Kara Sears
The US tax code operates on a system of voluntary compliance, where taxpayers are expected to calculate and submit their own taxes. However, this does not mean that the payment of taxes is voluntary. The Internal Revenue Code outlines the taxes that individuals, estates, and trusts are legally required to pay. While the tax system is complex and constantly evolving, with new laws and revisions, taxpayers who fail to comply with tax laws may face criminal penalties, including fines and imprisonment. People have attempted to challenge tax laws on various grounds, including religious and moral objections, constitutional rights, and the argument that the tax system is voluntary. However, courts have consistently upheld the requirement to pay taxes, rejecting arguments against tax laws as frivolous and imposing penalties for tax evasion.
| Characteristics | Values |
|---|---|
| People can refuse to pay taxes on religious or moral grounds | First Amendment |
| Summonses sent by the IRS to taxpayers and third parties violate the Fourth Amendment | Fourth Amendment |
| Federal income taxes violate the Fifth Amendment | Fifth Amendment |
| Taxpayers do not have to file returns or provide financial information | Fifth Amendment |
| Compelled compliance with federal income tax laws is a form of servitude | Thirteenth Amendment |
| Federal income tax laws are unconstitutional | Sixteenth Amendment |
| The Sixteenth Amendment does not authorise a direct non-apportioned federal income tax on US citizens | Sixteenth Amendment |
| The 2017 Trump tax law is high cost, skewed toward high-income people, and has failed to produce the promised economic benefits | 2017 Trump Tax Law |
| The Tax Cuts and Jobs Act (TCJA) of 2017 is set to expire on December 31, 2025 | Tax Cuts and Jobs Act (TCJA) |
| The corporate tax rate was cut to 21% | Corporate Tax Rate |
| Deductions for state and local taxes (SALT) were capped at $10,000 | SALT Deduction Cap |
| Standard deductions were doubled | Standard Deductions |
| The child tax credit was expanded | Child Tax Credit |
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What You'll Learn
- People can refuse to pay taxes on religious or moral grounds
- Summonses sent by the IRS to taxpayers are unconstitutional
- Federal income tax is a taking of property without due process
- People don't have to file returns due to protection against self-incrimination
- Tax evasion is illegal and can lead to criminal penalties
People can refuse to pay taxes on religious or moral grounds
While some individuals or groups claim that taxpayers may refuse to pay federal income taxes based on their religious or moral beliefs, this argument is considered frivolous. Those who make this argument mistakenly invoke the First Amendment, and often the Religious Freedom Restoration Act (RFRA), in support of their position.
The First Amendment to the United States Constitution states that "Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances." However, the First Amendment does not provide a right to refuse to pay income taxes on religious or moral grounds, or because taxes are used to fund government programs opposed by the taxpayer. It also does not protect commercial speech or speech that aids or incites taxpayers to unlawfully refuse to pay federal income taxes, including speech that promotes abusive tax avoidance schemes.
Similarly, the RFRA does not afford a right to avoid payment of taxes for religious reasons. While taxpayers may argue that federal income taxes violate their religious freedom, the Supreme Court has made it clear that the Fifth Amendment does not provide a blanket right to refuse to file an income tax return on the grounds of self-incrimination. In the case of *United States v. Sullivan* (1927), the Court stated that a taxpayer cannot "draw a conjurer's circle around the whole matter by his own declaration that to write any word upon the government blank would bring him into danger of the law." Therefore, taxpayers cannot simply refuse to comply with the filing and reporting requirements of federal tax laws by making blanket assertions of the constitutional privilege against self-incrimination under the Fifth Amendment.
Despite these clarifications, some individuals and groups continue to make frivolous arguments, claiming that their religious or moral beliefs exempt them from paying taxes. It is important for taxpayers to understand that these arguments are not legally valid and that there may be consequences for attempting to pursue a claim on these grounds.
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![The Fries Rebellion, 1789-99. an Armed Resistance to the House Tax Law, Passed by Congress, July 9, 1789, in Bucks and Northampton Counties, ... Plates, Including a Portrait of the Author.]](https://m.media-amazon.com/images/I/71UAkCBQ1RL._AC_UY218_.jpg)
Summonses sent by the IRS to taxpayers are unconstitutional
The argument that summonses sent by the IRS to taxpayers and third parties are unconstitutional is considered frivolous by the IRS. The Fourth Amendment to the United States Constitution provides the "right of the people to be secure in their persons, houses, papers, and effects" and prohibits "unreasonable searches and seizures".
The United States Supreme Court has held that "the Fourth Amendment does not prohibit the obtaining of information revealed to a third party". The Fourth Amendment also provides that "no Warrants shall issue" without "probable cause". However, the Supreme Court has ruled that the IRS does not need to meet any standard of probable cause to obtain enforcement of its summons. In Donaldson v. United States, the court rejected the argument that summonses sent to third parties violated the Fourth Amendment, holding that "summonses issued by the IRS seeking documents in the possession of third parties do not implicate petitioner's rights under the Fourth Amendment".
Some individuals or groups continue to assert that IRS summonses violate the Fourth Amendment protections against search and seizure. Other contentions include that federal income taxes violate the Fifth Amendment by constituting a "taking" of property without due process of law, that taxpayers are not required to file returns or provide financial information due to the protection against self-incrimination in the Fifth Amendment, and that federal income tax laws are a form of servitude in violation of the Thirteenth Amendment.
The IRS has discussed these arguments in detail and warned taxpayers of the consequences of attempting to pursue claims on these grounds. Numerous courts have explicitly and implicitly recognised that the Sixteenth Amendment authorises a non-apportioned direct income tax on US citizens and that federal tax laws are valid as applied.
