CITES BY TOPIC:  nontaxpayer

Long v. Rasmussen, 281 F. 236 (1922)

"The revenue laws are a code or system in regulation of tax assessment and collection. They relate to taxpayers, and not to nontaxpayers. The latter are without their scope. No procedure is prescribed for nontaxpayers, and no attempt is made to annul any of their rights and remedies in due course of law. With them Congress does not assume to deal, and they are neither of the subject nor of the object of the revenue laws..."

[Long v. Rasmussen, 281 F. 236 (1922)]

Botta v. Scanlon, 288 F.2d. 504, 508 (1961)

"A reasonable construction of the taxing statutes does not include vesting any tax official with absolute power of assessment against individuals not specified in the states as a person liable for the tax without an opportunity for judicial review of this status before the appellation of 'taxpayer' is bestowed upon them and their property is seized..."

[Botta v. Scanlon, 288 F.2d. 504, 508 (1961)]

Economy Plumbing & Heating v. U.S., 470 F2d. 585 (1972)

“Revenue Laws relate to taxpayers [officers, employees, and elected officials of the Federal Government] and not to non-taxpayers [American Citizens/American Nationals not subject to the exclusive jurisdiction of the Federal Government].  The latter are without their scope.  No procedures are prescribed for non-taxpayers and no attempt is made to annul any of their Rights or Remedies in due course of law.  With them [non-taxpayers] Congress does not assume to deal and they are neither of the subject nor of the object of federal revenue laws.”

[Economy Plumbing & Heating v. U.S., 470 F2d. 585 (1972)]

PDF South Carolina v. Regan, 465 U.S. 367 (1984)

When enacted in 1867, the forerunner of the current Anti-Injunction Act provided that "no suit for the purpose of restraining the assessment or collection of tax shall be maintained in any court." Act of Mar. 2, 1867, 10, 14 Stat. 475. 10 Although the Act apparently has no recorded legislative history, Bob Jones University v. Simon, 416 U.S. 725, 736 (1974), the circumstances of its enactment strongly suggest that Congress intended the Act to bar a suit only in situations in which Congress had provided the aggrieved party with an alternative legal avenue by which to contest the legality of a particular tax.

The Act originated as an amendment to a statute that provided that

    "[n]o suit shall be maintained in any court for the recovery of any tax alleged to have been erroneously or illegally assessed or collected, until appeal shall have been duly made to the commissioner of internal revenue . . . and a decision of said commissioner shall be had thereon, unless such suit shall be brought within six months from the time of said decision . . . ." Internal Revenue Act of July 13, 1866, 19, 14 Stat. 152.
The Anti-Injunction Act amended this statute by adding the prohibition against injunctions. Act of Mar. 2, 1867, 10, 14 [465 U.S. 367, 374]   Stat. 475. The Act, therefore, prohibited injunctions in the context of a statutory scheme that provided an alternative remedy. As we explained in Snyder v. Marks, 109 U.S. 189, 193 (1883), "[t]he remedy of a suit to recover back the tax after it is paid is provided by statute, and a suit to restrain its collection is forbidden." This is cogent evidence that the 1867 amendment was merely intended to require taxpayers to litigate their claims in a designated proceeding.

The Secretary argues that, regardless of whether other remedies are available, a plaintiff may only sue to restrain the collection of taxes if it satisfies the narrow exception to the Act enunciated in Williams Packing, supra. Williams Packing did not, however, ever address, let alone decide, the question whether the Act applies when Congress has provided no alternative remedy. Indeed, as we shall see, a careful reading of Williams Packing and its progeny supports our conclusion that the Act was not intended to apply in the absence of such a remedy.

Williams Packing was a taxpayer's suit to enjoin the District Director of the Internal Revenue Service from collecting allegedly past-due social security and unemployment taxes. The Court concluded that the Anti-Injunction Act would not apply if the taxpayer (1) was certain to succeed on the merits, and (2) could demonstrate that collection would cause him irreparable harm. 370 U.S., at 6 -7. Finding that the first condition had not been met, the Court concluded that the Act barred the suit. Significantly, however, Congress had provided the plaintiff in Williams Packing with the alternative remedy of a suit for a refund. Id., at 7.

