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By Karl Meyer
Edited by Frederick Mann

Introduction by Frederick Mann
This report contains the edited text of four reports on "war tax resistance" by Karl Meyer. My heartfelt thanks to Mr. Meyer for his generous permission to republish his articles.

The point should be made that the editor disapproves of all taxes, whether used to wage war, or ostensibly used for "worthy causes." Tax is theft.

Controlling Federal Tax Withholding
Practical War Tax Resistance: 1

Many people feel they should resist militarism by resisting the payment of federal income taxes. Yet they believe they are unable to engage in war tax resistance because taxes are withheld from their salary or wages. This obstacle can be overcome by nearly everyone. Thousands of war tax resisters have stopped the withholding of taxes that would be used for military spending by claiming additional allowances or exemption from withholding on their W-4 forms. This brochure explains how people reduce or eliminate withholding and some of the possible consequences.

Form W-4, the Employee's Withholding Allowance Certificate, is an IRS form that most employees must fill out when they begin a job. The employer uses it to determine the amount of federal tax to be subtracted from an employee's wages or salary. Anyone may fill out a new W-4 at any time, and must do so whenever her or his exemption status changes.

For tax purposes, "withholding allowances" and "dependents" are not the same thing. The law allows people to claim allowances for themselves, for their dependents, and for deductions and credits they expect to claim on their tax returns, such as medical bills, mortgage interest, charitable gifts, child care costs, alimony payments, retirement contributions, and many other deductible payments.

Employees are responsible for the number of allowances they claim on their W-4 forms. Employees are not required by law or etiquette to explain their allowances to employees. In fact, an employer could not know how many allowances an employee is legally entitled to claim without being fully informed about that person's private financial situation.

In order to prevent the withholding of taxes for war tax resistance purposes, an individual first figures out all the allowances she or he is legally entitled to, according to IRS regulations. This process is explained on the W-4 form worksheet. The tax resister then claims additional allowances to stop the withholding of the war tax portion. This amount, whether it is 10%, 50%, 100% or somewhere in between, is a matter of personal political and ethical choice.

The IRS instructions on the W-4 form are so complicated that many people are not prepared to contend with them in the atmosphere of a personnel office or job site where the form is usually filled out. It is a good idea to study the form in advance and figure out how many allowances IRS rules permit and how many extra allowances to claim for war tax resistance purposes. The law requires only that the W-4 form itself be filed. It is not necessary to return the worksheet to the employer.


Under the 1991 withholding tables and rates, the first $1,250 of a single person's annual income is exempt from withholding even if no allowances are claimed; for a married person, the first $3,550 is exempt. Above these amounts, each allowance that is claimed on the W-4 exempts another $2,100 of one's annual income from withholding. To get a rough estimate of tax exempt income for the year, calculate the number of legal allowances, multiply by $2,100 and add either $1,250 (if single), $2850, (unmarried, head of household), or $3,550 (if married). To resist war taxes, a person can claim one additional allowance for each $2,100 of the taxable balance of income to be protected from withholding.

Tax resisters can also consult IRS Publication 15, Circular E, Employer's Tax Guide to determine their total number of legal allowances and the number needed to reduce or prevent withholding. See the Resources section of this leaflet for location information.

Married Example (Refer to Note 1 below)

Married Couple with annual wages of                         $20,000
Personal Allowance:                                  1
Special withholding allowance (read exceptions):     1
Other dependents (e.g. children):                    3
Allowances for expected deductions and credits:      1
Total legal allowances: 6 x $2,150 =                        $12,900
Add amount exempt from withholding: $12,900 + $3,550 =      $16,450
Annual wages less total: $20,000 - $16,450 =                $3,550
Balance equals estimated taxable income (Note 2):           $3,550
Resisting war taxes of 52% on taxable income: 3,550 x .52 = $1,846
Additional allowances to be claimed: 1846 / 2150 =   0.9 (Note 3)
Total allowances claimed:                            6 + 1 = 7


  1. Remember, for married couples and heads of households with earned income below $21,245, the Earned Income Credit may reduce the tax you owe and change the results of these calculations. You may also claim the EIC in advance through the payroll withholding calculations.
  2. This method of estimation loses accuracy if much of your taxable income falls in the 28% bracket (above $20,350 single, $27,300 head of household, $34,000 married), and will result in less withholding than you had planned.
  3. Round up, 1 in our example, to avoid over withholding and pay the balance you wish to pay when you file your return. For most people, each withholding allowance makes a difference of about $323 (2150 x .15) in tax withheld, so the calculations shown here can only approximate the amount of tax you want taken out.

The "Exempt" Option on the W-4 form is intended for use by people who owed no taxes the previous year and expect to owe none in the current year. Claiming exempt will prevent taxes from being withheld from a person's wages or salary. However, employers are required to send a person's W4 to the IRS if s/he claims exempt but usually earns more than $200 a week. People who work only part of a year, or who have widely fluctuating wages, may have to claim a higher number of allowances or claim exempt in order to prevent over-withholding.

Although we are personally responsible for the claims we make on our W-4 forms, since 1981 employers and the IRS have had a limited authority to reject a W-4 if they can establish that excessive allowances have been claimed.

Under the regulations, employers are supposed to reject a W-4 and request a corrected one if , 1) a person has altered or added on to any of the printed language on the W-4, or 2) a person has verbally communicated that s/he is claiming allowances or exemptions not permitted by IRS rules. If a person tells an employer that s/he is claiming extra allowances because of war tax resistance, the employer is supposed to reject the W4. If the employer honors the W-4 anyway, the employer may become liable for civil and criminal penalties. This is why it is often advisable that a person not justify her or his war tax resistance claims to the employer.

In addition, if a person claims more than 10 allowances, or claims exempt and wages usually exceed $200 per week, employers are required to send a copy of the W-4 to the IRS. The IRS may eventually try to verify such W-4s by sending the employee forms asking for information similar to that requested on the income tax return. If the employee does not defend the claim to the satisfaction of the IRS, it may instruct the employer to withhold taxes on the basis of allowances as figured by the lRS. In such situations the employer must have lRS approval for any change in the employee's withholding status. The process of verification may take many months. In the meantime, the employer is supposed to honor the employee's W-4. Because of the likelihood of IRS rejection of larger claims, it is generally more practical to claim 10 or fewer allowances for war tax resistance purposes. Remember, if you have had even less tax withheld during the year than you wished, you may adjust it upward by giving your employer a new W-4. The employer must withhold according to your new W-4 no later than the first pay period 30 days following its receipt.

The IRS may assess a $500 civil penalty for a false W-4 if they decide excessive allowances have been claimed. A W-4 claiming excessive allowances is not subject to the civil penalty for filing a "frivolous tax return." If the $500 false W-4 penalty is wrongly imposed, this can be challenged by seeking an "abatement" of the penalty through the "W-4 Coordinator" at the IRS Service Center.

There is also a criminal penalty of up to one year in jail and a fine of up to $100,000 (nothing even close to this amount has ever been imposed on a war tax resister) for "willfully supplying false or fraudulent information" on a W-4 form which decreases the amount of withholding. Criminal penalties cannot be applied automatically. Only 16 war tax resisters have been criminally prosecuted for W-4 resistance; six of them served jail sentences ranging from 30 days to nine months. And only one war tax resister has been prosecuted since 1972, so the current risk of criminal prosecution appears to be small. However, IRS policy and procedure on criminal prosecution could change in the future, and resisters should be aware of such a possibility.

Currently the IRS relies on tightened rules, monitoring W-4 claims, and the $500 civil penalty as its main enforcement tools. The assessment of the civil penalty is infrequent when compared to the many war tax resisters who are effectively using W-4 resistance to prevent withholding of war taxes.

Employees are not required by law to explain their allowances to employer. Many people are very anxious about how a new employer will react if they claim so many allowances, or how an old employer will react if they increase the number of allowances they claim. Experience has shown that a firm, polite attitude in response to an employer's questions helps assert personal responsibility for one's claim and satisfies the employer. Such replies as, "This is the number of allowances I believe I am entitled to," "This is my personal tax situation," or "This is the number of allowances I have been advised to claim," may satisfy an employer. If an employer balks or persists in asking for further explanation, a simple repetition of the same or slightly varied responses usually gets the message across that this is a personal, private matter and that no further explanation will be offered.

Some people, concerned about truthfulness in their relationships, are troubled about signing the declaration at the bottom of the W-4 after claiming extra allowances, because it might be interpreted as a false statement. Some, however, have come to understand these claims as honest. They make these claims because they firmly believe it is wrong to pay taxes for war, and that they are morally entitled to refuse to pay them. When they sign the certification on the W-4, they feel they are making an honest statement of belief, even though they realize the IRS would disagree.

