Background: An anti-government movement that believes that income taxes are illegitimate
Ideology: Anti-government, some white supremacist elements
Outreach: Books, manuals, seminars, radio shows, Web sites
Favorite arguments: Filing tax returns violates Fifth Amendment rights; the Sixteenth Amendment was never properly ratified; wages are not income; income taxes are voluntary; income taxes apply only to residents of Washington, D.C., and certain other limited areas
Criminal activity: Overall level of criminal activity is high, consisting mostly of attempts at tax evasion. Some tax protesters have engaged in large-scale scams and frauds. Violent incidents are also well-documented.
The tax protest movement is a relatively long-lived anti-government movement rising out of opposition to federal income taxes. Tax protesters generally believe that either the income tax laws are in some way invalid or that they do not apply to most citizens; therefore, they believe they have a legal and moral right not to pay taxes. Many tax protesters suspect that the government covers up the "truth" about the income tax in order to continue oppressing the people and taking their money. Tax protesters engage in a wide variety of tax evasion strategies that range from simple refusal to pay taxes to complicated schemes using onshore and offshore trusts in order to hide income from the government. Tax protesters are also violent on occasion, attacking IRS agents or property or others charged with enforcing the law.
Origins: No Taxation Even With Representation
Benjamin Franklin once said that only two things in life were certain -- death
and taxes. Yet two centuries later, a movement has emerged in the United States
that struggles -- though so far with little success -- to overturn the latter
of these two certainties. The tax protest movement, originating in the 1950s
and 1960s, is the oldest right-wing anti-government movement still in existence
in the United States and one of the most active. Along with the better-known
militia and sovereign citizen movements, the tax protest movement is a key component
of the strain of extreme right-wing anti-government activism often referred
to as the "patriot" movement.
Few people enjoy paying taxes, of course, especially income taxes, and many
people attempt to avoid them through legal or illegal means. Yet tax protesters
are not synonymous with tax evaders, even though most tax protesters do in fact
evade paying income taxes. A tax evader uses illegal methods to avoid paying
required taxes. A tax protester, however, regardless of whether he or she actually
attempts to evade paying taxes, is someone who has become convinced that they
have a moral, ethical or legal right or responsibility to refuse to pay taxes.
In other words, tax protest is an ideological commitment.
Since the end of World War II, two major tax protest movements have arisen.
One is a left-wing tax protest movement that formed largely as a reaction to
the Vietnam War. A number of pacifistic opponents to the war argued that it
was immoral to pay income taxes that would go toward supporting an "imperialistic"
American military machine. These activists, who often referred to themselves
as "war tax resisters," usually either refused to pay income taxes at all or
demanded some sort of guarantee that their taxes would not support the military
-- a guarantee that the government was obviously not going to grant. The end
of the war in Vietnam robbed the movement of some of its energy, but it survived
long enough to find new life during the Reagan and Bush administrations in the
1980s in opposition to United States policies in Latin America. War-tax resisters
still exist today, though in much reduced numbers.
The other tax protest movement to emerge in the second half of the 20th century
had a very different history. It was an extreme right-wing movement that had
its origins in longstanding conservative opposition to the income tax, which
was ratified as the 16th Amendment in 1913. Conservatives objected to the progressive
nature of the tax, the loss of personal income, and, later, the intrusive nature
of the withholding process. Some pointed out that a "heavy progressive or graduated
income tax" was one plank in Karl Marx's Communist Manifesto.
Early opposition in the postwar era was relatively mild and consisted in large
part of various campaigns to repeal the 16th Amendment. Of these, the most important
were attempts to pass the so-called "Liberty Amendment." First introduced in
Congress in 1952, it essentially tried to strengthen states' rights. However,
in 1957 Congressman Elmer Hoffman of Illinois introduced a revised version of
the Liberty Amendment that included a section mandating the abolition of income,
estate and gift taxes. In this form, the amendment garnered considerable support
among extreme right-wing conservatives as well as the budding libertarian movement.
