Tax Q&A: I heard there isn’t actually a law that says we have to pay taxes. Is this true?

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Tax Q&A: I heard there isn’t actually a law that says we have to pay taxes. Is this true?

Is it true that there’s no law saying I have to pay income taxes? This is a common question on tax forums and discussion boards. Many websites and publications argue that paying taxes is illegal, immoral, unconstitutional, dishonest — basically every synonym for evil except “fattening”. The famous tax protestor Irwin Schiff calls income taxes “The Biggest Con.” The rise of popular libertarian candidates like Ron Paul has caused many people to scrutinize the Constitution and reconsider current tax rates.

So what’s the big deal? Is it true that we don’t owe taxes? Can we do anything about it?

There are several common conversational gambits among tax protestors, but the most common is: “What law, specifically, requires us to pay income taxes?” That’s as good an introduction as any to the subject. So we can deal with it quickly: the law is Title 26 of the United States code, Subtitle A, Chapter 1, Subchapter A, part I. It starts with “There is hereby imposed on the taxable income … a tax determined in accordance with the following table.”

The Code goes into an excruciating amount of detail about what is taxable, what is not, who must pay, what doesn’t count, etc. etc. etc. Many tax protestors will read this over and argue that even though it says what the taxes are, how they’re calculated, and the like, it never actually says you have to pay them.

But just try that argument with something outside the tax code. If you’re given a fifteen-page description of the duties of a professional mold removing gell salesman, and are offered and accept the salary of a mold removing gell salesman, but then argue that all these duties never specified that you had to perform them (but you’ll cash the checks, thank-you-very-much) you wouldn’t get too far.

Tax protestors are like the mythical mold removing gell salesman. Even if the tax code is not written so that, for every possible reading, the intended payers are the actual payers, the courts have ruled that, essentially, the document means what its writers meant it to, and grammar be damned you have to pay what the code says you owe.

Some people still refuse to pay. Often, they end up in court. Sometimes, they even win their cases. The problem is this: even if some people win their cases, the average result is that a tax protestor ends up paying the taxes owed. Plus fines. Plus, his lawyers will have some extra income from defending him, and they’ll pay taxes on that.

In other words, it’s not practically effective. But let’s suspend our disbelief for a bit, and ask what would happen if people started winning these cases — if the jury agreed that the government had accidentally omitted a crucial clause from a critical sentence, and nobody legally owed income taxes. What would happen is that Congress would hastily meet, add back the offending clause, and be done with it. After all, they passed the Sixteenth Amendment specifically to authorize income taxes. If they hadn’t meant to make income taxes the law, they wouldn’t have rewritten the constitution.

If Congress acts like paying taxes is the law, and taxpayers act like it’s the law, and only a few law-parsers say otherwise — the law will change, not the country. If you want to pay lower taxes, there are three things you can do that will get you good results: you can structure your spending and saving to take advantage of tax breaks; you can get involved in politics and try to make the government more responsible and less spendthrift; or you can make less money. If none of that sounds appetizing, you may just have to move.

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19 Responses to “Tax Q&A: I heard there isn’t actually a law that says we have to pay taxes. Is this true?”

  1. Mike Harmon Says:

    Nice writing style. I look forward to reading more in the future.

  2. Martin Says:

    So “taxable income” is taxable at X, Y or Z percent. That still does not clarify what constitutes taxable income. When I trade my time, which has a value, for money, this is not income, it is an even trade. This is in my opinion the interesting argument as to why most Americans might not owe taxes – since they have no taxable income to be taxed.

    Pointing to a circular law which says “taxable income must be taxed” is hardly persuasive in this light.

  3. Tax Rascal Says:

    That’s a fair point! However, there are two things to consider:

    1) If your time is an asset, which you’re selling, then you ought to owe capital gains taxes on it for the tax code to be consistent.

    2) Even if it’s irrational, my point is that if the law, as it’s written, isn’t enforceable, then the law will be rewritten so it is enforceable. The government runs as if taxing income is the right thing to do, and if the phrasing of the law makes that a problem, the phrasing will change before the government shrinks.

  4. steveldm Says:

    paying taxes is totally voluntary

  5. Tax Rascal Says:

    Even if it is, you have to convince a jury of that. And even if you do, Congress will just turn around and make it involuntary like they meant to.

    Your best-case scenario here is that you have a lot of inconvenience and worry and legal fees in order to not pay taxes for one year. Your worst-case is that you pay the fees, pay the taxes, pay fines, pay interest — and end up in jail.

    Sounds like a bad deal, even if you turn out to be right.

