For years many of us in the war tax resistance network have been arguing with the IRS that no one should be charged with a frivolous penalty when they send a letter of protest against war spending with their accurate 1040 form, whether or not they are refusing some or all of the tax due.
Of the egregious cases, Steve Leeds’ story is right up there. He did not even owe taxes when he received a frivolous penalty warning letter after he filed for 2009 and included a letter of protest about taxes being used for war. He fought this threat and actually got an apology from the IRS. Another couple resisted for the first time by refusing to pay $50 of their tax due and enclosing a letter explaining their war tax protest. Threatened with a $5,000 penalty each, they paid the $50, but before long a bill for $10,000 landed on their doorstep anyway. They were also successful in fighting the penalty with the help of their Congressperson’s office.
The Good News
Today war tax resisters and protesters can celebrate a little free speech victory. We can now point to a memo issued on August 16, 2013, by the IRS Chief Counse, “Application of Section 6702 Penalty to Taxpayer Who Files a Return with War Complaint.” The simple conclusion of this 4-page memo aimed at IRS workers is,
“When the taxpayer timely files a correct and complete return, the section 6702 penalty should not be assessed based solely on the fact that the taxpayer enclosed a letter with the return explaining why the taxpayer is not paying the self-assessed tax due. If a penalty has been assessed, it should be abated.”
We hope this memo is getting around to all those IRS employees who open our envelopes and sort the contents, especially those employees at the “frivolous return” center in Utah. Now if war tax resisters and protesters receive a warning letter or penalty after sending in an accurate return with a letter enclosed, you can cite this memo and help educate the employees yourself.
If you believe that you were improperly assessed the penalty and either paid it or had the money seized by the IRS, send in a request for an abatement (Form 843) to the frivolous penalty program: Internal Revenue Service, Attn: FRP M/S 4450, 1973 N. Rulon White Blvd., Ogden, UT 84404. This worked for one resister recently.
Warning: This memo only applies to the letter enclosed with an accurate 1040 for those who file. The IRS has 40-some categories of frivolous arguments, and if any of these are reflected on the 1040 form the IRS can assess a $5,000 penalty. In general NWTRCC counselors suggest that individuals who file with the IRS do not make their protest on the tax form itself (or accept the risk of the $5,000 penalty). Fill the form out accurately but enclose a letter telling them why you are not sending the amount due—or register a protest in a letter with your form even if you are not resisting.
We are reminded of the protest that began after the IRS instituted this penalty ($500 at the time) in 1982. You can read an old article about “cabbage patch resistance” online.
Post by Ruth Benn