In the late 1950s, Willis Stone became national chairman of the Liberty Amendment
Committee and tried to raise support for the proposed amendment through a book,
Action for Americans. Stone and the Committee were able to persuade several
state legislatures (eventually nine) to request that Congress send the amendment
to the states for ratification, but this fell far short of the requirements
for a constitutional amendment. Since then, far-right conservatives have repeatedly
tried to reintroduce the Liberty Amendment in Congress -- most recently by Congressman
Ron Paul of Texas in 1998 -- but without any success. Given the costs of the
Cold War and the simultaneous expansion of government services in the 1950s
and 1960s, it is not surprising that Stone and the Liberty Amendment Committee
had little chance of success.
Arguments: "The Law That Never Was"
As a result of these failures, however, the nature of the tax protest movement
slowly changed. The more mainstream conservatives lost interest, while the hard
core turned to other strategies. The emphasis shifted away from attempts to
repeal the 16th Amendment; instead, tax protesters (often referring to themselves
as "tax patriots") increasingly spent their energies coming up with various
alternative interpretations of the 16th Amendment, the tax laws or other United
States laws that would in some way nullify or defeat the imposition of income
taxes. The pioneer behind these efforts seems to have been a Wichita, Kansas,
building contractor named Arthur Porth who, in 1951, filed a claim to recover
his income tax payment of $151. Porth argued that the 16th Amendment was unconstitutional
because it placed the taxpayer in a position of involuntary servitude contrary
to the 13th Amendment. Not surprisingly, the courts found little merit in his
argument, but this failed to stop Porth, who embarked upon a long career of
inventive challenges to the income tax laws. His most influential effort came
in the early 1960s, when he filed a tax return that was blank except for a statement
declaring that he was pleading the Fifth Amendment (i.e., claiming that filling
out a tax return violated his right of protection from self-incrimination).
Moreover, Porth became an activist; he traveled around the country distributing
tax protest literature, including a book titled A Manual for Those Who Think
That They Must Pay an Income Tax. Not surprisingly, Porth was convicted on various
tax evasion charges and sent to prison, but he had already become a grass-roots
hero to the nascent tax protest movement.
A variety of tax protest theorists followed in Porth's footsteps; as a result,
the movement increasingly became a menagerie of groups and individuals devising
reasons why tax laws were invalid or did not apply to most Americans. The focus
of the movement's efforts became the development and propagation of pseudolegal
and pseudohistorical theories intended to delegitimize the federal income tax
(and, in many cases, state income taxes as well). The movement's early leaders
included a variety of colorful characters. Jerome Daly and William Drexler were
disbarred Minnesota attorneys who popularized not only the Fifth Amendment argument,
but also the "no dollar" defense, which claimed that income taxes could not
be paid because Federal Reserve Notes (i.e., paper money) were not redeemable
in specie and were therefore not legitimate currency. Later, in the early 1980s,
they would each receive prison sentences for creating and marketing bogus churches
(the Basic Bible Church and the Life Science Church respectively) for the purpose
of allowing people to avoid paying income taxes. Another Minnesotan, Daniel
Pilla, also advocated the "no dollar" defense, as did William Vaughn Ellsworth
of Arizona. Another Arizonan, Marvin Cooley, began his tax protest career in
the late 1960s and soon published a book, The Big Bluff, containing a variety
of documents, sample letters, citations and copies of his tax returns for other
tax protesters to use. He was a vocal advocate of the Fifth Amendment defense.
As the tax protest movement grew rapidly in popularity during the 1970s, arguments involving the 13th Amendment, the Fifth Amendment and Federal Reserve Notes were joined by many other novel theories. The most popular tax protest arguments over the past several decades include the following: a requirement to file tax returns violates First Amendment freedom of speech protections; the tax laws only apply to residents of limited areas like Washington, D.C., or federal territories; the tax laws apply only to federal employees; income taxes are voluntary; income taxes are dependent upon a contractual arrangement between an individual and the government; the 16th Amendment was not lawfully ratified, because different states had slight differences in the punctuation, etc., of their individual ratifications (popularized by Bill Benson and Martin "Red" Beckman in their book The Law That Never Was) ; the 16th Amendment was not lawfully ratified, because Ohio was not legally a state at the time it ratified the amendment; the Internal Revenue Code was not "positive law"; the Internal Revenue Service is not a legitimate government agency; wages do not qualify as "taxable income"; "sovereign citizens" are exempt from income tax. All of these arguments have been declared frivolous by the courts -- usually repeatedly -- but are used again and again by tax protesters; some fall in and out of style. When a tax protest argument fails in court, the response among tax protesters is typically not to conclude that the argument was erroneous but rather to assume that the judge was wrong, corrupt or deliberately misinterpreting the law.