Many war tax resisters file returns; others do not. The decision whether to file a return is a personal one. Here are a few factors that may help a person reach a decision.

It appears that the IRS is more likely to identify W-4 resisters who have filed returns than those who have not. Therefore, people who file annual returns are probably more likely to be assessed the $500 civil penalty for a false W-4 form, and to have their employers instructed to reject their W-4 forms. However, the IRS can readily identify people who have filed returns in the past and then stopped filing. The lRS can also identify non-filers through W-2 forms, 1099 forms, and other methods. The IRS may send people who are identified as non-filers a series of notices requesting them to file. Sometimes the IRS takes no further action. The agency has recently upgraded its computerized systems to locate non-filers, and also has the authority to prepare returns and assess taxes of non-filers. IRS prepared assessments often inflate the amount owed, and this may put pressure on the resister to produce his or her own tax records to refute the IRS claim.

People who do file returns will not be protected from the $500 civil penalty for filing a false W-4 by taking "war tax" deductions or credits on their tax return. A "false" W-4 cannot be "corrected" or justified by anything written on the tax return. In addition, taking a "war tax " credit or deduction may result in the $500 civil penalty for filing a "frivolous" tax return. Therefore, war tax counselors usually suggest that if people wish to file, they file a correct return and refuse to pay the war tax portion.

There is a criminal penalty for not filing a return of up to one year in jail and up to a $100,000 fine. However, criminal prosecution of war tax resisters for not filing is extremely rare. We know of only two cases in the past 40 years. One person was jailed for 60 days, the other was given probation and a community service sentence. There may be a risk of being assessed the civil fraud penalty (75% of the tax due) if a person files a "false" W-4 and also doesn't file a return. In an extreme case, a felony prosecution for attempted tax evasion is possible.

Many people prefer to file returns in order to confront the government as directly and personally as possible. Others file because they believe it is the most responsible and honest action they can take despite the risks. Still others believe that not all taxes are bad, so they file and refuse to pay only the military portion of their taxes.

Non-filers, on the other hand, may believe they can be just as open and public about their resistance in ways other than filing returns. Some non-filers do not wish to cooperate with the government in any way including filing returns. Many non-filers also believe that by reducing the risk of IRS intervention in their war tax resistance, they have more time and energy to engage in other areas of peacemaking. However, everyone identified by the IRS as an "illegal tax protester" (a category in which the IRS includes war tax resisters) is subject to having their W-4 forms investigated.

A war tax counselor or support group may be able to help an individual decide which action is best for her or him. However, we strongly believe that whatever the choice a person makes, war tax resistance should not be done in secret or for self gain.

We encourage all war tax resisters to talk to friends, family, and the general public about why we choose not to pay taxes for militarism. We also encourage people to devote their resisted taxes to works of peace, education, social sharing, and the common good.

They make these claims because they firmly believe it is wrong to pay taxes for war, and that they are morally entitled to refuse to pay them. When they sign the certification on the W-4, they feel they are making an honest statement of belief, even though they realize the IRS would disagree.

To File or Not To File an Income Tax Return
Weighing the Risks, Benefits and Consequences for War Tax Refusers
Practical War Tax Resistance: 2

For reasons of conscience, many people believe that they should resist military spending by refusing to pay federal income taxes.

The first leaflet in this series, Controlling Federal Tax Withholding explains how some resisters prevent the withholding of war taxes from wages and salaries by claiming extra allowances on W-4 forms. Other literature deals with war tax refusal through self-employment, contract employment, or reducing income below taxable thresholds.

People who have just begun to resist war taxes in these ways typically ask, "What should I do when it's time to file my income tax return?"

Many refusers decide not to file tax returns at all. This article explores the risks, the benefits and other consequences for war tax refusers who file annual tax returns and for those who do not file.

Those who file income tax returns as required by law provide a lot of information that can be helpful to the IRS in collecting the tax. They disclose the amount and the source of their income. They disclose the location of assets, such as savings or stocks, which produce income. When they sign an income tax return, showing tax due but not paid, they are also consenting to the assessment of the tax. This is an important step in the collection process, because without an "assessment," voluntary or involuntary, there can be no collection. Signing a tax return showing tax due is a "self-assessment" that allows the IRS to proceed directly to the collection process.

If you do not file your own income tax return, the IRS needs to file a return in your name, mail you a copy, allow you to appeal and then make a final assessment of tax due, before they can demand payment and begin the collection process. These steps are time consuming, and each delay tends to decrease the likelihood that the IRS will ever get to the stage of active collection efforts.

Delaying assessment and collection efforts has both benefits and drawbacks. The main benefit is that the IRS may never assess or collect the tax at all. The main drawback is that delayed assessment will result in large civil penalties and interest accumulation. In addition, if a return is filed, the IRS has only 3 years to assess the tax due. For a non-filer, however, there is no "statute of limitations" for assessment. Also, while some tax resisters have been able to defeat collection by declaring bankruptcy, taxes for which no return was filed cannot be "discharged" in bankruptcy court.

Failure to file may also increase the otherwise minor risk a war tax resister faces of incurring the onerous 75% civil fraud penalty.

There are separate penalties for delinquency, for negligence, for failure to pay estimated tax, for late payment, and so forth. The penalty for failure to file is independent of, and ten times greater than, the penalty for late payment. When the penalties and interest are added on, they often double or triple the total amount claimed by the IRS when they finally get around to processing their claim.

To be hit suddenly with assessments for tax liabilities piled up for several years, plus added penalties and interest, can be very intimidating for anyone who feels vulnerable to the IRS collection tactics. Until the tax is paid or collected, interest continues to accrue at a high rate and is compounded daily. Also, when the IRS files for you, they may assert excessive claims because they make errors in estimating your income, or because they do not allow for exemptions, deductions or credits that you would claim if filing for yourself. Getting the IRS to correct such errors can be complicated and difficult.

Before 1987, it seemed clear that not filing a tax return significantly increased the likelihood that the resisted taxes would never be collected. People who filed annual tax returns showing substantial amounts of unpaid tax usually had the IRS trying every year to collect the tax by seizure of wages, bank accounts, or other assets.

Many of those who did not file never heard from the IRS at all. Sometimes they received notices asking them to file, but if they ignored those notices there usually was no effective follow-up, no assessment, and no attempts to collect.

This picture began to change radically in 1987 and 1988. The IRS developed a capability to file skeleton returns automatically, using information provided by employers and other income payers on annual W-2 and 1099 reports. The IRS is now demonstrating an ability to assess taxes and penalties against those who do not file. This capability seems likely to improve and become more efficient in the next few years.

As that happens, non-filers will lose the benefits of delay and non-enforcement, while the full burden of penalties and interest assessments will pile up against them. While the philosophical reasons for not filing may remain important to many war tax resisters, the practical drawbacks will increase.

There is one group for whom the practical benefits of non-filing will remain strong. That group is those who are self-employed or employed in some form of "underground economy'' in which their income is not reported to the IRS on W-2 or 1099 reports that all income payers are supposed to file. As the IRS relies more heavily on computerized and automated processes, their ability to assess taxes against these kinds of unreported income will probably remain low and may even decline.


Through the use of skillful public relations the IRS has been able to frighten people by exaggerating the likelihood of criminal prosecution and imprisonment for those who evade or resist taxes.

Willful failure to file a tax return is a federal criminal misdemeanor offense punishable by up to one year in jail and up to a $100,000 fine for each year's refusal. Federal sentencing guidelines recommend punishment in individual cases linked primarily to the amount of tax not paid; probation is generally authorized only for amounts of tax under $5000 (total of all counts).

Yet the number of people prosecuted and jailed nationwide is minuscule when compared to the several million people who do not file returns, using the IRS' own estimates.

Among thousands of principled war tax refusers, we know of only two in the last 50 years who have been indicted for failure to file a tax return. One of those had implicated himself by filing a blank return. In 1980 he was sentenced to probation, with community service. He served no time in jail. The other, a non-filer since 1947, was sentenced to 60 days in jail, plus three years' probation, in 1978.

The IRS has internal guidelines (IRS Law Enforcement Manual IX, Section 100) which a few years back basically provided that criminal prosecution may be recommended only in cases where the "average yearly additional tax for criminal purposes is $2500 or more," continuing over a period of at least three years, although exceptions may be made in "a number of situations" to allow prosecution of people with lower liabilities if their nonpayment involves "flagrant conduct." The current guidelines are a jealously guarded IRS secret, but are believed to be similar.

The IRS is relying more on monetary civil penalties and civil enforcement processes as the U.S. prisons become more crowded with other offenders, and as the IRS computerized information capabilities improve.

