Tax protesters in the United States advance a number of administrative arguments asserting that the assessment and collection of the federal income tax violates regulations enacted by responsible agencies –primarily the Internal Revenue Service (IRS)– tasked with carrying out the statutes enacted by the United States Congress and signed into law by the President.
[5] Some tax protesters argue that even if the Internal Revenue Code provides for penalties, IRS employees do not have the authority to assert penalties—basing the argument on Internal Revenue Code section 6020(b)(1) which states: Some protesters contend that this provision shows that IRS agents have no authority to impose penalties unless they have a delegation from the Secretary of the Treasury.
The phrase "or his delegate" is defined in part as "any officer, employee, or agency of the Treasury Department duly authorized ... to perform the function mentioned or described ...".
[8] The Court rejected the taxpayer's argument, and ruled that an IRS Revenue Agent "plainly falls" within the cited Treasury regulation.
Another group of protesters claims the existing law demands income tax only from federal employees and residents of US territories.
For example, tax protester Irwin Schiff's web site, in reference to the 2005 Federal trial resulting in his most recent conviction and imprisonment on tax charges, includes the statement: "... the Government’s prosecutors and Judge Dawson interceded in order to prevent me from proving that all IRS seizures are illegal, and not provided for by law.
For example, an IRS levy on a principal residence must be approved in writing by a federal district court judge or magistrate.
The following is an excerpt from the court’s decision in the case: In a variation on this argument, some tax protesters have argued that section 6331 of the Internal Revenue Code should allow the IRS to seize only the salary of an officer, employee, or elected official of the United States or the District of Columbia.
The regulations for the OMB control number under the Paperwork Reduction Act specifically mention statutory tax obligations, providing (in part): Additionally the Paperwork Reduction Act itself states (in part): "...this subchapter shall not apply to the collection of information ... during the conduct of ... a civil action to which the United States or any official or agency thereof is a party ... or ... an administrative action or investigation involving an agency against specific individuals or entities.
Some tax protesters have argued that criminal defendant Robert Lawrence[29] was successful with an OMB control number argument when his case was dismissed by a federal court in 2006.
The IRS agents brought their errors to the attention of the government lawyers, who then asked that the charges be dropped.
At the Court of Appeals, Lawrence contended that he should be reimbursed because the government's conduct against him had been "vexatious, frivolous, or in bad faith."
In March 2007 the United States Court of Appeals for the Seventh Circuit rejected the OMB argument.
The following is an excerpt from the Court's decision: In the case of United States v. Wunder, the United States Court of Appeals for the Sixth Circuit stated: In the case of United States v. Patridge, the United States Court of Appeals for the Seventh Circuit affirmed a tax evasion conviction, and rejected the convicted taxpayer's OMB control number argument, with these words: In the same case, the Court of Appeals rejected the taxpayer's argument that the Paperwork Reduction Act could block a tax evasion conviction: Despite the presence of the OMB control number on Form 1040 and despite the language of regulation 1320.6(e) above, tax protesters have repeatedly litigated several variations of the "OMB control number argument" without success.
'");[37] United States v. Dawes (taxpayer's argument—that the tax regulations and IRS instruction books must contain an OMB control number—was rejected);[38] Lonsdale v. United States (taxpayer's argument—that relevant IRS forms in connection with summonses, liens or levies must contain OMB control numbers for the summonses, liens or levies to be valid—was rejected);[39] Karkabe v. Commissioner (taxpayer's arguments—that Form 1040 did not display a valid OMB control number, and that the Form 1040 was "bootleg" and "illegal" -- were rejected by the court).
[42] Lindsey K. Springer, a proponent of the Paperwork Reduction Act/OMB control number argument, raised the issue in his own federal criminal tax case.
[45][46] The OMB control number argument and variations of this argument have been officially identified as legally frivolous Federal tax return positions for purposes of the $5,000 frivolous tax return penalty imposed under Internal Revenue Code section 6702(a).
As explained below, the "Internal Revenue Service" is referred to in statutes and regulations as an "agency," as a "bureau," and as an "administrative unit" of the U.S. Department of the Treasury.
Although the IRS, as a bureau within the Treasury Department, was not created by statute (and no law requires that the IRS, as a bureau within an executive department, be "created" by statute),[51] the United States Supreme Court, in Chrysler Corp. v. Brown,[52] specifically referred to the Revenue Act of 1862, the "Act of July 1, 1862, ch.
Where taxpayers are authorized to sue on matters arising out of IRS actions, the United States is the proper party defendant" (from Devries v. Internal Revenue Service.
[54]) The United States Court of Appeals for the Tenth Circuit has rejected the argument that the Internal Revenue Service was not lawfully created.
[55] Similarly in Collins v. Internal Revenue Serv., a Federal district court stated: In Hawks v. Commissioner, the U.S. Tax Court ruled the arguments (1) that "there is no organization in the Department of the Treasury known as the Internal Revenue Service", (2) that the IRS "is not an agency of the United States", and (3) that the IRS is "an unlawful organization", to be frivolous.
At least nineteen references to "Internal Revenue Service" are found in titles 2, 5, 12, 23, 31, and 42 of the United States Code.
[64] The House Committee Report accompanying the Internal Revenue Service Restructuring and Reform Act of 1998,[65] specifically refers to the IRS as being one of the "agencies within the Treasury.