Tax protesters are individuals who, for whatever reason, deny that they are under any obligation to pay federal or state income taxes or refuse to pay their taxes for other reasons. People who refuse to pay taxes believe that the tax laws in place are unconstitutional and that they do not apply to them.
Tax protesters have various reasons for refusing to pay their taxes, but there are basically two types.
Some people believe that tax laws are legitimate, and they acknowledge that they must pay taxes. Due to fundamental disagreements with one or more government policies, they have decided to stop paying taxes so they won’t have to pay for that activity and to express their displeasure. The majority of them view this as civil disobedience and are aware of, and prepared to accept, the legal consequences.
Another category of tax protestors is those who believe (or claim to believe) that they do not have to pay tax, usually on the grounds that the income tax is unconstitutional or that the tax code does not actually create a duty to pay taxes.
While tax protesters have existed throughout history, the modern movement began after World War II with Vivien Kellems, a Connecticut industrialist and political activist who challenged monthly tax withholdings.
In 1948, she refused to withhold taxes from her employees’ wages, claiming the government had no power to do so. The IRS then seized her bank account for the money owed. A book she wrote asserts that she won a lawsuit against them, although she did not challenge the constitutionality of tax withholding.
The Seventh Circuit Court of Appeals said that individuals are drawn to the “tax protestor movement’s illusory claim that there is no legal requirement to pay federal income tax.” The court dubbed the tax-protester assertions “wholly defective and unsuccessful.”
The phenomenon of tax protesters is not limited to the United States. In other countries, similar arguments are made, although it is more notorious in the United States.
Several tax protester theories originated in the United States, such as denying the authority of courts and have spread to Canada. In the United States, courts have consistently rejected these arguments as invalid and incoherent.
What Are the Tax Protester’s Arguments?
Tax protesters come up with new arguments all the time, and it is impossible to discuss and debunk them all.
As a general rule, you should only seek tax advice from a licensed accountant or tax lawyer. If you are seeking information about tax law from a reputable source, you will never be told that you do not have to pay taxes or that you never have to pay taxes.
A brief discussion and debunking of some of the most common tax protest arguments follow.
Myth 1: The 16th Amendment Was Not Properly Ratified
In 1913, the 16th Amendment to the Constitution was ratified, giving the federal government the power to tax incomes from any source. In the past, the federal government lacked the constitutional power to collect income taxes.
To become a part of the Constitution, a proposed amendment must be passed by 2/3 of Congress and ratified by the legislatures of ¾ of the states. When individual state legislatures were considering ratifying the amendment, like any other law, each state had to draft a bill and put it to a vote. The full text of the proposed amendment varied from state to state, as did spelling, punctuation, and capitalization.
In spite of this, the substance of each version of the proposed amendment was the same. The income tax argument has been rejected by every court that has considered it.
Myth 2: The Tax Code Doesn’t Actually Require Me to Pay Taxes
Tax protesters claim that the tax code, which defines income and lays out various tax deductions, credits, and exemptions, does not actually require citizens to pay taxes. “Show me the law,” is their argument.
Here is the law: 26 USC § 6012 provides criminal penalties for failing to file a tax return, and 26 USC § 6151 states that payment of any taxes owed, barring a few specific exceptions, must be made at the time the return is filed.
Myth 3: The IRS Must Explain Exactly Why I Have to Pay My Taxes, Within an Amount of Time Specified By Me
Some people claim you can avoid paying taxes if you write a letter to the IRS demanding a detailed explanation of why, exactly, you are required to pay your taxes.
Furthermore, they claim that if you put a provision in the letter that says, “If you do not respond within 15 days, you formally relinquish any right to collect taxes from me, now and forever,” they will be bound by those terms, and if they don’t respond, you won’t be liable.
It is, of course, false.
First of all, as a matter of contract law, silence almost never constitutes acceptance.
Secondly, the IRS provides plenty of information on its website about the services taxes fund, why taxes are important, and how the IRS is authorized to collect taxes. Send them a letter requesting this information, and they’ll probably be happy to send you some literature answering your legitimate questions. You still have to pay your taxes if they don’t respond.
Myth 4: I’m a Member of a Historically Oppressed Ethnic Group, So I Don’t Have to Pay Taxes
Several ethnic groups have been treated unfairly or oppressed throughout American history. Examples include African Americans, Native Hawaiians, and Native Americans.
Though we, as a society, continue to grapple with the consequences of these actions, the law applies equally to everyone in the U.S., regardless of race or ethnicity. Both legal rights and legal obligations, including taxes, fall under this category.
Neither a court nor the tax code provides an exemption from tax liability solely because one belongs to an ethnic group that has previously suffered injustice at the hands of the U.S. government.
Why Should I Pay Taxes?
Protesting Federal income taxes is not a criminal offense in the United States. Tax evasion, as well as repeating arguments that have previously been declared invalid by the courts, triggers a number of offenses.
Tax protesters argue that taxes are unconstitutional or should not be paid on many websites.
According to the IRS, these arguments are untrue, and taxes should be paid.
Paying taxes helps the country stay afloat because the money goes to other resources. The IRS may impose a penalty of $5,000 and a 75% civil fraud penalty on anyone who files a return or submits a submission based on frivolous tax arguments.
Do I Need a Tax Attorney?
There is a great deal of misinformation floating around about U.S. tax law. If you need tax advice, you should only seek it from a licensed tax attorney or accountant. You should consult a tax attorney if you hear a novel legal argument that claims you do not have to pay taxes. Your argument will likely be explained in as much detail as you want.
Rather than not paying your taxes, consult a legal expert. Find the right tax attorney for your needs through LegalMatch and avoid penalties by the IRS.