Many war tax refusers who fear criminal prosecution if they do not file are not aware that "willful failure to pay tax" is also a criminal offense carrying the same penalties as "willful failure to file". We know of no criminal prosecution of a war tax refuser for "willful failure to pay," but when you file a tax return with a letter stating that you refuse to pay, you are actually providing the IRS with evidence of the crime of ''willful failure to pay".

Every war tax refuser should be aware that they could be indicted for "willful failure to file," or for "willful failure to pay," but the risk is so slight for most people that it can be regarded as negligible when compared to the other practical burdens and risks of war tax refusal.

In the years to come, the IRS could use criminal penalties more frequently to frighten people into reporting income from the underground economy, but indications of such a trend have not yet been seen.


Apart from practical personal benefits or risks, many people make a decision on the filing question based upon ethical, religious, or political beliefs about war tax refusal. Philosophical arguments for filing returns include the following:

A. The idea of equitable taxation for social needs is sound in itself, therefore we should cooperate with the underlying taxation system, while openly resisting only the appropriation of taxes for war.

B. The moral basis of conscientious war tax refusal relies upon open disobedience and acceptance of consequences. We should resist taxes openly, and not evade them or conceal our income in any manner.

C. The moral and political impact of conscientious tax refusal comes from informing the IRS and our political representatives about our protest and the reasons for it. If we refuse taxes without informing the IRS, there will be no political impact, because we will not be clearly distinguishable from millions of others who evade taxes for reasons of personal benefit.

D. The act of political protest is more significant than preventing specific collection of taxes from us.

Arguments for not filing include the following:

A. Because of the domination of militarism, the U.S. tax system has becomes so perverse and distorted that it does not serve a positive social purpose. If we wish to contribute to the needs of society, we can do that more effectively by taxing ourselves and contributing to the unmet needs that we see, instead of cooperating with the Federal taxation system in any manner.

B. The Federal government and the IRS have become morally illegitimate. We have no obligation to cooperate with them, or to accept the penalties and harassment that they impose on tax refusers.

C. The political impact of filing protest returns is negligible. IRS employees are unlikely to pay attention to the protest part; because of their vested interests, they are among the people least likely to be influenced by our ideas. We can refuse taxes openly without reporting ourselves to the IRS. We can have more political and social impact by talking openly about our tax refusal to friends and coworkers who are more likely to be influenced by us. We can communicate openly with the general public through leaflets, public education, and letters to periodicals.

D. Preventing assessment and collection is more significant than tax protest alone, because when we prevent collection, we are able to use thousands of dollars of uncollected taxes to directly finance political educational and social causes that meet the true needs of society. If we countenance assessment and collection, we have fewer resources left to devote to the common good.

One Chicago war tax refuser did not file returns for 1981 through I987. In June, 1988, she received a computerized assessment for 1982, 1983, and 1984: the assessments were as follows:

      Tax Due   Penalties   Interest    Total
1982   $353       $286        $190      $829
1983   $667       $516        $368      $1551
1984   $691       $449        $264      $1404
       -----      -----       ----      -----
TOTAL  $1711      $1251       $822      $3784

Criminal prosecution and imprisonment for failing to file is possible, but it is not the most threatening factor in the decision about filing tax returns. Criminal liability and risk for filers and non-filers appears to be comparable, and slight, for most tax resisters.

For the overwhelming majority of war tax refusers, the greatest burdens and risks arise from anxiety about the impact of IRS collection actions on their income, job security, ownership of real estate and other assets such as bank accounts and pension benefits.

At present, it is difficult to assess the relative benefits and risks for those who file or do not file. The information we provide here is intended to help individuals decide, in the light of their own feelings and circumstances.

Those who earn wage income that is reported to the IRS annually on W-2 forms by employers or have other forms of income that are reported on Form 1099, can expect to get automated assessments from the IRS, for many or most years, if they do not file annually for themselves. If their employment is sporadic, transitory, or marginal, if they move frequently from job to job, or from place to place, it will be hard for the IRS to catch up with them or to keep up with them. If they do not file tax returns, assessment may come at any time, without time limitations, and the IRS assessments may be higher, but the delays and obstacles to assessment and collection will make successful collection lower and slower. The IRS must collect the tax within ten years of the final assessment date, or it becomes legally uncollectible. People on the move are hard to collect from and the IRS gives up on them because the collections are not cost effective.

People whose residence, employment or vocational focus are stable may find that it is no longer feasible to prevent assessment and collection efforts by not filing a voluntary tax return. If they do not file, the liability for added penalties and interest will greatly increase their overall liability. They will be vulnerable to frequent collection of greater amounts.

The authors of this leaflet believe that people who are self-employed, or receive most of their income from unreported sources, may well be able to prevent the assessment and collection of taxes by not filing any income tax returns. They may be vulnerable if unfriendly acquaintances who know about their tax refusal report them to the IRS. Even then they may be in a position to ride out any IRS inquiry if they decline to provide information to the IRS, if their visible assets are modest, and if their past income sources are difficult to trace.

People of conscience, who are committed to effective tax resistance over an extended period of years, may have to shift their strategy of resistance as the IRS increases its computerized capability to file returns and assess taxes more promptly.

The most effective strategy for war tax refusers who may be determined to prevent any collection of war taxes will include these elements:

  1. They will derive their income from sources that are not reported to the IRS,
  2. They will not file income tax returns,
  3. They will make themselves collection proof by employment flexibility and by not holding real estate or other real property and assets in forms that are easy to find and seize.

We believe that whatever choice a person makes, war tax resistance should not be done for personal financial gain. We encourage war tax refusers to talk to friends, family and the general public about why we choose not to pay for militarism. We encourage people to devote their refused taxes to works of peace, education, social sharing and the common good.

[Editor: Build Freedom strategy is that tax reduction or elimination "should be done for personal financial gain." Maximum personal gain results in maximum societal gain. If you can legally avoid paying taxes, you should do so. Paying taxes is evil.

How to Resist Collection,
Or Make the Most of Collection When It Occurs

Many people believe they should resist military spending by refusing to pay federal income taxes. Earlier leaflets in this series discuss how to control income tax withholding and whether or not to file an income tax return. This leaflet describes what the Internal Revenue Service does to collect unpaid taxes, and what war tax refusers can do to prevent collection, or to cope with it when it happens. Dealing with IRS collection efforts is a central part of the war tax resistance commitment. Some tax refusers who live below a taxable income or work for income that is not reported to IRS may never hear from the tax collectors. Most other war tax resisters (WTRs) face IRS collection efforts from time to time. How we respond to collection is as important, for some, as the initial decision to resist. We continue our witness against militarism when we confront and interact with the tax collectors. It makes sense philosophically and practically for WTRs to plan ahead on how they will act if the IRS comes knocking.

Some war tax refusers take active measures to prevent collection; others allow it to take place. Either path offers opportunities to witness against militarism. Which path to choose is a personal decision according to individual motivations and circumstances.

For the IRS, the first step on the road to collection is a tax assessment. The government has to establish that, as of a specific date, a specific amount of tax is owed for a specific year. Most U.S. taxpayers assess their own taxes by the act of filing an income tax return. Many WTRs also participate in this self-assessment process. Other resisters do not file a return. This choice has the practical effect of avoiding or delaying assessment. However, the government can file a return in the name of a non-filer, and make an assessment based on available information about the non-filer's income. To do this the IRS uses information from W-2 and 1099 forms submitted annually by employers and other income payers. IRS-generated tax claims are routinely mailed to non-filers with a demand for payment. The date of "final assessment" on such claims is significant. Whether a return is filed voluntarily or by IRS action, the government has ten years from the date of assessment to collect the tax owed. If ten years pass, the unpaid tax becomes legally uncollectible. The only exception is the unusual situation when the IRS initiates court action to prolong the collection period.

After assessment, the IRS sends the tax resister several computer-generated payment notices. These escalate in severity of tone, trying to persuade the resister to pay up. If they don't produce payment, the IRS will send by certified mail a "Final Notice," and if you do not pay within 30 days, they may seize your bank assets, wages or other property. Though they can begin enforced collection 30 days after mailing the Final Notice, it usually takes several months before they get around to active collection attempts.

The IRS usually moves against wages or bank accounts first, because they are the easiest assets to locate and seize. If the agency attempts to seize wages or other compensation, a levy notice will be sent to the resister's place of employment. This levy remains in effect until the total amount of tax owed, plus interest and penalties, is paid in full. A portion of the resister's weekly earnings is exempt from levy. As of 1991, the weekly amount exempt from levy is $106 for a single taxpayer, plus $41 for each qualifying dependent. (§ 6334d Internal Revenue Code. This and other figures cited in this leaflet are subject to frequent change. Check with a counselor or IRS regulations for current figures.) Levies from bank accounts apply only to the amount that you have on deposit on the date that the levy is served on the bank. The IRS can levy the same account multiple times, but it has to serve the bank each time.

