Appeals court reins in the IRS

In one of the most under-reported rulings in current law, the U.S. Court of Appeals for the Second Circuit in New York state, slapped some restraints on the Internal Revenue Service.

On Jan. 25, the court ruled that the IRS may not compel taxpayers to turn over personal or private property to the tax collectors unless the IRS has a federal court order. The ruling came in the resolution of a lawsuit brought by Robert Schultz of the anti-income tax group, We the People.

The court said: “…absent an effort to seek enforcement through a federal court, IRS summonses apply no force to taxpayers, and no consequence whatever can befall a taxpayer who refuses, ignores, or otherwise does not comply with an IRS summons until that summons is backed by a federal court order…[a taxpayer] cannot be held in contempt, arrested, detained, or otherwise punished for refusing to comply with the original IRS summons, no matter the taxpayer’s reasons or lack of reasons for so refusing.”

The appeals court said the pertinent provisions of the tax code are unconstitutional on their face. The ruling nullified key enforcement provisions of the Internal Revenue Code, and took away much of the IRS’s power to force compliance with its administrative demands on personal and private property. The court termed these demands just “requests.”

The judicial panel stated that federal courts exist to protect taxpayers from what it termed an “overreaching” IRS and said that the IRS must resort to the federal courts before it can bring legal force on anyone to surrender private or personal property to the agency.

Schultz said the court, in its action, has recognized that the IRS routinely violates people’s due process rights in its daily administrative practices. He said the appeals court’s findings may firmly establish the substance of the causes of action in We the People’s right-to-petition lawsuit before the district court in Washington, D.C.

Schultz added that in the near future, he will have further statements on these events and will disclose plans to create widespread public awareness of the group’s efforts and its success.

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