Quatloos! > Tax
Scams > Tax
Protestors > Tax
Protestor Theories De-Bunked > Amendment
The Tax Scam Artist's Lie: Federal income taxes
constitute a "taking" of property without due process
of law, violating the Fifth Amendment.
Some assert that the collection of federal income taxes constitutes
a "taking" of property without due process of law, in
violation of the Fifth Amendment. Thus, they claim, any attempt
by the Internal Revenue Service to collect federal income taxes
owed by a taxpayer is unconstitutional.
The Fifth Amendment to the United States Constitution provides
that a person shall not be "deprived of life, liberty, or
property, without due process of law . . . ." The U.S. Supreme
Court stated in Brushaber v. Union Pacific R.R., 240 U.S. 1, 24
(1916), that "it is . . . well settled 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 limitations
of the due process clause.
Further, the Supreme Court has upheld the constitutionality of
the summary administrative procedures contained in the Internal
Revenue Code against due process challenges, on the basis that
a post-collection remedy (e.g., a tax refund suit) exists and
is sufficient to satisfy the requirements of constitutional due
process. Phillips v. Commissioner, 283 U.S. 589, 595-97 (1931).
The Internal Revenue Code provides methods to ensure due process
to taxpayers: (1) the "refund method," set forth in
section 7422(e) and 28 U.S.C. §§ 1341 and 1346(a), where
a taxpayer must pay the full amount of the tax and then sue in
a federal district court or in the United States Court of Federal
Claims for a refund; and (2) the "deficiency method,"
set forth in section 6213(a), where a taxpayer may, without paying
the contested tax, petition the United States Tax Court to redetermine
a tax deficiency asserted by the IRS. Courts have found that both
methods provide constitutional due process.
In recent years, Congress passed new laws providing further protection
for taxpayers' due process rights in collection matters. In the
Internal Revenue Service Restructuring and Reform Act of 1998,
Pub. L. 105-206, § 3401, 112 Stat. 685, 746, Congress enacted
new sections 6320 (pertaining to liens) and 6330 (pertaining to
levies) establishing collection due process rights for taxpayers,
effective for collection actions after January 19, 1999.
Generally, the IRS must provide taxpayers notice and an opportunity
for an administrative appeals hearing upon the filing of a notice
of federal tax lien (section 6320) and prior to levy (section
6330). Taxpayers also have the right to seek judicial review of
the IRS's determination in these due process proceedings. I.R.C.
§ 6330(d). These reviews can extend to the merits of the
underlying tax liability, if the taxpayer has not previously received
the opportunity for review of the merits, e.g., did not receive
a notice of deficiency. I.R.C. § 6330(c)(2)(B). However,
the Tax Court has indicated that it will impose sanctions pursuant
to section 6673 against taxpayers who seek judicial relief based
upon frivolous or groundless positions.
Relevant Case Law:
Flora v. United States, 362 U.S. 145, 175 (1960) - the
court held that a taxpayer must pay the full tax assessment before
being able to file a refund suit in district court, noting that
a person has the right to appeal an assessment to the Tax Court
"without paying a cent.
Schiff v. United States, 919 F.2d 830 (2 d Cir. 1990)
- the court rejected a due process claim where the taxpayer chose
not to avail himself of the opportunity to appeal a deficiency
notice to the Tax Court.
Goza v. Commissioner, 114 T.C. 176 (2000) - the court
rejected the taxpayer's attempt to use the judicial review process
as a forum to contest the underlying tax liability, since the
taxpayer had an opportunity to dispute that liability after receiving
the statutory notice of deficiency.
Pierson v. Commissioner, 115 T.C. 576, 581 (2000) - the
court considered imposing sanctions against the taxpayer, but
decided against doing so, stating, "we regard this case as
fair warning to those taxpayers who, in the future, institute
or maintain a lien or levy action primarily for delay or whose
position in such a proceeding is frivolous or groundless.
Davis v. Commissioner, T.C. Memo. 2001-87, 81 T.C.M. (CCH)
1503 (2001) - the court imposed a $4,000 penalty for frivolous
and groundless arguments, after warning that the taxpayer could
be penalized for presenting them.
The Tax Scam Artist's Lie: Taxpayers do not
have to file returns or provide financial information because of
the protection against self-incrimination found in the Fifth Amendment.
Some argue that taxpayers may refuse to file federal income tax
returns, or may submit tax returns on which they refuse to provide
any financial information, because they believe that their Fifth
Amendment privilege against self-incrimination will be violated.
