Tax Protestors and Penalties: Ensuring Perceived Fairness and Mitigating Systemic Costs

The United States enjoys a very high rate of voluntary compliance. Reasons for compliance are complex and can include motivations like feelings of personal integrity and patriotism. Tax avoidance is a serious problem that can undermine compliance and confidence in the collection system. Tax avoidance can also lead to anger among compliant taxpayers about bearing the burden of paying for government services which is unequally assumed by compliant taxpayers. As a result, consequences for avoidance must be severe.Among those who do not pay are those who engage in so-called tax behavior, which is often spread through seminars and the Internet. These individuals base the legitimacy of their nonpayment of taxes on a variety of arguments that the government does not have the power to collect taxes or does not have the power to collect taxes from the group of people to which they belong. While it is easy to group tax together and simply dismiss their behavior as illegal avoidance, such an approach does not fully resolve the problem. This approach may result in some inarticulate taxpayers being grouped with protestors causing their claims to be ignored. Thus, simply dismissing all potential tax undermines confidence in the system. This Article argues that current law does not adequately deter avoidance by these individuals or compensate the system for positions. However, labeling the arguments as frivolous does not solve the problem, nor does barring the users from entering the court system. Those defending their non-payment taxes through arguments that fall squarely in the realm of protestor positions should be required to pay for not just some, but rather for all of the costs incurred by the entire system, including the courts, in the collection of their liabilities.