816 F.2d 603 (11th Cir. 1987);
United States v. Benson, 941 F.2d 598 (7th Cir. 1991); Socia v.
Commissioner, 23 F.3d 941 (5th Cir. 1994), reh. den. 1994 U.S. App.
LEXIS 22014; United States v. Stahl, 792 F.2d 1438 (9th Cir. 1986),
cert. den. 107 S.Ct. 888; United State v. Sitka, 845 F.2d 43 (2nd Cir.
1988).
Miller v. United States, 868 F.2d 236, 239-41 (7th Cir. 1989).
Biermann v. Commissioner, 769 F.2d 707 (11th Cir. 1985).
Buckner, 830 F.2d at 102.
United States v. Dube, 820 F.2d 886, 891 (7th Cir. 1986).
Coleman v. Commissioner, 791 F.2d 68, 70-71 (7th Cir. 1986).
Moore, 627 F.2d at 833.
Knoblauch v. Commissioner, 749 F.2d 200 (1984), cert. den. 474 U.S.
830 (1985).
"Despite plaintiff's and numerous other tax protesters' conention
that the Sixteenth Amendment was never ratified, courts have long
recognized the Sixteenth Amendment's ratification and validity."
Betz v. United States, 40 Fed.Cl. 286, 295 (1998)
***********************************************************************
The 16th Amendment is ineffective because the word "income" is not
defined.
It is true that "income" is not defined by the Constitution, but the
Constitution defines very few words. "Freedom of speech," "due
process" and "equal protection" are all undefined in the Constitution,
and yet those provisions are enforced by the courts. Similarly, the
courts determine what is "income" within the meaning of the 16th
Amendment, and have held that "income" has its usual meaning.
(As an aside, one of the hallmarks of tax protester arguments is that
they are "ad hoc" arguments, selectively and inconsistently applied. A
tax protester will argue that "incomes" is not defined by the 16th
Amendment, which is therefore ineffective, but no tax protester has
ever argued that "direct tax" is not defined, and so all taxes are
constitutional whether or not they are apportioned.)
***********************************************************************
The Internal Revenue Code does not define "income."
Technically correct, but irrelevant. Section 61 of the Internal
Revenue Code defines "gross income," from which taxable income is
calculated, "income from all sources" and gives a number of examples
of the types of income included in "gross income" in section 61,
including compensation for services (i.e., wages, salaries, and other
forms of earned income).
It is actually fairly common for statutes to omit fundamental
definitions of legal concepts, and for taxing statutes to omit
fundamental definitions of what is being taxed. For example, property
taxes rarely define what is meant by "property." The Internal Revenue
Code includes a gift tax and an estate tax as well as an income tax,
and both taxes are imposed on the value of property, and yet there is
no definition of "value" and no definition of "property."
"Upon review of May's amended petition, we find no allegations of
fact which could give rise to a valid claim; rather, the complaint
merely contains conclusory assertions attacking the
constitutionality of the Internal Revenue Code and its application
to the taxpayer.[Footnote omitted.] Tax protest cases like this one
raise no genuine controversy; the underlying legal issues have long
been settled. See, e.g., Abrams, 82 T.C. at 406-07 (citing cases
rejecting similar arguments). Because May's petition raised no
justiciable claims, the Tax Court properly dismissed the petition
for failure to state a claim." May v. C.I.R., 752 F.2d 1301, 1302
(8th Cir. 1985), (among other things, May's amended complaint
alleged that "The Respondent has totally erred in its determination
of 'income' when no definition of 'income' appears in the Internal
Revenue Code. No basis exists for this improper determination of
'income' by the Respondent." 752 F.2d at 1304, note 3).
***********************************************************************
The income tax cannot apply to "sovereign state citizens" because they
are not "citizens" within the meaning of the 14th Amendment.
There are actually a number of problems with the concept of "citizens"
of the states of the United States who are not "citizens" within the
meaning of the 14th Amendment. If this tax protester claim is true,
then:
1. The words "citizen of the United States" must have a meaning in
the 14th Amendment which is different than the meaning given those
words in other parts of the Constitution.
2. The words "United States" must have a meaning in the first
sentence of the 14th Amendment which is different than the meaning
given those words in other parts of the Constitution.
3. The word "jurisdiction" must have a meaning in the first sentence
of the 14th Amendment which is different than the meaning given
that word in other parts of the Constitution.
4. The 14th Amendment must extend the power of Congress to legislate
for "federal citizens" without regard to the limits on
Congressional power found in other parts of the Constitution.
5. The 14th Amendment created a new kind of citizenship, and did not
merely open the existing definition of "citizen" to include former
slaves as well as whites.
6. The 14th Amendment does not mean what it says, and does not apply
to "all persons."
7. The power of Congress to tax is limited by citizenship, and
Congress cannot tax immigrants or foreigners who are within the
United States but not citizens of the United States.
