Battling The Irs Tax Resisters Risk Criminal, Civil Penalties For Refusing To Pay Up

Waging peace with the Internal Revenue Service is a mostly losing battle.

Yet a few thousand war tax resisters, including some in the Inland Northwest, continue a fitful skirmish with IRS agents. Many file their returns, but enclose letters explaining their decision not to pay, or not to pay the share they think supports military spending.

Most know the agency will eventually get the sums due, but they will not surrender the money themselves.

Unlike constitutionalists and tax resisters at the other end of the political spectrum, they do not challenge the government’s right to impose the income tax.

June Petersen says her contacts with the IRS have been overwhelmingly cordial. But for several years in the late 1980s and early 1990s, the Pend Oreille County resident refused to pay taxes because she believed U.S. policies in places like Central America were wrong.

Once, the IRS responded by placing a lien on her mother’s home, even though Petersen had no title to the property.

Twice, the agency seized the taxes due, plus penalty and interest, from her bank accounts.

Petersen said she relented in 1993, based on her belief President Clinton would be less likely to get American troops involved in international crises.

Although somewhat disappointed with his record, she said she has remained current on her taxes.

But, the retired railroad agent said, the IRS continues to take what she thinks is exceptional interest in her returns, which typically involve taxes of only a few hundred dollars.

“I know they’re going to investigate me,” Petersen says. “I know they’re going to find something wrong.”

A second local resister who did not want his last name used said he has kept income from his family low just to avoid taxes.

Randy said that will not be possible for 1997 because of a substantial inheritance, but he intends to maintain his resistance, and do so publicly.

Compared with his low profile in recent years, he said, “It’s a little more scary.”

The IRS says it does not comment on individual cases. But spokeswoman Judy Monahan said the agency does not red-flag returns based on the filer’s past history.

“It would have to be something based on the return,” she said.

Monahan said a rumor - not true - has crept through Spokane this year that the IRS is scrutinizing certain types of returns.

There has always been tax resistance, she said, but media fascinatation with the topic has swelled since the Oklahoma City bombing.

The IRS had identified 2,331 people in Washington and 752 in Idaho as tax resisters in 1996, based on letters enclosed with returns or “frivolous alterations” to tax forms.

But the agency does not break down those numbers by reason, so there is no way of knowing if the objections are based on the defense spending cited by those on the political left of the spectrum or constitutional challenges raised by those on the right.

Either way, said Monahan, the total of 2.5 million returns that will be filed from Washington this year dwarf the handful that will be protested.

Karen Marysdaughter, coordinator of the National War Tax Resistance Coordinating Committee, estimates 10,000 withhold part or all of their taxes based on their opposition to military expenditures.

“I’m assuming we’re looking at the tip of the iceberg,” she adds.

Marysdaughter, of Monroe, Maine, said many who oppose war taxes simply keep their incomes below thresholds that would trigger payments.

Others own so little in the way of assets they become “uncollectible” accounts.

Marysdaughter said the coalition was created in 1982 in response to the Reagan defense buildup. A Vietnam-era predecessor had died in the 1970s.

The group has about 50 affiliates nationally that raise awareness of war tax resistance by demonstrating, distributing literature and counseling, Marysdaughter said.

A Seattle affiliate, the Nonviolent Action Community of Cascadia, also maintains a special fund where war tax resisters can deposit money they refuse to give the IRS.

Money in the account is returned to the resisters if necessary to satisfy a relentless IRS.

In some cases, said Coordinator Geov Parrish, the agency has never made an effort to seize the money of known resisters.

“The IRS computerization hasn’t been nearly as effective as they would have liked,” he said.

Parrish said the war tax resistance movement encourages followers to redirect defense taxes to peaceful uses within their communities.

“Our opposition isn’t to the tax system itself,” he said.

Since 1972, war tax resisters have introduced a bill in Congress that would allow objectors to pay their tax into a Peace Tax Fund that would support programs like the Peace Corps. Parrish concedes the bill has little chance of passage.

The Cascadia group will leaflet last-minute filers Tuesday, as will the Peace and Justice Action League in Spokane, which will be outside the Postal Service’s Trent Annex Tuesday night, said co-director Rusty Nelson.

The group will also conduct a “penny survey” at the downtown Post Office. Participants get 10 pennies to distribute among jars representing various types of expenditures.

Nelson said the “education” jar is usually the most popular, while defense garners about 10 percent of the total.

Nelson and Parrish said their current incomes are too low to reach tax thresholds, but they have resisted in the past and would again.

Marysdaughter said the national coalition figures defense costs eat up almost half the federal budget - if debt associated with past defense efforts is included, as well as defense-related expenditures by the departments of Veterans Affairs and Energy, and the National Aeronautics and Space Admnistration.

By contrast, the Clinton administration’s 1997 budget pegs direct millitary expenses at 15 percent of the federal total.

Coalition members believe withholding income taxes that support military spending is justified under international laws forbidding participation in crimes against humanity, Marysdaughter said.

The coalition also asks resisters to refuse to pay a 3 percent excise tax on phone bills that is a holdover from levies imposed during past wars.

Representatives of US West Communications and GTE said only a miniscule number of customers do so.

Randy said his tax resistance began with the anti-nuclear movement. Demonstrating against weapons of mass destruction while paying for their development made no sense, he said.

For Petersen, the moment of truth came when four American nuns were gunned down in El Salvador by gunmen linked to the U.S.-backed government.

“That was the catalyst as far as I was concerned,” recalled Petersen, who said she had reserved judgment on the Vietnam War.

Although she has always filed her returns, Petersen said she withheld all or part of the taxes due for the next several years.

“I believe in taxes,” she said. “I believe in taxes very much for parks and for people who need help.”

Petersen said the sums due as tax were instead deposited into the Seattle fund Parrish oversees.

When she filed her returns, she enclosed a note: “I cannot in good conscience give you the money but you know where it is, take it.”

When the agency moved to put a lien on her Seattle account, the fund shipped the money back. Petersen said agents finally took the funds, plus penalties and interest, out of her local bank account.

She said she has left a little money in the account, even though she has paid her taxes in full in recent years.

She still objects to certain aspects of U.S. policy, but voices her opposition in letters to her representatives, Petersen said.

“I think it’s our responsibility to object,” she said. , DataTimes ILLUSTRATION: Color Photo

MEMO: This sidebar appeared with the story: WHAT’S AT STAKE The Internal Revenue Service can impose numerous criminal and civil penalties on taxpayers who try to avoid their obligations, for whatever reasons. In most cases, returns, with payments must be postmarked by midnight Tuesday. Criminal charges can be brought for evasion, fraud, or willful failure to file a return, provide information, or pay any tax due. Civil penalties can be sought for some of the same actions, for failing to provide a Social Security number, filing late, negligence in complying with tax law, or filing a frivolous return. Some resisters from both the right and left ends of the political spectrum file frivolous returns, defined as those which do not provide enough information to figure the tax because of a desire to frustrate the administration of tax laws. The penalty is $500. But IRS spokeswoman Judy Monahan said properly filled out returns will probably avoid imposition of the fine, even if the filer refuses to pay all the tax due. Fees for filing late are determined by how much past the due date returns are filed and whether fraud is involved. With returns filed more than 60 days late, for example, the minimum penalty is the smaller of $100 or 100 percent of the unpaid tax. Failure-to-pay penalties start at 0.5 percent of the tax due for each month payment is overdue, unless an extension has been filed. The rate increases to 1 percent once a notice of intent to levy is issued. The maximum penalty is 25 percent. Bert Caldwell