The IRS can also seize property owned by the resister, such as land, a house, a business, or a car. Jointly owned property, in general, is not immune from seizure. The rules on jointly owned property vary according to the common property laws of each state. Any war tax resister who owns property individually or jointly should contact a war tax resistance counselor for detailed advice about IRS seizure powers and procedures In general, the IRS does not seize valuable property to satisfy small tax obligations, but they do have the power, and guidelines shift with the political climate. Some property is exempt from levy, such as personal and household belongings up to a value of $1650, books or tools of the trade, business or profession of the resister up to $1100, court-ordered child support payments, and unemployment benefits (§ 6334c IRC). The IRS also has an administrative policy of not routinely seizing some other kinds of property, such as Social Security and Medicare payments, welfare payments, IRAs or pension plan proceeds. (For additional details, see IRS Publication #586A, The Collection Process, free from IRS offices.)


For most war tax refusers the ideal is to prevent collection of refused taxes. However, it is wise to prepare oneself for the possibility that the IRS may collect some or all of the unpaid tax. If possible, resisters should join or form a local support community of people who will help spiritually, physically, and financially, if any of them faces enforced collection. While a local support group is best, there are mutual aid groups within some religious denominations, and there are some regional and national support organizations. Some groups share the financial burdens of interest and penalty assessments when the IRS collects from their members. One national fund organized to do this is the War Tax Resisters Penalty Fund, PO Box 25, North Manchester, IN, 46962.

Individual resisters may also prepare to survive enforced collections through personal savings made for that purpose. These savings may be in the amount of the refused taxes, but some people believe in giving away their refused taxes to socially useful causes. People who do this would be wise to budget for savings that they could draw on in the event of IRS collections. Most resisters want to invest such savings in socially useful ways.

War tax refusers in many communities have established "Alternative Funds" for collective deposit and use of refused war taxes. Such funds usually provide an option for WTRs who wish to place their refused taxes in escrow to be available for reimbursement in case of IRS collections. The interest earned is usually given away to organizations working for peace, and to meet other human needs. Sometimes the principal is used for revolving loans to peace and justice organizations. You can get a list of Alternative Funds from the publishers of this leaflet.

Some war tax converters invest their "collection day" savings in community development loan funds that finance housing and work opportunities for low income people in the U.S. and the Third World. Descriptions of such constructive investment opportunities can be found in Economics As If the Earth Really Mattered, by Susan Meeker Lowry, 1988, New Society Publishers, 4527 Springfield Ave, Philadelphia, PA, 19143.

Holding tax resistance savings in conventional bank accounts has two disadvantages: I) Banks report interest earnings to the IRS, using your Social Security number; this is the main way the IRS locates bank deposits for seizure; 2) Banks invest much of their reserves in U.S. Treasury notes, thus financing the very things you are unwilling to finance with your taxes. Many other bank investments support militarism and oppression at home and abroad.

Savings and investments that do not pay interest will not be reported to the IRS.

Through a combination of group support, mutual aid, and personal savings, resisters can be prepared to weather IRS collections. Even better would be to prevent collection. Ways to accomplish that are the subject of our next section

Compensation for Labor. The most reliable way to prevent collection of labor earnings is to be self-employed, or to be employed in small alternative enterprises that do not report their wage payments to the IRS. This is an important strategy for effective, long-term war tax refusal. There are many trades and professions that offer viable opportunities for self-employment, while avoiding the tax reporting and withholding system. These include the building trades, private practice in medical, psychiatric and counseling professions, home-based computer and accounting services, home nursing and child care, art, writing, etc.

People who have the flexibility to move quickly from one job to another can readily frustrate the IRS collection system. Menial jobs, or jobs in food service or nursing, often provide this kind of flexibility. If you quit a job as soon as IRS levies your wages, they will often give up on trying to collect from you, or it might take them months or years to catch up with you at a new place of employment.

Another strategy is to reduce your wages to the level at which they are exempt from seizure by arranging part time employment when you are levied. Some companies that value the work of a conscientious tax refuser will agree to increase the non-wage compensation of the employee by paying the entire premium for comprehensive medical insurance, or providing other benefits. If an employee wishes to continue full time work, such employers will sometimes agree to donate the difference between the full time salary and the weekly amount that is exempt from seizure, as a company donation to charitable causes selected by the war tax refuser.

Preventing collection in the workplace often requires tenacious commitment and imaginative solutions. Self-employment in many occupations often involves accepting lower levels of sustained income.

Bank Accounts. It is quite easy to protect bank deposits from IRS seizure by following a few simple principles. The IRS learns the location of all interest bearing accounts because banks are required to report interest payments to the IRS. Collection can be prevented by removing all deposits from interest bearing accounts as soon as you expect or receive a "Final Notice" to pay from IRS. If you remove the deposits in cash and deposit them elsewhere, you can avoid leaving a paper trail from one bank to the next. Banks are required to report to the IRS all individual deposit or withdrawal transactions of currency in excess of $10,000 per transaction. To prevent such reports people withdraw or deposit cash in amounts of less than $10,000 at any one time.

[Editor: The above information may be inaccurate. An acquantance reported that the IRS levied $1330 from his bank account in August '93, even though it was non-interest-bearing, and in addition, had been opened as a W-8 account, which had no SS number. Besides that, he had even served the bank with a "Constructive Notice," warning them not to give information on the account to any outside party. Still, the IRS found the funds and took them. In addition, he was keeping most of the cash at home, with no more than $100 or so usually at a time in the account. Yet, the IRS must have been watching the deposits, because they happened to seize $1330 immediately after it was deposited. So the text in the previous paragraph could be a little naive.

It is possible to open a bank account by phone and mail in the name of your choice, without showing any ID. A W-8 account can be opened without an SS number. You may also want to consult How to Create a New Identity by Anonymous (Citadel Press, 120 Enterprise Ave, Secaucus, NJ 07094; 1983. For details on W-8 accounts, order Report #TL19: How to Bank with Greater Privacy.]

Another way that IRS may discover the location of bank accounts is by serving levies at several banks in the immediate vicinity of your home. Therefore, it is a good idea to use a bank that is in another neighborhood or town if you want to avoid such a levy.

There are a couple of other precautions which one might take to safeguard bank accounts from being located. A collection officer visiting your home to ask you to pay might see bank correspondence in an open mailbox, or might question your landlord or neighbors about your assets. Therefore, some cautious tax refusers use a PO Box or a friend's address as a banking address and also pay their rent and utility bills with cash.

Such precautions can preserve the convenience of banking accounts, while protecting your bank assets from discovery and seizure.

Security Deposits. A refundable security deposit is an asset belonging to you. The IRS can serve a levy on your landlord and seize your security deposit. You can protect against this by arranging to pay your rent two months in advance, in lieu of having a refundable security deposit.

Motor Vehicles. The IRS discovers the ownership of motor vehicles by checking registrations with the Secretary of State of your state, or by finding a vehicle parked at your home and seizing it on the assumption that it belongs to you. When the IRS is actively pursuing collection, you can protect your vehicle by always parking it far enough from your home or place of employment that a collection officer is very unlikely to find it. Many war tax refusers have their vehicle registered in the name of an agreeable relative or friend who has no outstanding liabilities. Transfer of title should be done well before the IRS asserts claims against you, since they may seize a vehicle if they have reason to believe that you are using someone else as a nominee to hold title to your vehicle; they will be able to keep the vehicle unless you can prove that it is not actually yours.

Personal Property and Tools of Your Trade. $1650 of your personal property and household goods is exempt from seizure. The IRS rarely attempts to enter homes and seize personal belongings, except in the case of people who are quite wealthy and owe the IRS large sums of money. $1100 of your tools of trade are exempt from seizure. Professionals or trades people who need expensive equipment to carry on their self-employment business might consider having their equipment and business facilities owned by others, and leasing it from the owners; or the equipment and facilities might be owned by a nonprofit cooperative or corporation.

IRS attempts to seize the home of Betsy Comer and Randy Kehler of Colrain, Massachusetts have led to sustained community resistance on the part of tax payers and war tax refusers alike. After eleven years of frustration at not being able to collect taxes from the couple, the IRS "seized" and tried to auction off the small farmhouse. The community successfully organized against the auction, and the IRS was forced to buy the house itself. Randy and Betsy and their daughter continued to live in their home for the next two years, but in 1991 the IRS evicted the family and jailed Randy for contempt of court. A well-prepared network of local affinity groups and supporters from around the country immediately reoccupied the house, and have maintained a continuous occupation of the property despite its subsequent sale to a young couple. Through these actions, unprecedented public attention has been brought to the war tax resistance movement and the issues of military spending which fuel our efforts.

