Thomas Vaughn Barlow really does not like the IRS. On June 8, 2007, he sent it a letter, which stated:
This means that if you do not answer me lawfully and take my money or property or in any way continue to harass me or fail to assure me of my being secure in my persons, houses, papers and effects, that I’m justified in acts of war to balance your terrorism. Do you get it? I will kill any of your agents I can find. I will blow up your buildings. This is war.
Barlow is a Mormon. Well, sort of. He was part of the Fundamentalist LDS Church, at least before he got kicked out. Was his letter not a little over the top? The jury thought so. He received a 21-month prison sentence [1].
Was this type of conduct typical of Mormons? Sure, the LDS agree to be subject to kings, presidents, rulers, and magistrates, and to obey, honor, and sustain the law. It is taught in Primary, and part of what it means to be a good Mormon and American. The trouble comes when we get into the details. Yes, the Tax Code – Title 26 of the U.S. Code – is very detailed. Does the 12th Article of Faith include the agreement not to tangle with the Executive Branch tax collectors?
Fighting the IRS is, in some ways, part of Mormon lore. Individual Mormons (typically the well-heeled) have taken some very aggressive tax positions and have gone to court to defend them.
Consider the first Mormon-related tax case in modern times. Ernest Wilkinson – yes, the Ernest Wilkinson, successful lawyer and BYU President – engaged in some creative accounting to minimize his tax exposure for a whopping (by 1960s standards) $ 1.4 million in legal fees he had received from the Ute Indian tribe. President Wilkinson took the IRS to court, and he won [2]. Over the next 50 years, other Mormons have taken some fairly aggressive tax positions which led them to Tax Court [3].
What is not particularly aggressive to go to court to challenge tithing deductions that were disallowed because of inadequate documentation [4]. By the same token, it was only mildly aggressive to defend the deductibility of payments made to sons while on their LDS missions, at least before the U.S. Supreme Court ruled those deductions improper [5].
Where the Church itself is a party in litigation with the tax authorities, the subject seems to be its seemingly-never ending quest to be exempt from property taxes [6]. The Church has also litigated whether it is tax-exempt in all of its far-flung economic activities [7].
These cases, mainly good faith disputes, do not say much about whether Mormons are prone to be tax scofflaws. More probative on this question are the many Mormons who have engaged in tax rebellion.
The first published opinion in this category involved James and Jean Smith, who argued that had been singled out and selectively prosecuted by the IRS because they were Mormons, based on the false belief that members of the Church constitute what Federal officials call the “Tax Rebellion Movement.” The Smiths left no doubt about what they were. They claimed that the 16th Amendment was never properly ratified, and they attacked the legality of the United States’ monetary system, arguing that they never received any “constitutional dollars” which would be subject to Federal income taxation [8].
The notion that the IRS was picking on Mormons during this era was apparently getting some circulation among tax protestors. A few years earlier, George Markovsky felt compelled to write a letter to the IRS, which stated:
[The revenue agent’s] pocket ‘Summons‘ specifically requests above-named Associates (i.e., petitioner and his wife) to abjure their First and Fifth Amendment Immunities by meeting with her on September 9, 1976 for the purpose of answering questions and providing information and documentary evidence for Holy Office types to use against them.
Mr. and Mrs. Markovsky are NOT members of the Mormon Church. Hence they are under no threat of being excommunicated from the Celestial jurisdiction by the Hierarchy of that or any other church for exercising their First Amendment Religio/Political Freedoms to be (Tax) Protesters (or ‘Protestants‘ if you will, the terms are interchangeable because they mean the same things).
And, of course, the statute of limitations expired 200 years ago on the sorry idea that secular servants had “authority” to undress (excommunicate) individuals of their Civil Rights and Liberties and thereafter imprison them for the Heresy of being protesters or dissenters to the status quo. First Amendment Injunction took care of such arrogances.
The Markovsky’s take the position that because 1040′s, W-4E’s, W-4′s, and other Income Tax forms are Confessions, which are enforced by Inquisitorial procedures that you and yours are engaged in the UNAUTHORIZED PRACTICE OF (Catholic) CHURCH LAW. You and yours seem to have forgotten – or never knew – that formal Confession to an entrenched priestly class has, from time immemorial, been the controlling Sacrament of Catholic Religions; that it was the compulsions surrounding the Liturgy of Confession which Martin Luther rejected, ab initio, over 400 years ago by his Priesthood of all Believers principle, thereby precipitating the PROTESTANT (Protester) Reformation; and that this same Self-Priesthood principle is the precedent underlying Separation of Church and State and other First Amendment Injunctions.
