Are Income Taxes Unconstitutional or Illegal?
In the United States, income tax is a legal tax that must be paid, assuming certain requirements are met. Learn about the history of the US income tax and the tax code.
Despite periodic challenges, the legality of the income tax code has been upheld in court time and time again. Yet many people still try to avoid paying taxes based on what the IRS calls "frivolous tax arguments." Many of these arguments are misinterpretations of existing law or the Constitution itself.
However, the IRS recognizes that taxpayers have rights regarding their tax situations. For details, review the IRS Taxpayer Bill of Rights.
Not sure if you need to file taxes? Use our free tool to find out; if you need to file income taxes each year; create a free eFile account and file them by the Tax Day deadline to claim your refund in the year it is due. Did you know the federal government claims your tax refund if you did not file within three years of the due date?
Top 5 Unsuccessful Arguments Against Income Taxes
Every year, many people try and fail to argue against paying taxes. The IRS releases an annual report of frivolous tax arguments, and here at eFile.com, we have compiled a list of the top 5 well-known arguments, all of which have been struck down in court.
"Taxation is taking property, so it violates the 5th Amendment."
Supporters of this claim assert that tax collection is taking of property without the due process of law and, therefore, unconstitutional. They cite the 5th Amendment of the Constitution, which states that no person shall be “deprived of life, liberty, or property, without due process of law."
Why it's frivolous: While the 5th Amendment to the Constitution does protect individual citizens against unlawful seizure of property, the Constitution itself grants the federal government the power to tax (learn more about the history of taxes, including taxation in the United States). Having an amendment to the Constitution prohibit taxation would create a contradiction; therefore, taxation of income is not considered a violation of the 5th Amendment.
The 1916 case Brushaber v. Union Pacific Railroad Co. upheld this interpretation. In addition, the United States Supreme Court upheld the constitutionality of the Internal Revenue Code in Phillips v. Commissioner in 1931.
"Filing an income tax return is voluntary."
Some people claim that filing an income tax is voluntary because, according to their interpretation, the IRS said so itself, relying on the fact that the Form 1040 instructions state that filling out the form is voluntary. In addition, the 1960 Supreme Court case Florida v. United States even stated that our “system of taxation is based upon voluntary assessment and payment, not upon distraint." Since then, multiple cases have been based on the voluntary argument for not filing and paying taxes, including United States v. Tedder in 1986 and United States v. Gerrads in 1994.
Why it’s frivolous: It is true that both Florida v. United States and the IRS instruction manual use the word “voluntary." However, this is used in reference to the ability of the taxpayer to calculate and file the appropriate returns instead of having the federal government determine the returns from the start. There is no mention of the filing of an income tax return itself being voluntary anywhere in the IRS Tax Code.
Learn more about the history of the IRS 1040 Form and see its evolution through time.
"Taxation is slavery, and thus a violation of the 13th Amendment."
As mentioned above, taxation is compulsory, not voluntary. Some claim that compulsory taxation is a form of slavery and thus illegal. They cite the 13th Amendment, which outlawed slavery in the United States.
Why it’s frivolous: The 13th Amendment protects all people in the United States from involuntary servitude or slavery unless it’s done as a punishment for a crime. However, the courts have repeatedly ruled that taxation does not qualify as involuntary servitude or slavery and, thus, is not banned by the 13th Amendment. Generating income as a citizen deems them reliable for paying taxes on said income as they voluntarily perform work or services for a paying entity.
"Federal Reserve notes are not income."
People advancing this argument claim that Federal Reserve notes (those green bills in our wallets) are not real forms of currency because they cannot be exchanged for gold or silver. They bring up Article I Section 10 of the Constitution, which grants the federal government the exclusive power to create and regulate money. More specifically, they claim that Section 10 limits all legal currency exclusively to gold and silver.
Why it’s frivolous: Article I Section 10 does grant exclusive power to Congress and the federal government to create and regulate money (including gold and silver). However, there is no explicit or implicit limitation on declaring another form of legal tender. Therefore, Federal Reserve notes are considered income because they are a form of legal tender. Numerous court cases have upheld this notion, including United States v. Riffen.
"The United States only consists of the District of Columbia and US territories."
Some contend that the United States only consists of the District of Columbia, federal territories like Guam, Puerto Rico, the Northern Mariana Islands, and various other islands in the Pacific Ocean and the Caribbean Sea. Federal enclaves like military bases and Native American reservations are also included. According to them, anyone outside of that territory is not a resident of the United States; instead, they are residents of the state they live in, which they claim is sovereign.
Why it’s frivolous: The United States consists of 50 states as well as District of Columbia, federal territories, and federal enclaves. When the Constitution was ratified in 1787, it unified the individual states under a strong federal government, reserving some powers for the states and leaving some for the federal government. In no way does it imply the sovereignty of any state. Several court cases, including United States v. Collins and Brushaber v. Union Pacific Railroad Co., upheld this. Both cases state that the 16th Amendment grants the federal government the power to levy tax anywhere under the federal umbrella, including the 50 states.
Have you never paid taxes because you believed in one of these arguments? Prepare and file your past tax returns or a current income tax return and pay any due tax as soon as possible. Sometimes, you can set up a same-day wire payment from your financial institution.
IRS Taxpayer Bill of Rights
Do you know that you have rights as a taxpayer? Whether or not you agree with the arguments above, the IRS gives you the following ten rights regarding your taxes:
- The Right to be Informed
- The Right to Quality Service
- The Right to Pay No More than the Correct Amount of Tax
- The Right to Challenge the IRS's Position and Be Heard
- The Right to Appeal an IRS Decision in an Independent Forum
- The Right to Finality
- The Right to Privacy
- The Right to Confidentially
- The Right to Retain Representation
- The Right to a Fair and Just Tax System.
For more information about your rights as a taxpayer, review IRS Publication 1, Your Rights as a Taxpayer.
Related Tax Links, Resources
TurboTax® is a registered trademark of Intuit, Inc.
H&R Block® is a registered trademark of HRB Innovations, Inc.