Bob Schulz's We the People group may be tilting at windmills, but its efforts reflect a re-energized tax protest movement.
Today's right-wing tax protest movement is normally far from the minds of most taxpayers. Yet the movement's size and growing visibility were made stunningly clear to federal officials and 2 million other Americans when they opened the Feb. 16, 2001, edition of USA Today.
Inside was an expensive, full-page advertisement from the We The People Foundation For Constitutional Education (WTP), a tax-exempt organization run from Queensbury, N.Y., by a man named Robert Schulz.
The ad named three former IRS agents who claimed that most Americans owe no income tax and that the 16th Amendment, which authorizes the U.S. government to levy income taxes, is fraudulent and invalid.
Over the next few weeks, USA Today published two more WTP ads, one featuring business owners who had stopped withholding taxes altogether from the wages they paid. Among other things, the ads argued that only employees of foreign-based companies owed income taxes.
Now, after a much ballyhooed, 20-day hunger strike by Schulz over the summer, the Department of Justice has agreed to send a representative to meet with Schulz and his allies in the "tax honesty" movement. Though a September meeting was postponed indefinitely after the terrorist attacks in New York and Washington, WTP has met with surprising success in making its unorthodox message heard.
"Our effort is called 'Project Toto,'" one of Schulz's USA Today ads explained. "Just as the little dog in 'The Wizard of Oz' pulls the curtain back and exposes the truth about the Wizard, our series is intended to ... reveal [that] ... the tax system is founded upon fraud and operates as a giant hoax."
'The Greatest Hoax Ever'
WTP's various arguments have been rejected repeatedly by the courts. But the fact that the organization was able to raise at least $250,000 to pay for a total of four USA Today ads (one in 2000 and three in 2001) is one indication of what seems to be a resurgence of tax protest — a movement that was eclipsed during the 1990s by the appearance of right-wing militias.
Other signs include the scores of Web sites that offer dubious tax advice and arguments purporting to prove that federal taxes needn't be paid. Former militia members organize tax "research" seminars in states from New Hampshire to California. Bestselling books explain how not to pay any taxes.
Most visible of all has been Schulz's We The People. In an interview with the Intelligence Report, Schulz claimed that WTP has donors and volunteers "from every state in the country."
WTP began as an outgrowth of Schulz's earlier activism in conservative legal causes. For two decades after founding the All-County Taxpayer's Association in 1979, Schulz brought dozens of pro se lawsuits against the state of New York for supposed constitutional violations.
In 1997, just as the militia movement was beginning a steep decline, Schulz founded WTP to conduct "a statewide educational effort" about the New York State Constitution. But within two years, Schulz had discovered federal tax protest "research." From that point forward, WTP focused almost exclusively on the issue of taxation.
In the last year, WTP has picked up steam. In a February meeting in Arlington, Va., WTP was able to bring together almost 400 people from across the spectrum of the tax protest movement, including militia members, far-right attorneys, tax-evading business owners, former IRS agents and extremist authors.
According to The New York Times, Schulz denounced the tax laws at his meeting as "the greatest hoax ever perpetrated by a government on its people."
The subsequent USA Today ads, funded by participants at that meeting, caused considerable consternation in Congress. In April, the Senate Finance Committee held a hearing called "Taxpayer Beware: Schemes, Scams and Frauds," in order to question IRS Commissioner Charles Rossotti on increasingly open, explicit disregard of the tax laws by numerous citizens in the aftermath of 1998 legislation weakening IRS enforcement.
With the USA Today ads posted as exhibits behind him, the commissioner conceded that tax fraud was "absolutely a big problem" and that "we need to be more aggressive."
In short order, USA Today refused to run further WTP ads. "They told us," Schulz says now, "that we were encouraging people to break the law."
Starved for Attention
Within a few days of the hearing, hundreds of protesters gathered outside IRS headquarters in Washington, D.C. Alleging that there is no legal requirement to pay taxes, they chanted, "Show us the law!"
And promises made by Rossotti and the IRS to crack down on tax protesters did not discourage WTP either. In June, two months after the Senate hearings, the dauntless Schulz announced he would fast until the government answered all his questions about the tax code.
Perhaps surprisingly, he received little initial encouragement from other tax protesters. "The overwhelming number of people I heard from said, 'Don't do it, they'll let you die, we need you alive.' They didn't understand," Schulz says.
But with U.S. Reps. Roscoe Bartlett (R — Md.) and Ron Paul (R — Texas) (see also The Mouse That Roared) supporting his request for a hearing with tax officials, Schulz went ahead.
He says he did not eat for almost three weeks, losing 22 pounds over the first 20 days of July and even scoring a Day 12 appearance on Fox News' highly conservative "Hannity & Colmes" show. He finally relented, he says, when the Department of Justice agreed to a September meeting.
Whether the government saw the meeting as a chance to record complaints or merely to pacify an annoying gadfly, Schulz anticipated a full-press interrogation of "top tax and legal experts," and he implied that even IRS Commissioner Rossotti might attend.
As a result, Schulz organized an August convention of 42 tax "researchers" in Las Vegas to talk strategy on outsmarting the IRS. He also didn't pass up the chance to make some money from his role in what he pictured as the coming historic confrontation.
On his Web site (www.GiveMeLiberty.org), Schulz pre-sold videos and WebCast Internet broadcasts of the upcoming meeting. Schulz's most expensive "Patriot Package," offered to the public for $30, includes a specially "numbered 'Freedom Certificate' personally signed by Bob Schulz.'"
Now, with Schulz's meeting indefinitely postponed, it's unclear where the next hot spot in the tax protest movement will erupt. Certainly, Schulz's efforts — and his tireless self-promotion — seem to have put him at the center of the action, at least for the moment.
But whether or not the focus remains on Schulz and We The People, one thing seems certain: Tax authorities, who literally have spent decades trying to beat back the tax protest movement, have a long way to go.