Claiming protection under the Free Exercise Clause of the First Amendment, certain tax defiers have refused to pay taxes based on their religious objections to military expenditures or other types of spending by the government.
Despite the decades of rejection, tax defiers have continued to tweak this argument, adding claims under the Religious Freedom Restoration Act of 1993 ("RFRA") (19) and the Ninth Amendment.
Tax defiers have utilized the Fifth Amendment to argue that income tax laws represent an illegal taking by the government without due process, and that compelling income tax reporting constitutes a violation of the tax defiers' right against self-incrimination.
Contending that taxation is "slavery" or "involuntary servitude," tax defiers have tried to use the Thirteenth Amendment's prohibitions of slavery and involuntary servitude as a sword to defeat their income tax obligations.
In trying to limit the reach of the federal income tax code, tax defiers have resorted to taking absurd interpretations of constitutional and Tax Code provisions.
To make this argument, tax defiers turn the Internal Revenue Code on its head.
Tax defiers assume that "taxable income" and its "sources" can only be determined by Section 861 and its regulations, rather than Section 61.
COURTS' BALANCING THE NEEDS OF LEGITIMATE TAXPAYERS WITH THE HARM CAUSED BY TAX DEFIERS
In dealing with tax defter arguments, courts have had to strike a balance between welcoming honest taxpayers with legitimate tax claims into the courts and spurning tax defiers with rejected, meritless tax claims.
Tax defiers mostly fall in the underreporting or nonfiling categories.
Any solution rests in large part on seeking a balance in fairness between permitting taxpayers with legitimate good faith claims a full opportunity to air these claims administratively and before the courts, and excluding, deterring, and punishing tax defiers espousing illegitimate positions brought to undermine the tax system itself.
Stating that "neither civil penalties nor criminal prosecution have slowed the growth of the tax protestor movement" and searching for a different approach "to compensate the system for the costs imposed by tax protestors' frivolous arguments and to deter others from converting to the tax protestor movement," one commentator advocates the use of nondiscretionary, significant civil penalties on tax defiers.
Such laws coupled with active enforcement will send a strong deterrent message to tax defiers and honest taxpayers alike that engaging in tax defter conduct comes with a heavy price.
The government's response must equally take advantage of the powerful resources of the Internet and similar media to bring enforcement efforts directly to the door of the tax defiers and the taxpaying community.