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Federal income tax is a taking of property without due process
The Fifth Amendment to the United States Constitution states that no person shall be "deprived of life, liberty, or property, without due process of law". Some people argue that federal income tax constitutes a "taking" of property without due process of law, and is therefore unconstitutional. This argument has been deemed frivolous by the IRS, which has warned taxpayers of the consequences of attempting to pursue a claim on these grounds.
The United States Supreme Court has stated that the Fifth Amendment:
> .... is not a limitation upon the taxing power conferred upon Congress by the Constitution; in other words, that the Constitution does not conflict with itself by conferring, upon the one hand, a taxing power, and taking the same power away, on the other, by the limitations of the due process clause.
In United States v. Sullivan, 274 U.S. 259, 264 (1927), the Supreme Court ruled that a taxpayer cannot "draw a conjurer's circle around the whole matter by his own declaration that to write any word upon the government blank would bring him into danger of the law". In other words, a taxpayer cannot refuse to file an income tax return on the grounds that it violates their Fifth Amendment privilege against self-incrimination.
In United States v. Carlton, 512 U.S. 26, 30 (1994), the Court declared that:
> The due process standard to be applied to tax statutes with retroactive effect [...] is the same as that generally applicable to retroactive economic legislation.
Retroactive application of legislation must be "justified by a rational legislative purpose". This principle applies to income taxes, as well as estate and gift taxes.
In Sochia v. Commissioner, 23 F.3d 941 (5th Cir. 1994), the court affirmed tax assessments and penalties for failure to file returns, failure to pay taxes, and filing a frivolous return. The taxpayers had claimed a Fifth Amendment privilege on each line of their tax return that called for financial information. The court also imposed sanctions for pursuing a frivolous case.
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People don't have to file returns due to protection against self-incrimination
The right against self-incrimination is a crucial aspect of the Fifth Amendment, which states that no person can be compelled to be a witness against themselves in a criminal case. This right is not limited to criminal trials and can be invoked in any proceeding where testimony is legally required and the answers could potentially be used against the individual in a future criminal proceeding.
While the Fifth Amendment provides robust protection against self-incrimination, it does not offer absolute immunity from all forms of incrimination. It is important to note that the privilege only applies to "testimonial" evidence, such as statements admitting guilt, and does not extend to non-testimonial physical evidence like blood and DNA tests, handwriting samples, fingerprints, or business records.
In the context of tax laws, some individuals argue that they are not required to file tax returns or disclose financial information due to the protection against self-incrimination. However, this argument has been deemed frivolous by the Internal Revenue Service (IRS). The IRS has clarified that there is no constitutional right to refuse to file an income tax return based on the Fifth Amendment. The Supreme Court, in United States v. Sullivan, asserted that a taxpayer cannot evade the legal obligation to file tax returns by invoking the Fifth Amendment.
It is worth mentioning that while individuals cannot refuse to file tax returns, they do have the right to assert the Fifth Amendment on specific questions within the tax return that they believe may incriminate them. This assertion cannot be a blanket refusal to complete the tax return but must be applied on a question-by-question basis.
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Tax evasion is illegal and can lead to criminal penalties
Tax evasion is the illegal, intentional non-payment or underpayment of taxes due, and those who engage in it can be subject to criminal prosecution, penalties, and jail time. Tax evasion is a felony punishable by up to five years in prison or a fine of up to $250,000 for individuals ($500,000 for corporations) or both. It is a criminal charge that carries penalties and fines, and people caught evading taxes are generally subject to substantial penalties.
Tax evasion involves the use of illegal methods to avoid paying taxes, such as deliberately under-reporting or omitting income, keeping two sets of books, or making false entries. It is not the same as tax avoidance, which is the legal use of tax laws to reduce one's tax burden by finding legal ways to reduce taxpayer obligations, such as investing in retirement accounts or charitable giving.
The consequences of tax evasion can be severe, as it is a criminal offence. In the United States, federal tax evasion is defined as the purposeful, illegal attempt to evade the assessment or payment of taxes imposed by federal law. Conviction of tax evasion may result in fines and imprisonment, such as five years in prison on each count of tax evasion. The Internal Revenue Service (IRS) has the authority to conduct criminal investigations and determine tax evasion, even if tax forms were not filed.
The IRS considers various factors to determine if the act of failure to pay was intentional, including the taxpayer's financial situation. If an investigation is opened, special agents use investigative techniques such as interviewing third-party witnesses, conducting surveillance, and executing search warrants. If the evidence substantiates criminal activity, the case can be referred for prosecution.
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Frequently asked questions
No, people cannot stop the tax law. Failure to file a tax return can subject the noncomplying individual to criminal penalties, including fines and imprisonment, as well as civil penalties.
No, the court has dismissed this claim. In United States v. Gerads, 999 F.2d 1255, 1256 (8th Cir. 1993), the court stated that the claim that federal income tax is voluntary "clearly lacks substance" and imposed sanctions for bringing a frivolous appeal.
No, taxpayers cannot refuse to pay income taxes on religious or moral grounds by invoking the First Amendment. The Supreme Court has stated that taxpayers cannot "draw a conjurer's circle around the whole matter by his own declaration that to write any word upon the government blank would bring him into danger of the law."
No, the government's ability to function could be impaired if people refused to pay taxes because they disagreed with the government's use of tax revenues.
No, if there were no corporate tax, people would incorporate to avoid income taxes.