The Markovsky’s have no objection to Priests and other Clergymen practicing the liturgy of Confession within the privacy of their religious associations. That’s known as Freedom of Religion!
But they REFUSE to permit persons living off public payrolls TO PRACTICE THEIR IGNORANCE OF FIRST AMENDMENT INJUNCTIONS ON THEM, as if they were subjects of a Church/State Theocracy, instead of Sovereign citizens of a Republic founded on the individual’s Self-Priesthood. Moreover they reject the pretension that when the First Amendment demoted Priests and other Clergymen to private citizens thereby enjoining Official use of the implements of religious psychology to promote Political Orthodoxy on this side of the Atlantic – that it somehow transferred their erstwhile sacerdotal License, intact, to Secular Servants of these United States [9].
Around this time, the conviction of Sheryl Brown for willful failure to file an income tax return was affirmed, over his objection that the prosecution violated the Free Exercise Clause of the First Amendment by obtaining records from the Mormon Church [10].
Over the next two decades, Mormons have tried to conceal their income by starting their own church and claiming to be tax-exempt [11] and by arguing, like Sheryl Brown, that the IRS had no power to compel records from the LDS Church [12]. Perhaps the granddaddy of all Mormon tax protestors is Philip Marsh, who was successfully prosecuted for marketing un-taxing kits to help people drop off the IRS’ radar screen [13].
In the last ten years, Mormons have argued that they are discriminated against in the Tax Court [14]. They have also repeated claim that the LDS Church is immune for IRS summons process [15]. One can see why Mormon tax evaders would find the Church cooperation harrowing. After all, if the IRS wanted to know how much gross income someone earned during a year, they merely need to access the person’s tithing records and multiply by ten.
While these cases were going on, there can be no question what the official LDS position is on income taxes: it encourages people to come clean with the IRS. For example, a Mormon bishop recommended that a congregant write a letter to the IRS confessing that he filed a tax return, in order to relieve his ex-wife of joint and several liability she might otherwise suffer [16].
This ethos – respecting the IRS and its authority – sometimes makes the Church conform when it would not otherwise want to. For example, I am one of those cynical people who think that Spencer W. Kimball’s “revelation” about blacks and the priesthood was not a message from God. Instead, it was an example of political expediency and tax planning. I do not believe that it had to do with BYU major sports aspirations. Rather, it was the very real concern that the LDS Church and BYU would lose its tax exemption, combined with a lawsuit involving the Boy Scouts of America.
As a religious institution, the Mormon Church and BYU are charitable entities recognized as tax-exempt by the IRS. This means that persons who donate to them can claim the donations as tax deductions. The Church’s budget comes largely from charitable contributions. The ability of donors to claim tax deductions is, in some minds, a form of government subsidy.
A group of black taxpayers and their minor children attending public schools in Mississippi brought a class action on May 21, 1969 against the United States, seeking to enjoin the Secretary of the Treasury and the IRS from according tax exempt status to private schools in Mississippi which excluded African-American students on the basis of race or color.
In July 1970, while the lawsuit was pending, the IRS issued two Releases, announcing that “it can no longer legally justify allowing tax-exempt status to private schools which practice racial discrimination nor can it treat gifts to such schools as charitable deductions for income tax purposes.”
Meanwhile, a group of white citizens entered the lawsuit, claiming that they had a First Amendment right not to associate with persons of other races, which would be infringed by the IRS’ revocation of the white private schools’s tax-exempt status.
The Supreme Court ruled in favor of the black plaintiffs, concluding that the IRS actions of denying tax -exemption to discriminatory schools was constitutional, and that it could disallow deductions for persons making gifts to such schools. Regarding the interests of the white families, the court noted that its decision did not prevent them from sending their children to segregated private schools at their own expense, paying the full cost of education at such schools. Such schools, however, were not entitled to public support, as which tax-exemption qualified. It reasoned that the Federal Government could not under the Constitution give direct financial aid to schools practicing racial discrimination, but that tax exemptions and deductions certainly constitute a Federal Government benefit and support. “While that support is indirect, and is in the nature of a matching grant rather than an unconditional grant, it would be difficult indeed to establish that such support can be provided consistently with the Constitution” [17].
