Tax Protestors

It's time again for one of my periodic warnings against following the alluring siren song of tax protestors. There are literally dozens of them, most of them with their own websites. Luckily, this number is finally starting to drop, as IRS stops ignoring them and tosses them in the pokey.

That is why I always make a big distinction between reducing taxes through creative and aggressive interpretation of the tax laws (what I do) and the illegal evasion of the tax laws by such promoters as Irwin Schiff and Bob Schulz (to name just a few). Bob Schulz is currently on a foolhardy campaign to encourage everyone to refuse to file tax returns and employers to refuse to withhold taxes from their employees' paychecks. Anyone following this stupid advice will deserve their prison stays.

I have written very long analyses of the tax promoter arguments before; so I will just summarize the most popular ones here.

No Conflict of Interest
While some people may think that I am defending the IRS and the current tax system in the USA as a means of job protection for myself and fellow tax practitioners, nothing could be further from the truth. I have always been very vocal in my support for the platform of the Libertarian Party, including the absolute elimination of all income and estate taxes. However, we need to bring about such a change through the normal legislative process. Just refusing to obey the laws that we may disagree with, as the misguided Bob Schulz advocates, will accomplish nothing more than earn Mr. Schulz and his followers room & board in the Federal Grey Bar Hotel.

Taxes Are Voluntary
Irwin Schiff has received a lot of publicity with this idiotic limited reading of the tax return instructions. He and his cohorts read that the US tax system depends on voluntary compliance and interpret it to mean that we have a choice as to whether or not to voluntarily file all of the required tax forms. What they ignore is the rest of the story, as Paul Harvey likes to say. If someone refuses to voluntarily comply with their tax reports, IRS is more than willing to do it for them and take extremely aggressive actions, up to and including deadly force, to get the money they think the US government is owed.

Taxes Are Illegal
Many tax protestors, such as Bob Schulz, Joe Banister and WorldNet Daily, have stuck their lives on the line based on the assumption that the 16th Amendment was not actually properly ratified back in 1913. As I have said before, I have reviewed some of the documentation for this argument and believe that they make a fairly convincing case. However, any argument that the amendment was improper should have been made back around 1913; not 80 to 90 years later. It has been accepted as law for too long by too many people to now claim that it is illegitimate. It has in effect been de facto adopted by the American people long before most of us were born. Again, it would require a new constitutional amendment to repeal the 16th.

Bob Schulz & his ilk are living in a fairy tale world. I have never been shy about pointing out examples where our rulers in DC routinely violate the Constitution, especially when it involves tax money. I wish with all of my being that our rulers would take seriously their vow to protect & defend the Constitution. However, we need to be realistic and deal with the real world with the people who are continuously elected and sent to DC to rule our lives. Acting as if the reincarnation of George Washington and Thomas Jefferson were currently in power is just nuts.

I have worked with several cases over the past few decades, trying to untangle the messes misguided tax protestors created for themselves. The ironic thing is that, in every single case, when my staff & I prepared the tax returns, the clients ended up owing much less than the IRS was claiming, and in most of them, would have been due refunds. However, in many of those cases, the IRS double standard kicked in. While an IRS debt lasts forever and beyond, a request for refund must be made within three years or else the overpayment is forfeited to the government. I've seen clients lose thousands of dollars because of this.

In Conclusion
While there may be some tax protestor promoters who sincerely believe their arguments will succeed, most of them have been around long enough to see what the results are for anyone following their advice; prison. Why Irwin Schiff has any credibility, after spending so many years in prison for tax evasion, is a mystery to me. Of course, any country that heeds family values advice from the likes of Hillary Clinton obviously can't expect to come anywhere close to an ability to distinguish between right and wrong.

KMK
- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 7/02/2002 01:25:00 PM Send this post: