Court to Taxpayers: Go Ahead, Ignore the IRS

Interesting development in the world of tax rebellion, starring Bob Schulz of the We The People Foundation, prominently discussed in my May 2004 Reason feature story on the "tax honesty" movement–those people and organizations who argue for a dizzying variety of reasons that the income tax is not legally binding.

Schulz is in the midst of legally challenging IRS summonses on him; the U.S. Court of Appeals for the Second Circuit rules against Schulz, on the interesting grounds that he had no real cause of action regarding these IRS summonses because, in the language of its Jan. 25 decision, "absent an effort to seek enforcement through a federal court, IRS summonses apply no force to taxpayers, and no consequence whatever can befall a taxpayer who refuses, ignores, or otherwise does not comply with an IRS summons until that summons is backed by a federal court order." Although a technical defeat for Schulz, he was delighted to have that notion on the record.

The Justice Department, understandably, was less delighted and has filed a motion to amend that decision. From that motion: "This will undoubtedly result in taxpayers asserting that they are simply free to ignore IRS summonses and are under no obligation to comply with them. The fair and effective administration and enforcement of our tax laws may thereby be significantly impaired." The motion goes on to cite the Supreme Court's 1964 Reisman v. Caplin and the Second Circuit's 1958 U.S. v. Becker decisions as precedents that indeed we have to ask how high when the IRS says jump.