Of course, the schools at issue in Green v. Connally were truly segregated, in that blacks were not allowed admission into them. This was a distinction that had been used by Mormon leaders. During a Devotional address on November 25, 1969, President Wilkinson addressed students and faculty on these recent accusations of racism at BYU, citing the BYU admission policy that stated students are admitted regardless of their race as long as they maintain the ideals and standards of the Church.
In the 1970s, the IRS turned its sights on a southern college known as Bob Jones University. Like BYU, Bob Jones University permitted black to enroll, and claimed not to be segregated. However, it treated black and white differently. The sponsors of the Bob Jones University, a fundamentalist Christian institution in Greenvile, South Carolina, believed that the Bible forbade interracial dating and marriage.
To effectuate these views, blacks were completely excluded from the school until 1971. From 1971 to May 1975, the University accepted no applications from unmarried blacks, but did accept applications from blacks married within their race.
Beginning in May 1975, the University permitted unmarried African-Americans to enroll, but a disciplinary rule prohibits interracial dating and marriage. That rule read:
There is to be no interracial dating
1. Students who are partners in an interracial marriage will be expelled.
2. Students who are members of or affiliated with any group or organization which holds as one of its goals or advocates interracial marriage will be expelled.
3. Students who date outside their own race will be expelled.
4. Students who espouse, promote, or encourage others to violate the University’s dating rules and regulations will be expelled.
The University continued to deny admission to applicants engaged in an interracial marriage or known to advocate interracial marriage or dating.
On April 16, 1975, the IRS notified the Bob Jones University of the proposed revocation of its tax-exempt status because of its discriminatory policies.
The IRS officially revoked the University’s tax-exempt status in January, 1976. Bob Jones University challenged the revocation. The case would ultimately reach the U.S. Supreme Court. The government took the position that Bob Jones University’s racial policies made it ineligible for tax-exempt status.
If the IRS’ decision in Bob Jones University was affirmed by the Supreme Court, it would close BYU’s argument that its racial policies were not discriminatory. The Church now was looking at the very real prospect that BYU would lose its tax-exempt status. That would be bad news indeed.
Other things were happening. In 1977, President Kimball was distressed when he was served with a subpoena to give a deposition in a case brought by the NAACP against the Boy Scouts of America and Troop 58, organized in one of the wards of the Liberty Stake in Salt Lake City. There were two black Scouts in the troop. One of them complained to the black ombudsman for Utah because he was deprived of the chance to become the senior patrol leader of his troop because of the Church procedure that the senior patrol leader had to be the deacons quorum president. It was contended that this violated the young man’s civil rights.
While the Church was not a party to the suit, the Church’s practice was a key issue in the litigation. It was for this reason the subpoena was issued to President Kimball. And because it was a subpoena duces tecum, he was directed to bring to the deposition every document relating to the Church’s policy withholding the priesthood from blacks.
Because he had had little to do with litigation during his life and was uncertain about what faced him, President Kimball was distraught. He could not sleep. He reportedly could talk of little else in the meetings with his counselors.
As we know, the change finally came in June 1978, as the Bob Jones University tax case was winding its way through the courts. Coincidence? I doubt it.
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[1] U.S. v. Barlow, Slip Copy, 2009 WL 2516843 (10th Cir. 2009).
[2] Wilkinson v. United States, 304 F.2d 469 (Ct Cl. 1962).
[3] Paxman v. Commissioner of Internal Revenue, 50 T.C. 567 (Tax 1969); Thatcher v. Commissioner of Internal Revenue, 61 T.C. 28 (Tax 1974); Buehner v. Commissioner of Internal Revenue, 65 T.C. 723 (Tax 1976); Kleinman v. C.I.R., T.C. Memo. 1984-347, 1984 WL 14996 (Tax 1984); Reile v. C.I.R., T.C. Memo. 1992-488, 1992 WL 206149 (Tax 1992); Torney v. C.I.R., T.C. Memo. 1993-385, 1993 WL 325063 (Tax 1993); Ferguson v. C.I.R., 108 T.C. No. 14, 108 T.C. 244 (Tax 1997); Ferguson v. C.I.R., 174 F.3d 997 (9th Cir 1999); Talmage v. C.I.R., T.C. Memo. 2008-34, 2008 WL 440831 (Tax 2008).
