How the IRS Infringes Upon Civil Liberties

August 23, 2005  ·  Filed under: Education

The current consumption tax proposal on the table and what this site is dedicated in tracking, The FairTax (H.R. 25), is about much more than simply creating a fair and equitable way for the government to raise the revenues that it needs for the various programs and services that cost us all dearly as a nation of tax payers. It’s about giving us back our constitutional rights and protections. It’s about restoring the “Live Free or Die” or “Give me liberty or give me death” spirit of the original Americans. It’s about giving our government a collective shout that enough is enough — give us back our freedoms, our country.

You may not realize (if you have read The FairTax Book, then you have begun to) just how much constitutional protections and rights we have given up with allowing the government to tax us the way they currently do. There is an excellent list in an article from the CATO Institute highlighting some of these infringements. Here are few that really shocked me as I read them tonight:

7. Shifting of the Burden of Proof. For non-criminal tax cases — the vast majority of cases — the tax code reverses the centuries-old common law principle that the burden of proof rests with the accuser. Except in some narrow circumstances, the IRS does not have to prove the correctness of its determinations. When the IRS makes erroneous assessments, as it often does, citizens carry the burden to prove that they are wrong. Efforts to shift the burden of proof to the IRS in the 1998 IRS Restructuring and Reform Act did not accomplish that goal. In addition, the new rules do not apply to the 97 percent of IRS actions that are deemed administrative in nature.[15]

8. No Trial by Jury in Tax Court. Despite Sixth and Seventh Amendment guarantees of trial by jury, the federal tax system carefully sidesteps such protections. To contest an IRS tax calculation prior to assessment, one must file a petition in the U.S. Tax Court. But since this is an administrative court, not an Article III court, no jury trial is required. To obtain a jury trial and related rights for civil tax cases, one must file suit in a U.S. District Court. But before that can happen, the alleged tax, penalties, and interest must be paid in full. And if the citizen wins, there is a burdensome route to retrieving the disputed money. For most people, those rules effectively eliminate the right to trial by jury in tax cases.

9. Unreasonable Searches and Seizures. In most situations, the Fourth Amendment guarantees that, before the government can search private property and seize records, it must demonstrate to a court that there is “probable cause” to believe that lawless conduct exists. However, the IRS’s summons authority under tax code section 7602 allows it to obtain records of every description from any person without showing probable cause and without a court order. There has also been an explosion in information reporting required by the IRS and a big expansion in its computer searching for personal records. Recently, the IRS won the power to access financial data on Visa cards issued by foreign banks. Many examples of abusive IRS searches and seizures were revealed in U.S. Senate hearings in 1997.[16]

10. Forced Self-Incrimination. The requirement to file tax returns sworn to under penalty of perjury operates to invalidate the Fifth Amendment protection against self-incrimination. Citizens face a legal dilemma. On the one hand, refusing to file a return would expose a citizen to prosecution for failure to file. On the other hand, disclosing information sought in tax returns constitutes a waiver of Fifth Amendment protections. The IRS can and does release that information to federal, state, and local agencies for both tax and non-tax law enforcement purposes.

There are a number of articles and studies at the CATO Institute dealing with the idea of the consumption tax in lieu of taxing income that I plan on decomposing in future posts here on this blog in the upcoming weeks. They will focus more on the economics behind the idea of taxing consumption rather than specific details of the specific details of The FairTax Act. Stay tuned.

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