History A tax protester, in the United States, is a person who denies that he or she owes a tax based on the belief that the constitution, statutes, or regulations do not empower the government to impose, assess or collect the tax. The tax protester may have no dispute with how the government spends its revenue. This differentiates a tax protester from a America: Freedom to Fascism America: Freedom to Fascism is a 2006 film by Aaron Russo, which alleges among a variety of claims that income tax is illegal The Law that Never Was The Law That Never Was: The Fraud of the 16th Amendment and Personal Income Tax is a 1985 book by William J. Benson and Martin J. "Red" Beckman which claims that the Sixteenth Amendment to the United States Constitution, commonly known as the income tax amendment, was never properly ratified. In 2007, and again in 2009, Benson's Cheek v. United States Cheek v. United States, 498 U.S. 192 , was a case in which the United States Supreme Court held that a tax protester's belief that he was not violating the Federal tax law based on a misunderstanding caused by the complexity of the tax law itself—if a genuine, good faith, actually held belief—would be a valid defense to charges of tax evasion,

Notable tax protesters Irwin Schiff Irwin A. Schiff is a prominent figure in the tax protester movement. Schiff is known for writing and promoting literature that claims the United States income tax is applied incorrectly. He has lost several civil cases against the federal government and has a record of multiple convictions for various federal tax crimes. Schiff is serving a 13- Richard Michael Simkanin Richard Michael Simkanin is a tax protester serving a prison sentence after having been convicted on twenty-nine counts of United States federal tax crimes Robert Clarkson Robert Barnwell Clarkson was an American tax protester in South Carolina. Clarkson graduated in 1969 from Clemson University with a bachelor of arts degree in economics. He served as a platoon leader in the Vietnam War. Clarkson graduated from South Carolina Law School in 1974 · Tom Cryer Tommy K. Cryer, also known as Tom Cryer , is an attorney in Shreveport, Louisiana who was charged with and later acquitted of willful failure to file U.S. Federal income tax returns in a timely fashion Vivien Kellems Vivien Kellems, was a Connecticut industrialist who fought the U.S. federal government for over 25 years over withholding under 26 USC §3402, and other aspects of income tax in the United States. She was also a fervent supporter of voting reform and the Equal Rights Amendment Wayne C. Bentson Bentson operated Western Information Network and the Bentson Group until May 1997. He represented himself as a tax expert and told his clients that they did not need to pay federal income tax Wesley Snipes Wesley Trent Snipes is an American actor, film producer, and martial artist. He has starred in numerous action-adventures, thrillers, and dramatic feature films and is well known for his role as Blade in the Blade trilogy. Snipes formed a production company titled Amen-Ra Films in 1991 and a subsidiary, Black Dot Media, to develop projects for