Real Estate. The IRS doesn't have a reliable way of knowing about your ownership of real estate unless you are living in it and using it as a mailing address. They probably will not know that you own a summer cottage or a piece of land in the country or in another state, unless they learn about it by chance inquiry, from someone who knows about it.

The most vulnerable real estate is a home that you live in and use as a mailing address. Particularly in larger cities, you might be able to protect your home by never using it as a mailing address for any employment or banking relationships and by having an unlisted telephone number. This is the concept of "sanctuary address." If you always used the address of a discreet and supportive tax refusal colleague as an address for all employment, banking, and other official transactions, the IRS would never know where you actually lived. This method isn't foolproof, but it certainly throws significant roadblocks in the way of IRS collection efforts. Experience shows that IRS collectors give up rather quickly when they run into several dead ends, because they can't waste too much time on any one case.

A more reliable and conventional strategy is to have title to all land and houses held by trusted friends or relatives who are not tax resisters themselves, or do not have income that is subject to federal taxes. This can be a spouse, if the spouse does not have unpaid tax liabilities and does not file a joint income tax return with the tax resister. (But be cautious about this. Ownership by a spouse might create a problem in some states where all marital property is regarded legally as community property.)

Another strategy is to have all land and houses owned by a Community Land Trust, which can offer long-term or life-time lease to housing residents. For more information on this concept, you can read about land trusts in the Community Land Trust Handbook, available for $10 from the Institute for Community Economics, 57 School St., Springfield, MA 01105.

Inherited Property. War tax refusers who inherit large amounts of property usually find it impossible to forestall payment of federal estate taxes, which must be paid from the estate before it is transferred to the heirs. In addition, there is an opportunity for the IRS to seize inherited assets to satisfy unpaid tax liabilities of the heirs.

Decreasing taxation on inherited property is a very complex subject, depending on the size and nature of the assets to be transferred by inheritance. Public freedomries have many books on this subject under the "Estate Planning" category.

WTRs who expect to inherit property, or wish to pass on property to their own heirs, would do well to prepare for this situation many years in advance, and to discuss their conscience issues thoroughly with relatives who may be involved.

In general, estates taxes may be avoided by gifts and trust arrangements made before the death of the benefactor. Gifts before death are probably the surest way to avoid IRS levies for unpaid taxes of the beneficiary. And individual can give up to $10,000 per year to any beneficiary, without being liable for federal gift taxes. A married couple can give up to $20,000 per year.

WTRs expecting an inheritance might suggest that it be transferred to them in the form of non-taxable gifts, over a period of years, before the death of the benefactors. This is a common practice in estate planning to decrease estate tax liabilities.

Some WTRs who do not believe they should benefit personally from inherited wealth have renounced legacies, before taxation, by arranging for the estates to donate their share directly to nonprofit organizations selected by the WTR, but such an arrangement would need to be worked out with other beneficiaries.

A General Disclaimer. Some of the tactics discussed in this section on preventing collections might be construed as criminal violations of § 7206(4) of the Internal Revenue Code which states in part that any person who removes, deposits or conceals any property on which levy is authorized, with intent to evade or defeat the collection of the tax, will be guilty of a felony, with a maximum penalty of $100,000 fine and three years in prison.

We know of no criminal prosecution of any war tax resisters for using any of these methods to prevent the collection of taxes, so the line between legal non cooperation and possible criminal concealment is difficult to define. Criminal prosecution for preventing collection seems extremely unlikely at this time. The IRS does not seem inclined to use this type of enforcement.

Conclusion. These are a few ideas on how to prevent collection of some kinds of assets that are most commonly seized by the IRS. If you have other kinds of assets or need to get a deeper understanding of how to protect the assets mentioned above, you could do additional research on your own, or seek personal counseling from a network of war tax refusal counselors whose names are available from the publishers of this leaflet.

With imagination, thoughtful research, and determined commitment, it is quite practical to prevent the collection of tax claims by the IRS. Many tax refusers have prevented almost all collections from them, for periods ranging up to fifty years in the case of some of our older colleagues.


IRS collection actions provide a powerful opportunity for people to witness their convictions to the government and to the public. Many non-resisters have been moved to action by the resisters who are confronting the war tax collection system. It stirs people to see their colleagues and neighbors face a salary levy or a house seizure and auction, following their conscience in the face of difficult consequences.

Many war tax refusers take their stand at the point when the government demands that they turn over taxes for the military by their own action. However, they may not believe that they have a conscientious obligation to carry their witness to the point of preventing enforced collection. They may not feel prepared to lose valuable family assets. A parent raising small children may decide not to sacrifice the family home to an IRS auction. Each war tax refuser has personal beliefs and life circumstances that determine how to respond to IRS collection efforts.

Even when resisters decide to allow enforced collection, there are actions they can take to protest collection and bring their message to the public. Support and assistance from other war tax resisters is very helpful in this witness. The IRS tries to deal with individuals and families in isolation, to create feelings of fear and powerlessness. Community is an effective antidote to this. Organized protests often generate extensive publicity about the idea of war tax refusal, and strengthen local communities of refusers.

When the IRS seizes vehicles or houses, it must conduct a public auction or sealed bid sale, to convert the property to cash. The IRS then deducts its claims for taxes and costs from the proceeds of the sale, and must return any balance left over to the tax resister. Local support communities have repeatedly used these auctions to create public awareness, by organizing large numbers of supporters to attend the sales and to submit creative alternative bids that highlight the ideas central to war tax refusal.

When wages or bank deposits are seized the money vanishes quickly. WTRs may not wish to focus public protest at their places of employment, so the occasions for organized public protests have not been as creative. However, community support for these WTRs is important. Some local groups pool resources in special funds to help fellow resisters who have been victimized by IRS collections. Sometimes they organize rent parties and other fundraising events.

There are situations in which war tax resisters may face imprisonment for contempt of court. The IRS may issue a summons requiring a resister to supply information for the purpose of making an assessment or collecting unpaid taxes. Such a summons is legally enforceable. A resister may be brought before a federal judge, held in contempt, and placed in jail for refusing the judge's direct order to furnish the requested information. However, resisters who have asserted a constitutional Fifth Amendment right not to provide information because it could later be used in criminal proceedings against them, have never been sentenced for contempt. A resister who receives an IRS summons should contact a war tax resistance counselor or lawyer.

Miriam Redstone and David Dillman, of Occidental, California, got a lot of mileage out of the IRS's seizure of their 1969 Dodge, "Dolly". The IRS spent $345 to auction off the car, and received only $105 from a man who immediately returned the car to its owners. The event galvanized community support for the couple's war tax resistance.

This leaflet summarizes the IRS collection process and the choices for war tax resisters. Many important details are not covered, and the laws, policies and practices governing IRS behavior change periodically. Handbooks on war tax resistance are available for more complete information. The National War Tax Resistance Coordinating Committee maintains a national network list of war tax resistance counselors and sympathetic lawyers to help you when you feel a need for expert advice.

Here are some thoughts in closing: War tax resistance should be based on thoughtful conscientious beliefs. We believe it should not be done for personal gain, nor with the naive hope that world peace will prevail within a year or two and end the need for long-term witness and resistance against militarism. Advance knowledge and planning are the best ways to prepare for IRS collections. No one strategy of response is best or correct for all war tax resisters. Collection of unpaid taxes by the IRS does not mean a failure of resistance. Our determination to take a strong and open stand against militarism is one measure of our success. By refusing to do harm, by directing our resources to what we believe to be good, we are taking personal responsibility for trying to create a nonviolent human community.


Many people want to refuse payment of Federal income taxes because of conscientious objection to military spending.

The Internal Revenue Service continually tightens and improves its computerized system to withhold, assess and collect taxes from people who work for wages and salaries. This system is based on mandatory reporting by businesses and institutions that make any kinds of income payments to individuals. Each year it seems more difficult to prevent assessment and collection of taxes on income from such sources.

While it tightens its system for taxing reported income, the IRS seems less able to notice or tax income payments that don't get reported in its automated systems. The human beings at IRS are watching computer screens. If it doesn't show up there, they don't know it exists.

People who hope to prevent collection of military taxes over an extended period of years may need to get their income from sources that are not monitored and controlled by the IRS. That means self-employment, cooperative ventures with other war tax refusers, employment by small businesses that are willing to make payments outside of the IRS reporting system, or learning to fit one's income pattern into complex IRS regulations in such a way that war taxes will not be claimed or can not be effectively collected.

Fortunately small business opportunities for self-employment and cooperative work are varied and numerous.

One purpose of this pamphlet is to discuss strategies for structuring self-employment businesses in order to avoid paying military taxes.

The second purpose is to describe how some military tax refusers have discovered and developed their abilities to make a living in a variety of self-employment areas.

In this section we'll discuss two divergent income and reporting strategies that you may use to avoid paying military taxes through self-employment.

