IRS bashes 'frivolous tax arguments'
Document provides likely preview of upcoming battle in D.C.Tuesday, August 21, 2001
By Jon Dougherty© 2001 WorldNetDaily.com
Editor's note: On Sept. 25 and 26, an historic meeting between the federal government and leaders of the "tax honesty movement" -- arranged in response to the hunger strike of tax activist Bob Schulz -- will unfold in Washington, D.C. WorldNetDaily will be there to cover the proceedings. As a prelude to this confrontation over the legality of the income tax, the following is the first in a series of reports discussing an internal document from the Internal Revenue Service's own website. The document is intended to guide the agency's employees in how to deal with what the IRS calls "frivolous tax arguments."
If you think payment of income taxes is voluntary, or that "wages, tips and other compensation" do not constitute income, or that you don't owe income taxes if you don't consider yourself a U.S. citizen, the Internal Revenue Service implores you to think again.
According to a 25-page IRS document entitled "The Truth About Frivolous Tax Arguments," none of those assertions – or a number of other "anti-tax" positions – are valid.
In fact, just as the title of the tax agency's online document says, the IRS officially considers such arguments invalid, and – in a section published at the end of the document – advises taxpayers that those who rely on such arguments in court are not only going to be found guilty, but are likely going to receive a stiff sentence.
"Those who act on frivolous positions risk a variety of civil and criminal penalties," the IRS document warns.
In fact, "those who adopt these positions may face harsher consequences than those who merely promote them," the document added, noting that Section 6702 of the U.S. Tax Code "provides for the imposition of a $500 penalty against any individual who files a frivolous income tax return."
'Voluntary' or not?
The IRS document is divided into six general categories; the first discusses the argument that filing taxes is "voluntary."
"Some assert that they are not required to file federal tax returns because the filing of a tax return is voluntary," the document states. "Proponents point to the fact that the IRS itself tells taxpayers in the Form 1040 instruction book that the tax system is voluntary."
Those who maintain the system is voluntary, says the IRS document, also point to "the Supreme Court's opinion in Flora v. United States [362 U.S. 145, 176 (1960)]," as a case that is "often quoted for the proposition that '[o]ur system of taxation is based upon voluntary assessment and payment, not upon distraint.'"
But, the agency says, the term "voluntary" as it is used in Flora and in other IRS publications "refers to our system of allowing taxpayers to determine the correct amount of tax and complete the appropriate forms, rather than have the government determine tax for them. …"
The actual "requirement to file an income tax return is not voluntary," the agency says, noting that filing requirements are "clearly" set forth in IRS and Treasury Department code.
Also, the IRS document quotes the 10th U.S. Circuit Court as finding that "although Treasury regulations establish voluntary compliance as the general method of income tax collection, Congress gave the Secretary of the Treasury the power to enforce the income tax laws through involuntary collection."
To tax activists, that seems like a baffling contradiction.
Forced to 'volunteer'?
"The government allows us to determine the amount of some tax and if we don’t voluntarily do this, they come in and stick guns to our heads. That’s their definition of voluntary?" said Devvy Kidd, advisory board member of the Sacramento, Calif.-based Wallace Institute,, a judicial activist group that deals with tax-related issues, among others.
"People have been asking the same question for nearly 80 years: What makes me liable for this tax? Can you show me the law? The response is always the same boilerplate one, or you simply get ignored," she said.
Kidd says arguing about what the tax code states is a waste of time because courts and tax specialists accept what is written there as if it were law. But the code never actually states that citizens are required to pay an income tax, activists claim. They also say the tax code is intentionally complex to mask its lack of legal authority.
Still, the IRS insists taxpayers don't have a choice when it comes to paying income taxes.
"In a similar vein" to the "voluntary filing" issue, the IRS publication says, "some argue that they are not required to pay federal taxes because the payment of federal taxes is voluntary."
According to the agency, the law says "the requirement to pay taxes is not voluntary and is clearly set forth in section 1 of the Internal Revenue Code, which imposes a tax on the taxable income of individuals, estates, and trusts. …"
Adding to the confusion is the fact that even some IRS officials have, in public interviews, described the system as "voluntary."
In an article discussing the dramatic fall in IRS audits and prosecutions of "tax cheats," Mark Weinberger, assistant Treasury secretary for tax policy, told USA Today in a June 20 article, "Let's face it, with a voluntary tax system, you still have to have a deterrent, so people who are tempted to not comply with the law believe they are going to get caught."
In order to substantiate her own claim that the IRS is misleading taxpayers about the requirement that they pay federal income taxes, Kidd directed WND to an Oct. 27, 1998 letter written by Harry T. Manaka, national director, Collection Field Operations, for the IRS.
