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The "Tax Honesty" folks, also known as tax protestors, have chosen an unenviable lot. They continue to argue against the very existence of the tax law in the face abundant contrary evidence from judges, juries, federal marshals and prison wardens.
Their thirst for scraps of evidence to support their worldview enables them to find hope in the oddest places -- including court decisions that they lose.
Robert Schulz is affiliated with "We The People," a "Tax Honesty" group. The IRS servied him with summons seeking documentation. Schulz hied to a New York District Court to quash the summonses. The Court turned him down, saying that he had to wait until the IRS went to court to enforce the summons. He appealed, and the Second Circuit turned him down again.
Mr. Schulz, in the face of serial courtroom defeats, declared victory:
The court has expressly recognized that the IRS, as has been asserted in the right-to-petition lawsuit, routinely violates people's due process rights in their day-to-day administrative practices.
Well, no. The judge just said that Mr. Schulz had no grounds to fight the summons in court until the IRS tries to enforce it in court. As the decision says:
The IRS has not initiated any enforcement procedure against Schulz and, therefore, what amount to requests do not threaten any injury to Schulz. Of course, if the IRS should, at a later time, seek to enforce these summonses, then the procedures set forth in § 7604(b) will afford Schulz ample opportunity to seek protection from the federal courts.
Mr. Schulz's spin was picked up and distributed by the World Net Daily internet news service; Schulz trumpeted his defeat as a victory in a quixotic and doomed anti-tax class action lawsuit that tax protestors always seem to be pursuing.
In the immortal words of Monty Python's Black Knight, 'tis just a flesh wound!
In real life, the IRS will eventually get around to enforcing the summons in court. It's safe to predict that he will lose and again declare victory.
Link to case: Robert L. Schulz v. IRS, CA-2 (1-25-05) (Note: link seems to be working erratically).
(Hat Tip: Taxguru.net)
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The items included in the Tax Update Blog are informational only and are not meant as tax advice. Consult with your tax advisor to determine how any item applies to your situation.
Joe Kristan writes the Tax Update items, and any opinions expressed or implied are not necessarily shared by anyone else at Roth & Company, P.C. Address questions or comments on Tax Updates to