Quest to defeat IRS `beast' characteristic of income tax protesters

PHOENIX -- Tom Martell sits in the federal penitentiary at Las Vegas, a prisoner of conscience.

The Arizona tax rebel had no criminal record before his conviction in January. Then the Gila County reserve sheriff's deputy defied Uncle Sam and lost.

Martell has been torn from his wife and stepchildren. He owes $218,000 in back taxes and penalties. His masonry company in Payson is gone. Upon release in June, he faces five years of house arrest and probation. Martell's crime, prosecuted in the U.S. District Court: failure to file federal income tax returns. "I fought the good fight, but I understand now that as a Christian I must submit to them," Martell, 53, said in a recent phone interview. "Had I anticipated the atrocity I would be exposed to, I wouldn't have done it." Martell is not alone in challenging the government's authority to impose and collect income taxes. The U.S. Treasury loses an estimated $130 billion each year because of citizens who underpay or file no return. One IRS official recently told Congress that hundreds of thousands of tax protesters file blank 1040 forms, or none at all. A bulletin on the World Wide Web, advertising one of many anti-IRS books, proclaims: "Lawfully!!! STOP paying income taxes. The United States government is a foreign corporation in respect to the other 50 states." Most of the hard-core resisters are ultraconservative, middle-age, white, professed-Christian males. Call them Freemen or constitutionalists. By whatever name, they combine a phobia of the feds with heroic notions of defeating "the beast": the IRS. They view the agency as an arm of a global conspiracy, involving the United Nations, the Trilateral Commission, the Federal Reserve Board, communists and Jews. The most rabid disclaim citizenship, renounce Social Security numbers, spurn driver's licenses and repudiate federal authority. One of them, Irwin Schiff, so hates the IRS that he's entered the presidential race on the Libertarian ticket. "Let me tell you something," said Schiff, 67, of Las Vegas, author of How Anybody Can Stop Paying Income Taxes. "Income tax is collected on the basis of fraud, extortion and ignorance." Besides shunning tax laws, some resisters turn to violence or harassment of federal officials. The most radical have bombed IRS offices and killed federal agents. A leader of the Pilot Connection Society, a notorious anti-tax group, filed phony liens against the property of revenue agents and federal judges. Last year, six leaders of the group, including Douglas Carpa of Phoenix, were convicted on felony counts, including tax evasion and mail fraud. Michael Yamaguchi, U.S. attorney for northern California, described the Pilot Society leaders as rip-off artists who bilked consumers for $10 million and cost Americans $150 million in lost revenue. "The requirement to file tax returns and pay income tax, state or federal, is not a law that a person can choose to ignore," Yamaguchi warned. "The so-called `Patriot Untax Community' is hereby put on notice." While thousands of rebels refuse to file taxes, IRS officials admit that few are prosecuted. The agency has launched 340 criminal investigations against tax resisters since 1993, winning 162 convictions. Timothy Lee, chief of criminal investigations in the Phoenix office, said Arizona does not seem to be a hotbed, despite the state's reputation as a haven for self-styled "sovereign citizens." In the past three years, he said, there have been seven convictions in Arizona, New Mexico and Nevada. Most evaders are pursued in civil court. "These things go in cycles," Lee added. "I think it (resistance) is definitely higher profile than it was a few years ago. "If somebody's telling you that you can be untaxed, I guess that's the word, hang onto your wallet." America's first income tax, aimed at the wealthy, began and ended with the Civil War. A subsequent levy in the 1890s was ruled unconstitutional. In 1913, adoption of the 16th Amendment authorized Congress to "lay and collect taxes on incomes from whatever source derived, without apportionment among the several states." Peaceniks and patriots have resisted ever since, deploying an arsenal of history, semantics, law, philosophy and theology with little success. It started for Martell in the 1970s, when IRS agents confiscated his Pontiac Grand Prix amid a dispute over deductions. After doing research, he became convinced that America's revenue system is a fraud and stopped filing returns. Martell contends that no law requires the payment of income taxes. He says the term "income" does not apply to wages. He believes the IRS actually is a trust fund in Puerto Rico. Martell says he made a mistake fighting the IRS in the courtroom. Other resisters are more inclined to fight outside the system. In 1983, militant tax rebel Gordon Kahl engaged federal agents in a pair of bloody shootouts. The first left two U.S. marshals dead. The second took the life of an Arkansas sheriff, then took Kahl's. IRS offices also have been subjected to terrorist attacks and threats, such as a 1991 bombing at a collection center in Fresno, Calif., and the discovery of an unexploded bomb outside a Reno office last year. But even the most fanatic tax protesters generally would rather file prodigious legal briefs than fight. After 22 years of criminal investigations, Lee said it's a waste of time to argue with zealots. No matter what is said or documented, they answer with legal citations, conspiracy theories and riddles. Donald W. "Mac" MacPherson, a Phoenix tax lawyer, has heard the arguments and used some of them. Known for representing ex-Gov. Evan Mecham during impeachment hearings, MacPherson has defended clients in more than 50 criminal tax cases in 24 states since 1979. "People have been pushed to the point of no return," he said. "The problem has become so big. And the thing that scares them (federal officials) most about the protesters is that they'd start a revolt. I think we do have a revolt in the sense of the general mentality in this country." MacPherson is the author of Tax Fraud & Evasion: The War Stories, an autobiography that blends his experiences in Vietnam and tax court. He accuses the government of extortion, invasion of privacy and other crimes. He compares IRS agents to "gooks" he killed as an Army special forces officer and boasts of using guerilla courtroom tactics to win cases. At the same time, MacPherson scoffs at some of the frivolous arguments raised by tax rebels. He often uses legal technicalities to defend them. "I view these protesters, or clients, in general, as my troops," he said. "I'm the commander, and I have to safeguard my troops . . . I agree with them philosophically. I want them to win. But I have an obligation as an attorney to tell them what the law is, to warn them." Despite their fiery rhetoric, most tax rebels surrender when the IRS zeros in on them. "It's not so much a change of principle," said John Flynn, a Phoenix accountant who runs ads offering to help with IRS problems. "They just realize the IRS has tremendous, far-reaching powers, and they see it's David vs. Goliath." If there is anyone who embodies the anti-tax movement, it is Martin "Red" Beckman of Montana, the movement's so-called "grandfather." Author of The Law That Never Was, which proclaims the 16th Amendment was never ratified, Beckman staved off foreclosure of his home by the IRS for 20 years, at one point rallying 200 people to his defense. The crowd included Bo Gritz, a constitutionalist who ran for president, and Jack McLamb, a former Phoenix police officer who founded Police Against the New World Order. McLamb and Gritz devised a semi-violent strategy involving mops, soapy water and a skirmish line. As McLamb tells it, the bucket brigade awaited troops with plans to "shove the mops under their face shields and soap up their eyes and let them shoot us all if they wanted." The federal officers retreated. The resisters declared victory. And, although Beckman eventually was evicted, he still travels the nation on an anti-government lecture circuit.

Copyright 1996
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