Federal government authority Tax protester constitutional arguments

internal revenue service building on constitution avenue in washington, d.c.. agency collects taxes , enforces internal revenue laws.

neither u.s. supreme court nor other federal court has ruled income tax imposed under internal revenue code of 1986 unconstitutional. under supreme court ruling in cheek v. united states, defendant in tax evasion prosecution has made arguments federal income tax laws unconstitutional may have arguments turned against him (or her). such arguments, if based on held beliefs, may constitute evidence helps prosecutor prove willfulness, 1 of elements of tax evasion.

sovereign individual , government privilege

some tax protesters argue should immune federal income taxation because sovereign individuals or natural individuals, or on ground have not requested privilege or benefit government. these kinds of arguments have been ruled without merit. example, in case of lovell v. united states united states court of appeals seventh circuit stated:

plaintiffs argue first exempt federal taxation because natural individuals have not requested, obtained or exercised any, privilege agency of government. not basis exemption federal income tax. [citation omitted] individuals, natural or unnatural, must pay federal income tax on wages, regardless of whether received privileges government. plaintiffs contend constitution prohibits imposition of direct tax without apportionment. wrong; not. u. s. const. amend. xvi…

the court of appeals in lovell affirmed u.s. district court order upholding frivolous return penalty under 26 u.s.c. § 6702(a). similarly, in united states v. sloan, taxpayer s contention — not citizen of united states, rather, freeborn, natural individual, citizen of state of indiana, , master —not servant —of government — ruled not legal ground argument taxpayer not subject federal tax laws; tax evasion conviction upheld united states court of appeals seventh circuit. similarly, united states court of appeals third circuit stated, in powers v. commissioner: powers [the taxpayer] contends either immune tax laws, or slave federal government. false choice creature of powers tax protester ideology, not laws of republic. similarly, in 2008 united states court of appeals tenth circuit rejected taxpayer s argument gains of individual s labor taxed if gains received federal venue . in case, taxpayer s argument—that irs had no ability impose tax on taxpayer because citizen of several states, not federal u.s. citizen —was ruled frivolous.

variations of argument individual “sovereign” have been rejected in tax cases such united states v. hart, risner v. commissioner, maxwell v. snow, rowe v. internal revenue serv., cobin v. commissioner, , glavin v. united states.

the argument individual received form w-2 wages or other compensation not subject federal income tax because individual has neither requested, obtained, nor exercised privilege agency of government ruled frivolous united states court of appeals first circuit in sullivan v. united states , again in kelly v. united states. see united states v. buras (argument taxpayer can subject excise tax if benefits privilege extended government agency rejected).; nichols v. united states; , olson v. united states.

the argument individual received form w-2 wages not subject federal income tax unless tax imposed in connection government granted privileges ruled frivolous united states court of appeals seventh circuit in coleman v. commissioner. argument individual received form w-2 wages not subject federal income tax unless taxpayer enjoys grant of privilege or franchise ruled frivolous united states court of appeals eighth circuit in may v. commissioner. argument individual received form w-2 wages not subject federal income tax unless taxpayer has obtained privilege governmental agency ruled frivolous united states court of appeals ninth circuit in olson v. united states, , united states court of appeals tenth circuit in prout v. united states.

in case of steward machine company v. davis, supreme court rejected argument relation of employment 1 essential pursuit of happiness may not burdened tax, , upheld validity of social security tax. court stated: . . . natural rights, called, subject taxation rights of less importance. excise not limited vocations or activities may prohibited altogether. not limited outcome of franchise. extends vocations or activities pursued of common right. .

regarding taxability of income in connection events or activities not involving government privilege or franchise, united states supreme court stated in united states v. sullivan gains illegal traffic in liquor subject federal income tax. u.s. supreme court ruled in rutkin v. united states receipt of money obtained extortion taxable income wrongdoer. u.s. supreme court ruled in james v. united states receipt of money obtained through embezzlement taxable income wrongdoer, though wrongdoer required return money owner.

the argument person s income not taxed when person rejects or renounces united states citizenship because person claims citizen exclusively of state, , variations of argument, have been officially identified legally frivolous federal tax return positions purposes of $5,000 frivolous tax return penalty imposed under internal revenue code section 6702(a).

federal zone

some tax protesters argue under article i, section 8, clause 17 of constitution, federal income taxes can imposed inside called federal zones , areas —such district of columbia, military bases or other places– on congress has direct authority.

this argument based in part on u.s. supreme court decision in case of united states v. bevans. in bevans, parties argued on whether federal court in massachusetts had jurisdiction on case of u.s. marine charged murder occurred on ship in boston harbor. no issues regarding federal income taxation or internal revenue code presented or decided court in bevans case. internal revenue code , internal revenue service did not yet exist in 1818, when bevans murder case decided.

the clause 17 argument rejected in case of united states v. sato:

defendants argue clause 17 limits legislative power of congress such geographical areas on congress may legislate, or may exercise power of taxation, areas described in clause 17. position contrary both natural reading of constitution , case law. clause 17 limits not power of congress, power of states. [t]he word exclusive employed eliminate possibility legislative power of congress on district [of columbia] concurrent of ceding states. . . . similarly, clear power of congress collect taxes, created article i, section 8, clause 1 of constitution, independent power not limited other specific powers enumerated in section 8. united states v. butler, 297 u.s. 1, 65-66, 56 s. ct. 312, 319 (1936). readily apparent congress power tax extends beyond exclusive legislative districts contemplated clause 17. defendants motion dismiss based on clause 17 denied.

the clause 17 argument unsuccessful in celauro v. united states, internal revenue service. tax protesters contend u.s. supreme court decision in caha v. united states restricts jurisdiction of federal government impose income taxes inside states , based on following language court’s opinion:

this statute 1 of universal application within territorial limits of united states, , not limited portions within exclusive jurisdiction of national government, such district of columbia. speaking, within state of union preservation of peace , protection of person , property functions of state government, , no part of primary duty, @ least, of nation. laws of congress in respect matters not extend territorial limits of states, have force in district of columbia, , other places within exclusive jurisdiction of national gover[n]ment.

some tax protesters contend court s reference matters restricted federal government s jurisdiction on matters of taxation. caha not tax case. reference statute reference perjury statute. caha case involved perjury conviction defendant unsuccessfully argued federal court had no jurisdiction on prosecution crime of perjury committed in proceeding in land office @ kingfisher, oklahoma regarding ownership of real estate.

the reference in caha laws of congress in respect matters reference matters of preservation of peace , protection of person , property. court in caha rejected argument federal courts had no jurisdiction hear case under perjury statute, , defendant s conviction affirmed. no issues involving power impose , enforce federal taxes in fifty states presented or decided court in caha.

the courts have uniformly rejected federal zone argument congressional authority impose income tax limited district of columbia, forts, magazines, arsenals, or dockyards, etc. see, example, united states v. mundt; nelsen v. commissioner; abbs v. imhoff.