After four decades of organizing by right-wing tax protesters, U.S. officials have largely stopped enforcing laws against their illegal schemes.
Nearly 40 years before We the People placed full-page ads in USA Today urging would-be taxpayers to safeguard their constitutional rights by refusing to file income tax returns, a building contractor from Wichita, Kansas, named Arthur Julius Porth scribbled "I plead the Fifth Amendment to the Constitution of the United States" across his Form 1040 and sent it to the IRS.
Opposition to the federal income tax predates Porth's 1961 rebellion, but his one-man act of defiance inspired a legion of activists, helped spark a national "Tax Strike" movement in the two decades that followed and laid the groundwork for today's generation of militant tax protesters.
Although the government finally cracked down on tax protesters in the early 1980s, imposing new penalties and launching prosecutions that sharply curtailed the growth of the movement Porth and others had created, that did not last.
In 1998, after holding one-sided hearings into alleged IRS abuses, Congress reversed course, passing legislation that has drastically weakened IRS enforcement, cost as much as $300 billion in lost tax revenues, and helped to unleash a new wave of tax rebellion.
Today, the number of those who simply refuse to file has skyrocketed, and federal tax and Treasury Department officials have shown a remarkable reluctance to act decisively.
In just six years, a taxpayer's chance of being audited has fallen from one in 67 to less than one in 200, with the IRS' budget slashed by more than a quarter since the 1980s. Property seizures to recoup back taxes have virtually ended.
And, as The New York Times reported last April, the IRS, struggling to stay within its meager budget, effectively wrote off $2.5 billion owed by 668,018 taxpayers.
"I am worried," said Sen. Charles Grassley (R-Iowa), who then headed the Senate Finance Committee, "that the IRS is a dog that doesn't have a bark."
How did we get here? How is it that the poor in America now have a substantially higher likelihood than the rich of having their tax returns audited? How can increasing numbers of businesses and individuals simply refuse to file without much fear of prison or fines?
Although right-wing tax protesters cannot claim all the credit for this "victory," they are certainly reaping the benefits.
As the story of the tax protest movement and its founding patriarchs reveals, some of the central ideas espoused by the anti-Semitic Posse Comitatus and other tax-protesting "Christian Patriots" — including many in the militias — have now penetrated far into the mainstream. As we look at the situation today, it is important to understand how we got here.
Back to the Beginning
Like present-day tax resisters, A.J. Porth gave plenty of reasons for breaking the law, including the notion that the 16th Amendment was unconstitutional and "put Americans into economic bondage to the international bankers" — a thinly veiled anti-Semitic reference to the supposed "international Jewish banking conspiracy."
In addition to citing Bible verses to justify his actions, Porth argued that because paper money was not backed by gold or silver, taxpayers weren't obligated to pay their taxes because "Federal Reserve Notes are not dollars."
Reasoning like this led to Porth's 1967 conviction for violating federal tax laws, and he was sentenced to five years in prison.
But his crusade actually dates back to 1952, when he sued the government on the grounds that being forced to withhold money from his employees' paychecks was equivalent to slavery and therefore unconstitutional. His lawsuit was dismissed and in 1957 he was ordered to pay $4,000.
To many observers, Porth's ideas may have seemed like fringe material, but hatred of the 16th Amendment and the IRS has never been limited to the political margins. In 1952, Ralph Gwinn, a Republican congressman from New York, introduced the so-called "Liberty Amendment," which proposed to repeal the income tax. By 1964, seven states had endorsed the proposal before it died.
Leaders such as J. Bracken Lee, the governor of Utah, also called for repeal of the 16th Amendment, saying taxes were unconstitutional because they paid for foreign aid, which supported America's enemies. Lee made this and other anti-tax arguments throughout his 20-year political career; first as governor, from 1949 to 1957, and then as mayor of Salt Lake City, from 1960 to 1972.
A Newspaper Applauds an Emerging Movement
Porth may have been tilting at windmills, but his earnest zeal won him the endorsement of the Wichita Evening Eagle and Beacon, which editorialized that he had a "unique rationale" for his actions and deserved the "good wishes" of all its readers.