[4] Coultas v. C. I. R., T.C. Memo. 1972-1, 1972 WL 2135 (Tax 1972); Watkins v. C. I. R., T.C. Memo. 1973-267, 1973 WL 2445 (Tax 1973); Jeppsen v. C.I.R., T.C. Memo. 1977-274, 1977 WL 3565 (Tax 1977); Jeppsen v. C.I.R., T.C. Memo. 1978-343, 1978 WL 3021 (Tax 1978); Gifford v. C.I.R., T.C. Memo. 1980-351, 1980 WL 4188 (Tax 1989); Lyman v. C.I.R., T.C. Memo. 1984-115, 1984 WL 15437 (Tax 1984); Castleton v. C.I.R., T.C. Memo. 2005-58, 2005 WL 697961 (Tax 2005).
[5] White v. U.S., 514 F.Supp. 1057 (D.Utah 1981); Brinley v. C.I.R., T.C. Memo. 1983-408, 1983 WL 14392 (Tax 1983); White v. U.S., 725 F.2d 1269 (10th Cir. 1984); Brinley v. Commissioner of Internal Revenue, 82 T.C. No. 70, 82 T.C. 932 (Tax 1984); Brinley v. C.I.R., 782 F.2d 1326 (5th Cir. 1986); Davis v. U.S., 664 F.Supp. 468 (D.Id. 1987); Davis v. U.S., 861 F.2d 558 (9th Cir. 1988); Hernandez v. C.I.R., 490 U.S. 680, 109 S.Ct. 2136 (1989); Davis v. U.S., 495 U.S. 472, 110 S.Ct. 2014 (1990).
[6] Malad Second Ward of the Church of Jesus Christ of Latter-Day Saints v. State Tax Commission, 75 Idaho 162, 269 P.2d 1077 (Idaho 1954); Kunes v. Mesa Stake of Church of Jesus Christ of Latter-Day Saints,17 Ariz.App. 451, 498 P.2d 525 (Ariz.App. 1972); Corporation of the Presiding Bishop of the Church of Jesus Christ of Latter- Saints v. Department of Revenue, 1975 WL 1126 (Or.Tax, 1975); Corporation of Presiding Bishop of Church of Jesus Christ of Latter-Day Saints v. Department of Revenue, 276 Or. 775, 556 P.2d 685 (Or. 1976); New Jersey Stake of Church of Jesus Christ of Latter Day Saints v. Morris Township, 3 N.J.Tax 572 (N.J.Tax, 1981); Utah County, By and Through County Bd. of Equalization of Utah County v. Intermountain Healthcare, 709 P.2d 265 (Utah 1985); Corporation of Presiding Bishop of Church of Jesus Christ of Latter-Day v. Ada County,123 Idaho 410, 849 P.2d 83daho 1993); Maricopa County v. State, 187 Ariz. 275, 928 P.2d 699 (Ariz.App. Div. 1. 1996); Corporation of Presiding Bishop of Church of Jesus Christ of Latter-Day Saints v. Department of Revenue, 1997 WL 734056 (Or.Tax 1997).
[7] IHC Health Plans, Inc. v. C.I.R., T.C. Memo. 2001-246, 2001 WL 1103284 (Tax 2001); IHC Group, Inc. v. C.I.R., T.C. Memo. 2001-247, 2001 WL 1103286 (Tax 2001); IHC Care, Inc. v. C.I.R., T.C. Memo. 2001-248, 2001 WL 1103289 (Tax 2001);IHC Health Plans, Inc. v. C.I.R., 325 F.3d 1188 (10th Cir. 2003)
[8] Smith v. C.I.R., T.C. Memo. 1979-51, 1979 WL 3147 (Tax 1979).
[9 Markovsky v. C.I.R., T.C. Memo. 1985-283, 1985 WL 14910 (Tax 1985).
[10U.S. v. Brown, 600 F.2d 248 (10th Cir. 1979).
[11 Tschudy v. C.I.R., T.C. Memo. 1993-567, 1993 WL 491379 (Tax 1993)
[12 Codner v. U.S., 17 F.3d 1331 (10th Cir. 1994).
[13 U.S. v. Marsh, 144 F.3d 1229 (9th Cir. 1998).
[14] Hawkins v. C.I.R., T.C. Memo. 2003-181, 2003 WL 21436740 (Tax 2003).
[15]Thomas v. U.S., 2004 WL 1571968 (D.Me. 2004);Taylor v. U.S., 292 Fed.Appx. 383 (5th Cir. 2008).
[16]Smith v. C.I.R., T.C. Summ.Op. 2007-57, 2007 WL 1120287 (Tax 2007).
[17] Green v. Connally, 330 F.Supp. 1150, (D.D.C. 1971), aff’d, 404 U.S. 997, 92 S. Ct 564 (1971).
