What happens when you defy the IRS directly?

It’s a temptation in many ways. You can ignore all those letters from the IRS, and warnings about back taxes and liens. It may take weeks or even months before they do anything about it.

Your sense of righteousness may encourage this line of thinking. The IRS can’t take my hard-earned money, you tell yourself. They don’t deserve it!

You may even find some evidence that the law is on your side. Many tax protestors claim that mandatory taxes are based on constitutionally weak principles.

But this is a dangerous road, and you need to understand what you’re getting into.

Robert Beale, the former CEO of Comtrol, Inc., regrets this taking this route. In a December, 2007 article in the Minneapolis Star Tribune he told a story that’s filled with valuable lessons.

“In hindsight, I believe I was not wise. I’m sorry I even took this mission.”

His mission started when he became convinced that he wasn’t required by law to pay his income tax. This belief is more common than you might think. Many activists, lawyers, and even some former IRS agents make this claim.

The usual IRS response to the challenge is to ignore it or discredit the messengers. They warn taxpayers about scams in which the victims are charged a “consultation fee” to get help waiving their taxes. If you fall prey to one of these scams, you may suffer heavy consequences while the “consultant” keeps your money and walks away.

In fact, many of these scams do exist. Sometimes these organizations successfully dupe prestigious clients and celebrities, along with ordinary hard-working Americans.

However, film maker Aaron Russo has produced a documentary that makes a credible case for the non-payment of taxes in Freedom to Fascism.

Regardless of the truth, the IRS holds all the power, and their policy is to crack down on tax protestors.

Irwin Schiff, a vocal anti-tax advocate, was sentenced to more than 13 years in prison in 2006. This heavy prosecution comes on top of the usual tactics the IRS uses on citizens who don’t pay their taxes, such as the freezing and seizure of assets, invasions into your personal life, and garnishing your income and wages.

A tax resistor’s biggest mistake

When the IRS went after Robert Beale, he responded by hiding for a few years. This was the beginning of a string of errors. If you plan to fight the IRS, you need to take a strong stance. The IRS will argue that running away is proof that you know you’re in the wrong.

But the real pain a fugitive suffers is in their personal life.

Beale had the luxury of financial assets, and friends who were willing to take him in. But his wife didn’t want him to fight the government, and this disagreement eventually became grounds for a divorce.

Beale couldn’t make decisions for his company while he was in hiding. Eventually his own sons chose to depose him, and he lost his position as CEO of the company he started. He also lost his two homes and $5.6 million in company stock in divorce proceedings.

Beale said he had assumed that if the court ruled against him, he would just pay the tax and end the whole ordeal. Instead the IRS presented a bill for $2.5 million in back tax, penalties, and interest.

What happens when you fight the IRS alone?

Ultimately the IRS caught Robert Beale and put him behind bars. Now, with no money left for an attorney, he plans to represent himself in court.

He has two possible lines of defense, although neither looks promising. He could try to convince a jury that he sincerely believed he didn’t need to pay taxes, and that he acted in good faith.

Or he could try to hold the line that he wasn’t required to pay income tax, an approach that will probably fail. Many tax resisters feel patriotic about their stance, but it often leads to criminalization and humiliation.

“I thought I was going to be a hero, not a pariah,” said Beale.

If Beale had consulted a tax attorney sooner, he would have received some sensible advice. Perhaps he could have salvaged the situation, and kept some of his assets and perhaps his freedom.

If you’re determined to defy the IRS head-on, don’t do it alone. Remember that you’re still forced to play by the rules, even if those rules are in question. Get an experienced tax attorney who knows how to defend you, your property, and your reputation.

Jeff Fouts & Associates
772 Maddox Drive, Suite 114 • East Ellijay, GA 30540
Phone: (800) 509-2770 • Fax: (706) 636-5293