  6. Ku Says:

    It basically boils down to this: The complacent, dumbed down average American has not the fortitude to stand up for “it’s” rights. “It”, the complacent, dumbed down average American, has lost sight of what “it” is and what “it’s” government is supposed to be. Income taxes ARE UNCONSTITUTIONAL. If EVERYONE had the sense and the fortitude enough to come together and stand against the tyranny and corruption, we wouldn’t have to waste time talking about such trivial things.
    TAX HOLIDAY 2009: FREEDOM TO FASCISM

  7. Co Says:

    Ku is right. It’s starts with the individual. We could put an end to it if everyone believed that they, as one, an individual could do something. We need to band together. The individual can make a difference and Americans need to start believing in that. Don’t wait for the masses to do it. You are the masses and your oneself can make a difference.

  8. keshav Says:

    y we have to profassionl tax wen wer not getaning PF & ESI

  9. Ben Matthews Says:

    REMEMBER GORDON KAHL! In the 80′s in ND, Mr. Kahl refused to pay taxes. He was a simple farmer. He went to jail, then when released, spoke out. FACT: The govt sent feds to kill him. He prevailed in the gun fight, but was later found and executed. Too bad more people didn’t stand with him. Same a Carl Drega, look him up.

  10. Donald Says:

    Yes but the Supreme Court in 1916 ruled it unconstitutional to tax peoples incomes. This has never been revised. Even though Congress passed a law saying we had to pay taxes it is still unconstituional and every court case brough should be won. The government can pass any law they want but once its been considered unconstiutional it should be done away with, but this one wasn’t. I however do agree that people should pay them to enjoy the freedoms that we do.

  11. JJ Says:

    Donald is correct up until his final statement. The taxes you pay have NOTHING to do with the freedoms you enjoy. THUS, the reason our forefathers labeled the act “unconstitutional”. Check your facts, we are no longer on the gold standard. The gov runs on (unnecessarily) BORROWED money from the fed res. Your tax dollars do nothing more than pay the interest on that money. Politicians USED to campaign about “getting out of debt”, NOW the issue has become “REDUCING our DEBT”. In conclusion, the SADDEST FACT of this matter is…TOO MANY ppl have resolved themselves to the fate that the gov would just “change the law”. Which is a self-imposed declaration that “WE the people” is no longer our attitude, and that we have willfully given over our right to choose to our gov. ;O(

  12. Robin Weegar Says:

    Thx for information.

  13. Joe Says:

    I understand, but isn’t the code or statues unconsitituitional and in
    violation of the consitution? and the language manipulated to make
    other believe it is constitutional to collect taxes?

    for example…

    § 1463. Tax paid by recipient of income

    If—
    (1) any person, in violation of the provisions of this chapter, fails
    to deduct and withhold any tax under this chapter, and
    (2) thereafter the tax against which such tax may be credited is paid,

    the tax so required to be deducted and withheld shall not be collected
    from such person; but this section shall in no case relieve such
    person from liability for interest or any penalties or additions to
    the tax otherwise applicable in respect of such failure to deduct and
    withhold.

    This code section says that it is the Withholding Agents who are
    responsible for and must pay the penalties, interest, and additions to
    tax that are due on the income tax that was not properly withheld,
    reported, and paid into the Treasury. It is not the actual foreign
    taxpayer who is penalized by any of these penalties or additions by
    this statute, it is the tax collector, or Withholding Agent, who is
    penalized. Again, this keeps the tax and its enforcement under the
    statutes, indirect. If the actual taxpayers were made subject to
    interest, penalties and additions to tax that would be
    unconstitutionally direct taxation without apportionment and would
    also be a violation of the Constitution.

    The analogy one can very quickly and easily make is that of a sales
    tax collected by the stores in the fifty states. The sales tax is an
    indirect tax that is not imposed on any person, per se, but on certain
    transactions. When it is imposed on a transaction it is collected by
    a third party, the tax collector, the store. It is not collected by
    the government itself from the taxpayer. The government deals only
    with the tax collector, not the taxpayer.

    And, it is the store, the tax collector, that is made liable for the
    payment of the tax to the Treasury, not the customers, the actual
    taxpayers. Finally, if the tax collector (the store) fails the duty
    to collect the sales tax as required, it is again the tax collector
    (that store), and not the taxpayer, that is punished for that failure
    and made liable for penalties, fines, and additions to tax thereby
    incurred. The collection of the federal income tax is obviously
    properly effected under the true provisions of the Subtitle A statutes
    in exactly the same indirect manner with the “Withholding Agent” being
    cast in the role of the “store”, as the tax collector.

