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In the 2006 film America: Freedom to Fascism, several interviews are shown which claim that American workers do not need to pay income tax. Specifically, this clip claims that

There is no law which requires the average American worker (in the private sector) to pay a direct unapportioned tax on their labor and compensation, or services.

Is the average US worker legally required to pay income taxes, perhaps in a manner which is indirect or apportioned?

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    Since I didn't see the term used in the question, the group of people in the US that tend to make fallacious arguments like this is called [the "sovereign citizens" movement](https://en.wikipedia.org/wiki/Sovereign_citizen_movement). Broadly speaking, sovereign citizen arguments are almost all *complete hogwash*. – BradC Oct 31 '18 at 16:25
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    My understanding is that it's *not* a crime to not pay your taxes - it's a civil matter. Meaning that you won't go to jail for not paying, but the IRS can sue you and garnish your wages and stuff like that. However, it *is* a crime to not file. If that's what this quote is referring to, then it's misleading at best. – EJoshuaS - Stand with Ukraine Oct 31 '18 at 17:21
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    Pardon a noob answer/question - Without bogging us down in legal details, the short answer is yes, paying taxes is a legal requirement. My question is: aren't these sites curated to prevent frivolous questions that are wastes of time and space? – Eamarkowitz Oct 31 '18 at 16:59
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    I think Al Capone would dispute your comment, EJoshuaS. – Tim Nevins Oct 31 '18 at 18:12
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    @Eamarkowitz The standard here is that questions should be about "notable" claims, [see this FAQ for some explanation](https://skeptics.meta.stackexchange.com/questions/2506/what-is-a-notable-claim); it essentially just means that "enough" people actually believe the claim. Sovereign citizen claims are certainly fringe, but in my opinion, a feature-length documentary film with its [own wikipedia page](https://en.wikipedia.org/wiki/America:_Freedom_to_Fascism) should probably be considered notable enough to justify a question here. – BradC Oct 31 '18 at 18:34
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    @EJoshuaS It's a civil matter until the court orders you to pay, you refuse to pay, and you're imprisoned for the crime of disobeying a court order. – David Rice Oct 31 '18 at 19:18
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    @henning Part of the problem is "have you tried not paying?" can often be answered as "yes, for the last couple years!" as it frequently takes the IRS a few years to catch on. They're not prone to updating their old claims after the IRS winds up skewering them to the wall. – ceejayoz Oct 31 '18 at 19:45
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    I know of at least one person who tried... it didn't end well: https://en.wikipedia.org/wiki/Irwin_Schiff – JacobIRR Oct 31 '18 at 21:01
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    @TimNevins Capone was prosecuted for failing to file tax returns, not merely failing to pay his taxes. – Acccumulation Oct 31 '18 at 21:03
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    @Accumulation The conviction was for "Tax Evasion", i. e, not paying federal taxes owed. Potato - potahto. – Tim Nevins Oct 31 '18 at 21:16
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    @EJoshuaS: willlful failure to file _or_ pay is in fact a crime, see 26 USC 7203. But criminal prosecution and imprisonment are costly; IRS' administrative (not even civil) powers are usually enough to collect if you actually have the money, and if you don't putting you in prison is very unlikely to improve your financial condition, so in practice the gov't wouldn't benefit from prosecuting nonpayment. For nonfiling and fraudulent filing they do need at least the threat if not reality of prison time with some people. – dave_thompson_085 Oct 31 '18 at 22:42
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    @BradC not to mention the seemingly copy-pasted 10/10 reviews on IMDb. – TheWanderer Nov 01 '18 at 02:25
  • Since we don't have the complete context in your quote, could it have meant "directly out of your paycheck" versus "at the end of the tax year?" –  Nov 01 '18 at 16:38
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    @EJoshuaS It is a crime to *wilfully* fail to file a return or pay taxes. The defence can argue that the defendant had an honest belief in one of these bogus arguments, and hence isn't guilty of deliberately breaking the law. Sometimes it works. http://www.jsiegel.net/taxes/belief.htm – Paul Johnson Nov 03 '18 at 09:56
  • @PaulJohnson: I have an honest belief that there is no office statutorily qualified to receive tax return filings. They're all operating outside the law -- Hatch Act violations are widely documented, and I have firsthand experience that IRS offices ignore the data protection and privacy guarantees made by the law. In a fair world, I wouldn't have to submit information to places that are known to leave it unprotected, just do the calculation myself and make the payments. However, this belief doesn't mean I'm stupid enough to stop following the instructions. Put me on a jury on the other hand... – Ben Voigt Nov 03 '18 at 16:15
  • Most of legal systems don't have major written rules like "The person should do this" or "The person must do this". Legal systems just put out "sanctions" for those who do a prohibited conduct, or those who don't act in a obliged way. In general terms, there are no written rules as "The person should pay taxes". The real written rules only prescribe penalties for those who don't do that conduct. The "obligation" to pay taxes are just a "consequence" of the rules that prescribe penalties for someone who don't pay. So, you aren't "required" to pay - but, if don't, support the consequences. – mguima Nov 05 '18 at 13:11
  • Technically, there's a way to work in the US and legally not pay taxes - don't make enough for the IRS to require it. I believe the amount is something like $750/year. – David Thornley Nov 05 '18 at 18:44
  • See also https://skeptics.stackexchange.com/questions/18474/has-income-tax-been-found-unconstitutional-by-a-court. – DuckMaestro Apr 12 '20 at 02:39

