IRS

The IRS Tries to Squirm Out of the Law

Forget tax rebels. Now it's the tax collectors getting creative with the rules.

In "'It's So Simple, It's Ridiculous'" (May 2004), I explored the exotic world of tax rebels-Americans who believe citizens have no legal obligation to pay income tax. They describe themselves not as mere "tax protestors" but as a "tax honesty" movement, since they believe honesty about the income tax means admitting that none of us legally owe it.

The movement's prospects looked bleak. "A sober assessment of the empirical evidence," I wrote, shows "that victories for the tax honesty movement (the occasional criminal acquittal or mistrial) lead inevitably to a later defeat (further convictions or civil seizures)."

While tax protestors fare no better nowadays, it's the tax collectors who are today making headlines by quibbling about how to interpret various tax laws. Congress has been investigating reports that the Internal Revenue Service (IRS) may have aimed unusually abusive information requests, denials of status, and bureaucratic foot-dragging at nonprofit groups with a conservative bent.

In May, former IRS official Lois Lerner, who had been in charge of the efforts directed at such groups, pled the Fifth Amendment before Congress. She now insists that all possibly incriminating emails regarding abuse of power aimed at the administration's ideological enemies were lost when her hard drive crashed and was subsequently destroyed. The agency also claims to have lost records for six other employees, including another senior official whose hard drive suffered a conveniently timed crash. Like a tax honesty advocate who argues that he has no taxable income in a technical sense, the IRS is now making difficult-to-believe claims to avoid providing evidence that might prove them liable for having violated the law.

In 2004, I wrote: "Never has any court anywhere—much less the IRS—accepted as valid any of the many arguments the movement offers for how and why there is no legal obligation for individuals to pay federal income tax. In fact, courts will fine you up to $25,000 for even raising them, insisting such arguments have been rejected so often by so many courts at so many levels that they are patently frivolous and time-wasting."

The IRS, however, has an advantage tax rebels do not: No matter how absurd their excuses may be for failing to obey the law, the legal powers that be continue to take them seriously.