The letter states: "Our system of taxation is dependent on taxpayers' belief that the laws they follow apply to everyone and that the IRS will respect and protect their rights under the law."
Kidd said another IRS document seems to suggest that U.S. district court judges may be subject to official intimidation by the Treasury Department, which could explain why federal courts routinely uphold the IRS's arguments.
"If you read this document, it becomes very apparent that federal judges are under the threat of investigation by the IRS. If one would like to argue conflict of interest here, a very good case can be made," she told WND. "How can any federal judge rule against the IRS if they know that retaliation is just around the corner?"
"Tax honesty" advocates have long sought to engage IRS, Treasury and other U.S. government officials in open public debate about key issues, such as: whether the income tax is mandatory; whether the 16th Amendment to the Constitution – which authorizes an income tax – was properly ratified; and whether IRS codes have the power and effect of genuine law.
"I'm doing everything I know how to do, short of breaking things and killing people, to bring the government back to its boundaries that the people have drawn around its powers," Bob Schulz, a tax activist who recently ended a hunger strike when federal officials agreed to meet him next month, told WorldNetDaily in July.
"The people are on a collision course with the government," he said. "I'm trying to prevent violence. I'm trying to draw attention to the fact that the government has an obligation to answer these complaints."
"I'm not against taxes. I pay all my taxes, income taxes and so forth. I'm interested in issues of government. … The way things are working are in sharp contrast to the way things are designed to work," he said.
Schulz, founder of We The People Foundation for Constitutional Education, is scheduled to meet federal officials Sept. 25 in Washington, D.C., at the Cannon House Office Building on Capitol Hill. He ended a three-week hunger strike Friday, July 20, after Rep. Roscoe G. Bartlett, R-Md., who supports Schulz, and Assistant Attorney General Dan Bryant signed an agreement to hold an open hearing in September discussing the movement's arguments.
Editor's note: The other arguments advanced by the IRS's internal document, "The Truth About Frivolous Tax Arguments," will be the focus of forthcoming WND reports.
Related stories:
Tax activist meeting in jeopardy
Tax activist ends hunger strike
Day 20: Schulz refuses IRS offer
Day 16: Hunger strike picks up steam
Day 10: Hunger strike continues
Tax activist begins hunger strike
Anti-tax crusader to stage hunger strike
Jon E. Dougherty is a staff reporter and columnist for WorldNetDaily, and author of the special report, "Election 2000: How the Military Vote Was Suppressed."
Tax activists refute IRS claims
Former revenue chief: 'We're confiscating property now. That's socialism'Wednesday, August 22, 2001
By Jon DoughertyEditor's note: Brought about by the successful hunger strike of tax activist Bob Schulz, an historic meeting between the federal government and leaders of the "tax honesty movement" will take place in Washington, D.C., on Sept. 25 and 26. WorldNetDaily will be there to cover the proceedings.
Leading up to this high-profile confrontation over the legality of the income tax, the following is the second in a series of reports discussing an internal document from the Internal Revenue Service's own website. The document is intended to guide the agency's employees in how to deal with what the IRS calls "frivolous tax arguments." Part 1, "IRS bashes 'frivolous tax arguments," was published in Tuesday's WorldNetDaily.
© 2001 WorldNetDaily.com
Tax experts, including one who spent a year researching whether enough states properly ratified the 16th Amendment – which authorizes Congress to collect income taxes -- are as insistent as ever that Americans are not mandated to pay Uncle Sam a portion of what they earn every year.
"I've read all of the cases the IRS mentions" in its 25-page document entitled "The Truth About Frivolous Tax Arguments," said Bill Benson, author of "The Law That Never Was," a book many believe debunks the government's claim that the income tax is legal and that the IRS is a properly authorized government agency.
Very simply, he says there is no actual law authorizing an income tax.
"They must have a law in order to have any of this [the income tax] to apply," Benson told WND. "They must have a law from its inception, and they don't have that."
A former criminal investigator for the Illinois Department of Revenue for nearly a decade, Benson said he has "17,000 certified and notarized documents showing that the 16th Amendment is an absolute, complete and total fraud."
When asked where he got the documents, Benson said they came from "the 48 continental United States," gathered during his one-year research effort in 1984 aimed at verifying whether or not the income tax amendment had been properly ratified.
But even activists within the "tax-honesty movement" grasp the reality of the mission they seek to accomplish: namely, to force an admission from the federal government that their arguments are correct. For Uncle Sam to admit his mistake could open the government up to unfair taxation recovery lawsuits that would make even the landmark tobacco litigation lawsuit – settled for hundreds of billions of dollars – pale in comparison.
"I have made it a personal stand not to argue the code with people. As far as I’m concerned, that is nothing more than willfully walking into quicksand," said Devvy Kidd, another noted tax activist. "You can't win the argument."
