|
We The People Foundation For
Constitutional Education, Inc.
2458 Ridge Road, Queensbury, NY 12804
Phone: (518) 656-3578 Fax: (518) 656-9724
www.givemeliberty.org
info@givemeliberty.org
January 30, 2005
Contact: Bob Schulz
For Immediate Release
(518) 656-3578
U.S. Court of Appeals Rules IRS Cannot Apply Force
Against a Tax Payer Without A Court Order
Taxpayers Free To Ignore An IRS Summons
Queensbury, NY – On January 25, 2005, the U.S. Court of Appeals for the
Second Circuit held that taxpayers cannot be compelled by the IRS to turn
over personal and private property to the IRS, absent a federal court order.
Quoting from the decision (Schulz v. IRS, case number 04-0196-cv),
“...absent an effort to seek enforcement through a federal court, IRS
summonses apply no force to taxpayers, and no consequence whatever can
befall a taxpayer who refuses, ignores, or otherwise does not comply with an
IRS summons until that summons is backed by a federal court order…[a
taxpayer] cannot be held in contempt, arrested, detained, or otherwise
punished for refusing to comply with the original IRS summons, no matter the
taxpayer's reasons, or lack of reasons for so refusing.”
Without declaring those provisions of the Code
unconstitutional on their face, the court, in effect, nullified key
enforcement provisions of the Internal Revenue Code, stripping the IRS of
much of its power to compel compliance with its administrative demands for
personal and private property. The court characterized IRS summonses issued
under Section 7602 as mere “requests.”
The court went on to say that the federal courts are there to protect
taxpayers from an “overreaching” IRS, and that the IRS must go through the
federal courts before force can be applied on anyone by the IRS to turn over
personal and private property to the IRS.
In addition, the Court held, in effect, that
the enforcement language of Section 7604 of the Internal Revenue Code is
unconstitutional. In plain language, Section 7604 directs federal
District Court judges to issue orders, merely upon a request by the IRS, for
the immediate arrest and incarceration of a tax payer “for contempt” for not
complying with the demands of an IRS administrative summons/request.
Prior to the 2nd Circuit’s recent landmark decision, the common
practice of compliant federal judges was to issue such orders, often without
an evidentiary hearing or allowing the taxpayer, in an Article III Federal
Court, to challenge IRS claims before being subjected to formal enforcement
proceedings (liens, levies, wage garnishments, searches, property seizures,
etc.). The result has been widespread and egregious abuse of its lawful
authority by the IRS, and substantial injury to millions of tax payers.
- more -
“Does the Court’s decision mean that companies do not have to turn over a
worker’s paycheck to the IRS simply because the IRS demanded it, and banks
do not have to turn over to the IRS the contents of someone’s bank account
merely because the IRS requested it?,” asked Bob Schulz, the plaintiff in
the case, and the Chairman of the We The People Foundation for
Constitutional Education, Inc.
Schulz asked, “Does this mean that at least in
the 2nd Circuit, no individual, no third party (such as an
employer or a bank) need worry about being threatened and intimidated by the
IRS for refusing to comply with an IRS demand for personal and private
property? Isn’t the 2nd Circuit Court of Appeals stating, in
clear language, that without an Article III Federal Court order, the IRS
cannot apply force against a tax payer?
“We would agree, the use of force by the IRS
against the person or property of any tax payer without an evidentiary
hearing and formal order issued by an Article III Federal Court, is a direct
violation of the Privacy and Due Process clauses of the United States
Constitution. It appears that the IRS has now been put on notice – they are
not above the law.”
In 2003, Schulz, was served several IRS
summonses ordering him to produce his books and records. Schulz, as
plaintiff, immediately challenged the IRS in District Court on
constitutional grounds, claiming that the summonses were issued without any
bona fide authority in law and with the sole, deliberate intent to
harass and intimidate as a result of the Foundation's high-profile activism
questioning the lawful authority of the IRS to impose a direct,
un-apportioned tax on labor.
Despite the clear language of an IRS summons which states, “You are
hereby summoned and required...” and the threatening language of the
federal tax statute at 26 USC 7604 (which governs enforcement of IRS
summons), the 2nd Circuit Court of Appeals has effectively ruled
that the language of the Internal Revenue Code, and the administrative and
enforcement practices of the IRS and DOJ, must comply with the strict Due
Process requirements of the United States Constitution, and that the IRS
will not be allowed to continue its practice of serving summonses upon
average tax payers with the intent of intimidating them into compliance.
Naturally, this Appellate decision directly
leads to further questions regarding IRS's other day-to-day administrative
practices where substantial constitutional “injuries” are, in fact,
inflicted routinely upon citizens and businesses in the form of liens,
levies, salary garnishments, property seizures, etc. -- all of which are
administrative, agency actions taken without any judicial review or court
order.
The 2nd Circuit’s decision also
carries profound implications regarding the Foundation’s historic
Right-to-Petition Lawsuit now underway in the D.C. Federal District. (We
The People, et al v. The United States, et al., Civ. No.
04-0211)
The IRS and DOJ, as defendants in the RTP lawsuit, have recently filed
motions asserting that the government has “no obligation” to “listen to” or
“respond to” the People’s First Amendment Petitions regarding the unlawful
administrative and enforcement practices and the systemic abuse of power by
the IRS and DOJ.
(more)
The 2nd Circuit’s recent decision could potentially have a
powerful positive effect on the RTP lawsuit, and the People’s historic
struggle to hold the IRS and our government leaders at every level,
accountable to the law.
The Court’s decision in the Schulz case is an
historic and courageous first step in restoring constitutional order to the
administration and enforcement of our nation’s tax laws, and effectively
puts the IRS and DOJ on notice that violations of tax payer’s Due Process
rights will no longer be tolerated.
To read the Second Circuit’s decision, go to
www.GiveMeLiberty.org/rtplawsuit/courtfilings/2ndCirc-Decision-Jan-05.pdf
To learn about the Right-to-Petition lawsuit and read the RTP legal
research, go to:
www.GiveMeLiberty.org/rtplawsuit/InfoCenter.htm
The Foundation’s website is :
www.GiveMeLiberty.org
-- 30 --
|