All of the above statements are wrong, but for the purpose of this FAQ
the last fallacy is the most important, because there is nothing in
the Constitution that limits the power of Congress to tax only
citizens, however defined. The power to tax which is given to Congress
by Article I, Section 8, of the Constitution, and by the 16th
Amendment, is not limited to the taxation of citizens, whether
"sovereign state citizens," "14th Amendment citizens," or any other
type of citizen. The power to tax applies to all residents of the
United States whether or not they are citizens, as well as to all
income earned within the United States whether or not the income is
earned by residents or non-residents. (The income tax also applies to
citizens of the United States living in other countries, but that is
another issue.) Therefore, even if the claim of two types of
citizenship is correct, it is still irrelevant because Congress can
tax noncitizens as well as citizens.
As explained above, tax protesters often have trouble with the concept
of the concurrent sovereignty of the federal government with the
states. For that reason, tax protesters often fail to understand that
our Constitution recognizes state and federal citizenship as two
different relationships, with the rights and obligations of state
citizenship being separate from the rights and obligations of federal
citizenship. However, the Supreme Court has clearly recognized the
reality of concurrent citizenship.
"It is a natural consequence of a citizenship which owes allegiance
to two sovereigns, and claims the protection of both." United
States v. Cruikshank, 92 U.S. 542, 549 (1876).
However, before the 14th Amendment, it was not clear how citizenship
was determined. This culminated in the infamous Dred Scott decision,
Dred Scott v. Sandford, 60 U.S. 393 (1856), in which it was held that
a slave (or former slave) who was not a citizen (or even a person)
under state law could not be a citizen (or even a person) under
federal law. Following the Civil War, this was reversed by the 14th
Amendment. As explained by the U.S. Supreme Court:
"The first section of the fourteenth article, to which our
attention is more specially invited, opens with a definition of
citizenship--not only citizenship of the United States, but
citizenship of the States.
"'All persons born or naturalized in the United States and subject
to the jurisdiction thereof, are citizens of the United States and
of the State in which they reside.'
"The first observation we have to make of this clause is, that it
puts at rest both the questions which we state to have been the
subject of differences of opinions. It declares that persons may be
citizens of the United States without regard to their citizenship
of a particular States, and it overturns the Dred Scott decision by
making all persons born within the United States and subject to its
jurisdiction citizens of the United States." (emphasis in
original.) The Slaughterhouse Cases, 83 U.S. 36, 72-73 (1873).
From the plain words of the 14th Amendment, and the decision in the
Slaughterhouse Cases, federal courts have consistently ruled that all
persons born within the United States are citizens of the United
States, and state citizenship follows from federal citizenship. For
example, the Supreme Court has held that a state cannot deny rights of
state citizenship to a citizen of the United States who resides within
the state. Dunn v. Blumstein, 405 U.S. 330 (1972); Evans v. Cornman,
398 U.S. 419 (1970).
"Relying on this Supreme Court authority, circuit and district
courts have treated the question before us today as one long
decided: '[I]n order to be a citizen of a state, it is elementary
law that one must first be a citizen of the United States.'" Kantor
v. Wellesley Galleries, Ltd., 704 F.2d 1088, 1090-1091 (9th Cir.
1983), (citations omitted).
Tax protesters (and white supremecists) argue that the phrase "all
persons" does not mean all persons, but only refers to former slaves
(i.e., blacks), because the purpose of the amendment was to grant
rights of citizenship to blacks, and whites were already citizens.
Even assuming that it is possible to conclude that the amendment does
not mean what it says, it cannot be concluded that the amendment only
applies to blacks if the effect would be to treat blacks differently
than whites. The purpose of the amendment was to give blacks the same
rights of citizenship as whites. That purpose would be defeated if it
could be concluded that blacks enjoy a form of citizenship that is
somehow different than the citizenship enjoyed by whites.
Tax protesters (and white supremecists) also argue that the phrase
"subject to the jurisdiction thereof" excludes those born within the
states of the United States because only those born in the District of
Columbia and the territories of the United States are "subject to the
jurisdiction" of the federal government. This is completely wrong, on
several grounds:
* The Supreme Court has plainly stated that "The phrase 'subject to
its jurisdiction' was intended to exclude from its operation
ministers, consuls, and citizens or subjects of foreign States
born within the United States." The Slaughterhouse Cases, 83 U.S.
36, 73 (1873).
* Those born within the states of the United States are within the
"jurisdiction" of the United States as that word is used within
other clauses of the Constitution, including the reach of the
judicial power of the United States in Article III. As explained
above, the laws of the United States enacted under the
Constitution of the United States are the "Supreme Law of the
Land" and so all of the residents of all of the states of the
United States are within the "jurisdiction" of the United States.
* If the 14th Amendment did not apply to those born within the
states, it would not apply to former slaves either, which would
defeat the entire admitted purpose of the amendment.
So What have the federal courts said about the claim that a person
born in a state of the United States is not a "citizen of the United
States" and is not subject to the federal income tax?
"Also basic to Mr. Sloan's "freedom from income tax theory" is his
contention that he is not a citizen of the United States, but
rather, that he is a freeborn, natural individual, a citizen of the
State of Indiana, and a "master"--not "servant"--of his government.