There is no constitutional right to refuse to file an income
tax return on the ground that it violates the Fifth Amendment
privilege against self-incrimination. In United States v. Sullivan,
274 U.S. 259, 264 (1927), the U.S. Supreme Court stated that the
taxpayer "could not 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."
The failure to comply with the filing and reporting requirements
of the federal tax laws will not be excused based upon blanket
assertions of the constitutional privilege against compelled self-incrimination
under the Fifth Amendment.
Relevant Case Law:
United States v. Schiff, 612 F.2d 73, 83 (2 d Cir. 1979)
- the court said that "the Fifth Amendment privilege does
not immunize all witnesses from testifying. Only those who assert
as to each particular question that the answer to that question
would tend to incriminate them are protected . . . . [T]he questions
in the income tax return are neutral on their face . . . [h]ence
privilege may not be claimed against all disclosure on an income
United States v. Brown, 600 F.2d 248, 252 (10 th Cir.
1979) - noting that the Supreme Court had established "that
the self-incrimination privilege can be employed to protect the
taxpayer from revealing the information as to an illegal source
of income, but does not protect him from disclosing the amount
of his income," the court said Brown made "an illegal
effort to stretch the Fifth Amendment to include a taxpayer who
wishes to avoid filing a return.
United States v. Neff, 615 F.2d 1235, 1241 (9 th Cir.),
cert. denied, 447 U.S. 925 (1980) - the court affirmed a failure
to file conviction, noting that the taxpayer "did not show
that his response to the tax form questions would have been self-incriminating.
He cannot, therefore, prevail on his Fifth Amendment claim.
United States v. Daly, 481 F.2d 28, 30 (8 th Cir.), cert.
denied, 414 U.S. 1064 (1973) - the court affirmed a failure to
file conviction, rejecting the taxpayer's Fifth Amendment claim
because of his "error in . . . his blanket refusal to answer
any questions on the returns relating to his income or expenses.
Sochia v. Commissioner, 23 F.3d 941 (5 th Cir. 1994),
cert. denied, 513 U.S. 1153 (1995) - the court affirmed tax assessments
and penalties for failure to file returns, failure to pay taxes,
and filing a frivolous return. The court also imposed sanctions
for pursuing a frivolous case. The taxpayers had failed to provide
any information on their tax return about income and expenses,
instead claiming a Fifth Amendment privilege on each line calling
for financial information.
The Tax Scam Artist's Lie: Compelled compliance
with the federal income tax laws is a form of servitude in violation
of the Thirteenth Amendment.
This argument asserts that the compelled compliance with federal
tax laws is a form of servitude in violation of the Thirteenth
The Thirteenth Amendment to the United States Constitution prohibits
slavery within the United States, as well as the imposition of
involuntary servitude, except as punishment for a crime of which
a person shall have been duly convicted. In Porth v. Brodrick,
214 F.2d 925, 926 (10 th Cir. 1954), the Court of Appeals stated
that "if the requirements of the tax laws were to be classed
as servitude, they would not be the kind of involuntary servitude
referred to in the Thirteenth Amendment." Courts have consistently
found arguments that taxation constitutes a form of involuntary
servitude to be frivolous.
Relevant Case Law:
Porth v. Brodrick, 214 F.2d 925, 926 (10 th Cir. 1954)
- the court described the taxpayer's Thirteenth and Sixteenth
Amendment claims as "clearly unsubstantial and without merit,"
as well as "far-fetched and frivolous.
United States v. Drefke, 707 F.2d 978, 983 (8 th Cir.
1983) - the court affirmed Drefke's failure to file conviction,
rejecting his claim that the Thirteenth Amendment prohibited his
imprisonment because that amendment "is inapplicable where
involuntary servitude is imposed as punishment for a crime.
Ginter v. Southern, 611 F.2d 1226 (8 th Cir. 1979) - the
court rejected the taxpayer's claim that the Internal Revenue
Code results in involuntary servitude in violation of the Thirteenth
Kasey v. Commissioner, 457 F.2d 369 (9 th Cir. 1972) -
the court rejected as without merit the argument that the requirements
to keep records and to prepare and file tax returns violated the
Kaseys' Fifth Amendment privilege against self-incrimination and
amount to involuntary servitude prohibited by the Thirteenth Amendment.
Wilbert v. Internal Revenue Service (In re Wilbert), 262
B.R. 571, 578, 88 A.F.T.R.2d 6650 (Bankr. N.D. Ga. 2001) - the
court rejected the taxpayer's argument that taxation is a form
of involuntary servitude prohibited by the Thirteenth Amendment,
stating that "[i]t is well-settled American jurisprudence
that constitutional challenges to the IRS' authority to collect
individual income taxes have no legal merit and are 'patently
The Tax Scam Artist's Lie: The Sixteenth Amendment
to the United States Constitution was not properly ratified, thus
the federal income tax laws are unconstitutional.