4 Answers4

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The IRS has a section of their website, The Truth About Frivolous Tax Arguments dedicated to explaining the flaws of popular incorrect arguments of why taxes don't have to be paid.

Specifically, it says:

The requirement to pay taxes is not voluntary. Section 1 of the Internal Revenue Code clearly imposes a tax on the taxable income of individuals, estates, and trusts, as determined by the tables set forth in that section. [...]

Furthermore, the obligation to pay tax is described in section 6151, which requires taxpayers to submit payment with their tax returns. Failure to pay taxes could subject the non-complying individual to criminal penalties, including fines and imprisonment, as well as civil penalties.

They go on citing a number of case laws supporting this point.

Snopes agrees with this:

[I]n a legal sense, neither the obligation to file of tax returns nor to pay taxes owed is voluntary — those requirements are specifically spelled out in Title 26 of the U.S. Code, particularly Section 6151

The NY Times also agrees in their review of the film:

Arguments made in court that the income tax is invalid are so baseless that Congress has authorized fines of $25,000 for anyone who makes them.

The article goes into some more detail on the law, as well as the consequences of violating it.

For more details see also As a US citizen, what law requires me to pay income tax? at law.SE.

Regarding the movie itself, it might not be the best source. To quote Wikipedia:

The film has been criticized for its promotion of conspiracy theories, its copious factual errors, and its repeated misrepresentations of the individuals and views it purports to criticize.