In each of this Court's subsequent cases that have applied the Williams Packing rule, the plaintiff had the option of paying the tax and bringing a suit for a refund. Moreover, these cases make clear that the Court in Williams Packing and its progeny did not intend to decide whether the Act would apply to an aggrieved party who could not bring a suit for a refund. [465 U.S. 367, 375]  

For example, in Bob Jones, supra, the taxpayer sought to prevent the Service from revoking its tax-exempt status under IRC 501(c)(3). Because the suit would have restrained the collection of income taxes from the taxpayer and its contributors, as well as the collection of federal social security and unemployment taxes from the taxpayer, the Court concluded that the suit was an action to restrain "the assessment or collection of any tax" within the meaning of the Anti-Injunction Act. 416 U.S., at 738 -739. Applying the Williams Packing test, the Court found that the Act barred the suit because the taxpayer failed to demonstrate that it was certain to succeed on the merits. 416 U.S., at 749 . In rejecting the taxpayer's challenge to the Act on due process grounds, however, the Court relied on the availability of a refund suit, noting that "our conclusion might well be different" if the aggrieved party had no access to judicial review. Id., at 746. Similarly, the Court left open the question whether the Due Process Clause would be satisfied if an organization had to rely on a "friendly donor" to obtain judicial review of the Service's revocation of its tax exemption. Id., at 747, n. 21. 11  

In addition, in Alexander v. "Americans United" Inc., 416 U.S. 752 (1974), decided the same day as Bob Jones, the Court considered a taxpayer's action to require the Service to reinstate its tax-exempt status. 12 The Court applied the Williams Packing test and held that the action was barred [465 U.S. 367, 376]   by the Act. Finally, in United States v. American Friends Service Committee, 419 U.S. 7 (1974) (per curiam), the taxpayers sought to enjoin the Government from requiring that a portion of their wages be withheld. The taxpayers argued that the withholding provisions violated their First Amendment right to bear witness to their religious beliefs. The Court again applied the Williams Packing rule and found that the suit was barred by the Anti-Injunction Act. In both of these cases, the taxpayers argued that the Williams Packing test was irrelevant and the Act inapplicable because they did not have adequate alternative remedies. In rejecting this argument, the Court expressly relied on the availability of refund suits. 416 U.S., at 761 ; 419 U.S., at 11 . This emphasis on alternative remedies would have been irrelevant had the Court meant to decide that the Act applied in the absence of such remedies. We therefore turn to that question.

The analysis in Williams Packing and its progeny of the purposes of the Act provides significant support for our holding today. Williams Packing expressly stated that the Act was intended to protect tax revenues from judicial interference "and to require that the legal right to the disputed sums be determined in a suit for refund." 370 U.S., at 7 (emphasis added). Similarly, the Court concluded that the Act was also designed as "protection of the collector from litigation pending a suit for refund," id., at 7-8 (emphasis added). The Court's concerns with protecting the expeditious collection of revenue and protecting the collector from litigation were expressed in the context of a procedure that afforded the taxpayer the remedy of a refund suit. 13  

Nor is our conclusion inconsistent with the 1966 amendment to the Anti-Injunction Act. In 1966, in 110(c) of the Federal Tax Lien Act, Pub. L. 89-719, 80 Stat. 1144, Congress amended the Anti-Injunction Act to read, in pertinent [465 U.S. 367, 377]   part, that "no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court by any person, whether or not such person is the person against whom such tax was assessed." Ibid. The central focus of the added phrase, "by any person, whether or not such person is the person against whom such tax was assessed," was on third parties whose property rights competed with federal tax liens. Bob Jones, 416 U.S., at 732 , n. 6. Prior to the adoption of the Tax Lien Act, such parties were often unable to protect their property interests. Ibid.; H. R. Rep. No. 1884, 89th Cong., 2d Sess., 27-28 (1966). 14 Section 110(a) of the Tax Lien Act gave such third parties a right of action against the United States. 15 The amendment to the Anti-Injunction Act was primarily designed to insure that the right of action granted by 110(a) of the Federal Tax Lien Act was exclusive. 416 U.S., at 732 , n. 6. The language added to the Anti-Injunction Act by the 1966 amendment is, therefore, largely irrelevant to the issue before us today. 16   [465 U.S. 367, 378]  

In sum, the Anti-Injunction Act's purpose and the circumstances of its enactment indicate that Congress did not intend the Act to apply to actions brought by aggrieved parties for whom it has not provided an alternative remedy [such as NONTAXPAYERS]. 17 In this [465 U.S. 367, 379]   case, if the plaintiff South Carolina issues bearer bonds, its bondholders will, by virtue of 103(j)(1), be liable for the tax on the interest earned on those bonds. South Carolina will [465 U.S. 367, 380]   incur no tax liability. Under these circumstances, the State will be unable to utilize any statutory procedure to contest the constitutionality of 103(j)(1). Accordingly, the Act cannot bar this action.
[South Carolina v. Regan, 465 U.S. 367 (1984)]

PDF Who are "taxpayers" and who needs a "Taxpayer Identification Number"?, Form #05.013 (OFFSITE LINK)

PDF Who are "taxpayers" and who needs a "Taxpayer Identification Number"?, Form #05.013 (OFFSITE LINK)

