1952JohnWhite

Welcome to Wikipedia!

Welcome to Wikipedia! Here is some information about the Sixteenth Amendment and the U.S. Federal income tax.

The U.S. Court of Appeals for the Fifth Circuit has stated:

As we observed in Lonsdale v. CIR, 661 F.2d 71 (5th Cir. 1981), the sixteenth amendment was enacted for the express purpose of providing for a direct income tax. The thirty words of this amendment are explicit: "The Congress shall have power to lay and collect taxes on income, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration." The Supreme Court promptly determined in Brushaber v. Union Pacific Ry. Co., 240 U.S. 1, 36 S.Ct. 236, 60 L.Ed. 493 (1916), that the sixteenth amendment provided the needed constitutional basis for the imposition of a direct non-apportioned income tax.

--from Parker v. Commissioner, 724 F.2d 469 (5th Cir. 1984) (bolding added).

From the U.S. Court of Appeals for the Seventh Circuit:

Plaintiffs also contend that the Constitution prohibits imposition of a direct tax without apportionment. They are wrong; it does not. U.S. Const. amend. XVI [ . . . ]

---from Lovell v. United States, 755 F.2d 517 (7th Cir 1984) (per curiam) (footnote not reproduced; bolding added).

From the U.S. Court of Appeals for the Ninth Circuit:

[ . . . ] his position [the position of Lowell H. Becraft] can fairly be reduced to one elemental proposition: The Sixteenth Amendment does not authorize a direct non-apportioned income tax on resident United States citizens and thus such citizens are not subject to the federal income tax laws. We hardly need comment on the patent absurdity and frivolity of such a proposition. For over 75 years, the Supreme Court and the lower federal courts have both implicitly and explicitly recognized the Sixteenth Amendment's authorization of a non-apportioned direct income tax on United States citizens residing in the United States and thus the validity of the federal income tax laws as applied to such citizens.

--from In re Becraft, 885 F.2d 547 (9th Cir. 1989) (bolding added).

From the U.S. Court of Appeals for the Tenth Circuit:

Dickstein's argument that the sixteenth amendment does not authorize a direct, non-apportioned tax on United States citizens similarly is devoid of any arguable basis in law. Indeed, the Ninth Circuit recently noted "the patent absurdity and frivolity of such a proposition." In re Becraft, 885 F.2d 547, 548 (9th Cir.1989). For seventy-five years, the Supreme Court has recognized that the sixteenth amendment authorizes a direct nonapportioned tax upon United States citizens throughout the nation, not just in federal enclaves, see Brushaber v. Union Pac. R.R., 240 U.S. 1, 12-19, 36 S.Ct. 236, 239-42, 60 L.Ed. 493 (1916); efforts to argue otherwise have been sanctioned as frivolous, see, e.g., Becraft, 885 F.2d at 549 (Fed.R.App.P. 38 sanctions for raising frivolous sixteenth amendment argument in petition for rehearing); Lovell v. United States, 755 F.2d 517, 519-20 (7th Cir.1984) (Fed.R.App.P. 38 sanctions imposed on pro se litigants raising frivolous sixteenth amendment contentions).

--from United States v. Collins, 920 F.2d 619 (10th Cir. 1990) (bolding added).

And, from the decision in yet another case before the United States Tax Court:

Since the ratification of the Sixteenth Amendment, it is immaterial with respect to income taxes, whether the tax is a direct or indirect tax. The whole purpose of the Sixteenth Amendment was to relieve all income taxes when imposed from [the requirement of] apportionment and from [the requirement of] a consideration of the source whence the income was derived.

---from Abrams v. Commissioner, 82 T.C. 403, CCH Dec. 41,031 (1984).

From the U.S. Tax Court:

At the trial, Mr. Wikoff [the taxpayer] also raised the issue of the constitutionality of the Federal income tax. He argues that as a graduated direct tax on income, the Federal income tax statute was not within the intended scope of the 16th Amendment to the Constitution. According to him, the framers of the 16th Amendment envisioned an indirect excise tax on corporations, such as that contained in the Tariff Act of 1909. Since the petitioner is an "individual sovereign citizen" and the Federal income tax is a direct, progressive tax, he claims not to be subject to such tax.

