The most spectacular and characteristic method of tax resistance is to refuse to pay a tax – either by tacitly ignoring the tax bill or by openly declaring that they refuse to pay. In other words, you can expect a rush of paperwork, trouble, and fines if you refuse to pay your taxes. This is true whether you refuse because of a high principle or simply because you prefer to keep the money. Some individuals or groups claim that taxpayers may refuse to pay federal income tax because of their religious or moral beliefs, or because of an objection to the use of taxes to fund certain government programs. In support of this frivolous position, these individuals falsely invoke the First Amendment and often the Restoring Religious Freedom Act (“RFRA”). Some individuals or groups claim that taxpayers can refuse to file federal tax returns or file tax returns on which they refuse to provide financial information because they believe their Fifth Amendment privilege against self-incrimination is being violated. The Law: There is no constitutional right to refuse to file a tax return on the grounds that it violates the Fifth Amendment privilege of self-incrimination. As the Supreme Court concluded, a taxpayer cannot “draw the circle of an incant around the whole affair by making his own statement that a word in the government`s loop would endanger him.” United States v. Sullivan, 274 U.S. 259, 264 (1927).
Failure to comply with reporting and reporting obligations under federal tax laws is not excused on the basis of sweeping claims of constitutional privilege against forced self-incrimination under the Fifth Amendment. The IRS discussed this frivolous argument in more detail, warning taxpayers of the consequences of trying to make a claim for these reasons. Reverend Rul. 2005-19, 2005-1 BC 819; Notice 2010-33, 2010-17 I.R.B. 609.Relevant Jurisprudence: The Law: The First Amendment to the United States Constitution provides that “Congress shall not enact any law that respects a religious community or prohibits its free exercise; or the restriction of freedom of expression or freedom of the press; or the right of the people to assemble peacefully and ask the government to make amends. However, the First Amendment does not provide for the right to refuse to pay income tax for religious or moral reasons, or because taxes are used to fund government programs that are rejected by the taxpayer. Similarly, it is well regulated that the RFRA does not grant the right to avoid paying taxes for religious reasons. The First Amendment does not protect commercial speech or speech that aids or incites taxpayers to illegally refuse to pay federal income tax, including returns that promote abusive tax avoidance systems. Relevant case law: United States v.
Lee, 455 U.S. 252, 260 (1982) – The Supreme Court has held that the general public interest in maintaining a sound tax system is of such importance that religious beliefs that are contrary to paying taxes do not provide a basis for refusing to pay, stating: “The tax system may not function, if denominations were allowed to challenge the tax system because tax payments were spent in a manner that violated their religious beliefs. Jenkins v. Commissioner, 483 F.3d 90 (2d Cir. 2007) – Der 2. The county upheld the imposition of a frivolous $5,000 penalty on the taxpayer and concluded that collecting tax revenue for expenses that violated the religious beliefs of individual taxpayers did not violate the Free Exercise Clause of the First Amendment, the Restoration of Religious Freedom Act of 1993, or the Ninth Amendment. United States v. Indianapolis Baptist Temple, 224 F.3d 627 (7th Cir.
2000) – The 7th Judicial District dismissed the defendant`s challenge to the federal tax on free-duty labour because these laws were not limited to the defendant or other employers related to religion in general, and there was no indication that they had been enacted for the purpose of increasing religious practices. Adams v Commissar, 170 F.3d 173 (3d Cir. 1999) – Der 3. The county confirmed tax loopholes and penalties for failing to file tax returns and pay taxes, noting that the Restoring Religious Freedom Act did not require federal income tax to reflect Adams` religious beliefs that paying taxes to fund the military is contrary to God`s will. and that their beliefs are not reasonable grounds for penalties. United States v. Ramsey, 992 F.2d 831 (8th Cir. 1993) – Noting that Ramsey “does not have the First Amendment right to avoid federal income tax on religious grounds,” the 8th Circuit rejected his argument that filing federal tax returns and paying federal income taxes violates his pacifist religious beliefs. Wall v.