"If the Internal Revenue Service disagreed with the figures on his tax return, it could use them in a criminal case against him," the paper declared. "So Porth plans to fill in his name and address, leave the rest of the return blank, and stand on the Fifth Amendment guarantee against self-incrimination."
Porth's so-called "Fifth Amendment Return" became wildly popular among tax protesters, even though federal courts categorically rejected the scheme. He wrote a handbook, lectured widely and won further fame for his commitment to confrontation.
Long before the so-called "common-law courts" of the 1990s handed down their edicts threatening government officials, Porth drafted homespun "arrest warrants" to be used against bureaucrats who allegedly violated the Constitution. But it was his 1967 conviction and subsequent prison sentence that made Porth's battle with the IRS a cause célèbre on the radical right.
Among those who campaigned for Porth's freedom was William Potter Gale, who would become the founder of the Posse Comitatus in 1971. Gale used the newsletter of his California-based Ministry of Christ Church — a church espousing the racist and anti-Semitic theology of Christian Identity — to promote Porth and the early tax rebellion movement.
After exhausting his appeals, Porth finally went to jail late in 1970, but he was released on probation 77 days later.
Behind the Curtain: Racism and Anti-Semitism Porth's actions excited and energized many on the radical right. Among those he inspired was Jerome Daly, a tax-protesting attorney from Minnesota who became Porth's lawyer and whose activism eventually led to his disbarment.
The two men met in 1965, the same year Daly filed his first protest return and just days before Porth was indicted by a federal grand jury. Like Porth, Daly was convicted of violating federal tax laws, and in 1969 the Eighth Circuit Court of Appeals issued a landmark decision invalidating what by then had become known as the "Porth-Daly Fifth Amendment Return."
By the summer of 1972, what had become known as the "Great Tax Strike" movement had grown enough to warrant a cover story and half of the 70 pages in the summer issue of the far-right American Mercury magazine.
Attacks on the income tax were often couched in vague antigovernment, pro-Constitution rhetoric, but anti-Semitism always played a large role in the conspiracy theories and arguments that reinforced the anti-tax message.
And sometimes that message was explicitly racist: "The Negroes in the United States are increasing at a rate at least twice as great as the rest of the population," warned the American Mercury in 1967, asserting that the tax burden posed by blacks "unquestionably doomed ... the American way of life."
The author of the article was Martin A. Larson, a contributing editor of the Mercury who chronicled the travails of tax protesters in two books: Tax Revolt: U.S.A.! Why and How Thousands of Patriotic Americans Refuse to Pay the Income Tax, published in 1973, and its sequel, The Continuing Tax Rebellion: What Millions of Americans are Doing to Restore Constitutional Government.
According to Larson, who later wrote a regular column on tax and money issues for the far-right newspaper The Spotlight, the majority of black women were prostitutes whose "offspring run wild in the streets, free to forage their food in garbage cans, and grow up to become permanent reliefers, criminals, rioters, looters, and, in turn, breeders of huge litters of additional human beings belonging to the same category."
A Magician Explains How to Fleece the Government
Larson praised A.J. Porth as "America's best-known and most active tax-rebel," but there were others who greatly contributed to the growth of the movement.
Unlike Porth, who made his pitch to thousands of Posse Comitatus activists and other gun-toting militants, men like Irwin Schiff spread the same message to millions of Americans who were much closer to the political mainstream.
Schiff, "America's leading untax expert," as he sometimes called himself, was a fast-talking insurance and financial consultant from Hamden, Conn., who parroted Porth's arguments about the Fifth Amendment and how paper money invalidated the income tax.
"I only received federal reserve units, not dollars," he once told a judge. "I received no lawful money upon which a tax can be collected."
In addition to his talents as an amateur magician, Schiff skillfully exploited the broadcast media's obsession with controversial content. His appearances on network television shows and radio broadcasts over the past 25 years have reached a huge national audience.