In the IRS document cited by Benson, there are lots of references to court cases and IRS code. But the problem, as WND's "TalkNetDaily" radio host and staff writer Geoff Metcalf points out, is getting the federal government to cite the legal chapter and verse of the law that requires mandatory payment of income taxes.
"I have often noted that if in fact we are compelled by law to pay income tax and the 16th Amendment was in fact properly and legally ratified (and it wasn't), then the government should be able to conclude their response in less than five minutes by merely stating, stanza and verse, where the law is, and how it applies: 'See here? Page such and such, paragraph such and such, subparagraph such and such. Now shut up and go home,'" said Metcalf.
One of the most compelling arguments of income tax opponents is the claim that the 16th Amendment was never even properly ratified, although understandably the IRS refutes that.
"This argument is based on the premise that all federal income tax laws are unconstitutional because the Sixteenth Amendment was not officially ratified, or because the State of Ohio was not properly a state at the time of ratification," says the IRS document. "This argument survived over time because proponents mistakenly believe that the courts have refused to address this issue."
However, the IRS says the amendment was properly ratified by "forty states, including Ohio, and issued by proclamation in 1913. Shortly thereafter, two other states also ratified the [A]mendment."
"There were enough states … even without Ohio to complete" the required three-fourths of the states to ratify the amendment, said the IRS document. "Furthermore, the U.S. Supreme Court upheld the constitutionality of the income tax laws enacted subsequent" to the ratification of the amendment.
In his research, however, Benson found that only four states ratified the amendment "without changing the wording." He maintains that, constitutionally, states cannot change words or punctuation when voting to accept or reject a constitutional amendment.
"The only thing the states can do is accept or reject the wording (of an amendment) as is," Benson told WND. "The legislatures of each state cannot change any of it. Otherwise, we'd have 48 different versions of the law."
"What is stated [in the IRS document] is a bald-faced lie," Kidd said.
"Since it was never ratified and we can prove it wasn’t, then apportionment is still in effect and again, everything else is moot," she said. The government's "progressive, unapportioned tax is, and always has been, unlawful."
Rather than dicker over IRS codes, legal impressions and court cases, Kidd and other "tax-honesty" proponents believe the key to discovering the legality of income tax lies in proving these contentions:
- That the IRS is not an authorized agency of the government and has no authority to conduct business;
- That the government's jurisdiction is not valid;
- The fraudulent ratification of the 16th Amendment unlawfully wiped out the apportionment clause of the Constitution;
- That an individual is, without question, forced to involuntarily surrender his Fifth Amendment right against self-incrimination by filing any income tax form under penalty of perjury.
Another area of concern, Kidd says, is that the courts themselves can’t even decide, in a universal manner, what constitutes an income tax or what the income tax really is -- direct or excise.
"That’s a fact and it creates what is known as a problem [IRS] document," she said.
Even former IRS commissioners have questioned the legitimacy of the very agency they serve.
"… We're confiscating property now. … That's socialism. It's written into the Communist Manifesto. Maybe we ought to see that every person who gets a tax return receives a copy of the Communist Manifesto with it so he can see what's happening to him," lamented T. Coleman Andrews, the Democratic commissioner of the IRS during the first 33 months of the Republican administration of President Dwight Eisenhower.
But the one fact dogging nearly every tax honesty advocate is this: Regardless of the actual legitimacy of their arguments, the courts, Congress and most of the American public don't see it their way.
The IRS can point to dozens of rules, regulations and court cases -- many decided by the U.S. Supreme Court -- backing the agency's position that it has a right to tax all of the income earned by American workers.
Also, even critics of the agency acknowledge that it must collect the amount of money Congress approves in the federal budget every year. And once passed, Congress expects the Treasury Department to fill the nation's coffers.
Finally, most states have agreements with the IRS to provide the agency with information. Under these agreements, individual states and the IRS notify each other about taxpayers that failed to file returns. The only state that does not have such an agreement is Nevada.
Nevertheless, tax activists say the September meeting in Washington, D.C., will once and for all provide them with an opportunity to address their concerns face-to-face with government and, hopefully, IRS representatives.
"We intend to prove our points at the hearings next month," Kidd said.
Related offers:
"The law that never was," a 2-volume set explaining how the 16th Amendment was never ratified, by Bill Benson.
Related stories:
IRS bashes 'frivolous tax arguments'
Tax activist meeting in jeopardy
Tax activist ends hunger strike
Day 20: Schulz refuses IRS offer
Day 16: Hunger strike picks up steam
Day 10: Hunger strike continues
Tax activist begins hunger strike
Anti-tax crusader to stage hunger strike
Jon E. Dougherty is a staff reporter and columnist for WorldNetDaily, and author of the special report, "Election 2000: How the Military Vote Was Suppressed."