United States, 756 F.2d 52 (8th Cir. 1985) – The 8. The county upheld the imposition of a frivolous $500 penalty on Wall for a “war tax deduction” in its federal tax return based on his religious beliefs, stating that “the necessities of tax collection through a sound tax system increase government interests convincing enough to outweigh the rights of free exercise of those who consider tax offensive on religious grounds in good faith. hold”. United States v. Peister, 631 F.2d. 658 (10th Cir. 1980) – The 10th District concluded that Peister`s right to religious freedom under the First Amendment had not been violated, rejecting his argument that he was exempt from income tax because of his vow of poverty after becoming pastor of a church he founded.
Salzer v. Commissioner, T.C. Memo. 2014-188, 108 a.m. T.C.M. (CHC) 284 (15. September 2014) – The court found Salzer`s justification for not paying taxes frivolous because he opposed the government`s “socialist” policies, noting that “the legal obligation to file a tax return exists regardless of a taxpayer`s personal political, economic, social or religious beliefs.” Other cases: Droz v. Commissioner, 48 F.3d 1120 (9 Cir. 1995); Boardman v. Shulman, 110 A.F.T.R.2d (RIA) 2012-6987 (E.D.
Cal. 2012); United States v. Ogilvie, no. 3:12–CR–00121–LRH–WGC, 2013 WL 6210645 (D. Nev. 27 November 2013). Gardner v. Commissioner, T.C. Memo. 2017-107, 113 T.C.M. (CCH) 1482 (2017) Some tax evaders refuse to pay all or part of the taxes owing, but then donate a corresponding donation to a charity.
In this way, they show that the intention of their resistance is not selfish and that they want to use part of their income to contribute to the common good. Opponents of taxation come from diverse backgrounds with different ideologies and goals. For example, Henry David Thoreau and William Lloyd Garrison were inspired by the American Revolution and the stubborn pacifism of the Quakers. [8] Some tax evaders refuse to pay taxes because their conscience does not allow them to finance the war, while others oppose the tax as part of a campaign to overthrow the government. [8] Ed Hedemann, who works as an independent contractor for several nonprofits and lives in Brooklyn, has not paid federal income tax since 1970. He pays Social Security, Medicare, state and local taxes, but refuses to pay federal income tax every year because he opposes any war and all U.S. military spending. Hedemann said the IRS tried to collect from him in various ways; In the past, when he was not self-employed, he quit his job before the IRS took some of his salary, he said. Now he makes it a point of honor never to owe money from his clients that the IRS could confiscate, he said, although he accepts payments for his work on checks and is rarely paid in cash. He even closed a bank account, so the government would not be able to find its funds there. In 1998, the Ministry of Justice ordered him to appear before the Federal District Court; The judge did not find him guilty of ignoring the court, he said, after refusing to make incriminating statements about himself in court. Some resistance fighters refuse to voluntarily pay only certain taxes, either because these taxes are particularly harmful to them, or because they are a useful symbolic target, or because they can be fought more easily.
A common argument used by tax protesters is that you can invoke the First Amendment and refuse to pay taxes because of religious or moral beliefs — for example, opposition to war or policies you consider discriminatory against immigrants. But the IRS makes it clear that the First Amendment “does not provide for the right to refuse to pay income taxes on religious or moral grounds, or because taxes are used to fund government programs that are rejected by taxpayers.” The IRS did not respond to MarketWatch`s request for comment on Americans refusing to pay taxes as a form of protest. The Taxpayer Bill of Rights clarifies your rights as a taxpayer, as well as the code of conduct that the IRS must follow when working with taxpayers. However, taxpayers do not have the right to refuse to pay income tax owed to the federal government. Some tax evaders defend themselves against only part of the taxes due. For example, some opponents of the war tax refuse to pay a percentage of their taxes equal to the military percentage of the state budget. There are several arguments why people should refuse to pay income tax. In response, the Internal Revenue Service (“IRS”) provided a rationale for why these arguments for refusing to pay income tax are fictitious and why income taxes should be paid. It`s hard to determine how many people choose not to pay federal taxes in protest, and how much the IRS will punish for it, Hedemann said. The National War Tax Resistance Coordinating Committee estimates that there are several thousand each year who refuse to pay some or all of the federal income taxes, or refuse to pay federal excise taxes on local services or fixed lines because they are against the war.
The number has changed over the years and was likely at its peak in the early 1970s, when about 20,000 rejected at least some of their income tax and 500,000 rejected their phone taxes, he said.
