Re: Fifth Amendment vs. Tax Returns

The Baileys (nanotech@cwix.com)
Sun, 09 May 1999 18:06:02 -0400

Freespeak wrote:

> At a meeting held in Tulsa the evening of Tuesday, May 4,
> Springer distributed a short paragraph people should provide
> to anyone asking them to file State or Federal income tax
> returns, the paragraph supposedly constructed by an attorney
> in the Department of Justice.

The problem with this strategy is that it reinforces a right everyone already has. No one is compelled to file their tax return or sign it. Everyone is "free" to not comply with the Internal Revenue Code. However, the IRS and the Department of Treasury are empowered to invoke the provisions of the IRC (including 'late filing' penalties, 'lack of filing' penalties, 'nonpayment' penalties, and interest on all of these penalties and on taxes owed). Additionally, the law allows the IRS to place and enforce liens against your property in order to collect taxes. While this strategy might get you out of contempt charges, it won't stop the IRS from liquidating your assets. Just because you aren't required attest to whether or not you broke the law or to supply evidence that might incriminate you, that does not eliminate the judicial remedies available to governmental agencies or insulate you from them.

The IRS can determine your tax liability without your help. If they are so inclined, they can fund a fairly invasive investigation. If you work they have 1099s to track your income. If you are self-employed, your customers must also supply 1099s for payments over certain amounts. If you aren't employed there is no tax liability to avoid in the first place. If you're not employed but have tons of bank accounts and securities that pay you dividends and interest, the IRS receives 1099s for these amounts also.

The most cogent cases I've seen are the ones that attack the government's authority to assess tax in the first place. However, the Supreme Court has discarded this argument in various vicissitudes several times. The argument is so inadequate now that it is the grounds for frivolous claims charges.

Finally, this DOJ employee, as well as yourself, should be careful spreading this "strategy" about since to the extent someone relies on this strategy, there could be vicarious liability issues for yourself and the DOJ employee.

Doug Bailey
doug.bailey@ey.com
nanotech@cwix.com