Tax protesters in the United States advance a number of administrative arguments asserting that the assessment and collection of the federal income tax violates regulations enacted by responsible agencies –primarily the Internal Revenue Service (IRS)– tasked with carrying out the statutes enacted by the United States Congress and signed into law by the President. Such arguments generally include claims that the administrative agency fails to create a duty to pay taxes, or that its operation conflicts with some other law, or that the agency is not authorized by statute to assess or collect income taxes, to seize assets to satisfy tax claims, or to penalize persons who fail to file a return or pay the tax.
Administrative arguments are distinct from constitutional, statutory, and general conspiracy arguments. Unlike other theories put forward by tax protesters, administrative arguments accept that Congress has the authority to enact income taxes and has in fact done so, but that the authorities charged with collecting the taxes (principally the Internal Revenue Service and its employees) do this in a manner that is in violation of US administrative law.
Arguments about tax administration and process
Some arguments relate to the regulatory process, the authority of IRS employees to assert penalties, the IRS authority to seize assets, or the validity of IRS tax forms.
Arguments about lack of regulations
Some tax protesters have tried to argue that because the Department of the Treasury has promulgated official regulations for some but not all Internal Revenue Code provisions, there can be no obligation to file income tax returns or pay taxes. The courts have uniformly rejected this argument, ruling that duties imposed by statute cannot be avoided merely because the IRS or some other agency has not promulgated a regulation under that statute, and that the mere fact that a statute specifies that an agency is authorized to promulgate a regulation does not necessarily mean that the agency is required to do so.
For court decisions on the "lack of regulations" arguments, see Carpa v. Smith;98-2 U.S. Tax Cas. (CCH) paragr. 50,627 (D. Ariz. 1998). United States v. Langert;902 F. Supp. 999, 95-2 U.S. Tax Cas. (CCH) paragr. 50,504 (D. Minn. 1995). Russell v. United States;95-1 U.S. Tax Cas. (CCH) paragr. 50,029 (W.D. Mich. 1994). United States v. Washington;947 F. Supp. 87, 97-1 U.S. Tax Cas. (CCH) paragr. 50,129 (S.D.N.Y. 1996). United States v. Hicks.947 F.2d 1356, 91-2 U.S. Tax Cas. (CCH) paragr. 50,549 (9th Cir. 1991).
Arguments about authority of IRS employees to collect penalties
Some tax protesters argue that even if the Internal Revenue Code provides for penalties, IRS employees do not have the authority to assert penalties—basing the argument on Internal Revenue Code section 6020(b)(1) which states:
Authority of Secretary to execute return. If any person fails to make any return required by any internal revenue law or regulation made thereunder at the time prescribed therefor, or makes, willfully or otherwise, a false or fraudulent return, the Secretary shall make such return from his own knowledge and from such information as he can obtain through testimony or otherwise.
Some protesters contend that this provision shows that IRS agents have no authority to impose penalties unless they have a delegation from the Secretary of the Treasury.
Tax protesters sometimes assert that court decisions that IRS agents have delegated powers from the Secretary of the Treasury constitute a blatant disregard for the law, which tax protesters cite as proof that the finding of the court is somehow opposite of what the law says. At any rate, under , , and and the Treasury regulation at 26 C.F.R. section 301.6020-1(a)(1), IRS agents do indeed have the delegated power to prepare section 6020(b) returns (see Craig v. Lowe96-2 U.S. Tax Cas. (CCH) paragr. 50,416 (N.D. Calif. 1996), aff'd on other grounds, 97-1 U.S. Tax Cas. (CCH) paragr. 50,316 (9th Cir. 1997).). See also Delegation Order 5-2, which specifically delegates this authority to Internal Revenue Agents, to Tax Auditors, to Revenue Officers of grade GS-9 and above, and to various other IRS personnel.Delegation Order 5-2, formerly known as "Delegation Order 182 (Rev. 7)", 5 May 1997, updated Sept. 19, 2012, Internal Revenue Manual, IRM 1.2.44.3, Internal Revenue Service, U.S. Dep't of the Treasury at . See also IRM 5.1.11.6.3.1, paragraph 2 (15 Jan. 2010), which authorizes the Automated Substitute for Return (ASFR) unit of the IRS to prepare income tax returns for individuals who fail to file their own tax returns after having been notified. In Craig, the taxpayer argued that only the Secretary of the Treasury himself or herself was authorized under section 6020 to prepare returns for taxpayers despite the plain language of section 6020 which uses the word "Secretary" (without the phrase "of the Treasury"). Under section 7701(a)(11)(B), where used in the Internal Revenue Code without the phrase "of the Treasury," the term "Secretary" means the "Secretary of the Treasury or his delegate" (Italics added). The phrase "or his delegate" is defined in part as "any officer, employee, or agency of the Treasury Department duly authorized ... to perform the function mentioned or described ...".See . The Court rejected the taxpayer's argument, and ruled that an IRS Revenue Agent "plainly falls" within the cited Treasury regulation.