As a result, he claims that he is not subject to the jurisdiction
of the laws of the United States. This strange argument has been
previously rejected as well. "All individuals, natural or
unnatural, must pay federal income tax on their wages," regardless
of whether they requested, obtained or exercised any privilege from
the federal government. Lovell [v. United States], 755 F.2d [517]
at 519 [7th Cir. 1984]; cf. [United States v.] Studley, 783 F.2d
[934] at 937 [9th Cir. 1986] (Studley's argument that "she is not a
'taxpayer' because she is an absolute, freeborn and natural
individual ... is frivolous. An individual is a 'person' under the
Internal Revenue Code."). Moreover, the tax code imposes a "direct
nonapportioned [income] tax upon United States citizens throughout
the nation, not just in federal enclaves," such as postal offices
and Indian reservations. United States v. Collins, 920 F.2d 619,
629 (10th Cir. 1990), cert. denied, ___ U.S. ___, 111 S.Ct. 2022,
114 L.Ed.2d 108 (1991) (citing Brushaber v. Union Pacific R.R., 240
U.S. 1, 12-19, 36 S.Ct. 236, 239-42, 60 L.Ed. 493 (1916)). Mr.
Sloan's proposition that he is not subject to the jurisdiction of
the laws of the United States is simply wrong." United States v.
Sloan, 939 F.2d 499, 501 (7th Cir. 1991), cert. den. 112 S.Ct. 940
(1992).
"And, finally, we reject appellants' contention that they are not
citizens of the United States, but rather "Free Citizens of the
Republic of Minnesota" and, consequently, not subject to taxation.
See United States v. Kruger, 923 F.2d 587, 587-88 (8th Cir.1991)
(rejecting similar argument as "absurd")." United States v. Gerads,
999 F.2d 1255 (8th Cir. 1993).
"Appellant challenges the district court's jurisdiction by
contending that because he is a state citizen, the United States
government lacks the constitutional authority both to subject him
to federal tax laws and to prosecute him for failing to comply with
those laws. Citing to Dred Scott v. Sandford, 60 U.S. (19 How.) 393
(1856), appellant argues that as a white, natural born, state
citizen, he is not subject to the taxing power of Congress. This
argument is completely without merit." As this court has made clear
in the past, claims that a particular person is 'not a [federal]
taxpayer because [he or] she is an absolute, free-born and natural
individual' constitutionally immune to federal laws is frivolous
and, in civil cases, can serve as the basis for sanctions. United
States v. Studley, 783 F.2d 934, 937, n. 3 (9th Cir. 1986)." United
States v. McDonald, 919 F.2d 146 (9th Cir. 1990).
To the extent the Monforton's contend that as 'Sovereign State
Citizens of Washington States' they are not subject to federal
income tax, this contention is frivolous." Monforton v. United
States, (9th Cir. )
United States v. Nelson (In re Becraft), 885 F.2d 548 (9th Cir.
1989).
"The Epperlys next argue that since they are 'American Inhabitants'
who possess sovereign powers and immunities, they are properly
classified under the tax code as 'nonresident aliens' and are not
subject to taxation by the federal government. Such an argument is
frivolous." Epperly v. United States, (9th Cir.)
United States v. Steiner, 963 F.2d 381 (9th Cir. 1992).
The following arguments are "completely lacking in legal merit and
patently frivolous: (1) individuals are not persons 'persons'
subject to taxation under the Internal Revenue Code; (2) the United
States' authority is confined to the District of Columbia; ...."
Lonsdale v. United States, 919 F.2d 1440, 1448 (10th Cir. 1990).
"Plaintiff claims that he is a nonresident alien or 'foreign
individual of America' in relation to the United States, and that
his residence and citizenship rest solely with the States of
Washington, 'a free, independent, sovereign, territory' with
'coequal authority with the other compact states of America.' ...
Despite plaintiff's creative argument, the court takes judicial
notice of the fact that the state of Washington is one of the fifty
states that comprise the United States of America, entering the
Union in 1889 as the forty-second state. [Citations omitted.] The
Fourteenth Amendment states that '[a]ll persons born or naturalized
in the United States and subject to the jurisdiction thereof, are
citizens of the United States and of the State wherein they
reside.' U.S. Const., Amend. XIV, section 1. Plaintiff, therefore,
along with being a citizen Of the state of Washington, is a United
States citizen because he was born in Washington State to parents
who were United States citizens. ... As a United States citizen,
plaintiff is required to pay federal income tax." Betz v. United
States, 40 Fed.Cl. 286, 294-296 (1998)
So where do tax protesters get the idea that the 14th Amendment
created some different kind of citizenship, or that there is a
difference between citizenship under the 14th Amendment and
"citizenship" as it existed before (or even after?) the 14th
Amendment? From a collection of obscure, discredited, and
misunderstood decisions.
"No white person born with the limits of the United States and
subject to their jurisdiction ... or born without those limits, and
subsequently naturalized under their laws, owes his status of
citizenship to the recent amendments to the Federal Constitution.
The purpose of the 14th Amendment .. was to confer the status of
citizenship upon a numerous class of persons domiciled with the
limits of the United States who could not be brought within
operation of the naturalization laws because native born, and whose
birth, though native, at the same time left them without
citizenship. Such persons were not white persons but in the main
were of African blood, who had been held in slavery in this
country..." Van Valkenburg v. Brown, 43 Cal. 43, 47 (1872).