It has long been settled that the Federal income tax is within the scope of the 16th Amendment and is constitutional. See, e.g., Brushaber v. Union Pac. R.R. Co. [1 USTC ¶ 4], 240 U.S. 1 (1916); Stanton v. Baltic Mining Co. [1 USTC ¶ 8], 240 U.S. 103 (1916); Cupp v. Commissioner [Dec. 33,459], 65 T.C. 68 (1975), affd. without published opinion 559 F. 2d 1207 (3d Cir. 1977). The "whole purpose" of the 16th Amendment, as stated by the Supreme Court in Brushaber v. Union Pac. R.R. Co., supra at 18, was "to relieve all income taxes when imposed from apportionment from a consideration of the source whence the income was derived." Thus, since the ratification of the 16th Amendment, it is immaterial, with respect to Federal income taxes, whether the tax is a direct or an indirect tax. Mr. Wikoff relied on the Supreme Court's decision in Pollock v. Farmers' Loan & Trust Co., 157 U.S. 429 (1895), but the effect of that decision has been nullified by the enactment of the 16th Amendment. Brushaber v. Union Pac. R.R. Co., supra.

--from Wikoff v. Commissioner, 37 T.C.M. (CCH) 1539, T.C. Memo. 1978-372 (1978) (bolding added) (footnote omitted).

More from the United States Tax Court:

Thus, since the ratification of the Sixteenth Amendment it is immaterial, with respect to income taxes, whether the tax is a direct or an indirect tax.

---from Johnson v. Commissioner, 37 T.C.M. (CCH) 189, T.C. Memo 1978-32 (1978).

And, from the United States Tax Court in another case:

Thus, since the ratification of the Sixteenth Amendment it is immaterial, with respect to income taxes, whether the tax is a direct or an indirect tax.

---from Sortillon v. Commissioner, 38 T.C.M. (CCH) 1097, T.C. Memo 1979-281, CCH Dec. 36,194(M), Docket No. 2108-79 (July 26, 1979).

Thus, the U.S. Tax Court has stated, in at least four different decisions (Johnson, Sortillon, Abrams, and Wikoff), that with respect to the Federal income tax, it does not matter whether the tax is deemed to be a direct tax or an indirect tax.

Tax lawyer Alan O. Dixler has written:

Each year some misguided souls refuse to pay their federal income tax liability on the theory that the 16th Amendment was never properly ratified, or on the theory that the 16th Amendment lacks an enabling clause. Not surprisingly, neither the IRS nor the courts have exhibited much patience for that sort of thing. If, strictly for the purposes of this discussion, the 16th Amendment could be disregarded, the taxpayers making those frivolous claims would still be subject to the income tax. In the first place, income from personal services is taxable without apportionment in the absence of the 16th Amendment. Pollock specifically endorsed Springer's holding that such income could be taxed without apportionment. The second Pollock decision invalidated the entire 1894 income tax act, including its tax on personal services income, due to inseverability; but, unlike the 1894 act, the current code contains a severability provision. Also, given the teaching of Graves [Graves v. New York ex rel. O'Keefe, 306 U.S. 466 (1939)] -- that the theory that taxing income from a particular source is, in effect, taxing the source itself is untenable -- the holding in Pollock that taxing income from property is the same thing as taxing the property as such cannot be viewed as good law.

--Alan O. Dixler, "Direct Taxes Under the Constitution: A Review of the Precedents," Report to the Committee on Legal History of the Bar Association of the City of New York, Nov. 20, 2006, as republished in Tax History Project, Tax Analysts, Falls Church, Virginia (italics in original; footnotes omitted), at [1].

