Tax Protestors Still Fight Legal War Lost in 1909

For nearly 100 years, arguments challenging the legality of income taxes have been irrelevant.

By David Semanchik, Esq.

Katina Kefalos, a 49-year-old from Columbus, Ohio sold real estate.

Richard D. Cooper, a 70-year-old from Littlefield, Ariz., owned a Laundromat and several rental properties in Provo, Utah.

What do these two have in common?  They both face several years in federal prison and a six-figure fine for tax evasion.

These two people are among a small but persistent group of Americans who do not pay income taxes because they believe our income tax laws are unconstitutional.  But in fact, Kefalos and Cooper fight a battle that was lost in 1909.

From junk e-mail and fliers to the small classified ads in the back of magazines, you’ve heard the sayings: “You are not legally bound to pay income taxes.  Learn how the government is breaching your constitutional rights.”

They’re tax protestors, these men and women who wave the flag and cite Thomas Jefferson as they refuse to file an income tax return.

For a short time, one group of tax protestors, the infamous Montana Freemen, received national exposure for their anti-government beliefs.

While what the Freemen and other tax protestors believe has some grounding in historical fact, their arguments overlook nearly 100 years of decisions that have upheld the federal government’s right to levy income taxes.

Tax protestors cite an 1895 Supreme Court decision that ruled the revived income tax, levied to pay for a growing country’s bureaucratic demands, was unconstitutional – not because it taxes U.S. citizens, but because it did not divide the taxes among the states based on their populations, as required by the U.S. Constitution.

So, indeed, in 1895, tax protestors would have been right to argue that federal income taxes are in fact unconstitutional.  But today’s protestors, and the people who sell kits and seminars on how to avoid paying income taxes, ignore what happened in 1909.

In an effort to relieve a cash-strapped government, President William Howard Taft recommended that Congress create an income tax based on taxpayers’ “ability to pay.”

As a result, Congress passed the 16^th Amendment, which was approved by a necessary three-fourths of the states in the union.  The amendment states: “The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.”

Since congressional passage of the 16^th Amendment arguments against the constitutionality of federal income taxes have been irrelevant at best.  The U.S. government has as much a constitutional right to levy income taxes as women have to vote (19^th Amendment, 1920).

While no one enjoys paying taxes, the U.S. government has a constitutional right to levy them.  Remember that next time you hear the anti-tax pitch.

David Semanchik is a member of the American Society of IRS Problem Solvers and a New Jersey Attorney.  You can contact him at 732 240 4055 to obtain a free subscription to his newsletter titled The IRS Times & Inquirer.