The Van Valkenburg decision is frequently quoted for the proposition
that white citizens do not owe their citizenship to the 14th
Amendment. However, the decision was a state court decision, not a
federal decision, and it is inconsistent with the decision of the U.S.
Supreme Court in the Slaughterhouse Cases, decided the following year,
in 1873. (See the quotation above from the Slaughterhouse Cases, in
which the court emphasized that, under the 14th Amendment, all persons
born in the United States are citizens.)
The other problem with the Van Valkenburg decision is that, although
the California court stated that there was a difference between how
the plaintiff (a white woman) became a citizen, the court nevertheless
concluded that she was a citizen of the United States within the
meaning of the 14th Amendment.
"[B]y whatever means the plaintiff became a citizen of the United
States, her privileges and immunities cannot be abridged by State
laws; and this is true. The purpose and effect of the amendment, in
this respect, is to place the privileges and immunities of citizens
of the United States beyond the operation of States legislation."
Van Valkenburg v. Brown, 43 Cal. 43, 47 (1872).
So although an old, discredited decision from California may
distinguish between white citizens and black citizens, it is a
distinction without a difference.
"By metaphysical refinement, in examining our form of government,
it might be correctly said that there is no such thing as a citizen
of the United States. ... A citizen of any one of the States of the
Union, is held to be, and called a citizen of the United States,
although technically and abstractly there is no such thing. To
conceive a citizen of the United States who is not a citizen of
some one of the states, is total foreign to the idea, and
inconsistent with the proper construction and common understanding
of the expression used in the constitution, which must be deduced
from its various other provisions. The object then to be obtained,
but the exercise of the power of naturalization, was to make
citizens of the respective states." Ex parte Knowles, 5 Ca. 300,
302 (1855).
Notice the date? This decision was rendered 13 years before the 14th
Amendment was ratified. Even if this opinion of the California Supreme
Court (not a federal court) was correct in 1855, it was not correct
once the 14th Amendment was ratified. See Levin v. United States, 128
F. 826, 282 (8th Cir. 1904); Harris v. Sacramento County, 196 P. 895,
897 (Calif. Dist. App. Ct. 1921).
"The 14th Amendment creates and defines citizenship of the United
States. It had long been contended, and had been held by many
learned authorities, and had never been judicially decided to the
contrary, that there was no such thing as a citizen of the United
States, except by becoming a citizen of some state." United States
v. Anthony, 24 Fed.Cas. 829, 830 (N.D.N.Y. 1873).
The major problem with this quotation is that it is incomplete, and
misleading when taken out of context. See what the court said next:
"Not mode existed, it was said, of obtaining a citizenship of the
United States, except by first becoming a citizen of some state.
This question is now at rest. The fourteenth amendment defines and
declares who shall be citizens of the United States, to wit, 'all
persons born or naturalized in the United States, and subject to
the jurisdiction thereof.' The latter qualification was intended to
exclude the children of foreign representatives and the like. With
this qualification, every person born in the United States or
naturalized is declared to be a citizen of the United States and of
the state wherein he resides." United States v. Anthony, 24
Fed.Cas. at 830.
Reading the whole quotation, it is clear that the court was saying
what every other court had said, that there was some question before
the 14th Amendment about what "citizen of the United States" meant and
how one became a citizen, but the 14th Amendment settled the question
by declaring that every person born within the United States was a
citizen of the United States.
"... the 14th Amendment is throughout affirmative and declaratory,
intended to ally doubts and to settle controversies which had
arisen, and not to impose any new restriction upon citizenship."
United States v. Wong Kim Ark, 169 U.S. 649, 687-688, (emphasis
added).
Why tax protesters cite the Wong Kim Ark decision is a bit of a
mystery, because in that case the U.S. Supreme Court held that a child
born to Chinese nationals living in California was a citizen of the
United States and could not be deported. The court's ruling was not
limited to blacks, Chinese, or any other race or nationality, the
court declaring:
"The fourteenth amendment affirms the ancient and fundamental rule
of citizenship by birth.... The amendment, in clear words and in
manifest intent includes the children born within the territory of
the United States of all other persons, of whatever race or color,
domiciled within the United States." United States v. Wong Kim Ark,
169 U.S. 649, 687-688, (emphasis added).
Because the child in question was born in California, and state of the
United States, and not the District of Columbia or other "federal
area," and necessary implication of the holding in the case is that
California is "in the United States and subject to the jurisdiction
thereof."
Despite the clear language of the 14th Amendment, and the clear court
decisions declaring that all persons born in the United States are
citizens of the United States, many tax protesters continue to claim
that there are two types of citizenship, one for whites and one for
blacks. This racist argument more than a little disturbing.
Nevertheless, although tax protesters squirm and twist and hem and
haw, the fact remains that no court in the history of the United
States has ever stated that there were two different types of U.S.
citizenship, with different rights or obligations, and no court in the
history of the United States has ever held that any resident of the
United States can be exempt from federal income tax by reason of a
different kind of citizenship.
***********************************************************************
You cannot be required to file an income tax return because a tax
return is a form of testimony and the 5th Amendment guarantees that
you cannot be compelled to testify against yourself.