From Young v. United States:

A capitation is a direct tax based solely on one's status, and is most often epitomized by a poll tax. Considering the large number of cases which consider discrimination settlements "income" subject to taxation within the broad ambit of 26 U.S.C. §61(a), see, e.g., Commissioner of Internal Revenue v. Schleier, 515 U.S. 323, 115 S.Ct. 2159, 132 L.Ed.2d 294 (1995); United States v. Burke, 504 U.S. 229, 112 S.Ct. 1867, 119 L.Ed.2d 34 (1992), the Court finds that the tax withheld by the Internal Revenue Service in this case [i.e., the Federal income tax under the Internal Revenue Code of 1986] is not a "capitation".

---Young v. United States, 2001-2 U.S. Tax Cas. (CCH) ¶ 50,732, fn. 3 (W.D. Ky. 2001) (Federal income tax case).

In Tilley v. United States, the taxpayer made the argument that the Federal income tax was "unconstitutional, since a tax measured by an individual's so-called income is in the nature of a capitation tax and can only be imposed by apportionment [ . . . . ]". That argument was ruled "frivolous" by the court. The court stated:

Several of the Tilleys' claims are frivolous and fail as a matter of law. In one claim, the Tilleys argue that "the taxes were unconstitutional, since a tax measured by an individual's so-called income is in the nature of a capitation tax and can only be imposed by apportionment." (Compl. ¶VI(d)(3)). The Sixteenth Amendment puts such an argument to rest, stating:

The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration."

---See Tilley v. United States, 270 F. Supp. 2d 731, 2003-2 U.S. Tax Cas. (CCH) ¶50,594 (M.D.N.C. 2003).

The United States Court of Appeals for the Fourth Circuit has indicated that after the ratification of the Sixteenth Amendment in 1913, whether an income tax is a "capitation or other direct tax" or not, the apportionment restriction (the rule that capitations or other direct taxes must be apportioned) simply does not apply if the tax in question is an income tax:

The power to tax is conferred on Congress by article I, section 8, clause 1 of the Constitution, but other sections of the Constitution impose certain restrictions upon the manner in which the taxing power of the Federal Government may be exercised. In addition to the general limitations placed upon that power by the due process clause of the Fifth Amendment, Congress is specifically prohibited from laying any tax on the export of goods; whatever indirect taxes it may enact shall be "uniform throughout the United States"' and it may impose a capitation or direct tax only if apportioned among the states according to population. This last restriction, the only one pertinent to the present case [the federal income tax under the Internal Revenue Code of 1954], has been limited in scope by the Sixteenth Amendment which permits taxes "on incomes, from whatever source derived" without regard to the apportionment requirement.

---Simmons v. United States, 308 F.2d 160, 165-66, 62-2 U.S. Tax Cas. (CCH) ¶9713 (4th Cir. 1962) (emphasis added), at [2].

The Sixteenth Amendment to the Constitution grants to Congress "the power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several states, and without regard to any census or enumeration." [ . . . . . ] A direct tax is a capitation tax, a tax upon real estate and upon income derived from real estate and from personal property held for investment, and upon income of personal property. Pollock v. Farmers' Loan & Trust Company, 158 U. S. 601; 15 S. Ct. 912; 39 L. Ed. 1108. The tax created by the challenged Act [the federal income tax under section 501 of the Revenue Act of 1936] has none of the features of a direct tax, and if a tax, is an income tax, and is therefore, subject only to the rule of geographical uniformity which is synonymous with the expression "to operate generally throughout the United States. [ . . . . ] If [the tax is] an income tax, no apportionment is required as provided in Sections 2 and 9 of Article I of the Constitution.

---Kingan & Company, Inc. v. Smith, 17 F. Supp. 217, 36-2 U.S. Tax Cas. (CCH) ¶9551 (S.D. Ind. 1936) (emphasis added), at [3].

Yours, Famspear (talk) 15:06, 11 March 2018 (UTC)

Also from the U.S. Tax Court:

Starting with the premise that taxes are either direct or indirect, Cracking the Code [a book promoting a federal tax evasion scam] lays the foundation for the remainder of the book on two fallacies. The first [fallacy] is that "federal direct taxes which affect citizens of the several states must be apportioned." The Constitution at one time required this apportionment; however, with the adoption of the 16th Amendment in 1913, this rule no longer applies to income taxes.

