A. Contention: Federal income taxes constitute a "taking" of property without due process of law, violating the Fifth Amendment.
Some assert that the collection of federal income taxes constitutes a "taking" of property without due process of law, in violation of the Fifth
Amendment. Thus, any attempt by the Internal Revenue Service to collect federal income taxes owed by a taxpayer is unconstitutional.
The Law: The Fifth Amendment to the United States Constitution provides that a person shall not be "deprived of life, liberty, or property, without
due process of law . . . ." The U.S. Supreme Court stated in Brushaber v. Union Pacific R.R., 240 U.S. 1, 24 (1916), that "it is . . . well settled
that [the Fifth Amendment] is not a limitation upon the taxing power conferred upon Congress by the Constitution; in other words, that the
Constitution does not conflict with itself by conferring upon the one hand a taxing power, and taking the same power away on the other by limitations
of the due process clause." Further, the Supreme Court has upheld the constitutionality of the summary administrative procedures contained in the
Internal Revenue Code against due process challenges, on the basis that a post-collection remedy (e.g., a tax refund suit) exists and is sufficient to
satisfy the requirements of constitutional due process. Phillips v. Commissioner, 283 U.S. 589, 595-97 (1931).
The Internal Revenue Code provides methods to ensure due process to taxpayers:
(1) The "refund method," set forth in section 7422(e) and 28 U.S.C. §§ 1341 and 1346(a), where a taxpayer must pay the full amount of the tax and
then sue in a federal district court or in the United States Court of Federal Claims for a refund; and
(2) The "deficiency method," set forth in section 6213(a), where a taxpayer may, without paying the contested tax, petition the United States Tax
Court to redetermine a tax deficiency asserted by the IRS. Courts have found that both methods provide constitutional due process.
In recent years, Congress passed new laws providing further protection for taxpayers' due process rights in collection matters. In the Internal
Revenue Service Restructuring and Reform Act of 1998, Pub. L. 105-206, § 3401, 112 Stat. 685, 746, Congress enacted new sections 6320 (pertaining to
liens) and 6330 (pertaining to levies) establishing collection due process rights for taxpayers, effective for collection actions after January 19,
Generally, the IRS must provide taxpayers notice and an opportunity for an administrative appeals hearing upon the filing of a notice of federal tax
lien (section 6320) and prior to levy (section 6330).
Taxpayers also have the right to seek judicial review of the IRS's determination in these due process proceedings. I.R.C. § 6330(d). These reviews
can extend to the merits of the underlying tax liability, if the taxpayer has not previously received the opportunity for review of the merits, e.g.,
did not receive a notice of deficiency. I.R.C. § 6330(c)(2)(B). However, the Tax Court has indicated that it will impose sanctions pursuant to
section 6673 against taxpayers who seek judicial relief based upon frivolous or groundless positions.
D. Contention: The Sixteenth Amendment to the United States Constitution was not properly ratified, thus the federal income tax laws are
This argument is based on the premise that all federal income tax laws are unconstitutional because the Sixteenth Amendment was not officially
ratified, or because the State of Ohio was not properly a state at the time of ratification. This argument has survived over time because proponents
mistakenly believe that the courts have refused to address this issue.
The Law: The Sixteenth Amendment provides that Congress shall have the 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. U.S. Const. Amend. XVI. The Sixteenth Amendment was ratified
by forty states, including Ohio, and issued by proclamation in 1913. Shortly thereafter, two other states also ratified the Amendment. Under Article V
of the Constitution, only three-fourths of the states are needed to ratify an Amendment. There were enough states ratifying the Sixteenth Amendment
even without Ohio to complete the number needed for ratification. Furthermore, the U.S. Supreme Court upheld the constitutionality of the income tax
laws enacted subsequent to ratification of the Sixteenth Amendment in Brushaber v. Union Pacific R.R., 240 U.S. 1 (1916). Since that time, the courts
have consistently upheld the constitutionality of the federal income tax.
E. Contention: The Sixteenth Amendment does not authorize a direct non-apportioned federal income tax on United States citizens.
Some assert that the Sixteenth Amendment does not authorize a direct non-apportioned income tax and thus, U.S. citizens and residents are not subject
to federal income tax laws.
The Law: The courts have both implicitly and explicitly recognized that the Sixteenth Amendment authorizes a non-apportioned direct income tax on
United States citizens and that the federal tax laws as applied are valid. In United States v. Collins, 920 F.2d 619, 629 (10 th Cir. 1990), cert.
denied, 500 U.S. 920 (1991), the court cited Brushaber v. Union Pac. R.R., 240 U.S. 1, 12-19 (1916), and noted that the U.S. Supreme Court has
recognized that the "Sixteenth Amendment authorizes a direct nonapportioned tax upon United States citizens throughout the nation."