The 5th Amendment applies to criminal proceedings, not civil
proceedings, and collecting taxes is a civil proceeding, not a
criminal proceeding. You cannot refuse to file an income tax return
because of the 5th Amendment.
The 5th Amendment states (in part) that "No person ... shall be
compelled in any criminal case to be a witness against himself...."
However, you can be compelled to testify against yourself in a civil
case. For example, O.J. Simpson could not be compelled to testify in a
criminal case, so he never took the witness stand during his murder
trial. But in the civil action brought against him by the Goldman
family for the same murders, he was called to the stand by the Goldman
family, required to testify, and found financially liable for the
killings.
The courts have therefore ruled that you cannot refuse to file an
income tax return by reason of the 5th Amendment.
A fifth amendment claim of self-incrimination does not justify an
outright refusal to file a tax return. Sullivan v. United States, 274
U.S. 259 (1927), rev'g 15 F.2d 809.
United States v. Neff, 615 F.2d 1235, 1239 (9th Cir. 1980), cert. den.
447 U.S. 925.
Parker v. Commissioner, 724 F.2d 469 (5th Cir. 1984).
United States v. Daly, 481 F.2d 28 (8th Cir. 1973), cert. den. 414
U.S. 164 (1973).
United States v. Porth, 426 F.2d 519 (10th Cir. 1970), cert. den. 400
U.S. 824.
Betz v. United States, 753 F.2d 834 (10th Cir. 1985).
In enacting a new assessable penalty for "frivolous income tax
returns," I.R.C. section 6702, Congress specifically identified 5th
Amendment arguments as "frivolous" arguments, and courts have upheld
fines against tax protesters who have failed to file income tax
returns on 5th Amendment grounds.
Having said all that, there are at least two ways in which the 5th
Amendment can be relevant to tax returns.
You cannot be compelled to disclose criminal activity on a tax return.
For example, if you are sell heroin or cocaine, you are required to
report your income from your illegal sales, but you are not required
to describe your illegal activities, or provide any other information
that might incriminate you. (You could describe your income simply as
"income from sales" without describing what you are selling.) If you
choose to identify your occupation or the nature of your sales, that
information can be used against you. (In Garner v. United States, 424
U.S. 648 (1976), the defendant identified himself as a "gambler" on
his tax return, and that information was ruled to be admissible
against him in a criminal trial for illegal gambling activities.)
If you fail to file a return, or file a fraudulent return, the
government cannot compel you to testify or provide information that
could be used against you in a criminal tax case. In other words, the
5th Amendment does not prevent the government from requiring you to
file a return or prosecuting you if you fail to file, but it does
prevent the government from compelling you to provide information to
help with your own conviction after you have failed to file. In order
properly to assert the privilege in the second kind of case, taxpayers
must show that their testimony would "support a conviction under a
federal criminal statute" or "furnish a link in the chain of evidence
needed to prosecute the claimant for a federal crime."' United States
v. Rendahl, 746 F.2d 553, 555 (9th Cir. 1984) (quoting Hoffman v.
United States, 341 U.S. 479, 486 (1951). Indeed, it is enough if the
responses would merely "provide a lead or clue" to evidence having a
tendency to incriminate. United States v. Neff, 615 F.2d 1235, 1239
(9th Cir.)(quoting Hashagen v. United States, 283 F.2d 345, 348 (9th
Cir. 1960)), cert. denied, 447 U.S. 925 (1980). However, the privilege
is validly invoked only where there are "substantial hazards of
self-incrimination" that are "real and appreciable," not merely
"imaginary and unsubstantial." United States v. Rendahl, 746 F.2d 553,
555 (9th Cir. 1984) (quoting United States v. Neff, 615 F.2d 1235,
1239 (9th Cir.). See United States v. Troescher, KTC 1996-523 (9th
Cir. 1996), for an example of a court applying these principles to a
refusal to respond to an IRS summmons.
***********************************************************************
The IRS cannot require anyone to file an income tax return because
that would be a violation of our 4th Amendment rights.
The 4th Amendment prohibits unreasonable searches and seizures, and
requires that search warrants be supported by probable cause.
The requirement for filing ordinary and reasonable returns does not
violate a taxpayer's protection against unreasonable search and
seizure under the Fourth Amendment. Flint v. Stone Tracy Co., 220 U.S.
107 (1911).
***********************************************************************
The income tax is voluntary.
This is a corruption of statements made by the IRS, the courts, and
Congress to encourage taxpayer compliance with the tax laws, without
the need for legal action against taxpayers.
A quotation frequently taken out of context by tax protesters is the
following by the U.S. Supreme Court:
"Our tax system is based upon voluntary assessment and payment and
not upon distraint." Flora v. United States, 362 U.S. 145, 175.
This quotation is out of context, because the court first noted that
the government could collect the tax by exercising its power of
distraint, "but we cannot believe that completing resort to this
extraordinary procedure is either wise or in accord with congressional
intent." 362 U.S. at 175. In other words, Congress can collect taxes
by force, but the court believed that Congress intended to give
taxpayers an opportunity to comply before exercising that force.