Criminal Activities: Tax Attacks
The tax protest movement not only grew during the 1970s, it also grew more
radical. Many tax protesters moved easily from believing that the tax laws were
illegitimate to concluding that the entire government was in various ways illegitimate.
The most notorious tax protest group to take this particular tack was the Posse
Comitatus, a loosely organized group that began in Oregon and California around
1970 and spread to the rest of the country during the next decade. Posse adherents
urged the use of vigilante justice to protect the citizenry from an unlawful,
tyrannical government. As early as 1972, a Posse group in Michigan sent threatening
notices to local law enforcement agencies about their enforcement of state tax
laws against a tax protester named George Kindred. Two years later, Wisconsin
Posse activist Thomas Stockheimer and several followers lured an I.R.S. agent
to a farm and assaulted him. By the early 1980s, groups like the Posse had developed
into an entirely new anti-government movement, the "sovereign citizen" movement,
many of whose members continued to be active in the tax protest movement. Many
of the intimidating and harassing tactics developed by sovereign citizens, like
placing bogus liens on the property of public officials and law enforcement
officers, were originally designed for use against I.R.S. agents and employees.
Several leaders of the sovereign citizen movement were adherents of Christian
Identity, a racist and anti-Semitic religion. Increasingly, tax protest leaders
were Christian Identity as well, including Martin "Red" Beckman of Montana,
Nord Davis of North Carolina and Gordon Kahl of North Dakota.
In 1983, Kahl demonstrated to the entire nation that the tax protest movement
was willing to go much further than simply evading taxes. A World War II veteran
who became involved in the tax protest movement in the late 1960s, about the same time he converted
to Christian Identity, Kahl stopped paying taxes in 1969; in 1973, he joined
the Posse Comitatus and became a state coordinator for the Posse in Texas. The
I.R.S. became interested in his activity after he appeared on television in
1974; three years later he was convicted on tax charges and sentenced to one
year in jail and five years' probation. Following his release, Kahl again refused
to file an income tax return, thereby violating the terms of his probation.
In 1981, a warrant was issued for his arrest, but United States marshals in
North Dakota, where Kahl now lived, were not eager to confront the well-armed
tax resister. When they finally did attempt to bring him in, in February 1983,
their earlier reluctance proved well- founded. Stopped at a roadblock, Kahl
opened fire, killing two marshals and injuring several others before fleeing.
It took law enforcement officers four months to track Kahl to a remote farmhouse
in Arkansas, where he killed a local sheriff before dying himself in a final
Kahl's killings were part of a pattern of violence. Although the majority
of crimes committed by tax protesters tend to be related to tax evasion -- willful
failure to file, tax fraud, wire fraud, racketeering, etc. -- there have been
many incidents involving threats, harassment and violence against people or
property related to the enforcement of tax laws. Some of the more noteworthy
incidents in recent years include:
April 1991: Dean Harvey Hicks launches a mortar
attack on an I.R.S. service center in Fresno, California. He had earlier
attempted twice to bomb a West Los Angeles I.R.S. office, once with a truck-borne
fertilizer bomb. At the time of his arrest, he was plotting to bomb an FBI office
in Los Angeles. He is convicted and sentenced to 20 years in prison.
April 1992: An unidentified person fires shotgun blasts into the front window of an I.R.S. office in Hayward, California.
September 1993: An attempt to destroy an I.R.S.
office in Santa Barbara, California, by pumping propane through a broken window,
is foiled after an employee smells gas and notifies the police.
July 1995: Tax protester Charles Polk is arrested
for plotting to blow up an IRS office in Austin, Texas. He later receives a
December 1995: Tax protester Joseph Bailie leaves
a fertilizer bomb outside an I.R.S. office in Reno, Nevada. The bomb fails to
explode, and Bailie is later convicted.
