A Federal 'strike
force' targeting tax reformers? Activists say teams of IRS agents in
'campaign to silence' them.” So ran the headline on a report on WorldNetDaily.
Out of habit I clicked through on the link. Articles and information
about tax protesters have been a pet interest of mine for over ten years
and I haven’t found a reason to give it up now.
For quite some time I have collected “lore and legend” of the tax protest
movement in the United States. Some of it was discussed in my Masters
thesis, along with the attitudes of Americans towards the income tax.
After taking up law practice in California I have had a number of opportunities
to counsel people regarding tax avoidance versus evasion, and was able to
investigate first hand a tax evasion scheme that had snared one of my clients.
He was lucky, as the scheme could have caused him severe financial problems
later on, regardless of what the IRS might have done, because it placed control
of his personal assets in the hands of other people with whom he had no personal
relationship. One was actually planning on leaving the state without
giving my client a forwarding address.
The gist of what WorldNetDaily had to say was that at the behest of
a Senate committee, the Treasury Department has been targeting people who
promote various tax avoidance schemes, that the government and consumer advocates
such as San Francisco Examiner columnist Robert L. Sommers have labeled
illegal. One of these promoters is Irwin Schiff, who bills himself
as the “nation’s leading authority on income tax and how the government illegally
collects it.” Whether or not Schiff’s opinions are correct is now in
court, as Treasury obtained a restraining order against him and his associates.
But Schiff has appealed, and the original order is now suspended pending
I’ve encountered Mr. Schiff before, and have heard his often repeated challenge
to pay anyone between $50,000 and $100,000 if they can show him a law that
requires someone to pay income tax. I took the opportunity of examining
some of the papers, which Schiff has made available on his site. Unfortunately,
not all of the download links worked. However, I was able to gather
that Mr. Schiff’s current position is that the taxing clauses of the US Constitution
require that the income tax system be voluntary, and that this was previously
expounded in the courts. He then goes on to contend that the government
has been perpetrating a massive fraud on the public ever since the 16th Amendment
was enacted, by pretending that tax payments are mandatory. Part of
his position is based on a legal argument that I have never had adequately
explained; that income in the “constitutional sense” is different from income
in the “ordinary sense.” As my examination of his papers doesn’t explain
it any better than any of the other materials I have seen, I’m not sure he
understands it himself.
The one thing I am sure of is that any good tax lawyer could show Mr. Schiff
the code sections. For example lets check out:
TITLE 26, Subtitle A, CHAPTER 1, Subchapter A, PART I, Sec. 1
Married individuals filing joint returns and surviving spouses
There is hereby imposed on the taxable income of -
every married individual (as defined
in section 7703) who makes a single return jointly with his spouse under
I’ve omitted the table. However, the last time I checked, there is nothing
voluntary about something that is imposed upon you, which is the reason why
I underlined “imposed” in the code section. As an additional comment
on this “voluntary system” argument, it should be noted that whenever a Judge
or Treasury official is quoted on it, the reference is inevitably to the
fact that people are expected to file their 1040 each year. This is
the voluntary compliance referred to. The government assumes that we
file our papers voluntarily in the same way that most of us generally obey
the speed limit laws. The possibility that people may file their tax
forms because they are afraid of the consequences of not doing so is ignored.
Then again, we also have highway patrol officers to ticket us if we drive
But Mr. Schiff and other anti-tax crusaders do have a point. Whenever
they get up on their soapboxes to challenge Title 26 or the Sixteenth Amendment,
there is little or no serious response from government agents. Joseph
Banister, a former criminal investigator with the IRS, says the Service is
"non-responsive, unable to withstand scrutiny, tyrannical, and oblivious
to the rule of law and the U.S. Constitution." In the end, the easiest
thing for the government to do would be to point out the law, chapter and
verse, and put the matter to rest. There is the possibility that they
might believe such a response would add credibility to the people involved,
and they may be right. Still, the point really is that we need to have
confidence in government, and if government doesn’t have enough confidence
in its own laws to show us how they work, then why should we have any trust
in our representatives who enact those same laws.
As it is, more and more people are becoming critical of the heavy handed
way in which many of government’s dealings with the people are managed.
As for the income tax system, we did very well without it before 1913, and
could probably do just as well now, except that we might have to rein in
a lot of the spending taken for granted by legislators and bureaucrats.
But that is not the point. The credibility of government is.
The federal income tax is probably the most disliked way of obtaining government
funds ever conceived of. The fact that no one seems truly cognizant
of this, and that no one has taken real and effective steps to remedy the
problem is a sign of how unresponsive our system is. The proliferation
of tax evasion schemes and the people who advertise them should be a sign
that something is wrong with the system and someone should fix it.
Steven Laib is a practicing attorney.