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Tax Protestor Theories During my 25+ years as a tax author, editor and/or columnist, I've received many dozens of long letters or phone calls from the "true believers" who are convinced that the U.S. tax law is illegal in one or more respects, is invalid or does not apply to the citizens of the various states, etc., etc., etc. (If you can find a copy of The True Believer by Eric Hoffer, it offers an excellent explanation of why many people persist in holding on to absurd belief systems.) I happen to believe that any income tax system is simply a legalized method of theft, wherein the ruler extorts property from the subjects or a majority of the citizens extort property from the more affluent minority of citizens. However, various methods of forceful extortion of property from the subjects of the realm have been common for all of recorded history. For an excellent review of the history of taxation, I encourage you to read "For Good or Evil: The Impact of Taxes on the Course of Civilization by Charles Adams. Regardless of my opinion of the nature of any form of enforced taxation, the U.S. income tax, social security tax and estate tax system is considered to be legal by the nine justices of the Supreme Court and all lower courts in the land. The collection of taxes will be enforced by marshals with guns. Some of the arguments of the protestors might even be valid. For example, there is some serious question as to whether the 16th Amendment to the Constitution (to permit an income tax) was properly ratified by the required number of states. But it's an argument that is purely academic and pointless. The courts at every level have held the income tax to be legal. The protestors might as well be trying to swim up Niagara Falls. Those who are unwilling to give the government a substantial part of their income have an alternative. It's called expatriation. They can give up their U.S. citizenship and move to a country (called a tax haven) with a less burdensome form of collecting revenues for various government services. (Of course, countries with minimal taxes also provide minimal services.) Another legal alternative is to engage in political action to try to eliminate the income tax by convincing a majority of the voters in this country that the income tax should be abolished or replaced with some other system of taxation. One of the largest political parties that is opposed to the income tax, social security tax and the estate tax is the Libertarian Party. They are using legal methods of political action to try to change the system. There are also a large number of people who are staunch advocates of a national sales tax. (Enter "national sales tax" in a search engine and you will get thousands of links.) A third legal alternative is to engage in pro-active tax avoidance (not evasion) by using legal methods to reduce taxes. Some of the ways in which this can be done are described in my article on Legal Ways to Stop Paying Taxes The following links are for those who are interested in the somewhat academic arguments put forth by tax protestors and why those arguments are not legally valid in the opinion of the various courts in the U.S. About once a year I allow myself to get ensnared into an exchange of email with some advocate of the theory that the U.S. income tax is a fraud and that we are not really required to pay taxes. This one came in an email that said: Perhaps you should do some tax research before you state all U.S. citizens are subject to (tax on) worldwide income. As a former IRS agent and Big 5 CPA, my research shows the IRS code says different. Please read the attached and go to www.informamerica.com. (link is no longer valid) [ (B. D., CPA) I don't know if he is really a CPA or a former IRS agent, but his comment prompted me to reply and to review the material he sent and the web site he mentioned. I then sent him a memo stating that the IRS asserts that U.S. citizens, residents and corporations are obligated to pay income taxes on their worldwide income unless there is a specific statutory exemption - such as for a limited amount of income earned while living outside the U.S.. I'm not able to find any contrary court case that was supported on appeal. If what he claims is true and if the IRS and the government would publicly admit it is true, then I would be happy to find some other way to make a living. Even if he might be technically correct, it makes no difference when the government and the courts impose harsh fines and/or criminal penalties on those who refuse to pay income taxes based on theories that are not supported by the courts. For information purposes, I sent a copy of my response to Richard Duke . Here is what Richard had to say on the matter. The 16th amendment to the Constitution grants the
power to Congress to tax. If a person says this amendment was never signed
in 1915 (it was not) or later, so what? The 16th amendment has been
ratified from actions taken by Congress from 1916 to the present. The 16th
amendment states: Court cases since 1916 have confirmed the 16th amendment and the power of Congress to lay and collect taxes. The Executive branch has confirmed the 16th amendment and the power of taxation in the hands of Congress. "Whatever source" includes any source--domestic or foreign. Section 1 of the IRC imposes a tax on taxable income. Section 61 of the IRC states: "Except as otherwise provided in this subtitle, gross income means all income from whatever source derived ..." (emphasis added). Taxable income is defined at IRC Section 63.
I then referred him to http://www.quatloos.com/taxscams/taxprot.htm and also to http://evans-legal.com/dan/tpfaq.html The second web site has an awesome amount of technical material dealing with the claims of various tax protestors. Vernon Jacobs The following are additional links to some articles that debunk some of the numerous theories put forth by the tax protestors. Pure Trust & Secret Trusts - by Vernon Jacobs http://www.offshorepress.com/taxhelp/otpuretrust.htm Anti-IRS Theories - http://www.quatloos.com/taxscams/taxprot.htm Tax Protestor Theories - http://www.quatloos.com/taxscams/taxprot2.htm Pure Trusts & Constitutional Trusts - http://www.quatloos.com/taxscams/contrusts.htm IRS
"Dirty Dozen" Tax Scams New York Times Report on Tax Protestors IRS
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