1) Using one strategy, most of your income comes directly from individuals not required to report, or businesses that choose to ignore reporting requirements. You do not file returns and do not report your income. If you get income at taxable levels, this route is illegal, but it can work effectively in practice.

2) In the second strategy, much of your income may come from other businesses and organizations that report these payments to the IRS, as required by law. You may file returns, but resist the payment of military taxes; you may ignore filing requirements, and wait to see whether the IRS discovers you and pursues you effectively; or you may structure your income and economic status in such a way that you can file returns, but no military taxes will be due.

If most of your income is for goods or services provided to individuals or businesses that don't report these payments to the IRS, the records at IRS won't show the taxable income you receive. A number of self-employment businesses typically provide services to customers of this type. These include:

This strategy for refusing war taxes is simple: you receive most of your income from sources that don't report to the IRS; you ignore the reporting requirements of Federal and state taxing agencies; you make your social contribution according to your own conscience. You may keep income records for your own use and your own protection in case you are ever confronted by IRS tax enforcement.

It is illegal to receive taxable income and not file a tax return. The criminal penalty for not filing is up to one year in prison and a $100,000 fine for each offense. There are other civil and criminal penalties that might apply. Nevertheless, this form of war tax refusal has worked effectively for many people willing to take a modest level of personal risk in the name of conscience. Because it's done quietly without formal reporting, we can't estimate the number of those who are doing it, but we know there are many. We do not know of any criminal prosecution of self-employed people in the organized war tax refusal movement for over fifteen years.


If much of your self employment income comes from other businesses and organizations, resisting collection of war taxes is not so simple. It may be difficult to devise a strategy that will work effectively, allowing you to get a livable income without eventual collection of war taxes. Because the intricacies of the law and regulations are complex and specific, we can't summarize all of them in this pamphlet. The person who wants to devise an effective self-employment strategy in this area will need to be self-educated about laws and regulations that apply to their particular vocational circumstances.

The IRS offers a wide variety of free publications, which contain the IRS interpretation of laws and regulations covering all the issues involved. In this pamphlet we will refer to the most relevant IRS publications, and summarize a few basic ideas and suggestions derived from reading them.

Many traditional self-employment vocations get most of their income from service or sales to other businesses and organizations. These clients are vulnerable to intrusive regulation and auditing by IRS. Some self-employment businesses are vulnerable to reporting requirements because of licensing or other government regulation. Vocations in these categories include:

For a variety of reasons, many people have used self-employment in small business to avoid paying taxes. As a result, the IRS constantly seeks to weave its net of regulations tighter in order to prevent people from doing this.

If you wish to be self-employed, you may operate as a sole proprietor, or you may incorporate your business under state law and then work as an employee of your own corporation. These options are discussed below.

Sole Proprietors
As a sole proprietor you operate under your own name or an assumed business name. You are supposed to report your business income on Schedule C and other forms that supplement your individual 1040 Income Tax Return. Many sole proprietors have used self-employment to avoid paying taxes. The contractual self-employment relationship can be advantageous to client businesses that use such services, because they can avoid paying employee tax and benefit obligations and avoid much of the record keeping burden involved in hiring wage and salary employees. To prevent sole proprietors and the businesses they work for from using this relationship to avoid Federal taxes, the IRS tries to close loopholes and tighten the regulations that define and govern employer, employee and independent contractor relationships.

If your self-employment income comes from other businesses and organizations, most will probably report these payments on IRS - Form 1099 - MISC, as required by law for payments of $600 or more each year. To do this they are required by law to obtain your Social Security number, or the Taxpayer Identification Number (TIN) that is issued to businesses by the IRS. Businesses use IRS Form W-9 to request a taxpayer identification number when they make payments to you. It can be helpful to have Form W-9 with you when you go to a potential employer, if you want to be treated and paid as an independent contractor. If you don't provide the Social Security number or TIN requested, the payer is required to withhold up to 31% of the payment to cover your potential tax liability.

IRS Publication 937 Employment Taxes and Information Returns is crucial to understanding all of this and devising a self-employment strategy. It lists twenty criteria that the IRS uses to determine whether a worker is an employee or a self-employed independent contractor. If you study these criteria, you may design your work life and define your relationship with those you work for so that you will in fact fulfill the criteria for an independent contractor relationship. For example, you may:

Publication 937 also offers four pages of case study examples of traditional self-employment businesses, with interpretations of how self-employment would be typically defined within those vocations.

The IRS also publishes a four page Form SS-8, with nineteen detailed questions, that helps IRS make a ruling on whether an individual worker is an employee for Federal tax withholding purposes. Either the worker or the employer may file this form to get a ruling from the IRS. By studying the form you can get more insight into how the IRS defines employment and self-employment.

You will see from all of this how the IRS is focused on trying to prevent self-employed sole proprietors from avoiding payment of taxes. An employer might incorrectly classify you as a non employee, and not withhold applicable income, Social Security, and Medicare taxes. If you subsequently failed to pay these taxes yourself, the employer could be held liable for all of the taxes you did not pay, plus other penalties. Therefore employers are wary about "independent contractor" relationships, in spite of some potential economic advantages for them.

You may properly qualify as a bona-fide self-employed sole proprietor, and the businesses you work for may report their payments on Form 1099 MISC. Even so, if you file a return but refuse to pay the tax, or decide not to file a return, the resulting inquiries or collection pressures from the IRS may intimidate your business customers and cause them to stop using your services.

These pressures from the IRS can cause problems in maintaining a client base. However, IRS enforcement capabilities are variable and unpredictable. They have so many rules that they often lack resources to enforce them. Many sole proprietors who don't file tax returns get away with it for years, even when much of their income is reported on Form 1099, because the IRS fails to use the information for effective follow-up.

Incorporation may solve some of the problems encountered in the self-employed sole proprietor relationship. Under the present law there is no IRS form or reporting system to track payments to corporations for services. Incorporating your self-employment business under state law would release your business customers from the obligation to report to the IRS on payments made to your business. Publication 937 (1992 edition) puts it this way:

"Payments to corporations are not reported on Form 1099 MISC...Treat a payee as a corporation if the payee's name ends with the corporate status, such as Incorporated, Inc., Corporation, or Corp. Do not treat payee as a corporation if the payee's name ends with Company or Co. or without any business status." - (page 29)

This is a loophole in the reporting requirements, and we don't know how long it may remain open. The IRS has sought legislative changes that would extend the 1099 reporting requirement to cover payments to service corporations. The specific wording quoted above has been dropped from the 1993 edition of Publication 937, although the law on reporting payments to corporations has not been changed. Also, some business customers may not be aware of this distinction, and may report payments to small service corporations on 1099 MISC. In presenting your corporation credibly to business customers, a businesslike name, such as Creative Editorial, Incorporated, might be more convincing than a personalized name, such as John Jones Services, Inc.

IRS Publication 334 - Tax Guide for Small Businesses and Publication 583 - TaxPayers Starting A Business describe the reporting and taxpaying obligations of several forms of small business organizations, including sole proprietorships, partnerships, and corporations.

According to Publication 334, "Each corporation ... must file a tax return even if it had no taxable income for the year and regardless of its gross income for the year." We do not know whether the IRS has any coordinated program with the states to monitor whether all registered corporations are complying with this obligation. Most states require an annual report of some kind from corporations in order to retain the corporate charter, and such reports may ask for an IRS Tax Identification Number.

Apart from the possibility of getting business income that is not reported to the IRS, incorporation of your self-employment business can have practical advantages for structuring your economic life to avoid all Federal income tax obligations. You might be the only employee of your corporation, or it might also employ your spouse, your children, and other relatives and friends. These are some of the ways that a corporation might structure business expenses and payments to meet your needs without creating tax obligations:

Since all net income of a corporation is taxable, the problem for a corporation that intended to avoid payment of taxes for war would be to adjust income and expenses in such a way that there would never be significant taxable income.

This might be done by carefully balancing bids and contracts that would generate profits against those that would yield a loss. You could work at profitable rates for prosperous people, and work at very low rates for people who are poor. An incorporated carpentry business that was showing signs of earning taxable income for a given year could employ jobless people to work on home repair for the poor at very low prices, until the potentially taxable income was used up. A medical clinic could treat poor patients at very low rates. A printing shop could charge bargain prices on bids for struggling peace and justice organizations. If you soaked up excess profits in this way you could plan to have very little taxable income at the end of each tax year. In these ways a corporate structure could be used to provide an adequate standard of living, with basic benefits, while legally avoiding income tax obligations.

Many self-employed war tax refusers are concerned about how to maintain health care insurance coverage and provide for future retirement income. At the time of this writing the Clinton administration is proposing broad changes in health care financing and coverage. We do not know what the future system will be like.