May 1997: Unknown arsonists set fire to a building housing I.R.S. offices in Colorado Springs, Colorado.
April 1999: Arsonists again attack a Colorado Springs
October 1999: Spokane, Washington, tax protester
Richard Eldon Peters is arrested by F.B.I. agents on suspicion that he recruited
two other men in 1998 to kill or retaliate against a witness who had testified
against Peters at an earlier trial.
October 1999: Richard Van Hazel and Troy Coe are
arrested in Rochester Hills, Michigan, charged with the attempted kidnapping
and murder of an accountant who gave testimony in an Arizona case involving
a chiropractor charged with income tax evasion. Van Hazel is a tax protester and
white supremacist who himself was convicted in 1987 for mailing death threats
to I.R.S. agents and an African American judge. He is later sentenced to life
January 2000: Nashville, Tennessee, tax protester
Rodney Lynn Randolph receives a four-year prison sentence on weapons charges
after a search of his home reveals an arsenal of weapons that included a hand
grenade, bomb-making materials, automatic weapons parts, a .50-caliber antitank
weapon and 200,000 rounds of ammunition.
Criminal Activities II: Tax Scams
Tax protesters usually evade taxes and sometimes commit acts of violence,
but a number of people involved in the tax protest movement have also engaged
in a variety of scams and frauds designed to capitalize on the beliefs of other
tax protesters and the greed of ordinary citizens. Though they generally believe
in the anti-tax rhetoric they preach, a variety of groups and individuals have
worked actively to defraud others through the marketing of bogus trusts, "untax"
kits or other devices that would ostensibly allow people to avoid paying income
Perhaps the most famous such tax protest organization was the California-based
Your Heritage Protection Association, which, at one point in the early 1980s,
could boast nearly 19,000 members. Its leader, Armen Condo, taught followers
how to file papers claiming they were exempt from income taxes and urged them
to pay a portion of those taxes to his organization as dues. Condo collected
around $2 million before being arrested and convicted of
mail and tax fraud in 1982, after which YHPA gradually died off. However, the
YHPA was followed by the Pilot Connection Society, founded by Phillip and Marlene
Marsh of Fresno, California. The Society sold "untax" kits to members from all
50 states, collecting more than $10 million in fees and dues before the Marshes
and five associates were arrested on a variety of charges in 1993 -- with members
in other states arrested subsequently. More recently, three members of the Wisconsin-based
group Sovereign Citizens for Liberty were arrested in 1997 for selling "untax"
packages. A variety of individuals unassociated with any particular group have
also been arrested on similar charges in the past several years.
Other Activities: Spreading the Word
Even when members of the tax protest movement do not commit crimes other than
evading taxes, they can still play an extremely important role on the far right
as recruiters. The tax protest movement is a major point of entry into right-wing
fringe groups and movements: because so many people dislike paying taxes, significant
numbers are susceptible to the claims of tax protesters. Once involved with
the tax protest movement, they become exposed to the beliefs and practices of
other extremist movements. Many people begin their association with fringe groups
by becoming tax protesters, then move on to the militia or sovereign citizen
movements. They may also be exposed to Christian Identity or other racist or
anti-Semitic ideologies as well.
Moreover, those influenced by the tax protest message often include wealthy,
well-educated, and influential individuals. Tax protesters sent to prison in
recent years include airplane pilots, doctors, veterinarians, businessmen, firemen
and police officers. Tax protester Grant McEwan -- who pled guilty in 1997 to
failure to file income tax returns, filing $1.1 million of bogus liens against
I.R.S. employees, threatening I.R.S. employees and bond jumping -- was a Florida
millionaire. Gary Beacom, sentenced in early 1998 to 21 months in jail on various
tax-related charges, was a well-known professional figure skater. He had been
recruited into the tax protest movement after moving to Idaho.
Tax protesters, well aware of the lure of anti-tax arguments, recruit energetically.
In 2001, for instance, a group of tax protesters led by Bob Schulz of the New
York-based We the People Foundation began "Project Toto," described as a plan
to "conduct a massive, large-scale, nationwide educational program to inform
millions of Americans" about tax protest theories.