This is better explained in Helvering v. Mitchell, 303 U.S. 391, 399
(1938), which the court cited in the Flora decision:
"In assessing income taxes, the Government relies primarily upon
the disclosure by the taxpayer of the relevant facts. This
disclosure it requires him to make in his annual return. To ensure
full and honest disclosure, to discourage fraudulent attempts to
evade the tax, Congress imposes sanctions. Such sanctions may
confessedly be either criminal or civil."
See also, Ginter v. Southern, 611 F.2d 1226, 1229 & n.2 (8th Cir.
1979), cert. den., 446 U.S. 967 (1980); Funk v. Commissioner, 687 F.2d
264, 265 (8th Cir. 1982). When confronted by claims that income taxes
are "voluntary," courts readily explain that the payment of income tax
is mandatory, not optional:
"Appellants' claim that payment of federal income tax is voluntary
clearly lacks substance. See Newman v. Schiff, 778 F.2d 460, 467
(8th Cir. 1985)." United States v. Gerads, 999 F.2d 1255 (8th Cir.
1993).
"The payment of income taxes is not optional ... and the average
citizen knows that payment of income taxes is legally required."
Schiff v. United States, 919 F.2d 830, 834 (2nd Cir. 1990).
"Any assertion that the payment of income taxes is voluntary is
without merit. It is without question that the payment of income
taxes is not voluntary. United States v. Gerads, 999 F.2d 1255,
1256 (8th Cir. 1993), (per curiam); Wilcox v. Commissioner of
Internal Revenue, 848 F.2d 1007, 1008 (9th Cir. 1988). The
assertion that the filing of an income tax return is voluntary is,
likewise, frivolous. Title 26, United States Code, Section
6012(a)(1)(A), 'requires that every individual who earns a
threshold level of income must file a tax return.' United States v.
Pottorf, 769 F.Supp. 1176, 1183 (D.Kan. 1991). Failure to file an
income tax return subjects an individual to criminal penalty. Id.,
(citing 26 U.S.C. § 7203)." United States v. Hartman, 915 F.Supp.
1227 (M.D.Fla. 1996).
A similar claim is that a federal income tax return is a form of
contract, and is therefore voluntary, or invalid if entered into under
duress. This claim is also uniformly rejected:
"The notion that the federal income tax is contractual or otherwise
consensual in nature is not only utterly without foundation by,
despite McLaughlin's protestations to the contrary, has been
repeatedly rejected by the courts." McLaughlin v. United States,
832 F2d 986 (7th Cir. 1987).
"Drefke argues that taxes are debts which can only be imposed
voluntarily when individuals contract with the government for
services and that those who choose to enter such contracts do so by
signing 1040 and W-4 forms. By refusing to sign those forms, Drefke
argues that he is 'immune' from the Internal Revenue Service's
jurisdiction as a 'nontaxpayer.'
"This is an imaginative argument, but totally without arguable
merit. 26 U.S.C. § 1 imposes upon 'every' individual a certain rate
of income tax depending on their amount of taxable income. 26
U.S.C. § 6012 states that unmarried individuals having a gross
income in excess of $4,300, and married individuals entitled to
make joint returns having a gross income in excess of $5,400
'shall' file tax returns for the taxable year. Considering Drefke's
gross income for 1979 and 1980, he was clearly required to file tax
returns for those years.
"26 U.S.C. § 6151 states that when a tax return is required to be
filed, the person so required 'shall' pay such taxes to the
internal revenue officer with whom the return is filed at the fixed
time and place. The sections of the Internal Revenue Code imposed a
duty on Drefke to file tax returns and pay the appropriate rate of
income tax, a duty which he chose to ignore." United States v.
Drefke, 707 F.2d 978, 981 (8th Cir. 1983), cert. den., sub nom.,
Jameson v. United States, 464 U.S. 942 (1983).
"Upon review of May's amended peition, we find no allegations of
fact which could give rise to a valid claim; rather, the complaint
merely contains conclusory assertions attacking the
constitutionality of the Internal Revenue Code and its application
to the taxpayer.[Footnote omitted.] Tax protest cases like this one
raise no genuine controversy; the underlying legal issues have long
been settled. See, e.g., Abrams, 82 T.C. at 406-07 (citing cases
rejecting similar arguments). Because May's petition raised no
justiciable claims, the Tax Court properly dismissed the petition
for failure to state a claim." May v. C.I.R., 752 F.2d 1301, 1302
(8th Cir. 1985), (among other things, May's amended complaint
alleged that "The filing of an 'imcome' [sic] tax return is
'VOLUNTARY' and penalties can not be instituted against a voluntary
act since to do so would make the act 'mandatory.'" 752 F.2d at
1304, note 3).
***********************************************************************
The Internal Revenue Service is not an agency of the federal
government, but a private corporation incorporated in Delaware (or,
alternatively, an agency of the government of Puerto Rico).
Section 7801(a) of the Internal Revenue Code states that the
administration and enforcement of the Code shall be performed by or
under the supervision of the Secretary of the Treasury. Section
7802(a) then says that there shall be a Commissioner of Internal
Revenue in the Department of the Treasury who shall have such duties
and powers as may be prescribed by the Secretary of the Treasury.