Australia There are many forms of taxation in Australia. Individuals and companies in Australia may be required to pay taxes or charges to all levels of government: local, state, and federal governments. Taxes are collected to pay for public services and transfer payments • British Virgin Islands Taxation in the British Virgin Islands is simple by comparative standards; photocopies of all of the tax laws of the British Virgin Islands would together amount to about 200 pages of paper. Taxation in the British Virgin Islands is mostly notable for what is not subject to taxation. The British Virgin Islands has: Canada The level of Taxation in Canada is average among Organisation for Economic Co-operation and Development countries. Approximately 70% of the Canadian government's income comes from taxation, the rest from tariffs, fees, and investments.[citation needed] • China Taxes provide the most important revenue source for the Government of the People's Republic of China. As the most important source of fiscal revenue, tax is a key economic player of macro-economic regulation, and greatly affects China's economic and social development. With the changes made since the 1994 tax reform, China has preliminarily set up • Colombia Taxation in Colombia is determined by the Congress of Colombia, the Departments of Colombia Assemblies and the Municipalities of Colombia councils, which determine what kind of taxes can be levied and which rates can be applied France Taxation in France is determined by the yearly budget vote by the French Parliament, which determines which kinds of taxes can be levied and which rates can be applied • Germany Taxes in Germany—being a Federal Republic—are levied by the Federation , the States (Länder) as well as the Municipalities (Gemeinden). Many direct and indirect taxes exist, whereof income tax and VAT are the most relevant. The German word for tax is die Steuer which originates from the Old High German word stiura meaning help. It should not • Hong Kong Categories: Taxation in Hong Kong | Hong Kong legislation | India Taxes in India are levied by the Central Government and the State Governments. Some minor taxes are also levied by the local authorities such the Municipality or the Local Council • Indonesia Indonesian taxation is based on Article 23A of UUD 1945 , where tax is an enforceable contribution exposed on all Indonesian citizens, foreign nationals and residents who have resided for 120 cumulative days within a twelve month period. Indonesia has a stratification of taxation including Income Tax, Local Tax (Pajak Daerah) and Central • Ireland The system of taxation in the Republic of Ireland is broadly similar to the system of taxation in the United Kingdom Netherlands Some of the most important taxes are that of the income tax , the wage withholding tax (Wet op de loonbelasting 1964), the value added tax (Wet op de omzetbelasting 1968) and the corporate tax (Wet op de vennootschapsbelasting 1969) • New Zealand Taxation in New Zealand is collected at a national level by the Inland Revenue Department on behalf of the Government of New Zealand. National taxes are levied on personal and business income, as well as on the supply of goods and services. There is no capital gains tax, although certain "gains" such as profits on the sale of patent Peru The income tax in Peru is collected by the Superintendencia Nacional de Administración Tributaria, best known as SUNAT. This country uses a system of progressive taxation on personal income, and a flat rate tax on business income • Russia The Russian Tax Code is the primary tax law for the Russian Federation. The Code was created, adopted and implemented in three stages. Part One, enacted July 31, 1998, also referred to as the General Part, regulates relationships among taxpayers, tax agents, tax-collecting authorities and legislators: tax audit procedures, resolution of disputes • Singapore Individual income tax in Singapore forms part of two main sources of income tax in Singapore, the other being corporate taxes on companies. Payable on an annual basis, it is currently based on the progressive tax system , with taxes ranging from 0% to 20% since Year of Assessment 2007. The Year of Assessment (YA) is based on the calendar year Switzerland Taxes in Switzerland are levied by the Swiss Confederation, the cantons and the municipalities. Switzerland is sometimes considered a tax haven due to its general low rate of taxation, its political stability as well as the various tax exemptions or reductions available to Swiss companies doing business abroad, or foreign persons resident in • Tanzania In Tanzania the Income Tax Act, 2004 came into effect in July 2004. This act restructured the income tax system in line with modern requirements and repealed the previous Income Tax Act, 1973. Tax is levied on income from employment, income from business and income from investment. Taxable persons include entities and individuals. An entity can be Thailand • United Kingdom Taxation in the United Kingdom may involve payments to a minimum of two different levels of government: The central government and local government. Central government revenues come primarily from income tax, National Insurance contributions, value added tax, corporation tax and fuel duty. Local government revenues come primarily from grants from United States Taxation in the United States is a complex system which may involve payment to many different levels of government and many methods of taxation. United States taxation includes local government, possibly including one or more of municipal, township, district and county governments. It also includes regional entities such as school and utility, and • European Union Value added tax is similar to a sales tax. It is a tax on the estimated market value added to a product or material at each stage of its manufacture or distribution, ultimately passed on to the consumer. Maurice Lauré, Joint Director of the French Tax Authority, the Direction générale des impôts, was first to introduce VAT on April 10, 1954,

Tax rates around the world Comparison of tax rates around the world is difficult and somewhat subjective. Tax laws in most countries are extremely complex, and tax burden falls differently on different groups in each country and sub-national unit. The lists below give an indication by rank of some raw indicators Tax revenue as % of GDP This article lists countries by total tax revenue as a percentage of gross domestic product for the listed countries. Three sources are used, one for each column. The tax percentage for each country listed in the sources has been added to the chart

Tax protester A tax protester is someone who refuses to pay a tax on constitutional or legal grounds. Many claim the tax laws are unconstitutional or otherwise invalid. Some refuse to file a tax return or file returns with no income or tax data supplied. Legal commentator Daniel B. Evans has defined tax protesters as people who "refuse to pay taxes or file arguments are a number of objections raised by individuals who deny that a person has a legal obligation to pay a tax for which the United States ^ b. English is the de facto language of American government and the sole language spoken at home by 80% of Americans age five and older. Spanish is the second most commonly spoken language government The federal government of the United States is the central government entity established by the United States Constitution, which shares sovereignty over the United States of America with the governments of the individual U.S. states. For official purposes in U.S. courts, the government is sued as the United States of America, and is referred to has determined that person is liable.