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tim
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  • Isn't it even that this applies to citizens of the US, no matter in what country they work in? – PlasmaHH Oct 31 '18 at 10:26
  • @PlasmaHH I'm not familiar with the specific details of that. It seems that the answer is [it depends](https://www.efile.com/foreign-earned-income-and-income-exclusion/) (from what I can tell, you have to file, but depending on the work and the amount earned you may be excempt from paying). – tim Oct 31 '18 at 10:40
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    Other resources for refuting tax-avoidance arguments are the venerable [Tax Protester FAQ](https://evans-legal.com/dan/tpfaq.html) (since 1998!) and [Jon Siegel's Income Tax Protestors Page.](http://www.jsiegel.net/taxes/IncomeTax.htm) The latter site even has [a page devoted to refuting "Freedom to Fascism".](http://www.jsiegel.net/taxes/F2F.htm) – Michael Seifert Oct 31 '18 at 13:16
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    @PlasmaHH: US citizens (and Green Card holders) have to file their income taxes and pay on US and non-US income. Interestingly (and uniquely), [regardless of whether they live in the US](https://politics.stackexchange.com/q/29728/14869). After the Foreign Tax Credit and the Foreign Earned Income Exclusion, they may not actually owe anything - but they still need to file. – Stephan Kolassa Oct 31 '18 at 14:00
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    @StephanKolassa not just legal residents, illegal ones as well. Illegal immigrants pay billions of taxes every year. – xyious Oct 31 '18 at 19:23
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    I would add a note that while, in general, income tax must be paid, there _are_ select groups who don't owe income tax -- off the top of my head (and therefore probably incorrectly) very-low-income and minors don't owe any income tax. _However_, those are narrow exceptions to an otherwise very wide rule, and don't detract from the correctness of this answer. IMO it should be added just for completeness. – Nic Oct 31 '18 at 20:01
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    @xyious but the requirement under discussion is about people who are required to report their worldwide income even if they reside outside the US. Illegal residents of the US do not reside outside the US, so they are out of scope. – phoog Oct 31 '18 at 21:48
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    @NicHartley: minors are not per se exempt, but most are in the low-or-no-income group; in fact minors with significant unearned income, usually on assets 'given' by rich parent(s), are taxed at _higher_ rates, often called the 'kiddie tax': formerly the parent(s)' rates, post-TCJA trust/estate rates. Some _income_ is exempt: interest on state/local govt bonds (traditionally called 'munis' though today few are from municipalities), military combat pay and veteran's benefits, part of Social Security retirement benefit, and most Roth plan/account distributions. And gifts. – dave_thompson_085 Nov 02 '18 at 02:11
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    "Arguments made ... are so baseless that Congress has authorized fines of $25,000 for anyone who makes them." and "Congress shall make no law ... prohibiting the free exercise thereof" seem in conflict. Any additional references aside from the NYT on that issue? – chux - Reinstate Monica Nov 02 '18 at 04:27
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    @chux Forbes has the same claim, and cited [26 U.S. Code § 6673 (a) (1)](https://www.law.cornell.edu/uscode/text/26/6673) which says that "Whenever it appears to the Tax Court that (...) the taxpayer’s position in such proceeding is frivolous or groundless (...) [it] may require the taxpayer to pay (...) a penalty not in excess of $25,000" – André Paramés Nov 02 '18 at 15:22
  • @AndréParamés Ah I see, it is the difference between arguing in tax court vs. public discourse. – chux - Reinstate Monica Nov 02 '18 at 15:26
  • I said this on another answer. Applies here too: Rather than quoting Wikipedia saying some unnamed people criticised it, it would be better to see the critiques. – Oddthinking Nov 02 '18 at 23:48
  • @chux When you are in court "freedom of speech" suffers immensely. Like you are not allowed to tell lies, made up stories etc. Admittedly that you can be fined for making incorrect claims in court is rather unique. – gnasher729 Nov 04 '18 at 01:40
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No it is not true. The Sixteenth Amendment was adopted in 1913, so taxes not apportioned to states are constitutional. US Code 26 Subtitle A is the relevant law.

The quoted text seems to allude to a number of arguments that income tax does not need to be paid. The IRS has a page refuting frivolous tax arguments, and anyone contemplating trying to claim that they don't need to pay income tax should read it first. Jonathan Siegel, Professor of Law at George Washington University Law School, also has a similar collection of tax myths, including a page specifically dedicated to refuting the claims made in America: Freedom to Fascism.

Regarding the quoted text:

  • "(in the private sector)": Presumably refers to the contention that only federal employees need pay federal income tax. This is based on a misreading of the law, which states that the term "employee" includes federal employees (my emphasis). Some people think that "includes" means "includes only".

  • "Direct unapportioned tax": Presumably this refers to the contention that the Sixteenth Amendment was never properly ratified, or does not authorise federal income tax. No court has ever accepted this argument..

  • "Labour or compensation, or services": Presumably this refers to contentions that wages are not "income" because they were received in direct exchange for a thing of equal value (i.e. some work). The courts have never accepted this argument either.