If you follow the strategy of getting unreported income and not filing tax returns, you won't be contributing to the Government Social Security system. However, when you reach retirement age you may be entitled to some level of benefits because of periods in your life when you did work for wages and contribute to Social Security. Even if no Social Security payments were made in your name, under the present system you would be eligible for a minimum level of old age benefits under the S.S.I. and Medicare systems. If you don't report income and pay taxes, you may want to pay for private medical insurance coverage, and to accumulate adequate savings in some form to provide for your expected needs when illness or age limit your income earning abilities. There are various ways to invest savings to protect them from seizure by IRS and allow the money to help others until you have need for it. One way is to invest in non-profit community development loan funds that do not pay interest to investors. Because no interest payments are being reported, the IRS would not be informed about the location of these investments. Other ways to hold savings are discussed in Practical War Tax Resistance #3, How to Resist Collection.

If you follow the strategy of incorporating and reporting corporate and personal income, the corporation will be withholding and paying Social Security contributions, and may also cover the cost of comprehensive medical coverage and some type of supplemental retirement fund for you. Regulations on retirement plans are complex and we won't attempt to analyze them here. Be aware that retirement benefits may be taxable as personal income at the time that they are paid out to you.


Lots of people would like to work as equals with others on shared vocational tasks, using shared resources, in partnerships, worker cooperatives or intentional communities. If such relationships involve an intention to practice war tax refusal it is important that the cooperators share a clear common commitment on how to deal with tax refusal issues. They need to be fully prepared for the risks and consequences if the time comes when they must face enforcement pressures from the IRS.

This pamphlet deals extensively with the methods that individuals and family units can use to refuse war taxes through self-employment. If there is agreement among partners or the principals of an incorporated business, similar tactics can be used to operate the business in such a way as to receive income and not report it, or to structure income and expenses so that no taxes will be due. However, as businesses become larger, involving more workers, it can become increasingly difficult to maintain agreement among the workers about how to handle tax issues, and to avoid disruptive attention from the IRS.

There is a form of corporate status used by religious communities that can be used to avoid having taxable income. This is the type of structure classified by the IRS as a 501(d) corporation; to qualify as a 501(d), the IRS requires you to have a religious basis, combine sources of income, occupy a common piece of property, and have a communal treasury in which everyone has an equal share. The net earnings of the members are aggregated and divided into equal annual pro rata shares which are reported on Form K-1.

This can reduce the reportable income of all members below the taxable threshold. Because a 501(d) is treated like a monastery, with members working for the common good, rather than employees, the K-1 share is also exempt from Social Security and Health Security withholding. The K-1 shares do not reflect what is actually spent for the benefit of various members, but rather reflects the pro-rated paper share of net earnings for each member. Presumably, the religious basis could be an ethical commitment by members to share things in common and to refuse to participate in structures of war and violence.

This is a very brief summary of collective approaches to war tax refusal. They require careful research and planning so that members know what they are getting into, and so that the structure can withstand possible scrutiny by the IRS. Collective approaches to war tax refusal should be the subject of a subsequent pamphlet in our series on Practical War Tax Resistance.

The war tax refusal strategies described in this pamphlet have been derived from personal experience, and from interpretations of tax law contained in the IRS publications referred to. Other free publications are listed in IRS Publication 910 - Guide to Free Tax Services, which contains an eleven page index to subjects discussed in the publications listed.

The Internal Revenue Code and Regulations, on which these publications are based, can be researched systematically in the Commerce Clearing House Standard Federal Tax Reporter and other loose-leaf Federal tax reporting services. IRS interpretations of the Tax Code and Regulations are sometimes contradicted by Federal courts, when challenged by taxpayers.

Some of the strategies described in this pamphlet are legal, some illegal, and some are of questionable legality. The criminal penalty for most offenses is up to one year in prison, plus fines running up to $100,000. It's up to three years in prison for fraudulent filing and reporting, plus higher fines. High fines are used to get at the assets of wealthy people. Federal fines are owed for the rest of your life, but it's not too hard to forestall collection. The writer of this pamphlet has owed over $1500 in criminal fines, some for 35 years, without ever paying any of them. Criminal prosecution of war tax refusers has been very rare.

There are many civil penalties that could be assessed for some of the actions described in this pamphlet, if the IRS catches up with you. Civil penalties plus accumulated interest will typically increase a tax claim to two or three times the amount of the original unpaid tax, by the time the IRS gets around to making a claim.

Information on specific penalties can be found in the Internal Revenue Code and Regulations, or in NWTRCC's Quick Reference on War Tax Resistance. When thinking about risks and penalties, it is good to remember that continuing to pay military taxes can be very costly to you and harmful to the future of life on this planet.

In this section we describe some areas of self-employment, and how tax refusers have developed their ability to make a living in these vocations without paying military taxes. We list a variety of trades and vocations. We briefly discuss learning and entry, equipment and capital, and tax issues specific to particular vocations.

The Building Trades - Carpentry, Electrical, Plumbing, Painting, Sheet Metal, Heating and Air Conditioning, Tiling, Dry Wall Hanging and Taping, Carpet Laying, Roofing

The building trades are a traditional area of self-employment, in which it can be easy to refuse payment of war taxes and prevent collection of tax claims. Work opportunities and scheduling are flexible. Pay scales are relatively high. The work is useful and necessary to others. Stress can be kept low, and the work can be satisfying for the worker.

Learning and Entry - It's possible to learn most trades by informal apprenticeship. Willingness to work as a helper for a low rate of pay can make you an attractive employee for small contractors, while you are learning the trade by working with them. The learning process can be accelerated by reading basic textbooks and do-it-yourself books on your trade. In most trades, one or two years of this kind of learning would qualify you to go out on your own, and to pass licensing exams in those trades where licensing may be required.

Equipment and capital - Having your own basic tools can improve your chances of being hired and retained as a helper in the building trades. Equipment varies from trade to trade, but $500 to $1500 worth of equipment could enable you to be self-employed in some of the trades. As you are learning, build your tool and equipment inventory gradually as needed.

Tax Issues - Many small contractors in the trades like to pay their workers as self-employed sub-contractors, because it cuts down on labor costs and paperwork. The IRS is trying to tighten up on contractors to prevent them from doing this, but many continue to pay their workers as subcontractors without withholding taxes, although more of them now feel compelled to report such payments on the 1099 Form. Once you become genuinely self-employed, it becomes quite practical to resist all reporting, filing and collection requirements of the IRS.

Cleaning and Housekeeping Services - House Cleaning, Office Cleaning, Window Washing

This seems to be one of the easiest areas for learning and for refusing payment of military taxes.

Learning and Entry - Contributors didn't mention how they learned to do cleaning. Maybe most of us have learned the basics by living in homes that needed to be cleaned and by doing it ourselves. An important element is learning to be very clear from the beginning with clients about what they want done and what you are committed to do. These two things need to be compatible. Reliability and good communication are important to successful relationships with clients. People often begin by working for modest wage rates, often for clients they already know personally. Clientele is built by word-of-mouth and by advertising in local papers. People with experience and a sound client base can readily earn $15 an hour or more.

Equipment and Capital - Equipment costs are minimal. Workers often use tools and equipment owned by their clients.

Tax Issues - Housekeeping services for individual householders are in a special class for tax purposes. Householders are not required by law to withhold income taxes, but they are supposed to report payments and to pay Social Security and Medicare taxes for anyone paid more than $50 a quarter as a household employee.* Most clients are happy to ignore this legal requirement because they don't want to be bothered with the paperwork and reporting. However this became a public issue in 1992 when it was raised in confirmation hearings for several Clinton cabinet appointees. Since then some housekeeping clients have become nervous about not reporting and paying the required Social Security taxes. Other tax issues are similar to those that apply in other areas of self-employment.
[* Editor: Congress is working on changing this threshold as of 3/94.]

Clerical Services - Bookkeeping, Accounting, Secretarial, Typing, Computer, Telephone Answering, Tax Preparation

A number of these office skills can be combined to provide comprehensive service for other small business clients who don't want to spend their time on office paperwork.

Learning and Entry - These skills are often learned on the job in wage paying clerical jobs. Community colleges offer courses for formal learning. Entry to self-employment is typically achieved by building a clientele gradually through word-of-mouth and local advertising.

Equipment and Capital - A personal computer and printer with adaptable capabilities is basic to this kind of business. A home office is practical. An investment of several thousand dollars would be typical in establishing flexible self-employment capability.

Tax Issues - Much of this kind of work would be done for other businesses. Bookkeeping and accounting would usually involve preparation of tax returns and reporting forms for clients. This is an example of the kind of business in which it might be prudent to incorporate and to operate in a legal manner to avoid tax liabilities. However, some people put together a package of clients and services that enables them to work in this area without reporting their income or complying with other IRS requirements.