In 1976, Schiff, then 47, wrote The Biggest Con: How the Government is Fleecing You. His second book, published six years later, was called How Anyone Can Stop Paying Income Taxes and earned him at least $135,000 in royalties over the next two years and another $85,000 in the decade that followed.
Schiff authored six other books, including his most recent, The Federal Mafia and How It Operates, which he wrote while in federal prison on tax charges.
In Nashville, an Ad Man Creates 'Money' for Tax Rebels
Another equally colorful and prominent promoter of tax resistance was Frederick "Tupper" Saussy III, author of the popular tax protest book, Miracle on Main Street. At just 160 pages, the slim volume sold 100,000 copies from 1980 to 1982.
Saussy was a musician, songwriter, artist and local celebrity from Nashville, Tenn., who applied his talents as the composer of advertising jingles to market both his book and a new kind of phony checkbook money that he invented for tax protesters to pay their debts.
Called "Public Office Money Certificates," Saussy claimed the worthless paper was "redeemable in dollars of the money of account of the United States upon an official determination of the substance of the money of account."
Others copied the concept, especially Posse activists in the Midwest who conned farmers into believing that similar fake financial instruments could rescue them from debt during the agricultural crisis of the 1980s.
Saussy was convicted of tax evasion in 1985 (and later became a federal fugitive), but he also gained right-wing notoriety for publishing Tennessee Waltz, the autobiography of James Earl Ray, the assassin of Martin Luther King, Jr.
Saussy's magnetic personality may have charmed audiences into embracing tax protest, but Arizona patriot Marvin Cooley's gruff demeanor was equally convincing.
"I will no longer pay for the destruction of my country, family, and self," he wrote the IRS in 1971. "Damn tyranny! Damn the Federal Reserve liars and thieves! Damn all pettifogging, oath-breaking U.S. attorneys and judges. ... I will see you all in Hell and shed my blood before I will be robbed of one more dollar to finance a national policy of treason, plunder and corruption."
Cooley had little formal education, but he, too, wrote a right-wing bestseller: The Big Bluff. This 1972 book, which described the struggles of his fellow tax protestor, W. Vaughn Ellsworth, and contained sample letters and copies of Cooley's tax returns, placed him in high demand on the far-right speaking circuit.
Cooley's seminars were well attended but he, like Saussy, Porth and the others, would eventually go to prison for tax evasion, in 1973 and again in 1989.
From Tax Protest to Terror
Among Cooley's followers was Robert Jay Matthews, the future founder of the neo-Nazi revolutionary group, The Order. In 1970, Matthews was 17 years old and still living with his parents in Phoenix when Cooley indoctrinated him about the income tax and made the teenager a sergeant-at-arms for some of his meetings.
Inspired by what Cooley had taught him, Matthews would list 10 non-existent dependents on his W-4 tax form in 1973. This was a common enough protest tactic, but Matthews failed to take into account the basic fact that no 20-year-old could have so many dependents — especially not one whose tax form showed him as unmarried.
Matthews was convicted on misdemeanor charges and sentenced to six months on probation. He soon left Arizona and moved to Metaline Falls, Wash., where he later launched The Order.
Another tax protester who followed Matthews' path of armed rebellion was Ardie McBrearty, the founder in 1974 of the United States Taxpayers Union, a group dedicated not only to repealing the 16th Amendment, but also to abolishing the Occupational Safety and Health Act, consumer protection statutes, gun control laws, and other "unconstitutional" legislation.
McBrearty was a believer in the white supremacist Christian Identity theology, and he eventually abandoned tax protest in favor of the militancy of The Order. His role in the group — he helped set up its security system — eventually earned him 40 years in prison.
The Feds Strike Back
By the early 1980s, the propaganda efforts of men like A.J. Porth, Jerome Daly, Irwin Schiff, Tupper Saussy, Ardie McBrearty, Marvin Cooley and others had motivated tens of thousands of Americans to act. The problem was severe enough that the agency launched a special "Illegal Tax Protester Program," and appointed special "tax protest coordinators" to each of its district offices.