Finally, Section 7803(a) of the Code states that the Secretary is
authorized to employ persons for the administration and enforcement of
the Internal Revenue Code.
Acting under these laws, the Department of the Treasury has adopted
regulations creating the Internal Revenue Service, of which the
following is a part:
"The Internal Revenue Service is a bureau of the Department of the
Treasury under the immediate direction of the Commissioner of
Internal Revenue. The Commissioner has general superintendence of
the assessment and collection of all taxes imposed by any law
providing internal revenue. The Internal Revenue Service is the
agency by which these functions are performed." Treas. Reg. Section
601.101(a)
Faced with the claim that the IRS is not an agency of the United
States government, the courts have reached the obvious conclusion:
"It is clear that the Internal Revenue Code gave the Secretary of
the Treasury full authority to administer and enforce the Code, and
the power to create an agency to administer and enforce the tax
laws. Pursuant to that legislative grant of authority, the
Secretary created the Internal Revenue Service, so that the IRS is
an agency of the Department of the Treasury, created pursuant to
Congressional statute." Snyder v. IRS,
"Plaintiff attempts to circumvent this conclusion by arguing that
the IRS is 'a private corporation' because it was not created by
'any positive law' (i.e., statute of Congress) but rather by fiat
of the Secretary of the Treasury. Apparently, this argument is
Based on the fact that in 1953 the Secretary of the Treasury
renamed the Bureau of Internal Revenue as the Internal Revenue
Service. However, it is clear that the Secretary of the Treasury
has full authority to administer and enforce the Internal Revenue
Code, 26 U.S.C. § 7801, and has the power to create an agency to
administer and enforce the laws. See 26 U.S.C. § 7803(a). Pursuant
to this legislative grant of authority, the Secretary created the
IRS. 26 C.F.R. § 601.101. The end result is that the IRS is a
creature of 'positive law' because it was created through
congressionally mandated power. By plaintiff's own 'positive law'
premise, the, the IRS is a validly created governmental agency and
not a 'private corporation.' Young v. Internal Revenue Service, 596
F.Supp. 141 (N.D.Ind. 1984).
See also, Cameron v. IRS, 593 F.Supp. 1540, 1549 (N.D.Ind. 1984).
The following arguments are "completely lacking in legal merit and
patently frivolous: ... (1) individuals are not persons 'persons'
subject to taxation under the Internal Revenue Code; (2) the United
States' authority is confined to the District of Columbia; ... (5)
wages are not income ...." Lonsdale v. United States, 919 F.2d
1440, 1448 (10th Cir. 1990).
"We perceive not need to refute these arguments with somber
reasoning and copious citation of precedent; to do so might suggest
that these arguments have some colorable merit. The
constitutionality of our income tax system--including the role
played within that system by the Internal Revenue Service and the
Tax Court--has long been established." Crain v. Commissioner, 737
F.2d 1417 (5th Cir. 1984), (responding to, among other things, a
claim that the "Internal Revenue Service, Incorporated" lacks
authority).
"Salman's argument that the Internal Revenue Service is not a
government agency is wholly without merit." Salman v. Jameson, 52
F.3d 334 (9th Cir. 1995). (Salman has now been enjoined against
filing any other lawsuits against the IRS or the United States. See
Salman v. Jameson, 97-1 USTC ¶50,452, 79 A.F.T.R.2d ¶97-2667
(D.Nev. 1997).)
***********************************************************************
There are lots of tax protesters who have won cases against the IRS,
such as John Cheek, Lloyd Long, and Gail Sanocki.
John Cheek was a classic tax protester. He was a pilot for American
Airlines who filed no tax returns for 5 years. He was convicted of
willfully failing to file and appealed his conviction all the way to
the U.S. Supreme Court, which reversed his conviction and remanded the
case for a new trial. The opinion of the Supreme Court is rather
confusing, and deals entirely with the issue of whether Cheek should
have been allowed to present evidence that he sincerely believed that
he was not required to file a tax return. The opinion is confusing
because the court characterized his beliefs as "absurd" and ruled that
he could not argue that the income tax was unconstitutional or
otherwise invalid. Exactly what he would be allowed to present to the
jury at his retrial is not clear, but whatever it was, it didn't do
him any good, because he was convicted again at his second trial. See
United States v. Cheek, 3 F3d 1057 (7th Cir. 1993).
The Lloyd Long case is one of the great "victories" of tax protesters,
meaning that it is absolutely meaningless. Mr. Long was prosecuted for
criminal failure to file and was acquitted by a jury, which apparently
had a reasonable doubt about whether he had "willfully" failed to
file. His acquittal does not "prove" that you are not required to file
income tax returns, any more than the acquittal of O.J. Simpson
"proves" that it is legal to kill your ex-wife.
Gail Sanocki is another mythical (and unpublished) case, the facts of
which are not clear. Apparently, the IRS was proceeding against her
and her husband and, at some point in the proceedings, the IRS dropped
its case against her (but not her husband). She had made many of the
usual tax protester arguments, but the government may have dropped the
case against her because of doubts about whether she was an "innocent
spouse" and so was not responsible for the tax returns filed by her
husband. Although tax protesters like to claim that the government was
conceding the validity of her tax protester arguments, there is simply
no reason to believe that it was anything but a case of the government
deciding not to prosecute because of doubts about the evidence, not
doubts about the law.