Paul Johnson
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    An important meta point here is that effectively **the law is what the courts say it is.** You can't change reality with rhetoric and logical tricks. So anyone coming up with some argument why the law is something different than the courts say it is might as well be writing science fiction. – T.E.D. Oct 31 '18 at 13:47
  • @T.E.D. This! Power trumps all. There were courts and judges and laws in fascist Germany, as well as communist Soviet Union, and current China. What "law" allowed Soviet Union to murder millions of their own citizens (Russian included), or suppress Hungarian uprising. Their law, with their power, and their chain of obedience. – paulj Oct 31 '18 at 14:11
  • @T.E.D. That reminds me of the "Sovereign Citizen" (and related) movements. They can make up as many convoluted arguments as they want; but that doesn't mean the court has to try to follow their nonsense. – JMac Oct 31 '18 at 15:56
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    I once heard a rumor the 16th amendment wasn't ratified by enough states... :) – rogerdpack Oct 31 '18 at 17:30
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    @rogerdpack At the time the 16th amendment was declared ratified, a statement by the Secretary of State that an amendment passed was legally sufficient to bring it into effect. Philander Knox, then Secretary of State, made such a statement. Courts have consistently held that it is way too late to challenge the constitutionality of the operation of such a conclusive presumption in the past; however, that process would certainly be considered unconstitutional today. (Imagine if Mike Pompeo simply declared that the 1st amendment had bee repealed and that his declaration was sufficient.) – David Schwartz Oct 31 '18 at 18:46
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    @paulj It's not even just that the courts have unilateral power to jail or execute you for disobeying (because in the US they... don't). It's that part of the law -- at least in practice, if not as written -- is that "precedents" can be set, and once set, they should be followed by any similar cases. So once the first judge decided e.g. that "includes" doesn't mean "includes only", _every_ judge will rule that way, barring mistakes or substantially different context. – Nic Oct 31 '18 at 20:03
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    @DavidSchwartz Can you offer a citation for that? According to Wikipedia, the 16th Amendment was ratified by a sufficient number of states--40, which is at least 75% of 48--before the Secretary of State ratified it. The courts might have taken up a challenge at the time, and a flat declaration without actual amendment would have been ignored; the problem is now it's established law and any quibbles about how it was amended are just that. – prosfilaes Oct 31 '18 at 23:59
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    @prosfilaes I'm not sure what you want a citation for. It sounds like everything you've said 100% agrees with what I've said. Do you mean a citation for that process being unconstitutional today? There's a line of Supreme Court cases holding that irrefutable presumptions violate due process and that this rule was an irrefutable presumption of validity. – David Schwartz Nov 01 '18 at 00:05
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    @DavidSchwartz That the Secretary of State's powers in this regard are substantially different then as opposed to now. The Supreme Court has refused to review Congressional impeachments, so it seems likely they'd refuse to review an executive processing of an amendment. Likewise, that the Secretary at the time declaring that some amendment had passed that hadn't even been through Congress wouldn't have been slapped down by the Supreme Court, if necessary. – prosfilaes Nov 01 '18 at 00:17
  • @prosfilaes Well, [it's not the Secretary of State anymore](https://www.law.cornell.edu/uscode/text/1/106b). The law on conclusive presumptions has changed a lot since then but nobody can reliably say what would have happened had there been a truly exceptional case earlier. – David Schwartz Nov 01 '18 at 00:49
  • @T.E.D. "So anyone coming up with some argument why the law is something different than the courts say it is might as well be writing science fiction." Or writing a new law, an amendment, or a court briefing. Court decisions do get overturned regularly, either by other court decisions or by changing the laws via legislation. It would be more correct to say, "The law is what the original intent of the authors of the law meant it to be, but is currently enforced as the courts say." – reirab Nov 01 '18 at 12:05
  • @T.E.D. "So anyone coming up with some argument why the law is something different than the courts say it is might as well be writing science fiction." Except that fiction is often entertaining. Batshit insane assertions about US tax law... less so. – HopelessN00b Nov 01 '18 at 21:02
  • @DavidSchwartz - If this is the argument I think it is, it has something to do with Ohio not really being a legitimate state, due to some technicality. Presumably, that would dip the total below the requirement. Note that I'm not *defending* the argument.... – RDFozz Nov 02 '18 at 15:54
  • @RDFozz That was one version of it. Another version is that a few states approved an amendment with slightly different language that, arguably, significantly changed the meaning. Some versions of these arguments are good arguments that might have worked had they had a chance to be made back in the day, but back in the day, the Secretary of State's declaration was considered conclusive. At least those means of dismissing those claims would be considered unconstitutional today as violating the right to due process. – David Schwartz Nov 02 '18 at 15:58
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Let me take a different tack on this. The statement as presented,

There is no law which requires the average American worker (in the private sector) to pay a direct unapportioned tax on their labor and compensation, or services.

is exactly (in a larger sense) correct, but this larger sense does not help the speaker.

The 16th amendment specifically permits an unapportioned 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.

The internal revenue code (US Code, Title 26) is enacted by Congress, imposes the various revenue taxes, and provides penalties for non-compliance. If this is not a law, I don't know what is.

Thing is, an income tax (as described in the OP) is not a direct tax, and hence does not need to be apportioned. The meaning of "direct" is often confused, and the fact that a taxpayer pays "directly" to the IRS is often the underlying source of confusion.

The Constitution provides that

No Capitation, or other direct, Tax shall be laid, unless in Proportion to the Census or Enumeration herein before directed to be taken. - Section 1, Article 9, Clause 4.

