Tea Parties

As I hope everyone realizes, yesterday was tax day. It was also a day filled with civil demonstrations being called “tea parties” that took place all over the country. Some were larger than others, but the turn-out was greater than we expected it would be at Tax Masters. While we have been watching this grass roots movement from afar, we decided it was time to go ahead and comment on the situation. I want to clearly state that we don’t support or condemn this movement, but there are some things about some of the rhetoric being thrown around that concern us.

The Law is the Law

Civil demonstrations are incredibly important in a republic, especially when the press is able to cover such events and to make them known to a wider audience. The key concept in civil demonstration to us at Tax Masters is the first word in the phrase: civil.

Not only does “civil” imply courteous, but it also refers to following the rules established by law. In other words, while it is perfectly legal and in fact moral to demonstrate for or against something you believe, you must still follow all current laws in order to avoid being labeled a criminal. It is incredibly important that you not use the fervor and fanfare of these tea party demonstrations as an excuse to not pay income tax and to not file tax returns. While demonstration is a great method for delivering a message to those who have the power to change the law, it is not a method by which you should disobey existing law.

A Warning About Tax Protesters

There are many issues being cited as relevant at the tea party demonstrations, including misuse of tax dollars, deficit spending, irresponsible use of tax dollars to bail out unworthy entities, and increased federal control over certain state-run programs like unemployment. While we have no first-hand knowledge of tax protesters joining the ranks at the tea parties, we have no doubts that this contingent will attempt to influence this movement as much as they can.

Our advice to the tea parties is to keep the tax protesters at arm’s length. They can be very convincing if you don’t have all the facts and they are capable of quickly dismantling the genuine spirit with which the tea parties have demonstrated. For those who have not dealt with tax protesters in the past, the most common argument they use is that the Sixteenth Amendment was not properly ratified, or that the state of Ohio was not actually an official state at the time of ratification. This argument is simply not true and has been repeatedly challenged and upheld in United States courts of law. At a time when Stuart Varney of Fox News (www.foxnews.com) is reporting a twenty-five percent collections shortfall at the IRS so far for the 2008 tax year, being affiliated with tax protesters might not be a great move. Also be aware that these protesters advance their agenda based in large part on paranoia. This may or may not be something tea party organizers can control, but they need to be aware that the tax protest crowd has a past and a reputation.

Tax Representation for Those In Need of It

We suspect that most of the people at these tea parties are law abiding people who are a bit upset about how much they are paying in taxes and about how that money is being spent. However, we’ve been in this business long enough to know that people can make innocent mistakes that get them into trouble with the IRS very quickly. One such mistake we are seeing more of is people taking money out of their retirement accounts before they are of retirement age. This can lead to significant tax debt if the financial institution doesn’t withhold the tax and early withdrawal penalties. For those who are having problems paying their taxes, we can help at Tax Masters. We offer comprehensive tax representation services, from audit representation to settling outstanding tax debt, to suspending levies, liens, and wage garnishment. If you are having trouble with the IRS, contact us today. We can help you solve your tax problem.

A Word to the Tax Protesters

Okay, here we go. I appreciate your frustration at paying taxes, but the law of the land demands that you file yearly tax returns and pay income tax to the United States government. Plainly stated, the IRS is a legal division of the United States Department of Treasury and has the constitutional duty to collect federal income tax from the citizens of the United States. The Sixteenth Amendment argument has survived all these years because proponents mistakenly believe that the courts have refused to address the issue.

Per information put out by the IRS itself (www.irs.gov), the courts have consistently upheld the constitutionality of the federal income tax. Just three years after the Sixteenth Amendment was ratified in 1913 by forty states (including Ohio), the Supreme Court upheld the constitutionality of the income tax laws that were based on the ratification of the Sixteenth Amendment in Brushaber v. Union Pacific R.R., 240 U.S. 1 (1916).

A surge of cases were brought in the 1980′s, all set on debunking the Sixteenth Amendment. In Knoblauch v. Commissioner, 749 F.2d 200, 201 (5th Cir. 1984) cert. denied, 474 U.S. 830 (1986), the court admonished the case as having no merit whatsoever and fined Knoblauch for bringing such a frivolous appeal before the court, stating that “Every court that has considered this argument has rejected it.”

In United States v. Stahl, 792 F.22d 1438, 1441 (9th Cir. 1986), cert. denied, 479 U.S. 1036 (1987), the court upheld Stahl’s conviction for not filing returns and for making a false statement. The court clearly declared that “the Secretary of State’s certification under authority of Congress that the Sixteenth Amendment has been ratified by the requisite number of states and has become part of the Constitution is conclusive upon the courts.”

In Miller v. United States, 868 F.2d 236, 241 (7th Cir. 1989) (per curiam), the court sanctioned the plaintiffs for having advanced a “patently frivolous” position. The court stated that “We find it hard to understand why the long and unbroken line of cases upholding the constitutionality of the Sixteenth Amendment… and those specifically rejecting the argument advanced in The Law That Never Was, have not persuaded Miller and his compatriots to seek a more effective forum for airing their attack on the federal income tax structure.”

The Tax Masters Conclusion

At Tax Masters, we believe it is our duty and privilege to pay our fair share of income tax to the government of the United States of America. Our role as a tax representative and tax resolution firm is based solely on our ability to help taxpayers regain compliance, settle outstanding tax debt, avoid unnecessary interest and penalties, and get back in the good graces of the IRS.

We stand ready to assist any US taxpayer who is in need of our services. To the tea party demonstrators and organizers, we stand behind your right to demonstrate, but we strongly encourage you not to use this movement as an excuse to avoid filing and paying your federal income tax. Running afoul of the IRS at a time of shortfall is tantamount to running headfirst into a brick wall. You’ll probably survive, but it sure is going to hurt.

Until you need us,

Patrick Cox Tax Masters