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There are many lawyers and well-educated people who believe that tax
protester positions are valid and have been successful in arguing tax
protester cases. People like Lowell H. Becraft, Irwin Schiff, etc.
A contributor to misc.taxes has made the following observations about
the career of Lowell H. Becraft as a tax lawyer: Richard Becraft has
been sanctioned several times for wasting the time of the courts with
the arguments described in this FAQ. See Becraft v. United States.
Irwin Schiff served time in federal prison for income tax evasion.
While he was in prison, the IRS took the royalties from the sale of
his book to pay his back taxes. For a fairly complete history of the
losses of Irwin Schiff against the United States tax system, see
Schiff v. United States, 919 F.2d 830 (2nd Cir. 1990); United States
v. Schiff, 876 F.2d 272 (2nd Cir. 1989); United States v. Schiff, 801
F.2d 108 (2nd Cir. 1986), cert. denied, 480 U.S. 945 (1987); Schiff v.
Simon & Schuster, Inc., 780 F.2d 210 (2nd Cir. 1985); Schiff v. Simon
& Schuster, Inc., 766 F.2d 61 (2nd Cir. 1985) (per curiam); Schiff v.
Commissioner, 751 F.2d 116 (2nd Cir. 1984) (per curiam); United States
v. Schiff, 647 F.2d 163 (2nd Cir. 1981), cert. denied, 454 U.S. 835
(1981); United States v. Schiff, 612 F.2d 73 (2nd Cir. 1979).
Irwin Schiff also once made the mistake of appearing on television and
offered to pay $100,000 to anyone who can identify the sections of the
Internal Revenue Code that impose any liability for tax. A man named
Richard Newman correctly identified sections 1, 6012, and sued Irwin
Schiff when he refused to pay the $100,000. The 6th Circuit Court of
Appeals agreed that Newman was right and Schiff's claim was
"ridiculous," but ruled that Schiff did not have to pay because Newman
did not telephone the television station with the correct answer
within the time specified in Schiff's offer.
William T. Conklin claims to be successful in fighting the IRS, and
has described himself as a "known tax protester like Jesus Christ,
Thomas Jefferson, Benjamin Franklin and George Washington." Conklin v.
United States, KTC 1994-259, Case No. 89-N-1514 (D. Col. 1994).
Unfortunately, his claims of success are contradicted by the public
record, because he has lost every case on record. See, e.g., Conklin
v. Commissioner, 91 T.C. 41 (1988); Church of World Peace, Inc. v.
Commissioner, T.C. Memo 1992-318; Church of World Peace, Inc. v.
Commissioner, T.C. Memo 1994-87.
Cases claimed as wins by William T. Conklin:
Church of World Peace, Inc. v IRS, 715 F.2d 492
United States v. Church of World Peace, 775 F.2d 265
Conklin v. United States, 812 F.2d 1318
Conklin v. C.I.R., 897 F.2d 1032
Tavery v. United States, 897 F.2d 1027
Tavery v. United States, Civ. No. 87-Z-180, USDC Colorado
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What penalties can be imposed on tax protesters?
Being a tax protester is not without its costs. The cases against tax
protesters usually include one or more of the following civil or
criminal penalties:
A failure to file an income tax return, or pay the tax when due,
results in a civil penalty of 5% per month (not to exceed a total
of 25%). IRC section 6651.
A willful failure to file an income tax return is a crime
punishable a fine of not more than $25,000 and imprisonment of not
more than one year, or both. IRC section 7203. This criminal
penalty is in addition to the civil penalty under section 6651.
IRC section 6702 allows the IRS to impose a $500 civil penalty
against any individual who files a return which is incorrect on its
face, or from which a tax cannot be calculated, if the return is
based on "a position which is frivolous." or a desire to impede the
administration of the federal income tax. This penalty is often
imposed against tax protesters who file returns with that are
blank, contain frivolous claims regarding what is "income," or are
not signed under penalties of perjury.
IRC section 6653(a) requires a penalty of five percent of any
underpayment of tax due to "careless, reckless, or intentional
disregard" of rules orregulations.
IRC section 6653(b) requires a civil penalty of 75% of any
underpayment of tax due to fraud. If there is a fraud penalty
imposed, then there is no penalty for negligence (section 6653(a))
or failure to file or pay (section 6651).
IRC section 6673 allows the Tax Court to assess damages of up to
$5,000 against taxpayers who file petitions in Tax Court that are
"frivolous or groundless." All of the arguments described in this
FAQ have been described as "frivolous or groundless" by the Tax
Court, and penalties assessed against tax protesters.
A willful attempt to evade the income tax is a crime punishable a
fine of not more than $100,000 and imprisonment of not more than
five years, or both. IRC section 7201. This criminal penalty is in
addition to the civil penalty for fraud under section 6653(b).
These penalties are all in addition to the interest that will be
imposed on underpayments of tax.