This refers to a head tax, but there are (in US law) only 3 kinds of direct taxes:

Only three taxes are definitely known to be direct: (1) a capitation [ . . . ], (2) a tax upon real property, and (3) a tax upon personal property. - Murphy v. Internal Revenue Service and United StatesLink

Direct taxes are taxes "directly" on property. Indirect taxes are taxes on transactions, or transfers of wealth. And most income falls squarely in the latter category.

In fact the apportionment/enumeration requirement is so burdensome that the Federal government has never even bothered to try for a national property tax or real estate tax. In this day of computers and networked data bases it would probably be doable, but not in the past.

Of course, you might ask, why the confusion? Well, that goes to Pollock v. Farmers' Loan & Trust Company, an 1895 Supreme Court decision that held that a tax on income derived directly from property (such as rent or dividends) was in fact a direct tax.

...taxes on real estate being indisputably direct taxes, taxes on the rents or income of real estate are equally direct taxes. Citation

It made no mention of earned income (as from a job), and so does not apply to what most see as "income tax". The decision invalidated the first general income tax, the Wilson-Gorman Tariff Act of 1894, and promised to really complicate bookkeeping for any subsequent income tax. The 16th amendment was a direct response to this situation.

So, as I started out saying, the statement is precisely correct. There is no law which requires payment of a direct tax (unapportioned or otherwise) on labor, compensation or services. But. The IRS income tax on these categories is an indirect tax, and that tax must be paid. The fact that you will pay directly to the IRS does not make it a direct tax (within this context).

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    Have any arguments been made in court about imputed income (income the IRS thinks one "should' have received, without regard for whether one actually received it)? In many cases, the fact that one should have received income may be taken as prima facie evidence that one did receive it, but if someone can provide evidence that they did not receive actual income, even if they willfully acted to avoid receiving it, would the foregone ability to have received income be considered "income derived from any source"? – supercat Oct 31 '18 at 16:36
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    Good point about the exact wording and the legal definitions of such. That we must parse individual words to understand each other is one of the big reasons we tend to talk past each other. Although, usually, the person making the claim doesn't try to elaborate and explain. – CramerTV Oct 31 '18 at 16:47
  • @supercat - I am not a (tax) lawyer, nor do I play one on television. In other words, I have no idea. – WhatRoughBeast Nov 01 '18 at 00:00
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    Any chance you could provide links to the pages you quote so we can check them in context? Thanks. – Oddthinking Nov 01 '18 at 05:24
  • @Oddthinking - Done for the two which actually take some work. – WhatRoughBeast Nov 01 '18 at 20:24
  • @supercat - I'm pretty sure you're confusing imputed and undeclared income. Imputed income is a benefit which has a "reasonable" market value, such as a company allowing your children to be covered by your (company) insurance. The value of that service is indeed taxable, but only if you receive it. The IRS is hard on getting taxes for stuff you did get, but they don't normally make stuff up. The "should have received" income is harder to parse. Are you talking, for instance, about owning a house which costs too much for your stated income? – WhatRoughBeast Nov 03 '18 at 04:49
  • @WhatRoughBeast: If e.g. someone rents a property to a relative at significantly below market rate, the IRS may charge the landlord income tax as though the property were rented at close to market rate on the premise that the transaction essentially combines a near-market-rate rental and a (non-deductible) gift of the difference between market and actual rental price. – supercat Nov 03 '18 at 16:01
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From the Wikipedia article on this film,

The film has been criticized for its promotion of conspiracy theories, its copious factual errors, and its repeated misrepresentations of the individuals and views it purports to criticize.

More to the point, further on the same Wikipedia article notes

One of the listed stars of the film, Irwin Schiff, was sentenced on February 24, 2006 to 13 years and 7 months in prison for tax evasion and ordered to pay over $4.2 million in restitution.

So we have here a film in which claims are made that the Federal income tax is illegal. At least one of the people making these claims, Mr. Schiff, was sent to jail for not paying said tax. Thus, it would seem that either there is a huge conspiracy of governmental actors, including the legislative, executive, and judicial branches and their various minions, who are acting together in a coordinated manner to subvert the precious rights of Americans to not pay income or any other tax - or else this film is a load of hogwash.

Frankly, I'm going with "hogwash".

Oddthinking
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    Rather than quoting Wikipedia saying some unnamed people criticised it, it would be better to see the critiques. – Oddthinking Nov 01 '18 at 05:22