Tax protester arguments are typically based on an asserted belief that the United States government is acting outside of its legal authority when imposing such taxes. The label "tax protester" should be distinguished from "tax resister Tax resistance can be a form of conscientious objection . Tax resistance can also be a variety of protest, or a technique of nonviolent resistance (for example, in India’s campaign for independence led by Mahatma Gandhi)", an individual who refuses to pay tax on moral rather than legal grounds.

This article discusses tax protester arguments with respect to the U.S. federal income tax The federal government of the United States imposes a progressive tax on the taxable income of individuals, partnerships, companies, corporations, trusts, decedents' estates, and certain bankruptcy estates. Some state and municipal governments also impose income taxes. The first Federal income tax was imposed during the Civil War, then again in.

Denial of tax liability

Arguments made by tax protesters generally deal with the U.S. Federal income tax The federal government of the United States imposes a progressive tax on the taxable income of individuals, partnerships, companies, corporations, trusts, decedents' estates, and certain bankruptcy estates. Some state and municipal governments also impose income taxes. The first Federal income tax was imposed during the Civil War, then again in and not with other taxes such as the gift tax In economics, a gift tax is the tax on money or property that one living person gives to another. The United States Internal Revenue Service says a gift is "Any transfer to an individual, either directly or indirectly, where full consideration is not received in return." Many gifts are not subject to tax, or are exempted from taxation, estate tax An inheritance tax is a tax which arises on the death of an individual. It is a tax on the estate, or total value of the money and property, of a person who has died. In international tax law, there is a distinction between an estate tax and an inheritance tax: an estate tax taxes the personal representatives of the deceased, while an inheritance, sales tax A sales tax is a consumption tax charged at the point of purchase for certain goods and services. The tax amount is usually calculated by applying a percentage rate to the taxable price of a sale. A portion of the sale may be exempt from the calculation of tax, because sales tax laws usually contain a list of exemptions. Laws governing the tax may, and property tax Property tax, or millage tax, is an ad valorem tax that an owner is required to pay on the value of the property being taxed. Property tax can be defined as "generally, tax imposed by municipalities upon owners of real property within their jurisdiction based on the value of such property." There are three species or types of property: (although some tax protesters have attacked the last category under allodial title Allodial title is a concept in some systems of property law. It describes a situation where real property is owned free and clear of any encumbrances, including liens, mortgages, and tax obligations. Allodial title is inalienable, in that it cannot be taken by any operation of law for any reason whatsoever claims).

Constitutional arguments

Some tax protesters may cite what they believe is evidence that the Sixteenth Amendment to the Constitution (removing any apportionment requirement for income taxes) was never "properly ratified" or that it was properly ratified but does not permit the taxation of individual income, or particular forms of individual income. One argument is based on the contention that the legislatures of various states passed bills of ratification with different capitalization, spelling of words, or punctuation marks (e.g., semi-colons instead of commas) (see, e.g., United States v. Thomas^[1]). Another argument made by some tax protesters is that because the United States Congress did not pass an official proclamation recognizing Ohio's year 1803 admission to statehood until 1953 (see Ohio Constitution), Ohio was not a state until 1953 and therefore the Sixteenth Amendment was not properly ratified (see Ivey v. United States^[2] and Knoblauch v. Commissioner^[3] in the referenced article). 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.^[4]

Statutory arguments

Some protestors have claimed that statutes enacted by the United States Congress pursuant to its constitutional taxing power are defective, invalid (see e.g., the Irwin Schiff quote below), or that the statutes are misapplied by the IRS, the courts, lawyers, CPAs, 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 that the term "income" is not defined in the Internal Revenue Code or the Constitution, and that the tax law should therefore 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, many have rejected it,^[5] and 26 U.S.C. §§ 61-64 does define various classes of income ("Gross income," "[a]djusted gross income," "[t]axable income," and "[o]rdinary income defined").^[6]

