A Success Story: Combining War Tax Resistance Tactics

| IRS,Real Life Stories

I came across this story in the NWTRCC newsletter archives and was reminded of the conversations we had at the May 2015 conference in Milwaukee, where many of Anonymous’ war tax resistance tactics were discussed. I’ve added links to updated NWTRCC resources.

-Erica

from the February 1998 issue of More Than a Paycheck

A Success Story

by Anonymous

Filing tax returns may make it easier for the IRS to collect refused taxes. But it doesn’t make collection inevitable. For the last decade I’ve been filing legitimate 1040s each year, each with a letter explaining why I’m sending the amount on the “Amount You Owe” line to a peace and justice group instead of to the IRS. In ten years, the IRS hasn’t seized a penny. Recently about $8,000 passed the ten-year statute of limitations and became permanently uncollectable, so I’m claiming success!

The method works for me because my lifestyle makes me almost uncollectable. I don’t own much property (will the IRS come and tow my bicycle?). I don’t have or need a credit card. I live alone and like living simply.

But this isn’t a story of how the IRS ignored me because I had no money. Twice I’ve inherited a sum over $100,000. Divestment from the stock market created high capital gains taxes, and I couldn’t leave money in conventional investments or the IRS could have collected easily. But there’s a lot to be said for sudden wealth. In my case, being “rich” has made it, paradoxically, very easy not to pay for war. I can reduce my wages below the exempt amount on a wage levy. And my investments don’t need to be liquid or high-yield. For example, I’ve made zero-interest loans to community loan funds (Ed. Note: see Preparing for the Possibility of Collection in Practical WTR #3) that help create affordable housing. This way, no information goes to the IRS.

Recently I’ve set up a “gift annuity” retirement plan with a large, socially responsible organization that supports my war tax resistance. This is a terrific, little-known way to keep large sums safe from collection. The organization will accrue the money, giving neither me nor (we hope) the IRS any access to it, till I reach a certain age; then they’ll pay me an annuity till I die; anything left over is theirs to keep. I even get to claim a large charitable-gift tax deduction right away!

I’ve also given away a lot of the money outright to good causes – the ultimate way to prevent collection, if you can afford it. Now I get by, with my retirement secured, from paycheck to paycheck on the income that’s exempt from my latest wage levy. For a year or two in between inheritances, the IRS actually put me on “temporarily uncollectable” status and ignored me.

a mailbox stuffed full of envelopes from the IRSLately I’ve started my own computer consulting business on the side. If it takes off, the IRS should find my next 1040s interesting. It may seem silly, when I’m this uncollectable, to tempt fate by filing the forms each year. But I find it helps me witness to law-abiding citizens when I can say I’m cooperating with the IRS in every way that doesn’t violate my principles. More importantly, if I didn’t file and if the IRS did find my money, they could conceivably seize many times what I owed. (Ed. Note: Even those who file can accumulate large amounts of penalties and interest. Penalties for fraud are the ones that accumulate the fastest but if a non-filer is public about their position they can avoid fraud penalties.) Finally, since I’m not likely to face serious fraud or evasion charges when I’ve filed legally, I feel free to do whatever it takes to prevent collection – for example, switching temporary bank accounts to change investments without a paper trail.

Over the years the IRS has tried hard to collect my taxes. They’ve sent levies to quite a few places where I no longer had money – bank accounts and other conventional investments and even a trust fund. They’ve never levied any of my alternative investments. I’ve gotten plenty of Notices of Intent to Levy, public liens on my assets (my credit rating must be a disaster!), a succession of wage levies, lots of phone calls from agents, and an occasional request to call an agent or come in for a visit. I’ve politely cooperated with everything except paying or helping the IRS collect. The agents have ranged from mildly threatening to openly supportive of my position, once I explain it. During the last few months before the statute of limitations expired on the $8,000, I kept expecting the IRS to stop being so polite and do something serious to collect. Nothing happened.

Well, maybe I’ve just been lucky all these years. But my sense is that filing 1040s and not paying can be a workable strategy even for someone who’s determined to keep large sums permanently out of the war chests.

One thought on “A Success Story: Combining War Tax Resistance Tactics”

  1. Ruth says:

    Nice story — but I would like to comment that twice the IRS has levied my investments in a community development finance institution, the same kind of “alternative investment” the writer speaks of. Not sure why they didn’t touch his/hers. Elizabeth

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