The Federal District Court for the District of Idaho has made it known that it will not gladly suffer “tax defiers.” In United States v. Howe, 2020 WL 565217 (Idaho Federal District Court), the United States Department of Justice filed suit against a taxpayer to reduce to judgment $350,000 in federal income tax debt and to foreclose on taxpayer’s real property. Taxpayer filed a motion to dismiss the lawsuit on grounds that the IRS systematically falsifies tax records, for unclean hands by the IRS, and other arguments challenging the IRS and Court’s authority to enforce the federal income tax laws. Later, when the Federal Magistrate ruled against him, the taxpayer filed a notice of intent to sue the judge for $350,000 plus various declaratory and injunctive relief.
The District Court denied the taxpayer’s motion to dismiss and further instructed the taxpayer, and all “tax defiers”, the folly of relying on tax protest arguments to try to defeat tax collection.
The District Court clearly and specifically ruled that tax defiers would not find a sympathetic ear in the Idaho Federal District Court:
Howe is, in essence, a tax defier—he believes taxes are unjust and that the federal government cannot force him to pay taxes. While Howe is entitled to his opinion, he is not entitled to disobey the law. As Judge Dale correctly noted, Courts have rejected these arguments for decades. Id. at 9. Whether Howe agrees or not, the law is clear. The Government can require taxes of its citizens and can enforce those laws in federal court when individuals refuse to pay. The Court has now explained on multiple occasions that the Idaho Federal District Court is the proper forum for the Government to bring its case in an effort to collect the roughly $350,000 in tax liabilities Howe owes the Government. The Court has jurisdiction over this claim and will not address this argument further.[1]
In addressing the threatened lawsuit against the federal magistrate, the court noted that judges are generally immune from civil damages along with declaratory and injunctive relief.
Finally, the Court affirmed the law abiding work of the IRS and held the taxpayer responsible for lawlessness in the tax realm. The Court ruled:
Finally, Howe comments that the attorneys for the Government “make[ ] a mockery of justice and the Rule of Law” and “destroy[ ] … the separation of powers” in this case. Dkt. 58, at 8. The subject matter of this case, however, illustrates that it is Howe, and not the federal government, who has made a mockery of the legal system. Howe owes the IRS hundreds of thousands of dollars in taxes. Every citizen in the United States is subject to its tax laws and Howe is no exception. Howe’s disagreements with these laws is, again, his prerogative. But ignoring the law is not. If he wishes the law changed, he can speak to his elected representatives or become engaged in the political process himself; he cannot simply disregard the law. Doing so is the mockery of the Rule of Law and justice system.[2]
Tax defiers typically do not fare well in federal courts, and definitely not in Idaho federal courts. I try to protect clients by steering well clear of tax protest arguments and instead focus of specific statutes and rules of procedure that govern taxation. The taxing authorities often err enough in applying the law that there is no need to turn to long rejected tax defier arguments. By asserting “tax defier” arguments, the taxpayer risks being found to having “made a mockery of the legal system” and cannot expect much success with the court.
Jared M. Le Fevre is a tax attorney and partner in the Tax, Trusts and Estates Practice Group of Crowley Fleck PLLP. Mr. Le Fevre represents taxpayers before the IRS, IRS Independent Office of Appeals, Tax Court, Federal District Court and state tax agencies throughout Montana, Wyoming, North Dakota, Idaho, and Utah. Mr. Le Fevre is involved in federal and state and local tax audits, appeals, and tax resolution throughout these western states. Mr. Le Fevre also advises clients on the tax effects of business and real estate transactions.
[1] Unites States v. Howe, No. 2:19-CV-00421-DCN, 2020 WL 5652178, at *2 (D. Idaho Sept. 23, 2020)
[2] Id. at *4.