Congress also raised the penalties for illegal tax protest in 1982. It took more than a year, however, for the legislation to make itself felt.
Illegal tax returns peaked in 1983 at 58,000, up 10-fold from five years earlier. Filing an illegal return now had serious consequences, and the fact that nearly 60,000 people were willing to risk jail in 1983 demonstrates the significant strength of the movement.
Other prominent propagandists included William "Bill" Benson, a former investigator with the Illinois Department of Revenue, whose two-volume set, The Law That Never Was, argued that the 16th Amendment was never properly ratified and that the income tax, therefore, was a nullity.
The first volume came out in 1985 and was co-authored by Martin J. "Red" Beckman, a hard-core anti-Semite and "constitutionalist" from Billings, Mont., who accused Jews of worshipping the devil and asserted that the Holocaust was God's "judgment upon a people who believe Satan is their god."
'A Struggle to the Death'
Not all tax protesters were religious bigots, but hatred of Jews has been a dominant theme in the tax strike movement since its inception. This point was driven home by Gordon Wendell Kahl, the 63-year-old Posse Comitatus activist and tax protester who shot and killed two federal marshals, also wounding two other lawmen, outside Medina, N.D., in February 1983.
Wanted for violating probation in a 1977 federal income tax case, Kahl — and two others, including his son — responded with gunfire when the marshals tried to arrest him. Kahl described his version of events in a 16-page handwritten letter he wrote the night of the shooting and mailed several weeks later.
In it, he announced that it was time to wage war against the Jews.
"We are engaged in a struggle to the death between the people of the Kingdom of God, and the Kingdom of Satan," Kahl wrote. "We are a conquered and occupied nation; conquered and occupied by the Jews, and their hundreds or maybe thousands of front organizations doing their un-Godly work. They have two objectives in their goal of ruling the world. Destroy Christianity and the White race. Neither can be accomplished by itself, they stand or fall together."
Kahl escaped right after the shooting and, despite a massive manhunt, disappeared into the right-wing underground for four months before the fbi finally tracked him down in the hills of northern Arkansas. A local sheriff was killed in the gun battle that followed, as was Kahl, who became the most famous martyr of both the Posse Comitatus and the tax protest movements.
He Who Laughs Last
Fifteen years after Kahl murdered the three lawmen, a bipartisan and overwhelming majority in Congress lent credibility to the claims of right-wing activists regarding IRS abuses. Repeating some of the same themes heard in Sen. Arlen Specter's 1995 probe into the events in Ruby Ridge and Waco, Republican-sponsored hearings in the House and Senate in 1997 and 1998 focused attention on supposed commando-style raids by armed tax inspectors wearing flak jackets.
No testimony was heard about the sharp decline in audit rates for wealthy Americans and large corporations as a result of deep cuts made to IRS spending by the same Congress in 1995, however.
Instead, lawmakers chose to emphasize the image of a menacing federal agency out of control — an image long cultivated by the patriarchs of tax protest and other ideologues of the radical right.
"The I.R.S. is too big and too mean," said then-House Majority Leader Dick Armey of Texas in November 1997. Swept up in heady antigovernment rhetoric, the House voted 426 to 4 to overhaul IRS collection practices and the Senate followed, 97 to 0.
Congress said it was "protecting taxpayer rights," but attacking the IRS was good election year politics and supporters of the "overhaul" did not seem overly troubled — or simply did not see — that their actions both vindicated an old generation of tax strikers and inspired a new legion of right-wing scofflaws.
The sponsors of this recent round of anti-IRS legislation did not share the explicitly anti-Semitic and racist motivations of those in the right wing tax protest movement. But their IRS-bashing owes much to the efforts of men like A.J. Porth, William Potter Gale and others who spent decades agitating around the issues of tax rebellion.
Even though the Posse and its militia descendants have been discredited in many ways, their relentless criticism of the IRS contributed to a climate that, decades later, helped politicians to dramatically weaken the IRS.
Daniel Levitas, a long-time expert on the radical right in America, is the author of a forthcoming book on the history of the militia movement and the Posse Comitatus.