This education program included events like a planned April 2001 protest in
Washington, D.C., attended by at least 1,040 people. However, the most visible
signs of their efforts were a series of full-page color advertisements in USA
Today. These ads featured tax protesters Bill Benson, author of The Law That
Never Was, a book arguing that the 16th Amendment had not been properly ratified;
Larken Rose, author of Taxable Income; and John Kotmair, leader of the nation's
largest tax protest organization, the Save-a-Patriot Fellowship. The ad copy
summarized several tax protest arguments and provided information about Shulz's
Web site. It also solicited contributions, which it noted were "tax deductible."
Finally, in April 2001, USA Today notified the We the People Foundation that
it would not accept any more of their advertisements, because the ads promoted
Prospects: Fewer Filings
Cracking down on the tax protest movement will be difficult. After well-publicized
hearings on alleged I.R.S. misdeeds in the late 1990s, the I.R.S. enforcement
budget was cut back considerably. As a result, with fewer agents and resources
(since 1992, the number of I.R.S. employees has been reduced by a sixth), the
I.R.S. has been unable to cope with the tide of people who deliberately refuse
to pay their taxes. Indeed, I.R.S. agents are no longer even allowed to use
the term "tax protesters" to describe them. Leaving aside criminal investigations
and prosecutions, even the number of civil suits filed by the I.R.S. against
non-taxpayers dropped from over 2,500 in 1992 to 641 in 1999. Seizure of property
for nonpayment of taxes dropped 99% from 1992. In the meantime, tax protesters
grow more brazen. The New York Times reported in November 2000 that a number
of business owners, influenced by tax protest leaders like Californian Joseph
Banister, have publicly announced that they will no longer withhold taxes from
their employees. As of spring 2001, the I.R.S. had taken no action against any
Groups: A Portfolio of Protesters
The tax protest movement includes a wide variety of prominent groups and individuals.
Because many protesters privilege their own pet ideas as to the illegitimacy
of income taxes, they spend much of their time sniping at one another's theories;
however, they will generally unite against such foes as the I.R.S. Some of the
leaders of the movement include:
Irwin Schiff. One of the most colorful and prominent tax protest leaders, Schiff has written numerous books, such as The Federal Mafia, pro-moting his income tax ideas. Though he has twice spent time in prison on tax-related charges, he still convinces many people who attend his expensive seminars.
Lynne Meredith. Head of a California-based group called We the People, Meredith publishes tax protest books, holds seminars across the country and markets various trusts as ways to "lawfully" (as opposed to "legally") avoid paying taxes. In April 2002, Meredith and six associates were arrested by federal agents and charged with mail fraud, conspiring to defraud the IRS, and various tax related charges. As of March 2003, they await trial.
John Kotmair. A former Baltimore police
detective, Kotmair runs the Save-a-Patriot Fellowship, currently the largest
organization of tax resisters in the United States. Its literature promotes
a variety of tax protest theories, although it denies being involved in tax
protesting. Kotmair spent two years in prison in the 1980s for tax evasion;
his son, Edward, was sentenced to 27 months in jail on similar charges in February
Joseph Banister. An I.R.S. investigator
who became a tax protester, Banister then resigned after being placed on administrative
leave and now is a full-time and popular tax protest advocate. Through his San
Jose, California-based organization, Freedom Above Fortune, he markets his book,
Investigating the Federal Income Tax and makes personal appearances.
Lowell "Larry" Becraft. The most prominent
attorney involved with the tax protest movement, Alabamian Becraft specializes
in representing tax protesters in court. With fellow tax protester Devvy Kidd
of Sacramento, California, he established the Wallace Institute, an organization
designed to, in the words of Kidd, "restore the Constitutional Republic" and
rid the country of "dictatorial democracy."
Otto Skinner. This long-time California-based
tax protester is best known for books such as The Biggest "Tax Loophole" of
"The New Man on the Job," John Scott Clubb, 1913. The
institution of income tax, ratified in the 16th Amendment of the Constitution,
was seen as a sharp penalty on the privileged classes.