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Tax Protestor Dummies 2 > Cases
("Damn, We Lost Again!
And why is it
that people who sell
tax protestor materials file their tax returns anyway . . .")
 Illegal tax protest movements have been around for decades,
springing up in different areas of the country and in a variety
of forms. These groups and/or individuals, known as illegal
tax protesters, deprive the government of substantial revenue.
Illegal tax protesters frequently lure otherwise innocent
taxpayers into participating in their schemes to pay little
or no taxes. A recent study found that 47,000 illegal tax
protesters owed more than $540 million in taxes -- 2.3% of
the total accounts receivable due from individuals. Illegal
tax protesters use a variety of false or misleading arguments
for not paying taxes, and advise taxpayers not to comply
with federal tax laws.
1. FIRST AMENDMENT. These illegal tax protesters argue that
using the Freedom of Religion clause of the First Amendment
can reduce income tax liability. A common scheme calls for
individual taxpayers to obtain minister's credentials and
a church or religious order charter by mail for a fee. The
individuals set up a new organization that purports to be
a church, religious order, or other religious organization.
They then take a vow of poverty and assign their assets and
income to the new organization. Taking a purported vow of
poverty or claiming fraudulent contributions to filter money
through a church is illegal. The tax law affords benefits
to churches and other religious organizations and to individuals
who make gifts or contributions to these organizations. The
law requires, however, that organizations claiming these
benefits actually be operated for religious purposes.
2. FOURTH AND FIFTH AMENDMENTS. These illegal tax protesters argue that filing
a Form 1040 violates the Fourth Amendment right to privacy or the Fifth Amendment
right against self- incrimination. However, the courts have consistently held
that disclosure of routine financial information required on a tax return does
not incriminate an individual or violate
the right to privacy.
3. SIXTEENTH AMENDMENT. These illegal tax protesters argue the Constitutional
amendment establishing the basis for income tax was never properly ratified.
However, the Sixteenth Amendment was ratified on February 3, 1913, and it states
"The Congress shall have power to lay and collect taxes on incomes, from
whatever source derived, without apportionment
among the several States, and without regard to any census enumeration."
INTERNAL REVENUE CODE ARGUMENTS
 These illegal tax protesters argue that:
1. there is no Internal Revenue Code that imposes taxes;
2. only "individuals" are required to pay taxes; or
3. the government can assess taxes only against people who file
 The tax law is found in Title 26 of the United States Code. Section 6012
of the Code makes clear that only people whose income falls below a certain
level do not have to file returns. Section 6201 of the Code states that the
Secretary of the Treasury is required to make assessments "of all taxes
imposed by this title [Title 26]."
 These illegal tax protesters argue that forming a business
trust to hold your income and assets will avoid taxes or
that a family estate trust will allow you to reduce or eliminate
your tax liability. In truth, establishing a trust, foreign
or domestic, for the sole purpose of hiding your income and
assets from taxation is illegal and will not absolve you
of your tax liability.
COUNTERING ILLEGAL TAX PROTESTER MOVEMENTS
 The Internal Revenue Service has focused its efforts
against illegal tax protester movements by adopting a multi-
functional compliance approach.
o The IRS helps otherwise innocent taxpayers who have been
misled by illegal tax protesters to rejoin the system.
o The IRS vigorously pursues enforcement actions against those who continue
to promote schemes or entice others to violate the law.
 Regardless of the argument the illegal tax protesters use, each movement
has two things in common: the arguments are consistently rejected by the courts
and the participants may face IRS enforcement action.
 The IRS has one of the highest conviction rates in federal
law enforcement. In addition to the courts handing down substantial
prison sentences, those convicted must also pay fines, taxes
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