--Waltner v. Commissioner, T.C. Memo. 2014-35, case no. 021953-12L (Feb. 27, 2014), at: [4] (bolding added).

From Professor Boris Bittker, who taught tax law at Yale Law School:

As construed by the Supreme Court in the Brushaber case, the power of Congress to tax income derives from Article I, Section 8, Clause 1, of the original Constitution rather than from the Sixteenth Amendment; the latter simply eliminated the requirement that an income tax, to the extent that it is a direct tax, must be apportioned among the states. A corollary of this conclusion is that any direct tax that is not imposed on "income" remains subject to the rule of apportionment. Because the Sixteenth Amendment does not purport to define the term "direct tax," the scope of that constitutional phrase remains as debatable as it was before 1913; but the practical significance of the issue was greatly reduced once income taxes, even if direct, were relieved from the requirement of apportionment.

--Boris I. Bittker, Martin J. McMahon, Jr. and Lawrence A. Zelenak, Federal Income Taxation of Individuals (2d ed. 2006) (emphasis added).

From Professor Erik Jensen at Case Western Reserve University Law School:

It [the Sixteenth Amendment] was a response to the Income Tax Cases (Pollock v. Farmers' Loan & Trust Co.), and it exempts only "taxes on incomes" from the apportionment rule that otherwise applies to direct taxes.

[ . . . ]

If a tax is direct but isn't "on incomes," it should still have to be apportioned.

--Erik M. Jensen, "The Taxing Power, The Sixteenth Amendment, And the Meaning of 'Incomes'", Oct. 4, 2002, Tax Analysts (footnotes not reproduced).

From Professor Calvin H. Johnson at the law school of the University of Texas at Austin:

The Sixteenth Amendment to the Constitution, ratified in 1913, was written to allow Congress to tax income without the hobbling apportionment requirement.

[ . . . ]

Pollock was itself overturned by the Sixteenth Amendment as to apportionment of income....

--Calvin H. Johnson, "Purging Out Pollock: The Constitutionality of Federal Wealth or Sales Tax", Dec. 27, 2002, Tax Analysts.

Professor Sheldon D. Pollack at the University of Delaware:

With the ratification of the Sixteenth Amendment, Congress possessed the constitutional power to impose an unapportioned income tax....

--Sheldon D. Pollack, "Origins of the Modern Income Tax, 1894-1913," 66 Tax Lawyer 295, 324, Winter 2013 (Amer. Bar Ass'n) (footnotes omitted).

From Gale Ann Norton:

Courts have essentially abandoned the permissive interpretation created in Pollock. Subsequent cases have viewed the Sixteenth Amendment as a rejection of Pollock's definition of "direct tax". The apportionment requirement again applies only to real estate and capitation taxes. Even if the Sixteenth Amendment is not viewed as narrowing the definition of direct taxes, it at least introduces an additional consideration to analysis under the Apportionment Clause. For the Court to strike an unapportioned tax, plaintiffs must establish not only that a tax is a direct tax, but also that it is not in the subset of direct taxes known as an income tax.

--from Gale Ann Norton, "The Limitless Federal Taxing Power," Vol. 8 Harvard Journal of Law and Public Policy 591 (Summer, 1985) (bolding added; footnotes not reproduced).

From Alan O. Dixler:

In Brushaber, the Supreme Court validated the first post - 16th Amendment income tax. Chief Justice White, who as an associate justice had dissented articulately in Pollock, wrote for a unanimous Court. Upholding the income tax provisions of the tariff act of October 3, 1913, Chief Justice White observed that the 16th Amendment did not give Congress any new power to lay and collect an income tax; rather, the 16th Amendment permitted Congress to do so without apportionment ....

--from Alan O. Dixler, "Direct Taxes Under the Constitution: A Review of the Precedents," Nov. 20, 2006, Tax Analysts (bolding added). Famspear (talk) 15:24, 11 March 2018 (UTC)