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. This argument
has survived over time because proponents mistakenly believe that
the courts have refused to address this issue.
The Sixteenth Amendment provides that Congress shall have the
power to lay and collect taxes on income, from whatever source
derived, without apportionment among the several states, and without
regard to any census or enumeration. U.S. Const. amend. XVI. The
Sixteenth Amendment was ratified by forty states, including Ohio,
and issued by proclamation in 1913. Shortly thereafter, two other
states also ratified the Amendment. Under Article V of the Constitution,
only three-fourths of the states are needed to ratify an Amendment.
There were enough states ratifying the Sixteenth Amendment even
without Ohio to complete the number needed for ratification. Furthermore,
the U.S. Supreme Court upheld the constitutionality of the income
tax laws enacted subsequent to ratification of the Sixteenth Amendment
in Brushaber v. Union Pacific R.R., 240 U.S. 1 (1916). Since that
time, the courts have consistently upheld the constitutionality
of the federal income tax.
Relevant Case Law:
Miller v. United States, 868 F.2d 236, 241 (7 th Cir.
1989) (per curiam) - the court stated, "We find it hard to
understand why the long and unbroken line of cases upholding the
constitutionality of the sixteenth amendment generally, Brushaber
v. Union Pacific Railroad Company . . . and those specifically
rejecting the argument advanced in The Law That Never Was, have
not persuaded Miller and his compatriots to seek a more effective
forum for airing their attack on the federal income tax structure."
The court imposed sanctions on them for having advanced a "patently
United States v. Stahl, 792 F.2d 1438, 1441 (9 th Cir.
1986), cert. denied, 479 U.S. 1036 (1987) - stating that "the
Secretary of State's certification under authority of Congress
that the sixteenth amendment has been ratified by the requisite
number of states and has become part of the Constitution is conclusive
upon the courts," the court upheld Stahl's conviction for
failure to file returns and for making a false statement.
Knoblauch v. Commissioner, 749 F.2d 200, 201 (5 th Cir.
1984), cert. denied, 474 U.S. 830 (1986) - the court rejected
the contention that the Sixteenth Amendment was not constitutionally
adopted as "totally without merit" and imposed monetary
sanctions against Knoblauch based on the frivolousness of his
appeal. "Every court that has considered this argument has
rejected it," the court observed.
United States v. Foster, 789 F.2d 457 (7 th Cir.), cert.
denied, 479 U.S. 883 (1986) - the court affirmed Foster's conviction
for tax evasion, failing to file a return, and filing a false
W-4 statement, rejecting his claim that the Sixteenth Amendment
was never properly ratified.
The Tax Scam Artist's Lie: The Sixteenth Amendment
does not authorize a direct non-apportioned federal income tax on
United States citizens.
Some assert that the Sixteenth Amendment does not authorize a
direct non-apportioned income tax and thus, U.S. citizens and
residents are not subject to federal income tax laws.
The courts have both implicitly and explicitly recognized that
the Sixteenth Amendment authorizes a non-apportioned direct income
tax on United States citizens and that the federal tax laws as
applied are valid. In United States v. Collins, 920 F.2d 619,
629 (10 th Cir. 1990), cert. denied, 500 U.S. 920 (1991), the
court cited to Brushaber v. Union Pac. R.R., 240 U.S. 1, 12-19
(1916), and noted that the U.S. Supreme Court has recognized that
the "sixteenth amendment authorizes a direct nonapportioned
tax upon United States citizens throughout the nation.
Relevant Case Law:
In re Becraft, 885 F.2d 547 (9 th Cir. 1989) - the court
affirmed a failure to file conviction, rejecting the taxpayer's
frivolous position that the Sixteenth Amendment does not authorize
a direct non-apportioned income ta.
Lovell v. United States, 755 F.2d 517, 518 (7 th Cir.
1984) - the court rejected the argument that the Constitution
prohibits imposition of a direct tax without apportionment, and
upheld the district court's frivolous return penalty assessment
and the award of attorneys' fees to the government "because
[the taxpayers'] legal position was patently frivolous."
The appeals court imposed additional sanctions for pursuing "frivolous
arguments in bad faith.
Broughton v. United States, 632 F.2d 706 (8 th Cir. 1980)
- the court rejected a refund suit, stating that the Sixteenth
Amendment authorizes imposition of an income tax without apportionment
among the states.