    It is clear that under the true provisions of the statutes of
    Subtitle A, the income tax is a tax that is collected indirectly at
    the source by withholding. Under the provision of the statutes, it is
    the tax collector in the form of the Withholding Agent who is made
    liable for the payment of the tax. Having withheld the money as tax
    from payments made to other persons, the tax collector is made liable
    by statute for the payment of the tax so that he is legally obligated
    to make payment of the withheld collected funds over to the U.S.
    Treasury. Again, in the provisions of the statues under § 1463, it is
    the tax collector who is punished for a failure to pay, not the
    taxpayer, and these facts again work to keep the whole scheme of the
    income tax legislation, together with all of the provisions for the
    collection and enforcement of the income tax, indirect and
    constitutional;

    The primary and general rule of statutory construction is that the
    intent of the lawmaker is to be found in the language that he has
    used. He is presumed to know the meaning of the words and the rules of
    grammar. U.S. v Goldenberg, et a!., 16S U.S. 95, 102 (l897).

    With that being said as regards to one’s self: A citizen of the state
    of «State» and of the United States of America. Therefore, is not a
    non-resident alien or foreign corporation who is subject to the
    withholding of income tax, or who is subject to the payment of the
    indirect income tax enacted under the provisions of the “tariff act of
    Oct. 3, 1913”. Further, wouldn’t that not make them neither a
    “Withholding Agent” nor an “employer” who has withheld any income tax
    from any subject “persons”, and because they are neither an
    “employer”, “Withholding Agent” or alien “person”, Are they then not
    made liable for income tax by any statute? Nor have earned they
    earned money in the territories or possessions where the federal
    government may tax outside the limits of the Constitution, or in any
    foreign country under a tax treaty that would make their foreign
    earnings taxable to the federal government outside of its territorial
    jurisdictions, and since they conduct no activity involving the sale
    or commercial transportation of alcohol, tobacco, or firearms products
    or materials, the same applies?

  14. Joe2 Says:

    That’s a good argument Joe. It leads me to the question “Is the citizen legally obligated to the tax collector or withholding agent?” I need to do some more research on the Supreme Court’s decision regarding the unconstitutionality of the income tax; but it seems to me that there would be no way it could remain a constitutional amendment if it were illegal. If Congress were given the power, and they developed the IRS as a result, then it follows the 16th amendment. Lots of questions pop up when you really start thinking about it.

  15. ALVIS JENKINS Says:

    Outside of the Internal Revenue Code are the “Regulations” which give the statutes their authority. Please note this about the so-called IRS notice of federal tax lien and the notice of intent to levy. Both of these statutes in Title 26 get their authority from Title 27 Code of Federal Regulations Part 70, section 141 and 161 respectively. Title 27 is ATF taxes, not income taxes. There are no controlling legislative regulations for subtitle A taxes (taxes on income) of Title 26.
    Subtitle A of Title 26 has no provision within any of the 1,563 code sections making anyone liable for the income tax.
    Researching the law for yourself can only bring the relief of knowing whether you are liable for the payment of income taxes. You can be sure of this fact, that you commit perjury when filing a W-4 or 1040 form if you are not engaged in a trade or business with the United States. Never take your case to federal court unless it is a Article III court, because here in this court, your constitutional rights are preserved. Learn the law and end paying a tax you have never owed.

  16. Josh Howlett Says:

    First off, congress cannot simply “Get together” and come up with a new tax amendment. They must run it off with every state and get a substancial 3/4 agreement consent. The 16th amendment was never ratified. Secretary of State Philander Knox commited fraud when he spoke to america claiming that 38 of the 50 states agreed on the amendment. This is contriversal because 2 of the 38 were mislead to believing the documents stating what the amendment would do, were slightly re-worded so that they would give their consent, but when Kentucky and Oklahoma found this out, they wanted to take back their agreement to the 16th amendment. Now it is still ratified with a substantial 36/36 required states, however, because the United States Congress did not pass an official proclamation recognizing the date of Ohio’s 1803 admission to statehood until 1953 Ohio was not a state until 1953 and therefore the Sixteenth Amendment was not properly ratified with only 35 out of a needed 36 votes.

  17. Tom Says:

    So, we’re still screwed, until AT LEAST 100,000,000 people decide to not pay / file taxes.

  18. Ray Says:

    Did someone say that Title 26 doesn’t clarify what taxable income is?

    I’m pretty sure this makes it crystal clear. http://www.law.cornell.edu/uscode/text/26/63

    I mean we have USC Title 26, We have the 16th amendmen… what more do tax protesters need?

    They deny the legitimacy of the ratification of the amendment but I bet if I researched their claims I’d find those to be false as well.

    Quit bitching, and pay. If you don’t want to pay then get involved in politics.

  19. Tax Rascal Says:

    The people on this website are idiots.

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