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U.S. Constitution: Sixteenth Amendment

Sixteenth Amendment - Income Tax

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.

On Wednesday, May 10, Stilley mailed a set of documents to the DOJ in response to DOJ's discovery demands. The documents revealed to DOJ for the first time that Lawrence was basing his entire defense on an act of Congress, 44 U.S.C. 3500-3520, also known as the "Paperwork Reduction Act" (PRA).

In Section 3512 of the Act, titled "Public Protection," it says that no person shall be subject to any penalty for failing to comply with an agency's collection of information request (such as a 1040 form), if the request does not display a valid control number assigned by the Office of Management and Budget (OBM) in accordance with the requirements of the Act, or if the agency fails to inform the person who is to respond to the collection of information that he is not required to respond to the collection of information request unless it displays a valid control number.

Another argument made by tax protesters is that the word "income" as used in the Sixteenth Amendment cannot be interpreted as applying to wages. Others have claimed that wages are not income because labor is exchanged for them (see below).

All courts that have considered these positions have rejected them, and have imposed sanctions on persons who raise these arguments.

Similar "Sixteenth Amendment arguments" have been uniformly rejected by the courts in other cases including Ficalora v. Commissioner;[5] Sisk v. Commissioner;[6] United States v. Sitka;[7] and United States v. Stahl.[8] The non-ratification argument has been specifically deemed legally frivolous in Brown v. Commissioner;[9] Lysiak v. Commissioner;[10] and Miller v. United States.[11]

William J. Benson, the co-author of the book mentioned in the Thomas case above, was unsuccessful with his Sixteenth Amendment argument when he had his own legal problems. He was prosecuted for tax evasion and willful failure to file tax returns. The court rejected his Sixteenth Amendment "non-ratification" argument in United States v. Benson.[12] William J. Benson was convicted of tax evasion and willful failure to file tax returns in connection with over $100,000 of unreported income, and his conviction was upheld on appeal. He was sentenced to four years in prison and five years of probation. See United States v. Benson

Benson and Beckman did not discover anything; they rediscovered something that Secretary Knox considered in 1913. Thirty-eight states ratified the sixteenth amendment, and thirty-seven sent formal instruments of ratification to the Secretary of State. (Minnesota notified the Secretary orally, and additional states ratified later; we consider only those Secretary Knox considered.) Only four instruments repeat the language of the sixteenth amendment exactly as Congress approved it. The others contain errors of diction, capitalization, punctuation, and spelling. The text Congress transmitted to the states was: "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." Many of the instruments neglected to capitalize "States," and some capitalized other words instead. The instrument from Illinois had "remuneration" in place of "enumeration"; the instrument from Missouri substituted "levy" for "lay"; the instrument from Washington had "income" not "incomes"; others made similar blunders.

Accordingly, the agents recalculated Lawrence's tax liabilities during the afternoon of May 11, 2006, and found that Lawrence's tax liabilities for 1999, 2000, and 2001 were not $10,275, $11,927, and $9,453 respectively but were $7,111, $11,927 and $702 for those years.

Additionally, during the telephone hearing on May 12, 2006, the Government informed the Court and the Defendent that the Government had discovered errors in the dollar amounts set forth in the indictment. The Government orally moved to amend the indictment by interlineation. Defense counsel objected and the Court denied the motion. Later the same day, the Government moved to dismiss al of the counts against Lawrence.