Home Child Care and Care for the Elderly
You may provide daycare for several children in your own home, or you may go to the homes of clients to provide care for small children, or nursing or companionship for elderly clients.

Learning and Entry - Training and certification as a registered nurse or licensed practical nurse enables you to earn higher income in this field. However, there are many opportunities in child care and companionship for the elderly that require little training or experience. Clients are often located through employment agencies and registries that specialize in this kind of placement, for a fee that may be paid by the client or the employee. Wealthy clients may pay as much as $500 a week to cover their "at work" hours for a five day week. Registered nurses, when needed, can earn more than that. Other opportunities may involve live-in arrangements, lower compensation, and longer hours of responsibility. Knowledge of the local market and intelligent negotiations will be helpful in avoiding exploitative arrangements.

If you care for several children in your own home, you might be liable to meet strict inspection and licensing regulations of state or local government, which can be costly to meet. However, it is often feasible to operate informally on the margins of licensing requirements.

Tax Issues - For an employee in the household of others, tax issues would be similar to those described in the section on Cleaning and Housekeeping Services.

Simple Living on the Land - Gardening for Income
Simple living on the land, combined with sustainable small scale agriculture as a source of income, is an attractive way of life, because it is in harmony with our desire to live on earth without harming others.

Learning and Entry - Many people raised in cities have made the transition to life on the land by reading the generous literature available on homesteading and gardening, and by learning from their rural neighbors. When they don't have money to buy land with existing housing on it, they often find a few acres to use, on land that is held in community land trusts, or is owned by sympathetic individuals or institutions. People begin by living in primitive housing already on the land and gradually add to it or build their own housing, often without electricity or running water plumbing. They usually garden with organic methods and sell their surplus produce at local farmers' markets and to local restaurants and groceries. A recent development in this kind of agriculture is "community supported agriculture"; customers pay the farmer an annual fee for an agreed portion of the produce from the garden; they receive their portion of vegetables and fruits as they mature and are harvested.

Equipment and Capital - This kind of agriculture in our era seems to require the use of an old truck or station wagon at least, some mechanical equipment for tilling the land, and various hand tools. Equipment is often assembled gradually from flea markets and auctions, for a few thousand dollars in total.

Tax Issues - A small family typically earns from two to fifteen thousand dollars gross from this type of agriculture. They often supplement their cash income through other kinds of part time work in the local community; they raise much of their own food and do many things for themselves that city people would pay to have done.

Since most of their income is not reported, they frequently ignore all IRS reporting and payment requirements. They often feel more secure in this if the land that they use is owned by others, with a long term lease granted to the users.

Writing and Editing - Technical Writing, Copy Editing, Translating, Desktop Publishing, Proofreading

Work of this type has often been done on a freelance basis in the past. The IRS is trying to tighten up on reporting of income paid to freelance writers. It remains an appropriate area for real self-employment, because the work can readily be done at home, according to one's own schedule, and the work product can be specified and priced by contract.

Learning and Entry - People we consulted in this field have typically gained their knowledge and experience through salaried employment; after some time they gained a network of contacts and knowledge that allowed them to build a client basis for freelance self-employment.

Equipment and Capital - Computer and communications equipment might cost several hundred to several thousand dollars, depending on the type of work being done.

Tax Issues - This would be an appropriate field for considering the incorporation option discussed earlier in this pamphlet. Most income in this field would come from publishing corporations. If you work for them as a sole proprietor they would report payments made to you on Form 1099 MISC. Eventual IRS levies might be frustrated by always agreeing in the contract that no payment is due until the work product is delivered, accepted and invoiced, and the client agrees to pay promptly as soon as the invoice is tendered. [ This advice on contract terms and invoicing applies equally to any other vocations, such as clerical services, where you typically work for a limited number of long term business clients, who would be reporting to the IRS on Form 1099 MISC.] An IRS levy is valid only for the amount owed to you at the time the levy is served. If no unpaid invoices are outstanding at the time of levy, the client owes you nothing and need not honor the levy. This becomes an issue only if the IRS is trying to collect unpaid tax assessments from you. While prompt payment of invoices may protect you from IRS levies, a Notice of Federal Tax Lien might prejudice your ability to collect income in the future from clients who had received notice of the lien.

Contractual Organizer for Social Justice Organizations
Many social justice organizations and associations have aims and philosophies that are in harmony with the conscience concerns of war tax refusers. Some have been willing to respect the war tax refusal concerns of their paid staff by agreeing to pay for services on a contractual basis, rather than a direct employment basis. This usually requires sensitive negotiations and some restructuring of the way the job is done to reassure some anxious directors that the contractual relationship is legitimate and that the viability or credibility of the organization won't be threatened by possible tax enforcement problems.

Physicians, Dentists, Nurses, Medical Professionals
In our society, most medical professionals are employed by institutional employers. If they are self-employed, they get much of their income from government and private insurance carriers. Medical professionals are so well placed to offer valued services direct to the public that they can make a decent living by self-employment in small clinics, if they are willing to work for less and take some risks, outside of the large institutional frameworks. One dentist in Massachusetts, who is a well known war tax resister, has continued to practice dentistry, even though his state license to practice has been suspended because of his refusal to file and pay both Federal and state taxes.

Artists, Musicians, Crafts people, Creative Writers
Such artists have traditionally been self-employed. They create what they want to and then try to sell more or less of it in order to make a living. If they sell through galleries or publishers and derive continuing income from royalties, they become vulnerable to Form 1099 reporting and to seizure of their continuing royalty income. These problems could be met by selling their art directly to the customer, or by selling their rights completely without relying on consignment or royalty arrangements.

Architects and Engineers
They are often self-employed. As with medical professionals, a commitment to war tax refusal could significantly limit the size and types of projects they could work on, and lead them to work for individual homeowners and small businesses rather than large institutional clients.

Small printing shops that cater to alternative movements exist in many communities and provide self-employment for radical printers. This noble tradition goes back to people like Benjamin Franklin, John Peter Zenger, and Elijah Lovejoy.

Retail Stores, Restaurants and Repair Shops
These can work as sources for self-employment income, but they tend to get in trouble because local sales tax reporting requirements draw them into mandatory income reporting systems, and their facilities and inventory are vulnerable to seizure. This is an area where the option of incorporating and keeping personal income below taxable levels might work effectively.

Other Miscellaneous
Other areas of self-employment used by our associates in the war tax refusal movement have included independent trucking and moving services, taxi driving, counseling, massage therapy, acupuncture, lawn care, apple picking and pruning, bicycle repair, computer programming, sales, and many others.

Many skills can be adapted and practiced with the goal of self-employment and sustainable war tax refusal. This often involves accepting a lower level of compensation than would otherwise be expected in your profession or vocation. People often find this a positive factor in developing their social and spiritual life. It is an unforeseen benefit from following the leadings of conscience and deciding to do what one believes to be right.

Complex systems of law and computers reach out to grab us and make us involuntary servants of the military spending system. We believe that self-employment for barter, for unreported income, and for income that we can protect from tax collection will become the most practical way to resist military taxes for many people. At the same time we can foster a democratic economic network that will be independent of centralized control by the government and the corporate economic establishment.

Publications Available Free from the IRS: Publication 937 Employment Taxes and Information Returns Publication 334 Tax Guide for Small Businesses Publication 583 Taxpayers Starting a Business Publication 542 Tax Information on Corporations Publication 15 Circular E, Employer's Tax Guide Publication 910 Guide to Free Tax Services

References, Available in the Business Section of Many Public Freedomries: Commerce Clearing House Standard Federal Tax Reporter
Useful Books:
Stand UP To The IRS
by Frederick W. Daily, 1992; Nolo Press, 950 Parker Street Berkeley, CA 94710-9867
How to Profit After You Inc. Yourself by Judith McQuown; 1985 Warner Books

- Many similar books available in freedomries -
For Counseling on Incorporation Strategies
David Nuttall, c/o National War Tax Resistance Coordinating Committee

Literature from National War Tax Resistance Coordinating Committee - P. O. Box 774 Monroe, ME 04951 207-525-7774

From War Resister's League - 339 Lafayette, Street New York, NY 10012: War Tax Resistance - A Guide to Withholding Your support from the Military - Price $12.00 + $2.40 postage

Send your comments and suggested corrections to: Karl Meyer, 1460 West Carmen Avenue, Chicago, IL 60640. 312-784-8065.

This report has been edited and reprinted from brochures produced by the National War Tax Resistance Coordinating Committee. NWTRCC is a coalition of local, regional, and national groups supportive of war tax resistance.

NWTRCC, P.O. Box 774, Monroe, ME 04951
Local Contact: 207-525-7774

Reports in this series:
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