"Taxpayer" v. "Nontaxpayer": Which one are you?--excellent article

PDF Your Rights as a Taxpayer-IRS pamphlet (OFFSITE LINK)

26 U.S.C. 6651 Notes talks about a "nonfiler" also

PDF IRS Restructuring and Reform Act of 1998, Section 3707 uses the term "nonfiler"

IRM 4.19.17: Nonfiler Program

Young v. IRS, 596 F.Supp. 141 (N.D. Ind  09/25/1984)

1. Application of Tax Laws to the Plaintiff

Plaintiff asserts that the Internal Revenue Code does not apply to him [nontaxpayer]. The basis for this claim is not easily found in the complaint. According to "plaintiff's answer to the court in re of defendant's pleadings," "It is a Fact that the Internal Revenue Code is NOT Postive [sic] Law. That U.S.C. Title 26 has NEVER been passed by Congress." (Emphasis in original).

The only support that the court can find for this argument amongst plaintiff's numerous filings is a letter dated May 7, 1981 from the American Law Division of the Congressional Research Service (plaintiff's Exhibit 7). That letter does say that the Internal Revenue Code of 1954 "was not enacted by Congress as a title of the U.S. Code." But this does not in any way support plaintiff's argument that the Internal Revenue Code is not positive law. First, that very same letter, in the very same sentence, states that "the Internal Revenue Code of 1954 is positive law. . . ." Second, although Congress did not pass the Code as a title, it did enact the Internal Revenue Code as a separate Code, see Act of August 16, 1954, 68A Stat. 1, which was then denominated as Title 26 by the House Judiciary Committee pursuant to 1 U.S.C. 202(a). Finally, even if Title 26 was not itself enacted into positive law, that does not mean that the laws under that title are null and void. A law listed in the current edition of the United States Code is prima facie evidence of the law of the United States. See 1 U.S.C. 204(a). As the letter offered by the plaintiff points out, "The courts could require proof of the underlying statutes when a law is in a title of the code which has not been enacted into positive law." In short, this court has the discretion to recognize the Internal Revenue Code as the applicable law, or require proof of the underlying statute.

Consistent with that discretion, this court recognizes that the Internal Revenue Code is positive law applicable to disputes concerning whether taxes are owed by someone like the plaintiff. This court refuses to embrace the plaintiff's position that the tax laws of the United States are some kind of hoax designed by the IRS to violate the constitutional rights of United States citizens. Quite simply, the court finds plaintiff's position preposterous.

The plaintiff's argument that the tax laws do not apply or pertain to him thus cannot be based on a "positive law" argument. The only other basis for the argument that this court can perceive is the possibility that the IRS assessed taxes against the plaintiff which he was not required to pay. An examination of the documents in this case, however, reveals that the plaintiff cannot rely on this argument either. The notices of deficiency attached to plaintiff's complaint indicate that the kind of taxes assessed against the plaintiff are "1040", or income taxes for wages received. The Internal Revenue Code makes clear that wages are gross income for taxation purposes when it states: "gross income means all income from whatever source derived, including . . . compensation for services. . . ." 26 U.S.C. 61(a). In the clearest language possible, the Seventh Circuit has stated that "WAGES ARE INCOME." United States v. Koliboski, 732 F.2d 1328, 1329 n. 1 (7th Cir. 1984). Many other courts have reached the same conclusion. See, e.g., Granzow v. Commissioner, 739 F.2d 265 at 267 (7th Cir. 1984); Lively v. Commissioner, 705 F.2d 1017 (8th Cir. 1983); Knighten v. Commissioner, 702 F.2d 59, 60 (6th Cir.), cert. denied, ___ U.S. ___, 104 S.Ct. 249, 78 L.Ed.2d 237 (1983); United States v. Romero, 640 F.2d 1014, 1016 (9th Cir. 1981). It is thus clear that plaintiff should have been assessed the taxes sought from him.

The actions of the IRS in assessing civil penalties against the plaintiff were also proper. Section 6653(a) of the Internal Revenue Code provides for the imposition of an addition to tax where underpayment or non-payment of taxes is caused by "negligence or intentional disregard of rules or regulations." The plaintiff here has filed no tax returns for the years in question. Such actions could have been perceived by the IRS as intentional disregard of the tax laws, as courts have consistently held that "even good faith reliance on misguided constitutional beliefs does not relieve a taxpayer of liability for such civil penalties." Granzow, at 267 n. 3; Edwards v. Commissioner, 680 F.2d 1268, 1271 n. 2 (9th Cir. 1982). Although the court does not now rule that plaintiff in fact intentionally disregarded the rules, it does find that the IRS was not unjustified in assessing these penalties.

[Young v. IRS, 596 F.Supp. 141 (N.D. Ind  09/25/1984)]