Another group of protesters claims the existing law demands income tax only from federal employees and residents of US territories. Their argument does not rely on nonpassage of the 16th Amendment, but does suggest it. They have asked the IRS and other authorities to cite the laws requiring others to pay income tax. This group claims never to have received an answer.
Arguments about authority of IRS employees to seize assets
Some tax protesters argue that the Internal Revenue Service has no authority to seize assets to satisfy tax claims. For example, tax protester Irwin Schiff's web site, in reference to the 2005 Federal trial resulting in his most recent conviction and imprisonment on tax charges, includes the statement: "... the Government’s prosecutors and Judge Dawson interceded in order to prevent me from proving that all IRS seizures are illegal, and not provided for by law."
In United States v. Rodgers, the United States Supreme Court stated:
Administrative levy, unlike an ordinary lawsuit, and unlike the procedure described in §7403, does not require any judicial intervention, and it is up to the taxpayer, if he so chooses, to go to court if he claims that the assessed amount was not legally owing.United States v. Rodgers, 461 U.S. 677, 103 S. Ct. 2132, 83-1 U.S. Tax Cas. (CCH) paragr. 9374 (1983) (dicta).
Similarly, in United States v. Baggot, the Supreme Court stated:
The IRS need never go into court to assess and collect the amount owed; it is empowered to collect the tax by nonjudicial means (such as levy on property or salary, 26 U. S. C. §§ 6331, 6332), without having to prove to a court the validity of the underlying tax liability.United States v. Baggot, 463 U.S. 476 (1983) (dicta) (parenthetical text in original).
After the decisions in Rodgers and Baggot, Congress provided for limited exceptions to the general rule that court approval is not required for a levy by the Internal Revenue Service. For example, an IRS levy on a principal residence must be approved in writing by a federal district court judge or magistrate.See Internal Revenue Code sections 6334(a)(13)(B) and 6334(e)(1). Section 6334 also provides that certain assets are not subject to an IRS levy, such as certain wearing apparel, fuel, furniture and household effects, certain books and tools of trade of the taxpayer's profession, undelivered mail, the portion of salary, wages, etc., needed to support minor children, and certain other assets.
The statute authorizing the Internal Revenue Service to seize assets without going to court is .For exceptions to this rule, see . For more background, see the United States Supreme Court decisions in United States v. National Bank of Commerce, 472 U.S. 713 (1985), at and G.M. Leasing Corp. v. United States, 429 U.S. 338 (1977), at . In the case of Brian v. Gugin, a group of taxpayers (including a Mr. Ralph Brian) sued a group of IRS and other government employees, (including Ms. Phylis Gugin), for what the taxpayers claimed was a violation of their rights. The following is an excerpt from the court’s decision in the case:
The plaintiffs' premise for their complaint is that the IRS agents were required to have a court order in order to be able to legally seize property for delinquent taxes. Unfortunately, this is a faulty premise. Title 26 U.S.C. §6331 authorizes the IRS to seize property of any person liable for any tax upon ten days notice. The plaintiffs are incorrect in stating that §§6331 and 6321 only apply to the Bureau of Alcohol, Tobacco and Firearms. The statute specifically states that any person may have their property levied upon. 26 U.S.C. §§6331(a) and 6321. The plaintiffs also cite 26 U.S.C. §7402 which grants jurisdiction to the district courts to issue orders, processes and judgments as well as enforce IRS summons. This section does not require a court order in order to levy on property under §6331.
A "levy" by definition is a summary non-judicial process which provides the IRS with prompt and convenient method for satisfying delinquent tax claims. ... [T]he IRS has the option under §6502 to collect its assessment by either a levy or a court proceeding ...
Accordingly, the IRS agents were acting within the authority granted under §6331 and no court order was required for the attempted levy on Ralph Brian's property. Concerning the constitutional violations alleged by the plaintiffs, this court cannot find that any constitutional rights were allegedly violated if the attempted seizure was lawful under §6331.
It is important to note that the plaintiff Ralph Brian is not without a course of action under the Internal Revenue Code. If the delinquent taxes claimed are not delinquent, the taxpayer may bring an action with the IRS for a refund.Brian v. Gugin, 853 F. Supp. 358, 94-1 U.S. Tax Cas. (CCH) paragr. 50,278 (D. Idaho 1994), aff’d, 95-1 U.S. Tax Cas. (CCH) paragr. 50,067 (9th Cir. 1995) (italics in original). See also Hughes v. Chevron Phillips Chemical Co., Memorandum Opinion and Order Granting Defendants' Summary Judgment Motion, case no. 2:10-cv-00210, U.S. District Court for the Northern District of Texas, Amarillo Div. (July 12, 2011) (argument that an employer complying with an IRS administrative levy of a worker's wages must have "a court order, levy, or a warrant of distraint signed by a judge of a court of competent jurisdiction" was ruled to be without merit).