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Protestor Theories De-Bunked > Fed
Income Tax System
The Tax Scam Artist's Lie: The
filing of a tax return is voluntary.
Some assert that they are not required to file federal tax returns
because the filing of a tax return is voluntary. Proponents point
to the fact that the IRS itself tells taxpayers in the Form 1040
instruction book that the tax system is voluntary. Additionally,
the Supreme Court's opinion in Flora v. United States, 362 U.S.
145, 176 (1960), is often quoted for the proposition that "[o]ur
system of taxation is based upon voluntary assessment and payment,
not upon distraint.
The word "voluntary," as used in Flora and in IRS publications,
refers to our system of allowing taxpayers to determine the correct
amount of tax and complete the appropriate returns, rather than
have the government determine tax for them. The requirement to
file an income tax return is not voluntary and is clearly set
forth in Internal Revenue Code §§ 6011(a), 6012(a),
et seq., and 6072(a). See also Treas. Reg. § 1.6011-1(a).
Any taxpayer who has received more than a statutorily determined
amount of gross income is obligated to file a return. Failure
to file a tax return could subject the noncomplying individual
to criminal penalties, including fines and imprisonment, as well
as civil penalties. In United States v. Tedder, 787 F.2d 540,
542 (10 th Cir. 1986), the court clearly states, "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 . . . . The IRS' efforts to obtain compliance
with the tax laws are entirely proper.
Relevant Case Law:
Helvering v. Mitchell, 303 U.S. 391, 399 (1938) - the
U.S. Supreme Court stated that "[i]n assessing income taxes,
the Government relies primarily upon the disclosure by the taxpayer
of the relevant facts . . . in his annual return. To ensure full
and honest disclosure, to discourage fraudulent attempts to evade
the tax, Congress imposes [either criminal or civil] sanctions.
United States v. Tedder, 787 F.2d 540, 542 (10 th Cir.
1986) - the court upheld a conviction for willfully failing to
file a return, stating that the premise "that the tax system
is somehow 'voluntary' . . . is incorrect.
United States v. Richards, 723 F.2d 646, 648 (8 th Cir.
1983) - the court upheld conviction and fines imposed for willfully
failing to file tax returns, stating that the claim that filing
a tax return is voluntary "was rejected in United States
v. Drefke, 707 F.2d 978, 981 (8 th Cir. 1983), wherein the court
described appellant's argument as 'an imaginative argument, but
totally without arguable merit.'.
Woods v. Commissioner, 91 T.C. 88, 90 (1988) - the court
rejected the claim that reporting income taxes is strictly voluntary,
referring to it as a "'tax protester' type" argument,
and found Woods liable for the penalty for failure to file a return.
Johnson v. Commissioner, T.C. Memo. 1999-312, 78 T.C.M.
(CCH) 468, 471 (1999) - the court found Johnson liable for the
failure to file penalty and rejected his argument "that the
tax system is voluntary so that he cannot be forced to comply"
The Tax Scam Artist's Lie: Payment of tax
In a similar vein, some argue that they are not required to pay
federal taxes because the payment of federal taxes is voluntary.
Proponents of this position argue that our system of taxation
is based upon voluntary assessment and payment.
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
as determined by the tables set forth in that section. (Section
11 imposes a tax on the taxable income of corporations.) Furthermore,
the obligation to pay tax is described in section 6151, which
requires taxpayers to submit payment with their tax returns. Failure
to pay taxes could subject the noncomplying individual to criminal
penalties, including fines and imprisonment, as well as civil
In discussing section 6151, the Eighth Circuit Court of Appeals
stated that "when a tax return is required to be filed, the
person so required 'shall' pay such taxes to the internal revenue
officer with whom the return is filed at the fixed time and place.
The sections of the Internal Revenue Code imposed a duty on Drefke
to file tax returns and pay the . . . tax, a duty which he chose
to ignore." United States v. Drefke, 707 F.2d 978, 981 (8
th Cir. 1983).
Relevant Case Law:
United States v. Bressler, 772 F.2d 287, 291 (7 th Cir.
1985) - the court upheld Bressler's conviction for tax evasion,
noting, "[he] has refused to file income tax returns and
pay the amounts due not because he misunderstands the law, but
because he disagrees with it . . . . [O]ne who refuses to file
income tax returns and pay the tax owing is subject to prosecution,
even though the tax protester believes the laws requiring the
filing of income tax returns and the payment of income tax are
Schiff v. United States, 919 F.2d 830, 833 (2d Cir. 1990),
cert. denied, 501 U.S. 1238 (1991) - the court rejected Schiff's
arguments as meritless and upheld imposition of the civil fraud
penalty, stating "[t]he frivolous nature of this appeal is
perhaps best illustrated by our conclusion that Schiff is precisely
the sort of taxpayer upon whom a fraud penalty for failure to
pay income taxes should be imposed.
Packard v. United States, 7 F. Supp. 2d 143, 145 (D. Conn.
1998) - the court dismissed Packard's refund suit for recovery
of penalties for failure to pay income tax and failure to pay
estimated taxes where the taxpayer contested the obligation to
pay taxes on religious grounds, noting that "the ability
of the Government to function could be impaired if persons could
refuse to pay taxes because they disagreed with the Government's
use of tax revenues.
United States v. Gerads, 999 F.2d 1255, 1256 (8 th Cir.
1993) - the court stated that "[taxpayers'] claim that payment
of federal income tax is voluntary clearly lacks substance"
and imposed sanctions in the amount of $1,500 "for bringing
this frivolous appeal based on discredited, tax-protestor arguments.
The Tax Scam Artist's Lie: The IRS must prepare
federal tax returns for a person who fails to file.
Proponents of this argument contend that section 6020(b) obligates
the IRS to prepare a federal tax return for a person who does
not file a return. Thus, those who subscribe to this contention
believe that they are not required to file a return for themselves.
Section 6020(b) merely provides the IRS with a mechanism for
determining the tax liability of a taxpayer who has failed to
file a return.
Section 6020(b) does not require the IRS to prepare tax returns
for persons who do not file and it does not excuse the taxpayer
from civil penalties or criminal liability for failure to file.
Relevant Case Law:
United States v. Lacy, 658 F.2d 396, 397 (5 th Cir. 1981)
- the court, in upholding the taxpayer's conviction for willfully
and knowingly failing to file a return, stated that " . .
. the purpose of section 6020(b)(1) is to provide the Internal
Revenue Service with a mechanism for assessing the civil liability
of a taxpayer who has failed to file a return, not to excuse that
taxpayer from criminal liability which results from that failure.
Schiff v. United States, 919 F.2d 830, 832 (2 nd Cir.
1990) - the court rejected the taxpayer's argument that the IRS
must prepare a substitute return pursuant to section 6020(b) prior
to assessing deficient taxes, stating "[t]here is no requirement
that the IRS complete a substitute return.
Moore v. Commissioner, 722 F.2d 193, 196 (5 th Cir. 1984)
- the court stated that "section [6020(b)] provides the Secretary
with some recourse should a taxpayer fail to fulfill his statutory
obligation to file a return, and does not supplant the taxpayer's
original obligation to file established by 26 U.S.C. § 6012.