Conspiracy arguments

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

In 1986, 99.5 million Americans were tricked into filing and paying federal income taxes when, legally, they didn't have to do either. If this statement shocks you, it is only because you and the rest of the nation have been thoroughly deceived by the federal government (with federal courts playing the key role), and an army of accountants, lawyers, and other tax preparers. All of these have a vested interest in keeping you ignorant concerning the real nature of federal income taxes.... [N]o provision of the Internal Revenue Code requires anyone to file or pay income taxes. This tax, unlike other internal revenue taxes, is strictly (censored voluntary).... However, in order to deceive Americans of this, as well as provide federal courts and the IRS with deceptive passages on which to hang illegal prosecutions and illegal seizures, the Internal Revenue Code was written to make paying income taxes appear mandatory. The government succeeded in doing this by tricking the public^[7]

Other arguments

Some tax protesters argue that an income tax is 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.^{[citation needed]} Strictly speaking, a genuine inability to pay taxes is not a crime (although "willful failure" to pay taxes is a crime). For the most part, unpaid tax bills are settled through civil actions rather than in the criminal courts. The government may seize assets, file liens, garnish wages and pursue other civil legal actions to satisfy the tax debt, but persons may not be jailed simply for failing to pay taxes. Instead, criminal charges arise from closely related actions, such as failing to file a tax return, filing a false tax return, concealing income or assets and certain other actions considered to be illegal tax evasion.

Frank Chodorov wrote "... you come up with the fact that it gives the government a prior lien on all the property produced by its subjects." The government "unashamedly proclaims the doctrine of collectivized wealth. ... That which it does not take is a concession."^[8] 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.^[9] For these reasons, some argue for the FairTax proposal of implementing a national sales tax to replace the federal income tax.^[10][11]

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. [1]

As stated in the Alaska District Court case of United States v. Rempel:^[12] "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....^[13]

See also Cheek v. United States.

Notes

1. ^ 788 F.2d 1250 (7th Cir. 1986), cert. denied, 107 S.Ct. 187 (1986).
2. ^ 76-2 U.S. Tax Cas. (CCH) paragr. 9682 (E.D. Wisc. 1976).
3. ^ 749 F.2d 200, 85-1 U.S. Tax. Cas. (CCH) paragr. 9109 (5th Cir. 1984), cert. denied, 474 U.S. 830 (1985).
4. ^ 274 U.S. 259 (1927).
5. ^ See http://evans-legal.com/dan/tpfaq.html#section61
6. ^ http://www.law.cornell.edu/uscode/html/uscode26/usc_sup_01_26_10_A_20_1_30_B_40_I.html
7. ^ Irwin Schiff. "The Income Tax is Voluntary!". The Federal Mafia. http://www.paynoincometax.com/chapter1.htm. Retrieved 2006-08-14.
8. ^ Young, Adam (2004-09-07). "The Origin of the Income Tax". Ludwig von Mises Institute. http://www.mises.org/story/1597. Retrieved 2007-11-07.
9. ^ Edwards, Chris (2002-04). "Top Ten Civil Liberties Abuses of the Income Tax". Cato Institute. http://cato.org/pubs/tbb/tbb-0204-2.html. Retrieved 2007-07-13.
10. ^ Boortz, Neal; Linder, John (2006). The Fair Tax Book (Paperback ed.). Regan Books. ISBN 0-06-087549-6.
11. ^ Sipos, Thomas (2007-07-10). "A Fair Tax for Progressives and Conservatives". American Chronicle. http://www.americanchronicle.com/articles/viewArticle.asp?articleID=31824. Retrieved 2007-07-13.
12. ^ United States v. Rempel, 87 Amer. Fed. Tax Rep. 2d (RIA) 1810, 2001 U.S. Dist. LEXIS 8518 (D. Alaska Feb. 14, 2001).
13. ^ 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

• America: Freedom to Fascism, a film that espouses tax protester arguments
• Zeitgeist, the Movie, another film presenting tax protester arguments

External links

• The Truth About Frivolous Tax Arguments, US Internal Revenue Service, January 1, 2010
• Criminal Tax Manual, § 40.00: “Tax Protesters” — From the Tax Division of the U.S. Department of Justice
• Income Tax: Voluntary or Mandatory? A law professor describes what he cites as errors in some popular tax protestor arguments.

Categories: Tax resistance

See Also:

• Tax: Encyclopedia
• Income Tax: Encyclopedia
• Excise Tax: Encyclopedia
• Tax Bracket: Encyclopedia
• Character (Income Tax): Encyclopedia

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