By Tara Warrington,
Legal Satyricon Correspondent
Every once in a while, you hear some yahoo claiming that the Federal Government doesn’t actually have the power to tax you. This post is designed to put that particular urban myth to rest.
First off, income taxes are constitutional. Article I, Section 8 of the United States Constitution contains an express provision granting Congress the power to “lay and collect taxes, duties, imposts, and excises” (U.S. Const. Art. I, Sec. 8, Cl. 1), and the power “to make all laws necessary and proper for carrying into execution” the laying of such taxes, duties, imposts and excises. U.S. Const. Art. I, Sec. 8, Cl. 18. Congress’s power to assess taxes is subject to the limitation that all “duties, imposts, and excises shall be uniform throughout the United States.” U.S. Const. Art. I, Sec. 8. Cl. 1. Article I, Section 9, clause 4 of the Constitution originally limited Congress’s power to lay and collect taxes to the extent that ‘capitation’ or direct taxes could only be imposed “in proportion to the census.” However, the Sixteenth Amendment (ratified in 1913) removed the proportional requirement for direct taxes on income: “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.” (From time to time arguments have been advanced that the Sixteenth Amendment was never properly ratified – see, Knoblauch v. Commissioner, 749 F.2d 200, 201-202 (5th Cir. 1984) – but these arguments have never been regarded as meritorious. See, id. Even if it could be successfully argued that the Sixteenth Amendment was not properly ratified and therefore inapplicable, I’d be prepared to argue that income taxes are not ‘direct’ taxes within the meaning of Article I, Section 9, therefore not subject to the proportionality requirement. Congress’s power to impose taxes on income would thereby only be limited by the uniformity requirement of Article I, Section 8.)
When Congress acts pursuant to its Constitutionally granted powers, and adheres to the procedural requirements for enacting laws, its actions are entitled to a presumption of constitutionality. See generally, United States v. Morrison, 529 U.S. 598, 607 (2000) (“we invalidate a congressional enactment only upon a plain showing that Congress has exceeded its constitutional bounds”). The portions of the Internal Revenue Code imposing income taxes have withstood numerous constitutional challenges. See generally, Brushaber v. Union P.R. Co., 240 U.S. 1, 17-18 (1916),Eisner v. Macomber, 252 U.S. 189, 207 (1920), and Commissioner v. Glenshaw Glass, 348 U.S. 426, 431 (1955). Of course, if it can be shown that Congress has exceeded the authority granted it under the Constitution, courts will invalidate a specific statutory provision. Courts will also review the application of statutory provisions to a specific set of facts. But a blanket claim that income taxes generally are unconstitutional will meet with swift rejection. See, e.g., United States v. Buckner, 830 F.2d 102, 103 (7th Cir. 1987), Cheek v. United States, 498 U.S. 192 (1991) (disapproving of Buckner on a procedural matter).
Second, not only will the IRS hit you with severe tax penalties for failing to pay your taxes when due, they can garnish your wages, seize your property, and will also likely refer your case to the Department of Justice for criminal action against you. Under 26 USC 6702, the IRS can assess a penalty for filing “frivolous” tax returns or other documents. Pursuant to its statutory power, the IRS maintains a list of “frivolous legal arguments” that will trigger application of this penalty provision. (Among those frivolous legal arguments, the IRS includes the claim that the Sixteenth Amendment was not properly ratified.) Also, the Department of Justice prosecutes “willful failure[s] to pay” taxes under 26 USC 7203. As the Supreme Court noted in Cheek v. United States, “Claims that some of the provisions of the tax code are unconstitutional…do not arise from innocent mistakes caused by the complexity of the Internal Revenue Code. Rather, they reveal full knowledge of the provisions at issue and a studied conclusion, however wrong, that those provisions are invalid and unenforceable.” 498 U.S. 192, 205 (Cheek’s consistent failure to pay taxes was thereby “willful” within the meaning of Section 7203, and thereby accepted the consequences – prison – if his position was challenged).
What if I disagree with how the federal government uses my hard earned tax dollars? Could I refuse to pay on those grounds? Again you could, but I wouldn’t recommend it. You will likely be subject to the same penalties and criminal sanctions. The Internal Revenue Code obligates each person who earns income in the United States to file a return computing taxable income for specified periods. Each person obligated to file a return is further obligated to pay any tax due. Internal Revenue Code Section 6151 provides: “[a] person required to make return shall, without assessment or notice and demand, pay such tax…” 26 USC 6151 (emphasis added). The position that you can ignore this duty on the ground that you object to the government’s use of funds is also among the IRS’s list of frivolous legal positions that will subject you to penalty.
So what can I do? Pay your taxes. If you have a legitimate dispute as to whether you owe such taxes (if you have claim that a particular code provision is unconstitutional, or you don’t want your tax dollars being spent on spa treatments), you can always request a refund. If your request is denied, you can sue for a refund in federal courts thereby obtaining a legitimate forum for your constitutional, or other legal, disputes. Are you likely to succeed? No. But at least you won’t end up a guest of the federal government.